My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I remind the House that I am president of the Heavy Transport Association.

The Question was as follows:

To ask her Majesty's Government whether Her Majesty's Customs and Excise is under parliamentary control and operates in accordance with the European Convention on Human Rights.

My Lords, Her Majesty's Customs and Excise is responsible to the Chancellor of the Exchequer and, in common with other public bodies, is bound under the terms of the Human Rights Act 1998 to carry out its responsibilities in a manner compatible with the European Convention on Human Rights.

My Lords, I am grateful for the Minister's somewhat optimistic reply. I fully accept the need for Customs and Excise to be able to seize a vehicle involved in smuggling. But is the Minister aware that the transport industry is becoming increasingly fed up with Customs and Excise seizing vehicles and then retaining them for considerable lengths of time without any involvement from the courts, except by means of appeal? Would not it be better if there were a requirement for a warrant to be issued by magistrates if Customs and Excise felt it necessary to retain a vehicle beyond, say, five days?

My Lords, I am surprised that my purely factual reply was described as optimistic. Of course, the courts are involved. An individual or company whose vehicle is seized can challenge that seizure within one month of the date of the seizure. If there is a challenge, Customs is obliged to begin magistrates' court proceedings to declare the vehicle forfeit so that it can continue to retain the vehicle. If the magistrates agree with applicant companies or individuals, they get the vehicle back. If not, then exactly what the noble Earl asks for has been achieved. In any case, there can be an appeal to the Crown Court.

My Lords, my noble friend will be aware of the case of Orchard v. Customs and Excise which was held last year before the VAT and Duties Tribunal about the confiscation of a motor vehicle arid contents in Dover. Does he know what has been the Government's response to the letter of formal notice that initiated an infringement procedure under Article 226 of the EC treaty issued by the Taxation Commissioner, Frits Bolkestein, on behalf of the Commission, and whether that has led to any reform of the practices at Dover?

My Lords, Customs and Excise replied to the letter last December, but no formal response has been received. The Commission recently decided to defer any decision on whether to act until the autumn. We are disappointed by that, because the Commission should understand that our view is fair and balanced. The provisions are aimed not at the ordinary shopper but at highly organised smugglers.

My Lords, I believe that the Minister mentioned an appeal to the magistrates' court after a month. That is all very well for vehicles, but what about their perishable contents?

My Lords, I understand that those who have perishable contents in their vehicles are invited to take them away when the vehicle is seized.

My Lords, have not the Government achieved the worst of all worlds with their policies in this area? They appear to have offended the hauliers represented by my noble friend Lord Attlee, the European Union and human rights groups by being too heavy handed. Yet on the other hand, they are somehow managing still to allow 17 billion cigarettes to be smuggled into the country every year.

My Lords, I was not aware that the noble Earl, Lord Attlee, claimed that the Freight Transport Association was offended by Customs procedures. Surely, the important consideration is that we should protect legitimate business. I should have thought that that would be the priority for the Conservative Party, just as I should have thought that it would be a priority for it not to be encouraging tax harmonisation within the European Union.

My Lords, how many single-vehicle companies and individual owners have been put out of business by their vehicles being impounded by Customs and Excise when they ought not to have been?

My Lords, I do not know how many such single-vehicle companies there are, but as only 700 commercial vehicles were impounded between June last year, when the policy was introduced, and January, clearly not many of those can involve single-vehicle companies.

My Lords, does the Minister accept that we have levels of smuggling into this country that we have not had since the 18th century? Does he further accept that, whatever one's views about tax harmonisation within the EU, such levels of smuggling are likely to continue whatever the level of seizures by Customs as long as excise duty rates differ so strongly between Britain and our continental neighbours?

My Lords, I am interested to hear that the Liberal Democrats are in favour of greater tax harmonisation. I should have thought that both Opposition parties would have taken account of the fact that our levels of duty on tobacco and cigarettes are justified by health reasons, quite apart from the fact that, otherwise, the cost that would have to be met by a reduction in expenditure on health, education and other worthy causes would be severe. If, for example, we were to reduce alcohol duties to the level prevailing in France, we would lose over £5 billion. That represents more than two pence on the rate of income tax.

My Lords, tax harmonisation is the policy of making the taxes on any commodity the same throughout Europe. The difference that my noble friend is complaining about is a large one. Would not a level somewhere between the two be acceptable?

My Lords, a level somewhere between the two would be slightly less damaging to health and would take slightly less revenue away from health, education and other worthwhile causes. If the noble Lord wants to see such a compromise, he is welcome to try to persuade his party about it.

asked Her Majesty's Government:

What size of income they believe constitutes a subsistence level for (a) a single person, (b) a couple and (c) a couple with two children.

My Lords, we do not believe that it is possible to arrive at such a figure. The measurement of poverty can include not just low income but factors such as how that income is spent, on whom in a family it is spent and for how long that low income persists. That is why we issued a consultation document on measuring child poverty last April. I hope that the noble Earl will feel able to respond to it.

My Lords, if it is impossible to arrive at such a figure, how come that 10 other major European countries have done so? Will the Minister attempt to put that ignorance right, or should the House regard it as invincible?

My Lords, the noble Earl did not, perhaps, listen with his usual care to my Answer. No one doubts that low income is part of the problem of poverty. I shall give the example of a lone parent who has a child of 10 and is on an income of £100 after housing costs. She is divorced, has her own home and is poor because she is training to be a teacher. Her poverty is short term, and the outcomes for her and her child are good. We should also consider the case of another lone parent with a similar child and a similar income who lives in a run-down council flat, has no qualifications and has lived on benefit for 10 years. Her outcomes are likely to be poor. What matters is the persistence of poverty. The poverty that scars children is the poverty that persists. That is what we must capture in our analysis.

My Lords, given that the Government do not, on the whole, approve of means-tested benefits, how do they arrive at figures for minimum benefits if they have no figure for minimum need?

My Lords, we inherit benefit figures, and the benefits are then targeted at those who need them. Since our Government came into office in 1997, we have seen increases well beyond the retail prices index in many benefits. We recognised that the groups that we wished to help needed our support. For example, the income support rate for those with children under 11 was £16.90 in 1997. If that figure had been RPI-ed, it would now be £18.50. In fact, it will be £37 by October. The figure will have doubled. The carers' premium on income support for those caring for people has doubled since 1997. Pensioner couples are, on average, £25 a week better off in real terms since 1997. The Sure Start maternity grant was £100 in 1997 and is now £500.

We inherit a benefits structure, we judge whether it meets the need, as we see it, and then we target our resources. We have a record of which we are proud.

My Lords, I welcome the Government's commitment to the eradication of child and pensioner poverty and congratulate my noble friend on continuing to face all corners with her customary fortitude, even on occasion perhaps what the good and noble Baroness, Lady Park of Monmouth, calls "the termites of the Treasury". But can she say what the Government believe to be the minimum income, after rent and council tax, necessary to protect expectant mothers from being at risk of giving birth to low-weight and thus highly vulnerable babies?

My Lords, I do not have a figure for a pregnant woman with or without children. However, in households of below average income, the 60 per cent figure—that is, the relevant poverty line for 2001 for a lone parent with two children under 11—is £147. Benefit levels for 2003–04 will be £147. The family budget unit, to which my noble friend refers, had it been RPI-ed, would be less than what we pay in benefits. That is a decent response to the issue.

My Lords, does the Minister recall that, at the general election, the Government appeared to have no problem defining child poverty? Their manifesto said that in the previous Parliament over a million children had been taken out of poverty. Subsequently, official statistics showed that claim to be wrong. Now the Government say that we must change the definitions. Will there be no definition against which to judge the Prime Minister's commitment to take children out of poverty within a generation until the inquiry is finished?

My Lords, I wish to make two points in response to the noble Lord. First, as a result of our policies since we came into office in 1997, 1.4 million children —not 1 million—have been taken out of poverty compared with the number that had been in poverty. I see that the noble Lord is shaking his head; I can write to him with the figures. I can assure him that they are correct. Some 1.4 million of those children who were living in poverty in 1997 are no longer living in poverty.

Secondly, we set ourselves another test, one that relates to wages rather than simply looking over and above the baseline figure from 1996–97. The test suggests that child poverty affects those children currently living below 60 per cent of median income. That means that as the wealth of the country increases, if benefits are only inflation-proofed then the gap will grow. We are one-third of the way to meeting our child poverty targets in one-third of the time. We have done very well, but we still have a long way to go. However, I am confident that our new tax credits policies will take us much further along the way.

My Lords, do the responses of the noble Baroness to the questions put by my noble friend and by the noble Earl, Lord Russell, suggest that one cannot define poverty as a state existing below a certain level of income but that it can be defined only in relation to the incomes of other people? Surely that cannot be poverty. If the noble Lord the Leader of the House were to be given a substantial pay increase next year, that would not make me any the poorer, would it?

My Lords, as my noble friend has just pointed out, it may not make the noble Lord any poorer; it may simply make him envious. However, the noble Lord is right. The problem with a relative measure of poverty is that one then measures inequality as much as one measures poverty. That was why, in response to his noble friend, I sought to make a distinction between what might not exactly be termed as "absolute" poverty but the benchmark of when we came into office and what we have done since then compared with relative poverty.

Following the line of the noble Lord, Lord Tebbit, the best way for the Government to meet their child poverty targets would be for the Chancellor of the Exchequer so to mismanage the economy that national wealth reduced. As a result, therefore, the relative figure would rise. However, while that would be jolly good for child poverty targets, it would be jolly bad for child poverty.

My Lords, without prejudice to the first Answer given by the Minister, does she accept that there can be such a thing as an income too low for subsistence?

My Lords, it is certainly true that, for reasons I do not fully understand, some people are living on incomes below the level of benefit income. They tend often to be self-employed people who are living off their stock. However, the noble Earl will also know that the statistics with regard to people living on very low incomes are not particularly robust—indeed, they are pretty flaky.

The noble Lord, Lord Tebbit, identified a problem. The test of measuring poverty which the Government have set themselves—the test of relative poverty—does not pick up other considerations such as the persistence of poverty. It is that persistence which scars. That is why we are consulting widely on re-measuring child poverty. I have checked that the relevant document is available in the Printed Paper Office. We have produced four ways of measuring it. At a seminar of academics and voluntary groups that I attended last week, several further methods were put forward.

We need to hold the widest possible consultation and achieve the widest possible consensus in order to arrive at a measurement of poverty that is transparent, robust and holds government to account, and, in turn, gives government proper policy levers in order to take action. If the noble Earl, Lord Russell, responds to our document, I hope that he will become a part of that way forward.

asked Her Majesty's Government:

Whether they are satisfied with progress towards achieving the road safety targets in the 10-year plan.

My Lords, the Government remain fully committed to their road casualty reduction targets for 2010 set out in the strategy document, Tomorrow's Roads: safer for everyone, and will take all necessary measures to achieve them.

My Lords, I thank the Minister for that reply. In view of the fact that the recently published road safety statistics show that accidents are increasing, does he agree with the Select Committee in another place, which said that speed is a major factor in road accidents? I shall quote a phrase from the committee:

"The Government needs to give political leadership".

What steps are the Government taking, bearing in mind that they have tightened significantly the criteria for the siting of speed cameras; they have refused to do anything about people using mobile telephones while driving; and the fact that their love affair with the extreme elements of the motoring lobby is quite contradictory to their targets set out in the 10-year road safety plan?

My Lords, the most recent accident statistics, as the noble Lord, Lord Bradshaw, describes them, should be taken in terms of deaths and serious injuries. That is the measure we take. While there has been a slight increase in the number of deaths, there is a continuing decline—as has been the case for many years now—in the number of deaths and serious injuries taken together.

It is quite true that the Select Committee pointed out that speed is one of the most significant elements in road accidents. We continue to keep speed limits under review. I should remind the noble Lord, Lord Bradshaw, that, under certain circumstances, local authorities are empowered, without the need to refer to central government, to reduce speed limits in their own areas. Speed cameras have formed another significant element in speed reduction. There is no doubt that speed cameras work, but it is important that they should be seen by motorists as a means of reducing accidents rather than as a means of raising money for the Treasury. That would reduce confidence in our policies in general.

My Lords, evidence shows that between 800 and 1,000 people are killed each year in work-related road accidents. Can my noble friend assure the House that the Health and Safety Commission and the Health and Safety Executive will have sufficient resources to be able to extend their activities into this area of work?

My Lords, we are aware of the Health and Safety Commission task force on this subject. We have received a report from the Health and Safety Commission on the matter, which has been placed in the Library of the House. We are now considering our response. I hope that there will be no significant delay in the Government's response to this important report.

My Lords, does the noble Lord agree that a major contribution to road safety has been made by the motorways of this country? Does he further agree that what is now required in order to reduce traffic congestion and gridlock, and to increase road safety, is more motorways?

My Lords, I do not think that that follows at all. It is certainly true to point out that two things have happened at the same time: the first is that there has been a continuing reduction in the number of deaths and serious injuries on our roads, which is to be welcomed; secondly, accidents on motorways are at a lower level than is the case on other types of road, where the road area is shared by pedestrians and cyclists as well as motor vehicles. It does not follow from that at all that we should have more motorways.

My Lords, can the Minister respond in further detail to the question raised by my noble friend with regard to the use of mobile telephones while driving? It is very troubling to see people using mobile telephones while driving at high speeds on the motorway. Do the Government have any intention to legislate in this area?

My Lords, I think that we have all experienced people using their mobile telephones in what appear to be dangerous situations. I have been overtaken both on the outside and on the inside by drivers carrying mobile phones. It is an offence to drive dangerously and using a hand-held mobile telephone is dangerous. However, it does not follow necessarily that it should be a specific and separate offence to drive while using a hand-held mobile telephone, although that may become necessary if we cannot persuade drivers not to do it. I remind the noble Baroness, Lady Williams, that after the wearing of seat belts was made compulsory, it took very many years for the belts actually to be used. We still think that, for the present and until we are convinced otherwise, the existing legislation covers this point.

My Lords, does my noble friend agree with the concern expressed by the Select Committee in the other place about the 11 per cent decline in the number of traffic police over the past four years? Can he reassure the House that the Government intend to ask police forces to make traffic policing a priority in the national policing plan?

My Lords, I can certainly confirm that traffic policing is a part of the general aims and objectives of police forces and is therefore a priority. I am not quite sure what are the numbers of traffic police. The work of traffic police is often integrated with crime prevention and crime discovery activities, which seems sensible. It is often difficult to tell whether a policeman is acting only as a traffic policeman. In any case, it is the use of technology which is very much helping in the reduction of traffic accidents.

My Lords, have the figures been split between cars and motor-bikes? The Minister concentrated on cars, but have there been more motorbike deaths and accidents recently? My experience is that motor-bike riders swish through the lumps and bumps in the road, whereas cars have to pull up and go slower.

My Lords, the figures I gave related to motor vehicles, including motor-bikes. It is certainly true that motor-bikes are much more dangerous for the drivers than passenger cars.

My Lords, I hope that—

My Lords, we really must go on to the next Question. I gave way to the noble Baroness, Lady Trumpington, because she kept importuning me.

asked Her Majesty's Government:

Whether they recognise Sikhs as a distinct ethnic group.

My Lords, we do, in accordance with the Law Lords' judgment of 1983 in the case of Mandla v Dowell Lee, which established that Sikhs are an ethnic group for the purposes of the Race Relations Act. If memory serves me right, the noble and learned Lord the Lord Chancellor, in his former life, appeared for the successful appellant.

My Lords, I thank the Minister for that Answer. Is he aware that the Sikh community in this country is so disappointed with the Government's general stance over the operation of the Race Relations Act that it is lobbying Parliament today to ask the Minister to reconsider current policy to catch up with the needs of today, and to accept that public authorities must monitor Sikhs separately for racial monitoring purposes? This is to ensure that the estimated 700,000 strong British Sikh community is given proper protection, especially following the events of September 11th, from discrimination in the operation of the Race Relations (Amendment) Act. Will the Government now consider issuing guidance so that all public authorities, not only some, are left in no doubt that they must take action on this matter?

My Lords, I was aware of the lobby and its views. I look forward to discussing this issue in more detail with representatives of the Sikh community when I meet them at the end of this month. In short, the representations made did not persuade the Office for National Statistics, which consulted the CRE on this issue, that it was necessary to include Sikhs as a separate category in the 1991 or 2001 censuses. But, of course, Sikhs would have been able to put "Sikh" on the census form under the "other" category, if they so wished. They will also be identified as a religious group, which was included in the 2001 census for this purpose.

My Lords, while accepting that the Mandla judgment identified Sikhs as a distinct ethnic group, it also created a number of anomalies in that other groups have been excluded from the definition. What do the Government have in mind to ensure that such groups, particularly those with religious beliefs, are included in future equality legislation?

My Lords, both in my role and more widely across government we are well aware of the sensitivity of this issue and of the importance in a multiracial and multi-ethnic society of properly reflecting the diversity that exists. Therefore, I am certain that before the next census—if it proceeds in the form of previous censuses—there will be the most careful consultation on this issue. We shall also seek proper consultation on the other circumstances in which it will arise in the future.

My Lords, is the noble Lord aware that the advice being given by the CRE to public authorities on how they should conduct ethnic monitoring in connection with their obligations to produce statements of race equality, requests them to use the ethnic categories contained in the census? Therefore public authorities will not have particular regard to the special needs of the Sikhs, or indeed of any other minority community which is not named in the census. Does the Minister agree that the advice being given by the CRE should be revised to take into consideration the diversity of ethnic groups in our society?

My Lords, the code of practice gives the advice signalled by the noble Lord, Lord Avebury—that is, that it is sensible to make it possible to compare local data with the census data. That is common sense because, without those comparisons, many other issues are difficult in policy terms. On the other hand, the code of practice also states that it is open for a local authority or police force to disaggregate, if they so wish, within a particular category to allow the finer grain detail in their monitoring that the noble Lord, Lord Avebury, advances. The code of practice, therefore, permits exactly what the noble Lord proposes.

My Lords, there is a significant Sikh community in Huddersfield, which is in my diocese, and a large Muslim community. There is also a quite significant Christian Asian community. In terms of the Question, can the Minister define where he sees an "Asian Christian" community?

My Lords, shooting from the hip, I would have thought that a Christian Asian would have indicated "British Asian" under the question about ethnic origin in the census; and, under the question about religious affiliation, would have written "Christian".

My Lords, given the historic commitment of the Sikh people to this country, is it not time that we had a turban in this House?

My Lords, that is an interesting and important question, which I am sure will be noted. I agree that Sikhs have made a great contribution to Britain. They are a proud race who fought the British in India and fought with the British in the last two wars. They have made many significant contributions to the social and economic life of this country.

My Lords, I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)

On Question, Bill read a second time; Committee negatived.

moved Amendment No. 1:

Page 2, line 1, leave out subsection (3).

The noble Baroness said: These are minor technical amendments which we should have included with our previous amendments to the clause. I apologise to the House for that omission.

The current definition of "children" is expressed to refer to subsection (1) only. Now that we have introduced references to "children" in Clause 1(2) and Clause 2(5) we need to ensure that the definition applies to the whole chapter. The amendments achieve that. I beg to move.

My Lords, perhaps I may ask the Minister a question. A concern that has always received a great deal of sympathy in this House in relation to young people with special educational needs—"looked-after children", to invoke the reference of the noble Earl, Lord Listowel—is in relation to children between the ages of 19 and 25. What is the status of that age group when it comes to meeting their needs?

My Lords, we have always made sure that within legislation we define where the application of different age groups is. For the purposes of this Bill, what I have said is what would apply. I take the noble Baroness's point. But it would be the case that that is applicable for those particular groups in legislation as we have said throughout. So in this context, it is not applicable; but it would be applicable in legislation where we made a point of referring to that particular age group. I am happy to send an explanation to the noble Baroness and place a copy of my letter in the Library of the House, but that is the case for the purposes of this part of the Bill.

On Question, amendment agreed to.

moved Amendment No. 2:

Page 2, line 7, at end insert—

""children" means persons under the age of nineteen;"

On Question, amendment agreed to.

moved Amendment No. 3:

Page 3, line 10, at end insert—

"(5A) Notwithstanding the provisions of subsection (5), no order under this section shall confer on the applicant exemption from any of the provisions determined by the following sections of the Education Act 1996 (c. 56)—

(a) section 321 (the duty to identify children with special educational needs as defined by section 312);

(b) section 317 (the duty on governing bodies of schools to use their best endeavours to meet the needs of pupils with special educational needs);

(c) section 323 (the duty to assess children's special educational needs, when necessary);

(d) section 324 (the duty to make and maintain statements of special educational needs, when necessary);

(e) section 331 (the duty to assess and provide for children under 2 years of age)."

My Lords, I want to speak briefly in support of the amendment. I have in mind two points which it makes clearly. One is that the children who are most at risk of being swallowed in the excitement of innovations of various kinds may well be those children who fall into the so-called 18 per cent of children who will not have statements. Those are the children who are most in need of having this protection on the face of the Bill.

Secondly, in the new subsection (5A)(a) proposed by the amendment, the duty to identify children with special educational needs must be protected. I believe this to be the most important part of the amendment. A school may innovate by introducing enrichment programmes and all kinds of different ways of teaching children who may have high ability, which I greatly welcome. Nevertheless, in whatever category or class of children—I mean "class" literally—there are certain to be a number of children who will not have statements but who will be entering into, perhaps temporarily, a condition of special educational needs and who have emotional or behavioural problems or who are falling behind in one way or another. It is essential, in the spirit of previous Acts, beginning with the 1981 Act, that the protection for such children should be on the face of the Bill.

My Lords, I hesitate to rise given that I did not take part in the Second Reading debate. This is a subject close to my heart and I would do myself no justice if I did not say a few words. I support Amendment No. 3, particularly with reference to the issues raised by the noble Baroness, Lady Warnock, concerning the need to identify children's educational needs. I echo everything said by the noble Baroness, Lady Darcy de Knayth. She paid due respect to the Government's position up to now, but it is critical that we maintain the spirit of the amendment as tabled. I look forward to the Minister's response.

For a long time parents have fought tooth and nail to have the right to statements. To leave those parents and children exposed to the flexibility of the governing body or the LEA is inappropriate and unwise, given the experience of a minority of children. I note with some concern that the amendment does not address the issue of service provision. It is all very well having grand plans for children and services, but parents are often dissatisfied with the way that statements are provided. Service delivery is important. I am disappointed that neither this amendment nor the others tabled address that issue.

My Lords, I have added my name to the amendment. It is fair to say that there is a great deal of meeting of minds across the Chamber. The noble Baroness, Lady Darcy de Knayth, mentioned that the Minister has been sympathetic and has put forward amendments. The noble Baroness, Lady Darcy de Knayth, is equally understanding about the need to achieve the Government's ends; namely, to allow for innovation to be freely undertaken in schools.

We all agree that it should not be done at the expense of provision for young people with special educational needs. The difficulty is the distinction as to whether it should be a game of chance and left to the discretion the Secretary of State, or whether it should be a matter of law by removing the discretion. There could be occasions when a Secretary of State makes a judgment that is more subjective than objective and everybody else takes a different view on the provision for special educational needs.

On Report the Minister said that it was inconceivable that a decision would be taken to allow for an innovative project which, in fact, had an adverse impact on young people with special educational needs. We only ever talk about the Secretary of State who we know is in power at any given time. People often say that Secretaries of State come and they go. They vary in style and the way in which they approach making decisions. Therefore, I believe the amendment is about taking chance and discretion out and making it a matter of law that there shall be no room for allowing any project that would impact adversely on provision for young people with special educational needs.

I suspect that we may just hear something to our liking from the Minister. If not, and the noble Baroness, Lady Darcy de Knayth, wants to press the amendment, she will have my support.

My Lords, I apologise for speaking at all. I have not spoken on this Bill. I have been involved in another Bill. The reason I am speaking is that many years ago I introduced a Private Member's Bill on special educational needs. After a considerable battle with the Government, eventually my noble friend Lady Blatch took over at Report stage and implemented the principles in the 1996 Act.

The reason I am speaking is that having really got in here by mistake and having discovered what was going on, it seems to me incredible that one should not have an effective measure of safeguard to preserve the statute of 1976 in its full efficacy. There should be no doubt about it at all. I do ask your Lordship's forgiveness for having taken the time of the House.

My Lords, I feel slightly abashed at joining in this Who's Who of legislation on special educational needs. When the Minister tabled the amendment that is now Clause 2(5), I thought it provided the defence and framework that is required to ensure that we retain those rather hard-won defences for those with special educational needs. However, enough people who know enough about this subject have raised questions for me to feel that it is just that we ask the Minister to give us chapter and verse on why she believes that it does give us this. What is the legal effect of her words in her opinion? Do we have the continuous process of ensuring the Government still have a duty to find out who has a problem and to give them some assistance?

It has been pointed out before that if the chain is broken and we lose, say, two or three years, that is the destruction of a child's education. During the decade and a half that I have been in this Chamber there has been a continuous struggle to ensure that that chain is in place. We have browbeaten governments of various hues and various Ministers over this matter for a long time. The fact that it might be removed is a matter for genuine concern.

We must ensure that we have not wasted all that time. Can the Minister tell us what the legal process is according to the Bill as it currently stands? Can she assure us that that process will take place and that we shall have in place what we have struggled for over those years? If so, I shall be content. However, we must hear that. If further legislation—secondary or primary—is required, the Government are duty bound to legislate. If that means that we must ask the Government to accept an amendment now so that they have time to make changes, I advise my noble friends to consider that. That is an important point. It is something we must guard because it has taken a long time winning.

My Lords, I am sure that Amendment No. 3 is entirely unnecessary from a legislative point of view. I cannot see that any government will ever contemplate acting against what is in that amendment. Therefore, the Government should accept the amendment because it makes no difference to their freedom of action. However, it gives the many people involved with special educational needs the comfort of certainty. There is a great deal to be said in favour of certainty. If one knows that the Government can at a whim undermine the whole structure of special educational needs in this country, although it may not seem likely it is a constant worry. The Government know they will not do it. It would not harm them to take Amendment No. 3 on board. It would give everybody else great comfort.

My Lords, during the passage of the Bill I have been particularly concerned about children in public care and their admission to schools. Such children are currently placed in schools that no one else wants, for various reasons and circumstances. I had hoped that the Bill would provide an opportunity to remedy that situation. Sadly, for technical reasons, that is not possible.

Some 26 per cent of looked-after children have statements of educational needs. If there is a serious concern that the protection for those 26 per cent may be in danger, I feel strongly that that should be avoided.

I look forward to the Minister's reply and I thank her for the great deal of time that she has spent listening to my concerns on the Bill. I very much hope that she can reassure us all. If not, I shall follow the advice of my noble friends and the noble Baroness, Lady Blatch, on the amendment.

My Lords, the critical need of parents of children with special educational needs is for clarity about what they are entitled to for the benefit of their children. It would be most unfortunate if, in that sector of needy society, a debate such as this led to division. I am sure there is no sentiment towards division, but rather a desire for agreement. I therefore invite my noble friend the Minister to agree with what I understand to be the principle of the Bill and to reassure us on how that principle is to be put into practice.

Under Clause 1, innovative projects will be permitted only if they may,

"contribute to the raising of educational standards"

I invite the Minister to agree that there can he no exemption from or relaxation of special needs legislation under Clause 2, on the power to suspend statutory requirements, unless the proposal would raise educational standards. In other words, such proposals must add to what is already there rather than detracting from it. That is the logical structure of Clauses 1 and 2. Innovation will better the present situation, not change it for the worse. Clause 2(5) gives additional clarity to that analysis that no exemption or relaxation will be permitted if it results in a detrimental effect on the needs of such children.

That analysis of principle seems straightforward. I cannot imagine that a statute that is designed to better things can be interpreted by invoking a power to take away good things that already exist.

How is that principle best put into practice? It is not only by my noble friend the Minister confirming what the principle is today, but also by her reassuring us that the department will issue guidance under Clause 2(6) at the earliest opportunity on how it will approach the granting of applications, having special regard to the statutory duties for children with special educational needs, which are set out in the amendment. That is necessary, because it would be most unfortunate if, with this desire for clarity, a system was introduced with no one—neither parent, nor local authority, nor child, if they are able to understand—knowing by what criteria the Secretary of State will make decisions on innovative projects that affect the special educational needs of children. I cannot see that that is too much to ask of the Government and it would confirm the requirement that I initially emphasised: the need for all those concerned with these children to have clarity.

My Lords, I urge the Government to accept the amendment. The Minister will probably say that it is not strictly necessary, but I see it as a belt and braces amendment, although I am not a lawyer. At times of financial or other difficulty, special educational needs is the area of education that tends to come under the greatest pressure. A future government could well try to get round the amendment that the Minister introduced at an earlier stage. I urge her to accept this amendment.

My Lords, it is a great privilege to hear new voices raised in our debates in support of this most vulnerable group of children. I echo all that has been said about the Government's desire to ensure that we do what is best and right for these children.

I am conscious that this is a Third Reading debate, but I should like to refresh the memory of those who have not been able to participate in our debates as they might have wished. This power will be on the statute books for only four years. Any school or local education authority applying for the power to innovate can be granted that power for three years, with the possibility of an extension for a further three years if the circumstances are appropriate—for example, if there has not been time to assess and evaluate what has happened. Talk of future Secretaries of State is inappropriate. I am not saying that there will always be the same Secretary of State for the next four years, but this power will disappear in four years. That is important.

I intend to spend some time on this and I hope to be able to give the reassurances that noble Lords and others outside the Chamber are seeking about the effect of the amendments that the Government have already made. I had hoped that I had already made clear that the legislation as drafted already means that nothing could be done through this power that would disadvantage children with special educational needs. I am more than happy to repeat that and to spell it out in greater detail.

My officials have been in conversation with the Special Educational Consortium, which was looking for some specific reassurances. The noble Lord, Lord Addington, is looking for similar reassurances. I hope that I am now able to give those.

I hope that it is clear to all noble Lords that we are committed to the basic statutory framework that is now in place. We have recently strengthened that framework through the Special Educational Needs and Disability Act 2001. We believe that the changes we have made are good and positive. We do not want to unpick them; we wish to see them embedded.

We do not in any way begin from the position that there is something wrong with the sections referred to in Amendment No. 3, or that we expect significant proposals for change—quite the opposite. Let me be clear about the meaning of the Bill as drafted. We have made a number of amendments to the Bill, the most significant being those that now appear in Clause 1(2) and Clause 2(5). They already provide the belt and braces that the noble Lord, Lord Swinfen, seeks. Those amendments mean not only that the Secretary of State must consider the interests of every pupil affected by a project, but also that no order may be granted if there is likely to be a detrimental effect on the education of children with special educational needs.

Those tests are deliberately drawn widely. The Secretary of State must consider the likely effect of the project on all children who may be affected by it, whether present or future, at the school in question or at another school. The protection for children with special educational needs in Clause 2(5) is sufficiently strong that a project that would be beneficial to a significant number of other children but would be harmful to the interest of a single pupil with special educational needs could not be approved.

The first clear point on the effects of the law in relation to the specific sections mentioned in Amendment No. 3 is that they could not be changed if that change would be likely to damage the education of children with special educational needs. No change that harmed children with special educational needs would be possible. It is clear that simply abolishing the duties in any of the sections to which the amendment refers would not be lawful. It would be detrimental to children with special educational needs, for example, to have no duty to assess or to identify. Without those duties the basic provisions for children with special educational needs would not function. Therefore it must not be lawful to remove them.

As the noble Baroness, Lady Darcy de Knayth, pointed out, many of the duties in Amendment No. 3 are expressed as "when necessary". Clearly it is necessary for someone to act to secure the best interests of children with special educational needs, but it would be to the detriment of those children if they did not do so. It follows that having no duty on anyone to act when necessary must be to the detriment of children with special educational needs. Accordingly, it would not be lawful to remove any of those duties. I hope that I have made it as clear as I can that that is the meaning of the legislation as the Bill is drafted.

The Bill would permit, for example, the transfer of duties from one party to another. To take an example I have used before in your Lordships' House, if under the power to innovate the governing body of a strong school were taking on responsibility for a weak school, we would be likely to want the special educational needs duties to transfer to the strong governing body. Otherwise the residual weak governing body would be left with no powers and a duty in relation to special educational needs that it would be unable to fulfil. Meanwhile, the body with the powers would be left without the duties. That would not be in the interests of children with special educational needs and therefore I do not wish to rule it out.

It is conceivable that some adjustment to the legislation set out in the amendment could be in the interests of children with special educational needs. I have said in your Lordships' House many times that it is my strongest desire that the power to innovate should be used for these children, who may benefit from innovative approaches which cannot take place under our current legislative framework. That is why I have looked for positive approaches to innovation.

The most obvious example, as I said, would be the transfer of duties from one body to another. Similar arguments would apply to the transfer of duties between local education authorities, or from local education authorities to voluntary bodies. In looking at the issue it is not inconceivable that a school or local education authority dealing with a number of children described as low incidence highly complex special educational needs may wish to involve one of our major voluntary organisations with knowledge, insight, experience and expertise on the particular special educational needs to work with it on the assessment of these children and to ensure that they are catered for properly.

I do not believe that any noble Lord would wish to rule out that possibility, but that is unfortunately what would happen if the amendment was passed. It would require in law that one body be exempted from the duty, as noble Lords will appreciate, in order for another body to take it on. What is not conceivable is that the duties in those sections could simply be abolished. It could not be the case that no one would have them. I can be clear, and I believe that this is the key assurance the noble Baroness is seeking, that that would not be lawful under the legislation as it stands.

I do not want to rule out the adjustments to the legislation that I have set out, which would be beneficial for children with special educational needs, in the interests of inserting a protection that, as I have described, is already there. So I do not believe that Amendments Nos. 3 and 4 are necessary in order to secure the protections that the noble Baroness rightly seeks.

But I wish to go further. In any case, if there were a proposal to transfer duties of the sort I have described, we would need to be clear not only that that was in the interests of the children, but also that the position would be absolutely clear for parents. It would not be acceptable to create a position where parents would not know where to go for help, guidance or support or would not know who to hold to account in relation to the legislation. That would not be in the interests of children with special educational needs and so that too would not be lawful.

Furthermore, any measure that left parents with no right of appeal could not be in the interests of children with special educational needs. That might be unlawful anyway for other reasons, but in any case it would not be permitted under the Bill as it stands. I can therefore be clear that the legislation as it stands satisfies the concerns raised. It also ensures that if any change were in the interests of children with special educational needs, it would be permitted. That is the goal to which I have aspired.

But in case there remains any doubt, I wish to go further still. I have already described, in moving the government amendments on Report, how we would expect applications to be dealt with and the process that we would expect to go through in order to assess proposals in relation to children with special educational needs. I have said that we will put that in guidance, to which my noble friend Lord Brennan referred. We will make clear in guidance that we would not regard as standard-raising any proposal that simply proposed to do away with those duties. We would not expect to see any such proposals in any case. But if there were any doubt about that matter, I hope that I have put it to rest by committing the Government to setting it out in guidance.

Finally, I know that the Special Education Consortium was concerned that it might be unable to police any proposals coming forward because it would not know about them in time. I know that the noble Baroness, Lady Darcy de Knayth, is concerned that proposals should not be left entirely to the Secretary of State's opinion, for all the right reasons and none of the wrong reasons. I will make the commitment that if the Secretary of State were to receive any application affecting the duties set out in the five sections included in the amendment, the Special Education Consortium would be informed and consulted about the proposals. That would ensure it would have an opportunity to be involved in decision making.

I believe that in what I have said I have met the concerns expressed to me both inside and outside your Lordships' House. I hope that I have made it clear that the legal position is much more secure than some might have feared. In setting out the legal position in such detail, I am conscious that I have taken your Lordships' time. But I hope that all noble Lords will recognise the importance of my having done so, the strengths of the commitments I have made, and, in particular, our involvement of the Special Education Consortium in the process as more than a belt-and-braces approach to ensuring that the needs of these children remain as paramount as they should be, but also allowing the opportunity to look for innovation in our schools and local education authorities. I hope that with those words the noble Baroness will feel able to withdraw her amendment.

My Lords, before the Minister sits down, is she aware of any precedent of a clause that has this power to suspend the statutory requirement other than in emergency legislation in wartime?

My Lords, I would not know that. As the noble Lord will know, we have debated the clauses at great length at other stages. I wish that the noble Lord had been able to put that question to me at a time when I could have written to him before another stage. I will of course commit to write to him with a definitive answer.

My Lords, before I thank the Minister for her reply, perhaps I may thank all noble Lords who have taken part in the debate for their fantastic support. I am overwhelmed. My noble friend Lady Warnock mentioned the important 18 per cent without the statement's protection, as did the noble Baroness, Lady Uddin, for whose informed support I am grateful. The noble Baroness, Lady Blatch, and the noble Lord, Lord Campbell of Alloway—I am delighted he is present as I remember his Private Member's Bill which resulted in the 1993 and 1996 Acts—both referred to the importance of safeguards. I am extremely grateful for the support of the noble Lord, Lord Addington. As always, he put his finger right on the question of whether what is proposed in our amendment is lawful.

I thank the noble Lord, Lord Lucas, for his unequivocal support. I thank also my noble friend Lord Listowel and the noble Lord, Lord Swinfen. I am particularly indebted to the noble Lord, Lord Brennan, for his careful analysis and informed advice, which did a great deal to set my mind at rest that anything to the detriment of children with special educational needs would not be lawful. I am extremely grateful to him for his suggestion that guidance would be a good idea.

I thank the Minister for her careful and long reply. That is a compliment, not a criticism. I am delighted by the clear statement with which she began; namely, that having strengthened the SEND legislation, she had every wish to keep those matters embedded and not renege on them. The amendments to Clause 1 are extremely welcome.

I am particularly grateful for the Minister's explanation that if a project adversely affects a single pupil with special educational needs, it could not be approved. However, what would happen as regards a new pupil entering the school after a project has started? Does the Minister wish to intervene?

My Lords, this is where I get lost in procedure as I understood that at Third Reading I could not reply to questions after I had made my main reply. As ever, I am at the mercy of noble Lords as regards procedure. However, as I said, a school would have to be able to demonstrate that a child arriving at that school would not be adversely affected by a project.

My Lords, I thank the Minister for that reply. It is clear that the key duties will remain and that it will not be lawful to remove any of them. A governing body or LEA that took over from a weaker LEA or governing body would still be bound by those duties.

I am most grateful to the Minister for saying that she would consult the SEC when drawing up guidance, and if someone came forward with an unusual proposal, for example. The Minister also said that parents would be informed and given a right of appeal. Our amendment consciously did not mention that. I am grateful to the Minister for making that point.

This has been a worthwhile exercise. I do not think that we have wasted the time of the House. I am glad to see that the Minister agrees. It is now clearly stated that the key duties remain. That is valuable. It is important that the Government send a clear message to service providers, especially LEAs, that they are committed to the legal framework and to the concept that children and young people should receive the special educational provision for which their needs call as a matter of legal right. Those who draft applications for innovative projects will receive the message that it is absolutely not the Secretary of State's intention to consider, let alone approve, applications which seek exemption from the key duties which LEAs have towards children with special educational needs with regard to identifying them, conducting assessments and making and maintaining statements.

I could make one or two other remarks but I think that I have spoken for long enough. Unhesitatingly, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 5:

Page 4, line 41, at end insert—

"() No order may be made (in relation to England) under Part 1 of this Act which includes reference to criteria prescribed under subsection (2) unless a statutory instrument containing the prescribed criteria has been laid in draft before, and approved by resolution of, each House of Parliament.

My Lords, I am absolutely with the noble Baroness, Lady Blatch, in wanting to get away from the concept of percentages. However, they are a useful guideline and they have helped our debates on the Bill to move forward. I refer to the response of the noble Baroness and others to our initial figure of 10 per cent. However, I make it clear that I referred to that figure as a starting point. I referred also to 30 per cent of secondary schools and 60 per cent plus of primary schools. We want to ensure that qualifying schools are well managed and well led so that all schools in the future will be able to move forward in terms of earned autonomy. It is a starting point, not an end point. It is important to have clarity with our proposals. I give an unequivocal assurance that the criteria will be clear. It is important—I am sure that the noble Baroness, Lady Blatch, agrees—for schools to know whether or not they qualify.

I turn to the amendment. I simply say to the House that the Delegated Powers and Regulatory Reform Committee looked in detail at our proposals for regulation-making powers in this regard. It was content with our proposed procedures, and I hope that, as is conventional, the House will be guided by the committee's view.

The noble Baroness suggested that the amendments made to the Bill on Report mean, in her view, that the affirmative procedure is needed. But while I certainly made it clear that our intentions in relation to what regulations would contain had changed, the changes to the scope of the regulation-making power in primary legislation were not significant. I am therefore clear—we have taken some care to examine this carefully—that there have been no changes in the primary legislation that would disturb the committee's judgment of the appropriateness of the procedure, given the extent of the powers.

All noble Lords will know that we have been completely open throughout about our intentions for the criteria for schools qualifying for earned autonomy and their development. We made our original intentions very clear in the policy statement that was placed in the Library of your Lordships' House. We made clear our continuing intention to consult. On Report, I responded to the concerns that had been raised in Committee. I set out in some detail the Government's revised intentions in relation to the qualifying criteria under Clause 6(2).

I have given very clear commitments on the Floor of the House, which will of course be met; am sure that that is not in doubt. The powers in primary legislation were presented openly to the Delegated Powers and Regulatory Reform Committee and were not the subject of adverse comment. We have been open about our intentions through out and we remain of the view—having checked very carefully, as I said—that the procedure we propose in the Bill is the appropriate one.

Therefore, in the light of the views of the Delegated Powers and Regulatory Reform Committee in particular, I very much hope that the noble Baroness will withdraw her amendment.

My Lords, could I ask the noble Baroness two questions, in the light of what has just been said?

My Lords, we are at Third Reading. We have to accept that there is one speech after the Minister has spoken.

My Lords, I have been here for some time and my understanding is that if I wanted, for clarification, to ask questions, that was in order. I shall be advised by the Clerk. If I cannot, I cannot.

My Lords, the noble Baroness opened her speech by asking further questions. I do not think that this is in order. If she had stood up before the Minister had sat down and had asked a question, that would have been in order. However, she is now making her wind-up speech and we must be satisfied with that.

My Lords, I said that in the light of what the noble Baroness said, I had two questions. I shall be advised by the Clerk. If I cannot ask them, I will not ask them.

My Lords, paragraph 6.122 of the Companion states:

"Only the mover of an amendment or the Lord in charge of the bill"—

that is, the noble Baroness, Lady Blatch—

"speaks after the minister on report except for short questions of elucidation to the minister or where the minister speaks early to assist the House in debate".

My understanding was that short questions could be asked by anybody but that they should be asked before the Minister sits down. However, I am sure that my noble friend Lady Ashton will answer two short questions for elucidation on this occasion.

My Lords, I have no intention of asking the questions if that is outside the Standing Orders. I ask for the advice of the Clerk about whether I am allowed to ask questions in light of what the noble Baroness said on my amendments.

My Lords, the advice comes from the Clerk through me. I have read out the rules. I am sure that my noble friend the Minister will answer two short questions for elucidation.

My Lords, does the Minister agree that what he said indicated that my noble friend Lady Blatch would be in order if she asked questions to clarify what the Minister had said?

My Lords, I have just said that. I have just said that it would have been better if the questions had been asked before the Minister had sat down but that, in these circumstances, if there is any misunderstanding or possibility of misunderstanding, I am sure that the Minister will answer two short questions for elucidation.

My Lords, I was looking for the statement that my questions were in order. My questions were not relevant questions before the Minister had responded to the amendment; they arose from what she said. My understanding is that I am in order. If I am in order, I shall ask my questions.

The noble Baroness said that the procedure that would be put in place would suffice. My question on procedure is: what will the procedure be, and what will the authority be, for the criteria? My other question relates to the figures of 30 per cent for secondary schools and 60 per cent for primary schools. Are there to be percentages? The Minister said in her response that we were getting away from percentages.

My Lords, I shall take the second question first. I was trying to convey a shared desire with the noble Baroness that we did not have percentages. I believe that she made that point in Committee with great force and I listened to her with great care. She said that we would somehow be saying that once one hits the barrier of 10 per cent in that context, if one happens to be the school to which the 11 per cent figure applies, one would not be able to receive earned autonomy. That is where the noble Baroness's original problem lay in this regard. I agree with her in saying that this is not about percentages. On Report, when I referred to the figures of 30 per cent and 60 per cent plus, I sought to indicate how far we have moved in our thinking and that those were the right kinds of numbers. I am not saying that when we hit 30 per cent, that is the cut-off point. We are saying that when looking at the criteria that we have put together, which we have said are appropriate, we believe that there will be about 30 per cent of secondary schools and 60 per cent of primary schools which will, within that fifth wave, have that applied to them. The figure may be 32, 29 or 64 per cent; we were seeking to demonstrate how far we had moved and to address the specific point that the noble Baroness raised in Committee. I hope that that is clear.

The position on the procedure is that that is done through negative resolution.

My Lords, I am grateful for the clear answer about the use of negative resolution. I do not see that as satisfactory for the House because it will not have a proper opportunity to consider the detail of the criteria.

Secondly, I hope that I can be forgiven for the confusion about percentages. The noble Baroness's own words were:

"Under the criteria that we propose, we expect that 30 per cent of secondary schools and 60 per cent of primary schools will qualify".—[Official Report, 17/6/02; col. 533.]

In her answer to me, she said that we wanted to get away from percentages. I was trying to ascertain from the Minister whether that was a new move, that percentages will not feature as the target and that the schools that qualify will qualify under the criteria. That is why we would like to see the criteria. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 [Powers of governing bodies to form or invest in companies to provide services etc.]:

moved Amendment No. 6:

Page 8, line 8, leave out from second "company" to end of line 9 and insert "registered under the Companies Act 1985 (c. 6) as a company limited by shares or a company limited by guarantee"

The noble Lord said: My Lords, we had full discussions on what are now Clauses 11, 12 and 13 in Committee and at Report. As a result of that useful debate, we have, as we promised, brought forward amendments which, I hope, deal with some of the concerns that were expressed.

Amendment No. 6 places on the face of the Bill a requirement that we originally intended to include in regulations; namely, that school companies will be required to register under the Companies Act as companies limited either by shares or by guarantee. We believe, on reflection, that that requirement is better stated on the face of the Bill to provide greater clarity. That responds to concerns that several noble Lords expressed, notably the noble Baroness, Lady Sharp. We believe that different types of company activity may be better suited to different company structures. For example, we would envisage purchasing companies being limited by guarantee, with service delivery companies more likely to be limited by shares. With service delivery companies, outside partners—I refer to the restricted definition in the Bill—might be brought in. However, we do not want to impose that on companies, so we have decided to give companies the freedom to decide which company structure to adopt, while ensuring that they must have limited liability status.

It is important to mention that both shares and guarantee offer limited liability status, giving companies financial protection. The size of the guarantee or the value of the shares issued will be for companies to decide, but in both cases the amount could be as little as £10. The financial liability that a governing body would have for the debt would be limited to that amount.

I reiterate the assurance I gave on Report that being limited by shares cannot invite hostile takeover; shares will be sold only if the members of a company agree. The companies will remain private companies and shares will not be publicly available. Amendments Nos. 8 and 9 are purely technical. They tighten up the requirements for companies to operate only in accordance with the requirements set out in regulations.

Amendment No. 10 places on the face of the Bill the requirement that only those specified in regulations may join companies. That was to be contained in regulations, but again we are placing that safeguard "upfront" to give a more visible degree of protection to companies and reassurance to those who were concerned. I am sure we all agree that the list of those allowed to join companies must remain in regulations. The list may need to be updated from time to time based on feedback from schools using these powers. Such amendment would have to be done by amending regulations rather than by primary legislation. I beg to move.

My Lords, I have read and re-read the amendments and find it difficult to distinguish between "has ceased to satisfy" and "fails to satisfy", and between "any applicable requirements of regulations under subsection (3)" and "the requirements set out in subsection (3)". The notion that this is tightening up fails to convince me. I do not understand the amendments. However, I shall not oppose them. If the Minister says that this is tightening up—he clearly has had a good briefing to that effect—I have to accept that.

I have two questions. First, paragraph 8, which has been amended by the Minister, refers to "voluntary school". I assume—I do not know—that "voluntary school" subsumes "voluntary aided" and "voluntary controlled" in the interpretation of what is a main school. Secondly, I am not sure whether Amendment No. 10 was tabled because of my reference at a previous stage to undesirable characters who will see schools as an easy target to become involved in commercial activities. I gave the example of someone who was, indeed, undesirable. Had the school been unwise enough to engage in any kind of commercial activity with that person, it would have ended in tears.

I find it difficult to begin to understand how one describes the kind of person to whom we refer. By nature, confidence tricksters are manipulative, convincing and easy to be taken in by. How can a set of regulations specify such undesirable or unsuitable people for the purposes of becoming a member of a company? Perhaps in his reply the Minister can give examples of how the kind of person referred to in Amendment No. 10 will be described.

My Lords, I intervene briefly to thank the Minister. Amendment No. 6 answers queries I raised on Report concerning the identity of companies and in particular whether they would be limited by shares or guarantee. I am grateful to the Minister for tabling the amendment.

My Lords, the noble Baroness, Lady Blatch, raised two points. First, she asked whether "voluntary" covers both "voluntary maintained" and "voluntary aided"; it does. Secondly, she raised the question of how to keep out undesirable characters. The noble Baroness gave examples of that at an earlier stage. There are two lines or protection here. First, there is the good sense of the schools concerned. We are talking about people from more than one school, so such a person could not be the friend of one of the governors or a friend of the head teacher of one of the schools unless the other schools involved in the company were convinced of the integrity of that friend. I do not know whether the noble Baroness reads the High Principals column in Private Eye. Some of the things which have occurred in our further education colleges would lend support to what she says.

However, we have the protection that more than one school will be involved and there will be an independent eye cast over any invitation to join. It is for the reason put forward by the noble Baroness that we are leaving the definition of "acceptable members of a company" to regulations. Clearly, that will improve with experience. We can state in regulations that the person who becomes a member of a company shall have educational objectives; or that such a person has something to contribute to the company educationally which cannot otherwise be found We can say all sorts of things of that kind but there will always be crooks.

Regulations will not be able to identify individuals who should be excluded. In the end, it is for us to indicate the type of person who might be included to the benefit of the operations of the company. It will be for the members of the company, the schools, to exercise their judgment. with the help of the local education authority as initial approver and supervisory authority, to ensure that undesirables do not come into the companies. That should accord with the experience of the noble Baroness, which she described on Report, of a company being formed by an individual school.

On Question, amendment agreed to.

moved Amendment No. 7:

Leave out Clause 11.

The noble Baroness said: My Lords, in moving Amendment No. 7, I shall speak also to Amendments Nos. 11 and 12. The Minister will be aware that I have serious reservations about schools becoming companies. I do not refer to schools being given the freedom to be more commercial but to the way in which the Government have set about this and the way that the provisions for such commercial activity are set out in the Bill and supporting policy papers.

In his helpful and detailed letter to me, the noble Lord offered a number of explanations. However, perhaps I may refer to a comment made by him in responding to the previous amendment. He referred to some of the incredible things which have occurred in further education colleges. I have to add that the Government took a long time to shine a light on such matters. In many cases, action was taken late in the day. The Government's own record is less than perfect when we consider their dealings with Capita. That company made a mess of Individual Learning Accounts and is still being investigated, yet has been given more work by the Government. It is even involved in the work of the Criminal Records Bureau, dealing with highly sensitive information and large sums of money. The Government's own record in that respect is not good.

In response to Amendment No. 10, which is relevant, the noble Lord said—not happily but glibly—that there will always be crooks. We know that there will always be crooks. However, we should be in the business of protecting our governors of schools. They are there not to be company chairmen, company members, or board members, but to ensure that good education takes place in schools and that schools are managed well in the interests of the education of the children within them.

When it comes to deciding who is a desirable or an undesirable person—or, indeed, a suitable or an unsuitable person—to become involved with the running of a company, the noble Lord said that help would always be available from the LEA, which is the supervisory body. However, we have been told that the latter will be very "light touch". It will be possible to carry out such duties under the law relating to these clauses—and, indeed, company law—only if the supervisory body actually knows what is going on. You cannot know what is going on without having a good deal of day-to-day information. The notion that this will not be extra-burdensome to LEAs simply is not true.

Moreover, should any of these companies go belly up, the LEA will have to pick up the tab. Thus LEAs would be well advised not to be too light a touch when complying with their duties and putting matters right. However, they should not do so when something goes wrong, as set out in the noble Lord's letter: well before something goes wrong, they should ensure that such matters are being properly managed. The letter says that the LEA,

"will only step in when it is clear that the company is running into trouble".

That is too late, especially when there have been visible signs that the company was running into trouble.

I shall leave the question of Clause 13 to one side for the moment. I believe that the costs of establishing all the measures outlined in Clauses 11 and 12 will outweigh the benefits that the noble Lord has claimed will be there for the purposes of "acting jointly", "purchasing jointly", and so on. We have argued on a number of occasions that joint purchasing is a longstanding practice of both LEAs and of schools. The notion that contractors cannot deal with a single body that represents a number of schools is simply not true. For example, one school says, "We'll put the order in", while the other schools will decide between them what they require. The order will be delivered, and the payments made to the company. If it were a problem, contractors would not be touting for business around the schools and saying, "If you order in reasonable quantities, we can give you discounted prices". It is an age-old practice, which still continues; and, indeed, it will continue to do so. I believe that the problems outlined by the noble Lord are exaggerated.

On the question of company members, the noble Lord agreed with the points that we raised regarding protection for schools as regards allowing undesirable people to become involved. We now know that there is an amendment to that effect which goes some way to protecting company members. However, describing "unsuitable people" ahead of them turning out to be so, is something that I regard as being a real challenge. The noble Lord says in his letter that the Government will consult upon those who will be allowed to join companies. But who will be consulted? Further, in what way will it be possible to do so?

In his letter, the noble Lord refers to the exercise of LEA functions,

"to make arrangements for the provision of services for schools for other persons".

Can the noble Lord explain what is meant by the words,

"for schools for other persons"?

I believe that they can provide services for other schools and for other persons. If there are to be "other persons", can the Minister say who are these third bodies who are not other schools? For example, would schools provide catering for the local playgroup, or would they provide cleaning services for a local private company down the road? What is the definition of "other persons", if they are not to be other educational establishments?

The noble Lord continued in his letter to cover the distribution of profit. I have to tell the noble Lord that not only Members of this House but also his colleagues in another place will be most interested in his response on the distribution of profit:

"Our regulations will prescribe that school companies may pay company profit back to the members, or retain it to invest in developing the capacity of the company. We do not propose that profit must be spent solely in the interests of education".

If it is not to be spent solely in the interests of education, are we to assume that governors can indulge in forming a company and making profits and that those profits are not expected—indeed, not just expected but required under this Bill—to be spent in the interests of education?

I know that the noble Lord will say that there will be third party members of these companies—joint members of the companies—who will not be educationists: they will be purely third-party commercial interests. Therefore, do we expect that there will he a constraint on those who are members of governing bodies in an expectation that their profits will go back into schools? I do not refer to a "requirement", because the Bill does not specify that; there is no requirement in the legislation to spend this money on education. However, do we expect that to happen, while the profit made by the wholly-independent commercial member of the company can be used for rewarding shareholders, or spent on whatever the chairman chooses?

There are a number of questions to be answered. I have in mind private companies making a profit in a safe haven. Some commercial people will regard a school as a safe haven within which to do business, in the full knowledge that if the company fails the LEA will pick up the tab. Alternatively, if the company succeeds, it will go away with a pocket full of money.

I turn to Clause 13·I shall not press my opposition to Clause 13·I want to take in good faith the fact that a great deal of work has been carried out by the Church and by the Government. I have enormous reservations about whether or not this will work. However, I should like to give this the benefit of the doubt because I believe that the work that has been carried out at national level between the Government and the joint venture members of the company to date is such that I should not wish to stand in its way. Nevertheless, I have some very real reservations that I should like to put on the record because there may well be difficulties in the future.

The right reverend Prelate, who has also very kindly written to me, as promised, with a very detailed letter, referred to the PFI not working. I have to point out that PFI projects have been as small as building small fire stations and setting up small Probation Service projects. Therefore, the notion that such initiatives do not work at a local level and on small projects is simply not true; indeed, such initiatives have worked and, in some cases, they have worked very well. There have also been examples of more than one project being dealt with at any given time so that, taken together, they have formed a much bigger project.

The noble Lord prayed in aid of his case the fact that for the year 2003–04 the department allocated £940 million PFI credit to 21 projects. However, only £10 to £20 million went to voluntary aided schools. If I were in the place of the right reverend Prelate, I should want to challenge those figures. As the right reverend Prelate knows, 10 per cent of the schools are voluntary aided schools. Therefore, in my book, 10 per cent of £940 million is £94 million, which is a good deal more than the £10 to £20 million that has been allocated. I am not sure that I can accept the idea that, because it is an unfair allocation, we have an argument for going down this road.

In his letter, the right reverend Prelate says:

"All three bodies"—

that is, the three bodies that are part of the joint venture company—

"will provide the funding".

I thought that this was being introduced because the Church, the LEA and the Government did not have the funding. If the funding is to be provided under the new arrangements, what is wrong with such funding being provided now? The letter continues:

"The JVCo [the joint venture company] will engage the necessary legal and technical advisers to carry out the procurement on behalf of the schools and dioceses and, with their inputs, appoint a Private Sector Partner (or Partners) who will provide the design, building, [and] finance".

So we have finance being provided by the private sector partners, and we have funding being provided by the Government, the Church and any other party to the joint venture company; but at what cost? Where will that money come from? What pot of money 'will it come from?

The letter continues:

"Furthermore as new tranches are ready to come on-line, there are potentially no bidding costs for the Private Sector Partner".

Am I to take it that competitive tendering has gone out of the window for these purposes? Some preferred bidder—some lucky chap out there who is running a company—is about to get the business for something like £40 million worth of work, which, we have been told, is the likely first tranche of spending. We are told that future contracts will simply keep going for that one contractor. Is there to be no process of competitive tendering for the business? For example, will other companies that provide such services he allowed to bid? If there are to be no bidding costs, I assume that there will be no bidding. The right reverend Prelate goes on to say that that would be a great saving to the public sector.

The next point concerns profits. It is not intended at this stage that the schools would be members of the joint venture company. If I was successful in removing Clauses 11 and 12, that would be the case; the joint venture company, at least in the initial stages, would he at one at national level with the Churches involved. As I say, I intend to leave that in the Bill.

The letter goes on to say that schools would be party to the procurement and would also gain a small share of the profits. Am I to understand that money will come from government, Church and other partners; schools will be repaired, refurbished and even newly built; that the company will make a profit (out of what, I ask); and when it makes a profit there is nothing in the Bill to say what will happen to those profits? Will the Church take them? Will the Government take them? Will the commercial partner take them? I thought the profits would go to the company doing the refurbishment work and building the schools.

My final point is on the final paragraph:

"The details of the joint venture companies are still in development, but it is thought likely that individual schools will pay the Private Sector Partner directly over the years of the contract with the benefit of DfES grant over the period and the proper level of local education authority contribution (for their liabilities), the governing body being responsible for the 10%".

So it is not a free option. The LEA will have to pay; the Government are going to have to pay; the Church will have to pay. But they all pay now for projects. So what is the beneficial factor in this option? I do not know.

As I said, despite my reservations which are now on the record, I want to give the right reverend Prelate and his colleagues who are making this case the benefit of the doubt and therefore I shall not oppose Clause 13. However, I intend to oppose Clauses 11 and 12. I beg to move.

My Lords, the Companion clearly states:

"The principal purposes of amendments on Third Reading are: to clarify any remaining uncertainties; to improve the drafting; and to enable the government to fulfil undertakings given at earlier stages of the bill".

Can the noble Baroness explain how amendments which remove a whole chapter from the Bill—in effect, wrecking amendments—fit the guidance in the Companion? I am sure that the noble Baroness will say that since she tabled the amendments and they were not rejected by the Public Bill Office they must be in order. But if the Opposition Front Bench and the Liberal Democrat Front Bench combine to table amendments which are completely outwith the guidance in the Companion, how are we supposed to take any notice at all of the Companion?

My Lords, if I am out of order I will be advised and I will remove them.

My Lords, the noble Baroness is not out of order because she has been allowed to table the amendments. I am asking how she feels her amendments, which remove a whole chapter from the Bill, fit the guidance in the Companion.

My Lords, if I am in order, then I am in order. I have spoken to my amendments. I beg to move.

My Lords, that is simply not acceptable. I have been sitting here, as has my noble friend Lord Carter, wondering why we bother to have the Companion. This does not apply only to these amendments; it applies also to others. For the years when I sat on the Benches opposite, I and my noble friends stuck religiously—if I may use that word standing just behind the right reverend Prelate—to the spirit of the Companion.

I am with my noble friend Lord Carter. I should like an explanation because we are not even discussing misbehaviour on the part of Back-Benchers; we are discussing what the Opposition Front Benchers are doing. This may be a new departure but the notion that one is in order is not the same as meeting the courtesies—a large part of them are courtesies—of the Companion. My noble friend Lord Carter is entitled to a reasoned reply to the question he put perfectly reasonably.

My Lords, I shall be repetitive. I took advice. I believe I am in order. If I am out of order, I will be advised and will respect the advice I am given.

Secondly, I have been entirely consistent throughout this Bill, from the first day, with my concerns about these clauses. We go through a Bill at each of the stages, both reflecting on what we have said and Ministers reflecting on what they have said. We had an interesting process of letters. As I say, if I am out of order I shall withdraw my amendment; if I am within order, I beg to move.

My Lords, my name and that of my noble friend Lady Walmsley is attached to this amendment. We have had no indication from the Clerks that it is out of order and we must therefore proceed as planned.

We have had much discussion in Committee and on Report on these clauses. My name is attached to Amendments Nos. 7 and 11, which apply to Clauses 11 and 12 but not to Clause 13. We learn, as a result of our extensive discussions, that in fact the powers to form companies, as Chapter 3 says, are limited powers; it only applies to two or more schools who wish jointly to form a company to do things together. The governing bodies of schools, already as bodies corporate, have the power to form a company for an individual school. The problem is that they cannot form companies with two or more schools to undertake joint purchasing or the provision of joint services. That is what the two clauses involve.

So this is a misleading title, both to the chapter as a whole and to Clause 11, which says,

"Powers of governing bodies to form or invest in companies".

The power is to form and invest in joint companies.

We from these Benches have also opposed these clauses from the start. Although I have learnt more about what the companies are supposed to be about and why the Government wish to set them up, we have not changed our view that on the whole we do not wish to see these two clauses in the Bill.

Why is that so? There are four main reasons. The first is that we feel it sends out the wrong message. On the whole, from these Benches, we do not feel that the heads of schools, teachers and governors should be getting involved in companies on behalf of schools. Schools are not companies; they are community institutions. Given all the other pressures on their time, teachers, governors and head teachers should be concerned with running their schools and not running companies. So we feel that the clause sends out the wrong message.

Secondly, we are worried about the implications of these clauses for the local education authorities. We have received all kinds of assurances from the Minister about the role of local education authorities. Yes, it is a light touch supervisory role. But they end up having to bail out or pick up the tab if anything should go very wrong.

I worry also whether local education authorities have the competence to act as supervisory authorities for setting up companies. By and large local education authorities do not employ accountants and lawyers who have a lot of knowledge about setting up companies. Again, they are hard pressed to do the job they have to do in terms of running the schools in their local area; they do not want to have to spend time looking at the details of companies that schools are setting up and making sure that they are not doing the things they should not be doing.

So again we feel that this is not something we want our local education authorities to spend time doing. Nor do we feel it is right that money taken from local taxpayers to help pay the costs of schools should be put at risk perhaps by nefarious doings on the part of some governing bodies.

The third argument relates to the degree with which we feel there is justification for setting up the companies. Can the Government really justify a case for setting up the companies? Their answer is that they want schools to purchase jointly. As the noble Baroness. Lady Blatch, pointed out, many schools have come together to purchase jointly for many years. LEAs were set up in part to reap the economies of scale of joint purchasing and we believe that that can still be achieved. As regards the provision of joint services, we spoke a great deal about the possibility of the development of software; that is, having two teachers from different schools developing software and perhaps deciding to form a company. We argued that they may not want to set up a company for themselves because they may want the profits to go back into the schools, but the company could be limited by guarantee. The answers to those arguments do not hold true.

The Minister also said in Committee:

"As regards the examples given of schools combining to purchase jointly without this power [to form joint companies], that is perhaps a possibility".—[Official Report, 17/6/02; col. 559.]

But what about those from whom they are purchasing? Surely they will want to have someone against whom there is some comeback. We have already observed that the local education authorities have to pick up the tab if things go wrong. I repeat that schools have been purchasing, and purchasing jointly, for many a long year. Quite frankly, there is no need to have such comeback; there is no need to form a company. As regards all these issues, the argument does not ring true; there is no real justification for the provision.

Finally, we have doubts about precisely why the Government want to set up these companies. Is there perhaps some subtext? One aspect is the new contracting-out order procedure which we approved in March this year; it is the assumption that LEAs will be able to persuade schools to form companies to take on and deliver the services which LEAs no longer feel competent to provide. We have discussed at length purchasing and providing, but I ask your Lordships to look at Clause 11(1) regarding the power to form companies. Paragraph (a) of that subsection relates to companies being formed:

"to provide services or facilities for any schools".

Paragraph (b) reads:

"to exercise relevant local education authority functions".

Paragraph (c) reads:

"to make, or facilitate the making of, arrangements under which facilities or services are provided for any schools by other persons".

What are the local authority functions? We are most perplexed. Is there an unwritten text? Are the Government looking for a route to semi-privatisation? We on these Benches would oppose that. We do not want to see the privatisation of education. We do not understand that subsection and believe that it may contain a subtext. We had doubts as to what it was all about.

I return to our fundamental objections. Schools, teachers and governors should be concentrating on running schools, not running companies. The proposition is misguided and we believe that it should be removed from the face of the Bill.

My Lords, I must intervene to express my gratitude to the noble Baroness, Lady Blatch, for saying that she will not press Amendment No. 12. However, I could wish that she had replied to my letter, which other noble Lords have not seen. It might have been helpful for them to have seen it before we had a debate about its contents. As the noble Baroness well knows, I do not have backup in the House and these are highly technical questions in relation to companies which I cannot answer. However, I am grateful to her for putting forward some of the concerns, but I have to admit to the House that I am not in a position to answer the specific points the noble Baroness made. Sometimes fact is more strange than fiction and to have the Conservative Opposition's lead speaker on the Bill opposing the establishment of companies and a diocesan Bishop speaking up for them is an extraordinary set of events.

I listened carefully to other parts of the debate and I do not want particularly to become involved in them. However, I heard what was said about LEAs by the noble Baroness, Lady Sharp, and I have concerns about that. I am not worried about the public/private partnership. I believe that that might be a way forward for some schools. However, are we not dealing with secondary education in the Bill? The White Paper was about secondary education.

I am a little troubled that we are preventing responsible governors of secondary schools from taking actions, using illustrations from higher and further education. It seems that the governors of other institutions within the public sector—and certainly the governors of independent schools—are able to do that. I may be wrong about that, but, having noted the cautions, I would want to be supportive of the enabling power. I have greater trust in the governing bodies I come across.

There are bound to be failures—there are failures in almost any walk of life—and risks have to be taken. However, I thank the noble Baroness, Lady Blatch, for saying that she will not press her amendment. If she did so, that would cause great difficulties for us. My advice is that the provision is a way forward to help smaller schools with projects and I trust the advice I have been given.

My Lords, without raising questions of procedure or of what is or is not in order—it is not my job from this Dispatch Box—I am a little surprised by the way in which the amendments come before us. In the nearly 20 years I have been in this House I have been used to the difference between Committee, Report and Third Reading. Generally speaking, in Committee we explore the areas of potential difficulty with the Bill. Each clause must positively stand part of the Bill and the debate on clause stand part is used to explore the Government's justification for any aspect of a clause. It is often difficult for Ministers to respond to that, but they must do so—it is the nature of the job.

In Opposition, one tries to refine one's objections and to pick out the points which remain objectionable after they have been explained. At Third Reading, if difficulties arise out of that debate, one tries to deal with those particular points. However, we find ourselves debating amendments, which have been accepted by the Public Bill Office, removing the whole of the clause. That is what I must respond to.

I do not believe that the noble Baroness, Lady Blatch, has and would argue that Ministers have not responded to her in great detail on the points she has raised both in speeches in the House and in detailed letters. I believe that we have addressed—I would say answered—all the points she has made so far. The question must be turned around. The noble Baroness, Lady Sharp, objects to the proposal because she believes that it is unnecessary and will not take place. I shall later deal with her point that this is perhaps some subtle plot to introduce semi-privatisation and to persuade schools to have that. I shall put that on one side for the moment.

Surely, in considering these amendments, our starting point must be the proposals which are purely voluntary. We must ask: on what basis is it the wish of anyone in Opposition parties to deny those schools—it may be a few—which have expressed a need for such facilities and which want to use them the right to take advantage of them? That must be the starting point, not the other way around.

Some schools are already forming companies on their own. The noble Baroness, Lady Blatch, gave examples. They have not found it too big a burden, so why should we prevent schools from joining together and thereby reducing the burden of forming companies? We have not plucked this policy out of the air—it is not blue-skies thinking in the Department for Education and Skills. It is a response to those who have come to us and indicated that they want to work together in new ways. They are confident, creative schools which want to work together in new ways to raise standards in their own schools and in others.

I repeat what I have said at each stage: the decision is entirely voluntary. I say to the noble Baroness, Lady Sharp, that they will not be forced or persuaded to form companies. They will do so only if it is for their benefit and only if, in their view—it is their view that matters—they will not be interfering with what I agree with the noble Baroness, Lady Sharp, is their main task: providing education for the pupils in their schools. Those companies are not an end in themselves; they are simply the best mechanism available to facilitate joint activity.

There are limits. A few minutes ago, I said, perhaps too broadly, that those companies are designed only for more than one school acting together. That is not quite accurate. They could be formed by a single school that wanted to provide services for other schools as well. That is presently not possible and will be made possible by this chapter. But the main users, I suspect, will be schools joining together, first, to reduce their administrative and purchasing burden. The noble Baroness, Lady Blatch, misunderstood that when she queried the phrase, "other persons". She thought that that referred to providing services for other persons. It does not. It refers to providing services for schools and only for schools by other persons. If she reads the Bill, she will see that that is right.

The second reason for using such companies is that schools may want to join together to deliver services to other schools in which they have real strength. That could result in benefits to company members and to other schools, which could receive good quality support. Let me give an example. Schools may have an educational idea but lack the distance learning or publishing skills appropriate to enable it to be made more generally available. They may therefore need to bring in outside organizations—perhaps a not-for-profit organisation, an educational institution in the field of further or higher education or a commercial publisher or distance learning skill provider. They may bring in such people as members of the company on the basis that they will take a share of the profits. And why not?

I cannot reconcile the opposition to that idea with what I understand to be the ethos of the Conservative Party. It simply does not make sense to me. If I can understand the ethos of the Liberal Democrats, their opposition does not make sense to me either. There could be real benefit to the quality of services offered to other schools through such companies by joining together private and voluntary partners with schools.

Let me make it clear that when talking about profits there is no question of governing bodies taking their share of the profits to use for anything other than the educational needs of their schools. There is no possibility of siphoning off profits, as has been suggested.

I turn to the issue of local education authorities. Again, there is an element of suspicion that is not justified by what the Bill provides. If and when such companies are set up, they will operate in a positive, productive partnership with their local education authority. They will have to, because local education authorities will give the go-ahead for their formation and will act as the supervisory authority thereafter. School companies will operate within a protective regime, correcting the balance between giving companies freedom to govern themselves—of course, there are some dangers, although the noble Baroness, Lady Blatch, overstated the case—to innovate and to use the fruits of that innovation for the benefit of education more generally. Much of that provision will be contained in regulations under Clause 12 and we shall listen carefully to the views expressed on that.

I am glad to hear that opposition to Clause 13 will not be pressed because the speech of the noble Baroness, Lady Blatch, contained a number of new misunderstandings. First, I can assure her that there are no changes to the tendering rules. There will be savings in bidders' costs, but they will be entirely passed on to the schools for the benefit of education and will not go outside. The amendment to leave out Clause 13 may not be pressed, but Clauses 11, 12 and 13 form a package. They enable individual schools to join in joint-venture companies to benefit from the good quality advice and support that they will acquire for use in private finance initiative schemes, if such schemes are appropriate as, for example, in the case of the proposed Church of England company.

The opposition to the clause is paradoxical. If it had been advanced by those who are opposed to entrepreneurial activity, innovation and the dissemination of good practice and new ideas, I should have understood it and handled it. But to have such opposition advanced at this stage by the party of capitalism and by the party of liberalism strikes me as strange. I hope that the amendments will not be pressed.

My Lords, I am sorry that the noble Lord is in a state of confusion over the matter. Let me make it clear: I am for innovation and the clauses on earned autonomy. In fact, we have tabled amendments to allow more schools rather than fewer to enjoy that. I am in favour of good practice, but therein lies the rub. The provision is not good practice; it is not thought through; and we have not received good answers about culpability, liability and protection of governors. How on earth will the extra time, money and effort be spent without any impact on the primary duty of a governing body, which is to manage its school?

I can only go by the words on the page. The letter that I cited from the noble Lord states "no bidding costs", not "lower bidding costs". So I was left with the impression that either someone else would pay them or that there would be no bidding. On profit, let me read from the noble Lord's letter, rather than refer to the words that he just used. The letter states:

"Our regulations will prescribe that school companies may pay company profit back to the members, or retain it to invest in developing the capacity of the company. We do not propose that profit must be spent solely in the interests of education".

I rest my case on that point.

When the noble Lord described third parties, what he said was not consistent with the Bill. Third parties have been described variously as third parties with an interest in educational matters and third parties that are purely commercial but which would join schools to form companies to make profits, some of which may find their way back into schools. But today every example of a third party to which the noble Lord referred had a specific link with education: further education authorities; educational publishers; and the like. While not excluding them, does that mean that any third party must be one with a link with education?

Difficulties remain. A bit of a campaign is going on today about procedure, but my concerns about the clauses remain. We have passed each stage of the Bill hoping that many of our points would be taken on board; but they have not. Here we are at the final stage of the Bill and I believe that I am procedurally within my right to refer to those concerns at this stage and, if I wish, to press the amendments to a vote.

We live at a time when there is a shortage of teachers and, in particular, a shortage of teachers teaching the subjects for which they are trained. The Government hold unprecedented sums of money centrally, denying schools the full benefit of core funding. Innumerable new burdens have been imposed on governors, Many of our schools, as yet unspecified, are the sort of school that the Secretary of State would not touch with a bargepole.

The Bill creates further pressure on schools to form companies. Having three layers of management—the schools themselves and the companies, the local education authorities and the Secretary of State—is a recipe for chaos. We are not preventing schools from joining together to save money. We are not preventing them from behaving commercially. They already do so successfully, and we hope that they will continue to do so. The right reverend Prelate asked why, if independent schools could do it, individual schools could not. Individual schools can.

This is not a secondary education Bill: would that it were. The Government talk about changes to secondary education, but there is hardly anything in the Bill that spells out the detail of reform to secondary education. I believe that colleagues on the Liberal Democrat Benches join me in this view only: we should protect our schools and the education of our children.

moved Amendment No. 11:

Leave out Clause 12.

On Question, amendment agreed to.

moved Amendment No. 13:

Before Clause 19, insert the following new clause—

My Lords, noble Lords on these Benches very much support the spirit of this amendment. The Government have set new records for the quantity of paper that has been spewing forth from Sanctuary Buildings. The advice being given often goes into extremely fine detail covering many pages. One has only to look at the number of books and amount of detail issued in connection with the numeracy strategy. These days, central government lay down week by week what mathematics should be taught in the classroom.

We see this as part of the centralisation agenda which started not with this Government, but long before, back in the 1980s under the administration of the noble Baroness, Lady Thatcher, who I see is in her place. We have all suffered from the increased centralisation and bureaucracy that has beset our schools. We need a bonfire of regulations. However, I do not think that this is the right amendment to achieve it. My doubts relate in particular to subsection (3) of the proposed new clause. It suggests that, when sending out any circular and so forth, the Secretary of State should indicate the time that it will take to fill out the forms or deal with the information. The amendment states that the,

"Secretary of State shall include a statement by him of the time he expects it will take for governing bodies or head teachers of schools or nursery schools, as appropriate, to read, consider and implement the regulation, circular or code of practice concerned".

Even if we take only the word "read", something of a problem is created. Obviously, it takes people different lengths of time to read a document because some are fast readers and some are slow. Then, when trying to work out the time involved in a board of governors considering the impact of a document, there too will be wide variation from institution to institution. It would be extremely difficult for the Secretary of State to specify times in this regard.

Subsection (2) invites the Secretary of State simultaneously to list all the representations he receives from head teachers and governing boards concerned with bureaucracy. One can bring to mind the vast numbers of letters that will be sent stating something like, "You expected us to read this material in five minutes, but it has taken us 55 minutes to do so".

As I said, in spirit we entirely support the proposed new clause, but in practice it is not the right way to seek to control bureaucracy. We need a bonfire of regulation, but what must be done is to go back to where we started. The problem lies in over-centralisation, a practice that was as much of a problem under previous Conservative administrations as it is under this Government.

Education should belong to the schools and to local education authorities. We want to go back to a time when we trusted our teachers to get on with the job, when they did not have to be told bit by bit what to do; we want to trust local education authorities to run the show. We do not want even more circulars about other circulars.

While we support the spirit of the amendment, we shall not be joining the Opposition in the Lobby.

My Lords, I recall helping a Conservative government once upon a time and being as much concerned then as I am today about the flow of paper into schools from government and local authorities. I do not believe that the amendment is an effective way of controlling it, but the intent is absolutely right. In the days when I was advising, a very senior official was appointed to control the flow of paper into schools. He did not succeed.

Teachers enjoy teaching—they enjoy the demands of their profession—but they are not administrators. They need time to prepare their lessons and to teach, and they are not getting enough of it. I said before how astonished I was to hear from a former chief inspector, a little over a year ago, that 400,000 teachers were teaching, and 400,000 qualified teachers were not teaching. That speaks a great deal about what teachers think of their profession.

They love teaching—they want to teach—and the greatest single service the Government can give to education is greatly to reduce the flow of paper into schools. I hope that the Minister will be able to give the House some real assurances on this issue.

My Lords, I have not so far taken part in the debate but there is an enormous amount of force in what the noble Baroness, Lady Blatch, said. Would not the answer be to pass the amendment and then, in the other place, subsections (2), (3) and, by extension, subsection (4), to which the noble Baroness on the Liberal Democrat Benches objected, could be removed there? That would leave in subsection (1), which is the really important one. Unless the amendment is passed, that will be impossible.

My Lords, I have spoken to this issue at previous stages of the Bill and once again I wish to make clear that the Government wholeheartedly support the spirit of the amendment. We understand that head teachers and teachers are under pressure. We are only too well aware of the importance of removing unnecessary burdens from our schools. It is something at the forefront of our minds in the continual challenge, as the noble Lord, Lord Dearing, and the noble Baroness, Lady Sharp, said, to let teachers concentrate on teaching and to create the right environment for all our pupils to succeed.

I accept that when one talks to those who should be in the teaching profession but are not, or to those who are moving out of the teaching profession, they refer to workload issues. It is very important to understand what we mean by "workload" and not simply to see it as an issue—important though it is—of the amount of paper that teachers have to deal with.

I am sure that the concept of a school system with no regulation, no information and no guidance is not realistic. I accept that the amendment of the noble Baroness, Lady Blatch, does not propose this, but we do need to be careful. Its aim is laudable but it would have damaging and obviously unintended consequences elsewhere. If we placed what would be necessarily crude and arbitrary limits on the number of regulations, we would ignore the unforeseen needs which we all know can materialise, in some cases almost out of the blue. We do not believe that it is right to surrender our ability to act swiftly and effectively to protect the rights and needs of pupils and adults working in schools simply to comply with the provisions of the amendment. Our schools need to operate within a common framework and to understand their position within it, particularly in regard to the choices open to them and the responsibilities placed on them.

Perhaps I may provide the House with some examples of what I mean. We need to be able to communicate with schools and education authorities in order to make them aware of new guidance material that we may issue. A case in point—one which is close to noble Lords' hearts—is Clause 173, which deals with the welfare of children and which the noble Baroness, Lady Blatch, supported. We surely would not want to put ourselves in the position of not being able to send out material on an issue of such importance because there was a limiting statutory duty to control material.

It is not only the need to respond immediately to particular issues that would be under threat but the regular work that goes on to try to improve provision for the most vulnerable children in our society and to enhance their life chances. For example, if we decided to revise and improve the admissions framework through a new code of practice because we found that it needed improvement for the most vulnerable, we would not want to tie the Secretary of State's hands by not allowing her to consult or communicate with schools.

I accept the point that schools do not gain from being deluged with irrelevant or poorly structured material. I emphasised at Report stage how important it is to ensure that our communications with schools are of high quality, and consistently so. But this amendment would jeopardise our ability to communicate with schools and could put us in a position of not being able to explain to schools what we were trying to do.

The amendment has defects, too, in that it requires the Secretary of State to work out how much time each head needs to read, consider and implement any specific regulation or circular. This assumes the "one size fits all" approach to regulations to which we are precisely opposed. Guidance, regulations and codes of practice will often apply to different schools in differing degrees according to their individual circumstances, and they will spend different amounts of time in considering and implementing them. We would not want the Secretary of State to spend time trying to second guess to the minute how long schools will spend reading documents. Schools will decide that for themselves. If they believe it is too long, I trust that they will make recommendations to us and we will act accordingly.

The amendment is lacking in that it does not address the issue of the quality of information issued. I know from my own experience of being both responsible for issuing information and being on the receiving end as a chair of governors until last year that it is the quality equally as much as the quantity—indeed, more so—of the communication or regulation that is of paramount importance.

With this in mind, I wish to give the House an example of some of the regulations that will emanate from the Bill. On the new school governance regulations we will be "road testing" draft guidance and regulations with focus groups involving representatives from the main stakeholder groups before we formally consult. This will ensure that what is being proposed is clear and fit for purpose. We want schools to get all the information they need, but no more than is necessary, to implement the planned changes.

The new guidance and draft regulations have already been considered by our advisory group on governance, discussed with Church representatives and piloted with focus groups of governors, local education authorities and diocesan boards in Darlington, Coventry and London. The focus groups warmly welcomed the opportunity to participate and made useful suggestions, while commending the department's general approach. In all cases, schools will get only exactly what they need for their own purposes, tailored to the category of school. This is what our approach to regulation is all about—discussing our changes with stakeholders, ensuring regulation is fit for purpose and tailored to the end user.

As I have explained at previous stages, we take very seriously our responsibility to remove those burdens on schools which should not be there. I have referred to the range of measures which are in place, from greatly increasing the numbers of support staff in schools to the current programme of 32 pathfinder schools which is exploring new and better ways of tack ling teacher workload.

Perhaps I may explain to the House the kind of resources we are looking at for these pathfinders. We have provided additional resources, including a new laptop for every teacher, Internet access and ICT support. Noble Lords will have heard me speak many times on the issue of new technology. I believe that new technology can be absolutely fundamental in helping our teachers to reduce their workload, simply because it provides a framework in which planning and other activities which we know take teaching time can be done more effectively. It is a very useful communication tool between schools, local education authorities and the department. We want to explore very carefully ways in which we can use the technology.

We have provided additional teaching assistance and administrative support in the pathfinder areas, including bursarial staff, to help free up teachers and school leaders to focus on professional responsibilities. We have introduced training for all staff in the use of the new ICT provision. We have increased non-contact time for teachers to free them up for lesson planning and marking, professional development and school planning activities, and we have put up to seven days the professional support time to be used in helping to deliver the changes and receiving advice on a variety of approaches to reduce teacher workload.

The 32 pathfinder projects are there—this takes nothing away from the issue of ensuring that the department sends schools what they need and no more—because we recognise that we also need to look in a broader context at the issues of teacher workload. They do not all rest on the bureaucracy to which noble Lords have referred. It is within the context of examining the 32 pathfinder projects that we want to ensure that we get this right. We recognise the pressure in this House and elsewhere to ensure that we do this properly. That is why we have set up the pathfinder projects.

We are not complacent about this matter. As noble Lords will be aware, the Secretary of State is considering her response to the report of the School Teachers' Review Body on teacher workload. I believe that it would be short-sighted of us to make hasty decisions about one aspect of workload pressures without thinking through the interplay with other factors which place pressures on teachers. We are engaged in thinking of ways to reduce these in conjunction with all those who have an interest in this area. Therefore, I do not want to act now, ahead of the Secretary of State's response in the autumn to the teacher workload report. I believe that to do so would be premature and possibly counter-productive.

Our intentions are very clear. We believe in sensible regulation fit for purpose. We wish to provide essential safeguards in the education system. We are committed to providing high-quality, clear communications for schools which recognise the needs of those delivering education. We are dedicated to an approach that involves stakeholders in deciding on these issues.

Having recognised the spirit in which the amendment has been proposed, I believe that it would not assist us in completing the work that we have started in this area. With those commitments, I hope that the noble Baroness will feel able to withdraw her amendment.

My Lords, I believe that the amendment would assist schools and their heads and governors if there were a duty on the Secretary of State to limit regulation and to limit the flow of paper into schools to only that which is necessary or essential and which at the end of the day enhances the experience of a child in the classroom.

There is a real world out there, and then there is the Department for Education and Skills. I have listened to everything that the Minister has said. I know that she is sincere in her belief in what she is saying. But those working in schools do not say these sorts of things. They do not say that the only documents that come through the door are those which are absolutely essential, or that the only documents they receive are those that add to and enhance the educational experience of the children.

I am almost offended by the examples of essential information given by the Minister; namely, to do with the safety of children, to do with emergencies that crop up without notice. Of course there has to be communication between the department and the schools, but the Minister uses those examples against what I am arguing about— the unnecessary information and documentation that goes out to schools.

In relation to subsection (3), the noble Baroness, Lady Sharp, was concerned that some view should be taken when regulations are passed down to schools about how much time is expected for a primary school or a secondary school to interpret a document and to implement whatever measures it contains. One of the problems is that regulations are passed inexorably downwards to schools, without any thought whatever about how much time needs to be expended on interpreting them, understanding the legalese and making sure that they are implemented—knowing that down the road will come Ofsted to inspect schools to see whether they have carried out the requirements. So I believe that subsection (3) is important.

Nevertheless, I take the point made by the noble Lord, Lord Monson. If the Government believe that the thrust of the amendment is right, and if my Liberal Democrat colleagues believe that it is right and really do have sympathy with schools because they are inundated with bureaucracy, let them support this amendment. Let the Government make sense of the duty that I wish to place on the Secretary of State to limit and control the flow of paper and regulations into our schools.

Schools will not be impressed by the good will of the noble Lord, Lord Dearing, the noble Baroness, Lady Sharp, the Minister or anyone else who says: "We have sympathy with the schools. We really do think that they are overburdened with bureaucracy. We really do think that there is too much of it. We do think that there are too many regulations. But we shall not go into the Lobby to support the amendment". The schools will not be over-impressed with that. They will be very impressed with this House if it first of all recognises that there is a problem—everyone who has spoken today, including the Minister, agrees that there is an issue. If they came into the Lobby with me and gave the Government the opportunity suggested by the noble Lord, Lord Monson, to tidy up this amendment—so that it is not just a practical issue for schools, but in such a way that bureaucracy will be reduced and time will be freed up to do what they should be doing; namely, teaching children—then the proposal will be made more deliverable as a result of the expertise which the Minister has at her command and which I do not.

There should be a bonfire of unnecessary regulations and documents which tax the precious time of governors, heads and teachers. I wish to test the opinion of the House.