Local Government Finance (Wales)

HC Deb 08 February 1995 vol 254 cc350-402 3.43 pm

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

I beg to move, That the Local Government Finance Report (Wales) 1995–96 (House of Commons Paper No. 140), which was laid before this House on 2nd February, be approved.

Madam Speaker

I understand that with this it will be convenient to discuss the following motions: That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (Wales) 1995–96 (House of Commons Paper No. 141), which was laid before this House on 2nd February, be approved. That the Special Grant Report (Wales) 1995 (House of Commons Paper No. 142), which was laid before this House on 2nd February, be approved.

Mr. Redwood

The motions allow total standard spending of £2,782 million for local government in Wales in 1995–96; an increase of 3.24 per cent. and an increase well ahead of inflation. The motions represent £15.1 million more than that which I announced on 29 November 1994, as the amount includes extra money for the police following the consultation. That takes the total increase to £87 million, when compared with the equivalent spending this year. It brings the increase to £600 million—or 30 per cent.—since 1990–91 which is well ahead of inflation at 21.3 per cent. That gives the lie to some of the criticisms that were made ahead of the debate to the effect that we had cut spending or been mean. Here is another large increase for the people of Wales and the services provided by their local government.

Mr. Alan W. Williams (Carmarthen)

The Secretary of State has mentioned a figure of £2,782 million, and Hansard tells us that on 14 December 1994, talking about the budget for Wales, he said that £2,767 million represented an increase of 2.7 per cent. However, I have a letter here from the chief executive of Dyfed county council saying that that £2,767 million is in fact £48.9 million less than the local authority budgets for this financial year. What the Secretary of State portrays as an increase of 2.7 per cent.—rising today to 3.2 per cent.—is really a cut of 1.8 per cent. below the existing level of expenditure. Can the right hon. Gentleman explain what is wrong with the chief executive's arithmetic?

Mr. Redwood

There are two ways in which the chief executive could be wrong. First, we must adjust for the change in functions. I was very careful about what I said, and if we compare like with like we see the increase that I have described. Perhaps the council's figures were not properly adjusted for the change in functions.

Secondly, as I have said, we must compare like with like. We must compare the total suggested to the House last year with the total suggested this year, or we could compare budgets with budgets. But we must not confuse the figures or we shall get a silly answer. I am comparing like with like, and making the right adjustments for the new range of functions that local government is undertaking.

Mr. Barry Jones (Alyn and Deeside)

Does the optimism of the Secretary of State's opening statement presage an intervention, or even a subvention, for the benefit of the hard-pressed local education authority in Clwyd? The possibility of major cuts in teacher numbers and the problems facing the county in providing for special needs are causing deep concern there. Will the right hon. Gentleman deal with those issues?

Mr. Redwood

Willingly; I shall speak in detail about Clwyd's budget later. I know that concerns have been expressed, but I believe that there are easy ways in which Clwyd could find the money that I believe its schools need and deserve, and I hope that the county councillors will look more carefully and find the right answer for local people.

Mr. David Hanson (Delyn)

The chief executive of Clwyd county council has said that as a result of the grant figures before us Clwyd will face a cut of £8 million—about 4 per cent.—because inflation has not been included in the settlement at the proper rate. Schools and many parents in my constituency and elsewhere are appalled at the consequences of the settlement and have urged me to vote against it. What justification can the Secretary of State offer me to take back to them?

Mr. Redwood

I shall explain later where I think the money can come from to provide high-quality education in Clwyd. That is what I want, and I am sure that it is what Opposition Members want, too. Given the generosity of the settlement, the solution lies in the county's hands.

The notional amounts report adjusts this year's county figures for the creation of self-standing police authorities from 1 April 1995. I propose to use those adjusted figures to measure increases in 1995–96 for capping purposes. The counties have been consulted on those figures and agree that they are accurate.

The special grant report will enable me to pay grants totalling £19.5 million to the new unitary local authorities in Wales that will be elected on 4 May. These grants meet in full the local authority associations' estimate of the running costs of the new authorities in their shadow period. I want them to get off to a good start and I hope that, if nothing else, Opposition Members will welcome our generosity in not only meeting the bill in full but meeting it by way of grant, so that there can be no question but that the money will be there to do the job.

I have consulted the local authority associations on the formula for distributing the grants and they have endorsed it. Total standard spending of £2,782.1 million includes £315.8 million for the new police authorities and £124.4 million for community care; £156 million will be paid as police grant to authorities by the Home Secretary, which the House has already approved, and the balance of £159.8 million will be provided by standard spending assessments.

I propose to provide £2,466 million in aggregate external finance, an increase of 2.4 per cent on the 1994–95 level. This will comprise £1,718.3 million in revenue support grant, £520 million in distributable non-domestic rates and £227.7 million in other revenue grants. It accounts for about 89 per cent. of total standard spending, compared with about 80 per cent. in the English equivalent settlement.

That means that Welsh council tax payers will continue to benefit from substantially lower levels of tax than their counterparts in England as a result of the settlement. I hope that Opposition Members will weigh that up carefully before thinking about voting against the proposal.

A new non-domestic rating list will come into force on 1 April. That shows an overall increase in rateable values for Wales of 18 per cent., reflecting the relative improvement in property values compared with London and southern England since the last valuation. That shows that the Welsh economy is doing relatively well, and that it is growing fast during a strong recovery.

The levels of rates raised from the new list must by law be the same in real terms as the rates raised in 1994–95. To counterbalance the rise in values, the poundage will fall from 44.2p to 39p next year. Some ratepayers' valuations have risen by considerably more than the compensating decline in poundage since the last valuation.

As my right hon. and learned Friend the Chancellor announced in his Budget, we have acted to limit the real rate rise in 1995–1996 to 10 per cent. for any given property and 7.5 per cent for smaller properties, usually occupied by smaller businesses. The cost of this will be met in part by phasing in rate reductions for those who gain from the revaluation and in part by a £25 million Exchequer contribution. Around 60,000 ratepayers in Wales will be assisted by the transitional arrangements.

The aim of the police funding formula is to distribute resources fairly to police authorities in Wales and England, taking account of each area's need for police services. The settlement represents an increase of over £30 million for Welsh police authorities compared with police budgets for 1994–95. It gives the new authorities a sound base for providing high-quality services in their first year. It also shows how disappointing Welsh Labour local government has been in meeting the needs of the police when it had the freedom to do so. I withdrew that freedom with great reluctance, but the decision represented by this budget is extremely popular in Wales, especially south Wales, where it gives a big boost to the police force.

I want the authorities to concentrate on appointing more constables and sergeants to patrol our streets and detect criminals. I do not wish to see the money spent on too much extra management or new offices. I look to the new police authorities to spend it wisely in line with the public's wish for effective crime control and reassurance.

I thoroughly disagree with the Labour party in its contention that £87 million more is not enough. Next year the counties will have sufficient money to pay for the teachers currently employed and, if they wish, they could recruit some more. LEA schools in Wales began this financial year with balances of £47.6 million. That was money given to schools in past years, and they still have considerable balances.

I remember an early visit which I made as Secretary of State to Clwyd to see a new development project. I was greeted by a crowd of chanting pupils from a local school, who had been permitted to do so by teachers and Labour councillors—perhaps they had even been organised by one or two of them. They shouted that the settlement that year was too low.

When I tried to discuss the matter with the pupils, I discovered they did not know how big the budget was, how much it had gone up by, or how the county proposed to spend the money that Parliament had voted. I felt that those pupils had been manipulated by people out to play politics with their lives in a quite disgraceful way.

Imagine my interest in discovering that Clwyd LEA schools had £5.2 million in unused balances at the start of this year—hardly evidence that past settlements, which have been criticised, have been mean. If the schools spent that money next year, it would have the effect of increasing their delegated budgets by almost 5 per cent.

Mr. Martyn Jones (Clwyd, South-West)

The Secretary of State knows that schools which manage their own budgets have to keep balances. The district auditors would be down on them like a ton of bricks if they did not. If the Secretary of State is so keen on giving money to the police because they lace cuts under the present SSA arrangement, does he not realise that Clwyd faces cuts in teacher numbers under the present SSA arrangement? Will he treat the education of children in Clwyd: in the same way as the police force in Clwyd?

Mr. Redwood

I do not propose to take powers away from Clwyd county council to decide how much should go to the schools. That is an important local democratic power. I am entitled to argue about how schools should carry out their functions when they argue that I have not given them enough money. I am about to demonstrate that there is plenty of money if the schools choose the right priorities in line with those of the electors whom some Opposition Members represent.

Sir Wyn Roberts (Conwy)

I am sure that my right hon. Friend is aware that in addition to the reserves that the schools in Clwyd have, the county has balances of some £6 million.

Mr. Redwood

My right hon. Friend is ahead of me in the argument that I am about to make to the House. The Western Mail tells me that spending the balances is not the answer. Yet it is money voted by the House for local government which has not been spent at a time when I am told that more money should be spent on education.

Mr. Ron Davies (Caerphilly)

The Secretary of State said that schools have their own accumulated budgets. I ask him a simple question. Will he confirm that the latest advice given to schools was contained in circular 294, which says: the ability to make savings in one year and deploy them in the next (e.g. to purchase a piece of equipment) is an essential feature of schemes of local management"? Is that the advice that he gives to schools?

Mr. Redwood

Of course schools should budget wisely. Of course they have some powers to save for the things that they most want. But when we have balances of more than £5 million, or 5 per cent. of the annual delegated schools budget, and schools tell me that they do not have enough money, I am entitled to ask why they do not spend some of that balance on the things that they say are most needed—enough teachers paid at the rate for the job.

The Labour party has run a wicked campaign to alarm school governors, parents and pupils.

Mr. Davies

I put a specific question to the Secretary of State. I am surprised that he did not answer it. The largest school in Clwyd, which has a budget of more than £2 million, has an accumulated budget of less than £40,000. That is well within acceptable levels. If the Secretary of State is so concerned about accumulated budgets in schools in Wales, why on earth has he not responded to the county authorities in Wales, which for the past 12 months have asked him to spell out his policy? The Welsh Office has promised those people for the past 12 months that the Secretary of State's guidelines will be published to explain what procedures he expects them to take. If he now criticises them, why did he not accept his responsibility 12 months ago and give schools the advice that he magically expects them to follow now?

Mr. Redwood

There is a great deal of delegated power in the system, I believe rightly so. I see that once again Opposition Members want to centralise everything. We give considerable scope to the local authorities to decide on priorities. We then give scope to the schools to decide on their priorities. I do not attack schools or local authorities unless they tell me through the elected representatives on the Opposition Benches that they do not have enough money. Then I ask where all the money has gone and whether they have some money that they could use for those priorities.

Opposition Members have been busy saying that the Government will not provide for the teachers' award in the settlement when they do not even know what the pay award is. I do not see how they can possibly judge that it cannot be afforded out of the settlement.

Mr. Roy Hughes (Newport, East)

Does the Secretary of State admit that the balances are not transferable from one school to another? Some schools have done badly and others, admittedly, have a surplus. If the funds were held by the local education authority at county hall level, they could be distributed to where the need was greatest. The Secretary of State talked about pupils demonstrating. I have received a letter from Mr. McCarthy, the headmaster of St. Gabriel's Roman Catholic primary school in Newport, and from a host of parents expressing great concern about losing teachers from the school. What am I to say to them? Am I to say that there are surpluses in other schools in the county? That is not the answer.

Mr. Redwood

The rest of my argument will help schools that do not have large balances. The aggregate balances are large, so my point applies to quite a large number of schools within the county. There is other money, which I shall reveal in a minute, which will also help.

Mr. Paul Murphy (Torfaen)

I am grateful to my hon. Friend the Member for Newport, East (Mr. Hughes) for making the point about balances in schools. On local authority balances, the Secretary of State knows as well as I do that district auditors, under Labour and Conservative Governments, always advised local government to hold reasonable balances. What sort of reasonable balances does the right hon. Gentleman suggest that Clwyd and other county councils should have? What is his definition?

Mr. Redwood

Of course there should be prudent balances; it is right that auditors discuss that with the county councils. It is for the finance specialists on the county along with their auditors to satisfy themselves about what is prudent and what is wasteful. There is a level of balance that is excessive and could be better spent on the services that are Parliament's primary intention in voting the money.

Mr. Alan Williams (Swansea, West)

The right hon. Gentleman has already accepted that there should be some balances and he has said that those balances should be prudent. How does he reconcile his present argument that he must tell the schools what to do with the Government's argument that they are leaving it to the governors and the parents to decide what to do?

Mr. Redwood

The right hon. Gentleman should not confuse the issue. I have already made it clear that, unlike Labour Members, I believe in the maximum of delegated power. We have backed that view with our actions. [HoN. MEMBERS: "Not in this settlement."] All I am saying is that if Labour Members and Labour councillors criticise the settlement because there is not enough money, I am quite within my rights to explain why I think that there is more than enough money in the settlement and to explain how very easily the teachers can be paid and can provide a good quality of education.

Mrs. Ann Clwyd (Cynon Valley)

Will the right hon. Gentleman explain, because I am a little confused and I am sure that some of my colleagues are, too, exactly what he means by the word "prudent"? Will he spell out what he means?

Mr. Redwood

I have already dealt with that point. It is a matter for the judgment of individual counties based on their budgets and their requirements, and for the auditors who obviously comment on these matters. I believe that the aggregate level of balances, both in the schools of Clwyd and in county councils around Wales, is considerably higher than is needed for a prudent balance.

I want now to make some progress with my argument—

Several hon. Members

rose

Mr. Redwood

I want to make a little progress with my argument and I shall then take interventions if hon. Members still think that there are problems with my analysis. I am sure that they will not think that because it is a carefully constructed analysis of the budget position that their authorities face. When we decided on the increases—

Several hon. Members

rose

Madam Speaker

Order. The Secretary of State has made it clear that he will not give way yet.

Mr. Redwood

When we decided on the increase in cash for local government next year, of course we took account of the need to pay teachers more. It is not some new development that has taken us by surprise. I also took account of all other relevant points about the budgets and requirements of Welsh local government in framing the settlement. I expect education to be a high priority for county councils next year; that is what the people of Wales clearly want.

The average results in schools in Wales are still too low. They are lower than those in England, lower than those in Scotland and lower by far than those in Japan. Tests on pupils with an average age of 15 years and eight months in England and Wales have shown that only one quarter could calculate correctly the total in the decimal sum 2.6 minus 4.12 plus 6.3 minus 0.44 without a calculator.

Mr. Jon Owen Jones (Cardiff, Central)

We shall find out how good the Secretary of State is at percentages. What is the percentage of the total budget of schools remaining in the balance?

Mr. Redwood

I have already answered that point; the hon. Gentleman was not listening. It is about 5 per cent. of the delegated schools budget. I have given the £5.2 million figure for Clwyd. I am saying that that figure is higher than it need be; it means that there is money there to help.

I go back to the point about levels of competence. I am sure that hon. Members in their more honest moments would agree that levels of competence in both English and arithmetic need to be raised as a matter of urgency in many Welsh primary schools so that secondary pupils have mastered the basics before moving on to other studies. The tables show that the schools that receive most money per pupil often produce the worst results. They warn against the idea that all that is needed is more money. What is needed is more ambition for the pupils, better teaching and more stretching assignments.

Mr. Ron Davies

The Secretary of State must understand that we expect answers to our questions because the people to whom he refers are our constituents. I must press him on what he considers to be "prudent". Does he understand that in Mid Glamorgan, for example, although there are balances, 85 per cent. of the budget is held by fewer than a quarter of the 45-plus secondary schools? Nothing in the Secretary of State's local management of schools arrangements will allow him, under the proposals that he now puts to us, to take money from the schools that have balances and give it to those running a threadbare economy. He must answer that question before he proceeds.

Mr. Redwood

I do not want to take money away from the successful schools. I simply stress than many of them have good money—

Mr. Alan Williams

Which ones are successful?

Mr. Redwood

Those that are successful at budgeting. They may also be successful at teaching and educating, and I hope that they are. I do not want to take away from them money that is there to be used for educational purposes. I shall go on to identify other money that may help schools which Opposition Members say have no balances on which to draw.

Clwyd county council spends a little over half its total budget on education. If it chose to spend an extra 1 per cent. of that budget on education and 1 per cent. less on other things, that would yield £3 million, or 3 per cent. extra on the delegated schools budgets. The ideal areas for spending less would be council publicity, members' allowances for too many committees and working parties, and general office overheads.

Mr. Barry Jones

Has not the Secretary of State launched a mean and organised attack on Clwyd county council aimed at creating a diversion to save his skin in this matter?

Mr. Redwood

Spelling out the facts about accounted budgets is hardly a mean attack. It is the sort of analysis which Labour as well as Conservative councils should encourage in council chambers throughout Wales. The public need to know how much money is there and how it is being spent, so as to ensure that the priorities are right.

Clwyd county council also has substantial balances, as my right hon. Friend the Member for Conwy (Sir W. Roberts) pointed out. If it spent £2 million of those on education, that would produce another 2 per cent. for the delegated schools budgets. I hear that it may now be thinking along those lines.

Mr. David Rendel (Newbury)

The Secretary of State said that money could be taken from councillors' allowances and expenses. Have not the Government recently introduced new measures to allow councils to pay councillors higher expenses? Do not all parties agree that it is necessary to increase, as far as possible, allowances given to councillors to ensure that we have a higher standard of councillor, which I am sure the Secretary of State would appreciate?

Mr. Redwood

The hon. Gentleman was not listening. I said that there were too many working parties and committees. That is so in the case of Liberal-Labour Berkshire council—the hon. Gentleman's council—which has massive balances that it should spend on a decent education for children in Berkshire. I am grateful to the hon. Gentleman for intervening and giving me a chance to say that.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

I am mindful of what Madam Speaker said earlier about exchanging insults, but I wonder whether the Secretary of States lives on this planet. I have in my hand a document from Gwynedd council, which says that this is the worst revenue support grant settlement in its history with a cut of £3.346 million. Unless the Secretary of State is right on everything and Gwynedd council is wrong, he must answer that point.

A second document from Dyfed council says that it is cutting school meals and charging more for them, stopping further expansion of its community education programme and giving up responsibility for the maintenance of buildings.

The settlement is an absolute disgrace and however much the Secretary of State tries to dress it up in fancy language and stupid figures, it is still a drastic cut. He must recognise that.

Mr. Redwood

Madam Speaker, £87 million extra next year is no cut or fancy figure. It is good money which I trust the House will vote for tonight. It is money that the councils need and which I want them to spend well.

If we look at Clwyd's education budget, what is even more depressing is how little of the money that Parliament votes for local authorities in Wales gets through to schools. In Clwyd, of a total 1994–95 schools budget of £146.5 million, only £99.6 million is given to schools for their delegated budgets. Whereas in Powys '78p in every pound of the schools budget goes to the schools to spend on what they think matters most, in Clwyd only 68p reaches the schools for teachers' salaries and other delegated items. If Clwyd matched Powys in its spending pattern for delegated spending on schools, rather than getting £99.6 million, schools would receive £114 million, which is a massive increase of 14 per cent.

Mr. Martyn Jones

The Secretary of State offered us a rather glib analysis of how much money Clwyd could save from council publicity, committee members' allowances and so on, which amounted to £1 million. I should like him to spell out in more detail how that money could be saved. I accept that Clwyd could take some money from budgets, but I hope that the right hon. Gentleman would also ensure that the district auditor did not look too unkindly at budget balances of between 1 and 2 per cent. The comparison with Powys is hardly fair because its SSA is much bigger than that of Clwyd. It has more money because it is an old rural county. If Clwyd received the same SSA it would not now face such problems. Will the right hon. Gentleman assure the House that he will allow the council tax payers of Clwyd to make a decision to increase their council tax to a level that would ensure that teachers in Clwyd do not have to face compulsory redundancy? I am sure that the people of Clwyd would accept that. It is in his gift to do so.

Mr. Redwood

The comparison between Clwyd and Powys does not hinge on the SSA, but on how much of the schools budget gets through to schools for their delegated purposes. The comparison is entirely fair. As to the rights of the councillors and constituents of Clwyd, I want them to make the decision. I am not taking that decision from them; I am just trying to influence it. It would be wrong of councillors to make teachers redundant when there is money in the settlement to pay for them.

We must ask what Clwyd is spending the money on that it is not delegating to the schools. The most obvious item in the education budget is the £3,256,000 spent on management and administration. That amount is 13 per cent. above the level of the next highest council. Let us say that Clwyd could save £2 million from the total of £46 million that does not get through to the schools. That would represent another 2 per cent. on the delegated schools budget.

As hon. Members will be aware, I have already identified easy ways of enabling the schools of Clwyd to see their budgets boosted substantially. The county could do that next year without cutting any other county service. I have suggested a list that adds up to about £12 million. I am not saying that Clwyd needs to find all that money or that it should, but if it found a proportion of it, Clwyd could have more teachers rather than fewer and schools could make more of their own decisions about which services they need and which teachers they wish to retain and recruit.

The scope for using balances and delegating more money to schools can be reproduced across Wales, county by county.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

Mid Glamorgan will draw no less than £8 million from its balances and reserves, but that will still mean a cut of £1.5 million in the school formula budgets and, the cruellest cut of all, a £1.5 million cut in the building maintenance budget. Many schools desperately need such spending because of their age and character. Mid Glamorgan has obeyed the right hon. Gentleman's instructions and taken money from its balances, but it is still encountering difficulties, so there must be something wrong with the right hon. Gentleman's formula rather than with local government.

Mr. Redwood

I am delighted that it will use some of its balances for good purposes. It can prudently do so and I look forward to it using that money. I also hope that it will look at the other items that I set out for one county, because Mid Glamorgan may find that some of them also apply to it.

As to improving run-down schools, no one is keener than I am to see the standard of maintenance and building repairs improved in those schools that need it. That is why I have made sure that there has been a generous capital settlement for education and for local government in general.

In the current financial year counties receive credit approvals of £42.5 million for educational capital spending—up by 11.6 per cent. on the previous year. For next year I am proposing a further increase of 7 per cent. to £45.3 million. I want to see that money spent on buildings of which we can be proud for the schools of Wales and I trust that Opposition Members agree with that aim.

In suggesting that councils control their central overheads, which in some cases are large, I am asking local government to do only what central Government are already doing. I told the House on 14 December 1994 that there would be a cash and real terms reduction in Welsh Office running costs for 1995–96, and similar reductions for Welsh executive non-departmental public bodies.

The local authority associations tell me that there is little room for further significant efficiency savings. In my experience, there is always room for large organisations with multi-million pound budgets to achieve savings by innovation and improved working practice. That judgment is supported by two recent reports from the Audit Commission on pay and performance, which concluded that savings of £500 million could be achieved by local government in England and Wales.

I am providing £43 million on top of the settlement in 1995–96 through special grant and credit approvals to meet the costs of local government reorganisation. As I promised, the costs of reorganisation are not a call on this revenue settlement.

Care in the community, which is another important matter, will receive £124.4 million—an increase of £38 million, or more than 44 per cent., on the current year's figure. It is not calculated for capping purposes. I have kept the November 1993 plans for care in the community, despite the further decrease in inflation, because I regard that as crucial.

Mr. Ieuan Wyn Jones (Ynys Môn)

I apologise to the Secretary of State that I was not here when he started his remarks. Does he recognise that the predictions that were made, when community care was introduced, of the number of people who would be cared for in their own homes, considerably underestimated the number of people who have made that choice? Is he satisfied that the increase that he is announcing will satisfy that increased demand?

Mr. Redwood

Yes; I think that it will. It is a generous increase. What matters is not the number of people who opt for a specific type of care but the total number of people who need care, whether it be in their home or elsewhere. I think that the plans do take more than fair cognisance of the likely growth in numbers. We want the policy to succeed; I am sure that Opposition Members do; I am sure that all sensible people in local government want it to succeed. A 44 per cent. increase in the amount of money for that purpose shows how important we believe it to be.

The hon. Member for Caerphilly (Mr. Davies) always comes to Welsh debates empty-handed. In all the time that I have debated with him, he has never promised more money than I have proposed. He had his chance this winter to offer more for the police, when local communities throughout Wales said that I had suggested too little. He did not take that chance. There was no shadow money for the police from the hon. Gentleman. Today he has his chance to say how much extra the Labour party would give local government in Wales if it had to make the decision.

I know that the hon. Gentleman will duck and weave again. I notice him already beginning to duck and weave because he knows that it is true. I can presume only that he never raises the cause of Wales in shadow Cabinet meetings, for fear of being slapped down by the Leader of the Opposition and the shadow Chancellor. There he sits, long on criticism, devoid of ideas, bereft of even shadow money. If he cannot deliver shadow money from a shadow Cabinet, why should anyone believe that he could deliver anything for real, were he ever in a position to try to do so?

It is odd that the hon. Gentleman does not wish to intervene. I think that he knows that it is a fair criticism. The hon. Gentleman obviously does not mention Wales in the shadow Cabinet. He goes out to make the tea instead of asking whether Wales can be given a decent place in shadow Cabinet plans. I look forward to hearing the shadow budgets. I am sure that, were they ever to leak out, we would discover that there was not an extra penny, let alone an extra pound or ecu, for Wales anywhere to be seen.

Local authorities will also receive generous capital provision next year. I announced on 14 December 1994 that that would total £525.6 million, up 4.5 per cent. on this year. I expect Welsh local authorities to act responsibly in setting their budgets. I shall consider those budgets carefully, in the light of my provisional capping principles and of all the available information.

This is a good settlement for Welsh local government. It is a delight to see that it puts Opposition Members in such good humour as I tease them about their inability to come up with anything better. It gives Welsh local government an increase greater than inflation. It gives it extra resources to prepare for local government reorganisation. It could mean more teachers in the classroom if councillors want them to be there and are determined to budget sensibly. It will definitely mean more police on the streets and more care in the community.

I want local authorities in Wales to raise the sights of local communities, raising standards in schools and providing generously for elderly and disabled people. I commend the settlement to the House.

4.19 pm

Mr. Ron Davies (Caerphilly)

If the Secretary of State had any friends, I do not think that even they would congratulate him on his performance.

Mr. Rowlands

Offer him a shadow salary.

Mr. Davies

I can hear my hon. Friend urging me to increase the shadow budget. There are no restrictions on our shadow budget; the problems begin with the restrictions that the Secretary of State is imposing on the real budget. It was interesting to note that all the detailed questions asked of the Secretary of State today have been pointedly ignored.

The thesis of the Secretary of State's argument was that unspecified schools, unnamed councillors and unquantifiable council officials had conspired together to build up unreasonable balances in Clwyd. He only managed to single out Clwyd county council and did not refer to any other counties in Wales. He suggested that the solution to the problem of local government finance in Wales could be dealt with by attacking Clwyd county council.

When the right hon. Gentleman was asked what constituted a prudent balance, he gave no answer. When he was challenged specifically on whether it was Government policy for those schools prudently to accrue balances for use in future years, he gave no answer. I cannot make the point strongly enough that those schools are following the specific advice given to them by the Government. It ill becomes the Secretary of State to criticise them for following Government policy.

Of course, Clwyd has built up balances. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) explained what had happened to Mid Glamorgan. But the Secretary of State signally failed to say what proposals he had to meet the expenditure next year if Clwyd and all the other counties in Wales used all their balances this year. We all understand, even if the Government do not, that one can sell and spend the family silver only once. That represents exactly what the Government have done—the bonanza of North sea oil, the proceeds of privatisation and all our industry have gone.

After 15 years of Tory Government, there is an increase this year equivalent to '7p in the pound on the standard rate of income tax. The right hon. Gentleman now 'wants Welsh local authorities to do precisely the same. If they get rid of the balances this year, next year they will face the prospect of either increasing rates—which he will not allow them to do because he will rate-cap them—or cutting deep into the body of public services. That is what the Government have been about. The Secretary of State's disgraceful speech demonstrates the fact as clearly as anyone would wish that he does not care for the future of Welsh local government, which has co-operated with the Government for the past 15 years.

Mr. Donald Anderson (Swansea, East)

Is it not an interesting commentary on what the Secretary of State said that he seemed to equate the quality of a school with the size of its balances?

Mr. Davies

I shall return to that point. However, I shall first deal with some of the generalities in the Secretary of State's statement.

It is worth looking at what the right hon. Gentleman said last year when he announced an increase of 4.2 per cent. in total standard spending. He said: 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"—[Official Report, 15 February 1994; Vol. 237, c. 876.] Those objectives could be achieved with a 4.2 per cent. increase last year. This year, the increase is 2.7 per cent. Judging the Secretary of State by his own standards and using his speech, what will the settlement mean? If 4.2 per cent. was fair, is 2.7 per cent. unfair? If 4.2 per cent. was the minimum necessary to allow councils to avoid sacking essential staff, what will be the consequences of a 2.7 per cent. increase in total standard spending? It means that essential staff will be sacked. The Secretary of State is condemned by his own arguments.

Mr. Redwood

Has not the hon. Gentleman noticed that the inflation rate has gone down?

Mr. Davies

By the Government's own estimate, the current inflation rate is 3 per cent. How can the Secretary of State expect local authorities, which will receive a real terms funding increase of 0.4 per cent., to cope with inflation of 3 per cent.?

Why will the right hon. Gentleman not tell us what the inflation figure will be for teachers' salaries? Once the Government have agreed to that inflation figure—it will be 2.5 or 3 per cent.; good luck to the teachers—the Government will have direct responsibility for it. Will the Secretary of State make complete resources available to meet the full cost of the teachers' pay award? Perhaps he will answer that question. The Secretary of State should get to his feet and give the House a proper answer.

Mr. Redwood

For about the third time: yes, of course we have taken full account of the likely teachers' pay award in the settlement. It is in the funding that we have described.

Mr. Davies

They are weasel words. When the Government say, "We have taken it into account," the House knows that they will underfund the teachers' pay award in the current year.

This is a harsh settlement by any standards. How can it be reconciled with all that we have been told over the past 12 months about the country's economic performance? The Secretary of State comments at every opportunity about how well we are doing. If we are doing so well, why will we have to sack teachers and stop caring for the elderly and the infirm in our communities? How is that a measure of economic success?

This year the effective increase in aggregate external finance support for standard spending assessments is 87.6 per cent. The Secretary of State did not mention that because last year the figure was 88.5 per cent. If he had managed to maintain AEF at last year's level, the council tax increase this year would be 2.5 per cent. rather than the 10 per cent. which every council tax payer in Wales now expects to pay.

The Secretary of State has managed his own unique triple whammy. As a consequence of the financial settlement, we have cuts in services, tax increases and a boost to inflation. Economic success, as defined by the Tories, brings cuts in public services and tax increases. The Secretary of State knows that the funding cuts will hit the education sector hardest.

The Secretary of State and his colleagues must understand that if we are to begin to address the problems of the economic and social malaise which their policies have created, we cannot neglect the educational needs of our society. Only one strategy matters to the Government: the political strategy of achieving tax cuts before the next general election.

The Government have no economic strategy, otherwise they would not cut education standards. They have no strategy for dealing with the increasing problems of alienation and unemployment among young people, otherwise they would not cut education standards. They have no strategy for dealing with drug abuse, crime and related social problems, otherwise they would not cut education standards.

I will tell the Secretary of State what goes on in Wales because he does not know much about it. Since 1990 there has been a four-fold increase in the number of registered drug addicts. Since 1979 the number of drug offences has increased by 184 per cent. I will use Islwyn as an example—if the Minister bothers to talk to the people, they will tell him what is happening.

In Gwent police C division, which is centred on Blackwood, the number of recorded drug offences has increased from 81 in 1990 to 294 in 1993. The Secretary of State says that he is good at percentages, so he can work that one out for himself. At the same time, the force strength in C division has fallen from 259 to 253. This year the county council is being forced to cut its expenditure on education and social services in that area by £5.5 million. The Secretary of State's arguments do not hold up, even if we accept his basis for presenting the figures. For those who are responsible for local government, the reality is far worse.

I acknowledge that there has been an increase of £87.6 million in total standard spending over last year and that is welcome. But let us look at it. It includes £38.4 million transferred to fund community care. That is not new money or additional expenditure, as the Secretary of State implied; it is a straightforward transfer from a different budget. It is ring-fenced and hypothecated for a new statutory duty; it is not available for expenditure on any other sector.

There has been a £37.5 million increase for police authorities. That is welcome, but it is a belated acknowledgement by the Secretary of State that his initial proposals were inadequate. All Welsh Opposition Members went to the Home Office or the Secretary of State last year to protest about the inadequate level of funding of our police forces in Wales.

What was the response of the police forces to the initial settlement that the Secretary of State proposed in December? Barely two months ago, he tried to tell us that it was satisfactory. The North Wales police had to announce an immediate freeze on recruitment. They prophesied that in 12 months' time there would be 60 fewer police officers as a result of the Secretary of State's proposals; there would be a freeze on recruitment of special constables, the closure of smaller police stations, community projects would be cut and there would be a failure to invest in communications, which the chief constable described as possibly catastrophic.

In Dyfed Powys the police faced a 10 per cent. reduction in the number of serving officers—a reduction of 100 police officers. The chief constable's view was that policing would be decimated, with a consequent inability to protect the public.

South Wales, which this year has had the lion's share of the increase and has done relatively well under the settlement, was underfunded, settlement by settlement, in previous years by the Government and the Home Office. Even after the increase, the treasurer of the police authority comments: with the settlement for 1995–96 we are able to look at increasing the operational strength of the force but even now we are not able to return to previous levels. All that the Secretary of State has done to improve police funding is to ameliorate a crisis of his own making. If he now expects us to give him credit for correcting his own mistake, he will be disappointed.

Mr. Redwood

Surely the mistake was made by Labour councillors who would not support the police.

Mr. Davies

That is not true. The Secretary of State knows full well that he was asked time after time—certainly by my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael)—whether under his budget he would give Wales the same indicative SSAs as were available for English local government and he refused.

The Secretary of State bears full responsibility for any underfunding of the South Wales police. He also knows that, whereas for one or two years the police authority received less than the SSA that he knew existed although he would not tell the public, in other years, because of how local authorities were budgeting capital expenditure, it received in excess of what was in the notional SSA.

Given that the Secretary of State is telling Clwyd to cut a few caretakers here and a few administrators there, and he is prepared to lay down to Clwyd what it should do now in response to the current crisis, why on earth did he not over the years give any indication to Mid Glamorgan, South Glamorgan, Gwent or West Glamorgan of the indicative strategies for police funding that he had in mind? Why?

Mr. Redwood

The Government always made it clear that it was the responsibility of local authorities. The money was there within the settlement and we wanted them to spend it.

Mr. Davies

It is a changed story now. In respect of Clwyd county council, the Secretary of State is prepared to look at the budget under a microscope and say item by item where the cuts should be. How can the Secretary of State say on the one hand that it is perfectly proper for authorities in south Wales to fund the police authority according to their own priorities and it is not a matter for him even to give the indicative SSAs, and on the other hand tell Clwyd county council almost item by item how it should organise its affairs? It is completely unacceptable.

Mr. Redwood

It is entirely similar. The Government always made it clear that they disagreed with the policing priorities established by Labour councils in south Wales. If Clwyd goes ahead with some of its threats to school budgets, I shall disagree with those priorities in the same way. I have no powers to stop those concerned, but I hope that common sense will prevail.

Mr. Davies

That shows the Secretary of State's double standards. Of the 38 Members of Parliament representing Welsh constituencies, 27 are members of the Welsh Labour group. Twenty-seven of us wrote to the Secretary of State expressing our concern and asking to meet him to discuss the police funding crisis in Wales. I am sure that hon. Members from other Opposition parties would have joined us. Such is the right hon. Gentleman's sense of accountability and sensitivity to public opinion that he refused even to meet us. The Secretary of State has no credibility in these matters.

Mr. Redwood

rose—

Mr. Davies

I know the cheap point that the right hon. Gentleman wants to make. If he intends to refer to this side of the House, I remind him that the Under-Secretary of State with responsibility for education in Wales has not even shown the courtesy of attending this debate.

Mr. Redwood

My hon. Friend is fulfilling the engagements that I would have undertaken if this debate had not been held today. I am sure that Wales will welcome my hon. Friend, who is to present awards and to hear the views of people in north Wales. The hon. Gentleman is right to be nervous. Why are only 13 Labour Members present out of 27? Why is Labour unable ever to marshall the majority of its Members of Parliament to support the hon. Gentleman—whether in the Welsh Grand Committee in Cardiff or for this debate, which the hon. Gentleman says is crucial?

Mr. Davies

The right hon. Gentleman answered his own question. My hon. Friends are fulfilling other duties—as Conservative Welsh Members are doing, no doubt. Of course the hon. Members for Vale of Glamorgan (Mr. Sweeney), for Monmouth (Mr. Evans) and for Brecon and Radnor (Mr. Evans) are fulfilling other duties.

Mr. Redwood

rose

Mr. Davies

There is no need for the right hon. Gentleman to become agitated. He knows that all Members of Parliament have other responsibilities. Even if only one third of the members of the Welsh Labour group were in the Chamber, we would still outnumber Conservatives from Wales by two to one. The right hon. Gentleman should not labour the point.

Mr. Redwood

My hon. Friends are entirely happy with the settlement and think that it is good news for Wales—so they do not need to be present. Only the Opposition tell me that it is a bad settlement. Why cannot at least half of Welsh Labour group members turn up to tell me that in person?

Mr. Martyn Jones

There are 14 of us present, which is more than half.

Mr. Davies

I am sure that Hansard will record my hon. Friend's sedentary intervention.

The Secretary of State wants to divert attention from the funding question. Community care, which is hypothecated, and police expenditure together total £75.9 million, leaving an increase of more than £11.7 million—4 per cent.—for all other services. Local authorities are required to cope with inflation, which is near 3 per cent., new legislation, increasing numbers of elderly people and a massive backlog of essential repairs and maintenance to buildings, roads and bridges.

The Government have scored their most spectacular own goal in education. First, they changed the composition of governing bodies to do away with party political influence and replaced people appointed under that system with teachers, parents, business men and others from the community. The Government then changed the rules governing finance, to give greater local discretion. They altered the rules governing local education authority financial allocations, giving less discretion to central services. Next, the Government changed the rules governing central Government allocation to local government, to give greater control to central Government. They changed the rules again, to rate-cap local government and prevent it meeting local needs. At the same time, the Government established new quangos under their control, with open-ended purse strings.

After spending 15 years constructing a system that the Government wanted, the people whom they chose to run it in the way that they wanted are in open rebellion. There are hundreds if not thousands of decent, law-abiding, respectable school governors in Wales who are now being placed in an impossible position. They are being asked to take decisions to cut the services that they are in public life to protect. What sort of Government are doing that to our communities? Only a party stupid and inept enough to give us the poll tax, VAT on fuel and the Post Office fiasco could plunge our education service into such chaos.

The Secretary of State has made three fundamental mistakes with education funding. First, the settlement itself is inadequate. Secondly, no provision has been made for the continuing increase in the number of pupils in Wales. Last year, there was an increase of 7,000 and next year there will be an increase of 8,000. That is roughly the equivalent of a new, large comprehensive school for each county in Wales. The full running costs of that new comprehensive school will have to come from the existing schools budget. That is a measure of the increase in pupil numbers alone.

In addition, the Government have made wholly inadequate provision to fund the teachers' pay increase. A 0.4 per cent. increase in the standard spending assessment falls far short of the 2.9 per cent. widely trailed as the teachers' pay award. That pay award alone will cost Welsh counties £17.5 million. That money has to come from somewhere—from other services or from the education budget itself. If the money has to come from education spending, there will, as a direct consequence, be between 500 and 600 fewer teachers in Wales next year. If there are 8,000 more students, the inevitable consequence will be larger class sizes which will, in the words of the Secretary of State for Education, "shoot up" and falling standards of education.

In typical fashion, the Secretary of State has tried to divert attention from his own inadequacies by attacking schools, teachers, governors and local authorities with the ridiculous claim that they are not spending the money allocated to them. The fact is that they are following very specifically the advice given by the Department for Education which states in its circular that balances are an essential feature of schemes of local management". Despite repeated requests over the past 12 months from Welsh education authorities, and despite repeated promises, none of which has been fulfilled by the Welsh Office, the Secretary of State has refused to give schools and local education authorities his advice on the question of building up balances.

One would have thought that the Secretary of State would at least acknowledge his own inadequacies and have the modesty to refrain from attacking the people who have been asking for advice for the past 12 months. In typical Tory fashion, he is now going to penalise most unfairly schools without balances for the supposed failings of schools with balances because they did not foresee that his views would apparently differ from those of the rest of the Government. He knows that he has no mechanism within local management of schools to divert the funds in these particular circumstances that he now chooses to criticise. Inevitably, the schools with the smallest balances are in the least prosperous parts of Wales and they will be hardest hit.

Mr. Gareth Wardell (Gower)

Will not one of the consequences of what the Secretary of State has said be that outlined clearly by the Audit Commission in its document entitled "Adding up the Sums"? The governing bodies of schools will have to reduce the number of highly qualified and trained teachers and substitute less qualified and less trained younger teachers. It will be the quality of education and the quality of teaching that will suffer as a consequence.

Mr. Davies

My hon. Friend is absolutely right. That is one of the many inconsistencies in the system. Having established local management of schools on the basis of a desire for local accountability and decision making, how on earth can the Secretary of State now criticise schools for operating the very system that he wanted?

Mr. Jon Owen Jones

May I draw my hon. Friend's attention to yet another consequence? The very few grant-maintained schools that exist in Wales, with their additional funding, will not be as badly hit as state schools. Could that not be portrayed as an attempt to hit state schools hardest, to persuade those that have so far resisted the call to adopt grant-maintained status to adopt that status in order to secure the funds that they need to maintain their teaching staff?

Mr. Davies

It hardly constitutes gentle persuasion, but I suppose that it is the sort of genuflection to democracy that we expect from the present Government. I have already mentioned an article in, I believe, last week's The Times Educational Supplement about the balances held by grant-maintained schools in England. I have tabled a parliamentary question to the Secretary of State; I hope that the few schools that have been misguided enough to opt out of local authority control in Wales will be given an honest answer. Certainly, according to published figures, grant-maintained schools have carry-over budgets far in excess of those of locally managed schools.

Sir Wyn Roberts

Will the hon. Gentleman give way?

Mr. Davies

I will, but I am anxious to finish my speech. This is the last intervention that I will take.

Sir Wyn Roberts

Is it not inevitable that grant-maintained schools will have larger surpluses? They receive 100 per cent. of the money due to them, while schools in Clwyd receive only 68p in the pound.

Mr. Davies

Grant-maintained schools are in a better position to build up carry-over surpluses because they receive more money than locally managed schools. As a former Minister of State in the Welsh Office, the right hon. Gentleman knows the consequences of that very well. When he presided over the Welsh education budget, once grant maintained schools had been established he top-sliced the budget to try to bribe Welsh schools to become grant-maintained. It was plain that, if they did so, they would have a direct relative advantage over schools that remained under local education authority control. That was a specific attempt to destroy the idea of a planned comprehensive education system. Unfortunately, at every opportunity, the people of Wales have overwhelmingly shown that they do not want a different system.

Let me give the Secretary of State an example of the impact that his policy is having. My hon. Friend the Member for Gower (Mr. Wardell) referred to the district auditor. Let me refer the Secretary of State to the Office for Standards in Education, which was set up to monitor standards. It has recommended, time after time, that local schools use the roll-over facility to meet the needs that have been identified.

One of the schools that the Secretary of State chooses to criticise happens to be in my constituency. I know it well; it has the distinction.of having taught Neil Kinnock, my former colleague in Islwyn. Lewis boys' school in Pengam has a balance amounting to just over 3 per cent. of its budget. It desperately needs investment in buildings and facilities: some of its buildings date from 1860. Following Ofsted's recommendations in a report on the school, it is trying to purchase new information technology equipment. The school has to find £20,000 and it cannot get it from the local education authority. One of the consequences of the settlement is that schools like that across the length and breadth of Wales will not be able to secure the minimum finance necessary to equip themselves with new information technology.

Mr. Alan Williams

Is my hon. Friend aware that the Secretary of State for Education in England has announced in the past couple of weeks that she is making available money for IT in English schools and that the Welsh Office has refused to introduce a similar scheme for Wales?

Mr. Davies

That point invites me to use one of my favourite arguments in favour of devolution, which will, no doubt, give my right hon. Friend the Member for Swansea, West (Mr. Williams) palpitations. Enormous powers have been devolved to the Secretary of State for Wales. He can choose the ways in which the education policy and the funding of education schemes in Wales differ from those in England. So there is already devolution of power in Wales—to the Secretary of State for Wales. I very much look forward to the day—I shall invite my right hon. Friend the Member for Swansea, West at some time to warmly endorse our view—when power will not be devolved to the Secretary of State for Wales, who represents an English constituency, but to the people of Wales and their elected representatives.

As a result of the settlement, schools such as the Lewis school in Pengam will be forced to try to second-guess the Secretary of State. He will not tell us what he has in mind. Schools will have to wonder what is a reasonable budget, what is a prudent percentage to carry over and how much their funds should be. If they try to build balances for a new science laboratory or new IT or, perhaps, to build a new sports hall, they will not know whether the Secretary of State will change the rules and penalise them the following year. His settlement has implied that intention this year.

It is typical that, under the Secretary of State's uncaring regimes which lack understanding, schools such as the Lewis school will be penalised. Once again, this centralising, dogmatic, intolerant Government have sought to remove local discretion, to reduce the powers of local government and to undermine accountability to the people. They have got it hopelessly wrong; the settlement is hopelessly wrong and that is why my colleagues and I will be voting against the motions tonight.

4.52 pm

Sir Wyn Roberts (Conwy)

My right hon. Friend the Secretary of State said that the settlement was good, the hon. Member for Caerphilly (Mr. Davies) called it a harsh settlement and, in the spirit of compromise, I shall call it a fairly tight but, nevertheless, manageable settlement, as has been almost every settlement that I have known.

There are certainly very good points to the settlement. The increase of 3.2 per cent. in total standard spending is welcome. Indeed, my understanding is that no less than 89 per cent. of it is being met by central Government. Some specific features have caused concern, but have been resolved. The police settlement has been greatly welcomed by the police force in Wales and substantial provision has been made for local government reorganisation. I also welcome the 4.5 per cent. increase in capital grants and credit approvals, which, I am sure, will be put to good use by Welsh local authorities.

The point has not been made that this year is the last for the Welsh counties and that some, if not all, have substantial balances. My county of Gwynedd, for example, has balances amounting to £8.6 million and it has already taken the view that it could reduce them to £6 million and possibly less to cushion the effect of the settlement. Other counties must be in the same position. If the Liverpool Daily Post is correct, Clwyd has already decided that it may devote at least £1 million of its £6 million in balances to strengthening services following the settlement.

Mr. Llwyd

In the light of the right hon. Gentleman's opening remarks which, because of the tone in which they were delivered, I heard some of my colleagues describing as almost rebellious, may I ask him whether he received the briefing from the chief executive of Gwynedd county council, which says clearly that there will be a cut of £3.346 million? Is he saying that that man is misleading Members of Parliament about Gwynedd?

Sir Wyn Roberts

I am grateful to the hon. Gentleman for leading me on to exactly what I was going to say next. When the counties talk about reductions they mean not that the 1995–96 settlement is less than the 1994–95 settlement but that the 1995–96 settlement is less than their actual budgets for 1994–95. That is precisely what the treasurer of Gwynedd said in the report to his finance committee, of which I do indeed have a copy. If the hon. Gentleman looks at the bottom of page 1 he will see that like is not being compared with like. As I said, the 1995–96 settlement is being compared with the council's actual budget for 1994–95, which was indeed higher than this year's settlement.

Of course the 1995–96 actual budget is also likely to be higher. Indeed, the Government permit counties to spend an average of about 3.3 per cent. over and above their SSAs before the cap comes into effect. The report by Gwynedd county treasurer shows that there is an anticipated increase in the budget for almost every individual service. In education, for example, the budget for this year is £86.894 million and the base for next year it is £89.21 million.

Of course there is concern about the level of the teachers' pay settlement and about inflation, and there is clearly a need for contingency reserves of about £2.9 million to cover those, but, as my right hon. Friend said, it is not only the counties that have balances. We heard yesterday that about £700 million was available in reserves in school budgets in England, and now we hear that Welsh schools too have about £47.6 million available in their reserves.

The Opposition have made a great deal of what my right hon. Friend said, but surely he would reply—I certainly would—that schools cannot have substantial reserves yet at the same time complain of an inadequate settlement. They can use their reserves. Of course there are schools that may not have reserves, in which case there is nothing to stop the county education authority coming to their assistance with its balances. I am sure that in practice that is what will happen.

There is no excuse for a drastic reduction in teacher numbers or in staffing generally in Gwynedd. Work has been done on some options, such as a 1 per cent. cut in the staffing budget, with a 1 per cent. cut in the total budget and up to a further 2 per cent. I dare say that those exercises are good for the souls of those concerned. The Audit Commission would approve, and I am sure that we should do so, but, given the balances available, it does not seem that drastic cuts will be necessary.

The hon. Member for Caerphilly should bear in mind the fact that expenditure per primary pupil in Wales is now 52.6 per cent. higher in real terms than it was in 1979–80. Expenditure per secondary school pupil is 64.2 per cent. higher in real terms than in 1979–80. Considerable expenditure has been made on education in Wales, with real terms increases.

Mr. Jon Owen Jones

Does not most education expenditure go on capital equipment, teaching or buildings? Throughout the period to which the right hon. Gentleman refers, the number of pupils declined enormously and a great percentage of the money was required simply to keep empty classrooms and school buildings. The Government's policies of opting out have made it difficult for local authorities to do anything about surplus places. Does not that artificially inflate the figure that is allegedly spent per child?

Sir Wyn Roberts

The hon. Gentleman is protesting too much and is seeking a complex explanation for the fact that expenditure per pupil now is much higher. If he had visited classrooms, he would know that that increase has shown up in the facilities available.

There are a substantial number of surplus places in schools in Wales, and whatever policy is pursued it must certainly be adhered to. Some grant-maintained schools might otherwise have been closed by local authorities, but there is still a duty on local authorities, which they must not shy away from, to get rid of surplus places. I do not think that the hon. Member for Cardiff, Central (Mr. Jones) can use the policy on grant-maintained schools as an excuse for not getting rid of surplus places. I do not want to pursue this argument too far as the amount of time available is limited.

My right hon. Friend the Secretary of State has been able to increase the moneys available for community care, which was something of a pinch point. Gwynedd's social services budget will increase from £29.328 million this year to £33.5 million next year. That, and total expenditure of £124.4 million in Wales, will be widely welcomed in Gwynedd.

The failure of my borough of Aberconwy to secure a significant allocation under the strategic development scheme has caused it disappointment, which I share. I have been dealing with the matter in correspondence with my right hon. Friend, and I am grateful for the letter that I received today in which he emphasised the strength of competition for SDS funds and stated that only seven out of 35 projects succeeded in attracting funds.

The borough welcomes the increased funding for housing renovation grants, which are much needed in the renewal area of Penmaenmawr. Aberconwy has a surplus on its collection fund, which will help to keep down the council tax, but the gross cost of rent allowances will have risen by about 300 per cent. between 1991–92 and 1995–96.

The borough's director of financial services therefore suggests that the rent allowance element be excluded from the capping calculations, because councils have little or no control over it. Rent allowances are in the hands of landlords and rent officers, and I hope that my right hon. Friend will look into the matter.

I listened carefully to the hon. Member for Caerphilly, although I am bound to say that his speech sounded rather like an old, clattering alarm clock. He failed to wake us up for the simple reason that he did not answer the key questions: would the Labour party, if it were in government, increase grant and, if so, by how much, or would it remove the cap and allow the council tax to rise? Those are the alternatives open to the hon. Member for Caerphilly. He has not told us which he would choose, and neither has he said by how much he would allow the council tax to rise.

More surprisingly, I heard no mention of the Opposition's local government policy document, "Renewing Democracy, Rebuilding Communities". I have used the title of the document to oblige the Opposition and to ensure that it is placed on the record. The Opposition's policies are explained in the document: to abolish the cap and compulsory competitive tendering, to return business rates to local authority control and to release capital receipts and payments to councillors. Are those Labour policies or not? If they are, why on earth did we not hear about them?

Mr. Ron Davies

Let me reassure the right hon. Gentleman that it is a consultative document. [HON. MEMBERS: "Ah!"] Unlike some of his hon. Friends, the right hon. Gentleman will appreciate the virtues of consultation. I look forward to him writing to me with his detailed observations on that consultation document.

Sir Wyn Roberts

If I can help the Labour party by contributing my views, I may do so—if I thought that it would have any effect.

I am bound to say that the tone of the document suggests that the consultation is not very real. The precise propositions to abolish the cap and so on are likely to be adopted by the Labour party, which will lead to a return to the old, profligate, bureaucratic and inefficient local authorities of the 1970s and 1980s.

I think that Mr. McKinstry was right, and in case any hon. Member does not know what that former Labour councillor and adviser wrote in The Spectator on 21 January, here it is: In my job with the Labour party at Westminster … I could see only too clearly that the spirit of Labour in local government—that mean minded cocktail of political correctness, bureaucracy, intervention and abuse of public money—pervaded the whole party". I am disappointed that we did not hear what the Opposition would do if they were in government. Until we know rather more positively what they will do, we shall continue to be disappointed.

I began by saying that this was a fairly tight settlement but a manageable one. I shall finish by joining my right hon. Friend the Secretary of State in describing it as a good settlement.

5.10 pm

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

This is the first opportunity that I have had to follow the right hon. Member for Conwy (Sir W. Roberts) since he returned to the Back Benches. It would be wrong if we did not put on the record the great kindness and courtesy that he showed to those of us who came to see him on various issues and problems. It was always appreciated. We welcome him back to the Back Benches. I hope that his successor will learn the right hon. Gentleman's courtesy, style and kindness as quickly as possible. Our personal relationships with the right hon. Gentleman have certainly been beneficial.

For a moment at the beginning of the right hon. Gentleman's speech it sounded, on the Richter scale of language that we have come to expect from him, as if he was going to be slightly rebellious. He managed not to be. I saw slight signs of worry on the Secretary of State's face. If the right hon. Member for Conwy starts to rumble him, the Secretary of State really has to worry.

There are a number of symptoms of the late stages of a Government in decline. We saw an extraordinary set of them today. Financial decadence has been preached by the Secretary of State and, believe it or not, even by the right hon. Member for Conwy, who suggested that because county councils were to be abolished in 12 months, they ought to clear their balances out. Is that the official position of the Government?

How much does the Secretary of State think should remain in the balances of county councils in their last year? What sort of assumptions does he make in his plans for the changeover from county to unitary authority? Has he made assumptions about the amounts of money that will be transferred and how they will be transferred? I should be grateful if the Secretary of State could advise us on that. The recommendation of the right hon. Member for Conwy was that county councils should clear out their balances in their last year of office. That is a sign of a Government preparing to leave office.

Then there was the prescription of the right hon. Member for Conwy that balances should be run down to cover the costs of the failure of the Secretary of State to reach a satisfactory settlement with the Treasury.

Mr. Jon Owen Jones

: I wonder why my hon. Friend is surprised. Does he recognise a parallel between the subject that we are discussing and what the Government are doing with the Welsh Development Agency? They are running down the assets of the WDA in preparation for the time when they are no longer in office. We shall then have to refund that organisation for the capital assets that it has been forced to spend.

Mr. Rowlands

I said that there were a number of symptoms of a Government on their way out. They have been manifested in the debate this afternoon. The concept of running down one's assets and balances is a striking contrast with the Thatcherite prudent housekeeping about which we had lectures for a decade and more. None the less, it is interesting to note the right hon. Gentleman's solution for local authorities which face tight financial problems such as those described by my hon. Friend the Member for Caerphilly (Mr. Davies), those referred to by Welsh Members in their representations to Ministers and those which I am sure will be described in the debate.

I know that among Conservative Members there is a feeling that local government cries wolf every year when this annual ritual takes place. That seems to be the idea. I will tell the Secretary of State the symptoms that have appeared this year which I have not seen before. I have never received so many representations from governors of schools as I have this year. Governors of schools took on the greater responsibilities placed on them by the Secretary of State and in the overwhelming majority of cases rose to the occasion. As a result, they recognise forcefully the consequences of some of the decisions that have been made by central Government. Whatever the Secretary of State may think about previous years' ritual objections and criticisms—I gather that in England criticism has reached monumental proportions when Shropshire is up in arms—I have received more representations from governors of schools than on any other settlement.

I have never received so many letters from headmasters in the terms that I have received this year. They do not speak for the National Union of Teachers. The Secretary of State ought to distinguish between the stolid representations against which he has gained a level of immunisation and the new phenomenon this year of representations from head teachers who do not necessarily belong to a union. They may or may not belong to a union, but they have written and spoken to me in terms different from anything that I have heard before.

Head teachers feel that the system and the financial arrangements are closing in on their schools and on the type of education service that they are capable of providing. They have been told that they should spend their balances, as should the county councils, while remaining prudent. We repeatedly asked the Secretary of State during his speech to tell us what percentage was a prudent balance. Time and again, the Government have been more than willing to give the strictest possible advice on capping formulae. We need a new formula to determine what constitutes a prudent remaining balance.

The nature of the representations that I and many hon. Members have received this year compared with previous years should at least make the Secretary of State think that he might be the one who has got it wrong. Just for once, he should consider that the various representations received indicate that there is at least a genuine major doubt about the financial settlement.

We have had some comments not from the Secretary of State but from the right hon. Member for Conwy about surplus school places. In his ministerial days, the right hon. Gentleman used to lecture us about surplus school places. I do not know whether he has gone to look for surplus places in his constituency or campaigned in his constituency to close down school places. Perhaps as a new Back Bencher he will now suddenly find that when one talks about surplus school places one is talking about schools that are cherished and loved by parents and their young children.

It is easy to talk about surplus school places. The right hon. Gentleman should visit Bedlinog and see the concept of surplus school places in practice. There is a small nursery school and primary school at the top of a hill and another school right down at the bottom. Both schools are loved by the community, by the parents and by the pupils. When people say, "Let us remove X thousand school places from the system," they really mean that schools in villages should be closed down, creating in a village already suffering from dereliction—a pit may have been closed, for instance—yet more dereliction. The last school that was closed lay derelict and empty for years. Closing schools to deal with surplus places would create more dereliction in small communities such as Bedlinog. I am sorry, but I will not advocate that.

The county council made a proposal as part and parcel of its attempt to balance the books to close schools in Pentrebach and Bedlinog. There was an immediate, natural and full reaction by the community to the idea of its schools being closed. It is easy to talk vaguely about surplus places, but in fact they represent much-loved schools.

I will not support the closure of school surplus places in Bedlinog. If there was a Bedlinog in the constituency of the right hon. Member for Conwy, he would not support the closure of the school. We heard quick and easy words from the English Secretary of State for Education yesterday. I should like to see her going round doing away with surplus school places.

My right hon. Friend the Member for Swansea, West (Mr. Williams) was right. One of the other curious consequences of the Government's reforms is that it is more difficult for a county education authority to plan and reorganise its education system in the way that the Secretary of State supports. If a school is threatened with closure, the automatic consequence is that that school will seek grant-maintained status. Will the Secretary of State for Wales support the closure of schools by the county education authority or will he be tempted politically to say, "At last I have an application for grant-maintained status before me, and I do not have many: I have tried everything under the sun—I have made schools have recounts and treble recounts to try to get grant-maintained schools off the ground, but for some reason they do not seem to get popular support from staff, teachers and parents."? If the Secretary of State can persuade the county education authority to threaten to close some schools, he can then come as a saviour and have a brand new collection of grant-maintained schools. If that is the right hon. Gentleman's cynical ploy, he should admit it. If it is not, he should agree that his policies have made it infinitely more difficult for there to be planned management of the development of education within any county.

Mr. Redwood

Does the hon. Gentleman agree that in view of the enormous popularity of grant-maintained schools with the children of shadow spokespeople, to have enough places for the rest of the people who want to go to such schools we need to have more of them?

Mr. Rowlands

I have never indulged in the politics of personality in any shape or form and I will not lower my tone and my contribution to the right hon. Gentleman's level. We are talking of schools in our communities that have no wish to become grant maintained. The only possibility of an application for grant-maintained status has been when there has been a threat of closure, after which the Secretary of State has come forward as a saviour. Is that the thinking behind some of the proposals? If it is, it is a cynical ploy and we are right to reject it.

It is not a matter of just hanging on to the education that we have. We desperately need new investment in our schools. The county of Mid Glamorgan has obeyed the exhortation of the right hon. Member for Conwy and taken £8 million out of the balances to cover some of the £12 million deficit. Despite raiding £8 million from its surpluses, the county has had to make two cuts. It cut £1.5 million from the schools formula budget. I do not present that as a draconian cut, but I believe that it is damaging the local management of schools. The one Government reform that I have strongly supported is LMS, which has been a success story. Headmasters, headmistresses and staff have taken to the concept of LMS and have managed to make it work. It is sad that as a consequence of this financial arrangement counties may have to put pressure on school formula budgets, as Mid Glamorgan has attempted to do, while desperately trying to avoid the worst impact.

The other cruel cut in Mid Glamorgan is a cut of £1.5 million in the centrally controlled building maintenance budget. The Secretary of State and other Conservative Members frequently portray the money held back at county level as being used to finance a bloated bureaucracy. That is a standard accusation. If it is true, the matter should be looked at—I accept that—but when the right hon. Gentleman makes such sweeping statements he should look more closely at what has been kept back centrally.

I give the Secretary of State one example. In my area—1 do not know whether this is the case in other areas—many schools do not want to take on the responsibility of financing school transport. The county has offered to transfer that responsibility, but most of the local schools have said that they do not want to take on the headaches and administrative costs of school transport. Parents are very worried about how their children get to and from school. There is an understanding between most schools in the county and Mid Glamorgan county council that that area of expenditure should not be transferred.

Another responsibility is major external repairs to buildings. It is not that the county council is in some wicked way holding back money from the local schools: on the whole, schools have wanted responsibility for big external repairs to remain at county level. There has been a tragic cut of £1.5 million in Mid Glamorgan. I come back to my Bedlinog school. Because of the age of the building, the external wall of that much-loved school, which is strongly supported by parents, teachers and children, is in desperate need of substantial repair. The same point could also apply to Vaynor and Penederyn high school.

This expenditure is vital to schools that are old fashioned, but which have many years of life left in them if investment in repairs and maintenance is made now. There is no reason to think that an old building is dead and must be knocked down. As I have said, that creates a form of dereliction. I am afraid, however, that as a result of this financial settlement, much essential building maintenance may be postponed. The postponement of such investment has disastrous consequences on the whole fabric of some of the old but characterful schools in our community. I hope that the Secretary of State will think twice when he makes sweeping allegations about the counties' centrally held funds.

We have missed a trick. We should have asked the Secretary of State to come to the Mid Glamorgan orchestral concert which is held every January. Perhaps we shall get him to come to the last one, next January, in St. David's hall. There are some 2,500 parents present, so children have the chance to play before an audience as big as the audiences for Shirley Bassey and Tom Jones. The hall is packed out and the places could be sold all over again. It is a tremendous and wonderful success story of the past 15 years.

One of the success stories of the time during which I have represented the constituency has been the growth of orchestral music in Mid Glamorgan. We were always able to sing and we always had choirs, but there was a strange absence of orchestral tradition in our community. In Merthyr, we have a youth orchestra of 160 youngsters who practise every Friday evening between 4.30 pm and 6 pm. My daughter and son belonged to that orchestra and never missed a rehearsal on a Friday night; they would then go out for the night. They would go to the rehearsals with 'flu, no matter how ill they were. We now have a magnificent county orchestra.

With the new unitary policy, we must be careful that we do not destroy these collective arrangements. The orchestra is funded by the county. Its success depends on the centre at Ogmore, where the children go for five or six days. That visit is paid for by money held centrally. It is not bureaucratic money, but money held centrally and used to make a county orchestra from the smaller building bricks of the Merthyr, Bridgend, Rhymney and Pontypridd orchestras. The Secretary of State makes sweeping statements about centrally held funds. Some of those centrally held funds support the activities that I have described, which could be in danger as a result of a poor financial settlement and, unless we are careful, local government reorganisation.

We should not just be trying to hang on. An area in which we should be spending money is nursery provision. Curiously, as a result of being an old county borough, Merthyr has considerable nursery provision. One of the historic successes of this old county borough is that it developed nursery education fairly comprehensively. As the borough's boundaries are now rather different, there are areas, including areas in the Rhymney part of my constituency, which have no nursery provision. We have the nonsensical position where Abertysswg has no nursery provision but lower Rhyrnney has full nursery cover and upper Rhymney has no formal nursery education.

What has happened to all the Government's plans for nursery education? Where is the great initiative that was supposed to come from the Prime Minister down for the development of nursery education? Where is the Secretary of State's nursery provision? And where, in this financial settlement, is the extra money needed to fill the gaps in nursery education in the communities that I represent?

When I say nursery education, I mean education. I do not believe in too much play. I started school at the age of three and learned to read at that age. Like many others of my generation, I believe that the learning process opens up the real world for children, so I favour old-fashioned nursery education. I should like to see the gaps in nursery provision in Wales filled. I hope that filling those gaps will be one of the missions of the new county boroughs of Merthyr Tydfil and Rhymney. I feel that I am spitting into the wind when I write to county education directors and ask why they make no provision in next year's budget for filling those gaps in education and they turn round and say that they are just about hanging on to the nursery provision that they have now.

Before the Secretary of State decides that the proposals are fair, generous and wonderful, he should realise the pressures on the ground in what we all agree is one of the most vital services for the future—our education service.

5.31 pm

Mr. David Rendel (Newbury)

I am delighted to have a chance to participate in this debate, not least because I listened to the Secretary of State's announcement on 14 December, which turned out to be some sort of Budget for Wales, when the bad news for local government finance in Wales was first revealed. I had hoped that the battering he had on that occasion would have lent him some strength in Cabinet discussions and given him a chance to return with better proposals today. Sadly, my hopes have been dashed in that regard.

My hopes were raised again when we debated the local government settlement for England; I had hoped that the Secretary of State would have taken the warning that the country felt that the amount of Government money going towards local government resources was inadequate. Sadly, that, too, seems to have passed him by, as has the rumpus that erupted recently between school governors and parents who are trying to get their children educated in our schools. They feel extremely sore about the effect of this Government's actions on the education system, not only in England but in Wales. I am sorry that the Secretary of State has chosen to take no notice of what has happened in this Chamber or outside it since he made his announcement on 14 December last year.

Unfortunately, the settlement means that people, particularly teachers, are likely to be thrown on the scrap heap. In effect, therefore, the settlement will waste resources, be inadequate for Wales's needs and probably cause a reduction in local government services in Wales.

I shall concentrate on education, because, not surprisingly, it has been a major subject of debate today, not least because it plays such a major part in local authority finances. Wales has a particular problem with the education system because of the sparsity of population in its rural areas. We are all aware that sparsity of population is not yet fully taken into account in the formulae that the Government use to decide on standard spending assessments and grants to local authorities. I hope that the Government will face that problem before we reach this occasion next year, because it needs to be dealt with not only in Wales but throughout the country.

I return to the point made earlier about school closures. In sparsely populated areas, the closure of a school, even if there are empty places, presents particular difficulties. The Government have not yet fully understood that point, so it needs to be made again. School closures in sparsely populated areas present financial difficulties when the nearest school is some distance away. Social difficulties arise when children's education is disrupted and family arrangements are also disrupted as parents find that they must take their children to a different school. They also have financial consequences for the community as a whole.

It is easy for the Government to think purely in terms of the cost of education to local government, but the cost of educating a child includes the cost of getting that child to and from school, not only for daytime work but for extra-mural activities. It is important for the Government to recognise that a saving for local government in terms of direct funding of a school may be counterbalanced—even overturned—by the extra costs to the community as a whole of moving children to a different school some distance from where they live.

Sir Wyn Roberts

Another factor that must be borne in mind is the quality of education that children receive. When numbers run very low, the quality of education suffers because it is impossible to maintain an adequate supply of teachers.

Mr. Rendel

It is interesting that that argument is often advanced by Conservative Members, many of whom pay large sums of money to ensure that their children are educated in small classes. The suggestion that the quality of education necessarily worsens when school sizes go down is not valid. It has certainly never been proved. In Powys, for example, attempts have been made to increase school sizes to about 1,000 pupils. Those attempts have not proved successful and some of the best-quality education is given in schools with only about 500 pupils.

The problem of nursery education was rightly discussed by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). It is a significant factor in terms of education in Wales. As we know, it presents problems throughout our nation but particularly in Wales, where clear gaps exist in nursery provision, especially in the state sector. We should all seek to fill those gaps. I admit that there are some good voluntary and charity nursery schools that are well worth their place in the education system and I hope that the Government will see their way to encourage such schools. For example, the Malldwyn family centre has proved highly successful; if the Government could copy such schools, it would be well worth while. Such nursery schools allow children to get a decent education while allowing parents to live their lives as they wish. That cannot happen in parts of Wales with an absence of nursery provision.

Care in the community is a major and growing part of local government financing, so it is right that the Government now see the need to put more money into it. Many of us have believed for some time that the care in the community policy is right in principle, but we have seen what a shambles has been made of it in practice.

The money that is provided for care in the community always has to catch up with requirements a year or two late. Any hope that the Government might have that the extra money put into care in the community this year means that there will be a real increase in spending is damned by the obvious fact that that money is needed simply to plug the holes in the care in the community programme that have become evident in the past few years. The claim that so much more is now provided for Wales as a result of the Government's settlement must be countered with the contrary claim that the settlement merely represents a catching-up exercise.

The transitional costs of introducing care in the community are not being met. The most serious problem relates to the most severely handicapped adults. An attempt has been made to shut many of the older institutions that used to care for those people. That has caused enormous anguish to those who will be forced to care for them in the community without adequate resources. If one listens to the parents of those who have reached adulthood, but are so severely handicapped that they cannot properly care for themselves, one is immediately aware of the difficulties that they face in looking after their adult children in the community. One must therefore accept that the Government still have a long way to go before they can claim that they have properly funded their care in the community policy in Wales.

A particular problem for Wales this year is that it is rapidly moving towards the election of the new shadow authorities for the new unitary authorities. This year's settlement must obviously provide for the costs of those shadow authorities and, happily, to a large extent it does. It is also setting the trend for the future of those authorities, because those authorities have been given a guideline as to how they should plan for local authority expenditure once they become fully fledged authorities in their own right. It is sad that they will have to plan for a base of spending well below the real needs of the people of Wales. It is sad that, in effect, they will have to plan for cuts in services well below the level of need.

The settlement is a sad reflection of the Government's lack of care for Wales. It shows what happens when the man in charge is more interested in bribing the voters of south-east and southern England with tax cuts than in looking after the real needs of, and providing services to, the Welsh people. Wales deserves better.

5.42 pm

Mr. David Hanson (Delyn)

The hon. Member for Newbury (Mr. Rendel) mentioned the sparsity of the population in Wales, but perhaps he should have referred to the sparsity of Tory speakers in the debate. It seems that only the Opposition are interested in the settlement and its effect on Wales. The Opposition have made a healthy contribution to the debate and we will continue to do so during the remainder of it.

I have been driven to speak by the scurrilous attack that the Secretary of State for Wales—let us remember that he is the right hon. Member for Wokingham (Mr. Redwood)—made on my county of Clwyd and the effect that that settlement will have on it. I should also like to respond to the Secretary of State's interpretation as to what Clwyd should do about that settlement. I have been in the House for just three years, but I was struck by that vitriolic attack on Clwyd. Perhaps it was meant to boost the right hon. Gentleman's virility on the near empty Conservative Benches, but I am sure that it failed in that objective.

Apart from that attack on my county council, the Secretary of State for Wales expressed his strong concerns about the tactics used by my constituents—the schoolchildren of Maes Garmon in Mold. Last year, they had the temerity to go to a meeting held by the Secretary of State in north Clwyd to protest about the effects of the spending assessment and grant allocation on local education authority spending. The right hon. Gentleman described their actions as politically motivated and he implied that, by putting across their strength of feeling, they were almost deranged. As for their political motivation, I should tell the right hon. Gentleman that those schoolchildren came to my surgery to lobby their Labour Member of Parliament, just as they lobbied Labour councillors. They felt so impassioned about the effects of any cuts in the education budget on their school and its teachers that they felt that they had to lobby the Secretary of State for Wales. What was his response? It is not apparently part of Tory party democracy of the late 20th century that people should be able to lobby the Secretary of State about the effects of spending cuts on their schools.

I should like the Minister and the Secretary of State to tell me how many schools in Clwyd they have visited in the past year. In the past year, how often have they expressed their concerns about education to local councillors? How often have they written to Clwyd Members drawing their attention to the concerns that were expressed by the Secretary of State in the Chamber this afternoon? On all three counts, the answer is that they have taken such action on very few occasions. I certainly never received a letter from the Secretary of State expressing concern about the level of balances in Clwyd. The Minister might like to respond on that point.

The blunt fact is that the settlement is a very difficult one for local schools, the local education authorities and all local government services in Clwyd. The Secretary of State has argued that Clwyd should consider its management costs and be prudent with its balances: apparently, it should consider reducing its overall expenditure so that it is more in line with the expectations expressed in central Government diktats from the right hon. Member for Wokingham.

The Secretary of State offered no suggestion on the level of balances that he wants Clwyd county council to set. He mentioned £5.5 million as the current balance; the county council's budget this year is £271 million. Is £5.5 million a prudent balance on that level of expenditure? Although some money may be taken out of the balances—I am sure that the county council will do that as a result of the settlement—does £5.5 million represent a prudent balance? What is a prudent balance? Perhaps the Minister will tell us.

Is it prudent for Clwyd county council, in its final year of existence, to plunder its balances so that, next year, the new authorities of Flintshire, Denbighshire and Wrexham have to go back to the Secretary of State and say that they have no inheritance from the former authority? They will tell him that no balances were passed on to them and that they are therefore in a difficult position.

We have heard many Members of both Houses talk about selling the family silver. If we spend that family silver as a short-term measure to shore up Clwyd county council and to overcome its current problems, when it has only a £5.5 million balance from £271 million expenditure, what will happen next year? What will happen to Flintshire, Denbighshire and Wrexham. when the undoubted central aim of Government policy is to reduce public spending? What will happen when, next year, the Government reduce the settlement still further and impose a stricter cap?

Mr. Jon Owen Jones

It will be a generous settlement next year because it will be election year.

Mr. Hanson

I hope that my hon. Friend is right because my constituents deserve a better settlement than that offered today.

Clwyd county council has made it clear that, this year, as a result of the settlement, it will have to make cuts of £8 million in the services it provides centrally—a cut of approximately 4 per cent.—if it is to keep within the Government's set capping limit. I take my council's word on that, because it has examined the issue properly.

My authority was not elected to make cuts of £8 million in services and it has no intention of doing so. It has no mandate to do that, because I remind the Minister that 32 of the 66 members of that authority are Labour and only six represent the Tory party. Four out of five Clwyd Members of Parliament are Labour Members and none of us was elected on a mandate to make cuts of £8 million.

Mr. Jones

Where is the Tory Member for Clwyd?

Mr. Hanson

The hon. Member for Clwyd, North-West (Mr. Richards), the Under-Secretary of State, is out on duty today, when he should be in the Chamber to answer for the Government's policies. This year, Clwyd county council, my local county council, will be confronted by an £8 million cut in expenditure. That money cannot be made up simply by prudent management. It cannot be made up simply by raiding the balances and selling the family silver for future years. It must be made up—unless there is an increase in the cap or, even better, perhaps an abolition of the cap or an increase in grant—by direct cuts in services in my county.

Those cuts will fall, by and large, on the education committee, because the education committee makes up most of the cost of Clwyd county council's expenditure. The county council has already considered making large cuts and has cut the central non-schools budget; nevertheless, it must make £3.5 million of proposed cuts, which in my county means the loss of nearly 300 teachers. Cuts in the non-schools budget have been made. Those cuts are now falling on the delegated school budgets, as governors are realising.

As my hon. Friends said, the reaction to those cuts is not an uprising of politically motivated people. I have received hundreds of letters from worried parents who do not blame the county council. They are streetwise parents. They know where the responsibility lies and they all, individually and collectively, have said to me, "Please go to the Welsh Office and ask it to review the grant, or, at the very least, we are willing, as ratepayers in Clwyd. to pay more on our local council tax by a higher cap to allow us to spend money in investing in our children's future."

As recently as last night, I presented a petition to the House on behalf of a school in Carmel in my constituency, signed by 2,000 parents who specifically asked for a review of the grant and the rate cap. I have received 200 letters from parents from one school in Northop Hall in my constituency. They are not politically motivated by unions. They are genuine parents who send their children to Clwyd schools—as I do—and whose children need investment in the future. Those parents want a proper settlement that reflects their aspirations, yet my county is confronted with a cut of £8 million, which will translate into £3.5 million in the education budget.

Clwyd county council social services have reviewed their budget recently because of the settlement and, as a result, must plan cuts of £1.4 million in a budget that is already unable to sustain the demand, statutory and real, that hits it. They are considering "rationing" services or charging for them, which would have a significant impact on the people in our community, whom I represent, to whom we try to deliver top-quality services. It will almost inevitably hit the most disadvantaged people in our community with the most difficult problems, who need the support of the county council. It makes any idea of a comprehensive, co-ordinated approach to community care a pipe dream, because that reduction in funding will hit hard the county council's ability to deliver locally based services.

The highways committee has considered services and has already identified £400,000 of cuts in the local maintenance budget for roads in Clwyd. I drive on roads in Clwyd continually and I can tell you, Mr. Deputy Speaker, that work certainly needs to be done, and that cut will really have an impact on our local services.

In answer to the Secretary of State, of course Clwyd county council has considered, and will continue to consider, its central core services—the services provided at shire hall in Mold in my constituency. The county council has already considered about £400,000 worth of savings in central departments, and I am sure that it will consider further. No Labour authority is about inefficiency. If there are genuine inefficiencies, I hope that the Secretary of State will write to me and tell me about them, so that I can write to the county council and ask it to review them. Let him put it on the record today. When the Minister replies, Mr. Deputy Speaker, let him tell the House, and tell me as the local Member of Parliament, the savings that Clwyd county council can make. If he is to go down the road of considering budgets and determining what is waste and what is not, let him tell Members of Parliament who represent Clwyd what should be cut from the budget to make the savings and compensate for the loss in grant that will confront us. I look forward to hearing his response to those questions.

All that is from a Government who, while the settlement continues, continue to plough money into grant-maintained schools throughout Wales—enormous amounts of capital spending—and recently announced a £20 million good schools initiative. In my opinion, the £20 million would be far better spent by local authorities in Wales rather than in response to a central diktat of what is a good school from the Secretary of State for Wales.

On the funding of schools, perhaps the Minister will tell us why the small schools initiative of England does not translate to Wales, and why small schools do not receive similar financial support to that which such schools receive in England.

My local authority would wish many steps to be taken today. I shall therefore be forced to vote against the settlement unless those steps are announced in the Minister's reply. The county council would certainly want the cap to be raised, so that additional resources might be raised locally by local taxpayers to pay for services that local taxpayers want. People have consistently voted for better spending and improved spending on education; if the Minister cares to visit Clwyd, he will find that many people in my community are willing to pay more in the absence of proper Government spending to achieve that level of services.

The Minister needs to consider many technical aspects of capping. In Clwyd, matters such as the Dee crossing and the Bryn Estyn case place additional costs on the county council, but are not, in the opinion of the county council or Members of Parliament who represent that county, adequately reflected in the calculation of the standard spending assessment.

Obviously, the council cannot achieve cuts of £8 million in 1995–96 without seriously reducing services. Let me remind the Minister that those serious reductions follow £22 million of reductions in county council spending in the past three years alone. The county council cannot do that without further serious cuts in services. The settlement is detrimental to the people of Clwyd and to the people whom I represent.

I leave the Secretary of State and the Minister with the thought that there are things that can be done by the Government to improve the situation in Clwyd. There is a will in Clwyd to find additional money from existing resources to help to offset the effects of the settlement, but, ultimately, people in my county want and demand good services. They want and demand maintenance of the existing level of services. If the Minister votes tonight to maintain the settlement, he will commit my county to serious decisions on the future of schools, social services, highways, the infrastructure and the industrial development of Clwyd.

People in my constituency say that they do not want increased class sizes; they do not want reduced numbers of teachers; they do not want less spending on buildings, fewer books and less spending on the range of school matters. They do not wish old people to be forced to pay increased charges for their home helps. They do not wish the infrastructure of our local community to be run down. The one way in which I can reflect those demands is to vote against the settlement, and I shall do so with pleasure.

5.57 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

I am disappointed that the Secretary of State is not in the Chamber at the moment. For some time, I had tried to obtain a meeting with him to discuss some important economic matters in the south of my constituency. I wrote to him in English, as I know that he does not like anything Welsh, but I could not obtain a reply. Eventually, I received a reply saying that he would see me after Christmas—that is when he would be up in the constituency.

Nevertheless, the Secretary of State appeared in September on the set of the "White Knight" film. He has since referred to "White Knight" in speeches with worrying regularity. He even referred to "White Knight" in the Welsh Grand Committee. He sees himself as some kind of white knight. I should prefer to call him something else, but he is not here to meet that particular barrage just now and, in any event, time does not permit the full number of words that I should like to use.

The white knight syndrome typifies the right hon. Gentleman's style of politics. I am grateful for the revised settlement for the police, which is sensible and will serve the needs of north Wales very well; but we have seen the white knight syndrome in action, because the first offer was ridiculous and would not have afforded any level of policing. I speak as the son of a policeman and the brother of a policeman, and I am a qualified lawyer and have had many dealings with the police. As the right hon. Member for Conwy (Sir W. Roberts) well knows, the first settlement would have been a disaster for north Wales, hence the review of £3.3 million when the white knight came riding in with bags of much-needed money. It is a silly ploy to offer a couple of peanuts and then hand over half a bag of them. We can all see through it; the public can see through it and are clearly aware of what is going on.

The right hon. Member for Conwy and I have a common interest—apart from being two humans, our constituencies split the borough of Aberconwy. He said earlier—I think in reference to Gwynedd—that further cuts were good for the soul. I do not accept for one moment that further cuts are good for the soul given the consistent deep cuts in Gwynedd over four or five years. Those are not empty words—as the right hon. Gentleman well knows, there have been substantial cuts. To say that those cuts are good for the soul is little short of disingenuous.

Sir Wyn Roberts

I said—the hon. Gentleman can check it in the Official Report—that the exercise experienced in Gwynedd of a 1 per cent. cut, an additional 1 per cent. cut, then a possible 2 per cent. cut might be good for the soul and might appeal to the Audit Commission. I also said that I did not think that the cuts would be called upon.

Mr. Llwyd

With the greatest of respect, if the right hon. Gentleman looks back over the past three or four years, he will see that such cuts have been made. I do not know why this year should be different from those years. I have attempted to make that point. I welcome the right hon. Gentleman's intervention, but I do not think that it took us much further.

I agree entirely with the remarks of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who spoke of the pressing need for nursery school provision. We in Wales have a great pride in our education system and have always seen the value of good education. I have one perfectly true story of what happened in my constituency five years ago. A gentleman came from a public school to teach a science subject in a secondary school in the south of my constituency. When he arrived at the school, he saw that the laboratory was a shambles. Gwynedd education authority had no money to invest in the school—I do not blame it for that, as it had other priorities all over the county and a small budget with which to meet the needs. The teacher rang a friend of his in the science department of a public school and asked him if he had [...]spare equipment. His friend said that it was just as [...] rung as the public school was installing a [...] laboratory and his friend could have the old one.

That secondary school now has the best-equipped physics laboratory in Gwynedd. We are relying on scraps. There is a hidden agenda, and we know what it is. The Government want education for the rich and any old nonsense for the rest of us. They are in the business of establishing, yet again, a ruling class. We are not blind and we can see what is going on.

My hon. Friend the Member for Ynys Môn (Mr. Jones) mentioned the hidden problems of this year's budget. Care in the community is becoming an increasing drain on local authority resources. As the hon. Member for Newbury (Mr. Rendel) said, there is no doubt that the policy is welcomed in principle, but unless it is properly financed, it will not achieve what was intended.

The right hon. Member for Conwy mentioned one or two matters raised by Aberconwy borough council in its responses to the settlement. As he said, the strategic development scheme announcements were disappointing for the borough. I echo that sentiment and go further—there is no conceivable reason why the scheme should not have been allowed.

Aberconwy is not designated for European assistance in the form of grant aid. If what I have seen of Welsh Office applications to Europe for grant funding in south Gwynedd is anything to go by, its procedure is a shambles. I wonder when, if ever, we shall gain any form of credibility in the European Union. The application for south Gwynedd has been submitted to the European Union Commission three times. It was submitted in March and was bounced back, marked in red—we are talking about education-to show where the application had gone wrong. It was resubmitted in April or May and was bounced back marked in a different colour. Shortly after Christmas, this year, there was a meeting so that the directors general, of the various departments could tell the Welsh Office how to put a case together. We in south Gwynedd have waited almost 12 months to advance one inch, and have not yet done so. I suspect that that is one reason why the white knight would not see me earlier than next week, despite many attempts by me and those in my office to see him earlier. I am disappointed in the general level of proficiency in the Welsh Office vis-à-vis its contacts with the European mainland.

I shall develop the argument put fairly and squarely by the right hon. Member for Conwy about the concern in Aberconwy about the rent allowance costs, which are a heavy burden. I would be obliged if the Minister would look again at the effects on Aberconwy and other areas in Wales of that policy. At present, it is a drain and little else, and it should be shored up, otherwise other cuts will have to be made—where, I cannot say. I appreciate that the SSA formula recognises the incidence of rent allowance, but it does not deal sufficiently with its effects. Will the Minister respond to that point in due course?

The right hon. Member for Conwy mentioned the £3.46 million cut. Whatever the position and the mathematics, that represents a real cut. Gwynedd, Dyfed, Clwyd and other responsible authorities throughout Wales have avoided cutting their education budgets. Part of the reason for that is probably that we in Wales respect good education and what it can provide in a normal economy. This year, there is no doubt that Gwynedd's education budget will be cut. It is no use the Minister saying that it is because of this, that or the other; it is directly because the money allocated is insufficient to meet the county's needs.

Mention has been made of the further 1 per cent. cut in Gwynedd's staffing budget, the 1 per cent. cut in the total budget and a possible further 2 per cent. cut. Those are stark enough cuts in themselves, but when they come in the fifth year of cuts, the position becomes almost unmanageable. I am sure that many officers and members in local government in Gwynedd are fed up with being apologists for the Government. They are at the sharp end and have to deal with the cuts and try to explain them. They know that if a responsible administration were looking after a central, core budget, the cuts would not have to be made. But there will be a cut in Gwynedd's budget. It gives me no pleasure to say that. As various hon. Members have said, there are hidden problems in the budget in Gwynedd which involve community care and which will impact even further than has been suggested.

Dyfed county council is proud of its education system and of the way in which it has looked after its schools in the face of tremendous funding pressure. There is a link between Dyfed and Gwynedd, as both counties have a large number of fairly small primary schools. Those of us who come from rural backgrounds know how important village or town schools are to communities. The local authorities have recognised that fact and they have hitherto safeguarded their schools. However, they fear that they cannot hold out any longer; the dyke will burst any minute. Many dozens of villages throughout Dyfed, Gwynedd and Clwyd will suffer directly as a result of the settlement that has been offered.

As I mentioned in an intervention, Dyfed has recognised that it will have to cut its community education provisions. The nature of school meals will change and they will cost more. The local authority will be not be able to maintain school buildings. We obviously face difficult times, and it is not good enough for the Government to say that we should cut the cloth accordingly. The cloth has been cut as much as it can be cut, and the Government must recognise that fact.

The Secretary of State recognised that there was a crisis in policing in north Wales. I had several meetings with him to discuss that subject, as did other hon. Members. We are now facing a crisis of equal proportions, and this crisis is not simply confined to the police; it extends to education, transport, social services and community care. I invite the Government to reconsider this savage settlement, which will do nothing for local government.

The new unitary authorities will be grossly disadvantaged. Many of us were involved in the legislative process last year, and we do not want to bequeath those authorities a legacy of failure before they have even commenced operations. The settlement must be reviewed if we are to adopt a responsible attitude to local government in Wales.

6.12 pm

Dr. Kim Howells (Pontypridd)

It is a pleasure to follow the thoughtful remarks of my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd). At the end of his speech he highlighted a matter which worries a great many Welsh people as we move towards the establishment of unitary authorities in Wales. In that respect, we are much further ahead than England.

I am worried about a whole range of subjects, and my hon. Friend referred to some of them. We face a serious problem with the maintenance of school buildings in the valleys of south Wales. School buildings are literally sliding down the hillsides because of the extensive mining that occurred in the past, and the cost of shoring up those buildings is often exorbitant.

A question mark hangs over the future of special needs education in schools in south Wales. Marvellous initiatives have been taken in special needs education—mainly instigated, not by the Government, but by staff and pupils. The "much despised creatures"—as they are described by the Government Front Bench—the administrators of education in Wales, have done a marvellous job trying to integrate children with handicaps into mainstream education. We aim to give everyone an equal opportunity in society and allow them their rightful civil liberties.

My children do not have fields to play in and I perceive a constant need throughout the urban centres in Wales for green spaces for our children in schools.

I am concerned about the state of our schools and the problems associated with their maintenance. Owing to the topography of south Wales and its industrial past, many buildings in Pontypridd will have to be grouted at a cost of hundreds of thousands of pounds. Many of the schools in the constituency of my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) have faced a real crisis. Old and newer mining operations have burrowed under schools and under whole communities. What might be a quite expensive repair bill for a household, can prove catastrophic for a school. As a result, ordinary care and maintenance jobs, such as painting walls and repairing electrical fittings or windows, are often put off for many years in schools in south Wales. The money must be spent simply to keep the walls and the buildings together.

A school in my area, ysgol Gyfan Rhydfelin, had to nail doors shut because subsidence had forced the walls askew and prevented the doors from locking. It was a fire hazard and an absolute disgrace. We solved that problem, but only after quite a struggle. That school also has terrapin classrooms. Time and again, schools in south Wales solve their maintenance problems by housing children in temporary classrooms. The climate is invariably very wet and often very cold, and no child should spend his or her educational life under those appalling conditions.

Mine was the most lucky of generations because when I went to school in south Wales the schools had just been built. They were airy and light. People believed that children should not be trapped in concrete playgrounds, and the schools were surrounded by fields. They were marvellous places.

Those same schools which were built in the 1950s and 1960s are now falling apart because the maintenance costs simply cannot be met. The school maintenance budget in Mid Glamorgan alone has been cut by £1.5 million. There is no excuse for that, and I hope that the Minister will address the problem.

Special needs education concerns me enormously. Many schools in Wales have done a marvellous job providing special education. The special care unit at Bryncelynog school in my constituency has pioneered all sorts of projects. A little primary school at Pentyrch has transformed not only the lives of the disabled children who have now been integrated into mainstream education, but the whole school, because it has changed schoolchildren's views of those who have physical handicaps. That marvellous initiative must not be threatened in any shape or form by the Government's tight-fisted fiscal policies. Integration should continue and special needs must be met.

The schools in the constituencies of my hon. Friends are crying out for speech therapists and for peripatetic physiotherapists, which would solve the problem of children taking whole days off school in order to receive physiotherapy treatment in hospitals. We are talking about our future wealth-creating base: our children. We cannot afford not to tap the potential of children with disabilities any more than we can afford not to tap the potential of those children who are lucky enough not to suffer any disability.

Finally, I return to the problem of the lack of green spaces in so many of our schools. My own children's school, Coedylan primary and junior school, has no grass for the children to play on; it has a small, concrete playground. That position is echoed throughout Wales.

There was a time when children could play on the mountainsides and in the streets. They cannot do that any more. Anyone with kids knows that parents are too paranoid and frightened to allow their children to roam on the mountainsides because of the stories that we hear. Children cannot play in the streets because there are too many cars.

If I may be slightly flippant, I suspect that one of the reasons why the Welsh rugby, soccer and cricket teams have performed so badly in recent years—heroically perhaps, but pretty badly—is that kids are inhibited by the fact that their whole sports lives are structured. The only time they ever indulge in sports is when they take part at school or go to a special coaching class on a Saturday.

If financial pressures are to be brought to bear on boards of governors, education authorities and schools, there must be no more sell-offs of school playing fields and green spaces. Those facilities have to be properly maintained and extended.

I am glad that the Secretary of State has returned to the Chamber. He has missed some marvellous speeches from hon. Members who have kids attending schools in Wales—as mine and those of my constituents do. He will have heard that there is what amounts to a crisis, certainly in the minds of many of us who observe what is happening in schools today. For that reason alone, I shall vote against the Government tonight. I hope that they listen to what has been said. It is extremely important because those children are the future of Wales.

6.20 pm

Mr. Alan Williams (Swansea, West)

I apologise for croaking my way through just a few comments in the aftermath of cold. The nub of the debate was an exchange between my hon. Friend the Member for Caerphilly (Mr. Davies) in his opening speech and the Secretary of State. My hon. Friend pointed out that when we take out of the settlement the special amounts for the police and for community care, we are talking about an increase of 0.4 per cent. at best. Immediately, the Secretary of State rose to his feet and his answer was, "It is all right because inflation has fallen to 2 per cent."

It seemed strange that the Secretary of State could put forward such a proposition. He was saying that it was all right because the rate of inflation will be only five times higher—instead of six or seven times higher—than the extra money being provided. Most of us know that it will be six or seven times higher at some time during the year. That is what it is all about—the authorities were first entrapped and then virtually strangled for years as far as resources are concerned.

My own county has absorbed £6 million in cuts in the past three years by using up some of its reserves. The Secretary of State said that we should not worry about the increase in teachers' pay because the provision is enough to cover it. How can he say that before he knows what the teachers' pay increase will be? The provision was set long before he could even have had prior warning of what the increase would be—which no doubt he has now.

The Secretary of State has no accounting or statistical grounds to say that an increase of one fifth of the rate of inflation will enable local authorities to cover an unknown and significant—although most of us would say inadequate—increase in teachers' pay. I have to declare an interest as my wife is a teacher. We have to recognise that the consequence of today's announcement is either cuts in teaching staff or larger classes, leading to a reduction in the standards of education provision.

I caution hon. Members about the idea being pushed by one Conservative Member about lifting the cap. Let me make this cautionary point about what the Secretary of State has said about the 89 per cent. central provision. If the Government decided to fund the teachers' pay rise by lifting the cap, a 1 per cent. increase in local authority costs would mean a 9 per cent. increase in the council tax because of the ratchet effect, so councils would be blamed for the fact that the Government have under-provided.

I now come to another peculiar proposition that the Government have suddenly dug up. The Secretary of State has been thoroughly briefed. He mentioned reserves in addition to school reserves. His case was that the reserves will be the solution for this year. What is the Secretary of State actually saying about reserves? We know that the Government always say that to be in debt is wrong and will criticise those irresponsible councils which get into debt—of course, they are not Conservative councils according to the Government—yet the Minister stands at the Dispatch Box to announce increased borrowing powers to get councils deeper into debt.

What about the concept of reserves? Are they good or bad? The Secretary of State does not really know. He cannot make up his mind. Are the schools which have no reserves virtuous because they used them up to meet previous cuts in resources, or are the schools with big reserves being prudent? The Secretary of State will not give us any guidance. He depends on his concept of a prudent level of reserves, but he gives no indication of what it is.

We understand that there is a difference between certain reserves. We know that big reserves are good in grant-maintained schools because the right hon. Gentleman has told us so, but the Government will not tell us whether those reserves are good in other schools. We assume they cannot be good, because the Government are telling them to use them up. That is the illogicality of our position.

I made an intervention about information technology. Is it not anomalous that at Question Time the Secretary of State will stand up and say, "Look at what inward investment in information technology and electronic engineering has meant to Wales," but, at the same time as his right hon. Friend the Secretary of State for Education has announced a scheme in England to make extra information technology facilities and equipment available in English schools, he has flatly refused to do the same in Wales, which, according to him, will be hoisted by the boot laces by the electronics and information technology industries?

The Secretary of State is a mass of inconsistencies. He had the cheek to say to my hon. Friend the Member for Caerphilly—I know that it was a jocular comment—that my hon. Friend leaves the shadow Cabinet to make the tea. We all know very well that the Government will not let the right hon. Gentleman leave the Cabinet to make the tea.

Dr. Howells

Because he would poison it.

Mr. Williams

No, because while he was outside he would sell the kettle. Is that not what they are advocating? They are telling schools to spend the money that they put aside to buy equipment. That is what the Secretary of State said. I have never heard such financial absurdity. I will go with relish into the Lobby to vote against it.

6.28 pm

Mr. Win Griffiths (Bridgend)

The consistent theme from the Opposition has been the dire straits into which the local government settlement has put local authorities in Wales. There is no doubt that all my hon. Friends have consistently made a plea for the Government to reconsider the settlement, which will result in a cut in the services which local authorities in Wales will be able to provide. We heard from the right hon. Member for Conwy (Sir W. Roberts) the novel suggestion that county councils could, as they go out of existence, run down their reserves with impunity. Has it not occurred to the right hon. Gentleman that immensely important education, social, highways and transportation services will have to be provided by the new unitary authorities? It will be prudent of county councils, as it will of district councils, to maintain balances that can be handed over to the new authorities.

The Secretary of State said today, as he did on ITN lunchtime news yesterday, that a lot of money is available. My right hon. Friend the Member for Swansea, West (Mr. Williams) reminded us that the Secretary of State could not have included sufficient money to cover the pay review body's settlement for teachers, which will not be announced until later this week. It would have been impossible for the right hon. Gentleman to anticipate last December the fine-tuning in January and to know exactly the review body's recommendation. He does not know the figure any more than local education authorities, even though all have tried to make budgetary provision for that pay increase.

None of the education authorities in Wales has wholly provided for the anticipated 2.9 per cent. pay increase. All will have to dip into their balances to make up the shortfall. Some authorities have already told schools that they are expected to provide some of the extra funding. Other authorities may be able to do so out of the fabled, fabulous balances that they are supposed to hold.

When the Minister replies, I hope that he will say if he knows anything more about today's school balances compared with the figures thrown about at the start of this financial year. My bet is that most schools have already used their balances to purchase better equipment or more books and for other purposes. The consistent message from virtually every Welsh council is that the budget represents a cut over last year.

The Secretary of State was at pains to stress that one must compare like with like and the settlement for this and last year. Local authorities must consider the money that they had to spend this year and that which the right hon. Gentleman is making available for next year. Whichever indicator one uses—the TSS, AEF, SSA or other initials that come to mind in respect of local government spending—it is clear that there will be a real terms cut this year. Although there will be extra money, it will buy less. The same is true of education and housing authorities.

My hon. Friends the Members for Merthyr Tydfil and Rhymney (Mr. Rowlands), for Delyn (Mr. Hanson) and for Pontypridd (Dr. Howells), and my right hon. Friend the Member for Swansea, West pointed out that the message from north, south, east and west Wales is that more money is needed. The same is said beyond Wales—the hon. Member for Newbury (Mr. Rendel) brought the same message from the Liberal Democrats.

The Secretary of State can say as much as he likes about extra cash, but it will not buy the same in the current financial year that it did last year. Cuts have been made over several years. Over the past three years, Mid Glamorgan has had to make savings of £34 million. This year, authorities throughout Wales are being stretched on the rack and are falling apart.

Today I received two letters from Clwyd, over which the Secretary of State took so much time to salivate in his criticisms. Mr. Edward Williams of ysgol Morgan Llwyd wrote: Teimlwn bod ein pobl ifanc wn haeddu gwell. That means, "Our children deserve better." The Federation of Welsh Schools commented that teachers are fed up trying to hold together a system that is falling apart around them.

Pupil-teacher ratios are a good indicator of the economic climate in education. From 1979 until 1990, pupil-teacher ratios in secondary schools fell year on year—from 16.8 pupils per teacher to 15.3. In 1993, ratios began to creep up, to 15.7 pupils per teacher. In primary schools, the ratio was at its lowest in 1984, when it was 21.5 pupils per teacher. By 1993, it had increased to 22.1. The situation is worsening inexorably.

Judging from the cash available, there has been an increase in district budgets of 1.1 per cent., but when one considers what can be bought, that represents a reduction of 2.5 per cent.—£11 million less than what is needed for a standstill budget. Compared with district council spending last year, there will be an overall cut of nearly 6 per cent.

The number of homeless in Wales is increasing and the state of its housing stock is worsening. Current new builds are probably only half the number required. The Government signed up to the United Nations housing strategy—a declaration, as far as Wales was concerned, that there would be houses for all by the year 2000. The money given to local authorities or to Tai Cymru will probably allow only 40 per cent. of that target to be achieved. In the year that the Government signed that document, they have already admitted failure. There will be deeply damaging cuts in both industrial and rural Wales.

The Secretary of State was at pains also to stress that he had fully catered for improved technology, to help bring the new unitary authorities into being—and we applaud him for that. He has catered in full also for the shadow authorities' budget. However, when it comes to financing possible redundancies, the right hon. Gentleman has provided £3.5 million, which must be borrowed.

The Secretary of State is on record as saying that he expects very few workers to lose their jobs, even though at one time he talked about a 5 per cent. loss which he thought would mainly be accomplished by natural wastage. There are huge differences in the numbers who are likely to lose their jobs and the terms on which they will lose them.

The Government have chosen, in their arcane way, to interpret TUPE—the Transfer of Undertakings (Protection of Employment) Regulations 1981—in such a way as to exclude a large number of local government workers. As is often the case when the Government interpret the directive's demands, they have got it wrong. This is another instance in which they would be well advised to come to a new accommodation with local government workers to make sure that the redundancy scheme is properly financed. How many people's redundancies can be financed on a £3.5 million scheme? Very few, I would guess.

In addition to local government reorganisation, the Welsh Office is proposing that contracting out be reintroduced in Wales much sooner than in England, where the Department of the Environment is proposing a reasonable delay of 18 months to enable the new authorities to settle in before moving to compulsory competitive tendering. In Wales, however, some authorities have to begin the job six months after reorganisation, some a year after and many 18 months after. Bearing in mind the difficulties that local authorities will have with their budgets, will the Secretary of State extend the period before local authorities have to examine the problems that CCT will cause them?

Finally, I deal with efficiency. The Welsh Office's own expenditure plans showed efficiency savings of 2 per cent., 2 per cent., 1.5 per cent. and 1.7 per cent. for 1992–93. All of a sudden, in 1993–94, the planned efficiency saving was 5.6 per cent. Will the Minister tell us exactly what savings were achieved that year?

Let us examine staff numbers in local government and the Welsh Office. Whereas Welsh Office staff have declined in number by 82 since 1979—a reduction of just over 3 per cent.—local government staff have declined by nearly 14,000, or about 6 per cent., which is double the number of redundancies. By any measure, local government has already shown itself to be more efficient.

The settlement proves that the Welsh Office, by having 15 press officers and quadrupling its publicity expenditure, is trying to sell the impossible in Wales. We shall be left with crumbling and under-resourced schools, exhausted and over stretched teachers, frenzied fund-raising parents trying to get money for the basics in our schools, impoverished housing stock, houses unfit for habitation, growing repair lists, growing numbers of homeless, roads increasingly potholed and taking longer to repair and overstretched social services. The needs of children and the elderly will not be met, and it will all be down to a settlement that is wholly inadequate for the needs of the real world. We shall vote against the settlement proposals.

6.43 pm

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

We have heard the traditional claims that this or that is going wrong and that we are heading for disaster or crisis. One need only turn to the previous year's debate or that of the previous year or the one before to realise that the same claim has been made again.

Let us analyse today's debate. It is clear that it has been a low-key, even-tempered debate about how local government in Wales is proceeding in the final year before our popular reorganisation. The only thing that we have not heard is a positive alternative from Opposition Members, including the hon. Member for Bridgend (Mr. Griffiths), whom I can at least congratulate on broadening the debate more than any of his colleagues, either today or in previous debates on Welsh affairs. However, the hon. Gentleman will have to pay more attention to the facts. I assure him that we have given careful consideration to compensation for local government reorganisation and have included appropriate funding for the costs that are likely to arise in the coming financial year.

Nor has the hon. Gentleman studied his housing brief. He certainly has not read the interim house condition survey, which was published last year and which outlined the continuing improvement in housing in Wales. No doubt he will examine it more closely in future.

The settlement gives local government in Wales an additional £87 million to spend—a total of more than £950 for every man, woman and child in Wales. It provides more money for the police—a fact widely welcomed by police authorities—and for care in the community. In addition, there is £43 million to fund the costs of local government reorganisation and a generous increase in the local government settlement for the forthcoming year.

Welsh local authorities are responsible for very large budgets. All but one county council have budgets of more than £150 million. They have flexibility to manage their budgets as they see fit and will be setting their budgets at a time of low inflation, which means that their money will go much further than last year or previous years. They can use accumulated reserves to fund expenditure if they consider it prudent to do so.

In his opening remarks, my right hon. Friend the Secretary of State pointed out that there is always room for efficiency savings in large-scale organisations. Given the discretion available to them, I cannot accept Opposition Members' argument that the settlement will not enable local authorities to protect the front line or, most important, functions. They can protect those functions if they have the will to do so.

Central Government support will account for about 89 per cent. of total standard spending. Local authorities will have increased scope for raising revenue locally, which they have sought in the past. At the same time, Welsh council tax payers will pay considerably less for their council than their counterparts in England and Scotland. Those on income support or low incomes can qualify for benefit up to 100 per cent. of their council tax bill.

I am not prepared to speculate on council tax levels for 1995–96; that is a matter for individual local authorities. Council tax levels will depend on local authorities' budget decisions and their success in collection and changes in their tax base. Welsh billing authorities have an excellent record on collection, for which I commend them. I understand that they estimate a surplus of £15 million on collection funds at 31 March this year. That is very good news for council tax payers in Wales as it means that they will benefit from lower bills—a reduction of about £15 at band D in the coming financial year. Indeed, press reports suggest that at least one Welsh local authority is planning to reduce its council tax.

None the less, I must tell the hon. Member for Delyn (Mr. Hanson) that it is essential for the Government to have power to protect local taxpayers from unreasonable council tax increases, especially at times when it is necessary to restrain public expenditure.

Opposition Members have voiced their concern for local taxpayers in speculating on the council tax increase that will result from the settlement proposals. It seems inconsistent for them to argue for the removal of capping, which would almost certainly result in a considerable increase. They cannot have it both ways.

Mr. Hanson

Will the Minister explain why the Welsh Office knows better than the people of Clwyd, who elected 32 Labour councillors out of a total of 66 in the most recent election and who have previously delivered a Labour majority? The Minister's party has six councillors. Is not local democracy about letting local people decide on the local services that they want?

Mr. Jones

Capping is now a well accepted and appreciated protection. Local electors know that they have that protection in addition to the accountability that they should expect to come directly from their councillors.

Welsh local authorities have established an excellent record for prudent budgeting in recent years, and I trust that that will continue. The criteria for capping are provisional, and my right hon. Friend the Secretary of State will take all relevant considerations into account before making his final decisions.

The hon. Member for Caerphilly (Mr. Davies) reminded us that he has no policies on this matter, just as he has no policies on anything else. The proposal to abolish capping is only a consultative proposal. We all know how thin Labour's policies are; it was understandable that the hon. Gentleman should appeal to my right hon. Friend the Member for Conwy (Sir W. Roberts) to write to him and offer anything that he could possibly set up as a policy—so desperate is the hon. Gentleman to find something positive to say.

The police settlement is excellent, and is consistent with the new funding formula arrangements. It will be welcomed by the public and the new police authorities, if not by Opposition Members. It is essential for the new authorities to have a sound financial base in their first year, so that they can provide the high quality of policing that the public have a right to expect. As single-service authorities, they will have less flexibility than counties and districts in making budgetary decisions; they may also wish to build a prudent level of reserves to meet contingencies in future years.

I am glad that the hon. Member for Caerphilly welcomed the police settlement. I can well appreciate the condemnation that he implied about past spending decisions and policing levels, not least in the constituency of Islwyn. The electorate of that constituency will note the disapproval expressed by the shadow Secretary of State for Wales. The spending decisions of the police forces in Gwent and South Wales were made by Labour county councillors, and the electorate should consider Labour county councillors' priorities when deciding whether to give their traditional vote to the Labour candidate yet again.

Much of today's debate has been about education, especially the speeches of the hon. Members for Merthyr Tydfil and Rhymney (Mr. Rowlands), for Delyn, for Meirionnydd Nant Conwy (Mr. Llwyd) and for Pontypridd (Dr. Howells) and of the right hon. Member for Swansea, West (Mr. Williams). Their comments were very much in line with the emphasis that we who come from Wales have always placed, and will continue to place, on that important subject.

Mr. Jon Owen Jones

Will the Minister give way?

Mr. Jones

I am short of time, but I will take one last intervention.

Mr. Jon Owen Jones

I thank the Minister, because he has made an important point. He said that the police authorities' spending decisions were made by Labour councillors. Is he telling us that the spending decisions that led to the difficulties experienced by South Wales police authority were made by Labour councillors? That is not the impression that I have gained from the press; nor is it the impression gained by the police.

Mr. Jones

I cannot imagine where the hon. Gentleman gets his impressions from, impressionable young man though he may be. The fact is that Labour county councillors kept the South Wales constabulary desperately short of money. I know what the current impression is among the hon. Gentleman's electorate and mine in Cardiff: they welcome a 15 per cent. increase in spending for the South Wales constabulary, which will right the wrong perpetrated by Labour councillors.

Inevitably, there have been many complaints about alleged cuts in education by one or more of the eight county councils in Wales. In theory they come of age this year, but I do not think that that will be celebrated as much as their conclusion next year. What the apologists in the Opposition say confirms that those councils appear to be incapable of making their own decisions, which are forced on them by someone else every time—usually the Government.

The hon. Member for Delyn asked me about prudent balances. The district auditor and the Chartered Institute of Public Finance and Accountancy recommend that authorities should have reasonable balances; what is reasonable in any particular case is a matter for the individual authority and its auditor. I realise that that is not in line with the hon. Gentleman's centralising tendency: amazingly, in an early intervention, he appeared to be asking for the power to decide education spending to be taken away from Clwyd county council. That must have been his local concern.

My right hon. Friend the Secretary of State has made it clear that some balances are needed for prudent management, and that it is a good idea for schools to save up for new equipment. He has also said something that is plain common sense: how can schools with £47 million in balances say that they cannot afford to pay their teachers when they have so much in the bank?

The hon. Member for Pontypridd asked me about education capital spending. The constituency example that he gave is a matter for Mid Glamorgan county council. In the current financial year, counties have received credit approvals amounting to £42.5 million for education capital spending—a rise of 11.6 per cent. on last year. Next year will see a further increase of 7 per cent., to £45.3 million. I hope that authorities will hear what the hon. Gentleman says and what we say, and will make the best possible use of the resources and capital receipts that are available. I hope that they will renovate and replace classrooms like that featured on the front page of today's Western Mail.

As my right hon. Friend the Secretary of State pointed out, county councils certainly have the financial ability to make education a priority—to provide for the pupils of tomorrow, and to provide more rather than fewer teachers. But they choose other priorities: they choose to spend the money elsewhere. My right hon. Friend reminded us that Clwyd allows only 68p in every £1 of the school budget to reach schools, and rightly contrasted that with the position of Powys, where the figure is as high as 78p. The sums that Welsh county councils are keeping back from schools are not small. In Clywd, the total is more than £17.5 million, in Gwent rit is nearly £22 million, in South Glamorgan it is nearly £16 million and in West Glamorgan it is nearly £14 million.

I am sure that parents will wish to consider how much money is being kept from their schools. They will want to decide who they trust more to make spending decisions—their local schools, or remote education committees. I think that many will believe that their schools are almost certainly better placed to make the right decisions, and will decide, for instance, to provide more teachers rather than adopting the scare tactic of slashing numbers that is so beloved of Labour education committees.

For too long, Labour has regarded Wales as largely a collection of rotten boroughs. Not long ago, an article was published in which someone said of Welsh Labour councillors that the "we know best" attitude must change. He called for Labour councillors to treat people as potential converts rather than eternal enemies, and demanded a new type of considerate councillor. Who was that far-seeing individual? It was the hon. Member for Caerphilly, in an article entitled "Call to end 'Cult of Arrogance"'. There is testimony from the expert himself about the way in which the Labour party has treated the people of Wales.

We have new councils this year—new, popular councils that will be close to the people. Here is the opportunity for the people of Wales to take control of those councils, and to cast away the tide of arrogance that has dominated local government in Wales for so long. This is the opportunity for councillors, who are responsive to the people of Wales, to run efficient councils and provide value for money with attractive council tax. Already, one council in Wales is talking about cutting its council tax. That could be followed by so many councils in Wales, which could ensure that priorities were right and that money went, in particular, to education so that we could have more teachers rather than fewer.

Question put:—

The House divided: Ayes 295, Noes 269.

Division No. 68]	[6.59 pm
AYES
Ainsworth, Peter (East Surrey)	Bonsor, Sir Nicholas
Aitken.Rt Hon Jonathan	Booth, Hartley
Alexander, Richard	Boswell, Tim
Alison, Rt Hon Michael (Selby)	Bottomley, Peter (Eltham)
Allason, Rupert (Torbay)	Bowden, Sir Andrew
Amess, David	Bowis, John
Arbuthnot, James	Boyson, Rt Hon Sir Rhodes
Arnold, Jacques (Gravesham)	Brandreth, Gyles
Arnold, Sir Thomas (Hazel Grv)	Brazier, Julian
Ashby, David	Bright, Sir Graham
Atkins, Robert	Brooke, Rt Hon Peter
Atkinson, David (Bour'mouth E)	Brown, M (Brigg & Cl'thorpes)
Atkinson, Peter (Hexham)	Browning, Mrs Angela
Baker, Nicholas (North Dorset)	Bruce, Ian (Dorset)
Baldry, Tony	Burns, Simon
Banks, Matthew (Southport)	Butcher.John
Banks, Robert (Harrogate)	Butler, Peter
Bates, Michael	Butterfill, John
Batiste, Spencer	Carlisle, John (Luton North)
Bellingham, Henry	Carlisle, Sir Kenneth (Lincoln)
Bendall, Vivian	Carrington, Matthew
Beresford, Sir Paul	Carttiss, Michael
Biffen, Rt Hon John	Cash, William
Body, Sir Richard	Channon, Rt Hon Paul

Churchill, Mr	Heathcoat-Amory, David
Clappison, James	Hendry, Charles
Clark, Dr Michael (Rochford)	Heseltine, Rt Hon Michael
Clarke, Rt Hon Kenneth (Ru'clif)	Higgins, Rt Hon Sir Terence
Clifton-Brown, Geoffrey	Hill, James (Southampton Test)
Colvin, Michael	Horam, John
Congdon, David	Hordern, Rt Hon Sir Peter
Conway, Derek	Howard, Rt Hon Michael
Coombs, Anthony (Wyre For'st)	Howarth, Alan (Strat'rd-on-A)
Coombs, Simon (Swindon)	Howell, Rt Hon David (G'dford)
Cope, Rt Hon Sir John	Howell, Sir Ralph (N Norfolk)
Cormack, Sir Patrick	Hughes, Robert G (Harrow W)
Couchman, James	Hunt, Sir John (Ravensbourne)
Cran, James	Hunter, Andrew
Currie, Mrs Edwina (S D'by'ire)	Jack, Michael
Curry, David (Skipton & Ripon)	Jackson, Robert (Wantage)
Davies, Quentin (Stamford)	Jenkin, Bernard
Davis, David (Boothferry)	Jessel, Toby
Day, Stephen	Johnson Smith, Sir Geoffrey
Deva, Nirj Joseph	Jones, Gwilym (Cardiff N)
Devlin, Tim	Jones, Robert B (W Hertfdshr)
Douglas-Hamilton, Lord James	Jopling, Rt Hon Michael
Dover, Den	Kellett-Bowman, Dame Elaine
Duncan, Alan	Key, Robert
Duncan Smith, lain	Kilfedder, Sir James
Dunn, Bob	King, Rt Hon Tom
Durant, Sir Anthony	Kirkhope, Timothy
Dykes, Hugh	Knapman, Roger
Elletson, Harold	Knight, Mrs Angela (Erewash)
Emery, Rt Hon Sir Peter	Knight, Greg (Derby N)
Evans, David (Welwyn Hatfield)	Knight, Dame Jill (Bir'm E'stn)
Evans, Jonathan (Brecon)	Knox, Sir David
Evans, Nigel (Ribble Valley)	Kynoch, George (Kincardine)
Evans, Roger (Monmouth)	Lait, Mrs Jacqui
Evennett, David	Lamont, Rt Hon Norman
Faber, David	Lang, Rt Hon Ian
Fabricant, Michael	Lawrence, Sir Ivan
Fenner, Dame Peggy	Legg, Barry
Field, Barry (Isle of Wight)	Leigh, Edward
Fishburn, Dudley	Lennox-Boyd, Sir Mark
Forman, Nigel	Lester, Jim (Broxtowe)
Forth, Eric	Lidington, David
Fowler, Rt Hon Sir Norman	Lightbown, David
Fox, Dr Liam (Woodspring)	Lilley, Rt Hon Peter
Fox, Sir Marcus (Shipley)	Lloyd, Rt Hon Sir Peter (Fareham)
Freeman, Rt Hon Roger	Lord, Michael
French, Douglas	Luff, Peter
Fry, Sir Peter	Lyell.Rt Hon Sir Nicholas
Gallie, Phil	MacGregor, Rt Hon John
Gardiner, Sir George	MacKay, Andrew
Garel-Jones, Rt Hon Tristan	Maclean, David
Garnier, Edward	McLoughlin, Patrick
Gill, Christopher	McNair-Wilson, Sir Patrick
Gillan, Cheryl	Madel, Sir David
Goodlad, Rt Hon Alastair	Maitland, Lady Olga
Goodson-Wickes, Dr Charles	Malone, Gerald
Gorst, Sir John	Mans, Keith
Grant, Sir A (SWCambs)	Marland, Paul
Greenway, Harry (Ealing N)	Marshall, John (Hendon S)
Greenway, John (Ryedale)	Marshall, Sir Michael (Arundel)
Griffiths, Peter (Portsmouth, N)	Martin, David (Portsmouth S)
Gummer, Rt Hon John Selwyn	Mates, Michael
Hague, William	Mawhinney, Rt Hon Dr Brian
Hamilton, Rt Hon Sir Archibald	Merchant Piers
Hamilton, Neil (Tatton)	Mills, lain
Hampson, Dr Keith	Mitchell, Andrew (Gedling)
Hanley, Rt Hon Jeremy	Mitchell, Sir David (NW Hants)
Hannam, Sir John	Moate, Sir Roger
Hargreaves, Andrew	Monro, Sir Hector
Harris, David	Montgomery, Sir Fergus
Haselhurst, Alan	Moss, Malcolm
Hawkins, Nick	Needham, Rt Hon Richard
Hawksley, Warren	Nelson, Anthony
Hayes, Jerry	Neubert, Sir Michael
Heald, Oliver	Newton, Rt Hon Tony
Heath, Rt Hon Sir Edward	Nicholls, Patrick

Nicholson, David (Taunton)	Stanley, Rt Hon Sir John
Nicholson, Emma (Devon West)	Steen, Anthony
Norris, Steve	Stephen, Michael
Onslow, Rt Hon Sir Cranley	Stern, Michael
Oppenheim, Phillip	Streeter, Gary
Ottaway, Richard	Sumberg, David
Page, Richard	Sweeney, Walter
Paice, James	Sykes, John
Patnick, Sir Irvine	Tapsell, Sir Peter
Patten, Rt Hon John	Taylor, Ian (Esher)
Pattie, Rt Hon Sir Geoffrey	Taylor, John M (Solihull)
Pawsey, James	Taylor, Sir Teddy (Southend, E)
Peacock, Mrs Elizabeth	Temple-Morris, Peter
Pickles, Eric	Thomason, Roy
Porter, Barry (Wirral S)	Thompson, Sir Donald (C'er V)
Porter, David (Waveney)	Thompson, Patrick (Norwich N)
Portillo, Rt Hon Michael	Townend, John (Brildlington)
Powel, William (Corby)	Townsend, Cyril D (Bexl'yh'th)
Rathbone, Tim	Tracey, Richard
Redwood, Rt Hon John	Tredinnick David
Renton, Rt Hon Tim	Trend, Michael
Riddick, Graham	Trotter, Neville
Robathan, Andrew	Twinn, Dr Ian
Roberts, Rt Hon Sir Wyn	Vaughan, Sir Gerard
Robertson, Raymond (Ab'd'n S)	Viggers, Peter
Robinson, Mark (Somerton)	Waldegrave, Rt Hon William
Roe, Mrs Marion (Broxbourne)	Walden, George
Rowe, Andrew (Mid Kent)	Walker, Bill (N Tayside)
Rumbold, Rt Hon Dame Angela	Waller, Gary
Ryder, Rt Hon Richard	Ward.John
Sackville, Tom	Wardle, Charles (Bexhill)
Sainsbury, Rt Hon Sir Timothy	Waterson, Nigel
Scott Rt Hon Sir Nicholas	Watts, John
Shaw, David (Dover)	Wheeler, Rt Hon Sir John
Shaw, Sir Giles (Pudsey)	Whitney, Ray
Shephard, Rt Hon Gillian	Whittingdale, John
Shepherd, Colin (Hereford)	Widdecombe, Ann
Shersby, Michael	Wiggin, Sir Jerry
Sims, Roger	Wilkinson, John
Skeet, Sir Trevor	Willetts, David
Smith, Sir Dudley (Warwick)	Winterton, Mrs Ann (Congleton)
Smith, Tim (Beaconsfield)	Winterton, Nicholas (Macc'f'ld)
Speed, Sir Keith	Wolfson, Mark
Spencer, Sir Derek	Wood, Timothy
Spicer, Sir James (W Dorset)	Yeo,Tim
Spicer, Michael (S Worcs)	Young, Rt Hon Sir George
Spring, Richard	Tellers for the Ayes:
Sproat,lain	Mr. Sydney Chapman, and
Squire, Robin (Hornchurch)	Mr. Bowen Wells.

NOES
Abbott, Ms Diane	Bradley, Keith
Ainsworth, Robert (Cov'try NE)	Bray, Dr Jeremy
Allen, Graham	Brown, Gordon (Dunfermline E)
Alton, David	Brown, N (N'c'tle upon Tyne E)
Anderson, Donald (Swansea E)	Bruce, Malcolm (Gordon)
Anderson, Ms Janet (Ros'dale)	Burden, Richard
Ashdown, Rt Hon Paddy	Callaghan, Jim
Austin-Walker, John	Campbell, Mrs Anne (C'bridge)
Barnes, Harry	Campbell, Menzies (Fife NE)
Barron, Kevin	Campbell, Ronnie (Btyth V)
Battle, John	Campbell-Savours, D N
Bayley.Hugh	Canavan, Dennis
Beckett, Rt Hon Margaret	Cann, Jamie
Beggs, Roy	Chidgey, David
Beith, Rt Hon A J	Chisholm, Malcolm
Bell, Stuart	Church, Judith
Benn, Rt Hon Tony	Clapham, Michael
Bennett, Andrew F	Clark, Dr David (South Shields)
Bermingham, Gerald	Clarke, Eric (Midlothian)
Berry, Roger	Clarke, Tom (Monklands W)
Blair, Rt Hon Tony	Clelland, David
Blunkett, David	Clwyd,Mrs Ann
Boateng, Paul	Coffey, Ann
Boyes, Roland	Cohen, Harry

Connarty, Michael	Ingram, Adam
Cook, Robin (Livingston)	Jackson, Glenda (H'stead)
Corbett Robin	Jackson, Helen (Shef'ld, H)
Corbyn, Jeremy	Jamieson, David
Corston, Jean	Janner, Greville
Cousins, Jim	Johnston, Sir Russell
Cox, Tom	Jones, Barry (Alyn and D'side)
Cummings, John	Jones, leuan Wyn (Ynys Mon)
Cunliffe, Lawrence	Jones, Jon Owen (Cardiff C)
Cunningham, Jim (Covy SE)	Jones, Lynne (B'ham S O)
Cunningham, Rt Hon Dr John	Jones, Martyn (Clwyd, SW)
Dafis,Cynog	Jones, Nigel (Cheltenham)
Dalyell, Tam	Jowel, Tessa
Darling, Alistair	Kaufman, Rt Hon Gerald
Davies, Bryan (Oldham C'tral)	Keen, Alan
Davies, Ron (Caerphilly)	Kennedy, Charles (Ross.C&S)
Davis, Terry (B'ham, H'dge H'I)	Kennedy, Jane (Lpool Brdgn)
Denham, John	Khabra, Piara S
Dewar, Donald	Kilfoyle, Peter
Dixon,Don	Kirkwood, Archy
Dobson, Frank	Lester, Joan (Eccles)
Donohoe, Brian H	Lewis, Terry
Dowd, Jim	Liddell, Mrs Helen
Dunnachie, Jimmy	Litherland, Robert
Dunwoody, Mrs Gwyneth	Livingstone, Ken
Eagle, Ms Angela	Lloyd, Tony (Stretford)
Eastham, Ken	Llwyd, Elfyn
Enright, Derek	Loyden, Eddie
Etherington, Bill	Lynne, Ms Liz
Evans, John (St Helens N)	McAllion, John
Fatchett Derek	McAvoy, Thomas
Field, Frank (Birkenhead)	McCartney, Ian
Fisher, Mark	McCrea, The Reverend William
Flynn, Paul	Macdonald, Calum
Foster, Rt Hon Derek	McKelvey, William
Foster, Don (Bath)	Mackinlay, Andrew
Fraser, John	McMaster, Gordon
Fyfe, Maria	McNamara, Kevin
Galbraith, Sam	MacShane, Denis
Galloway, George	McWillam, John
Gapes, Mike	Madden, Max
George, Bruce	Maddock, Diana
Gerrard, Neil	Mahon, Alice
Gilbert, Rt Hon Dr John	Mandelson, Peter
Godman, Dr Norman A	Marek, Dr John
Godsiff, Roger	Marshall, David (Shettleston)
Golding, Mrs Lin	Marshall, Jim (Leicester, S)
Gordon, Mildred	Martin, Michael J (Springburn)
Grant, Bernie (Tottenham)	Martlew, Eric
Griffiths, Nigel (Edinburgh S)	Maxton, John
Griffiths, Win (Bridgend)	Meacher, Michael
Grocott, Bruce	Meale, Alan
Gunnell, John	Michael, Alun
Hall, Mike	Michie, Bill (Sheffield Heeley)
Hanson, David	Michie, Mrs Ray (Argyll & Bute)
Hardy, Peter	Milburn, Alan
Harman, Ms Harriet	Miller, Andrew
Harvey, Nick	Mitchell, Austin (Gt Grimsby)
Hattersley, Rt Hon Roy	Moonie, Dr Lewis
Henderson, Doug	Morris, Rt Hon Alfred (Wy'nshawe)
Heppell,John	Morris, Estelle (B'ham Yardley)
Hill, Keith (Streatham)	Morris, Rt Hon John (Aberavon)
Hinchliffe, David	Mowlam, Marjorie
Hodge, Margaret	Mudie, George
Hoey, Kate	Mullin, Chris
Home Robertson, John	Murphy, Paul
Hood, Jimmy	Oakes, Rt Hon Gordon
Hoon, Geoffrey	O'Brien, Mike (N W'kshire)
Howarth, George (Knowsley North)	O'Brien, William (Normanton)
Howells, Dr. Kim (Pontypridd)	O'Hara, Edward
Hoyle, Doug	Olner, Bill
Hughes, Kevin (Doncaster N)	O'Neill, Martin
Hughes, Roy (Newport E)	Orme, Rt Hon Stanley
Hughes, Simon (Southwark)	Paisley, The Reverend Ian
Hutton,John	Parry, Robert
Illsley, Eric	Patchett Terry

Pearson, Ian	Soley, Clive
Pendry, Tom	Spearing, Nigel
Pickthall, Colin	Spellar, John
Pike, Peter L	Squire, Rachel (Dunfermline W)
Pope, Greg	Steel, Rt Hon Sir David
Powell, Ray (Ogmore)	Steinberg, Gerry
Prentice, Bridget (Lew'm E)	Stevenson, George
Prentice, Gordon (Pendle)	Stott, Roger
Prescott, Rt Hon John	Strang, Dr. Gavin
Primarolo, Dawn	Straw, Jack
Quin, Ms Joyce	Sutcliffe, Gerry
Radice, Giles	Taylor, Mrs Ann (Dewsbury)
Randall, Stuart	Taylor, Rt Hon John D (Strgfd)
Raynsford, Nick	Taylor, Matthew (Truro)
Redmond, Martin	Thompson, Jack (Wansbeck)
Reid, Dr John	Timms, Stephen
Rendel, David	Tipping, Paddy
Robertson, George (Hamilton)	Turner, Dennis
Robinson, Geoffrey (Co'try NW)	Tyler, Paul
Roche, Mrs Barbara	Walker, Rt Hon Sir Harold
Rooker.Jeff	Wallace, James
Rooney, Terry	Walley, Joan
Ross, Ernie (Dundee W)	Wardel, Gareth (Gower)
Rowlands, Ted	Wareing, Robert N
Ruddock, Joan	Watson, Mike
Sedgemore, Brian	Wicks, Malcolm
Sheerman, Barry	Wigley, Dafydd
Sheldon, Rt Hon Robert	Williams, Rt Hon Alan (Sw'n W)
Shore, Rt Hon Peter	Williams, Alan W (Carmarthen)
Short, Clare	Wilson, Brian
Simpson, Alan	Worthington, Tony
Skinner, Dennis	Wray, Jimmy
Smith, Andrew (Oxford E)	Young, David (Bolton SE)
Smith, Chris (Isl'ton S & F'sbury)
Smith, Llew (Blaenau Gwent)	Tellers for the Noes:
Smyth, The Reverend Martin	Mr. Stephen Byers, and
Snape, Peter	Mr. Joe Benton.

Question accordingly agreed to.

Resolved, That the Local Government Finance Report (Wales) 1995–96 (House of Commons Paper No. 140), which was laid before this House on 2nd February, be approved.

It being after Seven o'clock, MR. DEPUTY SPEAKER put the Questions necessary to dispose of the other motions relating to local government finance in Wales, pursuant to Order [3 February].

Resolved, That the Limitation of Council Tax and Precepts (Relevant Notional Amounts) Report (Wales) 1995-96 (House of Commons Paper No. 141), which was laid before this House on 2nd February, be approved. That the Special Grant Report (Wales) 1995 (House of Commons Paper No. 142), which was laid before this House on 2nd February, be approved.—[Mr. Conway.]