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Mr. Hendry: I suggest that the hon. Lady speak to the hon. Member for Croydon, Central (Geraint Davies). He has been nodding in agreement with me and saying, "Hear, hear." When the hon. Lady looks at the matter in more detail and reads about it in Hansard, it will become clear that no compulsion is involved in what I have described. It is a way to make greater use of existing housing stock without building on greenfield sites. It will also enable many people living in severe hardship to live in greater comfort in their own homes.
The third matter on which I want to touch is the crisis in farming and in our rural communities in general. For too long, the Government have turned a blind eye to the plight of the farming community and to the knock-on effects being felt in rural communities. The Government seem incapable of making even key decisions that affect the farming community. For example, a new regime covering the disposal of carcases from farms comes into force on Thursday, but farmers have yet to be told how the system is going to work. There is no way for the new scheme to be operational in the two days remaining, and farmers are extraordinarily worried about how it will operate.
Increasingly, farms in my constituency are closing down, and the knock-on effects on other elements in the community are evident, with post offices, shops, village garages and pubs all closing. The whole fabric of rural communities is being undermined by the Government. There has also been a rise in rural crime, and people feel that their fears about crime are not being addressed. Home Office figures show that police numbers in Sussex are at last rising above the level inherited by this Government six years ago, and it has taken the Government six years to get them up to that level. However, the growing population in Sussex means that there has been a dramatic drop in the ratio between police and population.
In 1997, when the Conservative Government left office, there was one police officer for every 474 members of the public. In 2002, there was one officer for every 510 members of the public. That shows that police coverage is getting worse all the time.
In so many areas, Government policies are diminishing and worsening community life. The Government have shown that they are turning their back on the south-east and the home counties. They do not truly care about the problems that people in those areas face. The Government's policies hit all parts of the country, but nowhere worse than the south-east.
We are finding now that people who were willing to give the Government a fair wind and a second chance at the last election now feel betrayed and let down. That is turning into real anger towards the Government. One used to find people who said, "I voted Labour in '97 and I'll vote for them again at the next election." However,
it is much harder now to find people who admit to voting Labour, because they feel so betrayed, on so many fronts.I welcome the Opposition motion today. I hope that Labour Members will not merely sweep aside the concerns that it expresses, and that they will listen to what is said about them. I hope that they will begin to act on them, rather than just pretending—as is not the case—that the world that they see is the only world that exists.
4.54 pm
Geraint Davies (Croydon, Central): It is a pleasure to follow the hon. Member for Wealden (Mr. Hendry), and, as he noted, I sympathise with his points about more efficient use of limited housing resources, releasing equity and enabling people to continue in their own homes.
When I tried to intervene on the hon. Member for Castle Point (Bob Spink) regarding the fairness of funding formulae, he failed to let me let him know that his grant settlement reached the ceiling of 12.5 per cent. and that I do not understand why he had such a massive problem with that when my settlement in Croydon was on the floor, at 3.5 per cent.
Two separate debates are occurring. One is about global funding and the other about distributional impacts. On global funding, the Government have clearly been enormously generous over the years and local government investment has gone up by about 25 per cent. in real terms since 1997. In Croydon, for example, schools funding has been increased by more than 30 per cent., which translates into 550 extra teachers and teaching assistants. The Chancellor mentioned in the Budget that we can look forward to an extra £15 billion for education, £1 billion for housing and £5 billion for transport by 2006, as well as an extra £40 billion for health by 2008. There will be £61 billion extra overall for public services by 2006. We must all recognise that, globally, more money is being invested. Anyone who compares that with the 20 per cent. cut idea will see that there is no choice to be made: it is Labour all the way. Only last year, Croydon had an extra 227 nurses and 76 police officers as well as the teachers and teaching assistants that I have mentioned.
That said, this year's formula has been controversial. From the perspective of Croydon and London, I am aware of commentaries by such people as Professor Robert Elliot of Aberdeen university and Professor Andrew Oswald of Warwick university who have focused on the fact that costs are higher in London and the south-east. The cost of housing is 80 per cent. higher in London. Private sector wages are about 40 per cent. higher in London—more specifically, they are 50 per cent. higher in inner London and 25 per cent. higher in outer London. In cases of competition between the private and public sectors for workers, it is obvious that if the private sector pays the market rate and the public sector does not, there will be a recruitment problem in the public sector.
In the specific case of teachers in outer London, there is a mark-up of £2,043, or 11 per cent. That is not completely unreasonable, but as that teacher becomes a middle-ranking and then a head teacher, the cash amount—it is not a percentage—becomes a smaller and
smaller proportion. Young teachers come to Croydon to train, but when they want a family and a family home, they move away, and they do not come back. The only way to recruit, say, a deputy head teacher in London is to employ a teacher already in London. People do not leave London, then come back. That raises issues of quality. What has happened is that we have, imaginatively, brought in more foreign students from Australia, New Zealand and other places to fill places.
Mr. Watts: My hon. Friend says that there has been some change in council grants this year, and that is undoubtedly so. Does he accept that south-east councils have historically enjoyed higher rates of grant than those in, for example, the north-west, and that they have, as a consequence, had much lower council tax? This year's settlement only moves us back to a fairer system.
Geraint Davies: No, I do not accept that. When economists consider the actual costs of delivering services in the south and the north, they find that the number of public service recruits is much higher in the north. If we consider the wages of standardised private and public workers in the south, we find that the private sector worker gets paid much more. In the north, the public sector worker is paid more.
Council tax comparisons are usually based on a standardised band D household, but in fact the valuation differences between south and north mean that there are many more band D houses in the south. People in the south and in London are paying more per head than people in the north, and there is a migration of funds to the north.
Mr. Watts: Will my hon. Friend accept that the failure to revalue properties has meant that there has been a drift of resources from the north to the south?
Geraint Davies: No. I have forgotten the latest figures, but certainly more than £10 billion is moving in the other direction.
Geraint Davies: I shall not give way again, especially as I know that the hon. Gentleman will agree with me, and that would be outrageous.
Unfortunately, for various reasons to do with supply and demand, housing costs in London have been subject to wider movement than those in north, while the opposite is true of the formulae. There are always questions about methodology when we debate such issues. Does one use housing? Does one use wages? How should one use wages?
In London, there is great wage disparity between the 11 boroughs with a floor of 3.5 per cent. and the seven with a floor of 8 per cent. The reason for the differential is that areas of London with higher than average public and private wages are clustered together and receive more, while those where public and private wages are lower than average receive less. The cost of employing a teacher, a dustbin-person or any other public servant is broadly the same throughout London, and does not reflect the private sector pay differentials that are
necessary in different parts of the city. That is the driving force for the big disparities that cause specific problems in London.On the pay differences between London and the regions, it is worth pointing out that a 40 per cent. increase for firefighters sounds—and is—wholly unreasonable. However, it is not completely ridiculous for firefighters in London, although it might be if they were based in Cardiff—where I come from. If everyone were given a 16 per cent. increase, it might not be enough for a London person, yet it would be more than was needed elsewhere. That is why I was pleased that, to encourage full employment in all regions, the Chancellor mentioned the need for a sensible balance between public and private sector pay and conditions. I look forward to the continuation of that debate.
When people are asked about their own experience of education, hospitals and so on, they say that it is marvellous and that it is improving under Labour. However, when they read the papers, they think that their experience must be exceptional because things are not always as rosy elsewhere. The reason for that is that journalists live in London where there are special pressures on the health service—due partly to immigration and partly to cost—and on the education and transport systems. Although it is difficult, we need to get the balance right.
The interventions from my hon. Friend show that such matters are controversial. However, the answer is to listen to what people say and to respond. There are distributional issues both within London and between London and other regions, and we need to reflect those dynamics.
I am glad about the extra resources that have been provided in Croydon over many years. They have given us more police officers, more nurses, more teachers and rising standards. I appreciate the fact that the Government have responded to the short-term budgetary problems in Croydon schools, which were partly brought about by the exceptional increases in the cost of superannuation. I am pleased that the Government have taken those problems seriously and have provided an extra £1.3 million for education. The local council has just announced an extra £500,000.
There are still issues. We need to be reassured that next year will be the same as last year and that we shall continue to make progress on the standards of excellence that we have grown used to since the election of a Labour council in Croydon—a council that I was proud to lead at one point. With that, I conclude my speech.
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