Michael Gove – 2011 Speech to Ofqual Standards Summit


Below is the text of the speech made by Michael Gove to the Ofqual Standards Summit on 13th October 2011.

Thank you all for coming along this morning.

As Amanda [Spielman] and Glenys [Stacey] pointed out, the purpose of today is to open a debate, not to close it. To ask some questions, not to come to firm conclusions. But I’m very conscious that when you have a debate in education, there’s always a danger that the participants in that debate can be caricatured. On the one hand, you have those people who believe in rigour, who instantly morph into Charles Dickens’s Thomas Gradgrind, demanding facts alone. And on the other hand, those people who believe there’s room for free play and creativity in education are sometimes caricatured as the offspring of AS Neill, the headteacher responsible for Summerhill, the school in which it was entirely up to children how they spent their time every day. I sometimes feel some sympathy for one of the children at Summerhill, who once at the beginning of the day asked their teacher, ‘Sir, must we do as we please today?’

But in looking at that debate I think it’s also important to recognise that in Glenys and in Amanda we have two people who can help us steer it, who are superbly well-equipped. Now of course, as soon as I mention Glenys and Amanda, you’ll wonder which of the caricatured roles I’ve just described do they fit into. Are they Gradgrind’s daughters, or are they the spiritual sisters of AS Neill? Well I’d like to think of them in a wholly different light. I’d like to think of them as the Cagney and Lacey of the standards debate, two hard bitten cops who are out there to make sure that those of you who are responsible for doing wrong are put behind bars. But actually, despite the toughness that Cagney and Lacey displayed, which both Glenys and Amanda have, I actually think a better comparison would be to think of them as Kay Scarpetta and Jane Tennison. Both of them are skilled forensic investigators of crimes and believe me – and believe me, if you’re responsible for those crimes, there is no escape from these two.

But in looking at the debate about standards overall, one of the questions you might be asking is where do I stand? And it’s very, very important, when one is talking about standards, to recognise that you’re tightrope-walking over a minefield. On the one hand, if you’re the sort of Education Secretary who praises the achievements of young people, than you can be accused of being Pollyanna, saying that everything’s wonderful and there’s no need to worry. On the other hand if you raise a critical eyebrow and say that you do have some concerns, then people instantly put you into the Eeyore camp, and instantly presume that you are a relentless pessimist. So which am I? Pollyanna or Eeyore? Am I Candide for thinking that all is for the best in the best of all possible worlds? Or Victor Meldrew who, when I look at Key Stage 2, GCSE or A level results, simply cry out, ‘I don’t believe it!’ Well, the truth is, I’m actually on the optimistic side of the equation – a qualified optimist, but an optimist nonetheless. I believe that our children are working harder than ever before. I believe that the trend suggests that the Flynn Effect, as it’s been called, is correct. That children are more intelligent than ever before. I certainly believe that the teachers that we have in our schools are the best generation ever. And I also believe that children and teachers are working harder than ever.

But because they’re working harder, we have to make sure that our exam system works harder as well. And we need to make sure it works harder because education overall is being put to the test as a result of global forces. One of the most profound influences on me in doing this job has been Sir Michael Barber. And Sir Michael’s work for McKinsey has reinforced in my mind what so many studies have also underlined. That the tendency, which has bedevilled English education in the standards debate, to look to the past, is not the most effective way of making sure that standards are where they should be. What we should be looking at are the rest and the best. We should be comparing ourselves with other jurisdictions. We expect that each successive generation evolves, adapts, and does better than the previous generation. That’s what being human is all about: being the best, striving for excellence. It means, in a standards context, comparing ourselves with other countries and other jurisdictions that are doing even better.

But it’s important, in asking our exam system to do more, asking our curriculum to do more, that we also recognise that exams cannot do everything. And it’s important again that I emphasise, in front of this audience and in front of every audience, that some of the most important things that happen in schools cannot be tested, examined or quantified, no matter how sophisticated the method we are that they used. How do you measure enthusiasm or love of learning? How do you quantify the sense of joy or anticipation that a pupil feels when they arrive in a classroom knowing they’re going to be entertained and inspired for an hour. How do you quantify good citizenship? How do you calibrate team spirit? It’s because there is so much that can’t be measured and quantified objectively that we’re changing the way in which schools are rated by Ofsted, so that the new Chief Inspector will have a direct brief to ensure that, alongside the data that we publish on the basis of exam performance, a more rounded judgement is made about the quality of teaching and leadership in each school, so that we balance exam performance with the performance of the school in so many other areas – such as what we might call the tacit curriculum, and what we might also call character building.

But it is the case that exams do have a critical function alongside the changes that we might make to inspection, and indeed to the national curriculum, in making sure that we continue to raise standards in all our schools for all our children. They have, as we all know, an accountability function. Exams are one of the ways in which we judge schools, one against the other. But they also have a sorting function in letting us know which candidates are doing best. And that sorting function helps us identify, during the progress of a child’s education, which pupils need more support and which need more stretch and challenge. And it also helps, at 16 or 18, in allowing that individual child to decide which institution it might be best for them to progress to, and in helping institutions decide whether or not that young person has the capacity to benefit from what they have to offer.

And of course qualifications have a preparation function. The programme of study and the syllabus that is tested in the qualification should be a body of knowledge that equips a young person to move on confidently to the next stage of their lives – whether that’s taking up an occupation, or moving on to further or higher education.

Now some of you may be thinking, ‘Well, that’s all very well. But qualifications do you have, Secretary of State, to pronounce on this debate?’ I suspect I only really have only one qualification to enter into this debate. And that qualification is that none of the qualifications that I have come from the English schools system. I was educated in Scotland. And therefore, I don’t have a dog in the fight when it comes to deciding whether the A levels of the 1970s or the 1950s were a golden era. Because I was fortunate enough to be educated in that jurisdiction, I can look at the English exam system with – I hope – an element of detachment. And because I can look at the exam system as a citizen of the United Kingdom, but someone who was educated outside the system, I feel instinctively that we should judge that system against its international peers. And that’s why, throughout the time that I’ve been both the Shadow Education Spokesman and the Secretary of State, I’ve been so keen on those international comparisons that professor Michael Barber and others have drawn to our attention. Most of you will be wearily familiar with me pointing out the way in which we’ve slipped down the PISA league tables in the last 10 years. But let me reinforce the importance of what that means. Research published this week by the Department for Education drew to all our attention the fact that if our children performed as well children in Shanghai, then instead of 55 per cent of children getting five good GCSEs (including English and maths), it would be 77 per cent. So if you think about it: over 20% getting qualifications that they don’t currently get – over a fifth of the cohort overall. That means 100,000 more children getting the bare minimum of qualifications that most employers regard as a test of real employability. There’s 100,000 lives transformed for the better if we improve our education system. By a different measurement, it would mean that a child who currently gets 8 C grades at GCSE would – if they were as well-educated, and doing as well as pupils in Shanghai – would get 3 As and 5 Bs at GCSE. That’s a real difference. A concrete step forwards. And one that I believe that we should seek to take and aspire to reach here.

Now, specifically in asking if our examination system is helping us reach that level, one of the first questions we have to ask, and it’s a question, not a statement or a declaration, is are the examinations which we’re asking our children to sit delivering to them the level of knowledge that we have a right to expect if they are going on to compete against children from Shanghai for the jobs and the university places of the future. And into that debate there have already been some voices which have been very clear, that we are not giving children the level of knowledge that they require. I’m just going to reference some objective statements by individuals who again are the users of those from the education system generates as graduates and school leavers.

There was a recent survey from the British Chamber of Commerce and in it over half of small businesses in this country said they thought that the education system was failing to produce individuals with adequate skills needed for work. In their report they said, in general, and this is a reflection of business, not me, “younger people lack numeric skills, research skills, ability to focus and read plus written English”

David Frost, who’s the Director-General of the British Chamber of Commerce, said that a generation had been ‘failed’ by schools. “After 11 years of formal education,” he asserted, “employers say that they’re getting kids coming to them who can’t write, can’t communicate and who don’t have that work ethic.”

And it wasn’t just small businesses. A poll of some of Britain’s largest businesses found that there was widespread concern about the quality of potential recruits. Three out of four of those large businesses surveyed said that school leavers and graduates lack the basic skills needed to join the workforce. And of course, many of those business leaders have subsequently gone on the record. Sir Christopher Gent expressed his concerns, specifically about A Levels, and he argued: “grade inflation has devalued A levels and it is now an OK exam that used to be an excellent one.”

Sir Michael Rake, the Chairman of BT, said: “I personally think A Levels have been devalued.” And when he was still CEO of Tesco, Terry Leahy said: “Sadly, despite all the money that has been spent, standards are still woefully low in too many schools. Employers like us … are often left to pick up the pieces.”

I might disagree with any individual emphasis that any of those business leaders have put on their criticism of the exams system, but I can’t ignore what they say. And even if I were inclined to ignore what employers are saying, I couldn’t ignore what universities are saying as well. We know that more and more universities are considering remedial course for pupils, who when they arrive are unprepared for the rigours of further study. We know that there are many courses at elite universities, like Imperial, where a disproportionate number of places are taken up by students from outside the UK because they arrive better equipped for those courses. And indeed Sir Richard Sykes, the former Rector of Imperial College London, recently said of our GCSEs, that they produced students who were familiar only with “sound bite science” and he argued that the syllabus that prepared students for Imperial College, was based on a “dumbed down syllabus.” He believed that the examination we had was an inadequate preparation for Higher Education.

And it wasn’t just Sir Richard. The Royal Society in 2011, concluded in its study of science GCSEs that the level of mathematics that was being tested was poor. The Royal Society of Chemistry argued that there had been a catastrophic slippage in school science standards. They said that pupils would get a good GCSE pass by showing only a superficial knowledge of scientific issues. And the Institute of Physics has been critical too. They argue that Physics A Level is not preparing students for university and in particular, the Institute of Physics has lamented the fact that A Level Physics no longer requires pupils to be tested in calculus and their report has found strong criticism from universities about the mathematical knowledge of physics undergraduates. And that’s even though these students are generally amongst the most qualified and hard working of undergraduates.

So we can see there a weight of evidence, from distinguished voices, expressing specific concern about the body of knowledge with which students arrive into the workplace or at university.

Now again, I stress, it is not for me to endorse every single one of those findings or judgements. But it is for me to ask why, when there are so many voices asking critical questions, are they so concerned and what can we do to address them.

It’s also the case that the discontent that is felt amongst employers and universities, or is felt in a more widespread way across the country, relates not just to the level of knowledge but also to the grade that is conferred on students – the badge that suggests that an individual is ready to pass on to the next level. As we saw earlier in Glenys’s presentation, there’s been a significant rise in the number of students securing good passes. Part of that is undoubtedly down to better teaching, to harder working students and to an increase in achievement overall. But is all of it? It’s a question that we need to look at seriously given the scale of the growth in grades. The number of students getting five GCSEs at grade C or above has gone from 45 per cent in 1996 to over 75 per cent in 2010. Is all of that due to an improvement in teaching? Last year, there were over 370,000 A* results. There were only 114,000 comparable results in 1994.

And over the last 15 years, the proportion of pupils achieving at least one A at A level has risen by approximately 11 percentage points. In 2010, more than 34,000 candidates achieved three As at A level or equivalent, which allow them to progress to one the best universities. That’s enough to fill half the places within the Russell Group. Universities are increasingly asking: “how can they choose between so many candidates who appear to be identically qualified?” Again, some of that improvement is undoubtedly due to schools performing better. But for universities the question is, can it be entirely due to that?

As Glenys pointed out, there is research which suggests, from a number of independent academic sources, that there is evidence of grade inflation. Researchers at Durham University have been particularly good at challenging the growth in grade performance. One piece of analysis from Durham concluded that between 1996 and 2007, the average grade achieved by GCSE candidates of the same ‘general ability’ rose by almost two thirds of a grade. And the rise, they argued, is particularly striking in some subjects: in 2007, pupils received a full grade higher in maths, and almost a grade higher in history and French, than pupils of the same ability when they sat the exams in 1996. Similar trends have been found at A level. Academics at Durham found that in 2007, A level candidates received results that were over two grades higher than pupils of comparable ability in 1988. And pupils who would have received a U in Maths A-Level – that’s a fail – in 1988 received a B or C in 2007.

Now, again, I have to emphasise this for the third time, some of that improvement will be down to improvement in our education system: better funding, better teaching, harder working students, but all? We have a duty to ask those tough questions.

We also have a duty to ask tough questions about the types of reforms or change that we might make. Glenys has pointed out that the process, when it comes to awarding grades we have at the moment, is of course a subtle one and it depends on individuals in this room, whose level of statistical knowledge and sophistication in manipulating numbers far outranks my own. But I just want to ask a couple of questions. And one them relates to, and what you might regard an arid debate, between criterion and norm referencing.

Like Glenys, I believe that you can’t go back to a situation where exams all were graded on the basis of norm referencing. I do ask one question for debate, and I don’t mind if, at the end of it, people shoot me down. But I think it’s important to open the debate. Should it be the case that while we award As, Bs and Cs, entirely on the basis of the criteria which people reach, is there a case for exploring whether or not an A* should be allocated to only a fixed percentage of candidates. I’d like to see that debate explored and engaged with.

There’s another question as well. Should we publish more data about how all candidates perform? So yes, of course you know that their work is capable of securing an A or an A*. But you also know how they’re ranked, depending on the subject. I know that there are some exam boards that are debating the advisability of this but one anecdote weighs very heavily with me. Now I know – and I suspect that others of you may point this out later – that data is not the plural of anecdote but I was struck when I visited Burlington Danes Academy that the headteacher there, Sally Coates, had a rank order system she devised. Every half term, students sit examinations in every subject. They’re ranked, and performance is shared between the student, their family and the teacher. So every student knows whether they’re first or 120th in English, mathematics, and history – and also for sporting achievement, cultural achievement and effort overall. At the end of each term, the performance is then published. So students have an opportunity to improve their performance between half term, when it’s private, and the end of term when it’s public. When I asked the headteacher, Sally Coates, if this wasn’t a bit – please excuse my phrase – ‘hardcore’, and had it resulted in a revolt amongst students and parents, she looked at me and said, ‘actually, it’s the single most popular thing that I’ve done.’ Parents love it, because they’re given information that they’d previously been denied.

In the past, parents asked, ‘How has my son done?’ and they would receive the reply, ‘He’s a lovely boy.’ Now they accurately knew where he stood. But secondly, it was also the case that individual students could then compare their performance and their contemporaries’ performance in subjects. And students were now ranking teachers, on the basis of those who added value and demanding that certain teachers who were not getting them up the rankings be moved on, and that they be transferred into the classes of those teachers who were getting pupils up the rankings. So if ranking can achieve that in one school in White City, if additional data and transparency can generate those beneficial results, is there a case for exam boards publishing more data about the performance of students, rather than less. It could be a completely wrongheaded idea. But I put it out there explicitly for debate.


I also think, that as well as considering norm referencing and ranking, and the two of course are connected, we do of course need to look at other changes which are occurring elsewhere which will have a bearing on how achievement is assessed in the future. Technology is critical. As Jerry Jarvis pointed out, the examination system industry in this country has moved from being ‘a cottage industry to mass manufacturing.’ As it has done so, there is an inevitable move towards the greater deployment of technology in assessment. But the rate of technological change in education I think is rapidly going to accelerate in the next few years. We’ve already seen iTunesU and the Khan Academy have transformed the delivery of content. We already know that there are more and more sophisticated ways of using technology for formative assessment. So we have to ask ourselves ‘how will technology change the way in which assessment should be delivered and grades should be awarded?’ I think that looking at the capacity that technology has to transform the accuracy and the authority of assessment, it also gives us the potential to generate yet more data, in order to know how our schools, how our teachers and how our whole system is performing.


In talking about teachers, I also want to ensure that our exam and our assessment system is fair to them. I recognise that the structure of accountability that we’ve set up and in particular the way that’s gone hand in hand with certain examination changes has put additional pressures on them. As Glenys pointed out, there are different views about the effect of modularisation. I’m very clearly of the view that modularisation has led to people absorbing knowledge and then forgetting it, rather that taking the whole body of knowledge necessary for a course together, and using it to best effect synoptically at the end of an examination course. I also think in sheer practical terms that modularisation and the culture or re-sitting has meant that more time is spent on external assessment and less time is spent on teaching and learning

Early entry

I also think there is a case at looking at the culture of early entry. It is the case that there are many students of comparable ability who if entered early for exams do less well and that the culture of early entry is being driven by the way in which accountability is worked in this country. I don’t think there’s anything wrong with truly outstanding students getting particular qualification out of the way, as it were, so they can then progress. But we do need to look at the way in which the nature of accountability and the way in which our exams are offered have meant that the natural progression through the curriculum has become distorted.

I also think that as well as looking at technology, early entry and the culture of re-sitting, we also need to ask ourselves, overall, if we are, in the questions that we ask, and in the design of those questions, encouraging the sorts of thinking skills and creativity that are so important.

As we saw earlier, and as Glenys pointed out, the structure of some questions in modern exams sometimes leads the student by the hand through the process of acquiring marks. Curiously, I believe that many of those who are most anxious to reinsert creativity and original thinking, and a display of knowledge in the round, would actually find the question from an era that they would have derided as the time of rote learning, may in many respects be questions better designed to elicit that degree of creativity that some of the contemporary questions that our exams ask now.

So some questions, which I’d like you to engage with. And in leading that debate, I’m confident that in the team we have at Ofqual, we have the right people and the right institution with the right remit to make a difference.

The role of Ofqual

One of the things I’m specifically keen to do is to emphasise that, with the leadership that Ofqual has, there is a new requirement for Ofqual to do more. I believe that Ofqual shouldn’t simply be monitoring achievement over time. Ofqual specifically, and this is the injunction we place on it in our Education Bill, should be asking itself the question: ‘how do we do and how do our exams do, compared to the best in the world?’

That necessarily means that Ofqual moves from being an organisation that perhaps in the past provided reassurance, to one that consistently provides challenge to politicians, to our education system overall and to exam boards and awarding bodies. That is why I think it is so important that Ofqual, like all regulators, if it is to be an effective watchdog.…sharper teeth. It is why I believe that Ofqual should the ability to fine if necessary. We do have to ask ourselves questions about this summer’s examinations. Why were there so many mistakes? Why did we leave students to have unnecessary heartache at a time of stress and tension? It’s not enough to be complacent and say that these things happen. We’re dealing with some of the most important moment in some people’s lives and therefore it is critically necessary for a regulator like Ofqual to have the powers required, to ensure that the many gifted people that work in our exam boards and awarding bodies, make sure that every year they do their best for students who are doing their best.

In stressing the role that Ofqual plays, it’s important to recognise that no matter how gifted, effective or assertive that particular body is, the responsibility for maintaining standards, and indeed the responsibility for raising standards, rests on all of us. It’s important that collectively we recognise that exam boards and awarding bodies, in the natural and healthy desire to be the best as an exam board, don’t succumb to the commercial temptation to elbow others out of the way, by saying to schools and to others “we provide an easier route to more passes than others.” I’m sure that would be a temptation that would never be felt in any breast in this room, but it’s important that that temptation, whilst it exists, is resisted. If it isn’t, then action might need to be taken.

It’s also important that we recognise that there is a direct responsibility on government. I talked about accountability earlier and the way in which it can skew performance. One of the things that I’ve been accused of recently is that by introducing a new accountability measure, the English Baccalaureate, I’ve skewed performance. Well actually, the importance of the English Baccalaureate cannot be overstated. It is one accountability measure amongst many. The reason that it has had the resonance that is has, is because it is popular and it reflects the truth. A good performance or strong performance in these academic subjects: English, mathematics, the three sciences, modern languages and a humanity, like history or geography, confers on students the chance to progress, whether on to a great job, or a high performing university. Nudging students towards these subjects and asking schools which don’t have pupils performing well in these subjects why not, is a way of generating greater social mobility and higher achievement overall.

I believe the way in which parents now ask schools whether or not students are being offered these subjects reflects the fact that the common sense of the majority of parents, and the shrewd judgment of university admissions tutors, and the hard won experience of employers, all coincide in saying that these are the qualification that they prize. Not the only qualifications that they prize and schools shouldn’t be allowed to say that pursuing these qualifications squeezes out creativity. It is perfectly possible to combine these subjects with creative subjects with cultural reach, and with sporting achievements, and with everything that gives a rounded education. These are the subjects which are a passport to further progression and it’s important that schools recognise that that is the demand of parents, higher education institutions and employers.

As well as having this accountability measure, we will be publishing more and more data. It will possible in the future for newspapers, for trade unions, for anyone to construct the data that we publish to create their own baccalaureate, or their own basket of measures by which schools can be judged. And if for any reason that the English Baccalaureate is superseded by another measure developed by another institution or media organisation, which has greater currency….great. My aim is to ensure that the data is there for meaningful, nuanced and rounded comparisons to be made and for us all to push things in the right direction.

One of the reasons why I’m anxious that we should have that accuracy in the data is because I was moved so profoundly by Alison Wolf’s report on vocational education and the way in which she laid bare the fact that there are so many students that had pursued qualifications, which were nominally the equivalent of three or four GCSEs, but in the world of work weren’t seen as even amounting to a single GCSE. That is why we’re engaged in the process of ensuring that there is genuine equivalence and genuine parity between those vocational subjects that are every bit as testing as GCSEs and rigorous GCSES. We’ll be saying more in due course on how we’ll be taking forward Alison’s work.

So some questions, some assertions and I hope a clear direction of travel.

Finally, a warning: if the changes that I make – or that I want to make – win some favour with the audience in this room, and we’re able to move together collectively, one thing may happen in English education. Something unprecedented. Potentially, some might say, revolutionary. We might have a year – even a year while I’m still in office – where GCSE and A level results dip. Where fewer students get A stars, fewer students get As. When that happens, there will be an inevitable pointing of fingers – mostly, in my direction. ‘You’re presiding over a decline, you’re presiding over failure.’ Well, I won’t believe that’s true for a moment. I believe that our children and our teachers will be doing better than ever. But I think that if our exam system is accurate, precise, demanding and world-class, there will be years where performance will dip, as well as rise. And it’s far, far, far better if we’re honest with our children, honest with ourselves as a nation, and have an exam system that is world beating and respected everywhere. Because what we want an exam system to do, in the word of my old Scots mother, is ‘tell the truth, and shame the devil.’

Thank you.

Michael Gove – 2011 Speech to the Edge Foundation


Below is the text of the speech made by Michael Gove to the Edge Foundation on 29th September 2011.

It’s a special pleasure to be here at this Edge event. No organisation has done more to champion the cause of vocational education and never has your clear, consistent, challenging voice been required more than now.

And it’s particularly pleasing to be here alongside my colleague John Hayes. No-one in Parliament has done more to champion the importance of vocational education than John. Over the last five years he has developed a coherent programme of reform for further education, he has made a compelling case for elevating the practical in our education system and I am delighted he is now a joint Department for Education and BIS Minister responsible for vocational learning. John is an old friend of mine and I am, frankly, jealous that he has a new admirer in Vince Cable, but so valuable is he that I am more than happy to live with a situation where there are three of us in this relationship.

A historical problem

Most new governments tend to complain about problems they inherited from their predecessors. And given our own inheritance it’s not surprising that we should be the same. Today I want to address head-on a problem that we’ve been bequeathed by the previous Government – of Lord John Russell. Lord John Russell was Prime Minister between 1846 and 1852. As the leader of a coalition of Whigs and Radicals there is much to recommend him. But it was on his watch that we as a nation first tried, and failed, to solve a problem which bedevils us still.

The problem is our failure to provide young people with a proper technical and practical education of a kind that other nations can boast. It was a problem identified by the German-born Prince Albert, the driving force behind the Great Exhibition of 1851, and it was a problem the Royal Commission of 1851 was designed to address.

Although Britain had been the first country to industrialise, and although, with the abolition of the Corn Laws, we were poised to benefit from the massive expansion of free trade, we were already falling behind other nations in our capacity to inspire and train the next generation of engineers, technicians, craftsmen and industrial innovators.

Whether in Germany or America, new competitors were eroding our inherited advantage. But while the problem was correctly identified as far back as 1851, the steps necessary to address this failing were not sufficiently radical. Ever since then there have been a series of failed governmental interventions, too numerous to list, none of which got to the heart of the matter.

160 years after the Great Exhibition was planned, the same problems which inspired its creation remain. Our international competitors boast more robust manufacturing industries. Our technical education – which the original Royal Commission and endless subsequent commissions and reviews identified as the fundamental problem – remains weaker than most other developed nations. And, in simple terms, our capacity to generate growth by making things remains weaker.

My colleagues George Osborne and Vince Cable have both made the case, with force, coherence and intelligence that our economic recovery depends on a manufacturing renaissance. Given the devastation wrought on our economy by the events of the last three years the need to drive private-sector growth is urgent and overwhelming. And that depends on a reform of our education system which addresses our long-term weakness in practical learning.

At crucial moments in the development of our education system the opportunity to embed high-quality technical routes for students was missed.

As Corelli Barnett has persuasively argued, the prevailing intellectual orthodoxy at the time of educational expansion in the late nineteenth and early twentieth century was disdainful of the practical and technical. While our competitors were ensuring that engineers, technicians and craftsmen were educated to the highest level, British – and specifically English – education reflected an inherited aristocratic disdain for trade. The highest goal of education was the preparation of young men for imperial administration, not the generation of innovation.

But as Barnett has argued, a neglect of the type of education which sustains economic growth and technical progress fatally weakened the empire which was the administrative elite’s pride and joy. Barnett’s analysis of Britain’s historic decline relative to its competitors gathers force as he surveys the decisions taken after the Second World War. We failed to modernise economically in those years. And we failed to make all the changes we should have in education.

In particular, one of the most promising potential reforms envisaged by the last coalition Government was neglected. The visionary wartime education minister Rab Butler appreciated the importance of technical education and hoped to see the creation of a new generation of technical schools in the postwar years. But underinvestment and a plain lack of elite interest meant hardly any technical schools were ever opened. Andrew Adonis and Stephen Pollard have argued – in their insightful book on the class system – that this represented one of the gravest errors in the history of the English education system.

Anyone looking at the decline of manufacturing in the postwar years, the spectacular failure of Britain to match the level of technical innovation in the countries we defeated and the continuing low levels of achievement of those outside the academic elite could not but conclude that we had failed as a nation.

The missed opportunity

The seeds of a solution were put in place by the last Conservative Government with the introduction of a modern apprenticeship programme – a programme this Coalition Government wants to grow rapidly. But under the last Government practical and technical education lost its way. And that is because, despite all the rhetoric, their heart wasn’t in it.

By heart I mean a passionate understanding of, and commitment to, the joy of technical accomplishment, the beauty of craft skills, and the submission to vocational disciplines which lie at the heart of a truly practical education.

Instead of celebrating the particular, instead of respecting the unique value of specific skills, instead of working with the grain of both human nature and recognising the differing difficulties inherent in acquiring mastery of certain processes, practical education has been robbed of its specialness.

The result was a system that was pasteurised, homogenised, bureaucratised and hollowed out. Everything was reduced to fit tables of achievement. Narrow metrics meant that everything practical was brigaded into specific silos and success was judged on the sheer number of young people who could be processed through the system rather than giving proper attention to what they had learned.

The dangerous preoccupation with quantity over quality was most evident in the response to the Leitch Review. The Review envisaged a demand-led system in which young people and employers together set the pace for the growth in proper training, in a way which met both their needs. But the response to this invitation to let go was a whole new suite of national targets for the quantity of qualifications taken.

One of the dangers of this approach was that by ignoring the value of skill in itself they fell into the trap clearly identified by the philosophers Matthew Crawford and Richard Sennett in their wonderful books The Case for Working with Your Hands and The Craftsman. That was ignoring the inherent value of craftsmanship; what Crawford calls the ‘intrinsic richness of manual work – cognitively, socially, and in its broader physical appeal’.

And at the same time very little time was devoted to thinking about what young people on vocational courses actually learn. Some qualifications that were called vocational are actually pseudo-academic: attempting to recreate the cognitive skills associated with the accumulation of abstract knowledge rather than developing the entirely different but equally rich cognitive skills associated with practical and technical learning.

Insecurity about the real value of craft meant that vocational learning was, in some people’s eyes, legitimised by being made academic.

Qualifications, once tailored to the requirements of employers have become increasingly detached from their needs and, instead, driven by the preoccupations of public policymakers. That needs to change.

The last Government also fell into the trap of assuming that globalisation meant that in an economy like ours, hard and practical craft skills were being remorselessly superseded by abstract knowledge working. But the development of information technology does not mean that every job is digitised and the future for everyone is Orange as an employer.

As the economist Alan Blinder argues, the crucial distinction in the labour market in the future will be between ‘personal services’ that require face-to-face contact or are inherently tied to a specific site and ‘impersonal’ services that can be provided from anywhere. He points out that many knowledge-worker jobs such as accountancy, computer programming, even radiography can be outsourced to companies in far-off countries. These professional jobs are increasingly vulnerable while practical employment is increasingly secure. As he puts it, ‘you can’t hammer a nail over the internet’. Nor indeed take blood, serve a Michelin-starred meal, look after a deeply disabled child, or repair a £2000 mountain bike.

Because, as well as providing us with the technicians, industrial innovators and craftsmen and women of the future, proper vocational education also needs to provide us with the courses and qualifications to underpin the future success of chefs and childcare workers, beauticians and care assistants, landscape gardeners and fashion photographers. And our current education system has, far too often, not been providing the right courses and qualifications. The growth in what are called vocational qualifications in our schools has actually, in many cases, been an inflation in the number of quasi-academic courses.

Growth or inflation?

A superficial look at the statistics would suggest a renaissance in vocational learning over the last few years unprecedented in human history. In 2004, 22,500 vocational qualifications were taken in schools. By 2009 this had risen to 540,000 – mostly at age sixteen – a 2,300% increase. But looking behind these figures we discover that many of these qualifications are not quite the hard, practical, immersion in the craft and technical skills or the skilfully designed preparation for the modern world of work some of us might have imagined.

And looking at the timescale over which this massive surge has occurred it is striking that it all follows the decision of the last Government to fix the value of some of these qualifications so they counted in league tables. Since I have been Education Secretary I have been struck by the concern among many employers, many higher education institutions, many parents and many headteachers that the rapid growth in the take-up of some of these qualifications is indeed less a reflection of their inherent worth than a function of the value they have been given for league table purposes.

Some of these qualifications badged as vocational enjoy a ranking in league tables worth two or more GCSEs, making them attractive to schools anxious to boost their league table rankings. And that has meant that some schools have been tempted to steer students towards certain qualifications because it appears to be in the school’s interests even when it’s not in the student’s.

This has to be changed. Qualifications do not gain prestige simply by having a Government minister announce that they are a good thing. And the labour market does not have much respect for the ability to answer multiple-choice tests dealing with ephemeral facts about some occupational field – the sort of thing which has become far too common in our over-regulated education and training system. Employers do, and for good reason, value a whole range of practical skills, and practical experiences, which go far beyond the confines of the most demanding A level papers.

Indeed one of the unhappy trends which actually grew in force over the past 13 years was the assumption that the purely academic route was really always the preferred one – and unless you’d secured a place on leaving school to study at university for three years you were somehow a failure.

These assumptions undermine social cohesiveness because, in a big society, unless each feels valued and all feel valued, then the conferral of value is imperfect. And they also limit opportunity.

The benefits of the practical

The truth is that there are practical routes – workplace courses, apprenticeships – which are far more secure routes to success than many university courses and which are, understandably, hugely popular with savvy learners.

The best apprenticeships programmes are massively oversubscribed. BT typically has 15,000 applicants for 100 places each year. Rolls-Royce has ten applicants for every place and Network Rail is similarly oversubscribed. There is far greater competition for some of these courses than there is for places at Oxford or Cambridge. And there’s good reason for this. These types of courses offer a route to good salaries and quick promotion at world-beating firms.

Whenever I meet the bosses of firms like these they tell me that their employees who trained as apprentices first perform better and secure promotion faster than their colleagues who arrive fresh from university. What’s more, many of the best courses – like those offered by BT – hold open the door for further study in higher education at a later point during their career, if they want to. At BAE 65% of their apprentices go on to higher learning and 10% go on to higher education.

And irrespective of whether these apprentices go on to higher education in due course, they are powering the success of the businesses on which our economy depends. However seductive marketing, advertising, sales, promotion or corporate social responsibility work may be for the academically inclined, these roles don’t exist unless there is something hard to market, advertise, sell, promote or be responsible about.

And that depends on making things. Which we won’t do in the future unless we train more people to master practical and technical skills at the highest level. What we need are more apprenticeships which follow the model of Rolls-Royce, BT and BAE rather than the rebadging of classroom courses and less rigorous work experience schemes as apprenticeships.

That is why I am so delighted that Vince Cable, David Willetts and John Hayes have secured additional funding to help the private sector grow the number of high-level apprenticeships and it’s also why I am working with John to ensure we can reduce the bureaucracy which employers have to negotiate before they can take on more new apprentices.

But if we are to ensure more and more students are capable of benefitting from a growth in apprenticeship numbers we have to take action to improve vocational education before people leave school. We have to have courses, qualifications and institutions during the period of compulsory schooling which appeal to those whose aptitudes and ambitions incline them towards practical and technical learning.

Reform in every area to elevate the practical

We’re already using our radical schools reform programme to promote new institutions designed to support high-prestige technical education with a clear link to employment and further study.

The university technical colleges – a model developed by my great reforming predecessor Lord Baker and the late Lord Dearing – tick all the boxes.

The idea is very straightforward: technical colleges will offer high-quality technical qualifications in shortage subjects like engineering. They will do so as autonomous institutions – legally they will be academies – sponsored by at least one leading local business and a local university.

The pattern for their success has already been set by the new JCB Academy in Staffordshire, which I was privileged to be able to visit earlier this year. It combines hard practical learning – with courses in technical subjects involving applied work of the most rigorous kind – alongside a series of academic GCSEs – including maths, English, science and a foreign language.

If one looks at those countries around the world that have the best technical education systems, core academic subjects are taught and assessed alongside – not in place of – technical learning until students reach 15 or 16. To take the example of Holland where children can move onto a technical route at twelve – all 16-year-olds are assessed in foreign languages, arts, sciences, maths and history. Our country is sadly unique in the poverty of its aspiration for all young people.

That’s why earlier this week I floated the idea of an English Baccalaureate – a new certificate for all children who achieve a good GCSE pass in English, maths, a science, a modern or ancient language and a humanity like history or geography. It would also act as a new league table measure to encourage schools to give all young people a broad and rounded base of knowledge. I was deeply alarmed to discover that just 15% of children would currently achieve this set of five good GCSEs. We have to do better.

But it’s crucial to note that securing this core base of knowledge would not preclude the study of technical or vocational subjects as some have suggested. It’s not either/or but both/and. I’m absolutely clear that every child should have the option of beginning study for a craft or trade from the age of 14 but that this should by complemented by a base of core academic knowledge.

And the new generation of university technical colleges – by taking students from other schools at the age of 14 – will help secure this route. When we open a new UTC in Aston in 2012 pupils will specialise in engineering and manufacturing alongside core academic GCSE subjects. Crucially, students will have the opportunity to work with Aston University engineering staff and students as well as local businesses and further education colleges.

Our aim is to open at least twelve UTCs with a minimum of one in each major city. And we know there is huge demand out there for this kind of institution from local authorities and businesses who understand the benefits that this type of school would bring to their community. Lord Baker has also done a fantastic job of winning over major international firms and universities, creating a real head of steam behind the model.

UTCs are a fantastic innovation but they aren’t the only type of institution that will benefit from our radical reform plans.

I’m also incredibly excited by the studio schools movement. The first two studio schools – based on groundbreaking work by the Young Foundation on employability – have just opened in Kirklees and Luton.

These schools will offer both academic and vocational qualifications and are explicitly designed to break through the traditional divide by providing an aspirational but practical pathway that will offer a broad range of qualifications and a clear route either to employment or university. Our Free Schools programme will allow communities across the country – supported by the superb Studio Schools Trust – to bid to open this type of institution.

And we anticipate many more Free School proposals will come forward which focus on offering high-quality vocational and technical education. In Sweden, post-15 practical education has been the fastest growth area for Free Schools in recent years.

So there are already many things this Coalition Government is doing to boost vocational education. But we want to apply these same principles – a focus on the quality of qualifications and courses as well as quantity and the prioritisation of clear progression routes to further education or employment – to the wider system.

Which is why I’m absolutely delighted today to be able to announce that Alison Wolf – the Sir Roy Griffiths Professor of Public Sector Management at King’s College London – has agreed to lead a review into pre-19 vocational education. She is probably the leading expert in the country on skills policy and has advised, among others, the OECD, the Royal College of Surgeons, the Ministries of Education of New Zealand, France and South Africa, the European Commission and the Bar Council.

This review will be very different from previous efforts. It is not going to lead to yet another set of unwieldy, Whitehall-designed and short-lived qualifications, or a new set of curriculum quangos. Instead, we want to establish principles, and institutional arrangements, which will encourage flexibility and innovation. We want qualifications to respond easily to changing labour market demands – and to demand excellence in ways which are true to the skills and occupations concerned.

Finding ways to achieve these goals has never been more important. As the pace of globalisation quickens the ability to offer a genuine and high-quality technical education to young people in this country is no longer simply a desirable social goal but a pressing economic necessity.

It won’t happen by inflating league tables or setting new central targets but only by investing in institutional and structural solutions which provide clear routes to good jobs and further educational opportunities.

It’s asking a lot of Alison, Lord Baker, the Studio School Trust and Edge to help solve a problem that generations of politicians and policymakers – from Lord John Russell onwards – have been unable to grasp. Though I cannot think of any other team I would like to see rising to one of the greatest historical failings of our education system than one led by Alison and Ken.

Michael Gove – 2010 Speech to Westminster Academy


Below is the text of the speech made by Michael Gove, the Education Secretary, to the Westminster Academy on 6th September 2010.

There is no profession more noble, no calling more vital, no role more important than teaching. Far and away the best part of my job is spending time with teachers – watching and admiring, listening and learning, being uplifted and inspired.

Whether it was the brilliant young head of History at Lampton School, Hounslow, the English lesson I observed at ULT’s fantastic Manchester Academy, the superb science teaching I was privileged to glimpse at Urmston Grammar in Trafford or the wonderful primary lesson I so much enjoyed when I visited Durand Primary in Brixton, each of these encounters with great teaching left me feeling more optimistic about the future.

I believe we have the best generation of teachers ever in our schools, and one of the most dynamic factors behind that has been the phenomenal impact of Teach First.

The single most enjoyable evening I’ve had in politics was spent at the Teach First annual awards, celebrating the brilliant and inspirational work of young people like Manjit More and Ed Watson, teachers whose passion for their subject and sheer enjoyment in learning are life enhancing, indeed for those they teach, life changing.

And one of the reasons I’m here at Westminster Academy today is that Teach First teachers are playing their part, alongside so many other gifted professionals, in changing the lives of young people immeasurably for the better. This school, like many other great schools is generating impressive results for children from a challengingly diverse range of backgrounds.

But one of the tragedies of the last thirteen years is that, despite record spending, there still aren’t enough of these good schools.

While we have some of the best schools in the world, we also have too many which are still struggling.

There are hundreds of primaries where the majority of children fail to get to an acceptable level in maths and English.

The majority of children leave those schools without the knowledge and skills required properly to follow the secondary school curriculum and make a success of the rest of their time in education.

For many of those children who have not reached an acceptable level of literacy by the end of primary, their time at secondary is marked by defiance and disruption. We have hundreds of thousands of persistent truants and thousands of pupils are excluded for disruption and assault.

Overall – as a country – about four in ten do not meet basic standards by the age of eleven and only about half manage at least a ‘C’ in both English and maths GCSE.

What makes this situation so much worse, indeed indefensible, is that poor performance is so powerfully concentrated in areas of disadvantage. In our education system it is still far too often the case that deprivation is destiny.

The gap in attainment between rich and poor, which widened in recent years, is a scandal. For disadvantaged pupils, a gap opens even before primary school. Leon Feinstein’s research has shown that the highest early achievers from deprived backgrounds are overtaken by lower achieving children from advantaged backgrounds by age five.

Schools should be engines of social mobility – the places where accidents of birth and the unfairness of life’s lottery are overcome through the democratisation of access to knowledge. But in the schools system we inherited the gap between rich and poor just widens over time.

The poorest children in our school system are those eligible for free school meals. There are about 80,000 children in every school year who are eligible. Tracking their progress through school we can see they fall further and further behind their peers by the time they reach the end of primary. At secondary the gulf grows wider still. By sixteen, a pupil not entitled to free school meals is over 3 times more likely to achieve five good GCSEs as one who is entitled. By the time they reach university age just 45 children out of a cohort of 80,000 on free school meals make it to Oxbridge.

On a moral level, this waste of talent, this blighting of individual lives, is an affront to decency. And in economic terms, as we face an increasingly competitive global environment, it’s a tragedy.

Other nations have been much more successful recently in getting more and more people to be educated to a higher level. With capital so footloose, labour needs to be better educated and trained than ever before. But while we have been moving backwards with education reform over the last few years, as Tony Blair has pointed out, other nations have been forging ahead much faster and further when it comes to reforming and improving their education systems.

The international comparisons are stark.

Under the last Government in the most recent PISA survey – the international league tables of school performance – we fell from 4th to 14th in science, 7th to 17th in literacy, 8th to 24th in maths.

And at the same time studies such as those undertaken by Unicef and the OECD underline that we have one of the most unequal educational systems in the world, coming near bottom out of 57 for educational equity with one of the biggest gulfs between independent and state schools of any developed nation.

Governments often choose to compare the present with the past and say: haven’t we come far. But the entire human race is progressing at an accelerating pace – technologically, economically and educationally.

Especially educationally. And we are falling behind. As a nation instead of comparing ourselves with the past, we should compare ourselves with the best.

And those who want to stay the best, or be the best, are changing fast.

There are three essential characteristics which mark out the best performing and fastest reforming education systems.

Rigorous research, from the OECD and others, has shown that more autonomy for individual schools helps drive higher standards.

Landmark work by Professor Michael Barber for McKinsey, backed up by the research of Fenton Whelan, has shown that teacher quality is critical: the highest performing education nations have the best qualified teachers.

And research again from the OECD underlines that rigorous external assessment – proper testing you can trust – helps lever up standards.

And these lessons are being applied with vigour and rigour in other nations.

In America, President Obama is pressing ahead with radical school reform to close the gap between rich and poor. And he’s implementing all three policies to generate lasting improvement.

He is promoting greater autonomy by providing cash and other incentives to encourage more charter schools, the equivalent of our free schools and academies.

He has offered extra support to programmes designed to attract more great people into teaching and leadership.

And he has encouraged states and school districts to provide greater accountability through improved testing and assessment. In other ambitious countries, the drive for greater autonomy is generating great performance.

In Canada, and specifically in Alberta, schools have also been liberated, given the autonomy enjoyed by charter schools in the US. Headteachers control their own budgets, set their own ethos and shape their own environments.

In Calgary and Edmonton, a diverse range of autonomous schools offer professionals freedom and parents choice.

And the result?

Alberta now has the best performing state schools of any English-speaking region.

In Sweden, the old bureaucratic monopoly that saw all state schools run by local government was ended and the system opened up to allow new, non-selective, state schools to be set up by a range of providers.

It has allowed greater diversity, increased parental choice and has seen results improve – with results improving fastest of all in the areas where schools exercised the greatest degree of autonomy and parents enjoyed the widest choice.

In Singapore, often cited as an exemplar of centralism, dramatic leaps in attainment have been secured by schools where principals are exercising a progressively greater degree of operational autonomy. The Government has deliberately encouraged greater diversity in the schools system and as the scope for innovation has grown, so Singapore’s competitive advantage over other nations has grown too.

The good news in England is that a new Government committed to following this path to success already has great examples here to draw on.

Granting greater autonomy has already generated some great success stories here. In the five or so years after 1988 the last Conservative Government created fifteen city technology colleges. They are all-ability comprehensives, overwhelmingly located in poorer areas, but they enjoy much greater independence than other schools.

They have been a huge success. Now the proportion of pupils eligible for free school meals in CTCs who achieve five or more good GCSEs A* to C is more than twice as high as for all maintained mainstream schools.

These results are now being replicated by the small group of schools that were turned into academies under the last government – and which were modelled on the CTCs.

As a group they improved three times faster than other schools this year and some individual academies posted incredible improvements of 15 to 25%. Those in some particularly challenging areas, such as Burlington Danes on London’s White City estate, run by the charity ARK and the Harris Academies in South London secured dramatic gains.

It’s absolutely clear that academies and CTCs succeed because of their autonomy. Heads are given the freedom to shape their own curriculum; they are at liberty to insist on tougher discipline, pay staff more, extend school hours, and develop a personal approach to every pupil. In his memoirs published last week Tony Blair gave an excellent description of why they’re so effective:

[An academy] belongs not to some remote bureaucracy, not to the rulers of government, local or national, but to itself, for itself. The school is in charge of its own destiny. This gives it pride and purpose. And most of all, freed from the extraordinarily debilitating and often, in the worst sense, political correct interference from state or municipality, academies have just one thing in mind, something shaped not by political prejudice but by common sense: what will make the school excellent.

These freedoms were curtailed. But this Government trusts teachers to control the classroom and trusts parents to choose schools.

That’s why we’re offering all schools the chance to take on academy status – starting with those rated outstanding by Ofsted. Already over 140, and counting, of the best state schools have taken up our offer of academy freedoms – in just three months. All of these schools have committed to using their new found powers and freedom to support weaker schools.

It’s also why we’ll continue to challenge schools that are struggling; either they improve fast or they will have their management replaced by an academy sponsor, or an outstanding school, with a proven track record.

There was an artificial ceiling of 400 such academies placed and the programme was not refused to primaries. But I am removing both of these barriers to the rapid expansion of the programme.

And we’re helping great teachers, charities, parent groups and some existing academy sponsors, to start new Free Schools. This morning we’ve announced the very first batch of 16 projects that are ready to progress to the next stage of development and are keen to be up and running in a year’s time.

Given that it typically takes three to five years to set up a new school I’m incredibly impressed that just ten weeks after launching the policy there are already projects at this advanced a stage. It’s a tribute to the incredible energy and commitment of these pioneering sixteen groups and the immense hard work and commitment of a superb team of civil servants who’ve been helping them.

Following their lead are hundreds of other groups, each with innovative and exiting proposals, in active contact with the Department and the New Schools Network.

I’m particularly excited that amongst this first batch are projects proposed by outstanding young teachers like Sajid Hussein – who’s King’s Science Academy will be located in one of the poorer areas of Bradford and Mark Lehain – another state school teacher who sees the potential for Free Schools to help students who’ve been let down by the current system.

One of the reasons I’m so attracted to the Free Schools policy is the experience of the KIPP schools – which started with two Teach for America graduates in Houston with an incredible vision for transforming the life chances of some of their city’s poorest young people.

Now parents queue round the block for a chance to get their child into a KIPP school and there are almost hundred across the US – their results are astonishing and almost all their pupils get to a top university. Only by allowing new providers to set up schools will this kind of innovation breath life into our education system.

And only by allowing new providers into the system will we meet the growing demand for new primary school places in those parts of the country where the population is increasing.

Under the old bureaucratic system of controlling education it could take five years or more to get a new school up and running. But we have real and pressing demographic pressures which demand the creation of more good school places in the next few years.

I don’t believe that enough was done to prepare schools, especially primaries, for this pressure. The way that capital was allocated was much too bureaucratic and slow moving, primaries weren’t prioritised properly and local authorities were given the wrong sums of money. We’re taking steps now to put that right – and one of those crucial steps is helping new schools to become established in areas where there’s a growing demand for school places.

While this drive towards a more autonomous school system is an essential part of our plans it is only part of a wider series of reforms necessary to make us truly competitive internationally and to close the gap between rich and poor.

Our first Education White Paper, to be launched later this year, will lay out a programme of reform for this parliament that will not only lead to a more autonomous school system led by professionals but will also

– increase the number of great teachers and leaders in our schools

– give teachers the power to tackle poor discipline

– create a fairer funding system so that extra funds follow the poorest pupils who need the most support *introduce a simpler, more focused National Curriculum

– restore faith in our battered qualifications system.

Teachers and other education professionals will be at the front and centre of the White Paper because everything else we want to achieve flows naturally from the quality of the workforce. And that is the second great principle of education reform – nothing matters more than having great teachers – and great headteachers.

In the 1990s a series of in-depth studies conducted by American academics revealed a remarkably consistent pattern. The quality of an individual teacher is the single most important determinant in a child’s educational progress. Those students taught by the best teacher make three times as much progress as those taught by the least effective.

And the effect of good teaching isn’t ephemeral but cumulative, with students exposed to consistently effective teaching making faster and faster progress than their contemporaries, while the effect of bad teaching isn’t just relative failure but regression in absolute terms.

Research in the Boston school district of the US found that pupils placed with the weakest maths teachers actually fell back in absolute performance during the year – their test scores got worse.

Indeed, wherever we look across the globe, a crucial factor which defines those countries whose schools are most successful is the quality of those in the teaching profession.

In Finland teachers are drawn from the top ten per cent of graduates. In the two other nations which rival Finland globally for consistent educational excellence – Singapore and South Korea – a similar philosophy applies. Only those graduates in the top quarter or third of any year can go into teaching.

In South Korea the academic bar is actually set higher for primary school teachers than those in secondaries, because the South Koreans, quite rightly, consider those early years to be crucial.

Of course academic success at university doesn’t automatically make you a good teacher. You need emotional intelligence as well as the more traditional kind. The best teachers demonstrate that indefinable quality of leadership which springs from enjoying being with young people and wanting to bring out the best in them.

And the reason why Teach First has been so incredibly successful in this country is that they have not only recruited some of our most gifted graduates from our top universities, they have rigorously sifted them to identify those with the leadership and personal qualities that make the best teachers.

Thanks to Teach First, more and more of our most talented young graduates have gone on to teach in some of our toughest schools. In 2002, only four graduates from Oxford University chose a career teaching in a challenging school; in 2009/10, 8% of finalists applied to teach in a challenging school through Teach First, and the programme is now 7th in the Times’ 100 top graduate recruiters. The impact on schools has been incredible. An evaluation by the University of Manchester found that challenging schools which take Teach First teachers have seen a statistically significant improvement in their GCSE results and that the more Teach First teachers were placed in a challenging school, the bigger the improvement.

With programmes setting up in dozens of countries from Lebanon to Australia it is now a global success story.

And many Teach First alumni are now getting involved with Free School and Academy projects – applying the entrepreneurial spirit that won them places on the programme to the new powers and freedoms that we’re offering to professionals.

All of this explains why one of the first decisions I took in office was to increase Teach First’s grant by £4 million to enable them to double their number of recruits each year; expand across the whole country and for the first time into primary schools.

In the White Paper we will unveil a whole range of proposals alongside the growth in Teach First to ensure we attract the best possible people into education to help in our mission.

And alongside that we will, perhaps even more critically, ensure that we help those teaching now to do their jobs even better by providing them with the support, additional professional development and security they need to fulfil their full potential and help their pupils do the same.

We’ll be announcing new policies which will make it easier and more rewarding for teachers to acquire new skills and additional qualifications. We will make it easier for teachers to deepen and enhance their subject knowledge, ensuring teachers are seen, alongside university academics, as the guardians of the intellectual life of the nation.

We need to act because not enough good people are coming to teaching, or staying in teaching.

Teachers who have left the profession tell me that the grinding load of bureaucracy which has been piled on them has been a major factor in walking away from a job so many entered with such high hopes and idealism. One of the best headteachers I’ve ever met told me during the election that he yearned to be free from a Government which had baseball-batted him over the head with bureaucracy. So we will be tackling bureaucracy at source, stripping out unnecessary obligations placed on hard-pressed teachers and overworked governors, simplifying the Ofsted inspection regime and tackling health and safety rules which inhibit out-of-classroom learning and have undermined competitive team sports.

But, crucial as reducing bureaucracy will be, nothing is a bigger barrier to getting more talented people to become teachers, and stay teachers, than discipline and behaviour. Among undergraduates tempted to go into teaching the reason most commonly cited for pursuing another profession, well ahead of concerns about salary, is the fear of not being safe in our schools.

There are massive problems with violence and disruption in our most challenging schools. There are over 300,000 suspensions per year and about a quarter of a million persistent truants. Thousands of teachers every year are physically attacked and about one in three teachers have been subject to false accusations.

We will never get more talented people into the classroom; we will never give disadvantaged children the inspiration they need to succeed, unless we solve this problem.

In our first months we’ve already taken action to give teachers more power to deal with discipline problems. First, we’ve removed the ban on same-day detentions, giving heads and teachers a stronger deterrent against poor behaviour. Previously, teachers had the power to put pupils in detention, but only if the school gave their parents 24 hours’ notice in writing. In future each school will be able to decide what notice to give and how to inform parents.

We’ve also increased teachers’ powers to search troublemakers.

Previously teachers could only search, without consent, anyone who was suspected of carrying a knife or other weapon.

We’ve significantly extended this list to include: Alcohol, controlled drugs, stolen property, personal electronic devices such as mobile phones, MP3 players and cameras, legal highs, pornography, cigarettes and fireworks.

In the White Paper we will outline further changes including the clarification and simplification of use of force guidance and crucially how we’ll protect teachers against false and malicious allegations from pupils and parents. This growing problem acts as a huge deterrent to teachers – especially male teachers in primary schools.

Newly released figures show that 28% of primary schools now have no male teachers at all – which can make it even hard to provide a supportive and safe environment for disruptive boys.

So the message is clear.

We’re on the side of teachers, we’re determined to restore order and we’re not going to be deflected from laying down lines which the badly behaved must not cross.

But just as we need to be clear about the need for order we also need to be clear about the pressing, urgent, need to improve provision for those disruptive, difficult and damaged children who need special help.

In the White Paper we’ll lay out plans to radically improve the environment in which disruptive and excluded pupils are educated and we will ensure that those organisations with a proven track record in turning young lives round are given the opportunity to do more.

And, of course, we need to tackle the deep-rooted causes of educational disaffection that leads so many young people to be disruptive in the first place. At the heart of our White Paper plans for a simpler, fairer funding system is the Pupil Premium.

This will see extra money attached to young people from deprived backgrounds – which will be clearly identified to their parents.

Schools that benefit from this additional cash will not be told exactly how to use it – but we will expect them to ensure that children struggling with the basics get the extra support they need so they don’t fall irretrievably behind their peers.

And to help ensure money is spent wisely right at the beginning of schooling we will take radical action to get reading right.

Children cannot read to learn before they have learned to read. Without that secure foundation even the most gifted and innovative teacher will struggle to inspire and inform.

We know that, whatever else may work, teaching children to read using the tried and tested method of systematic synthetic phonics can dramatically reduce illiteracy.

So we will make sure that teacher training is improved so every new primary teacher – and every teacher in place – is secure in their grasp of phonics teaching. We will ensure teachers have the best reading materials to help embed great phonics teaching.

I am clear that we need that solid foundation, but we also need to create room for greater flexibility once the basics are secure. That is why we will develop a new National Curriculum that excites and challenges young people while giving teachers the space to develop their own pedagogy. I will be saying more over the coming weeks about our plans for a curriculum review but it’s crucial that the expectations we set of what children should know will be more ambitious and based upon global evidence concerning what knowledge can be introduced to children at different ages.

In particular we have to move beyond the sterile debate that sees academic knowledge as mutually exclusive to the skills required for employment; and rigour as incompatible with the enjoyment of learning.

The most exciting curriculum innovations in development at the moment are those which find ways to trigger the curiosity inherent to young minds towards intellectual tough material.

To take one example, the computer games developed by the brilliant mathematician Marcus du Sautoy show children’s imaginations can be harnessed to a deep understanding of the most complex ideas.

Hand in hand with curriculum reform is the need to restore faith in our exam system. Qualifications are the currency of education – and just like with the money markets – confidence is everything.

Over the past few years there has been a growing and justified concern, from parents and from teachers.

Last month the exams regulator Ofqual acknowledged that the GCSE science exams were not set at a high enough standard. I’ve been saying this for years – backed by learned institutions like the Royal Society for Chemistry.

But my warnings were ignored and the status quo retained despite the fact that it was actively damaging the education of hundreds of thousands of children a year.

Critical to restoring confidence in our exams system is a much more assertive and powerful regulator. We will legislate to strengthen Ofqual and give a new regulator the powers they need to enforce rigorous standards.

We will ask Ofqual to report on how our exams compare with those in other countries so we can measure the questions our 11, 16 and 18 year olds sit against those sat by their contemporaries in India, China, Singapore, South Korea, Australia, New Zealand and Canada.

Our young people will increasingly be competing for jobs and university places on a global level and we can’t afford to have our young people sitting exams which aren’t competitive with the world’s best.

And for A Levels we’ll give those institutions with the greatest interest in maintaining standards – universities – more power to shape exams and determine their content.

As well as reforming exams to make them more rigorous we need to change league tables to make them more effective.

One thing I’m determined to do is publish all the exam data held by the Government so that parents, schools and third parties can use web-based applications to create many new and bespoke sorts of tables.

This will mean they’re not dependent on the measures that Government decides to use; and also that there is complete transparency about the qualifications our young people are taking.

But Government still needs key measures of secondary school performance to ensure that the reforms we’re putting in place are having a real impact on performance in our schools and are closing the gap between rich and poor.

Over the next few months – before the publication of the White Paper – there’s the opportunity for a real debate about what we, as a nation, should expect of young people at the age of 16. And so what these key measures should be.

I think most people would agree that English and maths GCSE are an irreducible core that nearly all young people should be expected to achieve at 16.

But I believe there is an argument that the vast majority of young people should take a wider range of core academic GCSEs: an English Baccalaureate that would ensure that all children – especially those from less privileged backgrounds – have a chance to gain a base of knowledge and a set of life chances too often restricted to the wealthy.

So I’m proposing that the Government look at how many young people in each secondary school secure five good GCSEs including English, maths, a science, a modern or ancient language and a humanity like history or geography, art or music.

Such a broad yet rigorous suite of qualifications would allow students here the chance to secure a school-leaving certificate which shares many of the virtues of the European baccalaureate approach. I am a great admirer of the already existing International Baccalaureate and am determined to support a wider take-up of that qualification. But the GCSE is a popular and resilient qualification, well understood by employers, teachers and students.

It seems to me that one of the best ways of capturing the breadth and rigour of the IB while making the most of the strengths of the GCSE is to create special recognition for those students who secure good passes in a balanced range of rigorous qualifications.

An English Bac could incentivise schools and students to follow the courses which best equip them, and us as a nation, to succeed.

I am deeply concerned that fewer and fewer students are studying languages, it not only breeds insularity, it means an integral part of the brain’s learning capacity rusts unused.

I am determined that we step up the number of students studying proper science subjects. Asian countries massively outstrip us in the growth of scientific learning and they are already reaping the cultural and economic benefits.

And I am passionately concerned that we introduce more and more young people to the best that has been thought and written, which is why I lament the retreat from history teaching in some of our schools and believe also that we should incentivise deeper knowledge of our shared cultural heritage.

I believe that a change in how we measure and grade schools, to reward those who have pupils who succeed in all these areas, and a special recognition of student achievement with the award of a Baccalaureate certificate to those pupils who secure these passes, could reinvigorate the culture of learning in this country.

I’m not suggesting this would or should be the only measure used but I do believe that this is a valid expectation of most young people in the 21st century.

It also would not preclude the study of other GCSEs outside of this core or any vocational qualifications that would be of genuine benefit for student’s progression to post-16 education and employment.

But it would dramatically strengthen the position of core academic subjects in our schools and stop the shift to less challenging courses driven by the current perverse accountability system.

And it would align us with the expectations other advanced countries have of their children.

In nearly every other developed country in the world children are assessed in a range of core academic subjects at 15 or 16 even if they are on a “vocational” route.

This is true in Europe, where for example in France all children take the Brevet des Colleges which assesses French, maths, history/geography/civics and a modern foreign language.

In places like Holland that have separate vocational routes from the beginning of secondary school all children are still typically assessed on the core academic subjects (in Holland this is languages, arts, science, maths and history).

In Finland – the best-performing country in Europe according to international league tables – all children are assessed in maths, Finnish, history, science and art/music at GCSE age.

In Asia there is typically assessment of the whole core curriculum at GCSE level. In Singapore, for example, all pupils must take English, another language, maths, science, humanities, plus one other subject (of course they also still use O Levels in Singapore).

And in the States nearly all schools have mandatory assessment during high school in maths, English, science and social studies (including history and politics).

We are extremely unusual in having no requirement to study anything academic apart from English, maths and science after 14 (and only English and maths have to be assessed using GCSE).

Taken altogether, the changes we want to make represent a formidable reform programme. A more autonomous school system led by professionals; a new generation of brilliant teachers; a new era of discipline in our schools; a fairer funding system; a simpler and more challenging curriculum and a qualifications system that restores standards rather than diminishing them.

I’m under no illusions about how tough it will be to drive this programme through but the scale of the challenge is such that we have no choice but to be this radical and this ambitious. There is no option but to push ahead on all fronts as quickly as possible.

Children only have one chance – and I am impatient to ensure that my children – that all children – get the best possible chance to succeed in our state schools.

Paul Goggins – 2003 Speech on Restorative Justice

Below is the text of the speech made by the then Home Office Minister, Paul Goggins, to the Restorative Justice Conference on 28th November 2003.

I am delighted to be able to make a contribution to today’s conference which provides us with an important opportunity to highlight the benefits of Restorative Justice and to feed back some of the responses we have received from the consultation that has been taking place over the last few months.

I hope that today will also be an opportunity to exchange ideas and good practice. As Sir Charles has already said, it is an exciting time for restorative justice.

Of course this approach isn’t new, and many of you have been working in this area for a long time – spreading the word and developing good practice. But I do sense that Restorative Justice is beginning to capture people’s imagination and to gather some real momentum.

So I want, first of all, to thank you all for the contribution you are making to the development of Government thinking on Restorative Justice; in particular for your thoughtful and thought-provoking responses to the strategy document; and indeed for the ways in which you continue to take restorative justice forward in practice.

I especially want to thank Sir Charles and the Restorative Justice Consortium who have done so much to press and pioneer this work. The Government is determined to put the victim at the heart of the criminal justice system. It was no co-incidence that we published our National Strategy for Victims and Witnesses on the same day as the Restorative Justice strategy, indeed the two are designed to support each other.

The Domestic Violence, Crime and Victims bill announced in this week’s Queen’s Speech will, for the first time, give victims of crime guaranteed rights to information and advice from all the criminal justice agencies and ensure that the interests of victims are championed right across government.

And Restorative justice is, of course, centred on the needs of victims: their need to spell out the harm an offender has inflicted on them; their need to draw a line under events and put the crime behind them; their need to see an offender put something back into the community to make restitution for the damage they have caused.

Some people argue that this is a soft option – but I don’t agree.

Facing up to the consequences of what he has done and making amends can be a real turning point for an offender. It certainly was for the 17 year old I came across who had met face to face with the person whose house she had burgled and had resolved to make changes to her life – change that now includes a full-time college course.

It also transformed the attitude of the young boy I was told about on a visit to a local Youth Offending Team after he met the leader of the disabled persons’ group who were regular users of a building he had recently damaged.

And in reality it is this kind of change that victims want. Of course they are deeply angry and hurt by crime and their sense of justice will mean they want to have punishment meted out. But they also want to see attitudes challenged, to see people given the chance to change and to make amends for the harm they have caused.

Without doubt one of the biggest obstacle we face in the criminal justice system at the present time is the perception that it lacks public confidence. Crime is down 25% in the last 6 years and you are less likely to be a victim of crime now than at any time in the last 20 years. But people simply don’t believe it – they feel afraid and sceptical.

Part of the answer at least lies in greater public participation – and restorative justice can help achieve that – whether by direct contact between the victim and offender or through the kind of community improvements delivered through sentences like the Enhanced Community Punishment. One of the things I particularly like about the Enhanced Community Punishment is the distinctive logo that will enable local people to recognise that someone has been putting something back into the community as payment for the damage they have done.

Justice shouldn’t be something far removed from the individuals and communities harmed by crime. And a more open and engaged process will give people the grounds for greater confidence in the Criminal Justice System.

But I don’t want Restorative Justice to simply be reserved for serious offenders. I also want to see this approach become firmly embedded in the everyday life of local communities. It can guide the way that schools develop effective discipline and anti-bullying strategies. It can help deal with low level anti-social behaviour as well as provide a way of mediating between neighbours who can’t get on – and don’t have a clue about how to start putting things right.

Restorative justice should be a way of restoring balance to relationships and situations where conflict and fear may otherwise reign.

The consultation process on Restorative Justice has been crucial to the development of our thinking. We received just over 100 responses to the strategy document and I want to warmly thank every one of you who sent in your views. Your thoughts, ideas, criticisms and comments will form the basis of future policy and practice.

Christine Stewart is going to go into this in more detail, but I want to outline some of the key themes that have emerged.

One of the key issues to emerge from the consultation is the pace of implementation. It was striking that so many people who passionately believe in Restorative Justice want to see it introduced in a careful, gradual way. They want to be sure that as it grows it keeps its integrity. They want to be sure that that too much enthusiasm does not lead to this approach being used when it isn’t actually appropriate.

I take heart from this caution, because it reflects the approach we are in fact taking: careful development, continuing innovation, safeguarding standards, and ongoing research into its impact and effectiveness.

As we promised in the document, work has started with a group of practitioners to develop accreditation standards for restorative justice. We have also invited bids from those who are interested in carrying out research into the trial of the new diversionary Restorative Justice. It is important that we put in place a strong evidence base for the work we are doing.

A second key issue, that many of the responses raise, was that restorative justice should be more than just an add on to the Criminal Justice System, more than just another tool in the toolbox.

There are, of course, a number of other very important goals for the criminal justice system in addition to restoration. Punishment, public protection, the reform and rehabilitation of offenders and crime reduction are all clearly stated purposes of sentencing in the new Criminal Justice Act. But Restorative Justice does have a legitimate place alongside them: helping to meet the needs of victims, repairing harm, rebuilding relationships.

Restorative justice is a way of doing things that we need to get into the thinking and working of every agency and every sector.

A third key issue raised is about the respective roles and contribution of voluntary and statutory agencies in the delivery of restorative justice. A few people questioned whether the police should have a role – I certainly think they should.

Others argued for a distinct restorative justice service – independent of any existing CJS agency. Many respondents highlighted examples of existing successful practice of Restorative Justice within the Criminal Justice System.

The truth is, of course, that we don’t yet have all the answers – we’ll learn more as we go along, from the research commissioned by the Home Office as well as from projects on the ground. But what we do know for certain is that voluntary sector practitioners have been and will continue to be crucial to the development of Restorative Justice.

Along with the great majority of the responses, I welcome and celebrate the current diversity of provision. Restorative justice has grown up from the grass roots. It is innovatory – people are continuing to discover new ways of applying it, in care homes, in schools and prisons, to resolve disputes in the community, and to tackle anti-social behaviour.

This innovation should not be constrained or held back by making Restorative Justice the preserve of any one sector or organisation.

A further key issue emerging from the responses was the need for a broader understanding of Restorative Justice. Many identified this as fundamental to public confidence and success.

So we need to work together, in a co-ordinated way, to raise understanding of Restorative Justice – within all the Criminal Justice agencies and across the public as a whole. That doesn’t necessarily mean a big public information campaign. It’s probably too early for that and we need, as always to make sure that we have sufficient capacity in place to meet demand and expectation.

What will raise people’s awareness and appreciation of restorative justice – and gain their trust – is their own direct involvement in and experience of restorative processes. Hearing about it from people they know and trust and seeing it in action.

I know this from my own personal experience. Having read and heard about Restorative Justice I was already a supporter, but seeing at first hand, in Pentonville prison, a meeting between an offender and a victim really brought home to me what a powerful process it can be, and the kind of transformation it can bring about for all those involved.

So these are some of the issues that have come out of the consultation, together with a few of my own observations. As I said at the start, whilst it is still relatively young there is a momentum behind Restorative Justice now.

That momentum has come largely from local agencies, and from the dedication of practitioners applying RJ in their work – and in their everyday lives.

And perhaps this is the most important feature of Restorative Justice. It is not merely a process or a system – it represents a set of values that acknowledge harm but emphasise the need for reconciliation and the possibility of reform.

So thank you for your work, your commitment to and passionate belief in Restorative Justice and your contribution to the development of our overall strategy and policy.

I feel confident that we are really on to something and hope that you will continue to work with us – building a criminal justice system that meets the needs of victims, and has the trust of the community.

William Ewart Gladstone – 1893 Speech on Unemployment

Below is the text of an answer given in the House of Commons on 1st September 1893 by the Prime Minister and First Lord of the Treasury, William Ewart Gladstone, on unemployment.

COLONEL HOWARD VINCENT : I beg to ask the First Lord of the Treasury whether, in negatively replying to the representations recently made to him on behalf of the large number of persons in London and elsewhere now without employment, he has considered the state of affairs disclosed by the last number of The Labour Gazette, officially published by the Board of Trade, as to the decline in trade, the increase in pauperism, the 20,000 highly skilled artizans unemployed, and the widespread reduction in wages; and if the Government propose to take any steps to mitigate the consequences to the masses of the people?

MR. W. E. GLADSTONE : I cannot help regretting that the hon. and gallant Gentleman has felt it his duty to put the question. It is put under circumstances that naturally belong to one of those fluctuations in the condition of trade which, however unfortunate and lamentable they may be, recur from time to time. Undoubtedly I think that questions of this kind, whatever be the intention of the questioner, have a tendency to produce in the minds of people, or to suggest to the people, that these fluctuations can be corrected by the action of the Executive Government. Anything that contributes to such an impression inflicts an injury upon the labouring population. Every and any suggestion with reference to the improvement of the position of the people, whether in respect to fluctuations in trade or any other matter, is always entitled to and will have our best and most careful consideration; but I believe the facts are not quite correctly apprehended. The decline in trade is not greater now than at previous periods of depression from which there has invariably been a recovery. Although there is a slight increase of pauperism as compared with last year, pauperism is much less in proportion to the population than at any previous period of our history. The Return of the Local Government Board for the year 1892 shows a percentage of 2.5 of the population, as compared with 3 per cent. in 1882, and 4 per cent. or 5 per cent. 20 or 30 years ago. The unemployed among the artizan population are at present about 6 per cent. for the Unions making Returns, but this rate is not specially high at this moment, and it has fallen pretty steadily since the beginning of the year, when it was 10 per cent., and higher percentages have been known in previous periods of depression.

COLONEL HOWARD VINCENT : Is it not proposed to take any steps at all in the matter?

MR. W. E. GLADSTONE : I have stated that I am not aware of anything in the present depression of trade which indicates any duty incumbent upon the Government except the duty of considering any proposal or suggestion which may be made, and which has about it the smallest promise of utility.

MR. J. BURNS : Will the right hon. Gentleman consider, with the President of the Local Government Board, the desirability of again sending a Circular Letter to all the Local Authorities asking them to give employment to the unemployed on reproductive and useful works, as was done in 1886, 1888, 1890, and 1892 by the late President of the Local Government Board?

MR. W. E. GLADSTONE : Yes; I shall be happy to consider that question.

Nick Gibb – 2010 Speech to Catholic Education Service


Below is the text of the speech made by Nick Gibb to the Catholic Education Service on 13th October 2010.

Thank you, Father [Michael] O’Dowd, for that introduction.

With the Spending Review imminent, members of the Cabinet are locked in rooms across Westminster this week. But Michael asked me to pass on his best wishes to you for your conference and I’m delighted to be here to share our vision for education with you.

The last time that I saw many of you was at St Mary’s University College in Twickenham for the Big Assembly with His Holiness Pope Benedict [XVI].

First and foremost, it was an extremely successful event and I’d like to congratulate Oona [Stannard] and the Catholic Education Service on the leading role that it played in organising it.

There were some of the very best choirs that I’ve ever heard, which is testament to the importance that Catholic schools place on the wider development of pupils through extra-curricular activities.

But above all, it was a fantastic celebration of the role that the Catholic Church plays in our education system and the perfect way to mark the start of the Year of Catholic Education.

In his speech, His Holiness said:

As the relative roles of church and state in the field of education continue to evolve, never forget that religions have a unique contribution to offer.

Faith schools have been part of the English education system since it began.

The historian Nicholas Orme traced this back as early as the 7th century when he described churches and cathedrals as ‘centres of literacy’.

By the 15th and 16th centuries, the Church had become one of the most important providers of education in local communities.

And when Catholicism re-established itself in the mid-19th century, the establishment of Catholic schools was prioritised so that children had places to learn.

Faith organisations have just as important a role to play in education in the 21st century.

Today, around a third of maintained schools in England are faith schools and, despite operating in some of the poorest areas of the country, they are consistently outperforming other schools.

At a pupil level, 6 per cent more pupils in secondary faith schools achieved 5 A* to C GCSEs including English and mathematics than the national average, while 6 per cent more pupils in primary faith schools reached the expected level in English and mathematics. When you look just at Catholic schools, both of these figures increase further still to 7 per cent.

At a school level, almost half of the 200 best-performing secondary schools in the country are faith schools, while 64 per cent of the 200 best-performing primaries are faith schools – of which nearly a quarter are Catholic.

And as well as having more diverse intakes than other schools, Ofsted recognises that faith schools are more successful than non-faith schools at promoting community cohesion.

A few weeks ago, I visited St Gregory’s Catholic Science College in Harrow.

It was the first school I visited when I became a minister and I was delighted to be asked back because I was blown away by my first visit there.

Last summer, 66 per cent of pupils achieved five A*-C GCSEs including English and mathematics. But I was struck most by the strong ethos that the headteacher has instilled, the emphasis on aspiration and, as tends to be the case with the happiest and most industrious schools, how I could tell just walking through the gates that there was a culture of respect and good behaviour.

If we could replicate schools like St Gregory’s, there would be no need to have a schools minister or a Department for Education. But while we do have some of the best schools in the world in our country, we also have too many which are still struggling.

Still a long way to go

As we saw from the Key Stage 2 progression statistics published last week, there are hundreds of primary schools where the majority of children fail to get to an acceptable level in mathematics and English.

The majority of children leave those schools without the knowledge and skills required properly to follow the secondary school curriculum and make a success of the rest of their time in education.

Overall, four in ten pupils don’t meet basic standards by the age of eleven, and only about half manage at least a ‘C’ in both English and mathematics GCSE.

What makes this so much worse is that poor performance is so powerfully concentrated in the areas of the greatest disadvantage.

It is enormously demoralising to track the progress of the poorest pupils.

The stark report published by the Equality and Human Rights Commission earlier this week showed that only a third of children eligible for free school meals reach a good level of development by the age of five, compared to more than half who are not.

This gap then continues through primary and secondary school until, aged 16, pupils entitled to free school meals are over half as likely to achieve five good GCSEs and more than twice as likely to be permanently excluded.

By the time they reach university, just 45 children out of a cohort of 80,000 on free school meals make it to Oxbridge.

It is because deprivation still far too often dictates destiny that we are introducing a pupil premium. It will provide extra funding for schools with the poorest pupils to pay for smaller classes, extra tuition and the best teachers.

But we are also determined to learn from the other nations that have been much more successful recently in getting more and more people to be educated to a higher level.

The most recent PIRLs study of 10-year-olds saw England fall from 3rd out of 15 countries in 2001 to 15th out of 40 countries in 2006.

While the PISA study showed that only 2 out of 57 countries have a wider gap in attainment between the highest and lowest achievers.

Three pillars of reform

There are three essential characteristics which mark out the best performing and fastest reforming education systems.

First, they are guided by the principle that more autonomy for individual schools helps drive up standards.

Second, the highest performing education nations invariably also have the best teachers.

Third, there is rigorous external assessment based on a curriculum that provides a deep and rich learning experience.

The coalition government is determined to implement all of these lessons in our country and I will reflect on how we intend to do so today.

Greater autonomy

One of the first things we did was to offer all schools – including primary schools for the first time – the chance to take on academy status – starting with those rated outstanding by Ofsted.

In recent years, academies have consistently outperformed other schools. Last year, their rate of improvement was twice that of other schools, with some individual academies posting incredible improvements of between 15 and 25 per cent. Those in some particularly challenging areas, such as Burlington Danes on London’s White City estate, run by the charity ARK, and the Harris Academies in South London, have all secured dramatic gains.

In his memoirs, Tony Blair gave an excellent description of why they’re so effective:

[An academy] belongs not to some remote bureaucracy, not to the rulers of government, local or national, but to itself, for itself. The school is in charge of its own destiny. This gives it pride and purpose. And most of all, freed from the extraordinarily debilitating and often, in the worst sense, political correct interference from state or municipality, academies have just one thing in mind, something shaped not by political prejudice but by common sense: what will make the school excellent.

Whether it’s new approaches to the curriculum, to assessment, to discipline and behaviour, to pastoral care, to careers guidance, to sport, the arts and music, new ways of gathering data on pupil performance, new ways of supporting teachers to improve their practice, new ways of tackling entrenched illiteracy and new ways of ending the culture of low expectations, it is that single-minded focus on what will work for them that we want all schools to have.

Over 140 outstanding schools have already taken up our offer and will lead the way – and I hope that many more will follow, including faith schools.

I am grateful to Oona and to the CES for the constructive dialogue that we’ve had over the past few months about the involvement of faith schools in the Academies programme.

In that spirit of partnership, let me also say that you have been right to raise concerns about the potential impact that conversion would have on land, on governance, on the curriculum, amongst other things.

I want us to work through all of these issues and that is why we were pleased to provide a small amount of funding to help develop a model funding agreement for Catholic schools.

And I do want to be 100 per cent clear that it would be wrong for us to expect faith schools converting to academies to do anything differently. That is why faith designation will continue into academies and, while they must of course comply with the School Admissions Code so that they are inclusive, academies will be able to continue to give priority to children of their faith.

I believe that, in time, faith schools can play the same kind of leading role in the Academies programme as they do in the wider schools system, not least because they have so much to offer in working with other schools that need more support to improve.

As well as expanding the Academies programme, we’re helping teachers, charities, churches and parent groups to start new free schools.

Bishop McMahon pointed out earlier this year that free schools are about local communities getting together, pooling their resources and supporting the needs of the local community, and how this resonates with the way that so many Catholic primary schools were founded.

Despite the robust approach that we’re taking to assessing proposals, we’ve already announced the first sixteen projects that are progressing to the next stage of development and want to be up and running next September.

Given that it typically takes between three and five years to set up a new school, it is a tribute to the incredible energy and commitment of these pioneering groups that they have already reached such an advanced stage.

Encouragingly, there are already a number of proposals from faith groups and, while the door of course remains open for faith groups to establish new schools through the existing voluntary-aided route, I hope you will look at this route as a means of increasing the number of faith places available.

While I’m on the subject of new schools, let me also say that I understand why some communities were disappointed by the announcement to end the Building Schools for the Future (BSF) programme.

Sadly, we inherited a scheme that was characterised by massive overspends, tragic delays, botched construction projects and needless bureaucracy so we had to take action.

The end of the BSF programme does not mean the end of school rebuilding. I believe we can build more schools more efficiently and more quickly in the areas that need it the most in the future and that is what we’ve asked our review team to deliver.

Similarly, Oona has been lobbying on your behalf recently about the removal of home to school transport, which I understand is an important consideration for you and for parents.

Parents have the right to bring up their children in the way that they see fit and, if they adhere to a faith, to bring up their children with respect to the tenets of that faith.

Our education system must reflect that choice and LAs must respect a parent’s wishes.

Every council’s budget is under pressure but their primary responsibility is to spend taxpayers’ money in a way that meets local needs and, if you or parents don’t believe that’s happening, I have no doubt that you will let them know.

While the drive towards greater autonomy is an essential part of our plans, it is only part of a comprehensive programme of reforms to make us truly competitive internationally and to close the gap between rich and poor.

Comprehensive programme of reform

Our first Education White Paper, to be launched later this year, will set out the whole-system improvement needed to improve standards and close the gap between rich and poor.

Teachers and other education professionals will be at the fore because everything we want to achieve starts with, and flows from, the quality of the workforce.

In the White Paper, we will unveil a whole range of further proposals to ensure we attract the best possible people into education and, perhaps even more critically, provide those teaching now with the support, professional development and security they need.

We’ve already doubled the size of the Teach First programme so that more highly skilled graduates come in to help us with our mission, and we will also make it easier for experienced, talented people to change career and move into teaching.

To ensure they get off to the best possible start, we will look at how we can improve the quality of initial teacher training and, in particular, strengthen phonics and mathematics training for primary teachers.

And because the best teachers apply their passion for learning to their own careers as well as to their pupils, we will make it easier and more rewarding for teachers to acquire deeper knowledge and new qualifications, including postgraduate and management qualifications.

As crucial as recruitment and training will be, there is nothing more dispiriting for teachers than dealing with a grinding load of bureaucracy and nothing more likely to put them off completely than dealing with bad behaviour,

We are determined to lift burdens on teachers so that they can get on with their jobs, and to build on the action that we’ve already on ill discipline by simplifying the use of force guidance and protecting teachers against false and malicious allegations from pupils and parents.

Once teachers are secure and able to develop their professional skills, we then have to create more room for them to use them.

So we will develop a new National Curriculum that excites and challenges young people. It will be informed by teachers and experts, but based on the best global evidence of what knowledge and concepts can be introduced to children at different ages.

We will set out more details in the White Paper but I can assure you that I believe that RE is an important part of the curriculum.

RE is thought provoking, allows pupils to develop a greater understanding of the communities they live in and, importantly, it is valued by parents.

Finally, hand in hand with curriculum reform comes the need to restore confidence in our battered qualifications system.

So we will legislate to strengthen Ofqual and we will also ask it to evaluate how our exams compare with those in other countries so that we know how well our children stand against those from the countries with whom we are increasingly competing.


I’m proud to call myself a supporter of faith schools – and Catholic schools in particular – because they have such a strong track record of building strong communities that work together to help one another and of supporting the most disadvantaged.

We want to learn from you and are committed to working with you as we take forward the far-reaching reform programme that I’ve set out.

Because, just like the Catholic Church, we want to ensure that all children get the best possible chance to succeed.

Eddie George – 1998 Speech to TUC Conference

Below is the text of the speech made by Eddie George to the 1998 TUC Conference.

If the newspapers are to be believed – and I make no comment on that – then you have just welcomed Daniel to the lion’s den. Although this is my first experience of this particular lion’s den, I must admit I have been in a few others. In fact, the last time that I faced such a formidable audience, the Chairman tried to reassure me by explaining that it wasn’t me they were angry with, it was the person who had invited me to speak. So to avoid any possible misunderstanding, I would like to begin by thanking John Monks for inviting me along this afternoon. It is perhaps no coincidence that today is Respect for the Aged Day in Japan!

Actually, I am very pleased to be here and to have this opportunity to respond directly to some of the serious concerns that have been expressed recently by trade union leaders, among others, about monetary policy. Let me start with perhaps what is your biggest concern. You think that the Monetary Policy Committee, which I chair and which sets interest rates, is only interested in controlling inflation and takes little or no account of the effects of its decisions on real economic activity and jobs. Some of you evidently think that that is because we are a crowd of ‘pointy-heads’, or ‘inflation nutters’, or even ‘manufacturing hooligans’, and I am not sure that these descriptions are intended as terms of endearment.

More seriously, and perhaps more generously, some of you think that the problem lies with our remit from the Government, which is first to maintain price stability, defined as an underlying inflation rate of 2 – 2.5% and, subject to that, to support the economic policy of the Government including its objectives for growth and employment.

Whatever the reason, your concern is that we place too much emphasis on holding prices down and not enough on keeping growth and employment up. The implication is that you see a trade-off between inflation and the rate of economic growth, so that if only we would let up a bit on controlling inflation then this country could enjoy higher activity and lower unemployment which are the really good things of life, or at the very least we could avoid some of the worst damage that is currently afflicting the whole of agriculture, large parts of manufacturing industry and even some services sectors. That might even be true – for a time. The trouble is that in anything other than the short-term it will be likely to mean more, rather than less, economic damage and lower, rather than higher, growth and employment.

Often in the past in this country we behaved as if we thought that promoting higher growth and employment, which of course is what we all want to see, was largely a matter of pumping up demand. We paid too little attention to the structural supply-side constraints. All too often we tried to buy faster growth and higher employment even at the expense of a bit more inflation. In effect, we tried to squeeze a quart out of a pint pot, and you all know the result – rising inflation and a worsening balance of payments which eventually could only be brought back under control by pushing up interest rates dramatically, far higher than they are today, and forcing the economy into recession.

I do not need to remind you of the really miserable social as well as economic consequences, as right across the economy people lost their jobs, their businesses and their homes; or insidiously repeated experience of boom and bust produced a pervasive short-termism in business behaviour which infected both industry and finance and, dare I say, both employers and employees however much we all like to blame everyone else. Everyone was tempted to grab what they could while the going was good.

But we have learned from that experience. We have learned that in anything other than the short-term there really is no trade-off between growth and inflation. What we are trying to do now through monetary policy is to keep overall demand in the economy growing continuously, broadly in line with the capacity of the economy as a whole to meet that demand. Both the previous Government and the present one set a low inflation target as the immediate objective of monetary policy, not as an end in itself but in effect as a measure of our success in keeping demand in line with supply. So the real aim is to achieve stability across the economy as a whole in this much wider sense.

Now there is not a lot, quite frankly, that we can do directly through monetary policy to affect the supply side, the underlying rate of growth that can be sustained without causing inflation to rise. That can be influenced by the whole raft of Government policies ranging from education and health to taxation and social security, and it depends ultimately on the ingenuity, the productivity and the flexibility of the economy. Employers and employees working together clearly have a crucial role to play in this context and I recognise the constructive and forward-looking role that many of you are now playing to improve the supply-side capacity of the economy.

But monetary policy operates on the demand side and the best help that we can give is to keep overall demand consistently in line with that supply-side capacity, not letting it run above capacity but not letting it fall below capacity either, as reflected in consistently low inflation. That way we can moderate, rather than aggravate, the unavoidable ups and downs of the business cycle, enabling steadier growth, high levels of employment and rising living standards to be sustained into the medium and longer term, and if we can do that then it will contribute indirectly to the supply side by creating an environment which encourages more rational, longer-term decision-making throughout the economy.

I would hope, President, that on this basis we could all agree at least on what it is we are trying to do. The debate is not about the ends, it is about the means. We are every bit as concerned with growth and employment as you are, as anyone in their right mind must be. But we are interested in growth and employment that is sustained into the medium and long term, and permanently low inflation is a necessary condition for achieving that. If I thought that low inflation were simply an end in itself, then I have to tell you I would get very little satisfaction from my job.

But even if we agree on the objective, that still of course leaves plenty of room for us to disagree about what that means for the actual policy stance, the level of interest rates, at any particular time. In fact, as you may have noticed, because we are wholly open about it, even the individual members of the Monetary Policy Committee have actually been known to disagree about that – at the margin.

Outside the MPC a lot of people say to me, “Okay, I agree we don’t want to return to boom and bust” – I have heard that this afternoon – “but”, they say, “you are still overdoing it. From where I sit, or from what I’m told”, they say, “we’re headed for recession, it’s just hours away”. Sometimes they imply that we are also going to undershoot the inflation target and sometimes they don’t much seem to care about what happens to inflation.

Now there are always plenty of people who claim to know what’s going to happen to the economy, to know that interest rates are “clearly far too high”, or “clearly far too low”, and the present time is no exception. It has been difficult recently to hear yourself think about the deafening noise of opinions on the state of the economy which, understandably, often reflect the situation in their particular neck of the whole economy wood.

The truth is that neither we, nor they, nor anyone else, can know with any great certainty precisely where demand is in relation to capacity in the economy as a whole. Still less do we know where it is likely to be over the next couple of years, and that is the more relevant consideration, given the time that it takes before changes in interest rates have their full effects.

Monetary policy isn’t a precise science, we have never pretended that it is, but it cannot be just a matter of sweeping, broad-brush impressions based upon partial information either. What we have to do is to make the best professionally-informed analysis we can of all the sources of information available to us, relating to every sector of the economy and every part of the country and then constantly review and, as necessary, modify our judgments month by month and quarter by quarter, in the light of the flood of new information as it becomes available.

That, of course, is exactly what we do in fact do, using the vast array of official economic statistics and financial market data, all the publicly available, and some private, surveys and commentaries, as well as a wealth of anecdotal and structured survey evidence that we collect ourselves through our 16 non-executive directors, through the frequent visits which MPC members make around the country, through meetings in London and through our network of 12 regional information-gathering and disseminating agencies with their 7,000 industrial contacts throughout the United Kingdom, and we openly display the facts as they are available to us as well as our analysis and our conclusions regularly through the publication of the minutes of our monthly meetings and in the quarterly Inflation Report.

So when people say to me that the economy is headed for recession, I am interested in comparing the evidence on which they base their views with our own evidence, and I want to know whether or not they are also saying that they expect us to undershoot the Government’s inflation target.

Let us just for a moment turn down the noise and look at some of the relevant facts as they relate to the economy as a whole.

Since the economy started to recover from recession in the spring of 1992, some six‑and‑a‑half years ago, overall output has grown at an average annual rate of about 3%. That is well above the trend rate for the past 20 years of just 2%. Employment has increased by 1.2 million over this period, while unemployment has fallen almost month by month, on the familiar claimant count measure, from a peak of over 10% in 1993, to some 4.7% now. That is the lowest rate for 18 years. Meanwhile retail price inflation (on the Government’s target measure) has averaged around 2.75% ‑‑ that is the lowest for a generation. There is not much evidence here that low inflation inevitably means low growth and employment.

But, of course, we started this period with demand blow capacity ‑‑ with a fair amount of slack in the economy which we were gradually taking up. By last year, it had become clear, in the evidence of rising capacity utilisation and of growing tightness in the labour market, that unless we acted to moderate the growth of demand we were at risk of overheating. That is why we tightened policy over last summer, to slow things down before inflation took off and to head off a subsequent recession. Although, as I say, you can never be sure ‑‑ economic forecasting is a very uncertain business ‑‑ a necessary slow-down, rather than a more serious recession is what we think we are seeing; and, as I understand it, that is what your own General Council thinks too.

Our problem in slowing the economy down has been enormously complicated by the increasing imbalance between the domestic and the internationally‑exposed sectors of the economy. Domestic demand for goods and particularly for services has been unsustainably strong and large parts of the economy have been doing very well on the back of that. But the sectors which are most exposed to international competition have been suffering enormous pressure as a result, initially, of the exaggerated strength of sterling ‑‑ especially against the major European currencies in the run‑up to decisions on the Euro ‑‑ and as a result subsequently of the successive waves of turmoil spreading through large parts of the global economy. Overall demand growth, at least until fairly recently, remained excessive, and the labour market has continued to tighten.

The question was what should we do? It was not that we did not know that large parts of the economy were under the hammer; we had been as conscious of that as anyone. Still less was it that we did not care; we care, just as you must, about activity and jobs in all sectors of the economy. But the stark choice confronting us was either to tighten policy, knowing that it would inevitably increase the pain which the internationally exposed sectors were already suffering, or to disregard the developing excess overall demand in order to protect the internationally‑exposed sectors from further damage. That was the choice that confronted us.

This second course might have meant less pain for the internationally‑exposed sectors in the short run, but it would have meant putting the whole of the economy, including the exposed sectors, at risk of accelerating inflation; and it would, in all probability, have meant a much sharper downturn in the economy as a whole a little further ahead. We have been round that buoy all too often before. And so we tightened policy, trying as best we could through our tactics to minimise the unwanted upward pressure on the exchange rate.

I know, President, only too well that this will be cold comfort to many of you in the exposed sectors, but there is no point in pretending that things are other than they are. The present imbalance means we are trying to maintain stability in the economy as a whole in extraordinarily difficult circumstances.

But I will make one final point. The inflation target we have been set is symmetrical. A significant, sustained fall below 2.5% inflation must be regarded just as seriously as a significant sustained rise above it. I give you my assurance that we will be just as rigorous in cutting interest rates if the overall evidence begins to point to our undershooting the target as we have been in raising them when the balance of risks was on the upside. There is now evidence that domestic demand growth is moderating, as it must do, and that the labour market is tightening more slowly than before. On top of that, as we said in our press notice last Thursday (announcing that we had not changed interest rates) we recognise “that deterioration in the international economy could increase the risks of inflation falling below the target”. That is still not the most likely outcome in the eyes of most of us; and, given the real world uncertainties, we cannot anyway sensibly tie our hands. But there is no doubt in my mind that recent international developments have at least reduced the likelihood that we will need to tighten policy further.

I am grateful for your attention. Thank you.

David Gauke – 2015 Speech to the ABI biennial conference


Below is the text of the speech made by David Gauke, the Financial Secretary to the Treasury, at the ABI Biennial Conference held in London on 3 November 2015.

Good morning – I’m very pleased to be here with you today.

UK insurance has a long and proud history, stretching back to the London coffee houses of the 17th century. But there is nothing old-fashioned about today’s industry. It is a great UK strength and an industry we are proud of.

It is good news for everybody – your shareholders, your customers, and the wider economy – that British insurance is the best in Europe. Our ambition, as a government, is to do our utmost to keep it that way.

The insurance industry has a dual social role.

First of all, it is vital in helping businesses and individuals manage risks and plan for the future.

But it is also a key contributor to national prosperity. You employ 300,000 people. You sell £20 billion a year in exports. In 2014, the industry held £1.9 trillion in invested assets and contributed £29bn to the country’s GDP.

The past few years have had important developments on both fronts.

We all remember the floods of 2012 and the winter of 2013-14.

Flooding is a stark example of the importance of insurance, and I would like to thank the insurance industry and the ABI in particular, for their hard work and commitment to successfully progress Flood Re.

It is a great example of government and the private sector working closely together. It will ensure available and affordable insurance for those at high flood risk and will make a real difference to people’s lives.

I am delighted that the regulations introducing Flood Re have now been approved by both Houses in Parliament and that Flood Re will soon be designated. This means that Flood Re will shortly receive its powers and duties. Subject to Prudential Regulation Authority (PRA) approval, it will then have the legal authority to start operating.

We’ve also had the most fundamental change to how people can access their pension savings in nearly a century. Adapting to these changes has required a great deal of work from the industry, and I have been impressed by the many providers that have stepped up to make these reforms a success.

Over 200,000 people have taken advantage of the new flexibilities and I’m pleased that already over 90% of customers are being offered flexible options, and that a quarter of the largest providers are planning product launches in the next six months.

The ABI has found that £5 billion was accessed by savers in the first six months of the freedoms. That represents a major step forward in creating a climate where individuals can take control of their own hard-earned savings, and enhance their retirements as they see fit.

These are truly historic reforms, and the government will work closely with industry to ensure that they deliver real freedom and choice for consumers.

We’ve also had major steps forward on the prosperity agenda.

The Insurance Growth Action Plan tasked UK Trade and Investment to develop target market strategies for China, India, Brazil, Turkey, Indonesia – that is, some of the most rapidly growing markets in the world.

These strategies were designed to sell the UK insurance markets’ comparative advantage in these emerging markets, and are already helping UK insurers to access those markets.

Which means more revenue, more jobs, more growth.

So there’s been no shortage of good news stories. But there are also important challenges ahead.

Our changing society and our rapidly developing technological landscape means that there is a lot for the industry to adapt to.

With challenges, of course, come opportunities. UK financial services are nothing if not adaptable – so I know that the industry will adapt to the changing environment, spot new opportunities – and continue growing, and serving their customers.

So what are the key areas of change – and of opportunity – for the future?

I would suggest three:

The first, keeping up with a changing society;

The second, making the market even more effective;

And the third, staying competitive in the global race.

Pensions are a vital part of the insurance industry. And it’s no secret that, as our society enjoys ever-greater longevity, the pensions system will require a new approach.

We have two principles here:

First, that people who have spent their working lives saving money into their pension pots should have the freedom to decide how to spend that money.

And second, that pension products should meet the needs of different types of pensioners;

The government’s policies are transforming retirement savings for the long-term, from top to bottom. The pension freedoms we have introduced mark an unprecedented shift of power, away from government and industry, and towards the consumer.

Good progress has been made to date. But it is important that industry continues to innovate, and introduce new products that are tailored to consumers’ changing needs.

In light of the recent reforms, this is a great time for the industry to reflect and consider what it can do to provide a better service and encourage more people to think about saving for retirement.

Now that customers have more choices, they will also want more advice. And it is clear that new and emerging technologies have an important role to play here.

New digital models to provide high-tech, low-cost, user-friendly advice are emerging in the industry all the time. These new technologies could have a significant role to play in meeting customers’ needs around financial advice.

The Financial Advice Market Review, launched in August, is considering the opportunities and challenges presented by such technologies to provide cost-effective advice services. In particular, the review seeks to understand how the regulatory environment can support technology-based advice models. The review will report back at Budget 2016 and I would encourage all of you to engage with it.

Looking to the future, the pensions tax consultation was an opportunity for insurers to take stock and consider how the industry can adapt and provide a better service

It’s been really positive to see the ABI, who have been a key stakeholder, working closely with government to ensure pension provisions are improved.

The consultation closed at the end of September, and we’ve already picked up on some of the key themes:

  1. the need for more effective communication around the importance of saving for a pension;
  2. the significance of having a stable system;
  3. the need for consistency in the system to tackle perceptions of unfairness.

The ABI will be a great support to us in developing our policy over the coming months, and we look forward to working with them.

But, of course, it’s not all about pensions. And the second area I’d like to touch on today – making the market even more effective – touches on all aspects of the insurance industry.

Effectiveness comes from security.

Insurance fraud is a significant problem, which comes at a great cost to consumers and industry. It’s a particular issue with motor insurance – and the government has taken a number of steps to tackle this problem.

Earlier this year, the government set up the Insurance Fraud Taskforce. The group, made up of consumer and industry representatives, has been asked to investigate the causes of fraudulent behaviour and recommend solutions to reduce the level of insurance fraud. We hope to achieve a set of robust and ambitious proposals by the end of the year, ultimately aimed at reducing the cost of insurance fraud for consumers.

We have also set up MedCo, which became operational in April 2015. It will facilitate the independent sourcing of medical reports in soft tissue injury claims, helping tackle fraudulent and unnecessary whiplash claims. And we’re reviewing the MedCo Portal, to make sure it’s meeting its objectives and tackle teething problems.

Effectiveness also comes from making the most of new technology.

I’ve already touched on how automated advice systems can help provide low-cost but high-quality advice on pensions.

But there’s much more it can do. Financial technology helps the customer and – as a driver of innovation – it helps the industry’s competitiveness.

That’s why we’re pulling out all the stops to foster the best investment environment, the right tax system, the appropriate regulatory framework and the best infrastructure for Fintech companies to flourish across the UK.

We now have a “Special Envoy for Fintech” in the shape of Eileen Burbidge, whose role will be to promote the UK as a global Fintech hub and help develop our strategy.

We’re launching an international benchmarking exercise to look at how we perform compared to other countries.

And we’re working closely with the regulators to explore how we allow innovators to experiment with novel ideas early on, without having to worry about getting regulatory authorisation.

It’s an exciting, rapidly growing area – so I look forward to your ideas on how we can make the most of it.

To make the market work more efficiently, we also need to take action on tax measures where appropriate.

I know, for instance, that concerns have been raised by several UK insurers that misuse of the EU status of Gibraltar by other UK insurers to avoid VAT was impacting on their ability to compete fairly.

So at the Summer Budget we took action, and changed the VAT rules so that the supply of these insurance repairs services is deemed to be where the service is used and enjoyed – i.e. in the UK. The measure will level the playing field and deter possible expansion of this avoidance.

And while we’re on the subject of tax, I would like to say a few words about the insurance premium tax – IPT for short.

As you know, the UK standard rate of IPT remains lower than many other EU states, including Germany where the standard rate is 19%.

As part of the Summer Budget, it was announced that the standard rate would be increased from 6% to 9.5% as of 1st November.

We recognise the challenges insurance businesses have faced in implementing the IPT rate change this summer. I can assure you that HMT officials are in close communication with industry representatives, to see whether the HMG/ABI agreement on amending the rate needs to be reviewed.

In addition, as part of a major exercise in digitalising the UK tax system, we are making operational changes to make it easier for insurers to submit their IPT returns.

We would like to thank you for the cooperation we’ve had so far and hope that you will agree that the government’s work on e.g. tackling insurance fraud and VAT tax avoidance will help keep premiums down in the long run.

The third area which I would like to talk about today is global competitiveness.

We have made real progress in showcasing what we have to offer internationally. Already, we’re reaping the rewards.

But we also have to be constantly on the lookout for opportunities to keep us one step ahead. And where we risk falling behind, we need to act.

One such area is alternative risk transfer.

Through Insurance Linked Securities (ILS), new ways have been found to share insurance risk with capital markets. ILS has helped to increase the capacity of the reinsurance sector, particularly for specialist or extreme types of risk, and investors have benefited from high performing assets which diversify portfolios.

This is now a $60 billion market and growing fast. ILS looks here to stay.

But crucially, the UK does not currently have the right framework to support the growth of ILS in the London market. So there is the risk that the expertise which ILS business requires could be drawn elsewhere.

That is why the Chancellor announced in the March Budget that Treasury and the UK regulators, working closely with the London market, would design a regulatory and tax framework to support the domicile of ILS business in the UK.

And as well as constantly refocusing ourselves, we also have to ensure we remain competitive within Europe.

Europe, at its best, can bring good benefits. Put simply, our insurance firms tend to do very well in Europe.

Our industry’s use of technology and experience of online sales gives us an edge in European markets where a large number of UK insurers already operate. And our continued role in the EU has helped us influence regulation to protect UK interests, such as the long-term guarantees package in Solvency 2.

A few weeks ago, the commission launched its action plan for Capital Markets Union (CMU), a flagship project for the new commission. Its primary objective is to create deeper and more integrated capital markets in the EU, by breaking down the barriers to the free movement of capital.

The action plan recognises that Europe requires significant long-term investment in assets such as infrastructure. Insurers, who often have long term liabilities, are the largest institutional investors in Europe and natural investors in such assets.

So the CMU is good news for insurers, good news for the City, and good news for the UK.

Having said that, there is a balance to be struck between regulation and competitiveness.

We have been supportive of Solvency 2, for example, as it represents a major improvement on the patchwork of European insurance legislation under the previous Solvency 1.

Solvency 2 is the global gold standard in insurance regulation and will bring opportunities for UK firms to expand to new markets, to innovate and to provide new products.

We firmly believe Solvency 2 will help support financial stability across the financial system, while securing insurers’ central role as a stable, long term provider of finance through the “matching adjustment”.

We recognise Solvency 2 will need time to bed in, and we will be monitoring its impact closely. In particular, we have pressed for consistent and proportionate implementation to ensure a level playing field across Europe. We will also be keeping a close eye on how Solvency 2 affects the competitiveness of UK firms outside the EU.

So as can be seen, it’s been a busy time for the industry!

But, I hope, also an exciting time.

As the UK economy continues to go from strength to strength – and just last week, we had the news that we are now the top G7 country in terms of the ease of doing business – that will create fresh opportunities for UK businesses.

We look forward to working with you to make the most of those opportunities.

No doubt, there are challenges ahead; but I firmly believe that with a savvy approach and a flexible outlook, the UK insurance industry can continue to be a world leader for many years to come.

Thank you.

David Gauke – 2013 Speech on Social Investment Tax Relief


Below is the text of the speech made by the Exchequer Secretary to the Treasury, David Gauke, on 22nd October 2013 and was held at the Livery Hall at the Guildhall in London.

I’m very pleased to be here this morning, in such a historic venue.

In fact, as something of an amateur historian, when I was given the rather grand job title of Exchequer Secretary to Her Majesty’s Treasury three and a half years ago, I thought it would be a good idea to investigate its history.

And – after an extensive trawl through the internet archives – I discovered that the title of Exchequer Secretary to the Treasury dates all the way back to the mid-1990s!

In that context – when I was looking at the history of the term social enterprise – I was not surprised that it predated the title, Exchequer Secretary to the Treasury, but not by as much as I might have thought. It was first coined as recently as 35 years ago, at Beechwood College in Leeds.

Of course the concept of a social enterprise dates back much further. Whether that be the John Lewis Group in the early 20th century… The Co-operative Group in the 19th century…

Or going back even further, The Bridge House Estates; which was founded a stone’s throw from here in 1282, to maintain bridges over the River Thames.

The government recognises the crucial role that such groups have played, and will always play in our economy.

And we recognise the important role it currently plays. The social enterprise sector – in fact – employs more than 2 million people, and the total annual incomes from the sector are estimated at over £160 billion per year.

So not only are these organisations good for thousands of communities up and down the country. They also play a key role in driving the UK economy.

As such, we want to give social enterprise groups the support they need.

Social Investment Market

One of the recurring issues that we know these organisations face is access to finance. And without access to capital it can be a real struggle to scale-up, to grow or even to become self-sustaining.

For this reason the government – led by the work of Nick Hurd – is committed to growing the social investment market.

And as part of this work, we’ve launched a number of initiatives focusing on all parts of growing this market, including:

– the supply of finance

– the demand for finance

– creating an ‘enabling environment’ for social investment

So we’ve worked hard to ensure that we’ve got the right regulation in place to support the sector.

And we’ve also established a number of publically-backed funds to directly support social enterprises in the UK.

But we know that there remains one massively under-represented type of investor in this market – and that’s the type of investor I want to spend the rest of my time focussing on today. The private, individual investor.

Individual investor

Some services to cater for this type of investor are emerging. But we know that there is a further appetite out there, and we need to find a way to tap into it.

A Cabinet Office paper published in the summer stated that fewer than 16% of High Net Worth Individuals currently have investments with ethical, social or community benefits. Yet 77% of potential pension contributors said they would prefer to contribute to a social investment fund than to a conventional fund for their pension. And 36% said they would choose social investment even when it involves a significant trade-off with financial return.

So we needed to find a way to tap into this enthusiasm. And I know from my day to day role – my more readily understood, but somewhat less glamorous job title is Minister for Tax – that tax levels and reliefs can be a key lever for encouraging certain behaviour.

It was with this in mind, and this type of investor in mind, that at this March’s budget, we committed to introducing a tax relief for social investment.

Social investment tax relief

That tax relief, the matter-of-factly titled ‘social investment tax relief’ is currently being designed by my officials at the Treasury.

We consulted on it over the summer and I’d like to thank everyone here that contributed.

We now plan to introduce the relief by early next summer, through the 2014 Finance Bill.

In the consultation document we outlined that the relief would:

Firstly, offer individuals income tax relief – as a proportion of the amount invested – for investment into qualifying social enterprises.

Secondly, allow social enterprises to receive up to £150,000 in investment through the scheme in any 3 year period.

Thirdly, offer relief on investment instruments other than equity.

Fourth, focus on allowing established forms of social enterprise – Community Interest companies, community benefit societies and charities – to benefit from the relief.

And fifth: allow for investments via a ‘nominee’ – to cater for those individuals who do not want to make investment decisions personally and would prefer to make use of professional expertise.

I appreciate that there are a lot more details to be ironed out, but we will be publishing our draft legislation on this in December, and I strongly urge you to explore some of the detail then.

Enterprise Investment Scheme

Now, some of you may have noticed something familiar in the form of this relief. And this is neither coincidence nor plagiarism.

The model of the scheme takes inspiration from the successful and long-standing Enterprise Investment Scheme, or EIS.

A scheme which will not only be well understood by many investors, and thus easy for them to figure out and operate in.

It is also a scheme which is very successful at achieving its aims. In fact, since its establishment in 1994, it has brought over £8.7 billion of equity investment into nearly 20 000 small, UK companies.

This shows the impact that a well-targeted tax intervention can have on motivating private investment into specific areas of the economy, and it is a success that we want our relief to emulate.

Wealth advice community

So that is how we plan for the social investment tax relief to look.

But – as many of you will know – announcing a tax relief is only half the story. We need people to know about it. And we need people to know how to use it. And that is why the wealth management sector –many representatives of which are in this room today – will have such an important role to play in all this.

You are at the forefront of delivering financial advice to the public. You’re the ones they turn to when they want to know where they can invest most safely, or most profitably, or most ethically. So you can play a crucial role in enabling investors to understand and to make use of this scheme.

And networks such as this one – the Social Investment Academy – have a crucial role to play too, in bringing together people from across the advisory community. And in spreading news of the scheme.

I understand that this is only your second meeting as a group? So I’m very grateful to have had the opportunity to speak to you so early in your existence.

And I’m sure that either myself, or a member of my Treasury team will be very happy to attend another of these events closer to the implementation of the tax – when we have greater detail on its exact workings – to explain things in more detail.

We want to see – as I’m sure do many people in the room – a strong social investment market here in the UK.

And – as government – we’re doing the best we can to support it – through our actions on both regulation and on taxation.

We hope that you – as wealth advisors – will be able to help us spread the word, and to build the strength of the market here.

And I’ll look forward to working with you as you do so.

Thanks for listening.

David Gauke – 2013 Speech on Tax Competitiveness


Below is the text of the speech made by the Exchequer Secretary, David Gauke, on 28th February 2013.

I was very pleased to be invited to speak at this event, which I know forms part of Politeia’s Recovery and Growth economic series.

‘Recovery and growth’ are, of course, two of the biggest challenges facing the UK. And as a Government, as a country, we cannot afford to be complacent about our economic position in the world.

We are in a global race. This race pits us against a number of existing and new competitors and, like any competition, there will be winners and there will be losers. There will be countries that continue to move towards ever greater prosperity, and there will be countries that see their economic outlook, and in turn their standard of living, decline.

As Government, it’s our role to do what we can to ensure that the UK falls into the former category. That our economy is stable once again, and that our businesses have the right environment to compete in the 21st century. Some factors in achieving this are beyond our control. The economic circumstances we inherited. Commodity prices. The Eurozone crisis.

But other factors are within our control and, within the strict fiscal constraints in which we have to operate, we have to make sure that we pull all the levers available to us to achieve growth. This is why we are reducing burdensome regulation – reforming planning and employment law, modernising our infrastructure, improving our education system, increasing apprenticeships and reforming welfare.

But one of the biggest levers we have access to, and the lever that I would like to talk about today, is tax.

I know that this Government’s tax policy has been at the centre of some very lively debate, and this is a debate that we welcome. Allister has played a very large role in this debate, and it is absolutely right that organisations like Politeia and the Taxpayers Alliance have joined the discussion too, and made calls for radical reforms. I welcome a debate not only on how much we tax but what we tax.

But what I want to do this evening is take head-on the critique that this Government has failed to make significant supply-side reforms to our tax system and, in particular, our corporation tax system. I will make the case that this Government, when compared to both its international competitors, and its historic predecessors, has embarked on some radical tax reform in challenging circumstances.

We inherited the largest deficit since the Second World War, but the Government is taking decisive action to return the public finances to a sustainable path. Spending cuts will constitute 79 per cent of the total fiscal consolidation by 2015/16. Total spending, as a proportion of GDP, is forecast to fall from 47.4 per cent in 2009-10 to 40.9 per cent in 2016-17. Nonetheless, we operate in an environment where a competitive and efficient tax system is essential, but with limited flexibility in the public finances.

So how have we responded? Put simply, this Government wants to establish the most competitive tax system in the G20. Not only to attract businesses here, but also to help the enterprise that already exists on these shores.

We set out our plans in the Corporate Tax Roadmap, and have worked hard, together with business, to introduce a substantial package of corporate tax reforms to make the UK more attractive as a place to invest.

We have cut corporation tax from an inherited rate of 28%, to 23% from this April, and then 21% from April 2014. We have reformed the Controlled Foreign Companies tax regime, which is seeing organisations move their head offices to, rather than away from, the UK. We are introducing the patent box and making our R&D tax credit regime more generous; ensuring that the UK is an attractive place to invest for innovation. And we have increased the rate of VAT, as taxing consumption is much less damaging to businesses than taxing employment or profit.

We’ve managed to deliver all these changes in a time of austerity, and I know that other countries have been envious of what we’ve managed to achieve.

My focus this evening is on business tax, but we cannot ignore personal tax. The top rate of 50 per cent, as inherited from Labour, was one of the highest in the developed world. It was supposedly implemented to raise greater revenue and address the country’s deficit, but ended up having the opposite effect.

It only served to discourage talented individuals from working in the UK, it raised little (if anything) in revenue and – most worryingly – it sent a signal to businesses and entrepreneurs (the exact people that could bring jobs and growth and revenue to our country) that Britain was not open for business.  And that is why this April we will be reducing that rate to 45p – a level which is lower than Japan, Germany, Canada and Australia.

This was a politically brave move, it isn’t one that will make us popular with some people, but I am certain it sends the right message to high earning individuals and strengthens our prospects for growth.

A better tax environment for business leaders and for businesses though, isn’t just about the policies we introduce. It’s about making sure that we engage with the sector when making these policies, and that we give them advanced warning of any major changes.

This is why, for example, we published the majority of Finance Bill clauses in draft, for greater scrutiny, at least 3 months before introduction of the Bill. Businesses welcomed this opportunity to engage as early as possible, and this has resulted in better quality tax law. We will continue that engagement. In fact, this greater level of engagement has proven beneficial with regards to collecting taxes too.

The complexity of many large companies’ tax cases, and the large amounts involved, make engagement the most cost-effective way to improve tax compliance and support businesses at the same time. So for the largest two thousand corporations in the UK, we now have dedicated HMRC customer relationship managers.

This strategy has been very successful. By supporting the organisations and ensuring rigorous compliance they garnered positive feedback from business, while also helping HMRC to maximise revenues by recovering the right amount of tax.

But HMRC can only collect the tax that is due under the law. And the law in this area is not simply a domestic matter. As with most major economies, the tax system in the UK is consistent with internationally agreed OECD guidelines.

There are international concerns over whether the current corporate tax rules manage to properly capture the profits generated by multinational companies in the jurisdictions where their economic activity is located. And it’s understandable that not only citizens, but the vast majority of businesses will feel aggrieved if some companies aren’t seen to be paying their fair share of tax.

This is a complex area, but any reform will require concerted international action. It is an issue that all countries are facing, and politicians will continue to work with each other to develop the appropriate international solutions.

We are also working hard to simplify the tax system on our shores. We established the Office of Tax Simplification – or OTS – in 2010 to provide independent advice on simplifying the UK tax system, and we have implemented a number of their recommendations.

But let me address one argument that is sometimes made – that ‘if only we simplified the tax system, we wouldn’t see the avoidance that has featured so prominently in recent months’. There is an element of truth in this. Complexity can provide the opportunity for avoidance.

But it is also the case that complex behaviour can take advantage of simplicity in the tax system. Many of the high profile cases that have attracted media attention have had little to do with complexity within our tax system.

I believe we have to look at the complex interaction between the tax systems of different countries and an international tax architecture that has not kept pace with the complex modern global business environment. In other cases, relatively simple tax rules have been exploited by complex and contrived behaviour. To paraphrase Einstein, a tax system has to be as simple as possible. But no simpler.

This has been something of a whistle stop tour through this Government’s actions on tax, but hopefully it provides some kind of overview of the large number of actions we’ve taken, and changes we’ve implemented, to reduce the tax burden on businesses. I believe that these have been radical reforms. And I’d like to spend the last few moments explaining why, by comparing the actions that this Government has taken against those of both our international competitors, and our political predecessors.

With regards to international comparisons, I believe that our approach has been vindicated, and that the UK is increasingly becoming known as a competitive nation for investment. We have a considerably more competitive CT rate than the US at 40%, France at 33.33% and Germany at 29%.

But perhaps most striking was the recent survey by KPMG, asking tax professionals to rate the three countries they rated as most attractive from a tax perspective. In 2009, the UK featured in only 16% of responses. By 2012, this number had increased to 72%. In three years, we had moved from being an also-ran to the number 1 spot as the most competitive tax regime in the world, ahead of the Netherlands in second and Ireland in third.

The report stated that a low effective tax rate remains the number one tax factor when assessing the competitiveness of a country’s tax system, but that stability, simplicity and advanced warning of major changes are also of high importance. These are all factors this Government has worked hard to enhance, and the report is a reflection of the way this Government has rebalanced our tax regime from being a business hindrance to a business facilitator.

So when some complain that we have not taken the radical steps necessary to make our tax system competitive, I would say – ask the people who deal with the tax system for a living, who deal with different tax jurisdictions on a day to day basis. KPMG did just that.  And the answer is clear – and positive.

Closer to home though, let us compare the radicalism of the current Government, in terms of cutting business taxes, with the Governments of Mrs Thatcher. Like many in this room, I look back with admiration to a Government that came to power at a time when the country faced severe economic difficulties. Our borrowing high, our competitiveness in decline, the Thatcher Government pursued a number of radical reforms which transformed our country for the better.

But in terms of tax reform, how do we compare?

A comparison with the first Thatcher Government – with Sir Geoffrey Howe as Chancellor – draws up some interesting parallels. Both Governments have to be described as tax reformers, as opposed to tax cutters. The deficit in 1979 was 4.1% of GDP, lower than the 11.2% we inherited but, like the current Government, Sir Geoffrey’s focus was on reducing borrowing. For example, the overall tax burden was sharply increased in the 1981 Budget, in the teeth of a recession. However, within the constraints in place, both Governments have engaged in tax reform. Both Governments increased VAT and cut income tax, predominantly by raising the personal allowance.

Turning to business tax, in the early ‘80s, further revenue was found from the Petroleum Revenue Tax and a windfall tax on bank deposits. A comparison can be made with higher taxes on North Sea Oil and the Bank Levy. But if we ignore all those taxes, we see that only minor changes were made in business taxes. In current prices, the value of the net change in the corporation tax burden was less than £1bn per year.

In contrast, the total fiscal impact of changes to the corporation tax regime introduced by George Osborne, excluding the North Sea, amount to a reduction of around £7 billion per year by 2015/16.

The current Government’s record also stands comparison to the second Thatcher Government from 1983 to 1987. With the advantages of benign economic conditions (a just reward for the courage shown in the first term), a huge Parliamentary majority and a Chancellor – Nigel Lawson – with a close interest in tax reform, this Government has a deserved reputation for radicalism in this area.

The 1984 Budget saw the announcement of substantial reductions in the corporation tax rate, from 52% to 35%. However, it should be remembered that this was funded by making capital allowances and other reliefs less generous. That is not to say that the reforms were wrong – they were not, they have stood the test of time and future Governments followed in this direction. But this meant that the net corporation tax burden was reduced by less than £1bn per year in today’s prices for the 1983 to 1987 Parliament, as with the preceding Parliament.

This once again shows the radicalism of this Government’s equivalent reduction by £7billion a year by the end of this Parliament.

It is true, of course, that different times require different responses. Capital is more mobile now than it was in the 1980s. Consequently, competition is greater and Governments have to work harder to attract investment than was once the case. Nonetheless, it is clear that not just in international terms but also in historical terms, this Government has delivered substantial tax reforms, making our tax system much more competitive.

But this is not to suggest that we will become complacent, nor that we think our work is done. The nature of a global race is that one cannot be static. But with regards to tax reform, I believe that we have made strong progress towards our goal of the most competitive tax system in the G20.

That we are creating a simpler, competitive, well-enforced tax structure, which will help businesses to help the country back into economic prosperity. That we are putting in place the conditions for recovery and growth.

Thank you.