Local Government Finance (Wales)

HC Deb 15 February 1994 vol 237 cc876-918

8.1 pm

The Secretary of State for Wales (Mr. John Redwood)

I beg to move, That the Local Government Finance (Amendment) Report (Wales) 1993–94 (House of Commons Paper No. 169), which was laid before this House on 31st January, be approved.

Mr. Deputy Speaker (Mr. Michael Morris)

With this, it may be convenient to consider the following motion: That the Local Government Finance (Amendment) Report (Wales) 1994–95 (House of Commons Paper No. 168), which was laid before this House on 31st January, be approved.

Mr. Redwood

The report sets out my decisions on the local government revenue settlement for 1994–95.

The Second report puts right a mistake in the description of the basis for distributing the distributable amount for 1993–94 which was approved on 8 February 1993. I can assure the House that the amendment in this document does not affect the money that authorities should receive.

I announced my provisional settlement proposals to the House on 30 November last. I have given careful consideration to the representations that I have received on the level of the settlement and the views of the local authority associations in coming to my final decisions. I believe that my provisional proposals remain appropriate.

I propose to set total standard spending for 1994–95 at £2,704.8 million. That includes a sum of £86 million for care in the community—an increase of 4.2 per cent., or more than £100 million extra cash compared with 1993–94.

Mr. Win Griffiths (Bridgend)

The Secretary of State said that the figures in the reports were in a sense provisional at the end of last year, but that he feels that nothing has happened to change his view. Will he tell us what impact he believes the pay settlements will have on the spending that he has allowed local authorities? It seems to me that there must be a cut in staff and services if they are to keep within the sums of money that he made available at the time when he was not aware of the settlements.

Mr. Redwood

I am grateful to the hon. Gentleman for posing the central question. I hope that during my remarks I will satisfy the House, if not all Labour Members, that the settlement proposals are fair and will mean that good quality services can be delivered by councils throughout Wales, and that they offer enough money to avoid sacking essential staff. They certainly offer enough money to avoid sacking any teacher who is needed in the classroom. I do not want to see that happen. I trust that hon. Members do not, too. It is up to local authorities. I believe that the extra grant—the extra spending permission—means that a good quality education can be delivered to children in Wales without it in any way being jeopardised by the proposals. I shall illustrate later the fact that local government has considerable flexibility to spend wisely and well. It has resources at its disposal to do a good job.

Mr. Nick Ainger (Pembroke)

When the Secretary of State made his provisional announcement on the total standard spending assessment for Wales, was he aware that the various salary review bodies would be making a recommendation that was almost twice the current rate of inflation?

Mr. Redwood

I did not know the exact amount of the recommendation, but I assumed that some pay increase was likely. I have made an increase in grant, which I am just about to explain to the House, and which will go some way to meeting the requirements of local authorities. They have other assets and resources. I will illustrate them later.

I propose to provide £2,419.2 million in central Government support towards this spending, an increase of 3.3 per cent. on 1993–94. Opposition Members will see that that is a good rate of increase compared with the current rate of inflation. The support package will comprise £1,740.1 million in revenue support grant, £464 million in distributable non-domestic rates and £215.1 million in other revenue grants. More than £89 in every £100 of Welsh local authority expenditure on revenue account will be funded by central Government support. That generous level means that Welsh council tax payers benefit from substantially lowered levels of tax than their English counterparts. Welsh taxpayers should continue to benefit from relatively low levels of tax next year, assuming sensible budgeting decisions.

The revenue settlement is matched by the substantial local government capital settlement for 1994–95 which I announced on 30 November. This totals £503 million in capital grants and credit approvals, a 4 per cent. increase on 1993–94. It means welcome permissions to improve capital stock in housing, education and other crucial local government service areas.

The Welsh non-domestic rate poundage—or business rate—for 1994–95 will increase by 1.8 per cent. in line with inflation to 44.8 p. That modest increase, coupled with the transitional arrangements announced in the Budget, will be of considerable benefit to business. About 20,000 business ratepayers who faced the largest increases following the 1990 revaluation will benefit by £5.3 million from the transitional changes.

This is a decent settlement for local government in Wales. It gives local authorities an additional £100 million to spend when the low level of inflation is helping them to keep down the cost of providing their services. The £86 million that I am providing for care in the community is an increase of almost £50 million on 1993–94 and will enable local authorities to build on the introduction of the service in 1993–94. Since the 1990–91 settlement, revenue resources for local authorities have increased by almost £530 million, or 27 per cent.

My provisional settlement proposals were met by some criticism that they could lead to substantial increases in council tax levels. Increases as high as 15 per cent. were suggested. Most local authorities have yet to set their budgets, but I am glad to report to the House that press reports indicate a far more modest level of increase.

Clwyd council council and Cardiff city council are reported to be proposing a reduction in their council taxes. South Glamorgan county council and the Vale of Glamorgan borough council are reported to be planning increases limited to 3 per cent. or below. That shows that it can be done and I hope that other councils will look after the interests of their taxpayers.

On 14 December, I announced my provisional capping criteria. I will give careful consideration to local authority budgets and make my capping decisions in the light of all the information available to me when I have received it.

May I commend Welsh billing authorities for their better than expected performance in collecting the council tax? They estimate an overall surplus on collection funds of £17.6 million as at 31 March 1994, which translates into an average £18 reduction in council tax for a band D dwelling, which could be passed on to taxpayers in their 1994–95 bills or allows the council more flexibility in its general finance planning.

Local councillors have considerable flexibility in their budgeting. The sums of money that I am describing are large. Revenue and capital spending combined of more than £3,000 million is many times the amount spent by quangos in Wales, outside the health service, arid represents a large share of my total budget for Wales. [Interruption.] I hope that Opposition Members are not suggesting that I should cut spending on health—that is a vital service, which I thought they also supported.

Flexibility is increased by the payment of rate support grant and distributable non-domestic rates as a block grant. It is for local authorities to decide how to spend the money that they are given, in line with their priorities and with local needs. Councils can raise income through fees and charges; they have balances which they can choose to spend or retain; and they have assets which they use for service provision or sell to raise capital. They have large administrations, which they should always be looking to make more effective. In education, there are surplus places to be removed, there is energy to be used more efficiently and there are ancillary services to be contracted out, if that can provide better value for money for local taxpayers.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

I apologise for interrupting the Secretary of State. No doubt he is aware of the serious problems facing the South Wales constabulary and its funding by local authorities. Is there any hope that he and the Home Office Minister responsible might get around the table with the police and local authorities to sort out the problems? People are seriously worried about the growing crime problem and the lack of policemen on the beat. I hope that he will agree to that request, which I have made on behalf of many of my constituents and many people in other constituencies.

Mr. Redwood

I am about to come to the subject of the South Wales police, but I shall answer the hon. Gentleman's question directly. I and my hon. Friend the Under-Secretary of State for Wales are always willing to discuss with local government matters relating to local government finance, and have done so during the months leading up to the settlement. My hon. and right hon. Friends at the Home Office are always willing to discuss police matters, if they are important and warrant a ministerial meeting. There was such a meeting recently, and a Home Office Minister discussed that very issue.

The last thing I want is for local authorities to skimp on the police. The budget problems of the South Wales police have been much in the news. Recently published Audit Commission profiles show that the South Wales constabulary's expenditure per head of population is above average for comparable forces and that more police are on duty there than in similar forces. I trust that local authorities and the police authorities will make sensible decisions about future services.

Most of the issues that have been raised tonight are for the police authority, and I hope that it will get on with its job. Where necessary, police stations should be kept open and enough policemen should be made available for beat duties and detection work.

Mr. Roy Hughes (Newport, East)

Wherever blame lies as regards the South Wales constabulary, surely it would be madness to merge the Gwent and South Wales forces at this unfortunate time. Gwent has a very good record and we want it to stay like that.

Mr. Redwood

I will ensure that the Home Office sees a transcript of this debate, and I have noted what the hon. Gentleman has said.

The last thing that I want is for local authorities—

Mr. Walter Sweeney (Vale of Glamorgan)

Does my right hon. Friend agree that the fact that the Home Office planned to allow £7 million extra for the police budget in Wales whereas local government has chosen to allow only £2.2 million is a disgrace and reflects very badly on the running of the police authority and the chairmanship of the committee involved?

Mr. Redwood

My hon. Friend is right. The allocation of budgets is a matter for the local authority, and that issue is a matter for public debate in the council chamber.

Mr. Alun Michael (Cardiff, South and Penarth)

In that case, can the Secretary of State explain why in England we can get a straight answer from the Secretary of State for the Environment and the figures for standard spending assessments for the past five years, this year and next, but we cannot get the same information for Wales from either the Home Secretary or the right hon. Gentleman?

Mr. Redwood

As the hon. Gentleman knows, standard spending assessment calculations for England are carried out on a slightly different basis from those for Wales, which we set out in the report. Local authorities should have the maximum flexibility to make their own decisions. It is therefore a matter for local debate whether the community values its police service enough and whether that service needs more money to do a good job or the authority should take a look at how it is being run.

Mr. Michael

I take it that that is an implicit criticism of the right hon. Gentleman's colleague, the Secretary of State for the Environment, because he and the Home Secretary—who has responsibility—can produce figures for England. The right hon. Gentleman cannot produce them for Wales. Why? Surely it is because he is not providing the money to Welsh local authorities.

Mr. Redwood

That was a fatuous remark. I have already answered the underlying question. Local authorities should have the maximum discretion and should be answerable for their decisions to local electors, who want good police and education services. The money is there for authorities to do it if that is their wish.

Alongside skimping on the police, the last thing I want is for local authorities to reduce the number of teachers if they are needed to teach pupils. I am delighted to report that education standards in Wales have been rising during the past few years, following the introduction of the national curriculum and our other reforms. As I said recently, we have much further to go and more progress to make. That is very much at the top of my agenda and that of my right hon. Friend the Secretary of State for Education.

Local authorities in Wales reduced the level of rent arrears by more than 10 per cent. between 1990–91 and 1992–93, but more progress must be made. Since 1987, the number of vacant local authority dwellings has also decreased. Those are the cuts that I want—cuts in the number of empty houses, in rent arrears and in tax arrears, so that the money is there to spend on the services that people want.

I am pleased to report that care in the community has in general been introduced successfully. It is a good example of a major service being given to local government so that local rather than national democracy can determine the details of its future. How that flies in the face of Opposition criticisms that we always take important decisions away from local government. Care in the community will be one of the fastest growing services in the public sector during the decade to come, and we have entrusted it to local government.

Mr. Gareth Wardell (Gower)

By defining community care—by that I mean social care as opposed to health care—in a certain way, the Secretary of State might be seeking to increase the proportion of our vulnerable population who are pushed into the means-tested category. He must be careful that he does not end up by defining health care in one way and social care in another and thus denying health care its proper role. That can clearly be seen from the fact that elderly people are being discharged into the community—as he knows because he has heard it from me before—without the necessary facilities for the disabled. His Department has decided to put the disabled facilities grant in the basic credit allowance, where it must compete against other local authority priorities. Why does he not put it back into the special credit allowance?

Mr. Redwood

Opposition Members speak with forked tongues. They say that they want local government to be more responsible and more trusted and to have more freedom, and when I provide that freedom, they complain that I am not telling local government what to do. I do not intend to lay down every detail. I too happen to believe that the disabled should be a high priority. The money is available, and in my settlement for next year I have explicitly recognised the needs of the disabled by providing a substantial increase. I hope that local government will respond by doing the decent thing. I want elderly people to be looked after well. If they can be cared for at home, well and good, but the necessary facilities must be available.

Mr. Dafydd Wigley (Caernarfon)

Does the right hon. Gentleman know that, during the current winter, an increasing number of homes for the elderly, particularly nursing homes in the private sector—in referring to the private sector, I make no value judgment—are experiencing difficulty in filling beds as a result of the policy that is being pursued in this field? Does he realise that in some cases only half of the beds in a home are occupied and that therefore people are vulnerable because they are uncertain as to whether their home—their only home—will remain in existence? May we have an assurance that there will be coherent planning to ensure that the transition to care in the community will not make anyone vulnerable in this way?

Mr. Redwood

That is exactly what the authorities are asked to ensure. Of course, they must have sensible plans so that beds and facilities are always available for those who need them. In a way, the fact that more elderly people are now being looked after in their own homes is an indication of the success of the concept of care in the community. We have arrested the very rapid growth in the number of permanent residential places that we saw before the policy was introduced.

As we now see, local authorities, despite some gloomy warnings, have, in general, managed well in the first year of their responsibilities. They have examined thousands of cases, and many people have been helped to make decisions about their own future. Many are able to continue living, as they wish, in their own homes. This has meant a fall in the demand for residential care, which was increasing rapidly in previous years. It is the duty of the relevant authorities to plan future provision so that everything will work smoothly for those most in need.

I trust that local authorities will respond positively to this settlement. I believe in good local government. I believe that councils have an important role to play. I am disturbed if I learn of cases of alleged impropriety or irregularity in their financial performance or in their accounting. I trust that all parties in the Hosue will unite not only in believing in local government but also in agreeing that local government should set and maintain the highest possible standards of conduct when spending the very substantial sums of money that parliament votes to it.

This is a large settlement. It is a good settlement in an era of low inflation. It gives local government in Wales the money that it needs to provide high-quality services and to get on with the job. It need not lead to high tax increases or to the redundancy of crucial workers. Well run councils will flourish as a result of this settlement, and I offer them every encouragement to do so. I commend the settlement to the House.

8.23 pm

Mr. Ron Davies (Caerphilly)

We have just seen a new model Secretary of State. The right hon. Gentleman came to the Dispatch Box and talked about conciliation. He said that he had taken into account the views of local authorities put to him since he met them last year. He may have taken authorities' views into account, but he did not accept any of their observations. He commended Labour-controlled local authorities for their council tax and rent collection rates. He actually praised democratic local government for its value and compared it with his own quango state. He really is a new model Secretary of State, but his reality is quite different from his rhetoric.

The reality is that this is a poor settlement for local government in Wales. It has been roundly condemned, not least by the county councils, which, as the largest employers in Wales, will have to face the considerable burden imposed on them by the Government's acceptance of the public sector review body's recommendations without the additional cash to meet the awards.

This settlement represents a further step along the road that we have been travelling since 1979. The financing of local government is again circumscribed. Local government's ability to respond to the needs of the community it serves as it and its electors deem appropriate is being curtailed yet again, and local government is losing its independence to central Government. The centralising tendency of which this settlement is a further representation is one of the most pernicious and corrosive characteristics of the modern Conservative party.

It will not be lost on anyone who is concerned with the application of the settlement that, despite the Secretary of State's earlier remarks, as the democratically controlled public sector represented by local government faces further cuts, the undemocratic sector represented by the 111 Welsh quangos has seen budget increases. In the case of the major bodies—the Development Board for Rural Wales, the Welsh Development Authority and the Cardiff Bay development corporation—the figure is more than 8 per cent. Given the succession of scandals and the aura of sleaze hanging over the Secretary of State's quango sector, I do not think anyone will deny that, in terms of value for money and financial probity, direct democratic control is a far better watchdog than the financial control systems of the Welsh Office.

The total standard spending of £2,705 million is £105 million above the settlement for the current financial year. The Secretary of State has argued that this is an increase of nearly 4 per cent. In the strictest sense, it is an increase of nearly 4 per cent., but that statistic itself is absolutely meaningless. In the current financial year, budgets—what authorities will have spent on delivering services, not on what the Welsh Office considers that they should spend—amounted to £2,688 million. Against that, next year's settlement, which we are debating tonight, represents an increase of only 0.6 per cent.

Even that is not itself a true reflection of reality. As the Secretary of State indicated, the current settlement includes provision for community care to the tune of £86 million. That is some £40 million below the Assembly of Welsh Counties' assessment of what is required to meet the needs of the community. In any event, it is not available for general spending. If that figure is removed from the spending total, the current increase is only 2.3 per cent. above the settlement for 1993–94 and, being £28 million or 1 per cent. below the current year's budgets, represents a real terms reduction of 4 per cent.

That is a measure of the cuts that the Government wish to force on local government this year. In any circumstances it would be difficult enough, but this year Welsh local government has to suffer the cumulative burden of previous years' cuts. It has also to struggle with the social and economic consequences of the recession foisted on the country by central Government, and it is expected this year to meet the costs of an unwanted, costly and unsatisfactory reorganisation of local government.

Predictably, while the Government with one hand are distorting their expenditure and creating unnecessary expense, with the other hand they are reducing the discretion available to county councils to raise their own resources. The capping limits, unfair and arbitrary as they are, are again imposing a straitjacket. All Welsh counties, for instance, are limited to a budget increase of 1.75 per cent. over 1993–94, as are the cities of Cardiff and Swansea and the borough of Newport. As my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) pointed out, this cap of 1.75 per cent. is at the root of the funding problems of the South Wales police authority area.

Mr. Jonathan Evans (Brecon and Radnor)

Does the hon. Gentleman agree that the difficulties of the South Wales police authority are at least partly due to the authority's belief that it would underspend in the current year and the fact that its calculations were out by about £2 million? Does the hon. Gentleman agree that that is at least a factor?

Mr. Davies

Coming from the party that controls the Welsh Office and has £208 million unaccounted for last year, it ill behoves the hon. Gentleman to lecture anyone. There have been cumulative expenditure problems in the South Wales police authority going back to 1988. Since then, the authority has faced underfunding of £38 million and experienced enormous difficulties.

The hon. Gentleman will know that the South Wales police authority committee, its officers and its chief constable have visited Parliament to put their cases to hon. Members representing the South Wales police authority area and to Earl Ferrers, the Minister responsible for the police. They certainly have not encountered any criticism from the Government. If the hon. Gentleman believes that there is some criticism to be made, I suggest that he takes a leaf out of the Secretary of State's book and refers the matter so that it can be properly audited. He will then see that no blame whatsoever can be attached to the members or the officers of the police authority.

Mr. Evans

Is the hon. Gentleman aware that the district auditor has suggested that there is a total lack of accountability or any proper financial control in the police authority? As the shadow spokesman for Wales, is he unaware of that?

Mr. Davies

The hon. Gentleman might well have seen a copy of the provisional report. That report was made on the same basis as the one presented to Westminster city council, which referred not to a difficulty of £2 million created as a direct result of Government underfunding of the police authority, but to the expropriation of millions of pounds to line the pockets and further the political interests of his party. However, I did not notice the hon. Gentleman's vociferous condemnation of Westminster city council or any other Tory-controlled councils.

If there is any evidence of financial mismanagement in the policy authority, it has to be properly investigated; it has to be the subject of a proper report by the district auditor. If the district auditor finds any wrongdoing, wilful neglect or unacceptable maladministration, I shall certainly join the Secretary of State in condemning it.

I have the advantage of being condemning such maladministration, whether it applies in the democratic sector or the quango sector. Unfortunately, despite the corruption, mismanagement and fraud for which the Secretary of State is personally responsible in the quango sector, we have heard not one word of condemnation either from him or from his colleagues.

Mr. Sweeney

The hon. Gentleman has brought the case of Westminster city council into the debate, no doubt for comparison. Is not the difference between those issues that Westminster city council implemented a highly successful policy that resulted in political benefit to the party which introduced it, whereas in this case there was clearly no benefit, and the policy was disastrous for policing in south Wales?

Mr. Davies

I note the look of intense embarrassment on the faces of the Secretary of State, his Parliamentary Private Secretary and the Minister of State. The hon. Gentleman would do well to read the Official Report of tonight's debate. I am sure that he will want to reflect carefully on the justification that he has just made of corruption in local government.

Mr. Redwood

I wish to make it crystal clear to the hon. Gentleman, as I thought I had in the past, that of course I condemn fraud, wherever it is discovered and proven. That applies to my own staff and to outside bodies as well as to elected local government bodies. It must be condemned and rooted out if there is suspicion of it and it can be proven. Now that the hon. Gentleman has performed his mirrors vanishing trick with the extra billions, does he agree with two simple points—that there will be 3.3 per cent. more money available next year in central Government support, and that the RSG alone is up £71 million? Where is he spiriting it all away?

Mr. Davies

Nothing is being spirited away. The Secretary of State has raised two points and I shall deal with them both. First, he is anxious to ensure that corruption in public life is rooted out. I shall take the right hon. Gentleman at his word. I put it to him, however, that there is abundant evidence that the part of public life where corruption, sleaze and fraud flourish is that for which he is responsible. The democratic sector in Wales—the local authority sector—shows no such evidence of corruption, sleaze and fraud. If the Secretary of State wishes to root out the endemic corruption in Welsh public life, he should ensure that the 40 per cent. of his expenditure currently accounted for by quangos is brought under direct democratic control. That is how to ensure that corruption no longer exists.

Mr. Rod Richards (Clwyd, North-West)

Will the hon. Gentleman give way?

Mr. Davies

With the greatest respect to the hon. Gentleman, I am replying to the Secretary of State. I know that the hon. Gentleman has only recently arrived in the Chamber; he is what we might call a sioni-come-lately. I shall give way to the hon. Gentleman when I have dealt with sioni coed coch.

Mr. Deputy Speaker (Mr. Michael Morris)

Order. Will the hon. Gentleman translate that into English for the benefit of the Chair?

Mr. Davies

I am afraid that I cannot. If I were to do that, you would rule me out of order Mr. Deputy Speaker, but we all know to whom I am referring.

Secondly, the Secretary of State referred to a vanishing act. It is not a vanishing act. The most valuable comparison is between this year's standard spending assessment and last year's budget. The Secretary of State continues to compare this year's standard spending assessment with last year's standard spending assessment. The SSA last year bore no relationship whatsoever to the democratically expressed needs of Welsh local authorities. That is the heart of the difference between us. I see that the hon. Member for Clwyd, North-West (Mr. Richards) has regained his composure, so I happily give way to him.

Mr. Richards

The thrust of the hon. Gentleman's argument seems to be that the central Government contribution to local government expenditure is underfunded. Will he tell us by how much he believes it is underfunded, and how much more the Government ought to be contributing towards local government expenditure?

Mr. Davies

The heart of the problem is that, since 1979, the Government's policies have led to economic failure.

Mr. Richards

Answer the question.

Mr. Davies

It is a direct answer to the question. Since 1979, there has been a succession of economic failures. The Government have increased the tax burden on the British public and cut on local authority expenditure. Had we had a Labour Government for the past 15 years, we would not be in the state we are in now. That is the only answer that the hon. Gentleman will get.

Mr. Richards

Will the hon. Gentleman give way?

Mr. Davies

I will happily give way to the hon. Gentleman again, but he must understand that I shall repeat the answer that I have just given him, so there is not much point in repeating that question.

Welsh local government is underfunded. Had we had a Labour Government since 1979, we would not have experienced the disastrous economic performance, nor the increased tax burden, nor would we have the waste, fraud and corruption of the quango state. That is the answer to the hon. Gentleman's question. If he asks the same question again, I will merely refer him to the answer I gave some moments ago.

Mr. Richards

Thankfully, we have not had a Labour Government since 1979. The question was quite specific. We were talking about the revenue support grant for 1994–95. By how much would the hon. Gentleman recommend that the Government should increase their contribution to local government?

Mr. Davies

I refer the hon. Gentleman to the answer I gave a few moments ago, as I said I would. He might find it more fruitful to represent his own local authority, whose director of finance is clearly dissatisfied with the amount of representation that he receives from his Member of Parliament. In a letter dated 10 February, he wrote to me: The final local government revenue settlement for 1994–95 has resulted in a position where the Borough Council's draft budget for the new year is some £200,000 greater than the council tax limitation capping figure set by the Secretary of State. That has obviously created substantial budgeting problems for the authority. The hon. Gentleman would do his constituents a better service by making his representations directly to the Secretary of State, thus ensuring adequate funding for his local authority.

Mr. Richards

Will the hon. Gentleman give way?

Mr. Davies

I have already given way to the hon. Gentleman.

Mr. Richards

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker (Mr. Michael Morris)

I hope that it is a point of order for the Chair.

Mr. Richards

It is, Mr. Deputy Speaker. The hon. Member for Caerphilly (Mr. Davies) has quoted a communication that he says came from a constituent of mine, but he did not relay it to me. Is it in order for him to raise the matter on the Floor of the House in such circumstances?

Mr. Deputy Speaker

It is perfectly in order for any such reference to be made; if a particular matter is to be raised, however, it is courteous to inform the hon. Member involved.

Mr. Davies

With respect, Mr. Deputy Speaker, I ask you to reflect on that ruling. I certainly did not know that I was to be subjected to a barrage of interruptions from the hon. Gentleman.

Mr. Deputy Speaker

The hon. Gentleman will have made his own judgment on what material to use; he will have noted which hon. Members were present, and I assume that he made his judgment on that basis. My ruling stands.

Mr. Davies

I do not dispute your ruling for a moment, Mr. Deputy Speaker, but we find ourselves in bizarre circumstances: it appears that I should have anticipated the precise nature of the interventions of the hon. Member for Clwyd, North-West. I suppose, however, that that was rather predictable, and that I should have known better.

Let me return to what I was saying about the increase in aggregate external finance. It is 1 per cent. lower than the increase in total standard spending, and there will be an increase in the percentage raised by local taxation. We must welcome the principle, which would enhance democracy and extend freedom of choice at local level; if that principle is to be acceptable in practice, however, we need a central Government who both honour the role of local government and are themselves a Government of sound finance.

Unfortunately, the present Government meet neither criterion. The 2.5 per cent. VAT surcharge to pay for the poll tax fiasco is still with us, and from April this year the average family in Wales will pay an extra £14 per month in income tax, insurance charges and indirect tax. Moreover, if this financial settlement is approved tonight, it may mean a 10 per cent. increase in the average Welsh council tax—a rise from £328 in the current financial year to £360 in 1994–95. Perversely, if all authorities spend to their capping limits, the increase may be even higher, bringing the average council tax bill to £377.

The impact of the settlement on revenue expenditure will be both direct and severe. I shall give specific examples shortly; but, before I do so, I wish to comment on the capital programme, which gives the clearest possible demonstration of the Government's unwillingness to respond to the proven ability of local councils to be partners in the enterprise of economic development.

In cash terms, over £13 million has been cut from the capital expenditure plans, with programmes such as housing, environmental services and roads bearing the brunt. Most significant, more than £70 million has been cut from capital programmes under local authority control to allow supplementary credit approvals under Welsh Office control for European regional development fund schemes.

As a result of those policies, projects throughout Wales have now been approved for European regional development fund funding, but have been shelved because of insufficient credit approval. What attitudes prevail in the Welsh Office to allow such a waste of both additional resources and local opportunities? Alyn and Deeside has had to shelve nearly £1 million of infrastructure work; Brecknock has had to shelve a tourism venture; Meirionnydd has had to abandon £650,000 worth of seafront and townscape works. All those projects could have been financed with the aid of European moneys, but for Welsh Office policy.

The five urban counties—the three Glamorgans, Clwyd and Gwent—all report the loss of millions of pounds of available grant. I hope that the present Secretary of State will set aside his Europhobia, and ensure that Wales maximises its benefits from the European Union.

Mr. Jonathan Evans

Will the hon. Gentleman give way?

Mr. Davies

I will, because I mentioned the hon. Gentleman's local authority. Let me point out, however, that I have been very generous in giving way, and I want to allow others to speak.

Mr. Evans

I accept that the hon. Gentleman allowed me to intervene earlier, and I thank him for his courtesy for giving way now.

The hon. Gentleman specifically said that a tourist project in my constituency had been deferred. I know of a significant number of tourist projects that are being undertaken by Brecknock borough council in the current financial year; perhaps the hon. Gentleman will give details of the project that is not proceeding.

Mr. Davies

I will, but, if I may, I will convey them via my hon. Friend the Member for Torfaen (Mr. Murphy). I have the information in my files, but I want to proceed with my speech. My hon. Friend the member for Torfaen will reply in winding up—if he catches your eye, Mr. Deputy Speaker.

Let me refer specifically to two services which illustrate just how damaging are the policies reflected in the revenue support grant settlement. The Secretary of State would have us believe that he is concerned about educational standards; no doubt we shall debate that at some length in the near future. I do not know whether the Secretary of State has had any relevant experience, or whether his children attend a state school, but I know, from my experience and that of my constituents, just how difficult it is to strive for high standards in decrepit buildings with not enough resources, too few teachers and inadequate LEA support. That is what exists throughout much of Wales nowadays, and that is the situation that the settlement will perpetuate.

In the most cynical move of all, the Government have accepted the recommendations of their review bodies on public sector pay, and then left the cash-strapped LEAs to face the consequences. Let me put it in the words of the financial adviser to the AWC, Steve Dunster: All of the Counties are now wrestling with the problem of the pay award for school teachers of 2.9 per cent. The Government is not pretending that adequate funds have been provided, but rather that the additional costs must be met from efficiency savings and improvements in productivity. Frankly it is impossible to apply that sort of policy to a small primary school with a handful of teachers. West Glamorgan is struggling to find a contribution to schools budgets for the pay award of 2 per cent., leaving the schools to find the balance from their reserves if they have any. I would expect this to be a common experience across Wales—the first reaction of my colleague County Treasurers is that some shortfall will arise everywhere". Put simply, that means that LEAs will have to cut other parts of their education budgets to meet the cost of the pay awards independently calculated and approved by Government.

The problem of cuts is of precisely the same order as last year's. In our debate 12 months ago, I forecast that that settlement would mean the loss of 2,500 local authority jobs; that estimate proved correct. Two thousand of those 2,500 jobs were lost from the education sector alone. The pattern will be repeated next year as a result of this settlement.

In Dyfed, cuts across the board have been overshadowed by the ending of discretionary grants. Talented young people wishing to develop skills in areas such as the arts, or those wishing to further their studies to improve their chances of employment, will be denied the opportunity by the squeeze that central Government have imposed on local finances.

Mr. Gareth Wardell (Gower)

Does my hon. Friend agree that, under local management of schools, the Audit Commission report "Adding Up the Sums" informs governing bodies that they should consider carefully when it comes to giving teachers their annual increases? They must often choose to employ young, untrained, inexperienced teachers and get rid of experienced teachers, which will lead to a radical decline to educational standards.

Mr. Davies

My hon. Friend is absolutely right. He has reminded me of the comment by Baroness Blatch, who I believe has some authority in such matters. She said that she was of the view that governing bodies and parents would be happy to see increased class sizes so that the teachers' pay bill could be met. I should be grateful if the Secretary of State would confirm that that is now the view of the Government. I am more than happy to give way to the Secretary of State if he wishes to confirm that the Education Minister who speaks for the Government in another place is speaking for him.

Mr. Richards

rose—

Mr. Redwood

I have made my position clear on that matter. I want high-quality education and I think that the money is there to achieve it. Of course I do not intend to gainsay what my colleagues say.

Mr. Davies

The last comment was significant. The Secretary of State does not gainsay what his colleague says. Let us put on the record clearly that his colleague said that she believed that governing bodies and parents would be happy to see increased class sizes so that the teachers' pay bill could be met. We have that as official Government policy.

Mr. Richards

rose—

Mr. Davies

I must proceed. I have given way.

Discretionary grants are also the main casualty of a £1.3 million cut in education spending in South Glamorgan and a £2.5 million cut in Gwent. Gwynedd faces a cut between £2 million and £3 million, redundancies are expected in Powys, and almost £5 million will be cut from education alone in Clwyd, with at least 200 teaching jobs at risk. My own county of Mid Glamorgan, the poorest and most deprived of any in England and Wales by any criteria, has to face cuts totalling £15 million, of which education has to take its share of the brunt.

Mr. Richards

rose—

Mr. Davies

I have told the hon. Gentleman that I shall not give way.

My second illustration concerns the ability of Welsh local authorities to contribute to effective levels of policing. Every Opposition Member will testify to the sense of bitterness and bewilderment felt across whole communities whose collective experience tells them that policing levels have fallen below the minimum that can be regarded as adequate. Senior police officers and chief constables are being forced to speak out and to testify publicly that the services are inadequately funded by central Government and that they are unable to provide the level of funding which they, in their professional judgment, deem necessary.

The failure of the Government's economic and social policies has led to an increase in crime of 125 per cent. since they took office and to an increase of nearly 50 per cent. since 1989. Whole communities feel threatened. City centres are unsafe and elderly people cower in their homes. The response of the Government, the party that once prided itself on being the party of law and order, has been to cut, through the settlement, the resources available to police authorities.

In the South Wales police authority, on the basis of existing budgets, the chief constable is facing the prospect of closing 40 police stations. That is from a financial position of, at the end of the current financial year, being 220 officers below strength. The basic problem is that the county authorities are constrained to a 1.75 per cent. increase in overall spending by the capping procedures. That increase does not even meet the additional costs of previous pension increases.

Despite all the representations to the Secretary of State for Wales and the Home Secretary, the Government have remained intransigent and have refused to make adequate resources available to the police. Presumably, they are content to read headlines such as that in the Western Mail on 2 February 1994: Police 'volunteers' save crisis-hit force". The article says: Police are working for nothing to stop criminals overtaking the crisis-hit South Wales force. Officers are patrolling the streets knowing they will not be paid for their 'goodwill' overtime … Barry, Townhill in Swansea, Llanedeym and Ely in Cardiff, Merthyr and Aberdare are among the places where police men and women are 'volunteering' to maintain the service. One officer, who asked not to be named, said, 'it's happening all the time'. Some admit being motivated by fears about the consequences to their own families if they clocked off on time". It is patently clear from the Secretary of State's speech that the Government have no regard for the independence of local government and are indifferent to the damage being done to vital public services as a result of the cuts that they are enforcing. Like so much else to which the Government have turned their hand, their policies are heading for failure. Their central economic policy has failed and the British people are having to pay the price through the heaviest ever tax burden and through cuts in public services. The Government clearly care nothing for the principles of democratic accountability, but they will eventually have to face the electorate. They will then pay the price for their arrogance. The sooner that opportunity arises, the better.

8.56 pm

Mr. Walter Sweeney (Vale of Glamorgan)

The hon. Member for Caerphilly (Mr. Davies), the Opposition spokesman, seemed to blame defects in policing in Wales on failures by the Government to provide sufficient budgetary resources. I should like to put that in the context of some figures that I have obtained from the Home Office, to which I wrote seeking reassurance on that point. I understand that expenditure on the police service in England and Wales has risen from £1,100 million in 1978–79 to an estimated £5,862 million in 1992–93. That represents an increase in real terms of 83 per cent. since our Government came to office.

Mr. Michael

Will the hon. Gentleman acknowledge that the success of the Government is an increase in crime of more than 124 per cent. and that the reality of the spending on the police is that there has been an increase of only some 7 to 8 per cent. in the number of policemen and women on the streets? Is he proud of that?

Mr. Sweeney

What I am proud of is that the pay and conditions of the police have been tremendously improved while the Conservative Government have been in office. I am also pleased that absolute numbers, not only of police, but of civilians have been considerably increased over that period.

If one considers south Wales alone, one sees that at the end of October 1993, South Wales police had 3,159 police officers and 1,171 civilian staff. That represents an increase in actual strength of 515–214 police officers and 301 civilians—since May 1979.

My understanding is that there are two prime causes for the present financial situation affecting the South Wales police. The first is inadequate accounting arrangements by the South Wales police authority. The force budget for 1993–94 was set on the assumption that there would be an underspend for the previous year of something over El million. In fact, there was an overspend of well over £500,000. Moreover, the force was not told of that outcome until July last year.

I understand that the chief constable asked for a budget of £139.8 million for the present financial year in order to meet the expected demands on the force. That would have meant an increase of 8 per cent. on the previous year. The budget approved by the police authority provides an increase of only 1.6 per cent. Provision from central Government for police expenditure for the present financial year has increased by well over 5 per cent.

Mr. Michael

Will the hon. Gentleman explain how he has arrived at the conclusion that the increase for police purposes is 5 per cent? He said that he had received an answer from the Home Office, but the Home Secretary has refused to tell the House about Welsh local police authorities. The hon. Gentleman has produced a figure out of thin air and it cannot have come from the Home Office. Where does it come from? If the hon. Gentleman is basing this argument on the figure for England and Wales, be should know that only 1.75 per cent. of additional expenditure is allowed for by the Secretary of State for Wales. He should come clean.

Mr. Sweeney

If the hon. Gentleman is a little more patient, he will learn where the figures come from.

Overall provision for Wales for local authority funding of policing has been increased by 5.6 per cent. over last year. Provision for central Government specific grant, which meets 51 per cent. of police expenditure, has more than matched that figure. In other words, the police authority has given its force an increase of 2.2 million for the present year and central Government provision would have provided for an increase of some £7 million—only £1 million less than the chief constable asked for.

I submit that these are matters for the South Wales police authority to put right. It is the duty of the police authority to ensure that its police force receives an adequate budget, and it is regrettable that the budget provided by the South Wales policy authority to the force is insufficient to meet the demands being made on it.

The chief constable is tackling the problems by reducing overtime, cutting transport costs and adjusting recruitment. I deplore the fact that it has been necessary to take such drastic action, but we need to place the blame where it clearly lies—with the police authority and the three county councils that comprise its membership. It is their fault that there has been underfunding and a lack of budgetary control.

The problems have arisen partly because the police took on civilians, which was an approved policy. The intention was that civilians would be recruited and their salaries paid from the moneys saved by the reduction in the number of police which would be achieved through retirement. Unfortunately, it appears that the civilians were taken on, but the officers nearing retirement have not left the force, so the books have not been balanced.

Another problem is that the payment of overtime seems not to have been properly recorded. That matter needs to be examined and the South Wales police authority must get a grip on the situation to achieve proper value for money. All the elected representatives on the three county councils involved need to recognise the importance that the public attach to effective levels of policing.

9.2 pm

Mr. Win Griffiths (Bridgend)

I begin by taking up the point on which the hon. Member for Vale of Glamorgan (Mr. Sweeney) surprisingly left the debate. It involves the relative merits of the Government's settlement for the South Wales police authority and the ability of the county council to finance it.

Even if the Home Office had provided double the amount that the hon. Gentleman mentioned, the capping criterion—the 1.75 per cent.—used for local authority expenditure means that the only way in which the council could provide the 5.5 per cent. would be to cut other aspects of their budget. They would have to sack more teachers or people involved in administration. The hon. Member for Vale of Glamorgan should have waited for a response to the issues that he raised, but he has now deserted the debate, presumably because he knew that he did not have a leg to stand on.

Mr. Jonathan Evans

In all fairness, I should point out that my hon. Friend the Member for Vale of Glamorgan is a member of the Standing Committee that is debating the Coal Industry Bill and which resumed at 9 pm.

Mr. Griffiths

All I can say is that the hon. Member for Vale of Glamorgan should have had the courtesy to tell us that he would not be able to stay for the rest of the debate. It is a pity that he did not stay, because there is the fundamental flaw in his argument that, whatever amount in excess of 1.75 per cent. might have been made available—I emphasise "might"—the county councils in the South Wales police authority region were always left with the difficulty of the capping criteria. If they put more money into the police force budget, they would have to cut other parts of their budget, and that cannot be gainsaid.

That is why police stations, such as those in Porthcawl and Kenfig Hill and Pyle in my constituency, will be no base from which the police can operate. In fact, all that I will have in my constituency is the major police station in Bridgend town. Elsewhere, there will be no police presence in those very important police stations.

Mr. Jonathan Evans

I am grateful to the hon. Gentleman for giving way a second time. Does he recognise that many of us in many parts of Wales may feel that our police authorities should have additional resources? It is well known that I have visited the Home Office many times, arguing for more resources for Dyfed-Powys police. The key thing, however, is that, whatever budget is set, it is the responsibility of a police authority to operate within the budget. The hon. Gentleman misses the point. The South Wales police authority has demonstrably not lived within its budget.

Mr. Griffiths

The key point to be made is that, whatever amount has been given to the South Wales police authority theoretically through Home Office funding, as a result of the 1.75 per cent. capping criteria on the county council the only way in which it could have made that amount of extra funding available to the South Wales police force would have been to cut other services. As a result of the way in which the Government have pressed and pressed upon local authority finance for years, there is no longer any fat to cut, and the muscle and bone are now being attacked. That can be demonstrated throughout Wales.

I shall draw attention to one special crisis point—I hesitate to say "bone of contention" in that context—of funding in my constituency, concerning the A4229 link from the M4 near South Cornelly down to Porthcawl, where that A road is nothing more than a country lane for a few miles. It passes a few houses called Jubilee gardens where, virtually every week, there is an accident involving motor vehicles, and every week cars plough into the front gardens of those properties. Fortunately, of late there have been no serious accidents to people, but there have been in the past.

Yet, as a result of the way in which the capping criteria work—the limitations on the spending of the county council—funding from the European Community that could be made avilable to upgrade and improve that road and remove a serious hazard to the public has had to be repeatedly postponed. The residents of Jubilee gardens—barely 20 of them—have laboured long and hard to present a petition to Mid Glamorgan county council, which is the responsible authority, but they have charged me with the duty of giving a photocopy of it to the Secretary of State for Wales. Fewer than 20 people have gathered together a petition of more than 10,000 names, demanding the improvement of that road.

Having mentioned Porthcawl, I will conclude on this point. I believe that the Secretary of State was enjoying himself in Porthcawl this very day, where I have no doubt many Conservative councillors in the area bent his ear about obtaining a change to the local authority boundaries for the unitary authorities. Money is being spent on those changes where there are three communities, Ewenny, in St. Brides Major and Wick, where more than 80 per cent. of the people who returned ballot papers from the Electoral Reform Society said that they wanted to stay with Bridgend. Indeed, there is one street there of which, one side is Bridgend and the other side could become the Vale of Glamorgan.

The Secretary of State had time to go to Porthcawl today but he has no time to come with me and meet the people in these communities so that he can see, first, what a foolish stand he is taking on this issue and, secondly, a great opportunity for money to be saved if he were only to leave the map as it is. Even at this late stage, I appeal to him to save money and let these communities stay with Bridgend.

9.9 pm

Mr. Jonathan Evans (Brecon and Radnor)

The report needs to be seen in the context of the financial situation that the Government and the country face.

Mr. Rhodri Morgan (Cardiff, West)

Ignore it.

Mr. Evans

We cannot ignore, as we hear from the hon. Gentleman from a sedentary position, the fact that there was a £50 billion deficit in the national finances, and we addressed that issue in the Budget. Subsequently, we have heard complaints from the Opposition about tax rises. Tax rises are inevitable if we are to address the deficit. Labour Members lack all credibility if they suggest to the House or to the country that if they were in government they could avoid this situation; presumably, if they are opposed to dealing with he deficit, they would be in favour of carrying on with it and thereafter adding to it all the costs of the various promises that they have made to local government and to their friends in various lobby groups.

I call these things "promises" because we now know, do we not, that they do not count as pledges unless they are declared in the House itself? That is the context of the announcement that my right hon. Friend the Secretary of State for Wales has had to make concerning local government finance in the current year.

In spite of these difficulties, Opposition Members seek to quote from reports by treasurers of various local authorities in Wales. [Interruption.] I cannot hear all these sedentary interventions. I cannot deal with them all. If any hon. Member cares to make one on his feet, I should be more than happy to give way.

Mr. Martyn Jones (Clwyd, South-West)

The hon. Member mentioned promises about tax. Perhaps he would explain why his Government have made promises about tax which they have now broken.

Mr. Evans

I do not recognise that the Government made any promise in relation to tax, other than maintaining that we are a party that believes in low taxation and that we will always maintain significantly lower levels of taxation than Opposition Members.

Several hon. Members

rose—

Mr. Evans

I should like to return to the kernel of the debate, which is the quotation that we heard from the treasurer of a district council in Clwyd, North-West. No doubt the hon. Member for Caerphilly (Mr. Davies) was delighted to receive the letter from the treasurer of that council. I should like to quote from a letter written to me by the treasurer of Radnorshire district council: The Government and the Secretary of State for Wales could take much pride in this year's settlement. With a 3 per cent. increase in SSA the average Welsh District can increase spending by nearly double inflation.

Mr. Ron Davies

rose—

Mr. Evans

I will give way to the hon. Gentleman, because he will know, as I know, that Radnorshire and Newport were the only authorities to suffer reductions in the SSA. On behalf of Radnorshire, I have been making my concern about that plain.

Furthermore, the treasurer says that, when the overall settlement for Wales was announced, it was better than people in Radnorshire had been warned to expect. But the way in which the formula works in order to split spending between the various authorities in Wales means that it has worked substantially to the disadvantage of Radnorshire district council.

My hon. Friend the Under-Secretary of State knows, because I have raised the matter with him in correspondence, that I am concerned about the difficulties of rural local authorities. Local authorities in the rural parts of Wales have presented their case for a long time. We all recognise that they face additional costs in the delivery of local government services primarily because of the sparsity of population. We had always understood that the formula recognised the difficulties that such local authorities face. I have considered the documents that have been provided.

Mr. Ron Davies

For the sake of the completeness of the record, will the hon. Gentleman confirm that the letter to which he referred was dated 13 January? In a letter to me dated 13 January, the treasurer of Radnorshire district council states: I enclose herewith copies of letters which I have sent to the Welsh Office and also to Mr. Jonathan Evans, M.P. for Brecon and Radnor. You will see from these letters that the Council is not at all satisfied with either the Revenue Settlement or the Capital Settlement for the 1994/95.

Mr. Evans

The letter from which I quoted directly was dated 24 December 1993. It made it clear that the specific problem was that Radnorshire district council and Newport district council, which lies in the constituency of the hon. Member for Newport, East (Mr. Hughes) faced a reduction in their standard spending assessment. That presented them with particular difficulties.

There are three reasons for the problems. I have mentioned that a sparsity factor should be built into the formula to meet the difficulties faced by some rural local authorities. My right hon. Friend the Secretary of State for Wales will be aware that the European regional development fund grants, which were given to Radnorshire district council in 1992–93, had a disproportionate effect on its SSA. They affected the composition of the formula for working out the council's SSA in the current financial year and that is likely to cause a problem next year.

I have received from my right hon. Friend an explanation of those difficulties, but he will be aware that Radnorshire district council has always spent at or below its SSA and has charged at or below standard levels. It has not been a profligate authority. It serves a small population, and the difficulties it faces are not caused, as the Labour party would claim, by the fact that the overall settlement for Wales is inadequate. The representations that I have received show that that is far from the truth. The council's difficulties are caused by the way in which the settlement has impinged on it and on the authority in the constituency of the hon. Member for Newport, East.

I was surprised when the hon. Member for Caerphilly informed the House that my local authority, Brecknock borough council, would not proceed with a project. You may recall my surprise when I learnt that, Mr. Deputy Speaker, and my challenge to the hon. Member to give some details. I was aware that, during the past financial year, my right hon. Friend the Secretary of State approved the new Brecon leisure centre, a major project in my constituency. I was also pleased that only some months ago he provided a further £100,000 towards the centre's grandstand facilities around the athletics track. You can understand my surprise, Mr. Deputy Speaker, when I heard the Labour Front-Bench team suggest that the leisure centre project, or another project, would not proceed.

During the debate, I was challenged by Opposition Members for having disappeared briefly from the Chamber. I confess that I did leave the Chamber; I spoke to the chief executive of Brecknock borough council, Mr. Doylend, to check the information that the hon. Member for Caerphilly gave the House an hour or so ago. Mr. Doylend has told me that the council is pleased with the settlement as it affects itself. The borough council does not experience the same disadvantages from the working of the formula as Radnorshire does, so Mr. Doylend is perfectly happy for me to report to the House that it is pleased with the settlement.

Mr. Doylend also informed me that in the current financial year there will be an increase of 3 per cent. in the local council tax. He spoke to the treasurer of Brecknock borough council only this afternoon, and he knows of no project whatever within the council's area that is to be cancelled as a result of the settlement, yet the House was told of one only an hour or so ago by the hon. Member for Caerphilly.

When I challenged the hon. Gentleman he said that the hon. Member for Torfaen (Mr. Murphy) would give us some details of the project. In view of my conversation with the chief executive, which took place only a few minutes ago, I shall certainly give way to the hon. Gentleman if he is now in a position to give us some details about the project that he claimed was to be cancelled.

Mr. Ron Davies

I am happy to confirm that that was precisely the information given to me by the Council of Welsh Districts. I shall give the hon. Gentleman full sight of the information at the end of the debate; it appeared in a list of projects that had fallen foul of the rules on the European regional development fund, and I assure him that it was given to me in good faith.

Mr. Evans

In the circumstances, may I say with equal courtesy that I accept the hon. Gentleman's explanation for the erroneous information that he put before the House. The briefing from the Labour-controlled Council of Welsh Districts is demonstrably inaccurate yet again. With respect, I offer the hon. Gentleman the suggestion that if in future he wants to inform the House about projects that are to be cancelled, he might speak to the chief executives or to members of the councils, rather than to the Council of Welsh Districts, which provides so much of the briefing that he conveys to us from the Dispatch Box.

Mr. Redwood

I confirm that my hon. Friend has been assiduous in putting the case for Radnorshire. However, is he aware that, although Radnorshire does not benefit from the formula this year, it has benefited considerably in the past, for reasons that include its rural nature? The total SSA in 1991–92 was £2.493 million, in 1992–93 it was £2.971 million and in 1993–94 it was £3.281 million. That is one of the biggest rates of increase. I hope that it has been of benefit to Radnorshire, and I am glad that Brecknock is happy with this year's settlement.

Mr. Evans

I am very much aware of the point that my right hon. Friend makes, and I recognise the fact that those settlements were welcomed in previous years. However, the fact remains that Radnorshire district council has on-going programmes, and they must be funded during the coming financial year. Clear difficulties have been caused to the district council, although it has not joined in the misleading of public opinion that we hear from so many Opposition Members. What I have said during the debate shows that the settlement for Welsh local authorities in general has been welcome, but for Radnorshire in this specific year it has caused great difficulties.

I draw my remarks to a close by saying that this is a difficult financial time. The settlement announced by the Secretary of State is better than could have been expected, and the speeches that we have heard from Opposition Members have been as erroneous as the briefing that many of them received from the Council of Welsh Districts.

9.24 pm

Mr. Ieuan Wyn Jones (Ynys Môn)

I do not want to enter into the argument between the hon. Member for Brecon and Radnor (Mr. Evans) and the Labour Front Bench. However, the hon. Gentleman made two statements which, frankly, cannot go unchallenged. The first was the amazing proposition that, because the Government have a public sector deficit of £50 billion, Opposition parties must somehow tailor their policies as a result. It is an amazing proposition that our policies should be coloured because the Government have created this massive deficit.

The second statement that must be challenged is that the hon. Gentleman was not aware that the Tories made any statements at the last election that the Government would not raise taxes. The reality is that they made statements time and again that the Government had no intention whatever of imposing value added tax on fuel. I remember the former Prime Minister, Baroness Thatcher, telling the House that the Government had no plans to impose VAT on fuel. However, that is what happened in last year's Budget.

The hon. Gentleman must accept that we are not constrained by the difficulties that the Government face because we have the opportunity to tell them what sort of settlement local authorities should receive and the level and range of services that they should provide.

The Secretary of State told us that he believed in good government. The test of whether he means what he says will be if, first, local authorities are given proper resources for the range of services that they provide and, secondly and just as importantly, if local authorities are given the freedom to deliver those services. For the past 10 years or more, local authorities have had their powers stripped one by one in the sort of salami-slicing approach of taking a bit year after year. Clearly, if powers are taken from local authorities, they will not be able to provide the range of services that one normally associates with them.

The hon. Member for Gower (Mr. Wardell) told us about the difficulties that many education authorities now face and I shall mention one or two of them. Following the transfer of higher and further education to the new quangos set up by the Welsh Office, and the transfer of some responsibility from education authorities to schools, local authorities are no longer able to provide the range of services that they provided 10 years ago. The difficulty is that schools are in the invidious position of having to choose to cut teacher numbers and increase the size of classes, or cut extra-curricular activities which have provided children in Wales with the breadth of education that was provided when we were at school. By that I mean provision of music, art and drama.

How many generations of young people from rural parts of Wales and the valleys of south Wales have made it in the international arena because local authorities were able to provide those services? Why are young people no longer able to participate in such activities unless they belong to middle-class families or families which can pay for the services? It is a shame that we are letting our young people down in this way. I would like local authorities and schools to be given the freedom, the opportunity and the resources to ensure that they can give this generation the opportunities that we had. Our parents fought to give us that opportunity, but I fear that our generation is letting down our children.

My final point relates to the resourcing of police authorities. We have heard a great deal about the difficulties of the South Wales police authority. I would not like the debate to go by without mentioning also the difficulties faced by the North Wales police authority. Year after year, the authority has asked the Home Office to provide the resources that would enable it to increase the numbers of personnel, and year after year it has been turned down.

Last year, the authority was given no increases. The difficulties which may be peculiar to the South Wales police should not cloud the fact that police authorities all over Wales are having problems. I hope that the Government recognise the need properly to resource police authorities in Wales.

We have heard about the massive increase in crime rates in rural Wales—rates that were unheard of a generation ago. It is essential that the police are given the resources necessary to allow them to carry out their task properly. We need to have more policemen on the beat, walking the streets and making sure that the elderly are safe in their homes. The police understand that they need more money to be made available, not only through the Home Office, but through the county councils.

Mr. Gareth Wardell

Will my hon. Friend add to his list the fundamental importance of the forensic science service? Unless the police have the resources to buy those services, they will be unable to undertake proper criminal investigations. There will be insufficient cash for the evidence collected to be made available to the Crown Prosecution Service, if a prosecution is necessary.

Mr. Jones

I am grateful to my hon. Friend and I am sure that his intervention will have been heard by the Government.

It is right that criminals should be dealt with properly and that we should have a range of sentences in our courts, it is equally necessary for the police to have proper resources to do their job. I hope that the Welsh Office now understands the crisis facing local authorities on a range of issues. Even if the Government were unable to address that crisis in this year's settlement, it will not be forgotten next year.

9.33 pm

Mr. Roy Hughes (Newport, East)

I am glad to acknowledge the support of the hon. Member for Brecon and Radnor (Mr. Evans) regarding the financial difficulties of Newport borough—directly, of course, as a result of the decisions of this Administration. It was most magnanimous of the hon. Gentleman.

We all recognise that local government is highly complex and no one can deny that fact. For a Government intent on curbing local government activity at every turn, that complexity is a godsend. Tonight was no exception, of course. We had the usual juggling act from the Secretary of State, when he gave us the "now you see it, now you don't" act.

My hon. Friend the Member for Caerphilly (Mr. Davies) said that we live in an age of quangos; there are 111 of them. They are a blot on the landscape and many people feel that the sooner they are got rid of, the better. Those bodies are accountable only to the Secretary of State and they are invariably filled with Tory placemen. I am sad to say that there have been increasing examples of corruption in high places. By comparison, local government in Wales has been of a high order. In England, there have been minor difficulties in Lambeth, but they have been dwarfed into insignificance by what has happened in Tory-controlled Westminster. Our local government in Wales has been first class by comparison.

The democratic nature of local government needs encouraging, not throttling. The simple fact of the Welsh rate support grant settlement is that the council tax payer will pay at least an extra 10 per cent. That is several times the level of inflation. What is more, the 10 per cent. increase imposed on the council tax payer is in addition to all the other increases announced in the previous two Budgets. I shall briefly list but a few: VAT on domestic fuel will increase to 8 per cent. from 1 April, with more to come the following year; petrol tax is up; vehicle excise duty is up; national insurance contributions are up. Many more examples could be cited. Where are families to get the money to pay the additional council tax and other taxes?

I have been informed that in Newport borough, standard spending, instead of increasing by 2.3 per cent. as it should, has fallen by 0.5 per cent. The Government are shifting more of the burden on to taxpayers. In Newport, male unemployment is between 13 and 14 per cent. There is a need for economic regeneration. Yet our local authority is denied resources. Newport could provide jobs not only for the town itself but for so many of the areas in the valleys.

On housing, so much more could be done to house the homeless, let alone put construction workers back to do the work that they have been trained to do. Instead, many of them are languishing in the dole queue. Local government should be allowed to spend receipts from the sale of council houses. That could do a great deal to regenerate the economy of Wales and elsewhere. Local authorities have had to cope with much new legislation, including the Children Act 1989 and legislation on community care, the national curriculum and mental health services. In respect of those items, the settlement is harsh.

In conclusion, local government in Wales needs a better deal, but it is not likely to get one from the Conservative Government. They are a millstone round the neck of local government and of Wales in general. The sooner they are ousted the better. We need a Labour Administration who will create a democratically elected assembly for Wales.

9.37 pm

Mr. Rod Richards (Clwyd, North-West)

I shall be brief, Mr. Deputy Speaker. A few weeks ago, the hon. Member for Caerphilly (Mr. Davies) stopped me and asked me whether I could please tell him the Welsh word for "idea". So I told him. The Welsh word for "idea" is "syniad". I said, "But surely what you want to know is the Welsh for no idea—`dim syniad'." What we heard from the hon. Gentleman this evening was absolutely no idea about the financing of local government. He said time and again that local government in Wales was underfunded. He said that the police were underfunded. He said that education was underfunded. Yet when he was challenged to be precise about by how much the police were underfunded, he could not say. When he was challenged to say by how much education was underfunded, he could not say.

I challenge the hon. Gentleman, through his spokesman who will reply to the debate for the Opposition, the hon. Member for Torfaen (Mr. Murphy). The hon. Member for Caerphilly said that he was unhappy with the settlement for teachers' pay. Will the hon. Member for Torfaen tell the House what he believes would be a fair settlement for teachers' pay in 1994–95? He must think that the people of Wales are naive if he thinks that his party would not spend more on local government, because his party proposes a Welsh assembly to oversee local government in Wales costing £1 million a day. Will he commit himself to £1 million a day?

The hon. Member for Torfaen said that education has been underfunded. It has been underfunded by Clwyd education authority in my constituency. I refer him to Llandrillo college of further education, on which Clwyd education authority has not spent a bean in 15 years. thanks to the Conservative Government, the college is about to receive its first tranche—£1.6 million—of a £6 million investment this year.

Mr. Wyn Griffiths (Bridgend)

Does the hon. Gentleman recall what it cost Wales when the Conservative Government of the day last reformed local government? Will he tell us how much extra money the proposed reform will cost?

Mr. Richards

I am more than happy to answer that question. It will cost less than the proposals of the Labour party, which wishes to add an assembly to the cost of the reform of local Government in Wales.

Mr. Donald Anderson (Swansea, West)

on this, the hon. Gentleman has said boldly that—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. I think that the hon. Gentleman has finished his speech.

9.41 pm

Mr. Alex Carlile (Montgomery)

I must apologise to the House for my absence during the early part of the debate, particularly to the Secretary of State. I have been following the Government's advice and getting "back to basics". I spent much of this evening with my own wife, but unfortunately underestimated the time at which the debate would start.

I will not detain the House long, but I want to tell the House something of what is happening in Powys in so far as it affects my constituency in Montgomeryshire. I hope that we shall hear a good deal more of the name Montgomeryshire in the years to come, despite the current ill intentions of the Secretary of State.

There are certain things with which we can possibly live. If highways are not repaired—the Government insists on failing to provide the money to repair them—I suppose that we can live with a few broken roads. We in Montgomeryshire are becoming used to broken roads. I have often raised problems relating to country roads with the county surveyor. I have letter after letter saying that Powys county council, which is not profligate—I do not think that it has ever been so accused—does not have the money to repair them.

Let us turn to other issues, such as social services and care in the community. We cannot afford to live with broken people. In some cases in Montgomeryshire, people are being forced to go "into the community". But they are sent not into their own community or to where their nearest and dearest are—if they have any surviving relations—but to the most convenient pigeonhole which falls within the Government's policy. That leads to broken people. I do not consider that an acceptable way of dealing with local government requirements.

I do not know whether the Secretary of State has asked the chairmen of social services committees or directors of social services about funding for care in the community, but if he does they will tell him and his hon. Friends on the Front Bench that it simply is not enough to meet the task. I take no issue with the task, as resettling patients in the community is entirely desirable, but I take issue with the failure to provide the wherewithal for that task. Nor can we afford broken futures.

Education provision in the county of Powys will be frozen in real terms for the forthcoming financial year. Powys will only achieve that freeze by cutting other services, such as the opportunity for adults, especially the elderly, to enjoy their share of knowledge. The mobile library service in Montgomeryshire, which is something of a lifeline to many pensioners who live in remote villages, is being cut to save the miserable sum of £25,000. Powys county council does not want to cut it, but feels that it has no choice. It is a disgrace that we should have reached the stage where, because of the Government's local government finance policy, the mobile library service has to be cut. Pensioners will not be able to obtain books because there is no public transport for them to get to libraries in Welshpool, Newtown or the other towns in my constituency.

What about education? The hon. Member for Ynys Môn (Mr. Jones) mentioned some of the effects of what are, in real terms, cuts in education. He mentioned music teaching. I am not so concerned about the cases he cited of international musicians of great stature who have come from rural Wales. Such people are likely to appear in any event, as great natural talent shows itself.

I am more concerned about the majority who are amateur musicians—there are probably many in the House—who sing in choirs, play the piano for their own enjoyment or play in small amateur orchestras. There are thousands of them and they form the basis for musical enjoyment in this country. They will not be able to become musicians because many schools are not able to buy music tuition for young people, which is so essential as a base on which to build their future enjoyment of music.

The other day, I received a letter from parents at one school in my constituency, which revealed that they are being forced to buy music tuition at a very high price—if they can buy it at all—from a commercial organisation, whereas only a few years ago such tuition was free [Interruption.] I wish that the hon. Member for Erith and Crayford (Mr. Evennett) who is sitting behind the Secretary of State and is not a Welsh Member of Parliament, would show a little less exasperation and amusement. Local government finance cuts matter in Wales. They may not matter to him, but they matter to us. Another aspect of education—[Interruption.] I wish that the hon. Gentleman would keep quiet.

Wales has produced its share of good artists, who learned art at school. Art teaching is not a luxury, but should be a part of every child's education. That provision, too, has been cut in Powys as a result of the Government's local government finance policies.

Teaching through the medium of Welsh is a core area of education that is facing privatisation in Montgomeryshire. Montgomeryshire—indeed, Powys—is the only county in Wales that does not have a Welsh-medium secondary school. Welsh teaching is provided in some schools in my constituency and it is done very well, but some parents reasonably wish to send their children to a Welsh-medium school. Plans for such a school have been prepared time and again. An entire school—or at least part of one—has been proposed, but the possibility has probably been put back for yet another year because of the Government's policies. Why is it that, in respect of all subjects and at all levels, children should suffer and possibly face broken futures as a result of the Government's policies?

The issue that causes most concern in education is class size. There is no doubt that the increase in teachers' pay will not be met in Powys this year without a significant increase in the size of classes. Powys county council, acting on what it believed, on the basis of Government policy, to be the likely outcome, made an allowance of 1 per cent. to cover the increase in teachers' salaries for the forthcoming year. The council got it wrong, and the result is that class sizes will increase.

Mr. Redwood

indicated dissent.

Mr. Carlile

The Secretary of State shakes his head. I do not know what magic the right hon. Gentleman can conjure up to ensure that class sizes will not increase if there is not enough money to meet the teachers' pay increase.

Mr. Redwood

If the hon. and learned Gentleman had had the courtesy to be present for the entire debate, he would realise that exactly those points were covered extensively in some lively exchanges between Opposition Members and myself. I hope that the hon. and learned Gentleman will read the record of the debate so that he may understand the position that his constituents will face next year.

Mr. Carlile

I shall read the record with great interest. The fact is that the right hon. Gentleman did not begin to attempt to answer my question. If he can show Powys county council how to avoid cuts in the numbers of teachers and increased class sizes I shall certainly write to him in proper apology, as I hope he would expect me to do.

Mr. Jonathan Evans

As the hon. and learned Gentleman knows, I represent the other half of Powys—the major proportion of Powys; a bigger proportion than is represented by the hon. and learned Gentleman. He will know that the former director of education, Mr. Robert Bevan—now a member of the Powys authority—has come up with the very proposition that the hon. and learned Gentleman is putting forward: that there will be teacher redundancies.

The hon. and learned Gentleman will be reassured to hear that I spoke to the chairman of the education committee about this on Saturday and was informed that he hopes that it will be possible to make an arrangement whereby the matter can be dealt with without teacher redundancies. I hope that the hon. and learned Gentleman will welcome that statement from the chairman of the education committee.

Mr. Carlile

We have all this hoping that arrangements can be made; but the fact is that Councillor Robert Bevan, the immediate past director of education for Powys, made it quite clear, from his great fund of experience and his knowledge of the education system in the county, what will happen. I put it to the hon. Member for Brecon and Radnor (Mr. Evans), who represents what he describes as the other half of Powys—a description which may give rise to some interest in debates on another piece of legislation—that what Mr. Bevan said is what will happen.

The basic point that I wish to make is that, once again, we are witnessing cuts in local government services in rural Wales. Powys county council is not to blame—neither its members nor its officers. The public do not understand what the Government are up to when they see, in particular, every aspect of their children's education being hammered by the policies of the right hon. Member for Wokingham (Mr. Redwood). Month after month, people feel that Wales is being ruled more and more from London, and that is not acceptable.

9.53 pm

Mr. Martyn Jones (Clwyd, South-West)

I should like to raise the question of the specific effect on Clwyd of the inadequate revenue support grant provision. Before doing so, however, I remind the hon. Member for Clwyd, North-West (Mr. Richards) that the Welsh for "promise" is "addewyd". The Government promised that they would not raise taxes or increase VAT, but they did just that. We face real cuts in services in Clwyd—indeed, throughout Wales—as a result of the Government's policies over the past 15 years. Significantly, the hon. Member for Clwyd, North-West mentioned that fact that for 15 years—precisely the Conservatives' period in office—Llandrillo college in Clwyd had not received any money for repairs.

We learnt from my hon. Friend the Member for Caerphilly (Mr. Davies) that there is a real-terms cut in revenue support grant provision throughout Wales. Despite the flannel from the Government, that applies to Clwyd. Excluding community care provision, Clwyd will receive only 1.66 per cent. more than last year. Admittedly, inflation is low, but the figure is below inflation and hides the necessity for extra provision to meet the needs of new legislation such as the Children Act 1989, and measures relating to the national curriculum and mental health.

Central Government have agreed to wage rises but have not funded them, having said previously that they would not agree to any pay increases for teachers. Those increases now have to be funded out of already inadequate budgets. Even the additional community care money for 1994–95 is estimated by the Association of Welsh Councils to be £40 million below requirements.

Total standard spending is up by 4 per cent., but the aggregate external finance, including revenue support grant, non-domestic rates and specific grants, has increased by only 3.2 per cent. The gearing means that council tax payers in Clwyd face an increase of 11.8 per cent., or £20, on band D. The specific grants for the police and the courts have increased by 5.1 per cent. but that reduces the amount available for other services such as education. To add insult to injury, the Secretary of State assesses council tax at £233 for counties and £53 for districts, based on 100 per cent. collection, which is clearly unrealistic. A 5 per cent. loss on collection means another £15 on band D. Those factors affect all counties, but Clwyd has particular problems.

The standard spending formula for Clwyd is based on composite social indicators, including some features which do not exist in Clwyd, but mask its real needs. Although the sparsity of population provision which applies to large areas of Clwyd is some compensation, it is not sufficient, so Clwyd suffers lack of provision for sparsity population and for social deprivation indicators.

Despite that, Clwyd is the lowest spender in Wales. Last year it received £30 per head below the average for Wales. The grant we are debating tonight will mean £24 per head below the average this year. By pure coincidence, £24 per head in Clwyd represents £10 million in funding for Clwyd—exactly the amount that will have to be cut from education and other services this year. It will mean huge class size increases and redundancies among teachers. The councils do not want to do that. They have already had to charge for mentally handicapped day centres.

I realise that we are reaching the end of the debate, so I shall make just one further point on capping. If the Secretary of State will not put right the underfunding of education and social services in Clwyd, why does he not allow council tax payers to take the decision?

Mr. Wardell

Will my hon. Friend confirm that the Government have a simple solution to the problem—the market, of course? They are giving schools the opportunity to increase pupil numbers by poaching children from neighbouring schools. They are setting one school against another. That is the formula that the Government want to put in place to solve the problem.

Mr. Jones

I am sure that my hon. Friend will agree that that is a recipe for chaos in the education service throughout Wales.

If the council tax payers of Clwyd were told that they could avoid charges for day centres for the mentally handicapped and cuts in the number of teachers and that they would have adequate discretionary grants if they were prepared to pay only £14 a year per head more in grant, I am sure that the overwhelming majority of people in Clwyd would accept that. After all, that is only the equivalent of a Mars bar a week for every person in Clwyd, which is peanuts compared with the cuts and their effects on the pupils in our schools.

9.59 pm

Mr. Donald Anderson (Swansea, East)

I remind the hon. Member for Brecon and Radnor (Mr. Evans) that the councillor to whom he referred, Robert Bevan, was one of the many directors of education in Wales who resigned because they could no longer stomach the cuts introduced by the Government. Mr. Bevan did so in his early fifties.

In response to what was said by the hon. Member for Clwyd, North-West (Mr. Richards), let me issue the bold challenge presented by my hon. Friend the Member for Caerphilly (Mr. Davies): will he tell us the precise amount by which provision should have been increased? Do I recall his saying that he believed that Clwyd county council's local education authority had underfunded its own provision? Of course, he will be unable to specify the precise amount.

Mr. Richards

I am more than happy to reply. During the past three years, all the education authorities in Wales have underfunded schools by £33 million in terms of capital provision.

Mr. Anderson

I wonder from what hat the hon. Gentleman pulled that figure. He said earlier that the Government had not resiled from any election promises about taxation; let me remind him that, in an Orwellian manner, the Government no longer describe themselves as the party of low taxation, preferring to style themselves as the party of lowest possible taxation.

The Under-Secretary of State must recognise that this is another example of the Government's centralisation tendency. That tendency can be seen in every sector of local government—with, I concede, the exception of community care—at a time when the quangocracy is increasing enormously and the accompanying sleaze is increasing as well. Although the Secretary of State is trying to civilise at the edges, the beast that he and his colleagues have created is growing.

The essence of the problem lies in the Conservative party's awareness that it can never achieve power in Wales through normal democratic means; it must create quangos to form a sort of authority through which it can work, bypassing the local authorities, whose power is being increasingly eroded and diminishing the morale of local councillors.

We have already heard about the effect of the settlement on public sector pay increases and local authorities' difficulty in accommodating the teachers' 2.9 per cent. pay increase—and other expected increases—in their budgets. Something will have to give, and what will give is other necessary services.

The Government assume that local authorities will be able to collect 100 per cent. of the council tax. That contrasts with the collection rate of taxes in direct Government control. The income tax collection rate, for example, is about 98 per cent.; the VAT collection rate is about 97 per cent.; and the BBC estimates that the television licence collection rate is 10 per cent. lower than it should be, while the Home Office accepts that it is 7.5 per cent. to 8 per cent. lower than the desired figure. Yet the Government boldly assume that local authorities can do what they cannot.

There have also been effects on council tax bills. The Government's contribution to spending in my city of Swansea, for example, is limited to an increase of only £60,000, or 0.2 per cent., on the previous year. When compared with the provision for the standard spending assessment and the gearing effect, it means an increase in the council tax of 15.3 per cent. in the city of Swansea. In that sector, the Government are trying to throw the blame for their own policy failure on to local authorities and, as a result, forcing them to put up the council tax.

My hon. Friends have already made forceful points about the effects of the elimination of discretionary grants on music, the arts and so on. It is clear that the position now is worse than ever. What earlier generations of school children were able to take for granted is no longer available because there is a clear deterioration in the provision in the education sector. In addition to music and the arts, we should consider the lack of discretionary grants for those who wish to become lawyers. The withdrawal of those grants will certainly mean that, in future, our solicitors and barristers will come only from those families who are able to pay for the training. I believe that that is socially wrong, and it derives directly from the policies of the Government.

10.5 pm

Mr. Paul Murphy (Torfaen)

As always, the debate on the rate support grant settlement for Wales has been interesting, informed and, on occasions, quite exciting. The hon. Member for Clwyd, North-West (Mr. Richards) talked about the lack of knowledge or experience of Opposition Members in local government finance. I calculated that among all the Labour Members who have spoken in the debate, there were over 50 years of experience of local authorities. My hon. Friend the Member for Caerphilly (Mr. Davies) and I were chairmen of the finance committees of our local authorities. So I must tell the hon. Gentleman that we have some knowledge and experience of what has occurred under both Governments over the past two decades.

My hon. Friends the Members for Caerphilly and for Bridgend (Mr. Griffiths) referred to the backcloth of the reform of Welsh local government. The House will consider that in a few weeks; it is currently being dealt with in another place. When we see cuts in county and district council budgets that are a direct result of the 4 per cent. reduction in the settlement, we must contrast them with the £100 to £200 million that the people of Wales will have to pay to reform local government. There is no enthusiasm for that among people in the Principality.

The Secretary of State said in his press release that the settlement gives local authorities adequate resources to maintain services. The vast majority of local authorities of all political persuasions in Wales do not agree with him. No more did they agree in July 1979 when the former Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), said: We will sweep away tiresome and excessive control over local government. They do not need, they do not want, the fussy supervision of detail that now exists. Over the past 15 years, almost 150 Acts have taken away the powers and responsibilities of local authorities, and Wales is now the most centralised and the least democratic part of the European Union.

My hon. Friends the Members for Clwyd, South-West (Mr. Jones) and for Newport, East (Mr. Hughes) and the hon. Member for Brecon and Radnor (Mr. Evans) all said that, in their respective areas, the system of standard spending assessments had broken down. The formula on which the SSAs are based has also broken down. The Audit Commission said exactly the same thing when it stated that SSAs were used for capping, not for grant distribution. The Select Committee on the Environment recently said that the SSA formula was oversimplified and based on outdated information and did not take into account long-term unemployment and chronic ill health, both of which are extremely important factors in Wales.

What happened last year? We had the spectacle of the Secretary of State for Wales standing at the Dispatch Box wanting to cap Aberconwy council, of all councils. It is a small authority which has hardly been regarded as profligate and has nothing to hide. Capping is not only unfair but undermines democracy and does not work. Experts from the London School of Economics tell us that capping has led to higher spending because councils spend to their capping limit.

In June 1993, when he was quite new to his present responsibilities, the Secretary of State for Wales said: I believe that we have a good system". He said that he was proud to inherit the Welsh model."—[Official Report, 23 June 1993; Vol. 227, c. 418.] I have to tell him that the Welsh model existed until about a year ago. Successive Secretaries of State for Wales—the former right hon. Member for Worcester (Mr. Walker) and the right hon. Member for Wirral, West (Mr. Hunt)—said that they would not publish the criteria for capping. Since the right hon. Member for Wokingham has been Secretary of State for Wales, we have had slavishly to follow the English example on capping.

Some hon. Members have asked whether the Council of Welsh Districts is good at providing briefing information. I am sure that the hon. Member for Brecon and Radnor will join the council in congratulating the Secretary of State on overcoming the wild variations in SSAs about which it complained for a number of years. I suppose that the council is right in some aspects of its briefing.

Eighty per cent. of districts will still have problems in setting their budgets and gearing is still a great problem: a 2.1 per cent. increase in spending will mean an increase of 11.3 per cent. in the council tax in Wales. Some of my hon. Friends have mentioned the impact on district councils. Homelessness in Wales has increased in the past 12 months by 10 per cent., but, despite what the Secretary of State said, the capital available to local authorities to spend on housing has been cut by £10 million. That is why the district councils say that the settlement is inadequate for the provision of public sector housing.

Reference has also been made to taxes. Conservative Members said that it was important that taxes were increased in order to help the economy. Taxes are certainly going up in Wales, even though the Government are supposed to be anti-tax. For example, the cost of rent rebates will now have to be borne wholly by the local authorities, which will mean a significant increase in council house rents in the next financial year. At the same time, the Secretary of State has told Welsh housing associations that they face a cut of 9 per cent. in their grant. They now have the lowest grant since their inception in Wales.

The chairman of Tai Cymru has written to tell housing associations that he does not want rents to be increased, but how can it be avoided when the grant has been cut by 9 per cent? Ultimately, the cuts mean that the Government and the Secretary of State are unaware of how important it is to have a viable public rented sector in the Principality in order to do something about the 80,000 people who are on council house waiting lists in north and south Wales.

The biggest blow has been to the county councils. We heard about the impact of cuts on county councils from my hon. Friends the Members for Newport, East, for Swansea, East (Mr. Anderson), for Clwyd, South-West and for Caerphilly (Mr. Davies). Mid Glamorgan will have to make cuts of £15 million which, by any standard or measurement of deprivation, will mean cuts in public services. Gwynedd has to cut between £2 million and £3 million; South Glamorgan is cutting nearly £1 million off social services and £500,000 off highways; and in Gwent, the 1.6 per cent. increase must cover pay, inflation and capital development.

The worst effect on counties, as many of my hon. Friends have said, is the impact on the police service and on education. For example, my hon. Friend the Member for Bridgend spoke about the importance of considering the formulae for the police. The Home Office has already said that, for every police authority in England and Wales, it expects a 5.5 per cent. increase in expenditure to maintain the forces of law and order in England and Wales. How can police authorities increase their expenditure to that extent when the Secretary of State for Wales is saying that county councils can increase spending by only 1.75 per cent? It is impossible for those figures to match; as a result, there will be a reduction in the services provided by our police authorities throughout the Principality.

In education, we shall find that there is insufficient money to pay for the 2.9 per cent teachers' pay award. It will mean that that award will be paid for with other teachers' jobs, with larger classes and a reduced education service.

My hon. Friend the Member for Clwyd, South-West rightly spoke about Clwyd. A cut of £6 million to £7 million has to be made in the education service for north-east Wales. Cuts are taking place in South Glamorgan, Gwent and Dyfed. As the chairman of the local education authorities' employing body recently said: The real problem for local education authorities is the crippling financial limits imposed by this Government", and nowhere is that truer than in Wales.

The Welsh Office claims that the average council tax will be about £280. All its claims that we have heard in the Chamber in rate support grant debates over the years have proved to be wrong. We believe that the council tax is much more likely to reach about £350. Part of the reason for that is that local government has had to grapple with a system of finance that has changed more dramatically in seven years than it has done in seven centuries. Another part of the reason is that councillors in Wales are still genuinely attempting to preserve our schools, to safeguard our communities, to maintain law and order, to house the homeless and to improve the quality of life of the people whom we represent.

My hon. Friend the Member for Caerphilly said that our councils have experienced constant underfunding of vital services for 15 years. The cumulative effect of all that is affecting and endangering the fabric of Welsh society.

Mr. Richards

The hon. Gentleman keeps speaking about underfunding, and he mentioned South Glamorgan county council. Will he therefore explain to the House how the chairman of South Glamorgan county council can put advertisements, with large photographs of himself, costing £500 a time, in the Western Mail and the South Wales Echo, wishing the readers a happy new year and a happy Christmas?

Mr. Murphy

The good people of South Glamorgan need to have some good will in their lives around Christmas time and I think that that is the only good news they have. Last year, for example, they had to cut their music departments, they had to cut their outdoor pursuits departments and they had to witness the spectable of their discretionary grant system being cut altogether. I could describe a litany of problems that South Glamorgan and other councils have had.

Mr. Sweeney

rose—

Mr. Murphy

I will not give way.

If the hon. Gentleman can find only that example of what he would regard as reckless council spending, I am sorry for him. My hon. Friends the Members for Swansea, East, for Caerphilly, for Newport, East and others have pointed to the real problems of government in Wales, not what the hon. Gentleman has just been talking about. They mentioned the shame of the fact that we have to witness democratically elected Welsh councils being starved of funds year after year, while unaccountable and appointed quangos are responsible for nearly £2.5 billion in the Principality.

Worse, some of those organisations fritter away thousands of pounds—much more than the cost of the so-called photograph that the hon. Gentleman spoke about. Let him read the report of the Public Accounts Committee to see what it has revealed of the squandering of public funds—Welsh money—by those quangos in the past few months alone. They get little more than a mild rebuke from the Secretary of State.

What happens to our local authorities? They have to face the most savage capping restrictions and the inevitable suspicion that goes with them. Is it any wonder that the people of Wales now regard our system of government as potentially rotten and distinctly unwholesome? For that reason alone, I urge the House to vote down these measures.

10.19 pm

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

It would be desirable if I could come to the Dispatch Box now and say that we have had a good, constructive and worthwhile debate this evening. I noticed that the hon. Member for Torfaen (Mr. Murphy) began his lengthy summing-up by referring to what I think he would want to describe as the wealth of local government experience on the Opposition Benches. But did that contribute to ordered, constructive debate? [HON. MEMBERS: "Yes."] No.

All we have had from the Opposition Benches tonight is a bunch of uncosted wish lists. Possibly one of the lengthiest came from the hon. and learned Member for Montgomery (Mr. Carlile). The one point on which I would find myself in agreement with the hon. Member for Caerphilly (Mr. Davies) is in his description of the hon. and learned Member for Montgomery as a Johnny-comelately. Perhaps he has just rushed in from the robing room, as described in the Western Mail yesterday. He had a list that managed to cover practically every service of local government.

The hon. Member for Clwyd, South-West (Mr. Jones) referred to education services, and the hon. Member for Gower (Mr. Wardell) to forensic services. We have had a parade of hon. Members wanting to give the impression that they supported the police, that they wanted to support more money for the South Wales police authority: the hon. Members for Merthyr Tydfil and Rhymney (Mr. Rowlands), for Cardiff, South and Penarth (Mr. Michael), for Caerphilly, for Ynys Môn (Mr. Jones), for Torfaen and for Bridgend (Mr. Griffiths).

I welcomed the contributions from my hon. Friends the Members for Brecon and Radnor (Mr. Evans) and for Vale of Glamorgan (Mr. Sweeney), who referred to the reality of the budget of the South Wales police authority. I understand that the authority is studying a report by the district auditor on its financial arrangements. As my right hon. Friend the Secretary of State has already made clear, police funding is a matter for the police authority and its constituent local authorities, and I see that the South Wales police are already taking the steps that they see fit to resolve the budget problem.

The wish lists carried on. The hon. Member for Bridgend brought in the need to spend on roads in Porthcawl. He seemed especially stunned by my right hon. Friend the Secretary of State pursuing him into Porthcawl today, but he felt the need to mention it in Hansard tonight. An equally lengthy list came from the hon. Member for Caerphilly. He was concerned about pay increases. That was matched by a number of hon. Gentlemen who alluded to the teachers' pay settlement. They referred to the cost of the settlement, but at no time have I heard any of them say that the teachers' pay increase was justified. I wonder why some of them are here as representatives of teachers' unions.

Surprisingly, the hon. Member for Caerphilly volunteered one figure among the almost total lack of costings that we have been given tonight. He quoted the county councils as saying that they wanted to spend another £40 million on care in the community. Generally, the hon. Gentleman in his lament about insufficient money for local government was also concerned about the alleged loss of independence for local government.

Interestingly, in that the hon. Gentleman was echoed by the hon. Member for Ynys Môn, who made a plea for more power for Welsh councils. That is odd coming from the party that we would all identify as the devolutionary party, Plaid Cymru. He would effectively take powers away from the people and give them back to councils instead. He would take the power away from parents to have more influence and control over what happens in their schools.

Presumably, he would take power away from council tenants so that they would have less control over housing, and the control would be given back to local authorities.

I can at least acknowledge the contribution of the hon. Member for Swansea, East (Mr. Anderson) who echoed the fact that community care was yet another example of the practical devolution that we have introduced, giving opportunities to local government to take that forward.

Perhaps the nutshell of today's debate was supplied by the contribution by the hon. Member for Newport, East (Mr. Hughes). He wanted more spending here and more spending there, with more spending on housing, but he preceded these comments by voicing his regret at extra taxation. The hon. Member for Caerphilly presented us with the same dichotomy. He wanted more spending but was not, so he said, in favour of more taxation.

I think that all hon. Members will have noticed that, when my hon. Friend the Member for Brecon and Radnor intervened in the speech of the hon. Member for Caerphilly, he received no answer from him about costings and how the extra expenditure would be met by the Labour party. On local government spending, as with every other sort of spending, the Labour party will not come clean, just as it did not come clean at the last general election. The Labour party is already showing that it will not come clean at the next general election.

Perhaps most worrying to many of us were the wild, sweeping statements of the hon. Member for Caerphilly. It was incredible that he appeared to equate the South Wales police authority with Westminster city council. Members of the Labour party rushed to judge Westminster city council, and the hon. Member gave the clearest impression that he applies the same judgment to members of the South Wales police authority. What confidence can any Labour member of that authority have in the man who is supposed to be Labour's shadow Secretary of State for Wales?

The hon. Member for Caerphilly made allegations about the endemic corruption in public life in Wales, and once more alluded to sleaze. It is said that beauty is in the eye of the beholder—sleaze must be in the eye of the sleazy. People such as the hon. Gentleman should realise the damage that they do and the way that they demoralise all those working in public service in Wales. It is true that there have been some failings in public service in Wales, none of which should be ignored. Such failings should be pursued as firmly as possible. The firmest line has been taken by my right hon. Friend the Secretary of State. Above all, when maintaining a proper balance, one cannot ignore the wilful damage that such people do to Wales. There are many fine people in public service in Wales who do fine work, but the Labour party smears them all with the same brush.

In his opening speech my right hon. Friend emphasised the Government's commitment to local government, and the facts speak for themselves. Even at a time of necessary restraint in public expenditure, the settlement proposals before the House increase the resources available to local government by more than £100 million or 4.2 per cent.—well ahead of inflation. Since 1990–91, the level of revenue resources has increased by 27 per cent.—if the functional changes are taken into account, the increase is well over 30 per cent. The amount of money that we are making available for care in the community will more than double.

Local authorities must budget within their means and those of the taxpayers they serve. Local government is not being singled out—it is the duty of all organisations that spend taxpayers' money to exercise prudence and restraint in their spending. That is vital if we are to maintain the momentum of economic recovery and build for the future.

I have confidence in the ability and willingness of local government in Wales to act responsibly. It is to be hoped that even the Labour councils will take forward the settlement with far more confidence than has been displayed among the Opposition tonight. I am sure that local government in Wales will do so.

Question put:—

The House divided: Ayes 303, Noes 269.

Division No. 127]	[10.28 pm
AYES
Ainsworth, Peter (East Surrey)	Clifton-Brown, Geoffrey
Aitken, Jonathan	Coe, Sebastian
Alexander, Richard	Colvin, Michael
Alison, Rt Hon Michael (Selby)	Congdon, David
Allason, Rupert (Torbay)	Conway, Derek
Amess, David	Coombs, Anthony (Wyre For'st)
Ancram, Michael	Coombs, Simon (Swindon)
Arbuthnot, James	Cope, Rt Hon Sir John
Arnold, Jacques (Gravesham)	Cormack, Patrick
Arnold, Sir Thomas (Hazel Grv)	Couchman, James
Ashby, David	Cran, James
Aspinwall, Jack	Currie, Mrs Edwina (S D'by'ire)
Atkins, Robert	Curry, David (Skipton & Ripon)
Atkinson, David (Bour'mouth E)	Davies, Quentin (Stamford)
Atkinson, Peter (Hexham)	Davis, David (Boothferry)
Baker, Rt Hon K. (Mole Valley)	Day, Stephen
Baker, Nicholas (Dorset North)	Deva, Nirj Joseph
Baldry, Tony	Dickens, Geoffrey
Banks, Matthew (Southport)	Dicks, Terry
Banks, Robert (Harrogate)	Dorrell, Stephen
Bates, Michael	Douglas-Hamilton, Lord James
Batiste, Spencer	Dover, Den
Beggs, Roy	Duncan, Alan
Bellingham, Henry	Duncan-Smith, Iain
Beresford, Sir Paul	Dunn, Bob
Biffen, Rt Hon John	Durant, Sir Anthony
Blackburn, Dr John G.	Dykes, Hugh
Bonsor, Sir Nicholas	Eggar, Tim
Booth, Hartley	Elletson, Harold
Boswell, Tim	Emery, Rt Hon Sir Peter
Bottomley, Peter (Eltham)	Evans, David (Welwyn Hatfield)
Bottomley, Rt Hon Virginia	Evans, Jonathan (Brecon)
Bowden, Andrew	Evans, Nigel (Ribble Valley)
Bowis, John	Evans, Roger (Monmouth)
Boyson, Rt Hon Sir Rhodes	Evennett, David
Brandreth, Gyles	Faber, David
Brazier, Julian	Fabricant, Michael
Bright, Graham	Field, Barry (Isle of Wight)
Brooke, Rt Hon Peter	Fishburn, Dudley
Brown, M. (Brigg & Cl'thorpes)	Forman, Nigel
Browning, Mrs. Angela	Forsyth, Michael (Stirling)
Bruce, Ian (S Dorset)	Forth, Eric
Budgen, Nicholas	Fowler, Rt Hon Sir Norman
Burns, Simon	Fox, Dr Liam (Woodspring)
Burt, Alistair	Fox, Sir Marcus (Shipley)
Butcher, John	Freeman, Rt Hon Roger
Butler, Peter	French, Douglas
Butterfill, John	Fry, Sir Peter
Carlisle, John (Luton Norm)	Gale, Roger
Carlisle, Kenneth (Lincoln)	Gallie, Phil
Carrington, Matthew	Gardiner, Sir George
Carttiss, Michael	Garnier, Edward
Cash, William	Gill, Christopher
Channon, Rt Hon Paul	Gillan, Cheryl
Chapman, Sydney	Goodlad, Rt Hon Alastair
Churchill, Mr	Goodson-Wickes, Dr Charles
Clappison, James	Gorman, Mrs Teresa
Clark, Dr Michael (Rochford)	Gorst, John
Clarke, Rt Hon Kenneth (Ruclif)	Grant, Sir A. (Cambs SW)

Greenway, Harry (Ealing N)	Moate, Sir Roger
Greenway, John (Ryedale)	Monro, Sir Hector
Griffiths, Peter (Portsmouth, N)	Montgomery, Sir Fergus
Grylls, Sir Michael	Moss, Malcolm
Gummer, Rt Hon John Selwyn	Needham, Richard
Hague, William	Nelson, Anthony
Hamilton, Rt Hon Sir Archie	Neubert, Sir Michael
Hamilton, Neil (Tatton)	Newton, Rt Hon Tony
Hampson, Dr Keith	Nicholls, Patrick
Hannam, Sir John	Nicholson, David (Taunton)
Hargreaves, Andrew	Nicholson, Emma (Devon West)
Harris, David	Norris, Steve
Haselhurst, Alan	Onslow, Rt Hon Sir Cranley
Hawkins, Nick	Oppenheim, Phillip
Hawksley, Warren	Ottaway, Richard
Hayes, Jerry	Page, Richard
Heald, Oliver	Paice, James
Heathcoat-Amory, David	Patnick, Irvine
Hendry, Charles	Patten, Rt Hon John
Hicks, Robert	Pattie, Rt Hon Sir Geoffrey
Higgins, Rt Hon Sir Terence L.	Pawsey, James
Hill, James (Southampton Test)	Peacock, Mrs Elizabeth
Hogg, Rt Hon Douglas (G'tham)	Pickles, Eric
Horam, John	Porter, Barry (Wirral S)
Howarth, Alan (Straf'rd-on-A)	Porter, David (Waveney)
Howell, Rt Hon David (G'dford)	Portillo, Rt Hon Michael
Howell, Sir Ralph (N Norfolk)	Rathbone, Tim
Hughes Robert G. (Harrow W)	Redwood, Rt Hon John
Hunt, Rt Hon David (Wirral W)	Renton, Rt Hon Tim
Hunt, Sir John (Ravensboume)	Richards, Rod
Hunter, Andrew	Riddick, Graham
Jack, Michael	Robathan, Andrew
Jackson, Robert (Wantage)	Roberts, Rt Hon Sir Wyn
Jenkin, Bernard	Robertson, Raymond (Ab'd'n S)
Jessel, Toby	Robinson, Mark (Somerton)
Johnson Smith, Sir Geoffrey	Roe, Mrs Marion (Broxbourne)
Jones, Gwilym (Cardiff N)	Rowe, Andrew (Mid Kent)
Jones, Robert B. (W Hertfdshr)	Rumbold, Rt Hon Dame Angela
Kellett-Bowman, Dame Elaine	Ryder, Rt Hon Richard
Key, Robert	Sackville, Tom
Kilfedder, Sir James	Sainsbury, Rt Hon Tim
King, Rt Hon Tom	Scott, Rt Hon Nicholas
Kirkhope, Timothy	Shaw, David (Dover)
Knapman, Roger	Shaw, Sir Giles (Pudsey)
Knight, Mrs Angela (Erewash)	Shepherd, Colin (Hereford)
Knight, Greg (Derby N)	Shepherd, Richard (Aldridge)
Knight, Dame Jill (Bir'm E'st'n)	Shersby, Michael
Knox, Sir David	Sims, Roger
Kynoch, George (Kincardine)	Skeet, Sir Trevor
Lait, Mrs Jacqui	Smith, Sir Dudley (Warwick)
Lang, Rt Hon Ian	Smith, Tim (Beaconsfield)
Lawrence, Sir Ivan	Soames, Nicholas
Legg, Barry	Speed, Sir Keith
Leigh, Edward	Spicer, Sir James (W Dorset)
Lennox-Boyd, Mark	Spicer, Michael (S Worcs)
Lester, Jim (Broxtowe)	Spink, Dr Robert
Lidington, David	Spring, Richard
Lilley, Rt Hon Peter	Sproat, Iain
Lloyd, Rt Hon Peter (Fareham)	Squire, Robin (Hornchurch)
Lord, Michael	Stanley, Rt Hon Sir John
Luff, Peter	Steen, Anthony
Lyell, Rt Hon Sir Nicholas	Stephen, Michael
MacGregor, Rt Hon John	Stem, Michael
MacKay, Andrew	Stewart, Allan
Maclean, David	Streeter, Gary
McLoughlin, Patrick	Sumberg, David
Madel, Sir David	Sweeney, Walter
Maitland, Lady Olga	Sykes, John
Malone, Gerald	Tapsell, Sir Peter
Mans, Keith	Taylor, Ian (Esher)
Marland, Paul	Taylor, John M. (Solihull)
Marlow, Tony	Taylor, Sir Teddy (Southend, E)
Marshall, John (Hendon S)	Temple-Morris, Peter
Martin, David (Portsmouth S)	Thomason, Roy
Mates, Michael	Thompson, Sir Donald (C'er V)
Mawhinney, Rt Hon Dr Brian	Thompson, Patrick (Norwich N)
Merchant, Piers	Thornton, Sir Malcolm
Mills, Iain	Thurnham, Peter
Mitchell, Andrew (Gedling)	Townend, John (Bridlington)
Mitchell, Sir David (Hants NW)	Townsend, Cyril D. (Bexl'yh'th)

Tracey, Richard	Wheeler, Rt Hon Sir John
Trend, Michael	Whitney, Ray
Trotter, Neville	Whittingdale, John
Twinn, Dr Ian	Widdecombe, Ann
Vaughan, Sir Gerard	Wiggin, Sir Jerry
Viggers, Peter	Wilkinson, John
Waldegrave, Rt Hon William	Willetts, David
Walden, George	Wilshire, David
Walker, Bill (N Tayside)	Wolfson, Mark
Waller, Gary	Young, Rt Hon Sir George
Ward, John
Wardle, Charles (Bexhill)	Tellers for the Ayes:
Waterson, Nigel	Mr. David Lightbown and Mr. Timothy Wood.
Watts, John
Wells, Bowen

NOES
Abbott, Ms Diane	Cunningham, Jim (Covy SE)
Adams, Mrs Irene	Dafis, Cynog
Ainger, Nick	Dalyell, Tam
Ainsworth, Robert (Cov'try NE)	Darling, Alistair
Allen, Graham	Davidson, Ian
Alton, David	Davies, Bryan (Oldham C'tral)
Anderson, Donald (Swansea E)	Davies, Rt Hon Denzil (Llanelli)
Anderson, Ms Janet (Ros'dale)	Davies, Ron (Caerphilly)
Armstrong, Hilary	Davis, Terry (B'ham, H'dge H'l)
Ashton, Joe	Dewar, Donald
Austin-Walker, John	Dixon, Don
Banks, Tony (Newham NW)	Dobson, Frank
Barnes, Harry	Donohoe, Brian H.
Barron, Kevin	Dowd, Jim
Battle, John	Dunwoody, Mrs Gwyneth
Bayley, Hugh	Eagle, Ms Angela
Beckett, Rt Hon Margaret	Eastham, Ken
Beith, Rt Hon A. J.	Enright, Derek
Bell, Stuart	Etherington, Bill
Benn, Rt Hon Tony	Evans, John (St Helens N)
Bennett, Andrew F.	Fatchett, Derek
Benton, Joe	Faulds, Andrew
Bermingham, Gerald	Fisher, Mark
Berry, Dr. Roger	Flynn, Paul
Betts, Clive	Foster, Rt Hon Derek
Blunkett, David	Foster, Don (Bath)
Boateng, Paul	Foulkes, George
Boyes, Roland	Fraser, John
Bradley, Keith	Fyfe, Maria
Bray, Dr Jeremy	Galbraith, Sam
Brown, Gordon (Dunfermline E)	Galloway, George
Brown, N. (N'c'tle upon Tyne E)	Gapes, Mike
Bruce, Malcolm (Gordon)	Garrett, John
Burden, Richard	George, Bruce
Byers, Stephen	Gerrard, Neil
Caborn, Richard	Gilbert, Rt Hon Dr John
Callaghan, Jim	Godman, Dr Norman A.
Campbell, Mrs Anne (C'bridge)	Godsiff, Roger
Campbell, Menzies (Fife NE)	Golding, Mrs Llin
Campbell, Ronnie (Blyth V)	Gordon, Mildred
Campbell-Savours, D. N.	Graham, Thomas
Caravan, Dennis	Grant, Bernie (Tottenham)
Cann, Jamie	Griffiths, Nigel (Edinburgh S)
Carlile, Alexander (Montgomry)	Griffiths, Win (Bridgend)
Chisholm, Malcolm	Grocott, Bruce
Clapham, Michael	Gunnell, John
Clark, Dr David (South Shields)	Hain, Peter
Clarke, Eric (Midlothian)	Hall, Mike
Clarke, Tom (Monklands W)	Hanson, David
Clelland, David	Hardy, Peter
Clwyd, Mrs Ann	Harman, Ms Harriet
Coffey, Ann	Hattersley, Rt Hon Roy
Connarty, Michael	Henderson, Doug
Cook, Frank (Stockton N)	Heppell, John
Cook, Robin (Livingston)	Hill, Keith (Streatham)
Corbett, Robin	Hinchliffe, David
Corbyn, Jeremy	Hoey, Kate
Corston, Ms Jean	Home Robertson, John
Cousins, Jim	Hood, Jimmy
Cox, Tom	Hoon, Geoffrey
Cryer, Bob	Howarth, George (Knowsley N)
Cummings, John	Howells, Dr. Kim (Pontypridd)
Cunliffe, Lawrence	Hoyle, Doug

Hughes, Kevin (Doncaster N)	Orme, Rt Hon Stanley
Hughes, Robert (Aberdeen N)	Parry, Robert
Hughes, Roy (Newport E)	Patchett, Terry
Hughes, Simon (Southwark)	Pendry, Tom
Hutton, John	Pickthall, Colin
Illsley, Eric	Pike, Peter L.
Ingram, Adam	Pope, Greg
Jackson, Glenda (H'stead)	Powell, Ray (Ogmore)
Jackson, Helen (Shef'ld, H)	Prentice, Ms Bridget (Lew'm E)
Jamieson, David	Prentice, Gordon (Pendle)
Jones, Barry (Alyn and D'side)	Prescott, John
Jones, leuan Wyn (Ynys Môn)	Primarolo, Dawn
Jones, Lynne (B'ham S O)	Purchase, Ken
Jones, Martyn (Clwyd, SW)	Quin, Ms Joyce
Jones, Nigel (Cheltenham)	Radice, Giles
Jowell, Tessa	Randall, Stuart
Keen, Alan	Raynsford, Nick
Kennedy, Charles (Ross.C&S)	Redmond, Martin
Kennedy, Jane (Lpool Brdgn)	Reid, Dr John
Khabra, Piara S.	Rendel, David
Kilfoyle, Peter	Robertson, George (Hamilton)
Kinnock, Rt Hon Neil (Islwyn)	Robinson, Geoffrey (Co'try NW)
Kirkwood, Archy	Roche, Mrs. Barbara
Leighton, Ron	Rogers, Allan
Lestor, Joan (Eccles)	Rooker, Jeff
Lewis, Terry	Rooney, Terry
Litheriand, Robert	Ross, Ernie (Dundee W)
Livingstone, Ken	Rowlands, Ted
Lloyd, Tony (Stretford)	Ruddock, Joan
Loyden, Eddie	Sedgemore, Brian
Lynne, Ms Liz	Sheerman, Barry
McAllion, John	Shore, Rt Hon Peter
McAvoy, Thomas	Short, Clare
McCartney, Ian	Simpson, Alan
Macdonald, Calum	Skinner, Dennis
McFall, John	Smith, Andrew (Oxford E)
McKelvey, William	Smith, C. (Isl'ton S & F'sbury)
Mackinlay, Andrew	Smith, Llew (Blaenau Gwent)
McLeish, Henry	Snape, Peter
McMaster, Gordon	Soley, Clive
McNamara, Kevin	Spearing, Nigel
McWilliam, John	Spellar, John
Madden, Max	Squire, Rachel (Dunfermline W)
Maddock, Mrs Diana	Steinberg, Gerry
Mahon, Alice	Stevenson, George
Mandelson, Peter	Stott, Roger
Marek, Dr John	Strang, Dr. Gavin
Marshall, David (Shettleston)	Straw, Jack
Marshall, Jim (Leicester, S)	Taylor, Mrs Ann (Dewsbury)
Martin, Michael J. (Springburn)	Taylor, Matthew (Truro)
Martlew, Eric	Turner, Dennis
Maxton, John	Vaz, Keith
Meacher, Michael	Walker, Rt Hon Sir Harold
Meale, Alan	Walley, Joan
Michael, Alun	Warden, Gareth (Gower)
Michie, Bill (Sheffield Heeley)	Wareing, Robert N
Michie, Mrs Ray (Argyll Bute)	Watson, Mike
Milburn, Alan	Welsh, Andrew
Miller, Andrew	Wicks, Malcolm
Mitchell, Austin (Gt Grimsby)	Wigley, Dafydd
Moonie, Dr Lewis	Williams, Rt Hon Alan (Sw'n W)
Morgan, Rhodri	Williams, Alan W (Carmarthen)
Mortey, Elliot	Wilson, Brian
Morris, Estelle (B'ham Yardley)	Winnick, David
Morris, Rt Hon J. (Aberavon)	Wise, Audrey
Mudie, George	Worthington, Tony
Mullin, Chris	Wray, Jimmy
Murphy, Paul	Wright, Dr Tony
Oakes, Rt Hon Gordon	Young, David (Bolton SE)
O'Brien, Michael (N W'kshire)
O'Brien, William (Normanton)	Tellers for the Noes:
O'Hara, Edward	Mr. Jon Owen Jones and Mr. Jack Thompson.
Olner, William
O'Neill, Martin

Question accordingly agreed to.

Resolved, That the Local Government Finance (Amendment) Report (Wales) 1993–94 (House of Commons Paper No. 169), which was laid before this House on 31st January, be approved.

Motion made, and Question put,?

That the Local Government Finance Report (Wales) 1994–95 (House of Commons Paper No. 168), which was laid before this House on 31st January, be approved.—[Mr. Conway.]

The House divided: Ayes 292, Noes 178.

Division No. 128]	[10.43 pm
AYES
Ainsworth, Peter (East Surrey)	Day, Stephen
Aitken, Jonathan	Deva, Nirj Joseph
Alexander, Richard	Dorrell, Stephen
Alison, Rt Hon Michael (Selby)	Douglas-Hamilton, Lord James
Allason, Rupert (Torbay)	Dover, Den
Amess, David	Duncan, Alan
Ancram, Michael	Duncan-Smith, Iain
Arbuthnot, James	Dunn, Bob
Arnold, Jacques (Gravesham)	Durant, Sir Anthony
Arnold, Sir Thomas (Hazel Grv)	Dykes, Hugh
Ashby, David	Eggar, Tim
Aspinwall, Jack	Elletson, Harold
Atkinson, David (Bour'mouth E)	Emery, Rt Hon Sir Peter
Atkinson, Peter (Hexham)	Evans, David (Welwyn Hatfield)
Baker, Rt Hon K. (Mole Valley)	Evans, Jonathan (Brecon)
Baker, Nicholas (Dorset North)	Evans, Nigel (Ribble Valley)
Baldry, Tony	Evans, Roger (Monmouth)
Banks, Matthew (Southport)	Evennett, David
Banks, Robert (Harrogate)	Faber, David
Bates, Michael	Fabricant, Michael
Batiste, Spencer	Field, Barry (Isle of Wight)
Beggs, Roy	Fishburn, Dudley
Bellingham, Henry	Forman, Nigel
Beresford, Sir Paul	Forsyth, Michael (Stirling)
Biffen, Rt Hon John	Forth, Eric
Blackburn, Dr John G.	Fowler, Rt Hon Sir Norman
Bonsor, Sir Nicholas	Fox, Dr Liam (Woodspring)
Booth, Hartley	Freeman, Rt Hon Roger
Boswell, Tim	French, Douglas
Bottomley, Peter (Eltham)	Gale, Roger
Bottomley, Rt Hon Virginia	Gallie, Phil
Bowden, Andrew	Gardiner, Sir George
Bowis, John	Garnier, Edward
Boyson, Rt Hon Sir Rhodes	Gill, Christopher
Brandreth, Gyles	Gillan, Cheryl
Brazier, Julian	Goodlad, Rt Hon Alastair
Bright, Graham	Goodson-Wickes, Dr Charles
Brooke, Rt Hon Peter	Gorman, Mrs Teresa
Brown, M. (Brigg & Cl'thorpes)	Gorst, John
Browning, Mrs. Angela	Grant, Sir A. (Cambs SW)
Bruce, Ian (S Dorset)	Greenway, Harry (Ealing N)
Budgen, Nicholas	Greenway, John (Ryedale)
Burns, Simon	Griffiths, Peter (Portsmouth, N)
Burt, Alistair	Grylls, Sir Michael
Butcher, John	Gummer, Rt Hon John Selwyn
Butler, Peter	Hague, William
Butterfill, John	Hamilton, Rt Hon Sir Archie
Carlisle, John (Luton North)	Hamilton, Neil (Tatton)
Carlisle, Kenneth (Lincoln)	Hampson, Dr Keith
Carrington, Matthew	Hannam, Sir John
Carttiss, Michael	Hargreaves, Andrew
Cash, William	Harris, David
Channon, Rt Hon Paul	Haselhurst, Alan
Churchill, Mr	Hawkins, Nick
Clappison, James	Hayes, Jerry
Clark, Dr Michael (Rochford)	Heald, Oliver
Clarke, Rt Hon Kenneth (Ruclif)	Heathcoat-Amory, David
Clifton-Brown, Geoffrey	Hendry, Charles
Coe, Sebastian	Hicks, Robert
Colvin, Michael	Higgins, Rt Hon Sir Terence L.
Congdon, David	Hill, James (Southampton Test)
Conway, Derek	Hogg, Rt Hon Douglas (G'tham)
Coombs, Anthony (Wyre For'st)	Horam, John
Coombs, Simon (Swindon)	Howarth, Alan (Strat'rd-on-A)
Cope, Rt Hon Sir John	Howell, Rt Hon David (G'dford)
Cormack, Patrick	Hughes Robert G. (Harrow W)
Cran, James	Hunt, Rt Hon David (Wirral W)
Currie, Mrs Edwina (S D'by'ire)	Hunter, Andrew
Curry, David (Skipton & Ripon)	Jack, Michael
Davies, Quentin (Stamford)	Jackson, Robert (Wantage)
Davis, David (Boothferry)	Jenkin, Bernard

Jessel, Toby	Robertson, Raymond (Ab'd'n S
Johnson Smith, Sir Geoffrey	Robinson, Mark (Somerton)
Jones, Gwilym (Cardiff N)	Roe, Mrs Marion (Broxbourne)
Jones, Robert B. (W Hertfdshr)	Rowe, Andrew (Mid Kent)
Kellett-Bowman, Dame Elaine	Rumbold, Rt Hon Dame Angela
Key, Robert	Ryder, Rt Hon Richard
Kilfedder, Sir James	Sackville, Tom
King, Rt Hon Tom	Sainsbury, Rt Hon Tim
Kirkhope, Timothy	Scott, Rt Hon Nicholas
Knapman, Roger	Shaw, David (Dover)
Knight, Mrs Angela (Erewash)	Shaw, Sir Giles (Pudsey)
Knight, Greg (Derby N)	Shepherd, Colin (Hereford)
Knox, Sir David	Shepherd, Richard (Aldridge)
Kynoch, George (Kincardine)	Shersby, Michael
Lait, Mrs Jacqui	Sims, Roger
Lang, Rt Hon Ian	Skeet, Sir Trevor
Lawrence, Sir Ivan	Smith, Sir Dudley (Warwick)
Legg, Barry	Smith, Tim (Beaconsfield)
Leigh, Edward	Soames, Nicholas
Lennox-Boyd, Mark	Speed, Sir Keith
Lester, Jim (Broxtowe)	Spicer, Sir James (W Dorset)
Lidington, David	Spicer, Michael (S Worcs)
Lightbown, David	Spink, Dr Robert
Lilley, Rt Hon Peter	Spring, Richard
Lloyd, Rt Hon Peter (Fareham)	Sproat, Iain
Luff, Peter	Squire, Robin (Hornchurch)
Lyell, Rt Hon Sir Nicholas	Stanley, Rt Hon Sir John
MacGregor, Rt Hon John	Steen, Anthony
MacKay, Andrew	Stephen, Michael
Maclean, David	Stern, Michael
McLoughlin, Patrick	Stewart, Allan
Madel, Sir David	Streeter, Gary
Maitland, Lady Olga	Sumberg, David
Malone, Gerald	Sweeney, Walter
Mans, Keith	Sykes, John
Marland, Paul	Tapsell, Sir Peter
Marlow, Tony	Taylor, Ian (Esher)
Marshall, John (Hendon S)	Taylor, John M. (Solihull)
Martin, David (Portsmouth S)	Taylor, Sir Teddy (Southend, E)
Mates, Michael	Temple-Morris, Peter
Mawhinney, Rt Hon Dr Brian	Thomason, Roy
Merchant, Piers	Thompson, Sir Donald (C'er V)
Mills, Iain	Thompson, Patrick (Norwich N)
Mitchell, Andrew (Gedling)	Thornton, Sir Malcolm
Mitchell, Sir David (Hants NW)	Thumham, Peter
Moate, Sir Roger	Townend, John (Bridlington)
Monro, Sir Hector	Townsend, Cyril D. (Bexl'yh'th)
Montgomery, Sir Fergus	Tracey, Richard
Needham, Richard	Trend, Michael
Nelson, Anthony	Trotter, Neville
Neubert, Sir Michael	Twinn, Dr Ian
Newton, Rt Hon Tony	Vaughan, Sir Gerard
Nicholls, Patrick	Viggers, Peter
Nicholson, David (Taunton)	Waldegrave, Rt Hon William
Nicholson, Emma (Devon West)	Walden, George
Norris, Steve	Walker, Bill (N Tayside)
Onslow, Rt Hon Sir Cranley	Walter, Gary
Oppenheim, Phillip	Ward, John
Ottaway, Richard	Wardle, Charles (Bexhill)
Page, Richard	Waterson, Nigel
Paice, James	Watts, John
Patten, Rt Hon John	Wells, Bowen
Pattie, Rt Hon Sir Geoffrey	Wheeler, Rt Hon Sir John
Pawsey, James	Whitney, Ray
Peacock, Mrs Elizabeth	Whittingdale, John
Pickles, Eric	Widdecombe, Ann
Porter, Barry (Wirral S)	Wiggin, Sir Jerry
Porter, David (Waveney)	Wilkinson, John
Portillo, Rt Hon Michael	Willetts, David
Rathbone, Tim	Wilshire, David
Redwood, Rt Hon John	Wolfson, Mark
Renton, Rt Hon Tim	Wood, Timothy
Richards, Rod	Young, Rt Hon Sir George
Riddick, Graham
Rifkind, Rt Hon. Malcolm	Tellers for the Ayes:
Robathan, Andrew	Mr. Sydney Chapman and Mr. Irvine Patnick.
Roberts, Rt Hon Sir Wyn

NOES
Abbott, Ms Diane	Hall, Mike
Adams, Mrs Irene	Hanson, David
Ainsworth, Robert (Cov'try NE)	Hardy, Peter
Alton, David	Harman, Ms Harriet
Armstrong, Hilary	Hill, Keith (Streatham)
Austin-Walker, John	Hinchliffe, David
Banks, Tony (Newham NW)	Home Robertson, John
Barnes, Harry	Hood, Jimmy
Battle, John	Hoon, Geoffrey
Bayley, Hugh	Howarth, George (Knowsley N)
Beith, Rt Hon A. J.	Hoyle, Doug
Benn, Rt Hon Tony	Hughes, Kevin (Doncaster N)
Benton, Joe	Hughes, Robert (Aberdeen N)
Bermingham, Gerald	Hughes, Simon (Southwark)
Betts, Clive	Hutton, John
Blunkett, David	Illsley, Eric
Boyes, Roland	Jackson, Helen (Shef'ld, H)
Bradley, Keith	Jones, Barry (Alyn and D'side)
Brown, N. (N'c'tle upon Tyne E)	Jones, leuan Wyn (Ynys Môn)
Bruce, Malcolm (Gordon)	Jones, Nigel (Cheltenham)
Burden, Richard	Jowell, Tessa
Byers, Stephen	Kennedy, Charles (Ross,C&S)
Caborn, Richard	Kennedy, Jane (Lpool Brdgn)
Callaghan, Jim	Kilfoyle, Peter
Campbell, Mrs Anne (C'bridge)	Kirkwood, Archy
Campbell, Menzies (Fife NE)	Leighton, Ron
Campbell, Ronnie (Blyth V)	Litherland, Robert
Campbell-Savours, D. N.	Loyden, Eddie
Canavan, Dennis	Lynne, Ms Liz
Cann, Jamie	McAllion, John
Carlile, Alexander (Montgomry)	McAvoy, Thomas
Chisholm, Malcolm	McCartney, Ian
Clapham, Michael	Macdonald, Calum
Clark, Dr David (South Shields)	McFall, John
Clarke, Eric (Midlothian)	Mackinlay, Andrew
Clarke, Tom (Monklands W)	McMaster, Gordon
Clelland, David	McWilliam, John
Clwyd, Mrs Ann	Madden, Max
Coffey, Ann	Maddock, Mrs Diana
Connarty, Michael	Mahon, Alice
Cook, Robin (Livingston)	Mandelson, Peter
Corbyn, Jeremy	Marshall, David (Shettleston)
Corston, Ms Jean	Martin, Michael J. (Springburn)
Cox, Tom	Martlew, Eric
Cunliffe, Lawrence	Maxton, John
Cunningham, Jim (Covy SE)	Meale, Alan
Dafis, Cynog	Michie, Bill (Sheffield Heeley)
Dalyell, Tam	Milburn, Alan
Darling, Alistair	Miller, Andrew
Davidson, Ian	Morris, Estelle (B'ham Yardley)
Davis, Terry (B'ham, H'dge H'l)	Mudie, George
Dewar, Donald	Mullin, Chris
Dixon, Don	O'Brien, Michael (N W'kshire)
Dobson, Frank	Olner, William
Dowd, Jim	O'Neill, Martin
Eagle, Ms Angela	Orme, Rt Hon Stanley
Eastham, Ken	Patchett, Terry
Enright, Derek	Pickthall, Colin
Etherington, Bill	Pike, Peter L.
Evans, John (St Helens N)	Pope, Greg
Fatchett, Derek	Powell, Ray (Ogmore)
Faulds, Andrew	Prescott, John
Fisher, Mark	Primarolo, Dawn
Foster, Rt Hon Derek	Purchase, Ken
Foster, Don (Bath)	Quin, Ms Joyce
Foulkes, George	Raynsford, Nick
Fyfe, Maria	Redmond, Martin
Galloway, George	Reid, Dr John
Gerrard, Neil	Rendel, David
Gilbert, Rt Hon Dr John	Robertson, George (Hamilton)
Godman, Dr Norman A.	Roche, Mrs. Barbara
Godsiff, Roger	Rooney, Terry
Golding, Mrs Llin	Salmond, Alex
Gordon, Mildred	Sedgemore, Brian
Graham, Thomas	Short, Clare
Grant, Bernie (Tottenham)	Simpson, Alan
Griffiths, Nigel (Edinburgh S)	Skinner, Dennis
Griffiths, Win (Bridgend)	Smith, Andrew (Oxford E)
Gunnell, John	Smith, C. (Isl'ton S & F'sbury)

Smith, Llew (Blaenau Gwent)	Wareing, Robert N
Snape, Peter	Watson, Mike
Spearing, Nigel	Welsh, Andrew
Spellar, John	Wigley, Dafydd
Squire, Rachel (Dunfermline W)	Wilson, Brian
Steinberg, Gerry	Wise, Audrey
Strang, Dr. Gavin	Worthington, Tony
Taylor, Mrs Ann (Dewsbury)	Wray, Jimmy
Taylor, Matthew (Truro)
Turner, Dennis	Tellers for the Noes:
Walker, Rt Hon Sir Harold	Mr. Bob Cryer and Mr. Terry Lewis.
Wardell, Gareth (Gower)

Question accordingly agreed to.