§ The Secretary of State for Wales (Mr. Nicholas Edwards)
With permission, Mr. Speaker, I wish to make a statement about the Welsh rate support grant settlement for 1985–86.
I am today announcing to the Welsh consultative council on local government finance the details of the 1985–86 rate support grant settlement. Copies of the text of my statement to the consultative council, together with a number of key statistical tables, have been placed in the Library of the House. The rate support grant report has been laid before the House today and will be debated in the usual way. A copy of the report has also been placed in the Library. I will be announcing my decisions on the related capital expenditure issues in the near future.
The main features of the 1985–86 rate support grant settlement confirm the intentions that I announced in July. The total of relevant expenditure provision accepted for grants is £1,514.1 million. This comprises £1,309 million for current expenditure and £205.1 million for non-current items. Current expenditure provision—after allowing for the abolition of national insurance surcharge from next April and the greater role of the Manpower Services Commission in funding certain areas of further education — is £46 million or 3.6 per cent. more than the expenditure underlying local authority budgets in 1984–85, while the total of relevant expenditure is about 5 per cent. more than the comparable budgeted total for the present year.
Aggregate Exchequer grant will be £1,014.2 million comprising £149 million for specific grants, £26.5 million for transport supplementary grant, £2 million for national parks supplementary grant and £836.7 million for the rate support grants. Domestic rate relief is unchanged at 18.5p in the pound which costs £25.5 million, leaving £811.2 million as block grant. After deducting £600,000 for payments to specified bodies, the amount available for distribution to local authorities is £810.6 million.
The aggregate Exchequer grant of £1,014.2 million is £18.2 million or 1.8 per cent. more than the aggregate Exchequer grant provision in the main rate support grant settlement for the current year. Far more important for rating purposes, however, it is almost £50 million or 5 per cent. higher than the amount that authorities have included in their budgets for the present year, after allowing for the expenditure changes to which I have already referred. It represents 67 per cent. of relevant expenditure.
I believe that the settlement is very fair, and the consultative council has acknowledged that it represents an improvement on last year. That this is so owes much to the restraint which has been exercised by a majority of Welsh local authorities. Unfortunately, however, a small minority of authorities persist in spending in excess of their targets. I confirm, therefore, that I am setting targets for 1985–86 and grant penalties for exceeding those targets. I have retained the same basic system for determining next year's expenditure targets as that used in the present year but increased the weighting given to the grant related expenditure component.
The targets may require local authorities to make difficult choices in determining their spending priorities, but I believe that the targets are achievable by all authorities. Every authority's target gives a cash increase 1057 in its current expenditure. The minimum increase is 2 per cent. and the maximum 4 per cent. , after making allowance for the national insurance surcharge and further education changes. In addition, for authorities spending at or below target in 1984–85 I have added 0.5 per cent. to their current expenditure total. Thus the maximum current expenditure increase for such authorities is 4.5 per cent. in line with the projected rate of inflation for the economy as a whole. In aggregate, the targets that I am announcing today are £7.6 million higher than the provisional sum notified to authorities in the summer. The increase largely reflects the use of fixed interest rates and a slightly lower assumption for council house rents.
The grant withholding penalty for local authorities spending in excess of targets has been strengthened. The amount of grant withheld for excess expenditure up to 1 per cent. above target is 100 per cent. of that excess, but above that level the rate of holdback increases to a maximum rate of 150 per cent. for authorities spending 2 per cent. or more above target. This compares with a maximum of 90 per cent. in the current year, reached at 5 per cent. spending above target. I am retaining the arrangements under which any authority spending at or below target is exempted from both grant holdback and the close-ending adjustment. The incentive for local authorities with low rateable resources to achieve their targets has, in the past, been considerably reduced because I placed a limit on grant holdback for such authorities. This year, therefore, I am reducing that limitation by 50 per cent.
Block grant will be distributed in accordance with the formulae agreed by the Welsh local authority associations. I have decided to retain the existing block grant mechanisms which determine the distribution of block grant and the same safety net for limiting grant losses associated with changes in GRE—a maximum 4p loss at county level and 1p at district level.
One innovation that I am introducing this year is a forward indication of targets for 1986–87 and 1987–88. This will assist local authorities in their planning. I must emphasise, however, that these are indeed indications and that circumstances in which the Government have to review them cannot be ruled out. Whether those indicative targets will need to be transformed into formal guidance figures depends to a very large extent on authorities' performance next year. I have told the consultative council that if budget returns show that authorities, individually and collectively, are on course to spend in line with the Government's plans for 1985–86 I am prepared to examine with the associations whether an alternative means of containing expenditure and encouraging moderate rate increases is possible for future years.
As I said earlier, the settlement provides for an increase in both grant and relevant expenditure of about 5 per cent. more than authorities have included in their budgets for the present year, after allowing for certain expenditure changes. That is why, in a period of expenditure restraint, I regard the settlement as very fair. It is now up to the local authorities in Wales to respond sensibly and with restraint, and I believe they will. Given this and continued vigilance against spending excesses and manpower increases, it should be within their power to maintain satisfactory levels of service in key areas while keeping rate increases on average to levels comparable with inflation.
1058 I commend my proposals for the 1985–86 Welsh rate support grant settlement to the House.
§ Mr. Barry Jones (Alyn and Deeside)
The right hon. Gentleman still operates a harsh system. Does he understand that the minuscule easing of the target figures and the prospect of forward indications of targets are welcome, although they are but small crumbs from his table? Has not block grant in real terms been cut—according to the calculation of the Association of District Councils by about £30 million?
Whatever future tinkering the right hon. Gentleman may propose, is not the penalty regime very much more severe than 1984–85? Beyond a 2 per cent. overspend, the rate of grant lost levels out at one and a half times the amount of excess spending. Is that not extremely harsh? in fact, will not the amount of grant to be taken away from Wales altogether and returned to the Treasury inevitably exceed the total overspending by Welsh local authorities, even though the overall excess over target is very small? Could not this be seen as a Welsh ratepayers' contribution to the Treasury?
On rate increases, is it not realistic to suggest that some authorities will not succeed in getting within their targets and that the average rate figures will go up more like 8 or 9 per cent. because of the severity of the penalty regime and the overall cut in aggregate Exchequer grant?
Is not the right hon. Gentleman being very coy indeed about expressing clearly a view on the effect of this statement on the standard and depth of local government services? Is he not aware that he is placing local authorities under intolerable pressures? Does he know that a typical Welsh district might have to make real savings of up to £250,000 to achieve a district rate increase in line with inflation? What will the right hon. Gentleman do to reduce the volatility in the Welsh rate support system as it affects the Welsh districts? I am informed that there will be differences in targets set of up to 30 per cent. —arguably from a 19 per cent. increase to a 10 per cent. decrease. I remind the right hon. Gentleman that there are also differences in grant-related expenditure of up to 19 per cent.
If authorities in aggregate manage to get down to the overall targets, will that not be a serious cost to the services provided to our beleagured communities? I have in mind the quality of maintenance on roads and buildings, the quality of administration, the closure of libraries, the increase in the price of school meals, the decline in the number of policemen and teachers and the decline in Welsh housing and industrial development.
Penalties have again been increased, the ratepayers' contribution has again increased while central Government's contribution has decreased, and aggregate Exchequer grant has again been cut. Does the right hon. Gentleman realise that he has put Welsh local authorities at very great disadvantage with his tightening of the financial screws? Under the right hon. Gentleman we have lost our democratic local government freedoms. We have lost 100,000 manufacturing jobs. One Welshman in five is out of work. The settlement will become known as a guarantee of social distress.
§ Mr. Edwards
Last year we heard from the hon. Gentleman the usual forecast of rate increases. He said that they would be well over 10 per cent. In fact, the average increase was about 8 per cent. Once again, this year, the 1059 hon. Gentleman has pitched the average a good deal higher than the inflation rate that I forecast. Once again, we shall wait and see the result.
The hon. Gentleman says that this is a harsh system. However, there are increases in relevant expenditure and in grant of 5 per cent. more than budgeted expenditure in the current year, which is more than the inflation rate. No one can say that that represents a harsh regime.
The hon. Gentleman referred to block grant cuts. It is true that since 1981–82 aggregate grant has grown by only 19 per cent. while there has been inflation of 22 per cent. Over that period, in cost terms, there was a fall of 3 per cent. which had to be borne by the local authorities. Over such a period, however, no one could describe that as a savage round of cuts.
The hon. Gentleman says that penalties are severe if targets are not met. However, all the evidence that I have suggests that the majority of authorities—certainly the majority of the counties — will meet their targets or come very close to meeting them. I have been able to tell Mid Glamorgan, for example, that, its final target being £1 million higher than the figure suggested in the summer, it is now within an almost minuscule percentage point of its target. Mid Glamorgan, too, should be able to meet its target.
The hon. Gentleman referred to the volatility of targets for districts. That volatility arises almost completely because of the rate fund contribution to housing revenue account. Districts decide either not to put up rents by as much as other districts, or to increase maintenance by much more than the average amount.
We all agree that targets are not an ideal system. I have made it clear to the local authorities and to the House that if we continue the progress made so far towards meeting the Government's objectives, I hope that we may move away altogether from the target system. We are on the road to achieving that result.
Finally, the hon. Gentleman painted the usual picture of the severity of effects on services. He cited some examples. I have before me figures for the expenditure of Welsh local authorities on education over the past seven or eight years. In terms adjusted for price and wage increases, we are spending more than, or almost exactly the same amount as, we spent seven or eight years ago. At the same time, there has been a fall of nearly 12 per cent. in the number of pupils. There has been no savage cut in that area, and it is a gross exaggeration to pretend that there has been.
§ Mr. Speaker
Order. I shall do my utmost to call all those hon. Members who wish to put a question. I ask hon. Members to make their questions succinct and brief. This matter will be the subject of an order later, and it will be debatable. This will be not a day for long speeches.
§ Sir Anthony Meyer (Clwyd, North-West)
Is my right hon. Friend aware that there is general admiration for the way in which he manages to walk a very slack tightrope? The tightrope is slack because it lacks the necessary tension which would arise if local authorities were compelled to raise the money that they spend.
In that position, however, my right hon. Friend is vulnerable to cross-breezes. Is he aware that while there 1060 is still a determination that all waste should be cut out, there is also increasing anxiety lest essential services should start to suffer from a further increase in economies?
§ Mr. Edwards
I do not think that, when we are offering local authorities the ability to increase expenditure by slightly more than the rate of inflation without imposing severe rate burdens on them, there is any need for the type of suffering that my hon. Friend suggests might occur.
§ Mr. Michael Foot (Blaenau Gwent)
Does not the right hon. Gentleman appreciate that one of the heaviest burdens that most local authorities in Wales have to bear, some more severely than others, is that imposed by heavy, mass and persistent unemployment? Should there not be, under this settlement, some form of arrangement by which the scale of unemployment is taken into account" Might not the settlement take into account, for example, expenditure that must be made to maintain skillcentres which the Government and others are not willing to assist us to maintain? Should not the right hon. Gentleman have have come to the House to say, among other things that in the rate support grant he will try to do something to rescue us from the cuts that he is imposing i a other spheres, such as massive cuts in regional aid for Wales?
§ Mr. Edwards
Some of the matters to which the right hon. Gentleman refers are taken into account in the GRE assessment. I note that the target of the right hon. Gentleman's Blaenau Gwent authority is well above the estimated inflation rate. In terms of the targets per head which have been set for English and Welsh counties, all of the eight Welsh counties are in the top 11 for England and Wales. That suggests that they are getting treatment which compares favourably with comparable authorities which face comparable difficulties elsewhere.
§ Mr. Alex Carlile (Montgomery)
Does the Secretary of State intend to produce a simple guide to his statement and the documents that accompany it so that the people of Wales can understand the Government's meanness? Does he agree that a consequence of his statement, even in a well-managed and law-abiding county such as Powys, will be a decline in education provision, which has already led to the closure of a remedial education unit in Newtown. the closure of a special unit for teaching travellers' children in Welshpool and the closure of one-third of the school meals service in Powys? That is leading day by day to a decline in education standards about which head teachers are not being consulted properly because it is happening so suddenly?
§ Mr. Edwards
The simple way in which to put it, so that people can understand it, is to say that the grant provision is 5 per cent. higher than the amount which authorities have included in their budgets for the present year, which is above the anticipated rate of inflation, that Powys has a budget-to-target increase of 4.68 per cent., which is above the rate of inflation, that since 1981–82, Powy's spending has grown more than the general rate of inflation, and that I understand that that authority has resolved to meet its target. How it does that is for it to decide.
§ Mr. Keith Best (Ynys Mon)
Is my right hon. Friend aware that three elements of his statement will be especially welcomed? The first is that we can see an end to targets, which none of us like. The second is the 5 per 1061 cent. bonus to local authorities — it can fairly be described as such. The third is the courageous attitude that he has now taken towards forward-planning, thus giving local authorities an opportunity of greater stability when planning. That is especially important in regard to stability of interest rates in supplementary reports. He is also giving indicative targets for the next three years—something that no previous Government have had the courage to do.
§ Mr. Edwards
I am sure that it is helpful to let local authorities plan. If they continue to co-operate as they have in the past, we could abolish targets. That would benefit everyone. Since 1979–80, Welsh local authorities' current expenditure has increased by 2 per cent. more than the increase in costs. Our aim is that, by 1987–88, current expenditure should be no higher in cost terms than in 1979–80. I do not believe that anyone can say that that is a severe regime. Against that background, it is absurd and a distortion of the truth to talk of slashing cuts in services.
§ Mr. Ray Powell (Ogmore)
I appreciate your request, Mr. Speaker, for hon. Members to be brief, but as we have received a document of 85 pages and a statement of 15 pages about rate support grants in Wales, I have many questions to ask. The Secretary of State continually comes to the House with statements and prophesies further doom and gloom for Wales. Last week there was a £60 million cut from our regional aid, and today his statement is about a further reduction in grant in real terms to local authorities. Will he state how many local authorities will receive less grant aid in real terms next year than they received this year?
Page 5, paragraph 8, of the statement gives a figure of £46 million, which is 3.6 per cent. higher than that included in local authorities' budgets for 1984–85. The Secretary of State claims that that is within the 4.5 per cent. increase in costs projected for the economy as a whole. Will adjustments be made to allow for a further inflationary increase? Will he state the total reduction in grant aid to local authorities since he was appointed to office in 1979? Is the Government's message the same as before—
§ Mr. Speaker
Order. There is to be a debate on this subject. The hon. Member is making now the speech that he might well make on that occasion, if he were to catch my eye. In fairness to the House, there is another statement to follow this statement and a long day and night Committee sitting. He should confine himself to one question.
§ Mr. Powell
I promise that I shall not delay the House tonight because I shall not wish to catch your eye, Mr. Speaker, but this issue is so important to the ratepayers of Ogwr that I wish to ask the last part of my question. Does the Secretary of State expect ratepayers yet again to pay more for fewer services? How many jobs will be lost as a result of his statement? What services will suffer? Will they include the care for the elderly, our schools, the fire brigade and social services?
§ Mr. Edwards
I have given the hon. Gentleman the overall figures and I circulated to every Welsh Member the detailed schedule, which sets out the position for each local authority in Wales. It would be unreasonable to detain the House by giving the detailed answers that the 1062 hon. Gentleman requires. Ogwr has a target increase which is above the anticipated rate of inflation. For the reasons I have given, I see no reason to anticipate the slashing cuts in services, about which the hon. Gentleman loves to talk.
§ Mr. Keith Raffan (Delyn)
Will my right hon. Friend confirm that this extremely fair settlement will not harm the educational prospects of pupils in Clwyd? Does he agree that the maintenance of a high standard of education depends on the county council at last getting its priorities right and concentrating on its statutory obligations?
§ Mr. Edwards
I see no reason why there should be a great sacrifice by the education service in Clwyd. It is remarkable that the resources available and being spent on education in Clwyd, adjusted for cost and price increases, are substantially more than they where when we first had a separate Welsh rate support grant settlement. Indeed, it is about £10 million a year more than when the Labour Government made its slashing cuts in expenditure in 1977–78. There are more than 11 per cent. fewer pupils in the schools, and the pupil-teacher ratio in Clwyd is at its best ever.
§ Mr. Dafydd Wigley (Caernarfon)
Will the Secretary of State confirm that there has been no broad change in the definition of grant-related expenditure, and that it is broadly an assessment of the cost to a local authority of providing a standard of service comparable to other local authorities? If that is the case, why has Gwynedd this year once again a GRE of £97.2 million, but a target of only £94.4 million, which is £2.5 million less than the Government recognise as necessary to maintain the services?
§ Mr. Edwards
As the hon. Gentleman has had explained to him often before, targets are related not only to GRE but to previous expenditure patterns and to the pattern of expenditure that the local authority actually thought was right for the people in its area. He can hardly complain now and demand that the local authority should achieve the exact theoretical pattern of expenditure that creates GRE.
§ Mr. Ian Grist (Cardiff, Central)
Is my right hon. Friend aware that yesterday his right hon. Friend the Secretary of State for the Environment promised to send a "child's guide" to the rate support grant system to a number of hon. Members. Will he please send one to me? I am sure that I am not alone in being confused this afternoon. Will the Secretary of State say what effect his announcement will have on the city of Cardiff and the county of south Glamorgan?
§ Mr. Edwards
I sympathise with my hon. Friend about the complexity of these issues. South Glamorgan has a target increase above its budget of 5.19 per cent., which is well above the rate of inflation. I do not anticipate that it will have any difficulty in meeting its target. Since 1981–82 its current expenditure has grown a good deal more than the general increase in inflation and it has been a relatively low spender. I would think therefore, that it would have no difficulty in maintaining services and a low rate increase in the current year.
§ Mr. Donald Anderson (Swansea, East)
The Secretary of State will recall that we used to have a high domestic rate relief, partly because of our high water rates. He 1063 halved that domestic rate relief. As we are now likely to have higher water rates, will he increase the domestic rate relief?
§ Mr. Edwards
No, I shall not. I halved the domestic rate relief because I believed that it was currently a priority to give the maximum assistance to industry and to job creation. The change has been of great benefit to industry, and will help in our common objective of reducing unemployment. I am surprised, therefore, that the hon. Gentleman should suggest that we should go back on that move.
§ Mr. Tom Hooson (Brecon and Radnor)
My right hon. Friend has done well in limiting himself to grant withholding as a method of discipline with the various local authorities. I note that among the counties the safety net needs to be applied only to Powys. Has not the time come to reopen the GRE need indicator, not only in relation to rural sparsity but at the opposite end of the scale, that is, where there is a high density of population?
§ Mr. Edwards
We have had this debate over a long period. We keep looking at the GREs of the local authority association. I would have thought that my hon. Friend would be glad that the limiter was used in that case and that we took account of the special problems of his county.
§ Mr. Donald Coleman (Neath)
The right hon. Gentleman said twice when he introduced his statement that he believed that it was a fair statement. Does he recall saying the same thing last year? Why is west Glamorgan county having to reconsider having nurses in comprehensive schools, cutting the meals service and doing away with music and swimming tuition? What does his statement offer west Glamorgan? How will it affect the decisions that the county may have to make?
§ Mr. Edwards
I pay tribute to west Glamorgan, which has made a considerable effort to get within target. It started as a very high spender, relative to the GREs, which my hon. Friend the Member for Brecon and Radnor (Mr. Hooson) urged should be the basis on which we should proceed. We have allowed west Glamorgan a considerable period to adjust its expenditure from those high levels. It could meet its target, probably for the first time, on the basis of plans which it is now considering. I hope that it will do so, and that all Welsh counties will be able to meet their targets.
§ Mr. Stefan Terlezki (Cardiff, West)
Does my right hon. Friend agree that in an ideal world it would be marvellous to have an unlimited amount of money to spend? But in reality where is the money to come from? We could print or borrow more money, which would cause higher inflation, higher interest rates and perhaps higher unemployment.
§ Mr. Edwards
I am sure that it must be a priority to keep down interest rates and domestic and industrial rates. The rate burden on industry has a considerable effect on jobs. I do not apologise for introducing a settlement that will help to keep down the general level of rates, as it has in recent years, to at or below the inflation rate.
§ Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)
So that Mid-Glamorgan authority nearly reaches its target, will the Secretary of State estimate how many fewer teachers, home-help hours and school books there will be in the county?
§ Mr. Edwards
Adjusted for price and wage increases, personal and social service expenditure by Welsh local authorities has increased under this Government, and expenditure on education has been maintained, although Wales has nearly 12 per cent. fewer pupils. The reduction in teachers in no way matches the reduction in pupils. It is absurd for the hon. Gentleman to argue that there should not be some adjustment at a time of falling school rolls.
§ Mr. Gwilym Jones (Cardiff, North)
Does my right hon. Friend agree that his statement will be welcomed in Cardiff, although some of my constituents might prefer the loonier councils in Wales to be swept away by an extension of the reform of local government that we shall debate later today? Does he accept that his statement will concentrate the minds of our local councillors and will force them to return to what they should do rather than to waste taxpayers' and ratepayers' money on items such as CND weeks and reality-free zones?
§ Mr. Edwards
Local authorities should consider carefully their expenditure priorities at a time when it is clearly important that they should hold down the rate burden.
§ Mr. Allan Rogers (Rhondda)
The Secretary of State talks about industrial rates and the need to keep them down to attract industrialists to the valleys and communities of south Wales. Does he accept that a major criterion used by industrialists in coming to Wales is that there is a reasonable social infrastructure for them to move into, and that the continual cut in resources for Wales is a disincentive to industry to invest there?
§ Mr. Edwards
It is not a continual cut in resources for Wales. There is an increase above the expected rate of inflation in relevant expenditure and in aggregate grant. The target for the Rhondda is well above the expected rate of inflation. As the hon. Gentleman was informed in the Welsh Grand Committee only today, we are launching a major new road scheme for the improvement of his constituency.
§ Mr. Peter Hubbard-Miles (Bridgend)
Is my right hon. Friend aware that Mid-Glamorgan county council decided recently to take £3 million from capital reserves rather than to make the necessary economies in this year's budget, which will result in a shortfall next year of £6 million? That decision was taken against the advice of the treasurer and the leader of the Labour group, who put his proposals to the Labour group but who was defeated by 31 votes to 19, although he remains the leader.
§ Mr. Edwards
My hon. Friend is right to draw attention to the dangers inherent in putting off difficult decisions. Mid-Glamorgan's spending has increased by 4.1 per cent. more than inflation since 1981–82, and there is a danger that if it does not make the necessary changes it will store up difficulties for itself.
§ Mrs. Ann Clwyd (Cynon Valley)
If the Secretary of State believes, as he said in answer to my hon. Friend the Member for Rhondda (Mr. Rogers), that the infrastructure is adequate, does he expect to attract more Japanese companies to Cynon Valley? If he does, will he assure us that those companies will not require workers to retire at the age of 35?
§ Mr. Edwards
I am not sure that the hon. Lady's latter point arises from this statement. I welcome Japanese 1065 investment, but the policy statement issued by that company was not one of the finest examples of Japanese management techniques.
§ Dr. Roger Thomas (Carmarthen)
In the light of what the Secretary of State called his generous statement, may we look forward to headmasters in his constituency and mine — they are adjacent — giving up the idea of demanding £5 from hard-pressed parents to pay for inadequate school resources?
§ Mr. Edwards
It is about time that Dyfed authority got down to the job of considering the details of its budgeting and what has been happening with its financial arrangements, because it is hard to see why it is confronted with such difficulties. Its target increase is above the inflation rate, yet it is on course to exceed that target by £1 million. Instead of encouraging schoolmasters to campaign, the authority should have a thorough and proper re-examination of its finances.
§ Mr. Ron Davies (Caerphilly)
Does the Secretary of State appreciate that the message that will go to Wales following the statement is that there will be a further reduction in resources to Welsh local authorities, and that the penalties for the authorities which cannot comply with the Government's guidelines will be even harsher? Does he further understand that, as the total money available to local authorities decreases, an increasing percentage of cuts will be made in the provision of statutory services? That means that less money will be available for discretionary measures, which either improve the quality of life or are employment-related schemes. Does the Secretary of State agree that the statement will lead to a diminution in the quality of life, especially in the valleys of south Wales, and to an increase in unemployment?
§ Mr. Edwards
I am sure that strange messages will go out from hon. Members such as the hon. Member for Caerphilly (Mr. Davies), who are more anxious to make political points than they are concerned with reality. The 80 per cent. block grant has hardly altered since we first made a separate Welsh rate support grant settlement, and the suggestion that hunks of discretion will be removed from Welsh local government is not true.
§ Mr. John Watson (Skipton and Ripon)
Is my right hon. Friend aware that I do not represent a Welsh constituency, but that I represent the rest of Britain, which must foot the bill?
§ Mr. Speaker
Order. An hon. Member who represents an English constituency has the right to participate in Welsh debates. We shall all be interested to learn how the hon. Gentleman can relate Skipton and Ripon to this statement.
§ Mr. Watson
Will my right hon. Friend tell the House what proportion of local authority spending in Wales will be covered by the rate support grant that he announced this afternoon, and how that proportion will relate to most constituencies in the rest of the United Kingdom, including Skipton and Ripon?
§ Mr. Edwards
The rate support grant proportion of 67 per cent. is based on completely different rateable values in Wales than in England. The real difference, which accounts for the settlement today being somewhat easier than the settlement in England, is that the Welsh local authorities have made a considerable effort to achieve the expenditure targets set by the Government. They have come close to doing so, while the minority of high-spending authorities in England have failed to do so, have enormously overspent on the Government's targets, and are still paying the price for that overspending.