Local Government Finance (Wales)

HC Deb 08 February 1993 vol 218 cc691-737 3.59 pm

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

I beg to move, That the Local Government Finance Report (Wales) 1993–94 (House of Commons Paper No. 412), which was laid before this House on 1st February, be approved. I understand that with this it will be convenient to discuss at the same time the next motion on the Order Paper:

That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (Wales) 1993–94, which was laid before this House on 1st February, be approved.

Mr. Allan Rogers (Rhondda)

The Secretary of State has set out the basis on which the debate is to be conducted. Is it true that this afternoon, in answer to a written question, he will publish the costs of local government reform? If so, does he not think that we should have that information, so that we know the full parameters of the debate?

Mr. Hunt

I anticipate today sending to the local authority associations and publishing the Touche Ross report on the transitional costs of local government reform but that is not a matter to be debated today. There will be an opportunity to debate the report. I am not responsible for the business of the House, but I shall do my best and use my best endeavours to ensure that there is proper opportunity to discuss the report.

Today we are dealing with the local government finance report, which contains my decisions on the local government revenue settlement for 1993–94. The relevant notional amounts report sets out the amounts in lieu of budgets for 1992–93 which I propose to use in measuring budget increases in 1993–94 for the purpose of applying the provisional capping criteria which I announced to the House on 14 December. It may be convenient for the House if I deal first with the settlement proposals.

As the report states, I propose to set the total standard spending, or TSS, for the next financial year 1993–94 at £2,599.8 million. That includes the £35.9 million in additional resources which has already been announced for the new responsibilities that local authorities will assume for care in the community from 1 April 1993.

Mr. Barry Jones (Alyn and Deeside)

Many of us believe that the right hon. Gentleman has given our councils a very poor deal over care in the community. Community care involves some of the most vulnerable in our society, not least the elderly and the disabled. There is concern in my constituency about services in the new financial year at the Melrose centre. Is he prepared to visit the centre, which does magnificent work but which will suffer serious cuts in the new financial year unless he can give the county a better deal than he is to announce today?

Mr. Hunt

The hon. Member will agree that it is for the local authority to determine its priorities. I have just announced confirmation of an allocation of £35.9 million for those additional responsibilities. As I recall, Clwyd county council will receive £6.6 million out of that £35.9 million. At the end of the day, it must be for the local authority to determine its priorities. I shall come to the point raised by the hon. Gentleman in a moment. I shall ensure that the figure for Clwyd county council is checked, although I believe it to be £6.6 million.

In addition to the £35.9 million is a further £1.6 million in resources in respect of changes to the independent living fund arrangements. Those additions to spending are fully funded by central Government through aggregate external finance or AEF.

The TSS for 1993–94 also takes account of the transfer of responsibilities for further and residual higher education services to the Welsh funding councils and of the phased transfer of school inspection functions to the Office of Her Majesty's chief inspector (Wales), all from 1 April this year. The TSS represents a 3.1 per cent. increase on the level for 1992–93 when allowance is made for the education-related functional adjustments. The increase is slightly higher—3.5 per cent.—when the additional community care resources are taken into account.

I propose to set aggregate external finance for 1993–94 at £2,344.2 million. That is an increase of 1.7 per cent. on the level of AEF for 1992–93, again after allowing for education-related functional adjustments. The level of increase is slightly higher when the additional community care resources are taken into account. The AEF package comprises, as the House may recall, three elements, including revenue support grant and distributable non-domestic rates. The RSG is £1,669.3 million, and distributable non-domestic rates amount to £470.2 million. There are specific and supplementary grants of £204.7 million. The Welsh non-domestic rate poundage for 1993–94 will increase by 3.5 per cent. in line with inflation at the appropriate time to 44p.

In setting AEF for the coming year, I have had very much in mind the point made to me by the local authority associations—that the proportion of revenue that local authorities in Wales can raise from local taxation should be increased. The lower level of increase in AEF relative to that for TSS means that local authorities should, on average, raise 10 per cent. of their income from the council tax, which is an increase of about 1.3 per cent. on last year. My plans will mean that 90 per cent. of all local authority revenue expenditure in Wales will be funded by central Government support.

Those figures will enable local authorities to spend just over £900 for every man, woman and child in Wales. I shall provide through Government support more than £810 towards that expenditure of £900. I believe that that is welcome news for the people of Wales, and it should ensure that council tax bills are kept to reasonable levels for the coming year.

I have received many representations on my settlement proposals, and I have chaired two meetings of the Welsh Consultative Council on Local Government Finance, or WCCLGF. At those meetings settlement matters have been discussed in detail. I am the first to acknowledge that the settlement for 1993–94 is not easy, and that local authorities will face some difficult decisions in determining their spending plans for next year. I wanted to place that point firmly on the record, because I have often recognised, individually and collectively with the local authorities concerned, that local government will face some difficult decisions.

Local government is not alone in that regard. Central Government, businesses large and small and individuals all face tough decisions. We cannot spend what we cannot afford, and that is particularly the case for central and local government, as they can spend only at the expense of the taxpayers they serve.

Mr. Alex Carlile (Montgomery)

Does the Secretary of State believe that the fact that village schools all over rural Wales now face the real threat of closure, and that local authorities are now having to take very hard decisions is an acceptable price to pay for Government policy? Does he also believe that it is right that, as a result of Government policy, care in the community for some elderly people means care in a community very distant from their own?

Mr. Hunt

Local authorities must determine their priorities. The hon. and learned Member for Montgomery (Mr. Carlile) is, in reality, talking about TSS. The overall level of TSS in Powys has risen by 21 per cent. since 1990–91. The hon. and learned Gentleman must recognise that that is the background to the current settlement. The 21 per cent. increase is at the bottom end of the range of increases, which average 25 per cent. over the past two financial years, and although the 21 per cent. increase appears to be a good figure, I recognise that it nevertheless presents Powys county council with some difficult decisions.

However, at the end of the day, the local authority must determine how it will deal with those difficult decisions. I will not seek to override any decisions that are taken, because that is a matter for Powys county council.

Mr. Nick Ainger (Pembroke)

Will the Secretary of State give way?

Mr. Hunt

I will give way in a moment.

The local authority will appreciate, as will the hon. and learned Member for Montgomery, that the restraint of public revenue expenditure must be of paramount importance as we build for the future. If we are to stimulate investment and ensure a soundly based economic recovery that will bring with it better long-term prospects for jobs and services, we must restrain public sector expenditure. Pay restraint is a key component in holding down the level of spending; that is why I wanted to stress once more that my settlement plans are based on the assumption——

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

Will the Secretary of State give way?

Mr. Hunt

I will give way in a moment, after I have responded to the hon. Member for Pembroke (Mr. Ainger).

My settlement plans are based on the public sector pay restraint assumptions announced by my right hon. Friend the Chancellor of the Exchequer in his autumn statement on 12 November. I urge local government to keep pay increases within the zero to 1.5 per cent. limits set out in the autumn statement, because excessive pay increases can be met only at the expense of jobs and services. Only by exercising restraint now will we be able to benefit from economic recovery.

Mr. Ainger

In response to the hon. and learned Member for Montgomery (Mr. Carlile), the Secretary of State referred to the fact that Powys had received a 21 per cent. increase in its SSAs over two years. I am sure that the Secretary of State will tell me that Dyfed received a 25 per cent. increase in its SSAs over the past two years. Does the right hon. Gentleman accept that there was not a 25 per cent. increase in services? The increase was intended simply to cover the pay settlements for the fire brigade, police and teachers, all of which had been set by central Government, not local government?

Mr. Hunt

The hon. Gentleman is quite right to say that Dyfed has received 25 per cent. increase in total standard spending over the past two years. However, he is wrong about the reason for that increase. There has been a substantial increase in total standard spending—the total figure that is allocated—which includes several components in addition to pay.

It is not possible to close a school in the public sector without the local people exercising the right to approach the Secretary of State. Against that background, I hope that the hon. Member for Pembroke will recognise that I cannot intervene in respect of individual spending decisions. However, I am the ultimate court of appeal with regard to decisions of that nature.

Mr. Rowlands

The Secretary of State is referring to restraint in public revenue expenditure. Is he aware that the results of the settlement and the cuts in revenue expenditure have meant the virtual halting of capital expenditure in many of our counties? I refer, for example, to expenditure on new roads and refurbishing schools, improvements in respect of pavements and street lighting —the very capital expenditure which could create jobs and which I thought was meant to be the publicly led capital growth that the Secretary of State is after.

Mr. Hunt

Let me deal with that point straight away. On capital spending, the amount available for basic credit approvals has reduced by £8.9 million, but that is to take account of the transfer of further education institutions. However, overall Government support for all local authority capital expenditure is up by 4 per cent. on 1992–93 to £484 million. That is a real-terms increase of £5.7 million. It allows for gross spending of £620 million, which is a real-terms increase of £45 million. Given the ability to utilise in full capital receipts realised during 1993, and the availability of——

Mr. Rowlands

rose——

Mr. Hunt

If I may make this point to the hon. Gentleman, there are also additional resources available to cover expenditure to be reimbursed by grants from the European regional development fund, so I expect all authorities to be able to proceed with their planned capital programmes. I make that point absolutely clearly.

Mr. Rowlands

If Mid Glamorgan is an example to go by, fear of capping has caused a cut in revenue expenditure. The council is now so scared of spending that it has cut almost every new capital expenditure programme. The revenue consequences of capital expenditure are now preventing capital expenditure from going ahead.

Mr. Hunt

I do not want to intervene to try to second-guess what the hon. Gentleman is saying about Mid Glamorgan. It is for Mid Glamorgan to reach those decisions. Again, it will reach them against the background of one of the highest increases in total standard spending over the past two years. In the case of Mid Glamorgan, that is an increase of 26 per cent. in TSS. I ask the hon. Gentleman to look at the figures.

Mr. Ron Davies (Caerphilly)

Does the Secretary of State accept the truth behind the point of my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands)? The right hon. Gentleman cannot avoid responsibility, because his settlement and his capping regime are putting county councils in such a position that they have no alternative but to cut their capital programmes. Why does he not accept that that is an inevitable consequence of the settlement and the capping regime that he has introduced?

Mr. Hunt

The figures that I have used are the figures. I see that the hon. Member for Caerphilly (Mr. Davies) does not dispute them. They make it possible, I believe, for local authorities to maintain their capital programmes. That is my judgment. I look forward to seeing what happens in reality, but I believe that, in so far as local——

Mr. Rowlands

Are we discussing reality?

Mr. Hunt

Yes, we are discussing reality. As the year progresses, we shall see capital programmes being maintained. Certainly the figures show that they can be.

Education has been mentioned. If one looks back over the past three years in Wales, one sees an underspend on the capital education spending programme. Already this year, provision for education capital spending is £63 million. The latest forecast is £59.8 million gross. In the financial year 1991–92, provision was £66.6 million. The actual spending was £56.4 million. There was a 15.3 per cent. underspend. I very much hope that those capital programmes to which I attach high priority are also regarded as a priority by the local authorities concerned.

Mr. Ron Davies

I am reluctant to intervene a second time, but I am trying to be helpful. If the Secretary of State realises the importance of the capital programme, if what my hon. Friend the Member for Merthyr Tydfil and Rhymney has said comes about, and if it transpires in April, May and June that the counties must entirely disband their capital programmes, will he undertake to review the settlement at that time?

Mr. Hunt

I see that the hon. Gentleman still does not challenge the figures. The figures are there. They enable local authorities to attach a high priority to capital spending. What I am saying is that I hope that local authorities will attach a high priority to capital spending. Last week, I was able to announce a record capital spending programme for the Welsh Office. I have already mentioned the facility afforded by the Chancellor of the Exchequer for the utilisation of receipts this year. The mechanism is there for capital programmes to be maintained, and I hope that they will be maintained.

Mr. Paul Murphy (Torfaen)

rose——

Mr. Hunt

May I proceed for a moment? I am anxious that the hon. Gentleman's hon. Friend the Member for Caerphilly (Mr. Davies) gets an opportunity to deliver his speech. Of course, the hon. Member may still be in the process of constructing it. He has just received it, so I shall give way.

Mr. Murphy

The Secretary of State talks about the capital programme for local authorities. How does he square his statement with the fact that there has been an 18 per cent. reduction in capital spending for districts in 1993, which is a total of £22 million?

Mr. Hunt

I shall give the hon. Gentleman the correct figures. Government support for local authority capital expenditure is an 18.5 per cent. increase on 1992–93. The hon. Member for Torfaen may have seized upon the wrong 18 per cent. The figures are absolutely correct. As I pointed out, the settlements for this year and last year increased total standard spending by 25 per cent. That is a substantial increase. With the increase of 3.1 per cent. for next year, total standard spending will have increased by almost 29 per cent. since 1990–91.

Many of the representations I have received have been more about the disparity in the levels of increase between county councils and district councils. The average increase in next year's standard spending assessments for district authorities is 9.8 per cent. For county authorities, it is 1.6 per cent., after taking account of the further education adjustments. Additional community care resources raise the level of the county increase to 3.6 per cent. The Assembly of Welsh Counties and individual county authorities have expressed considerable disquiet at the comparatively low level of increase in county resources. We discussed the matter at the meeting of the Welsh Consultative Council on Local Government Finance on 12 January.

The principles underlying the allocation of total resources between the county and district authority tiers have been the subject of long-standing agreement between the local authority associations. The methodology has remained virtually unchanged since the early 1980s. The starting point is the aggregate level of expenditure by each tier for the financial year three years preceding the settlement. For 1993–94, the base year for the tier share calculation is 1990–91.

The agreement of the authorities that the usual methodology should be used for 1993–94 was sought in September 1992. Early agreement is needed, because the tier share calculation cannot be undertaken until relatively late in the settlement timetable. When the result of the exercise for the coming financial year was known in December, the Assembly of Welsh Counties asked that I reconsider the arrangements. I said that I was perfectly prepared to so if both associations—the counties and the districts—could agree on proposals for change. I was told that, sadly, it was not possible for agreement to be reached.

I did not consider it appropriate that I should intervene to break with precedent and prescribe the allocation between tiers, especially at such a late stage. I suggested to both associations that we should make an early start on the methodology for 1994–95, and they have agreed.

The tier share arrangements, together with the arrangement for distributing resources between individual authorities within the tiers, show that local government has an active and positive role to play in the annual settlement in Wales. As the House will know, it is a much more direct role than is played in England. I am proud of the fact that we can reach agreement on many of these matters with local authorities. It is a role which I am anxious to maintain.

Neither I nor any of my predecessors has seen fit to intervene in the tier share arrangements. If I had tried to rewrite the arrangements on this occasion without the agreement of both the associations, it would have been contrary to the spirit of co-operation and partnership which we have built up over many years.

The SSAs for 1993–94 set out in the Local Government Finance Report (Wales) have been determined, as in years past, in accordance with the distribution methodology that has been agreed with the associations through the consultative council. I would like to pay tribute to the associations for its work in achieving fully agreed conclusions. The work load has been particularly onerous this year because of the need to consider the best means of distributing the additional resources for care in the community.

My Department, county councils and the health service in Wales have worked together closely in making the necessary plans for implementing the new care in the community arrangements. I gave careful consideration to the need for the Secretary of State to make special arrangements for the distribution of the new community care resources; but, in view of the close working relationships that have been built up and the arrangements that we are making for monitoring progress on implementation, I decided not to introduce special grant arrangement in Wales.

With the agreement of the Assembly of Welsh Counties, the resources are being distributed through the settlement but with the amounts for each county authority clearly identified, as I pointed out to the hon. Member for Alyn and Deeside (Mr. Jones). I shall keep the position under review to ensure that the resources are used for their intended purposes.

The functional changes for 1993–94 to which I have referred this afternoon, and the changes to financial arrangements arising from the Local Government Finance Act 1992, mean that it is not possible—for capping purposes—to make a direct comparison between budgets set by local authorities in 1992–93 and budgets set for 1993–94. That is why I have exercised my statutory powers to specify for each authority in Wales a base position, known as a relevant notional amount, to measure budget increases for the purposes of applying capping principles. The relevant notional amount that I propose to specify for each local authority in Wales is set out in the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (Wales).

I announced details of provisional notional amounts together with my provisional capping principles on 14 December. Local authorities were invited to make representations on their provisional notional amount figure by 19 January. Seven authorities responded with requests for amendments. I have given careful consideration to these representations and made revisions to the provisional figures, for six authorities—four in respect of county, further and higher education expenditure and two in respect of district collection fund interest expenditure.

Counties have until 28 February and district authorities have until 11 March to finalise their budgets for 1993–94. I urge them, notwithstanding the difficulties that some will face, to budget prudently and in line with my plans. My provisional capping principles will assist authorities in this task. In recent years, Welsh authorities have, on the whole, budgeted responsibly; although some have set their budgets at a higher level than I would wish. I have not considered it necessary to use my capping powers to date and I hope that I will not need to have recourse to them in 1993–94.

My settlement plans should mean that all local taxpayers in Wales receive reasonable council tax bills in the next financial year. Bills will vary depending on the budget decisions of individual authorities and the valuation band of the property in question. For the purposes of distributing revenue support grant, as hon. Members will see from the report, I have identified a council tax figure for council tax spending for each property band.

The figure for band C properties is £231—£35 less than the average community charge for two adults in 1992–93, even after relief through the community charge reduction scheme is taken into account. What is perhaps even more important is that it is less than the average domestic rates bill in Wales was in 1989–90. Two thirds of properties in Wales fall in band C or the lower A and B bands. In view of that, I announced on 26 November that I considered transitional arrangements for the introduction of the council tax to be inappropriate.

My decision has been welcomed by the local authority associations. Individual council tax payers will benefit from a range of discounts. For example, single adult households will benefit from a 25 per cent. discount; those on income support will pay no council tax; and those on low incomes will receive council tax benefit on a sliding scale. Benefits for people on low incomes, including income support claimants, is estimated at more than £40 million in 1993–94.

Mr. Gareth Wardell (Gower)

In the standard spending assessment, is the Secretary of State making allowances for district councils to be reimbursed for the tremendous increase in the take-up of housing benefit and rent allowance schemes? For example, last year Swansea council assisted 5,235 of its people with rent allowances, and the net cost to the council and community charge payers—after the Government subsidy—was £703,000 extra. Is he going to help such councils in view of those difficulties?

Mr. Hunt

Allowance was made at the outset, and I have no plans to change the formulae, which are well understood by local authority associations. I have some information, if I might move on to collection of the community charge.

I am most encouraged by the latest information supplied by local authorities on collection of the community charge. I am pleased to announce that they estimate a surplus of £16 million in their collection funds at 31 March 1993. It is clear that districts will collect more than 100 per cent. of the community charge that they budgeted to collect at the start of the financial year— [Interruption.] I think that the hon. Member for Rhondda (Mr. Rogers) might have said that the poll tax was therefore a good idea after all—but perhaps he did not.

Mr. Allan Rogers (Rhondda)

Just to put the record straight, I said that the Secretary of State used the same advocacy for the poll tax when he promoted that as a local government Minister. I hope that he is more correct about this form of local government finance than he was about the poll tax.

Mr. Hunt

The £16 million is a real figure, and I can tell the council tax payers of Wales that it will feed straight through to reduced council tax bills next year. For a tax payer in a band C property, that will mean on average a council tax £15 less than it would have been, and £17 less for those in band D properties. That is thanks to the diligence and efficiency of the authorities in collecting the community charge.

I will give careful consideration to the budget set by each local authority for 1993–94. In doing so, I will refer to my provisional capping criteria. In making my decisions on whether to cap individual authorities, I will take into account all relevant considerations. However, local authorities should not doubt my resolve to protect local taxpayers from unreasonable council tax burdens through use of my capping powers if that should prove necessary.

The settlement for 1993–94 provides Welsh authorities with a realistic level of funding in the current economic situation and should achieve reasonable council tax levels for the people of Wales. I commend the report to the House.

4.34 pm

Mr. Ron Davies (Caerphilly)

First, I thank the Secretary of State for the co-operation he showed to the Opposition, who have sought to ensure that these debates are held at a reasonable hour. The allocation of the full three hours is appreciated.

I am rather surprised that the Secretary of State has not taken the opportunity of his first appearance at the Dispatch Box since the memorable day at Cardiff on Saturday to express his congratulations to the Welsh rugby team. I must speculate that he was perhaps less enthusiastic about the result than my hon. Friends.

Mr. David Hunt

I always believe that actions speak louder than words. I thought the hon. Gentleman would have noticed the Welsh schools rugby union tie and the Welsh rugby union emblem that I am wearing. I could not have been more delighted by that result and I join him in paying tribute to a magnificent match and a tremendous Welsh victory.

Mr. Deputy Speaker (Mr. Michael Morris)

I thought that they were worn but not mentioned in respect for the Chair.

Mr. Davies

I am sure that there will be an opportunity for further discussion on that match, but not today.

I wonder what world the Secretary of State lives in, because his speech gave the impression that the settlement is a model one—generous even, and widely accepted in Wales. He talked about the consultations that he had and claimed that various increases in expenditure are available now. He implied that the settlement is reasonable, that it had been carefully worked out and that it was supported by a broad consensus. The reality is quite different.

The settlement is flawed both in its methodology and in the overall level of money available. The reality is that all Welsh local authorities have united in opposition to it. It is clearly inadequate, because it will not be able to guarantee the retention of vital public services. At a conservative estimate, it will destroy about 2,500 jobs in the public sector in Wales.

The settlement represents another step in the remorseless undermining of the financial base on which local democracy stands. It has come from a Secretary of State who gave us the poll tax and justified it by saying that he wanted to see local government made more accountable. On 9 March 1990, he said of the poll tax: The whole purpose of the community charge is to make councils accountable to their electors. What accountability is there now, when all local government spending and the provision of more than 90 per cent. of local expenditure is determined by one man? There is nothing accountable, democratic or local about that.

The Secretary of State, whose Government have no mandate in Wales, who does not represent a Welsh constituency and who has been rejected by the people of Wales at the ballot box, has reached the level of taking even more powers to himself in defiance of public opinion and in the teeth of opposition from Welsh local authorities. In doing so, he has imposed, for the first time, capping limits on democratically elected public bodies. That decision reverses his previous principles. He has set those limits to ensure that his will is imposed, not on behalf of the people of Wales, but on behalf of a Tory Government whose financial and economic policies have brought the country to the brink of ruin.

Let the Secretary of State be in no doubt about the weight of feeling against the settlement among Welsh local authorities. He has claimed that additional resources are available, but that is not true. There has been an overall increase of 4.6 per cent.—£115 million—in the standard spending assessment, but the right hon. Gentleman has pointed out that that includes £37.5 million to meet the new statutory responsibilities relating to care in the community. With that figure removed, we are left with 3.1 per cent. over the 1992–93 standard spending assessment —but last year's provision was itself inadequate and far removed from what local authorities actually spent on delivering services.

When compared with budget figures—that is, what was actually spent—the increase is down to 0.2 per cent. When the revised figure is compared with the agreed estimate of both Welsh local authority associations of what is required to meet inflation costs directly incurred, and additional responsibilities, some measure of the severity of the settlement can be seen.

The local authority requirement was for a further £130 million. That represents the lowest provision—or under-provision—in the reports. In particular, £70 million is required to meet the balance of pay awards, previously agreed in 1992 and effective only recently in the case of police and fire services. Implementation of the Children Act 1989, the national curriculum and waste management are all new responsibilities, but have not been allocated commensurate new resources.

Mr. Rod Richards (Clwyd, North-West)

The hon. Gentleman clearly stated that he was against capping local government expenditure. How would he like local government expenditure to be controlled—or would he simply give local authorities a free hand?

Mr. Davies

Let me make it clear to the hon. Gentleman and to the Secretary of State that we are debating the Secretary of State's proposals for financing local government. If the hon. Gentleman can persuade the Secretary of State to arrange another debate—here or upstairs in Committee; in Westminster or in Cardiff—I shall be happy to discuss the subject. I am prepared to discuss it anywhere, any time, any place. Today, however, we are debating the Secretary of State's proposals, and his under-financing of Welsh local authorities. I am not going to let the right hon. Gentleman off the hook. [Interruption.]—We are discussing a capping report and Labour Members oppose that capping. If the Secretary of State or the hon. Member for Battersea (Mr. Bowis), who is sitting behind him, wants suggestions about how local government finance should be arranged, I shall be happy to respond in debate. [Interruption.]

The Secretary of State can shout at me from a sedentary position as much as he likes. Let me make it clear to him that he can have a debate if he wants it, but he will have to find the time for it. Now is not the time.

The Secretary of State must explain why every major central Government Department has been given an increase of over 3.1 per cent..—and why his Department has been given an increase of 8.7 per cent.—over planned provision for 1992–93. Local government, which is providing services directly, faces severe cuts in real terms. While quangos multiply and flourish, elected authorities —responsible and accountable to the public, with high standards of financial propriety ensured through internal and external audit and full public scrutiny—are being denied essential resources.

Over the past decade, Wales has suffered a decline relative to the United Kingdom as a whole and to Europe. The economic recession places further burdens on local authorities—housing the homeless, providing support for the unemployed and disadvantaged and caring for the poor and elderly. If we emerge from the slump, it will be due in no small measure to public expenditure on infrastructure—on new roads and development programmes—to investment in education and training and to the provision of jobs in the building of new homes, schools and roads and the improvement of the environment. Both to deal with the casualties of recession and to escape the recession, we need public sector-led growth, but, instead of growth, we have been given a programme that will accelerate decline.

Let us examine the choices with which Welsh authorities have been faced. One of the grimmest local government documents that I have ever seen is Mid Glamorgan's report entitled "1993–1994 proposals for a reduction in services". I do not want to go into all the details, but let us consider the choices facing Mid Glamorgan's elected representatives. They have been told to cut £5.5 million from its education budget, over £1 million from highways expenditure and over £1 million from social services—a total of £15 million. That presents the authority with unacceptable choices. Such cuts undermine and destroy the present fabric and the future care of our communities.

I am surprised that the Secretary of State did not answer the question put to him very directly by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). The right hon. Gentleman must accept that the tightness of the provision being made for Mid Glamorgan, together with the threat of capping, confront the authority with a grim choice. Either it maintains its capital budget or it must sack teachers. It is not surprising that an authority faced with such an unenviable choice wants to hold on to what it has, and decides not to sack teachers.

The Secretary of State should understand the inevitable consequence of the provision that he has made—that a capital programme will not be honoured. I hope that he finally appreciates that. I hope that, when he returns to the Welsh Office, he will talk to Mid Glamorgan, South Glamorgan and all the other counties that face the grim choice and the loss of their capital programmes.

Mr. Jonathan Evans (Brecon and Radnor)

The hon. Gentleman mentioned a report from Mid Glamorgan, which he has clearly studied in some detail. Perhaps he can tell us whether the report makes any reference to the number of surplus school places in Mid Glamorgan.

Mr. Davies

I am happy to debate surplus school places. Let me tell the hon. Gentleman that the way in which to get rid of them is not to do what was done in the case of Gwent: when Gwent tried to get rid of surplus school places, Cwncarn secondary school—which was destined for closure if that happened—was bribed to opt out of the public sector, to ensure its maintenance. I have done my homework in the case of Mid Glamorgan; I hope that the hon. Member for Brecon and Radnor (Mr. Evans) has done his in the case of Powys.

Mr. Richards

Answer the question.

Mr. Davies

I have given a very clear answer.

Let me make clear to Conservative Members the damage that they will be doing, not only to the structures of local government—although that is bad enough—but to families, if they vote in favour of the settlement. Let me read a letter, addressed to the Secretary of State, from a resident of Milford Haven—a constituent of my hon. Friend the Member for Pembroke (Mr. Ainger): I am writing to you as a result of discovering last week that Dyfed Education Authority has been forced to stop all discretionary grants for 1993–94. When I 'phoned my local Education Office to enquire about grants for both my daughters they told me that I could apply for a grant for my elder daughter because she has a place at University. My second daughter has always had a poor deal educationally. She is dyslexic and has had only the most minimal help and that only in recent years … Despite this, being a hardworking girl, she took the courageous decision to return to school, for this year, to try and improve her results. Her plan was to take the B tee …. This would give her the opportunity, at a later date to be considered for teacher training. Now that the grants have been stopped there is no chance of that. What do you suggest I tell her? 'Sorry, Louise, I know you're only seventeen but you are on the scrap heap'. I have spent the last fourteen years bringing up my daughters alone. I have had only the minimum of help from government sources. I have taught both children that if you work hard you'll succeed in the end. Now your policies show them that what I have taught them is a cruel joke. The present situation in the country shows John Major's announcements about equal opportunity for all to be a myth…Please don't insult me by blaming our local authority. They have no real choices because of things like capping. The continual 'robbing Peter to pay Paul', simply can't go on. It is destroying lives in all parts of society. I see it every day in my job as district nurse. More and more of my time is spent on trying to help people overcome social problems that are affecting their health. I will end by saying that I despair for all us as long as this is allowed to continue. That was written to the Secretary of State for Wales and copied to the Secretary of State for Education and to the Prime Minister. As of last Friday, neither the Secretary of State for Wales nor the Secretary of State for Education nor the Prime Minister had had the courtesy to respond to the letter.

What price, then, the citizens charter? What price the parents charter or the students charter? Throughout the counties of Wales the pattern is repeated: £12 million of cuts in Clwyd threatening 300 teachers' jobs, and more than £3 million in Gwynedd. The right hon. Member for Conwy (Sir W. Roberts) and the hon. Member for Clwyd, North-West (Mr. Richards) will vote for that tonight. In South Glamorgan and Gwent, £8 million and £11.5 million respectively are to be cut, with service cuts across the board. The hon. Members for Cardiff, North (Mr. Jones) and for Monmouth (Mr. Evans) will vote for that tonight. In Powys, there will be more than £3 million-worth of cuts in education, highways, social services and fire services. And there is to be the tragic loss of Storey Arms because of the cuts in South Glamorgan's budget. The hon. Member for Brecon and Radnor will vote for that tonight.

Mr. Alun Michael (Cardiff, South and Penarth)

I congratulate my hon. Friend on the way he is nailing responsibility to its rightful place—the door of the Welsh Office. People throughout South Glamorgan are appalled by the way in which the Secretary of State has forced our county to make cuts, in music, in choirs and bands and orchestras, in outdoor pursuits and in local youth services. Those cuts will leave many hands idle. Is not it appalling that the quality of life in our communities is threatened by the decisions of the Secretary of State for Wales?

Mr. Davies

My hon. Friend makes his own compelling case and I am grateful for his support.

I have not yet mentioned the hon. Member for Vale of Glamorgan (Mr. Sweeney), who is sitting with a quizzical look on his face—[Interruption.] My hon. Friends are making some helpful suggestions to assist the hon. Gentleman with his decision making. I suggest that he does as he always does when he has a crisis of conscience —what the Whips tell him to do.

Mr. Jonathan Evans

The hon. Gentleman has referred to the position of Storey Arms. He will know that in my constituency there are 10 such outdoor education centres run by county councils, some of them Welsh. The only county council threatening to sack people is the Labour-controlled South Glamorgan county council, which is drastically reducing the budget for Storey Arms and engaging in a political stunt by trying to direct the blame for that towards the Secretary of State, rather than where it should go under political accountability—to the people who made the decision in the first place.

Mr. Davies

I have heard that argument before, so I took the trouble to discuss it with the treasurer of South Glamorgan and the chairmen of the finance committee and the education department. I was told that the choice facing South Glamorgan is to comply with its statutory duties and make cuts of this nature or to put itself in breach of the law by cutting back on its statutory provision.

I understand the great difficulty that the hon. Member for Brecon and Radnor faces. He may have 10 such facilities in his constituency, but by voting for these reports tonight, he will ensure that there are nine. If there are a succession of such reports he will find that he ends up with far fewer.

Mr. Win Griffiths (Bridgend)

The Association of Heads of Outdoor Education Centres and other related associations have been strenuously lobbying members serving on the Education Bill Standing Committee, because it is not just Storey Arms which will go. If the Government's education policies continue, all these centres will be lost in the not-too-distant future.

Mr. Davies

These are the clear choices facing hon. Members in the Lobbies tonight. It is just a pity that the people of Wales cannot vote on the record of the Secretary of State. It is also a pity that the right hon. Gentleman does not have uppermost in his mind his responsibility to work with local authorities to improve the quality of Welsh life, instead of choosing continually to undermine them.

The right hon. Gentleman sought, for instance to divert attention from these cuts and their consequences by dividing the counties from the districts, seeking to achieve by presentational trickery what he could not do in open debate. He wanted to hide from the people of Wales the direct consequences of his policies. Today he tried to suggest that there was an agreement of sorts—that the tier share was unfortunate this year, but that that was some historical accident which did not matter because counties and districts had agreed.

That is just not true. I should like to read into the record a letter that I received from the secretary of the Assembly of Welsh Counties, written on 5 February: Dear Mr. Davies 1993–94 Tier Share of Standard Spending Assessments With reference to your inquiry as to whether the Assembly of Welsh Counties had agreed the 1993–94 tier share of SSAs, there is no justification for the Secretary of State making such an assertion, unless he attempts to rely on discussions held last September between Welsh Office officials and officers of the Assembly"——

Mr. David Hunt

That is right.

Mr. Davies

Fine. I continue: If the Secretary of State opts for this argument, then it is only fair to point out that at the time of the alleged officer agreement no figures relating to the 1993–94 grant year were available, and the minute of the meeting records that further discussions would take place when the relevant data became available. As Secretary of the Assembly of Welsh Counties and also on behalf of the Financial Adviser and other officers present representing the AWC at the meeting with Welsh Office officials on 28 September 1992, I give the categorical assurance that no agreement was signified at that meeting to the use of the tier share methodology for the 1993–94. D. Hugh Thomas That is a clear repudiation of the Secretary of State's position, and I hope that he will reflect on it.

Mr. Hunt

I agree with the words used by that honourable public servant—with every word. I confirmed earlier that the agreement reached in September was reached in the context in which Mr. Thomas has put it, and the minutes record an agreement. I accept that Mr. Thomas genuinely believed that agreement had not been reached. I hope, however, that the hon. Gentleman will move on from what could be a very divisive issue. If he proceeds to give the view of the Council of Welsh Districts —I do not know whether he has consulted it—he will no doubt tell us that it takes an opposite view to the one expressed by Mr. Thomas. Such discussion does not further relations between local authorities, the Government and the Opposition, and I suggest that the hon. Gentleman does not carry on with it.

Mr. Davies

That comes ill from a Secretary of State who, after the meeting at which he sought to divide the counties from the districts, went out to the steps of the Welsh Office to brief the press and said. "If they can agree among themselves, so be it. If they cannot, let them fight it out." So who is talking about divisions and consensus? I will not have a Secretary of State who has done all he can to cause division and undermine local government telling me or any of my hon. Friends who have spent years in local government about divisiveness.

Of course I have consulted the districts closely. It is true that they have done relatively well this year compared with the counties. There is certainly disagreement on the formula used to calculate the tier split. Even so, the pattern of cuts for the districts is exactly the same. There is a £12 million cut in the housing programme, economic development budget cuts in Swansea, 30 per cent. of the urban programme schemes have been axed in Cardiff and the urban renovation projects in Blaenau Gwent have been scrapped. I have a direct answer to the Secretary of State's question. We have consulted the districts closely and found that the pattern of cuts is exactly the same as that for the counties.

Mr. Walter Sweeney (Vale of Glamorgan)

It is a bit rich for the hon. Gentleman to suggest that the Secretary of State is fomenting differences. The hon. Gentleman spoke about Storey Arms, an issue which I took up with the South Glamorgan council on behalf of a number of constituents. I am still awaiting a reply, but I do not complain about that. South Glamorgan council has a discretion in the matter: for the hon. Gentleman to try to put the blame for every action by a local authority on the Secretary of State is plainly stupid.

Mr. Davies

I mean no reflection on the hon. Gentleman when I say that that issue was discussed about 10 minutes ago. He has only just managed to work out his question. The hon. Gentleman is the only hon. Member I know who thinks that being called a diligent constituency Member of Parliament by the Secretary of State is a compliment.

There is a great variation, especially among the districts, in the range of budget increases allowed under the new draconian capping rules. Districts such as Newport and Cardiff are restricted to increases of under 2 per cent. Islwyn, Aberconwy, Torfaen and Swansea will be restricted to increases of between 2 and 3 per cent. As we have seen, those represent substantial cuts in real terms and will lead to drastic cuts in services. The areas to suffer will include some of the most deprived communities in the United Kingdom, and the severity of the cuts will mean that in many cases even the reduced capital programme cannot be undertaken. That will directly undermine the thrust of the Government's revised economic policy that was announced in the autumn statement.

What is the logic or the justice of penalising the former mining valleys while the relatively more prosperous areas do so much better? Monmouth does best with an increase of over 25 per cent. Dinefwr, South Pembrokeshire and Carmarthen have increases above 20 per cent. That irrational pattern is repeated year after year. How can local authorities be expected to plan ahead, and make long-term financial decisions when next year's allocation is always in doubt, and especially so this time, when Welsh Office uncertainties and inaccuracies have resulted in the severest delays?

On 29 January, the Western Mail reported that the Secretary of State said: I am the first to acknowledge that my plans present some councils with difficult budgeting decisions. He can say that again. He continued:

Nonetheless, this settlement is the most that the country and local taxpayers can afford in the present economic circumstances. There it is in a nutshell. The Secretary of State acknowledges that after 14 years of government by his party, after the receipt of billions of pounds from asset selling, the one-off windfall of North sea oil, the succession of brilliant reforming Chancellors and consensus-seeking Secretaries of State for Wales, the Government do not think that we can afford to house people decently, to care for the elderly or educate the young. The Secretary of State might think that that is good enough for the people of Wales. We do not, and that is why we shall vote against the motions.

5.4 pm

Mr. Martyn Jones (Clwyd, South-West)

I should like to concentrate on the way in which the proposed rate support grant settlement will affect my county of Clwyd. My constituents and I depend on my county for a wide range of essential services which are best provided by local government. I shall describe what the cut in funding—for that is what it is—for county-based services will mean. Despite what the Secretary of State said, it is a cut on a cut and on many previous cuts. He cannot seriously expect the residents of Clwyd to believe that the elected representatives of whatever party would happily agree to cut budgets and therefore services by £3 million last year and £12 million in the coming year.

Clwyd has the unhappy problem of the Welsh Office treating standard spending assessments as figures cast in tablets of stone, which results in Clwyd having an assessment of £37 per head below the all-county average. Leaving aside the principle of using a figure which was always intended as a guideline for precise financial control, it is obvious that a county with rural and urban problems has uniquely synergistic circumstances. Its use means that Clwyd faces a cut of £12 million, if the threat of capping with the same criteria as last year is maintained.

As a result, the community development budget in Clwyd will be reduced by £374,000. That will lead to cuts in libraries, an 80 per cent. reduction in adult fiction and rationalisation of the mobile library service, which is a godsend in a rural area. While those proposals imply a poorer service, they are at least preferable to the option of closing 15 static libraries to reach the same target.

Development and tourism will have to be cut. There are proposals to reduce the development and marketing budget, which critically affects the capacity of the county council to assist in building up the county's economic infrastructure at a time of recession. Revenue for education will be reduced by £7 million. The aim has been to reduce the impact on school budgets through central support services taking a higher percentage of the reductions. As a consequence, target savings have been reached in Clwyd by increasing the cost of school meals and school transport charges.

With 70 per cent. of the education budget delegated to schools, it is inevitable that, despite the protection afforded, there will be reductions in teaching staff. That will mean the loss of more than 200 jobs. The areas of environment and protection cover emergency planning, the fire service, the planning department, the registration service and the trading standards service. The cuts in those services amount to £216,000. Target reductions of just under £500,000 were required, but such savings could not be found, because there is already a shortage of firefighters and cuts would have made it impossible to maintain the proper level of fire cover. Despite that, the service budget is to be cut by £156,000.

In highways and transportation, the proposed cut is £1 million, and that will affect highway improvements. Capital resources for that purpose will be switched to structural maintenance to ensure that the rate of deterioration in the fabric of the county's highways does not continue to increase. The switch not only affects the council's capacity to improve the county's infrastructure, but will have an impact on local employment.

The policy and financial resources area of Clwyd county council faces a reduction of £500,000. That will require efficiency savings, income generation and 21 job losses. The social services budget will be reduced by £1 million, and that is the worst cut. The proposals for Clwyd lead to reductions in capacity to implement in full the requirements of the Children Act 1989. There will be increases in home care charges, meals on wheels charges and luncheon club charges for the elderly, as well as increases in charges for day centres attended by those with learning difficulties.

Mr. David Hanson (Delyn)

Does my hon. Friend agree that Clwyd county council also estimates that many jobs may be lost in many other sectors? I am particularly concerned about the projections for Theatre Clwyd in my constituency. Our concern is that cuts in revenue support grant will lead to further closures and job losses and perhaps to the loss of centres of excellence. I also support my hon. Friend's comments about library services. I visited the mobile library in my constituency three weeks ago and found a valuable service to rural areas which is threatened by cuts. Is my hon. Friend aware that my constituency in particular, which covers the shire towns of Clwyd, faces job cuts which will have knock-on effects on the local economy?

Mr. Jones

I agree with my hon. Friend and I thank him for his intervention. I did not mention Theatre Clwyd, but it is a centre of excellence which attracts jobs and investment to the area.

As the Secretary of State said, the community care moneys will be increased by £6.6 million. That is all very well, but the committee is still underfunded to meet the obligation, as most of the transferred moneys will be used to replace a loss of Department of Social Security income in residential establishments. The committee is short of its target reduction figure by £640,000, the only alternative which would have enabled the committee to come in on target being the closure of yet more elderly persons' homes —three in all.

The reductions that I have mentioned give only part of the picture in terms of the scale of the problem. Budgets were already overstretched before the Secretary of State's guidelines and standstill budgets have been the norm for some years, which means that there has been little scope to develop services or to keep pace with the increased demand for services by customers and the increased responsibilities imposed on local authorities by central Government.

Furthermore, at a time of severe recession, reductions in the services provided by local authorities affect most severely those who are most vulnerable to changes in economic conditions. In having to make cuts in services, with the inevitable job implications—perhaps as many as 400 jobs are at risk, and the knock-on effect must also be included—the county council is having to help worsen the situation for those people for whom it has responsibility. Rather than being given the capacity to offset the worst effects of the recession and to plan for the future, the county council's expenditure reductions mean that it has a reduced ability to promote the long-term welfare and economic well-being of the people of Clwyd.

What does all this mean in terms of democracy, employment or even common sense? First, in terms of local democracy, it means that councils cannot make up shortfalls in central taxation of funding by Government —that is what we are debating today. They cannot raise local taxes because of that expensive fiasco, the poll tax. As the Secretary of State said, 90 per cent. of funding comes from central sources, and the local element is capped anyway so there are more insidious effects. Councils are now reluctant to fulfil the wishes of their electors by turning down even the most obnoxious planning applications—waste tips, opencast quarries and so on—because most are subsequently granted by the Secretary of State after an expensive appeal paid for by the council. That effectively removes any genuine local democracy.

Mr. Roger Evans (Monmouth)

Will the hon. Gentleman give way?

Mr. Jones

We do not have a lot of time, but I will give way.

Mr. Evans

Is the hon. Gentleman seriously suggesting that any local authority in Wales is so far in dereliction of its duty that it is granting planning permission and not discharging its proper statutory obligations to consider plans on their merits and according to policies?

Mr. Jones

No.

That effectively removes any local democracy and allows developments of the kind that I have mentioned in places where they could not and should not be allowed —for example, at a site such as Pen y Bont in my constituency, where a waste tip is bordered on all sides by a river which carries water to my constituency and that of the Secretary of State. The plan was turned down by the county council, but was granted by the Secretary of State after an expensive appeal paid for 90 per cent. out of central Government taxation and 10 per cent. by my local constituents.

There are two employment considerations. There is the first and immediately obvious direct effect of the loss of 200-plus jobs in teaching, 50-plus jobs in social services and 21 jobs in shire halls. Secondly, the ability of the council to attract jobs will be reduced. Clwyd county council has persuaded 87 companies to set up there, with the creation of 3,172 jobs. The attack on Clwyd's grant will damage economic development. It needs more money to promote such schemes, but it is getting less.

That leads me neatly to the lack of common sense in the whole business. The cut will mean a reduction in home helps, more expensive meals for the elderly, cuts in transport and in day care for the mentally handicapped. It will mean that Clwyd will not be able to meet the conditions of the Children Act 1989, or the provisions of the National Health Service and Community Care Act 1990. Where is the common sense in legislating for such provisions and then not giving the agencies which have to implement them the wherewithal to carry out the required tasks?

To make matters worse, the differential between the districts and the county suggests that, although the settlement is not over-generous, the services that they provide are valued more than those provided by the county.

Dr. John Marek (Wrexham)

I have been listening to my hon. Friend, and it is clear that Clwyd county council is in terrible straits. Although the Government do not have a mandate in Wales, where they had a derisory vote in the last general election, they are in office here in London for four years and will continue to screw down county councils. Is not the lesson to be drawn from that that the Secretary of State should get on with reorganisation of local government as quickly as possible to put an end to the county councils and introduce unitary authorities to restore the power and freedom of action that local authorities used to have in the Principality?

Mr. Jones

As a supporter of unitary authorities, I agree with my hon. Friend, but there will be elections before that—a point to which I shall be coming.

The difference in funding between the districts and the counties is strange, given that the upheavals created in education and social service provision by the Government's legislation has affected local government functions. Where is the sense in that? The Government would deny that this is cynically designed to cause even more chaos in education and to drive schools into opting out. It would be interesting to know where they would get the money to fund every school directly if all decided to go for direct rule from Whitehall via Cardiff, which is what grant-maintained status means.

Lastly, I shall cynically speculate that those enforced cuts in county council spending are nicely timed to force Labour councils to reduce services and make unpopular choices under the threat of capping just before the next county elections. It might also have more than a little to do with the fact that the council tax has every chance of bringing enormous bills through our letter boxes once more. The poll tax is dead: long live poll tax 2. Or perhaps, Nightmare on High Street 1" is being superseded by "Nightmare on High Street 2", subtitled, "The Council Tax".

5.17 pm

Mr. Jonathan Evans (Brecon and Radnor)

During the debate, we have heard of an outdoor education centre that is based within my constituency and run by South Glamorgan county council. As I said earlier, it is one of 10, all of them run by local authorities, including three London authorities, three in Wales and Wiltshire, Oxfordshire and Essex. Those centres are greatly valued, not only in my constituency but by the 17,000 pupils all over the country who visit my constituency to benefit from attending the centres.

We have heard an attempt to pin on my right hon. Friend the Secretary of State for Wales the blame for a decision that has so far been only recommended, and has yet to be made by South Glamorgan county council—that to close the Storey Arms centre. In the circumstances, it is important that we look carefully at the background to the matter. It is interesting that the proposals that are to be considered by the county council involves not just the change to Storey Arms but also affect two other centres of learning outside the county council boundary at Llanover and Porthcawl.

In the case of the Storey Arms centre, as I understand the proposal, it is not that it should be closed altogether, but that the amount of money being provided by way of funding to South Glamorgan county council from the Secretary of State is so insufficient that there should be a cut in its budget and it should become self-financing, inviting pupils to pay £180 a time to visit the centre.

I have a letter that was sent to my right hon. Friend the Secretary of State for Wales by Mr. David Morris, the Labour Member of the European Parliament for Mid and West Wales, who draws attention to the prospective decision. In the final paragraph, he states: I would, therefore, appeal to you to provide South Glamorgan County Council with an extra allocation of funds to save Storey Arms from closure. In other words, Mr. Morris invites my right hon. Friend to find sufficient money to save that specific centre. That demonstrates that South Glamorgan county council has embarked on a political stunt.

It was wicked to have contemplated such a course of action, especially because it dreadfully embarrasses Opposition Members, including the hon. Member for Bridgend (Mr. Griffiths). In an intervention in the speech of the hon. Member for Caerphilly (Mr. Davies) he referred specifically to the representations that have been made by the Association of Heads of Outdoor Education Centres.

The hon. Member for Bridgend will know—I am aware that he has tirelessly been doing his duty considering the Education Bill in Committee—that the association has been making representations on a clause that would convert outdoor education centres to free-standing status. It is proposed that there should be a two-year transitional period, but that is not the position of South Glamorgan county council. Indeed, it has pre-empted that debate. It has said that the scheme will come into operation on 1 April. That means that the Storey Arms will have two months in which to acclimatise itself to a new financial regime.

Mr. Cynog Dafis (Ceredigion and Pembroke, North)

The hon. Gentleman shows a partial understanding of the situation in which the outdoor education centres find themselves. It is clear from all the representations that I have received from them that, under the local management of schools system—a system which directs considerable funds to individual schools—the centres throughout England and Wales are generally in great difficulty already. They are saying that the spread of grantmaintained status would finish them off. Storey Arms is suffering earlier than the rest, but they are sure to suffer as well.

Mr. Evans

That intervention demonstrates the limited understanding of the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis). That comes as some surprise to me, because he is a member of the Committee that is considering the Education Bill.

Mr. Win Griffiths

The Association of Heads of Outdoor Education Centres, along with Mr. McMorrin —he is active in Wales and is a constituent of the hon. Member for Brecon and Radnor (Mr. Evans)—has said that the existing system of financing the local management of schools is putting pressure on outdoor education centres and that clause 224 of the Education Bill represents the last nail in their coffin. They say that South Glamorgan county council's decision—it has been forced to take it because of its financial predicament—to pre-empt clause 224 is not an isolated one. There are Conservative-controlled authorities in England—in Cumbria—that have already mothballed outdoor education centres. The position of South Glamorgan county council is not unique.

Mr. Evans

The hon. Gentleman makes my point for me. He has referred to the clause in the Education Bill that has been the subject of representations both by the association to the Minister and by myself. He well knows that the action that is being taken by South Glamorgan cuts the ground from under his feet when he comes to argue these matters in Committee, and specifically in the context of Storey Arms.

The hon. Gentleman mentioned other outdoor education centres. He knows that within my costituency there are nine other such centres, many of which are run by Conservative authorities. They are not, however, under the threat that faces Storey Arms, whatever difficulties are arising. We are seeking to address these matters in terms of the switch to the local management of schools.

Mr. Jon Owen Jones (Cardiff, Central)

Will the hon. Gentleman give way?

Mr. Evans

I should like to make some progress, but I give way to the hon. Gentleman.

Mr. Jones

I have been taking children to the outdoor centre at Dol-y-Gaer over the past decade and more. In the past few days I have had conversations with Clive Roberts, the manager of Dol-y-Gaer, and with Mr. Pugh, the manager of Storey Arms. The difference between Storey Arms and many of the other nine centres in the hon. Gentleman's constituency is that Storey Arms has almost 100 per cent. usage by school children from the county. Other authorities are having increasingly to find finance from companies and other sources to pay for the use of the centres. The problem is trying to turn round Storey Arms, as it were, within the time scale that South Glamorgan county council has in mind. It is——

Mr. Deputy Speaker

Order. This is becoming a speech.

Mr. Evans

South Glamorgan county council has to consider, in the context of the funding that has been made available to it, whether the facilities can be kept available for the school children of South Glamorgan. My primary concern is to keep Storey Arms centre open. I have very much in mind the employment of 14 of my constituents who work at the facility. The key feature is that South Glamorgan county council is making a decision that will damage 2,000 children from its area who visit Storey Arms centre each year. It is clear from the cacophony of protests from Opposition Members that the decision has been made by South Glamorgan county council and that it is not attributable to my right hon. Friend the Secretary of State.

I have had the opportunity to speak to South Glamorgan county councillors about the matter. They have told me that the financial problem that faces the county council could easily be addressed. It seems that that has not happened because of the political difficulties that we have heard about from the hon. Member for Cardiff, Central (Mr. Jones). Within the Ely area of Cardiff there is a surplus of secondary school places, which means that savings could be made. Unfortunately, South Glamorgan county council is fearful of making such a decision, for political reasons. It seems that it is prepared to carry the cost of surplus places and to make a political stunt decision that is designed to pin the blame on my right hon. Friend the Secretary of State.

That example clearly illustrates the thrust of the Opposition's approach to these matters. They are not prepared to consider the facts of life and to take proper but tough decisions. Instead, they wish to pin the blame on someone else. It is extraordinary that we are receiving daily from the National Union of Teachers cards that tell us about the wonderful system of accountability that we have with our local education authorities. On the contrary. LEAs and too many other authorities and individuals in local government wish to disclaim accountability. We must surely pin accountability to where it lies, and in this instance there is no doubt that South Glamorgan county council is responsible.

5.28 pm

Mr. Alex Carlile (Montgomery)

Perhaps we can now return to the subject after that extraordinary diatribe, which had nothing to do with the settlement. I remind the hon. Member for Brecon and Radnor (Mr. Evans) that about an hour ago the Secretary of State said, "We are discussing reality." I suggest to the Minister that the Secretary of State was discussing only his perception of reality, rather than the reality that counties and districts in Wales are having to face.

What sort of reality is it, 14 years after Lady Thatcher quoted St. Francis of Assisi on the steps of No. 10 Downing street, that leads to the situation that I am about to describe? I shall take the real example of Miss J., who lives in a village in my constituency and whom I visited a few days ago. She has a 95-year-old father. She and her father lived alone in a council house until very recently. They have no car and rely on the good nature of friends to drive them around.

Miss J's father is in hospital in Newtown. It has been decided that he should be removed from hospital to a place in the community—somewhere where he can pass his last few years. But in what community? He has been offered one place in Shropshire, far away from public transport, and another place in Shropshire even further from public transport. He is not even allowed to die quietly in his country, Wales. His daughter, who is neither young nor in the best of health, will hardly be able to visit him—perhaps once a fortnight through the kindness of her friends.

The destruction that this version of care in the community is bringing to the daughter's life and that of her father is self-evident. It arises because there simply is not the finance available in Powys to ensure that an elderly gentleman, born and bred in his own village, can pass the rest of his days in close proximity to the village from where his daugher can have reasonable access to him.

What kind of reality is it when the chief executive of Powys county council, for understandable reasons, is leaving, partly because of the uncertainty that faces local government in Wales? He has gone to a very good job. Our loss is Shropshire's gain. He is an extremely able chief executive, but I do not doubt for a minute that his decision was made partly because morale in local government in Wales is very low. Indeed, just before the end of last year, the council's director of education took early retirement, saying openly that he was doing so because of declining morale in local government and the uncertainty of the education system under this Government. The deputy director of education took early retirement, too: his spirit was sapped by what had been happening in local government.

What kind of reality is it when, after years, decades and in some cases more than a century of providing not only good but essential service, the village school in Pontrobert in my constituency, which has adequate buildings, high education standards and excellent teachers, is facing closure and is fighting for its life, led by its redoubtable chairman of governors, Mr. Huw Gwalchmai? What kind of job is it to be the chairman of governors of a school, especially a village school?

In what kind of reality is Powys county council and its high schools being asked to meet the requirements that will rightly be made by the Welsh Language Bill when it becomes law? Why are staff at Caereinion high school in my constituency riven by dissension about the way in which they should deal with the problem of education through the medium of Welsh? It is because successive Governments have not ensured that the problem was properly tackled throughout Wales.

What kind of reality is it that leads to the most inconsistent administration of trading standards law that we have seen in the past 25 years since the enactment of the Trade Descriptions Act 1968? In one county, shoddy and defective goods may lead to a prosecution; but in another there is no money even to consider a prosecution. The uncertainty goes further than that, because the Secretary of State, in the foreplay to his extraordinary dance with the White Paper on local government reform, seems to have changed his mind at least once already about what will happen to trading standards in Wales.

What kind of reality is it when we hear that Theatre Clwyd, a great centre of excellence which has brought a new level of cultural attraction and achievement to north and mid-Wales, faces cuts that will mean a reduction in the availability of performing arts, in the availability of participatory arts and in the availability of the often neglected visual arts for the northern half of Wales? I do not think that that is a reality that the Secretary of State should be proud of.

I do not much care—and neither do the people of Wales —which quadratic equation is applied to the funding of local government in Wales. We have heard the Secretary of State's version of the quadratic equation. On the Labour side, we have at least one expert on the quadratic equation from Wrexham. Each could produce their own formula, for what it is worth. What matters much more than the formula is what happens to people.

What kind of reality is it that leads to the public in Wales having to drive over potholed roads; or to find that there has been a bailey bridge on a well-used road between Welshpool and Montgomery for the past 20 years? These are the realities which people should not have to face.

It is a matter of shame, which the Government should recognise as their own shame, that, 14 years after Lady Thatcher stood quoting the words of generous hope and concord of St. Francis of Assisi, the level of public service through local government in Wales has declined, that the quality of democracy in Wales has declined and that public uncertainty has increased.

I call on the Minister to answer those questions when he replies to the debate, because without answers the people of Wales will remain rightly dissatisfied with the performance of this Government and their current viceroy from an English constituency.

5.38 pm

Mr. Rod Richards (Clwyd, North-West)

Perhaps we can now return to the reality of this debate, after the speech of the hon. and learned Member for Montgomery (Mr. Carlile), whose face becomes increasingly unfamiliar to Conservative Members as the years go by.

I know of no problem that the Labour party cannot solve without spending more money. Indeed, for the Labour party it is as easy as signing an IOU. It fails to realise and recognise that more money spent on local government means less money spent elsewhere on health, on benefits or whatever. The Opposition fail to recognise that one cannot run the country as they ran it in the 1970s. They spent and spent and spent without realising their obligations to the country at large.

Mr. Ainger

The hon. Gentleman says that the previous Labour Government spent and spent and spent; but what is the projected public spending borrowing requirement for next year?

Mr. Richards

That is precisely the point. It is because the projected public sector borrowing requirement is so high—about £30 billion—that Government spending must be constrained. It is a point that the Opposition have failed to understand this year, as they have always failed to understand it. Indeed, every Labour Government have failed to understand that fundamental aspect of governing a country. Government spending must be placed in the context of Government income, which has to be put in the context of the economy of the world. As the Opposition know, the economy of the western world has been in recession.

I have seen many crocodile tears from the Opposition who recommend that the Government should spend more on this, that or the other. However, they have not mentioned the waste and corruption in local authorities, usually those run by Labour. There are scandals and corruption from Lambeth to Liverpool, from Monklands to Manchester, and in Sheffield——

Mr. Ron Davies

On a point of order, Mr. Deputy Speaker. Will you make it absolutely clear to the hon. Gentleman that we are debating the revenue support grant orders for Wales? None of the local authorities that he mentioned has anything to do with Wales, and neither of the reports that we are debating will affect local government in the areas that he mentioned, so his references must be wholly out of order.

Mr. Alex Carlile

Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. Let me rule on one point of order at a time. I assume that the hon. Member for Clwyd, North-West (Mr. Richards) is alluding to those authorities in relation to the reports. If so, he is in order, but if he develops his argument, he will not he in order.

Mr. Carlile

Further to that point of order, Mr. Deputy Speaker. Is it in order for an hon. Gentleman to accuse local authorities of criminal offences and of corruption without naming those authorities and without having evidence on which to base his accusation?

Mr. Deputy Speaker

Hon. Members are responsible for what they say in the House. The Chair has no responsibility for that.

Mr. Richards

The last authority that I mentioned was Sheffield city council. The Opposition will be aware that that council is providing offices rent and rates-free to five Labour hon. Members.

Mr. Deputy Speaker

Order. I made it clear that allusions were in order, but the hon. Gentleman is not to develop them. The order is clear—let us return to the subject of Wales.

Mr. Richards

I referred to those authorities in England because I wished to draw an analogy with the Labour party in Rhyl in my constituency, which appears to have modelled itself on Lambeth. That is no surprise, because it is run from Liverpool city council.

Some members of Rhyl Labour party have applied to Clwyd county council for funding for what they call the Rhyl West community resource team. The team requires resources of about £80,000 from public sector funds. However, it means nothing other than jobs for the boys of Rhyl Labour party, because it will offer the good people of west Rhyl nothing more than advice and information——

Mr. Ron Davies

On a point of order, Mr. Deputy Speaker. I did not wish to make another point of order, but it is clear that the hon. Gentleman's scurrilous and unprovoked attack on individuals in his constituency is outside the debate. He is referring to individuals——

Mr. Deputy Speaker

Order.

Mr. Davies

Let me put my case, if I may.

Mr. Deputy Speaker

Order. I hope that the hon. Member for Caerphilly (Mr. Davies) has already put his case, because he has spoken for several seconds. He said that the hon. Member for Clwyd, North-West was out of order, but I have been listening especially attentively in the light of the previous points of order, and so far the hon. Gentleman is in order.

Mr. Richards

I am grateful to you, Mr. Deputy Speaker.

The £80,000 allocated by Clwyd county council to such a project means £80,000 less for another project.

Mr. David Evans (Welwyn, Hatfield)

Is my hon. Friend aware that, when the Opposition get excited, it means that one has hit the nail on the head?

Mr. Richards

My hon. Friend has also, characteristically, hit the nail on the head.

The so-called resource team offers to do no more than established organisations already do. It will do nothing but duplicate services already being provided by citizens advice bureaux. The bureaux and the library information service would like more funding from Clwyd county council, and they already provide the advice and information that the resource team would duplicate.

Mr. Ron Davies

Further to the point of order, Mr. Deputy Speaker. If the hon. Gentleman was talking about an application that had been approved by the local authority, that would be within the terms of the debate, but as he is talking about an organisation which has merely made an application to the local authority, he cannot be in order.

Mr. Deputy Speaker

As I understand it, we are debating the financial year 1993–94, and I presume that applications for that year have not yet closed. I assume that the organisation is applying for local government funding, so it must be covered by a debate on expenditure.

Mr. Richards

I am trying to highlight the fact that the Opposition do not use public funds in the best possible way. I mentioned citizens advice bureaux and the library information service, which would like more funding. A benefits advice shop already exists in Rhyl, so the resource team which has applied for £80,000 will merely duplicate the existing services. It is absolutely scandalous.

I, and, I am sure, many other hon. Members, have corresponded with people who are involved with the mentally handicapped in Clwyd, and Clwyd social services department has cut the resources available to them. It is outrageous that the Opposition should use funds to duplicate services when other services, which the county council is cutting, need more funding.

We shall take no lessons from the Opposition on underfunding or on any other aspect of funding until they put their house in order and ensure that their local government representatives properly represent the people who elected them.

5.48 pm

Mr. Jon Owen Jones (Cardiff, Central)

I was expecting the hon. Member for Clwyd, North-West (Mr. Richards) to continue his speech for much longer. I am most grateful that he did not.

Following the election, the Secretary of State has imposed capping criteria in Wales for the first time. The capping has not been imposed gradually, as may have been the case in England. In Wales, the axe has fallen especially suddenly, severely and unfairly. By the autumn, it became clear that there would be a £200 million shortfall in the amount that county councils would be allowed to spend. The final settlement confirms that only £78 million has been allowed for inflation, for increased demand and for the problems associated with an increasingly elderly population. It was believed that £262 million was necessary. The additional sum allocated for community care is recognised by everyone within the service as completely inadequate for the increased demands put on it.

I know that local authorities argue constantly—and with good cause—for more funding. This time they can with justice claim a crisis of cash shortage. Vital services, in the real sense of the word, are being put at risk. I am talking not about library services but about vital services such as the social services and the fire service. I am not being alarmist in saying that people will die as a result of the cuts. Essential functions in education and in highways will be severely affected. Many valued provisions will cease to exist.

The cuts are also unfair because they are not evenly applied. Districts, as we have been told, will be allowed a 10 per cent. increase in spending, but the counties will receive only a 1.5 per cent. increase. Is this another of the Secretary of State's attempts to divide and rule? He has no mandate in Wales, and he seeks to put those who have a mandate at one another's throats.

In my county of South Glamorgan, £8 million will have to be cut from the budget this year. Up to 600 jobs will be lost, at a time of huge unemployment. Almost 15 per cent. are out of work in my constituency alone.

The cuts are being made when there is an unprecedented imposition of what should be taught in schools and how it should be taught. Counties such as South Glamorgan are forced into an ever-narrowing curriculum. The Gradgrind, Dickensian view of teaching is in the ascendancy among Conservative Members and is now to be pushed on the people of Wales.

In South Glamorgan, we have the nationally acclaimed South Glamorgan youth orchestra, which is now under severe threat. Music is to become an optional extra in schools, available only to those who can pay. That may not be of great concern to some Conservative Members, but Labour Members believe that a subject such as music should be available to all, because it enriches all people.

Youth and community education is to be decimated at a time when it is most needed. There is 30 per cent. youth unemployment in parts of South Glamorgan, yet youth and community education faces a cut of £750,000.

There has been much discussion about outdoor pursuit centres and about the centre at Story Arms. All the outdoor pursuits centres, not only those run by South Glamorgan county council, are in danger of closing.

Mr. Jonathan Evans

indicated dissent.

Mr. Jones

Yes, they are. The hon. Gentleman should talk to people at more of them. All outdoor pursuit centres now have to compete for the same area of the market. They are all trying to get companies to spend a lot of money on sending their executives and directors on leadership courses, because those people can pay.

The outdoor pursuit centres were established to give an essential part of education to the pupils who should receive it as a right and not because they could afford it. I used to take groups of biology A-level pupils to the Story Arms centre. Field studies are an important part of the geography A-level course. I also used to take disabled children to the centre. It is a great thing to see the satisfaction and sense of achievement that those pupils can get from outdoor pursuit centres. That opportunity will be denied them by Conservative cuts.

Mr. Jonathan Evans

The hon. Gentleman has put his points forcefully to the House. Has he put them to Russell Goodway, the leader of South Glamorgan county council?

Mr. Jones

Yes, I have. I have urged Russell Goodway to try to find cuts in other parts of the budget. I know that that will mean that someone else suffers, but because I have a personal interest in the matter, I have made that suggestion. If Councillor Goodway tells me that he cannot find extra funding and that he cannot find any other area to cut, I shall understand his position.

Storey Arms needs a little more time in which to try to win a reprieve. That will not help the people of South Glamorgan who want to use the service. If it survives, it will do so because it takes in more external funding, and it will have to cut the service it now provides for children in South Glamorgan schools. From that point of view, they will still have lost.

Economic development in South Glamorgan has had to face cuts. What a time to do that! The county council has been one of the foremost in developing links with industry. Unfortunately, there will have to be cuts in economic development.

Some £400,000 must be cut from discretionary awards to students, which means that the poor will no longer be able to afford to take up many important courses. Taiwan now sends more people to university than Britain does, yet we shall have to cut discretionary awards, which will mean that students cannot take up courses.

The council is being forced to cut care for the elderly and for those with mental health problems. Those least able to cope are having to pay the price for the Government's mismanagement of the economy.

Even the fire service does not escape the cuts. A new fire station is due to be built in Pentwyn in my constituency, but the project is now to be delayed. The fire service in parts of east Cardiff will no longer be able to meet its statutory attendance times. That is why I said that some people will die as a result of the cuts.

It is shameful for the Secretary of State, who has no mandate from the people of Wales, to come here to impose cuts on us. I hope that Conservative Members will have the courage to vote with us at 7 pm.

5.56 pm

Mr. Walter Sweeney (Vale of Glamorgan)

To listen to Opposition Members, one would think that the Secretary of State for Wales had imposed on Wales the most swingeing cuts imaginable. The reality is that, over the last two years, there has been an increase of 25 per cent. A further increase of 3.1 per cent. is scheduled in the forthcoming year. That is hardly a brutal cut in services.

I heard the hon. Member for Caerphilly (Mr. Davies) suggest that a Conservative Member of honour would vote against the Government on this occasion. I make it perfectly clear to him that I thoroughly support the Government's plan and what my right hon. Friend the Secretary of State has said. Given the stringency with which the Government need to approach spending in general, my right hon. Friend's announcement today is suprisingly and reassuringly generous.

Mr. Dafis

I point out to the hon. Gentleman that the difference between the standard spending assessment allowed by the Welsh Office to Dyfed county council and the budget that the council requires to maintain standard services at last year's level is £20 million.

Mr. Sweeney

That makes one wonder how that local authority has run its affairs in the past. The perception of the hon. Member for Cardiff, Central (Mr. Jones) differs from the reality. It is rather like George Orwell's slogan in "Animal Farm": Four legs good, two legs bad. The hon. and learned Member for Montgomery (Mr. Carlile) referred to a heart-breaking case known to him. I am sure that we could all look into our postbags or reminisce about our surgeries and refer to hard cases that would help to illustrate the difficulties facing local and national Government at the present time.

As Conservative Members are well aware, unfortunately we cannot spend money that we do not have. It is because we have been attempting to do that—[Interruption.] Opposition Members cannot have it both ways. If they do not like us borrowing so much, they must accept that it is natural to take a grip on public spending. Local government must share part of that burden.

If local and national Government do not take a grip on public spending, private individuals will have to shoulder the entire burden. People have made it clear to me in correspondence and at my surgeries that they cannot shoulder a growing burden of Government debt. They cannot and will not do that. If they are pushed, the result will be job losses. The wealth creators will be driven under, and that cannot be good for any of us. In the long term, there would be a reduction in the services which Opposition Members complain that we are jeopardising.

This is a fair settlement that is in the interests of the Welsh economy and the Welsh people. To attack my right hon. Friend the Secretary of State for not being Welsh and for not representing a Welsh constituency is cheap in the extreme and irrelevant. The public will appreciate that, as usual, my right hon. Friend the Secretary of State has driven a hard bargain in the interests of the people of Wales, and has done a good job for us today.

6.2 pm

Mr. Llew Smith (Blaenau Gwent)

The best measuring rod of whether local government finance is fair must be whether it responds to people's needs. I have always believed that investment and finance should go where the need is greatest. The Welsh Office has recognised that my constituency of Blaenau Gwent is the second most deprived borough in Wales. If one were to visit my constituency, one would see high levels of unemployment. Those who are employed are on low wages. We have some of the worst housing stock in Wales, and some of the most severe health problems.

I want to highlight the poverty and deprivation in Blaenau Gwent. In 1991–92, 30 per cent. of the children in Blaenau Gwent received free school meals. In 1990–91, nearly 97 per cent. of the families with children at one school in Blaenau Gwent received income support. The 1991 census showed that pensioners in my constituency were more likely to be without a bath, shower or inside toilet than anywhere else in Gwent.

The unemployment rate in Blaenau Gwent is higher than the Welsh average. Young people in particular have tremendous skills, talents and creativity, but they are not being allowed to use them to benefit the communities that comprise Blaenau Gwent or to benefit the great industries in which they should be working.

Some people might say that local government finance should not concern itself with employment as it is really about providing public services. However, we all recognise that employment and public services are interlinked. I was reminded of that some weeks ago, when the local authority announced that many housing grants were being ended. The authority was approached by building contractors, who highlighted the adverse effect that that would have on housing in Blaenau Gwent. The contractors also stressed that many of their employees would be made redundant.

It is not just the contractors and people who build and repair the houses who are affected. A building supplier told me that, because of the contraction in the building industry and the fact that the local authority was ending many housing grants, he would have to make many people unemployed.

Many of our services, particularly housing, have been affected. Blaenau Gwent has some of the worst housing stock in Wales. As a result of the Government's policies, Blaenau Gwent has been unable to build one new council house in the past nine years, even though there are 4,000 people on the housing waiting list. As I have said, in recent months the authority has announced that there will be even greater housing problems in future as a result of the cuts in housing grants.

With all those problems and many more, one would have expected the Government to respond positively to the problems of communities like Blaenau Gwent. However, that has not happened. The Welsh Office recently told Blaenau Gwent that its SSA for 1993–94 will be lower than the provisional figure that it issued just a month ago.

The borough will now have to make savings of £171,000 in addition to the cuts of £2.1 million that committees are being forced to make on the basis of the provisional spending limit. That equates to approximately £70 per household in the borough of Blaenau Gwent. The people who already face considerable deprivation will experience even more deprivation in terms of job losses and cuts in services.

Not only is that unfair: it is the economics of the madhouse. Government cuts in provision to local authorities in the middle of the recession will not save the Exchequer a penny. While the Government take money away from local authorities with one hand, they must with the other hand provide the Treasury with more money to meet the costs of unemployment. We now know that every unemployed person costs the state about £9,000 in benefits and lost taxes. That figure does not take into account the increase in the number of free school meals, housing benefit and many other social problems which increase as unemployment increases.

The Government do not believe in public expenditure. However, I believe in it, and I am committed to it. Public expenditure can be a liberating force which can allow young people to do something useful with their lives. It can bring dignity to the unemployed, the homeless and people experiencing sub-standard education. It gives them the opportunity to do something good with their lives.

Public expenditure also helps to transform our communities—the garden festival in my constituency is a classic example. That area would not have been transformed without public investment. The lesson we should learn is that we need a higher level of public expenditure if we are to regenerate those communities. What is more, decisions relating to that public expenditure should be taken increasingly by people who are elected, accountable and as close as possible to local people.

In contrast, over the past decade there has been a process of increased centralisation. In respect of that, there has been an increase in the use of the power of capping. That will obviously affect communities like Blaenau Gwent, which already suffer so much deprivation, adversely in the months to come. In addition to the centralisation of powers, those powers are also being hived off to Government quangos, to unelected and unaccountable business men and, occasionally, business women.

Last week, my hon. Friend the Member for Blackburn (Mr. Straw) quoted the Financial Times, and said that unelected quango boards

are now responsible for a fifth of all public expenditure—at £42,000 million, more than the total spending of local government, and a figure which has increased three times since 1979."—[Official Report, 3 February 1993; Vol. 218, c. 344.] The movement away from accountability, linked to decisions which are increasingly to be made by bankers under the Maastricht treaty, will increasingly force people to ask, "What is the use of voting if the people we vote for have no real decisions or real influence over decisions that affect our lives?" The system of local government finance, as stated by the hon. Member for Tyne Bridge (Mr. Clelland) last week, is unfair, unjust and deliberately tailored to shackle, rather than free, local priorities and local enterprise."—[Official Report, 3 February 1993; Vol. 218, c. 363.] The hon. Gentleman was speaking about England, but the debate shows that, tragically, the situation is no different in Wales.

6.10 pm

Mr. Roger Evans (Monmouth)

I welcome the settlement. The hon. Member for Caerphilly (Mr. Davies) almost gave the game away by saying in terms that Monmouth had done well this year. He is for once—almost uniquely—correct. However, table 1.6 shows that Monmouth's public expenditure per head of population is still the lowest of any district council in Wales—£123, as opposed to £194 in Blaenau Gwent.

In the peculiar system of standard spending assessments, until this year there has been a bias in favour of urban Wales and against rural Wales. In particular, in Monmouth it was felt very strongly in the past few years that a low-spending rural authority which happens, of course, to be Conservative-controlled, having extra costs as a result of not being an urban authority—for example, it costs much more to collect domestic refuse in the country—has been penalised in the past but not this year. I congratulate my right hon. Friend on his statement and I thoroughly welcome it.

It is not satisfactory to say that, somehow or other, the announcement is miserable and mean and that it will cause enormous anguish, although that argument has been articulated with brilliant skill by various hon. Members. The point at stake, as my hon. Friend the Member for Vale of Glamorgan (Mr. Sweeney) has said, is that we must look at the announcement in the context of the past three years which, including the year that we are discussing, show an increase of no less than 29 per cent.

A few hon. Members who are present happen to represent constituencies other than Welsh constituencies, but my right hon. Friend the Secretary of State for Wales is again to be congratulated on achieving in Wales a better deal than obtains in England. The total standard spending in Wales per head is £901 in the year that we are talking about, as opposed to £856 in England, and the aggregate external finance per head in Wales is £812, compared with £698 in England. That is an enormously important benefit for the Welsh economy and for Welsh local government. It should be recognised as such, and my right hon. Friend should be congratulated.

The hon. and learned Member for Montgomery (Mr. Carlile) addressed us with eloquence and passion, but I fear that in the exuberance of his passion he paused to cast unnecessary scorn upon quadratic equations. The curious feature of the debate among the critics has been an absence of any analytical critique of the way in which standard spending assessments have been calculated. The method of calculation has an enormous effect on distribution, which affects each and every local authority in our constituencies.

I am probably more critical than many, but, there is an attempt to measure social and other needs, on analysis, and costs and to average out Government expenditure so that everybody receives a reasonable and fair share. Hon. Members have expressed the needs of their local authorities, but I am most surprised that critics of my right hon. Friend the Secretary of State for Wales have not aimed their fire at the basis of the system. Perhaps that is because it commands general support.

I welcome the second paper, which relates to capping. It is a matter of great regret that it is necessary, but Conservative Governments have or should have learnt from the experience of past years. You will recall, Madam Deputy Speaker, that we had a rating revaluation in 1963 and we lost a general election in 1964; we had a rating revaluation in 1973 and we lost a general election in 1974. That was largely because local authorities of another political persuasion proceeded to increase expenditure, exercising their local powers to do so. Indeed, we saw that strikingly with the poll tax in Gwent, when Gwent county council was elected in 1989 for four years. In its first year of poll tax, it showed very little reticence in raising the figure to unacceptable levels.

Local authorities cannot have it both ways. They spend an enormous proportion of public money. There must be some accountability to the Treasury for the burdens on the taxpayer and on the economy. At the same time, local authorities cannot escape responsibility for their spending decisions. It is all too easy to threaten cuts in the most essential, desirable and poignant services when a much more critical examination of how they run their affairs would be appropriate. I support both measures.

6.15 pm

Mr. Roy Hughes (Newport, East)

There appears to be a hidden agenda for Newport borough's finances and rate support grant settlement. Last Saturday morning, as I was thinking of getting ready to go to Cardiff for the international to witness the eclipse of England, I started to open my post. One of the first letters that I opened was from the Welsh Office. It informed me that the Secretary of State had accepted the findings of his inspector, Mr. R. Davies, following a public inquiry in October 1991 into the application by the American concern, Browning-Ferris Environmental Services Ltd., to build a waste disposal plant in the Lliswerry area of Newport.

That disgraceful decision was made by a Welsh Office Minister representing an English constituency. The findings on page 40, paragraph 9.226 of the report even seem to acknowledge that Newport in south Wales will be seen as a dustbin for the receipt of waste from all over the world. Page 41, paragraph 9.30 of that report points out that there is a risk of noticeable pollution, but that is qualified by stating that the risk is negligible.

Mr. Sweeney

On a point of order, Madam Deputy Speaker. That remark does not appear to be at all relevant to the debate.

Madam Deputy Speaker (Dame Janet Fookes)

So far as I can gather, the hon. Member for Newport, East (Mr. Hughes) is talking about financial matters which fall within the general ambit of the debate.

Mr. Hughes

This matter will affect the finances of Newport borough council.

The public will rightly question whether the vapours pouring from the stack at the plant will be cancer-causing. That is a natural fear. What is not in dispute is the company's proposal. The report states: The proposal would be a facility for the reception, storage and treatment of aqueous and oily wastes using a variety of well-established non-thermal treatment techniques, such as neutralization, oxidation, reduction, de-watering and chemical demulsification. The wastes would arise from the South-west Region and would include inorganic sludges and oily wastes from the automobile and steel industries…food wastes: usually classified into 4 waste types (a) sludges, (b) acidic wastes, (c) oily wastes and (d) other aqueous wastes requiring specialized handling or treatment.

Mr. Llew Smith

Will my hon. Friend confirm that the firm, Browing-Ferris, to which he referred has been taken to court in the United States, prosecuted and found guilty of breaking environmental legislation? Can he also confirm that Browing-Ferris has connections with the criminal world in the United States?

Madam Deputy Speaker

Order. It is clear to me that the hon. Member is starting to go wide of the financial implications. He must stick with that to remain in order.

Mr. Hughes

I appreciate what my hon. Friend the Member for Blaenau, Gwent (Mr. Smith) said. I shall make a brief reference to the point that he made.

I have outlined what I would call a nice cocktail which is close to a heavily built-up area. Then there is the record of the company involved. A while ago, Greenpeace sent me a dossier on Browning-Ferris. According to that dossier, toxic waste in the United States is closely linked with organised crime, and Browing-Ferris is right in the thick of it.

Madam Deputy Speaker

Order. I am sorry, but the hon. Member is now going out of order. He must return to finance.

Mr. Win Griffiths

Obviously, my hon. Friend is raising a serious issue—the pollution which could be caused by the plant. Does he know whether Newport borough council, in preparing its estimates for the coming financial year, took into account all the extra work which would be required by the environmental health department and other Departments to police the plant? Those departments opposed the plant. More importantly, has the Welsh Office taken any account of that extra work in the money that it is giving to Newport?

Mr. Hughes

My hon. Friend illustrates the point which I am trying to make. What if charges similar to those already made against the company were to happen in Newport? I shall give some examples. In 1984, in Williamsburg, Ohio, investigators charged that Browing-Ferris officials poured contaminated rain water directly into a tributary of local drinking water. In 1985, a grand jury indicted BFI, CECOS and their former employees on 96 counts of violations at the hazardous waste pits. There are many more examples of similar charges made against the company. Such charges certainly impinge directly on the finances of Newport borough council and the revenue support grant settlement. For example, there would be the cost of more environmental health officers and the need for extra police for such a questionable plant.

I have a letter dated 4 February from Mrs. C. R. Jones at the Welsh Office, authorised by the Secretary of State, to Messrs. Davis Llewellyn and Jones, chartered architects and town planners in Cardiff who act on behalf of Browing-Ferris. Mrs. C. R. Jones says: A further letter will be sent to you in connection with your clients' claim for an award of costs against Newport Borough Council. That is relevant to the financial aspect. In rejecting the company's application, the council was merely acting in line with the wishes of the town's charge payers. Their disquiet was expressed through mass meetings, an all-night vigil, petitions, and so forth. Where is the democracy in all that? Will the Welsh Office meet the cost of the public inquiry and so on?

There are many risks involved for farmers with cattle and agricultural products, and there is a traffic hazard in the conveyance of the waste matter. The council has gone out of its way to make Newport a more attractive place to live. At a stroke, that is all being put in jeopardy. Property values will drop and people will want to move out of the area. Are those matters not relevant to Newport borough council's finances and its revenue support grant settlement?

The decision will blight the whole of south Wales. Proud south Wales, which produced the coal that fuelled the industrial revolution, is now to be reduced to a dustbin for the receipt of waste from all over the world. The people of Newport do not want the plant, and neither does the council. This thoroughly undemocratic decision is an indictment of the Government and, more particularly, the present incumbent at the Welsh Office. The Secretary of State has failed to speak up for Wales. If he has any conscience left, he will resign.

6.26 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

On 12 November 1992, the Secretary of State set the scene for the current settlement. He said: I consider my proposals to be realistic in the current economic climate. They give a level of settlement above predicted inflation. For all I know, the Secretary of State might genuinely believe that. If he believes it, it is self-delusion on a grand scale. He also said: I recognise that local government in Wales will have to make hard choices about spending priorities if authorities are to stay within my plans. How right he was. That passage is an absolutely classic understatement.

The Secretary of State said that his capping criteria are designed to ensure that essential services are maintained and taxpayers are shielded from unreasonable levels of council tax. That is all laudable. However, the people of Wales are not reassured when they realise that those were the words of advice and direction of a member of a Government who were, at least notionally, at the helm during the stormy seas of Black Wednesday.

If the millions of pounds that were thrown away on a hopeless exercise were available to local services in Wales, we would be facing a much brighter future. As always, the Government say, "Do as I say, not as I do."

Earlier, when the hon. and learned Member for Montgomery (Mr. Carlile) was referring to the closure of rural schools, the hon. Member for Clwyd, North-West (Mr. Richards) was grinning like a Cheshire cat. He can grin; he sends his child to a public school in England. That shows how much care and concern he has for Wales.

Mr. Richards

I point out to the hon. Gentleman and to the House that all three of my childen have gone to Ysgol Gymraeg Ynisgedwyn in Ystradgynlais.

Mr. Llwyd

Is there a child currently at an English public school?

Mr. Richards

There is a child currently at an English public school and there are still two children at Ysgol Gymraeg Ynisgedwyn primary school in Ystradgynlais.

Mr. Llwyd

The Meirionnydd district council and the Aberconwy district council are the two councils in the constituency which I have the honour to represent. Earlier, the Secretary of State said that councils largely agreed with his criteria. Unfortunately, those two councils are certainly not in agreement. The hon. Member for Caerphilly (Mr. Davies) made the point earlier and I will not dwell on it. The point is well made and I support it.

In discussing the position of Meirionnydd district council, it may assist the House if I mention one or two facts. That council has strong misgivings about the use of standard spending assessments as anything other than a crude way of measuring need and, consequently, about their limited value as a method of determining the level of expenditure.

The formula for calculating the SSA is relatively simple and the number of factors contained in it are relatively few, but it can produce only a general answer. As we know, it affects not only the revenue support grant but the level of expenditure.

Tax capping is both undemocratic and damaging to the interests of the public. The 1993–94 settlement contains a permitted increase of only £59,000 in Meiriormydd's budget. That represents 1 per cent. Is that the only way to ensure adequacy of service? It certainly is not. It may save a few pounds here and there, but it will inevitably mean savage cuts in services. The net effect of the proposals will be to render the district council a mere puppet of central Government. That is in line with the thinking of the Tories, who wish to impose their will on Wales via the Welsh Office.

However, the councillors are at the sharp end. They have to face public disquiet about cuts imposed by this cowardly Government. Undoubtedly, the tax-capping proposals in Meirionnydd will result in a loss of jobs. I am told by officers of the council that there will be job losses of up to 8 per cent. in the non-manual work force. That is a savage and bitter blow to our local economy. Worse still, it is a blow which is entirely avoidable.

As a responsible authority, Meirionnydd raised the matter with the Secretary of State, only to receive a bland reply which was economic in content and negative in tone. I told the Secretary of State on 14 December in this Chamber that members of the local authority who visited him and his officers returned with an overwhelming feeling that the Welsh Office would not listen to them. Perhaps that is what the Welsh Office wants, but it is clearly not what my constituents and the people of Wales want. They all deserve better.

Aberconwy borough council tells me that the criteria will mean a cut in current spending plans of some £1 million. That will inevitably translate into lower levels of service, job losses and the cancellation of capital schemes. The council will also have to look to reduce spending. That could affect jobs at the sharp end of service provision—for example, in parks, gardens, maintenance and so on.

Mr. Jonathan Evans

Will the hon. Gentleman give way?

Mr. Llywd

No. I am sorry, but I have limited time.

A major point to consider is that inevitably the level of available finance will be lower. That will cause the council serious problems in fulfilling its statutory duties under the Environmental Protection Act 1990 and all that it entails, the Children Act 1989 and the care in the community provisions which are to be implemented soon.

In addition, the commutation of loans for improvements grants does not appear to reflect the inteution to be neutral on budgets. It is of the utmost importance to Aberconwy to ensure that the borough is attractive to tourists and visitors because much of the economy relies on tourism. The lower level of provision could easily affect the attractiveness of the area which, in turn, will affect hotels, guest houses and so on throughout the borough. Of course, residents will be adversely affected, too.

The serious problems that district councils face are almost nothing compared with the problems that county councils face. The way in which the SSAs are calculated means that the counties will lose £28 million this year. The county SSAs are set to rise by only 1.6 per cent. That is an average figure for Welsh counties; the figure for Gwynedd is only 0.4 per cent. The mere £35 million allowance for the introduction of care in the community represents nothing like the real cost.

It is disheartening to note that, during the debate on 12 February last year, my hon. Friend the Member for Caernarfon (Mr. Wigley) and the hon. Member for Cardiff, South and Penarth (Mr. Michael), among others, made a special plea to the Secretary of State for additional funding if care in the community was to be introduced with any confidence. Alas, those pleas and the pleas of others fell on deaf ears. It is evident from the current plans that the Government do not want to listen.

As my hon. Friend the Member for Ynys Mon (Mr. Jones) said during the last Welsh Question Time, as a result of the capping criteria Gwynedd county council will have to cut £3 million from its standstill budget. That is not a measure which will ensure the provision of essential services.

Gwynedd county council has been hard at work in the past two years finding 3 per cent. cuts each year. Only recently it had to face the appalling prospect of closing a specialist home for the elderly infirm when it had no other place to house them. Thankfully, that cut was averted, but I keep thinking of that little boy with his thumb in the breached dyke. How long can the council hold on?

The highly professional team of officers and conscientious councillors in Gwynedd are desperately worried, and rightly so. They must now consider cuts in nursery education. Looming on the horizon we have the appalling spectre of wholesale closures of rural schools, with the consequent damage to countless communities, the culture and the language.

The people of my constituency have had enough. If ever there was an easy time to explain the need for a fully accountable and powerful assembly in Wales, this is it. If the Government persist, they will pay for their callousness and folly at the next election.

I wish to raise two specific points. The first is the poundage rate for non-domestic rates in Wales. It is unrealistically high. It means that small businesses in my community and elsewhere are under continuous seige. The so-called party of small businesses is selling those businesses down the river in exactly the same way as the Minister of Agriculture, Fisheries and Food did 18 months ago. He pledged that the hill livestock compensatory allowance payments were safe in his hands, but now he wants to cut them by 26 per cent. They are the kind of Government with whom we are dealing. Why cannot the Government recognise the plight of small businesses and scrap the uniform business rate? In the short term, why do not the Government introduce a more equitable poundage?

The second specific point that I want to raise is the 12.5 per cent. non-collection factor used to arrive at the tax base rate. It is unrealistically low. That means that £261 for band D is too low. That should be revised as a matter of urgency. The Secretary of State's pledge to maintain services at a reasonable cost is an empty platitude.

Support for the Tory party in Wales is at an all-time low. That is no wonder. The day of reckoning will soon be here when Tories disappear completely off the Welsh map. I look forward to that day in the interests of social justice and decency.

Several Hon. Members

rose——

Madam Deputy Speaker

I call Mr. Paul Murphy.

Mr. Rogers

On a point of order, Madam Deputy Speaker. When is it possible for representatives of the biggest county in Wales and the one most savagely affected by the cuts to participate in the debate?

Madam Deputy Speaker

There is always a difficulty when more people seek to speak than it is possible to call in the time available.

6.36 pm

Mr. Paul Murphy (Torfaen)

I appreciate, even with an extended debate, the inevitability of the shortness of time for the important issues that have been raised. Certainly the point made by my hon. Friend the Member for Rhondda (Mr. Rogers) about Mid Glamorgan will have been noted by the people in that county and in the Principality.

The debate highlights the constantly shifting sands of local government finance in Britain and Wales. The House should realise that the Conservatives have passed 152 Acts of Parliament affecting local government since they have been in office. Virtually every one of those measures adversely affected the functions and services offered by our councils, and virtually every one was opposed by the people of Wales.

The theme of the debate has been that the Conservative party has no mandate from the people of Wales to impose its will on the local authorities and their budgets. The Government have produced an unstable local government finance system. Within the short space of four years, the people of Wales have gone from the rates to the poll tax and then to the council tax. The poll tax was abolished 355 days after it was introduced, yet the Conservative party lectures our local authorities about financial prudence.

The instability of the system, combined with its super-complexity—with talk of SSA, RSG, AEF and all the rest—have made it inevitable that there is no longer any public confidence in the local government finance system in Wales or England.

During the past few years, there has been tremendous uncertainty over the annual settlements in Wales, which—I am sorry to say—has been made worse by the constant dithering about local government reform. I understand that a report about the transitional costs of such reform has been placed in the Library today, and I am sure that that will not help Welsh councils.

Last year, the district councils were badly hit. My hon. Friend the Member for Newport, East (Mr. Hughes) said that environmental health monitoring of chemical waste plants will be affected. In my constituency, the ReChem toxic waste plant was badly afected by cuts in district allocations last year.

This year, the county councils have been affected. Even though there have been quarrels over the so-called tier split, the Welsh district and county councils are united in their opposition to the settlement and disagree with their increasing lateness. Hon. Members will recall that, four or five years ago, we debated settlements as early as December or November, but it has got later every year. The authorities are also united in thinking that the business rate has been reduced for no apparent reason, which will cost local authorities millions of pounds.

The publication of the original figures that the local authorities received lacked care, and was sloppy and badly managed. The collapse of Municipal Mutual Insurance, which the Government did not aid, has meant that many councils have had to budget for increased insurance costs.

The settlement is inadequate; it follows the tradition of underfunding Welsh local government, which has led to the long-term neglect of our roads, schools and houses. One county treasurer said: The settlement is the most severe imposed on county councils in recent years, and appears to be based on adherence to a formula which penalises budgetary prudence, and rewards those local authorities which paid least heed to Government guidelines in 1990–91. The treasurer of Swansea district council said: This is the worst settlement in my 12 years experience as Treasurer. Both agree that the revenue settlement is at least £132 million short of what Welsh councils need.

The districts have come off better this year, with a 9 per cent. increase, but one third of all Welsh districts will have difficulty in setting their budgets; five have provisional increases of less than 2 per cent., and seven have increases of less than 5 per cent. Our two greatest towns, Cardiff and Swansea, coincidentally must make cuts of £3.5 million each.

Mr. Rogers

Does my hon. Friend agree that the Secretary of State has been a little disingenuous when talking in terms of the district and county councils working together and coming to an agreement? In fact, he set out to pit one against the other. The suggestion that they would go along together is about as likely as putting two ferrets in a sack and getting them to kiss.

Mr. Murphy

My experience of ferrets is very limited, but I am sure that my hon. Friend is right about the general principle.

When he opened the debate, the Secretary of State referred to local authority capital spending and said that it was up. That does not apply to the districts. There has been an 18 per cent. reduction in the districts' BCAs. The housing budget is down by 19 per cent. and other approvals by 37 per cent., as my hon. Friend the Member for Blaenau Gwent (Mr. Smith) pointed out.

The urban programme has been cut in Wales, and in England it has disappeared. All those reductions are a result of the fact that the Welsh Office wants extra money for European supplementary credit approvals. They have robbed our districts to pretend that they have additionality rules for our European moneys.

Many of my hon. Friends have mentioned capital receipts, which still need to be used. I know that they have been used for 1993, but we need a commitment today that their use will be extended until 1994 and beyond.

The Council of Welsh Districts also wants at least £200 million of the set-aside receipts in council coffers released during the next three years, because the districts have suffered a reduction of about 60 per cent. in capital money since 1990.

The capital budgets of Colwyn, Torfaen, Cynon Valley, Rhondda and Cardiff have all been substantially reduced. As most of my hon. Friends have said, Welsh county councils have been hit by massive revenue reductions. My hon. Friends the Members for Clwyd, South-West (Mr. Jones), for Delyn (Mr. Hanson), for Bridgend (Mr. Griffiths), for Cardiff, South and Penarth (Mr. Michael) and for Cardiff, Central (Mr. Jones) have all rightly referred to the fact that education—the largest part of local authority spending—has been decimated by the settlements. It is a great irony that I and some of my hon. Friends have spent the past three months in the Education Bill Committee, wasting our time talking about grant-maintained, opted-out schools and the rest of it. That is a supreme irrelevance to the provision of education for the people of Wales.

All that time wasted and all that money squandered, yet discretionary grants in Wales have been cut and cut again. Support for the Welsh language, peripatetic music services, the education psychology service and school building and maintenance systems have all been cut, at a time when people are beginning to understand that it is the provision of education services for young people in Wales that is important and not the pursuit of dogma and doctrine.

Social services are also suffering from the county council cuts. For example, Gwent has had to cut its toy library, playground equipment and child abuse publicity. The police have not escaped and there have been cuts in training, vehicle maintenance and operational equipment. In Gwent, my police authority, 13 police stations are threatened with closure. That is happening at a time when vigilante groups roam Wales and crime is on the increase.

All that affects our jobs, as my hon. Friends the Members for Blaenau Gwent and for Caerphilly (Mr. Davies) said, since for every 10,000 jobs lost, £900 million is lost to the taxpayer. To deny job losses, as the Secretary of State and the Minister do, is to live in cloud cuckoo land —like their belief that the average band D council tax in Wales will be £262. It is more likely to be well over £300, and will range between £270 and £380.

Doubtless the Minister will say that he will not hesitate to use his capping powers, but this is the first time that capping criteria have been published for Wales. The former Secretary of State, Lord Walker, and the present Secretary of State have both said, in speech after speech in the House and in Wales, that there was a consensus in Wales between local authorities and the Welsh Office that there was no need for capping criteria to be laid down because, on balance, Welsh local authorities have had a responsible attitude towards spending and have been nothing like the examples given by the hon. Member for Clwyd, North-West (Mr. Richards), who was describing a totally different world. Why is it necessary to sour relations between local government and the Welsh Office by laying down unnecessary capping criteria?

The settlement does more than that. It is part of the Government's erosion of Welsh local democracy. Why can quangos get money at the drop of a hat? Contrast that with the impoverishment of our services and the adverse effects on the quality of Welsh life that will undoubtedly flow from the constant underfunding of Welsh local government and from the settlement in particular.

The Government cap our councils, cut off their finances and restrict their powers. At least we know that, despite that, our Welsh local authorities will continue to provide services to the people who elect them. They will protect those people from the dogmatic excesses of the Government and they still remain the best hope for effective and representative democracy in Wales. I urge the House to vote against the motion.

6.49 pm

The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones)

I rush to acknowledge the only point in the speech of the hon. Member for Caerphilly (Mr. Davies) with which I could agree. I join him in congratulating the Welsh rugby team on its achievement on Saturday—at the very least 10–9 is a statistic on which none of us could disagree. I even welcome his suggestion that we might have further discussion about what happened on Saturday. I am sure that all hon. Members would find that more productive than today's debate.

If I was charitable, I would describe the standard of debate from the Opposition as, at best, wishful and typically negative—no new ideas, the same old sterile debate. The hon. Member for Caerphilly came out with his predictable wish list for spending. Of course he complained about the capping proposals, but it was most significant that, when my hon. Friend the Member for Clwyd, North-West (Mr. Richards) asked him what he would do in the same situation, answer had he not. When my hon. Friend the Member for Brecon and Radnor (Mr. Evans) asked him what he would do about surplus places in schools, answer had he not.

Instead, the hon. Gentleman resorted to a ritual attack on what he chooses to describe as quangos. Such criticism is rich from a party that favours the ultimate quango, a Welsh assembly, which the people of Wales have rejected decisively. It is typical that the Labour party favours the introduction of such an assembly—another socialist, centralist body that would take powers away from local councils.

How quickly is the illusion of Bournemouth ripped away. The vain attempts to put a Clinton mask on the face of the Labour party is all as nothing 24 hours later. To put it in a proper, or rather historical, context, Labour Members should be properly identified as the Bourbons of France—they learn nothing, they forget nothing. Little wonder that the editorial in the Western Mail—the national newspaper of Wales—after the general election acknowledged that the present Labour party was unelectable.

Despite the impression that some Opposition Members, including the hon. Member for Caerphilly and the hon. and learned Member for Montgomery (Mr. Carlile), seek to give, the economic difficulties we face are not confined to this country. As my hon. Friend the Member for Clwyd, North-West pointed out, economic problems are experienced throughout the world. This is not the occasion, however, for a discourse on the state of the world economy; the House is well aware of the problems.

It would be irresponsible to set a settlement level that the country cannot afford. I find it difficult to reconcile arguments for a higher level of resources in the current circumstances and the concerns I have heard expressed about the possible level of the council tax in Wales. Opposition Members do not appear to appreciate that it is the taxpayer who must foot the bill for public expenditure. Fortunately, the Government appreciate that; that is why we have had to make the necessary decisions on public spending—decisions that affect central Government, too; it is not just local government that is having to face up to hard choices.

The settlement package that we propose gives local government an increase in resources above the rate of inflation, which continues to decline, before the £37.5 million additional resources that we are providing for care in community are taken into account. It gives local authorities scope to raise a higher proportion of revenue from local taxation. It should also keep council tax bills at reasonable levels.

The settlement provides a sound basis for the introduction of the council tax in April. Despite the gloomy prognostications of Opposition Members, the tax will be welcomed by the people of Wales, who will see it as a fair and balanced system of local taxation. Bills will be based on the valuation band of the property in question. Single-adult households will receive a 25 per cent. discount on their bills, and householders on income support will pay nothing. Those on low incomes will be eligible for council tax benefit. A range of other discounts and exemptions will also be available.

If local authorities budget in line with our plans, the majority of Welsh households will pay less than they did under the community charge, and subsequently less than they did under the old domestic rating system. The prophets of doom underestimate the Government's determination to see the new system work and the high degree of professionalism that local government in Wales will bring to its administration. Local authorities have invested an enormous amount of energy and effort in preparing the new tax. They are ready for 1 April and I commend them on their achievement.

The hon. Member for Clwyd, South-West (Mr. Jones) was naturally concerned about his own country, and he echoed the concern raised by the hon. Members for Alyn and Deeside (Mr. Jones) and for Cardiff, Central (Mr. Jones) about care in the community. The hon. Member for Clwyd, South-West rightly reminded us that Clwyd county council is receiving an additional £6.6 million for care in the community. That is part of a total increase in spending for care in the community which amounts to £35.9 million. That sum is not simply what the Department of Social Security would have spent—around £28 million: we have found an additional £8 million to cover the extra work involved.

The distribution of money for care in the community follows the existing patterns relating to Department of Social Security spending, but it also reflects the need to achieve more flexible forms of community care. Exceptionally, we will identify the amounts needed for care in the community in each county in Wales. I want to ensure that the situation is monitored to ensure that our desires are realised.

My hon. Friend the Member for Brecon and Radnor spoke movingly about outdoor centres, 10 of which are in his constituency. [Interruption.]

Madam Deputy Speaker

Order. There are too many private conversations going on.

Mr. Jones

Thank you, Madam Deputy Speaker.

I thought that it was significant that my hon. Friend was able to observe that, out of the 10 outdoor centres, only one, owned and operated by South Glamorgan council, is threatened with closure—the other nine, which are owned by English or Welsh councils will continue to operate.

My hon. Friend the Member for Brecon and Radnor, together with the hon. Members for Cardiff, Central and for Cardiff, South and Penarth (Mr. Michael) spoke about the provision of music education in South Glamorgan council. I was especially struck by a letter from one of my constituents, Mr. Andrew Swift, to the Western Mail entitled "Silencing the Land of Song", in which he repeatedly asked what other services provided by South Glamorgan council would suffer the same level of cut as that to be imposed on the provision of music education. How can a cut of 90 per cent. in the provision of any service, particularly music education, be justified?

Mr. Michael

Will the Minister give way?

Mr. Jones

I cannot give way to the hon. Gentleman. time is short, thanks to his hon. Friends.

If South Glamorgan council had said that a cut of between 1 and 5 per cent., or even slightly more, was intended, we might have understood, but to try to impose a 90 per cent. cut speaks volumes about the political party that is in control of that council. I should have thought that the hon. Member for Cardiff, South and Penarth would join me in condemning that council when one considers the advances that have been made in Cardiff and the way in which my party made St. David's hall possible. The facilities for the arts in Cardiff have been expanded, but now music provision is being subject to a disgraceful attack, which is a source of great regret to me.

South Glamorgan council has until the end of this month to finalise its budget, and I imagine that it will set a budget in the region of £272 million. I hope that the hon. Member for Cardiff, South and Penarth shares my hope that it will listen to all the expressions of opinion about the provision of music education in South Glamorgan. I hope that that council will yet change its mind and reverse the planned 90 per cent. cut.

The hon. and learned Member for Montgomery referred to a case concerning Miss J. I am sure that he will understand that I cannot discuss that case now, but if he would care to write to me, I shall certainly pursue it on his behalf. I was drawn by his oratory, which reminded us of his expertise in the courts—after all, he is one of Her Majesty's counsel. How he managed to weave into his argument references to foreplay and quadratic equations was not readily understandable until he told us that an expert in such equations was sitting behind him, the hon. Member for Wrexham (Dr. Marek). I hope that that hon. Gentleman will forgive me, for I had thought that his expertise related to railway timetables.

My hon. Friend the Member for Clwyd, North-West reminded us to Labour's deplorable public expenditure record, both past and present. He made a strong case for the many deserving local causes for which he would advocate council funding. I was disturbed by the admittedly alarmist observation by the hon. Member for Cardiff, Central that people would die. I have checked with Welsh Office officials, and have found no such representations that have been made to us, in any such terms, by any council in Wales. I fear that the hon. Gentleman will wish to reflect on his ill-judged comments, and on his sweeping condemnation of everyone involved in Welsh local government.

My hon. Friend the Member for Vale of Glamorgan (Mr. Sweeney) was right to remind us that we must get a grip on spending. He pointed out that the most obvious consequence of uncontrolled spending would be the burden of increased job losses——

It being Seven o'clock, MADAM DEPUTY SPEAKER put the Question, pursuant to order [29 January].

The House divided: Ayes 296, Noes 239.

Division No. 142]	[7.00 pm
AYES
Adley, Robert	Brooke, Rt Hon Peter
Ainsworth, Peter (East Surrey)	Brown, M. (Brigg & Cl'thorpes)
Aitken, Jonathan	Browning, Mrs. Angela
Alexander, Richard	Bruce, Ian (S Dorset)
Alison, Rt Hon Michael (Selby)	Burns, Simon
Allason, Rupert (Torbay)	Burt, Alistair
Amess, David	Butler, Peter
Ancram, Michael	Butterfill, John
Arnold, Jacques (Gravesham)	Carlisle, John (Luton North)
Arnold, Sir Thomas (Hazel Grv)	Carlisle, Kenneth (Lincoln)
Ashby, David	Carrington, Matthew
Aspinwall, Jack	Carttiss, Michael
Atkinson, David (Bour'mouth E)	Cash, William
Baker, Rt Hon K. (Mole Valley)	Channon, Rt Hon Paul
Baker, Nicholas (Dorset North)	Chaplin, Mrs Judith
Baldry, Tony	Churchill, Mr
Banks, Matthew (Southport)	Clappison, James
Banks, Robert (Harrogate)	Clark, Dr Michael (Rochford)
Bates, Michael	Clarke, Rt Hon Kenneth (Ruclif)
Batiste, Spencer	Clifton-Brown, Geoffrey
Bellingham, Henry	Coe, Sebastian
Bendall, Vivian	Colvin, Michael
Beresford, Sir Paul	Congdon, David
Biffen, Rt Hon John	Conway, Derek
Body, Sir Richard	Coombs, Anthony (Wyre For'st)
Bonsor, Sir Nicholas	Coombs, Simon (Swindon)
Booth, Hartley	Cope, Rt Hon Sir John
Bottomley, Peter (Eltham)	Couchman, James
Bottomley, Rt Hon Virginia	Cran, James
Bowden, Andrew	Currie, Mrs Edwina (S D'by'ire)
Bowis, John	Curry, David (Skipton & Ripon)
Boyson, Rt Hon Sir Rhodes	Davies, Quentin (Stamford)
Brandreth, Gyles	Davis, David (Boothferry)
Brazier, Julian	Day, Stephen
Bright, Graham	Deva, Nirj Joseph

Dickens, Geoffrey	Kirkhope, Timothy
Dicks, Terry	Knapman, Roger
Dorrell, Stephen	Knight, Mrs Angela (Erewash)
Douglas-Hamilton, Lord James	Knight, Greg (Derby N)
Dover, Den	Knight, Dame Jill (Bir'm E'st'n)
Duncan, Alan	Knox, David
Duncan-Smith, Iain	Lait, Mrs Jacqui
Dunn, Bob	Lamont, Rt Hon Norman
Durant, Sir Anthony	Lang, Rt Hon Ian
Dykes, Hugh	Lawrence, Sir Ivan
Eggar, Tim	Legg, Barry
Elletson, Harold	Leigh, Edward
Emery, Rt Hon Sir Peter	Lennox-Boyd, Mark
Evans, David (Welwyn Hatfield)	Lester, Jim (Broxtowe)
Evans, Jonathan (Brecon)	Lidington, David
Evans, Nigel (Ribble Valley)	Lightbown, David
Evans, Roger (Monmouth)	Lilley, Rt Hon Peter
Evennett, David	Lloyd, Peter (Fareham)
Faber, David	Lord, Michael
Fabricant, Michael	Luff, Peter
Fenner, Dame Peggy	MacGregor, Rt Hon John
Field, Barry (Isle of Wight)	MacKay, Andrew
Fishburn, Dudley	Maclean, David
Forman, Nigel	McLoughlin, Patrick
Forsyth, Michael (Stirling)	McNair-Wilson, Sir Patrick
Forth, Eric	Madel, David
Fowler, Rt Hon Sir Norman	Maitland, Lady Olga
Fox, Dr Liam (Woodspring)	Major, Rt Hon John
Fox, Sir Marcus (Shipley)	Malone, Gerald
Freeman, Roger	Mans, Keith
French, Douglas	Marland, Paul
Fry, Peter	Marshall, John (Hendon S)
Gale, Roger	Martin, David (Portsmouth S)
Gardiner, Sir George	Mawhinney, Dr Brian
Garel-Jones, Rt Hon Tristan	Mellor, Rt Hon David
Garnier, Edward	Merchant, Piers
Gill, Christopher	Milligan, Stephen
Gillan, Cheryl	Mills, Iain
Goodlad, Rt Hon Alastair	Mitchell, Andrew (Gedling)
Goodson-Wickes, Dr Charles	Mitchell, Sir David (Hants NW)
Gorman, Mrs Teresa	Moate, Sir Roger
Grant, Sir Anthony (Cambs SW)	Monro, Sir Hector
Greenway, Harry (Ealing N)	Moss, Malcolm
Greenway, John (Ryedale)	Needham, Richard
Griffiths, Peter (Portsmouth, N)	Nelson, Anthony
Grylls, Sir Michael	Neubert, Sir Michael
Gummer, Rt Hon John Selwyn	Newton, Rt Hon Tony
Hague, William	Nicholls, Patrick
Hamilton, Rt Hon Archie (Epsom)	Nicholson, David (Taunton)
Hamilton, Neil (Tatton)	Norris, Steve
Hampson, Dr Keith	Onslow, Rt Hon Sir Cranley
Hannam, Sir John	Oppenheim, Phillip
Hargreaves, Andrew	Ottaway, Richard
Haselhurst, Alan	Page, Richard
Hawkins, Nick	Paice, James
Hawksley, Warren	Patnick, Irvine
Hayes, Jerry	Patten, Rt Hon John
Heald, Oliver	Pattie, Rt Hon Sir Geoffrey
Heathcoat-Amory, David	Pawsey, James
Hendry, Charles	Peacock, Mrs Elizabeth
Higgins, Rt Hon Sir Terence L.	Pickles, Eric
Hill, James (Southampton Test)	Porter, Barry (Wirral S)
Horam, John	Porter, David (Waveney)
Hordern, Rt Hon Sir Peter	Portillo, Rt Hon Michael
Howard, Rt Hon Michael	Powell, William (Corby)
Hughes Robert G. (Harrow W)	Rathbone, Tim
Hunt, Rt Hon David (Wirral W)	Redwood, John
Hunt, Sir John (Ravensbourne)	Renton, Rt Hon Tim
Hunter, Andrew	Richards, Rod
Hurd, Rt Hon Douglas	Riddick, Graham
Jack, Michael	Rifkind, Rt Hon. Malcolm
Jackson, Robert (Wantage)	Robathan, Andrew
Jenkin, Bernard	Roberts, Rt Hon Sir Wyn
Johnson Smith, Sir Geoffrey	Robertson, Raymond (Ab'd'n S)
Jones, Gwilym (Cardiff N)	Robinson, Mark (Somerton)
Jones, Robert B. (W Hertfdshr)	Roe, Mrs Marion (Broxbourne)
Jopling, Rt Hon Michael	Rowe, Andrew (Mid Kent)
Kellett-Bowman, Dame Elaine	Rumbold, Rt Hon Dame Angela
Key, Robert	Ryder, Rt Hon Richard
King, Rt Hon Tom	Sackville, Tom

Sainsbury, Rt Hon Tim	Thompson, Patrick (Norwich N)
Scott, Rt Hon Nicholas	Thornton, Sir Malcolm
Shaw, David (Dover)	Thurnham, Peter
Shaw, Sir Giles (Pudsey)	Townend, John (Bridlington)
Shephard, Rt Hon Gillian	Townsend, Cyril D. (Bexl'yh'th)
Shepherd, Colin (Hereford)	Tracey, Richard
Shepherd, Richard (Aldridge)	Tredinnick, David
Shersby, Michael	Trend, Michael
Sims, Roger	Trotter, Neville
Skeet, Sir Trevor	Twinn, Dr Ian
Smith, Sir Dudley (Warwick)	Vaughan, Sir Gerard
Smith, Tim (Beaconsfield)	Viggers, Peter
Soames, Nicholas	Waldegrave, Rt Hon William
Speed, Sir Keith	Walden, George
Spencer, Sir Derek	Waller, Gary
Spicer, Sir James (W Dorset)	Ward, John
Spicer, Michael (S Worcs)	Wardle, Charles (Bexhill)
Spink, Dr Robert	Waterson, Nigel
Spring, Richard	Watts, John
Sproat, Iain	Wells, Bowen
Squire, Robin (Hornchurch)	Wheeler, Rt Hon Sir John
Steen, Anthony	Whitney, Ray
Stephen, Michael	Whittingdale, John
Stern, Michael	Widdecombe, Ann
Streeter, Gary	Wilkinson, John
Sumberg, David	Willetts, David
Sweeney, Walter	Wilshire, David
Sykes, John	Wolfson, Mark
Tapsell, Sir Peter	Wood, Timothy
Taylor, Ian (Esher)	Yeo, Tim
Taylor, John M. (Solihull)	Young, Sir George (Acton)
Taylor, Sir Teddy (Southend, E)
Temple-Morris, Peter	Tellers for the Ayes:
Thomason, Roy	Mr. Sydney Chapman and
Thompson, Sir Donald (C'er V)	Mr. James Arbuthnot.

NOES
Abbott, Ms Diane	Clelland, David
Adams, Mrs Irene	Clwyd, Mrs Ann
Ainger, Nick	Coffey, Ann
Ainsworth, Robert (Cov'try NE)	Cook, Frank (Stockton N)
Allen, Graham	Corbett, Robin
Alton, David	Corbyn, Jeremy
Anderson, Ms Janet (Ros'dale)	Corston, Ms Jean
Armstrong, Hilary	Cousins, Jim
Austin-Walker, John	Cox, Tom
Banks, Tony (Newham NW)	Cryer, Bob
Barnes, Harry	Cummings, John
Barron, Kevin	Cunliffe, Lawrence
Battle, John	Cunningham, Jim (Covy SE)
Bayley, Hugh	Cunningham, Dr John (C'p'l'nd)
Beckett, Margaret	Dafis, Cynog
Benn, Rt Hon Tony	Darling, Alistair
Bennett, Andrew F.	Davidson, Ian
Benton, Joe	Davies, Rt Hon Denzil (Llanelli)
Bermingham, Gerald	Davies, Ron (Caerphilly)
Berry, Dr. Roger	Davis, Terry (B'ham, H'dge H'l)
Betts, Clive	Denham, John
Blair, Tony	Dewar, Donald
Blunkett, David	Dixon, Don
Boateng, Paul	Dobson, Frank
Boyce, Jimmy	Donohoe, Brian H.
Boyes, Roland	Dowd, Jim
Bradley, Keith	Dunnachie, Jimmy
Bray, Dr Jeremy	Dunwoody, Mrs Gwyneth
Brown, Gordon (Dunfermline E)	Eagle, Ms Angela
Brown, N. (N'c'tle upon Tyne E)	Eastham, Ken
Burden, Richard	Enright, Derek
Byers, Stephen	Etherington, Bill
Caborn, Richard	Evans, John (St Helens N)
Campbell, Mrs Anne (C'bridge)	Faulds, Andrew
Campbell, Menzies (Fife NE)	Field, Frank (Birkenhead)
Campbell, Ronnie (Blyth V)	Fisher, Mark
Campbell-Savours, D. N.	Flynn, Paul
Cann, Jamie	Foster, Derek (B'p Auckland)
Carlile, Alexander (Montgomry)	Foulkes, George
Chisholm, Malcolm	Fraser, John
Clapham, Michael	Fyfe, Maria
Clark, Dr David (South Shields)	Galloway, George
Clarke, Tom (Monklands W)	Gapes, Mike

Garrett, John	Mitchell, Austin (Gt Grimsby)
George, Bruce	Moonie, Dr Lewis
Gerrard, Neil	Morgan, Rhodri
Gilbert, Rt Hon Dr John	Morley, Elliot
Godman, Dr Norman A.	Morris, Rt Hon A. (Wy'nshawe)
Godsiff, Roger	Morris, Estelle (B'ham Yardley)
Golding, Mrs Llin	Morris, Rt Hon J. (Aberavon)
Gordon, Mildred	Mowlam, Marjorie
Gould, Bryan	Mullin, Chris
Grant, Bernie (Tottenham)	Murphy, Paul
Griffiths, Nigel (Edinburgh S)	Oakes, Rt Hon Gordon
Griffiths, Win (Bridgend)	O'Brien, Michael (N W'kshire)
Grocott, Bruce	O'Brien, William (Normanton)
Gunnell, John	O'Hara, Edward
Hain, Peter	Olner, William
Hall, Mike	O'Neill, Martin
Hanson, David	Orme, Rt Hon Stanley
Hardy, Peter	Pendry, Tom
Harvey, Nick	Pickthall, Colin
Hattersley, Rt Hon Roy	Pike, Peter L.
Henderson, Doug	Pope, Greg
Heppell, John	Powell, Ray (Ogmore)
Hill, Keith (Streatham)	Prentice, Ms Bridget (Lew'm E)
Hinchliffe, David	Prentice, Gordon (Pendle)
Hoey, Kate	Prescott, John
Home Robertson, John	Primarolo, Dawn
Hood, Jimmy	Purchase, Ken
Hoon, Geoffrey	Quin, Ms Joyce
Howells, Dr. Kim (Pontypridd)	Radice, Giles
Hoyle, Doug	Randall, Stuart
Hughes, Kevin (Doncaster N)	Raynsford, Nick
Hughes, Roy (Newport E)	Reid, Dr John
Hughes, Simon (Southwark)	Robertson, George (Hamilton)
Hutton, John	Robinson, Geoffrey (Co'try NW)
Ingram, Adam	Roche, Mrs. Barbara
Jackson, Glenda (H'stead)	Rogers, Allan
Jackson, Helen (Shef'ld, H)	Ross, Ernie (Dundee W)
Jamieson, David	Rowlands, Ted
Janner, Greville	Ruddock, Joan
Jones, Barry (Alyn and D'side)	Sedgemore, Brian
Jones, Ieuan Wyn (Ynys Môn)	Sheldon, Rt Hon Robert
Jones, Jon Owen (Cardiff C)	Shore, Rt Hon Peter
Jones, Lynne (B'ham S O)	Simpson, Alan
Jones, Martyn (Clwyd, SW)	Skinner, Dennis
Jowell, Tessa	Smith, Andrew (Oxford E)
Keen, Alan	Smith, Llew (Blaenau Gwent)
Kennedy, Jane (Lpool Brdgn)	Soley, Clive
Khabra, Piara S.	Spearing, Nigel
Kilfoyle, Peter	Spellar, John
Kirkwood, Archy	Squire, Rachel (Dunfermline W)
Leighton, Ron	Steel, Rt Hon Sir David
Lestor, Joan (Eccles)	Steinberg, Gerry
Lewis, Terry	Stott, Roger
Litherland, Robert	Strang, Dr. Gavin
Livingstone, Ken	Straw, Jack
Lloyd, Tony (Stretford)	Taylor, Matthew (Truro)
Llwyd, Elfyn	Tipping, Paddy
Loyden, Eddie	Turner, Dennis
Lynne, Ms Liz	Tyler, Paul
McAllion, John	Vaz, Keith
McCartney, Ian	Walker, Rt Hon Sir Harold
Macdonald, Calum	Wallace, James
McFall, John	Walley, Joan
McLeish, Henry	Wardell, Gareth (Gower)
McMaster, Gordon	Wicks, Malcolm
McNamara, Kevin	Wiggin, Sir Jerry
McWilliam, John	Wigley, Dafydd
Madden, Max	Williams, Rt Hon Alan (Sw'n W)
Mahon, Alice	Williams, Alan W (Carmarthen)
Mandelson, Peter	Wilson, Brian
Marek, Dr John	Winnick, David
Marshall, David (Shettleston)	Wise, Audrey
Martin, Michael J. (Springburn)	Worthington, Tony
Martlew, Eric	Wright, Dr Tony
Meacher, Michael	Young, David (Bolton SE)
Meale, Alan
Michael, Alun	Tellers for the Noes:
Michie, Bill (Sheffield Heeley)	Mr. Eric Illsley and
Miller, Andrew	Mr. Thomas McAyoy.

Question accordingly agreed to.

Resolved, That the Local Government Finance Report (Wales) 1993–94 (House of Commons Paper No. 412), which was laid before this House on 1st February, be approved.

MADAM DEPUTY SPEAKER then put the Question necessary to dispose of proceedings on the remaining motion on local government finance ( Wales).

Question agreed to.

Resolved, That the Limitation of Council Tax and Precepts (Relevant Notions Amounts) Report (Wales) 1993–1994 (House of Commons Paper No. 413), which was laid before this House on 1st February, be approved.