Local Government Finance (Wales)

HC Deb 08 February 1996 vol 271 cc485-529 4.16 pm

The Secretary of State for Wales (Mr. William Hague)

I beg to move, That the Local Government Finance Report (Wales) 1996–97 (House of Commons Paper No. 141), which was laid before this House on 1st February, be approved. I understand that with this it will be convenient to discuss also the following motion: That the Limitation of Council Tax and Precepts (Notional Amounts) Report (Wales) 1996–97 (House of Commons Paper No. 142), which was laid before this House on 1st February, be approved. The finance report sets out my decisions on the local government revenue settlement for 1996–97. The standard spending assessments specified in the report have been calculated in accordance with a formula agreed with the local authority associations. The notional amounts report sets out the amounts in lieu of budget requirements for 1995–96, which I propose to use to measure the coming year's budget increases for the purposes of capping. Those notional amounts reflect historic spending patterns in unitary authority areas and preserve the spending power of the new authorities.

As the House will recall from my statement in December, I propose to allow total standard spending, or TSS, of £2.867 billion for local government in Wales in 1996–97. That is an increase of £85 million, or 3.1 per cent., on the previous year. It includes £331 million for the four Welsh police authorities— £2.463 billion in standard spending assessments for the 22 new unitary authorities, and £72 million in specific grants such as probation service grant and national park grant. Under my provisional capping criteria, each local authority in Wales can, if it sees fit, increase its expenditure in comparison with its notional amount by at least 3.4 per cent.

The settlement allows police spending to increase by 5.1 per cent., and follows an increase of more than 11 per cent. in police budgets last year. It corrects the historic underfunding of police services by county councils prior to 1995–96, and it enables Welsh police forces to build on their success in combating crime, and to make communities safer places in which to live and work. The chief constables of all four Welsh forces have welcomed the settlement.

I propose to provide £2.517 billion in central Government support, known as aggregate external finance or AEF, in support of total standard spending—an increase of £52 million, or 2.2 per cent., on the previous year. That amounts to £860 per person in Wales—about £130, or 18 per cent., more than the level planned for England. It is 87.8 per cent. of total standard spending, compared with 79 per cent. of total standard spending in England. AEF comprises £1.792 million in revenue support grant, £459 million in distributable non-domestic rates, £237.8 million in specific grants—which includes the police grant to be made by the Home Secretary—and £29 million for council tax damping to cover the impact of council tax increases arising from the disaggregation of budgets last year.

Mr. Dafydd Wigley (Caernarfon)

Will the Secretary of State confirm that, if local authorities increase their expenditure in line with the likely 4 per cent. settlement for public sector pay, do not spend more than the expenditure limits recognised by the Welsh Office, and do not raise their council tax by more than the rate of inflation, they will still have a shortfall of several million pounds—as in the case of the new Caernarfonshire-Merionethshire authority? That would inevitably lead to the closure of rural schools, the retraction of care in the community services, and even the closure of leisure centres for two or three days a week. Is that not inevitable with this settlement?

Mr. Hague

The pay awards announcement will be made separately. I must tell the hon. Member that the settlement level for each authority is the product of the standard spending assessment formula, which is agreed with the local authority associations, the actual level of total standard spending and aggregate external finance, which I am setting out here.

If the hon. Gentleman or other hon. Members say that the amount of support that is given to an individual local authority should be different, they must argue that either the SSA formula should be changed or the total amount of support should be different. The hon. Member for Caernarfon may well be able to do that, but no one has yet told me what is the right amount for local government if the amount that I propose is wrong. I must pose that question to Opposition Members.

Mr. Donald Anderson (Swansea, East)

Is it not rather disingenuous to say that the pay settlements are separate? They substantially impact on local authorities and on the amount of money available to them. For example, the Welsh Office has information about the effect of the previous teachers' pay settlement on teacher numbers. We know that the teacher settlement for the coming year is 3.8 per cent, which is bound to have an effect on the number of teachers in our schools. What estimate has the Welsh Office made of the likely reduction of teachers as a direct result of the settlement?

Mr. Hague

The total effect will not be 3.8 per cent., because of the way in which the Government propose to stage the increases. We are making a 3.1 per cent. increase in total standard spending and a 2.7 per cent. increase in the amount of money that the Government give to local authorities. That is more than the likely increase in the outturn of expenditure by the Welsh Office, which in turn is more than the increase in expenditure for the Government as a whole.

Local authorities are therefore receiving at least their full share of the increase in Government expenditure for the coming year. We are entitled to expect local authorities to make improvements and administrative savings that are similar to those made by central Government during the coming year, so that they can minimise the consequences for the council tax payer.

Mr. Peter Hain (Neath)

The sophisticated presentation of the figures will not wash in Neath and Port Talbot, because the new authorities will have to make cuts of £7 million which have nothing to do with their own efficiency or attempts to reorganise services. This punitive, paltry and pathetic settlement will discriminate against the Neath and Port Talbot side of West Glamorgan, and will mean that some council tax payers— in Trebanos village, for example—will pay £50 more than their neighbours across the road. The settlement has nothing to do with local decisions, and everything to do with the Secretary of State's failure to deal with the councils' complaints about this matter.

Mr. Hague

As the hon. Gentleman knows, Neath and Port Talbot is one of the authorities that benefit from the damping schemes that I have announced. The hon. Gentleman is an Opposition Front-Bench spokesman, although in this debate he speaks from the Back Benches. Opposition Front-Bench Members have not been able to say—we wait with interest to discover whether they are able to tell us in this debate—what the settlement level should be. The hon. Gentleman thinks that the level I have announced is paltry. We look forward to hearing what the right amount would be, and we look forward to hearing the Labour party committing itself to it.

In addition to the revenue package that I have announced, I am providing local authorities with £508 million for capital programmes next year, and with £42 million towards the transitional costs of local government reorganisation. In all, local authorities will receive £83 million towards their transitional costs over the two years, from 1995 to 1997.

The responsibility for setting budgets and determining council tax levels lies with local authorities. Capping exists to enable me to restrain public expenditure, and capping rules acknowledge that, historically, the majority of Welsh local authorities—not all—have chosen to budget above the standard spending assessment.

However, provisional capping limits are not spending targets that I lay down. Local authorities have the discretion to set their budgets below capping limits, although many authorities seem to want to set their council tax as high as capping limits permit. That is one factor that the Opposition must consider when they advocate scrapping capping limits altogether. There would undoubtedly be an impact on council tax levels.

Mr. Ieuan Wyn Jones (Ynys Mon)

Surely the Secretary of State recognises that many local authorities have no alternative but to set their budgets at the capping level. If Anglesey county council, for example, had a standstill budget—the same budget as that allocated to Gwynedd and Ynys Mon last year—it would have a budget of £63 million. Under the capping arrangement, the council is not allowed to spend more than £61 million. What alternative does that give the county council? Is it not inevitable that services will suffer?

Mr. Hague

It is not good enough for people responsible for spending public money to say that they have no alternative to courses of action, such as the maximum level of taxation available to them. All of us who are responsible for spending public money have to use that money as efficiently and effectively as we can. I have announced the measures that we are taking in the Welsh Office, and I will refer to them again in a moment. Local authorities vary greatly in how good they are at spending their money efficiently and effectively. I will refer to the record of one or two authorities in a moment.

It was because I was concerned by reports that a majority of local authorities planned to budget up to the limit implied by my provisional capping principles that I announced last week an additional targeted damping scheme. It will ensure that, excluding any increases in community council precepts, no council tax increase can exceed 25 per cent., and I expect the great majority of increases to be well below that level.

The sum involved in the scheme is additional to aggregate external finance. I want to direct the resources to where they are most needed. When taken with aggregate external finance, including the £29.1 million available for disaggregation damping, the total level of Government support for local government revenue spending is brought to £2.533 billion in Wales, which is an increase of 2.7 per cent. The figure is virtually identical to that in other parts of the United Kingdom.

Mr. Nick Ainger (Pembroke)

Let us be honest. The Secretary of State knows by now that local government finance is not a science, and that it is a very inexact art. In this year above all years, with all the problems related to disaggregation, and with only notional sums being taken into account, should not the Secretary of State be far more flexible in relation to the capping limits? We may well find that mistakes have been made in the calculation, and that local authorities will have no alternative but to cut significantly services that, in the past, they would have been able to protect.

Mr. Hague

The capping limits this year are more flexible than they were in previous years. That is partly in recognition of the particular circumstances, although we are spending a great deal of money to fund the transitional costs for local government. The hon. Gentleman must remember that, when I make capping limits more flexible, the immediate response of local authorities is to say, "Right, we will spend all the way up to our capping limits, whatever that means for the council tax." I introduced an additional damping scheme in the light of that.

Mr. Cynog Dafis (Ceredigion and Pembroke, North)

Will the Secretary of State tell us something about the methodology used in the distribution of the extra moneys provided at the end of January, and tell us whether there was any consultative process to enable unitary authorities to make representations to him? Is it not unreasonable that no additional moneys remain available to the new Ceredigion county council, so that the band D council tax will be £508—£80 more than in Cardiff, which obtained an additional £3.6 million, even though the Ceredigion average income is far less? Is not the distribution extremely inequitable?

Mr. Hague

The decisions that I announced at the end of January 1996 were the result of a process of consultation on my original proposals. That consultation ended on 5 January 1996, so I announced the additional proposals when I had reviewed all responses to the consultation.

I understand the hon. Gentleman's argument. Historically, council tax levels are higher in the area of his constituency, but I have targeted the additional help to places where council tax increases threaten to be the largest, because the anxieties that were expressed to me were overwhelmingly about the level of change that might take place, not the level that existed for historic reasons and because of previous spending decisions, which we cannot go back and unravel now. I allocated the additional money on that basis.

Mr. Nigel Evans (Ribble Valley)

As my right hon. Friend knows, I was a West Glamorgan county councillor for six years. During that time, I spoke to many people in West Glamorgan who were supremely grateful for the fact that the Government had capping in place, because the Labour county councillors were sweating with hope that, at some time, capping would be lifted, so that they could push spending through the roof. Yes, the people of Wales want their services to be protected, but we must do all we can to protect the people of Wales from high-spending Labour councillors.

Mr. Hague

My hon. Friend's experience has too often been the experience of councillors throughout the country. It has shown that, if we did not have capping principles, council tax would be dramatically higher, without necessarily bringing improved services to local populations.

Mr. Don Touhig (Islwyn)

rose—

Mr. Hague

I must make progress if we are to have time for hon. Members to take part in the debate.

I have been worried about reports of the possible closure of Theatr Clwyd, and I have carefully considered the case made to me and my hon. Friend the Under-Secretary of State, the hon. Member for Cardiff, North (Mr. Jones), by the new Flintshire authority for additional help from central Government. I share its opinion that Theatr Clwyd should continue to provide the high-quality productions for which it is famous. I have decided to provide, via the Arts Council of Wales, a one-off grant of £1.3 million to pay off completely Theatr Clwyd's outstanding capital debt.

My offer is subject to satisfactory assurances from Flintshire and other successor authorities to Clwyd county council that they will give the theatre the support it needs to continue to operate on its present basis for the foreseeable future, and I need such assurances by 8 March 1996. That is a major contribution to securing the future viability of the theatre, and I hope that it will be welcomed by hon. Members.

Mr. David Hanson (Delyn)

As the Member of Parliament representing Mold, where Theatr Clwyd is situated, I welcome the Secretary of State's announcement. Flintshire county council, my hon. Friend the Member for Alyn and Deeside (Mr. Jones) and I made strong representations to the Under-Secretary of State, the hon. Member for Cardiff, North (Mr. Jones), about the future of Theatr Clwyd. I am sure that today's announcement will give a kick start to the local authorities adjacent to Flintshire to help with those contributions.

It is a first step. There remains a major shortfall of perhaps £300,000 to £400,000, and I hope that the door will not be closed. We also need to consider the ability of the Secretary of State to kick-start the Arts Council of Wales as a "next steps" agency.

Mr. Hague

I am grateful to the hon. Gentleman for his welcome. As he says, he and the hon. Member for Alyn and Deeside made representations, as did my hon. Friend the Member for City of Chester (Mr. Brandreth) in the Whips Office, so there was concern on both sides of the House. The sum of £1.3 million in taxpayers' money to write off the theatre's debt completely is a major contribution. I now look to the authorities and others to ensure that the theatre continues to operate in the foreseeable future. That £1.3 million must be the limit of what the Government can provide.

Mr. Barry Jones (Alyn and Deeside)

I thank my hon. Friend the Member for Cardiff, North (Mr. Jones) and the right hon. Gentleman and his Parliamentary Under-Secretary for receiving the deputations and considering the strong case that we made. How can the Secretary of State persuade the English local authorities very close to Mold to help meet the £300,000 shortfall? Does he agree that Theatr Clwyd is the jewel in the crown of Welsh theatre production?

Mr. Hague

I agree with the hon. Gentleman's last point. Local authorities in Wales and in England must make their own decisions about the support they give. However, I hope that the people responsible for the management and finances of the theatre will take every opportunity to market it effectively in the future, in terms of obtaining both support and custom. The Government have given the theatre an opportunity for the future, which we want to see it take up.

My settlement proposals give local government the resources it needs to maintain services in the first year of the new unitary arrangements. Inflation is low, and it is forecast to remain so. I acknowledge that difficult choices must often be made—that is true for all who are responsible for spending taxpayers' money. All councils must make every effort to use their resources as wisely as possible. Many councillors try to do that, but not all achieve it.

If we can believe what we read in the newspapers, one local authority—Rhondda Cynon Taff county borough council—proposes to spend more than £20,000 on a new mayoral chain. That is a large sum to spend when the mayor could make use of the regalia of one or more of his predecessors. When things such as that happen—albeit involving a relatively small amount of money—people are bound to question council priorities.

The same authority has ambitious plans for a new headquarters which will cost in excess of £20 million. Of course, the council needs a place to meet and the staff need a place to work, and the Government have assisted the council with accommodation for the time being. I recently announced support for six authorities which plan to build new accommodation or to upgrade existing buildings. However, those six authorities will spend less between them than that one authority plans to spend. Council tax payers have a right to ask for a more modest approach.

I do not want, or need, to single out that one authority: in some areas, leading councillors will be paid allowances as great as £23,000. The Blaenau Gwent county borough council is the 17th largest authority in Wales in population terms, but it has the fifth most expensive chief officers' structure. It has more chief officer posts than any authority, apart from Swansea county council, which serves three times the population.

Councillors in Blaenau Gwent have voted themselves allowances which are six times greater than those paid to the elected members of the old Blaenau Gwent authority. We are told that travel and subsistence will be paid in addition, but there is no requirement for councillors to turn up to meetings. That raises questions about the priorities of local government.

Mr. Ron Davies (Caerphilly)

The Secretary of State will recall my suggestion that he follow the example set by his counterpart for Scotland and introduce a mandatory scheme to stop any existing abuses. I urge him to introduce such a mandatory scheme. If he is so minded, he will have the full support of the Opposition. If he is not, upon their election, a Labour Government will take action to stop any such abuses.

Mr. Hague

That is an interesting position. The hon. Gentleman has said that there should be mandatory schemes because councillors are not fit to decide their allowance arrangements, but he believes that capping should be abolished so that councillors can freely decide on the impositions to be placed on everyone else.

The hon. Gentleman's approach is inconsistent. The Government should not have to instruct local authorities about such matters: they should have the discretion to make those choices. Council tax payers who hear their local councils ask the Government for more money should question whether the councils are spending money wisely, and whether the expenditure is necessary.

Mr. Alun Michael (Cardiff, South and Penarth)

Does the Secretary of State therefore disagree with the Leader of the House, who announced that an independent means of setting Members' salaries was the right approach? Is it not the same principle that my hon. Friend the Member for Caerphilly (Mr. Davies) suggested should be carried into local government?

Mr. Hague

No, I do not think it is. We have a Welsh Office and a Secretary of State for Wales so that we can judge issues on their merits in Wales. That is what we are doing today.

Mrs. Ann Clwyd (Cynon Valley)

Will the Minister give way?

Mr. Hague

No, I must get on with my speech.

In the restraint of public expenditure, I am asking no more of local government than of other public sector borrowers. I informed the House in December of my plan to reduce my Department's running costs by 8 per cent. in cash terms over the next three years. Organisations that are responsible for large sums of public money have a duty rigorously to assess their spending priorities and their running costs.

Reorganisation has given Welsh local government a chance to improve management structures and strategies. Some new authorities have worked on establishing cost-effective management teams to provide taxpayers with better value for money, but others still have work to do. Preparing for reorganisation is a complex process. Much has been accomplished, but much remains to be done. In recognition of that, I am making more than £80 million available to fund transitional costs, but for reorganisation of local government to work, we need management discipline as well as financial resources from central Government.

It is clear that we are providing increased resources to local government, that we are making special allowances for reorganisation, and that local authorities are responsible for council tax levels. Only one thing remains unclear—the alternative to the size and shape of the proposed settlement.

Some people have suggested alternatives. To be fair to them, the local authority associations suggested that I should reduce the budgets of the Cardiff Bay development corporation and the housing associations to provide more money for local government. That could in no way have paid for the 19 per cent. increase in revenue funding they sought, but at least they suggested some alternatives, and I respect them for that.

Plaid Cymru Members, some of whom have intervened, will probably suggest the alternative that there should be more money for the Welsh block overall. They would not be able to make that proposition were Wales not part of the United Kingdom, but they will probably advance it anyway, and it is one point of view. However, not everyone seems willing or able to suggest alternative numbers to those in the reports. Opposition Front-Bench Members are conspicuous among those unable to do so, although they are free with their opinions about other matters.

Mrs. Clwyd

Will the Minister give way?

Mr. Hague

I should finish my point.

It is 10 weeks since we published the proposals. It is hard to believe that the Opposition have not thought about what the settlement should be. If they have not thought about it, we are entitled to ask what they have been doing in the past 10 weeks. If they have thought about it, it is time that public were told their conclusions. Tonight, at 7 o'clock, I expect that they will vote against the proposals. If they do that, they must prefer something else. If they prefer something else, we are entitled to ask what it is. Would council tax be higher or lower?

Mrs. Clwyd

On a point of order, Madam Deputy Speaker. I wonder whether the Government intend to make a statement, and whether the Secretary of State knows that, in addition to increasing council tax, they will also tax those who are sick. The Government have sneaked through a answer saying that they intend to put 25p on the cost of prescriptions. That is disgraceful.

Madam Deputy Speaker (Dame Janet Fookes)

It is quite clear to me that this is not a point of order. It is a point of information that the hon. Lady wishes to get over, and she has not been able to do it in any other way.

Mr. Hague

I shall not be distracted from asking Members who are against the settlement whether they think it should be higher or lower. We do not necessarily need exact numbers. They could tell us whether it should be a bit higher or much higher.

Where would they find resources in the Welsh block? Would they come from the health budget that I have increased, the training budget, to which I have directed money, the Countryside Council for Wales, whose budget I have increased, the Welsh Development Agency, which has received an increase in its grant in aid, or, as the local authorities have suggested, the Cardiff Bay development corporation, although that would stop the barrage halfway through its completion?

The problems of financing local government spending would be worse, not better, were we to introduce even a small number of the specific proposals to which Opposition Members have put their names.

Mr. Ainger

Will the Minister give way?

Madam Deputy Speaker

Order. It is quite clear the that Minister is not giving way; therefore, the hon. Gentleman must resume his seat quickly.

Mr. Hague

I have given way many times. I want to provide time for Members to take part in the debate, and for the hon. Member for Caerphilly (Mr. Davies) to say what he thinks the settlement should be. I should point out that ending compulsory tendering, which is one Opposition policy, would worsen the problem of controlling local government spending. They could finance it by their other policy of ending capping, but that would undoubtedly mean that local authorities would choose to spend a great deal more, and council tax payers would have to pay for it.

Mr. Ian Bruce (South Dorset)

Will my right hon. Friend give way?

Mr. Hague

In fairness to all Members, I must continue my speech.

The settlement that I have announced gives local government a high priority within the Welsh block. It increases the resources available to local government, and it addresses the issues raised by reorganisation. The Opposition have presented no honest alternative, and on that basis I recommend it to the House for approval.

4.45 pm

Mr. Ron Davies (Caerphilly)

The Secretary of State has been getting in some much-needed practice for his next job in opposition. He is far more concerned to talk about Opposition policies than about his own financial settlement. It is instructive that, although we are discussing a financial settlement dealing with the distribution of some £3 billion of public money, according to the Secretary of State the most important point is the cost of civic regalia in Rhondda Cynon Taff. That reveals his priorities.

The Secretary of State has tried to convey the message that the settlement is reasonable, that it will not lead to service cuts and that any unreasonable council tax increases will be the fault of local councils, not central Government. On all those counts, the truth is the exact opposite.

In reality, it is an unreasonable settlement at a time of economic slump. Despite their new responsibilities and a major reorganisation, councils in Wales will face a reduction in Government support. The settlement increases aggregate external finance by 2.2 per cent. Inflation for the year to December was 3.2 per cent. In real terms, therefore, authorities in Wales face a 1 per cent. cut in their level of support.

Resources for the police increased last year and the Secretary of State took credit for it. Perhaps he will also take responsibility for the fact that the number of serving police officers has fallen by nearly 200 since 1992 and fell by nearly 100 last year, when he took direct responsibility for funding police authorities in Wales. Yet again, the reality falls far short of Tory manifesto commitments and it is clear that we cannot trust the Government on law and order.

Mr. Nigel Evans

Will the hon. Gentleman give way?

Mr. Davies

No.

I would have liked to welcome the extra money for community care, but that increase, for which the Secretary of State claims credit, comes entirely from the budget of the Department of Social Security. When the number of elderly people is dramatically increasing—there was a 17 per cent. increase in the number of people aged 65 and over between 1979 and 1994 and it is forecast to increase further—not a penny more is being spent on one of the most vulnerable sectors in our society. That is not the whole picture. Excluding the ring-fenced money for police and community care, Wales faces a 2.6 per cent. cut in real-terms provision for such basic services as education, housing and social services.

Mr. Evans

Will the hon. Gentleman give way?

Mr. Davies

No.

Mr. Evans

On a point of order, Madam Deputy Speaker. The Secretary of State gave way more than 20 times during his speech, yet the Opposition spokesman is not prepared to give way even once.

Madam Deputy Speaker

It is entirely a matter for the hon. Member who has the Floor to decide whether to give way. It is not a point of order for the Chair, so that was a bogus point of order which has taken up time.

Mr. Davies

Perhaps I should take this opportunity to explain to you, Madam Deputy Speaker, that a large number of my hon. Friends who represent Welsh constituencies want to represent the interests of their constituents today, so I shall make my speech as brief as possible to allow them to do that.

Education may be a matter of jest for the Secretary of State, because neither he nor his family nor his constituents have to live with the consequences of the cuts that he is imposing. Will he confirm that, as a result of the Government's decision today to increase teachers' salaries by 3.8 per cent., but not to make any more funding available for authorities in Wales, they will have to face additional burdens of the following order? The counties of Dyfed, Gwent and South Glamorgan, or their successor authorities, will have to find a further £4 million. The counties of Clwyd and West Glamorgan will have to find a further £3 million. The county of Mid Glamorgan will have to find a further £5 million. If the people whom the Secretary of State represents, or his family, were being condemned to the squalor and declining conditions that our children face in their education, I put it to him that he would not be as complacent about this further imposition on Welsh local authorities.

There will be service cuts in these vital areas, and hardly an authority in Wales will be able to fulfil its plans for investment in the social and economic infrastructure which are needed to face the challenge of the new millennium. The capital settlement this year includes a cash cut of 5 per cent.—more than £34 million—and a real terms cut of 8 per cent.; that is £50 million less than what is needed just to compensate for inflation.

I acknowledge that the damping down grant has been introduced, but all that does is put a temporary bandage over the structural and financial crisis facing the poorer Welsh authorities as a result of the per capita redistribution of the former counties' disaggregated budgets. Overall, the Welsh block grant has not been increased, so the £45 million allocated to damping down will have to come from other cuts in Welsh Office expenditure: from the health service and from economic development, for example. Local authorities which this year are benefiting from the damping down grant—especially the poorer counties of Rhondda Cynon Taff, Merthyr and Blaenau Gwent—will face enormous difficulties next year, because no provision has been made for the continuation of the assistance.

It is what I would call typical Tory economics—sacrificing long-term strategic interests for a short-term political fix. That it is a short-term fix, the Secretary of State made absolutely clear in his press release of 30 January: I envisage this additional assistance as a one-off, giving authorities time to adjust service expenditure and bring it more in line with their standard spending assessments". In other words, he intends to sack teachers, spend less on social workers and invest less in the future of our communities. As with so many other areas of Government activity, the problems of today's Tory Government will be left to tomorrow's Labour Government to sort out.

My hon. Friends will be interested to contrast the Secretary of State's press release entitled William Hague limits council tax increases with the facts. The facts are that average council tax increases across Wales will be 17.5 per cent. Twelve local authorities in Wales face increases of more than 20 per cent., and half of all Welsh council tax payers—more than 550,000 households—face increases of nearly 25 per cent.

The reason for this state of affairs is quite clear: following years of taking power away from local councils and concentrating it in the hands of central Government, the council tax is now a council tax in name only. Nearly 90 per cent. of local authority expenditure is set and met by central Government, so when the Government cut funds, the burden falls on local government—precisely what has happened this year.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

rose—

Mr. Nigel Evans

He is not giving way.

Mr. Davies

I shall happily give way to my hon. Friend, because he represents a Welsh constituency and I know that this is a matter of great interest to him.

Mr. Rowlands

On behalf of my constituents I should like to draw to the attention of my hon. Friend the fact that a standstill budget for the new county borough of Merthyr Tydfil will still mean a 25 per cent. increase in the council tax. So much for damping down.

Mr. Davies

That is precisely my point. My hon. Friend understands very well that 12 local authorities face increases of more than 20 per cent. The cuts mean that a total of £26 million in real terms—33 per cent. of what is necessary to keep in line with inflation alone—will be lost; and we need look no further than the Secretary of State to attribute responsibility for the crisis facing Welsh local government.

What I really do not understand is why the right hon. Gentleman is so reluctant to take responsibility. After all, this is a right-wing agenda and the Secretary of State is a self-confessed right-wing Minister. So why is he so coy? Why does he not boast of his achievements? It is part of a right-wing policy to cut public expenditure to fund a pre-election bribe. No matter that tax bribes are taken back at a stroke by council tax increases.

It is also part of the right hon. Gentleman's right-wing policy to force more public services into the private sector. No matter that the policy itself, like the ill-thought-out nursery voucher scheme, will undermine existing provision. It is part of his right-wing policy to reduce in absolute terms the level and quality of public services—in his own words, to roll back the frontiers of the state. No matter that the price for that is paid by communities whose collective future is made insecure, and by individuals whose private lives are blighted by misery.

I shall offer the Secretary of State just one example of how the life of an individual can be made a misery. On Saturday, the parents of a 15-year-old terminally ill girl came to see me. Her name is Jade Smith, and she lives in Bedwas in my constituency. The girl is mentally and physically handicapped and has been tube-fed for the past five years. At the moment, Mid Glamorgan county council enables her to attend a special school at Ysgol Ty Coch, which is in the constituency of my hon. Friend the Member for Pontypridd (Dr. Howells).

As from April, however, the new Caerphilly authority, which I have the privilege of representing, because of the cash cuts imposed by the Government, will be unable to buy a place in Ysgol Ty Coch, so the authority has had to reclassify one of the homes in which it provides respite care for adults. As a result, my constituent has to go to Ty Gwilym adult respite care centre and share the facility with 30 to 40-year-old adults.

The first time Jade Smith went there, she had to share the reception area with middle-aged men, over 40, who were mentally disturbed and abusive. The next time she went there, the care assistants were committed to taking out the 30-year-old women who were there for respite care, so there was no one there to look after her except a sitter.

I offer that as a clear example of the impact that the Government's cuts are having on the quality of public services in Wales. The Secretary of State appears anxious to intervene. I would ask him to take the smile off his face just for a moment and, in his intervention, to tell me whether he thinks that the girl I have described is getting the sort of care that he would want if he were responsible for a 15-year-old terminally ill child.

Mr. Hague

I shall decide on my own interventions. The hon. Gentleman is clearly unhappy with the budget that I have set. Will he tell us, then, by how much he would increase it?

Mr. Davies

I gave way to the Secretary of State because I had a particular point to put to him. I am sorry that he does not think that the care of a 15-year-old terminally ill child is sufficiently serious to deserve a serious and responsible answer. It is because of such cases that there is so much anger at the Government. They are quick enough to preach to others about personal responsibility; it is a pity that they do not recognise their responsibilities with the same alacrity.

The current settlement has two essential flaws. First, the 2.2 per cent. increase in aggregate external finance from £2.4 billion in 1995–96 to £2.5 billion in 1996–96 falls £26 million short of what is required to keep pace with the 3 per cent. increase in inflation.

Mr. Ian Bruce (South Dorset)

How much extra would the Labour party give Wales?

Mr. Davies

Secondly, although total standard spending increases by 3.1 per cent., from £2.7 billion to £2.86 billion, the proportion met by AEF falls from 88.6 per cent. to 87.8 per cent., a 0.8 per cent. drop.

Mr. Bruce

How much?

Mr. Davies

In practice, that is the transfer of responsibility from central to local government that was slipped out in an answer to my right hon. and learned Friend the Member for Aberavon (Mr. Morris). In a letter to him last year, the Secretary of State said: I believe that over time local authorities in Wales should raise a higher proportion of their income from Council Tax. The 11 per cent increase is the result of this approach. There are many local authorities in Wales that would relish the prospect of reducing their increase to 11 per cent., but far from protecting Welsh interests in the Cabinet the Secretary of State, like his predecessor, has set in train a deliberate policy of disadvantaging Wales vis-a-vis the rest of the United Kingdom.

Last year, Welsh council tax rose by 11.9 per cent. Mr. Bruce: How much?

Mr. Davies

Council tax in Scotland rose by 5.7 per cent., and council tax in England rose by 5.2 per cent. Hon. Members: Bye-bye.

Madam Deputy Speaker

Order. I do not think that the debate is greatly helped by somewhat childish demonstrations, which are not confined to one side of the House.

Mr. Davies

Now that the hon. Member for South Dorset (Mr. Bruce) has left, I am sure that the quality of the debate will improve.

This year, that unacceptable gap is widening still further. The Welsh average increase of 17.5 per cent. is much higher than the Scottish increase and more than double the figure that the Chief Secretary to the Treasury mentioned. We know, therefore, that it is now official Conservative policy to force council tax increases, and to force higher increases in Wales than elsewhere.

This year's average increase of 17.5 per cent. has more than wiped out the cut of 1p in the standard rate of income tax in the Budget. The council tax rises will cost Welsh taxpayers about £69 million extra this year. The Conservative party and Conservative party policies have failed Wales.

The dependency culture that has arisen under the Conservatives has placed increasing burdens on local authorities. Reliance on income support has increased by 81 per cent. That is the dependency culture, courtesy of the Conservatives. Reliance on housing benefit has increased by 54 per cent.—the dependency culture, courtesy of the Conservatives. Reliance on council tax benefit has increased by 107 per cent.—the dependency culture, courtesy of the Conservatives. Reliance on family credit has increased by 580 per cent.—the dependency culture, courtesy of the Conservatives.

Since 1979, Welsh local authorities have struggled valiantly to serve their communities. It is predictable that the settlement reflects the failure of Conservative policies, rather than Labour's aspirations for building for the future. Opposition Members hope that it will be a very long time before Wales is ever again served by such an incompetent and uncaring Government.

5.3 pm

Sir Wyn Roberts (Conwy)

The speech by the hon. Member for Caerphilly (Mr. Davies) was more remarkable for what he did not say than for what he said. He was on the horns of a dilemma, because much of the speech was devoted to more spending and his approval of that, but at the same time he was not quite sure how that spending was to be paid for. The hon. Gentleman seemed to react with horror to the idea of council tax increases, and so one can conclude that the only remedy in his mind to meet the high spending that he proposed was an increase in the aggregate external finance. That, of course, is composed of grant from the Exchequer—in other words, taxpayers' money—and money that comes from businesses in Wales. Therefore, the only conclusion that we can draw from the hon. Gentleman's remarks, which we did not hear, is that commercial rates would go up in Wales.

We should appreciate the full extent of the support given by central Government and businesses to local authority spending in Wales. My right hon. Friend the Secretary of State referred to the fact that 87 per cent. of the total standard spending is provided by the Exchequer and business rate payers. That amounts to some £864 a person in Wales, compared with 79 per cent. or £732 a person in England. Council tax payers in Wales have a head start of £132, which should not be disdained. Of course, that advantage recognises the different circumstances and needs that prevail in Wales. That advantage will be maintained, if local authorities keep their total spending down to the levels set by the Government.

As well as that advantage, we have the capping regime, which is designed to protect the domestic rate payer against excessive demands. We in Wales are very favourably treated, and long may that continue. I wonder how long it will continue, because there is clearly a change in the wind. During a debate on local government finance in England, the hon. Member for Holborn and St. Pancras (Mr. Dobson) said: The Labour party … would return the business rate … to local control."— [Official Report, 31 January 1996; Vol. 270, c. 1029.] Some of us remember the days when that was the case. Business people complained bitterly about the rate burden imposed upon them by Labour local authorities. Of course, the business rate was increased, as it was so much easier to sting businesses than domestic rate payers, because business people had fewer votes to cast at local government elections.

We did not hear a commitment to the return of the business rate to local control in Wales, but it was implicit in the speech by the hon. Member for Caerphilly. I have to warn him that there would be dire consequences for businesses. We remember only too well how local control of the business rate had an adverse effect on employment in the past, and there is every prospect that that would happen again in the future. Every commercial rate payer should sit up and take note of what might be in store for them.

If the business rate were returned to local control, there would be enormous disparities throughout Wales. The industrialised areas would be enriched, and the rural areas impoverished, unless there was a very substantial change in the grant system or agricultural land was rated. That is an idea that has never been far from the minds of right hon. and hon. Members of the Opposition, so the farmers had better sit up and take notice too.

The return of the business rate to local control is not the only change proposed by the Opposition. Again, I refer to the speech by the hon. Member for Holborn and St. Pancras, in which he proposed the abolition of compulsory competitive tendering. That can only mean, as my right hon. Friend the Secretary of State suggested, increased staff for local authorities and increased costs for council tax payers. That is what will happen. It is all spelt out in the document entitled "Renewing democracy, rebuilding communities", which was issued by the Labour party.

It is not surprising that Opposition Members are minded to change current council tax bands and to abolish the restraint on local authorities that is provided by the capping procedure. The Welsh electorate can contemplate council tax rates soaring under a possible future Labour Government to whatever heights our local masters think appropriate, subject only to the Secretary of State's reserve capping powers, which are to be used only when all else has failed.

I was interested when the hon. Member for Caerphilly made an offer to my right hon. Friend the Secretary of State to put a lid on some of the abuses by local authorities that my right hon. Friend reeled off. The hon. Gentleman offered to assist. What power does he think he has as an Opposition spokesman for Wales? He has no power, and local authorities in Wales can tell him to go to kingdom come.

Mr. Ron Davies

I suggested to the Secretary of State—it was noticeable that he did not respond—that he should follow the example set by his Cabinet colleague, the Secretary of State for Scotland. There is a mandatory scheme in Scotland. I told the Secretary of State that, if he were minded to introduce appropriate legislation, the Opposition would assist its passage through Parliament.

Sir Wyn Roberts

We are talking about directly elected authorities. Surely there is a tradition in Wales that our elected bodies are responsible, and primarily responsible to their electors.

Mr. Davies

Get away.

Sir Wyn Roberts

I hear what the hon. Gentleman says. Is he referring to the record of Labour local authorities in Wales? Is he not proud of that record? Does he think that there is a great deal to be criticised about the behaviour of his directly elected local authorities in Wales? Does he think that we must take mandatory powers to restrain them?

Mr. Davies

The answer is simple. If the Secretary of State is so concerned about abuse, why does he not do something about it? My party's position is clear. If there are abuses after the next election, Labour will act to stop them.

Sir Wyn Roberts

I am glad to hear that.

There should not, of course, be the abuses that we have heard about. Local authorities are directly elected and they should behave responsibly. The hon. Gentleman and the Labour party clearly have in mind a considerable increase in local authority spending. They are doffing their caps to higher spending. I hope that council tax payers in Wales will take account of that.

We are discussing an important statement for local government in Wales, it being the first for the new unitary authorities. There should be a saving as a result of reducing two tiers of local government to one. I am sure that there will be a reduction in due course. I am glad that my right hon. Friend the Secretary of State has been able to increase the permissible spend by about £85.6 million, or 3.1 per cent., for next year. I am grateful for the transitional funding that he has provided. My guess is that the new authorities will do well and make a good fist of their responsibilities in time.

Unfortunately, the new authorities have a cloud on their horizon in the shape of the Welsh Assembly that has been proposed by the Opposition and confirmed last night by the right hon. Member for Sedgefield (Mr. Blair), the leader of the Opposition. If the unitary authorities are to have their financial allocations decided by the assembly, I can foresee endless troubles ahead. It will be devil take the hindmost—in other words, devil take the worst represented, sparsely populated rural areas.

The equality of treatment secured in Wales by the complicated formulae that are before us will disappear before the massed ranks of the assemblymen from the heavily populated areas. Couple that with the disparity caused by local control of commercial rates, and we have a scene set for civil strife such as we have not seen since the middle ages. If we in the north suffer too much in the proposed scenario, I am sure that we shall produce our Owain Glyndwr, who will take over Caerphilly castle and throw out the robber baron.

The mind boggles at the prospect of the proposed assembly dealing with local government expenditure throughout Wales. Unfortunately, however, the prospect is real enough, as is the unfairness that may result. My right hon. Friend and his officials at the Welsh Office hold the balance between authorities. They are there to ensure fairness in the distribution of resources throughout Wales.

I ask a key question, which I hope the hon. Member for Caerphilly will answer: who will perform the function that I have described if we have an assembly to rule us? If the hon. Gentleman cannot answer the question now, I hope that he will at least give it some consideration. The assembly will be an extra tier of government, and extra tiers do not come cheap. It will have to be paid for in some way, probably with money that might otherwise be spent on local Government services, or perhaps on the health service. Both areas are major consumers of Welsh Office money.

If we are to have an all-Wales dimension to local government, there is much to be said for developing the role of the unitary authorities. We have already established by statute the consultative council that has responsibility for local government finance, with which my right hon. Friend the Secretary of State discusses resource issues in advance of a settlement. Possibly these discussions need to be amplified. In that context, perhaps there should be greater scope to deal in more detail with specific responsibilities such as education or social services. That is one possibility. It would not be impossible to devise a similar forum for the health service.

We carry responsibility. Whatever happens in local government must be reconciled with our parliamentary system, which must always have ultimate responsibility to the electorate. We would be foolish to try to escape that responsibility by foisting it on others.

We shall hear a great deal about particular needs that should be met, and needs that will have to be paid for. I was delighted to hear the announcement by my right hon. Friend the Secretary of State about Theatr Clwyd. We must remember that those who demand more spending object to council tax increases in the same speech, and almost in the same breath. More expenditure seems to be fine providing that someone else is paying for it. I hope that that is not our approach in our private lives. Unfortunately, it is one that some of us seem to regard as acceptable in our role as public advocates.

The settlement is fair and as sound as we could wish it to be. It represents a challenge to the new authorities to secure good value for the money that the Government, through the taxpayer, have given them.

5.19 pm

Mr. Barry Jones (Alyn and Deeside)

I am glad to follow the right hon. Member for Conwy (Sir W. Roberts), but I disagree with his master classes. My speech will be briefer than his.

There are many large aging council estates in my constituency and they need urgent regrading, upgrading, modernisation and repair. Built before and after world war two, they are in real need of investment. In the townships of Buckley, Saltney, Shotton, Garden city and elsewhere, windows, doors and roofs are rotting away. My constituents increasingly despair of the situation. Alyn and Deeside district council has a good housing record, but its problems, as I have seen when visiting the localities, are very real indeed, and the new Flintshire county council will inherit them.

The terrible cold and ensuing damp, and the mountainous snow and a chilling cold wind have turned my constituents' homes into iceboxes. The cold is literally making some of my constituents who are trapped in their houses ill. I know of distraught mothers who feel that they cannot let their youngsters sleep in bedrooms that are without central heating. The wind and frost penetrate their rooms. Mould grows on the walls of the bedrooms and ice forms on the windows.

Any youngster prone to asthma or any bronchitic disorder does not need those conditions, and neither do elderly tenants who are prone to arthritis. Hundreds of my most respectable constituents dread winter's advance, particularly after the terrible weather that we have had. They are in severe difficulties. In less serious conditions, I have received petitions from constituents in the townships.

Will the Secretary of State give serious consideration to the release of council house sales receipts that have accrued in my local authorities, as the authorities wish to invest them only to bring relief to the beleaguered families that I have described? It would be a powerful intervention if the right hon. Gentleman did that. If he does not do that now, will he do so in the near future?

In terms of the schools service, will the Secretary of State undertake to fund the teachers' pay settlement in full? If he were to say that he will do that, the new unitary authorities would be more confident that they could tackle the real problems that they know that they will inherit. I do not wish to see emergency meetings of school governors and parent-teacher associations desperate to bail out their local schools from the financial problems that they envisage. Nor do I want pupils with special needs to lose. I note the point that my hon. Friend the Member for Caerphilly (Mr. Davies) made. All of us could give examples of these problems.

I do not want any youngster with special needs to lose as a consequence of the defects of this settlement. I do not want even more pressure to be put on class teachers, who are groaning under the incessant demands of Ministers issuing their latest and ever more demanding curriculum fiats. It is time for Ministers to stop putting the pressure on class teachers. They do a good job. They are doing their best, and the Government have gone too far. Stability is needed and it is time for the Government to rest their case for further change. The morale of class teachers is very low, so the chance of our children getting the best start in life is diminished.

It is the fate of the new unitary councils to start their uncertain lives desperately short of money. It is a very cynical scene that they inherit.

Mr. Nigel Evans

Will the hon. Gentleman give way?

Mr. Jones

No, I hope to conclude shortly.

It is a cynical scene. Grants will be cut. The council tax is certain to go up, and will do so in a big way. Services to our constituents—the taxpayers—will be cut. Labour Members know that Ministers on the Treasury Bench have not delivered a top-class financial settlement. We believe that they must take responsibility for these serious shortcomings, and at the very least, to help our new councils, undertake to pay the teachers' salary increase in full.

In an election year—that is what we are looking at in the new financial year—the Government expect the councils to carry the blame for the large increases in council tax. In my view, the new Flintshire county council deserves better from the Government, and the large-scale increases in the council tax will surely be seen at home in our constituencies as the consequence of inadequate ministerial allocations.

5.26 pm

Mr. Walter Sweeney (Vale of Glamorgan)

First, in reply to a point made by the hon. Member for Alyn and Deeside (Mr. Jones), who seemed to be following the precedent set by the hon. Member for Caerphilly (Mr. Davies) in not taking interventions, I should point out that there is a clear trade-off between the level of teachers' pay and the number of teachers who can be employed. That is the economic reality of the education budget, and we ignore it at our peril and to the detriment of our education system.

The hon. Member for Caerphilly clearly believes that interventions can be accepted only from hon. Members who represent Welsh constituencies; yet he refused an intervention from me and subsequently took one from my right hon. Friend the Secretary of State, so there was a certain illogicality there. He then used my right hon. Friend's intervention to argue with something that my right hon. Friend had not said. By that stage I was becoming a little confused by the hon. Gentleman, and not for the first time.

The hon. Member for Caerphilly did not like my right hon. Friend's reference to a Labour authority wasting money on a new mayoral chain when the outgoing authority had a perfectly good chain that could have been used. Perhaps that performance by a new Labour authority—I suppose that they are all new Labour authorities these days—can be contrasted with the new Labour authority in Vale of Glamorgan, which is abolishing the mayoralty entirely. Meanwhile, the Leader of the Opposition appears to be espousing the concept of super-mayors. I am not quite sure whether it is new Labour to abolish mayors, buy them new chains or create super-mayors, but no doubt things will become apparent when Labour policy develops in due course.

With regard to rate support, I believe that the settlement is a very good one, against the background of the Government's determination to limit Government spending to a level that the taxpayer can afford. In Wales, we seem to be doing particularly well out of this: total standard spending is up by 3.1 per cent. in 1996–97.

As I am particularly concerned about the level of police funding, I am pleased to learn that the Dyfed police grant has risen by 4.9 per cent. since 1995–96, to £24.2 million. The Gwent figure of £31.3 million represents an increase of 4.5 per cent., and the North Wales figure of £34.7 million an increase of 5.1 per cent. I have saved the best till last: South Wales has been given £75.2 million, an increase of 5.4 per cent. The increases were even larger last year. The South Wales police benefited from a 15 per cent. increase, and the further increase of 5.4 per cent. is clearly good news, notwithstanding what was claimed from the Opposition side earlier.

Mr. Alex Carlile (Montgomery)

As the hon. Gentleman is talking about the police, will he give us his opinion of Government policies which have led to a reduction of 1,333 in the number of police officers nationwide since 1992, when an increase of 1,000 that year had been promised?

Mr. Sweeney

In my area, the reduction in real-terms spending on the police is attributable to the three Labour-controlled county councils which provide the membership of the South Wales police authority. Significantly, since the Government hypothecated spending on the police in Wales the police have received a substantial increase in funding. If those Labour authorities had complied with Home Office recommendations on police funding levels, police funding in Wales would not have fallen behind in that deplorable way.

As a general principle, I think it right for local authorities to decide their own spending priorities. However, because of the Labour party's woeful neglect of spending on the police in Wales—which was against the interests of all Welsh people and a good illustration of Labour's being tough on crime in its rhetoric but soft on crime in reality—the Government had no alternative but to hypothecate spending on the police to develop the improved police force that Conservative Members are determined to achieve.

Total standard spending in Wales this year is £984; in England, it is £922. The aggregate external finance is £864 in Wales, and £832 in England. That shows that the Conservative Government see spending in Wales as a priority if services are to continue to improve. It is unfortunate that so many of the local authorities are Labour controlled as the public are not receiving the full benefit of the money because the Labour party is more interested in mayoral chains and increasing councillors' allowances than in improving efficiency and the quality of services.

Although the council tax is likely to rise substantially in Wales, it will still be much lower than it is in England. That will be worth remembering when people receive their council tax demands.

Mr. Touhig

Does the hon. Gentleman share the apparent triumph with which the Secretary of State announced this afternoon that he would place a 25 per cent. ceiling on increases? Without the extra help that the Secretary of State has now offered, council tax in my part of the Caerphilly county area would have risen by 68 per cent. What sort of settlement is that?

Mr. Sweeney

The hon. Gentleman has made an interesting point. I infer from what he said that he would like central Government to impose a lower limit on council tax increases. That would considerably reduce Labour local authorities' freedom. I am surprised to hear such an argument from the hon. Gentleman.

Mr. Ainger

Will the hon. Gentleman give way?

Mr. Sweeney

No, I have already given way three times—unlike some Opposition Members.

Let me make a political point about capping. In the interests of all the people of Wales who pay council tax, my right hon. Friend the Secretary of State has maintained a capping system. As a Conservative, I wonder whether it might have been a better political move for our Government to do away with capping for this year only in the run-up to the election, thus demonstrating to all the electors in Wales how much Welsh local government spends when it is run by the Labour party. They would then have a good idea of what they could expect under a Labour Government.

My right hon. Friend, however, is too responsible to act in that way. He is intent on protecting the Welsh people against the profligacy of Welsh councillors. Having made my political point, I accept my right hon. Friend's judgment; but I hope that the Welsh electorate will give careful consideration to the implications of Labour demands for the relaxation or abolition of capping. If such action were taken, our council taxes would go through the roof.

The total level of standard spending is tough but realistic. When the poll tax was introduced, Labour local authorities used it as an excuse to raise spending, knowing that they could then falsely blame the Government for the increase in poll tax bills. That is why capping should continue. I would not like the Conservative Government's reorganisation of local government—with widespread cross-party support—to be used as something with which to bash the Government over the head. As it is, local authorities will be under pressure to be careful about how they spend and which services they support.

The hon. Member for Alyn and Deeside rightly stressed the importance of education. I welcome local authorities' continued freedom to give priority to education spending. Returning to the subject of the police, I warmly welcome what my right hon. Friend said—

Mr. Win Griffiths (Bridgend)

He has said that already.

Mr. Sweeney

It is worth repeating. [Interruption.]

Madam Deputy Speaker

Order. There is too much running commentary from the Opposition Benches.

Mr. Sweeney

It is worth repeating, because I have another point to make about the police. The funding formula for police pensions has been changed: the Government have increased the allocation to 12 per cent. of available funding. That will help to allay police fears about their pensions. The new sparsity element in the funding formula will help the police to cater for the special needs of isolated, thinly populated rural areas.

More support for local government expenditure, which Opposition Members presumably ask for—although they have not been prepared to specify how much additional expenditure they advocate—would have meant cuts in other Welsh Office projects such as those on health. Presumably, Opposition Members would not have wanted any such cuts yet that is the logic of their request.

Changes in the draft notional amounts may have adversely affected the Vale of Glamorgan compared with Cardiff. I should be grateful for an assurance from my hon. Friend the Minister that nothing that has been done in amending those amounts will unfairly prejudice my constituents in the Vale of Glamorgan.

I congratulate the Government on today's statement by my right hon. Friend. He has produced an excellent deal for Wales.

5.40 pm

Mr. Alex Carlile (Montgomery)

I offer you, Madam Deputy Speaker, what I hope you will agree is a sincerely felt apology for a kindly but inappropriate gesture as a Conservative Member was departing from the Chamber—a Member representing a non-Welsh constituency. There is, however, a good deal of frustration among Opposition Members at the efforts of Members who represent English constituencies to intervene in debates concerning Wales alone. Even the hon. Member for Ribble Valley (Mr. Evans), who has impeccable personal Welsh credentials, attempts to intervene as a Welsh Member of Parliament manque in such debates. If he wishes to be not a manque, but a real Welsh Member of Parliament, he should attempt once again to be elected to represent a Welsh constituency, although I doubt whether he would succeed.

The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones)

Will the hon. and learned Gentleman give way?

Mr. Carlile

Of course I will give way to the Minister's brief on the Front Bench.

Mr. Jones

I feel I have been promoted, but I am grateful to the hon. and learned Gentleman for giving way. If he has an apparent prohibition on non-Welsh Members speaking in the debate, I am curious why he ducked last year's debate and sent the hon. Member for Newbury (Mr. Rendel) to substitute for him?

Mr. Carlile

The hon. Gentleman knows that, in these debates, time is at a premium and that it is extremely unhelpful if Back-Bench Members—

Madam Deputy Speaker

Order. As time is at a premium, it would be more appropriate if the subject in hand were dealt with rather than the question of whether Members of Parliament should or should not put forward their names. Everyone knows that all are equally free to do so.

Mr. Carlile

Of course I will not pursue the matter, Madam Deputy Speaker, save to say that it is extremely important that Welsh Members should have the first opportunity to speak in these debates. Those of us who catch your eye, Madam Deputy Speaker, are those who are called. I should like to discuss the position in the Powys unitary authority in the next 12 months. I hope that the Secretary of State for Wales and the Minister replying to the debate will agree that that authority is not smitten by political prejudices of one sort or another. It is politically independent and is attempting to do an honest job and to provide as good a level of service to its inhabitants as possible.

Powys unitary authority is a victim of the use of what appears to be an outmoded formula in the complex circumstances of the reorganisation of local government in rural mid-Wales. In real terms, the real loss to the authority for the forthcoming year is £4 million. That money must be cut from somewhere. It will be from services that affect people. Will the Minister tell the House and the people of Powys why the Government are not only forcing a substantial increase in council tax—although, in Powys, that will be limited to about 20 per cent.—but accompanying that with a cut in services? What services will be cut?

The first thing that Powys county council has sought to cut is administration. It has succeeded in removing £2.5 million from its administrative budget. One's first reaction to that might be to say, "That is very good. We can do without a layer of administration. That is a real saving and it will not affect the services to people." But that is not true. A £2.5 million cut in administration costs in a rural county such as Powys means a significant reduction not only in jobs in local government, but, almost certainly, in the efficiency and response of services provided to local people.

It is one of the facts of political life that Welsh local authorities have little discretion. I do not applaud a position in which central Government give Welsh local government so high a proportion of its expenditure that they have local councils by the throat. I would much prefer a different local government financing mechanism.

We are faced, however, with the current mechanism. That means a reduction not just in jobs as a result of those administrative cuts, but in other services. In my constituency, there is a bridge that is used by school buses, agricultural vehicles and other traffic. Without notice, it was closed and, overnight, its weight limit was reduced. Now, neither lorries nor school buses can go over it. As a result, buses taking children to school must make a 21-mile detour twice a day. That has led to well publicised and not in the least surprising protests by parents of children who travel on those buses. Meanwhile, the highway authority says that it had to reduce the bridge weight limit to make it safe, but that it cannot give any idea of when the bridge will be repaired.

In the vicinity of Garthmyl, near Montgomery in my constituency, a metal Bailey-type bridge has stood for the whole of the 16 years that I have lived in Montgomeryshire and, I believe, for about 20 years before that. There is no answer as to when that will be repaired. The highways budget, which is extremely important for people's mobility in a rural area such as mine, should not face such privation.

I will give two further examples of services that are bound to be cut. The trading standards authority, which is extremely important in rural Wales because of the animal health provisions that it has to enforce, faces severe financial restrictions. Obviously, animal welfare and health take priority for that authority. As a result, virtually no money will be left for the other trading standards functions.

In education, it is inevitable that, as elsewhere in Wales, the increase in teachers' salaries, which teachers merit—many of them do not have the professional status that they deserve compared with other professions and occupations—will mean that class sizes will increase. As a result, schools will not be as good. We are lucky: we have good schools in rural Wales, but why—because the Government do not give them funding—should there be a reduction in education standards and an increase in professional dissatisfaction among teachers?

I do not want to take up any more time. I have merely given some examples of the sort of cuts that will have to be made even in a county about which no Minister can make accusations of political prejudice, or have preconceptions on political lines.

That is what is happening in Wales, as objective judgments show. That is what is happening in rural areas where politics plays no major part in the making of spending decisions. That simply is not good enough—for rural Wales, at least. Ministers must try to find a new and fairer formula which takes sparsity and rurality properly into account.

5.49 pm

Mr. Nigel Evans (Ribble Valley)

I am grateful for the opportunity to take part in this important debate, and also for what the hon. and learned Member for Montgomery (Mr. Carlile) said about my Welsh credentials. I do indeed feel fully qualified to make what I hope may be a useful contribution to the debate.

The most significant aspect of the speeches by Opposition Members was especially true of the speech by the hon. Member for Caerphilly (Mr. Davies). It was, as my right hon. Friend the Member for Conwy (Sir W. Roberts) pointed out, the fact that the hon. Gentleman signally failed to answer the simple question that the Secretary of State asked him—if the Labour party is unhappy with the settlement, how much more money would a future Labour Government provide?

That was a simple question, and although the hon. Gentleman did not allow me to intervene on him, I should be more than happy to allow him to intervene on me now, if he is prepared or able to tell a listening nation how much extra money Labour would give. Am I speaking slowly enough? Is the question simple enough? No.

The time that I spent listening to the hon. Gentleman's speech was one of the longest 18 minutes of my life, because in all that time he said so little. He carped a lot, but failed to answer the questions. I do not know whether he has ever been on "Question Time" on BBC television, but if he did appear on that programme it would be a dull affair, because members of the audience would ask the questions, but he would fail to answer them. He is not even prepared to come to the Dispatch Box now.

I was a county councillor in Wales for six years, and I also have a retail business in Swansea. I have lived 34 years of my life in Wales. When I was on the county council, we had consultation periods for business men to come to the local authority and plead with us to keep the business rates as low as we could. When business rates shot through the roof, those businesses, many of them operating at the margins, found it difficult to find the money from their profits.

What a farce that consultation exercise was for many of the business men. After they had made their plea and explained to the leaders of the local authority the problems their businesses faced, and the difficulty that they would have in finding extra money to meet the bills, the local authority put the business rates up through the roof. That was a tremendous slap in the face for local businesses in difficult circumstances.

I am delighted that control has now been taken away from local authorities, to prevent those businesses, which were making such great efforts and providing jobs in Wales—and throughout the rest of the country—from being penalised. They are, of course, the lifeblood of many small villages.

A lot is said about levels of council tax, and we have heard much carping from Opposition Members. However, council tax rates are much lower in Wales than in England; they are certainly lower in Wales than in my constituency. It is also fair to say that, if areas were represented by Conservative-controlled local authorities, their council tax would be that much lower than if they were run by Labour authorities, as many now are. My advice to people in Wales is to reconsider what local authorities spend on their behalf, and at the local elections to choose Conservative councillors, who will spend their money efficiently.

I saw much wasteful expenditure when I was on West Glamorgan county council—

Mr. Paul Flynn (Newport, West)

Will hon. Gentleman give way?

Mr. Evans

No, I shall not, because I tried to intervene several times on the hon. Member for Caerphilly and others, and was told that I could not do so. I am simply doing exactly the same to Opposition Members. The sooner they stop carping, the sooner I shall finish my speech, and they will have the opportunity to have their say.

Mr. Alan Williams (Swansea, West)

Will the hon. Gentleman give way?

Mr. Evans

I shall not give way. The right hon. Gentleman—

Mr. Williams

On a point of order, Madam Deputy Speaker. In interjections and during his speech, the hon. Member for Ribble Valley (Mr. Evans) has referred to the constituencies of my hon. Friends and myself. I am sure that you will agree that it is a normal courtesy that, when a Member refers to other Members' constituencies in the House, especially if he makes political points about them, he should then give way to one of the local Members.

Madam Deputy Speaker

That may be a courtesy, but it is not a requirement.

Mr. Evans

I am grateful to you, Madam Deputy Speaker—[Interruption.] I tried to intervene several times during the debate. The right hon. Member for Swansea, West (Mr. Williams) came into the Chamber only recently. He has not been here for the entire debate, although I am sure that he has good reasons for not having been here. I am not prepared to give way to him now.

We have heard some horror stories about local authority expenditure, and of course I saw what happened when I served on the local authority in West Glamorgan. Expenditure on chains of office, new buildings and councillors' allowances was appalling. Last year, I condemned the members of Mid Glamorgan council for trying to put their expenses up through the roof in a disproportionate manner. Their snouts were firmly in the trough.

The Labour party may talk about fat cats, but I can talk about the fat cats of Wales—and they are not in business but in Labour-run authorities. The Labour party should do all in its power to condemn local authority members for trying to increase their expenses.

Mr. Alan Williams

On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker

I trust that this is a genuine point of order.

Mr. Williams

It is, Madam Deputy Speaker. The hon. Member for Ribble Valley is utterly misusing the procedures of the House of Commons by making snide and pathetic attacks on people who cannot defend themselves, and then being afraid to give way to those who seek to defend them.

Madam Deputy Speaker

That is not a point of order for the Chair.

Mr. Evans

Thank you, Madam Deputy Speaker. I hope that that was not the intervention that the right hon. Gentleman attempted to make before. If it was, I am delighted that I did not give way to him.

As for education expenditure, I hope that local education authorities will pass the money to the schools to spend, and not keep any of it back for central administration. It was instructive to hear Opposition Members talking about cutting services. They talk about front-line services, and about the customers who will suffer if they lose those services, yet not one of them talked about cutting administration and central bureaucracy.

My advice to Labour-run local authorities is to re-examine their internal running costs, as everybody has had to do, and to find ways of improving efficiency as much as they can. They should not make local service customers suffer simply to make a political point. There was a 45 per cent. increase in expenditure on nursery education between 1979 and 1994, and a 54 per cent. increase in expenditure on secondary education in Wales over the same period.

However, the increase in expenditure is not the only important factor. Also vital is the testing that goes alongside the education that young people receive. The Labour party opposed that policy, and also the introduction of the national curriculum, which is improving standards all the time.

I was pleased to learn of the extra expenditure on law and order. On top of the extra 11 per cent. last year, that is excellent news, especially considering the fact that, when the Labour party was in power, spending on the police was one of the categories that suffered greatly.

I hope that the extra expenditure will result in more police on the beat, particularly in rural areas, and the utilisation of new technology, such as closed circuit cameras, which are extremely useful in reducing crime. I hope also that there will be a continuation of the civilianisation of office posts, which will release policemen and policewomen and enable them to go back on the beat.

Compulsory competitive tendering in local authorities has made authorities far more efficient, and has resulted in those authorities being able to save money to spend on services for local people. The Labour party is totally opposed to that policy, and would chuck out a policy that has saved many millions of pounds while providing excellent services to local people. Labour would replace the system with expensive in-house bids, from which the public would not benefit. That is a spiteful and dogmatic move by Labour that is not in the best interests of Welsh people.

My right hon. Friend the Member for Conwy posed an important question about Labour's pledge to introduce an assembly. We know that there are no current plans to provide a Welsh assembly with tax-raising powers, such as are envisaged for the Scottish assembly. Labour Members who believe in the principle of an assembly ought to ask why a Scottish assembly will be allowed to raise tax, while the Welsh will not be trusted to do so. Having seen the way in which Labour local authorities operate in Wales, I can fully understand why the Labour party is scared of allowing a Labour-run assembly—as Opposition Members would probably see it—to raise taxes.

In conclusion—[HON. MEMBERS: "Hear, hear."] I am glad that Opposition Members are enjoying my speech. The speaker who follows me from the Opposition will have an opportunity to tell the House how much extra money he wants to see being spent in Wales, and where he would get that money from.

6.1 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

In reply to the hon. Member for Ribble Valley (Mr. Evans), there are one or two things that my party would do to save money and put it into local government. We would not be paying for nuclear arms for one thing, and we would not be stuffing money into the pockets of people on quangos for another. We would review the operation of the standard spending assessment, which works to the detriment of many councils in Wales. I have no doubt that we would look at other matters over time.

The Secretary of State announced on 18 December: the revenue settlement for local authorities for 1996–7 is a fair one in the current climate". In his press release—in the Welsh Office, government is by press release now—he said that it was based on his view of what the real needs of local government were at the appropriate level. I believe that either he or every single council in Wales is absolutely wrong.

In his apologia for the settlement, he prayed in aid— again by press release—the notion that there would be more use of the private finance initiative, with £360 million of capital investment being produced in the next three years. Where on earth did he get that figure from? If it was conjured up by his merry band at the Welsh Office, he should be circumspect about quoting it.

For example, the Welsh Office recently astounded the new Denbighshire authority by using an inaccurate measurement of the length of roads in the authority. That affected the authority's SSA, and the Denbighshire authority is currently £600,000 out of pocket. So much for a careful evaluation of the spending needs of Welsh local government.

The overall situation in Welsh local government is that authorities feel that they cannot make any further cuts. The latest settlement is again a substantial cut in real terms. It comes after four years of cuts, and authorities now have virtually nothing left to cut. Let us examine the evidence. I referred to Denbighshire, and that authority is very concerned that precepts from the new fire authority—imposed on Denbighshire by the Government—will be very heavy.

The authority is concerned about the spiralling cost of reorganisation. Those of us who served on Committee on the Local Government (Wales) Act 1994 warned the Government that their figures for the cost of reorganisation were pie in the sky. Here we are again—1974 revisited. The new authorities are being burdened by crippling debts.

In a parliamentary answer, the Minister of State said that £41 million-plus was being allocated for 1996–1997 to cover a proportion of councils' expenditure on compensation, accommodation and information technology."—[Official Report, 5 February 1996; Vol. 271, c. 55.] I do not know where the figure of £41 million comes from, but I hope it is not from the same person who worked on Denbighshire's SSA. The Welsh Office is now graciously saying that councils can spend £41 million of their own chargepayers' money to offset part of the cost of reorganisation. In fact, the Welsh Office does not have a clue about the total cost. It is in the dark—as is everybody else, unfortunately.

This is another abject display of the failure of the Welsh Office adequately to provide for the needs of Wales. The huge rise in the cost of community care has clearly not been adequately addressed by the Government. The increase in the 1996–1997 settlement on last year's is only 1.8 per cent., while the Government's own figures forecast that prices will rise by 2.5 per cent, resulting in a further squeeze on local authorities.

My authority, Caernarfonshire and Meirionnydd—soon to become Gwynedd—has been allocated £365,000 extra cash, leading the council to the inescapable conclusion that it must cut services substantially and impose large increases in council tax for 1996–1997. The current settlement is, in fact, a 1.3 per cent. reduction compared with the 1995–1996 budget. By applying the standstill budget—which comes into effect after four years of cuts—the budget exceeds the capping limits by £2.66 million.

Therefore, my local council has basically three operational choices. First, it can cut services. That will mean closing rural schools and leisure centres, and making teachers and those in social services redundant—workers in both those sectors, I might add, do splendid work, and are already at full stretch. Secondly, it could capitalise its revenue expenditure, and that could obviously entail the deferment of much-needed capital projects. Thirdly, it could use some of the balances. The amount available in Gwynedd will not be known until September, but in any event it will only defer the need to cut, and may give a skewed budget figure to work on next year. Incidentally, such a move would produce an artificially low level of council tax, and would defer the need for a more substantial increase.

There is no doubt that this council's dilemma is typical in Wales. Basic services are under threat, and no one should be under any illusion about who is at fault. In their craven urge to hold on to power, the Tory Administration are happy to cut services for the young and the elderly— and leisure, education, community care and social services, and public transport—while voting for a tax-cutting Budget.

Let no one forget also that the Labour party acceded to the cuts. By allowing the Tories to cut income tax, Labour concurred with the Government's local government cuts. Any fool can realise that these must be paid for, and it is a shame that Labour did not adopt a principled approach, like my party. When Labour councillors blame it all on the Government, they should think again about what Labour should have done—and perhaps, in days gone by, would have done.

Mr. Ron Davies

The hon. Gentleman will accept that the Labour party voted against the Budget that cut income tax last November.

Mr. Llwyd

A handful of Labour Members did, but officially Labour did not.

Mr. Davies

I want to make it absolutely clear that the Labour party officially voted against the Budget last year.

Mr. Llwyd

I beg to differ. The Labour party abstained on that vote—a few of the more principled Labour Members went through the same Lobby as I did. But I will leave it there for the time being.

Anglesey county council has had its planned spending capped at £61 million—a cut of £2 million on last year's budget. Again, there will be cuts. Carmarthenshire county council is facing a difficult future. The options being discussed include cutting the repair and maintenance of schools, increasing the cost of school meals, and shutting training centres. In addition, there is a real threat to teaching jobs. A 3.5 per cent. reduction, which is what they are facing, could mean cutting 68 teaching jobs. In Rhondda Cynon Taf, there is talk of increasing the cost of transport to schools and school meals, closing nursery schools, cutting the maintenance programme, closing small schools and reducing clothing and other grants.

So how can the Secretary of State honestly and sincerely state that his main priority has been to increase investment in schools? He says that Wales benefits from the success of our economic policy along with the rest of the UK, but how can that be, when the overall capital package for Welsh local government has been cut by £17.5 million, with cuts in housing, roads and transport, in strategic development schemes, and in personal, social and all other services? How can those cuts honestly relate to a so-called booming economy?

The paltry increase in the education budget will have no effect on the strangulation of local authority education. That disgraceful emaciation is made even worse by the fact that some £6.6 million is being allocated for the ideologically driven, elitist, popular schools initiative—in fact, £2 million more for that initiative, rather than an overall increase for the whole of the education budget.

That is where the Government's priorities lie. No doubt they will blame education standards on whichever political hue they target at the time. That the Government have set their face against local government is accepted by all. Surely the settlement is excellent evidence for that. I regret saying it, but I have no doubt that class sizes will increase, teacher numbers will decrease, public transport will be cut, and social services will undoubtedly suffer a hefty cut. Libraries will close, leisure centres close or be run part-time, and even residential homes will close. Those evils, and many more, will follow this settlement, as night follows day.

In Aberconwy Colwyn, for example, the story is much the same. I received a plea from the Aberconwy and Colwyn women's aid group last week. Despite the amount of work it is doing, and the huge and regrettable increase in demand for its work, that work is in peril, and its very existence brought into question.

The imposed cuts by the Welsh Office will risk the lives of some people. What is even more sure, they will affect the quality of life for tens of thousands of people throughout the length and breadth of Wales. The Secretary of State says that he has thought carefully about the settlement. I say to him, "Think again," and the people of Wales say, "Think again."

The settlement is unworthy, and an insult to Wales. It is small wonder that the Conservatives fared abysmally in the recent local government elections. They probably feel that they have nothing to lose by starving local government in Wales, but the people of Wales will not allow the wool to be pulled over their eyes any longer. The Government will pay heavily for their cynical approach to the delivery of vital local services. Of late, there has been talk of a Tory-free Wales. Surely that speculation must become a reality within the next 12 months.

6.13 pm

Mr. Barry Field (Isle of Wight)

I cannot follow the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and allow him to get away with that. I served on the all-party Select Committee on the Environment, and when we considered standard spending assessments, we found a degree of objectivity in them and that they were not slanted towards the political control of any authority. The hon. Gentleman knows as well as I do that, in the past 20 years, local government has no longer been seen as being government locally, but as a method and vehicle for bashing central Government and, in many cases, as a device for entering this House. A look through the antecedents of many hon. Members will show that there has been a considerable rise in the past 20 years in the number who were councillors, including myself. Sadly, instead of serving their local communities as they used to do—they had a great and proud history—councils have become highly politicised branches of their local parties and are more interested in carping against central Government than in delivering high-quality services to their local council tax payers.

I am taking part in this debate because Welsh Members often argue that there should be so much lower council tax charges in Wales because of pay levels and the general gross domestic product in that area. I refer my hon. Friend the Minister to a written reply in column 118 in today's Hansard. The reply sets out—I do not know whether similar comparisons are available for Wales—the number of normal, basic rate and higher rate taxpayers in every county in England. He will not be surprised to learn that the Isle of Wight is at the bottom of that league.

Having had a lot to do with Wales, particularly when the Isle of Wight unfortunately lost a company which relocated there, I guess that the hon. Gentleman will find that Wales is much higher up the list of averages than many areas in England. Indeed, we learn from the settlement tonight that there is almost a £200 difference for a band D property in Wales, compared with England. That is the subsidy that English taxpayers are putting into Wales. I do not think that that can be justified. Welsh Members regularly tell us that that reflects the lower price of property, to which I say again, make the comparison with the Isle of Wight. I do not think that that argument holds water either.

My hon. Friend the Minister who will reply to the debate may not know—it is probably a well-kept secret— that, until the advent of unitary authorities, the Isle of Wight used one of the Welsh authorities as a comparison, as a typical authority of a similar size for statistical purposes. In every case, we found that, by and large, the Welsh Office was doing better for Welsh authorities than we expected with our English settlement.

We have heard much from Opposition Members about capping, but Welsh Office expenditure on local government amounts to 45 per cent. of its total expenditure. That tells me that the Secretary of State for Wales is certainly not ignoring local government as the Opposition have suggested throughout the debate, but giving it a fair deal out of his total budget for Wales.

I hear the argument about capping propounded by hon. Members on both sides of the House these days, but hon. Members should remember that about a quarter of total expenditure in the United Kingdom goes on local government. There is no way that one could let that rip if one is serious about inflation and wants to keep it under control as this Government do.

With his experience of Wales, my hon. Friend the Minister made a very good case on the uniform business rate. Will my Front-Bench colleagues tell me why, when it was enshrined in the uniform business rate legislation that it was designed to help manufacturing industry and is required to do so, we do not continually stuff that fact down the throats of the Opposition? For years, all that we heard from the Opposition was, "What are the Government doing for manufacturing industry?" The uniform business rate has been one of our greatest successes, especially where, as around the borders of Wales, businesses in high-rate areas were often siphoned off into nearby lower-rate areas. That compounded unemployment. I know that from my experiences on the Isle of Wight.

One helpful thing about the uniform business rate is that it has created uniformity for businesses. More than that, it allows Welsh business men to plan ahead when they draw up their budgets. The sad fact is that rates are the one form of taxation that have to be paid whether the business is making a profit or a loss. That has always been the case. The other problem was that businesses always had to second guess what local councillors would do and could not properly plan their budgets. My right hon. and learned Friend the Chancellor of the Exchequer has announced the business rate in his Budget. That is helpful, especially for small businesses that work on such tight margins these days because competition is so strong. They know precisely what their business rates will be and allow for them in their budgets.

The hon. Member for Caerphilly (Mr. Davies) has left the Chamber, but he touched on a point about roads that rang a chord with me. I say to the Government that, as one gets to extremities of the kingdom, especially with local authorities that have no trunk roads and so do not get assistance from the Department of Transport, road surfaces tend not be as good as they are in other areas.

I bet any Welsh Member a tin of leek soup that he would find much poorer road surfaces on the Isle of Wight because of the way in which our transport supplementary grant has gone recently than he would find in probably any part of the kingdom. That is to some extent true as one goes from England to Wales. I hope that my right hon. Friend the Secretary of State will put forward in Cabinet the fact that we need to consider those authorities that find it difficult to maintain good road surfaces in sparsely populated areas.

Finally, I want to touch on allowances for councillors, a point which has been much vaunted in this debate. Can my hon. Friend the Minister tell the House—or place information in the Library about it—what precisely the allowances are for the new unitary authorities and what the councillors who have been elected to shadow bodies have fixed for themselves in allowances?

My understanding is that a number of councillors in Wales who have been elected to unitary authorities are already councillors on existing authorities. I hear from my friends in the valleys that they are drawing allowances on the old authorities and the new shadow authorities. They are getting a double dose of the taxpayers' money, which should be spent on the local community and not on them. If my hon. Friend the Minister cannot give me the figures when he replies, perhaps he could pop them in the Library or encourage me to table a parliamentary question so that we can discover how many hon. Members represent constituencies where councillors have their trotters in the trough of taxpayers' money.

Unfortunately, the hon. Member for Caerphilly is no longer here, but I have to tell my Welsh colleagues that he is known as Dai for diagnosis. He is all diagnosis and no delivery of the answers. Colleague after colleague has said to him, "Don't tell us how little, tell us how much you would give and how you would fund it." No answer came.

6.23 pm

Mr. David Hanson (Delyn)

I shall not follow the line of the hon. Member for Isle of Wight (Mr. Field). This may be a Great Britain Parliament, but there are Welsh Members who wish to speak about their constituency interests. If the Conservative party is so popular, why is their local council performance in Wales so abysmal? In my local council, three Conservatives were elected with 43 Labour members. We have had the acid test. The hon. Gentleman's philosophy has been tested in many parts of Wales and found to be dramatically lacking. I am sure that many Conservative Members with Welsh seats will find that that will come true at the general election.

I know that my hon. Friends also want to speak, so I shall make only a couple of points. I genuinely welcome the Secretary of State's movement on Theatr Clwyd. It was the least that he could do, given that the abolition of Clwyd county council caused the problem in the first place. The announcement will give a certain kick-start to the local authorities that neighbour Flintshire to enable them to contribute to the maintenance of this excellent facility in north Wales.

I pay tribute to Flintshire county council, which has immediately put £600,000 of local taxpayers' money up front to help support the retention of the theatre and to the members of Clwyd county council, the governors and Patrick Gilchrist, the theatre general manager, and his staff. They have had a difficult time over the past few weeks but played a strong role with me in presenting the case to Ministers for assistance.

My local newspapers, the Daily Post and The Chronicle, have also played a magnificent role in generating public interest. I have been overwhelmed with letters of support for the theatre. A sackful of Daily Post clippings awaits the Secretary of State. They will arrive on his doorstep even though he has made his announcement, and show community support for the theatre.

As I said in my earlier intervention, there is still a shortfall of between £300,000 to £400,000 in Theatr Clwyd's funding compared with what was given by Clwyd county council. While I know that Flintshire will make great efforts to make efficiency savings and ensure that more people come through the doors of the theatre and welcome the movement on Theatr Clwyd's debt charges, there is still a major shortfall. I hope that the Secretary of State's initiative will support the local council to find the funding from other sources. I hope that there will be opportunities to raise the matter again because, although I feel fairly confident about the theatre's future, I would still like to ensure that the present funding continues.

The Secretary of State's statement does what Conservative party statements on local government normally do. The Government cut the grant to local authorities, force local authorities such as Flintshire to face massive council tax rises and shift the balance of spending from central to local government and then maintain, despite all that, the charade of the capping system, which mitigates against local democracy. My local authority was elected with certain mandates. It does not behove the Secretary of State to impose a capping limit on my local authority, which may mean real-terms cuts in local authority services.

The Government's grant statement has reduced Government spending still further. In 1993–94, 64 per cent. of local government spending was met by central government. In 1994–95, it was 62 per cent.; and in 1995–96 it is 58 per cent. The reduction continues. Central Government support is being cut and local government's contribution is having to rise. When the council tax bills go through people's doors in April, the increases that have been made to maintain services will be, in large part, because of reductions of central Government grant.

In a written answer to the right hon. Member for Conwy (Sir W. Roberts) on 30 January, the Secretary of State stated: inflation remains low and the Government have made it clear that pay increases should be met from efficiency savings and other economies."—[Official Report, 30 January 1996; Vol. 270, c. 682.]`

The Parliamentary Under-Secretary of State for Wales (Mr. Rod Richards)

indicated assent.

Mr. Hanson

I see the Minister nodding in agreement. That is all very well, but if teachers are offered a 4 per cent. pay rise it will be a further burden on local taxpayers and will mean that rates are increased or services cut to pay for things outside local authority control.

The disaggregated budget in Flintshire is £113,729,000. Its SSA is £1.2 million less than that at £112 million. That is a dilemma for local authorities such as Flintshire. The current budgets of Alyn and Deeside district council, Delyn district council and Clwyd county council, which cover the new Flintshire authority, are more than what the Secretary of State has already said they should spend this year. What does he expect Flintshire not to spend money on that it is currently being spent on? Where will it reduce spending next year to meet the SSA target that the Secretary of State has proposed?

The SSA of our near neighbour, Denbighshire, is lower than its notional expenditure—£78 million as compared with £80 million. The SSA of another neighbour, Wrexham, is £98 million while its notional expenditure is £97 million. At current levels, in its constituent parts, my local authority is already spending more than the Secretary of State says that it should spend in the next financial year. That will present my local authority with difficult choices about whether to increase council tax, cut local public services or find alternative means. The problems will be the result of a poor settlement, which I shall be pleased to vote against this evening.

Those difficulties are fairly clear and straightforward. The county council at Flintshire will undoubtedly experience difficulties with its schools budget and its education funding for next year. I have already received representations from the North-East Wales Education Forum which has expressed grave concern over the potential for future funding of education next year in Flintshire. Local schools in my constituency have already expressed their concerns about education funding next year in Flintshire.

Flintshire county councillors are saying that, while they have the choice to determine their priorities and to spend as they will—as the Secretary of State and junior Ministers will no doubt say—they must deal with their notional expenditure level, which is £1.2 million more than the Government say they should spend. That shortfall will fall heavily on a number of services—of which education will be the most important.

Only this week I received a letter from a school pupil in my constituency who said that he had written to the Prime Minister to tell him that his school class is without paper on which to write letters or school material. That case was originally brought to my attention by a supply teacher in the school in Mold. If school pupils have no paper to write on, that is not just a problem for the local authority as it struggles with funding, but for the Secretary of State. It presents a genuine problem of the underfunding of local government services.

I disagree with the Secretary of State on the notion of capping. The idea of local democracy, of having local government reforms and of holding an election last year— where people from all political parties put forward their policies and programmes before local people—is negated by the idea that the Secretary of State, representing Richmond, Yorks, can protect my local ratepayers from the council that they have chosen to elect. That is a fundamental negation of democracy. Whatever the financial arguments about whether the council should or should not spend, the Secretary of State should do what the Conservative party preaches: trust the people. The people of Flintshire and the people of Wales have chosen certain authorities to fulfil certain election promises.

It is a negation of democracy for the Secretary of State to say that he knows best and that he will put a limit on the council services to which my constituents and councillors can aspire. In his statement, the Secretary of State mentioned a notional amount of £113 million for my local authority and an SSA of £112 million. He should cease the capping regime. I shall vote against the settlement tonight because I disagree with the underfunding of my local authority and the principle of capping.

6.33 pm

Mr. Roy Hughes (Newport, East)

We have just had a major reorganisation of local government and the wholesale creation of unitary authorities. Many of the areas that are now designated as unitary authorities do not have the resources to carry out such far-reaching functions. It seems farcical that there are now five directors of education in Gwent, where there was previously one.

The local government reorganisation is expensive, but the Government have willed the ends and we are now entitled to say that they must provide the means. Instead, as my hon. Friend the Member for Caerphilly (Mr. Davies) said, many councils now face increases of 25 per cent. in council tax despite the recent additional £16 million that the Welsh Office has provided. The local government finance system has not withstood the test of local government reorganisation.

The Secretary of State is allowing new councils to spend, and Government support for that spending is being distributed among the new councils in a way that does not match the expenditure on services inherited from the old councils. That mismatch is causing significant variations in council tax increases and will be difficult to explain to council taxpayers throughout Wales.

If Newport spends at the level at which the Secretary of State is minded to cap the authority, Newport's council tax will be among the lowest in Wales. In the borough, the council tax rate is estimated to be about £392 for a band D property. The Secretary of State is minded to cap the authority at its standard spending assessment, which is £117.5 million. But out of the 22 new authorities, 19 are now being allowed to spend in excess of their SSA before reaching their capping level. I am entitled to ask the Secretary of State why Newport has been discriminated against. The Welsh Office is well aware that the SSAs for the new councils are not an accurate reflection of their need to spend. I understand that the Secretary of State has admitted that the SSAs need to be thoroughly reviewed. On the evidence, Newport seems to be being badly treated.

I am sure that none of us would wish to underestimate the complexities of local government finance. One reason for Newport's low capping limit is that Gwent county council drew heavily on reserves in its last year to sustain expenditure on services that could not be sustained within its annual income. The Secretary of State must appreciate that if Newport is to keep its expenditure within the capping limit that he has set, services will have to be drastically cut, particularly education and social services. Surely those two vital services should not be cut—they represent more than three quarters of Newport's total budget expenditure. Will the Secretary of State consider Newport's peculiar and anomalous position?

We know that Wales is now the most deprived region in western Europe. The time has obviously come for change: we need the return of a Labour Government and the election of a Welsh Assembly.

6.38 pm

Mr. Win Griffiths (Bridgend)

Labour Members have given an accurate account of the parlous state in which the underfunding of local government has left Wales—thanks to the Welsh Office. One thing that we know for sure is that everyone in Wales recognises that, despite the fact that total standard spending is to be higher this year than it was last year, once account is taken of inflation and the fact that last year's total made no allowance for factors such as the teachers' pay award, local authorities have already spent as much as the total standard spending that is allocated for the coming financial year that is to start in April. So, at best, there is a standstill.

Last year, local authorities dipped into their reserves to the tune of slightly more than £100 million. My hon. Friends the Members for Alyn and Deeside (Mr. Jones), for Delyn (Mr. Hanson) and for Newport, East (Mr. Hughes) have made a powerful plea for the Government to re-examine the settlement's impact on the services provided by local government in Wales. The one chink of light that we have seen—my hon. Friend the Member for Delyn paid tribute to it—was the action that the Secretary of State has taken in relation to Theatr Clywd in Mold, for which we are thankful. We only wish that he viewed all local government spending in Wales in the same positive and progressive manner.

My hon. Friend the Member for Alyn and Deeside pleaded with the Secretary of State to reverse the settlement's effect on teachers' pay. The Under-Secretary of State for Wales, the hon. Member for Clwyd, North-West (Mr. Richards), said, in a written answer to me, that he expected pay awards in the public sector, including those subject to the recommendations of the School Teachers' Review Body, to be met through increased efficiency and other economies."—[Official Report, 18 January 1996; Vol. 269, c. 755.] The Secretary of State ought to say where he believes those economies might be made. He knows that, during the past few years, local education authorities in Wales have cut their administrative expenditure by millions of pounds. The hon. Member for Ribble Valley (Mr. Evans), who comes from Wales, should be better apprised of that fact. The Secretary of State also knows that every county council in Wales is currently giving more than 90 per cent. of its education budget to its schools. Councils are doing even better in that respect than the Welsh Office has asked them to do.

Mr. Richards

The hon. Gentleman mentioned that local government had been underfunded in Wales. Will he tell the House whether, in his view, the total standard spending should be higher—yes or no?

Mr. Griffiths

I shall return to that point at the end of my remarks. I can assure the hon. Gentleman that I shall examine the issue seriously. After 17 years of disastrous Tory government in Wales, we have serious problems funding the work of local government and other public services. In the past few years, under the Tories, class sizes and pupil-teacher ratios have increased, following a long period in which they decreased. The situation in relation to pupil-teacher ratios is deteriorating, according to answers from the Welsh Office.

Mr. Richards

indicated dissent.

Mr. Griffiths

It is no use the Under-Secretary shaking his head. His own written answers have proved that that is the situation; he needs only to check Hansard to confirm it. The figures are marginal in both cases: an increase of 0.2 per cent. in primary schools and of 0.8 per cent. in secondary schools. If, however, we examine the impact of those figures on primary schools in terms of class size, we find that, between 1993–94 and 1994–95, there were more than 7,000 children in classes of more than 30, thanks to the cuts.

The truth about Tory rule in Wales during the past few years is a story of cuts all the way. Ministers' parliamentary answers also provide that information. In 1993–94, revenue support grant was 64 per cent. of local government spending. In 1995–96, it has decreased to 58 per cent. The truth was revealed in a letter to my right hon. and learned Friend the Member for Aberavon (Mr. Morris)—[Interruption.] It has been said before, but it is worth repeating because it is the truth, and the truth needs to be rammed home.

The right hon. Member for Conwy (Sir W. Roberts) talked about a wind of change. The wind of change has come from the dales of Yorkshire. It is blowing hard into Wales, bringing easterly winds with the ice and the snow that people in the south Wales valleys are currently suffering. Metaphorically speaking, the world of finance—as my hon. Friend the Member for Caerphilly (Mr. Davies) graphically demonstrated—is having an icy effect on the lives of people in Wales. The Secretary of State wrote to my right hon. and learned Friend the Member for Aberavon: I believe that over time local authorities in Wales should raise a higher proportion of their income from council tax. The 11 per cent. increase is the result of this approach. He said that; there was no doubt about it. He wanted and planned for a minimum increase of 11 per cent. He planned for local authorities either to cut their services or to raise disproportionately their council tax.

Mr. Richards

The hon. Gentleman referred to pupil-teacher ratios. Is he therefore saying that more money should be spent on education in Wales—yes or no?

Mr. Griffiths

I am very happy to answer that question: yes, I do believe that more money should be spent on education in Wales. However, Labour Members are not the people who are examining the books in the Welsh Office, although it will not be too long before we do—and then there will be new priorities. If the Minister is inviting me to come along to the Welsh Office to have a preview of the books, I shall happily take up the offer.

If we are talking about publicly available information about how the Welsh Office is cutting the money it makes available to local government, let us consider revenue support grant which, in constant value terms during the past couple of years, has decreased by more than £37 million. Local government renovation grants have, in the past year, decreased in real terms by almost £4 million. Housing capital provision has decreased by almost £16 million.

It is no wonder that my hon. Friend the Member for Alyn and Deeside made an impassioned plea for the Welsh Office to release capital receipts so that councils with housing responsibilities—which they will all, of course, have from April—can modernise their housing stock and install central heating so that when the icy winds blow down from the Yorkshire dales, people will be warm. It is cuts all the way.

A Welsh Office press release of 13 December states that, this year, total capital provision in Wales will decrease by more than £17 million. The Secretary of State has tried to present himself as a latter-day Father Christmas by offering £29.1 million and another £15.9 million to dampen the effects of the redistribution of grant to the new local authorities, and by relaxing the capping criteria to enable authorities to raise more money locally.

The Secretary of State knows that if councils in Wales took full advantage of the generous offer and did not cut the services that they provide, but instead sought to fund everything as though there had been no change, seven councils in Wales would have to raise council taxes by more than 30 per cent. Another four councils would have to increase their council tax by more than 20 per cent.; seven councils would require increases of 10 per cent.; and only four councils would require increases of less than 7 per cent. My local authority, Bridgend, is caught in that trap. It will have either to make a huge increase— of more than 36 per cent.—in council tax or to make really serious cuts in services. There is no room for substantial administrative cuts.

I hope that the Secretary of State will look seriously at changing the formula. He asked where more money could be found. I remind him that it was only a couple of years ago that his predecessor returned money to the Treasury. I notice that, in one year, a £59 million underspend was shown in the accounts presented to the Welsh Office. Does the Secretary of State know whether, this year, he is on course for an underspend or an overspend? If there is an underspend, will he give the money to local authorities?

6.49 pm

The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones)

This afternoon, my right hon. Friend the Secretary of State for Wales set out in detail our settlement decisions for 1996–97 and explained the considerations that have informed those decisions. Notwithstanding the fact that the settlement gives local government a real-terms increase in revenue spending, backed up by an aggregate external support package that covers about 87 per cent. of spending, and notwithstanding the fact that, on a per capita basis, the support is 8 per cent. higher than that proposed for England, we have had a predictable barrage of complaints and criticism from the Opposition.

The hon. Member for Bridgend (Mr. Griffiths) was brave enough to give way when he was asked whether he would increase the local government settlement, yes or no. I shall have to read his speech carefully to try to find the answer. He then criticised my right hon. Friend the Secretary of State for enabling local government to raise more of its money locally. That is a peculiar criticism when my right hon. Friend is responding to local government requests to be able to do exactly that.

What I noticed particularly in this year's debate, which is being held a year to the day after the previous one, is the change in the Opposition. What has happened to the laughable, bumbling, clueless Ron we remember from last year? Today, he was still clueless—that does not change—but last year he was at least able to include two welcomes in his speech. He welcomed the increase in total standard spending and he welcomed the increase in spending for the police. This time, he gave a tired, jaded, sour performance.

There may be a clue to the decline of the hon. Member for Caerphilly (Mr. Davies) in his speech last year. He had barely got a paragraph into it when he was pressed by one of his hon. Friends to increase the shadow budget for Wales. Amazingly, he claimedThere are no restrictions on our shadow budget".—[Official Report, 8 February 1995; Vol. 254, c. 361.] Throughout his speech, then as now, he told us nothing about the shadow budget. Doing one thing and saying another has become the hallmark of the Labour party; in the hon. Member for Caerphilly we have someone who will take it to the nth degree. He is capable of saying one thing, and then another thing, but no one understands what on earth he means. I shall let everyone into the secret. He does not understand either.

The greatest problem arises when the hon. Member for Caerphilly says something positive. Few have failed to notice that his friends in the BBC have been running a campaign to promote a Welsh Assembly. Only this week, a whole programme was devoted to the subject. It tried to claim that a Welsh Assembly would cost less than £15 million.

How much the hon. Gentleman's friends in the BBC must regret it when his loose cannon goes out. Last week, he admitted that a Welsh Assembly would mean about another 500 civil servants. Such bureaucracy creation would take place before a Welsh Assembly did anything. Taking an average salary with the on-costs, I can easily calculate that, with £40,000 per civil servant, £20 million would be spent before the Welsh Assembly did anything.

Mr. Ron Davies

So that the record is accurate, my statement was that it was my estimate that the establishment of the Assembly in Cardiff would create an additional 500 jobs outwith the civil service.

Mr. Jones

The hon. Gentleman has confirmed the warning as given. He has blown what his friends at the BBC were trying to do out of the water.

I appreciate how difficult it is for the hon. Gentleman when he comes to the Dispatch Box. It is an occasion when he is on the record; such occasions are embarrassing for him. I must, however, try to deal with the points of substance that he raised. He claimed that the inclusion for community care was nothing but a transfer from the Department of Social Security. That is not correct; the money being provided is new money. The additional £25.2 million this year takes the figure to £149.6 million additional money for community care. Next year, the figure will be £190.3 million.

The hon. Member for Caerphilly claimed that the damping provision would mean cuts in the national health service. Again, he was not right. The extra money that has been provided for damping is from unallocated resources. In view of his point about cutting the national health service, the hon. Gentleman will not and cannot come clean. "How much more?" is the question that the Opposition constantly face. Where will it come from? They cannot say. However, if they are to be credible when they go into a general election, Labour Members must buy a large sign for the hon. Gentleman. They should hang it in his office where he cannot miss it. The sign should read, "It's the money, stupid." That is the only way in which the point can be brought home to the hon. Gentleman.

My right hon. Friend the Secretary of State has been able to announce £1.3 million for Theatr Clwyd, subject to certain provisions. I am grateful for the welcome that the hon. Members for Delyn (Mr. Hanson) and for Alyn and Deeside (Mr. Jones) have given that announcement. My right hon. Friend and I had very great regard for Theatr Clwyd, and we were much reinforced in that by the lobbying by my hon. Friend the Member for City of Chester (Mr. Brandreth) and especially by my hon. Friend the Member for Clwyd, North-West (Mr. Richards). I am sad that the situation of Theatr Clwyd was precipitated by local government. My right hon. Friend has given the theatre the way forward and it is now for local government to respond properly.

I thank my right hon. Friend the Member for Conwy (Sir W. Roberts) for his contribution. I cannot do better than use the words of the hon. Member for Alyn and Deeside, who described it as a master class. My right hon. Friend's concerns were well expressed. He explained the threats Labour represents in terms of the effect on the business community and the rates that business would have to pay if local government took over business rates. That point was rightly emphasised by my hon. Friends the Members for Ribble Valley (Mr. Evans) and for Isle of Wight (Mr. Field).

Equally, as my right hon. Friend the Member for Conwy asked, would farm land be made rateable? What would the farmers have to fear? What would be the price of ending capping? It is impossible to put a price on all the threats in the unspecific policies of the Labour party. My right hon. Friend did not exaggerate when he talked about the possibility of civil strife in Wales as the consequence of Labour's policies.

Mr. Ainger

Will the hon. Gentleman give way?

Mr. Jones

No, because there is too little time left. The hon. Gentleman has not been here for the whole debate anyway.

The hon. Member for Alyn and Deeside referred to housing. I am sure that he welcomes the substantial provision we have made for housing spending—£1.2 billion for private sector renovation since the current grant regime was introduced and an 84 per cent. higher real-terms spend on capital and revenue for repairs on council housing.

My hon. Friends the Members for Vale of Glamorgan (Mr. Sweeney) and for Ribble Valley welcomed our increase in police spending. I know that that was dismissed by the hon. and learned Member for Montgomery (Mr. Carlile) in his usual elitist way. It is, however, the case, as my hon. Friends said, that the police in south Wales have had to have an approximately 22 per cent. increase in just over a year because of the appalling underfunding when the figure was decided by the Labour-controlled councils in south Wales.

My hon. Friend the Member for Vale of Glamorgan asked about the changes made in the notional amount figures for the Vale of Glamorgan and Cardiff unitary authorities. The changes arose from the provision of more accurate data by South Glamorgan council for the disaggregation of its spending on education to the new authorities. The Vale of Glamorgan authority knows the reasons for the change and accepts the greater accuracy of the new data. The council is understandably disappointed by the reduction in its base position, but it can increase its budget by 3.9 per cent. in the coming year.

The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) mentioned road mileage lengths being taken into account in calculating Denbighshire's standard spending assessment. The non-financial data that we use in calculating SSAs are carefully validated and verified with all local authorities. They provide the information. We have not received representations from Denbighshire or any other local authority on road lengths. I am surprised that the hon. Member for Newport, East (Mr. Hughes) feels that the settlement disadvantages Newport county borough council. It enables the council to increase its spending by 5.6 per cent.—the second highest percentage increase of any authority in Wales.

The most noticeable aspect of the debate was the absence of any positive policies from the Opposition. I say to the House and to Wales that we should always remember that council taxes are decided by councillors. It is as that rueful expression says—"We get the councillors we deserve." My right hon. Friend the Secretary of State rightly mentioned some of the crazier spending decisions that have been made, and I warn Opposition Members that they treat the public with contempt at their peril.

Last Saturday's South Wales Echo showed the fat cheques that have been paid out to Labour councillors in back pay for the amounts that they have awarded themselves. That has gone down very badly in Cardiff. The mood is changing in Cardiff which, regrettably, is a one-party state, and it is changing elsewhere in Wales.

Question put:—

The House divided: Ayes 268, Noes 196.

Division No. 47]	[7.00 pm
AYES
Ainsworth, Peter (East Surrey)	Bates, Michael
Aitken, Rt Hon Jonathan	Batiste, Spencer
Alison, Rt Hon Michael (Selby)	Bellingham, Henry
Allason, Rupert (Torbay)	Bendall, Vivian
Amess, David	Beresford, Sir Paul
Ancram, Michael	Biffen, Rt Hon John
Arbuthnot, James	Body, Sir Richard
Arnold, Jacques (Gravesham)	Bonsor, Sir Nicholas
Ashby, David	Booth, Hartley
Atkins, Rt Hon Robert	Boswell, Tim
Atkinson, David (Bour'mouth E)	Bottomley, Peter (Eltham)
Atkinson, Peter (Hexham)	Bowden, Sir Andrew
Baker, Nicholas (North Dorset)	Bowis, John
Baldry, Tony	Boyson, Rt Hon Sir Rhodes
Banks, Matthew (Southport)	Brandreth, Gyles
Banks, Robert (Harrogate)	Brazier, Julian

Bright, Sir Graham	Hampson, Dr Keith
Brooke, Rt Hon Peter	Hanley, Rt Hon Jeremy
Brown, M (Brigg & Cl'thorpes)	Hannam, Sir John
Browning, Mrs Angela	Hargreaves, Andrew
Bruce, Ian (Dorset)	Harris, David
Burns, Simon	Haselhurst, Sir Alan
Burt, Alistair	Hawkins, Nick
Butler, Peter	Hawksley, Warren
Butterfill, John	Hayes, Jerry
Carlisle, John (Luton North)	Heald, Oliver
Carlisle, Sir Kenneth (Lincoln)	Heath, Rt Hon Sir Edward
Carrington, Matthew	Heathcoat-Amory, David
Carttiss, Michael	Hendry, Charles
Cash, William	Higgins, Rt Hon Sir Terence
Channon, Rt Hon Paul	Hill, James (Southampton Test)
Chapman, Sir Sydney	Hogg, Rt Hon Douglas (G'tham)
Churchill, Mr	Horam, John
Clappison, James	Hordern, Rt Hon Sir Peter
Clark, Dr Michael (Rochford)	Howard, Rt Hon Michael
Clarke, Rt Hon Kenneth (Ru'clif)	Howell, Rt Hon David (G'dford)
Clifton-Brown, Geoffrey	Howell, Sir Ralph (N Norfolk)
Coe, Sebastian	Hughes, Robert G (Harrow W)
Congdon, David	Hunt, Rt Hon David (Wirral W)
Coombs, Anthony (Wyre For'st)	Hunt, Sir John (Ravensbourne)
Cope, Rt Hon Sir John	Hurd, Rt Hon Douglas
Cormack, Sir Patrick	Jack, Michael
Couchman, James	Jenkin, Bernard
Currie, Mrs Edwina (S D'by'ire)	Jessel, Toby
Curry, David (Skipton & Ripon)	Johnson Smith, Sir Geoffrey
Davis, David (Boothferry)	Jones, Gwilym (Cardiff N)
Day, Stephen	Jones, Robert B (W Hertfdshr)
Deva, Nirj Joseph	Jopling, Rt Hon Michael
Devlin, Tim	Key, Robert
Dorrell, Rt Hon Stephen	King, Rt Hon Tom
Douglas-Hamilton, Lord James	Knapman, Roger
Dover, Den	Knight, Mrs Angela (Erewash)
Duncan, Alan	Knight, Rt Hon Greg (Derby N)
Duncan-Smith, Iain	Knight, Dame Jill (Bir'm E'st'n)
Dunn, Bob	Knox, Sir David
Durant, Sir Anthony	Kynoch, George (Kincardine)
Dykes, Hugh	Lait, Mrs Jacqui
Elletson, Harold	Lamont, Rt Hon Norman
Emery, Rt Hon Sir Peter	Lawrence, Sir Ivan
Evans, David (Welwyn Hatfield)	Leigh, Edward
Evans, Jonathan (Brecon)	Lennox-Boyd, Sir Mark
Evans, Nigel (Ribble Valley)	Lester, Sir James (Broxtowe)
Evans, Roger (Monmouth)	Lidington, David
Evennett, David	Lloyd, Rt Hon Sir Peter (Fareham)
Faber, David	Lord, Michael
Fabricant, Michael	Luff, Peter
Fenner, Dame Peggy	Lyell, Rt Hon Sir Nicholas
Field, Barry (Isle of Wight)	MacGregor, Rt Hon John
Fishburn, Dudley	MacKay, Andrew
Forman, Nigel	Maclean, Rt Hon David
Forsyth, Rt Hon Michael (Stirling)	McLoughlin, Patrick
Forth, Eric	Major, Rt Hon John
Fox, Dr Liam (Woodspring)	Malone, Gerald
Fox, Sir Marcus (Shipley)	Mans, Keith
Freeman, Rt Hon Roger	Marlow, Tony
French, Douglas	Marshall, John (Hendon S)
Fry, Sir Peter	Marshall, Sir Michael (Arundel)
Gardiner, Sir George	Martin, David (Portsmouth S)
Garnier, Edward	Mawhinney, Rt Hon Dr Brian
Gill, Christopher	Mayhew, Rt Hon Sir Patrick
Gillan, Cheryl	Mellor, Rt Hon David
Goodlad, Rt Hon Alastair	Merchant, Piers
Goodson-Wickes, Dr Charles	Mills, Iain
Gorman, Mrs Teresa	Mitchell, Andrew (Gedling)
Gorst, Sir John	Mitchell, Sir David (NW Hants)
Greenway, Harry (Ealing N)	Monro, Rt Hon Sir Hector
Greenway, John (Ryedale)	Montgomery, Sir Fergus
Griffiths, Peter (Portsmouth, N)	Needham, Rt Hon Richard
Gummer, Rt Hon John Selwyn	Neubert, Sir Michael
Hague, Rt Hon William	Newton, Rt Hon Tony
Hamilton, Rt Hon Sir Archibald	Nicholson, David (Taunton)
Hamilton, Neil (Tatton)	Norris, Steve

Onslow, Rt Hon Sir Cranley	Stephen, Michael
Oppenheim, Phillip	Stem, Michael
Ottaway, Richard	Stewart, Allan
Page, Richard	Streeter, Gary
Paice, James	Sumberg, David
Patnick, Sir Irvine	Sweeney, Walter
Patten, Rt Hon John	Sykes, John
Pawsey, James	Tapsell, Sir Peter
Peacock, Mrs Elizabeth	Taylor, Ian (Esher)
Pickles, Eric	Taylor, Sir Teddy (Southend, E)
Porter, Barry (Wirral S)	Temple-Morris, Peter
Porter, David (Waveney)	Thomason, Roy
Portillo, Rt Hon Michael	Thompson, Sir Donald (C'er V)
Rathbone, Tim	Thompson, Patrick (Norwich N)
Redwood, Rt Hon John	Thomton, Sir Malcolm
Renton, Rt Hon Tim	Thumham, Peter
Richards, Rod	Townend, John (Bridlington)
Riddick, Graham	Townsend, Cyril D (Bexl'yh'th)
Rifkind, Rt Hon Malcolm	Tracey, Richard
Robathan, Andrew	Tredinnick, David
Roberts, Rt Hon Sir Wyn	Trend, Michael
Robinson, Mark (Somerton)	Twinn, Dr Ian
Rowe, Andrew (Mid Kent)	Vaughan, Sir Gerard
Rumbold, Rt Hon Dame Angela	Viggers, Peter
Ryder, Rt Hon Richard	Waldegrave, Rt Hon William
Sackville, Tom	Walden, George
Scott, Rt Hon Sir Nicholas	Waller, Gary
Shaw, David (Dover)	Ward, John
Shaw, Sir Giles (Pudsey)	Wardle, Charles (Bexhill)
Shephard, Rt Hon Gillian	Waterson, Nigel
Shepherd, Sir Colin (Hereford)	Watts, John
Shepherd, Richard (Aldridge)	Wells, Bowen
Shersby, Sir Michael	Whitney, Ray
Skeet, Sir Trevor	Whittingdale, John
Smith, Tim (Beaconsfield)	Widdecombe, Ann
Spencer, Sir Derek	Wilkinson, John
Spicer, Sir James (W Dorset)	Winterton, Mrs Ann (Congleton)
Spicer, Sir Michael (S Worcs)	Wolfson, Mark
Spink, Dr Robert	Yeo, Tim
Spring, Richard	Young, Rt Hon Sir George
Sproat, Iain
Squire, Robin (Homchurch)	Tellers for the Ayes:
Stanley, Rt Hon Sir John	Mr. Timothy Wood and Mr. Derek Conway.
Steen, Anthony

NOES
Adams, Mrs Irene	Church, Judith
Ainger, Nick	Clapham, Michael
Ainsworth, Robert (Cov'try NE)	Clelland, David
Allen, Graham	Clwyd, Mrs Ann
Anderson, Donald (Swansea E)	Coffey, Ann
Anderson, Ms Janet (Ros'dale)	Cohen, Harry
Armstrong, Hilary	Connarty, Michael
Ashton, Joe	Cook, Frank (Stockton N)
Austin-Walker, John	Cook, Robin (Livingston)
Banks, Tony (Newham NW)	Corbyn, Jeremy
Bames, Harry	Cousins, Jim
Barron, Kevin	Cox, Tom
Battle, John	Cummings, John
Bayley, Hugh	Cunningham, Jim (Covy SE)
Benn, Rt Hon Tony	Dafis, Cynog
Bennett, Andrew F	Davies, Bryan (Oldham C'tral)
Bermingham, Gerald	Davies, Rt Hon Denzil (Llanelli)
Berry, Roger	Davies, Ron (Caerphilly)
Blair, Rt Hon Tony	Davis, Terry (B'ham, H'dge H'l)
Bray, Dr Jeremy	Dewar, Donald
Brown, N (N'c'tle upon Tyne E)	Dixon, Don
Bruce, Malcolm (Gordon)	Dobson, Frank
Byers, Stephen	Dowd, Jim
Campbell, Mrs Anne (C'bridge)	Dunwoody, Mrs Gwyneth
Campbell, Ronnie (Blyth V)	Eagle, Ms Angela
Campbell-Savours, D N	Fatchett, Derek
Canavan, Dennis	Faulds, Andrew
Cann, Jamie	Field, Frank (Birkenhead)
Chidgey, David	Flynn, Paul
Chisholm, Malcolm	Foster, Rt Hon Derek

Galloway, George	Morris, Rt Hon Alfred (Wy'nshawe)
Gapes, Mike	Morris, Rt Hon John (Aberavon)
Garrett, John	Mowlam, Marjorie
George, Bruce	Mudie, George
Gilbert, Rt Hon Dr John	Mullin, Chris
Godman, Dr Norman A	Murphy, Paul
Godsiff, Roger	Nicholson, Emma (Devon West)
Golding, Mrs Llin	Oakes, Rt Hon Gordon
Gordon, Mildred	O'Brien, Mike (N W'kshire)
Grant, Bernie (Tottenham)	O'Brien, William (Normanton)
Griffiths, Nigel (Edinburgh S)	O'Hara, Edward
Griffiths, Win (Bridgend)	Olner, Bill
Grocott, Bruce	O'Neill, Martin
Hanson, David	Pearson, Ian
Harman, Ms Harriet	Pendry, Tom
Henderson, Doug	Pike, Peter L
Hill, Keith (Streatham)	Pope, Greg
Hinchliffe, David	Prentice, Gordon (Pendle)
Hodge, Margaret	Primarolo, Dawn
Hoey, Kate	Purchase, Ken
Hogg, Norman (Cumbernauld)	Quin, Ms Joyce
Hoon, Geoffrey	Radice, Giles
Howarth, Alan (Strat'rd-on-A)	Randall, Stuart
Howarth, George (Knowsley North)	Raynsford, Nick
Howells, Dr Kim (Pontypridd)	Rendel, David
Hoyle, Doug	Robinson, Geoffrey (Co'try NW)
Hughes, Kevin (Doncaster N)	Roche, Mrs Barbara
Hughes, Robert (Aberdeen N)	Ross, Emie (Dundee W)
Hughes, Roy (Newport E)	Rowlands, Ted
Hughes, Simon (Southwark)	Ruddock, Joan
Hutton, John	Salmond, Alex
Illsley, Eric	Sedgemore, Brian
Jackson, Glenda (H'stead)	Sheerman, Barry
Jackson, Helen (Shef'ld, H)	Sheldon, Rt Hon Robert
Janner, Greville	Shore, Rt Hon Peter
Jones, Barry (Alyn and D'side)	Short, Clare
Jones, Ieuan Wyn (Ynys Môn)	Simpson, Alan
Jones, Jon Owen (Cardiff C)	Skinner, Dennis
Jones, Lynne (B'ham S O)	Smith, Andrew (Oxford E)
Kaufman, Rt Hon Gerald	Smith, Chris (Isl'ton S & F'sbury)
Keen, Alan
Kennedy, Jane (L'pool Br'dg'n)	Soley, Clive
Khabra, Piara S	Spearing, Nigel
Kilfoyle, Peter	Spellar, John
Lestor, Joan (Eccles)	Squire, Rachel (Dunfermline W)
Livingstone, Ken	Steinberg, Gerry
Lloyd, Tony (Stretford)	Stevenson, George
Llwyd, Elfyn	Straw, Jack
Loyden, Eddie	Sutcliffe, Gerry
Lynne, Ms Liz	Taylor, Mrs Ann (Dewsbury)
McAvoy, Thomas	Thompson, Jack (Wansbeck)
McCartney, Ian	Touhig, Don
McCartney, Robert	Vaz, Keith
Maodonald, Calum	Walker, Rt Hon Sir Harold
McFall, John	Walley, Joan
McKelvey, William	Wardell, Gareth (Gower)
Mackinlay, Andrew	Wareing, Robert N
McMaster, Gordon	Wicks, Malcolm
McNamara, Kevin	Wigley, Dafydd
MacShane, Denis	Williams, Rt Hon Alan (Sw'n W)
McWilliam, John	Williams, Alan W (Carmarthen)
Madden, Max	Winnick, David
Mandelson, Peter	Wise, Audrey
Marshall, Jim (Leicester, S)	Worthington, Tony
Michael, Alun	Wright, Dr Tony
Michie, Bill (Sheffield Heeley)	Young, David (Bolton SE)
Milburn, Alan
Miller, Andrew	Tellers for the Noes:
Mitchell, Austin (Gt Grimsby)	Mr. Joe Benton and Mrs. Bridget Prentice.
Morgan, Rhodri

Question accordingly agreed to.

Resolved, That the Local Government Finance Report (Wales) 1996–97 (House of Commons Paper No. 141), which was laid before this House on 1st February, be approved.

Resolved, That the Limitation of Council Tax and Precepts (Notional Amounts) Report (Wales) 1996–97 (House of Commons Paper No. 142), which was laid before this House on 1st February, be approved.—[Dr. Liam Fox.]

c529
1. DELEGATED LEGISLATION 30 words
c529
1. NORTHERN IRELAND 20 words
c529
2. CONTRACTING OUT 26 words
c529
3. AGRICULTURAL HOLDINGS 19 words
c529
4. LOCAL GOVERNMENT 31 words