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19 Dec 2000 : Column 16WH

Key Worker Housing (South-East)

10.30 am

Jane Griffiths (Reading, East): I am very grateful for the opportunity for this debate. I have been applying for a debate on the subject since the House returned from the summer recess. [Interruption.]

Mr. Nicholas Winterton (in the Chair ): Order. Will hon. Members who are leaving the Chamber please do so quietly, so that others can hear the hon. Member who has the Floor?

Jane Griffiths : Thank you, Mr. Winterton.

The state of affairs with respect to recruitment and retention of key workers varies around the country. No two parts of the United Kingdom have identical economies. Economies also vary within regions. My colleagues from Kent will say that regeneration is needed in parts of the county. Hon. Members from the Thames Valley would probably report the opposite--that there is a tendency for the economy to overheat at present.

The definition of a key worker needs careful thought. We all assume that the term covers police, nurses and teachers, but does not the private sector also contain key workers? What about bus drivers and retail staff? Who are the key employees in our economy, ensuring that people can carry on their lives?

Decisions by my right hon. Friend the Chancellor in the comprehensive spending review have revealed the importance that the Government place on public services. In July, my right hon. Friend announced an extra £11.9 billion for education--a 33 per cent. increase, which pays for another 6,000 teachers; an extra £11.4 billion for health--a 35 per cent. increase, to include 4,780 extra doctors and help to pay for 20,000 more nurses; an extra £4.2 billion for transport--a 50 per cent. increase; and an extra £2.4 billion to fight crime--a 19 per cent. increase. All those increases in spending and all those extra staff are welcome. However, in Reading, East and in much of the south-east of England there may be no beneficial outcome from those decisions with respect to staff. People will not take jobs in areas in which their pay does not enable them to afford a place to live.

The debate should proceed in the context of an understanding of the real benefits that the Government have brought about for people in Reading, East. Figures from the Treasury reveal that homeowners there are saving about £1,000 a year because of lower and stable mortgage rates. About 30,000 homeowners in my constituency have benefited from mortgage rates that have averaged 7 per cent. interest, instead of the 11 per cent. that was the average under the previous Government. Across the south-east, 2.5 million homeowners are benefiting from low and stable mortgage rates.

The Government's assured handling of the economy has reduced housing costs for people in Reading, East and the south-east as a whole. Welcome as that is, it has benefited people who already own a home, rather than helping to make home ownership easier. It could even be argued that the stability and careful handling of the economy has helped people to feel more confident in

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their working lives, and has caused some of the house price inflation that is particularly noticeable in the south-east. Some examples and figures will give an idea of the situation in Reading, East.

Last Friday, I visited St. Martin's primary school, in Caversham Park village in my constituency. The school had just been awarded beacon status for writing. My visit revealed why it had been chosen as a beacon in writing, because I saw the enthusiasm and commitment to the teaching of writing throughout the school.

While I was looking around the school and talking with the children and staff, the head teacher told me about the school's experience in trying to recruit a year 2 teacher. St. Martin's primary advertised for a new teacher. The advertisement attracted some interest--people asked for information--but the interest and expense incurred in advertising did not result in any application.

Fortunately for the school, the head teacher managed to attract an Australian teacher, who was travelling in the UK, to come on a one-year contract. The teacher was interested in working at the school, but found that she would not be able to find accommodation in the area that she could afford. She was therefore not able to take up the job offer. The head teacher was very concerned, and her only solution was to offer the teacher a room in her house so that she could take up the job. While that was very kind and considerate, it is clearly no way to recruit teachers. The upshot is that, because of all the difficulties, the Australian teacher has decided that she will go elsewhere, and will not be teaching in St. Martin's school. That leaves the school in a quandary.

It is important that schools such as St. Martin's primary continue to deliver quality education. For the school to be able to spread best practice, which is why it was awarded beacon status, it must be able to attract good teachers. It is not right that a head teacher has to put a teacher up in her own house so that the person can afford to come to Reading.

The head teacher of the Hill primary school, in another part of Caversham in my constituency, wrote to the director of education and community services at Reading borough council on 25 October, on behalf of Reading primary head teachers association. He set out the concerns of the association with regard to the recruitment and retention of teachers as a result of the high cost of housing in my constituency. The problem experienced by schools is not that Reading borough council is doing or has done nothing, which is a point to which I shall return.

Earlier this month, I received a letter from the chair of governors at Caversham primary school--yet another successful school like the Hill and St. Martin's--which already delivers the quality education that we are striving for across my constituency and the south-east in general. The chair of governors, Mr. Odel, had written to me previously about the difficulty in recruiting and retaining teachers for the school. This month, he wrote that the problems were intensifying. Recently, the school advertised for a maternity cover teacher. In spite of placing a large advertisement in a national publication--again, at considerable expense--he described the response as dreadful. The school has had to resort to persuading former teachers to return to work there. Mr. Odel is aware that Caversham primary

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school is not alone in Reading in experiencing that problem. His concern is that it is only a matter of time before some schools in the area introduce a four-day week.

The situation is the same elsewhere in the public sector. Figures from the Royal College of Nursing show that the three-month vacancy rate has risen by 30 per cent.--almost one third--in the south-east in the past year. That situation is reflected at the Royal Berkshire and Battle Hospitals NHS trust in my constituency, which said today that it currently has vacancies. It has done the same as many others in the same situation--recruited nurses from abroad. It attends every recruiting fair that it can, and, sometimes, recruits three or four times for the same job. When people come for interview, they are happy to come and work in the area, until they find out the cost of housing.

I am grateful to my hon. Friend the Member for Reading, West (Mr. Salter), who highlighted the situation regarding police recruitment on 28 July. He said:

The recruitment and retention of firefighters has also been debated before in the Chamber. Some firefighters have to travel ludicrous distances to Reading--from places such as Lincolnshire and Dorset--because they cannot afford to live in Reading. There are implications for key workers in jobs that are crucial to public safety--for example, tiredness. It worries me that firefighters may have driven more than 100 miles before starting their shifts.

Who are the key workers? The starter homes initiative, which was launched last week, does not outline a definitive list of key workers, and rightly so, but funding under the scheme will be prioritised to teachers, police, nurses and other health workers. We have all heard the good news that nurses and other health workers are to receive a significant pay increase. It will help them, but it will not help them enough in my constituency.

Last week, my right hon. Friend the Chancellor announced a sum of more than £7 million to tackle Reading's traffic problems. It is a welcome tenfold increase on the money that was made available by the previous Government and is a signal that the present Government are serious in their commitment to tackle traffic congestion. Prosperity brings with it congestion. Last month, Reading Transport, the local bus company, had to reduce its mileage by 5 per cent., partly as a result of serious congestion in the city. Buses cannot keep to their timetables, and people are less willing to use that

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mode of transport if they expect to have to stand in the rain. However, the main reason for the reduction in mileage was the shortage of bus drivers. That resulted in lost mileage to such a level that the bus company was at risk of incurring serious fines for not keeping to its timetable. The company made the difficult decision to reduce mileage so that people could be sure that the bus was likely to arrive, rather than running a more ambitious timetable.

Reading Transport is 25 drivers short of the number that it needs to run a full timetable, although the recruitment of five drivers this week has improved the situation. At its worst, the company was 40 drivers short. That is not because it pays badly, although historically bus drivers do not earn a great deal. Reading Transport is known for its pay and conditions. For example, Stagecoach Swindon has just given its drivers a 25 per cent. pay increase, yet those drivers are still earning less than those who work for Reading Transport, which pays £7.53 an hour compared with the top rate of £6.50 an hour at Stagecoach Swindon.

According to the managing director of Reading Transport, the situation is worse than when we previously had a boom economy. Now there is a greater shortage of affordable rented accommodation in the town. Interestingly, when FirstBus won the contract for the Madjeski park-and-ride, it brought in drivers from south Wales to fulfil it. The fact that unemployed people in south Wales were willing to travel that distance to work in Reading speaks volumes about the relative difference in the economy of south Wales and that of Thames valley.

Who else can be considered to be key workers? It is all well and good having a generally healthy and booming economy, with people earning good money, but they need the opportunity to spend it in a smooth-running local economy. This autumn, Reading university had a slightly later start of term than other universities. The result was that Reading-based students who had had summer jobs in shops, cafes and bars left them to return to their universities, and there was a two-week gap before students at Reading university appeared on the scene.

In that two-week period, the queues and waiting times were longer at restaurants, bars and shops. I experienced the problem when I was eating lunch in a restaurant. The apologetic manager said, "I am sorry for the long wait. We had a very good student working as a waitress, but she has left. We are getting a new one, but she cannot start for another two weeks and we simply cannot serve you as quickly as we want to." That is how tight the situation is.

Well-staffed public services underpin not only successful communities but successful local economies. On 1996 figures, the retail sector is the largest single employment sector in the Reading economy, providing more than 20 per cent. of jobs. That was before the opening of the Oracle shopping and leisure destination, which provided 3,500 jobs.

Last week, the Government announced the £250 million starter home initiative for consultation until March next year. Local councils have welcomed

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the initiative, and see it as complementary to other policy and financial tools. But what does the scheme really mean? The starter homes initiative shows a current upper limit of £93,000 in Reading's lower-quartile housing market values according to Land Registry data for the first quarter of 2000--25 per cent. of the properties sold in Reading during that time cost no more than £93,000.

In a dynamic market such as Reading's, a threshold such as that of the "lower quartile" is more welcome than a fixed-value figure. For example, in the property section of the Reading Chronicle on 15 December, seven properties were priced at less than £93,000. The cheapest property advertised in that edition was a one-bedroomed, first floor maisonette conversion selling for £79,950. Four years ago, a similar property was selling for approximately half that price. To purchase the property today would require a single person's salary of approximately £21,700, assuming a 95 per cent. mortgage based on three and a half times a person's salary, with £6,000 available for deposit and fees. That is more than most public sector workers earn, and a newly trained teacher or newly qualified nurse is unlikely to have the £6,000 required for the deposit. That is why the starter homes initiative is so welcome. Due to the assistance offered under the initiative, the salary requirement is brought down--from £21,700 to less than £16,000. That brings home buying within the reach of many more public sector staff.

Dr. Alan Whitehead (Southampton, Test): Does my hon. Friend agree that the existing schemes, such as do-it-yourself shared ownership and similar proposals already piloted by local authorities, could be of great assistance in making affordable homes for people on their first salaries, and that that is the way forward for a number of local authorities in the south-east where the price of houses is of the order that she mentioned?

Jane Griffiths : My hon. Friend is absolutely right. Schemes such as do-it-yourself shared ownership play an important part. I congratulate local authorities that have piloted them. I also note, with approval, schemes that exist in London but not in other areas, such as that of the Peabody Trust, in which housing is available for public sector workers who can share ownership. When the owner moves on, the property remains available for another key worker in the public sector. That seems to be an excellent notion, and local authorities and others should look at such trust schemes. There is more than one answer to any problem.

Reading borough council has taken steps to create the right strategic policy framework to enable employers to partner the local authority. It seems simple and attractive to give the name "key worker" to our teachers, police officers and nurses and to say that they should be eligible for affordable housing. However, the pitfall for local authorities in acquiring a new designation of key worker would be that it would have the opposite effect and put even more pressure on public housing.

We need well-staffed public services. Government initiatives have helped towards that but, however commendable, they cannot provide a blanket solution to the nation's problems. I want to highlight the problems that come with prosperity. I may be unusual among Members of Parliament in that I have lobbied, in

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the past, for new jobs not to come to my constituency. That is not what Members usually do. However, new jobs that come into a local area do not necessarily bring benefits with them. The Meteorological Office in Bracknell needed to relocate, and it was suggested that it should move to south Reading. I proposed that it should go somewhere else, because those who work in the Met Office live in the Bracknell, Wokingham and Reading areas. They would be unlikely to move house--they would simply drive into my constituency. We do not need those new jobs.

The housing market appears to be moderating, at least in London, and what happens in the capital tends to happen a little bit later in the rest of the south-east. The Halifax and Nationwide building societies report a sharp decline in house price inflation this year. That is welcome, but problems remain with rented housing. When the local market is dynamic, as it is in Reading, rented housing becomes available at a growing rate. However, the rented housing that is becoming available in my constituency is, to an increasing extent, towards the upper end of the market--luxury apartments in the city centre. That accommodation is welcome, but it is not affordable to nurses, teachers or junior police officers.

It is difficult to create affordable rented housing in flourishing city centres, but that is what we must do--that is the road that we must take. There is no space to build many houses with gardens for family use, so people will move to apartment dwellings. That change in culture is necessary, but it will not happen unless affordable housing can be found. I welcome the Government's starter homes initiative and those initiatives taken by local authorities, but I ask my hon. Friend the Minister to look at the problems that prosperity brings.

We should look ahead to what we fear may, but hope will not, happen. We do not want schools working only a three or four-day week; we do not want our streets not to be policed or patients to lie on trolleys in hospital corridors owing to a lack of nurses. We do not want there to be no buses because there are no bus drivers; we do not want an unbelievable crush in our shops because not enough people are serving behind the counters, although people are walking in with money to spend on their Christmas shopping. That is the nightmare scenario that is before us. I ask my hon. Friend the Minister to consider ways in which the Government might assist to provide affordable housing for all our key workers in the south-east.

Several hon. Members rose--

Mr. Nicholas Winterton (in the Chair ): Order. This is a one-hour debate and we want to give the Minister adequate time in which to respond. If those who have said that they want to catch my eye limit their remarks to five minutes, everyone will be able to speak.

10.54 am

Mr. Tim Loughton (East Worthing and Shoreham): I shall make a few brief comments. I largely agree with the remarks made by the hon. Member for Reading, East (Jane Griffiths), whom I congratulate on securing this debate on the key issue for key workers in the south-east and for us all. She rightly said that there are differentials

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within the region, but much of what she said will strike a chord in my part of the south-east on the Sussex coast, where there is a problem with housing for key workers, particularly in public services such as nursing. Before I became the Member of Parliament for East Worthing and Shoreham, the Worthing and Southlands hospital had about 75 nursing vacancies. People from the local hospital trust have been to South Africa and Australia to try to recruit additional nurses. As we speak, they are in the Philippines, because we still have 75 vacancies three and a half years later.

The local police service also has many vacancies. Despite everything that the Home Secretary says about recruiting additional policemen and the fact that 4,535 policemen were recruited throughout the country last year, 5,948 policemen left the police service last year--a net loss. That is partly due to problems with housing conditions, as the hon. Lady said. She was right to say that the Government will be unable to deliver on pledges of extra staff if people cannot find affordable homes in the areas where vacancies exist.

I am pleased that the hon. Lady did not mention only public service workers. The example of bus drivers strikes a chord with me. The Brighton and Hove bus company, which serves my part of Sussex well, has been haemorrhaging staff for many years. Recently, many staff have moved from Sussex to the north, simply because they cannot afford to buy homes in our part of the south-east. That has led to the problems of transport infrastructure weakness that have been mentioned.

There is also a problem with the recruitment of teachers, particularly male teachers in primary schools. I visit all the primary schools in my area, and it is rare to find a male teacher--there may be a lone one--on the staff of primary schools. That also applies to nursery schools in both the state and private sectors. To encourage greater nursery provision, we need to recruit and house staff.

There is a particular problem with nursing. Last week's report from the Royal College of Nursing suggests that as many as 70,000 registered nurses do not work in the nursing profession. That is a large factor in the 22,000 nursing vacancies. One in five trainee nurses fail to complete their training, and I am sure that the pressure of housing conditions must be a factor.

The hon. Lady rightly identified the problem of defining a key worker. The Government's proposal to leave the definition largely to local authorities does not make the situation any easier. The definition is supposed to cover nurses, but will it extend to doctors, who are surely key workers also? Equally importantly, will it extend to ancillary workers, without whom hospitals could not operate? The definition will supposedly cover teachers, but will it also cover ancillary workers such as caretakers, without whom schools could not remain open? Will the definition include civilian police staff? Without them, uniformed policemen could not spend as much time out on the beat, because they would have to stay behind their desks in police stations doing paperwork. Many civilian personnel have been recruited to the police service over the past 15 years to remedy that problem.

There is also a problem in social services and we have a particular problem in Sussex with the recruitment of child social workers, which is partly due to the cost of

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living in the south-east. I think that the average pay for a child social worker in the north of West Sussex is about £5.50 an hour. When one considers that Burger King at Gatwick airport pays just over £7.40 an hour, it is a real no-brainer. That is why we lack so many key workers in key public services. How will it affect people working in mental health in the community, of whom there is a severe shortage in my constituency? What about local authority employees who were such key workers in dealing with emergencies during the recent floods?

Yesterday's figures from the Minister's Department overruling the democratically arrived at Serplan figures are just another example of the Secretary of State providing the wrong houses in the wrong places and not concentrating at all on the problem of affordable housing in the south-east. Employment demand is likely to grow by some 6 per cent., especially in the high-tech, higher status employment areas, which is likely to lead to further upward pressure, overheating in the property market and further employment shortages. Average incomes in our region are high, but the distribution around that average is particularly uneven so that lower income households are disproportionately disadvantaged in the housing market. Inevitably, whatever the Government say, the south-east will always be dominated by the City of London and City salaries spilling out into the region, and the situation is worsening.

I leave the Minister with some questions about the consultation document that was published last week. We welcome initiatives to help with starter homes, but can he tell us more about which key worker jobs will be covered? Will the financial help be in the form of grants or loans? What happens if the key worker in a family leaves a key worker job or moves away altogether? What happens if that key worker is promoted to a grade that no longer qualifies for key worker assistance? What help will all this bring to private renting where there is a big problem too? How will the proposed means testing work?

The real problem is supply. The key worker initiative within the starter homes initiative is all about helping demand. The problem will never be solved unless we tackle the problem of supply. These proposals have the potential greatly to distort the housing market, particularly in housing prices up to £100,000. We certainly need more shared ownership perks schemes. The hon. Member for Southampton, Test (Dr. Whitehead) was quite right. Do-it-yourself shared ownership schemes were very successful under the previous Government, but they have been cut to such levels that in my local authority area of Adur, there is funding for just one such scheme in the current year.

We need more homesteading proposals. We need proposals such as zero stamp duty on starter homes for young couples starting on the housing ladder. We must consider more imaginative solutions, as is already happening in certain parts of London, such as tax breaks for hostel accommodation that is particularly suited to student nurses and trainees in other public services. There are many other considerations for retaining public service workers, particularly nurses, such as better child care facilities and so on. The questions that the hon. Member for Reading, East raises are perfectly legitimate and her concerns are shared by

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all of us in the Chamber today. The proposals put forward so far by the Minister in the consultation document sound good, but in practice are fraught with problems. Perhaps he will start to address some of them by responding to the points that I have raised.

11.3 am

Mr. Martin Salter (Reading, West): I congratulate my hon. Friend the Member for Reading, East (Jane Griffiths) for securing a timely debate. It is significant that a large proportion of the hon. Members in the Chamber come from the Thames valley and M4 corridor, which suffers disproportionately from the strain on public services and burgeoning house prices. We have seen changing patterns of employment in Reading, Slough and Newbury, which is very much the high-tech capital of the region. But even high-tech internet company chief executives need the services of fire fighters, police officers, ambulance drivers and hospital porters.

If the debate achieves anything, we need to get the problem across to some of our friends in the north. Some members of my party think that the south-east is featherbedded and that people enjoy record levels of prosperity, so everything must be fine. However, as my hon. Friend the Member for Reading, East (Jane Griffiths) said, the region is facing problems caused by prosperity, which is the price of success.

A few short years ago, in the early 1990s, there were record numbers of house repossessions in Reading: 2,200 homes were repossessed in 12 months. It was difficult to find a street in my constituency or that of my hon. Friend the Member for Reading, East that did not have boarded-up properties. One could not point the finger at Reading borough council for being negligent as it won national awards for its empty homes strategy. The council used the downturn in the housing market--the tragedy caused by negative equity and by the boom-and-bust policies of the previous Government--to create a larger supply of social housing. But someone who has studied at police college or for a graduate place in teaching should be able to afford to buy a two-up, two-down terraced property in a town like Reading, Slough or Newbury. Those houses were built more than 100 years ago for workers at the Huntley & Palmers biscuit factory and on the railways. However, as my hon. Friend said, such properties now sell for £110,000 to £120,000, which is far beyond the reach of someone graduating as a teacher or a public service professional on a salary of about £20,000 to £22,000.

Fiona Mactaggart (Slough): Does my hon. Friend accept that the solution to the problems in the Thames valley corridor, which he and my hon. Friend the Member for Reading, East so vividly described, must include rented properties? One of the most important things about the education action zone in Slough is that rented properties are offered to new teachers. It is the only housing for new teachers and the policy is working. Rented property in Slough is not as expensive as in Reading--it is quite cheap--but it is full of asylum seekers, so the market does not work. Rented housing would be helpful to key workers in a range of employment.

Mr. Salter : I accept my hon. Friend's point, but while

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the supply of affordable rented housing in the short term may attract people to an area, in the long term people's aspirations to home ownership must be recognised and Government policy must be targeted with that in mind.

I am currently serving on the police service parliamentary scheme, which is a useful secondment because I can get to know the problems and challenges that face the police service in the Thames valley. I say to the hon. Member for East Worthing and Shoreham (Mr. Loughton) that the rot in the police service started when the previous Government implemented the recommendations of the Sheehy report and abolished the police housing allowance. That ripped £4,800 a year from the salaries of police officers in the Thames valley and triggered the recruitment and retention crisis in the south-east and many other regions. Conservative Members should recognise that the decision to implement the Sheehy report was catastrophic and triggered the problems that we face now. They should apologise for past mistakes.

As my hon. Friend the Member for Reading, East said, the problems have been exacerbated by the huge £6,000 differential created between the Thames valley and other police services surrounding London and the Metropolitan police force. It is little wonder that officers who live in Reading and Slough apply to the Metropolitan police force for an additional £6,000 per annum, or do their probation in the Thames valley and then go to Lincoln, Dorset, Cumbria or Northumbria where they can afford to purchase properties on the national salary rate and do not have to endure the financial penalties of living in a high-cost area.

I welcome the Government's starter homes initiative. However, is the £250 million to help 10,000 public service workers--or key workers--a one-off initiative or part of an on-going support programme? Moreover, will it be enough?

Although market forces have their place in mixed economies, they cannot deliver for us in this respect. The civilising element in the make-up of any mixed economy is the quality of its public services. The previous Government have a lot to answer for: they screwed down public service wages year on year and took bad decisions, such as the removal of the police housing allowance.

We need highly trained, highly motivated public service workers--be they teachers, doctors, nurses or hospital workers--and they need, above all, a roof over their heads. The marketplace will not provide that. It is up to the Government and public authorities to ensure that public service workers can afford to live in the south-east and other high-cost housing areas.

11.10 am

Mr. David Rendel (Newbury): Key worker housing is a vital issue in west Berkshire, so I am delighted that the subject has been introduced. There are some 10,000 more jobs in west Berkshire than there are people to do those jobs, and that figure will rise to 14,000 when the Vodafone headquarters are completed.

Consequently, many local firms have vacancies, salaries are being forced up as the local economy overheats, and house prices are going through the roof. That puts further pressure on the small stock of available and affordable rented accommodation, some of which is being sold off under the previous

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Government's right-to-buy policies. The price of land is being pushed up so quickly that it is almost impossible for housing associations to buy more land on which to build. Those are the problems of success, which are preferable to the problems of failure that are experienced by those in inner cities. I am happy to represent an area that is so successful. Nevertheless, they are problems, and we must find solutions.

As the hon. Member for Reading, East (Jane Griffiths) said, it is difficult to arrive at an exact definition of key workers. However, there is no question that they form ever more and ever larger groups--not only teachers, nurses and policemen, but bus drivers, for example. I have to tell the hon. Lady and the hon. Member for Reading, West (Mr. Salter) that bus drivers are paid even less by Newbury Buses than by Reading Buses. It is difficult to recruit bus drivers and yet ours is a predominantly rural area in which the only form of public transport is the bus. That is causing great problems.

We are very short of postmen, and the Royal Mail is constantly trying to recruit more. When I was in my local post office yesterday, I was told that they could not remember a time when they did not have vacancies.

We are short of local authority staff, including planners. In an area such as mine, where the number of planning applications has soared, planners are difficult to find--many are leaving for less stressful jobs in other parts of the country.

Broadly speaking, I welcome the Government's starter homes initiative. However, they are only scratching the surface of a major problem. My calculations suggest that, on average, 10 to 20 households per constituency may be helped by the policy. Given that there are 14,000 more jobs than people in my area, that is a low figure--even if, as I suspect, we would be well above the average.

I should like to focus on the police, who face a crucial problem in the Thames valley, especially in west Berkshire. The extra salaries for the Metropolitan police are attracting people to commute from as far out as west Berkshire--and I know to my cost how difficult that can be. The position may get even worse if parts of the Thames Valley police are given a small salary increase, but it does not stretch as far as west Berkshire. Our policemen could be sucked away into places such as Slough, Reading and Wokingham because they pay a little extra, so the problem in west Berkshire will, if anything, worsen.

I am delighted that the Government have set up a crime fighting fund to try to increase the number of policemen throughout the country. For 2000-01, sufficient money for Thames Valley has been allocated to increase the number of policemen by 111. However, the current predicted increase is 42 and falling, and the chief constable said only a couple of weeks ago that the actual increase could prove to be zero. That is not because there is no money to recruit or pay policemen, but because no one is prepared to take on those jobs. As quickly as policemen are recruited, they are lost to other parts of the country, or through retirement or premature sickness.

The local police force has applied to defer to next year the money that cannot be used, but that application has not yet been successful. Would it not be better to spend

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some of the money set aside for recruiting policemen on providing extra housing? I put that suggestion to the chief constable, who seemed keen and rapidly accepted it, but unfortunately the Minister said that that is not possible. The money must be spent simply on the salaries of extra policemen, and not, for example, on a shared-ownership housing scheme that might encourage policemen into our area.

That is a great pity. I hope that the Minister can assure me that he will try to persuade his Home Office colleagues to reverse their current dogmatic policy of spending that money only on salaries. Spending it on other means of encouraging police recruitment in our area would be in line with the starter homes initiative, and would marginally increase the money available for that initiative. Given that it would lead to the recruitment of more policemen, such a policy would also be fully in line with the crime fighting fund. As it stands, the money will probably go back into the pot, never to be used for recruitment. In the light of those points, it would be madness and grossly illogical for the Government not to follow up that idea.

Mr. Nicholas Winterton (in the Chair ): I call Mr. Alan Whitehead, who I hope will be extremely brief.

11.17 am

Dr. Alan Whitehead (Southampton, Test): I shall be very brief indeed, Mr. Winterton.

Everyone should welcome the starter homes initiative. It contains provisions to encourage local authorities to bid for available funds, and given that there is considerable pressure in my local authority area, I want to encourage Southampton city council to make an early bid. Southampton general hospital has recently recruited more than 70 nurses from the Philippines, who are currently lodging in nurses' homes. Reference was made to the police rent allowance and recruitment, and discussions with the chief constable of Hampshire constabulary have suggested a problem in that regard.

If local authorities get involved in the starter homes initiative, I hope that they will consider imaginative schemes for opening up new housing, rather than eroding existing council house stock. I commend the Southampton city council scheme, "opening up the empties", which has put back on the market housing above offices and shops that was hitherto vacant. That is the way forward, and I hope that schemes such as the starter homes initiative will be used in a positive way to bring new housing into the market. Such housing should not allowed to compete with existing stock, which is in short supply in my local authority and elsewhere in the south-east.

Mr. Nicholas Winterton (in the Chair ): I am very grateful to the hon. Gentleman for being so brief.

11.19 am

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin ): My hon. Friend the Member for Reading, East (Jane Griffiths) has raised an important issue that affects not only her constituents but, as she says, many others in

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the south-east. As some hon. Members have remarked, these are problems of prosperity. It is ironic that in my constituency and many others that are further north, we are demolishing houses that are unsaleable--that has happened 200 yd from where I live--whereas at the other end of the country, we have the problems described by my hon. Friend. There is a case for regional planning to try to share out the benefits of the undoubted prosperity that the economy, through safe management, is starting to produce. This is the first time that I have heard an hon. Member plead for jobs not to be transferred to their constituency, although I understand that my hon. Friend was making a serious point. If she would like to put in a word for my constituency, or for one or two others that are further north, we would be grateful.

The Government recognise the need to ensure that key workers can live within a reasonable travelling distance of the communities that they serve. Recruitment and retention of key workers such as nurses, teachers and police has become a problem in the south-east because of high prices and high rents, and my hon. Friend is naturally concerned about that. The problem is not new, but it has worsened as house prices have mushroomed in recent years. We must recognise that access to subsidised rental housing was adversely affected by right-to-buy sales of some of the best local authority housing stock and by sales of other public sector housing.

Last night, I talked to someone connected with a London hospital trust, who told me that under the previous Government many nurses' homes in central London were sold off for short-term gain, with the current Government left to face the consequences. I make that point gently, because the hon. Member for East Worthing and Shoreham (Mr. Loughton) did not lay it on too much, but had he done so, I could have been provoked. Although I do not pretend that the seeds of the problems that we face today were all sown under the previous Government, as my hon. Friend the Member for Reading, West (Mr. Salter) remarked in relation to police housing allowances, some problems can undoubtedly be traced back to them.

Our Government are taking a number of measures to address those issues. On 13 December, we announced details of the starter homes initiative, which will make available £250 million in the next three years to help key workers in high-demand, high-price areas. In the same period, we shall double the funding for the Housing Corporation improved development programme and take measures to improve its targeting and delivery. Next year, we shall provide more than £240 million for south-east housing authorities, including increases of more than 50 per cent. for almost one-third of relevant authorities. As suggested by my hon. Friend the Member for Southampton, Test (Dr. Whitehead), we are providing stronger incentives to bring empty properties back in use. Both our housing strategy, which we announced last week, and the draft revised regional planning guidance for the south-east--RPG9--emphasise the need for local implementation of our policies for affordable housing. Those initiatives highlight our additional investment and other mechanisms through which local authorities and others can help to deliver affordable housing, not only for those on council waiting lists, but for the key workers to whom hon. Members have referred.

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Several local authorities are already taking positive steps to tackle housing problems. My hon. Friend the Member for Slough (Fiona Mactaggart) said that an education action zone in her constituency has come to an arrangement with a local housing association to provide 25 homes for rent and shared ownership by local teachers. We want such schemes to be introduced elsewhere. In Runnymede, some health authority workers have priority rights to specific flats. I am aware that in other areas--including Reading--work is in progress to assess the need for affordable homes, define local key workers, establish strategy, review letting policies and take action to deal with problems. A range of partnerships with health authorities and other key regional partners is developing. The Government's measures are intended to support such partnerships.

As I have mentioned, £250 million is being provided over the next three years for the starter homes initiative. Full details of the scheme and an invitation to bid were released last week as part of our housing policy statement. Preliminary bids are due to be submitted in mid-February and final bids by the end of April. We expect to announce allocations to successful schemes in June. We expect the starter homes initiative to help about 10,000 key workers, particularly teachers, police, nurses and other essential health workers, to buy their homes in urban and rural areas where high prices might otherwise price them out of the communities they serve.

Several hon. Members asked about the definition of key workers. Groups other than those I have listed could be assisted if a good case were made for doing so. The hon. Member for East Worthing and Shoreham gave some examples and my hon. Friend the Member for Reading, West mentioned bus drivers and firefighters. The wage increases for bus drivers in Reading that my hon. Friend mentioned are a rare example of market forces operating in favour of the workers.

Mr. Salter : Will my hon. Friend give way?

Mr. Mullin : If my hon. Friend will forgive me, I have only a short time in which to respond to many points.

Bids should reflect local circumstances. It will be necessary to demonstrate that they will help workers whose services are essential to the community and who must be housed in or near that community. We will expect bids to have the support of the local authority and to provide evidence that high housing demand and prices are creating recruitment and retention difficulties for the key workers who are targeted. We are keen to encourage a wide range of bids. We are not placing any restrictions on the type of help that might be offered, which could include, for example, shared ownership, by which a person part rents and part buys a property;

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interest free loans, or cash grants. Bids will, however, have to demonstrate value for money. We have not imposed restrictions on the organisations eligible to bid. Our aim is to ensure that the programme is well targeted and that it contributes to meeting the needs of key workers and the communities that they serve.

The hon. Member for East Worthing and Shoreham suggested that my right hon. Friend the Secretary of State had imposed the wrong number of houses on the south-east. In our draft revised regional planning guidance, we make it clear that a range of types and sizes of houses, and even a range of tenures, should be provided within localities. We fully recognise the problems and we provide local authorities with a range of mechanisms for dealing with them. If some people are fortunate enough already to own a home in one of the more prosperous parts of Britain, it is no good their trying to pull up the drawbridge after them, but when I hear some of the protestations about our plans to build houses uttered by the hon. Gentleman and his hon. Friends from such areas, I sometimes think that that is what is on their mind. People should recognise that, if they want services, they will have to arrange affordable housing for the people who provide those services. I am not always sure that that is appreciated.

The hon. Member for East Worthing and Shoreham referred to do-it-yourself shared ownership. In response to the housing Green Paper, we said that we would consider changes in the future. There is relevant research funding, which will continue to be available to local authorities until March 2002 at the earliest. The hon. Gentleman also suggested that the starter homes initiative would distort the housing market and fuel further prices rises. Obviously, we must try to avoid that, but our funding will be spread over three years and will be carefully targeted. Help will go to small numbers of people relative to all housing market transactions, and we expect the impact on the housing market to be marginal. As to what will happen when key workers leave or are promoted, people who have been assisted will not be required to repay their assistance in those circumstances. However, when they move house, they may have to repay the assistance provided if it was provided as an equity loan or through shared ownership.

My hon. Friend the Member for Reading, West asked whether the starter homes initiative was a continuing project or a one-off. As he knows, we now plan three years ahead, so it is designed to cover the next three years. Who knows what will happen after that? We will judge by the circumstances prevailing at the time--

Mr. Nicholas Winterton (in the Chair ): Order. Time is up.

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