School Teachers' Pay and Conditions (No. 2) Bill

HL Deb 04 July 1991 vol 530 cc1126-80

4.30 p.m.

House again in Committee on Clause 1.

Lord Rochester moved Amendment No. 2: Page 1, line 9, at end insert ("Before doing so he shall consider any names put forward by bodies representing local education authorities, school teachers or other interested parties for appointment as members of the review body.").

The noble Lord said: This must be just about the most modest amendment there could be. At Report stage of the Bill in another place the Parliamentary Under-Secretary of State resisted an amendment aimed at requiring the Prime Minister to consult those representing the interests of local education authorities, school teachers and governors before appointing the review body. The Minister did so on the grounds that such consultation would be contrary to the principle of an independent review body. However, he said at that time: The amendment may be intended to ensure that the interested parties can put forward names for my right hon. Friend the Prime Minister to consider. If that is the case, I hope that the hon. Gentleman"— it was my honourable friend Mr. Simon Hughes— will be reassured to learn that they will be free to do that". —[Official Report, Commons, 6/6/91; col. 440.]

Just now the noble Lord, Lord Belstead, appeared almost to reproach me for introducing the amendment. He appeared to find it in some way inconsistent with my support for the first amendment, but I emphasise that the words that I have just quoted are not my words. They are the words of the Minister responsible. It follows from his statement in another place that inclusion in the Bill of the words proposed in the amendment would be entirely in keeping with what the Government have in mind. By accepting the amendment, the noble Lord, Lord Belstead, can demonstrate at this early stage in our proceedings that the Government are willing as far as possible to join with noble Lords on this side of the Chamber in establishing a consensus in our discussions. I hope that he will do just that. I beg to move.

Baroness Blackstone

I should like to support the amendment, which, as the noble Lord, Lord Rochester, said, is extremely modest. I should like also to correct a point that I believe the Minister made in the debate on the previous amendment. He suggested that the amendment implies that the local authorities or the teachers' unions would nominate representatives. That is not the purpose of the amendment. The purpose of the amendment is simply to put the Prime Minister under some obligation to consider names submitted for his consideration by the local education authorities, the teachers' associations or any other interested parties. Those names would have been chosen by the various bodies concerned on the grounds that they have knowledge and expertise in education, not that they should represent those interests. From these Benches, we therefore support the amendment.

Lord Belstead

The comments of the noble Lord, Lord Rochester, about what was said in another place are right. It was made clear in another place that it would be open for names to be proposed for membership of the review body. As I sought to explain, it is intended that my right honourable friend the Prime Minister will make the appointments to the review body just as he does to the other review bodies. He will choose the people whom he considers best fitted to give independent advice on the pay and conditions of school teachers and he will naturally look at the names that have been suggested.

Perhaps I may now deal with a point upon which I disagree with the noble Lord, Lord Rochester, and with the noble Baroness, Lady Blackstone. If we incorporate the amendment in the Bill, we shall run into the danger of having a representative element. After all—I realise that I am repeating myself, but I must reiterate this point—the two bodies specifically mentioned in the amendment—the local education authorities and the teachers—were two of the three elements that comprised the old Burnham Committee. It is fair to say that that committee suffered from having representation on it. It achieved only three negotiated settlements in a period of some 20 years. We are trying to get away from that by setting up a review body which we believe will be good for the teaching profession and which we believe the teaching profession believes will be good.

As I said, the Prime Minister will consider names connected with the education world, but I hope that, for the reasons that I have given, there will be no pressure to incorporate the amendment in the Bill. With that assurance, I hope that the noble Lord may feel that it is right to withdraw the amendment.

Lord Rochester

I am disappointed in what the noble Lord, Lord Belstead, has said. If he fears that there is a danger of bringing representative elements onto the review body—the Government are aware of that danger—I should have thought it evident that it was a move that they could resist if they so choose. As I see it, the Government have nothing to lose by accepting the amendment, but it is a matter on which I am effectively in the hands of the Minister. It is not a matter on which I should press the Committee to a Division, and in those circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Rochester moved Amendment No. 3:

Page 1, line 9, at end insert: ("( ) After the establishment of any further education councils that may later be constituted in England and Wales, the review body shall continue to examine and report on the statutory conditions of employment of teachers who occupy posts which, when section 1 of this Act comes into force are posts held by school teachers within the meaning of section 5 below.").

The noble Lord said: As I see it, this amendment is of a very different order from the previous one. It deals with the question of how the pay and conditions of sixth form college teachers should be determined in the long term. For the immediate future, their position is plain. Under Clause 5 of the Bill, they are deemed to be school teachers and will therefore be covered by the review body. However, from the Government's recently published White Paper, Education and Training for the 21st Century, it is equally clear that, with effect from April 1993, responsibility for the funding of sixth form colleges in England and Wales is to be transferred from local authorities to the new central councils that the Government propose to establish.

On Second Reading, I observed that, to say the least, that places the teachers involved in an invidious position. I added that, in terms of career development alone, there are at present strong links between teachers in sixth form colleges and those in secondary schools and suggested that we should think carefully before allowing those links to be broken. If the employment conditions of teachers in primary, secondary and grant-maintained schools are in future to be determined by a statutory review body, I cannot see what justification there is for excluding sixth form college teachers from the same treatment.

In my view the same considerations extend to colleges of further and higher education, polytechnics and universities. I appreciate that those institutions do not fall within the Long Title of the Bill and they do not therefore feature in the amendment. I further appreciate that to establish review bodies for teachers in further education colleges would be at variance with a key part of the Government's White Paper. Nevertheless, I venture to observe in passing that for the purpose of pay determination the various components of education should be treated in the same way. If the Government persist in dealing with them differently they may well come to regret their action. However, for the moment I am concerned only with teachers in sixth form colleges.

The amendment could hardly be more explicit in tackling head-on the inconsistency to which I have referred. It aims to ensure that after the control of sixth form colleges is transferred in April 1993 from local education authorities to the new councils the statutory conditions of employment defined in subsection (2) of Clause 1 of the Bill of teachers occupying posts in sixth form colleges will continue to be determined by the school teachers' review body. There would thus be a common pay structure for teachers in sixth form colleges and those teaching in sixth forms in secondary schools. That would seem to me to be eminently desirable as the work undertaken by teachers at the relevant level in both types of establishment is essentially the same.

A further basic principle is involved. I live in Cheshire, a county providing an education service which for years has been regarded as one of the finest in the land. Its director of education has told me that when the principals of the county's three sixth form colleges first learnt of the Government's proposal to place their colleges, without any prior consultation and for all purposes, including funding, outside the control of the local education authority they were shell-shocked. I am glad to say that they have now recovered and show every sign of putting up a spirited defence.

This week I spoke to the principal of the highly regarded sixth form college in my own home town, Northwich. It was formerly a grammar school and was established as long as ago as 1553. It is still called after its Elizabethan founder, Sir John Deane. For some years now the college has been over-subscribed by 50 or 60 students annually. The principal told me that he greatly values the support that he has received from the local education authority and much regrets that no role is envisaged for it in the new sector which is to operate from April 1993. Indeed, he finds the references in the White Paper to LEAs perverse. The departure from local accountability involved in transferring control of sixth form colleges to the new councils is, for him, a matter of great concern. I stress to the Committee that my informant is a leader in the front line of education who has to deal as best he can on the ground with what we as politicians decide.

The councils' advisory committees will have to cover areas far larger than counties and cannot possibly respond adequately to local needs or understand the role now played by each college. That applies especially to the employment conditions of sixth form college teachers which relate not only to what are called in the Bill their professional duties and working time but also to responsibilities which they now willingly accept and which are much wider than those involved in their teaching commitments. The decisions of the councils will necessarily be arbitrary. Through their regional committees they will have to employ large numbers of staff to develop a comprehensive local network and thus put in place yet another bureaucracy. The Government are forever talking of the need for more local accountability but in their actions handing more and more over to central control. The time has come to call them to account.

As I have said, two fundamental principles are at stake. I hope that the Committee will now consider very carefully the way in which the amendment proposes that those principles should be dealt with. I beg to move.

4.45 p.m.

Lord Peston

In offering my support for the amendment, to which I have added my name, I too am making my first contribution to your Lordships' deliberations on the School Teachers' Pay and Conditions (No. 2) Bill. My name was down to speak at Second Reading. I had intended to reply to the debate on behalf of the Opposition, but since there was no debate there was nothing for me to reply to and I decided not to waste your Lordships' time. I am extremely annoyed with the noble Baronesses, Lady Cumberlege and Lady Denton, because if they had spoken I should have had an opportunity to speak.

I assume that the Government have thought about the subject. Having suggested in the White Paper that sixth form colleges will become part of the further education sector and therefore will come under the further education funding councils in due course, they must have seen the logical problem which the noble Lord, Lord Rochester, has put to the Committee. I also assume, and look to the Government for reassurance, that sixth form colleges are expected to remain in existence. I raise that matter because perhaps the problem could be solved by having no sixth form colleges. Therefore, I should like the Minister to make some remarks on that point.

If we have both sixth form colleges and sixth forms, and I assume that we shall, logically we ought to accept that we should treat like with like. We have the old cliché of the level playing field: teachers ought to be paid on the same basis. The amendment states that they ought to be treated in that way under the Bill. Further, it states that the problem has to be solved one way or another. One of the questions which troubles me is that further education councils are called funding councils and will therefore be expected to be involved in matters with which the review body is involved.

The problem arises from government initiatives, which may be good or may be open to criticism. The issue cannot be left hanging. This is the only Bill we have dealing with school teachers' pay and conditions and the matter must therefore be raised under this heading. In supporting what the noble Lord, Lord Rochester, said I am not telling the Government that there is a problem, but I should like enlightenment as to how they propose to solve the problem.

Baroness David

Perhaps I may add a word or two before the Minister replies. I am a governor of a sixth form college. We have had a meeting since the White Paper was published and I have therefore heard a great deal about the anxieties of staff in such colleges. Unlike my noble friend Lord Peston, I doubt very much whether the Government thought very much about the position of sixth form colleges and their staff before the White Paper was published.

Staff in the colleges work under school regulations. Presumably after 1993 that will change. Obviously there has been no consultation because the staff are very uncertain as to what their position will be and how it will change. Their colleagues in sixth forms in schools will continue to work under the same regulations as now. I should very much like to ask the Government whether they have thought about that aspect and to say a little more about their plans for sixth form colleges in the future.

Certainly when I was there the staff were uncertain about what their future would be. They had not made up their minds because they had not had time to have a great many discussions about what was wanted for the future. The arrangement in the White Paper seems to me very peculiar. I hope that a good deal of further thought will be given to it. In the meantime I hope that this amendment can be accepted, or at least that the Government will agree to look at it.

Lord Cavendish of Furness

The noble Lord, Lord Rochester, and other noble Lords are concerned about the status of teachers in sixth form colleges—and I can assure the noble Lord, Lord Peston, that sixth form colleges will remain—following the Government's reorganisation of further education. I should perhaps give notice here that, with respect, I suspect that we have found some technical deficiencies in this amendment, and I shall come to them later. I shall deal, first, with the framework of the Bill.

I think that the noble Lord, Lord Rochester, went further and challenged the policy of sixth form colleges moving into a new sector. The Committee will be aware of the Government's proposal to establish a new framework for the education and training for the 16 to 19 age group. The aim is to bring coherence to an area of education vital for the future both of the nation and of the students themselves. The Government therefore intend to create a unified FE sector incorporating both colleges of further education and sixth form and tertiary colleges. If we are to bring about the improvements which we seek, it is important that this whole new sector should be permitted to develop as a coherent whole. Separate arrangements for determining the pay and conditions of a minority of the teaching staff would perpetuate divisions no longer relevant.

The effect of this amendment would be that the teaching staff in former sixth form colleges would continue to fall within the scope of the review body, while those in colleges of further education would have their pay and conditions determined by the arrangements which emerge. That would not be right. As the White Paper Education and Training for the 21st Century—to which the noble Lord, Lord Rochester, referred—makes clear, the best way forward for all colleges in the new sector is for pay and conditions to be settled through negotiations between employer and employee. We believe there should be the maximum freedom for institutions to determine such matters in response to their own needs and circumstances. The detailed arrangements will of course need to be considered by the colleges themselves, with the staff concerned and with the Government.

We believe that students in this age group will be better served by self-governing institutions which are responsive to student demand and to the needs of the labour market. Sixth form colleges are large institutions which have a great deal in common with colleges of further education. They should enjoy the same freedom.

How will the transfer work? Staff in both colleges of further education and sixth form and tertiary colleges will initially be transferred to the employment of the institutions in the new sector on their existing pay and conditions. At the point of transfer the statutory pay and conditions arrangements which apply to school teachers, and hence to teachers in sixth form colleges, would cease to apply to those staff because at that moment those institutions cease to be schools. After transfer it will be for the teachers themselves and their future employers, the governing bodies of sixth form colleges, to decide on future pay and conditions.

In the future, as now, there will be a schools sector and an FE sector. There is of course room for argument about where the dividing line should be. This is where we have given it a lot of thought. I have explained that the Government firmly believe that sixth form colleges have more in common with FE colleges than they do with the schools sector, and that, in effect, the line should be repositioned. The noble Lord, in suggesting that there is a contradiction between asking the review body to make recommendations on the statutory conditions of service of sixth form teachers in schools, and requiring teachers in sixth form colleges to become part of the new FE sector, is in effect suggesting a different positioning of the line.

I said that I would speak about the technical deficiencies, and I can see that this would be a difficult amendment to draft. In speaking in the debate noble Lords have made clear that they want teachers in what are now sixth form colleges to continue to have their statutory conditions of employment determined on the basis of recommendations of the school teachers' review body. I have already indicated that I do not think that that would be desirable. I am not even sure whether this amendment would achieve that.

First, it speaks in terms of posts which are created, varied and removed by LEAs or governing bodies from time to time. Secondly, teachers in sixth form colleges would be protected only if the college's change in status was to follow the establishment of the bodies referred to, necessarily in rather a general way, in this amendment. But the very generality of these words leaves unclear precisely what new arrangements would fall within them.

Your Lordships' Committee rightly rejects the practice of dismissing proposed amendments simply because the drafting is not faultless. If the spirit is right, the right drafting will follow. In this case, however, the technical difficulties are rather of the essence of the problem. In seeking to put sixth form colleges and teachers, after they have in fact left the school sector, within the ambit of the school teachers' review body, this amendment would treat as school teachers a group of people who would plainly be something else in common sense as well as in statutory definition.

The Government's objectives are to improve standards and efficiency and to raise the status of education. Our policies for school teachers and for the FE sector will, in their different ways, do precisely that. But the two sectors have different structures and different needs. The mechanisms to raise standards and efficiency reflect those differences. I hope that with that explanation the noble Lord may feel able to withdraw his amendment.

Lord Renton

Perhaps I may add one point. We should bear in mind the Long Title to the Bill. It says: An Act to make provision with respect to the remuneration and other conditions of employment of school teachers". As my noble friend Lord Cavendish has pointed out, this would bring within the competence of the review body the wages and conditions of people who technically under the Bill are not to be regarded as school teachers at all.

As I understand it, therefore, this amendment could not be made without altering the Long Title. That is borne out by a reference in the amendment to Clause 5 where a school teacher is defined as, a teacher employed by—

1. (a) a local education authority, or
2. (b) the governing body of a voluntary or grant-maintained school,

in the provision of primary or secondary education". It does not include further education at all.

Lord Cavendish of Furness

I would say to my noble friend that I cannot give him a definitive answer, but I think that the noble Lord, Lord Rochester, has acknowledged the point that the Long Title would need to be altered.

Lord Renton

I am sorry. I did not hear that.

Lord Peston

The key fact is that sixth form college teachers are school teachers. They come fully within the Long Title of the Bill. The noble Lord, Lord Renton, in misunderstanding the nature of the Bill, does not realise the logical consequence of this and other bits. If I may say so to the noble Lord, Lord Cavendish, he has not faced up to the logical problem here. I am not seeking to get involved in a debate on where we ought to draw the line between further education arid the schools or to ask (although I could disagree with him on another occasion) whether the sixth Form colleges have more in common with the FE sector than with the school sector. We can debate that at some time. The key point is that the noble Lord acknowledged that in, say, three years' time, there will be sixth form colleges and there will be sixth forms.

I understand that the Government, and certainly we, favour both sorts of institution. We also believe that they both do what is called sixth form work, if I may define that. I think it follows—and this is the point that the noble Lord, Lord Rochester, led us to — that there must be a great deal in common (indeed, I would go further and say that there must be identity) between the remuneration and conditions of employment of the two sorts of people: one lot in sixth form colleges and the other lot in schools.

I should like to hear what the noble Lord, Lord Rochester, says about how well our amendment was drafted, because I am not in that business, as the noble Lord himself is not. However, we have a point here of great importance. Let us suppose that the review body awards a particular award for the sixth form teachers and that is different from what would then be the sixth form colleges. Either the former is better than the latter and the latter will have difficulty in recruitment, or it is worse than the latter and the former will have difficulty in recruitment. One or other will not be able to operate properly in terms of the labour market. Therefore, they have to be the same. If the statutory body fixes the remuneration of sixth form teachers, they will determine the remuneration of sixth form college staff. That is the nature and logic of the problem. All we are asking at this stage is whether the DES will tell us how the problem is to be solved. I am sorry to intervene a second time, but that is the answer I was looking for.

5 p.m.

Lord Rochester

I should like to thank those who have taken part in this short debate, in particular the noble Lord, Lord Peston, who has saved me the trouble of responding to the noble Lord, Lord Renton. I am not sure whether the noble Lord, Lord Renton, was in his place at the time, but I said in my opening speech that for the purposes of Clause 5 of the Bill, sixth form college teachers were school teachers. There may be a difference of view; but it is upon that that I have based the amendment.

Lord Renton

I was in my place when the noble Lord started to move the amendment, but I did not hear him say (perhaps it was sotto voce) that the Long Title would have to be amended.

Lord Cavendish of Furness

In response to Lord Peston, it is not a question of how one draws the line. The line is not being drawn for the convenience of the Government; it is a matter of policy that we want to have sixth form colleges in a new sector. Furthermore, we take the view that in large measure the people teaching in both do different things. Of course there will be arguments saying that in large measure they do the same things because in many sixth forms of schools they will be teaching younger people and taking part in other school activities. It has not simply been a matter of trying to find a convenient way of doing it; it is deliberate policy.

Baroness Blackstone

Perhaps the noble Lord speaking for the Government can clarify whether he is saying it is the Government's definitive view that teachers in sixth form colleges do quite different things from teachers in sixth forms. If that is the Government's position, I am extremely surprised because I do not believe it to be the fact.

Lord Cavendish of Furness

I acknowledge that many of the things are the same; but it must also be self-evident that teachers in sixth form colleges do different things from teachers of sixth forms in schools.

Lord Rochester

I am disappointed but not surprised by the response of the noble Lord, Lord Cavendish of Furness. When I referred to the Long Title it was to say that I appreciated colleges of further and higher education education and universities did not come within it and were therefore not included in the amendment. For the purpose of moving the amendment, I see no reason to alter the Long Title of the Bill. I am satisfied, as is the noble Lord, Lord Peston, that sixth form college teachers come within the Long Title of the Bill as at present constituted.

In moving the amendment, I made plain that acceptance of it by the Government would involve them in changing course on two major matters of principle in a way which would mean that all teachers at secondary schools and sixth form colleges would continue indefinitely to have their pay and other statutory conditions of employment determined in the same way, and that the funding of sixth form colleges for this purpose would not be handed over to the new central councils which the Government propose to set up.

The noble Lord, Lord Cavendish, talked about there being a difference between the Government's view and that expressed on this side of the Committee as to where the line should be drawn. I hope I made it plain in passing when moving the amendment that I knew very well in my own mind where the line should be drawn. Indeed, there should be no line at all in the sense that for the purpose of pay determination it still seems to me that all elements of education should be treated in the same way and if a pay review body is good for one set (in this instance school teachers) it should be good for others as well.

The ground has been well covered in the debate and I do not propose to go over it again. Major principles are involved, and there is clearly a sharp difference of view between the Government and those on this side of the Committee as to how those principles should be dealt with. Despite the technical deficiencies which the amendment may have we are dealing with the principles of the Bill, as the noble Lord, Lord Cavendish, said. I judge that there are at least two basic principles involved, and in those circumstances I feel I have no alternative but to divide the Committee.

5.7 p.m.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 55; Not-Contents, 102.

Division No. 2
CONTENTS
Ardwick, L.	Morris of Castle Morris, L.
Aylestone, L.	Murray of Epping Forest, L.
Blackstone, B.	Nicol, B.
Boston of Faversham, L.	Ogmore, L.
Carmichael of Kelvingrove, L.	Peston, L.
Carter, L.	Pitt of Hampstead, L.
Chelmsford, Bp.	Rea, L.
Cledwyn of Penrhos, L.	Redesdale, L.
Cocks of Hartcliffe, L.	Richard, L.
David, B.	Ritchie of Dundee, L.
Dean of Beswick, L.	Rochester, L.
Dormand of Easington, L.	Sainsbury, L.
Ewart-Biggs, B.	Seear, B.
Ezra, L.	Sefton of Garston, L.
Gallacher, L.	Serota, B.
Galpern, L.	Shepherd, L.
Gladwyn, L.	Stoddart of Swindon, L.
Graham of Edmonton, L. [Teller.]	Taylor of Blackburn, L.
	Tonypandy, V.
Hampton, L.	Tordoff, L. [Teller.]
Hanworth, V.	Underhill, L.
Harris of Greenwich, L.	Wallace of Coslany, L.
Hilton of Eggardon, B.	Whaddon, L.
Hollick, L.	White, B.
Jeger, B.	Williams of Elvel, L.
Jenkins of Hillhead, L.	Wilson of Langside, L.
Kilbracken, L.	Winchilsea and Nottingham, E.
Lockwood, B.	Winterbottom, L.

NOT-CONTENTS
Abinger, L.	Brabazon of Tara, L.
Aldington, L.	Bridgeman, V.
Alexander of Tunis, E.	Brigstocke, B.
Ampthill, L.	Brougham and Vaux, L.
Arran, E.	Butterworth, L.
Astor, V.	Caithness, E.
Astor of Hever, L.	Cavendish of Furness, L
Attlee, E.	Clanwilliam, E.
Belhaven and Stenton, L.	Cockfield, L.
Beloff, L.	Cork and Orrery, E.
Belstead, L.	Craigavon, V.
Blatch, B.	Cumberlege, B.
Blyth, L.	Darcy (de Knayth), B.
Boyd-Carpenter, L.	Davidson, V. [Teller.]

Denham, L.	Monk Bretton, L.
Denton of Wakefield, B.	Montgomery of Alamein, V.
Eccles of Moulton, B.	Morris, L.
Elibank, L.	Mottistone, L.
Elliot of Harwood, B.	Mountevans, L.
Elliott of Morpeth, L.	Mowbray and Stourton, L.
Elton, L.	Moyne, L.
Faithfull, B.	Murton of Lindisfarne, L.
Flather, B.	Nelson, E.
Fraser of Kilmorack, L.	Nelson of Stafford, L.
Gainsborough, E.	Newall, L.
Grantchester, L.	Norrie, L.
Gray, L.	Nugent of Guildford, L.
Gridley, L.	Oppenheim-Barnes, B.
Hailsham of Saint Marylebone, L.	Orkney, E.
	Oxfuird, V.
Haslam, L.	Pearson of Rannoch, L.
Hastings, L.	Pender, L.
Henley, L.	Quinton, L.
Hesketh, L. [Teller.]	Rankeillour, L.
Hives, L.	Reay, L.
Holderness, L.	Renton, L.
Hooper, B.	Renwick, L.
Howe, E.	Rodney, L.
Hylton-Foster, B.	Savile, L.
Jeffreys, L.	Soulsby of Swaffham Prior, L.
Joseph, L.	Strathclyde, L.
Knollys, V.	Strathmore and Kinghorne, E
Lawrence, L.	Sudeley, L.
Long, V.	Swansea, L.
Mackay of Ardbrecknish, L.	Thomas of Gwydir, L.
Mackay of Clashfern, L.	Trumpington, B.
Macleod of Borve, B.	Ullswater, V.
Mancroft, L.	Vaux of Harrowden, L.
Marlesford, L.	Vinson, L.
Marsh, L.	Wade of Chorlton, L.
Merrivale, L.	Young, B.
Mersey, V.

Resolved in the negative, disagreed to accordingly.

5.14 p.m.

Lord Peston moved Amendment No. 4: Page 1, line 18, after ("considerations") insert ("(not including financial constraints)").

The noble Lord said: This amendment stands in my name and that of the noble Lord, Lord Rochester. It is the first explicit move into the area of finance. I hasten to tell the Minister that the purpose of the amendment is to draw out the Government in order to give some explanation of what they have in mind by what I call the financial side to the Secretary of State's directions to the review body.

I understand the nature of the problem. On the one hand, we want to have a review body which will be independent, which means that it would be pointless for the Secretary of State to tell it what it had to report or to constrain it in such a way that it had no choice about what it reported. At the other extreme, a review body which did not take account of what I might call the facts of life would be quite useless and the Secretary of State would again have to take over the role.

I understand that some directions have to be given, and parameters—the rules of the game or whatever —have to be laid down. I am trying to discover what the Secretary of State intends, bearing in mind that hanging over all our deliberations on these matters is the interim advisory committee. We have had several years' experience of that committee. This is not the interim advisory committee, but I assume that lessons have been learnt from that committee, which was distinctly financially constrained.

As I understand it, the Secretary of State has said that he will not impose a financial constraint—those are the exact words. I did not hear him speak, so I did not hear which of the words he emphasised. My guess is that he emphasised the word "constraint" rather than ally other. In other words, he had some intention of calling to the attention of local authorities what I have called the facts of life. He must be willing or intend to ask them to consider what can be afforded.

I want to know what the Secretary of State will do and what he will offer to the review body as guidance or parameters. I assume that he will also guide them to matters other than financial considerations. Presumably he will draw attention to problems relating to recruitment of teachers, to fairness and so on. But what will he in fact say?

The wording of the amendment has been chosen to reflect the fact that we understand that the Secretary of Stale has said that he will not lay down financial constraints. That is why we have chosen that wording to put in the Bill. Our purpose is not so much to have the words inserted in the Bill as to know what he will say to the review body.

In that connection, I should like to raise the technical point of how the review body will work. It must harmonise with the rest of the Government's education policy; and a very important aspect of that education policy is the fact that many schools—in due course perhaps almost all schools—will have delegated bodies, and the school governing body will be the relevant body, as it is called technically. The LEA will then be under a duty to act upon the governing body's decision and make appropriate payments to the teachers concerned.

There seems to be a lack of connection between the parameters laid down under the pay and conditions order, that the review body will have made its recommendations in the light of the guidance of the Secretary of State in terms of what is affordable, and that there will be schools with delegated budgets which have to be in a position to do what they want to do, bearing in mind their assessment of their needs. To make again the logical point: if schools are not to be free to make their own decisions, why have we delegated budgets to them in the first place?

I ask for enlightenment. I do not say that the problem has not been solved. I assume that the DES has locked at the problem and can tell us the solution. But I want to know how the whole financial structure will operate. I have used the amendment as a peg, as has the noble Lord, Lord Rochester. The phrase "not including financial constraints" is useful. I should like education for myself and other noble Lords on what the Secretary of State has in mind.

Lord Rochester

Having put my name to the amendment, perhaps I may say a few words in support of the noble Lord, Lord Peston.

In Standing Committee in another place there was interminable argument, as there often is, concerning the distinctions to be drawn between "directions", "considerations" and "constraints". The Government insisted that, whereas under the 1987 Act the Secretary of State could impose financial constraints on the interim advisory committee, there was nothing in the Bill providing for such constraints. Under the Bill the Minister could only direct the review body to have regard to certain considerations.

At col. 60, the Minister of State, Mr. Eggar, said: A constraint is binding … The review body will be required only to have regard to a consideration—then, having had regard to that, it would form its judgement and recommend whatever it thought fit. It will not he bound by a cash limit or by any other constraint. It will be what we have always said that it would be—a review body". He stated that the critical word was "considerations". That is the word on which the noble Lord, Lord Peston, seeks elaboration from the Government.

I support the amendment. It seeks to take the Government at their word and to cut through the doubts and different interpretations to which the word "considerations", and others, give rise. It seeks to make absolutely plain on the face of the Bill that in its deliberations the review body will not be bound by any financial constraints. If the Government mean what they say, they should be happy to accept the amendment, as I hope they will.

Lord Cavendish of Furness

We do not wish to accept the amendment. The Teachers' Pay and Conditions Act 1987 gives the Secretary of State the power to impose a financial constraint on the interim advisory committee. The Bill gives the Secretary of State no such power in respect of the school teachers' review body. That is perhaps the most important difference between the Act and the legislation which the Government propose to put in its place. The noble Lord, Lord Peston, accepts that. Indeed, from what he said in the debate, he acknowledges the clear distinction between the "constraints" of the 1987 Act and the "considerations" to which, under the Bill, the Secretary of State may direct the review body to have regard.

Perhaps I may quote from my right honourable friend's Statement on 17th April. He said: These considerations will include, as now, the Government's view that the school teachers' pay should be such as to recruit, retain and motivate sufficient staff of the appropriate calibre within what can be afforded, as expressed at present in the level of education standard spending set by the Government". [Official Report, Commons, 17/4/91; col. 434] The noble Lord accepts that the financial constraint on the IAC was binding, whereas the review body will simply be required to "have regard to" a consideration. Having done so, it will form its own judgment on the matter in question and recommend precisely as it thinks fit.

However, the noble Lord appears to need reassurance. His amendment would prevent the Secretary of State from giving the review body a direction that it is to have regard to a financial constraint. I suspect that this is in fact a contradiction in terms.

Be that as it may, I hope I can reassure him on the substance of his concern. As it is now drafted—even without the noble Lord's amendment—"constraints" of any kind are ruled out. I am not asking him to accept that the Secretary of State has a power which he will either never use, or use only benevolently. My right honourable friend cannot choose whether or not to impose a constraint on the review body. He does not have the power even to make that choice. In the absence of that power under this Bill my right honourable friend simply may not "constrain" the review body as he is able to constrain the IAC. Any attempt to do so could simply be ignored by the review body. By its very silence on the matter the Bill gives the noble Lord precisely the assurance which he seeks.

One of the considerations to which the review body will have regard is affordability, as expressed in the level of education standard spending. I do not believe that the noble Lord would wish otherwise. Most teachers are paid for by local education authorities. The resources at the disposal of those local authorities will be one consideration that the review body will need to bear in mind. However, that is not the same as financial constraint, as the noble Lord's amendment acknowledges.

With that education, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Peston

I thank the noble Lord for his answer. I ask for one additional clarification. I understand that the Secretary of State cannot say categorically to the review body, "You are constrained to do this". I give an example. The Secretary of State can either say to the review body, "Compared with last year's pay settlement you are constrained by not being able to make a recommendation this year that will cost more than last year plus the rate of inflation". There are two logical interpretations. The first interpretation is that the Bill says that he must not say that. The second is that the Secretary of State can say that to the review body but it does not have to take notice of it because he ought not to do so. I am not anxious either way but I should like clarification. Can the Secretary of State not constrain the review body; or, if he tries to constrain it, should it behave as though he had not tried to do so? Can the noble Lord assist me? He knows that I shall not pursue the matter. However, it interests me to know the department's interpretation.

Lord Cavendish of Furness

I am quite sure that my right honourable friend can ask the review body "to have regard". I am absolutely certain that the review body can then go its own way. I repeat a sentence that is on the record. Constraints of any kind are ruled out.

Lord Peston

That is an extremely helpful reply. I am glad to have it on the record. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.30 p.m.

Lord Ritchie of Dundee moved Amendment No. 5: Page 1, line 20, at end insert: ("( ) The review body may also examine and report on such matters relating to the statutory conditions of employment of school teachers in England and Wales as they think fit.").

The noble Lord said: I too must add my apologies for not having been able to be present at the Second Reading. The proposed review body is the Government's final response to the plight of the teachers who for four years have been without negotiating powers, and who prior to that had a system which did not work—the Burnham machinery. It is therefore of the utmost importance that all matters of pay and conditions of work should be able to be discussed, including matters raised by the teachers themselves. I stress "conditions" because, as the noble Lord, Lord Belstead, pointed out at Second Reading, it will be the only review body which deals with conditions as well as pay.

We are somewhat anxious that Clause 1(4) implies that the only matters which may be considered by the review body are those which have been referred to it by the Secretary of State.

Perhaps I may just remind your Lordships that the clause states: With respect to matters referred to the review body by him, the Secretary of State may give directions to the review body as to considerations to which they are to have regard and as to the time within which they are to report; and any such directions may be varied or revoked by further directions under this section".

We know that it is the Government's intention that there should be free discussion within the review body because we have the assurances which the Minister, Mr. Eggar, gave in the Commons Standing Committee. He pointed out that Clause 1(1) of the present Bill follows Section 2(1) of the Teachers' Pay and Conditions Bill 1987 which set up the interim advisory committee. That committee had been totally free to discuss any matter which it thought fit.

At the first sitting of the Standing Committee Mr. Eggar said that it was the Government's intention to give the review body: exactly the same latitude to make recommendations across the whole range of teachers' statutory pay and conditions as has been given to the IAC. The review body will be able to work to its own agenda".

We also have the words used by the noble Lord, Lord Belstead, on Second Reading. He said: Can the Secretary of State prevent the review body from considering any matter? Again it is important for me to say that from my reading he cannot. Clause 1 defines the review body's duty to make recommendations on any specific matter referred to it and to report within a set time. But its report will be able to range more widely if it considers that to be appropriate". He went on to say: my right honourable friend would expect to invite the review body to address any matter concerned with school teachers' statutory conditions of employment as it thinks fit. In fact, a review body would not need such an invitation. When it has been asked to report on any matter, it would be able to recommend any other matter if it thinks fit. The Bill does not preclude that".—[Official Report, 21/6/91; cols. 361–2.] That being the case, why should the latitude granted to the review body not be expressed on the face of the Bill? My argument is the usual one—that government assurances do not outlast governments. May it not be the case that another government, of whatever political complexion, would view the matter differently and ignore all recommendations from the review body which were not strictly in response to their own directions?

I should have liked to take the matter further by tabling an amendment which would ensure that machinery was in place to enable teachers and their representatives to suggest issues for consideration by the review body. As far as I can tell, there is no mention of such an allowance explicit or implicit in the Bill.

However, again we have the words of the Minister in Standing Committee. He said: teachers associations and employers in submitting their evidence, will be able to suggest issues that they believe that the review body should consider". Again that is a useful assurance.

However, at present I confine my plea to the inclusion of the words of the amendment as it stands for the reasons I have given; namely, that government assurances are not the same as having the matter written onto the statute book. For that reason we should like to see it included on the face of the Bill. I beg to move.

Baroness David

I support the amendment. We wish to stress the independence of the review body. Indeed, that was underlined on Report in another place when Mr. Eggar confirmed that the secretariat would be provided by the Office of Manpower Economics. That was the subject of an amendment in Committee which was turned down. However, that assurance was given on Report and there will be an independent secretariat. We wish to stress that total independence of the review body and that it can consider all matters which it believes to be relevant. If the words of the amendment can be added, that will make the position clearer I support what the noble Lord, Lord Ritchie, said.

Lord Renton

It seems to me that there are two quite separate issues. First, whose initiative is it to be to get the review body to consider matters within the ambit of the Bill? The Bill makes it quite clear that at present it must be the initiative of the Secretary of State. Clause 1(1) states: such matters relating to the statutory conditions of employment … as may from time to time be referred to the review body by the Secretary of State". Here it is suggested that teachers or their representative bodies should use their own initiative, irrespective of what the Secretary of State considers should be referred to the review body. I have grave doubts about that. I should have thought that the right thing to do—and it can be done within the scope of the Bill—is for any teachers who feel that a particular matter relating to pay and conditions of employment should be considered by the review body should ask the Secretary of State to consider it. That puts the matter into proper order rather than confusing the situation.

Similarly, if the review body wished to use an initiative, it should be required to ask the Secretary of State. After all, the Secretary of State is given the responsibility by Parliament to administer this new scheme. He can be questioned by Parliament as to what he does. However, there is no suggestion that members of the review body who use their own initiative or teachers' organisations which use their own initiative could be questioned in Parliament; they could not. It is best to focus responsibility upon the Secretary of State because he can then be challenged by Parliament on what he does.

I turn from the initiative of getting matters considered by the review body to the separate issue of what matters they should be. Under the amendment it is suggested that they should be such matters relating to school teachers "as they think fit". That is ambiguous. I do not know whether it refers to the review body or the teachers. The amendment does not make that clear. I do not believe that we have been told about that.

On Page 1, line 21, there is less ambiguity. It refers to the review body being given the opportunity to choose matters. As regards what the matters should be, do we really need to go beyond what is stated in Clause 1(2) under the definition of "statutory conditions of employment" because that is fairly wide? In relation to school teachers it means their remuneration—that is plain enough—and: such of their other conditions of employment as relate to their professional duties and working time". "Professional duties" embrace a very wide range of possibilities. I should not have thought it reasonable that the review body should be required or enabled to consider matters which go beyond remuneration, professional duties and working time. Therefore I would not expect my noble friend on the Front Bench to accept the amendment. Indeed, I go further; I hope that he does not.

Lord Cavendish of Furness

I thank the noble Lord, Lord Ritchie, for exploring this area. The noble Lord expressed anxiety that the review body might be prevented from making recommendations on matters which it would otherwise have wished to address. He suggests that that is the implication of Clause 1(1), which requires the Prime Minister to appoint a review body to examine and report, on such matters as may from time to time be referred to it", by the Secretary of State. That concern lies behind this amendment, the effect of which would be to specify on the face of the Bill that the review body had the power to consider and to make recommendations on such matters relating to statutory conditions as it thinks fit.

The amendment is unnecessary simply because the review body can decide to address matters other than those specifically referred to it by the Secretary of State; it would in fact require a specific provision in the Bill to remove or constrain it in the way that the noble Lord fears might happen. The Bill defines duties. In this case the Prime Minister's duty is to set up the school teachers' review body for this purpose, and the review body's duty is to examine and report on the matters referred to it within a specified time.

The review body will be able to work to its own agenda. It does not require an amendment to the Bill to be able to do so. It can address issues suggested to it by teacher associations and employers, when they submit their evidence, if that seems right. It will certainly be open to the Secretary of State to make a more limited reference to the review body on, say, a specific conditions of employment matter that needs immediate attention. It has been the frequent practice of some of the health service review bodies to work to a limited reference and to make a supplementary report restricted to that limited area. It is sensible to allow for similar references to be made to the teachers' review body.

In regard to regular references, existing review bodies are invited to report on a regular basis. But it would be open to the Prime Minister in any specific year to request a report by a different date from that in previous years. Indeed, a few years ago my right honourable friend the then Prime Minister asked the review bodies to report in January rather than, as had been previous practice, some two months later. There might equally be a good reason for asking it to report a month or two later. It is sensible for the Secretary of State to have the same kind of flexibility in respect of the school teachers' review body. But, as I have said, and as right honourable and honourable friends made absolutely clear in another place, references to the review body will be made on a regular basis.

I hope that I have given some reassurance to the noble Lord, Lord Ritchie of Dundee, and that he will now feel able to withdraw his amendment.

Lord Ritchie of Dundee

I do not doubt the good faith of Her Majesty's Government in their assurances that the review body will have the maximum freedom to discuss all that it feels it should and can. But I also take the point made by the noble Lord, Lord Renton, that there are two aspects to the situation. One is the matter of initiating issues to be discussed; how that can and should be done; whether it should be done, as he suggests, via the Secretary of State, and if not that way, what other way. The other matter is the question of whether it has total freedom to discuss matters of its own concern.

I do not believe that the position is sufficiently clear in the Bill as it stands. I am also not satisfied that my proposed amendment makes the position any clearer. In those circumstances I shall think again about the matter and come back at Report stage with perhaps a more carefully thought-through suggestion. Therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

Clause 1 agreed to.

Schedule 1 [The review body]:

[Amendment No. 7 not moved.]

5.45 p.m.

Baroness Davidmoved Amendment No. 8: Page 8, line 8, after ("body") insert ("shall be that number of members which is equivalent to a simple majority of its full membership at the time concerned").

The noble Baroness said: The purpose of Amendment No. 8 is to ensure that a reasonable number of members of the review body are involved in agreeing recommendations to the Secretary of State. The amendment provides for a variable quorum of between three, where the minimum five members have been appointed, and five where there are the full nine members.

As presently drafted, Schedule 1 states that, The review body shall consist of not less than five and not more than nine members".

It states also that, The quorum of the review body … shall be such as the review body may determine". The combination of the provision for a membership of as few as five and the review body being able to set its own quorum may mean that two individual members of the review body can agree on recommendations to go forward to the Prime Minister and the Secretary of State. Our view is that that would be unsatisfactory and more specific arrangements in regard to the review body's quorum should be included on the face of the Bill.

In Committee in another place Mr. Fallon said, Amendment No. 31 is unnecessary. I agree that some ground rules about how the review body is to operate must be set out in the statute but those need not include detailed 'housekeeping arrangements"'—[Official Report, Commons, Standing Committee A, 14/5/91; col. 85.]

To refer to the issue of minimum membership requirements in the quorum of the review body as merely a discussion on "housekeeping arrangements" seems very curious. It belittles the serious intent of the original amendment and ignores the fact that it is considered an important enough subject to have specific reference in Schedule 1, paragraph 4, of the Bill.

The matter is surely more important than, for example, the expenses for the chairman and members, for which provision is carefully made in the Bill in Schedule paragraph 3. The arguments in support of the amendment are similar to those in support of the amendment which called for the review body to include within its membership people with the relevant knowledge and experience of education. That was not accepted by the Committee.

Essentially, it is argued that without proper safeguards as envisaged by the amendment it would be possible for a small number of people, which may not include any one with relevant knowledge and experience, to make recommendations to the Prime Minister and the Secretary of State on significant and wide-ranging changes to both pay and the statutory conditions of employment of school teachers. We want Schedule 1, paragraph 4, of the Bill to read, The quorum of the review body shall he that number of members which is equivalent to a simple majority of its full membership at the time concerned". Further, it should state, arrangements relating to their meetings shall be such as the review body may determine". That is eminently reasonable.

Because the nature of the review body of school teachers is so different from that of other review bodies, we believe that the minimum requirement for its operating quorum should be included within the provisions of the Bill. Mr. Fallon's statement omitted to say what the Government's proposed arrangements for the review body's operation were. Amendment No. 8 provides a further opportunity for the Government to say what their thoughts are on the matter. I beg to move.

Baroness Seear

I want to support Amendment No. 8, to which I added my name, from the point of view of my experience of sitting as a member of a review body for a number of years. A great many matters arise of a technical or semi-technical nature. That is why, included as members, there must be a wide variety of people with a wide range of experience between them, not only carrying out the work, but making recommendations. I regret that we did not accept the recommendation to include two people with educational experience.

Preparing a review body report is an extremely technical job. It needs a wide range of knowledge to produce a good report. If the key people are not there because too small a quorum has been allowed, we are apt to obtain a much worse report than would otherwise be the case.

Baroness Denton of Wakefield

Perhaps I may comment briefly on the amendment moved by the noble Baroness, Lady David, and supported by the noble Baroness, Lady Seear, that the quorum for a review body be defined by a simple majority of the full body. I fear that that would handicap the chairman in his ability to deliver the best possible report, and on time—the latter being of particular importance to the teachers.

We all brought different skills, strengths and knowledge to the interim advisory committee. We were effective because these were directed efficiently. In the final resort it was not just the majority of the committee but the whole committee that met, discussed and was responsible for the report. No one joins such a body lightly. It is an honour and a privilege to be invited to serve. But each individual also has responsibilities to the employer, the employees, the family and not least the bank manager. I believe that it would be very wrong to try to direct how to manage the contribution which is brought to the body. The review body should have freedom in that matter.

Lord Renton

The Bill follows a precedent which has been used dozens of times in our statute law; namely, to allow a quango or any statutory body which we establish to try to choose what its own quorum should be and to do so from time to time. There, Are several good reasons for that precedent. The first is that we expect distinguished and responsible people to be appointed. We should not try to lay down in too much detail the way in which they conduct their proceedings.

I hope that the second reason too is regarded by Members of the Committee as a sound one. There should be limits to the amount of detail that we go into of a purely administrative kind when we enact legislation. Our primary and even our secondary legislation is far more detailed than that found in other European countries. For us to try to depart from precedent for the reasons that I have given is neither necessary nor desirable in this case.

Lord Cavendish of Furness

I was going to reply to the amendment in very much the same terms as my honourable friend in another place, Mr. Fallon, and say that it is unnecessary. I accept entirely the sincere wish of the noble Baroness, Lady David, to improve the workings of the Bill. We shall be relying on the review body to make recommendations for the pay and conditions of over 400,000 teachers. Its recommendations will play a crucial role in securing high quality education for the nation's children. I am sure that we shall also be relying on the review body to decide how many of its members need to be present at every meeting, perhaps making different provision for meetings serving different purposes. It is exactly that kind of flexibility that this amendment would remove.

I do not believe that the noble Baroness wants to put the review body into too much of a straitjacket. I am very grateful to the noble Baroness, Lady Seear, and to my noble friend Lady Denton for giving the Committee the benefit of their experience. I am also grateful for the wisdom of my noble friend Lord Renton. I tend to the view of my noble friend Lady Denton, and particularly so when the noble Baroness, Lady Seear, refers to technical matters. That reinforces the view that the body might have to split up and deal with different things at different times.

The existing review bodies agree their programme of meetings many months in advance. Most meetings are concerned with considering written or oral evidence. It may not be necessary for even half of the members of the review body to attend all such meetings. As my noble friend said, the review bodies consist of many people of different talents. The review bodies are free to set up sub-committees if that seems sensible. Records of all meetings are circulated to all members, who have the opportunity to comment. Drafts of the final report are circulated in a similar way. My noble friend Lady Denton made the point that the report itself, in the final analysis, is the work of the whole review body. With those remarks, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness David

I thank the noble Baroness, Lady Seear, for her support. I am slightly amused in that we have two members of review bodies who take directly opposite views of the amendment, one believing that it is important that there should be a majority and the other not. I do not see how it would handicap the chairman by having the provision. One hopes that if responsible people are appointed to this extremely important body they will not accept the appointment unless they are able to attend most of the meetings. All we are asking for is a simple majority.

The noble Lord, Lord Renton, spoke of not putting too much detail into legislation. Asking for a simple majority does not seem to be a small detail. I suggest to him that there is already a great deal of detail in Schedule 1 to the Bill. He may find that there is too much detail. I should like to consult about the matter and read carefully what the noble Lord has said. I may well come back to it at the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.

Baroness Blackstonemoved Amendment No. 9:

Before Clause 2, insert the following new clause:

("Statement on Resources

.—(1) Section 2(1) and (5) below shall have effect subject to the provisions of this section.

(2) The Secretary of State shall in making or issuing any order under section 2(1) or (5) below in respect of the remuneration of teachers lay before Parliament a statement that he is satisfied that the resources available to local education authorities in the financial year concerned (whether from locally raised revenue, revenue support grant or fees) are (or, in the case of a subsequent financial year, will be) adequate to enable each such authority without consequential diminishment of resources available to it for other expenditure to make payment to school teachers in the financial year concerned in accordance with section 2(6) (a) below.

(3) Where an order in respect of the remuneration of teachers made in accordance with section 2(1) or (5) below has effect in more than one financial year, the Secretary of State shall before the start of each such year lay before Parliament a statement in accordance with subsection (2) above in respect of that year.").

The noble Baroness said: The new clause proposed in the amendment requires the Secretary of State to make public a statement which can then be debated in Parliament as to the availability of resources in each year to fund an award. The provision does not of itself guarantee funding and neither does it pre-empt resources from other sources. It does not in any way seek to direct public expenditure or create any form of specific grant or hypothecated expenditure as regards teachers' salaries. Under the amendment there would be an examination on an annual basis on whether from the various sources available to them local authorities will have enough money to pay an award made by the Secretary of State without diverting expenditure from other services.

The amendment is not saying that the Secretary of State should necessarily provide additional revenue support grant for the amount of any real increase in pay because local authorities may be able to obtain more revenue through local taxation. However, there are two constraints on authorities' abilities to raise money via the community charge or in future the council tax. The first is capping and the second is the gearing ratio, as it is known in the trade. As to the first, the Secretary of State would need to be able to say either that there had been no capping or that the limits in each case were high enough to enable each authority to fund its award without affecting other services. As to the second, the gearing ratio is currently 4:1 on average under the community charge and 6:1 on average on the projected council tax.

The gearing ratio shows the amount by which local taxation increases or decreases in proportion to an increase in expenditure. Thus in that context a 1 per cent. increase in overall spending to fund the gap in a pay award would produce under the community charge a 4 per cent. increase or a 6 per cent. increase in relation to the council tax. It would then be a matter for Parliament, in debating the Secretary of State's statement, to take a view on the practicability of expecting authorities to levy quite high increases of that kind while at the same time retaining confidence locally in the quality of the local authority administration.

The amendment also requires the Secretary of State to lay a statement in each year where a payment is made over more than a year.

Unfortunately, the Government have left the authorities, as employers, in a rather difficult position in recent years. For example, in 1991–92 the standard spending assessments saw a 7.1 per cent. Increase overall, with education receiving an 8.8 per cent. increase above budget. However, the interim advisory committee proposed an overall teachers' pay increase of 11.3 per cent. This was not implemented in full by the Government, in that pay was increased in two stages resulting in an overall increase of 8.6 per cent. This still left a £420 million shortfall in 1991–92 compared to the local authorities' estimates of need. In effect, almost the whole of the standard spending assessment increase for education would have been swallowed up by the shortfall in government funding for the teachers' pay increase. Only 0.2 per cent. of the increase would remain for spending on other areas within education budgets where, as I am sure all Members of the Committee will agree, there are clearly very many pressing needs.

At Report stage in another place the Secretary of State said that he would normally expect the standard spending assessments to cover the increase. This is a step in the right direction. What is more worrying was his remedy when the increase would not cover the pay award. He proposed increased efficiency savings, or phasing the award, which is what he did in 1991–92. However, because teachers' pay is such a big chunk of local authority spending, it seems rather unlikely that efficiency savings elsewhere could cover such a shortfall. What in practice would happen is that other services would be cut. Phasing, I am afraid to say, meets neither the needs of teachers who are being denied the full increase recommended by the interim advisory committee, nor the needs of the local authorities and the schools which have an interest in retaining a well motivated, committed and experienced workforce that is not demoralised by low pay. Phasing appears to be the means by which the Government implement recommendations on pay while in practice short-changing the employees concerned. When there is a tight financial situation, it is easier for authorities in the short term to fund a phased award. The long-term interests of the education service, however, lie in fair and properly funded awards which this amendment seeks to reflect.

Unrealistic assumptions, when coupled with pay awards for school teachers arising from the recommendations of a review body, will have a direct impact on the provision of all local authority services. The new clause seeks to address this problem by putting the onus on the Secretary of State to ensure the adequate resourcing of school teachers' pay awards without diminishing the resources available for other things.

It is essential that the recommendations of the review body are properly funded by the Government. Without this commitment there would be the prospect not only of reductions in educational provision and other local authority services in order to pay for a substantial increase in teachers' pay, but also the possibility that teachers may be made redundant so that the local authorities can cover the pay award. I am sure that this is not a consequence which the Government would want to see occurring. The Explanatory and Financial memorandum to the Bill states: The expenditure of local authorities on teachers' pay will continue to be taken into account"— I think those are the words— for the purpose of determining revenue support grant"; whereas: The expenditure of grant-maintained schools on teachers' pay will continue to be covered by the grants paid to them under section 79 of the Education Reform Act 1988". The suggestion of different treatment between the LEAs and grant-maintained schools for funding purposes is really quite unacceptable.

In conclusion, statements by the Secretary of State in another place that in certain circumstances the Government may make extra funding available, are reassuring. However, everyone involved in education would be more reassured if this amendment were accepted and put on the face of the Bill. I beg to move.

Baroness Seear

I support the amendment. I am sure it will be argued that this is treating the teachers' position in quite an exceptional way. That is not done for other groups which could reasonably be compared with teachers. However, that is the whole point. I do not think that any Members of the Committee will deny that right across the country and across all parties there is acute anxiety about the level of education. The matter must be treated, for a time at any rare, in a quite separate way. Parliament on all sides is very anxious to see that this should be done; it wants to keep a watch on it. It is for that reason that the matter should be reported to Parliament. It gives the opportunity for the great anxieties that have been expressed already to be voiced by parliamentarians and for them to watch. After all, that is one of their major tasks—to watch what the Government are doing in this area of quite exceptional importance.

Lord Houghton of Sowerby

Perhaps I may make an observation. This is a very important matter and probably the trickiest amendment on the Marshalled List. I do not know whether it fulfils its purpose, which is clear enough: that is, how the findings of the review body Are to work downwards to the teachers themselves in the new and varied circumstances in which t hey will be placed. Up until now the teachers have been given salary scales with increments, very much like civil servants and others in semiprofessional occupations, and where traditionally, if not in any other way, there are long-term expectations of employment. No civil servant regards his incremental scale as something he loses. The scale is there he knows he will get there, subject to efficiency. Therefore he can build his expectations upon the conventions of his vocation.

I understand the heads of schools are now going to have an allocation of the budget of the local education authority. The heads of schools are going to be turned into accountants as well as head teachers. I understand that they are to be given an allocation for their school, based presumably on estimates made to the local education authority on what resources are needed for that school. In these circumstances the differences in the cost of teachers will be important. After all to employ a teacher at the top of the scale will be rather more expensive than to employ somebody at the bottom unless, overall, the staff of schools are to have a sort of median position and the changes in incremental positions will not substantially affect the overall cost. If head teachers are going to say, "I should like you to come, but you are an expensive teacher and I could manage with a cheaper one", then we have a new factor in the payment of teachers. May it be then, that in these circumstances they are not as secure as they thought they were, either as regards pay or employment?

I do not know what is happening at the present time which can give teachers any assurances on these matters. The review body can look at the profession as a whole. It can prescribe for those in post, for those who expect to be there, and so on. But if, marginally, all over the country there is a certain amount of manipulation of local school budgets, some teachers may find that their jobs disappear. I am not sure whether they can expect completely secure employment. What effect will these new provisions for financing schools and for making heads responsible for the budgets of their schools have on conditions of employment? If some teachers in the same grade are more expensive than others, the unions concerned may say, "It is about time that we had more uniform rates which do not contain this length of incremental progression".

I do not know what the answer may be. Perhaps the Minister can comment on this problem. Does it exist? Is it a fear or is it a reality? What assurances will teachers have that the recommendations of the review body will apply to all teachers in post, and that teachers will not be pushed out of post because of expenditure considerations at a local level?

The findings of the review body must be subject to the overriding decision of Government in any exceptional economic circumstances. However, I am assuming that a review body will be watching that point very carefully and will not make recommendations which it fears the Government will not be able to implement. Review bodies have to be realistic. I should like a reply to that point. Will this be a complexity in the adjustment of teachers' pay under the new reforms? Have the new reforms stabilised to a sufficient extent to enable us to judge possible consequences of that kind?

Lord Belstead

The Committee may be aware that the amendment follows very closely on an amendment tabled by the Opposition in another place. The amendment there was not put to the vote but the honourable Member who moved it explained that the amendment had been tabled because of the need to discover the Government's intentions. It seemed to me that the noble Baroness went perhaps a little more towards the heart of the matter on this occasion.

I shall try to answer the points raised by the noble Baroness and other Members of the Committee. The amendment requires that a statement should be made about affordability. My right honourable friend the Secretary of State has made the position very clear. At the risk of being tedious, perhaps I may repeat it. If the school teachers' review body recommends, and the Government accept, a pay settlement which would imply expenditure greater than that assumed in education standard spending, then the Government must consider three options. The Government might conclude that the cost of the pay award could be abated; they might judge that it was reasonable to expect that savings could be found elsewhere; or they might indeed conclude that extra funding should be made available. That would be for the Government to decide at the time in the light of all the relevant circumstances.

In that context, the noble Baroness, Lady Blackstone, suggested that local education authorities should most certainly not be expected to look for efficiency savings. The amendment would in effect remove any pressure for them to do so. It is not right to assume that there is never scope to improve efficiency in education spending without cutting front line provision such as books, removing surplus places or getting the benefits of competitive tendering. I am surprised that the noble Baroness sees these matters differently. No government who see themselves as responsible stewards of public funds would be ready to give a blank cheque. That is basically what the amendment does. Having said that, I believe that the present Government have been ready to meet the review body recommendations. We have a good record.

I also draw attention to what the noble Baroness said in criticism of government funding of teachers' pay. She referred to a shortfall. This year's education standard spending total is some £17,486 million compared with last year's £15,083 million, which represents an extra £2.4 billion more in cash or a 16 per cent. increase. That is a vast amount. Within the assumptions that led to that 16 per cent. increase were three elements relating to teachers' pay; a pay award reflecting the remit given to the IAC last September, the follow-through costs of last year's award and an element for pay discretion. It is the case that the local education authorities say that they cannot afford an award higher than the increases in 1991–92 total standard spending over their 1990–91 budgets. I find that difficult to accept. Let us look at the figures for education alone. The increase in the 1991–92 education standard spending over the 1990–91 budgets is actually around 9 per cent. against the expected cost of the teachers' pay settlement this year of 8.3 per cent. Even that does not give the true picture because it assumes that budgets are the right starting point for making such comparisons. As we all know, they are not.

The noble Lord, Lord Houghton, asked about the effect of local management of schools on the remit of the review body. Perhaps I may write to the noble Lord on that point. But it is a misapprehension to assume that the setting up of the review body and the setting out of its remit will in some way clash with the discretion of local managers of schools to decide on the numbers of teachers whom they employ. That may or may not happen; but in this debate I do not think that I can gallop down that road after the noble Lord.

I noticed that the noble Baroness was careful to explain the wide variations between local authorities in their ability to absorb the costs of additional recommended pay awards through raising local revenue or through having a greater margin between budgets and standard spending assessments. That illustrates precisely the difficulty that my right honourable friend would face in deciding whether he could meet the terms of this amendment; namely, whether he could reasonably make the statement which he is required to make under Amendment No. 9.

Having said that, I believe that this has been a useful debate. It has given the opportunity for the Government to show that they have a record on education spending of which they can be proud. At the same time it has given me an opportunity to disagree fundamentally with the noble Baroness in the sense that, when one comes down to it, the amendment would mean the writing of blank cheques. That is something to which the Government could not agree.

Baroness Blackstone

I am grateful to the Minister for his reply. Of course I am not in favour of blank cheques being written. However, I am concerned to ensure that, where the new pay review body makes clear recommendations which are acceptable to the Government, and indeed to all the parties, there should be adequate funds to make sure that the recommendations can be implemented without other services being cut.

Moreover, if I may say so, it is not the case that I said that local authorities should not seek efficiency savings. Of course they should do so wherever they can. Having worked as a senior official in a local education authority, where my job was to allocate the resources of a very large budget, I was constantly preoccupied with attempts to secure efficiency savings. I said that I thought it was unlikely, as efficiency savings take some time to come through, that, within one year—which is, after all, what we are talking about—there would be enough such savings to fund the kind of shortfall which we may experience in the foreseeable future if there is a recommendation for a substantial pay increase and no matching substantial increase in the revenue funding to local authorities.

If cuts in services were to lead to shortages such as fewer books in libraries, or even the taking of empty places out of the system through school closures, the impact would vary. I am sure that everyone would agree that to reduce the number of books available to children would be an undesirable cut, but that taking empty places out of the system is a desirable and sensible efficiency. However, I must point out that the Government have made it much more difficult for local authorities to close schools as a result of their arrangements for opting out. Any school which is threatened with closure simply goes down that route. If a school's application to be grant maintained is acceptable to the Secretary of State, the local authority cannot reduce the number of places.

The Minister did not say very much about the problem of the phasing of awards—a matter which I raised and which is covered by the amendment. It seems to me that if we are to resort constantly to the phasing of awards, we shall find ourselves in the position where the recommendations of the review body are frequently not being met. It will be most helpful if, at some point, the Government will explain what their attitude is likely to be to the use of the phasing of awards on a frequent basis.

However, having said that, I do not wish on this occasion to divide the Committee on the matter. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Orders relating to statutory conditions of employment]:

Baroness Blackstonemoved Amendment No. 10: Page: 2, line 35, at beginning insert ("and subject to subsection (1A) below").

The noble Baroness said: In moving this amendment I shall, with the leave of the Committee, speak also to Amendment No. 11. The purpose of these amendments is to ensure that the Secretary of State modifies the review body's recommendations only when he has "clear and compelling reasons" to do so and to make it necessary for him, when he does so, to state his reasons in both Houses of Parliament. It is important that the powers of the Secretary of State to modify recommendations are only used when there are demonstrably good reasons for so doing. Indeed, in his announcement on 17th April about the Government's intentions to legislate the establishment of a review body, the Secretary of State said: The Government, for their part, will undertake, as in the case of other review bodies, to implement the review body's recommendations unless there are clear and compelling reasons to the contrary". [Official Report, Commons, 17/4/91; col. 433.] The Secretary of State's stated intention to implement the recommendations of the review body unless there are such clear and compelling reasons not to do so has not been carried through to the wording of the Bill. It is true that on Second Reading of the Bill in another place the Secretary of State said: The Government will be committed to implementing the recommendations of the review body unless there are clear and compelling reasons to the contrary". [Official Report, Commons, 29/4/91; col. 43.] The amendment would make that the only basis upon which the Secretary of State would be able to modify materially the review body's recommendations. In such circumstances, it would require him to state his reasons to both Houses of Parliament.

As the Secretary of State has used those words on two occasions in another place in stating his intentions, I should have thought that the Government would have little difficulty in accepting the amendment. It must surely be right for him to obtain the approval of both Houses of Parliament when he wishes to make major modifications. Therefore, the onus would be put on the Secretary of State to take the necessary time to consider seriously and objectively whether his reasons for wanting to modify the recommendations of the review body are truly—in his own words—"clear and compelling", in the knowledge that such reasons would be subject to public scrutiny through full debate in Parliament. I beg to move.

Lord Rochester

As my name is attached to it, I should like to say a few words about the amendment, although I have very little to add to the remarks just made by the noble Baroness, Lady Blackstone. It seems that, thus far, the Government have failed to give any convincing reasons—at least, they have not convinced many of us—as to why they are unwilling to have included on the face of the Bill the clear verbal assurances which they have given, as the noble Baroness said, that they will implement the review body's findings, unless there are "clear and compelling reasons" why they should not do so.

We must remember that the Bill is not for our benefit; it is for the benefit of teachers in the field. It follows, therefore, that the powers to be given to the review body should have the support of as many teachers as possible. For our part, we may be prepared to accept the Secretary of State's assurances, but some teachers may be reluctant to do so. That is entirely understandable, when they know that it is only a few months since the same Secretary of State was assuring them that the first Bill of this kind unquestionably provided the best way forward. But look what happened to that Bill.

The amendment would also oblige the Secretary of State to lay before Parliament the reasons which he regards as being so clear and compelling that he is justified in overturning the findings of the review body. By definition, that should not present him with any great difficulty. Moreover, it is also in keeping with Amendment No. 15, with which we shall deal shortly. Having said that, I am glad to be able to express my support for the amendment.

Lord Belstead

I believe that there is little or no disagreement between the noble Baroness, Lady Blackstone, the noble Lord, Lord Rochester, and the Government, that the Government should be able to have the final word on whether a recommended settlement should be implemented. It is fair to say that the spokesman for the official Opposition made that clear in another place. The Government's commitment has been clarified in a way which has generally been recognised as helpful. I refer to the commitment that the recommendations of the review body will be implemented unless there are, clear and compelling reasons to the contrary". That commitment clarifies the way in which the Government would exercise their responsibilities.

That is not the kind of assurance that it would be practical or realistic to enshrine in statute. The noble Lord, Lord Rochester, said that he could not understand why. We have review bodies for doctors, dentists, the judiciary, the health service, and so on. They have had undertakings given to them by successive Prime Ministers over the years that recommendations will be implemented unless there are clear and compelling reasons for not doing so. Such undertakings have not been put in statute for any of those review bodies. Therefore, I throw the ball back to the noble Lord and ask him why he wishes in this case to put such an undertaking on the face of the Bill. That is what the amendment seeks to do, and it runs into difficulties.

As the amendment recognises, it is the Secretary of State who must judge whether there are clear and compelling reasons for doing other than accept the review body's recommendations. It follows, that writing the clear and compelling commitment onto the face of the Bill would not require the court to consider the merit of the Secretary of State's judgment and, if necessary, to substitute its own. That is not the way the amendment is drafted. I do not believe that the court should be asked to act in that way. It is not its role. The court would consider only whether the Secretary of State's decision was one which a reasonable Minister, properly considering the matter, would reach.

My right honourable friend's undertaking is clear and firm. It is the same commitment that successive Prime Ministers have made over the years regarding review body recommendations. The amendment would not in practice strengthen that commitment. For that reason, I hope that the noble Baroness will withdraw it.

6.30 p.m.

Baroness Seear

I cannot resist pointing out to the Minister that during the whole of the 13 years that I was on the Top Salaries Review Body—my memory may be failing me—I cannot remember one occasion when all recommendations were accepted. There were always compelling reasons not to do so. We were summoned to No. 10 and had the compelling reasons explained to us in great detail. One cannot be confident that the remark about compelling reasons will mean that people will receive anything like what the review body recommends.

Lord Belstead

I do not want to cross swords with the noble Baroness about what has happened in the past. My understanding of review body recommendations has always been that they have, over the past 12 years, been accepted, although staged, except in the case of the very highly paid, where alterations have been made, usually at the margins. I shall not sour relations this evening by reminding the Committee of the one occasion 20 years ago that I can remember when a review body recommendation was refused. That led to a great deal of mayhem.

Lord Pitt of Hampstead

I feel that I should intervene because I have worked under a system similar to the one that is being considered. Over the years Governments have committed themselves to accepting review body recommendations. When the recommendations are made they then find that there is some compelling reason for not meeting them, or they meet them and decide to phase the recommendation, or, in the case of the health service—this is much worse—they agree to meet the recommendation and then expect the cost to be met to some extent from savings. That is a relevant point which is why I want to raise it now.

If the same is done in the case of education, there will be serious consequences for our schools and children. We have had the consequences in the health service. One of the problems caused by the underfunding of the health service has been that, while governments regularly accept review body recommendations for increases, they pay only a proportion of the increase. They require the rest to be met from savings. I hope that the Minister will tell us that the Government are committed never to do that. If it is done in respect of education, it will have a deleterious effect on education in the same way as it has had a deleterious effect on the NHS.

Lord Belstead

The noble Lord has departed a long way from what the Opposition Front Bench spokesman in another place has said. On Second Reading in another place, the honourable gentleman Mr. Straw said that Opposition right honourable gentlemen and honourable gentlemen did not resile from the fact that, on the basis of clear and compelling grounds, the Government should be able to change or phase in a review body recommendation. I believe that that is a fair resume of what he said. So to put to me that to have the option of phasing in a recommendation, if necessary, is inconceivable, is something that I could not go along with on behalf of the Government.

Lord Rochester

Before the noble Baroness, Lady Blackstone, replies to the debate perhaps I may respond to what the Minister said to me. I accept that the assurances given by the Secretary of State in respect of this review body are the same as those given by successive governments in respect of other review bodies; but I am sure that the Minister will agree that this review body is unique in that it will be a statutory review body. It is therefore not unreasonable to include within that statute an assurance of the kind sought.

Baroness Blackstone

I am grateful to the Minister for his reply. I agree with him that the Government must have the last word on such a matter and that there may be clear and compelling reasons why the Government would want to reject some aspects of the review body's recommendations. However, I am a little surprised that the Government do not want to make a gesture in favour of the teachers by accepting the amendment to make it clear that, unless there are such clear and compelling reasons, the Government will accept the review body's recommendations.

As the noble Lord, Lord Rochester, said, this review body is different from others because it is a statutory review body, and therefore the proposal contained in the amendment, that where the recommendation is not accepted the Secretary of State should come back to Parliament, is desirable. There may be technical difficulties with the amendment. I am happy to accept that. I should like to consider the matter further and decide later whether to raise it again on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 11 not moved.]

The Principal Deputy Chairman of Committees (Baroness Serota)

In calling Amendment No. 12, I should point out that if it is agreed to I cannot call Amendments Nos. 13 and 14.

Lord Peston moved Amendment No. 12: Page 4, line 15, leave out from first ("employment") to end of line 17 and insert ("a school teacher's contract of employment shall have, or continue to have, effect only so far as consistent with subsection (6) (a) and (b) above").

The noble Lord said: This is another example of an amendment which arises from my concern that the Government have not thought through this legislation as much as they should have done. I shall start with what is obvious: teachers' contracts of employment must be consistent with all the matters covered by an order. There can be no doubt that if there is an order, the contracts must be consistent with it. We do not seek to deny that.

While remaining consistent with the order that the Secretary of State will make when the Bill becomes an Act, it should be possible to build on the basis of the order to take account of local circumstances. That is what we have in mind in the amendment. Such local flexibility already exists under the Teachers' Pay and Conditions Act 1987, as any reasonable person would expect. It is puzzling that from the way that the Bill is drafted—I shall return to that point later because there is a complication—it appears that there is no room for manoeuvre.

I shall give an example of flexibility under the Teachers' Pay and Conditions Act 1987. The Department of Education and Science made two documents available to me today. One is called School Teachers' Pay and Conditions, the other is a circular called School Teachers' Pay and Conditions of Employment. On head teachers, the document lays down various specific requirements for conditions of employment—namely, that they must be subject to the Education Acts from 1944 to 1988. It then makes clear, using the words that we have in mind, and, to the extent to which they are not inconsistent with these conditions"— that is all the conditions they lay down— a school which has a delegated budget", can lay down additional rules and regulations to take account of the circumstances in which the school finds itself. I can find similar wording on the local authority. Therefore, the concept that such flexibility should exist is clearly acceptable to the Government, as it would be to any reasonable person.

There is a second aspect to the flexibility which we have not debated today; that is everything that comes under Clause 3 of the Bill which relates to grant-maintained schools' governing bodies simply being able to give notice to the Secretary of State that they wish to opt out of the whole pay review structure. We have not debated that today.

En passant, I wonder whether the Treasury has fully understood what it seems the DES is trying to get away with here. I understand that the Prime Minister himself recently said that he would like to see all schools become grant maintained. It would then look as though all schools would become grant maintained according to the Prime Minister. They would all opt out of the school teachers' review body in order to gain flexibility. The whole pay structure would fall apart. That may not worry extreme decentralisers, but if I ware still in the Treasury I would regard it as an economic disaster in the making. That is why I ask whether the Government have understood the Bill they put before us at all.

The key point is that, having pulled the Government's tail on the subject, I assume that the case for grant-maintained schools opting out must be so that they can fine-tune their requirements to their needs. Therefore, it seems to me that what the noble Baroness, Lady Seear, and I have put down must be philosophically acceptable to the Government. It must be what they have in mind.

There may be a way out of this. It may be that when the Minister replies he will explain that this is the solution to the problem. Clause 2(4) on page 3 of the Bill states that: A pay and conditions order may— I emphasise "may"— (a) confer discretion on the local education authority". I shall not bore the Committee with the rest of the sentence. Perhaps the noble Lord is about to say that that paragraph covers the flexibility that the noble Baroness and I had in mind. If it does, I prefer the word "shall" to "may", but I throw in the suggestion in case that is the area under which flexibility will appear.

To summarise, it seems to me that the order having been laid down, it would clearly be in the Government's interests, because it would be in the interests of the schools and the local authorities, for them to go on to say, "We shall not infringe the order at all. We will meet the requirements, but we can see ways of building on the requirements to meet our specific needs". That is the point of the amendment and I hope that, even if the Government cannot accept it, they can show a sympathetic response and say that they would like to consider the matter further and perhaps come back to your Lordships. I beg to move.

6.45 p.m.

Lord Pearson of Rannoch

Like other Members of the Committee, I apologise for speaking now when I did not do so at Second Reading. I make this intervention because I have been talking recently to officials of the Professional Association of Teachers and have been discussing various aspects of the Bill. That association is a teaching union which is perhaps rather generous about its name. Since it has a rule which prevents its members from going on strike, it could perhaps claim the title "Association of Professional Teachers". Be that as it may, the PAT speaks for 37,000 members. Its officials put a question to me which I could not answer with certainty, so I wish to put it to the Minister for clarification. I suspect that the matter interests other teaching unions too.

I ask my noble friend therefore whether the Government expect the review body to recognise all six national teachers' associations as bodies representing school teachers. Is it the Government's view that such recognition should lead to consultation over non-statutory conditions of service and over any discretionary elements contained in a pay and conditions document determined as a result of deliberations of the review body? I should be grateful to my noble friend for clarification.

Lord Cavendish of Furness

The structure of the Bill is clear and logical. The review body will make recommendations on statutory conditions of employment; that is, pay, duties and working time. the Secretary of State will then make a pay and conditions order. Once that order comes into force, teachers must be paid in accordance with the order; the non-pay provisions in the order take effect as terms of their contracts of employment. Their contracts may not then contain any extra provisions on pay, professional duties and working time.

It is important to remember that a distinction is drawn in Clause 1(2) of the Bill between those conditions of service which are statutory, namely remuneration and provisions relating to professional duties and working time, and those which are not. The Bill does not bite on the latter. Furthermore, it contains an important provision, Clause 5(3), which permits particular matters to be defined by order as "statutory" or "non-statutory", thus permitting a very clear line to be drawn between issues which are to be the subject of recommendations by the school teachers' review body, and thus applying uniformly to teachers in the maintained sector covered by a pay and conditions order, and those which can be settled directly between teachers and their employers, locally or nationally as the case may be.

The provisions in the 1987 Act are different in one important respect, in that they give authorities the opportunity to introduce extra conditions of service in the areas of pay, duties and working time, provided that they do not conflict with the statutory provisions. The change reflects the fact that since the 1987 Act was passed we have seen fundamental changes in the way in which our schools are run. Where schools have delegated budgets, the important decisions are taken by the governing bodies. Allowing local authorities to include supplementary provisions in teachers' contracts in the key areas of duties and working time would strike directly at governing bodies' right and duty to manage their schools—to decide for themselves, within the statutory framework, how resources, including staff resources, are to be used to best effect.

Perhaps we may take as an example a local agreement incorporated into teachers' contracts of employment which has the effect of guaranteeing classroom teachers a certain amount of non-contact time during the pupil day. This may accord very well with a governing body's priorities for its staff. But, alternatively, a governing body may have other priorities—say, a greater use of discretionary payments —and might not have wished to adopt the approach decided upon by the LEA.

Another governing body might have wanted to devote some or all of the budget which the authority assumed would be spent on casual supply teachers to increasing the staff complement and thereby reducing class sizes. In recognition of this lighter teaching load through smaller classes the teaching staff might have been prepared to agree that casual supply teachers should be called upon less frequently. Obviously the school would benefit in a number of different ways: fewer lessons would be taught by casual supply teachers who did not know the pupils and much less administrative time would have been wasted in searching for supply teachers from outside the school to cover for absent staff.

Such an arrangement is perfectly possible under the school teachers' pay and conditions document. Those kinds of arrangements already operate in a good many well-managed schools with delegated budgets. However, an arrangement of that kind—the exercise by a governing body of its managerial responsibilities —would be difficult or impossible to operate if, at the behest of the LEA, teachers' contracts guaranteed a fixed amount of non-contact time. Giving teachers more non-contact time is an admirable objective, but, where a school has a delegated budget, it should be for the governing bodies to weigh that against its other objectives for its staff and its pupils.

The noble Lord, Lord Peston, referred to Clause 2(4) (a) which allows a pay document to allow an LEA or a school to decide how many incentive allowances to award. The Government have every intention of allowing the LEAs and governors to continue to take such decisions.

Worry has been expressed that some matters which are presently covered in the Burgundy Book of national non-statutory conditions of service might be caught by the definition of statutory conditions of employment and therefore brought within the ambit of a pay and conditions order. It is not the Government's intention that that should necessarily be the case. I have already referred to the power under Clause 5(3) to provide that a particular matter should or should not be regarded as remuneration, or as falling within the professional duties and working time of school teachers, for the purposes of a pay and conditions order. It may indeed be appropriate to make an order under Clause 5(3) which has the effect of ensuring that all matters presently addressed in the Burgundy Book are in future defined as non-statutory conditions of employment, and therefore remain matters for employers and employees to determine. The Government are in principle sympathetic to that proposition, but will need to give careful thought to precisely what matters an order under Clause 5(3) should address.

My noble friend Lord Pearson asked me about the Professional Association of Teachers. The Government consult the association on a wide variety of matters. They will certainly consult the association when they are required, under Clause 2(1), to consult teachers' associations and others about the review body's recommendations. The Bill also requires the review body to afford such bodies representing school teachers as appear to them to be concerned a reasonable opportunity of submitting evidence and of making representations. I have no doubt that the review body, like the IAC, will consult all the main teachers' associations, including the Professional Association of Teachers.

The Bill does not refer by name to any representative body, whether of teachers or employers. It would clearly be inappropriate to single out any one such body for special treatment. Equally, any attempt to include a comprehensive list could act against the interests of a body that came into being or changed its name after the legislation came into force, but I am sure that the Professional Association of Teachers will be among that number.

Non-statutory conditions of employment will continue to be a matter for teachers and employers to decide. It is for the LEAs and the governing bodies of grant-maintained schools to decide which associations to recognise for the purpose of determining non-statutory conditions of service. However, we would naturally expect all six main teaching associations to be parties to local or national negotiations on non-statutory conditions of service such as those at present contained in the Burgundy Book or any matter relating to statutory conditions which are to be decided between employers and teachers under Clause 2(4) of the Bill.

I apologise for having spoken at length on this amendment. I hope that in the light of what I have said the noble Lord may feel able to withdraw his amendment.

Lord Peston

I thank the noble Lord for his explanation. If ever there were a case in which one had to say, "I must read what the Minister has said before making a decision", this is it. I do not understand 90 per cent. of what he has just said. If the Professional Association of Teachers understands the answer to the noble Lord, Lord Pearson, it will certainly rise considerably in my esteem. It seems to me that the Minister's briefing goes 100 per cent. in the wrong direction. The aim of the amendment is to remove the restrictions that the Bill lays down and to give flexibility. The answer that the Minister gave is exactly the reverse. He is under the impression that there is flexibility once the order is in operation, but Clause 2(7) states: the contract of employment of a school teacher shall contain no terms other than those which have effect by virtue of a pay and conditions order". In other words, the anxiety of the Professional Association of Teachers and of the noble Baroness, Lady Seear, and myself stems precisely from the terms of that sentence.

Perhaps I may turn to Clause 2(4) (a) which has nothing to do with incentive allowances. It is to do with flexibility. I am worried about the way in which the noble Lord interpreted it. He does not even see that as a way out of the restrictive problem. I certainly intend to read what he has said in great detail and think about it. I shall not be quite as nasty as I am normally by suggesting that he reads his own speech when he has a little more time, but I hope that he will at least give further thought to the matter because it is extremely important. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness David moved Amendment No. 13: Page 4, line 16, after ("shall") insert ("(with the exception of any terms not inconsistent with the order in respect of teacher appraisal)").

The noble Baroness said: Amendments Nos. 13 and 14, which are grouped together, are a continuation and elaboration of the arguments put forward by my noble friend with regard to the previous amendment requating greater local flexibility and using two specific examples. Like my noble friend, I believe that the Minister may have answered some of the questions, but I shall certainly have to read his answers carefully. I do not know whether he will read out the same answers or whether he will give us different information and advice. I shall give these examples to see whether we shall obtain a little more clarification.

As my noble friend said, Clauses 2(6) and 2(7) do not allow any local variations to be built into teachers' contracts of employment which have a bearing on statutory conditions of service. As the Bill stands, it would prevent local development of issues covered by statutory conditions deriving from, say, appraisal regulations or race or sex discrimination law from being expressed in the contract if there were any provision in the statutory document on the same issue. That cannot be intended. The purpose must be to require the contract, in so far as it deals with matters covered by an order, to include no terms which are inconsistent with the terms of the order. If it were intended to mean what the drafting states, it would he impossible for a local education authority to develop locally any issue covered by statutory conditions.

The wording used in the Teachers' Pay and Conditions Act 1987, which established the IAC, allows teachers' contracts of employment to include duties and rights which complement but do not override those covered by statute. The amendment recognises that the review body is in many ways a continuation of the system set up for the IAC procedure and uses the wording in the 1987 Act. As my noble friend said, one wonders how carefully the Bill has been thought through before being presented to another place.

Perhaps I may take the specific example of appraisal. Included in the new 1991 school teachers' pay and conditions documents, under the conditions of employment of head teachers, is a requirement for them to supervise and participate: in arrangements made in accordance with regulations made under Section 49 of the Education (No. 2) Act 1986 for the appraisal of the performance of teachers in the school". Head teachers are also required under those regulations to: participate in arrangements made for the appraisal of his performance as head teacher, and that of other head teachers". Similar requirements are laid down for school teachers on the standard scale and for deputy head teachers.

The regulations are due to be published shortly and will cover such areas as the aims of appraisal, the appraisal cycle, the appraisal procedures and the use and retention of appraisal records. The regulations will be accompanied by a detailed guidance circular from the Department of Education and Science. That is the statutory framework. If that were to be replaced by the terms of an order the new framework would have to be abandoned.

At Committee stage in another place on 14th May Mr. Fallon said: It is, I believe, widely accepted that the review body should consider pay, duties and working time in the round. It follows that recommendations that are accepted by the Government should take effect without gloss or addition…Allowing local authority employers to include supplementary provisions in teachers' contracts in the key areas of duties and working time strikes directly at the governing body's right and duty to manage its school, and to decide for itself within the statutory framework how to best use resources and how to deploy and manage staff".—[0fficial Report, Commons; Standing Committee A, 14/5/91; col. 105.]

Mr. Fallon attempted to introduce a red herring. The Government's own appraisal regulations, which establish a national framework to be applied at local level by the "appraising body", make that body the LEA. In the future that role of the LEA may well include its own detailed arrangements as a further gloss on the statutory provisions brought in by way of a pay and conditions order.

Mr. Fallon's view that allowing local authority employers to include supplementary provisions in teachers' contracts in the key areas of duties and working time strikes directly at a governing body's right and duty to manage its school is irrelevant in the context of appraisal. Except in the case of grant-maintained schools appraisal is specifically a duty of the LEA.

Amendment No. 14 argues for a specific exemption for local statutory conditions giving effect to provisions of race or sex discrimination legislation. The amendment also follows on from the more general amendment, which seeks to give local authorities more scope. Amendment No. 14 seeks to ensure that local LEA policies deriving from race or sex discrimination legislation would not be rendered unlawful because they overlap with statutory conditions introduced by way of a pay and conditions order.

If, at some future date, statutory conditions relating to race or sex discrimination were to be introduced by way of a pay and conditions order, any existing orders or regulations issued under race or sex discrimination legislation might well overlap with the terms of the new pay and conditions order. LEAs may already have developed local issues deriving from legislation.

As presently worded, the Bill states that: so far as concerns his statutory conditions of employment, the contract of employment of a school teacher shall contain no terms other than those which have effect by virtue of a pay and conditions order". If that wording is retained it would presumably be impossible for LEAs to implement local arrangements arising from orders and regulations issued under race or sex discrimination legislation where a pay and conditions order covers the same ground.

I should like a little more reassurance. I hope that the noble Lord will not have to repeat all of his last speech, but we need clarification on those subjects. I hope that the examples which I have given will help the Minister to clarify the position. I beg to move.

7 p.m.

Baroness Seear

I support the amendment. I share the general confusion about the Government's policy in this regard. I always understood that the whole point of local financial management, enhanced powers for governors and parents and all the rest of the worthy measures which have been introduced was to give greater flexibility. Are we wrong in thinking that the Bill as it stands greatly reduces flexibility? If it does, what is the point?

I am genuinely confused and am not trying to score a point. Are we moving towards greater flexibility and greater opportunities for parents and governors to make decisions suited to their schools, or are we not? If we are, are we wrong in thinking that the Bill as it stands prevents that from happening? We should be delighted to be told that we are wrong.

Lord Cavendish of Furness

I shall not read the speech I made earlier. I, too, shall have to do some rather careful reading because this is not a simple subject. In this case I shall give two answers, and they will be different.

In moving the amendment relating to appraisal. the noble Baroness argued that local education authorities need to be able to oblige their teachers, through their contracts of employment, to participate in local arrangements for the appraisal of school teachers. I understand that that is a matter which the local authority employers have already raised with Ministers.

Perhaps I may explain a little of the background. There is, I believe, general agreement in this Chamber, and in another place, that a national system of teacher appraisal should be introduced. It is generally recognised that appraisal will help teachers to realise their potential and to carry out their duties more effectively. Accordingly, the Government will shortly lay regulations before this Chamber which require LEAs and governing bodies of grant-maintained schools to ensure that the performance of all school teachers is appraised. The intention is that LEAs and governing bodies of grant-maintained schools should have the scope within the parameters set by the regulations to introduce their own local arrangements. Concern has been expressed that the effect of Clause 1(7) of the Bill will be that LEAs will be unable to include in teachers' contracts the duty to comply with those local arrangements.

I believe that that concern is unfounded, and I hope that I can reassure the Committee. The present school teachers' pay and conditions document lists the present statutory professional duties of school teachers. One of those duties is: participating in arrangements made in accordance with regulations made under section 49 of the Education (No. 2) Act 1986 for the appraisal of his performance and that of other teachers". It is thus a contractual duty for every school teacher to participate in the arrangements which the LEA has made under the regulations. In other words, an LEA can put in place local arrangements and require its teachers to abide by them, provided that the arrangements are consistent with the national framework of appraisal which will soon be put in place by the regulations.

There is therefore no contradiction between the structure of the Bill and the powers and responsibilities of LEAs under the forthcoming appraisal regulations.

I turn now to the subject of race and sex discrimination. The noble Baroness has raised an important point, and I am very grateful to her for doing so. She asked me whether we had thought everything through, and perhaps I may concede a little here.

The Government believe, for the reasons I have explained, that so far as concerns pay, duties and working time the contracts of employment of school teachers should not contain terms other than those which have effect by virtue of a pay and conditions order. The noble Baroness has drawn attention to the fact that both the Race Relations Act 1976 and the Sex Discrimination Act 1975, which impose duties and responsibilities upon the employers of teachers, provide that an act committed by an employee is treated for the purpose of those Acts as if it were done by his employer whether or not it was done with the employer's knowledge and approval. In other words, if a teacher in discharging his or her professional duties commits an act which, if done by his or her employer, would contravene the provisions of either the Race Relations Act or the Sex Discrimination Act, the teacher's employer will be held responsible.

It is true that an order made two years ago under Section 222 of the Education Reform Act provides that, where a governing body of a school with a delegated budget is exercising its staffing powers and is not itself the employer of the staff concerned, that governing body, rather than the local education authority, is treated for the purpose of those acts as if it were the employer. However, I accept that it is in the legitimate interests of both the LEA and the governing body to ensure that the contracts of employment of individual teachers include the duty not to act in a way which would amount to discrimination by their employer under existing legislation on race and sex discrimination. As matters stand, the employers would be unable to do that.

That said, I do not believe that an amendment of the kind proposed by the noble Baroness is the best way to achieve that purpose. When the Bill was drafted it was envisaged that there might be matters which, although falling within the definition of statutory conditions of employment, it would be quite right to regard as exceptions to the general principle set out in Clause 2(7). That is one of the purposes for which Clause 5(3) was included in the Bill. As the noble Baroness is aware, that clause gives the Secretary of State the power to provide that a particular matter is, or is not to be regarded as a statutory condition of employment. That would enable the Secretary of State, by defining the matters in question as not being statutory conditions of employment, to ensure that employers could still include in teachers' contracts the necessary provisions with respect to sex and race discrimination.

But I believe that there are likely to be other matters requiring to be similarly excluded. The precise scope of each exclusion will need further detailed consideration in consultation with those concerned. I therefore believe that Clause 5(3) provides a better way of addressing the problem that the noble Baroness has identified than attempting to do so through an amendment or, if the list of exceptions is to be exhaustive, a series of amendments to the Bill itself. I am most grateful to the noble Baroness for raising this important point. I can assure her that the Government will consider most carefully how the effect of what she intends can be best achieved through a Clause 5(3) order.

Baroness Seear

Forgive my stupidity over this, but I am afraid that I am not understanding. I am not particularly concerned in this context with the bits about race and sex discrimination, or about appraisal. Is it, or is it not, going to be the case that, if you are in an inner city school, unable to recruit and experiencing the most frightful problems of getting and retaining staff, you still have to provide exactly the same sort of pay and conditions for your teachers as if you were in, say, Harrogate?

Lord Cavendish of Furness

I shall have to come back to the noble Baroness on that, if she does not mind. I do not have an answer to that to hand.

Lord Rochester

Before the noble Baroness replies, may I intervene briefly? In the light of his doubts, is the noble Lord, Lord Cavendish, prepared on behalf of the Government to look at this again with a view to perhaps himself bringing forward something at the next stage which would help to meet the anxieties expressed by both the noble Baroness, Lady David, and my noble friend Lady Seear?

Baroness David

I am exceptionally pleased that I brought forward these amendments and that my noble friend Lord Peston brought forward Amendment No. 12. It seems that there is uncertainty on the part of the Government as well as the rest of us about what the Bill intends in all this. I hope that the Minister will do what the noble Lord, Lord Rochester, asked. I think that the Minister has admitted that there is a lack of clarity about this matter and that it needs looking at again.

Would the noble Lord agree to look at the whole of this again and possibly come forward with a government amendment, or at any rate write to us in the meantime to tell us the Government's thinking? In the meantime we shall read extremely carefully, with towels round our heads, what the Minister has said and try to understand it, make sense of it, and look again at the part of the Bill he has quoted. May I ask him to respond to that?

Lord Cavendish of Furness

I shall certainly look at the debate and see what has been said. I shall do what I can to be helpful. But it must always be borne in mind, and I must repeat, that there have been changes, and that since 1987 the way things are run has altered. Where schools have delegated budgets and the governing bodies are making important decisions, we are keen to see that go forward. Against that background I shall look at it. I am sure that the noble Baroness accepts that it is firmly our policy to give the school governing bodies with delegated budgets their head.

Baroness David

Yes, but that has not quite answered my question. Will the noble Lord have another look at this amendment and either come back with another amendment or write to us so that we know how best to pursue the matter? It clearly needs pursuing, and it will be pursued at Report stage.

Lord Cavendish of Furness

I am conscious that there is unfinished business here. I am not prepared to commit myself about what exactly I am going to do, but I wish to be helpful in the matter.

Baroness Seear

If our interpretation is right this is a tremendously important point. For example, perhaps the noble Lord can sort this out. Supposing you are somewhere like a bad inner city area, where you cannot get people because of the most ghastly housing conditions. Is it going to be quite improper for the school governors to offer housing assistance to someone to get him into that area because that is not in the terms and conditions?

Lord Cavendish of Furness

What I am really saying is that under the arrangements we are proposing problems such as those which the noble Baroness has raised are going to be eased. However, I want to study this and I shall certainly be writing to the noble Baronesses.

Baroness David

If the Minister says that he wants to study this, that satisfies me and I am grateful for what he has said. With that assurance, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 14 not moved]

7.15 p.m.

Lord Rochester moved Amendment No. 15: Page 4, line 30, leave out from ("case") to end of line 32 and insert ("no such order shall be made unless a draft of the instrument containing the order has been laid before, and approved by a resolution of, each House of Parliament.").

The noble Lord said: I regard this as one of the most important amendments that we have to discuss. The arguments are clear cut. It is plain from Clause 2(9) that if the Secretary of state decides to make, any material modification to recommendations of the review body", his decision will be subject to annulment only by a negative resolution of either House of Parliament. We feel strongly that a decision to reject the review body's findings should be validated by an affirmative resolution in both Houses. I was going to say that that is not simply because we are here talking about an annual pay bill of around £10 billion. I may not have heard the noble Lord, Lord Belstead, correctly but I think he said at an earlier stage that we are talking about a pay bill considerably higher than that.

However that may be, in responding at Second Reading on 21st June to the arguments advanced by the noble Baroness, Lady Blackstone, and myself on this matter, the noble Lord, Lord Belstead, said at col. 366: The use of the negative resolution procedure is parallel with the procedure used by other review bodies. He said that indeed in some cases there was no parliamentary procedure at all.

I understand that. But the review body for school teachers, unlike all others, as a number of us have had occasion to say before, is to be a statutory body set up by Parliament. It is therefore Parliament that should positively take responsibility if the body's recommendations are to be rejected by the executive. That is the procedure now operative under the 1987 Act, which established the interim advisory committee, and it was in fact last used in this House under that Act only two weeks ago.

I shall not again remind the noble Lord, Lord Belstead, of the precise words he used in support of that procedure when the interim advisory committee was being set up in 1987. At Second Reading he said that in quoting his earlier words I was for once perhaps being rather less than fair in that I was not comparing like with like. I am sorry that he should have felt that, and readily acknowledge that Parliament was earlier providing only for interim arrangements and that now an independent review body is being established.

But it is—and I cannot emphasise this too strongly, and the noble Lord will understand that it is a general feeling on this side of the Committee—precisely because this is to be a statutory body that the issue is of such concern to us. It is in the belief that that view is shared by other noble Lords that I commend this amendment to the Committee. I beg to move.

Baroness Blackstone

I should like to support this amendment. Indeed, I put my name to it. I have little to add to what the noble Lord, Lord Rochester, has said, and I do not want to take up the time of the Committee in echoing him. He put it extremely well. This seems to us to be an important constitutional safeguard. It was one that existed in the 1987 Act, and we think that it ought to go into this Bill too.

Lord Belstead

With respect to the noble Lord and the noble Baroness, I think that this amendment, which would require a pay and conditions order to be subject to affirmative resolution if it materially modified the review body's recommendations, overlooks to a considerable extent the procedures that are followed in implementing settlements in other public sector pay groups. The noble Lord, Lord Rochester, said that there was a difference: one was a statutory matter, and the other was not. Perhaps I may remind the House that, for example, my right honourable friend the Home Secretary, makes regulations on police pay subject only to the negative resolution procedure. My right honourable friend the Secretary of State for Scotland can reject the decisions of arbitrators on teachers' pay by negative resolution and substitute his own views without any reference to Parliament. Perhaps the most significant point is that both the pay and conditions of staff in the National Health Service, whose remuneration is the subject of recommendations by two review bodies, are simply approved by the Secretary of State for Health without any parliamentary procedures at all.

Baroness Blackstone

I apologise for interrupting the Minister. But would he not agree that the circumstances are different in this case? In the case of the other review bodies the Government are both the paymaster and the ultimate employer. In this case the position is quite different because the Government are imposing a decision on a quite different employer—that is, local authorities.

Lord Belstead

I recognise that it is different. If the noble Baroness will forgive my saying so, it is a little bit simplistic in the sense that the Government share the costs with the employers. There is a major factor (which I will come to in a moment) which to my mind makes clear that the procedures under the Bill compare very favourably with the examples I have given and therefore emphasise the case for not agreeing with the amendment.

Perhaps I may deal in passing with the point that the noble Lord, Lord Rochester, made about the 1987 Act. The noble Baroness has mentioned the same one. When I was dealing with the Bill in 1987 I referred in approving terms to the need for an affirmative resolution; but we were setting up an interim advisory committee, not a review body. I believe that the precedents for a review body which I have just mentioned are a formidable argument.

It is important to make the point that under the Bill the review body is subject to a wealth of consultation. Under Clause 1(5) the review body is under a duty to give notice of matters referred to it, and of any directions from the Secretary of State, to all interested parties—local authorities, voluntary schools, grant-maintained schools and teachers' organisations. That means matters are brought entirely into the open. Under Clause 2(1) the Secretary of State is required to consult interested bodies before giving effect to the recommendations. Here, I believe that lines 35 to 38 of page 2 of the Bill are crucial, for they mean that the Secretary of State's own reference to the review body will constrain what he is able to put into effect. If the review body decides to make recommendations outside the matters referred to, it can do so under the Bill. However, according to the wording of lines 35 to 38 or. page 2 the Secretary of State cannot possibly make up things of his own volition outside his own original reference to the review body. If at the end of that wealth of consultation the Secretary of State decides to implement the majority of the recommendations in full but makes one or two changes at the margins—perhaps in response to points made in the consultations—I question the desirability of having to resort to an affirmative resolution.

I believe that here is a case in the Bill where the affirmative resolution desired by noble Lords opposite does not take account of other review body procedures or the provisions of the Bill which would set up a review body with a wealth of consultation. I have reached the conclusion that the parliamentary procedures provided for in the Bill (of which, incidentally, I notice the noble Baroness, Lady Blackstone, is availing herself in two orders against which she is praying on Friday week) are the right way forward. For those reasons, I ask the Committee not to agree to the amendment.

Lord Rochester

I do not think that I and my noble friends are altogether satisfied by what the noble Lord, Lord Belstead has said. This is a special case and should be treated accordingly; but if this matter is to be pressed, it should be done at a time when there is a more representative number of noble Lords present. I undertake to do the noble Lord, Lord Belstead, the courtesy of carefully reading what he has said; but I give notice that we may well return to this at a later stage. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 [Special provisions as to grant-maintained schools.]:

Baroness David moved Amendment No. 16: Page 4, line 35, after ("school") insert ("of the relevant size").

The noble Baroness said: Clause 3 deals with special provisions as to grant-maintained schools. I should like to make it clear that the amendments to Clause 3 which we put down do not suggest any change in our attitude to grant-maintained schools. We still intend to abolish them when we come to power. In the meantime, we have to do the best we can for teachers in those schools and we have put down a series of amendments. The first one is No. 16, which is grouped with No. 17. I speak to both amendments.

The purpose of the amendments is to ensure that only schools of a reasonable size are eligible to opt out of the national pay review body. At present, it will be possible for any grant-maintained school to opt out of the national pay review body and conduct its own negotiations with teachers. Since the Secretary of State recently changed the criterion for the opting out of primary schools to allow those with fewer than 300 pupils to apply, even very small schools can potentially opt out of the national pay review body. The Bill allows the Secretary of State no scope to refuse such applications. This amendment would limit those eligible to opt out of the LEA and apply for grant-maintained status to the larger primary schools of over 300 pupils, which were the only ones eligible when the ERA was first introduced. Under this amendment secondary schools would also need to have more than 300 pupils, but very few secondary schools have fewer than that number. I beg to move.

Baroness Denton of Wakefield

I could not anticipate the reasoning behind the amendment moved by the noble Baroness, Lady David. If I understand it correctly, it relates to the principle that big is beautiful. I find that principle difficult to accept. It is unfair to schools whose size does not meet this criterion; in particular, it is unfair to primary schools. If I read it correctly, I share common ground with the noble Baroness, Lady Blackstone, in believing that perhaps in the past the focus on this sector has not been as great as deserved. Some of the best teaching, governing and teamwork goes on in primary schools, and to take away from them the decision-making process given to larger schools would be unfortunate. My experience on the IAC was that many teachers saw LMS as a threat; but in those schools where it had been introduced, we found that the freedoms were welcomed and used by head teachers to benefit both teachers and pupils. The noble Lord, Lord Houghton, would have been pleased to know that rather than losing teachers, teachers had more time to teach and support was given to them. More discretion to manage given to those who manage must be for the good. To restrict it by size, often generated by geographical and not academic factors, would seem to me not to be desirable.

Lord Pearson of Rannoch

Perhaps I could interject briefly to refer to the private sector. I hope that it will not cause the noble Baroness too much irritation. There are a number of prep. schools, many with fewer than 300 pupils, which manage their affairs financially and otherwise with great success, producing a very good education. I think that "small is beautiful" may apply here too.

7.30 p.m.

Lord Belstead

I hope that the noble Baroness will not think me discourteous when I say that, with her customary clarity and eloquence, she said that there was no change in the policy of the party opposite so far as concerns grant-maintained schools. Having had a quick look at the Marshalled List, I was not surprised to hear her say that. We have not reached Amendments Nos. 21 and 23, but the first of those amendments has the almost breathtaking effect of making it possible for the Secretary of State just like that quite simply to prevent a grant-maintained school from opting out of the national pay arrangements; and Amendment No. 23 would allow the Secretary of State to revoke an order which permitted a grant-maintained school to opt out of the national pay arrangements, if it were said to: be conducive to the development of the education service in the area concerned". I have spent the past 25 years of my life debating across the Floor of this Chamber whether a mixed provision of education in any particular area is or is not conducive to a good education service. I see clearly from the amendments which have not yet been discussed that yes, indeed, the view of the party opposite towards grant-maintained schools has not changed. The policy is to do away with them if, as the noble Baroness said, it ever has the chance to do so. I only hope that it will not get the chance because I believe that grant-maintained schools are a thoroughly good idea. I am absolutely delighted that the numbers are constantly going up.

Having said that, the logic of this amendment is difficult to grasp. As the Committee knows, it is now possible for any primary or secondary school to apply for grant-maintained status. I agree with my noble friend Lady Denton, who made the very valid point that this amendment would create an unfair divide between small grant-maintained schools and the rest, the implication being that the governing bodies of small schools are not capable of operating local pay and conditions arrangements.

I am sure that the noble Baroness will forgive me when I say that we, on this side of the Chamber, cannot go along with that. Once a school of whatever size has obtained grant-maintained status there is no justification for withholding the flexibility allowed to other schools in the sector. If a governing body is capable of dealing with a whole range of other responsibilities that it will assume when the school becomes grant-maintained—and the Secretary of State will not agree to a proposal unless he is confident that it is capable—I can see no reason why it should be prevented from applying to make its own arrangements for pay and conditions if it wishes to do so.

There may well be an occasion when a governing body does not want to take on the additional responsibility of local pay determination or feels that the national arrangements are sufficiently flexible to meet its needs. Then it will not make an application to the Secretary of State. But, speaking for this side of the Chamber, I believe that it is right that schools which can become grant-maintained should be allowed to avail themselves of the opting-out provisions in this Bill if they wish to do so.

Lord Dormand of Easington

Before the noble Lord sits down I wonder whether I may press him a little on his statement—I think I use his words—that the number of grant-maintained schools is constantly going up. I understand him to have said that. In fact, the whole business of opting out is a complete failure by any standard. I wonder whether he has with him figures on the number of schools that have been given grant-maintained status. Perhaps he could tell us the number that is in the pipeline—when I ask questions on this point, I am always given the number "in the pipeline".

Perhaps he could compare that figure with the thousands of schools which are eligible to apply for grant-maintained status. I think that after all this time, all the publicity and all the pressures from the Government about how good the scheme is, he will probably find that the figure for schools is something of the order of 2 per cent. or 3 per cent. Does he concur with that view or will he say a little more about it?

Lord Belstead

The noble Lord is quite right to throw that question at me. My memory is that about a year to a year and a half ago the figure was around the 50 mark. I think I am right in saying that today between 70 and 80 schools have opted out. Hence I used the expression that the numbers are constantly going up. I believe that that is true for the past 18 months and I stick by that.

Perhaps I may make just one other point. I took the precaution of visiting grant-maintained schools. I know that there is absolutely no question about it. Of course in the best and indeed many good local education authorities, schools are proud and pleased to be part of the maintained system. Nevertheless, there are occasions when schools are benefiting for the good of their children from becoming grant-maintained.

Baroness Blackstone

Does the Minister agree that an increase of 20 over a year is hardly a huge number? To suggest that numbers are going up seems to be a little exaggerated in my view, if one considers that figure as a proportion of the total number of schools in the country. Indeed, is it not the case that yesterday the Prime Minister had to make a speech exhorting more schools to opt out and proposing new measures to encourage them to do so?

Lord Belstead

No, I stick by what I said. I said that the numbers are constantly going up and they are. Perhaps I may remind the noble Baroness that when the Education Reform Act was passing through this Chamber, although the Government first resisted, the House wrote consultation procedures into the Bill. Those consultation procedures take time. Meanwhile the numbers climb.

Baroness David

I shall not go into that argument at the moment. My amendment seems to have caused some surprise. The assumption of the noble Baroness, Lady Denton, is wrong. I do not think that big is necessarily beautiful. It seems to me that for a very small grant-maintained primary school to go into the system is rather stupid. Probably the governors would not want it. Let us hope that if they do not wish it, they will not have to do so. I certainly do not disagree with what she said about primary schools and the teaching in them. Some of the best of our schools are primary schools. Some absolutely excellent practices start there I am entirely in agreement with her on that point.

Private schools are not part of the national system and I do not believe that they need come into our discussion at all. I shall consider the matter. Certainly I shall withdraw the amendment at this time. It is quite interesting, however, to have had the discussion.

Amendment, by leave, withdrawn.

[Amendment No. 17 not moved.]

Lord Rochester moved Amendment No. 18: Page 4, line 42, leave out ("consult") and insert ("allow a period of not less than two months for consultation with").

The noble Lord said: This amendment is easily explained. At present, under subsection (2) of Clause 3 the governing body of a grant-maintained school is under a duty merely to consult its teachers before applying for exemption from a pay and conditions order The governing body is not obliged to allow a minimum period of time for such consultation.

The amendment suggests that if proper consultation is to be ensured—the Government have agreed to the principle—a governing body should allow for a period of not less than two months in which consultation can take place. The Government do not have a good record concerning the time that they have allowed for consultation before making major changes in education. For example, in preparing for the introduction of the Education Reform Bill in autumn 1987, they decreed that the consultation process should take place during the period of the summer holidays when schools were closed and governing bodies did not meet. I know from what happened in Cheshire that that was deeply resented at the time. The amendment suggests that teachers—and, if the next amendment is agreed, parents too—shall be permitted a reasonable period in which to respond to a proposal from a governing body to make an application for exemption from a pay and conditions order. I beg to move.

Lord Belstead

The noble Lord is right. Clause 3(2) requires governing bodies to consult their teachers before making an application to opt out, a change that has been made to the Bill since it started in another place. It is true that the Bill does not specify any of the details required for consultation. However, it is clear from case law that in order for consultation to be genuine sufficient time must be allowed to enable those being consulted to make informed representation. But precisely how long that will be will depend on the circumstances of the case.

For example, I should imagine that the length of time needed to carry out a meaningful consultation in a small primary school would be rather less than in a large secondary school with many staff and perhaps based at more than one site. Governing bodies will always have to act in accordance with the requirements of administrative law. Beyond that, the nature of the consultation—including the length of time it takes—is, rightly, a matter for individual governing bodies to decide.

It is inconceivable that governing bodies of grant-maintained schools, which are responsible for the success of their schools and have every interest in maintaining good relations with their teachers, would apply to opt out without giving those teachers a reasonable opportunity to comment on their proposals and giving careful consideration to their comments. That is why the Government were ready to put "consultation" into the Bill. If governors failed to do that, they would almost certainly be in breach of their duty to consult under Clause 3(2).

On the grounds that the effect of the amendment —which simply inserts a two-month period—would not be suitable in some cases although it might be in others, and that that aspect is covered already in what was a move by the Government to try to meet opinions expressed in another place about the need for consultation, I resist the amendment.

Lord Rochester

At Second Reading I gave credit to the Government for having accepted the principle of consultation in this regard. That was not the case with regard to the first Bill.

It is because there will be different circumstances that the amendment proposes a minimum period of two months. The noble Lord has stated that the procedures for consultation should be reasonable. The amendment suggests that a reasonable period should be allowed for consultation.

I am disappointed by the noble Lord's response. However, it is not a matter that I press further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.45 p.m.

Baroness David moved Amendment No. 19: Page 4, line 42, after ("consult") insert ("(a)").

The noble Baroness said: I shall speak also to Amendment No. 20. The aim of the amendments is to include consultation with parents as well as teachers of children when a grant-maintained school wishes to opt out of the review body. The Bill requires that only school teachers employed at a GM school need be consulted before an application is made to opt out of the pay review body. That ignores the interests of parents of children at the school.

In introducing their legislation on opting out in time for the Education Reform Act 1988, the Government stressed the importance of parental choice. Parents were given the right to ballot on the decision for a school to opt out. Parents have an interest in the overall organisation of the school. The arrangements for the pay of teachers are an important element in that. The pay of teachers represents about 80 per cent. of the school's budget.

It therefore seems logical for parents to have the opportunity to be consulted on such an important change as the decision of the school to ask to opt out of the national pay review body and to run its own negotiations, in particular when one considers how important parents are as regards running the school.

I shall be surprised if, in the light of their views about the importance of parents, the power that they should have and the degree to which they should be involved with schools and the education of the children, the amendments do not receive the support of the Government. I hope that they will be able to accept both amendments. I beg to move Amendment No. 19.

Lord Cavendish of Furness

The noble Baroness, Lady David, wishes to require governing bodies of grant-maintained schools to consult parents of pupils at the school before applying to opt out of the national arrangements. Her amendment is perfectly clear. I have listened carefully to what she says. But I remain unconvinced that such a requirement should appear on the face of the Bill.

What is appropriate is for governing bodies to consult the teachers in their schools before applying to opt out. They are, after all, the people most directly affected by such a change. Although there is strictly no need to include such a requirement in the legislation, the Government have listened to concern expressed in another place during discussions on the previous Bill, and Clause 3 of the present Bill contains such a requirement.

It is not appropriate, however, to write on to the face of the Bill a provision of the kind which the noble Lord suggests. Contrary to what the noble Baroness said, I remind her that grant-maintained schools, by their very nature, are uniquely responsive to the wishes and interests of parents. Their governing bodies include five parent governors. It is quite possible that the governing body of a grant-maintained school considering whether to apply to opt out might decide to consult parents more directly, and it will of course be free to do so. But such decisions must be for individual governing bodies, as managers of their schools, to take. It is not a matter in which it would be appropriate for the Government to intervene. In consequence, we oppose the amendment.

Baroness David

We do not seem to be achieving the success I should have wished. Teachers may be the people most directly involved, but many parents are on the governing body which runs the school. I am surprised that the amendment has been received so coldly.

The Minister gave some reassurance that parents will be involved in some ways. I do not intend to press the amendment at this stage of the evening. I shall read what the Minister has said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 20 not moved.]

Lord Rochester moved Amendment No. 21: Page 5, line 2, leave out ("shall") and insert ("may at his discretion").

The noble Lord said: Under Clause 3 the Secretary of State has no option but to accept an application by the governing body of a grant-maintained school to be exempted from a pay and conditions order. The amendment proposes that he should be given discretion as to whether he accepts or rejects such an application.

The amendment is designed to guard against governors putting forward a plan that the Minister felt was unacceptable because it did not make adequate provision for pay determination by means other than the review body, or because he considered that it might in some other way be detrimental to teachers or pupils in the school in question or at other schools controlled by the relevant education authority.

In deciding to opt out, a school may plan to use financial incentives to poach teachers from other schools in a way which would be damaging to education in the area as a whole. In some other way the Minister may feel that there are grounds for believing that a governing body is not truly representing the views of teachers or parents. I do not suggest that such contingencies are likely but they are possible. Surely it is only prudent to guard against them. That is what the amendment seeks to do.

In view of the earlier strictures by the noble Lord, Lord Belstead, directed at the Labour Opposition I make it plain that in moving this amendment I am not taking the opportunity to call for the abolition of all grant-maintained schools.

Baroness Blackstone

I support the amendment. What concerns us about the present arrangements in the Bill is that they make it potentially possible for a grant-maintained school to offer higher remuneration to teachers, particularly in subjects in which it is hard to recruit staff; for example, science, mathematics or design technology. Therefore, teachers may be poached from other schools in the area leaving the pupils in those schools without adequate provision in those subjects.

I am sure that Members of the Committee will agree that that would be an undesirable situation. Poaching could take place by a grant-maintained school which may have acquired additional resources in one way or another, perhaps through a bequest. That would allow it to pay more. Such a school may use funds which it had managed to save through efficiencies or cuts to attract teachers from other schools in the area to the detriment of those schools. For those reasons it seems desirable that the Secretary of State should have a discretion to intervene in such circumstances. I support the amendment.

Lord Cavendish of Furness

Earlier, my noble friend Lord Belstead explored eloquently this question. It is pleasing to hear the noble Lord, Lord Rochester, say that not all grant-maintained schools will be closed. I do net know whether the same commitment will come from the Benches opposite. Perhaps there is a slight difference of emphasis between the two policies.

Baroness Seear

I suggest that there is a total difference between the two policies.

Lord Cavendish of Furness

I accept that.

Perhaps I may make it clear how opting out will work. Under the provisions of Clause 3 the governing body of a grant-maintained school which wants to opt out of the national pay and conditions arrangements is simply required to apply to the Secretary of State indicating the date from which it wishes the national provisions to be disapplied. On receipt of that application the Secretary of State is required to make the necessary order: the Bill as drafted does not give him any choice in the matter.

The amendment would leave the Secretary of State with the discretion not to approve a grant-maintained school's application. I do not think it appropriate, still less practicable, for the Secretary of State to become involved in the internal managerial decisions of a growing number—and it is growing—of grant-maintained schools. Governing bodies, not the Secretary of State, are in the best position to judge what is best for their staff and their schools. In applying to opt out of the national arrangements they will be making a management decision which is properly theirs to make, having consulted their teachers. There is no good reason why such a decision should be subject to the Secretary of State's approval.

The noble Baroness and the noble Lord, Lord Rochester, raised the question of poaching. Employers must be free to behave as such. It would defeat the whole purpose if the Secretary of State were to be constantly looking over their shoulders. However, as regards poaching, we believe that it is for governors of individual schools, where there are delegated budgets and staffing powers of LMS with more extensive freedom given by grant-maintained status, to take the best decisions for their schools and respond to the wishes of parents and the particular needs. The noble Baroness said that somehow more money could be obtained. There is no evidence to suggest that, as regards poaching, a grant-maintained school would be at an advantage over any other school in the circumstances. I resist the amendment.

Lord Rochester

Again, I am not convinced by the response of the noble Lord. However, I do not believe that this is a matter which I should press further and, therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness David moved Amendment No. 22: Page 5, line 6, leave out ("other") and insert ("later").

The noble Baroness said: The purpose of this amendment is to ensure that a minimum of three months' notice from the date of the application of a grant-maintained school to opt out of the pay review body is provided for on the face of the Bill. At present the Bill allows the Secretary of State to agree to a date for a grant-maintained school to opt out of the pay review body and conduct its own negotiations earlier than three months from the date of application. That would mean that theoretically the Secretary of State could allow the school to opt out of the pay review body immediately without allowing any notice if the governing body were to agree.

There is little point in having a requirement for the governing body to give three months' notice written on the face of the Bill, as in Clause 3(3), if it can be ignored when the Secretary of State makes an order to allow a school to opt out. The amendment will ensure a minimum period of three months' notice. I beg to move.

Lord Belstead

I understand the point which the noble Baroness makes. I hope to be able to reassure her.

Clause 3(4) is drafted as it is because there may well be times when either the Secretary of State or the governing body itself in the light of changing circumstances feels that it would be appropriate to alter the date from which the national provisions should be disapplied. We would not expect this to happen often, and I would expect that the new agreed date would almost always be later than that specified in the notice of application. But there may also be exceptional circumstances when it makes sense to bring the date forward, perhaps by a day or two—for example, to ensure that a school is able to introduce its own arrangements from the very beginning of an academic year. While this is likely to happen only very rarely, it is clearly sensible to retain the maximum possible flexibility to enable decisions to be taken which are in the best interests of schools and their staff.

The noble Baroness may say, "That is all very well, but that is just the Government speaking and it is not on the face of the Bill". Indeed, she felt that the provision could be used to allow an immediate disapplication without, as it were, proper consultation. The answer to that is that clearly this power will have to be used responsibly. But I should emphasise that the date can be changed only if the governing body and the Secretary of State agree to change it. My right honourable friend would not agree to a change, particularly to an earlier date, unless there were good reasons for doing so. Moreover, the Secretary of State and the governors will, as always, be subject to the general legal requirement to exercise their powers reasonably. They will always, therefore, need to consider carefully the effect of their intended action on the individuals concerned, particularly in the light of the governors' consultation with their teachers.

I understand the reason why the noble Baroness raises this matter. I realise that we disagree philosophically about grant-maintained schools, but perhaps she may feel that it is right to leave this provision in the Bill in the light of the assurances I have given. The last reassurance about reasonableness may help considering that consultation has now been written into the Bill.

Baroness David

I thank the Minister for his explanation. His reply is reassuring, particularly as he says that there is a necessity to act reasonably. With that reassurance, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8 p.m.

Baroness David moved Amendment No. 23:

Page 5, line 8, at end insert: ("(4A) The Secretary of State may, where he is satisfied that it would be conducive to the development of the education service in the area concerned, withdraw any order made under subsection (4) above after giving not less than three months' notice to the governing body").

The noble Baroness said: The purpose of Amendment No. 23 is to enable a grant-maintained school that so wishes to opt back into the review body system and cease its own negotiations. Clause 3(1) (b) implies that opting out of the pay review body is not absolute but time limited. The words are: for the time being exempted". The possibility of opting back into the pay review body is not made explicit on the face of the Bill. It is not clear how a grant-maintained school that finds itself in difficulty with negotiations and decides that it would prefer to become part of the pay review body again can do so. The amendment would allow the Secretary of State to withdraw the order made when the school applied to opt out of the pay review body and allow the school to become part of it again.

The criterion that the Secretary of State would need to consider would be that such a change was conducive to the development of the education service in the area. Therefore he would need to consider whether on educational grounds such a reversal was justified. The amendment makes clear that when considering the application he must consider the education of the area as a whole and not just the children in the grant-maintained school. That is important. It is odd that that option is not allowed in the Bill. I hope that the Minister will again be able to give a reasonable answer and perhaps accept the amendment. I beg to move.

Lord Belstead

I am not sure that acceptance and reasonableness necessarily go hand in hand. In this case I hope that I shall be reasonable but I do not believe I can accept the amendment.

The amendment would imply a continuing role for the Secretary of State in monitoring what happens once a grant-maintained school has opted out of the national pay and conditions arrangements. In the Government's view that would be entirely inappropriate. Once a school has opted out, the pay and conditions of its staff will be a matter for the governing body. Governing bodies are the employers of their staff and must be free to behave as such. It would defeat the whole purpose if the Secretary of State were to be constantly looking over their shoulders with threats of revoking the order which gave them that freedom.

I know that there are gaps in philosophy between the two sides of the House on matters relating to grant-maintained schools, and I am afraid that this is one of them.

Baroness David

That answer was not as satisfactory as the last one. I do not quite follow why the Minister says that the Secretary of State would have to monitor the situation the whole time and be looking over the shoulders of governing bodies to see what is happening. Under the amendment it would be for the grant-maintained school to ask to opt back into the system of the pay review body. The school would simply make the request.

I shall not press the amendment. Our attitude to grant-maintained schools is not particularly friendly so I shall not go to all that much trouble to take their part. In the light of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Remaining clauses and schedule agreed to.

House resumed: Bill reported without amendment.