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8 Nov 2007 : Column 291

Mr. Leigh: I heartily agree with that. Of course, this will be denied by the Government, but that is the view of the rural communities.

That view is buttressed by what is happening to post offices. Lincolnshire faces a swathe of closures of apparently productive and profitable post offices that serve the community. The Public Accounts Committee constantly examines areas of waste and incompetence. We do not get involved in party politics; last week, we examined job-creation schemes. One such scheme was spending £73,000 per job, yet my constituents see that profitable, successful post offices that serve the rural community face extinction. We are talking about people who often work for small salaries and who provide an essential public service. No business case is offered for this, and gagging orders are served, so we cannot be given the facts. We write to Ministers and to the chairman of the Post Office, but we do not receive answers. The Government must address the real feeling of rural communities in this country that they are suffering in so many ways in terms of funding. Our Lincolnshire police force is at the bottom of the Government funding league—no county is more badly funded.

I now come to my main theme. Places such as Lincolnshire are, for the first time in their history, faced with a wave of immigration. So many of the issues that my councillors were talking about last week were based on worries about immigration. In a sense, we can have a healthy debate, because one can now talk about immigration without being accused of indulging in racist undertones. This immigration is coming from eastern Europe. The people are extremely welcome, individually and in groups, and they are hard working. However, 40 per cent. of the children in some schools in Boston speak only a foreign language. We welcome them because they will contribute to the community and within just a few months they will learn English. Apart from having difficult, foreign-sounding names, like the hon. Member for Montgomeryshire (Lembit Öpik), they will be completely indistinguishable from British people in a few months. However, where is the Government funding to provide all the services that those people need? This is not a traditional immigration debate about people who have a different ethos coming to places such as Lincolnshire. This is simply a practical debate about how we ensure that the roads, schools and all the rest of it are in place to provide for people. The Government need to provide some answers.

If we are to be honest about the immigration debate, we must also consider immigration from outside the EU. Personally, I think that the Muslim minority in this country provides an enormous amount of individuality and creativity, and is hugely beneficial. However, the Government have mishandled the whole Muslim question in two ways. First, they have been far too weak in dealing with Muslim extremism. The Government have not made it clear that people are welcome in this country, but primarily because they see themselves as British. We have only to look at the wave of Jewish immigration into this country in the early part of the 20th century to see how successful that community has been in integrating fully into our society. It is now represented in many spheres, right at the very top of society.

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We have to be firm with the leaders of the Muslim community and say to them, “You are very welcome, but you have to integrate”. I am very concerned about the creation of a ghetto mentality in the Muslim community, with Muslim faith schools, in which people spend too long in an introverted system. I would much rather see them integrate fully into the education system.

The other way in which the Government are mishandling the issue is in foreign and defence affairs. I shall stray a little into that area, if you will forgive me, Mr. Deputy Speaker, as I think that I am allowed to do so. The Government have alienated the Muslim minority in this country and throughout the world through their policies on Iraq, in particular, and Afghanistan, to a lesser extent. It is well known that I voted against the Iraq war, and I shall not go over that again. However, in the Liaison Committee over the past year, I have repeatedly asked detailed questions of the former Prime Minister, and I have also asked the Secretary of State for Defence what on earth is going on in Iraq. Answers have not been forthcoming.

We have had an answer from a senior serving officer, responsible for thousands of troops, who told a Sunday newspaper that the decision to pull soldiers out of the centre of Basra last month came after commanders concluded that using Iraqi forces would be more effective. He said:

The article also states:

The fact is that the invasion of Iraq was a fundamental diplomatic and military disaster. It has given enormous impetus to Muslim extremism and we are still making mistakes there. We are still alienating Muslim opinion. We have got out of Basra and it appears that the only victors there are the Muslim militias. I voted against the war and I think that we should get out as soon as possible.

There are also real dangers facing us in Afghanistan. I know that terrorism is a real problem there, and we should by all means go in there to deal with it. But if we think that we can impose our western liberal values on Iraq or Afghanistan, we are deluding ourselves.

Lembit Öpik: Does it strike the hon. Gentleman as ironic that, given the successes that we had in Northern Ireland in dissolving the motives for terrorism, little effort appears to have been made in the so-called international war on terror to understand the motives? To understand those motives is not to condone the acts of terrorism, but does he agree that the lessons from Northern Ireland could usefully be relearnt by the British and American Governments?

Mr. Leigh: Of course I agree with that. Probably everyone sitting in this Chamber agrees deep down, although they cannot say it publicly, that we have mishandled Muslim opinion and that we have failed to learn from what we achieved in Northern Ireland. It has been a mistake to try to impose our values and we are paying the price—through substantially increased spending on our security services.

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If we are to have an honest debate about immigration and local government, we must also have an honest debate about education and health policy. I suspect a lack of momentum in those areas. We had a Public Accounts Committee report only a couple of weeks ago on the academy programme. Large sums of money are being spent on academies, but the evidence shows that their results are below the national average. I know that they are placed in difficult areas and that some are catching up, but I question whether we are just recreating the comprehensive schools that were built in the 1960s. The first such schools experienced a surge in interest and academic standards, but because we did not address the fundamental flaws in the education system, they ultimately became failed schools. When the new paint has rubbed off in 20 years’ time, the academies could also become failed schools.

I have a simple solution that I have advanced consistently—although I have perhaps not brought my Front Benchers with me—which is giving head teachers the freedom to run their schools in the way that they want. That means giving them freedom over budgets, over hiring and firing teachers and over selecting, deselecting and expelling pupils. I am not talking about a return to grammar schools, because that debate misses the point. I am talking about more freedom for head teachers.

This very day, my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), a former leader of the Conservative party, is launching a new scheme for pathfinder schools in some of the most difficult areas. Those schools will provide real hope and opportunity in those areas, becoming beacons of excellence. But we have to set them free. If the academies are to be successful, they have to have that freedom.

That suggestion is not some weird idea from a right-wing think tank. Look at what is happening in Holland, and in Sweden, of all countries. Sweden has had continual social democratic government for the last half century and it has a universal voucher scheme. It is also introducing—although this is not generally known—a voucher scheme for hospitals. It is privatising hospitals and providing beacons within its national health service, delivering real choice. I strongly believe that politics is about empowerment, about providing ordinary people—through vouchers or any other means—the real empowerment in health and education that better off people already have.

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): Will the hon. Gentleman give way?

Mr. Leigh: I am afraid that I may only give way a couple of times and my time is about to run out.

I have identified a theme that I shall try to impress on Front Benchers on both sides of the House. We are now at a stage in politics at which we have agreed that central direction simply does not work. We now all apparently agree with localism, but if that is to be more than just a slogan, we have to trust the people. We have to trust individual choice and we have to empower local people to make choices in health and education.

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1.17 pm

Mr. Austin Mitchell (Great Grimsby) (Lab): It is a pleasure to follow the Chairman of the Public Accounts Committee. I shall not follow him all the way to Iraq, although I do share some of the concerns that he raised on the issue of immigration. However, I wish to speak mainly about housing. As my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) pointed out, after 10 years of this Government, we all sense a general improvement in the quality of the health service, hospitals and transport in our constituencies, but housing is one of the weaker areas in that general improvement, and that is why I wish to concentrate on it.

I welcome the commitment to an expanding housing drive in the Queen’s Speech, which will be pushed through by the new Minister for Housing. My right hon. Friend is not in her place at present, but she carries all our good will and will bring a new intelligence and dynamism to the housing issue. Having made that sycophantic point, I wish to raise certain problems in housing. We have tried to drive forward on housing while carrying an excessive burden from the past of failed policies, which will make it more difficult to make progress. It is a huge problem, because the building record has been poor. The supply and demand equation has featured in the escalation in house prices.

More importantly, under the Tories there was a long period of disinvestment in council and social housing that produced horrendous problems on housing estates. I draw the House’s attention to the research done by Leon Feinstein, of the university of London’s institute of education, entitled “The Public Value of Social Housing”. It analyses the relationship between housing and life chances and shows that the housing estates were very mixed communities in the 1950s. Very often, they were a springboard for success and social advance. By the turn of the century, however, thanks to disinvestment and the fact that the scarcity of public rented housing meant that they had become dumping grounds, the estates had become a drag on performance. They were associated with high unemployment and a comparative failure in life chances.

It is a shocking report, and the ground has to be made up. The problem is huge, and the Government must shed some of the burdens of failed policies in the past. They should take the money used on those policies and put it into the housing construction and refurbishment drives, as otherwise success will not be achieved—especially given the short time scale that now remains.

I have various criticisms to make, therefore, although I shall not make them in the spirit of a performance at the Bolling working men’s club, which was what the Opposition spokesman gave us earlier. I want to offer more sensible criticisms of some of our policies that are not working as they should.

First, I turn to the pathfinder programme. Some time ago on the “Tonight” programme, Trevor McDonald revealed that, under the pathfinder programme, viable terraced housing that could be reconditioned very cheaply was being pulled down and replaced with far more expensive housing that people did not want. That has been a feature of the pathfinder programme’s performance.

In addition, the National Audit Office has released a report on housing market renewal through the
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pathfinder programme, and I shall be able to tell the House about it at one minute past 12 noon tomorrow. However, I can say today that it is very critical and that it states that the programme does not provide good value for money. The pathfinder programme is disappointing, and the money spent on it could be used elsewhere.

Secondly, I emphasise that there can be no successful housing drive without councils’ full and enthusiastic co-operation. Yet the Government continue to pressure councils, keeping them short of the money that they need to do the job in respect of housing because they prefer them to privatise their housing stocks. Councils are still being bullied, bamboozled and bribed into going for privatisation, even though it is an expensive programme in itself. Enormous gap funding is required for the new housing associations, there is a big debt write-off and the NAO has estimated the costs per property of the whole transfer programme at about £700. That money could go to housing, but in fact it is being spent on estate agents, lawyers, consultants and accountants all over the country.

It is wrong for the Government to maintain the pressure to privatise housing. That pressure should be suspended until we put local authorities on a favourable financial footing so that they can play on a level playing field against the registered social landlords. At present, the playing field is not level, especially when it comes to RSLs’ ability to borrow and the debt write-off that they enjoy.

The Government are alienating local authorities instead of co-operating with them, but 3 million council properties remain in council control, often through arm’s length management organisations. More than 100 authorities have rejected transfer or decided not to go for it, and the Minister for Housing has said that 95 per cent. of them can meet the decent homes target by the dates to which we committed in our manifesto. However, many are forced to get money for repairs and refurbishment by selling off council housing and the sites to private developers.

It cannot make sense to try to increase the stock of public rented housing by selling it off and pulling it down. Yet that is what is happening in places such as Sheffield—where my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) and I were due to speak against the policy at a meeting tonight—Birmingham and Camden. The Minister for Housing has said that the amount pulled down will be less than the amount of new build, but that cannot be true in Camden, where very little land, if any, is available for council housing.

Ms Buck: Is my hon. Friend also aware that the financial pressure that some housing associations face has caused them to sell off street properties, either on the open market or at auction? Such properties are exactly the ones that we need if we are to create mixed communities. The very same effect that my hon. Friend described in respect of estates will therefore obtain with street properties.

Mr. Mitchell: I am grateful to my hon. Friend for that point, and I was about to deal with the role of the RSLs. The building drive can be pushed forward only with the co-operation and good will of councils. The
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RSLs are not a naturally entrepreneurial sector. For obvious reasons, they are cautious, preferring to build up balances and reserves rather than expand and improve. Moreover, they are merging together into bigger and bigger RSLs that cover the whole country rather than a specific area.

The RSLs are also sluggish. Some of the problems with the Thames Gateway seem to have arisen because the RSLs are not putting the drive into new building that is needed, and there is no one to bash heads together and force them forward. The Government are going to have to energise and drive forward the RSLs in a way that they seem reluctant to do at the moment.

Another criticism is that there is no firm basis for local authority finance. For three years running, the Labour party conference has demanded the so-called “fourth option”—that is, that the Government should stop taking money out of housing revenue accounts. At the moment, about £1.5 billion a year is taken out of those accounts to pay off historic debt, but why should we pay that debt? People do not pay off historic debt if they go into hospital, so why should they if they go into council accommodation? Another half a billion pounds of right-to-buy proceeds is also lost in the same way. Local authorities cannot compete on the same basis as RSLs in terms of loans, because—as the Department’s own research states—the management and maintenance grants that could provide a finance stream to borrow against are kept deliberately low to prevent them from being used for that purpose.

Mr. David Drew (Stroud) (Lab/Co-op): My hon. Friend is making an excellent speech, but he will know that one of the biggest problems facing local authorities that have chosen to remain social landlords is that they perceive that they are being penalised by the way that the money is clawed back. Does he agree that, as a result, it can appear that one area is subsidising another area, in a way that could, against the wishes of everyone involved, force the relevant ballot to be rerun?

Mr. Mitchell: That is true, and the Government must take account of the point that my hon. Friend makes. How can authorities participate if they find themselves in that trap, where they are left to rot by the Government? A form of gap funding should exist that enables them to fill the gap between the revenue and resources that are available to them and the costs involved in refurbishment and regeneration and in meeting the decent homes target. Gap funding along those lines is not provided to councils, but only to the private sector. That is another weakness, and the local authorities affected should not be left in that position.

It is true that the Government are undertaking an experiment at the moment, with six local authorities keeping the revenues from housing revenue accounts. However, the indications are that the experiment is not going well, and the six authorities are certainly not being treated very generously. Moreover, it will take time to survey the results of the experiment, and the problem is one that faces us now: unless local authorities’ housing revenue accounts are put on a firm basis so that they can participate in programmes such as the ones that have been described, they will not have the good will, or the ability, to build the houses that we need.

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