HC Deb 24 January 1990 vol 165 cc990-1016 10.14 pm
The Secretary of State for Wales (Mr. Peter Walker)

I beg to move, That the Welsh Revenue Support Grant Report 1990–91 (House of Commons Paper No. 53), a copy of which was laid before the House on 20th December, be approved.

Mr. Speaker

With this, it will be convenient to discuss the next three motions on the Order Paper: That the Welsh Revenue Support Grant Distribution Report (House of Commons Paper No. 54), a copy of which was laid before this House on 20th December, be approved. That the Welsh Non-Domestic Rating (County Share and District Share) Report (House of Commons Paper No. 55), a copy of which was laid before this House on 20th December, be approved. That the Distribution of Non-Domestic Rates (Relevant Population) Report for Wales (House of Commons Paper No. 56), a copy of which was laid before this House on 20th December, be approved.

Mr. Walker

The reports confirm that this is an excellent settlement. Total standard spending for 1990–91 is up by 7.1 per cent. over last years' budgets, and by no less than 9.4 per cent. over 1989–90 provision. Aggregate external finance for 1990–91 is increased by 8.6 per cent. over the comparable figure for 1989–90. This means that charge payers in Wales should expect to contribute only 15 per cent. of local government spending, with the balance being met by business ratepayers and Government grants.

Wales has benefited in this way because local and central Government have worked together in partnership. There has been no deliberate challenge to the Government's expenditure plans. There has been no creative accountancy and there has been no rate capping. This has been a remarkable success story from which the whole of Wales has benefited.

Local authorities in Wales know that they have been given a real opportunity to ensure a level of community charge averaging £173. They can achieve it if they budget responsibly in line with the settlement and in the interests of their charge payers.

Opposition Members have claimed that total standard spending of £2,114.5 million is less than the amount required. They have voiced similar unfounded claims in response to all previous Welsh rate support grant settlements. But where is the evidence? There is none. The fact is that Welsh local government has been given the resources needed to maintain and develop services.

I was very surprised when the hon. Member for Alyn and Deeside (Mr. Jones), in responding to my statement on 18 December, made the extraordinary claim: There is no room for efficiency savings after 10 years of Conservative Government."—[Official Report, 18 December 1989; Vol. 164, c. 28.] It is a remarkable thing that, if today he were Secretary of State for Wales, he would be telling local authorities that, after 10 years of Conservative Government, he did not expect any further improvements in the efficiency of local authorities.

The fact is that the Audit Commission has estimated that some £52 million of efficiency savings are achievable by Welsh councils purely on those services which the Commission has so far examined. Some of these have already been realised and Welsh councils are commendably seeking further savings. I hope that the Welsh local authorities will continue to recognise, as I believe they do, the scope for greater efficiency.

The settlement is also an excellent one for non-domestic ratepayers. Their contribution to local government spending has been held at the same level in real terms as in 1989–90. I have honoured my commitment to ensure that the introduction of the uniform business rate will not lead to an increase in the burden on business. As a result of these new arrangements, which will remove the inequitable distortions caused by variations in local poundages, the business sector now has certainty that the maximum increase in its contribution in future years will not exceed inflation. The revaluation will remove the inequity caused by using out-of-date rateable values.

It is important also to recognise that the contribution required from Welsh businesses amounts only to around 20 per cent. of local authority spending and that the transitional arrangements I have introduced will phase in the changes faced by individual businesses over a number of years.

The combined effects of the revaluation and the introduction of the unform business rate will serve to reduce the rates burden on industrial property.

Mr. Alex Carlile (Montgomery)

Does the Secretary of State regard it as reasonable for village shopkeepers in Wales to have to pay 100 per cent. more than they are paying at present? They tell me that that is the consequence of UBR.

Mr. Walker

In any revaluation, careful consideration is given to the value of the buildings. In certain aspects of retailing which have not been revalued for many years, adjustments have been made when the value has increased. Similarly, there has been a reduction for a range of manufacturing and industrial concerns. I have created a system whereby the inequities caused by a lack of revaluation are removed.

I am glad to say that the combined effects of the revaluation and the introduction of UBR will benefit industrial properties. That can only be beneficial for the reinvigoration of Welsh industry, especially in the valleys, where the rate burden of industries will be about £11 million lower.

Mr. Denzil Davies (Llanelli)

Does not the revaluation to some extent benefit manufacturing industry because of the decline in manufacturing industry over the past 10 years? That is not something to crow about—it is something to feel very sorry about.

Mr. Walker

Surprisingly, the right hon. Gentleman is talking a load of nonsense. Quite a lot of manufacturing industry owns elderly buildings. As the right hon. Gentleman knows from his constituency, inward investment has increaed on a colossal scale. I am glad that the industries of the valleys are benefiting from these proposals by £11 million a year.

Transitional provisions will also operate to reduce the effect of the new system on community charge payers. I have provided £20 million for a scheme of community charge transitional relief in 1990–91, over and above aggregate external finance. The overall effect is that the average charge actually payable in Wales—assuming that authorities spend in line with my plans—should be £165, and certainly less than £173. The scheme will continue in 1991–92 and 1992–93. I have today placed my latest estimates of the distribution of these resources in the Library.

The scheme will ensure that all charge payers in communities where community charges implied by the settlement are more than a specified threshold above the average rates bill per adult payable in 1989–90 will have their charges reduced by an amount equivalent to that excess—320 out of 860 communities in Wales will benefit, including all the communities in the Rhondda and a very high proportion of the communities in other valley areas.

Mr. Dafydd Wigley (Caernarfon)

Does the Secretary of State accept that the way that the system works is rough justice? Dwyfor, which the Department has identified as an area of low per capita and family income, has not one community that benefits from this safety net. Why is that happening? What can be done about it?

Mr. Walker

I consulted local authorities, and they were agreed that this was the best way of getting the fullest benefit from the available money. I am very much in favour of the system. It will mean low administrative costs and will be a benefit for charge payers. Some 750,000 charge payers will benefit from the scheme. Because there is extra money outside aggregate external finance, charge payers in areas gaining from the new system will not be required to contribute towards an area safety net.

For those on the lowest incomes, community charge benefits will be available to meet up to 80 per cent. of the charge—although, because of the low level of community charges in Wales, those who are on income support will actually enjoy an effective rate of relief higher than the 100 per cent. rate rebates that they obtain at present. [Interruption.] More than 100 per cent. I have taken steps to ensure that people know about these benefits and are encouraged to take them up. This will bring positive cash benefits to 300,000 of the lowest income people in Wales. There have been a number of reports that some Welsh councils are planning to increase their expenditure very substantially and therefore to set high community charges.

Mr. Ron Davies (Caerphilly)

rose—

Mr. Walker

No, I will not give way. This is an important point. Those councils mistakenly believe that their charge payers will assume that the Government are to blame.

Mr. Rhodri Morgan (Cardiff, West)

rose—

Mr. Walker

Let me remind the House that the settlement allows for an increase in expenditure of 7.1 per cent., but we learn that, among the counties, South Glamorgan, Powys and Gwynedd are planning to increase spending by between 12 and 13 per cent.

Mr. Barry Jones (Alyn and Deeside)

On rates, is not the maximum only 80 per cent? Would the Secretary of State care to think about that? Perhaps there is a note waiting for him on the Bench behind him.

Mr. Walker

The hon. Gentleman is going back to the rebate point. I do not need a note. I am saying that the people on the maximum rate rebate scheme, because of low incomes, will be substantially better off financially as a result of what we are doing.

The hon. Gentleman is trying to avoid the serious point that I am making, so I shall repeat it. South Glamorgan, Powys and Gwynedd are planning to increase spending by between 12 and 13 per cent. Among the districts, Newport is planning an increase in expenditure of over 20 per cent. and Cardiff of over 30 per cent. In the latter case, this follows increases in the previous two years of 13.4 per cent. and 19.7 per cent.—well above the average increase for all Welsh districts.

Mr. Morgan

rose—

Mr. Walker

No; I want to continue.

These increases are outrageous and totally irresponsible. They represent quite unjustifiable demands on charge payers, and pre-empt charge payers' decisions as to what they can afford.

Mr. Allan Rogers (Rhondda)

On a point of order, Madam Deputy Speaker.

Mr. Walker

They are, in fact, putting quite unnecessary burdens—

Madam Deputy Speaker (Miss Betty Boothroyd)

Order. There is a point of order.

Mr. Rogers

The business before the House is complicated. I think it would further the debate substantially if the Secretary of State would give way and reply to points of detail—

Madam Deputy Speaker

Order. The hon. Gentleman, if he catches the eye of the Chair, will have his say eventually.

Mr. Ray Powell (Ogmore)

Further to that point of order, Madam Deputy Speaker. It is important. The Secretary of State has said himself that it is a very important matter that he is dealing with. The questions that my hon. Friends want to ask him are about the explanations that he is giving. In regard to your ruling about hon. Members catching your eye, you will appreciate that the debate will last only one and a half hours. All of us have an interest in the issue, so we cannot all hope to catch your eye. Therefore, Madam Deputy Speaker, perhaps you will impress upon the Secretary of State that it is important for him to give way.

Madam Deputy Speaker

May I impress upon the House that points of order, which are not as genuine as I wish, usurp the time of the House? I hope to call as many hon. Members as possible.

Mr. Walker

I hope that the charge payers in Wales will note that two bogus points of order have delayed the debate.

I repeat that the increases are outrageous and totally irresponsible. They represent quite unjustifiable demands on charge payers, and pre-empt charge payers' decisions as to what they can actually afford. They are, in fact, putting quite unnecessary burdens on the charge payers they purport to represent.

Until local accountability takes full effect, I will have to consider how to protect Welsh charge payers from excessive spending and outrageous community charges. Rate capping was never used in Wales: it was never necessary to do so. I had hoped that this would be so with charge capping. But if spending is not reduced from this extravagant scale, the councils concerned will force me to consider using my powers to limit charges to reasonable levels in order to protect their charge payers.

Let me make it plain that the crucial difference between England and Wales in recent years has been the better performance of Welsh local government in budgeting sensibly and containing spending to responsible aand affordable levels. That has led to a succession of realistic, indeed generous, settlements that have recognised and rewarded the performance of Welsh authorities. However, on the basis of the figures that I have quoted, I can assure the House that the Welsh local authorities are helping to ensure that, quite simply, such generosity will not be forthcoming in future.

I was shocked to read in the press that the chief financial adviser of one Welsh council has apparently advised it to create a new baseline for spending. In doing so, he is quoted as saying that this might be the last of the favourable years for local authorities in Wales. I have to advise those who might peddle such views that, if their advice results in extravagant spending increases, that could be a self-fulfilling prophecy.

This debate is not just about the reports we have before us; it is also about the responsibility of the House to ensure that the interests of our community chargepayers are protected from the extravagant and unnecessary burdens that some councils at present seem willing to inflict on them. It is also about the need for local government to avoid taking short-term political decisions.

Perhaps some local authorities think that, as there is no election this year, they will put up the charge now and then take advantage when the elections occur. If that is their motive, they will be exposed. There is time for them to think again and for the wiser politicians among them, including members of the Welsh Counties Committee and the Council of Welsh Districts, to curb those who appear to be set on inflicting such damage.

Local government recognises that the Government have delivered a settlement that should be beneficial to Welsh chargepayers, and that authorities can best serve their chargepayers by containing their spending and keeping the community charges low. There is no need for charges to be higher than those I have published, and an average of £173 is achievable. This is an outstanding settlement for Wales, and I commend it to the House.

10.32 pm
Mr. Barry Jones (Alyn and Deeside)

The subject of this debate is important; it affects our children's education, our housing, the homeless, the care of the elderly and our local environment. The Secretary of State set out only half the story. In a nasty, indeed extraordinary, speech, he launched unjustified attacks upon responsible county authorities. I remind him that he could not have better local authorities with which to deal. He need only ask his officials and they would tell him that that was the case.

It is not an excellent settlement. The total standard spending and aggregate external finance are inadequate. The figure of £173 is unrealistic. It is likely to be about £210; £173 it is not. After the right hon. Gentleman's recklessly sanguine hymn of praise for his wretched poll tax—a tax that the people of Wales do not want—I can do no better than to quote W. B. Yeats: A Statesman is an easy man,

He tells his lies by rote;

A journalist makes up his lies

And takes you by the throat The right hon. Gentleman can ponder on that.

The Government are engaged in an elaborate exercise in buck passing. Time and again, Ministers cite a misleading and inaccurate standard community charge or poll tax. The figure is an illusion. So when the poll tax demands fall through the letter box in a few months' time, people in Wales will wonder why the figure is so much higher than the figure that the Government have publicised so widely and vigorously.

Already, the Government are trying to pin the blame on local councils, and the aim of the right hon. Gentleman's speech tonight was to furnish the Government with an alibi in advance. I want to tell the Secretary of State that the buck starts and stops with Ministers at the Welsh Office, and with the motions that the Government are trying to railroad through the House.

Mr. Tim Devlin (Stockton, South)

Will the hon. Gentleman give way?

Mr. Jones

No.

The major defect is the shortfall in resources as represented by the figure of total standard spending. The finance directors and treasurers of local authorities in Wales believe that the total standard spending figure falls short, by 4 per cent., of the sum required to maintain existing services and to cope with the considerable volume of added burdens being imposed by the Government under recent legislation—specifically, the implementation of the national curriculum, local management of schools, the proposals contained in the National Health Service and Community Care Bill and the vital requirement to safeguard our assets—our buildings and roads.

Mr. Devlin

Will the hon. Gentleman give way?

Mr. Ron Davies

Will my hon. Friend give way?

Mr. Jones

I shall not give way to the hon. Member for Stockton, South (Mr. Devlin); I shall give way briefly to my hon. Friend the Member for Caerphilly (Mr. Davies).

Mr. Davies

I am grateful to my hon. Friend for giving way to an hon. Member who represents a Welsh constituency. He has been speaking with great authority about the problems faced by Welsh valley authorities. Can he explain to us why, according to the figures given by the Secretary of State, the poll tax payers of Rhymney valley will be faced with bills of £166 after discount, whereas, according to the treasurer of Rhymney Valley district council, the council will have to levy a poll tax of about £225 if it is to maintain existing standards of service? Is not the figure given by the Secretary of State an Alice-in-Wonderland figure?

Mr. Jones

rose—

Mr. Devlin

rose—

Hon. Members

Sit down.

Mr. Jones

I shall not give way to the hon. Gentleman.

Mr. Ian Bruce (Dorset, South)

Will the hon. Gentleman give way?

Mr. Jones

No.

My hon. Friend the Member for Caerphilly has destroyed the alibi of the Secretary of State for Wales. With his cogent intervention he has exposed the paucity of the right hon. Gentleman's case. My hon. Friend will agree that there are more English Members than Welsh Members on the Conservative Benches. Where are the Welsh Conservative Members?

Mr. Devlin

Will the hon. Gentleman give way?

Hon. Members

Give way.

Mr. Jones

No.

We have about 400,000 dwellings in Wales with a rateable value of less than £100. That is more than one third of the total. In addition, 225,000 dwellings in Wales have a rateable value of £75 or less. Many of the families living in those dwellings will watch their household bill double or quadruple over the next four years. In valley communities and some rural communities with the lowest domestic rateable values, the community charge for one-adult households will be about the same as the present rate bill in four years' time. For a two-adult household it will be double, for a three-adult household it will be treble and for a four-adult household it will be quadruple. Those are the estimates of the much respected Association of District Councils in Wales.

Reaction to the news about the business rate has been understandably angry, to say the least. Even bodies traditionally supportive of the Conservative party, such as the CBI, have voiced alarm. Many economic analysts have warned of the effects that it will have on investment and the fundamental health of businesses.

As for the effect of the community charge on the domestic front, there has been hardly a voice of sympathy for the move.

Mr. Devlin

rose—

Mr. Jones

No, I will not give way.

John Banham of the CBI has even accused the new business rate of subsidising, as it were, the community charge. That was stated by The Western Mail, which is usually supportive of the Secretary of State's policies. I wish to examine the impact of what is proposed on small businesses and retailers, and I believe that it will be considerable, despite the transitional relief arrangements.

In the next few years, businesses face massive increases in business rates. In Cardiff, for example, a newsagent's shop on Cowbridge road faces a 97 per cent. increase in rates, from £1,616 to £3,183 when transitional relief ends. Also in Cardiff, our capital city, a petrol station on Cathedral road faces a massive increase of over 200 per cent., from £3,500 to £10,900 when transitional relief ends. In Newport, the Panasonic electronics factory faces a 24 per cent. increase, to £111,000, with the end of transitional relief. Also in Newport, the Westgate hotel—

Mr. Ian Bruce

On a point of order, Madam Deputy Speaker. I seek your guidance. Will it be in order at the end of this debate for hon. Members who represent English constituencies—even though, as I am, they may be of Welsh birth—to vote on this matter and thereby put British Treasury money into this instrument, bearing in mind that I shall have great difficulty in taking part in the debate?

Madam Deputy Speaker

That convoluted point of order has nothing whatever to do with the debate.

Mr. Jones

I repeat, there are more English Conservative Members on the Government Benches than there are Welsh Conservatives.

Mr. Devlin

On a point of order, Madam Deputy Speaker. Quite aside from whether the hon. Gentleman wishes to give way, and of course it is his privilege not to give way, will you confirm that it is in order for English Members to take part in the debate and to seek to question the hon. Gentleman?

Madam Deputy Speaker

It is, of course, perfectly in order for English or Scottish Members, should they catch my eye, to take part in the debate.

Mr. Donald Coleman (Neath)

Further to the point—

Madam Deputy Speaker

Order. I think that I dealt with that point of order very adequately.

Mr. Coleman

On a point of order, Madam Deputy Speaker. It is clear to my hon. Friends and me that Conservative Members are intent on interfering with a debate that particularly concerns Welsh—

Madam Deputy Speaker

Order. So far as I am concerned, no hon. Member will interfere with the debate. Mr. Jones has the Floor.

Mr. David Wilshire (Spelthorne)

On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker

I hope that it is a genuine point of order.

Mr. Wilshire

Is it in order for English Members to learn from the Welsh why the community charge is so much cheaper in Wales than in England?

Madam Deputy Speaker

We are all here to be persuaded about all kinds of issues.

Mr. Jones

A shop in Oxford street in Swansea currently paying £33,000 in rates will pay £54,000 with the end of transitional relief—an increase of over 60 per cent. In Alyn and Deeside my local newsagent currently pays £684 in rates. Next year, under the new non-domestic rating system, the rates will be £847. When transitional relief ends, the rates will rise to £1,869.

A Chinese restuarant in Shotton currently pays rates of £2,987. Its rates will more than double to £6,000 when transitional relief ends.

Mr. Nicholas Bennett (Pembroke)

Will the hon. Gentleman give way?

Mr. Jones

The impact on local authority rates bills will also be great, but local authorities are not compensated for that in the revenue support grant settlement. Therefore, the impact will mean higher poll taxes.

My local authority—Alyn and Deeside—currently pays £103,000 in rates on Deeside leisure centre at Queensferry. In the first year of the uniform business rate, the rates bill will rise to £134,000. Without transitional relief the rates payable wil be £202,000—an increase of 95 per cent. The full effect will mean that the council's rate bill for next year will rise by 25 per cent., and with the end of transitional relief the figure will be 82 per cent. The Government are not pointing all that out and local authorities must explain to their communities the damage that will arise from a supposed enhancement.

The Government claim that industry will benefit. Under the revaluation, Shotton steelworks stands to gain a £1.5 million cut in its rates bill and that is the equivalent of about 140 new jobs. I thank the Secretary of State for that. However, under the system of transitional relief, the steelworks must wait years before it receives the full benefit.

It is totally unrealistic to claim that the poll tax in Wales will work out at £173. The likely figure is £210. The settlement that the Secretary of State seeks to impose is £80 million, or 4 per cent., short. All the financial professionals agree on that.

The Government also ignore the high rate of inflation, high interest rates and the white and blue-collar salary increases which local government must bear. They underestimate the costs of collecting the poll tax and they overestimate the numbers who will pay it. As the settlement is defective, there will be severe pressure on the schools service, social services, housing and local environmental services.

The impact of the business rate on small businesses will be considerable. There may be bankruptcies, there will be hardship and there is disillusion. Already the rate of liquidations and bankruptcies has risen amazingly. The situation is now worrying throughout Wales.

The poll tax will bear down very hard on the Gwent valleys, on Mid Glamorgan, West Glamorgan and Dyfed. That is what politically impartial professionals in local government tell me. The poll tax is a poor reward for people who still bear the scars of deprivation and economic difficulties.

In 1987, the right hon. Member for Henley (Mr. Heseltine) said that the poll tax will be known as a Tory tax."—[Official Report, 16 December 1987; Vol. 124, c. 1141.]

With a dignity that few others can attain, the hon. Member for Clwyd, North-West (Sir A. Meyer) said that the Prime Minister had foisted the unworkable poll tax upon us. That is Conservative Members' definition of electoral poison in Wales.

Last week, the right hon. Member for Chesham and Amersham (Sir I. Gilmour) said that the poll tax is "wholly unfair", "Orwellian", and "illogical". He also said that it is "expensive," and "difficult," and "difficult to collect."

On transitional relief, welcome though it is, I note what the Secretary of State said tonight. The figure is the same as that which was given last December. What is new?

Opposition Members will vote against the revenue support grant report and the revenue support grain distribution report. There are seven Welsh Conservative Members. It appears that war has been declared on two knights of the shires, but I predict that the poll tax will put severe pressure on the remainder. There is discernible panic in Conservative ranks because of the poll tax—[Interruption.] I advise Conservative Members who are trying hard not to listen that the poll tax does not relate to ability to pay. The bigger one's house and the wealthier the citizen, the better the poll tax suits.

The people of Wales always demand fair play. We are a democratic and fair-minded people. The poll tax cannot be right in Wales. There is no support for the poll tax in Wales. Last year, in two parliamentary by-elections, the county elections and the European elections, the Welsh electorate delivered a resounding rejection of the poll tax.

Tonight, Her Majesty's Government will impose the poll tax upon the people of Wales. In effect, they propose a £173 confidence trick. The reports will only confirm an anti-Tory mood in Wales. That mood has been growing steadily, and it will sweep away the Conservatives. A Government who impose a poll tax on Wales deserve to be defeated.

10.52 pm
Mr. Gwilym Jones (Cardiff, North)

The hon. Member for Alyn and Deeside (Mr. Jones) began by wondering, in a rather naive voice, why some of the Welsh community charge figures about which we have heard will be at an excessive level. The hon. Gentleman knows the answer as well as I do, but he refuses to give it. There is only one truthful reason why any council in Wales will levy an excessive community charge, and that is because it will choose to do so.

Mr. John P. Smith (Vale of Glamorgan)

Will the hon. Gentleman give way?

Mr. Jones

I should not like it to be thought that there is no welcome in Wales, so I shall give way.

Mr. Smith

I, too, recognise that the Secretary of State's claims are premised on the assessment of Welsh authorities' spending requirements.

Before they start using the language of rate capping, I remind Conservative Members that on Monday, the Vale of Glamorgan borough council levied a community charge 36 per cent. above the Welsh Office's target. That is one of only two Conservative district councils in Wales. Incidentally, one of them has in the past—mistakenly, I believe—observed Government spending guidelines. If they—

Madam Deputy Speaker

Order. The hon. Gentleman is making a speech, not an intervention.

Mr. Jones

I promise the hon. Gentleman that I fully intend to refer to his own council, if he will only allow me to make progress.

My right hon. Friend the Secretary of State delivered an excellent settlement and has steadily improved the position. In November he said that the average community charge in Wales would be £174. On December 18 he told the House that the figure would be only £173, or £165 after allowing for the rebate scheme. Wales is doing better in every way. Sixty-seven per cent. of all council expenditure there is coming from central Government, which compares very favourably with a contribution of 56 per cent. in Scotland or of only 46 per cent. in England.

The new business rate of only 20 per cent. in Wales will bear down much more easily than the 28 per cent. that will apply elsewhere. Some 85 per cent. of all Welsh council expenditure will be covered, leaving only 15 per cent. to be raised by the community charge.

Mr. Ian Bruce

Does my hon. Friend agree that, if my right hon. Friend the Secretary of State for Wales ever finds himself looking for a new job, that of Secretary of State for Dorset should certainly be open to him? He is asking community charge payers in Wales to make only a 15 per cent. contribution, whereas in Dorset, the Government contribution will be only 38 per cent., leaving local authorities there to raise the remaining 62 per cent.

Mr. Jones

My hon. Friend makes his point effectively. Meanwhile, the people of Wales are doing better in every way.

Who then is letting down the people of Wales?—[HON. MEMBERS: "The Tories."] Who is causing the anger that has been created at the unnecessarily high level of community charge being imposed in some parts of Wales? The answer to that question is the local councils, which are best depicted here by hon. Members opposite.

The settlement provides Welsh councils with a 7.1 per cent. increase—not on Welsh Office figures, but on the local council's own figures.

Mr. Donald Anderson (Swansea, East)

Does the hon. Gentleman condemn the total irresponsibility of the Vale of Glamorgan council in ignoring that wonderful gift from the Secretary of State?

Mr. Jones

The hon. Gentleman should apologise for wasting the time of the House. I have already said that I shall be referring later to Vale of Glamorgan council.

Eighty-five per cent. of Welsh councils's spending will be met from central Government, leaving them to find only the balance of 15 per cent. themselves. They have chosen to set community charges that are far too high, purely for crude political advantage. As my hon. Friend the Member for Wirral, West (Mr. Hunt), the Minister for Local Government and Inner Cities, said when winding up last Thursday's debate on local government finance, Labour councils in Wales, as in England, are following the instructions from on high to set a rate as high as they can get away with. They are blatantly exploiting the confusion that has naturally arisen in the change from rates to community charge, by blaming any increases on the Government.

If what is happening in my constituency is typical of the rest of Wales, as seems to be the case, many Welsh people are justified in being furious at their local councils. South Glamorgan county council is proposing a community charge of £175 when it ought to be no higher than £147, and could easily be lower. That represents a 20 per cent. increase. Cardiff city council's community charge should be £31 but it proposes a figure of £78—a 152 per cent. increase.

If South Glamorgan is bad, Cardiff is crazy. Remember that Cardiff is the more extreme, more Left-wing council. It is not just a Labour council, it is supported by its allies in the Liberal party. If anyone has ever doubted whether the Liberals are a party of the extreme Left, I invite them to look at the situation in Cardiff, where the Liberal and Labour parties jostle with each other to show which is the dafter.

I know that they have been desperate to soak up the extra spending that has been proposed in this ridiculous 152 per cent. increase—£78. The Vale of Glamorgan council next door, which provides virtually the same services, is proposing a community charge of £24. That is the difference. People who live in an area administered by a responsible, Conservative-controlled council, get a community charge of £24. I understand that the Vale of Glamorgan county council does not expect any rise to be necessary next year.

The latest dodge is that Cardiff is selling back to itself land that it already owns so that it can charge the charge payers an extra £20.

I am sure that all hon. Members will accept that there may be variations between the figures, perhaps of 1, 2 or even 5 or 10 per cent., but 55 per cent. is the scale of the increase we face from April, and that is over and above what we know needs to be charged in Cardiff. That is way beyond any amount that is sane. It is crazy.

The settlement is very good. We had a 7.1 per cent. allowance for increases. The councils only had to find 15 per cent. They have now come up with a community charge of £253. They know that it is a political con, and they are trying to take advantage.

However, I remind the Opposition that "you can't fool all of the people all of the time." In Cardiff we have had that experience. The last time that Labour was in control in Cardiff it went in for increases on this scale and put up the rates up by 94.5 per cent. We had local elections a year later and Labour was swept from control.

The people of Cardiff will realise that they have to pay £90 a year more per person—the price of having a Labour or an extreme Left-wing council in charge. There will be elections next year, but that is a long way off. In the meantime my right hon. Friend the Secretary of State for Wales is the last line of defence for the people of Cardiff and the people of Wales.

How mad or bad do councils in Wales have to be before my right hon. Friend uses his powers and acts? I was glad to hear the firm commitment that he made this evening. He is absolutely right, and I encourage him to move in that direction. Unless some sanity comes to Cardiff and to similar crazy councils, he must consider capping them.

11.2 pm

Mr. Denzil Davies (Llanelli)

I shall try to be brief, as so many of my right hon. and hon. Friends wish to speak.

The uniform business rate is one of the many idiocies of the poll tax. At Question Time on Monday, and again this evening, the Secretary of State made much of the fact that manufacturing industries and factories, many of them in the valleys and throughout south Wales, will benefit because the valuation of those properties will be lower after revaluation. That is a fact, but perhaps he should not crow too much about it, as the valuations are lower because of the decline in manufacturing and industry in Wales during the past ten years.

B and Q will pay more, Great Mills will pay more and all the other temples of consumerism selling foreign goods will pay more because they make more profits. Maufacturing industry will pay less, not because its property is dilapidated, which is what the Secretary of State said, but because there is no profit in manufacturing industry. It is because of the decline in manufacturing industry in the past ten years.

The Secretary of State need not smile at my remarks. It is a fact that 10 years of Tory Government have caused a massive decline in manufacturing industry in Wales. It is nothing to shout about—we should feel sorry about it. That is why the revaluation is having that effect.

The uniform business rate will make matters worse. As I understand it, it does not matter how many factories or manufacturing units a district or county council area contains; what matters is the number of people it contains. Manufacturing industry rating goes first to the Treasury and then back to the Welsh Office before being distributed per head of population. Why should planning officers in Llanelli, Cardiff or anywhere else put land aside for industrial development if it can be put to better use—if houses can be built on it, and people put into those houses? That will mean more money, in the form of both poll tax and uniform business rate.

The reforms militate against manufacturing industry. The planning officer is in charge; the industrial development officer has nothing to do, because his land is worth less than the land earmarked for residential housing. The uniform business rate is a crazy tax, which will lead to a further decline in our manufacturing base. It is symptomatic of the 10 years of the present Government that property has always come first and manufacturing second, and the uniform business rate will exacerbate the problem. The sooner it is abolished and we bring back a community-based industrial tax, the better.

The link between industry and local government will be broken; no incentives will be left. South Wales does not possess many flat industrial sites, and we are particularly short of large sites for large industrial investment. Such sites will be used increasingly for housing purposes—as they have been over the past five years—and particularly for housing at the upper end of the market, as people living in such houses do not draw on local resources so much. The uniform business rate is one of the most idiotic aspects of the whole idiotic poll tax.

11.6 pm

Sir Anthony Meyer (Clwyd, North-West)

I shall not be voting against the orders. Unfortunately, I ran into my hon. Friend the Member for Hereford (Mr. Shepherd) in the Lobby, and he told me with tears in his eyes how much it would upset my right hon. Friend the Secretary of State if I did. Being—as my hon. Friend the Member for Teignbridge (Mr. Nicholls)—has so delicately put it—a member of the spineless tendency, I decided to take refuge in abstention.

I cannot withhold my admiration for the brazen cheek with which my right hon. Friend shamelessly raids the coffers of the Treasury for the benefit of poll tax payers—I have the Prime Minister's authority to use the term "poll tax"—of Wales. I also admire the immense skill with which he has handled local authorities of all political persuasions throughout Wales, and has managed—up to now—to induce them to behave in a reasonable manner; I do not want to do anything to make his task more difficult.

My brief tells me that the new system of local government finance is simpler and fairer, and that it will lead to more political accountability. I must say that I find "fairer" a little difficult to accept; I know that it is a cheap example, but I find it hard to understand why the Duke of Westminster should pay the same sum as an elderly couple who have retired to a small cottage precisely because of its lower rateable value.

"Simpler" is a bit more complex. Perhaps the scheme had simpler elements when it was first announced—it had, at least, the merit of rough injustice—but now we have rebates for the poorest, which I welcome; exemptions for some handicapped people, but not for others; safety nets, and then transitional cushioning for the introduction of the safety nets; and, on top of all that, the near-certainty that the level of non-payment, whether through deliberate refusal or through the impossibility of keeping track of migrants, will hugely exceed the estimates. It no longer looks quite so simple as it did at the beginning. It is now beginning to look as though the uniform business rate will give rise to some problems of its own.

There is a great deal of unjustified moaning about the uniform business rate. I take the point made by the right hon. Member for Llanelli (Mr. Davies), but, because of the delays over revaluation—neither side of the House can take great pride in that—many businesses have been paying far lower rates for a great many years than they ought to have done under any equitable system. There will therefore be large increases, and they will be a shock.

There is a delightful pub in my constituency, the Blue Lion at Cwm. At the end of every polling day, my wife and I like to have a drink there. We certainly intend to have a drink there after polling at the next general election. The landlord of that pub told me with some dismay that his business rate will increase from £4,700 to £7,300. I understand his shock. Although it will be spread over three years, it is nevertheless a very substantial increase.

It is a little awkward for the Government to argue that a sharp rise in the business rate for some is not unreasonable, since revaluation would have led to such an increase, even under the old rating system. My recollection is that the Government used the pretext of revaluation as some kind of scare—to suggest that retention of the existing rating system would be quite impossible.

As for the new mechanism for the revenue support grant, I thought that, if not more equitable, it would be easier to explain. By and large, I suppose that it probably is. To some extent, however, we are in Red Queen territory, too. Rhuddlan borough council, under the leadership of its exceptionally able chief executive, who is also the borough treasurer, and has been for a long time past, finds that it will get £745,000 less in revenue support grant than it received last year, entailing a poll tax increase from £35 to £53.

That does not mean that the borough council has been extravagant. All it means—we have the explanation from the Welsh Office—is that the reduction results from a revision—fully discussed with and accepted by the Council of Welsh Districts—to the formula for the current expenditure component of SSAs. Whilst this revision inevitably affects the SSA of certain districts, including Rhuddlan, it is important to set this change within the context of the excellent Settlement for Wales for 1990/91.

I accept that it is an excellent settlement for Wales, but it is pretty cold comfort for poor old Rhuddlan, just because the formula changes, to find itself £750,000 short, having to increase its poll tax element by 50 per cent. and risking being clobbered for so doing.

What about accountability? The first thing that leaps to mind—it is something that Ministers have been claiming, and my right hon. Friend the Secretary of State for Wales claimed it just now—is that local authorities will be raising a much smaller proportion of the money that they will spend than they did under the old system. Previously, it was nearly 40 per cent.; now, it is about 16 per cent. I do not understand where the accountability comes into it, according to that formula.

Under the uniform business rate, there is a further removal of accountability. Not only will councils not fix the rates; they will not even derive any benefit if they treat local businesses well. Once again, I cannot see the logic of it.

My right hon. Friend has excellent relationships with the Welsh local authorities. Until recently, they have responded well. Despite the huge defects of the system, I hope that they will continue to do so. That is one reason why I shall not vote against the reports tonight. If, none the less, after all this explanation I am asked by Opposition Members why I am not going into the Division Lobby, I shall have to confess that, frankly, I am stumped for an answer.

11.9 pm

Mr. Richard Livsey (Brecon and Radnor)

It is a pleasure and a privilege to follow the hon. Member for Clwyd, North-West (Sir A. Meyer). He has a style which has long been lost in the Conservative party, and we congratulate him on his recent campaign.

The best way to analyse what the Secretary of State is doing is to look at individual parts of Wales and see how they are affected by the revenue support grant, how that affects the level of the poll tax, and how they will be affected by the uniform business rate.

We need to examine specific circumstances. As the Secretary of State decided to bash Powys a little in his speech, I want to give some figures for that area.

Mr. Morgan

A loony Left council.

Mr. Livsey

As the hon. Gentleman says.

The Secretary of State should congratulate Powys on having come up with a poll tax that is almost bang on the average £173 that the right hon. Gentleman said was the right figure to go for. The only problem is that Powys's poll tax is likely to be the lowest in the whole of Wales, so it cannot possibly be the average.

The Welsh Office firmly predicted in November that the county of Powys would pay a poll tax element of £109; and, adding on the appropriate district and community council costs, the end figure for the poll tax would be £120 for Montgomery, £129 for Radnor and £130 for Brecknock.

The only problem with these predictions is that they showed a £3.5 million shortfall in expenditure compared with what the Welsh Office itself assumed the county would need to spend in the coming financial year to provide an average level of services—that is, the assumption for total standard spending. Local government treasurers in Powys were astonished by the Welsh Office's poll tax predictons. They rightly said that the £3.5 million shortfall had to be made up. That done, they predicted that the poll tax would between £175 and £200 a head.

Yesterday, Powys, along with the district, set its poll tax. The county poll tax ended up at £147, not the £109 forecast by the Welsh Office in November—an increase of £38 per head. Radnor district set its poll tax yesterday at £175, not the £129 forecast by the Welsh Office in November, an increase of £46 a head just to keep services—

Mr. Devlin

Will the hon. Gentleman give way?

Mr. Livsey

No, I will not.

As I said, all this was just to keep services equivalent to Welsh Office targets. In this exercise, the Welsh Office sets up figures only to knock them down again.

Powys will have the lowest poll tax in Wales, at £175. That was the average poll tax predicted by the Secretary of State last autumn. I can confidently predict that every other council in Wales will have a much higher figure.

All these false figures are nothing more than a con trick. The Welsh Office predicts that wages will rise by 6 per cent., but the Secretary of State for Education and Science has predicted an increase of 7.5 per cent. for teachers. The figures do not add up; no allowance has been made for such increases. The legislation for implementing the national curriculum and for local management—

Mr. Win Griffiths (Bridgend)

Mid Glamorgan has already found that, under the last settlement, the money provided by the Government was £350,000 short of what was needed. To provide water and extra power points in old primary schools, the council will have to spend almost £500,000 that the Welsh Office has refused to provide. That one small item is equivalent to another £1.25 on the poll tax. Is that not a disgrace?

Mr. Livsey

It was a disgrace. The hon. Gentleman makes his point well: the level of the poll tax was grossly under-estimated.

New burdens will be placed on community care by the National Health Service and Community Care Bill, and the green Bill, which contains provisions on litter and adds the burden of collecting it on districts, and will add an estimated 6 per cent. to the costs of districts.

To shorten my speech, I shall give two brief examples of problems that will arise under the uniform business rate. At present, a newsagent's shop I know in mid-Wales pays rates of i1,239, but under the uniform business rate it will pay £1,533—an increase of almost £300, or almost 24 per cent. A tourism complex in the south of my constituency currently pays £19,000 in rates, but under the uniform business rate it will pay £35,000—an increase of £16,000, or almost 100 per cent.

The uniform business rate will have a devastating effect on small businesses. The Treasury's contribution will be only 2 per cent., yet business rate payers in Powys will contribute 40 per cent.—not 20 per cent.—which was the figure that the Secretary of State gave. This is a good deal for the Treasury but a lousy one for small businesses. Added to those figures must be high interest rates, which, with the uniform business rate are a right and left hook to small businesses. Small business people who used to vote for the Conservative party will not do so again under any circumstances.

11.20 pm
Mr. Nicholas Bennett (Pembroke)

If the Labour party has any sense, it would not oppose the hon. Member for Brecon and Radnor (Mr. Livsey) at the next election. Only he makes the hon. Member for Alyn and Deeside (Mr. Jones) sound exciting.

Tonight, I heard the most synthetic opposition that I have ever heard in the House. The Labour party knows that Wales is getting a better deal on the community charge than Scotland or England. We are benefiting from the expertise of my right hon. Friend the Secretary of State for Wales.

I welcome the community charge system. I do not understand how it can be considered fair for 50 per cent. of the electorate in Pembrokeshire to vote in local elections but not make a direct contribution to the services that they receive, while the other 50 per cent. carry the burden through the rating system. Everyone over 18 who is eligible to vote in local elections should make a direct contribution to local authorities for the services that they receive.

It is nonsense for the hon. Member for Alyn and Deeside to claim that people who live in bigger houses have bigger incomes. Many of my constituents who live in large houses, but whose husbands or wives have died and whose children have moved away, are on low incomes. They do not wish to move from the home in which they have lived for 40 or 50 years. I do not believe that they should be driven out.

The community charge recognises that not houses but individuals use local authority services. Individuals use street lighting, dustbins, swimming pools and public libraries, not houses. They should therefore contribute to the cost of the services that they receive.

Mr. Win Griffiths

Will the hon. Gentleman give way?

Mr. Bennett

No, because the hon. Member for Alyn and Deeside would not give way to Conservative Members throughout his speech. The hon. Member for Bridgend (Mr. Griffiths) had a fair crack of the whip in the earlier debate on education.

The community charge will make local authorities more accountable. It cannot be right that a minority in many local authority areas picks up the bill for the services provided to the majority. Local authorities will be more accountable if every voter in local elections makes a direct contribution to the cost of local authority services.

We should be aware of the position in Wales. This year, we are receiving a 7.1 per cent. increase from the Government in local authority grants, based not on Welsh Office figures but on the previous year's spending of local authorities. In addition, relief will be available to one in three community charge payers, as announced by my right hon. Friend the Secretary of State in reply to a question from my hon. Friend the Member for Cardiff, North (Mr. Jones).

Some community charge voters will get an 80 per cent. rebate on the total charge that they would have had to pay, had they been on average earnings. It is important to acknowledge that the Government have taken into account people's ability to pay, not only in the fact that those who pay income tax and are on the highest rates will pay 16 times as much anyway in their contributions to central Government, but in the community charge itself, with relief of up to 80 per cent.

On the uniform business rate—

Mr. Neil Kinnock (Islwyn)

rose—

Mr. Bennett

The Leader of the Opposition, who rarely graces the Chamber during debates on Wales, wants to say something. Perhaps he would like to come in at this point?

Mr. Kinnock

The House will sympathise with my not being here more often, if I have to listen to hon. Members such as the hon. Member for Pembroke (Mr. Bennett). What does the hon. Gentleman mean by the term "community charge voters", since I have not heard it before? It is a candid expression for him to use. Since he is trying to draw a connection between the liability for taxation and the right to vote, will he tell us whether he should celebrate the fact that people will get up to 80 per cent. rebates? Should that mean a reduction in their civil right to cast their vote?

Mr. Bennett

Only the right hon. Gentleman's logic would get him to that final point. On his first point, as community charge payers will be the same people as the voters, there is clearly a correlation between the two. At the moment in some cases, the voters are rarely the ratepayers; in future, those who vote will also make a contribution to the services.

On the uniform business rate, it seems to me that Opposition Members are selective in their memories. They were in power from 1974 to 1979. The hon. Member for Alyn and Deeside was a junior Minister in the Welsh Office. The Labour Government cancelled the revaluation in 1978. Admittedly, the present Government also cancelled a revaluation, which only goes to show that when it comes to facing up to challenges, Governments of both parties have been in dereliction of their duties; but at last the nettle has been grasped, and it is important to recognise, when the hon. Member for Alyn and Deeside says that since 1973 there have been large increases in rateable value, that there have also been increases in rental value.

Mr. Ray Powell (Ogmore)

On a point of order, Madam Deputy Speaker. I assume that there will be a wind-up for this debate and, in fairness to both Front-Bench speakers, I think that we should have a little time for them. I take it that the Division will be called at 11.44 pm.

Madam Deputy Speaker

That is barely a point of order. We ought to proceed with the debate.

Mr. Bennett

I have been generous in giving way to Opposition Members and I have been speaking for five minutes.

Rental values have increased tremendously since 1973 and it is not surprising if rateable values have also increased in the same period. A lot of nonsense is talked about the increase in rateable values. A headline in my local paper says, "Rates Shock for Traders", and goes on to say: One trader in the town's High Street has seen the rateable value on his property jump from £64 to 1,450—a staggering 2,265 per cent. increase"—[Interruption.]

Madam Deputy Speaker

Order. The hon. Member who has the Floor should not be interrupted in this way.

Mr. Bennett

We have to ignore the intellectual tendency on the Opposition Front Bench because at this time of night they are a little more exuberant than they might otherwise be.

To return to the Tenby Observer of 19 January 1990, it says that one trader in the town's high street has seen the rateable value of his property jump from £64 to £1,450, an increase of 2,265 per cent. If it was really £64, that must be the lowest rateable value for any business in Wales. But even after the increase to £1,450 and without transitional relief, that business will ultimately pay £533.60. That hardly seems to me an unreasonable figure for business premises in a town in my constituency.

But that is the sort of publicity that we get in the local papers, when reporters do not explain what the amount will be under the business rate, but refer merely to the rateable value. The figures show that on the whole businesses in Wales will enjoy a good deal as a result of the settlement. With the transitional relief, no business will face an increase of more than 23 per cent. if inflation runs at 7 or 8 per cent.

My final—

Mr. Ray Powell

At last.

Mr. Bennett

The hon. Gentleman says, "At last." The House will know that he always makes bogus points of order in Welsh debates on the Floor of the House or during sittings of the Welsh Grand Committee. He does not have two pennies to rub together when it comes to a brain. If he wants me to make a short speech, I suggest that he keeps quiet.

I shall conclude my remarks by referring to the dog that did not bark in the night. The hon. Member for Alyn and Deeside spoke for a considerable time, as did the hon. Member for Dagenham (Mr. Gould) last Thursday, but they did not mention what the Labour party would do about local community charges and local business rates. It is political dishonesty that neither of them has the guts to tell the British public what the Labour party would do if it formed a Government. What would it do about domestic rates and business rates?

Mr. Wilshire

Does my hon. Friend agree that, if the Opposition do not have a clue what they would do, they cannot tell us?

Mr. Bennett

My hon. Friend is right.

Unfortunately, between the speech of the hon. Member for Dagenham on Thursday on the English revenue support grant reports and the speech of the hon. Member for Alyn and Deeside this evening, a report appeared in The Times on 22 January. In that report we are told that the Labour party is preparing to unveil"—

Mr. Rogers

On a point of order, Madam Deputy Speaker. Conservative Members have already taken 46 minutes out of a 90-minute debate and Labour Members have taken only 25 minutes. You will know that 25 Labour Members represent Welsh constituencies while only seven Welsh constituencies are represented by Tory Members.

Madam Deputy Speaker

That is not a point of order for the Chair.

Mr. Bennett

I have spoken for 10 minutes. during which there have been several interruptions. I am trying to bring my remarks to an end. I know that Opposition Members do not like it when I and my hon. Friends say that they have no policy.

We are told in The Times that the Labour party is preparing to unveil plans to abolish the community charge and replace it with a property tax levied according to people's ability to pay. Apparently the hon. Member for Dagenham will announce that at a conference in Cardiff next month.

The most important part of the report—it has not been confirmed or denied by any Opposition Member—is that the proposals will include the possibility of people living in large shared households receiving separate bills based on a proportion of the value of the property. That sounds suspiciously like the principle of the community charge. It is time that the Labour party came clean by telling us what it believes to be right.

11.33 pm
Mr. Ieuan Wyn Jones (Ynys Môn)

I shall begin my contribution to the debate by asking the Secretary of State to listen with care to a quotation from a report in today's edition of The Independent— Why does the Government insist on ignoring what authorities have been spending, relying instead on fictional figures? The Government figures arise from the wrong information being put into the computer in the first place. That statement was made by Alan Ward, the Conservative leader of Bracknell Forest district council, not by the treasurer of Gwynedd, Powys or South Glamorgan. Even Conservative council members are saying that the wrong information has been used to set poll tax levels.

The poll tax is abhorrent, unjust, inequitable, iniquitous and regressive. I believe that the Secretary of State takes to same view. Unfortunately, he has not on this occasion had the courage of his convictions, and he will not be joining us in voting against the measure.

The Welsh public oppose the poll tax partly because they have been misled by Welsh Office Ministers and the Government about its level. The figures produced by the Welsh Office in December are a serious under-estimate. The Welsh Office said that the average poll tax would be £174. A month later, we find that every district says that the figure will be substantially more—perhaps 40 per cent., 50 per cent. or 60 per cent. more. In my district, Ynys Mon, it will be 50 per cent. more.

The reason is that the Government have got all the figures wrong. They have under-estimated expenditure this year, never mind the fact that inflation is running at 8 per cent. Their figures include 3.4 per cent. for inflation next year. The Government have totally misunderstood the position in Wales. Now they say that it is the fault of local authorities that the poll tax will be more. Local authorities in Wales are to be held responsible for the way in which the Government have let the people down.

I remind the hon. Member for Pembroke (Mr. Bennett) that there will be a heavy political price to pay. He and his hon. Friends should have the courage of their convictions, like the Tory rebels last Thursday night. They will pay the price unless they join us in the Lobby tonight.

11.35 pm
Mr. Paul Murphy (Torfaen)

We all thought that we would have more time to discuss this important matter. However, whatever antics the Tories get up to in the Chamber or anywhere else do not hide the fact that this is the most unpopular tax ever to hit the Principality of Wales. They are wholly responsible for it.

We all agree that the overall settlement is totally inadequate. It is 4 per cent. short of what is needed to maintain existing services. The Secretary of State keeps telling us that year after year local authorities grumble about the settlements. In Wales they have every right to grumble because over a decade they have been robbed of millions and millions of proper rate support grant.

The Secretary of State has said that local authorities in Wales are extravagant. He has given them £78 million for improvement grants in the valleys and elsewhere, but he has not told us in his empty promises that he has not given them a single extra penny to process those improvement grants.

Many hon. Members have mentioned transitional relief, as they should. Although the system was agreed with local authorities, its implementation by the Welsh Office is flawed. Councils have already told the Secretary of State that not every poll tax payer in Wales will pay the tax, as is happening in Scotland. They have told him that his assumptions on council spending, on which the relief is based, are unreal. Under the so-called relief system, out of 855 communities in Wales, only 255 will receive relief. In South Glamorgan, out of 54 communities, only one will benefit. Thousands upon thousands of people will suffer as a direct result of the so-called relief system proposed by the Secretary of State.

The Secretary of State has boasted about the unified business rate, but he has not told business people in Wales that new businesses will have no relief, that businesses which move will lose their relief, and that, out of 100,000 business properties in Wales, 70,000 will be losers and only 30,000 will be gainers.

Nor has the Secretary of State revealed the full facts about the poll tax. He has not revealed how he has robbed our councils of nearly £80 million which will go directly on to the shoulders of the poll tax payers. He has not told us about how he refused to listen to Welsh councils in meeting after meeting over the last three or four months. The hon. Member for Cardiff, North (Mr. Jones) talked about Abraham Lincoln. Local authorities in Wales cannot all be wrong all the time about the level of their poll tax.

The Secretary of State has made the most disgraceful attack upon local authorities in Wales that I have heard. At least his predecessor, Lord Crickhowell, did not pretend to like councils in Wales. This Secretary of State came to Wales and said that local authorities were doing a good job. Today, Welsh local authorities will know what he really thinks of them. He has hinted darkly about inefficiency, overspending and irresponsibility. He cannot have it both ways and he is now in an awkward spot. He knows that his Back Benchers are opposed to the poll tax and he is trying to shift the blame on to the Welsh local authorities. The people of Wales will see through him. We know that there is only one person in Wales to blame for the poll tax, and that is the right hon. Gentleman. He has a great deal to answer for, and I urge the House to vote against the measures.

11.40 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Ian Grist)

From all the sound and fury tonight, one would not think that the Labour party, when it was in office in 1976–77, was responsible for cutting the rate support grant in real terms by 4 per cent.; in the next year by 8 per cent.; and in the year after that, by 4 per cent. Labour Members claim that their hearts bleed for local government, but I for one do not believe it. If this Government had continued with the Labour Government's policy, this year Wales would receive only £650 million instead of £1,000 million. That shows the difference in the achievements of this Government compared with the Labour Government.

Cardiff is the capital city of Wales and sets the tone for so much of life in the Principality. The community charge that the Welsh Office believed was right for Cardiff was £157, a reduction of 22 per cent.—£43—on the average rate bill for the current year. It was the largest reduction in Wales. What has happened? South Glamorgan has raised the rate by £47 and Cardiff has raised it not by the £29 that we predicted, but by £78, a difference of 168 per cent. I do not think that any hon. Member could believe that that was anything but unfair.

Cardiff's capital expenditure budget this year rose by 35 per cent., and receipts were down from £25 million to £3.5 million. They paid for it this year to paint the picture for next year. The total spend in Cardiff this year is up by 20 per cent. Councillor Mungham, chairman of the finance committee, is now predicting an increase in the budget for next year of 30 per cent. How on earth can he predict such a rise? He is playing fast and loose because politics is involved: there is to be a city election next year. That is the long and the short of what Councillor Mungham and the Labour party are doing.

The hon. Member for Alyn and Deeside (Mr. Jones) has obviously never understood what the total spending assessment included. It included an allowance of 7.5 per cent. for the teachers' pay rise; the personal social services were covered for the implementation of the Children Act 1989 and the disabled persons legislation and for training needs in social services; rises in police pay were included, as was highway maintenance; and some £32.9 million was made available for the cost of the community charge administration and benefit. Opposition Members obviously did not read their papers to discover what was happening. There was an 8.2 per cent. rise for those sectors.

There has been some misunderstanding about the unified business rate. Opposition Members do not appreciate that the amount of money to be raised from business in Wales has not increased: it has been reallocated according to the revaluation. For all the large increases, there have been gainers, too—a fact that people seem to overlook.

Of course, since 1973, there has been a change in real values and rents of properties, and everybody knows that: everyone who runs a shop or business will know how values and rents have risen in the past few years—

It being one and a half hours after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question necessary to dispose of them, pursuant to order [19 January].

The House divided: Ayes 252, Noes 206.

Division No. 47] 11.44 pm
AYES
Aitken, Jonathan Clark, Dr Michael (Rochford)
Arnold, Tom (Hazel Grove) Clark, Sir W. (Croydon S)
Ashby, David Clarke, Rt Hon K. (Rushcliffe)
Aspinwall, Jack Colvin, Michael
Bellingham, Henry Conway, Derek
Bennett, Nicholas (Pembroke) Coombs, Anthony (Wyre F'rest)
Bevan, David Gilroy Coombs, Simon (Swindon)
Boswell, Tim Couchman, James
Bottomley, Peter Cran, James
Bowis, John Currie, Mrs Edwina
Brazier, Julian Davies, Q(Stamf'd & Spald'g)
Bright, Graham Davis, David (Boothferry)
Brown, Michael (Brigg & Cl't's) Day, Stephen
Bruce, Ian (Dorset South) Devlin, Tim
Buck, Sir Antony Dorrell, Stephen
Budgen, Nicholas Douglas-Hamilton, Lord James
Burns, Simon Dover, Den
Burt, Alistair Dunn, Bob
Butcher, John Durant, Tony
Butler, Chris Dykes, Hugh
Butterfill, John Eggar, Tim
Carlisle, Kenneth (Lincoln) Emery, Sir Peter
Carrington, Matthew Evans, David (Welwyn Hatf'd)
Carttiss, Michael Fairbairn, Sir Nicholas
Chalker, Rt Hon Mrs Lynda Fallon, Michael
Chope, Christopher Favell, Tony
Churchill, Mr Fenner, Dame Peggy
Clark, Hon Alan (Plym'th S'n) Field, Barry (Isle of Wight)
NOES
Abbott, Ms Diane Dixon, Don
Allen, Graham Dobson, Frank
Anderson, Donald Doran, Frank
Archer, Rt Hon Peter Dunnachie, Jimmy
Ashton, Joe Dunwoody, Hon Mrs Gwyneth
Banks, Tony (Newham NW) Eadie, Alexander
Barnes, Harry (Derbyshire NE) Evans, John (St Helens N)
Barron, Kevin Ewing, Harry (Falkirk E)
Beckett, Margaret Ewing, Mrs Margaret (Moray)
Beith, A. J. Fatchett, Derek
Bell, Stuart Faulds, Andrew
Benn, Rt Hon Tony Fearn, Ronald
Bennett, A. F. (D'nt'n & R'dish) Field, Frank (Birkenhead)
Bermingham, Gerald Fields, Terry (L'pool B G'n)
Bidwell, Sydney Fisher, Mark
Blair, Tony Flannery, Martin
Blunkett, David Foot, Rt Hon Michael
Boateng, Paul Foster, Derek
Boyes, Roland Fraser, John
Bradley, Keith Fyfe, Maria
Bray, Dr Jeremy Galloway, George
Brown, Gordon (D'mline E) Garrett, John (Norwich South)
Brown, Nicholas (Newcastle E) Gilbert, Rt Hon Dr John
Brown, Ron (Edinburgh Leith) Godman, Dr Norman A.
Buckley, George J. Golding, Mrs Llin
Caborn, Richard Gordon, Mildred
Callaghan, Jim Gould, Bryan
Campbell, Menzies (Fife NE) Graham, Thomas
Campbell, Ron (Blyth Valley) Grant, Bernie (Tottenham)
Campbell-Savours, D. N. Griffiths, Nigel (Edinburgh S)
Carlile, Alex (Mont'g) Griffiths, Win (Bridgend)
Clarke, Tom (Monklands W) ' Grocott, Bruce
Clay, Bob Hardy, Peter
Clelland, David Harman, Ms Harriet
Clwyd, Mrs Ann Hattersley, Rt Hon Roy
Cohen, Harry Haynes, Frank
Coleman, Donald Henderson, Doug
Cook, Frank (Stockton N) Hinchliffe, David
Cook, Robin (Livingston) Hoey, Ms Kate (Vauxhall)
Corbett, Robin Hogg, N. (C'nauld & Kilsyth)
Corbyn, Jeremy Home Robertson, John
Cousins, Jim Hood, Jimmy
Cox, Tom Howarth, George (Knowsley N)
Cryer, Bob Howells, Geraint
Cummings, John Howells, Dr. Kim (Pontypridd)
Cunliffe, Lawrence Hoyle, Doug
Cunningham, Dr John Hughes, John (Coventry NE)
Dalyell, Tam Hughes, Robert (Aberdeen N)
Darling, Alistair Hughes, Roy (Newport E)
Davies, Rt Hon Denzil (Llanelli) Hughes, Simon (Southwark)
Davies, Ron (Caerphilly) Illsley, Eric
Davis, Terry (B'ham Hodge H'I) Ingram, Adam
Dewar, Donald Janner, Greville
Fishburn, John Dudley McLoughlin, Patrick
Fookes, Dame Janet McNair-Wilson, Sir Michael
Forman, Nigel McNair-Wilson, Sir Patrick
Forsyth, Michael (Stirling) Madel David
Forth, Eric Major, Rt Hon John
Fowler, Rt Hon Sir Norman Malins, Humfrey
Fox, Sir Marcus Mans, Keith
Franks, Cecil Maples, John
Freeman, Roger Marshall, John (Hendon S)
French, Douglas Marshall, Michael (Arundel)
Fry, Peter Maude, Hon Francis
Gardiner, George Mawhinney, Dr Brian
Garel-Jones, Tristan Maxwell-Hyslop, Robin
Gill, Christopher Mayhew, Rt Hon Sir Patrick
Goodlad, Alastair Mellor, David
Goodson-Wickes, Dr Charles Miller, Sir Hal
Gorman, Mrs Teresa Mills, Iain
Gow, Ian Mitchell, Andrew (Gedling)
Grant, Sir Anthony (CambsSW) Mitchell, Sir David
Greenway, Harry (Ealing N) Monro, Sir Hector
Greenway, John (Ryedale) Montgomery, Sir Fergus
Gregory, Conal Morris, M (N'hampton S)
Grist, Ian Morrison, Rt Hon P (Chester)
Grylls, Michael Moss, Malcolm
Gummer, Rt Hon John Selwyn Moynihan, Hon Colin
Hague, William Neale, Gerrard
Hamilton, Neil (Talton) Needham, Richard
Hampson, Dr Keith Nelson, Anthony
Hannam, John Neubert, Michael
Hargreaves, A. (B'ham H'll Gr') Newton, Rt Hon Tony
Hargreaves, Ken (Hyndburn) Nicholson, David (Taunton)
Harris, David Nicholson, Emma (Devon West)
Haselhurst, Alan Norris, Steve
Hawkins, Christopher Onslow, Rt Hon Cranley
Hayes, Jerry Oppenheim, Phillip
Hayward, Robert Page, Richard
Heathcoat-Amory, David Paice, James
Higgins, Rt Hon Terence L. Patnick, Irvine
Hill, James Patten, Rt Hon John
Hind, Kenneth Pattie, Rt Hon Sir Geoffrey
Hogg, Hon Douglas (Gr'th'm) Pawsey, James
Hordern, Sir Peter Peacock, Mrs Elizabeth
Howard, Rt Hon Michael Porter, David (Waveney)
Howarth, Alan (Strat'd-on-A) Portillo, Michael
Howarth, G. (Cannock & B'wd) Powell, William (Corby)
Howe, Rt Hon Sir Geoffrey Price, Sir David
Hughes, Robert G. (Harrow W) Raison, Rt Hon Timothy
Hunt, David (Wirral W) Redwood, John
Hunt, Sir John (Ravensbourne) Renton, Rt Hon Tim
Hunter, Andrew Rhodes James, Robert
Hurd, Rt Hon Douglas Ridsdale, Sir Julian
Irvine, Michael Rifkind, Rt Hon Malcolm
Jack, Michael Roberts, Wyn (Conwy)
Jackson, Robert Roe, Mrs Marion
Janman, Tim Rossi, Sir Hugh
Jessel, Toby Rowe, Andrew
Jones, Gwilym (Cardiff N) Rumbold, Mrs Angela
Jones, Robert B (Herts W) Ryder, Richard
Key, Robert Sackville, Hon Tom
King, Roger (B'ham N'thfield) Sainsbury, Hon Tim
King, Rt Hon Tom (Bridgwater) Scott, Rt Hon Nicholas
Knapman, Roger Shaw, David (Dover)
Knight, Greg (Derby North) Shaw, Sir Giles (Pudsey)
Knight, Dame Jill (Edgbaston) Shelton, Sir William
Knowles, Michael Shephard, Mrs G. (Norfolk SW)
Lamont, Rt Hon Norman Shepherd, Colin (Hereford)
Lang, Ian Skeet, Sir Trevor
Latham, Michael Soames, Hon Nicholas
Lennox-Boyd, Hon Mark Speller, Tony
Lightbown, David Spicer, Sir Jim (Dorset W)
Lilley, Peter Spicer, Michael (S Worcs)
Lloyd, Sir Ian (Havant) Squire, Robin
Lloyd, Peter (Fareham) Stanbrook, Ivor
Lord, Michael Stern, Michael
Luce, Rt Hon Richard Stevens, Lewis
Lyell, Rt Hon Sir Nicholas Stewart, Allan (Eastwood)
Macfarlane, Sir Neil Stewart, Andy (Sherwood)
MacGregor, Rt Hon John Stewart, Rt Hon Ian (Herts N)
MacKay, Andrew (E Berkshire) Stokes, Sir John
Maclean, David Stradling Thomas, Sir John
Sumberg, David Walker, Rt Hon P. (W'cester)
Summerson, Hugo Waller, Gary
Tapsell, Sir Peter Ward, John
Taylor, John M (Solihull) Wardle, Charles (Bexhill)
Taylor, Teddy (S'end E) Watts, John
Tebbit, Rt Hon Norman Wheeler, Sir John
Thompson, D. (Calder Valley) Whitney, Ray
Thompson, Patrick (Norwich N) Widdecombe, Ann
Thornton, Malcolm Wilkinson, John
Thurnham, Peter Wilshire, David
Townend, John (Bridlington) Winterton, Mrs Ann
Tracey, Richard Winterton, Nicholas
Tredinnick, David Wolfson, Mark
Trippier, David Wood, Timothy
Twinn, Dr Ian Woodcock, Dr. Mike
Vaughan, Sir Gerard Yeo, Tim
Waddington, Rt Hon David
Wakeham, Rt Hon John Tellers for the Ayes:
Walden, George Mr. Sydney Chapman and
Walker, Bill (T'side North) Mr. Nicholas Baker.
Jones, Barry (Alyn & Deeside) Primarolo, Dawn
Jones, Ieuan (Ynys Môn) Quin, Ms Joyce
Jones, Martyn (Clwyd S W) Randall, Stuart
Kaufman, Rt Hon Gerald Redmond, Martin
Kinnock, Rt Hon Neil Rees, Rt Hon Merlyn
Kirkwood, Archy Reid, Dr John
Lambie, David Robertson, George
Lamond, James Rogers, Allan
Leadbitter, Ted Rooker, Jeff
Leighton, Ron Ross, Ernie (Dundee W)
Lestor, Joan (Eccles) Rowlands, Ted
Lewis, Terry Ruddock, Joan
Litherland, Robert Sedgemore, Brian
Livingstone, Ken Sheerman, Barry
Livsey, Richard Sheldon, Rt Hon Robert
Lloyd, Tony (Stretford) Short, Clare
Lofthouse, Geoffrey Skinner, Dennis
Loyden, Eddie Smith, Andrew (Oxford E)
McAllion, John Smith, C. (1sl'ton & F'bury)
McAvoy, Thomas Smith, Rt Hon J. (Monk'ds E)
McCartney, Ian Smith, J. P. (Vale of Glam)
Macdonald, Calum A. Soley, Clive
McFall, John Spearing, Nigel
McLeish, Henry Steinberg, Gerry
McWilliam, John Stott, Roger
Madden, Max Strang, Gavin
Mahon, Mrs Alice Straw, Jack
Marek, Dr John Taylor, Mrs Ann (Dewsbury)
Marshall, David (Shettleston) Taylor, Rt Hon J. D. (S'ford)
Martin, Michael J. (Springburn) Thomas, Dr Dafydd Elis
Maxton, John Thompson, Jack (Wansbeck)
Meacher, Michael Turner, Dennis
Meale, Alan Vaz, Keith
Michael, Alun Wallace, James
Michie, Bill (Sheffield Heeley) Walley, Joan
Mitchell, Austin (G't Grimsby) Wardell, Gareth (Gower)
Moonie, Dr Lewis Wareing, Robert N.
Morgan, Rhodri Watson, Mike (Glasgow, C)
Morley, Elliot Welsh, Andrew (Angus E)
Morris, Rt Hon A. (W'shawe) Wigley, Dafydd
Morris, Rt Hon J. (Aberavon) Williams, Rt Hon Alan
Mowlam, Marjorie Williams, Alan W. (Carm'then)
Mullin, Chris Wilson, Brian
Murphy, Paul Winnick, David
Nellist, Dave Wise, Mrs Audrey
Oakes, Rt Hon Gordon Worthington, Tony
O'Brien, William Wray, Jimmy
O'Neill, Martin Young, David (Bolton SE)
Orme, Rt Hon Stanley
Pike, Peter L. Tellers for the Noes:
Powell, Ray (Ogmore) Mr. Ken Eastham and
Prescott, John Mr. Allen McKay.

Question accordingly agreed to.

Resolved, That the Welsh Revenue Support Grant Report 1990–91 (House of Commons Paper No. 53), a copy of which was laid before the House on 20th December, be approved.

Resolved, That the Welsh Revenue Support Grant Distribution Report (House of Commons Paper No. 54), a copy of which was laid before the House on 20th December, be approved.—[Mr. Peter Walker.]

Resolved, That the Welsh Non-Domestic Rating (County Share and District Share) Report (House of Commons Paper No. 55), a copy of which was laid before the House on 20th December, be approved.—[Mr. Peter Walker.]

Resolved, That the Distribution of Non-Domestic Rates (Relevant Population) Report for Wales (House of Commons Paper No. 55), a copy of which was laid before the House on 20th December, be approved.—[Mr. Peter Walker.]