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Mr. Shaw: Does the hon. Gentleman include the south-east in that? Increased pay in London has a ripple effect on the whole region, as my hon. Friends know only too well.

Mr. Davey: The hon. Gentleman is right. I suggested that there should be an index of the cost of living in London and other regions so that we get a handle on the differences between areas. I know that there are hot spots in other regions. Cities that are undergoing huge economic development also have increasing house prices and problems with recruiting staff—

Mr. Don Foster (Bath): Like Bath.

Mr. Davey: Yes, and many other successful cities, too. However, although there are hot spots, I do not think that

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other regions have a hot spot that covers the whole region homogenously. There is a particular problem in the south-east to which the Government have not faced up. They need to re-examine regional government and regional pay bargaining. Unless we decentralise pay bargaining in the public sector and allow regions to negotiate in light of the real costs in their regions, we will never sort out the problem.

As evidence, I cite a recent report by NERA Economic Consulting, which bears close scrutiny. It tries to get the best measure for the real costs of employing people in the public sector in different regions. To do that, it rightly uses private sector wages as a proxy for the state of regional labour markets. NERA's analysis shows that wages in outer London should be 20 per cent. higher than the average for the rest of the country, whereas the Government use a figure of 15 per cent. The figures for inner London are 40 per cent. and 30 per cent. respectively. Those are large differences that have major public finance implications. The Government have to take a closer look.

When considering mechanisms that they might use, whether regional pay or allowances, the Government must take that type of analysis into account. If they do not, Londoners' long-term quality of life will again be undermined because we will not have public servants in the numbers that we need, and we will not benefit in terms of the quality of service they provide.

Incidentally, I was surprised that the Conservative spokesman did not mention the NERA report. Councils throughout London and the south-east are relying on that sort of analysis to ensure that in future they get a better grant funding deal from the Government. The fact that the hon. Member for Brentwood and Ongar failed to mention it will be noticed by those councils, which will ask why the Conservatives are not speaking up for them. Yet again, the Conservatives have let down the councils in the regions and it has been left to the Liberal Democrats to argue for fair funding.

The third major factor is environmental constraints in London and the south-east—basic constraints such as land for housing, business, and green open spaces, and air and water quality. The Minister mentioned a few of those factors, and under the Greater London Authority Act 1999 the Mayor has to devise strategies for them. However, I suggest that there are other factors responsibility for which has not been given to the Mayor and of which the Minister and his colleagues should take cognisance.

First, there is the danger of flooding. I am told by people who know about these things that the need to plan for a second Thames barrier is not far off. If that is not done, the threat to London will be significant. Secondly, although the Mayor has policies on waste he does not appear to have got them right yet, and progress on recycling in this country is poor. In connection with that—even though he answered none of my questions—let me respond to a point made by the hon. Member for Brentwood and Ongar, who is no longer in his place, about Sutton council's recycling figures.

There was a problem with the figures on recycling for Sutton council. On the insistence of councillors, an inquiry was held which found that a council officer had made an error; that was investigated and the figures have now been corrected. Even according to the correct figures, Sutton has an amazing record on recycling, so it was

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rather unwise of the hon. Gentleman to pick on Sutton council, which is an environmental beacon council. In May last year, it won the EMAS—eco-management and audit scheme—award, the first London borough to gain the award, and one of the first recipients in Europe.

The GLA has powers in environmental matters, but two years on—early days yet, I admit—the Minister must be rather disappointed by the effect that the GLA has had. The GLA model is flawed: the authority has proved to be not powerful enough. I bet that during the Committee stage of the 1999 Act the Minister did not expect that the public-private partnership for London Underground would not have been signed by spring 2002. Night after night, he and his colleagues assured the members of the Standing Committee that PPP was the way forward and that it would bring investment quickly, but three years later not a dime has been invested in London as a result of it. It has been a total failure.

Let me give two other examples of the way in which when we discuss quality of life in London and the south-east we need to take a broader view than has hitherto been taken in this debate.

Mr. Don Foster: My hon. Friend was commenting on the GLA model and structure. I hope he agrees that it is very much to be hoped that when they eventually get around to publishing their White Paper on regional government, the Government will reveal a model for regional government that is very different from the one used for the GLA.

Mr. Davey: I agree with my hon. Friend, and commend to the Minister his ably written paper on regional government; it provoked a lively and well-informed debate at our recent Manchester conference.

One of the examples that I wish to discuss is the terminal 5 decision, about which many of my hon. Friends are concerned. Considering the environmental pressures on the capital, the Government's decision is surely flawed, as it will massively increase those pressures. Will the Minister tell the House whether or not he and his colleagues will give the go-ahead for a third runway at Heathrow? We are waiting to hear the result. The announcement by the Secretary of State for Transport, Local Government and the Regions on terminal 5 was instructive because he failed to rule out the prospect of a third runway at Heathrow. If the Government go ahead and permit all that development to be concentrated in a small sub-region of London, they will create even greater imbalance in our regional and national economies. They do not understand the constraints that the environment places on an economy and a region.

I wish to raise briefly a number of issues; my hon. Friends will go into greater detail if they catch your eye, Madam Deputy Speaker. Front-Bench spokesmen have mentioned them already, so it is right for me to deal with them briefly. First, I am concerned that the Government have not worked effectively enough with the Metropolitan police authority and the Mayor to try to tackle the rise in street crime. Although there has been an increase in police numbers, it has been insufficient. The extra costs on the MPA following 11 September have not been fully funded. The Government have not provided as much support for local authorities on lighting and CCTV as they could have, and need to do far more.

Jane Griffiths (Reading, East): The hon. Gentleman referred to CCTV—almost its first mention in our

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debate—and called for more support for local authorities to introduce it, which is fine and good. He lauded the record of Liberal Democrat-controlled authorities, but is he aware of, and will he join me in deploring, Liberal Democrat-controlled Wokingham district council, which forgot to bid for CCTV money last year?

Mr. Davey: May I correct the hon. Lady? If she bothers to look at the detail of what happened in Wokingham, she will find that, when Liberal Democrats took over after the resignation of the Tory chair of the environment committee, they found that the Conservatives had failed to put in an application. The hon. Lady is right to draw attention to the matter, but she should have aimed her remarks at Conservative Members. Liberal Democrats in Wokingham have been picking up the pieces of the failed Conservative administration and will no doubt be returned in large numbers in due course.

My second example is the appalling state of our transport system. To hear the Minister talk, it was if nothing had happened to worry commuters in the past few months or the past year. He hardly touched on the problems. Listening to him, it was as though nothing was wrong; everything was rosy and successful. He did not once mention the strikes, the lack of investment or all the delays. He should apologise for that record, not try to put a spin on it.

Mr. Raynsford rose

Mr. Davey: Are we going to get some more spin?

Mr. Raynsford: When the hon. Gentleman looks at the record tomorrow, he will see that throughout my speech the main theme was underinvestment. I hope that he will not make completely unfounded allegations that I did not raise the issue.

Mr. Davey: I shall certainly look closely at the record, but I do not think that the Minister said that his Government had under-invested in the transport system. We believe that they have. If the Minister had given the figures, they would have shown that his Government have, on average, spent less in the past five years than was spent in the last five years of the Conservative Administration.

My final point on quality of life concerns the NHS and the social care sector. My hon. Friend the Member for Sutton and Cheam (Mr. Burstow) has done a fantastic job in highlighting many problems, not just in London and the south-east, but across the country. In London, I am sure he agrees, we have particular problems, primarily because of staff shortages, wages and property prices; many care home owners have sold their property to developers for residential use. That has meant a massive reduction in the number of care home places in London and the south-east, which has had a knock-on effect on the NHS. To date, the Government have done almost nothing about it. It is Liberal Democrats who have raised the issue on our Opposition days, and we will continue to harry the Government until they start to tackle the problem. Until they do so, we will never be able to get the NHS right in London and the south-east.

If my hon. Friend the Member for Carshalton and Wallington (Tom Brake) catches your eye, Madam Deputy Speaker, I know that he intends to speak about

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the problems of abandoned cars, graffiti and the failure to keep the streets of London clean. As he has said on previous occasions—and I agree with him—those are fundamental to improving the quality of life of our citizens in this great capital and the great region of the south-east.

If we are to have a serious debate about the quality of life in London and the south-east, and if we are to get away from banging statistics across the Dispatch Box, as the two previous speakers did, we must discuss the underlying issues so that we can produce long-term analysis and strategic planning. We must adopt policies to ensure that we take power out of Whitehall and distribute it across the country, to give our regions strong government and to give London stronger government, thereby enabling our local communities and our regions to build a better quality of life for all our citizens.

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