Credit Approvals (Hansard, 1 February 1993)

§ 7. Mr. Rowlands
To ask the Secretary of State for Wales what will be the basic credit approvals for capital provision for (a) Mid Glamorgan and (b) Welsh counties in total for 1993–94; and what the figure was for 1992–93.

§ Mr. David Hunt
The basic credit approval issued to Mid Glamorgan county council for 1993–94 is £14,626 million, compared with £19,086 million for 1992–93. In total, basic credit approvals for Welsh counties for 1993–94 are £77,067 million, compared with £99,050 million for 1992–93. The reduction in 1993–94 reflects the transfer of responsibility for further education institutions to central Government. Separate provision has also been made available to local authorities for 1993–94 to cover expenditure which is to be reimbursed by grants from the European regional development fund.

§ Mr. Rowlands
Is the Secretary of State aware that—not only because of those capital cuts but because of the 12 threat of capping—many county councils, including Mid Glamorgan, are now having to abandon, postpone or cancel vital school and road-building projects, all of which could have created employment? At the same time, hundreds of jobs are going in every Welsh county as a result of the right hon. Gentleman's rate grant settlement proposals. How does all that square with the idea that public expenditure-led growth is possible in Wales, particularly in Mid Glamorgan?

§ Mr. Hunt
If the hon. Gentleman looks at the overall totals for the next financial year compared with those for the current year, and at the gross capital provision, he will see that in Wales the settlement is expected to yield gross capital spending of £620 million by local authorities. That is an increase of £61 million, or 11 per cent., and does not take account of the £70.6 million that I set aside to cover expenditure to be reimbursed by ERDF grants. The figures speak for themselves.

§ Mr. Ieuan Wyn Jones
The Secretary of State will understand that, because of the introduction of his capping criteria, Gwynedd, for example, will have to cut a standstill budget by at least £3 million this year. Inevitably, that will mean the closure of old people's homes and of some schools, and the loss of jobs. Will the right hon. Gentleman consider the issue seriously? I invite him to speak again to local authority leaders in Wales and to ensure that they are properly resourced this year.

§ Mr. Hunt
I do not know whether the hon. Gentleman realises that we are dealing with basic credit approvals. Provided that you, Madam Speaker, are happy that I should extend the answer to cover the whole local authority settlement, I would point out that in Wales it represents a 3.1 per cent. increase over the equivalent figure for last year. Per capita expenditure amounts to over £900 for every man, woman and child in Wales, towards which the Government will be providing through aggregate external finance, £810. In all respects that is a reasonable settlement, bearing in mind the present difficult economic circumstances. I pay tribute to all those involved in local government who, like the Government, are having to face up to those difficult decisions, against a background of difficult economic circumstances.

§ Mr. Ron Davies
Something is obviously worrying the Secretary of State, because we have had an increasingly eccentric performance from him this afternoon. As he does not live in, and as he does not represent, a Welsh constituency, obviously he does not understand the problems of Wales as we understand them. Does he not realise that the tight revenue settlement, together with capping, means that many local authorities are unable to spend even their reduced capital budget and that that will mean cuts and job losses in the schools and road building programmes and in homes for the elderly and the fire service? When will the Secretary of State acknowledge that unemployment in Wales is rising because of the Government's policies, not despite them?

§ Mr. Hunt
If eccentricity is a virtue, the hon. Gentleman displays it on every occasion in his comments to the Secretary of State. He must face up to the realities of the present situation, which are, clearly, that today we have been able to announce a record level of capital spend for next year over this year and that local authorities on their current account are having to face up to some very difficult 13 decisions, just as the Government are having to face up to those difficult decisions. If the hon. Gentleman calls eccentric a performance by the Treasury Bench which has just won one Welsh Question Time seven nil, then I am quite happy to plead guilty.