HC Deb 16 July 1984 vol 64 cc4-5
3. Mr. Gareth Wardell

asked the Secretary of State for Wales if he will undertake not to cut local authorities' capital spending during the year 1984–85.

The Secretary of State for Wales (Mr. Nicholas Edwards)

Discussions on local authority capital spending in 1984–85 are continuing within the framework of the Welsh Consultative Council on Local Government Finance.

Mr. Wardell

I thank the Secretary of State for that reply, but I would be grateful if he will now say whether he will oppose any Cabinet move to impose any capital moratorium on local authorities in Wales, where it is blatantly obvious that the construction industry is already suffering from the imposition of VAT on building alterations and the phasing out of industrial building allowances? Cuts in capital expenditure would constitute a fatal blow for thousands of employees in the building industry—the largest industry in Wales.

Mr. Edwards

I have already indicated to the Welsh Grand Committee my concern that, far from being cut, capital programmes are running ahead of plans. We are discussing with local authorities the best way of dealing with this situation.

Mr. Best

Does my right hon. Friend accept that local authority expenditure is part of total identifiable public expenditure and that, therefore, the Government have a duty to control it? Does he also accept that, more than anything else, local authorities need continuity and an understanding of what will happen in the future, particularly in the housing sector, in so far as that can be ascertained?

Mr. Edwards

I understand the need for continuity. As my hon. Friend said, that is an important part of our total public spending programme, and we have spelt out our long-term plans for that programme. We must consider seriously substantial overspending in any particular area.

Mr. Anderson

Housing has been the easy target for Government cuts since 1979. Will the Secretary of State now assure the House that the housing crisis will not be worsened by yet again forcing housing to bear the main burden of the current proposed cuts?

Mr. Edwards

We are talking about a possible overspend on housing expenditure programmes and, therefore, whether it is necessary to restrain those programmes from running ahead of spending. We are not talking about cutting them from the levels that have been spelt out previously.

Mr. Wigley

Is the Secretary of State not aware that building and construction firms throughout Wales, particularly in Gwynedd, from where I have received representations, are petrified that we are about to see yet another cycle of stop-go-stop, thus making it impossible to plan ahead in terms of investment and employment? Will the Secretary of State now think seriously about how to get a more coherent form of planning capital expenditure with local authorities so that we can avoid these problems?

Mr. Edwards

The builders must remember that any problem at present arises from the fact that we are running ahead of our plans, and that they have work on their books which they are carrying through to the end of this financial year. They may be concerned about not getting further additional work on top, but they have substantial work under existing spending programmes.

Mr. Barry Jones

From the hesitant, fencing replies that we have heard, we fear the worst. Will the right hon. Gentleman commit himself to fighting in the Cabinet against any imposition of cuts?

Mr. Edwards

I have made it perfectly clear that I am concerned about the fact that we are running ahead of our spending targets, and I am discussing with local government the best way of dealing with that.