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Mr. John Hayes (South Holland and The Deepings) (Con): The hon. Gentleman is absolutely right about migration being a key factor in housing demand, and
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consequently a factor in driving forward house price inflation. Does he agree that, since this Government came to power, public sector house building has roughly halved from its mid-1990s level? In addition, does he agree that a way of satisfying that additional housing demand would be to create a more fluid housing market in which more people owned their own home—as many people in public sector housing want to—which would create space for people currently in temporary accommodation who cannot get on to the public sector housing ladder?

Jon Cruddas: The purpose of my rather protracted walk through these statistics is to come to the issue of public service allocation, and public policy issues such as housing. We have seen a tripling of the number of people on the housing allocation and transfer lists as the population has expanded, which puts huge pressures on public services and deserves an adequate public policy response. The far-right activity to which I referred is one of the barometers of the pressures that are building up, and housing is one of the critical issues in that regard, as are health inequalities. Every issue relating to public policy investment needs an adequate public response, in order to make sense of the dynamic and extraordinary movements of population 10 miles down the road.

That is why I want to come back to the workings of the Public Accounts Committee. The Chairman has talked about seven issues relating to the relative merits of public sector activity. I would like the Committee to add another. I would like it to develop an adequate analysis of the relative ability of the state to deal with the demography at work in our urban communities that is creating such pressure points in urban areas of Britain. My urban community is extraordinary, because of the sheer scale of the population movement into it and the qualitative changes within it. As I said earlier, the epiphenomenon of the far right is materially grounded in such dynamics.

I want to return to some of the issues of public policy-making that lie behind that. I know that my hon. Friend the Financial Secretary is interested in the subject. Indeed, next week he will visit my constituency to examine some of those issues. There is a collision between a long-term legacy of poorly performing public services and poverty, and the extraordinary change that has created the scene on which the far right is operating. Some of its activities are grounded in issues of distribution that are geared by that extraordinary movement of people.

The situation puts enormous pressures on the state, both nationally and locally. The Government have an incremental strategy to refinance public services; the question is, can they tread water, let alone tackle a moving target in the form of growing populations that are not captured in the headline head count on which public policy is based? All the change has occurred since the last census, and the population figures on which public policy is based assume that the population is falling. None of that includes unauthorised migrant workers. According to some estimates, this city has a population of 7.4 million and could contain 100,000 extra people somewhere, over and above the formal head count.
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I realise that all that raises huge issues of public policy, but I ask the Chairman and the Committee to bear it in mind when considering their future programme.

Kitty Ussher (Burnley) (Lab): I believe that my constituency contains more BNP councillors than any other constituency in the country. We certainly need to consider the way in which Government policy responds to extreme and fast changes in demography, but the population is increasing not just in urban areas but in all areas where there is a sudden shift in the economy. My constituency is simply a town, not a city, and house prices have collapsed in recent years, although they are now improving to some extent. We should take account of the critical nature of change in the economy, rather than the direction in which it moves.

Jon Cruddas: I do not want to be too definitive in identifying the turning points that create such phenomena. I merely wish to draw attention to certain issues that need to be considered in different ways in different parts of the country. East London has a rapidly growing population. Public policy-makers cannot keep track of it, let alone get ahead of it. That is before account is taken of illegal migrants who are invisible for public policy-making purposes. Then there is real-terms house price inflation, and on top of that the long-term legacies of poverty, underinvestment and poor-quality public services. A rich seam is created on which, given our social formation, the far right is manifestly able to work. That takes different forms in different parts of the country, but we should be acutely aware of the way in which demography can contract or expand, and the effect on social cohesion in any part of the communities that we represent.

My borough has long-term problems of health inequality. I believe that, apart from Easington, it has the worst health-equality profile in terms of investment per head. Two years ago, the Government said that they would overcome some of the health inequalities and move us closer to the formula for investment. The resulting increase will kick in this April. Arguably, since the Government decided to invest so that we could move to where we should have been in 2001, the population has moved even further from the baseline for such decisions. In real terms, therefore, the health inequalities are worsening despite the Government's attempts to resolve them. I use that as an illustrative example of the tensions that this creates in terms of policy making.

Housing is the other acute issue in terms of public sector provision, not least in a community that was built on the principle of socialised housing—council estates.

Mr. Hayes: I am reluctant to interrupt the hon. Gentleman's fascinating account of his local experiences a second time, but I am sure he agrees that, given the fallen nature of man, the best that any Government can do is mitigate the inevitable sorrows of human existence. The point that I was really making to him is that that is partly about what government does and does not do. By encouraging greater housing ownership, we could reduce the demand on public policy and on the Government to supply housing. That would enable social sector housing to pick up some of the slack, which, unfortunately, ends with people being housed in
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unacceptable temporary accommodation. The fluidity in the housing market that I have described is beneficial in that it reduces pressure on the Government and allows them perhaps to accommodate those who find themselves in difficult circumstances.

Jon Cruddas: It seems to me that that argument always rests on the assumption that there are sufficient economic activity and wage rates in a community to sustain people so that they can purchase any extra supply of private housing. In my community, which is the lowest wage-cost economy in Greater London, and given the house price inflation of the last four or five years, the private housing market is disappearing in front of people's eyes in terms of their capacity to get into it. That means that all roads lead back to public housing investment, which is part of the discussion that I will have with my colleague the Financial Secretary next week.

I shall conclude, as I think I have made the point. I enjoyed working on the Committee and hope to sit on it again in future. It should begin to consider how it might add in a dynamic analysis of demography, especially in our urban communities, alongside this rigorous analysis of the relative efficiency of public sector activity in the economy.

5.2 pm

Mr. David Heath (Somerton and Frome) (LD): It is a great pleasure to follow the hon. Member for Dagenham (Jon Cruddas), who is right to point to the potential effects of failure of public policy in creating division in a community. I am glad he had the opportunity to make that speech.

I applaud the work of the Public Accounts Committee, and indeed of the National Audit Office. It does an inestimably important job. I have never had the privilege to serve on the Committee, but before I became a Member of the House I was an audit commissioner, working in a similar area. The co-ordination between the Audit Commission and the National Audit Office is hugely important in itself. One thing that I hope we can establish is that there are no gaps between the two bodies, which are responsible for checking the use of public funds.

I also pay tribute to how the Committee works. It clearly works with a degree of unanimity despite, as the hon. Member for Dagenham said, different starting points, although I suspect that those, to an extent, have been coalescing recently, with the possible exception of that of the Chairman, the hon. Member for Gainsborough (Mr. Leigh), whom I consider a real Conservative. The danger for real Conservatives is that they find themselves ghettoised, like socialists on the other side of the Chamber, and unable to have their position recognised by those on their Front Bench.

The Chairman was also right to point out that the publicity attendant on the work of the Committee is hugely important. It gains an awful lot of publicity, for good reason, but that in itself is a spur to better performance. Indeed, the fact that the Committee exists is a spur to better performance. The fact that civil servants and Ministers know that they are accountable
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to such a body is important: even if they do not have a report written about them, they know that they might have to face a difficult interrogation.

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