Local Government Finance (Wales)

HC Deb 12 February 1992 vol 203 cc1034-80 7.22 pm

The Secretary of State for Wales (Mr. David Hunt)

I beg to move, That the Welsh Revenue Support Grant Report 1992–93 (Revised) (House of Commons Paper No. 247), a copy of which was laid before this House on 10 February, be approved. I understand that it will be convenient for us also to discuss the next two motions: That the Welsh Revenue Support Grant Distribution Report (No. 4) (House of Commons Paper No. 241), a copy of which was laid before this House on 10 February, be approved. That the Distribution of Non-Domestic Rates (Relevant Population) Report for Wales (No. 3) (House of Commons Paper No. 153), a copy of which was laid before this House on 20 January, be approved. The reports before the House contain my decisions on the local government revenue settlement for 1992–93. Since my statement to the House on 13 January the Government have announced that they are recommending acceptance of the teachers review body report on pay and providing additional resources to help local education authorities meet the cost of the pay award. Last summer, in considering the local authority settlement for 1992–93, the likely pay bill for teachers was one of the matters that I took into account. In the event, the pay settlement, which will add 7.8 per cent. to the pay bill of education authorities, was somewhat higher than I had allowed for. I have therefore provided an additional £3.5 million in revenue support grant to bridge the gap. I believe that this underlines our commitment to ensuring that the dedication and achievements of our teachers are properly rewarded.

The additional resources are included in the revised revenue support grant and distribution reports before the House tonight. The original RSG and distribution reports, which were laid on 20 January, have been withdrawn.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

rose—

Mr. Win Griffiths (Bridgend)

rose—

Mr. Hunt

I shall give way to the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), and then to the hon. Member for Bridgend (Mr. Griffiths).

Mr. Rowlands

I am sorry to intervene so early, but the Secretary of State has gone straight into the question of funding the pay award. Is there any truth in the rumour that he intends to redistribute the grant in part from the district authorities to the county authorities, in order to cover some of the costs of the settlement?

Mr. Hunt

The reports are all clearly before the House. I have no proposals to change the figures in them.

Mr. Rowlands

I asked a specific question.

Mr. Hunt

No, there is no truth in the rumour. I said no. The figures are set out in the reports, and they are clearly before the House tonight.

Mr. Win Griffiths

Calculations were made for the education budget for the coming financial year when the original document was laid before the House last summer, and the Secretary of State is now talking about an underestimate. Will he tell the House how much local education authorities will have to draw from their own resources to cover the extra amount that will not be covered by the additional grant that the right hon. Gentleman has announced?

Mr. Hunt

As the hon. Gentleman probably knows, we cannot hypothecate the standard spending assessment. As part of local authorities, local education authorities receive an overall SSA. For Welsh counties the SSA increased on average by 8.1 per cent. That is well ahead of inflation, and —given the scope for efficiency savings over the range of services that counties provide—it represents a substantial sum. However, I realise that the recommended award is higher than I had expected, and I have therefore provided additional money to take account of that.

Mr. Dafydd Wigley (Caernarfon)

I touched upon the matter that I am about to raise earlier today, in the Welsh Grand Committee, but there was no chance to follow it up. My local county council, Gwynedd, told me today that the 7.5 per cent. increase will not only affect teachers' salaries, but will have a knock-on effect on several salary bands and expenses. There will be a shortfall of £500,000 in the budget, even after allowing for the proportion of the £3₷5 million that will come to Gwynedd. If that is the case, can the Secretary of State give an assurance that, if it is necessary to increase the poll tax in order to raise that money, Gwynedd will not be capped for doing so—regrettable though the increase may be?

Mr. Hunt

The amount allowed for Gwynedd in the standard spending assessment settlement is increased by £9.5 million—6 per cent. That is a reasonable increase, bearing in mind all the demands. Gwynedd will also receive a share of the additional money that I have provided. The hon. Gentleman asked about capping—I should like to return to that subject in a few moments.

There should be no need to resort to unjustified cuts in numbers of teachers or in any other elements of the education service—or to increase community charges. I believe that all the points that have been raised have been allowed for in the settlement I announced.

It might be helpful if I summarised the main features of the settlement. Total standard spending for 1992–93 is £2,608 million—that is equivalent to £1,195 per charge payer in Wales. That is an increase of 8.7 per cent. over the comparable TSS figure for 1991-92 and it is well over one percentage point more than the equivalent increase for English local authorities. The aggregate external finance, which now encompasses the community charge grant, for 1992–93 now stands at £2,352 million. If one takes the equivalent figure for 1991-92, it represents an increase of 6.9 per cent. That means that charge payers should expect to contribute less than 10 per cent. to the cost of local government services in Wales.

I am making available £40 million under the community charge reduction scheme. If one also takes into account the community charge benefit, the contribution from Welsh charge payers will fall to around 7 per cent. That means that 93 per cent. of the cost of local government services will be provided from central Government resources.

Mr. Rhodri Morgan (Cardiff, West)

rose—

Mr. Hunt

I shall give way after I have finished this point about the key figure. If authorities spend in line with TSS, it will mean an average community charge payment in Wales of about £85.

Mr. Morgan

I am absolutely astonished at the right hon. Gentleman's words. He said 93 per cent. of the costs will be met from central Government resources. He seems to assume that the uniform business rate, having been collected from local industry and dispatched to central Government, becomes the gift of central Government to give back to the local authorities. Those authorities used to collect it separately anyway. Surely he realises that that money is not equivalent to a Government grant, but represents local business taxes.

Mr. Hunt

As a result of legislation passed in the House, the non-domestic business rate is redistributed nationally by the Government. The Government do not have some special money that they produce at the Royal Mint. The Government are always redistributing resources whether they come from income tax, value added tax, the uniform business rate or whatever. I do not see the point of the hon. Gentleman's intervention.

Let me break down the figures. Within the aggregate external finance package, the revenue support grant total for 1992–93 is £1,621 million. The total allocated for revenue specific grants is £195 million and the distributable amount from the non-domestic rating account is £536 million. The Welsh non-domestic rate poundage for 1992–93 will increase by more than 4 per cent. to 42.5.

The distribution report before the House sets out the calculations for each authority's standard spending assessment. Those have been recalculated to take account of the increase in resources for teachers' pay. However, to achieve consistency, it has also been necessary for me to take account of other data changes. They include a number of credit approvals for capital spending which affect the loan charges element of individual authorities' SSAs. All the changes have been handled in accordance with the distribution formulae agreed with the local authority associations. The overall average increase in SSAs for the coming financial year is more than 8 per cent. after making allowance for the higher education institutions that are to leave the local authority sector on 1 April 1992. The average increase for counties is 8.1 per cent. and for districts 8.7 per cent.

Mr. Donald Anderson (Swansea, East)

The Secretary of State now appears to count it as a virtue that 93 per cent. of local authority expenditure will be met from central Government and 7 per cent. only from the local poll tax. Is my memory correct, because I recall that, when the Secretary of State and his colleagues were trying to sell the poll tax, one of its chief virtues was meant to be the accountability of local government to its local poll tax payers? In the light of the 7 per cent. contribution from those people, where does the accountability argument now stand?

Mr. Hunt

If the hon. Gentleman thought about it, he would understand that the figures sharpen accountability —[Interruption.] Of course they do. The hon. Gentleman's inference is much more serious because I have been searching for some considerable time for a suggestion from the Opposition as to whether they would maintain Wales's grant advantage. The hon. Member for Dagenham (Mr. Gould) said that he felt that about the right amount to be raised from local taxation was 20 per cent.

Mr. Anderson

What about accountability?

Mr. Hunt

I am not talking about accountability at the moment; I am talking about the real bill for Welsh people.

In Committee today I tried to allow the hon. Member for Alyn and Deeside (Mr. Jones) to intervene so that I could obtain that information. He did not do so, so we still have the question about what would happen to the Welsh grant advantage. If we had the tragedy of a Labour Government returned to office and if they allowed for local people to raise 20 per cent. of the contribution towards local expenditure, local bills for local people in Wales would treble. That is why the Opposition owe us an answer on that crucial point. I hope that we will hear it tonight.

I am firmly of the view that the levels of increase will enable local authorities to maintain and develop services without placing an unreasonable burden on charge payers. They are significantly in excess of inflation and, based on conclusions reached by the Audit Commission, I believe that there are also substantial efficiency savings available to local authorities. As I told the House on 13 January, I plan to meet the Welsh local authority associations shortly to discuss their future plans for efficiency initiatives. They have achieved much already, but I think that they would acknowledge that there is still much that can be accomplished.

Mr. Richard Livsey (Brecon and Radnor)

The right hon. Gentleman said that SSA settlements were in excess of inflation, but the SSA for Powys is just 6.2 per cent. even when allowance is made for the teachers' salary increases. Why is it that the mathematical analysis that has produced that SSA discriminates against the charge payers of Powys, who have set their poll tax at £100, right on the right hon. Gentleman's target?

Mr. Hunt

I am always concerned for the hon. Gentleman when he produces wrong figures, so may I put the record straight?

In Powys the SSA rises from £87.670 million to £93.187 million. That is an increase of £5³517 million, which is equivalent to a 6.3 per cent. addition. Compared with the 1991–92 budget in Powys, that SSA is 8 per cent. higher. It is the highest increase on last year's budgets of any of the counties in Wales.

If one assesses that SSA per head—I realise that I may be causing dissension elsewhere in the House—which county of all the Welsh counties receives the largest SSA per head? The answer is Powys. It receives £1,019 per head.

Mr. Livsey

As the right hon. Gentleman knows, Powys is by far the most sparsely populated county in Wales. What has happened now is that the relativity between Powys and the other county councils has reduced.

Mr. Hunt

Let me give the hon. Gentleman the exact figures. I do not want this to turn into a debate about Powys, but it is important for the people of Powys to know the facts. Aggregate external finance in Powys will rise from £70 million to £84 million. Therefore, the external finance towards a budget of £93 million will be £84 million. Working out the increase in SSA per head, one sees that Powys receives the largest increase over 1991–92 for the year 1992–93. The increase in Powys is larger than in any other county in Wales and amounts to £70 per head. Therefore, I hope that we have heard the last of that, but if there is any dispute over the figures the hon. Member for Brecon and Radnor (Mr. Livsey) will no doubt come back to me.

Mr. Gwilym Jones (Cardiff, North)

Would my right hon. Friend care to estimate what might happen to community charge payers in Powys if the Liberal Democrats' policy were implemented? The paper "Shaping Tomorrow's Local Democracy" says that the Liberal Democrats propose a cut in revenue support from central Government. It says: as soon as practicable the proportion of the total tax revenue which is raised at local, as opposed to national, level … must be very substantially increased".

Mr. Hunt

I should be delighted to hear what the hon. Member for Brecon and Radnor has to say about that because it would be bad news for Powys if the Liberals got anywhere near control. They have already said that local councils should raise far more of the money that they spend. They want increased accountability but they would increase the bill of people in Powys.

Taking into account the proposed increases for 1992–93, the average increase in Welsh districts' SSAs for 1991–92 and 1992–93 taken together is more than 30 per cent. That is an increase in SSA over only two years. The average increase for Welsh counties, after making allowance for the changes in higher education, is 24 per cent. over two years. Those are significant increases and they confound any argument that the Government are not committed to the adequate resourcing of local government in Wales.

I am aware of complaints that the standard spending assessments system does not properly reflect the needs of individual authorities and gives rise to volatile changes in individual authorities' SSAs year on year. The methodology for determining SSAs for 1992–93 has, as in years past, been agreed with the associations through the Welsh Consultative Council on Local Government Finance. It is time-consuming and often contentious work and I pay tribute to the associations for their efforts in achieving fully agreed conclusions.

The starting point for those discussions is that change should be limited to what is essential. I am in full agreement with the local authority associations that stability should be preserved unless there is a good reason for change. An important change to the district authority formulae for 1992–93, which the Council of Welsh Districts considered essential, has been the reduction in the distributive effect of the composite social indicator to 4 per cent. of the overall current SSA for district authorities. The composite social indicator—CSI—was included in the formulae for the 1990–91 settlement at the request of the CWD, with the intention of redistributing funds to those district authorities that suffer relative social deprivation. The CWD now considers that the CSI mechanism over-compensates those authorities, and so the Welsh Consultative Council agreed to the CWD's request for a change in 1992–93. I hope that that explains the background to the system.

SSAs should also reflect the changing circumstances of individual authorities. To that end, the distribution model uses financial and non-financial data supplied by local authorities. That includes population changes and the level of individual authorities' borrowing that affect loan charges. For those reasons and others, the position of local authorities relative to one another inevitably changes year on year.

I believe that the SSA arrangements are sound and that there are good reasons for the changes which affect individual authorities' SSAs.

Mr. Morgan

Some Opposition Members are not quite as bright as the Secretary of State. At least, we are not quite as well briefed on the intricacies of how those measurements are arrived at. Hon. Members on both sides of the House and probably leaders of the local authorities and their officers would like to eliminate much of the unnecessary quarrelling over the exact definitions of the allowance to be made for inflation. Has the Secretary of State managed to agree with the local authorities, or even just with their treasurers, what the proper rate of increase should be in the coming year for what could be called a "service standstill" budget? That would take into account all the extra costs that local authorities face, because it is a much more labour-intensive service than the average basket of goods. The retail prices index of inflation is irrelevant. What is the rate of increase that local authorities and the Minister's specialists agree is required to maintain services at the same level next year?

Mr. Hunt

That is precisely what is discussed at the Welsh Consultative Council for Local Government Finance. In all my experience as a Minister responsible for local government finance in England, I never knew a local authority publicly to say, "Thank you very much, we do not want any more". I remember a Labour Minister telling local authorities that the party was over. There has always been a conflict between central Government and local government about the appropriate level of spending, but in Wales we have a particularly effective mechanism. We sit round a table and argue the points through, which is the function of the Welsh Consultative Council for Local Government Finance. I pay tribute to the local government officials and leaders—[Interruption.] We do not agree a figure. I put what I believe to be the appropriate level of spending in the TSS —

Mr. Morgan

Is that a bank or a building society?

Mr. Hunt

It is neither a bank nor a building society. It means total standard spending and is the sum total of all the standard spending assessments in Wales. That is the key figure, which I believe has been increased appropriately.

I hope soon to submit for the approval of the House, a special grant report setting out arrangements for the payment of an additional £6 million that I am providing to fund 75 per cent. of the estimated revenue cost of council tax implementation. It would be inappropriate for the report to be laid before Parliament until it has given its consent to the Local Government Finance Bill. Standard spending assessments under the settlement for 1992–93 do, however, make provision for the 25 per cent. of that expected expenditure, which is not met and will not be covered by the special grant.

I announced on 13 January that I shall provide £40 million under the community charge reduction scheme for 1992–93. In deciding on the appropriate level of funding for the coming year, I have taken account of both the significant reduction in community charge levels that has been achieved through community charge grant for 1991–92, and the increased level of revenue support grant that I am providing for 1992–93. About 56 per cent. of charge payers in 500 communities will continue to receive community charge relief. The amount that I am committing to the scheme is double that provided in 1990–91, when the community charge for standard spending was £55 higher than the level that I consider appropriate for 1992–93.

Provided that local authorities spend in line with my plans, the personal community charge that they set should not exceed, on average, £118. [Interruption.] Opposition Members may be only just beginning to understand what I am saying. The important issue is the increase in TSS, which is the appropriate increase in all the circumstances. That £118 is less than half the equivalent figure for English authorities and £ less than the average charge of £121 set by Welsh authorities for 1991–92. Relief under the community charge reduction scheme for the coming year should reduce the average community charge in Wales to £100. When account is taken of community charge benefit, the average charge falls further to about £85.

Mr. Anderson

The Secretary of State will recall that the Prime Minister called the poll tax "uncollectable". On what assumptions is the Secretary of State working in respect of the proportion of the total sum capable of being collected by Welsh authorities, given that there is ever greater public resistance to it? Perhaps "resistance" is the wrong word, but it is more difficult for local authorities to collect that tax. Is the assumed figure—94 per cent.—more or less.

Mr. Hunt

I am pleased that the hon. Gentleman has raised that point, as I have the latest figures, which show that community charge collection in Wales is going well. Returns up to and including the third quarter of 1991–92 show that a total of 70 per cent. of the budgeted income for the year had been collected by 31 December. That includes four authorities that have collected 85 per cent. or more of their budgeted income—Dinefwr, Preseli, Ogwr and Brecknock. I hope that the hon. Member for Swansea, East (Mr. Anderson) appreciates that that is the quickest response that he has received to any question that he has asked in the House. Authorities expect to collect 100 per cent. of the budgeted total for 1990–91, and they are on course to achieve the same level of collection in 1991–92.

The hon. Gentleman asked for the exact figures for the full amount as against the budgeted amount. The latest figures for the end of the third quarter of 1991–to 31 December 1991—show that 69.8 per cent. of the budgeted amount and 65.5 per cent. of the full amount has been collected. That is a remarkably good record when compared with anywhere in the United Kingdom.

Mr. Anderson

Will the Secretary of State give way?

Mr. Hunt

I am sure that the hon. Gentleman will get a chance to make his own contribution.

I wish to pay tribute to staff, councillors and everyone working in local authorities in Wales who have achieved such a remarkably good result.

Some Members opposite have been telling people not to pay the community charge—[HON. MEMBERS: "Where?") I cannot see any in the Chamber. There are no such Members in the Chamber, but there have been Members on Opposition Benches—

Mr. Ray Powell (Ogmore)

The Secretary of State said "opposite".

Mr. Hunt

I said that there had been Members on Opposition Benches — I chose my words carefully— who have advocated the non-payment of poll tax or community charge. I can identify more than 30 Labour Members who told the people of the United Kingdom not to pay their poll tax or community charge.

I wish to say a few words about non-payment. There will be no amnesty for non-payers. We are taking further steps to ensure that authorities have the necessary powers for the proper enforcement of the community charge. We have extended from two to six years the period during which enforcement proceedings may be commenced. We are moving to put beyond doubt the admissibility of computer evidence in proceedings for community charge recovery in magistrates courts. My Department has written to local authorities about how to proceed in the short period before the Local Government Finance Bill is enacted.

We believe there is no obstacle to authorities continuing to apply for liability orders where they consider that their procedures for the presentation of cases meet the requirements of existing law. I understand that authorities are continuing to apply and that more than 6,000 liability orders were made by Welsh magistrates in the last two weeks of January.

The settlement before the House today is a good one for local government and charge payers alike.

Dr. Kim Howells (Pontypridd)

Will the Secretary of State give way?

Mr. Hunt

I shall not give way yet as I wish to address the point on capping raised by the hon. Member for Caernarfon (Mr. Wigley).

As the House knows, I have not announced charge capping criteria for 1992–93, but I will scrutinise carefully the budget of any authority which exceeds its SSA. I hope that it will not be necessary for me to use my charge-capping powers. In recent years, Welsh authorities have, on the whole, performed better than their English counterparts in setting prudent budgets. They have benefited from more generous settlements than their English counterparts in recognition of this, and it has not been necessary to charge cap a single Welsh local authority. That is a record which I want to continue, but I have become increasingly concerned during the past few days and weeks by reports I have seen in newspapers, which I hope are untrue, which suggest that a number of authorities are considering setting budgets that would place an unacceptable burden on charge payers. Those authorities should be in no doubt that I shall use my charge-capping powers if I consider it necessary. In view of those reports, I have today asked my officials to set up a special unit in the Welsh Office to make the necessary arrangements for capping. I hope any authorities that are contemplating diverging from my plans in setting budgets will think again and that I will not have to activate the capping procedures now in hand.

Dr. Kim Howells

It sounds as though the Secretary of State is setting up a special investigative division. I hope that it will have a better effect on Wales than did the introduction of the poll tax. Local authorities are not abstract notions—their members are elected by respectable, good people in Welsh communities who, through no fault of their own and because they cannot afford to pay the poll tax, have been dragged before the courts and criminalised. They are people who have never previously been in court. The Government are responsible for that and for bringing untold heartache and hardship to households. They should be thoroughly ashamed of that.

Mr. Hunt

I am not ashamed of that. We are talking about civil offences; it is wrong for people to seek to benefit from services while not paying for them. There is no question of people not being able to afford the poll tax or community charge, as the amount provided through the income support system more than covers the 20 per cent. they have to pay, due to the low community charge in Wales.

I believe that the settlement for 1992–93 provides Welsh local authorities with a realistic framework within which to maintain and develop service provision. 1 hope that they will respond to that challenge and will act in a responsible manner and not undo their past achievements. I commend the settlement to the House.

7.57 pm

Mr. Barry Jones (Alyn and Deeside)

How obviously Her Majesty's Government have sought to shunt this debate into the small hours. They tried to do so twice and, after nearly three weeks, we are now able to have a debate at a reasonable hour. We know that the Government have sought to hide this debate because they know that the poll tax is most unpopular in Wales. Tonight, the Secretary of State has presented the orders, revised, at only the last minute. That does not increase our confidence in the Government.

The poll tax continues under the Conservatives. They rejected Labour's offer of a poll tax abolition Bill. If our offer had been taken up last summer, another round of poll tax chaos would have been averted. Now, poll tax panic is once again breaking out in the Conservative ranks. The Government will have to fight the general election campaign against a background of renewed controversy over the cost, fairness and practicality of the poll tax. Whether the general election is on 9 April or 7 May, the Conservatives face the spectre of the electorate in Wales picking up their poll tax bills in one hand and Conservative election leaflets in the other.

The Government, who have already wasted more than £100 million on the poll tax in Wales, may yet add confusion to chaos. Will the Secretary of State now rule out any political gerrymandering to delay poll tax bills going out in Wales until after the general election?

The poll tax nightmare continues. Council treasurers are having to try to administer the discredited poll tax which even the Prime Minister described as uncollectable. They also have to collect growing poll tax debts and adjust their budgets to meet standard spending assessments under the threat of poll tax capping. The chaos, confusion and uncertainty among treasurers increase by the day.

Our councils in Wales are being asked to engage in the biggest debt collection exercise in the history of Wales. More than 400,000 summonses for poll tax arrears have been issued by magistrates courts in Wales. Even some of the poorest people in Wales still have to pay 20 per cent. of the poll tax. Ministers are threatening poll tax capping and, by implication, more cuts in local services.

This wretched record is the responsibility of the Secretary of State, and soon he will have to face the electorate and account for his actions. Conservative Members representing Welsh constituencies—fairly thin on the ground they are too—do not support the right hon. Gentleman's views on the poll tax. They do not believe that it should be inflicted on the people of Wales, and the right hon. Gentleman knows that. But the blame for the chaos lies with him.

The Secretary of State's central role in introducing the poll tax in England and Wales is well known. It is worth reminding the House once again of some of the gems of political wit, insight and intelligence uttered by the right hon. Gentleman in the past. He told the Conservative party conference in 1989: The fact is that, whatever Labour claim or do, the community charge is on course for successful introduction throughout England and Wales. The right hon. Gentleman recently said: I welcome the community charge system to which I was committed at the last election and to which I remain committed as a much fairer and better system. So why should we believe anything that the right hon. Gentleman has said tonight? Why should we ever believe him again?

Mr. David Hunt

As I understand it, the hon. Gentleman will put it to the electorate at the next election that we should return to the rating system. When he was Under-Secretary of State for Wales —

Mr. Rowlands

That is going back a bit.

Mr. Hunt

The hon. Gentleman is going back a bit too. He said then: I will go further and call attention to the many anomalies inherent in the rating system. The hon. Gentleman was against the rating system then, so why is he so much in favour of going back to it now?

Mr. Jones

That was a frivolous intervention, and the right hon. Gentleman knows it.

The Under-Secretary has been no shrinking violet on the poll tax either. The people of Pembroke, reeling under the hon. Gentleman's indifference to the workers of Trecwn and Brawdy, will, I am sure, remember that he said in this House quite recently: The community charge is a fair tax and a reasonable charge to make on people, so we should support it."—[Official Report, 23 May 1989; Vol. 153, c. 911.] Why should the people of Pembroke ever believe him again? We think that this is another nail in his parliamentary coffin.

Mr. Anderson

In the light of that crushing indictment of these two Ministers' record on the poll tax, does my hon. Friend agree that the least the people of Wales can expect from them is some contrition?

Mr. Jones

I am quite prepared to give way to either of them if he wants to apologise for the poll tax. Clearly, there is no contrition tonight.

I thought that the right hon. Gentleman was unconvincing on teachers' pay, particularly when answering questions posed by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and by the hon. Member for Caernarfon (Mr. Wigley). I understand that the total cost of the teachers' award in Wales will be £49 million. Welsh Office Ministers have claimed that the extra £3.5 million will help to cover the cost of the award, but the counties are left to find the balance of ;£45.5 million, on top—Ministers did not make this clear—of the built-in additional costs in 1992–93 of funding the 1991 teachers' award, which will cost an extra £14 million—because the 1991 award was phased in and part of it became effective only from December 1991. So the total extra cost to be found by the counties for teachers' pay in the coming year is £63 million, made up of 7.8 per cent. from the 1992 award, and an extra 2.8 per cent. from 1991.

The Secretary of State did not refer to the difficulties that the award will create. Whatever the merits of the teachers' award—we know that the teachers need the money—it is clear that the Government expect the counties of Wales to find ways of meeting exceptional increased costs within a settlement that we know is inadequate for local services as a whole—there is certainly a large hole in the settlement in respect of teachers' pay. On top of all that we have to contend with the right hon. Gentleman's bully-boy tactics of threatening capping.

The blame for next year's bills also lies with the right hon. Gentleman. The local authority associations in Wales consistently advised him that the settlement could be improved. Our spending needs continue to increase. The settlement is inadequate to meet the extra costs flowing from increasing statutory responsibilities. The counties face increasing costs related to the implementation of Government legislation on the national curriculum, on pupil assessment, on community care, and of the Children Act 1989, to say nothing of funding the teachers' pay award.

For districts, the costs of implementing environmental protection legislation and waste disposal legislation are considerable. The right hon. Gentleman did not make his case when discussing the difficulties faced by local authorities.

The Government have no excuses left for the 20 per cent. poll tax contribution rule—

The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett)

Will the hon. Gentleman give way?

Mr. Jones

No, not now.

The 20 per cent. rule has been condemned by every independent and professional body. It is to be removed under the council tax, yet the Government insist on keeping it while the poll tax remains. The rule is a disaster and a disgrace, and it is making the poll tax even more difficult to collect. It punishes the poor and it has created debt and hardship. In his passionate intervention earlier, my hon. Friend the Member for Pontypridd (Dr. Howells) spoke the truth.

These orders relate to housing and the Government have created a housing crisis. With over 70,000 people on waiting lists in Wales, homelessness at record levels and mortgage repossessions soaring, it is time for action by the Government, but they have cut the supply of affordable homes to rent. Capital allocations mean that few, if any, council houses will be built next year. In 1975, under the Labour Government, there were 8,294 council house starts. In 1990, the figure was down to just 350. Little wonder that homelessness has doubled in Wales since 1979.

These orders also refer to the attempts by local authorities to generate employment, something that they do very well in Wales. Will the Secretary of State take this opportunity finally to come out in support of RECHAR and additionality, which is of such great importance to the south Wales coalfield? It is about time that he chose between party and country and I ask him to stand up and fight for Wales.

This issue threatens to spread beyond the £18 million for the south Wales coalfield. Lack of progress on the additionality issue could threaten European grants and aid worth £18 million to Wales. The blame lies clearly with Her Majesty's Government. This dispute could not be happening at a worse time. Unemployment in Wales increased by 35 per cent. in the last 12 months, yet the Government are blocking millions of pounds for positive local authority initiatives to strengthen the economy, create employment and improve skills. In south Wales alone, not only RECHAR money worth £18 million but over £40 million in regional development funds are at risk. The projects at risk include phase 3 of Cardiff (Wales) Airport business park, the Tawe valley development project in west Glamorgan, the Crumlin navigation regeneration project in Gwent and the valleys innovation centre at Abercynon in Mid-Glamorgan.

This is the record that I honestly believe will put Welsh Ministers at risk when the general election comes. The record of Her Majesty's Government is poor and I was not surprised to see recently an article about the hon. Member for Pembroke (Mr. Bennett), the Under-Secretary. The West Wales Guardian published an article on its front page headed, "Nick's Seat At Risk". It said: Although … the major parties are running neck and neck nationally the regional patterns are not uniform and the swing in Wales forecasts that the Pembroke seat held by Welsh Office Minister Mr. Nicholas Bennett is marginal and will fall to Labour. This detailed analysis comes not from an impartial newspaper, but from one that favours the Conservatives. I am surprised to see that it is prepared to print the truth and predict that the excellent Labour candidate, Nick Ainger, will win the seat by 2,400 votes.

Mr. Nicholas Bennett

rose—

Mr. Jones

I can see that this is enraging the Under-Secretary, but I warn him that though he may come to the Box, he does so at his own peril.

Mr. Nicholas Bennett

On the day that that report was published, the Gallup poll in The Daily Telegraph—the one on which that newspaper relies—showed a 4.5 per cent. Conservative lead, which gives me a majority of 3,000.

Mr. Jones

If that is so, why does the West Wales Guardian refer to the Gallup poll?

I listened in vain for the Secretary of State's apology to the people of Wales for brazenly and blithely inflicting on them an unjust, unpopular and wasteful poll tax, although there was no support in Wales for it. It took a right hon. Gentleman representing the English constituency in Wirral to do that, and he is identified closely with it. The blame for the poll tax lies with the Conservative Government. The Conservatives know it and the people of Wales know it. We know that Conservatives have undermined local government. They have eroded local services and wasted millions of pounds. Time is up for the Government. It is time for a fresh start. It is time for a Labour Government.

8.15 pm

Sir. Anthony Meyer (Clwyd, North-West)

The hon. Member for Alyn and Deeside (Mr. Jones) can be sure that an anthology of his wit and wisdom is being lovingly compiled and will be extensively used during the next general election, although it would be more effective to play back some of his speeches. I am thinking not of the relatively sotto voce speech that he made tonight, but of the speech that he made a little while ago in the Welsh Grand Committee, which I shall treasure for a long time.

I am grateful to my right hon. Friend the Secretary of State for a fair and generous settlement. I remind him of what has been said about the Prime Minister—that he endeared himself to the previous Prime Minister because, she said, he said no so charmingly. My right hon. Friend says yes so charmingly that even his threepenny bits look like gold sovereigns. I am particularly pleased that, as a result of this and previous settlements, the adventure playground in Rhyl, which has such an important part to play in raising the morale of that rather depressed end of the town, will go ahead.

Members of Parliament, by definition, are never satisfied. We always want more, and I have to record my intense unhappiness that Clwyd county council has for so very long delayed action on Ruthin bypass. Now, in the restriction in the transport supplementary grant, it has been able to find a pretext further to delay the starting of that essential scheme. There are always schemes that we want. I am thinking in particular of the arts centre at Llandudno, on which I know that my right hon. Friend the Minister of State has worked so tirelessly behind the scenes. Local government looks to central Government for support for such projects.

I have a pet scheme of my own—the pier at Colwyn bay, one of the few remaining piers in north Wales, which will shortly fall into the sea unless something is done about it. I was delighted when, the other day, the hon. Member for Alyn and Deeside visited it and promised that a Labour Government would find the money to put it right. On this, as on everything else, the hon. Gentleman goes around pledging the moon. The trouble is that the moon has already been pledged, latterly in the shape of revenue support grants. These have been generous, because they had to bring the poll tax down to the low level at which it stands in Wales. Welsh Members are particularly pleased that we have managed to drive English Members of Parliament out of the Chamber, because that means that they will not know what a wonderful deal we are getting.

Mr. Robert N. Wareing (Liverpool, West Derby)

I am English.

Sir Anthony Meyer

I apologise to the hon. Gentleman. I am blind in my left eye.

I agree with the fears of the hon. Member for Swansea, East (Mr. Anderson) about what all this is doing for local autonomy. As my right hon. Friend said, 93 per cent. of all the moneys spent by local authorities no longer comes from any source for which they are responsible for voting. On top of that, there is the threat of community charge capping.

What does all that mean for local autonomy? I do not think that the public care much. For example, they support the transfer to central funding of the police and fire services. They are pleased to see that higher education is now the Government's responsibility. I think that the majority would like to see responsibility for teachers' pay transferred to the Government. Many would like to see education so transferred. They support, and I support, the concept of ring fencing for certain items of local government expenditure. My good friend the hon. Member for Gower (Mr. Wardell) is not present, but he and I both feel strongly that, if the interests of the more vulnerable sections of our community are to be protected, it may well be necessary to consider ring-fencing the moneys allocated for community care. All that is fine, but where is it leading us?

I recently attended a local government conference in Rouen in France, when I asked my French neighbour how much of the money that his local authority was spending was raised by taxes which were locally decided and voted. He said that it was between 80 and 85 per cent. That is in France, which it is the conventional wisdom among all of us to consider to be a highly centralised country.

Mr. Wigley

Does the hon. Gentleman accept that one of the problems in Wales—it may well be true in the rest of Britain—is the great disparity between levels of living standards and incomes? Areas in close proximity may have vastly different per capita and net household incomes. Therefore, with relatively small local authorities, there is a need, at the very least, for significant equalisation if levels of services are to be common throughout those areas. Perhaps that difference does not exist quite so much in areas of continental Europe.

Sir Anthony Meyer

I am not sure that I agree with the hon. Gentleman. The disparity can be every bit as great in France. One travels around spanking new towns and sees slummy bidonvilles on the outskirts with exactly the same problems, which are often more widespread and acute than ours. France has no fewer than five levels of government which it seems to put up with. I am not recommending that we should.

I wonder what on earth is happening. There was a steady move towards reducing the contribution made by the Government to local government, and by 1985–86 it was some 47 per cent. That has now risen to 93 per cent. That is almost entirely the consequence of the unacceptability of the poll tax and the need to sugar the pill, but the effect on local autonomy has been catastrophic. I should like to think that that effect was completely unintended, but I must take into account the destruction of all the countervailing centres of authority. I rejoice in the diminution of the power of the trade unions to challenge elected Governments. However, I observe with less rejoicing the attempts to restrict the activities of some voluntary bodies to stop them entering upon political activity.

All that is splendid, but we are going towards a highly centralised system of government. If ever that system were to fall into the hands of a party holding extreme views, we would be in a terrible plight. I am not sure whether that is not the most lingering legacy of the Government led by my right hon. Friend the Member for Finchley (Mrs. Thatcher); a more lingering legacy even than what I currently consider to be her greatest achievement, which is the modernisation of the Labour party. There are moments when one feels that the only effective check on the powers of central government is the power of the multinationals, plus the influence and power still exerted by the EC.

Against that rather unpromising background, my right hon. Friend the Secretary of State is trying to reorganise local government. He will not make the same mistake as his predecessor, my right hon. Friend the Member for Worcester (Mr. Walker), of separating the reform of local government from the reform of local government finance. Basically, that is the mistake that Gorbachev made when he tried to carry out political reform without economic reform.

That is why devolution in Wales deserved to fail last time. It was a scheme to set up an elected assembly which would have had the pleasant task of distributing money but none of the responsibility for raising it. Any viable scheme for devolution must include an assembly with revenue-raising powers. I notice that many of those who advocate devolution fall quiet when one talks about that aspect, but it should be faced. However we do it, it will be diabolically difficult to get back to genuine local autonomy.

What locally elected councillor will cheerfully vote for steeply increased locally raised taxes? I just do not know the mechanism whereby we can return to genuinely independent local authorities. If I knew the answer to that, I would be even more of a wizard than my right hon. Friend the Secretary of State. All I know is that the Opposition do not even have the courage to pose the question.

Several Hon. Members

rose—

Madam Deputy Speaker (Miss Betty Boothroyd)

Order. It might be helpful to inform hon. Members that, if they were to speak for less than 10 minutes each, it might be possible to call all those who wish to speak. As usual, the debate is in the hands of the House.

8.26 pm

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

I shall try hard, Madam Deputy Speaker, to obey your plea by dealing briefly with the one bit of the settlement that I understand. One good reason for not becoming Secretary of State for Wales is that one avoids becoming embroiled in the gobbledegook of the rate support grant with its formula S - N - (P x C), where C is the community charge for capital spending, quite apart from the total standard spending and the rest. There is a strong case for avoiding that.

But there is one part of the system that I have tried to understand and have watched closely, and that is the community charge or poll tax reduction scheme. We were told that, starting in 1991, a sum of money would be specifically directed to reducing poll tax payments in certain districts. It was not even a borough or district-wide scheme. In Merthyr Tydfil and Rhymney, it was applied at ward level. We reached the absurdity where one side of the street in one ward benefited from the scheme, while the other side in another ward did not. However, at least one understood it. Money was being specifically allocated to reduce the poll tax to certain householders in the community according to a variety of formulae.

But a couple of months ago in the House the Secretary of State made a statement on the revenue support grant for 1992–93. We all listened and nodded wisely. On the community charge reduction scheme, he said that he intended to make £40 million available in 1992–93. He went on to say that that would provide substantial assistance to charge payers who most needed relief, and that it was double the amount that was made available to charge payers in 1990–91. Any hon. Member listening as well as he could, given the acoustics of the House, would have thought that that was a generous settlement. He would have understood that the Secretary of State was doubling the poll tax reduction scheme from £20 million to £40 million.

I am not given to personal hyperbole, but that statement was pretty close to being dishonest. What was missing was the figure for 1991–92. Instead of saying that the figure was only being doubled from £20 million to £40 million, the Secretary of State said that in 1991–92 it would be £60 million. In fact, the right hon. Gentleman was announcing a £20 million cut in the poll tax reduction scheme. Would anyone hearing that statement in the House or reading it understand that there was to be a £20 million reduction? The Secretary of State did not have the honesty or courage to explain the impact and consequence of the settlement.

Mr. David Hunt

Perhaps I may correct the hon. Gentleman. This year, the figure is not £60 million but £62 million. That is a matter of public record. The hon. Gentleman will recall that, when I announced the community charge reduction scheme, the estimated community charge was £140 higher than it turned out to be. Also, the local authorities that originally proposed the scheme had expressed doubts because they said that the level of money going into it was producing serious anomalies. I therefore rethought the scheme, believing that the last year of the community charge would be the wrong time to make a fundamental change.

Mr. Rowlands

The Secretary of State cannot get away with that. If that is the explanation, why did not his statement include something to that effect? Why did not the right hon. Gentleman say, "As a result of discussions, I have reduced the value of the scheme from £62 million to £40 million. I have kept £22 million." Instead, the Secretary of State disingenuously told the House, "I have doubled the 1990–91 figure." That is why we do not trust much of what is said about that settlement.

The scheme was directly related to the individual poll tax payer. I can tell the right hon. Gentleman what that £22 million cut means in my constituency, ward by ward.

Mr. Hunt

The figure was not £22 million.

Mr. Rowlands

Of course it was. As the right hon. Gentleman has misled the House once, let him listen to the figures.

Madam Deputy Speaker

Order. I do not imagine that the hon. Member meant what he just said. Perhaps he will reflect on that remark, and rephrase it.

Mr. Rowlands

I always thought, Madam Deputy Speaker, that "misled" was a legitimate parliamentary term.

Madam Deputy Speaker

I assure the hon. Gentleman that I know what I am talking about.

Mr. Rowlands

I am suitably chastened, Madam Deputy Speaker, and of course I withdraw that remark. However, I hope that I may apply the posh word "disingenuous" to the Secretary of State's statement to the House that he was doubling the amount available for poll tax reduction, when in fact he was cutting it by £22 million in respect of Welsh poll tax payers.

Mr. Barry Jones

My hon. Friend makes a devastating set of remarks about the Secretary of State's technique. I remind my hon. Friend of an exchange during Question Time, when the Secretary of State told the House that 100 per cent. of the poll tax was being collected. It took an intervention by my hon. Friend the Member for Swansea, East (Mr. Anderson) to persuade the Secretary of State to correct himself, and say that he meant that 100 per cent. of expected poll tax collection—94 per cent. of that payable— was being collected.

Mr. Rowlands

My hon. Friend emphasises my point. I will tell the Secretary of State the consequences of his £22 million cut in the poll tax reduction scheme for Welsh communities and wards such as those that I represent. In Bedlinog, the increase in the poll tax will be 40 per cent., before one additional penny is spent on extra salaries, services, or inflation; in Dowlais, 36 per cent.; in Merthyr Vale, 47 per cent.; in Pant, 23 per cent.; in Park, 22 per cent.; in Troedyrhiw, 49 per cent.

That will be the effect on communities that are considered to be in deprived areas and deserving of extra support of the cut in the poll tax reduction scheme. Nothing in the Secretary of State's original statement or in his remarks tonight brought it home to people that that would be the true consequence of his decision.

I hope that, if nothing else, we shall be able to print at the bottom of every poll tax demand issued in those wards the fact that the extra £17 that everyone must pay is the surcharge placed by the Secretary of State on those communities.

Mr. Nicholas Bennett

Before the hon. Gentleman gets carried away, the House ought to be aware that, in Dowlais, for example, the amount of relief per charge payer in the coming year will be £41.

Mr. Rowlands

But the actual amount payable will increase by 36 per cent. The Secretary of State did not make any announcement to that effect when he made his original statement or at the Dispatch Box earlier today. We should not be kidded in that way. The people of Wales and the people of my communities will not be kidded. This is a Hunt surcharge on poll tax payers in communities that, only a year or two ago, were said by the Secretary of State to be the poorest and most deprived.

It is hard for anyone to come to terms with absolute statements of the kind made by the Secretary about increases in expenditure when responsible and respected borough and district treasurers, who are not known to suffer from hallucinations, tell us that, if environmental improvements, such as in waste disposal, are to be made, if they are to take up the generous allocation for home improvement grants, increase staffing, pay higher loan interest charges or even pursue policies mutually agreed between the Welsh Office and the Secretary of State and Labour-controlled county and district councils, the effect will be to increase the burden of revenue expenditure and to push those authorities to the level of potential capping.

Borough treasurers write to my right hon. and hon. Friends, as they do to Conservative Members, pointing out the consequences of increased expenditure resulting from legislation passed by the House, and introduced in the pre-election run-up by a Secretary of State who seeks sometimes to humiliate local authorities into taking action under the so-called citizens charter. We are entitled to say that the responsibility should lie with those who made those decisions. When it comes to the introduction, the implementation, and, even in the poll tax's death throes, the cut in the reduction scheme, the Secretary of State is the person responsible for the burden we face.

8.37 pm

Mr. Ian Grist (Cardiff, Central)

I am sorry that the hon. Member for Alyn and Deeside (Mr. Jones) is not in his place, because I was infuriated by his claim that the poorest of his and my constituents, and those of other right hon. and hon. Members, are suffering under the community charge. The hon. Gentleman knows perfectly well that they receive income support and that the element of income support calculated for community charge is based on the average charge for England and Wales—which is far higher than 20 per cent. of any community charge imposed in Wales.

The hon. Member for Alyn and Deeside knows also that Welsh community charges are extremely low by any standard. Even Cardiff, and South Glamorgan this year, will be making a charge of less than £3 a week per head. That is a jolly good bargain for the services that are provided locally. Some of my constituents will be charged £1.60 per week after diminution, which is remarkable value.

My hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) made the point that if local authorities and local government are to mean anything, they will have to raise more money locally. I wonder how people will squeal and scream at the charges and taxes that will be levied on them. If devolution were ever to come, would we ever have an assembly funded more than 90 per cent. by the British Parliament? You can bet your bottom dollar that would not happen, because the House would have no power over such an assembly, and would not be able to control its expenditure. It would, therefore, be a minimal amount which came from this place, with the maximum being raised in Wales by a Welsh assembly. Anyone who wants a Welsh assembly had better look out for the reaction of people in Wales to such a demand when they realise what will happen.

Having served in the Welsh Office during the period of the community charge and being responsible for housing and other matters, I want to pay tribute to the local authorities in Wales and to say how fortunate we are in being a small country where Ministers can get to know the councillors in charge, the chairmen of committees, the treasurers and so on, and where we can sit round a table, know each other personally and thrash these things out. That is how standard spending assessments are worked out, in agreement with each other—a point somewhat overlooked after the announcement, when people strike attitudes. It is noticeable, however, that with this particular set of settlements attitudes are pretty wishy-washy. It is a very good and reasonable set of settlements. The amount that councils have been given is well ahead of inflation at a time when the economy is stuck. I should have thought that on any basis that is a very favourable settlement.

The discipline brought by the community charge, together with the threat of charge capping, which has never had to be used in Wales, has encouraged councillors to increase efficiency and make every pound pay. If the Labour party got in and were to change the system yet again, and if they were to do away with the Audit Commission, which is part of their policy, we would be off again on the giddy roundabout.

The hon. Member for Alyn and Deeside mentioned council house building in the splendid year of 1975, when the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) was going round telling councils to "spend, spend, spend". My word, they did, and 15 months later we were international paupers because we were bust. All hon. Members know just how their councils ground to a halt. A major estate in my constituency at Llanedeyrn came to a grinding halt with no shops, no facilities, nothing—houses not finished and roads uncompleted. Everything resulted from the crazy expenditure of money at that time. The hon. Member for Merthyr Tydfil and Rhymney knows that very well.

Mr. Rowlands

Perhaps the hon. Member for Cardiff, Central (Mr. Grist) remembers, as I do vividly, that what we had to do in 1974–75 was pick up half-built private housing estates that had gone bust during the last private Tory housing boom.

Mr. Grist

I remember one estate in my area which the council "municipalised". As soon as we came to power in 1979 it was the fastest place for everyone to purchase his own house. I remember a party-political film unit coming to the constituency. I was asked where it could go to see people who wanted to buy their own houses, and I directed them to that estate, Ty Cerrig. They would have bought them from the word go. The municipalisation was unnecessary. It shows the sort of Government that we had then, which got away with municipalising, nationalising and spending. That is what we would have again. We have had a plethora of promises to free local government, which means spending more and more on housing, roads, education, all things which are highly desirable and all things on which we have been spending more money steadily and carefully; but under the promises of the Labour party we would have a burst of expenditure once again and we would be back to 1975, apparently the chosen year for the hon. Member for Alyn and Deeside to remember.

I would like to mention a purely constituency matter, although it has reference to what other hon. Members have said, particularly my hon. Friend the Member for Cardiff, North (Mr. Jones), with his medicentre and the row with South Glamorgan and the hon. Member for the Vale of Glamorgan (Mr. Smith), who has unfortunately left the Chamber, and that is South Glamorgan's behaviour over Corpus Christi school in my constituency. I should like to thank my hon. Friend the Member for Cardiff, North for having brought this matter up several times in the past.

Corpus Christi is a Roman Catholic school, the premises of which had been found to be unsafe. It is in a highly residential area and is long established. The area has been built up round the school so the roads which surround it have taken into account the layout of the school as regards traffic reactions and so forth. The authorities decided not to rebuild on site, although it is a big site and they could have done so perfectly well. They decided to move to a new green field site and sell the existing school. Because the proposal broke the local structure plan, the archdiocese and the county applied to the city council for permission to develop houses and to raise the money.

The city council refused to give them permission. The county therefore purchased the 15 per cent. owned by the archdiocese and granted itself planning permission on the site. That is an abuse of power which we considered in 1990 and put out to consultation. I believe that we are going to put out some rulings on it shortly. but, unfortunately, perhaps not in time to catch that particular abuse.

The site, with more than 100 houses, will debouch on to a small set of estate roads where, I am told, the traffic will be less than from the school. I find that unbelievable. Once cars are parked down one side of these roads, two-way traffic becomes difficult because one must dodge round the vehicles, so perhaps we shall have parking restrictions and all the rest of it clamped on the estate to accommodate the extra traffic which will flow out of these 100-plus executive houses.

The school itself is planned to go out of my constituency to that of my hon. Friend the Member for Cardiff, North, on a green field site on the edge of the city to which coaches will have to take all the pupils. It is a site for which a private Catholic school applied two years ago and was turned down, but the county has purchased the land for £1 million or £2 million—I forget which—and is prepared to grant itself planning permission yet again and to get Welsh Office funding to do so unless Welsh Water puts such a charge on the site that it becomes impossible. My right hon. Friend the Secretary of State ought to think again, call in the proposal and consider the widespread unease and dismay at the activities of the county council in abusing its power. If county councils and other authorities abuse their power in this sort of way they lose a great deal of public sympathy which otherwise they thoroughly deserve.

8.46 pm

Mr. Richard Livsey (Brecon and Radnor)

The altercation that I had with the Secretary of State about finance in Powys is causing serious concern within the county, and I hope that there will be an early opportunity for the chief executive and representatives of that council to meet the Secretary of State to discuss the matter. The standard spending assessments hardly cover inflation, especially when it comes to current teachers' salaries.

There will be further expenditure which local authorities will have to incur because of recent legislation. The Children Act 1989, in particular, places responsibilities on local authorities necessitating more resources. The same is true of community care and other recent legislation.

In the settlements recently announced by the Secretary of State there are winners and losers. I thank him for a good settlement in Radnorshire. Unfortunately, his Department has blotted its copy book with Radnorshire in the past couple of days, something that I shall refer to later.

The Secretary of State has been a little miserly in the settlement for Powys. Powys is setting a community charge of £100 which is spot on what the Secretary of State proposes. It has tried its best to work within his guidelines. The inevitable result, given the threat of capping, of some current settlements that authorities have achieved will be a cut in services in the coming financial year. In the districts there is a very sad story, with the failure to release funds from council house sales which has failed to fund the necessary housing to rent and will certainly fail to solve the housing crisis and resulting homelessness. As has already been mentioned, just over 70,000 people in Wales are on housing waiting lists. That is a serious and human problem, which confronts families every day.

The Secretary of State has engaged in a discussion—almost a debate—with the hon. Member for Swansea, East (Mr. Anderson) about the level of community charge collection. In previous years, the collection rate in my part of the world has reached 97 per cent., which is higher than the average of around 94 per cent. to which the Secretary of State referred. Local authorities in the area have been very responsible, although, like some hon. Members, they do not agree with the principles of the community charge.

The Government's distribution of cash to local authorities is very much a lottery. As the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) pointed out, the system is complex and difficult to understand. It needs to be simplified, because the formulae involved create distortions.

As I have said, we in Powys are very dissatisfied with our standard spending assessment. In an earlier intervention, I made a slight slip. I said that the revised assessment was 6.3 per cent., against a Welsh average of 8.2 per cent.—about 2 per cent. behind. Every time the Welsh Office revised the figures over the months between December and the present time, slightly less was allowed for in Powys. I do not mean that as a deliberate slight on the Secretary of State and his staff, but the fact remains that the regression analysis used to calculate the figures appeared to give Powys a smaller reward over those months.

That needs some examination. The knock-on effect has meant a cut of £600,000 in Powys's education budget, and many schools in the local management of schools scheme are having to cut their budgets. In recent weeks, I have come across many village primary schools whose LMS budgets face cuts of between £12,000 and £20,000—and that, of course, means cuts in essential services.

It is an enormous problem and it is compounded to some extent by the teachers' pay settlement. It all depends on how the counties have made their calculations for the coming year. We in Powys welcome the 7.5 per cent. settlement: teachers deserve a good settlement. It could have been better, but at least they have reaped some reward—although I suspect that it constitutes something of a sweetener. We have seen the same kind of sweetener in many parts of the public sector; we are, after all, within weeks of a general election.

Although it is welcome, that 7.5 per cent. settlement does not cover the requirements of teachers' pay throughout 1992. The local authority must find a further 2.3 per cent. from the previous year. My authority's full-year costs for 1991–92 represent an additional I per cent., and it faces a total 9.8 per cent. increase in teachers' salary costs. That shortfall must be met from the SSA settlement of 6.1 per cent.

We must take account of the precepts on county budgets. The Dyfed-Powys police authority, for example, has a precept of 11 per cent. in the coming financial year. That is way above the inflation level, but the county must find resources to assist the police authority. The land drainage precept has been increased by 10 per cent.—again, way above inflation. That puts the county budget in a difficult position. Then there are capital financing charges of 8.7 per cent. That must be added to the cost of extra pupil numbers in schools, and the implementation of the Children Act 1989. The additional demands on the county budget must be met; something has to give.

The district councils are also experiencing variable results. Until the announcement by the Welsh Office on 11 February, we thought that the Radnorshire settlement announced on 20 January was fair. Somewhere along the line, however, Radnorshire lost £90,000 between the two dates. That is causing considerable problems for the Radnorshire treasurer, because many details of the budget had already been worked out. I know that the Secretary of State will be receiving representations from the district. In local authority finance terms, £90,000 may not sound much, but—as the Secretary of State well knows—Radnorshire is a relatively small authority.

Mr. David Hunt

Late last night, Mr. Jonathan Evans telephoned me to say that there was some concern in Powys. I agreed with him, as I agree with the hon. Gentleman now, and I am very willing to speak to council officers if that is required.

The recalculation of Radnorshire's SSA to take account of teachers' pay meant that, for reasons of consistency, other changes that had arisen after the original calculations had been undertaken needed to be taken into account. They included the surrender of supplementary credit approvals totalling £600,000, because of the decision not to proceed with the Llandridnod Wells leisure centre. The approvals have been recycled for use by other districts and the loan charges element of Radnorshire's SSA has been reduced as a result.

Radnorshire still has a higher percentage increase in SSA than any other district—19.1 per cent., compared with an average of 8.7 per cent. Its SSA has increased by over 43 per cent. since 1991.

Mr. Livsey

I thank the Secretary of State for going into such detail. Those developments, however, result from changes in teachers' pay—which, after all, is a county rather than a district function. I know that there is a spin-off.

Mr. Hunt

I was merely saying that, irrespective of the county function, the fact that the figures were being recalculated because of the need to take the county's figures into account meant that the district's figures were brought up to date. Of course, Radnorshire's figures have nothing to do with the teachers' pay calculations.

Mr. Livsey

Nonetheless, quite a stir has been created in the district, and I am sure that the right hon. Gentleman will receive representations from it, too. I hope that he will take more notice of the statements that I am making than of quotations that he appears to have received from my Conservative opponent in the constituency. He has a tendency to listen more readily to Conservative candidates throughout Wales than to Welsh Members of Parliament. That is a very unacceptable state of affairs, which has been repeated time and again.

On the other hand, I am very grateful indeed to the Secretary of State for agreeing to meet a deputation from Powys. I know that they welcome that opportunity. 1 hope that by thanking the Secretary of State for it I shall make it clear that I want to be even-handed.

There is a very sad state of affairs in housing. The current extent of homelessness is entirely unacceptable. I spent part of last Saturday evening trying to assist a parent and four children to get a roof over their heads for the night. The family ended up in a police station looking for help. I am sure that that experience is shared by many Members of Parliament. We are having to pick up the pieces of a failed housing policy. It is immoral that people should be thrown on to the streets because affordable housing is unavailable as a result of the failure to build council houses in the last five years. The Government are refusing to release funds—the councils' own funds—for this purpose. In respect of housing, as in respect of the poll tax, the Government have failed. The poll tax is one of the worst reforms to have been introduced this century. It does not address the question of ability to pay, and we are now talking about a local government settlement that involves picking up the pieces.

9 pm

Mr. Keith Raffan (Delyn)

Before coming to my main remarks I should like to express strong support for the remarks of my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) about the Rhuddlan bypass, which is important not only to the town of Rhyl in his constituency but to the town of Prestatyn in my own. Both towns depend heavily on the tourist industry, and it is important that access to them is easy. The bypass will improve access, so it is important that work be started as soon as possible. I hope that my right hon. Friend will bear these remarks in mind. We understand from Clwyd county council that the reason for the postponement is connected with the transport supplementary grant.

I want to refer to a point made by the hon. Member for Swansea, East (Mr. Anderson). As my right hon. Friend the Secretary of State pointed out in his opening remarks, the level of central Government support for local authority revenue expenditure in 1991–92 shows an increase from 79 per cent. to nearly 93 per cent. I do not regard this as a healthy development, even though it is probably temporary. We are rapidly approaching the position taken by my right hon. Friend the Member for Blaby (Mr. Lawson): that all local authority revenue should be raised centrally, that we should abandon any attempt whatsoever to replace the rates whether by the poll tax, or the council tax—or whatever else is proposed. I do not go along with that, although I have reservations about the council tax, to which I shall come in a moment. We are rapidly approaching a situation in which central Government provide nearly all the finance for local authorities. That is not healthy. I believe in strong, representative local government. If we are to have that, councils must have a right to raise revenue to a much greater extent than is the case now or is likely to be the case with the council tax.

Before elaborating on those remarks I should like to comment briefly on one or two aspects of the community charge in its dying days. The average cost of collecting the minimum contribution of 20 per cent. of poll tax from those on social security benefit is £6 more per head than the amount raised. [Interruption.] The hon. Member for Cardiff, South and Penarth (Mr. Michael) is not usually like this. I am actually supporting him, but he is ignoring my support. It is important that we realise how expensive it is to collect the poll tax from people on benefit. It is absurd that the cost should be £6 more per head than the amount collected. The whole 20 per cent. is covered by the uprating of income support. In fact, people in Wales who are on benefit do well. They receive an uprating of 20 per cent. of the average community charge throughout England and Wales. Surely the sensible thing for the Government to do would have been to reduce the income support by 20 per cent. rather than waste money in attempts at collection. Surely it would be fairly easy to do this and cheaper than collection of the 20 per cent.

The case for abolition of the minimum calculation is overwhelming—[Interruption.] I want to get on. As I am agreeing with points that have been made by the Opposition, I do not understand how contention can arise. This is an unnecessary distraction for councils at a time when the transfer to the council tax is having to be made.

The second point relates to the community charge reduction scheme. My right hon. Friend knows that I have always been unhappy about the fact that we have a different community charge reduction scheme in Wales from that in England. The English system is much fairer and much better targeted. It is targeted towards individuals rather than towards whole community council areas. When my right hon. Friend made his statement on 13 January, the hon. Member for Torfaen (Mr. Murphy) said that, if my right hon. Friend's predecessor had listened to local government leaders in Wales, he would not have produced such an "inane" scheme.

When I tackled my right hon. Friend the Member for Worcester (Mr. Walker) on the issue when he was Secretary of State for Wales he said that he had listened to local government leaders in Wales and that they had come out in favour of a community charge reduction scheme that was oriented towards community council areas rather than towards individuals, the argument being that that would cost a lot less to administer and therefore there would be more money to spread around.

This scheme has created absurd anomalies. To illustrate my point, let me take the example of Rhyl and Prestatyn. The west end of Rhyl is a very deprived area. In 1991–92, Rhyl poll tax payers had a reduction of £48, whereas the poll tax payers of Prestatyn—many of them in similar housing, and in some cases in less good housing—had a reduction of £1. In the next financial year, 1992–93, the reduction in Rhyl will be £31 and in Prestatyn zero. The whole thing is cockeyed. It is as unfair and inequitable as the rates. It would have been much more sensible and much fairer for us to have adopted the English system that is oriented towards individuals rather than towards community council areas.

Mr. David Hunt

I thought very carefully about this, as my hon. Friend knows, and considered what he has just said, but I felt that in the final year of the community charge or poll tax it would have been wrong to ask everybody in Wales to complete an application form for community charge relief. I hope that my hon. Friend understands that.

Mr. Raffan

Yes, but rather than giving blanket assistance to all people in a community council area, it would have been far better in the first place to direct it towards those individuals who have suffered particularly badly.

My right hon. Friends on the Treasury Bench regard the council tax as a safe haven from the poll tax. They believe that the storms will abate and that we shall sail into smoother waters. The Opposition look smug, but how many versions of a replacement for the poll tax have they produced? Is it 63, at the latest count, or 64? Perhaps there has not been one this week. The Opposition have been very quiet this week, but no doubt there will be at least one more press conference at which they will produce one more version of their replacement for the poll tax.

The Opposition have to be fair. It is all very well for them to attack Conservative Members and Treasury Bench Ministers. I was a member of the Committee that considered the poll tax Bill and I am as guilty as anybody. I regret my support for the poll tax. If the Opposition want me to apologise, that is fine, but at the same time they must apologise for crawling to the International Monetary Fund in 1976 and for slashing public expenditure on water and sewerage infrastructure and so on when the last Labour Government were in power. If they are prepared to do that, we shall be quits. My point is that they have to come up with their final alternative and they have not yet done so. I notice that no Labour Member is rising to his feet. I certainly do not want to encourage any of them to do so.

I understand that the council tax will provide about 14 per cent. of local authority revenue, on average, in the United Kingdom, but even less in Wales. The rest will be provided by central Government grant and the uniform business rate. In my view, that is far too low a percentage of local authority revenue to be raised by means of a local tax.

The council tax alone is under local authority control and must finance any additional council spending. On average, a 1 per cent. increase in spending will require at least a 7 per cent. increase in council tax bills. The gearing, therefore, is 7:1. It may be more than that. I was interested in what the hon. Member for Brecon and Radnor (Mr. Livsey) had to say about standard spending assessments, which he referred to as "estimates"—which is clearly what they are. They are not precisely determined and can never be so. However, the amount of gearing depends upon the accuracy of the SSAs, which are the Government's estimate of the amount that counties need to spend to provide a standard level of service. As 1 say, they cannot be calculated precisely and the council tax increase that will be required to cover any underestimate in the SSAs will be magnified by the gearing factor. Gearing was a major factor, if not the sole factor, in the downfall of the poll tax. Yet it is still a major feature of the council tax. That is what concerns me. The council tax is a better and fairer tax. I will not get too carried away because, although I will not be here in the next Parliament, my words may be thrown back at my hon. Friends. I am not particularly enamoured by the council tax. At least it got us off the hook of the poll tax. [HON. MEMBERS: "Oh."] We all know that, so why not say it. We do not want to move from one fire into another fire and, as I have said, I am concerned about gearing.

The only way around the gearing problem, to diminish it, would be for councils to control more than the current 14 per cent. of their expenditure in the United Kingdom as a whole. That could be done by reducing the number of services for which councils are responsible. I am not keen on that idea and I do not think that many hon. Members would be keen on it because most of us believe in local government and I want to see it strengthened. I would not be too unhappy about the fire service and the police being hived off, but no more than that.

Another way to diminish gearing would be to make councils responsible for raising more of their revenue. We could, for example, give them control of the business rate. I have reservations about that. At least now business and industry are able to plan ahead, knowing roughly the bills they will be facing with the uniform business rate.

I remember my first few years in the House. Just before the rates were set, industries and businesses came to see me as they were justifiably anxious about the rise in rates in Clwyd. So, if they were once again to be given control of the business rate, there would have to be certain limits so that increases would not damage industry or competitiveness. There must be other ways to diminish the gearing factor and I should like them to be examined. Councils should have the right to raise more of their revenue.

The main problem with the council tax or any major reform of local government finance—on this I agree with my hon. Friend the Member for Clwyd, North-West and, although we did not compare notes, we think similarly —is that we are dealing with local government reforms the wrong way round. We are dealing with them in reverse order. This follows what I said in the debate on the Queen's Speech. We should have started with functions and internal management, moved on to format and structure and then dealt with how to finance the new structure with its revised functions. That is what we should have done in an ideal world. However, we are in a post-poll tax world, not an ideal one. Because of the political necessity of replacing the poll tax as soon as possible we had to deal with local government finance first. If we had done it in the order that I suggested, we would have had a much better chance of getting the local government finance system right.

All local government reforms—functions, finance and format—should be conceived and considered in relation to an all-Wales tier. I said on the radio the other morning, probably before most hon. Members were up—although I know that one person was up—that the first attempt to introduce Welsh home rule was an amendment to a Bill dealing with local government. It was moved by T. E. Ellis, the then Member for Merionethshire. That is how home rule was first attempted in Wales. Post second world war, it has been referred to as devolution. We must look at an all-Wales tier in a pragmatic way.

It is no use my hon. Friend the Under-Secretary talking about a Mickey Mouse Parliament. That will not convince anybody. There must be arguments from Ministers on this issue. If we move to one-tier authorities, where will the strategic planning and the transport and infrastructure planning happen, and who will carry it out? These are all-Wales issues and they need an all-Wales tier. Currently, on devolution, the Government seem to be blinded by the headlights of public opinion, stunned and unable to move other than to grope robotically for historic allusions to past referendums that have no relation to the here and now.

I welcome the Secretary of State's announcement today. That is progress—we are to have a debate on the constitutional issue and, indeed, we should do so. As I said during business questions the other week, if the Scots are to have three debates—one in Edinburgh—we should at least have one, and I am glad that it is to be in Cardiff. I hope that the Under-Secretary will respond to the point raised by the hon. Member for Swansea, East and I earlier today in the Grand Committee. I raise it again now because it received no response—we should have that debate before mid-March, preferably before the Budget so that it will happen during this Parliament. It is an election issue and must be debated before the election.

A new local government tax cannot be successfully conceived and born in isolation, cut off from discussion of the functions and format for which it will pay. Indeed, it should have been considered and debated not only in those contexts but in the much wider context of how local government is to fit in with regional government because they are interlocked and fitted into the government of the nation as a whole.

9.15 pm

Mr. Allan Rogers (Rhondda)

We shall miss the rapid-fire verbosity of the hon. Member for whatever it is in north Wales. Between his speech and the tie of the hon. Member for Tatton (Mr. Hamilton), I feel rather dizzy. I do not know whether it is the Amman Valley old boy's tie that he is wearing but at least it adds a little colour to the occasion.

Because of the strictures on time, I shall deal with only two problems, one of which I rehearsed in the Welsh Grand Committee but to which the Minister of State did not answer—the problem of the teachers' pay award. I hope that it can be dealt with during the wind-up speech. I deal with the issue as it applies to Mid-Glamorgan.

As I said in the Grand Committee, if the 7.8 per cent. overall award is granted, Mid-Glamorgan will have to find £1.7 million to pay it. The Government are going to give it additional funding of only £700,000, which means that Mid-Glamorgan will have to find £1 million—a very nice convenient figure. What can Mid-Glamorgan do about the shortfall? It could cut services, which it has already done in some areas; the only alternative—I hope that the Under-Secretary is listening—is to put £3 on the poll tax, and Mid-Glamorgan will have to do that unless the Under-Secretary of State can say now that the Government are prepared to fund the whole of the award.

We know that the award has been made at this time for electoral purposes, so why do not the Secretary of State and the Government have the guts to fund it? If one is going to bribe people, one should at least have the gumption to pay the whole bribe. One should not tell people to pay three quarters of the bribe themselves. That is a bit unfair—even by this Government's yardstick, it is a bit much.

The authority is already budgeting to maintain services: it is about 2.2 per cent. over its standard spending assessment, so there is no way it can fund the award without pushing up the poll tax. I know that you would pull me up for using bad parliamentary language, Madam Deputy Speaker; I would have liked to say that the Government have a bloody cheek to act in the way they have, but I am not allowed to say that.

Another issue about which I am very concerned is that of rents of factories. I am not sure what is happening in Wales, but I have suddenly received a rush—or a rash, however one wants to describe it—of papers coming through my fax from companies in the Rhondda which are being asked for huge rent rises from the Welsh Development Agency or the local authority. Whoever owns these factories—[interruption.] May I ask my hon. Friends to allow me to develop my case for a moment?

The rent rises, whether from the local authority or the WDA, are instigated by the district valuer. He is obliged to advise local authorities on economic rents when the revision takes place—it is like chasing one's tail. The district valuer says to the council, "That is what I consider an economic rent," and the councillors have to implement that rent. If they ignore it, they will be surcharged and called before the district auditor.

The situation is ridiculous. The Rhondda valley has high unemployment, and by any socio-economic indicator it is one of the most deprived areas of the United Kingdom. New factories are being built there, and the Government are saying how wonderful they are to help. I applaud the development, because we need the factories, but now the factories are being shut down because nobody can afford to pay the rents. The daft thing about it all is that 30 per cent. of the factories are empty anyway.

Local authorities have to charge the rents charged by the district valuers, or risk being surcharged. That means that firms are getting thrown out of factories or having to leave them, and people are being thrown out of work. Buildings are being vandalised because there is no one there. That all results in an even greater charge on the community.

I have raised two practical points, and I hope that they can be resolved. The first is the fact that the county council will have to add at least £3 per head to the poll tax in order to fund the electoral bribe for teachers. The second is the issue of rent increases for factories run by the Welsh Development Agency or by local authorities. I should appreciate it if the Minister would deal with those two matters.

9.21 pm

Mr. Gwilym Jones (Cardiff, North)

I congratulate the hon. Member for Rhondda (Mr. Rogers) on achieving the brevity that you, Madam Deputy Speaker, have sought from us all the evening. I shall try to emulate him.

I do not understand why the hon. Member for Brecon and Radnor (Mr. Livsey) brought up the hoary old chestnut of unspent council receipts. I invite the hon. Gentleman to identify one bank account in Wales in which a local council has on deposit council house receipts that it cannot spend. Such a bank account does not exist anywhere in Wales. Will the hon. Gentleman find me one?

The moneys are used to repay debts already accumulated by councils—and rightly so. If they were not, local community charge payers would have to pay twice.

Mr. Huw Edwards (Monmouth)

rose—

Mr. Jones

I shall give way once only. I am trying to be brief.

Mr. Edwards

Does the hon. Gentleman realise that, in the past 10 years, £741 million has accrued to local authorities in Wales through capital receipts, and that 25 per cent. is still supposed to be spent, according to the Under-Secretary of State? Is he convinced that 25 per cent. of capital receipts in Cardiff is being spent?

Mr. Jones

The hon. Gentleman walks into the same pitfall as the hon. Member for Brecon and Radnor. I invite him, too, to identify one bank account in Wales in which moneys are lying, not being used. The moneys are being used to redeem debt, and rightly so.

I shall pick up the theme pursued by my hon. Friend the Member for Cardiff, Central (Mr. Grist). It may be superficially tempting to say what a good deal a community charge represents. As my right hon. Friend the Secretary of State has said, the average for Wales should be £85—only 7 per cent. of the total that local councils spend. My arithmetic tells me that, for every average community charge of £85, some £1,214 is being contributed from sources outside the local council.

However, as the hon. Member for Cardiff, West (Mr. Morgan) tried to say on one of his frequent visits to the Chamber, nothing is for free. It is we, the taxpayers, who have to pay all that money—from whatever source it comes. It therefore behoves us as Members of Parliament —indeed, it behoves every citizen—carefully to consider all the implications of local council spending.

The reports before the House are good ones. As my right hon. Friend has said, they again put us in a position superior to that of England. They provide an increase of 8.5 per cent. over the comparable figure for last year, and even a 5.1 per cent. increase over the budgets of local councils in Wales. No one could suggest that that is not an increase in real terms, however, those real terms are calculated.

The aggregate external finance has increased by a massive 24 per cent. As my right hon. Friend said today, and in his statement on 13 January, he expects local councils to rise to the challenge. He was wise to remind us of his capping powers. It would be desirable if we could continue not to use those powers, but I do not believe for one moment that we should flinch from using them should that be necessary.

I am particularly pleased that the uniform business rate has gone up by less than the rate of inflation. That is most important at a time when we want to complete the recovery from the recession. That business rate is a great relief to local companies in comparison with the situation they faced not so long ago, when they were at the mercy of local councils. In the past, Cardiff has been subject to some horrendous rate increases—for example, 97.5 per cent. one year and 54 per cent. another.

In the first year in which the community charge operated, it was reliably estimated that it should have been set at £150, but we ended up with a charge of £250. Thanks to the Government, relief from community charge payments has been extended to all community charge payers in Cardiff. The reduction of £140 halved that community charge.

If prudent financial practices had been followed from the beginning by South Glamorgan council, the community charge of Cardiff could have been set at the same level as that for Wandsworth. We could have had a zero community charge.

If I was a member of the Opposition, perhaps I would now be talking about the hidden agenda. Such a discussion about Cardiff is not necessary, because South Glamorgan council, in advance of its community charge debate tomorrow afternoon, has published its plans for extra spending that it would like to undertake. They amount to another £25 million on top of the SSA.

I have been warned by Councillor Bernard Rees, the leader of the Conservative group on South Glamorgan council, that if, heaven forbid, there was a Labour Government, the community charge for everyone in Cardiff would double overnight. My right hon. Friend has already pointed out that even worse might befall those of us in Cardiff, because he told us how the hon. Member for Dagenham (Mr. Gould) envisaged that the community charge in Wales would treble. Instead of the current charge of £140, every charge payer in Cardiff might have to find a minimum of £450. It is conspicuous that, when my right hon. Friend raised that matter in the Welsh Grand Committee earlier and in the Chamber tonight, there was no answer from those sitting on the Labour Front Bench.

What have we got to show in Cardiff for the extortionate demands placed upon the charge payers? My hon. Friend the Member for Cardiff, Central has already referred to some peculiar commercial developments that the council has insisted upon. He reminded us of the tennis centre at Sully, and about the Gardenhurst centre for old people in Penarth. I will not comment on them, because they are outside my constituency, but I understand that they are being forced through in the teeth of great local opposition with complete disregard for local people's feelings.

My hon. Friend also referred to Corpus Christi high school, in which I have an interest because there are plans to relocate it at a green field site in my constituency. My local residents and councillors are just as fiercely opposed to that, and I shall continue to support them.

The most notorious of the controversial proposals is to build a medicentre—a commercial development—on one of the few open spaces of the University hospital of Wales. Why on earth is the council going in for that commercial development, especially as it is on a national health service site? Have we any confidence that the council could make those commercial developments work? I have little confidence, and I certainly would not entrust any commercial developments to it.

What else have we got to show for the high demands placed upon charge payers? We spent a lot of time today in Committee talking about education. Unfortunately, South Glamorgan council is one of the lowest spenders per head on education. Local citizens would immediately want to ask about the roads. By local repute, we have some of the worst roads in Wales. I recently called on a constituent, Mr. Full, who is trying to get one solitary extra light in Rhiwbina. He has received exactly the same correspondence from the council for the past 10 years. In fact, he has ended up with a more depressing reply than the one he first received 10 years ago.

I listened intently to the hon. Member for Alyn and Deeside (Mr. Jones), but I listened in vain for something substantial. I heard some hypocrisy about the RECHAR money, and I feel strongly about that. It is our money, because Britain is a net contributor to the Common Market. At best, it is an example of the problems with which the Government are trying to deal. The Common Market should be a collection of equal sovereign states and money should not be withheld at the whim of bureaucrats.

At worst, it is a case of party politics, because the Commissioner who seeks to thwart our desire for that money is a Labour nominee. I should be more than curious to know what the hon. Member for Alyn and Deeside has been doing to persuade his Labour colleague to stop blocking that money for Britain.

I also listened in vain to the hon. Gentleman's speech for a clear-cut answer about how much he would give local councils in Wales. His speech was full of criticism of the Government, but he had no positive proposals to make.

Devolution has been mentioned by more than one hon. Member. I am sure that the hon. Member for Caernarfon (Mr. Wigley) is striving to speak, but before he does so, may I say this: hands off Cardiff city hall. Cardiff city hall is the much-loved headquarters of our local council. For as long as any citizen of Cardiff can remember, it has been the home of Cardiff's local council. I hope that, after the reform of local government in Wales, we shall make that city hall once again the headquarters of a much more local, relevant and loved local council. I accept that we can allow visitors in, but we should never let the city hall be taken over by a remote quango.

The hon. Member for Caernarfon is right to be concerned about the form and geographical convenience of a regional assembly for Wales, but it should be in the style of a slatted shed usually preferred by DIY distributors. Moreover, I am sure that the overwhelming majority of Welsh people would prefer it to be sited in Aberystwyth.

9.31 pm

Mr. Dafydd Wigley (Caernarfon)

It is interesting that, of the four Conservative Back Benchers from Wales, two have spoken in favour of an elected all-Wales body, albeit their viewpoints differ from mine. I advocate strongly that there should be a national parliament but the need for democracy on a all-Wales level is now becoming an accepted factor. In considering the future of the government of Wales, the future of local government or the structure of financing, the all-Wales aspect must be taken into account. We cannot continue as we are, possibly into another Parliament. If the Government win the election and return for the fourth time as a Conservative Government, perhaps with even fewer seats in Wales—of the 38 seats, the Conservatives hold only six —a democratic deficit will have to be met.

Another problem is how to achieve a proper strategic body if we move to a local government structure as proposed by the Secretary of State in his consultation document. All those questions must be taken on board. Many hon. Members have referred tonight to the nonsense into which local government finance has now entered. No one could argue that the proportions coming from the centre are probably too high. The methods of raising money at local government level worry all of us. The poll tax is a nonsense and its residual elements are still grotesquely unfair, as the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) said. However, no one could argue that, if we are to have local democracy, the need to raise money locally should not be taken on board. The question is how that should be done fairly and how we can achieve a proper balance between central and local responsibility.

One of the problems is that, in so many ways, local government acts as an agency for central Government. It cannot control so many of its responsibilities and it cannot decide what it does because it is constrained by legislation.

Mr. Anderson

There is very little discretion.

Mr. Wigley

I agree with the hon. Gentleman. In the coming year we shall face more responsibility falling on local government in Wales. In 12 months time, the community care package will land. My local authority of Gwynedd faces a bill of some £750,000 and has asked the Secretary of State for help with that money in order to tackle care in the community. As more responsibilty is placed on local government, it will inevitably look to the centre for funding. Clearly, somebody has to pay for those activities, and we must have care in the community. It is not a cut-price option and must be paid for. We must introduce a mechanism to do so in an equitable manner so that those who can afford to shoulder a greater proportion of the burden do so.

My party and I favour a local income tax, but we could argue about the exact way of going about it. However, if local democracy is to mean something, there must be a fund-raising mechanism. I accept that that is equally true on the all-Wales level. If there is to be a meaningful all-Wales tier of government, that must have financial responsibility, which means the ability to raise funds. That could possibly be done by transfer to that organisation of some of the taxes currently raised—for example, value added tax.

I asked a question of the Secretary of State that has still not been answered. The hon. Member for Rhondda (Mr. Rogers) mentioned the Mid-Glamorgan equivalent of the issue that I raised in the context of Gwynedd, where we have a £500,000 shortfall in relation to the teachers' pay settlement, which has implications. If, as Gwynedd people have told me today, the implications involve either the sacking of a significant number of teachers or a significant increase in the poll tax, I hope that the Secretary of State will be prepared to look at the figures that Gwynedd proposes and show where they are wrong, if they are. If they are right, I hope that he will face up to the implications of that.

We face a housing crisis. One half, or even two thirds, of the cases that come up in surgery after surgery involve people who cannot find a place to live. The Secretary of State cannot avoid the fact that there is a crisis. Since 1979, the number of rented accommodation units available from local authorities has dropped from 308,000 to 226,000—a reduction of 82,000 in the number of council houses in Wales due to the Government's policy of selling them off. Those houses are no longer available and, as the cycle revolves, with people dying off or moving away, their houses are not available for letting to people on the list.

In the same period, the number of private rented accommodation units in Wales has dropped from 114,000 to 80,000—a reduction of 34,000. We have to counter balance against that an increase of only 14,000 in housing association units. Therefore, although we have lost 116,000 units, we have gained just 14,000—a net loss of 102,000.

Those problems would not be as bad if the people involved were in a financial position to buy their own houses, but they are not. They are out of work or, if they are in work, they have the insecurity of seeing redundancies and closures all around them.

In the Dwyfor district of my constituency, 400 people are on the waiting list for housing and cannot get houses, 20 per cent. of the housing stock are second homes which are empty for large proportions of the year and there are 800 houses on the market that people cannot sell. They are for sale at prices that people cannot afford to buy, and the local authority does not have the resources to buy the houses to rent them to those who want them. That is mismanagement.

We must crack the problem because we are creating social problems. What I have described in Dwyfor is as bad or even worse in the Arfon district, where it is compounded by the growth of University College of North Wales, Bangor. We welcome the fact that that institution is enjoying such a successful period, but, as the Minister of State knows full well, the availability of housing in Bangor is chronically low. Some 1,500 people in the Arfon district are on the waiting list. People are sleeping out and sleeping in cars, while families are having to split up, with some members living with the father and some with the mother as they have nowhere to live. That problem must be tackled.

I urge the Secretary of State to look at the financial mechanisms available to local authorities in the coming year to find a way to enable them—in one way or another —to get housing moving again so that it is available for rent to those who need it. There is a desperate need, and we must tackle the problem as a matter of urgency.

9.38 pm

Mr. Paul Flynn (Newport, West)

The most telling part of tonight's debate was the Secretary of State's confession that he considered the English system for the reduction in the charge to be superior—he nodded earlier. He had considered changing the system, but he decided against it. He was told many times in the Chamber last year and received many letters from my constituents and those of other hon. Members urging him to change the system. The reason he gave for not doing so was that he did not want people to fill out a form.

My constituents in Rogerstone in Newport will be paying £158 in poll tax this year, rather than the £117 that people in other parts of the town will be paying. I am sure that everyone in Rogerstone will be happy to fill out the form if it will save £41—

Mr. David Hunt

In many ways the English system is superior—after all, I devised it when I was the Minister responsible for local government, but I recognised that what local authorities in Wales had proposed was a simple. direct system that did not involve the administrative costs of the English system. So it is not just a question of filling out a form; it is also a question of administrative costs that would greatly reduce the amount of money available in the first place.

Mr. Flynn

The scheme in Newport, West is uniquely demented, as I have told the right hon. Gentleman before. Every poll tax payer there will pay an average extra £17. That has nothing to do with local authorities , or with the right hon. Members for Finchley (Mrs. Thatcher) or for Worcester (Mr. Walker)—the £17 extra this year is due to the Secretary of State. My constituents accept that. What they will not accept is the reason why they pay more in Rogerstone than in Wentloog which, extraordinarily enough, has nothing to do with the fact that one area is deprived and the other prosperous, that one contains many people on income support and the other does not. The reason is that one area has more farms than the other.

Under this crude system, the old rates were looked at. Some areas containing a large number of farms which paid little or no rates—I refer to Wentloog and Nash—pay rates that are artificially low, but deprived areas containing people on low incomes pay high rates. That extraordinary anomaly applies to Newport but not to Rhondda and many other constituencies in Wales. The Secretary of State has been told about this. I invite him to Rogerstone community centre and to the other areas paying the Hunt levy, which amounts to about £41 extra—and it is not due to additional council charges. It is due to decisions taken by the Secretary of State, who could have changed his mind but did not. My constituents will have to pay this levy because of a blunder by the Secretary of State.

9.41 pm

Mr. Peter Hain (Neath)

Listening to the mumbo-jumbo of the Secretary of State's speech, it seemed to me that he was relying far too heavily on the teenage scribblers in the Welsh Office who tell him that all his financial increases mean that local authorities are doing well. At the end of it all, however, West Glamorgan's education budget for the teachers' pay settlement is underfunded by £1 million. That in turn has led to the education budget having to be cut by £2.1 million this year. When the Under-Secretary replies, perhaps he will tell us whether he agrees with that cut, on which he has insisted.

Meanwhile, the poll tax continues in place. According to the Local Government Information Unit, it has cost the people of Wales £1 billion: two years of £140 subsidy, collection losses estimated by the Audit Commission, the cost of the community charge reduction scheme, the cost of transitional relief and the cost of setting up and administering the poll tax.

The unfair and oppressive 20 per cent. rule is still in place; every £6 collected under it costs local authorities £15 to collect. Leaving aside questions of equity, how can it make sense to maintain the 20 per cent. rule on grounds of efficiency? The oppressive unfairness of the tax continues. On Saturday morning I saw in my surgery a pensioner whose husband had died in December and who had received a poll tax arrears bill for £1.95 even though she and he had paid their bills to the borough council on the dot, week in, week out. We all know of similar examples, and the poll tax will continue to be a major issue in the general election.

Another issue that continues to dog the people of Neath is the discriminatory system of transitional relief that the Welsh Office operates. For example, the community area of Blaehonddan is getting no transitional relief this coming year, just as it got none in the year 1991–92. How can it be right that a pensioner couple, with a small miner's pension that takes them above the income support level, should be receiving no transitional relief, while I, with a Member of Parliament's salary, in the area of Resolven am receiving £68 transitional relief? There is no equity in that. We both depend on the same services and we both pay for those services, and we do not get anything more or less for that contribution. I ask the Secretary of State to look again at the way that this system is worked.

I have another point, about gearing and the enormous centralisation of financing of local government that has taken place under this Conservative Government. The position is worse than was suggested by the hon. Member for Delyn (Mr. Raffan). Because only 7 per cent. of a local authority's revenue is raised locally, for every 1 per cent. increase in revenue, the poll tax has to go up by 14 per cent. That is an enormous centralisation. It is not local accountability—it is local strangulation.

After 13 years of destructive rule by the Conservative Government, Wales at last has the opportunity to regenerate local democracy, to empower local communities and give them the right to have a say over their destiny. We shall get that right from a Labour Government.

9.46 pm

Mr. Huw Edwards (Monmouth)

Some of my colleagues have already talked about the housing crisis in their authorities. The difference between the authority that I represent and those that my hon. Friends represent is that I represent the only Conservative district authority in Wales. No Government policy has been more incompetent and inhumane than their housing policy.

A written answer to a question that I put to the Secretary of State shows that £741 million has accrued to local authorities from the sale of council houses in the past 10 years. My authority of Monmouth has accrued £24 million, of which £;10 million has been accumulated in the past three years. Brecknock, the authority of the hon. Member for Brecon and Radnor (Mr. Livsey), has accumulated £24 million, of which £15 million has come in the past three years. In Cardiff, the figures are £79 million in the past 10 years, of which £29 million has come in the past three years. This has happened since the Housing Acts of 1988 and 1989 which effectively put an end to the development of housing by local authorities.

The Government's theory is that local authorities should be enabling people to buy housing, so we have to ask how the Secretary of State and his policies have enabled people on the waiting list in my constituency to get into housing. Those who cannot afford to buy find that there is nothing to rent. The Government introduced legislation that was intended to stimulate the private sector, but we have seen from the figures mentioned by the hon. Member for Caernarfon (Mr. Wigley) that the number of private rented units in Wales has declined. Even in the Government's terms, their policies have failed miserably.

In Monmouth there are 2,500 households on the council house waiting list. There is rising homelessness and no purpose-built accommodation for homeless people. Despite that, the housing revenue subsidy has been cut this year. It is £200,000 short of expenditure on housing benefit. That confirms what people have been saying for years, since the Local Government and Housing Act 1989, that those on low incomes in council houses are subsidising those on the lowest income who are dependent on housing benefit.

Council rents in Monmouth are due to go up by £5.25 across the board. That is a 19 per cent. increase, which is far higher than the increase in the rate of inflation. Officials and councillors are highly embarrassed about the way in which they have to implement those policies in the only Conservative-controlled authority in Wales. In the housing department, three posts are being frozen at a time when it is trying to decentralise its services.

If Monmouth borough council has been able to spend 25 per cent. of its revenue from the sale of council houses in the past three years, why has not one house been built this year? Where has that 25 per cent. of £10 million gone? There is widespread concern in my constituency that that money is being put aside to build new council headquarters on land partly owned by the leader of Monmouth borough council. That was suggested on an HTV Wales television documentary just before Christmas. I hope that it can be confirmed that that is not the case, but there is no support for the building of new council headquarters at Portskewett on the edge of my constituency and the borough.

Even if we accept the Government's argument that money is going into housing associations, only 108 houses are under construction by housing associations in the current year according to a reply to me from the Under-Secretary of State during Welsh questions two weeks ago. How on earth will those 108 houses enable the 2,500 households on the council house waiting list to be rehoused? I can only conclude that, as I said at the beginning of my speech, the Government have no policy which is more incompetent and which even in their own terms has failed more than their housing policy. We need a Labour Government to rectify that.

9.51 pm

Mr. Win Griffiths (Bridgend)

I want to return to the question of the funding of the teachers' pay award, because the Secretary of State, in his answer to my earlier intervention, showed that he knew the answer to my question but was hiding under the hypothecation halo of the Treasury. He told us at the beginning that, in drawing up his plans for local government spending and the Government's contribution towards it, he had estimated what the teachers' pay award would be. He admitted that he had underestimated, and so had made a further contribution.

Therefore, I plainly asked the right hon. Gentleman what the difference was that the local authorities would have to find, and I hope that the Under-Secretary will tell us when he replies. In Mid-Glamorgan, the difference is about £1 million, and in West Glamorgan it is a similar figure. In South Glamorgan it is not far short of that. The Minister must be able to give the figure that the local authorities are expected to find by way of efficiency savings to make up that shortfall.

How does the Welsh Office estimate the efficiency savings that local authorities can make when it draws up its funding proposals for local government? Year by year, it has assumed that there is scope for such efficiency savings. Can it give us an estimate of the likely efficiency savings in local government for the coming financial year? At the same time, will the Minister tell us what the efficiency savings for the Welsh Office will be for the forthcoming year?

Is it not true that central Government spending has risen massively during the Government's lifetime? They have the audacity to accuse local government of overspending and to turn the screw on it while not accepting the blame for their own profligacy, of which the poll tax is the outstanding example. If Ministers had been any body of councillors in the United Kingdom, they would have been surcharged and prevented from serving on any elected body for the rest of their lives.

Local authorities are having to struggle desperately to maintain services. That struggle resulted in appalling decisions having to be taken. The Secretary of State pointed out that my own authority is in the top four for poll tax collection in Wales. There are stories of human hardship and misery behind the accumulation of that money. In the last two months of this year, Ogwr, which has a good record for poll tax collection, will stop the adaptation of properties for the disabled. That is an outrage, but the money has run out. The provision of central heating for people having medical priorities has been stopped because the authority does not have the money for that either.

The Welsh Office says that it is the provider of largesse beyond the dreams of any local government leader, yet there is example after example of difficult decisions being made by local authorities as to which services can be provided, and which must be cut back.

The Government and Welsh Office Ministers will not have the opportunity to bring about their threats of poll tax capping, because after 9 April they will not be in office. It will again be left to a Labour Government to pick up the pieces of the disaster that Tory rule has brought to Wales. Local government spending priorities will have to be reordered to ensure that the people who really need help will get it in the coming financial year.

9.56 pm

Mr. Rhodri Morgan (Cardiff, West)

I want to say one word to the Secretary of State or the Under-Secretary, and that is "increments". It is a little like a scene in "The Graduate", in which one of the characters says to Ben, "I just want to say one word to you—plastics." I am sure that you, Madam Deputy Speaker, remember that scene from "The Graduate", which I am sure you saw several times—unless you went to see "The Sound of Music" instead.

The word "increments" is critical. County treasurers say, "If only the Welsh Office would accept the impact of increments on the total cost of teachers' pay next year, compared with this year, there would be no need for 90 per cent. of the hassle and haggling involved in arguing, as we are now, whether or not the rate support grant settlement is fair."

I was disappointed by the Secretary of State's reply to my earlier intervention, when I asked whether local government finance experts in the Welsh Office had reached agreement with county council treasurers' departments on the total cost of providing next year the same basket of local government services, and the percentage increase required to meet it—known as a service standstill budget.

South Glamorgan has a no-growth budget, but that is not the same as a service standstill budget. It is much less than that. It involves genuine cuts, which have already been announced, and have created the same sort of crisis in South Glamorgan that my hon. Friend the Member for Bridgend (Mr. Griffiths) mentioned have arisen in respect of education cutbacks in Mid-Glamorgan.

In future years, I would like to see local government finance civil servants and county and district treasurers get together and give evidence to the Select Committee on Welsh Affairs or some other suitable body, with assistance from the Chartered Institute of Public Finance and Accountancy and other local government finance experts. Right hon. and hon. Members could still engage in arguments about politics, but not about figures. It ought to be possible for finance experts to agree between themselves the expected cost in 1992 of providing the same services available in 1991. Then we as politicians have only to come in and put the cream on the coffee. We can say that if an authority wants to expand services in certain areas it will cost a certain amount extra, on top of the 8.5 or the 7.9 or the 9.8 or whatever figure the finance experts tell us will give us the same basket of services next year as we are already getting this year, our base line which we all know about.

At the moment we are wasting time on a colossal scale in the House every year by going through this charade and being unable to agree because, as the Secretary of State has confirmed, he cannot agree with the county councils and their treasurers and with the district councils and their treasurers on whether we can accurately say what the cost will be, allowing for inflation and also for the particular way in which increments in teachers' pay and so on impact on a labour-intensive service such as local government. We could then reduce our argument to the politics of the situation, whether the public really wanted to pay for extra services, the same services, or lower services. That is what we should be arguing about. I would like the Under-Secretary of State to give some attention to that in his reply.

9.59 pm

Mr. Alun Michael (Cardiff, South and Penarth)

The best thing about this settlement is that it is the last from a Conservative Secretary of State for a long time to come. It has been memorable for the way in which the "demob happy" Tory twins of Clwyd launched their devastating attacks on 13 years of Conservative rule and what the Conservatives have done to undermine local democracy in Wales. It is ironic that the two Conservative Members who are standing down at the election now appear to support the policies of the Welsh Labour party.

For 13 years the Conservatives have used their position to lay waste local government and public services in Wales. They have underfunded local government. They have put 70,000 on the waiting lists, and condemned families to the horrors of homelessness. They have created a crisis in social services, with the Parliamentary Under-Secretary pontificating on what others should do while neglecting to offer real help and encouragement to those who have to work with the most neglected and difficult children in our society. While cutting the real value of pensions, they have transferred the responsibility for the care of the elderly from central to local government. They have paid scant regard to the increasing number of elderly people in Wales and have simply failed to provide the resources to match the need.

They have left us a heritage of crumbling schools, stolen our colleges from us and undermined the development of tertiary colleges in Wales in a callous and cavalier manner which has shocked the dedicated councillors and teachers who have shown love and care for our places of education —the Parliamentary Under-Secretary appears to be laughing at the education of children in Wales—and for the young people who need them so desperately.

That is the record, and the settlement that we are debating today is no different. The districts needed 11 per cent. to maintain vital services; they are being given just over 5 per cent. The Government's SSAs for the Welsh districts amount to £7 million below this year's budgets, and that with councils using £17 million of their own reserves. For 13 years the Government have imposed new duties on Welsh councils without giving them enough money to carry out those duties.

My hon. Friend the Member for Alyn and Deeside (Mr. Jones) gave the example of the Environmental Protection Act 1990. It is a fine thing to want better standards of refuse disposal, street cleaning, pest control and so on, but the shortage of cash is causing problems and distortions. Anyone who has examined the problems of waste disposal in south Wales knows that we have a crisis on our hands which needs a partnership between the Welsh Office and local government, not a diktat from on high or simple percentages on the previous year.

I agree with the hon. Member for Caernarfon (Mr. Wigley) that care in the community is not a cheap option. We have a terrible shortage of day care facilities for the mentally ill, for adults with learning difficulties, for people with Alzheimer's disease and for their carers, who shoulder such an enormous and painful burden. How can councils pick up that burden when the Government have slashed the proportion that they give towards the cost of local services? Where is the cash needed to create facilities, training for employment and job opportunities for the mentally disabled?

In my own county of South Glamorgan I have great sympathy for councillors who have had to slash £4 million to get within the Minister's unrealistic limits. The cuts have been painful. For instance, they have had to cut money for part-time youth centres. There is a proven link, which I would have thought the Secretary of State himself, in view of his past, would be concerned about, between youth provision and success in combating the rise in crime among young people.

I accuse Welsh Office Ministers of creating conditions in which crime can flourish in many of our communities, which already have pain enough to bear. I cannot fault the local councillors, who have had to give priority to keeping the schools budget intact, but I can condemn the Welsh Office Ministers who have confronted them with such a painful dilemma.

During the years of the oil revenue bonanza, the Government have failed to provide the cash that is needed to bring our schools up to standard. Our councillors have tried desperately to keep up with the need. This year, South Glamorgan has had to cut the building maintenance programme for schools by 40 per cent.—£1.5 million—to meet the Government's unrealistic target and I know that other authorities throughout Wales have experienced the same problem. The Welsh Office Ministers must carry the can for that pain, too.

As several of my hon. Friends have mentioned, the Secretary of State came out with a further devastating announcement this week to add to all that pain. He announced bad news as if he were Father Christmas or the tooth fairy. Let me spell it out. After the news of the teachers' settlement, the Secretary of State has refined his figures and has tried to say that he is being generous. That is a cruel hoax, which might be described outside this place —without fear of legal action—as misrepresentation.

In South Glamorgan, the cost of the teachers' pay award is £1.09 million, but the Secretary of State has increased the SSA by only £540,000. The extra cash that he has provided is even less—only £531,000. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and others have given the equivalent figures for their local authorities.

That means that councillors who have spent months struggling to get within their SSA suddenly have to find an extra £459,000 in cash terms, and £450,000 in terms of cuts, just to stay within that SSA. Until this week, they were succeeding; now, only 24 hours ahead of the rate-setting meeting, the Secretary of State has told them to pull another £450,000 out of thin air. That is absurd and it is irresponsible of the Secretary of State.

I want the Minister to give three undertakings to all the hon. Members who have raised that point tonight. l want him, first, to promise to reconsider the cash allocation; secondly, to promise to reconsider the SSAs and set a reasonable level; and, thirdly, to promise to discount the new cash gap when considering whether to impose a poll tax cap. Only a cynical and irresponsible Minister would fail to give a positive response to all three requests.

Even before that piece of news, councils were plagued by the complexity, rigidity and plain unfairness of the grant system—the so-called SSAs. This is a lottery without sense or logic. Six districts have been allowed increases that would plunge them into financial difficulties. My hon. Friend the Member for Torfaen (Mr. Murphy) says that his council would suffer a decrease in real terms, and the Council of Welsh Districts has begged the Welsh Office for a safety net or loss limiter to guard against such wild variations.

As the place names show, the effect of the Government's system fall most heavily on our most needy areas, particularly in the valleys. The Government boast about home improvement grants, yet they are reducing the contribution to councils from 90 to 75 per cent., which means an impact on poll tax bills that one estimate puts at some £2 or £3. That is a hidden and dishonest cut for local authorities to bear.

A number of hon. Members have referred to the money provided for economic development, which has suffered a 30 per cent. cut in two years. A number of our local authorities have an outstanding record in securing inward investment. A Secretary of State who seeks praise for his own efforts in that regard should not only acknowledge their success but give them the tools for the job along with the generous praise.

The shadow of the poll tax falls over this settlement. Unlike the Government, the Minister who will wind up the debate still supports the poll tax: I understand from sedentary remarks that he made earlier that he would like to retain it. Will he be honest with the House and the people of Wales tonight?

We have had £100 million wasted and lost to Wales. There have been massive collection problems, the amount uncollected being £17 million. The number of summonses issued is 500,000, and there has been an enormous waste of time and effort for the very people who told the Conservative party that the poll tax would not work.

Even after all the furore of the poll tax, the Government are providing inadequate funds to provide for their new and unfair council tax. The amount being provided for capital costs is inadequate, and for revenue expenditure the provision is £6 million instead of the necessary £8 million. Why, in the name of fair play, should Welsh councils and the people who live in their areas have to pay yet again for the Conservative party's blunders and for the refusal of Ministers to listen to common sense from Opposition Members, who understand and have practical experience of local government finance? Not only have the Government failed to grapple with the whole question of local government finance in Wales but Conservative Ministers have plunged our councils into chaos and wasted millions of pounds, and have then had the cheek to lecture us about tax.

In contrast, Welsh councils have yet again this year proved responsible, spending 1.8 per cent. less than their English counterparts despite 13 years' grievous suffering under the Government. But even now the Conservatives plan more obstacles and burdens for the people of Wales. Those of us who were working until five o'clock this morning in the Committee dealing with the Local Government Bill know that only too well. In a few months' time, thank goodness, a Labour Government will give new meaning to local government in Wales and fresh help to local councils and to those who rely on and enjoy their services.

10.11 pm

The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett)

Anyone listening to the hon. Member for Cardiff, South and Penarth (Mr. Michael) would find it hard to believe that the Government are increasing by 8.7 per cent. the total spending assessment for next year and that the provision will be 23 per cent. more than it was in 1990–91. Before the implementation of the £140 general reduction, the increase over two years was 35 per cent. Anyone listening to the hon. Gentleman would find it hard to believe that the average SSA increases of 8.7 per cent. for district and 8.1 per cent. for counties in the coming year will mean that assessments have increased by one quarter in just two years. Nor would anyone know that the Labour party, when it was in power, far from increasing local government expenditure in Wales, reduced it year after year. In 1976–77 provision went down by 4 per cent., the following year the reduction was 8 per cent., the year after it was 4 per cent., and then the party was thrown out of office.

This is the sort of nonsense that we are getting from the Labour party. A party that reduced local government spending complains that the present Government have increased spending by more than the rate of inflation and have made sure that the charge payers in Wales will pay only 7 per cent. of the total bill for local government services across the board. Anyone listening to Opposition Members would not know that.

Nor have the Opposition made clear their policies on spending. The hon. Member for Alyn and Deeside (Mr. Jones), in a speech lasting about 25 minutes, did not once tell the House what level of local government spending would be acceptable to Labour. All we heard from the hon. Gentleman was how his party would spend more every year. Every year at this time the hon. Gentleman makes the same speech about how his party would spend more, about how the local authorities in Wales are hard done by. Not once has he told the House how much more he would allow those local authorities to spend if he were the Secretary of State. He has not said what level of community charge would be acceptable to a Labour Government. We never hear from the Labour party what its real plans are. Those of us who watch the shadow Secretary of State's progress round Wales know that every day another spending promise is made in the Welsh press and on Welsh television. Not once have we been given the prices to go with the menu. That is the Labour party when it comes to local government expenditure in Wales.

We should spend some time warning the people of Wales what the Labour party, if it ever came to power, would mean for local government. First, it would mean higher spending by local authorities. The hon. Member for Dagenham (Mr. Gould) said that his party planned to increase the proportion of council spending met by the community charge payers in England from 14 per cent. to 20 per cent. If the same figures applied in Wales, that would result in a jump from 7 per cent. to 20 per cent. The Labour party has never told us what its figures would be.

Only a few weeks ago the deputy leader of the Labour party said in the Local Government Chronicle: I promise that when Labour is back in government … you will certainly get more than you receive now. Again we were not told by the deputy leader what the promises would mean. The simple fact is that we do not get any honesty whatsover from the Labour party about its spending plans or its policies, or what its policies would be for raising the necessary taxation.

In 1980 the Labour party said that the rates were unjust. In 1985 the leader of the Labour-controlled Association of London Authorities said: Rates over the years have become widely detested both by those who have to pay them and those who have to defend raising them. In 1990 the hon. Member for Sheffield, Brightside (Mr. Blunkett) said that Labour agrees that the rates system was flawed. But now we hear that the Labour party would bring back the rating system. The people of Wales need to know that. [Interruption.] The hon. Member for Bridgend (Mr. Griffiths) says that they would be fair. The word "fair" has the same connotation, when talking about fair rates, as the word "democratic" had in the German Democratic Republic, or that "people" has in people's republics. It is a weasel word that has no connection whatsoever with its true meaning.

The Labour party is already committed to bringing back the rating system with knobs on it. The Labour party would introduce four different factors for assessing rates: market price, rebuilding costs, maintenance and repair costs, and private rents. Of course, the Labour party has told nobody what sort of weighting factors there would be on any one of those four. In addition, the Labour party is committed to an annual rolling revaluation for every one of the 22 million domestic properties. When asked at a press conference about the cost of revaluing 20 million properties four times over, the hon. Member for Dagenham said, "I do not know." That is what we are getting from the Labour party time and time again. The hon. Member for Alyn and Deeside—

Mr. Alan W. Williams (Carmarthen)

Will the hon. Gentleman give way?

Mr. Bennett

No. The hon. Member for Alyn and Deeside—

Mr. Alan W. Williams

rose—

Mr. Bennett

There he goes. The hon. Gentleman has just come in. He has not been present.

Mr. Alan W. Williams

On a point of order, Mr. Deputy Speaker. Is the Minister in order? All that he has done so far is to attack the Labour party's policies. The debate is about the revenue support grant for Wales. I know that the Conservative party is preparing to be in opposition and that the hon. Member for Pembroke (Mr. Bennett) is preparing to be out of work after the election, but is this in order?

Mr. Deputy Speaker (Sir Paul Dean)

It is quite in order to compare policies. It is happening in the House all the time.

Mr. Bennett

Had the hon. Member for Carmarthen (Mr. Williams) been here, he would have heard silence from Labour party Members about their policies. I have to fill that vacuum by telling the people of Wales what the Labour party's policies are.

Mr. Win Griffiths

Will the hon. Gentleman give way?

Mr. Bennett

No. The hon. Member for Alyn and Deeside, who had so much fun in attacking this side of the House, said at this Dispatch Box when he was a Minister: I would go further and call attention to the main anomolies inherent in the rating system."—[Official Report, 5 July 1974; Vol. 876, c. 848.] He now wants to bring back that very system which, when he was a Minister, he was committed to getting rid of.

In addition, the Labour party wants to make sure that council tax payers will pay more. It wants to abolish compulsory competitive tendering and to stop what it calls the privatisation of essential public services. The hon. Member for Brightside said that at the Labour party conference. Furthermore, as my hon. Friend the Member for Cardiff, Central (Mr. Grist) said, the Labour party wants to introduce a Welsh assembly, something which the Leader of the Opposition was opposed to in 1974 and in 1978. Now he is in favour of it. The cost to the Welsh people of a Mickey Mouse assembly in Cardiff would be £50 million. It would duplicate the work done by this House and would ensure that Opposition Members became second class citizens in this House.

We have also heard that the Labour party is against —[Interruption.] That is one of the things that it does not like. That is why Labour Members stand up and shout, but they will not achieve their objective. The hon. Member for Dagenham said: I shall be precise. There will be no provision for capping in any legislation that we introduce."—[Official Report, 6 November 1991; Vol. 198, c. 472.] The hon. Gentleman also said: I promise that when Labour is back in government the coercive element in the local government grant will be removed. You may not get as much from a Labour Chancellor as you want. But you will certainly get more than you receive now. On 15 February 1991 in The New Statesman and Society, when asked whether he would allow councils to increase their annual rates by 60 per cent., the hon. Member for Dagenham said: I don't see, even then, that we would want to come in and cap. That is the prospect for the people of Wales if the Labour party ever came to power. The Opposition's policy would be spend, spend, spend and tax, tax, tax. There would be no Government controls. Opposition Members do not want to hear this. They want to shout it down because they know that it will be electorally unpopular.

Another policy that the Labour party has up its sleeve is one specifically made for business. Instead of a national business rate, whereby we protect businesses by ensuring that there cannot be an increase of more than the rate of inflation, the Labour party wants to take away the national business rate and give control back to the local authorities. The first thing that would happen, as in the old days, is that the local authorities would target businesses for extra taxation in order to finance their high spending plans. Even looking at the first two years of the non-domestic rate, if it had been based on the spending plans of local authorities in Wales, the rate would have been 3p higher than it will be this year as a result of Government controls. The Opposition do not want to hear that because we are pointing out the difference between what they say here and what is in their policy documents and what it will mean for the domestic charge payer and the business charge payer.

We are also told, in the words of the hon. Member for Dagenham, that the Labour party rebate system would "pauperise millions of people". It will be of great interest to the people of Wales to know that a Labour rebate system will make it difficult for many of those who are currently able to claim rebates as of right. They would be losers under the Labour party's policy

We have heard that the Labour party wants regional government—

Mr. Deputy Speaker

Order. Before I put the Question, I should inform the House that some hon. Members may find it a little difficult to get to the Lobbies. Access is available, but in view of the difficulties, I propose to add five minutes to the Division.

It being three hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Order [7 February].

Question put:—

The House divided: Ayes 188, Noes 132.

Division No. 80]	[10.22 pm
AYES
Alexander, Richard	Arnold, Jacques (Gravesham)
Alison, Rt Hon Michael	Arnold, Sir Thomas
Allason, Rupert	Ashby, David
Amess, David	Atkins, Robert
Amos, Alan	Batiste, Spencer
Arbuthnot, James	Beaumont-Dark, Anthony

Beggs, Roy	Knight, Dame Jill (Edgbaston)
Bennett, Nicholas (Pembroke)	Knox, David
Benyon, W.	Lang, Rt Hon Ian
Blackburn, Dr John G.	Latham, Michael
Blaker, Rt Hon Sir Peter	Lawrence, Ivan
Body, Sir Richard	Lightbown, David
Boscawen, Hon Robert	Lilley, Rt Hon Peter
Boswell, Tim	Lloyd, Peter (Fareham)
Bottomley, Peter	Lord, Michael
Bottomley, Mrs Virginia	McCrea, Rev William
Bowden, Gerald (Dulwich)	McCrindle, Sir Robert
Braine, Rt Hon Sir Bernard	MacKay, Andrew (E Berkshire)
Brandon-Bravo, Martin	McLoughlin, Patrick
Brazier, Julian	McNair-Wilson, Sir Michael
Brooke, Rt Hon Peter	McNair-Wilson, Sir Patrick
Brown, Michael (Brigg & Cl't's)	Malins, Humfrey
Chapman, Sydney	Mans, Keith
Conway, Derek	Marland, Paul
Coombs, Simon (Swindon)	Martin, David (Portsmouth S)
Curry, David	Maude, Hon Francis
Durant, Sir Anthony	Mawhinney, Dr Brian
Dykes, Hugh	Mayhew, Rt Hon Sir Patrick
Eggar, Tim	Meyer, Sir Anthony
Emery, Sir Peter	Miller, Sir Hal
Evans, David (Welwyn Hatf'd)	Mills, Iain
Evennett, David	Miscampbell, Norman
Fallon, Michael	Mitchell, Andrew (Gedling)
Farr, Sir John	Moate, Roger
Fenner, Dame Peggy	Monro, Sir Hector
Fishburn, John Dudley	Morrison, Sir Charles
Fookes, Dame Janet	Moss, Malcolm
Forsyth, Michael (Stirling)	Moynihan, Hon Colin
Franks, Cecil	Nelson, Antony
Gale, Roger	Neubert, Sir Michael
Gardiner, Sir George	Newton, Rt Hon Tony
Gill, Christopher	Norris, Steve
Glyn, Dr Sir Alan	Onslow, Rt Hon Cranley
Goodhart, Sir Philip	Page, Richard
Goodlad, Rt Hon Alastair	Patnick, Irvine
Goodson-Wickes, Dr Charles	Pattie, Rt Hon Sir Geoffrey
Greenway, Harry (Ealing N)	Pawsey, James
Greenway, John (Ryedale)	Peacock, Mrs Elizabeth
Gregory, Conal	Porter, Barry(Wirral S)
Griffiths, Peter (Portsmouth N)	Powell, William (Corby)
Grist, Ian	Price, Sir David
Ground, Patrick	Raffan, Keith
Gummer, Rt Hon John Selwyn	Rhodes James, Sir Robert
Hague, William	Riddick, Graham
Hamilton, Neil (Tatton)	Ridsdale, Sir Julian
Hampson, Dr Keith	Rifkind, Rt Hon Malcolm
Hannam, Sir John	Roberts, Rt Hon Sir Wyn
Hargreaves, A. (B'ham H'll Gr')	Ross, William (Londonderry E)
Hargreaves, Ken (Hyndburn)	Rossi, Sir Hugh
Harris, David	Rowe, Andrew
Haselhurst, Alan	Shaw, David (Dover)
Hayes, Jerry	Shaw, Sir Giles (Pudsey)
Hicks, Mrs Maureen (Wolv' NE)	Shaw, Sir Michael (Scarb')
Hicks, Robert (Cornwall SE)	Shelton, Sir William
Higgins, Rt Hon Terence L.	Shepherd, Colin (Hereford)
Hill, James	Skeet, Sir Trevor
Hind, Kenneth	Smith, Sir Dudley (Warwick)
Hogg, Hon Douglas (Gr'th'm)	Soames, Hon Nicholas
Hordern, Sir Peter	Spicer, Michael (S Worcs)
Howarth, G. (Cannock & B'wd)	Stern, Michael
Howell, Rt Hon David (G'dford)	Stevens, Lewis
Howell, Ralph (North Norfolk)	Stewart, Allan (Eastwood)
Hughes, Robert G. (Harrow W)	Stewart, Andy (Sherwood)
Hunt, Rt Hon David	Tapsell, Sir Peter
Hunt, Sir John (Ravensbourne)	Taylor, Ian (Esher)
Hurd, Rt Hon Douglas	Taylor, John M (Solihull)
Irvine, Michael	Taylor, Sir Teddy
Jack, Michael	Tebbit, Rt Hon Norman
Jackson, Robert	Thompson, Sir D. (Calder Vly)
Janman, Tim	Thompson, Patrick Norwich N)
Jessel, Toby	Thurnham, Peter
Jones, Gwilym (Cardiff N)	Tracey, Richard
Key, Robert	Tredinnick, David
King, Roger (B'ham N'thfield)	Tripper, David
Kirkhope, Timothy	Twinn, Dr Ian
Knight, Greg (Derby North)	Wakeham, Rt Hon John

Walker, Bill (T'side North)	Winterton, Mrs Ann
Waller, Gary	Winterton, Nicholas
Wardle, Charles (Bexhill)	Wood, Timothy
Warren, Kenneth	Yeo, Tim
Watts, John	Young, Sir George (Acton)
Wheeler, Sir John
Whitney, Ray	Tellers for the Ayes:
Widdecombe, Ann	Mr. Nicholas Baker and
Wilkinson, John	Mr. Tom Sackville.

NOES
Adams, Mrs Irene (Paisley, N.)	Flynn, Paul
Alton, David	Foster, Derek
Anderson, Donald	Foulkes, George
Ashton, Joe	Garrett, Ted (Wallsend)
Banks, Tony (Newham NW)	Godma Dr Norman A.
Barnes, Harry (Derbyshire NE)	Golding, Mrs Llin
Battle, John	Griffiths, Win (Bridgend)
Benn, Rt Hon Tony	Hain, Peter
Benton, Joseph	Hardy, Peter
Blunkett, David	Haynes, Frank
Boyes, Roland	Hinchliffe, David
Bray, Dr Jeremy	Howarth, Geroge (Knowsley N)
Brown, Gordon (D'mline E)	Howells, Geraint
Brown, Ron (Edinburgh Leith)	Howells, Dr. Kim (Pontypridd)
Caborn, Richard	Hoyle, Doug
Callaghan, Jim	Hughes, Robert (Aberdeen N)
Campbell, Menzies (Fife NE)	Hughes, Roy (Newport E)
Campbell-Savours, D. N.	Ingram, Adam
Clelland, David	Jones, Barry (Alyn & Deeside)
Cook, Robin (Livingston)	Jones, Ieuan (Ynys Môn)
Corbyn, Jeremy	Jones, Martyn (Clwyd S W)
Crowther, Stan	Kilfoyle, Peter
Cryer, Bob	Kinnock, Rt Hon Neil
Cummings, John	Kirkwood, Archy
Cunliffe, Lawrence	Lamond, James
Darling, Alistair	Leadbitter, Ted
Davies, Rt Hon Denzil (Llanelli)	Leighton, Ron
Davies, Ron (Caerphilly)	Lewis, Terry
Davis, Terry (B'ham Hodge H'l)	Livsey, Richard
Dewar, Donald	Lloyd, Tony (Stretford)
Dixon, Don	Lofthouse, Geoffrey
Doran, Frank	Loyden, Eddie
Dunnachie, Jimmy	McAllion, John
Dunwoody, Hon Mrs Gwyneth	McAvoy, Thomas
Edwards, Huw	McCartney, Ian
Enright, Derek	McFall, John
Ewing, Harry (Falkirk E)	McKay, Allen (Barnsley West)
Fatchett, Derek	McLeish, Henry
Fearn, Ronald	McMaster, Gordon

McNamara, Kevin	Ruddock, Joan
McWilliam, John	Skinner, Dennis
Madden, Max	Smith, Andrew (Oxford E)
Mahon, Mrs Alice	Smith, C. (Isl'ton & F'bury)
Marek, Dr John	Smith, Rt Hon J. (Monk'ds E)
Martlew, Eric	Smith, J.P. (Value of Glam)
Michael, Alun	Spearing, Nigel
Michie, Bill (Sheffield Heeley)	Steel, Rt Hon Sir David
Michie, Mrs Ray (Arg'l & Bute)	Stephen, Nicol
Moonie, Dr Lewis	Stott, Roger
Morgan, Rhodri	Strang, Gavin
Morley, Elliot	Taylor, Mrs Ann (Dewsbury)
Morris, Rt Hon J. (Aberavon)	Thompson, Jack (Wansbeck)
Mowlam, Marjorie	Turner, Dennis
Murphy, Paul	Wallace, James
Nellist, Dave	Wardell, Gareth (Gower)
O'Brien, William	Wareing, Robert N.
Orme, Rt Hon Stanley	Watson, Mike (Glasgow, C)
Patchett, Terry	Welsh, Michael (Doncaster N)
Powell, Ray (Ogmore)	Wigley,Dafydd
Prescott, John	Williams, Rt Hon Alan
Primarolo, Dawn	Williams, Alan W. (Carm'then)
Quin, Ms Joyce	Wise, Mrs Audrey
Redmond, Martin	Young, David (Bolton SE)
Reid, Dr John
Robinson, Geoffrey	Tellers for the Noes;
Rogers, Allan	Mr. Eric Illsley and
Rooney, Terence	Mr. Ken Eastham.

Question accordingly agreed to.

Resolved, That the Welsh Revenue Support Grant Report 1992–93 (Revised) (House of Commons Paper No. 247), a copy of which was laid before this House on 10th February, be approved.

MR. DEPUTY SPEAKER then put the Questions necessary to dispose of proceedings on the remaining motions.

Resolved, That the Welsh Revenue Support Grant Distribution Report (No. 4) (House of Commons Paper No. 241), a copy of which was laid before this House on 10th February, be approved.

Resolved, That the Distribution of Non-Domestic Rates (Relevant Population) Report for Wales (No. 3) (House of Commons Paper No. 153), a copy of which was laid before this House on 20th January, be approved.