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The day visitors allowance does not benefit Norwich particularly. My hon. Friend was talking about Westminster. There is a small difference between tourist visitors to Westminster and visitors to Norwich. I must say that I wish I had not given way to the Minister.
The ratio between Norwich's daytime population and its resident population is higher than in any other shire district. A city of 100,000 people serves a population of 500,000 in the county. It has high levels of social deprivation and population density, and a low-income community—the 64th lowest paid in the country, including London and the metropolitan boroughs. Recent reports suggest that 30,000 people live below the poverty line in Norwich, a higher proportion than in Birmingham or Sheffield. Norwich has recently received some really hard blows with some 2,500 jobs losses having been announced this year so far. If one allows for the multiplier, 5,000 jobs will be lost as a consequence. That means that the standard of living in the city will fall rapidly.
The capping limit will require revenue expenditure cuts of £5.5 million over the financial years 1995–96 and 1996–97. This is almost one third of the net general fund revenue budget and will mean major reductions in direct services. Recurrent cuts of £5.5 million and a one-off cut of £3 million have already been made in recent years. The cuts have been made overwhelmingly from overheads and not direct services. In the same period, over 350 jobs have been lost, which is 15 per cent. of the council's employment.
By the end of 1995–96, general fund reserves will have been reduced to £1 million, which is the lowest prudent level. There are no other reserves for trading or other general fund activities. The level of further recurrent cuts to be made by 1996–97 has risen to £5.5 million. That means that over four years, cuts totalling £11 million will have been required if the current system of national financial control is to be complied with and the designated budget achieved. That scale of cuts represents over 40 per cent. of net general fund spending and 22 per cent. of gross general fund spending, excluding housing benefit payments.
The cuts will impact on virtually all services with reductions in quality and standards, the closure of facilities and the cessation of services. The scope for further cuts in overheads is limited, with the result that there will be major reductions of direct services. That will mean greatly reduced, almost non-existent, discretionary services. The council will find it extremely difficult to meet its mandatory obligations. The whole appearance, culture and life of the city will deteriorate.
It seems to me that that is an exceptionally vindictive action. It may have been taken because, for 60 years, Norwich has been controlled by a very competent Labour authority. The number of Tories on Norwich city council has been reduced to one; as she is the mayor, there is no Conservative voice whatsoever on the city council.
Two important and well-loved community centres will have to be closed. Today, a petition with 25,000 names was presented to the city council asking that those community centres be kept open. One receives 150,000 visits a year. The tourist information centre will have to be largely closed, yet we are trying to develop the tourist industry. The income from tourism is spread throughout the city, in shops, hotels and restaurants.
The fact is that capping is a rotten system that does not recognise the particular needs of the city of Norwich which, by the way, has 1,600 listed buildings to look after and the largest collection of pre-reformation churches in western Europe. All that is the result of being the capital of a region. The Government's formula does not reflect the needs of, or the demands made on, the city council. It is with great regret that I have seen that the Government will not change their mind but retribution will come at the next general election.