HC Deb 11 February 1985 vol 73 cc5-6
5. Sir Anthony Meyer

asked the Secretary of State for Wales if he will ensure that Government measures to restrict capital expenditure by local authorities in Wales take full account of the loss of assisted area status and of diminished access to European Economic Community loans and grants.

Mr. Nicholas Edwards

The Government measures announced last December are restrictive only in the sense that they should ensure a much closer match between local authorities' capital spending and the sum allowed for this in the Government's expenditure plans than has been the case this year under the previous arrangements.

Sir Anthony Meyer

In the light of that reply, will my right hon. Friend assure me that no local authority will find that its calculations on the availability of capital for urban schemes or such like will be seriously affected by the unexpected withdrawal of assisted area status, leading in turn to reduced ability to obtain, for example, loans from the European Investment Bank?

Mr. Edwards

Capital allocations are now largely determined by formulae agreed with the local authority associations. Urban programme applications are considered individually on their merits. As I have already told my hon. Friend, we are considering whether any further action is possible in connection with the European Community.

Mr. Alex Carlile

Does the right hon. Gentleman acknowledge that Government restrictions on capital expenditure have, to some extent, at least in mid-Wales, been counterbalanced by the successful activities of Mid-Wales Development? When shall we hear that Mid-Wales Development is to have a substantially increased budget for the next financial year?

Mr. Edwards

I agree that Mid-Wales Development has been doing extremely good work. For example, I welcome its contribution to the recent Laura Ashley decision. The announcement about the budget will be made shortly. I cannot anticipate the amount. but among other matters the Laura Ashley involvement will be properly taken into account.

Mr. Best

Will my right hon. Friend assure the House that local authorities' accumulated capital receipts will remain theirs to spend and that they will be spent by the local authorities as soon as it is possible to remove the restrictions by the Government on that spending?

Mr. Edwards

Yes. We have already said that we intend local authorities to spend the money over a number of years rather than in a single year, since many of them have already, in effect, used the money once by increasing their borrowing in the last year or two. We shall have to spread the expenditure over more than a single year.