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7.52 pm

Mr. Sebastian Coe (Falmouth and Camborne): I am delighted to speak in the debate. I shall not detain the House for more than a few moments. I am pleased to be able to welcome the local government settlement for 1996-97. I do so for local and national reasons; it is impossible to divorce the two.

Virtually everything that we, as constituency Members of Parliament, hope for and promote--and our constituents' aspirations--depends on the way in which

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we consider our spending nationally. That impinges on inflation, on tax policy, on ensuing interest rate policy and--although there has been little mention of it during the debate--on the percentage of gross domestic product that the Government take out of the economy. Those issues must be considered.

I welcome the settlement in local terms because the three key beneficiaries of this year's settlement were education, health, in terms of our care in the community settlement, and the police--law and order. Hon. Members know that those three issues, especially in my constituency but in constituencies the length and breadth of the country, have considerable resonance at the moment.

I was interested in some of the comments made by the hon. Member for Newbury (Mr. Rendel), who spoke about the local government settlement in Cornwall and adopted a broad-brush approach. He is the Liberal Democrat spokesman. It is understandable that he will speak about the county. However, the Government's settlement for Cornwall, at more than 3 per cent., was generally accepted to be a good one. It was higher than that of any comparable county--and the national average was about 2 per cent. The education budget in the county increased last year by 5.6 per cent. That, in hard cash terms, is an extra £8.7 million going into county education against the background of a national increase of 4.5 per cent.

Mr. Betts: The hon. Gentleman has said that the settlement for Cornwall was more than 3 per cent. As I understand it, the SSA increase is 3.1 per cent. but the actual increase in grant is 2.6 per cent. As that increase in grant is less than the rate of inflation, and less than the teachers' pay increase award and will not cover the cost of increased numbers of children, does the hon. Gentleman advise the county council to cut education, to cut other services, not to fund the teachers' pay settlement or to increase the council tax by more than the rate of inflation? What does he advise?

Mr. Coe: I will not suggest any of those. I am suggesting that there are savings to be made. I am talking not about huge savings but about savings.

It is interesting that, at this stage every year, we get into this ritual dance. I have been in the House for three years. I remember exactly the same debate this time last year, prompted by Liberal Democrat Members. Bogus surveys shot around the county, demonstrating in no uncertain terms that every Cornish child was £100 worse off and more undervalued than anywhere else in the country. We woke up on the morning of the settlement to be told that there would be mass redundancies. Radio Cornwall camped outside county hall. At the end of the day, as my hon. Friend the Member for St. Ives (Mr. Harris) knows full well, there were two and a half redundancies in the teaching profession in the county. There was no mass loss of jobs in county hall.

We must move away from the meaningless argument that the index of assessment for local authorities is simply how large the increase in the internal directory is from one year to the next. We must talk about not only inputs but outputs. There must be some balance in the argument.

Mr. Rendel: I am not quite sure what the hon. Gentleman meant when he replied to the previous intervention. It sounded as though he thought that he

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could enable the circle to be squared, so to speak, by finding savings in unspecified areas of council spending, so that he could use those savings to increase education spending in the way that he would hope.

If that is what the hon. Gentleman meant, I would point him to the remarks made by the Secretary of State earlier in the debate. Such savings, when they are spent on something else, are not savings at all, according to the Secretary of State.

Mr. Coe: No. The point that I choose to make--and this is grown-up politics--is that the hon. Gentleman's county is run by the Liberal Democrats. It is, if I may say so, democracy. The council will have to decide priorities. That is no different from what Ministers do every day of the week. The priorities are simple. The hon. Gentleman must decide what the expenditure priorities are. His county was given the tools by the Government in key areas of expenditure. It is up to those people who represent my constituents at county level to determine those priorities. It is ludicrous to suggest that there is any process other than that.

Mr. Harris: Did my hon. Friend by any chance hear, as a number of us heard one day last week, the Liberal Democrat Treasury spokesman blaming the Government on the "Today" programme for excessive borrowing and public expenditure? Does my hon. Friend have the difficulty that I have in squaring such remarks with the remarks of the hon. Member for Newbury and any Liberal Democrat spokesmen in the House? Whenever they are on their feet, they call for more Government expenditure.

Mr. Coe: My hon. Friend makes an important point. As he knows full well, the priorities within Cornwall at county level are those of a Liberal Democrat-controlled council. They have to make their choices and set their priorities.

I do not naively or coyly suggest that Cornwall's education settlement last year was anything other than tight. I know that it was. I and my hon. Friends the Members for St. Ives and for South-East Cornwall (Mr. Hicks) have close links with schools in our constituencies. I have a parliamentary education forum and I meet head teachers from all my schools at least four times a year. I am open about last year's settlement. I was told in no uncertain terms by head teachers last year that they were pushed. They had to dig deep. They did not get rid of teachers.

I pay tribute to the quality of teaching in the county of Cornwall and the quality of governors of the schools. They had to make some difficult decisions and they made them well. Education in the county did not suffer. This year I am delighted that the settlement has been significantly more generous, in an economic climate that has allowed it.

I wish to draw to the attention of my hon. Friend the Minister a concern that was drawn to my attention and that of my hon. Friend the Member for St. Ives in a meeting with Kerrier district council two Fridays ago about its settlement this year. My hon. Friend the Minister will be aware that within the constituency of St. Ives lies the Royal Naval Air Station Culdrose. It is among the largest helicopter training schools in western Europe. It is

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a major provider within NATO cover. It is also a mainstay of the local economy. Research has shown that the defence sector supports 40 per cent. of the local economy of the Helston travel-to-work area, where many of my constituents are based. That is three times higher than the contribution of the defence sector to Plymouth. The air station contributes some £50 million to the district economy annually and to the economic well-being of west Cornwall.

As a result of the reductions in armed forces expenditure some difficult decisions have had to be taken not only as part of "Front Line First" but as a consequence of the peace dividend. RNAS Culdrose is being rationalised and the number of personnel is being reduced, not by huge numbers. Thank goodness, Culdrose has not been affected as badly as some defence establishments, but a significant reduction has been made. The effect on the local economy, which is already hard pressed, is difficult and damaging.

The area is already identified in Department of the Environment figures as the 17th or 18th worst unemployment blackspot in the United Kingdom. It is identified and highlighted in the Department's index of local conditions. In such circumstances, the rationale which purports to lie behind the SSA would dictate that the district's needs should increase to reflect the need for higher spending, greater social need and the commensurate reduction in the economic base. Instead, the reduction in the population as a result of the reduced number of service personnel, has worked right through the SSA formula to give us less support. I hope that the Minister can examine that issue. It was raised, sensibly in my view, by my local authority officials. I hope that my hon. Friend is at least able to reconsider some of the issues that are raised by that matter.

Two key features of recent Government policy can and will change the face of local provision in some important areas. The first is the private finance initiative. I hope that within the next year or so we in Falmouth and Camborne, particularly in Falmouth in the south of my constituency, will have access to a properly funded and resourced community hospital. We have a hospital, but within the local arguments and toing and froing which is always necessary, we are looking to build a new community hospital in Falmouth and Penryn.

It is my hope that that can and will be pushed forward by the PFI. It is perfectly reasonable to use that type of partnership to reduce the waiting list that often exists for money for such projects. I hope that the private finance initiative can help. I know that there is considerable local support for that.

The second feature is the city challenge initiative. I was interested to read a speech made by the Leader of the Opposition in Southwark cathedral the other night. He welcomed the city challenge initiative as one of the major factors which had helped got rid of the Hulme housing estate in Manchester. A great deal of revisionist rewriting of history takes place on the Opposition Benches. I should point out that the Hulme housing estate was knocked down as a result of a decision made back in 1991 by my right hon. Friend the Member for Henley (Mr. Heseltine), now the Deputy Prime Minister, to push forward with city challenge.

I do not wish to tax the House with the mechanism behind city challenge, which involved trading companies and various other partnerships, but it is fair to say that for

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the Labour party to claim that it was a huge success for either Manchester council or a new idea from the Labour party in local authority provision is--I am trying not to use the word "hypocritical". It may have been ignorance or simply carelessness. This was a decision made by a Conservative Secretary of State, supported by good, solid, Conservative policy.

I welcome the debate, and I welcome this year's financial settlement for the national reasons that I have identified and, more importantly, for the real benefits that it has brought to my constituency and the county of Cornwall.

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