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11 Apr 2003 : Column 545—continued
Geraint Davies: Does my hon. Friend agree that one of the reasons why it is difficult to recruit enough teachers, police officers and nurses in his constituency is the fact that the private sector pays an extra 30 or 40 per cent. in London weighting, while we pay those in the public sector nowhere near that in London?
Jon Cruddas: Indeed, and I will return to that structural problem slightly later in dealing with the demand for housing in Greater London and regeneration across the Thames gateway. Now, I want to focus on the general strategy of refinancing the public services, which is based on earlier debt repayment and reductions in unemployment, plus today's borrowing and tax rises. There will be a £61 billion cumulative increase in the public services by 2005–06, and year-on-year real terms investment in health, education, transport and the fight against crime.
The only way to measure the relative effectiveness of such a strategy is to see how it is working on the ground. Take, for example, education provision in my constituency. Ten years ago, Dagenham had the worst performing local education authority in terms of the quantification of outputs; today, it ranks around the middle of the league tables. There has been a dramatic rate of change in the LEA's relative performance in the past 10 years, especially in the past six. We have some of the most improved schools in the country. They have developed pioneering work in literacy and numeracy, some of which pre-dates the Labour Government, but that has been taken on board, developed and appropriated by the Labour Government. Two weeks ago, the LEA achieved beacon status for secondary schools.
Adult residents are now grasping the increased opportunities for basic skills provision, given the general profile of numeracy and literacy in the community. We see queues of people trying to tap into some of that greater provision for basic education and training. Overall, there is a profound shift in educational provision in the community, and that translates into a literal redistribution of life opportunities for working-class people.
We are expecting a new hospital to be built just on the outskirts of my constituency by 2005–06. The local improvement financial trust, the lift programme, will provide a whole series of integrated community health centres—mini hospitals—across my constituency in the next 18 months. The primary care trust will receive 40 per cent. budget increases over the next three years, and the early front-loaded reforms over this Parliament, through the strategic health authority and the PCT, are now bedding down quite well.
The changes for the police are quite staggering. Some two weeks ago, additional police officers were announced, which makes a 47 per cent. increase in police numbers since the general election. That equates to a change from 280 to 410 officers since the general election, and 15 new community support officers and 20-odd street wardens have been announced. We see more police on the streets and police cars and rapid response vehicles on the roads. The borough commander has identified 12 targets in his policing plan, 11 of which are being met, but we are slightly missing the one on auto crime. Dagenham is now the fourth safest borough in the capital.
On transport, three new river crossings to the east of London have now been agreed. We are extending the docklands light railway into Barking and, probably, Dagenham dock, and we are systematically overhauling the A13, which is the main link road into London.
Overall, therefore, we are witnessing massive change. At times, it is uneven and it is not fast enough, but there is no doubt that profound change is occurring. I fully support that strategy; it is the agenda on which we were elected and people will be patient, so long as they know that things will happen—but they acknowledge that things will not happen overnight. I believe that they will be patient if we preserve the link between tax rises and the borrowing figures in the Red Book and, most importantly, the expenditure plans themselves.
Mr. Love: My hon. Friend makes a powerful case for local public expenditure, but is there not an additional case? With a weak international economy and consumer confidence tailing off, public expenditure is one way to retain demand in the macro-economy.
Jon Cruddas: I take the point; it is fairly orthodox element of mainstream Keynesian thinking on the counter-cyclical role of the state. I want to come to some of the international issues that my hon. Friend raises in a moment.
Our strategy could be derailed if we were to use tax receipts to finance less borrowing; if we were to break the implied contract that we have with the British people in relation to the revenue raising consequences being accepted if there is a material change in the public services that they consume. That could happen in one of two ways: either we lose our domestic political nerve by not safeguarding our expenditure plans, or we enter into a system whose rules, as presently constituted, would bring into question that strategy and imply spending cuts to restrict borrowing.
Under the stability and growth pact, the objective as stated until middle to late last year was to balance budgets by 2002–03. Late last year, the Commission changed that, with an objective of a 0.5 per cent. cut in borrowing for the next three years. This week's Red Book estimates show that that would amount to a cut of some £35 billion in health, education, transport and the fight against crime if we were to meet the Commission's stated objectives.
To preserve that compact with the electorate, the rational position, therefore, is to remain cautious about early euro entry. The excessive deficits procedure has been triggered for Portugal and Germany, as has the
early-warning system for France, and it was reported last week that Italy is also in trouble. It is vital that we resist the internal and external pressures to compromise our strategy.I want to make a couple of extra points while I can on our industrial and regional policy within the broader mix. Since the last election, we have generally seen a welcome shift in different Departments away from some ideological preoccupations with the so-called new economy and towards a return to manufacturing strategy. Historically, Dagenham sits at the centre of manufacturing for London, and we are seeking to rebuild that by moving from car assembly to engine production.
With that new emphasis on manufacturing comes a renewed Government emphasis on the need to invest in infrastructure, to develop work with the devolved economic agencies, to promote new skills, to develop greater links between industry and universities and to provide more help for research and development. That is encapsulated in the centre for manufacturing excellence that is soon to be opened on the Dagenham estate. It is a vivid example of an enduring manufacturing strategy that has been developed by the Government since the last general election, and it will assist medium-term growth. That growth will also be helped by a developing regional economic strategy alongside the public services agenda and the priorities attached to wealth generation in the Thames gateway sub-region. However, these approaches raise questions in terms of public services. Dagenham sits at the centre of the Thames gateway, and it is anticipated that the borough will provide homes for tens of thousands of people over the next 10 years.
I welcome the proposed urban development corporation that has been announced in the new communities plan. I welcome also the new provision of £460 million, over three years, for land remediation and clearance. However, the UDC must be based on a real partnership with local authorities and local people. It must not railroad through propositions and change.
The housing agenda must work alongside developing the social equation in terms of investments over and above those planned for the area in respect of education, health, transport and the fight against crime. Departmental plans must take into account dynamic changes in population and should not be based on static assumptions. I therefore welcome the speech that was delivered by my right hon. Friend the Deputy Prime Minister at The Guardian urban regeneration conference this week. He stated:
- "I know that the growth areas must have the necessary infrastructure. So we are bringing forward the key decisions needed on transport, schools, hospitals and the potential for jobs".
I welcome the Budget, which is another staging post in our overall strategy. Massive and profound change is already under way at local level. We must keep our nerve
politically and grind out the strategy. We must not let domestic or external forces trim that strategy. I welcome the significant shifts in industrial and regional strategy since the election, which will consolidate the overall agenda. The Labour party was created materially to change the conditions of working people, and I believe that we are on the right track and achieving that goal.12 noon
Virginia Bottomley (South-West Surrey): One of the advantages of speaking on a Friday during the Budget debate is that we have had the opportunity to hear from our constituents their first reaction to the Budget announcements. Unlike the hon. Member for Dagenham (Jon Cruddas), my constituents are appalled by the Budget, not least the many pensioners who had anticipated retiring with adequate means, but who now face a return of one half of what it would have been had they retired in 1997. The £5 billion tax raid on pension funds has had disastrous consequences. The pensions crisis is causing real fear among the population, and there was no comfort in the Budget for my constituents.
I was interested by the mirth and merriment of Labour Members when I said that people in South-West Surrey received no comfort from the Budget. An untruth is peddled by the Government that all people in Surrey are prosperous. They claim that there is no poverty, no deprivation and no disadvantage. I wish that Labour Members could have heard the evidence from the citizens advice bureau that I visited last Friday.
In Surrey, costs are extremely high. Early sociologists who studied relative deprivation will know that to be hard-up amidst prosperity is extremely difficult. More than that, when it comes to funding a homestart project, a citizens advice bureau or a care home for older people, there are inadequate resources in Surrey to match the targets that the Government announce time and again.
I will give a clear example because today's debate about education makes the point all too clearly. There is no suggestion from the comments of the Secretary of State for Education and Skills that a recent survey shows that one in three teachers expects to leave teaching within five years. Teachers are protesting about their work load, Government interference and—I think not in Surrey—poor pupil behaviour.
I have taken the opportunity provided by the UNICEF initiative to involve young people in democracy to visit all my secondary schools this year. I have been to Rodborough, Broadwater and Waverley Abbey, and I am about to go to Woolmer Hill and Heath End. I have received a letter from the head teacher of Weydon school. She says that she is extremely worried, with all the other secondary heads, that we will
- "find ourselves with a deficit budget this year."
- "have to let teaching assistants go at the end of their contract, even though the National Agreement on teacher workload indicates that we should be appointing more . . . At a recent Headteachers' meeting, almost all of the Secondary Headteachers will be managing an 'in year' deficit."
- "Can anything be done to redress the change of funding arrangements which has so disadvantaged the South East of England?"
I have received many letters from Chiddingfold, Farnham and Hindhead about the appalling council tax increases. Pensioners, who earlier caused such merriment among Labour Members, have said that they have worked throughout their lives, but are now unable to turn elsewhere. They ask how they will cope with the council tax that has been imposed.
Housing is perhaps the most difficult aspect for teachers because housing in Surrey is extremely costly. The Surrey teachers council has given me the latest figures that show that the average house in Waverley costs more than that in inner-London. Of course, teachers in Waverley and Surrey do not benefit from London allowances. They receive a marginal allowance, but that does not compensate in any way for their extra costs. The same is true for police officers, social workers and nurses. In fact, public services in Surrey are now in such a poor state that its police force provides private health cover for police officers because they cannot rely on the national health service to deliver an adequate service. That is an absolutely appalling state of affairs.
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