Commons Sitting of 8 February 1996

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS

    CITY OF WESTMINSTER BILL [Lords]
    Motion made, and Question proposed,
    That the Promoters of the City of Westminster Bill [Lords] may, notwithstanding anything in the Standing Orders or practice of this House, proceed with the Bill in the present Session; and the Petition for the Bill shall be deemed to have been deposited and all Standing Orders applicable thereto shall be deemed to have been complied with;
    That if the Bill is brought from the Lords in the present Session, the Agents for the Bill shall deposit in the Private Bill Office a declaration signed by them stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the last Session;
    That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed) and shall be committed to the Chairman of Ways and Means, who shall make such Amendments thereto as were made by him in the last Session, and shall report the Bill as amended to the House forthwith, and the Bill, so amended, shall be ordered to lie upon the Table;
    That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during any previous Session.
    Hon. Members: Object.
    To be considered again on Thursday 15 February.

Oral Answers to Questions
  TREASURY

    Budget Deficit
    Mr. Michael Brown: To ask the Chancellor of the Exchequer what is the United Kingdom's budget deficit as a proportion of gross domestic product; and if he will publish equivalent figures for other states in the European Union. [12671]
    The Chancellor of the Exchequer (Mr. Kenneth Clarke): The UK's general government financial deficit for 1995–96 is forecast at 4¾ per cent. of GDP. In 1995, six European Union countries had lower budget deficits as a proportion of GDP than the UK, and eight had higher.
    Mr. Brown: I am grateful to my right hon. and learned Friend for that reply. Does that not show that Britain has
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    achieved a position at the top of the tree in relation to the budget deficit as a percentage of GDP? Will he acknowledge, however, that that is not the only statistic where we lead in the European Union? Will he confirm that, although our unemployment continues to fall, today Germany has announced that its unemployment has increased to 4 million?
    Mr. Clarke: My hon. Friend is right. We are reducing our fiscal deficit faster than any other major European country and today Germany has unfortunately announced that its unemployment has gone above 4 billion—I mean 4 million. [Interruption.] Let the Opposition take it as a warning. One of the main reasons why unemployment has risen in Germany is that it is suffering from a social chapter and all the additional on-costs on employment that this country has avoided.
    Mr. Shore: We know that the Chancellor of the Exchequer is hellbent on reaching the 3 per cent. of GDP borrowing requirement—one of the essential criteria—at the earliest possible moment, but what does he now say to his colleagues in the European Union, especially Germany, which has just reported a 4.1 million unemployment level? In those circumstances, will he urge it to cut its public expenditure further and to raise taxation so that it can conform next year to the 3 per cent. of GDP borrowing requirement criterion?
    Mr. Clarke: I am a strong advocate of getting down towards a balanced budget and of low inflation. They happen to be the Maastricht criteria as well, but as we move towards achieving them it is doing no harm to this country's economy. Sound Conservative policies are giving us the fastest growth of any major European country and falling unemployment. The problems in Germany and France are that they have not made the structural changes in their economies that a Conservative Government have been making in our economy for the past 16 years. Those two countries need more privatisation, less Government intervention, no social chapter, no minimum wage, a flexible labour market and the conditions for enterprise that we have put in place.
    Sir Michael Spicer: Will my right hon. and learned Friend confirm that convergence of budget deficits is not the key factor determining whether a single currency would work, but that much more important is a convergence of business cycles, for instance?
    Mr. Clarke: Yes, I do. The criteria are important. I am one of the people who argue that, if economic and monetary union is to go ahead, it is important to have strict adherence to the criteria on budget deficit, inflation, GDP-debt ratio, and so on. I have also frequently said, however, that the countries should go into economic and monetary union only if they are genuinely compatible with each other in other ways and would benefit from doing so. That includes being in the same stage of the business cycles, as my hon. Friend said.
    Mr. Malcolm Bruce: If the reports that the Government are to announce today—that public sector pay awards are to be about 4 per cent.—are correct, will the Chancellor explain how that will be funded, welcome as it may be to public sector employees whose pay has

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    been squeezed? Following, for example, the local authorities settlement, does such an award not inevitably mean that other services will have to be cut or that teachers will be made redundant? Does that not add to the crisis facing many national health service trusts, which are unable to meet their current demands, never mind such a pay award?
    Mr. Clarke: With respect, the hon. Gentleman knows that I cannot anticipate my right hon. Friend the Prime Minister's reporting to the House on the review body's report, which he will do this afternoon, but we have had a straightforward, successful approach to pay for several years. We take the view that, in the public sector as in the private sector, pay settlements should be affordable and fair and should reflect the low inflation culture that we have created, but the hon. Gentleman must wait for the proper announcement from my right hon. Friend.
    Mr. David Shaw: Will my right hon. and learned Friend confirm that the United Kingdom's position relative to other European countries is much better than the statistics that he has announced might suggest, because many other countries in Europe do not take unfunded pension liabilities into account when they calculate their budget deficits? If a common accounting basis were used throughout Europe, would not our budget deficit position be shown to be infinitely better than those of other countries?
    Mr. Clarke: Actually, for the purposes of European comparisons we endeavour to compare fiscal deficits on the same basis. Where other countries' accounting methods differ—they do not differ too much—there are moves to bring them on to the same basis. But my hon. Friend is right about funded pensions. When one looks forward and tries to judge the economic potential of a country, it is important to know to what extent it faces what is known as a demographic time bomb, especially if that will turn into unfunded pension demands that future working populations will have to pay. We have anticipated that possibility, with all the changes that we have made to pensions policy through the 1980s and into the 1990s. Our occupational pensions funds exceed the pension funds available to the whole of the rest of Europe, and we shall continue to ensure that we leave our successors a pensions liability that can be afforded and is properly funded.
    Mr. Gordon Brown: The Prime Minister has said that public spending should fall to 35 per cent. of national income; the Chief Secretary to the Treasury has said the same. Does the Chancellor agree with the Prime Minister that that should happen—yes or no?
    Mr. Clarke: If the hon. Gentleman would do the Prime Minister the courtesy of reading the quotations from him in The Sunday Telegraph, and also read the full text of what I said to the journalists from the Financial Times, he would find that the two are indistinguishable. The Prime Minister's remarks and mine could be swapped with each other. We have a clearly stated policy, which we have both enunciated, of a 40 per cent. target, and beyond that to go as far as we can. The 40 per cent. will be hit in 1997–98. If we continue to restrain growth in public expenditure below the growth in the economy, a steadily
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    declining share of GDP will be taken by the state. The Government are achieving that, and the high-tax, high-spending policies of the Labour party would take us in the opposite direction, as they always have in the past.
    Mr. Brazier: Does my right hon. and learned Friend agree that, although the current budget deficit figures are good in terms of international league tables, the cumulative figures are even better? If we consider the total weight of debt in accumulated budget deficits as a percentage of GDP, on which interest will have to be paid by future generations, is not this country almost the best in the developed world?
    Mr. Clarke: I can give a short answer. My hon. Friend is exactly right and puts his point clearly. The fact that we are steadily reducing our fiscal deficit means that we shall be on target to reduce debt as a proportion of GDP, and therefore to continue to reduce the burden of debt interest, as we have done in our period in office, which leaves room for economic growth and for other public expenditure, too.
    Following is the table:

    General government financial deficit as a per cent. of GDP in 1995

    Country

    Per cent.

    Belgium

    4.5

    Denmark

    2.0

    Germany1

    3.6

    Greece

    9.3

    Spain

    5.9

    France

    5.0

    Ireland

    2.7

    Italy

    7.4

    Luxembourg

    -0.4

    Netherlands

    3.1

    Austria

    5.5

    Portugal

    5.4

    Finland

    5.4

    Sweden

    7.0

    Note: Estimates from "European Economy", supplement A, Economic Trends, No. 12, December 1995.
    1 German figure for 1995 is its latest estimated outturn.

    Takeovers (Special Dividends)
    Mr. Pearson: To ask the Chancellor of the Exchequer what representations he has received regarding the use of special dividends in takeover bids; and if he will make a statement. [12673]
    The Financial Secretary to the Treasury (Mr. Michael Jack): My right hon. and learned Friend the Chancellor has received a handful of letters on this subject, including one from the hon. Gentleman. These are receiving attention.
    Mr. Pearson: When City financiers freely admit that the use of huge special dividends is a tax abuse, when the Financial Times says that no public interest in served by the loophole whereby the taxpayer subsidises corporate raiders and when The Times calls the practice an outrage and a state bribe, why are the Government doing nothing about it? When will they act to close the loophole which may already have cost the British taxpayer £200 million?
    Mr. Jack: I understand the concerns that the hon. Gentleman articulates, on behalf of those who may not understand the basis on which the mechanism is used. He will realise that, put simply, any dividend, whether special or not, is paid out of already taxed profits. So there cannot be the tax loophole that he identifies. If he is uncomfortable about the process of bids being made by one company to take over another, that shows his fundamental discomfort with the marketplace.
    Mr. Harry Greenway: Does my hon. Friend agree that the fact that there are many more shareholders in this country than there were when the Conservative party came to office is a very welcome development in our society?
    Mr. Jack: My hon. Friend is, as always, absolutely right on that point. When we came to office, there were 3 million shareholders; there are now 10 million. All the policies that enabled that increase to take place were opposed by Labour. Those shareholders now look forward to dividends without double taxation—a policy introduced by the Conservative Government. The Labour Government, on the other hand, believed in double taxation on dividends.

    Budget Statement (Leeds)
    Mr. Battle: To ask the Chancellor of the Exchequer what representations he has received on the impact of his 1995 Budget statement on Leeds. [12674]
    The Economic Secretary to the Treasury (Mrs. Angela Knight): My right hon. and learned Friend the Chancellor has received a number of representations since he made his Budget statement in November from all parts of the country, welcoming the measures in the Budget.
    Mr. Battle: Ministers may be content to reel off average figures, but is the Economic Secretary aware that the pay rates of thousands of workers in Leeds are still the lowest in the country? Some of my constituents earn well below £2.50 an hour and they have been hit hard by Tory tax rises for years. Is it not the case that it is not only the unemployed who are paying a high price for the Government's economic policies but thousands of people in work who are seeing their living standards fall?
    Mrs. Knight: The hon. Gentleman may care to learn that a family on average earnings is expected to be £4,500, or 40 per cent., better off next year than in 1978–79. When Labour was in power, real take-home pay grew not by 40 per cent. or 30 per cent., but by a miserly 1 per cent. Unemployment has fallen in Leeds in his constituency in the past year, and I hope that he will welcome that.
    Several hon. Members rose—
    Madam Speaker: Order. It is to be regretted that the Minister widened what was a narrow question by her answer. I call Mr. Marshall, as the question was widened by the Minister.
    Mr. John Marshall: Will not the Budget lead to a £9 a week increase in real take-home pay and a reduction in unemployment in Leeds and elsewhere in the United
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    Kingdom, as well as faster economic growth in Leeds and elsewhere in the United Kingdom than in other countries in Europe?
    Mrs. Knight: My hon. Friend is correct. I look forward to the people of Leeds enjoying the benefits of the Conservative Government's economic policies. I only hope that the Labour-controlled local authority in Leeds runs the city rather better in the future than it does at present.
    Ms Primarolo: What representations has the Minister received about regard the Deputy Prime Minister's endorsement of the late payment of bills, a practice that wreaks havoc on small businesses in Leeds and elsewhere? Will she condemn that practice? When do the Government intend to bring forward legislation to introduce a legal right to interest on late payment? Will the Government continue to string the business community along?
    Mrs. Knight: This question seems to have become extraordinarily wide. If the hon. Lady had ever run her own business, she would have found that there are both good times and bad times, and sometimes it is harder to pay the bills than others. [HON. MEMBERS: "Oh."] Wait a moment.
    Regarding interest on the late payment of debt, the organisations that represent small businesses are undecided about the route they wish the Government to pursue. I can assure the hon. Lady that the Government are determined to support small and large businesses, and our economic policies have proven just that.
    Mr. Pickles: With reference to the low paid in Leeds, has my hon. Friend had an opportunity to look at the statement from Unison on recent pay rises? Has she noticed the number of low-paid people in local authorities, particularly Labour authorities, including Leeds? Given that those authorities—particularly Leeds—support a national minimum wage, does she agree that this is a clear case of Labour saying one thing and doing another?
    Mrs. Knight: My hon. Friend makes exactly the right point. He may also be interested to know that, in Leeds, the local authority has decided to pass a lot of money into the reserves rather than spending it on services to the benefit of people in the city.

    Landfill Tax
    Mrs. Jane Kennedy: To ask the Chancellor of the Exchequer what assessment he has made of the economic impact of introducing a landfill tax. [12675]
    The Paymaster General (Mr. David Heathcoat-Amory): The landfill tax will encourage the minimisation, re-use and recovery of value from waste where it is economically efficient to do so. Since the revenue will allow the main rate of employer's national insurance contributions to be reduced, the tax will provide for a further boost to employment.
    Mrs. Kennedy: Does the Minister agree that, notwithstanding adjustments to the standard spending

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    assessment, the cost of the new tax will fall heavily on local authorities, which will find that the cuts in national insurance will not fully compensate for the new tax? Does she also agree that the people of Liverpool will face an extra burden of £1.5 million a year on their council tax bills? Is that not another example of a new Tory tax on an already overburdened people?
    Mr. Heathcoat-Amory: Local authorities will see a reduction in their national insurance contributions. As many of their services are labour-intensive, they will benefit in that way. Obviously, it is the instinct of Liverpool council to pass everything on to the ratepayer. That is not the instinct of Conservative councils. They will be in a good position to reduce the amount of waste that they send to landfill by seeking alternatives, such as re-use and recycling, which will reduce the amount of tax that they pay while they get the benefit of the national insurance contribution cut.
    Mr. Renton: Is it the intention that the landfill tax should be paid by a local authority, if it has to move thousands of tonnes of waste from where the authority put it 10 years ago to another site? May I warn my hon. Friend that an extension to the Bluebell railway line in my constituency, which is loved by railway buffs and is an important tourist attraction in Sussex, may not be able to proceed if the answer to my first question is yes?
    Mr. Heathcoat-Amory: I will clearly have to look into the Bluebell line, because I would not want to inhibit my right hon. Friend's project. I can confirm that, in principle, it is a rule of the tax that all controlled waste sent to a registered landfill site will bear tax at an appropriate rate.

    Incomes
    Mr. Miller: To ask the Chancellor of the Exchequer if he will make a statement on real personal disposable income levels in the United Kingdom between January and December 1995. [12677]
    Mr. Mudie: To ask the Chancellor of the Exchequer what is the Treasury's most recent estimate for the level of real personal disposable income in 1995. [12646]
    The Chief Secretary to the Treasury (Mr. William Waldegrave): Last November's Budget forecast showed real personal disposable income rising by 2 per cent. in 1995. We do not yet have the final figures.
    Mr. Miller: Is it not the case that, after tax and inflation, someone on average earnings will see his or her real income fall by the sharpest rate in 1995 since 1981, or is it that the only real disposable income in which the Government are interested is that of the likes of Cedric Brown?
    Mr. Waldegrave: The hon. Gentleman is partly right and partly wrong. It is true that people's take-home pay fell last year. That is because earnings were restrained. That was responsible behaviour by trade unions and employers, which helped to cause unemployment to fall fast. None the less, real personal disposable income rose sharply last year. I guess that the hon. Gentleman does not
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    understand that dividend income, which goes into pension funds that belong to people, has risen sharply, so people are better off in the assets they own.
    Mr. Mudie: The Minister's figures disguise the fact that the typical family is £800 a week worse off this year because of tax increases and that, despite the changes in the Budget, the family will be £670 a year worse off because of tax increases. In view of the fact that the Conservatives committed themselves, on page 5 of their manifesto, to reducing taxation further, are those tax increases incompetence or straightforward deceit?
    Mr. Waldegrave: I think that the hon. Gentleman got the decimal point in the wrong place when he was talking about £800 a week. He is on very weak ground. Take-home pay increased by 1 per cent. during the whole period of the last Labour Government. It has increased by not far short of 50 per cent. under the Conservative Government since 1979. That is very weak ground for the Opposition parties to try to fight on.
    Mr. Bill Walker: Does my right hon. Friend agree that the important thing is how this country has helped those who were unfortunate enough to be affected by the recession and that it is rich for the Opposition, who are always telling the Government to act, to complain when the Government have done so? They should consider how that is reflected in our performance when compared with that of every other European Union country.
    Mr. Waldegrave: My hon. Friend is perfectly right. In a recession, it was right to protect public services. If we had not taken the tough steps that my right hon. and learned Friend the Chancellor of the Exchequer took to correct the budget deficit afterwards, we would be facing a serious situation. The implication of the Labour party's questions is that Labour would not have put taxes up, in which case the debts would have been completely unsupportable. That is a nonsensical policy, like many of those put forward on the economy by the Labour party.
    Mr. Viggers: Is it not true that, by their firm action on the economy, the Government have held down interest rates and provided the lowest mortgage rates for 30 years? Will that not have a significant effect on disposable incomes? Has my right hon. Friend had any representations on interest rates from the Opposition?
    Mr. Waldegrave: Opposition policy on interest rates is an enigma wrapped in a mystery; they never tell us whether rates should move higher, lower or sideways. They have no views on the matter whatsoever. It is true that the firm handling of these matters by my right hon. and learned Friend the Chancellor of the Exchequer has meant that we have the lowest mortgage rates for a generation, inflation is in effect at its lowest rate since the war and the economy is growing faster than those of its main competitors in Europe. That is a formidable record.
    Mr. Andrew Smith: Is it not the truth that the very assumptions behind the Government's claim that people are an extra £9 a week better off in terms of living standards have been shot to pieces, on the one hand by the Government's driving up taxes and charges—putting up rail fares, driving up the council tax by at least

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    8 per cent., as the Chief Secretary admitted, and with prescription charges going up as well, as we will see today—and, on the other hand, by the fact that millions of public sector workers will not now receive a full 4 per cent. increase in 1996? Those are the very figures on which the Chancellor's assumptions were based. Is it not the case that living standards are not safe with the Conservatives and that the £9 a week claim is yet another broken Conservative promise?
    Mr. Waldegrave: I can answer that very shortly. The answer is no, because the forecast took into account the matters to which the hon. Gentleman refers. If he wants to fight on living standards rises under different Governments, he is on the weakest possible ground for Labour. There was complete stagnation in take-home pay under the last Labour Government.

    Economic Growth
    Mr. Simon Coombs: To ask the Chancellor of the Exchequer what is his latest estimate of the rate of growth of the economy in the current and next years. [12680]
    Mr. Kenneth Clarke: I expect the economy to grow by 3 per cent. in 1996 and by 3¼ per cent. in the year to the first half of 1997.
    Mr. Coombs: Would my right hon. and learned Friend care to tell the House where those excellent figures put Britain in the league tables for growth both in Europe and among the Group of Seven countries? What advice would he offer to other Governments, and to those who yearn for Government, on the best way of maintaining such levels of sustainable growth?
    Mr. Clarke: We have had the fastest growth of any major European country since the recovery started in 1992 and we are likely to continue to achieve that. Forecasting is always a difficult business, but I suspect that we are likely to have the fastest growth in the G7. That is because of the combination of policies that we are putting in place and the excellent competitive position that British industry has achieved.
    Mr. MacShane: If growth is so superlative, will the Chancellor of the Exchequer tell the House why the CBI has said this morning that exports are falling across all regions? Why is Jaguar laying off, or putting on short time, 1,000 people? Why is the steel industry having to go on to short time? What is the gap between the rhetoric of the Chancellor and the reality of an ever-declining manufacturing base in this country?
    Mr. Clarke: The reason our exports are not doing so well is that other countries are not doing as well we are. When France, Germany and, to a certain extent, the United States of America do not achieve the sort of growth that we achieve, their markets do not expand quickly enough for our competitive exports to perform quite so well. Nevertheless, we expect—as does everybody—an increase in disposable consumer income this year. Everyone accepts that conditions for investment are very good. Manufacturing investment went up by 12 per cent. last year alone. It could achieve at least that this year. It is not true that we have a declining
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    manufacturing base; manufacturing is continuing to do extremely well in this country and will do better when other countries begin to match our performance and provide the markets for our goods and services again.
    Mr. John Townend: If there is any danger of the Government not achieving their 3 per cent. growth targets, will my hon. and learned Friend not hesitate to make further reductions in interest rates? I should like to take this opportunity of congratulating him on how he has dealt with interest rates over the past 12 months.
    Mr. Clarke: I am grateful for my hon. Friend's last point. We set interest rates in order to achieve the inflation target and we shall continue to set interest rates on that basis. That is why—I think that everyone now accepts this—we shall achieve our 2½ per cent. inflation target by the end of this Parliament. We shall keep the target at 2½ per cent. or below during the next Parliament. Low inflation is helping to create the competitive position of British industry, the new jobs that the economy is creating, and the steady and continuous fall in unemployment that we have seen over the past 18 months.
    Mr. Mike O'Brien: Is it not true that Britain is floundering, and that the truth is a long way from the rosy picture painted by the Chancellor? Growth is lower than the Government predicted last year; Professor Patrick Minford—a Government adviser—said today that it will be less than 2 per cent. this year. Non-oil growth since 1979 has averaged 1.7 per cent.—the worst record of any post-war Government. Britain has fallen from 13th to 18th place in the international prosperity league. The reason for that is that Tory economic incompetence has let down the hard work of the British people.
    Mr. Clarke: The sadness for the hon. Gentleman is that he knows perfectly well that the truth is as I have just described it—it is difficult for a party in opposition, such as his own, to accept that. I am astonished to hear the hon. Gentleman pray in aid Patrick Minford, a man whom I have known and liked for many years; the two of us have never agreed on economic policy, as he is far to the right of me and far to the right of any of the wise men—or wise persons—who now advise me. One thing on which Patrick Minford and I are totally agreed is that the Labour party's recipe, with the social chapter, minimum wage, more Government intervention, higher tax and higher public spending, will be totally disastrous for this country and will put us way down any league table that anybody likes to produce.
    Mr. Yeo: Will my right hon. and learned Friend confirm that the estimates that he gave for the growth of our economy are based on an assumption that Britain will not be burdened with the obligations of the social chapter? Does he further agree that if we were to be burdened with those obligations, that would undermine our competitive position faster than any other single policy change and would reduce the prospects for cutting unemployment in this country more seriously than any other policy measure?
    Mr. Clarke: I totally agree with my hon. Friend. It is totally absurd for the Labour party to try to scoff at that argument. It makes an enormous difference to the jobs

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    market if extra non-wage costs are piled on to the employer. Extra costs on top of wages for an employer in France are more than double those in the United Kingdom, which is why France has unemployment of more than 10 per cent. and is troubled with problems, while the unemployment rate in this country is falling so steadily. That message must be spread across the rest of the continent—meanwhile, we are benefiting, with more than 500,000 new jobs and an unemployment rate which is already down by 750,000 from its peak.

    VAT (Tourism)
    Mr. Llwyd: To ask the Chancellor of the Exchequer how much value added tax the Exchequer recovered from the tourism industry in (a) 1993, (b) 1994 and (c) 1995; and if he will make a statement. [12642]
    Mr. Heathcoat-Amory: There are no reliable figures available on the amount of value added tax paid by the tourism industry. Some indication of the scale is given by the net VAT paid by hotels and similar businesses. In the three years to March 1995 this amounted to £614 million, £668 million and £727 million respectively.
    Mr. Llwyd: The Minister may be interested to know that I recently conducted in my constituency a wide survey of hoteliers and others involved in tourism. At the top of everyone's list was the problem of the imposition of 17.5 per cent. value added tax. That rate makes them uncompetitive compared with France, where it is 5.5 per cent.; Spain, where it is 7 per cent.; and Italy, where it is 9 per cent. Is it not time to review the imposition and the rate of VAT on our tourism industry?
    Mr. Heathcoat-Amory: The tourism industry has to pay tax just like any other industry—in some member states it is paid at a higher rate and in some it is paid at a lower rate. The tourism industry in this country is doing well. I am advised that in 1994, there were 21 million visitors to the United Kingdom—that figure was up on the previous year, and on the year before that. The industry does not need and will not get a tax privilege. The best thing that Governments can do is to stay out of the way, to stop over-regulation and to try to lower taxes generally, not just on tourism.
    Mr. Nigel Evans: Tourism is extremely important for small businesses, especially small businesses of Ribble Valley. Does my hon. Friend agree that one of the great boosts to tourism is fighting hard to ensure that our small businesses involved in tourism do not suffer from the imposition of the minimum wage or the social chapter?
    Mr. Heathcoat-Amory: Yes. Tourism is, classically, an industry that would suffer from over-regulation and red tape, whether it came from an opposition party or by the back door from the European Community. We are, therefore, adamant in keeping the social chapter out of Britain so that it does not restrict the highly successful growth of the tourism industry noticed by my hon. Friend.

    Fuel Tax
    Mr. William O'Brien: To ask the Chancellor of the Exchequer what recent estimate he has made of revenues accruing from the increases in fuel tax in the next 12 months. [12644]
    Mr. Heathcoat-Amory: The figures published at the time of the Budget show that the 5 per cent. increase in road fuel duties previously announced and confirmed in the Budget will raise £1,475 million in 1996–97, compared to a non-indexed base, and £850 million compared to an indexed base.
    Mr. O'Brien: Is the Minister aware of the increase in bus fares and other travel charges as a direct result of the increase in fuel tax? Is he also aware that the people who suffer most from that are pensioners, widows and families on low incomes? Does he accept that the increase is a further hidden tax introduced by this Government, which only confirms that the Conservatives are the party of higher taxation?
    Mr. Heathcoat-Amory: The transport industry generally must bear its share of any increase in road fuel duties, which were pre-announced by my right hon. and learned Friend the Chancellor. The hon. Gentleman will, however, know that the fuel rebate to the transport industry, and to the bus industry in particular, is still valuable. The help and subsidies given by local authorities mean that buses are still a subsidised form of transport.
    Mr. Fabricant: Will my hon. Friend confirm that, if he travelled in Europe, he would find that petrol and diesel are considerably more expensive than they are in the United Kingdom?
    Mr. Heathcoat-Amory: Yes, I can confirm that, despite the recent rise in petrol duty, we still have about the lowest excise duty rates on petrol of any European Union country.
    Mrs. Fyfe: In view of the severe weather experienced in some parts of the country, now and in the recent past, the Treasury must have an unexpected gain from spending on domestic fuel—not so much a windfall gain as a snowfall gain. Can the Minister estimate how much the Treasury has gained from the necessity to spend more on domestic fuel?
    Mr. Heathcoat-Amory: Cold weather payments are available and have been paid during periods of cold weather. The hon. Lady knows that help is given where it is most required.

    Economic Growth
    Mr. Riddick: To ask the Chancellor of the Exchequer if he will give official growth forecasts for 1996 for (a) the United Kingdom, (b) the EU and (c) Germany. [12645]
    Mr. Waldegrave: As set out in the November "Financial Statement and Budget Report", we expect the United Kingdom economy to grow by 3 per cent. in 1996.

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    The European Commission forecasts European Union growth of 2.6 per cent. in 1996, and the latest official forecast for growth in Germany in 1996 is 1.5 per cent.
    Mr. Riddick: Does my right hon. Friend agree that the level of growth in this country will help the continued fall in unemployment? Is he aware that, in January, unemployment in France hit the 3 million mark and that it is forecast to hit 4 million this month in Germany? When before was British unemployment almost half that of Germany's? Is that not a ringing endorsement of the British Conservative approach of free markets and minimum labour regulation?
    Mr. Waldegrave: I strongly agree with the implication of my hon. Friend's question. I do not think that there has been a time since records began when the relationship between British and German unemployment was so favourable to us. It is no benefit to us that the German economy is slowing down, but it cannot be denied— German leaders are now saying this—that the over-taxing and over-regulation of that economy is largely the cause of its slowing down.
    Mr. Sheerman: The Minister would not want me to nit-pick about the fact that the reunification of Germany has had a significant effect on the figures.
    How realistic are the targets for growth? Surely the Minister should wake up to the fact that manufacturing output is less now than it has been at any time since 1992 and that we appear to be heading for another deflation and another recession under the present Government.
    Mr. Waldegrave: It would be unwise of the hon. Gentleman to nit-pick in the way that he suggests, because unemployment in the former West Germany is increasing too, I am sorry to say, so his argument would be invalid.
    Growth in the United Kingdom in the coming year will outpace that in Germany and in most of our competitor countries. That is happening because the liberal economics that the Government have been following are right, and the type of mid-1960s so-called stakeholder economy favoured by the Labour party is producing exactly the wrong results.
    Mr. Forman: While I warmly welcome the figures given in my right hon. Friend's original answer, does he accept that we have the best possible chance of maintaining our comparative lead in the European Union if we give a high priority to continuing with our supply side policies—deregulation, privatisation and supply side reform?
    Mr. Waldegrave: I strongly agree. I would quote in aid of my hon. Friend's argument the article by Gavyn Davies, an economist who is respected on both sides of the House, I believe, in The Independent on Monday 5 February, headed:
    "No reason to copy the fading German miracle".
    Copying the fading German miracle is exactly the policy of the Labour party—the old social consensus management schemes of the 1960s, which are producing the very problems out of which Germany needs to get.
    Mr. Darling: On growth forecasts, both the Prime Minister and the Chief Secretary have told us that they believe that the public spending ratio should be 35 per cent. of GDP, but the Chancellor told the Financial Times that, in his judgment, 40 per cent. was the maximum that we should aim at. Which figure is right, and why cannot the Chancellor bring himself to mention the figure of 35 per cent.?
    Mr. Waldegrave: That is one of the most bogus of the Opposition's soundbites at the moment. It entirely depends on the timing. Let us get to 40 per cent. first and then, if the economy grows, as it continues to grow under the Tories, and if we restrain spending—my right hon. and learned Friend has been one of the toughest Chancellors in recent years in controlling spending—the proportion will fall further.

    Social Chapter
    Mr. Robathan: To ask the Chancellor of the Exchequer what representations he has received from business leaders regarding the economic implications of the social chapter. [12648]
    Mr. Waldegrave: The overwhelming majority of British businesses support the Government's decision to reject the social chapter because of its adverse effects on jobs and prosperity.
    Mr. Robathan: I am grateful to my right hon. Friend for that reply. Tomorrow, a group of senior business men will publish their opinions on the economic implications of various EU policies, including the ludicrous social chapter and the single currency. Will my right hon. Friend examine that publication and consider carefully the opinions therein of those senior business men?
    Mr. Waldegrave: I shall certainly do so. I draw my hon. Friend's attention to the Confederation of British Industry survey of the year before last, which showed that the majority of companies firmly opposed the social policy measures then under discussion under the social chapter. I am sure that their opinions have not changed.
    Mr. Pike: Will the Minister recognise that the majority of people want a Government who want fair pay and working conditions, and that they will be glad when the present Government go?
    Mr. Waldegrave: I believe that the majority of people want a fair chance to obtain jobs and that they know that they come in an enterprise economy, not an over-regulated, over-taxed economy, which the Labour party would give us, and did give us when the country had the misfortune to have a Labour Government.
    Mr. Mans: Does my right hon. Friend agree that the main difference between the Government's approach to the social chapter and the opposition parties' approach to the social chapter is that we want to leave it up to individual firms to decide whether to take up parts of that legislation, whereas they want to impose it on everyone?
    Mr. Waldegrave: That is entirely right. I am glad that the Leader of the Opposition has joined us because he showed himself to be profoundly ignorant of what the social chapter meant when he spoke to the CBI about it.

    VAT (Charity Sales)
    Mr. Wigley: To ask the Chancellor of the Exchequer what is the latest estimate of the cost of zero rating for VAT purposes all sales by registered charities; and if he will make a statement. [12649]
    Mr. Heathcoat-Amory: There are no official figures on which to base any firm estimates.
    Mr. Wigley: Does the Minister accept that disability charities play a vital role in helping disabled people, particularly with care in the community? That being so, is it not invidious that disability charities should be used as tax collecting agencies and have their work set back because of the level of value added tax that they must pay?
    Mr. Heathcoat-Amory: I readily acknowledge the good work that is done by disability charities. They receive help through the tax system, such as relief from business rates. The whole charitable sector receives tax relief of more than £1.5 billion per year. The hon. Gentleman will accept that VAT is a broad-based tax. It would be wrong to give charities total tax relief on their business activities, which in some cases are in competition with ordinary commercial activities.
    Rev. Martin Smyth: Does the Minister agree that charities have suffered as a result of the decline in the level of tax that they can recover on covenants, the imposition of VAT at the point of sale, and the triple whammy of the loss of money to the lottery?
    Mr. Heathcoat-Amory: I do not think that that is a decisive objection to our aim of, and achievements in, lowering taxes generally. The hon. Gentleman will know that lottery funding is welcome and has benefited a great many charities and at least counters any drop in revenue that is experienced across the sector.

  PRIME MINISTER

    Engagements
    Mr. Riddick: To ask the Prime Minister if he will list his official engagements for Thursday 8 February. [12661]
    The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Riddick: Will my right hon. Friend confirm that the Conservative and Unionist party will always stand four-square behind the Union? Is it not the case that the British constitution has evolved over centuries, but that it could take a matter of months for a meddling, middle-class public school boy to undermine or even destroy it?
    The Prime Minister: We have made some evolutionary changes to the constitution in recent years,
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    and I believe that there is scope for more evolutionary change in the years ahead. I do not believe that large-scale changes that would significantly alter the face of the United Kingdom and the Union as we know it are in the interests of the United Kingdom. Frankly, I believe that many of the plans that have been put forward do not address the difficulties.
    I see no reason why Scotland should be taxed more highly than the rest of the United Kingdom. Neither do I see any reason why Scottish Members should vote on Scottish matters that English Members cannot vote on, and then vote in the House on the same matters as they affect England, Wales and Northern Ireland. Those issues need very careful examination. I hope that they will receive that careful examination, as they clearly have not had it yet.
    Sir Malcolm Thornton: Has my right hon. Friend seen the recent newspaper article about education by the Labour transport spokesman, which I shall quote— [Interruption.]—which I shall paraphrase. It refers to public schools producing more social cripples than any other form of education devised by man. Does my right hon. Friend believe that that is yet another veiled attack on the Labour leader and some of his Front-Bench colleagues, or is it simply another example of hypocrisy?
    The Prime Minister: I feel as though I am in an air raid shelter on this occasion, speaking as a grammar school boy. My hon. Friend should not be too hard on the hon. Member concerned. I think that Labour Members are required to put their children down for private school these days so that they can remain in the vanguard of Labour education policy.
    Mr. Blair: Does the Prime Minister agree that the Scott inquiry was entirely fairly conducted and that no criticism can or should be made of its processes or procedures?
    The Prime Minister: As I said in the House on a previous occasion:
    "I asked Sir Richard to carry out the report and I have confidence that he will do so"—
    and has done so—
    "thoroughly."
    Mr. Blair: I must press the Prime Minister on that because he will know that, in the past few days, there has been a concerted attempt to rubbish the inquiry. Will he say unequivocally that he accepts that it was entirely fairly conducted?
    The Prime Minister: I just said to the right hon. Gentleman:
    "I asked Sir Richard to carry out the report and I have every confidence that he will do so"—
    and has done so—
    "thoroughly."
    The right hon. Gentleman is saying that neither he nor anybody else can comment fairly on the Scott report until people have had the opportunity to study it. I agree with that point, but it also applies to the past three years. It applies to the fact that the Opposition have made crude and blatant smears throughout those past three years without having had the evidence of the Scott report before

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    them. If, in his question, the right hon. Gentleman was making it clear that he believes that those were unjustified attacks without any evidence, I would be pleased for him to withdraw them now and make it clear that he will repudiate them.
    Mr. Blair: The Prime Minister is not even prepared to say whether the report is fairly conducted. When he says that we should await the findings of the report, let me remind him that he and his Ministers will have had the report for eight days, that four Government Departments have units working on it and that we are to get it a few hours before publication. I am not asking him to comment on its findings, but on whether it was fairly conducted. He set up the inquiry. He chose Sir Richard Scott. Is he now prepared to state that he is confident that it was fairly conducted? If he does not say that, the final vestiges of respect will be removed from the Government.
    The Prime Minister: I know that the right hon. Gentleman had carefully prepared his third soundbite before my first answer, and I am tempted to refer him to the two answers I have just given. I made it clear that
    "I asked Sir Richard to carry out the report and I have confidence that he will do so"—
    and has done so—
    "thoroughly."—[Official Report, 6 June 1995; Vol. 261, c. 15.]
    I have now said that three times. Will the right hon. Gentleman now stop preparing his soundbites in advance and listen to my answers before he prepares his questions?
    Mr. Illsley: To ask the Prime Minister if he will list his official engagements for Thursday 8 February. [12662]
    The Prime Minister: I refer the hon. Gentleman to the answer I gave some moments ago.
    Mr. Illsley: Why cannot the Prime Minister publish such an important document as the report of the Scott inquiry a few days before the statement on it next week so that the Opposition, and indeed the House, can be properly informed? Is it not disgraceful that a few Conservative Members will have had that report for eight days, but the rest of the House will receive it on the day of the statement?
    The Prime Minister: We plan to follow the precedents for a weighty report of this nature, and to permit Opposition spokesmen to see the report several hours before the statement is made. Of course, the House will also wish to study and comment on the report. That is why we propose to find time in Government time for an early debate on the report a few days after the statement has been made, once the whole House has had the opportunity to study the report and comment on it on the basis of detail, not of innuendo and smear, which has been the nature of the comments thus far from a number of Opposition Members.
    Dame Jill Knight: Does my right hon. Friend agree that the House of Lords provides a useful and important advisory service for this country at very little cost? It has
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    no power to overrule or frustrate the will of the House of Commons. Has my right hon. Friend heard of the old phrase, "If it ain't broke, don't mend it"?
    The Prime Minister: I believe that this House should treat constitutional reform of any sort with care and consideration, and examine what the outcome of that reform might be before being committed to it. I do not believe that the reforms proposed to the House of Lords are relevant to the problems and opportunities facing this country over the next five to 10 years. It seems to me that the reform in question is irrelevant—and intended to be a spiteful, thoughtless irrelevance.

    Campbell Soups
    Mr. Campbell-Savours: To ask the Prime Minister when he next plans to visit a Campbell Soups exhibition stand at a United Kingdom food trade fair. [12663]
    The Prime Minister: I have no plans at present to do so.
    Mr. Campbell-Savours: The Prime Minister will be aware of the call for an international boycott of Campbell Soups and Fray Bentos products, arising out of the appalling decision by the company to close down the highly profitable Homepride plant in my constituency— having purchased it for £58.6 million only 11 weeks earlier. Are not the real stakeholders in Homepride not the greedy shareholders in America who do not give a damn about the people of Maryport, but the work force who have invested their lives in making that company a success and who are now being put on the scrap heap? Will the Prime Minister join the 341 Members of Parliament—a majority of this House—who have called on the company to reverse its decision?
    The Prime Minister: I realise the extent of the disappointment that must be felt at Maryport over the decision. I understand that Campbell's has offered employees jobs at one of its five other plants—although, self-evidently, that will not be appropriate for many employees. I also understand the depth of the hon. Gentleman's concern for his constituents, but I hope that he and everyone else will bear in mind the fact that Campbell's has been in the United Kingdom for over 30 years. It employs more than 2,000 people here and has shown its commitment to the United Kingdom by investing more than £100 million here in the past 12 months. I would not wish to threaten and damage those investments, or the jobs that are safeguarded and are being created as a result of those investments.

    Engagements
    Mr. Chidgey: To ask the Prime Minister if he will list his official engagements for Thursday 8 February. [12664]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Chidgey: Does the Prime Minister agree with the Social Security Secretary, who has described today's proposed cuts of £1 billion in the social security budget as devastating?
    The Prime Minister: That is in no sense what my right hon. Friend has said about the outcome of the public expenditure round. The whole House will recall that, in recent weeks, I have been criticised by the Opposition for administrative costs being too high. Here we have a practical illustration of the Government seeking to cut administrative costs, in the interests of the taxpayer, to preserve the resources available for benefits—yet on that point the Opposition criticise me as well.
    The hon. Gentleman must make up his mind: does he criticise the Government for not cutting administrative costs or for making administrative savings? Even though he is a Liberal Democrat, he cannot have it both ways.
    Mr. Butterfill: Does my right hon. Friend agree that it is the height of hypocrisy to maintain that one is committed to the elimination of state subsidy and then to do the reverse? Do not the recent decisions by the Transport Commissioner show that the Labour party— whether old Labour or new Labour, in Westminster or in Brussels—is committed to state subsidy and to Spanish practices?
    The Prime Minister: The whole House will know of our concern about the Iberia decision. It is certainly not in the interests of the air travellers of Europe, and we have made that known to Commissioner Kinnock and to others.
    Mr. Hoon: To ask the Prime Minister if he will list his official engagements for Thursday 8 February. [12665]
    The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.
    Mr. Hoon: In a statement to the House about the setting up of the Scott inquiry, the Attorney-General
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    stated that matters of form and procedure were a question for the learned judge. Why will not the Prime Minister condemn unequivocally those, such as Lord Howe, who have sought to impugn the integrity of the learned judge and to attack the contents of his report before publication?
    The Prime Minister: On attacks on the contents of the report, if anyone has predetermined what the contents of the report might be, it is the hon. Member for Livingston (Mr. Cook) and not my noble Friend Lord Howe.
    On the first part of the hon. Gentleman's question, I refer him to what I said on 13 January 1994 at column 332.
    Mr. Butler: Does my right hon. Friend recall the words of Lord Palmerston, who said that to be born British is like winning the lottery of life? Will my right hon. Friend now go further and say that to be born or to live in Milton Keynes is like winning the national lottery, and join me in welcoming the grant of £19 million to build what will undoubtedly be the best theatre outside London?
    The Prime Minister: There may be some challenges about the scheme being the best theatre, but I know that my hon. Friend is proud of the scheme and I congratulate him on it.
    As for being proud of being British, I just hope that we do not reach the situation where to live in Scotland is to lose the lottery of taxation because it has to face extra taxation and a tartan tax.

Business of the House
3.30 pm
Mrs. Ann Taylor: May I ask the Leader of the House for details of future business?
The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): The business for next week will be as follows.
MONDAY 12 FEBRUARY—Opposition Day (5th allotted day). Until about 7 o'clock, there will be a debate on ministerial responsibility. That will be followed by a debate entitled "The Effect of Government Financial Constraints on Local Government Services". Both debates will arise on Opposition motions in the name of the Liberal Democrats.
Motion on section 5 of the European Communities (Amendment) Act.
TUESDAY 13 FEBRUARY—Opposition Day (6th allotted day). Until about 7 o'clock, there will be a debate on the morale of NHS staff. That will be followed by a debate on the private security industry. Both debates will arise on Opposition motions.
WEDNESDAY 14 FEBRUARY—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House.
Remaining stages of the Security Service Bill.
Motion relating to the Local Government Reorganisation (Compensation for Loss of Remuneration) regulations.
THURSDAY 15 FEBRUARY—Motion to approve the agreement between the Secretary of State for National Heritage and the BBC.
FRIDAY 16 FEBRUARY—Private Members' Bills.
MONDAY 19 FEBRUARY—Remaining stages of the Northern Ireland (Emergency Provisions) Bill.
Motion on the Appropriation (Northern Ireland) order.
In the following three days, Tuesday, Wednesday and Thursday, I anticipate taking Government business, including the social security uprating orders. Friday 23 February will be a non-sitting day. On Monday 26 February I propose a debate on the Scott report on a motion for the Adjournment.
One other piece of information that the House might like to have is that, subject to the progress of business, I propose that the Whitsun recess will be from close of business on Wednesday 22 May until Tuesday 4 June.
Mrs. Taylor: I thank the Leader of the House for that information. I am sure that the House will welcome the final piece of information and the advance warning. I thank the right hon. Gentleman also for moving the debate on local government regulations from late on Tuesday evening to Wednesday. I think that that will be for the convenience of the House.
What further information can the Leader of the House give us in response to Madam Speaker's statement yesterday about access to the Scott report? Will he confirm that the Government are proposing that Her Majesty's Official Opposition should have only six hours' prior sight of the report next Thursday morning? What are the Government's intentions about providing access to the
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report to Back-Bench Members, about which I could make some suggestions? Does the right hon. Gentleman think that it is in the spirit of Madam Speaker's statement yesterday that Ministers should have eight days to consider the report while the Opposition have only six hours?
Will the Leader of the House confirm that the debate that he has announced for a week on Monday will be a one-day debate or the start of a two-day debate? There has been some speculation about that.
The Leader of the House has announced that on Monday the House will debate EU matters covered by section 5 of the European Communities (Amendment) Act 1986. May I suggest to the right hon. Gentleman that that debate does not negate the need for a debate on the items recommended for consideration on the Floor of the House by a unanimous decision of the European scrutiny committees? That is a matter that I have raised with the right hon. Gentleman for the past three weeks. When does he expect that we shall be able to debate them? When can we expect the White Paper on the intergovernmental conference?
Perhaps the Leader of the House will tell us also when there will be further meetings of the European Standing Committees. They were meeting twice a week before Christmas and they still has outstanding business to consider, but it seems that since one of them passed a unanimous decision on the IGC documents, which was embarrassing to the Government, they have been closed down completely. What are the Government's plans for that Committee?
Does the Leader of the House recall the request that I made to him a fortnight ago for a debate on the waste of money due to the mismatch between social security payments and entitlements? Does the right hon. Gentleman think it appropriate to debate the Government's proposals to cut by 25 per cent. the administrative budget of the Department of Social Security? Surely the need for such a debate has become more urgent so that we can ascertain whether what the Secretary of State for Social Security described today as "process re-engineering" will undermine the Government's anti-fraud strategy. We need to debate that issue.
Finally, will the Leader of the House confirm or deny the suggestion that the Government have decided to press ahead with the privatisation of Her Majesty's Stationery Office without any further reference to the House? The right hon. Gentleman will be aware of the strength of feeling on the issue and will recall that when a debate took place—the House did not divide—right hon. and hon. Members on both sides of the House said explicitly that the privatisation process should not be finalised without the House being able to make a decision. Will the right hon. Gentleman ensure that a final decision is taken by the House itself and not by Ministers behind closed doors?
Mr. Newton: That was rather a long list. Perhaps I might start by expressing my gratitude to the hon. Lady for her words about the recess announcement and about her response to the usual channels' representations about the local government order, which is now to be taken on Wednesday.
My right hon. Friend the Prime Minister indicated a few minutes ago that the intention would be, in line with comparable reports in the past, that Opposition spokesmen

473
would be able to see the Scott Report some hours before publication. [HON. MEMBERS: "Disgraceful."] Hon. Members say "disgraceful", but if they take account of numerous precedents, they will find that what is proposed is properly in line with precedent. For Members of the House generally, I anticipate that—again in accordance with comparably weighty reports—the report will be made available when my right hon. Friend the President of the Board of Trade makes his statement, which I expect will be at 3.30.
On the debate for Monday 26 February, about which I gave the House early notice, I intended my announcement to be in respect of a one-day debate.
On European Community matters, which the hon. Lady raised, of course I acknowledge that the debate intended for Monday 12 February should not be a substitute for what is being pressed for by the European Standing Committees. We are still considering their recommendations and I hope to be able to respond shortly to the proposals.
On the IGC White Paper, about which the hon. Lady asked me last week, I cannot add to what I said then.
On scrutiny committees, I have written today to the hon. Member for North-East Derbyshire (Mr. Barnes) and indicated that I hope to make further progress shortly.
On social security, again the hon. Lady will have heard what my right hon. Friend the Prime Minister said. I can assume only that she, like the Liberal Democrats, who have consistently demanded that the Government reduce administrative costs, now wants a debate to press the Government to increase administrative costs, or at the very least to end the effort to keep those costs down. I see no reason to suppose that what my right hon. Friend proposes will in any way diminish or damage the drive against fraud.
On HMSO, as the House knows, there is no need for further parliamentary proceedings before a decision is made, and therefore I do not anticipate such proceedings.
Sir Patrick Cormack: Will my right hon. Friend, who has shown himself to be a thoughtful and sensitive Leader of the House, think again about what he said about making the Scott report available? Is there not a case for allowing Back Benchers access to that report on an embargoed basis at least a few hours before it is discussed in the House? Is it not particularly important that the exchanges on that report should be sensible and based on fact?
Mr. Newton: My hon. Friend knows me well enough—he was kind enough to make some observations at the outset—to know that I would never simply reject out of hand such a request. I am bound to say, however, that I see the greatest difficulty, in that he asks for something that has no precedent in respect of any report, however weighty, and therefore I would not wish to encourage hopes that I might be able to respond in the way that he would wish.
Mr. Simon Hughes: As my hon. Friends and I have given the House an opportunity on Monday to debate the principle of ministerial responsibility, can the Leader of the House
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confirm that the Minister who will speak in the debate on behalf of the Government will set out clearly the principles on which ministerial office is held in this country, and confirm that if the independent inquiry, which has the full confidence of the Prime Minister and was set up by the Government, finds that any Ministers have not discharged their responsibilities appropriately, they will, as has constitutionally been the custom in previous Administrations, leave office and resign?
Mr. Newton: My right hon. and hon. Friends who will speak in the debate on Monday will address the Government's policy on these matters with the clarity with which they always address matters.
Mr. Barry Field: May we have an early debate on the over-representation in the House of Members of Parliament from Scotland, for if the people of Scotland have the misfortune to have devolution thrust on them, surely the House would wish to know by how many the number of Scottish Members should be reduced to bring them into line with the rest of the Kingdom? Is there any mechanism in the existing bodies that are examining the representation of Members of Parliament in the House to postulate a hypothetical figure that would bring the number of Scottish Members into line with English representation?
Mr. Newton: I see no sign in the reported remarks of the Leader of the Opposition that those or any other questions have been considered. I am thinking particularly of the question of the tartan tax, and above all—I see the hon. Member for Linlithgow (Mr. Dalyell) rising in his place—the West Lothian question, as it used to be called.
Mrs. Gwyneth Dunwoody: I believe that the Leader of the House is trying hard to protect the interests of ordinary Members, and I therefore beg him to reconsider his answer about HMSO. This is a House of Commons matter: it is fundamental to the House of Commons. May I ask the right hon. Gentleman emphatically to consider the views expressed yesterday by right hon. Member for Old Bexley and Sidcup (Sir E. Heath) about the reputation of his Government before allowing the matter to proceed without a debate on the Floor of the House?
Mr. Newton: The hon. Lady, too, put her question in very kind terms. She will have heard what I said earlier, but I shall of course reflect on the point that she has made.
Mr. Richard Shepherd: The report by Sir Richard Scott, commissioned by the Prime Minister, touches on the most basic responsibilities of the House. It deals with whether the House was misled by Ministers of the Crown, and whether the liberty of the citizen was put at risk by the use of public interest immunity certificates. Will the Leader of the House give careful consideration to whether hon. Members who are elected on an equal franchise, and on the basis of equal representation, may have the same access to the document as the leaders of the Labour party?
Mr. Newton: Again, my hon. Friend will have heard what I said earlier to my hon. Friend the Member for South Staffordshire (Sir P. Cormack). I am afraid that I cannot add to that.
Mr. John Garrett: Although, strictly speaking, there may be no need for a vote on the

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privatisation of HMSO, does the right hon. Gentleman— as Leader of the House and defender of its interests— believe that, given the enormous importance of HMSO's services to the House, a vote is morally inevitable?
Mr. Newton: Again, I cannot add to what I have already said. I appreciate the hon. Gentleman's constituency interest in the matter, but I hope that he will acknowledge that I took early action to enable the House to debate it, relatively soon after it had become an issue.
Mr. Eric Pickles: Will my right hon. Friend consider arranging a debate, in Government time, on private education, so that hon. Members can have an opportunity to congratulate the hon. Member for Birmingham, Small Heath (Mr. Godsiff) on his decision to send his children to private school? In framing the motion for that debate, will my right hon. Friend draw on the words of the hon. Gentleman, who has said that he pays income tax at the higher rate to finance the state system, and is entitled to pay out of his own pocket to educate his children where he wishes? Does my right hon. Friend agree that the hon. Gentleman's right will always be protected under a Conservative Government?
Mr. Newton: I can certainly confirm that the right to choice in matters of education will be not only maintained but enhanced under a Conservative Government. As for the rest of my hon. Friend's question, I am sure that there will be further opportunities to debate educational matters, as we are to deal with at least two education Bills during the current Session.
Mr. Dennis Skinner: Will the Leader of the House reconsider his decision relating to the distribution of copies of the Scott report to Opposition Members? The report is unique in that it concerns the Government's conduct, particularly that of certain Cabinet Ministers, and we should all be able to read what has been said in advance. I give the right hon. Gentleman a guarantee: if Opposition Members get an advance copy, we shall not sell it for £1,000.
Mr. Newton: I cannot add to what I said earlier, but I will say that, in my view, the time when it will be necessary for hon. Members to study the report thoroughly is when we come to debate it. That is why, although I have announced an early debate, I have allowed ample time for this very long report to be properly studied.
Mr. Bill Walker: Will my right hon. Friend make time soon for a debate on the Top Salaries Review Body considering Members' pay? I address his attention in particular to the fact that, if certain constitutional changes were to take place, Scottish Members would be unable to ask questions or work on matters that had been devolved to Scotland. Consequently, they would become part-time Members and that would surely influence salary levels and outside interests.
Mr. Newton: If my hon. Friend has in mind a proposal that Scottish Members should be paid less, he might care to put that to Sir Michael Perry.
Mrs. Margaret Ewing: As it is clear that the Leader of the House and other hon. Members have
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concentrated their minds today on the scrutiny issue, may we have a statement next week on what seems to be the increasing abuse of planted questions on the Order Paper? I draw particular attention to today's Order Paper, which contains substantial questions relating to public service pay, prescription charges, safety on school buses and many other issues, including water authorities in Scotland. As a Scottish Member, I will be asked to comment by the press, who will no doubt be receiving the answers to those questions about now. I will not have seen them, although it is my duty as a Member of Parliament to scrutinise every aspect of Government legislation. Will he therefore deal with that serious issue quickly?
Mr. Newton: I shall consider the hon. Lady's point, but I am puzzled about how she puts it. There is nothing new about the practice of making announcements through written answers in the way that she appears to suggest is happening here. That has not caused difficulties in the past, and there is no reason why it should this afternoon.
Mr. Wilkinson: Repeatedly at Business Questions, including today, the issue of the scrutiny of European business has arisen. Will my right hon. Friend assure the House that, if there is a European ministerial Council in the period to 26 February, to which his statement refers, the Minister concerned will report back to the House in a statement? There should, for example, have been such a statement after the recent European Fisheries Council and there was not. That is a thoroughly bad precedent.
Mr. Newton: I note my hon. Friend's point. He will agree that it is right to consider such matters on a case-by-case basis, but there is a long history of statements being made when we thought it appropriate.
Mr. David Clelland: Will the Leader of the House arrange for an early debate in Government time on their attitude to the emergency services? He will recall that, on Tuesday, the Prime Minister heaped praise on the fire service and talked of the selfless bravery of firefighters, yet the Government's financial settlement for Tyne and Wear fire authority has left it with a £2.3 million shortfall. Is that not an example of hypocrisy and of the Government saying one thing and doing another?
Mr. Newton: I need hardly say that I do not accept the argumentative thrust of the last part of the hon. Gentleman's question, but I will bring his point on Tyne and Wear to the attention of my right hon. Friend the Secretary of State for the Environment.
Mr. Bob Dunn: May we have an urgent early debate on the constitutional relationship between Members of Parliament and their constituents, given that some Opposition Members appear to have difficulty deciding where their loyalties lie? Is it to the people who elect them or to the unions who sponsor them?
Mr. Newton: I shall certainly bear in mind that topic for debate as, alongside a number of other constitutional issues, a growing number of Opposition Members are not answering questions.
Mr. Thomas McAvoy (Glasgow, Rutherglen): Is the Leader of the House aware that, as a direct result of cuts

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imposed by the Secretary of State for Scotland, the new City of Glasgow council faces cuts in services of more than £60 million to balance its budget? In view of the crisis facing that council and other councils in Scotland, will the Leader of the House undertake to consider next week's business and allocate some time to bring the Secretary of State here to try and justify his actions?
Mr. Newton: With the relatively new sittings of the Scottish Grand Committee in Scotland as well as here, increased opportunities exist to bring such points to the attention of the Secretary of State for Scotland, but I cannot promise to make such a specific opportunity available next week.
Mr. Harry Green way: May we have a debate next week on local government finance, so that the House can consider the certain imposition on the council tax budget of several hundred pounds per household across London, including my constituency, if we had the regional government suggested for this country by the Leader of the Opposition last night? Will my right hon. Friend note that when pressed for detail, as the leading article in the Evening Standard says today, the right hon. Gentleman's words "turn to wool"?
Mr. Newton: I agree with my hon. Friend that many unanswered questions remain on such matters. But I am not sure that I can promise an early debate on them, because we have just had one.
Mr. John Austin-Walker: I draw the attention of the Leader of the House to the National Audit Office report released earlier this week, which revealed that £40 million had been overpaid to training and enterprise councils? South Thames TEC, which is now in receivership, has received a bill for £9.7 million, largely for courses that were inappropriate or did not take place. Is the right hon. Gentleman aware that other training agencies in my borough have not been paid for courses that were carried out? I draw his attention to early-day motions 380 and 381.
[That this House notes with concern the revelation by the National Audit Office that the receivers of South Thames TEC, which collapsed in 1994, have been sent a Bill for £9.7 million of overpayments by the Department of Employment for training courses which were never run or did not qualify for Government help; and contrasts this with the fact that some training organisations, including voluntary bodies, have not been paid for training courses which have been run and which were eligible for government grant.]
The second early-day motion reveals that moneys voted by Parliament for a specific purpose may be applied to a wholly unrelated debt, as a result of the actions of the Department of Education and Employment. Will the right hon. Gentleman arrange for a debate on that issue at an early stage?
Mr. Newton: I shall ensure that the Secretary of State for Education and Employment is made aware of the hon. Gentleman's concerns, and I can tell him now that the receiver has been working with the Department to secure appropriate evidence and reduce the bill. Any payments to unsecured creditors are a matter for the receiver.
Mr. Jacques Arnold: May we, as a matter of urgency, have a debate on what is clearly a crisis in education provision in south-east London? About a fortnight ago we heard of a mother who had to reject all the schools in Labour Southwark and send her child to a grammar school in Conservative Bromley, and today evidence has emerged of a father who has severely criticised schools in Labour Lewisham and is sending his children to a private school. Clearly there is a crisis, but what is particularly odd about the crisis is where the evidence is coming from—both those parents are Labour Members of Parliament.
Mr. Newton: I look forward to my hon. Friend's contribution to subsequent debates on the Bill dealing with grant-maintained schools' borrowing powers.
Mr. Peter Shore: Does the Leader of the House recognise that the Scott report is of exceptional interest to hon. Members? Can he tell us when the report will be made available to Lobby and other journalists? If it can be made available to them under an embargo—and we know that as soon as they receive it they will start ringing up Members of Parliament for their comments—surely it would make sense to make copies available to Members at the same time as they are made available to the Lobby.
Mr. Newton: I do not expect copies to be made available to others before they are made available to Members of Parliament.
Mr. Richard Tracey: Can I persuade my right hon. Friend of the urgent need for a debate on the recent report by the chief inspector of schools? He will agree that too many pupils in state-controlled schools are not reaching their full potential. In the commentary on the report one point seems to have been missed—most education authorities are controlled by the Labour party or the Liberal Democrats. Should not the Government now say what they will do with those education authorities to secure value for money in the teaching of our children?
Mr. Newton: For some time the Government have been pursuing a range of policies to enhance and improve education standards in authorities of all kinds. Indeed, my right hon. Friend the Secretary of State made some further announcements earlier this week.
Ms Glenda Jackson: Surely the biggest unanswered question in the House this week is why civil servants who were called to give evidence to the Scott inquiry have not received a copy of the report, although the Ministers in their Departments have. It is understandable that the Government would not wish Opposition Back Benchers to have copies of the report, but is it not indefensible, and a gross misuse of Government power, that civil servants who give dedicated service to the people of this country have been denied access, whereas their Ministers have received copies eight days in advance?
Mr. Newton: The hon. Lady will know that the arrangements have been agreed with Sir Richard Scott. The position as I understand it is that neither Ministers

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nor civil servants have access to the report now unless they need it to help prepare the Government's response. There is no difference between the position of Ministers and the position of officials in that respect.
Mr. John Marshall: May we have an early debate on early-day motion 379?
[That this House notes with concern the Evening Standard's report on Islington Council, the local authority in which the Right honourable Member for Sedgefield has his home; understands that the council has been unable to calculate properly its own performance against national indicators, and has published inaccurate information in the local press as a result; notes that financial arrangements are unsatisfactory in several important respects; further understands that the council does not know the nature of its housing stock; congratulates the Evening Standard on its report; believes that the performance of the Labour-controlled authority in which the Right honourable Member resides exemplifies the reality of his party in power; and calls on him to deal with Labour's inability to run councils such as Islington before expressing readiness to govern Britain.]
Does my right hon. Friend agree that the incompetence of Islington council demonstrates that new Labour is just as incompetent as old Labour? Anyone thinking of voting for new Labour would be well advised to look at Camden, Hackney, Islington and Lewisham, as they would then realise that new Labour is just as bad as old Labour, and— as has been said before—is hard Labour.
Mr. Newton: I am aware of early-day motion 379. The performance of Islington council is yet another warning to anyone who doubts the risks of allowing Labour to take control.
Mr. Bruce Grocott (The Wrekin): Although I am sure that no Opposition Member feels any personal hostility to the mistresses of Charles II, or to any of their descendants, we are baffled why they should have the same right to make laws as those of us who have been elected. In the light of the Cabinet's bizarre view—as expressed by the chairman of the Conservative party—that the continuation of the hereditary right to legislate is an essential part of British democracy as we know it, will the Leader of the House arrange for the right hon. Gentleman to come to the Dispatch Box and explain those views on behalf of the Government?
Mr. Newton: I would like the Leader of the Opposition to explain why he talks about the constitution without addressing any of the real issues, such as the tartan tax or the West Lothian question. Given that some 30 hereditary peers were among those who voted against the Government in the other place earlier this week, I am mildly surprised that there is so much hostility towards them among Opposition Members.
Mr. Harry Barnes: May I thank the Leader of the House for agreeing to meet some of my constituents from Clay Cross later today? May I also thank him for his replies to two previous business questions that I have raised about the work of the European Standing Committees. Perhaps I will be lucky for a third time. May we have a debate on the work of the compensation recovery unit? The unit takes away
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masses of benefits that have been paid to people such as a constituent of mine from Grassmoor who received an award of £40,000 following two mining accidents, only to find that £22,000 of that was taken away. There is a threshold of £2,500 before money starts to be taken away, which results in many solicitors advising people only to take awards below that amount. A report on the matter by the Select Committee on Social Security has been produced, so it would be appropriate for us to have such a debate.
Mr. Newton: Having pleased the hon. Gentleman— somewhat unusually—in two requests, I would love to make it a hat-trick. All that I can say, however, is that the Government are carefully studying the Select Committee's report.
Mr. Gerald(St. Helens, South): Will the Leader of the House reconsider the length of time allocated to debate the Scott report on the Floor of the House? In an average debate—even when Madam Speaker imposes a 10-minute rule—the maximum number of speakers who can take part is fewer than 30, or less than 5 per cent. of the Members of the House. The time at which the report will be in the hands of ordinary Back-Bench Members will mean that their ability to ask pertinent questions following the statement of the President of the Board of Trade will be somewhat limited. As this is one of the most important reports since the Franks report in the 1980s and earlier reports in the 1940s and 1950s, would it not be fairer and wiser to extend the debate to perhaps two or three days?
Mr. Newton: I hear what the hon. Gentleman says, but many important matters are debated in the House on the basis of one-day debates and it is not uncommon for there to be debates in which not everyone who wishes can take part. I certainly cannot promise always to provide enough time in relation to any subject for everyone who would like to participate to do so.
Mr. Jim Cousins: Will the Leader of the House reconsider the need for an urgent debate about the devastating changes proposed for the social welfare and support system? As a former Secretary of State for Social Security, he will know that in Tyne and Wear the present Secretary of State's statement puts more jobs at risk than all the jobs that we have lost in coal and shipbuilding in the area in the past 10 years.
Mr. Newton: The Department's aim is to try to improve efficiency in the delivery of the social security system by roughly a quarter in three years. Considering what is being said in other areas—for example in relation to national health service administration—it would seem entirely right that the Government should be trying to keep down administrative costs in the interests of expenditure, in this case on benefits, or, in the case of the NHS, on patient care.
Mr. Kevin Hughes: Will the Leader of the House arrange for the Secretary of State for Social Security to make a statement and justify why the War Pensions Agency is taking disability allowance away from war pensioners without there being any recourse

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to an appeal procedure? Or is it just a scam by the Government to raise revenue, so that they can dish it out in tax cuts for the rich leading up to the next general election?
Mr. Newton: That question verges on the irresponsible. The hon. Gentleman must know that there is nothing new about the way in which the war pensions system operates, going back over many decades. The method of operation has not been changed significantly by the present Administration, apart from the creation of the agency. That said, I will bring his concern to the attention of my right hon. Friend.
Mr. Tony Banks: Is the Leader of the House aware of all the significant developments that are, or could be, taking place in football? There is the possibility of a European Super League, the challenge to the deal between the Premier League, BSkyB and the BBC, and all the problems over the rulings on the transfer system. Those decisions are being taken by unelected people—general supporters have no input. There is no Parliament for football supporters. The people who are taking the decisions are self-appointed. Should we not have that debate here? We are the Parliament for football supporters and we should debate those developments. It would certainly please me and it might even please the Prime minister.
Mr. Newton: I have often thought that the hon. Member for Bolsover (Mr. Skinner) would be rather good on some terraces, but, on the main thrust of the question, the hon. Member for Newham, North-West (Mr. Banks) might like to consider applying for a Wednesday morning debate
Mr. Skinner: I used to play.
Mr. Newton: I am sure that the hon. Gentleman is very good on the pitch, too. I do not think I would want to run into him, however. I used to play as well. Indeed, I was captain of football at school. Coming back to the question, if the hon. Member for Newham, North-West is proposing a debate on sport, I will add it to what I call my little list.
Mr. Tam Dalyell: At Prime Minister's Question Time, the Prime Minister talked about precedents. The Leader of the House has also talked about comparable precedents. What precedents does he have in mind? If it is the Franks report, I gave evidence for an hour and 25 minutes to Lord Franks and his colleagues and I assure the Leader of the House that there is no precedent there. First, what precedents does he have in mind?
In reply to my hon. Friend the Member for Hampstead and Highgate (Ms Jackson), did we hear the right hon. Gentleman wrong when he said that Ministers and civil servants would be treated in exactly the same way? Therefore, is a civil servant like Sir Stephen Egerton, who gave evidence to Scott, to get a copy of the report eight days before it appears, like the Chief Secretary to the Treasury? The relevant question that my hon. Friend asked was whether civil servants who may be criticised, like Sir Stephen Egerton, were going to be treated like Ministers. What is the answer? Will Sir Stephen Egerton,
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whom I use as one example, get his report eight days beforehand? If he does not, the Minister's reply is misleading to the House, although doubtless he did not mean it to be.
Mr. Newton: If there is any question of something that I have said being misleading to the House, I will look into what the hon. Gentleman has said and correct it in an appropriate way. My understanding is that neither Ministers nor civil servants have access to the report now unless they need it to help prepare the Government's response. That is what has been agreed with the inquiry.
Mr. Dalyell: Ah!
Mr. Newton: That is what I said. That has been agreed with the inquiry, and any change to that position, if that is what the hon. Gentleman is urging, would similarly need to be discussed and agreed with the inquiry. On the first part of his question, the precedents that I had in mind were the Learmont report, the Nolan report and the report on Barings. I think that what I have suggested this afternoon would be broadly in line with what was done on those occasions.
Rev. Martin Smyth: While I welcome the fact that there will be a debate on the Appropriation (Northern Ireland) Order, does the Leader of the House agree that that will be a wide-ranging rather than a specific debate? Would it be possible for a meeting of the Northern Ireland Grand Committee to be called to consider hospital provision?
Mr. Newton: I cannot make such a promise at the moment, but the hon. Gentleman knows that we are considering the matter, following the representations that he and others have made. I rather doubt that we shall be able to resolve that before the debate that I have announced this afternoon.
Mr. Janner: Does the right hon. Gentleman recall that I asked last week for a debate on the disgraceful vandalism in schools in my constituency? He said that he would refer the matter to the Secretary of State for Education and Employment. Has he done so, and has he had a reply? He will be appalled, as I was, to learn that three more schools have been vandalised in my constituency in the past week—Wycliffe community college, New Parks community college and, perhaps worst of all, the Emily Forte special school. Those schools need protection, fencing and closed circuit television. They cannot get them without affecting the education of the youngsters. There should be Government money for that, and we should have a debate soon.
Mr. Newton: I understand that the hon. and learned Gentleman met my right hon. Friend the Secretary of State—although I am not sure exactly when—to discuss some of those matters. I think that the points that he made last week have been—certainly, I asked that they should be—brought to my right hon. Friend's attention. I have a number of points that I could make to him, but I will ensure that my right hon. Friend writes to him.
Mr. Mackinlay: May we have a debate in Government time about Government policy on cautioning offenders?

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The right hon. Gentleman will recall that I raised the matter last week and asked him to have a word with the Home Secretary about whether he would be prepared to answer questions on that during the debate on London policing. He failed to do that, other than to say that I had reached new depths of ignorance—which, of course, is Howardspeak for saying that I am correct.
We should have a debate because there is a Government circular on policy which will be of concern to Labour and Conservative Members. Policy is not being properly and equally applied. Replies have shown that 13 people were cautioned for rape in 1994. There is widespread concern that the Home Secretary is not on top of his brief on cautioning. May we have an early debate?
Mr. Newton: Anyone who thinks that my right hon. and learned Friend the Home Secretary is not on top of his brief has not been paying close attention. I will certainly bring those further representations to the attention of my right hon. and learned Friend, who is due to answer questions this day week.
Mr. Mike O'Brien: Can the Leader of the House assure me that the terms of reference of the debate on the Scott report will include not only what is in the report but what ought to be in it, and in particular, the fate of the ex-workers of Matrix Churchill, many of whom are constituents of mine or of my hon. Friends who represent Coventry? We want to be assured that we will be able to debate the circumstances that caused the loss of those employees' jobs—and the loss of income for their families—and the need for proper compensation, if that is what would be right as a result of the report.
Mr. Newton: Subject of course to your judgment Madam Speaker, it would be in order to raise in the debate anything that is considered relevant to the report or that arises from it.

Point of Order
4.14 pm
Mr. Simon Hughes: On a point of order, Madam Speaker. Last year you were helpful and made a ruling that, when a parliamentary question affected an individual constituency, hon. Members should be given notice of it. As far as I know, Ministers have complied with that ruling. Today, during business questions, the hon. Member for Moray (Mrs. Ewing) asked a similar question, on which I do not think you have ever been asked to reflect. She asked whether, when a written question is answered which directly affects a large number of hon. Members, the same sort of protection could be given so that we are aware of the answers before the rest of the world and do not face the difficulty that you dealt with last year.
That issue relates to the subject of reports, which was raised with the Leader of the House. I heard your ruling yesterday, Madam Speaker, and I know that reports to Ministers are clearly different, although, as Ministers are accountable to Parliament, those reports are made, indirectly, to Parliament. The Leader of the House gave an assurance that the report would be available to us at the same time as to the press. Perhaps you, Madam Speaker, could reflect on whether reports to Ministers could be encompassed in the same ruling as that on parliamentary answers that are of general interest.
Madam Speaker: On the hon. Gentleman's latter comments, I made my views clearly known yesterday and I have nothing further to add. I shall look at what he said in his earlier remarks, as I want to be helpful.
Mr. Newton: I confirm that I shall look at what the hon. Gentleman said.

Local Government Finance (Wales)
4.16 pm
The Secretary of State for Wales (Mr. William Hague): I beg to move,
That the Local Government Finance Report (Wales) 1996–97 (House of Commons Paper No. 141), which was laid before this House on 1st February, be approved.
I understand that with this it will be convenient to discuss also the following motion:
That the Limitation of Council Tax and Precepts (Notional Amounts) Report (Wales) 1996–97 (House of Commons Paper No. 142), which was laid before this House on 1st February, be approved.
The finance report sets out my decisions on the local government revenue settlement for 1996–97. The standard spending assessments specified in the report have been calculated in accordance with a formula agreed with the local authority associations. The notional amounts report sets out the amounts in lieu of budget requirements for 1995–96, which I propose to use to measure the coming year's budget increases for the purposes of capping. Those notional amounts reflect historic spending patterns in unitary authority areas and preserve the spending power of the new authorities.
As the House will recall from my statement in December, I propose to allow total standard spending, or TSS, of £2.867 billion for local government in Wales in 1996–97. That is an increase of £85 million, or 3.1 per cent., on the previous year. It includes £331 million for the four Welsh police authorities— £2.463 billion in standard spending assessments for the 22 new unitary authorities, and £72 million in specific grants such as probation service grant and national park grant. Under my provisional capping criteria, each local authority in Wales can, if it sees fit, increase its expenditure in comparison with its notional amount by at least 3.4 per cent.
The settlement allows police spending to increase by 5.1 per cent., and follows an increase of more than 11 per cent. in police budgets last year. It corrects the historic underfunding of police services by county councils prior to 1995–96, and it enables Welsh police forces to build on their success in combating crime, and to make communities safer places in which to live and work. The chief constables of all four Welsh forces have welcomed the settlement.
I propose to provide £2.517 billion in central Government support, known as aggregate external finance or AEF, in support of total standard spending—an increase of £52 million, or 2.2 per cent., on the previous year. That amounts to £860 per person in Wales—about £130, or 18 per cent., more than the level planned for England. It is 87.8 per cent. of total standard spending, compared with 79 per cent. of total standard spending in England. AEF comprises £1.792 million in revenue support grant, £459 million in distributable non-domestic rates, £237.8 million in specific grants—which includes the police grant to be made by the Home Secretary—and £29 million for council tax damping to cover the impact of council tax increases arising from the disaggregation of budgets last year.
Mr. Dafydd Wigley: Will the Secretary of State confirm that, if local authorities increase their
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expenditure in line with the likely 4 per cent. settlement for public sector pay, do not spend more than the expenditure limits recognised by the Welsh Office, and do not raise their council tax by more than the rate of inflation, they will still have a shortfall of several million pounds—as in the case of the new Caernarfonshire-Merionethshire authority? That would inevitably lead to the closure of rural schools, the retraction of care in the community services, and even the closure of leisure centres for two or three days a week. Is that not inevitable with this settlement?
Mr. Hague: The pay awards announcement will be made separately. I must tell the hon. Member that the settlement level for each authority is the product of the standard spending assessment formula, which is agreed with the local authority associations, the actual level of total standard spending and aggregate external finance, which I am setting out here.
If the hon. Gentleman or other hon. Members say that the amount of support that is given to an individual local authority should be different, they must argue that either the SSA formula should be changed or the total amount of support should be different. The hon. Member for Caernarfon may well be able to do that, but no one has yet told me what is the right amount for local government if the amount that I propose is wrong. I must pose that question to Opposition Members.
Mr. Donald Anderson: Is it not rather disingenuous to say that the pay settlements are separate? They substantially impact on local authorities and on the amount of money available to them. For example, the Welsh Office has information about the effect of the previous teachers' pay settlement on teacher numbers. We know that the teacher settlement for the coming year is 3.8 per cent, which is bound to have an effect on the number of teachers in our schools. What estimate has the Welsh Office made of the likely reduction of teachers as a direct result of the settlement?
Mr. Hague: The total effect will not be 3.8 per cent., because of the way in which the Government propose to stage the increases. We are making a 3.1 per cent. increase in total standard spending and a 2.7 per cent. increase in the amount of money that the Government give to local authorities. That is more than the likely increase in the outturn of expenditure by the Welsh Office, which in turn is more than the increase in expenditure for the Government as a whole.
Local authorities are therefore receiving at least their full share of the increase in Government expenditure for the coming year. We are entitled to expect local authorities to make improvements and administrative savings that are similar to those made by central Government during the coming year, so that they can minimise the consequences for the council tax payer.
Mr. Peter Hain: The sophisticated presentation of the figures will not wash in Neath and Port Talbot, because the new authorities will have to make cuts of £7 million which have nothing to do with their own efficiency or attempts to reorganise services. This punitive, paltry and pathetic settlement will discriminate against the Neath and Port Talbot side of West Glamorgan, and will mean that some council tax payers—

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in Trebanos village, for example—will pay £50 more than their neighbours across the road. The settlement has nothing to do with local decisions, and everything to do with the Secretary of State's failure to deal with the councils' complaints about this matter.
Mr. Hague: As the hon. Gentleman knows, Neath and Port Talbot is one of the authorities that benefit from the damping schemes that I have announced. The hon. Gentleman is an Opposition Front-Bench spokesman, although in this debate he speaks from the Back Benches. Opposition Front-Bench Members have not been able to say—we wait with interest to discover whether they are able to tell us in this debate—what the settlement level should be. The hon. Gentleman thinks that the level I have announced is paltry. We look forward to hearing what the right amount would be, and we look forward to hearing the Labour party committing itself to it.
In addition to the revenue package that I have announced, I am providing local authorities with £508 million for capital programmes next year, and with £42 million towards the transitional costs of local government reorganisation. In all, local authorities will receive £83 million towards their transitional costs over the two years, from 1995 to 1997.
The responsibility for setting budgets and determining council tax levels lies with local authorities. Capping exists to enable me to restrain public expenditure, and capping rules acknowledge that, historically, the majority of Welsh local authorities—not all—have chosen to budget above the standard spending assessment.
However, provisional capping limits are not spending targets that I lay down. Local authorities have the discretion to set their budgets below capping limits, although many authorities seem to want to set their council tax as high as capping limits permit. That is one factor that the Opposition must consider when they advocate scrapping capping limits altogether. There would undoubtedly be an impact on council tax levels.
Mr. Ieuan Wyn Jones: Surely the Secretary of State recognises that many local authorities have no alternative but to set their budgets at the capping level. If Anglesey county council, for example, had a standstill budget—the same budget as that allocated to Gwynedd and Ynys Mon last year—it would have a budget of £63 million. Under the capping arrangement, the council is not allowed to spend more than £61 million. What alternative does that give the county council? Is it not inevitable that services will suffer?
Mr. Hague: It is not good enough for people responsible for spending public money to say that they have no alternative to courses of action, such as the maximum level of taxation available to them. All of us who are responsible for spending public money have to use that money as efficiently and effectively as we can. I have announced the measures that we are taking in the Welsh Office, and I will refer to them again in a moment. Local authorities vary greatly in how good they are at spending their money efficiently and effectively. I will refer to the record of one or two authorities in a moment.
It was because I was concerned by reports that a majority of local authorities planned to budget up to the limit implied by my provisional capping principles that
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I announced last week an additional targeted damping scheme. It will ensure that, excluding any increases in community council precepts, no council tax increase can exceed 25 per cent., and I expect the great majority of increases to be well below that level.
The sum involved in the scheme is additional to aggregate external finance. I want to direct the resources to where they are most needed. When taken with aggregate external finance, including the £29.1 million available for disaggregation damping, the total level of Government support for local government revenue spending is brought to £2.533 billion in Wales, which is an increase of 2.7 per cent. The figure is virtually identical to that in other parts of the United Kingdom.
Mr. Nick Ainger: Let us be honest. The Secretary of State knows by now that local government finance is not a science, and that it is a very inexact art. In this year above all years, with all the problems related to disaggregation, and with only notional sums being taken into account, should not the Secretary of State be far more flexible in relation to the capping limits? We may well find that mistakes have been made in the calculation, and that local authorities will have no alternative but to cut significantly services that, in the past, they would have been able to protect.
Mr. Hague: The capping limits this year are more flexible than they were in previous years. That is partly in recognition of the particular circumstances, although we are spending a great deal of money to fund the transitional costs for local government. The hon. Gentleman must remember that, when I make capping limits more flexible, the immediate response of local authorities is to say, "Right, we will spend all the way up to our capping limits, whatever that means for the council tax." I introduced an additional damping scheme in the light of that.
Mr. Cynog Dafis: Will the Secretary of State tell us something about the methodology used in the distribution of the extra moneys provided at the end of January, and tell us whether there was any consultative process to enable unitary authorities to make representations to him? Is it not unreasonable that no additional moneys remain available to the new Ceredigion county council, so that the band D council tax will be £508—£80 more than in Cardiff, which obtained an additional £3.6 million, even though the Ceredigion average income is far less? Is not the distribution extremely inequitable?
Mr. Hague: The decisions that I announced at the end of January 1996 were the result of a process of consultation on my original proposals. That consultation ended on 5 January 1996, so I announced the additional proposals when I had reviewed all responses to the consultation.
I understand the hon. Gentleman's argument. Historically, council tax levels are higher in the area of his constituency, but I have targeted the additional help to places where council tax increases threaten to be the largest, because the anxieties that were expressed to me were overwhelmingly about the level of change that might take place, not the level that existed for historic reasons

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and because of previous spending decisions, which we cannot go back and unravel now. I allocated the additional money on that basis.
Mr. Nigel Evans: As my right hon. Friend knows, I was a West Glamorgan county councillor for six years. During that time, I spoke to many people in West Glamorgan who were supremely grateful for the fact that the Government had capping in place, because the Labour county councillors were sweating with hope that, at some time, capping would be lifted, so that they could push spending through the roof. Yes, the people of Wales want their services to be protected, but we must do all we can to protect the people of Wales from high-spending Labour councillors.
Mr. Hague: My hon. Friend's experience has too often been the experience of councillors throughout the country. It has shown that, if we did not have capping principles, council tax would be dramatically higher, without necessarily bringing improved services to local populations.
Mr. Don Touhig rose—
Mr. Hague: I must make progress if we are to have time for hon. Members to take part in the debate.
I have been worried about reports of the possible closure of Theatr Clwyd, and I have carefully considered the case made to me and my hon. Friend the Under-Secretary of State, the hon. Member for Cardiff, North (Mr. Jones), by the new Flintshire authority for additional help from central Government. I share its opinion that Theatr Clwyd should continue to provide the high-quality productions for which it is famous. I have decided to provide, via the Arts Council of Wales, a one-off grant of £1.3 million to pay off completely Theatr Clwyd's outstanding capital debt.
My offer is subject to satisfactory assurances from Flintshire and other successor authorities to Clwyd county council that they will give the theatre the support it needs to continue to operate on its present basis for the foreseeable future, and I need such assurances by 8 March 1996. That is a major contribution to securing the future viability of the theatre, and I hope that it will be welcomed by hon. Members.
Mr. David Hanson: As the Member of Parliament representing Mold, where Theatr Clwyd is situated, I welcome the Secretary of State's announcement. Flintshire county council, my hon. Friend the Member for Alyn and Deeside (Mr. Jones) and I made strong representations to the Under-Secretary of State, the hon. Member for Cardiff, North (Mr. Jones), about the future of Theatr Clwyd. I am sure that today's announcement will give a kick start to the local authorities adjacent to Flintshire to help with those contributions.
It is a first step. There remains a major shortfall of perhaps £300,000 to £400,000, and I hope that the door will not be closed. We also need to consider the ability of the Secretary of State to kick-start the Arts Council of Wales as a "next steps" agency.
Mr. Hague: I am grateful to the hon. Gentleman for his welcome. As he says, he and the hon. Member
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for Alyn and Deeside made representations, as did my hon. Friend the Member for City of Chester (Mr. Brandreth) in the Whips Office, so there was concern on both sides of the House. The sum of £1.3 million in taxpayers' money to write off the theatre's debt completely is a major contribution. I now look to the authorities and others to ensure that the theatre continues to operate in the foreseeable future. That £1.3 million must be the limit of what the Government can provide.
Mr. Barry Jones: I thank my hon. Friend the Member for Cardiff, North (Mr. Jones) and the right hon. Gentleman and his Parliamentary Under-Secretary for receiving the deputations and considering the strong case that we made. How can the Secretary of State persuade the English local authorities very close to Mold to help meet the £300,000 shortfall? Does he agree that Theatr Clwyd is the jewel in the crown of Welsh theatre production?
Mr. Hague: I agree with the hon. Gentleman's last point. Local authorities in Wales and in England must make their own decisions about the support they give. However, I hope that the people responsible for the management and finances of the theatre will take every opportunity to market it effectively in the future, in terms of obtaining both support and custom. The Government have given the theatre an opportunity for the future, which we want to see it take up.
My settlement proposals give local government the resources it needs to maintain services in the first year of the new unitary arrangements. Inflation is low, and it is forecast to remain so. I acknowledge that difficult choices must often be made—that is true for all who are responsible for spending taxpayers' money. All councils must make every effort to use their resources as wisely as possible. Many councillors try to do that, but not all achieve it.
If we can believe what we read in the newspapers, one local authority—Rhondda Cynon Taff county borough council—proposes to spend more than £20,000 on a new mayoral chain. That is a large sum to spend when the mayor could make use of the regalia of one or more of his predecessors. When things such as that happen—albeit involving a relatively small amount of money—people are bound to question council priorities.
The same authority has ambitious plans for a new headquarters which will cost in excess of £20 million. Of course, the council needs a place to meet and the staff need a place to work, and the Government have assisted the council with accommodation for the time being. I recently announced support for six authorities which plan to build new accommodation or to upgrade existing buildings. However, those six authorities will spend less between them than that one authority plans to spend. Council tax payers have a right to ask for a more modest approach.
I do not want, or need, to single out that one authority: in some areas, leading councillors will be paid allowances as great as £23,000. The Blaenau Gwent county borough council is the 17th largest authority in Wales in population terms, but it has the fifth most expensive chief officers' structure. It has more chief officer posts than any authority, apart from Swansea county council, which serves three times the population.

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Councillors in Blaenau Gwent have voted themselves allowances which are six times greater than those paid to the elected members of the old Blaenau Gwent authority. We are told that travel and subsistence will be paid in addition, but there is no requirement for councillors to turn up to meetings. That raises questions about the priorities of local government.
Mr. Ron Davies: The Secretary of State will recall my suggestion that he follow the example set by his counterpart for Scotland and introduce a mandatory scheme to stop any existing abuses. I urge him to introduce such a mandatory scheme. If he is so minded, he will have the full support of the Opposition. If he is not, upon their election, a Labour Government will take action to stop any such abuses.
Mr. Hague: That is an interesting position. The hon. Gentleman has said that there should be mandatory schemes because councillors are not fit to decide their allowance arrangements, but he believes that capping should be abolished so that councillors can freely decide on the impositions to be placed on everyone else.
The hon. Gentleman's approach is inconsistent. The Government should not have to instruct local authorities about such matters: they should have the discretion to make those choices. Council tax payers who hear their local councils ask the Government for more money should question whether the councils are spending money wisely, and whether the expenditure is necessary.
Mr. Alun Michael: Does the Secretary of State therefore disagree with the Leader of the House, who announced that an independent means of setting Members' salaries was the right approach? Is it not the same principle that my hon. Friend the Member for Caerphilly (Mr. Davies) suggested should be carried into local government?
Mr. Hague: No, I do not think it is. We have a Welsh Office and a Secretary of State for Wales so that we can judge issues on their merits in Wales. That is what we are doing today.
Mrs. Ann Clwyd: Will the Minister give way?
Mr. Hague: No, I must get on with my speech.
In the restraint of public expenditure, I am asking no more of local government than of other public sector borrowers. I informed the House in December of my plan to reduce my Department's running costs by 8 per cent. in cash terms over the next three years. Organisations that are responsible for large sums of public money have a duty rigorously to assess their spending priorities and their running costs.
Reorganisation has given Welsh local government a chance to improve management structures and strategies. Some new authorities have worked on establishing cost-effective management teams to provide taxpayers with better value for money, but others still have work to do. Preparing for reorganisation is a complex process. Much has been accomplished, but much remains to be done. In recognition of that, I am making more than £80 million available to fund transitional costs, but
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for reorganisation of local government to work, we need management discipline as well as financial resources from central Government.
It is clear that we are providing increased resources to local government, that we are making special allowances for reorganisation, and that local authorities are responsible for council tax levels. Only one thing remains unclear—the alternative to the size and shape of the proposed settlement.
Some people have suggested alternatives. To be fair to them, the local authority associations suggested that I should reduce the budgets of the Cardiff Bay development corporation and the housing associations to provide more money for local government. That could in no way have paid for the 19 per cent. increase in revenue funding they sought, but at least they suggested some alternatives, and I respect them for that.
Plaid Cymru Members, some of whom have intervened, will probably suggest the alternative that there should be more money for the Welsh block overall. They would not be able to make that proposition were Wales not part of the United Kingdom, but they will probably advance it anyway, and it is one point of view. However, not everyone seems willing or able to suggest alternative numbers to those in the reports. Opposition Front-Bench Members are conspicuous among those unable to do so, although they are free with their opinions about other matters.
Mrs. Clwyd: Will the Minister give way?
Mr. Hague: I should finish my point.
It is 10 weeks since we published the proposals. It is hard to believe that the Opposition have not thought about what the settlement should be. If they have not thought about it, we are entitled to ask what they have been doing in the past 10 weeks. If they have thought about it, it is time that public were told their conclusions. Tonight, at 7 o'clock, I expect that they will vote against the proposals. If they do that, they must prefer something else. If they prefer something else, we are entitled to ask what it is. Would council tax be higher or lower?
Mrs. Clwyd: On a point of order, Madam Deputy Speaker. I wonder whether the Government intend to make a statement, and whether the Secretary of State knows that, in addition to increasing council tax, they will also tax those who are sick. The Government have sneaked through a answer saying that they intend to put 25p on the cost of prescriptions. That is disgraceful.
Madam Deputy Speaker (Dame Janet Fookes): It is quite clear to me that this is not a point of order. It is a point of information that the hon. Lady wishes to get over, and she has not been able to do it in any other way.
Mr. Hague: I shall not be distracted from asking Members who are against the settlement whether they think it should be higher or lower. We do not necessarily need exact numbers. They could tell us whether it should be a bit higher or much higher.
Where would they find resources in the Welsh block? Would they come from the health budget that I have increased, the training budget, to which I have directed money, the Countryside Council for Wales, whose budget

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I have increased, the Welsh Development Agency, which has received an increase in its grant in aid, or, as the local authorities have suggested, the Cardiff Bay development corporation, although that would stop the barrage halfway through its completion?
The problems of financing local government spending would be worse, not better, were we to introduce even a small number of the specific proposals to which Opposition Members have put their names.
Mr. Ainger: Will the Minister give way?
Madam Deputy Speaker: Order. It is quite clear the that Minister is not giving way; therefore, the hon. Gentleman must resume his seat quickly.
Mr. Hague: I have given way many times. I want to provide time for Members to take part in the debate, and for the hon. Member for Caerphilly (Mr. Davies) to say what he thinks the settlement should be. I should point out that ending compulsory tendering, which is one Opposition policy, would worsen the problem of controlling local government spending. They could finance it by their other policy of ending capping, but that would undoubtedly mean that local authorities would choose to spend a great deal more, and council tax payers would have to pay for it.
Mr. Ian Bruce: Will my right hon. Friend give way?
Mr. Hague: In fairness to all Members, I must continue my speech.
The settlement that I have announced gives local government a high priority within the Welsh block. It increases the resources available to local government, and it addresses the issues raised by reorganisation. The Opposition have presented no honest alternative, and on that basis I recommend it to the House for approval.
4.45 pm
Mr. Ron Davies: The Secretary of State has been getting in some much-needed practice for his next job in opposition. He is far more concerned to talk about Opposition policies than about his own financial settlement. It is instructive that, although we are discussing a financial settlement dealing with the distribution of some £3 billion of public money, according to the Secretary of State the most important point is the cost of civic regalia in Rhondda Cynon Taff. That reveals his priorities.
The Secretary of State has tried to convey the message that the settlement is reasonable, that it will not lead to service cuts and that any unreasonable council tax increases will be the fault of local councils, not central Government. On all those counts, the truth is the exact opposite.
In reality, it is an unreasonable settlement at a time of economic slump. Despite their new responsibilities and a major reorganisation, councils in Wales will face a reduction in Government support. The settlement increases aggregate external finance by 2.2 per cent.
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Inflation for the year to December was 3.2 per cent. In real terms, therefore, authorities in Wales face a 1 per cent. cut in their level of support.
Resources for the police increased last year and the Secretary of State took credit for it. Perhaps he will also take responsibility for the fact that the number of serving police officers has fallen by nearly 200 since 1992 and fell by nearly 100 last year, when he took direct responsibility for funding police authorities in Wales. Yet again, the reality falls far short of Tory manifesto commitments and it is clear that we cannot trust the Government on law and order.
Mr. Nigel Evans: Will the hon. Gentleman give way?
Mr. Davies: No.
I would have liked to welcome the extra money for community care, but that increase, for which the Secretary of State claims credit, comes entirely from the budget of the Department of Social Security. When the number of elderly people is dramatically increasing—there was a 17 per cent. increase in the number of people aged 65 and over between 1979 and 1994 and it is forecast to increase further—not a penny more is being spent on one of the most vulnerable sectors in our society. That is not the whole picture. Excluding the ring-fenced money for police and community care, Wales faces a 2.6 per cent. cut in real-terms provision for such basic services as education, housing and social services.
Mr. Evans: Will the hon. Gentleman give way?
Mr. Davies: No.
Mr. Evans: On a point of order, Madam Deputy Speaker. The Secretary of State gave way more than 20 times during his speech, yet the Opposition spokesman is not prepared to give way even once.
Madam Deputy Speaker: It is entirely a matter for the hon. Member who has the Floor to decide whether to give way. It is not a point of order for the Chair, so that was a bogus point of order which has taken up time.
Mr. Davies: Perhaps I should take this opportunity to explain to you, Madam Deputy Speaker, that a large number of my hon. Friends who represent Welsh constituencies want to represent the interests of their constituents today, so I shall make my speech as brief as possible to allow them to do that.
Education may be a matter of jest for the Secretary of State, because neither he nor his family nor his constituents have to live with the consequences of the cuts that he is imposing. Will he confirm that, as a result of the Government's decision today to increase teachers' salaries by 3.8 per cent., but not to make any more funding available for authorities in Wales, they will have to face additional burdens of the following order? The counties of Dyfed, Gwent and South Glamorgan, or their successor authorities, will have to find a further £4 million. The counties of Clwyd and West Glamorgan will have to find a further £3 million. The county of Mid Glamorgan will have to find a further £5 million. If the people whom the Secretary of State represents, or his family, were being condemned to the squalor

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and declining conditions that our children face in their education, I put it to him that he would not be as complacent about this further imposition on Welsh local authorities.
There will be service cuts in these vital areas, and hardly an authority in Wales will be able to fulfil its plans for investment in the social and economic infrastructure which are needed to face the challenge of the new millennium. The capital settlement this year includes a cash cut of 5 per cent.—more than £34 million—and a real terms cut of 8 per cent.; that is £50 million less than what is needed just to compensate for inflation.
I acknowledge that the damping down grant has been introduced, but all that does is put a temporary bandage over the structural and financial crisis facing the poorer Welsh authorities as a result of the per capita redistribution of the former counties' disaggregated budgets. Overall, the Welsh block grant has not been increased, so the £45 million allocated to damping down will have to come from other cuts in Welsh Office expenditure: from the health service and from economic development, for example. Local authorities which this year are benefiting from the damping down grant—especially the poorer counties of Rhondda Cynon Taff, Merthyr and Blaenau Gwent—will face enormous difficulties next year, because no provision has been made for the continuation of the assistance.
It is what I would call typical Tory economics—sacrificing long-term strategic interests for a short-term political fix. That it is a short-term fix, the Secretary of State made absolutely clear in his press release of 30 January:
"I envisage this additional assistance as a one-off, giving authorities time to adjust service expenditure and bring it more in line with their standard spending assessments".
In other words, he intends to sack teachers, spend less on social workers and invest less in the future of our communities. As with so many other areas of Government activity, the problems of today's Tory Government will be left to tomorrow's Labour Government to sort out.
My hon. Friends will be interested to contrast the Secretary of State's press release entitled
"William Hague limits council tax increases"
with the facts. The facts are that average council tax increases across Wales will be 17.5 per cent. Twelve local authorities in Wales face increases of more than 20 per cent., and half of all Welsh council tax payers—more than 550,000 households—face increases of nearly 25 per cent.
The reason for this state of affairs is quite clear: following years of taking power away from local councils and concentrating it in the hands of central Government, the council tax is now a council tax in name only. Nearly 90 per cent. of local authority expenditure is set and met by central Government, so when the Government cut funds, the burden falls on local government—precisely what has happened this year.
Mr. Ted Rowlands rose—
Mr. Nigel Evans: He is not giving way.
Mr. Davies: I shall happily give way to my hon. Friend, because he represents a Welsh constituency and I know that this is a matter of great interest to him.
Mr. Rowlands: On behalf of my constituents I should like to draw to the attention of my hon. Friend the fact
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that a standstill budget for the new county borough of Merthyr Tydfil will still mean a 25 per cent. increase in the council tax. So much for damping down.
Mr. Davies: That is precisely my point. My hon. Friend understands very well that 12 local authorities face increases of more than 20 per cent. The cuts mean that a total of £26 million in real terms—33 per cent. of what is necessary to keep in line with inflation alone—will be lost; and we need look no further than the Secretary of State to attribute responsibility for the crisis facing Welsh local government.
What I really do not understand is why the right hon. Gentleman is so reluctant to take responsibility. After all, this is a right-wing agenda and the Secretary of State is a self-confessed right-wing Minister. So why is he so coy? Why does he not boast of his achievements? It is part of a right-wing policy to cut public expenditure to fund a pre-election bribe. No matter that tax bribes are taken back at a stroke by council tax increases.
It is also part of the right hon. Gentleman's right-wing policy to force more public services into the private sector. No matter that the policy itself, like the ill-thought-out nursery voucher scheme, will undermine existing provision. It is part of his right-wing policy to reduce in absolute terms the level and quality of public services—in his own words, to roll back the frontiers of the state. No matter that the price for that is paid by communities whose collective future is made insecure, and by individuals whose private lives are blighted by misery.
I shall offer the Secretary of State just one example of how the life of an individual can be made a misery. On Saturday, the parents of a 15-year-old terminally ill girl came to see me. Her name is Jade Smith, and she lives in Bedwas in my constituency. The girl is mentally and physically handicapped and has been tube-fed for the past five years. At the moment, Mid Glamorgan county council enables her to attend a special school at Ysgol Ty Coch, which is in the constituency of my hon. Friend the Member for Pontypridd (Dr. Howells).
As from April, however, the new Caerphilly authority, which I have the privilege of representing, because of the cash cuts imposed by the Government, will be unable to buy a place in Ysgol Ty Coch, so the authority has had to reclassify one of the homes in which it provides respite care for adults. As a result, my constituent has to go to Ty Gwilym adult respite care centre and share the facility with 30 to 40-year-old adults.
The first time Jade Smith went there, she had to share the reception area with middle-aged men, over 40, who were mentally disturbed and abusive. The next time she went there, the care assistants were committed to taking out the 30-year-old women who were there for respite care, so there was no one there to look after her except a sitter.
I offer that as a clear example of the impact that the Government's cuts are having on the quality of public services in Wales. The Secretary of State appears anxious to intervene. I would ask him to take the smile off his face just for a moment and, in his intervention, to tell me whether he thinks that the girl I have described is getting the sort of care that he would want if he were responsible for a 15-year-old terminally ill child.
Mr. Hague: I shall decide on my own interventions. The hon. Gentleman is clearly unhappy with the budget that I have set. Will he tell us, then, by how much he would increase it?
Mr. Davies: I gave way to the Secretary of State because I had a particular point to put to him. I am sorry that he does not think that the care of a 15-year-old terminally ill child is sufficiently serious to deserve a serious and responsible answer. It is because of such cases that there is so much anger at the Government. They are quick enough to preach to others about personal responsibility; it is a pity that they do not recognise their responsibilities with the same alacrity.
The current settlement has two essential flaws. First, the 2.2 per cent. increase in aggregate external finance from £2.4 billion in 1995–96 to £2.5 billion in 1996–96 falls £26 million short of what is required to keep pace with the 3 per cent. increase in inflation.
Mr. Ian Bruce: How much extra would the Labour party give Wales?
Mr. Davies: Secondly, although total standard spending increases by 3.1 per cent., from £2.7 billion to £2.86 billion, the proportion met by AEF falls from 88.6 per cent. to 87.8 per cent., a 0.8 per cent. drop.
Mr. Bruce: How much?
Mr. Davies: In practice, that is the transfer of responsibility from central to local government that was slipped out in an answer to my right hon. and learned Friend the Member for Aberavon (Mr. Morris). In a letter to him last year, the Secretary of State said:
"I believe that over time local authorities in Wales should raise a higher proportion of their income from Council Tax. The 11 per cent increase is the result of this approach."
There are many local authorities in Wales that would relish the prospect of reducing their increase to 11 per cent., but far from protecting Welsh interests in the Cabinet the Secretary of State, like his predecessor, has set in train a deliberate policy of disadvantaging Wales vis-a-vis the rest of the United Kingdom.
Last year, Welsh council tax rose by 11.9 per cent. Mr. Bruce: How much?
Mr. Davies: Council tax in Scotland rose by 5.7 per cent., and council tax in England rose by 5.2 per cent. Hon. Members: Bye-bye.
Madam Deputy Speaker: Order. I do not think that the debate is greatly helped by somewhat childish demonstrations, which are not confined to one side of the House.
Mr. Davies: Now that the hon. Member for South Dorset (Mr. Bruce) has left, I am sure that the quality of the debate will improve.
This year, that unacceptable gap is widening still further. The Welsh average increase of 17.5 per cent. is much higher than the Scottish increase and more than double the figure that the Chief Secretary to the Treasury
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mentioned. We know, therefore, that it is now official Conservative policy to force council tax increases, and to force higher increases in Wales than elsewhere.
This year's average increase of 17.5 per cent. has more than wiped out the cut of 1p in the standard rate of income tax in the Budget. The council tax rises will cost Welsh taxpayers about £69 million extra this year. The Conservative party and Conservative party policies have failed Wales.
The dependency culture that has arisen under the Conservatives has placed increasing burdens on local authorities. Reliance on income support has increased by 81 per cent. That is the dependency culture, courtesy of the Conservatives. Reliance on housing benefit has increased by 54 per cent.—the dependency culture, courtesy of the Conservatives. Reliance on council tax benefit has increased by 107 per cent.—the dependency culture, courtesy of the Conservatives. Reliance on family credit has increased by 580 per cent.—the dependency culture, courtesy of the Conservatives.
Since 1979, Welsh local authorities have struggled valiantly to serve their communities. It is predictable that the settlement reflects the failure of Conservative policies, rather than Labour's aspirations for building for the future. Opposition Members hope that it will be a very long time before Wales is ever again served by such an incompetent and uncaring Government.
5.3 pm
Sir Wyn Roberts: The speech by the hon. Member for Caerphilly (Mr. Davies) was more remarkable for what he did not say than for what he said. He was on the horns of a dilemma, because much of the speech was devoted to more spending and his approval of that, but at the same time he was not quite sure how that spending was to be paid for. The hon. Gentleman seemed to react with horror to the idea of council tax increases, and so one can conclude that the only remedy in his mind to meet the high spending that he proposed was an increase in the aggregate external finance. That, of course, is composed of grant from the Exchequer—in other words, taxpayers' money—and money that comes from businesses in Wales. Therefore, the only conclusion that we can draw from the hon. Gentleman's remarks, which we did not hear, is that commercial rates would go up in Wales.
We should appreciate the full extent of the support given by central Government and businesses to local authority spending in Wales. My right hon. Friend the Secretary of State referred to the fact that 87 per cent. of the total standard spending is provided by the Exchequer and business rate payers. That amounts to some £864 a person in Wales, compared with 79 per cent. or £732 a person in England. Council tax payers in Wales have a head start of £132, which should not be disdained. Of course, that advantage recognises the different circumstances and needs that prevail in Wales. That advantage will be maintained, if local authorities keep their total spending down to the levels set by the Government.
As well as that advantage, we have the capping regime, which is designed to protect the domestic rate payer against excessive demands. We in Wales are very favourably treated, and long may that continue. I wonder how long it will continue, because there is clearly a

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change in the wind. During a debate on local government finance in England, the hon. Member for Holborn and St. Pancras (Mr. Dobson) said:
"The Labour party … would return the business rate … to local control."— [Official Report, 31 January 1996; Vol. 270, c. 1029.]
Some of us remember the days when that was the case. Business people complained bitterly about the rate burden imposed upon them by Labour local authorities. Of course, the business rate was increased, as it was so much easier to sting businesses than domestic rate payers, because business people had fewer votes to cast at local government elections.
We did not hear a commitment to the return of the business rate to local control in Wales, but it was implicit in the speech by the hon. Member for Caerphilly. I have to warn him that there would be dire consequences for businesses. We remember only too well how local control of the business rate had an adverse effect on employment in the past, and there is every prospect that that would happen again in the future. Every commercial rate payer should sit up and take note of what might be in store for them.
If the business rate were returned to local control, there would be enormous disparities throughout Wales. The industrialised areas would be enriched, and the rural areas impoverished, unless there was a very substantial change in the grant system or agricultural land was rated. That is an idea that has never been far from the minds of right hon. and hon. Members of the Opposition, so the farmers had better sit up and take notice too.
The return of the business rate to local control is not the only change proposed by the Opposition. Again, I refer to the speech by the hon. Member for Holborn and St. Pancras, in which he proposed the abolition of compulsory competitive tendering. That can only mean, as my right hon. Friend the Secretary of State suggested, increased staff for local authorities and increased costs for council tax payers. That is what will happen. It is all spelt out in the document entitled "Renewing democracy, rebuilding communities", which was issued by the Labour party.
It is not surprising that Opposition Members are minded to change current council tax bands and to abolish the restraint on local authorities that is provided by the capping procedure. The Welsh electorate can contemplate council tax rates soaring under a possible future Labour Government to whatever heights our local masters think appropriate, subject only to the Secretary of State's reserve capping powers, which are to be used only when all else has failed.
I was interested when the hon. Member for Caerphilly made an offer to my right hon. Friend the Secretary of State to put a lid on some of the abuses by local authorities that my right hon. Friend reeled off. The hon. Gentleman offered to assist. What power does he think he has as an Opposition spokesman for Wales? He has no power, and local authorities in Wales can tell him to go to kingdom come.
Mr. Ron Davies: I suggested to the Secretary of State—it was noticeable that he did not respond—that he should follow the example set by his Cabinet colleague, the Secretary of State for Scotland. There is a mandatory scheme in Scotland. I told the Secretary of State that, if he were minded to introduce appropriate legislation, the Opposition would assist its passage through Parliament.
Sir Wyn Roberts: We are talking about directly elected authorities. Surely there is a tradition in Wales that our elected bodies are responsible, and primarily responsible to their electors.
Mr. Davies: Get away.
Sir Wyn Roberts: I hear what the hon. Gentleman says. Is he referring to the record of Labour local authorities in Wales? Is he not proud of that record? Does he think that there is a great deal to be criticised about the behaviour of his directly elected local authorities in Wales? Does he think that we must take mandatory powers to restrain them?
Mr. Davies: The answer is simple. If the Secretary of State is so concerned about abuse, why does he not do something about it? My party's position is clear. If there are abuses after the next election, Labour will act to stop them.
Sir Wyn Roberts: I am glad to hear that.
There should not, of course, be the abuses that we have heard about. Local authorities are directly elected and they should behave responsibly. The hon. Gentleman and the Labour party clearly have in mind a considerable increase in local authority spending. They are doffing their caps to higher spending. I hope that council tax payers in Wales will take account of that.
We are discussing an important statement for local government in Wales, it being the first for the new unitary authorities. There should be a saving as a result of reducing two tiers of local government to one. I am sure that there will be a reduction in due course. I am glad that my right hon. Friend the Secretary of State has been able to increase the permissible spend by about £85.6 million, or 3.1 per cent., for next year. I am grateful for the transitional funding that he has provided. My guess is that the new authorities will do well and make a good fist of their responsibilities in time.
Unfortunately, the new authorities have a cloud on their horizon in the shape of the Welsh Assembly that has been proposed by the Opposition and confirmed last night by the right hon. Member for Sedgefield (Mr. Blair), the leader of the Opposition. If the unitary authorities are to have their financial allocations decided by the assembly, I can foresee endless troubles ahead. It will be devil take the hindmost—in other words, devil take the worst represented, sparsely populated rural areas.
The equality of treatment secured in Wales by the complicated formulae that are before us will disappear before the massed ranks of the assemblymen from the heavily populated areas. Couple that with the disparity caused by local control of commercial rates, and we have a scene set for civil strife such as we have not seen since the middle ages. If we in the north suffer too much in the proposed scenario, I am sure that we shall produce our Owain Glyndwr, who will take over Caerphilly castle and throw out the robber baron.
The mind boggles at the prospect of the proposed assembly dealing with local government expenditure throughout Wales. Unfortunately, however, the prospect is real enough, as is the unfairness that may result. My right hon. Friend and his officials at the Welsh Office

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hold the balance between authorities. They are there to ensure fairness in the distribution of resources throughout Wales.
I ask a key question, which I hope the hon. Member for Caerphilly will answer: who will perform the function that I have described if we have an assembly to rule us? If the hon. Gentleman cannot answer the question now, I hope that he will at least give it some consideration. The assembly will be an extra tier of government, and extra tiers do not come cheap. It will have to be paid for in some way, probably with money that might otherwise be spent on local Government services, or perhaps on the health service. Both areas are major consumers of Welsh Office money.
If we are to have an all-Wales dimension to local government, there is much to be said for developing the role of the unitary authorities. We have already established by statute the consultative council that has responsibility for local government finance, with which my right hon. Friend the Secretary of State discusses resource issues in advance of a settlement. Possibly these discussions need to be amplified. In that context, perhaps there should be greater scope to deal in more detail with specific responsibilities such as education or social services. That is one possibility. It would not be impossible to devise a similar forum for the health service.
We carry responsibility. Whatever happens in local government must be reconciled with our parliamentary system, which must always have ultimate responsibility to the electorate. We would be foolish to try to escape that responsibility by foisting it on others.
We shall hear a great deal about particular needs that should be met, and needs that will have to be paid for. I was delighted to hear the announcement by my right hon. Friend the Secretary of State about Theatr Clwyd. We must remember that those who demand more spending object to council tax increases in the same speech, and almost in the same breath. More expenditure seems to be fine providing that someone else is paying for it. I hope that that is not our approach in our private lives. Unfortunately, it is one that some of us seem to regard as acceptable in our role as public advocates.
The settlement is fair and as sound as we could wish it to be. It represents a challenge to the new authorities to secure good value for the money that the Government, through the taxpayer, have given them.
5.19 pm
Mr. Barry Jones: I am glad to follow the right hon. Member for Conwy (Sir W. Roberts), but I disagree with his master classes. My speech will be briefer than his.
There are many large aging council estates in my constituency and they need urgent regrading, upgrading, modernisation and repair. Built before and after world war two, they are in real need of investment. In the townships of Buckley, Saltney, Shotton, Garden city and elsewhere, windows, doors and roofs are rotting away. My constituents increasingly despair of the situation. Alyn and Deeside district council has a good housing record, but its problems, as I have seen when visiting the localities, are very real indeed, and the new Flintshire county council will inherit them.
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The terrible cold and ensuing damp, and the mountainous snow and a chilling cold wind have turned my constituents' homes into iceboxes. The cold is literally making some of my constituents who are trapped in their houses ill. I know of distraught mothers who feel that they cannot let their youngsters sleep in bedrooms that are without central heating. The wind and frost penetrate their rooms. Mould grows on the walls of the bedrooms and ice forms on the windows.
Any youngster prone to asthma or any bronchitic disorder does not need those conditions, and neither do elderly tenants who are prone to arthritis. Hundreds of my most respectable constituents dread winter's advance, particularly after the terrible weather that we have had. They are in severe difficulties. In less serious conditions, I have received petitions from constituents in the townships.
Will the Secretary of State give serious consideration to the release of council house sales receipts that have accrued in my local authorities, as the authorities wish to invest them only to bring relief to the beleaguered families that I have described? It would be a powerful intervention if the right hon. Gentleman did that. If he does not do that now, will he do so in the near future?
In terms of the schools service, will the Secretary of State undertake to fund the teachers' pay settlement in full? If he were to say that he will do that, the new unitary authorities would be more confident that they could tackle the real problems that they know that they will inherit. I do not wish to see emergency meetings of school governors and parent-teacher associations desperate to bail out their local schools from the financial problems that they envisage. Nor do I want pupils with special needs to lose. I note the point that my hon. Friend the Member for Caerphilly (Mr. Davies) made. All of us could give examples of these problems.
I do not want any youngster with special needs to lose as a consequence of the defects of this settlement. I do not want even more pressure to be put on class teachers, who are groaning under the incessant demands of Ministers issuing their latest and ever more demanding curriculum fiats. It is time for Ministers to stop putting the pressure on class teachers. They do a good job. They are doing their best, and the Government have gone too far. Stability is needed and it is time for the Government to rest their case for further change. The morale of class teachers is very low, so the chance of our children getting the best start in life is diminished.
It is the fate of the new unitary councils to start their uncertain lives desperately short of money. It is a very cynical scene that they inherit.
Mr. Nigel Evans: Will the hon. Gentleman give way?
Mr. Jones: No, I hope to conclude shortly.
It is a cynical scene. Grants will be cut. The council tax is certain to go up, and will do so in a big way. Services to our constituents—the taxpayers—will be cut. Labour Members know that Ministers on the Treasury Bench have not delivered a top-class financial settlement. We believe that they must take responsibility for these serious shortcomings, and at the very least, to help our new councils, undertake to pay the teachers' salary increase in full.

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In an election year—that is what we are looking at in the new financial year—the Government expect the councils to carry the blame for the large increases in council tax. In my view, the new Flintshire county council deserves better from the Government, and the large-scale increases in the council tax will surely be seen at home in our constituencies as the consequence of inadequate ministerial allocations.
5.26 pm
Mr. Walter Sweeney: First, in reply to a point made by the hon. Member for Alyn and Deeside (Mr. Jones), who seemed to be following the precedent set by the hon. Member for Caerphilly (Mr. Davies) in not taking interventions, I should point out that there is a clear trade-off between the level of teachers' pay and the number of teachers who can be employed. That is the economic reality of the education budget, and we ignore it at our peril and to the detriment of our education system.
The hon. Member for Caerphilly clearly believes that interventions can be accepted only from hon. Members who represent Welsh constituencies; yet he refused an intervention from me and subsequently took one from my right hon. Friend the Secretary of State, so there was a certain illogicality there. He then used my right hon. Friend's intervention to argue with something that my right hon. Friend had not said. By that stage I was becoming a little confused by the hon. Gentleman, and not for the first time.
The hon. Member for Caerphilly did not like my right hon. Friend's reference to a Labour authority wasting money on a new mayoral chain when the outgoing authority had a perfectly good chain that could have been used. Perhaps that performance by a new Labour authority—I suppose that they are all new Labour authorities these days—can be contrasted with the new Labour authority in Vale of Glamorgan, which is abolishing the mayoralty entirely. Meanwhile, the Leader of the Opposition appears to be espousing the concept of super-mayors. I am not quite sure whether it is new Labour to abolish mayors, buy them new chains or create super-mayors, but no doubt things will become apparent when Labour policy develops in due course.
With regard to rate support, I believe that the settlement is a very good one, against the background of the Government's determination to limit Government spending to a level that the taxpayer can afford. In Wales, we seem to be doing particularly well out of this: total standard spending is up by 3.1 per cent. in 1996–97.
As I am particularly concerned about the level of police funding, I am pleased to learn that the Dyfed police grant has risen by 4.9 per cent. since 1995–96, to £24.2 million. The Gwent figure of £31.3 million represents an increase of 4.5 per cent., and the North Wales figure of £34.7 million an increase of 5.1 per cent. I have saved the best till last: South Wales has been given £75.2 million, an increase of 5.4 per cent. The increases were even larger last year. The South Wales police benefited from a 15 per cent. increase, and the further increase of 5.4 per cent. is clearly good news, notwithstanding what was claimed from the Opposition side earlier.
Mr. Alex Carlile: As the hon. Gentleman is talking about the police, will he give
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us his opinion of Government policies which have led to a reduction of 1,333 in the number of police officers nationwide since 1992, when an increase of 1,000 that year had been promised?
Mr. Sweeney: In my area, the reduction in real-terms spending on the police is attributable to the three Labour-controlled county councils which provide the membership of the South Wales police authority. Significantly, since the Government hypothecated spending on the police in Wales the police have received a substantial increase in funding. If those Labour authorities had complied with Home Office recommendations on police funding levels, police funding in Wales would not have fallen behind in that deplorable way.
As a general principle, I think it right for local authorities to decide their own spending priorities. However, because of the Labour party's woeful neglect of spending on the police in Wales—which was against the interests of all Welsh people and a good illustration of Labour's being tough on crime in its rhetoric but soft on crime in reality—the Government had no alternative but to hypothecate spending on the police to develop the improved police force that Conservative Members are determined to achieve.
Total standard spending in Wales this year is £984; in England, it is £922. The aggregate external finance is £864 in Wales, and £832 in England. That shows that the Conservative Government see spending in Wales as a priority if services are to continue to improve. It is unfortunate that so many of the local authorities are Labour controlled as the public are not receiving the full benefit of the money because the Labour party is more interested in mayoral chains and increasing councillors' allowances than in improving efficiency and the quality of services.
Although the council tax is likely to rise substantially in Wales, it will still be much lower than it is in England. That will be worth remembering when people receive their council tax demands.
Mr. Touhig: Does the hon. Gentleman share the apparent triumph with which the Secretary of State announced this afternoon that he would place a 25 per cent. ceiling on increases? Without the extra help that the Secretary of State has now offered, council tax in my part of the Caerphilly county area would have risen by 68 per cent. What sort of settlement is that?
Mr. Sweeney: The hon. Gentleman has made an interesting point. I infer from what he said that he would like central Government to impose a lower limit on council tax increases. That would considerably reduce Labour local authorities' freedom. I am surprised to hear such an argument from the hon. Gentleman.
Mr. Ainger: Will the hon. Gentleman give way?
Mr. Sweeney: No, I have already given way three times—unlike some Opposition Members.
Let me make a political point about capping. In the interests of all the people of Wales who pay council tax, my right hon. Friend the Secretary of State has maintained a capping system. As a Conservative, I wonder whether

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it might have been a better political move for our Government to do away with capping for this year only in the run-up to the election, thus demonstrating to all the electors in Wales how much Welsh local government spends when it is run by the Labour party. They would then have a good idea of what they could expect under a Labour Government.
My right hon. Friend, however, is too responsible to act in that way. He is intent on protecting the Welsh people against the profligacy of Welsh councillors. Having made my political point, I accept my right hon. Friend's judgment; but I hope that the Welsh electorate will give careful consideration to the implications of Labour demands for the relaxation or abolition of capping. If such action were taken, our council taxes would go through the roof.
The total level of standard spending is tough but realistic. When the poll tax was introduced, Labour local authorities used it as an excuse to raise spending, knowing that they could then falsely blame the Government for the increase in poll tax bills. That is why capping should continue. I would not like the Conservative Government's reorganisation of local government—with widespread cross-party support—to be used as something with which to bash the Government over the head. As it is, local authorities will be under pressure to be careful about how they spend and which services they support.
The hon. Member for Alyn and Deeside rightly stressed the importance of education. I welcome local authorities' continued freedom to give priority to education spending. Returning to the subject of the police, I warmly welcome what my right hon. Friend said—
Mr. Win Griffiths: He has said that already.
Mr. Sweeney: It is worth repeating. [Interruption.]
Madam Deputy Speaker: Order. There is too much running commentary from the Opposition Benches.
Mr. Sweeney: It is worth repeating, because I have another point to make about the police. The funding formula for police pensions has been changed: the Government have increased the allocation to 12 per cent. of available funding. That will help to allay police fears about their pensions. The new sparsity element in the funding formula will help the police to cater for the special needs of isolated, thinly populated rural areas.
More support for local government expenditure, which Opposition Members presumably ask for—although they have not been prepared to specify how much additional expenditure they advocate—would have meant cuts in other Welsh Office projects such as those on health. Presumably, Opposition Members would not have wanted any such cuts yet that is the logic of their request.
Changes in the draft notional amounts may have adversely affected the Vale of Glamorgan compared with Cardiff. I should be grateful for an assurance from my hon. Friend the Minister that nothing that has been done in amending those amounts will unfairly prejudice my constituents in the Vale of Glamorgan.
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I congratulate the Government on today's statement by my right hon. Friend. He has produced an excellent deal for Wales.
5.40 pm
Mr. Alex Carlile: I offer you, Madam Deputy Speaker, what I hope you will agree is a sincerely felt apology for a kindly but inappropriate gesture as a Conservative Member was departing from the Chamber—a Member representing a non-Welsh constituency. There is, however, a good deal of frustration among Opposition Members at the efforts of Members who represent English constituencies to intervene in debates concerning Wales alone. Even the hon. Member for Ribble Valley (Mr. Evans), who has impeccable personal Welsh credentials, attempts to intervene as a Welsh Member of Parliament manque in such debates. If he wishes to be not a manque, but a real Welsh Member of Parliament, he should attempt once again to be elected to represent a Welsh constituency, although I doubt whether he would succeed.
The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): Will the hon. and learned Gentleman give way?
Mr. Carlile: Of course I will give way to the Minister's brief on the Front Bench.
Mr. Jones: I feel I have been promoted, but I am grateful to the hon. and learned Gentleman for giving way. If he has an apparent prohibition on non-Welsh Members speaking in the debate, I am curious why he ducked last year's debate and sent the hon. Member for Newbury (Mr. Rendel) to substitute for him?
Mr. Carlile: The hon. Gentleman knows that, in these debates, time is at a premium and that it is extremely unhelpful if Back-Bench Members—
Madam Deputy Speaker: Order. As time is at a premium, it would be more appropriate if the subject in hand were dealt with rather than the question of whether Members of Parliament should or should not put forward their names. Everyone knows that all are equally free to do so.
Mr. Carlile: Of course I will not pursue the matter, Madam Deputy Speaker, save to say that it is extremely important that Welsh Members should have the first opportunity to speak in these debates. Those of us who catch your eye, Madam Deputy Speaker, are those who are called.
I should like to discuss the position in the Powys unitary authority in the next 12 months. I hope that the Secretary of State for Wales and the Minister replying to the debate will agree that that authority is not smitten by political prejudices of one sort or another. It is politically independent and is attempting to do an honest job and to provide as good a level of service to its inhabitants as possible.
Powys unitary authority is a victim of the use of what appears to be an outmoded formula in the complex circumstances of the reorganisation of local government in rural mid-Wales. In real terms, the real loss to the

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authority for the forthcoming year is £4 million. That money must be cut from somewhere. It will be from services that affect people. Will the Minister tell the House and the people of Powys why the Government are not only forcing a substantial increase in council tax—although, in Powys, that will be limited to about 20 per cent.—but accompanying that with a cut in services? What services will be cut?
The first thing that Powys county council has sought to cut is administration. It has succeeded in removing £2.5 million from its administrative budget. One's first reaction to that might be to say, "That is very good. We can do without a layer of administration. That is a real saving and it will not affect the services to people." But that is not true. A £2.5 million cut in administration costs in a rural county such as Powys means a significant reduction not only in jobs in local government, but, almost certainly, in the efficiency and response of services provided to local people.
It is one of the facts of political life that Welsh local authorities have little discretion. I do not applaud a position in which central Government give Welsh local government so high a proportion of its expenditure that they have local councils by the throat. I would much prefer a different local government financing mechanism.
We are faced, however, with the current mechanism. That means a reduction not just in jobs as a result of those administrative cuts, but in other services. In my constituency, there is a bridge that is used by school buses, agricultural vehicles and other traffic. Without notice, it was closed and, overnight, its weight limit was reduced. Now, neither lorries nor school buses can go over it. As a result, buses taking children to school must make a 21-mile detour twice a day. That has led to well publicised and not in the least surprising protests by parents of children who travel on those buses. Meanwhile, the highway authority says that it had to reduce the bridge weight limit to make it safe, but that it cannot give any idea of when the bridge will be repaired.
In the vicinity of Garthmyl, near Montgomery in my constituency, a metal Bailey-type bridge has stood for the whole of the 16 years that I have lived in Montgomeryshire and, I believe, for about 20 years before that. There is no answer as to when that will be repaired. The highways budget, which is extremely important for people's mobility in a rural area such as mine, should not face such privation.
I will give two further examples of services that are bound to be cut. The trading standards authority, which is extremely important in rural Wales because of the animal health provisions that it has to enforce, faces severe financial restrictions. Obviously, animal welfare and health take priority for that authority. As a result, virtually no money will be left for the other trading standards functions.
In education, it is inevitable that, as elsewhere in Wales, the increase in teachers' salaries, which teachers merit—many of them do not have the professional status that they deserve compared with other professions and occupations—will mean that class sizes will increase. As a result, schools will not be as good. We are lucky: we have good schools in rural Wales, but why—because the Government do not give them funding—should there be a reduction in education standards and an increase in professional dissatisfaction among teachers?
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I do not want to take up any more time. I have merely given some examples of the sort of cuts that will have to be made even in a county about which no Minister can make accusations of political prejudice, or have preconceptions on political lines.
That is what is happening in Wales, as objective judgments show. That is what is happening in rural areas where politics plays no major part in the making of spending decisions. That simply is not good enough—for rural Wales, at least. Ministers must try to find a new and fairer formula which takes sparsity and rurality properly into account.
5.49 pm
Mr. Nigel Evans: I am grateful for the opportunity to take part in this important debate, and also for what the hon. and learned Member for Montgomery (Mr. Carlile) said about my Welsh credentials. I do indeed feel fully qualified to make what I hope may be a useful contribution to the debate.
The most significant aspect of the speeches by Opposition Members was especially true of the speech by the hon. Member for Caerphilly (Mr. Davies). It was, as my right hon. Friend the Member for Conwy (Sir W. Roberts) pointed out, the fact that the hon. Gentleman signally failed to answer the simple question that the Secretary of State asked him—if the Labour party is unhappy with the settlement, how much more money would a future Labour Government provide?
That was a simple question, and although the hon. Gentleman did not allow me to intervene on him, I should be more than happy to allow him to intervene on me now, if he is prepared or able to tell a listening nation how much extra money Labour would give. Am I speaking slowly enough? Is the question simple enough? No.
The time that I spent listening to the hon. Gentleman's speech was one of the longest 18 minutes of my life, because in all that time he said so little. He carped a lot, but failed to answer the questions. I do not know whether he has ever been on "Question Time" on BBC television, but if he did appear on that programme it would be a dull affair, because members of the audience would ask the questions, but he would fail to answer them. He is not even prepared to come to the Dispatch Box now.
I was a county councillor in Wales for six years, and I also have a retail business in Swansea. I have lived 34 years of my life in Wales. When I was on the county council, we had consultation periods for business men to come to the local authority and plead with us to keep the business rates as low as we could. When business rates shot through the roof, those businesses, many of them operating at the margins, found it difficult to find the money from their profits.
What a farce that consultation exercise was for many of the business men. After they had made their plea and explained to the leaders of the local authority the problems their businesses faced, and the difficulty that they would have in finding extra money to meet the bills, the local authority put the business rates up through the roof. That was a tremendous slap in the face for local businesses in difficult circumstances.
I am delighted that control has now been taken away from local authorities, to prevent those businesses, which were making such great efforts and providing jobs in

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Wales—and throughout the rest of the country—from being penalised. They are, of course, the lifeblood of many small villages.
A lot is said about levels of council tax, and we have heard much carping from Opposition Members. However, council tax rates are much lower in Wales than in England; they are certainly lower in Wales than in my constituency. It is also fair to say that, if areas were represented by Conservative-controlled local authorities, their council tax would be that much lower than if they were run by Labour authorities, as many now are. My advice to people in Wales is to reconsider what local authorities spend on their behalf, and at the local elections to choose Conservative councillors, who will spend their money efficiently.
I saw much wasteful expenditure when I was on West Glamorgan county council—
Mr. Paul Flynn: Will hon. Gentleman give way?
Mr. Evans: No, I shall not, because I tried to intervene several times on the hon. Member for Caerphilly and others, and was told that I could not do so. I am simply doing exactly the same to Opposition Members. The sooner they stop carping, the sooner I shall finish my speech, and they will have the opportunity to have their say.
Mr. Alan Williams: Will the hon. Gentleman give way?
Mr. Evans: I shall not give way. The right hon. Gentleman—
Mr. Williams: On a point of order, Madam Deputy Speaker. In interjections and during his speech, the hon. Member for Ribble Valley (Mr. Evans) has referred to the constituencies of my hon. Friends and myself. I am sure that you will agree that it is a normal courtesy that, when a Member refers to other Members' constituencies in the House, especially if he makes political points about them, he should then give way to one of the local Members.
Madam Deputy Speaker: That may be a courtesy, but it is not a requirement.
Mr. Evans: I am grateful to you, Madam Deputy Speaker—[Interruption.] I tried to intervene several times during the debate. The right hon. Member for Swansea, West (Mr. Williams) came into the Chamber only recently. He has not been here for the entire debate, although I am sure that he has good reasons for not having been here. I am not prepared to give way to him now.
We have heard some horror stories about local authority expenditure, and of course I saw what happened when I served on the local authority in West Glamorgan. Expenditure on chains of office, new buildings and councillors' allowances was appalling. Last year, I condemned the members of Mid Glamorgan council for trying to put their expenses up through the roof in a disproportionate manner. Their snouts were firmly in the trough.
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The Labour party may talk about fat cats, but I can talk about the fat cats of Wales—and they are not in business but in Labour-run authorities. The Labour party should do all in its power to condemn local authority members for trying to increase their expenses.
Mr. Alan Williams: On a point of order, Madam Deputy Speaker.
Madam Deputy Speaker: I trust that this is a genuine point of order.
Mr. Williams: It is, Madam Deputy Speaker. The hon. Member for Ribble Valley is utterly misusing the procedures of the House of Commons by making snide and pathetic attacks on people who cannot defend themselves, and then being afraid to give way to those who seek to defend them.
Madam Deputy Speaker: That is not a point of order for the Chair.
Mr. Evans: Thank you, Madam Deputy Speaker. I hope that that was not the intervention that the right hon. Gentleman attempted to make before. If it was, I am delighted that I did not give way to him.
As for education expenditure, I hope that local education authorities will pass the money to the schools to spend, and not keep any of it back for central administration. It was instructive to hear Opposition Members talking about cutting services. They talk about front-line services, and about the customers who will suffer if they lose those services, yet not one of them talked about cutting administration and central bureaucracy.
My advice to Labour-run local authorities is to re-examine their internal running costs, as everybody has had to do, and to find ways of improving efficiency as much as they can. They should not make local service customers suffer simply to make a political point. There was a 45 per cent. increase in expenditure on nursery education between 1979 and 1994, and a 54 per cent. increase in expenditure on secondary education in Wales over the same period.
However, the increase in expenditure is not the only important factor. Also vital is the testing that goes alongside the education that young people receive. The Labour party opposed that policy, and also the introduction of the national curriculum, which is improving standards all the time.
I was pleased to learn of the extra expenditure on law and order. On top of the extra 11 per cent. last year, that is excellent news, especially considering the fact that, when the Labour party was in power, spending on the police was one of the categories that suffered greatly.
I hope that the extra expenditure will result in more police on the beat, particularly in rural areas, and the utilisation of new technology, such as closed circuit cameras, which are extremely useful in reducing crime. I hope also that there will be a continuation of the civilianisation of office posts, which will release policemen and policewomen and enable them to go back on the beat.
Compulsory competitive tendering in local authorities has made authorities far more efficient, and has resulted in those authorities being able to save money to spend on

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services for local people. The Labour party is totally opposed to that policy, and would chuck out a policy that has saved many millions of pounds while providing excellent services to local people. Labour would replace the system with expensive in-house bids, from which the public would not benefit. That is a spiteful and dogmatic move by Labour that is not in the best interests of Welsh people.
My right hon. Friend the Member for Conwy posed an important question about Labour's pledge to introduce an assembly. We know that there are no current plans to provide a Welsh assembly with tax-raising powers, such as are envisaged for the Scottish assembly. Labour Members who believe in the principle of an assembly ought to ask why a Scottish assembly will be allowed to raise tax, while the Welsh will not be trusted to do so. Having seen the way in which Labour local authorities operate in Wales, I can fully understand why the Labour party is scared of allowing a Labour-run assembly—as Opposition Members would probably see it—to raise taxes.
In conclusion—[HON. MEMBERS: "Hear, hear."] I am glad that Opposition Members are enjoying my speech. The speaker who follows me from the Opposition will have an opportunity to tell the House how much extra money he wants to see being spent in Wales, and where he would get that money from.
6.1 pm
Mr. Elfyn Llwyd: In reply to the hon. Member for Ribble Valley (Mr. Evans), there are one or two things that my party would do to save money and put it into local government. We would not be paying for nuclear arms for one thing, and we would not be stuffing money into the pockets of people on quangos for another. We would review the operation of the standard spending assessment, which works to the detriment of many councils in Wales. I have no doubt that we would look at other matters over time.
The Secretary of State announced on 18 December:
"the revenue settlement for local authorities for 1996–7 is a fair one in the current climate".
In his press release—in the Welsh Office, government is by press release now—he said that it was based on his view of what the real needs of local government were at the appropriate level. I believe that either he or every single council in Wales is absolutely wrong.
In his apologia for the settlement, he prayed in aid— again by press release—the notion that there would be more use of the private finance initiative, with £360 million of capital investment being produced in the next three years. Where on earth did he get that figure from? If it was conjured up by his merry band at the Welsh Office, he should be circumspect about quoting it.
For example, the Welsh Office recently astounded the new Denbighshire authority by using an inaccurate measurement of the length of roads in the authority. That affected the authority's SSA, and the Denbighshire authority is currently £600,000 out of pocket. So much for a careful evaluation of the spending needs of Welsh local government.
The overall situation in Welsh local government is that authorities feel that they cannot make any further cuts. The latest settlement is again a substantial cut in real
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terms. It comes after four years of cuts, and authorities now have virtually nothing left to cut. Let us examine the evidence. I referred to Denbighshire, and that authority is very concerned that precepts from the new fire authority—imposed on Denbighshire by the Government—will be very heavy.
The authority is concerned about the spiralling cost of reorganisation. Those of us who served on Committee on the Local Government (Wales) Act 1994 warned the Government that their figures for the cost of reorganisation were pie in the sky. Here we are again—1974 revisited. The new authorities are being burdened by crippling debts.
In a parliamentary answer, the Minister of State said that £41 million-plus was being allocated for 1996–1997 to cover
"a proportion of councils' expenditure on compensation, accommodation and information technology."—[Official Report, 5 February 1996; Vol. 271, c. 55.]
I do not know where the figure of £41 million comes from, but I hope it is not from the same person who worked on Denbighshire's SSA. The Welsh Office is now graciously saying that councils can spend £41 million of their own chargepayers' money to offset part of the cost of reorganisation. In fact, the Welsh Office does not have a clue about the total cost. It is in the dark—as is everybody else, unfortunately.
This is another abject display of the failure of the Welsh Office adequately to provide for the needs of Wales. The huge rise in the cost of community care has clearly not been adequately addressed by the Government. The increase in the 1996–1997 settlement on last year's is only 1.8 per cent., while the Government's own figures forecast that prices will rise by 2.5 per cent, resulting in a further squeeze on local authorities.
My authority, Caernarfonshire and Meirionnydd—soon to become Gwynedd—has been allocated £365,000 extra cash, leading the council to the inescapable conclusion that it must cut services substantially and impose large increases in council tax for 1996–1997. The current settlement is, in fact, a 1.3 per cent. reduction compared with the 1995–1996 budget. By applying the standstill budget—which comes into effect after four years of cuts—the budget exceeds the capping limits by £2.66 million.
Therefore, my local council has basically three operational choices. First, it can cut services. That will mean closing rural schools and leisure centres, and making teachers and those in social services redundant—workers in both those sectors, I might add, do splendid work, and are already at full stretch. Secondly, it could capitalise its revenue expenditure, and that could obviously entail the deferment of much-needed capital projects. Thirdly, it could use some of the balances. The amount available in Gwynedd will not be known until September, but in any event it will only defer the need to cut, and may give a skewed budget figure to work on next year. Incidentally, such a move would produce an artificially low level of council tax, and would defer the need for a more substantial increase.
There is no doubt that this council's dilemma is typical in Wales. Basic services are under threat, and no one should be under any illusion about who is at fault. In their craven urge to hold on to power, the Tory Administration are happy to cut services for the young and the elderly—

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and leisure, education, community care and social services, and public transport—while voting for a tax-cutting Budget.
Let no one forget also that the Labour party acceded to the cuts. By allowing the Tories to cut income tax, Labour concurred with the Government's local government cuts. Any fool can realise that these must be paid for, and it is a shame that Labour did not adopt a principled approach, like my party. When Labour councillors blame it all on the Government, they should think again about what Labour should have done—and perhaps, in days gone by, would have done.
Mr. Ron Davies: The hon. Gentleman will accept that the Labour party voted against the Budget that cut income tax last November.
Mr. Llwyd: A handful of Labour Members did, but officially Labour did not.
Mr. Davies: I want to make it absolutely clear that the Labour party officially voted against the Budget last year.
Mr. Llwyd: I beg to differ. The Labour party abstained on that vote—a few of the more principled Labour Members went through the same Lobby as I did. But I will leave it there for the time being.
Anglesey county council has had its planned spending capped at £61 million—a cut of £2 million on last year's budget. Again, there will be cuts. Carmarthenshire county council is facing a difficult future. The options being discussed include cutting the repair and maintenance of schools, increasing the cost of school meals, and shutting training centres. In addition, there is a real threat to teaching jobs. A 3.5 per cent. reduction, which is what they are facing, could mean cutting 68 teaching jobs. In Rhondda Cynon Taf, there is talk of increasing the cost of transport to schools and school meals, closing nursery schools, cutting the maintenance programme, closing small schools and reducing clothing and other grants.
So how can the Secretary of State honestly and sincerely state that his main priority has been to increase investment in schools? He says that Wales benefits from the success of our economic policy along with the rest of the UK, but how can that be, when the overall capital package for Welsh local government has been cut by £17.5 million, with cuts in housing, roads and transport, in strategic development schemes, and in personal, social and all other services? How can those cuts honestly relate to a so-called booming economy?
The paltry increase in the education budget will have no effect on the strangulation of local authority education. That disgraceful emaciation is made even worse by the fact that some £6.6 million is being allocated for the ideologically driven, elitist, popular schools initiative—in fact, £2 million more for that initiative, rather than an overall increase for the whole of the education budget.
That is where the Government's priorities lie. No doubt they will blame education standards on whichever political hue they target at the time. That the Government have set their face against local government is accepted by all. Surely the settlement is excellent evidence for that. I regret saying it, but I have no doubt that class sizes will
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increase, teacher numbers will decrease, public transport will be cut, and social services will undoubtedly suffer a hefty cut. Libraries will close, leisure centres close or be run part-time, and even residential homes will close. Those evils, and many more, will follow this settlement, as night follows day.
In Aberconwy Colwyn, for example, the story is much the same. I received a plea from the Aberconwy and Colwyn women's aid group last week. Despite the amount of work it is doing, and the huge and regrettable increase in demand for its work, that work is in peril, and its very existence brought into question.
The imposed cuts by the Welsh Office will risk the lives of some people. What is even more sure, they will affect the quality of life for tens of thousands of people throughout the length and breadth of Wales. The Secretary of State says that he has thought carefully about the settlement. I say to him, "Think again," and the people of Wales say, "Think again."
The settlement is unworthy, and an insult to Wales. It is small wonder that the Conservatives fared abysmally in the recent local government elections. They probably feel that they have nothing to lose by starving local government in Wales, but the people of Wales will not allow the wool to be pulled over their eyes any longer. The Government will pay heavily for their cynical approach to the delivery of vital local services. Of late, there has been talk of a Tory-free Wales. Surely that speculation must become a reality within the next 12 months.
6.13 pm
Mr. Barry Field: I cannot follow the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and allow him to get away with that. I served on the all-party Select Committee on the Environment, and when we considered standard spending assessments, we found a degree of objectivity in them and that they were not slanted towards the political control of any authority. The hon. Gentleman knows as well as I do that, in the past 20 years, local government has no longer been seen as being government locally, but as a method and vehicle for bashing central Government and, in many cases, as a device for entering this House. A look through the antecedents of many hon. Members will show that there has been a considerable rise in the past 20 years in the number who were councillors, including myself. Sadly, instead of serving their local communities as they used to do—they had a great and proud history—councils have become highly politicised branches of their local parties and are more interested in carping against central Government than in delivering high-quality services to their local council tax payers.
I am taking part in this debate because Welsh Members often argue that there should be so much lower council tax charges in Wales because of pay levels and the general gross domestic product in that area. I refer my hon. Friend the Minister to a written reply in column 118 in today's Hansard. The reply sets out—I do not know whether similar comparisons are available for Wales—the number of normal, basic rate and higher rate taxpayers in every county in England. He will not be surprised to learn that the Isle of Wight is at the bottom of that league.
Having had a lot to do with Wales, particularly when the Isle of Wight unfortunately lost a company which relocated there, I guess that the hon. Gentleman will find

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that Wales is much higher up the list of averages than many areas in England. Indeed, we learn from the settlement tonight that there is almost a £200 difference for a band D property in Wales, compared with England. That is the subsidy that English taxpayers are putting into Wales. I do not think that that can be justified. Welsh Members regularly tell us that that reflects the lower price of property, to which I say again, make the comparison with the Isle of Wight. I do not think that that argument holds water either.
My hon. Friend the Minister who will reply to the debate may not know—it is probably a well-kept secret— that, until the advent of unitary authorities, the Isle of Wight used one of the Welsh authorities as a comparison, as a typical authority of a similar size for statistical purposes. In every case, we found that, by and large, the Welsh Office was doing better for Welsh authorities than we expected with our English settlement.
We have heard much from Opposition Members about capping, but Welsh Office expenditure on local government amounts to 45 per cent. of its total expenditure. That tells me that the Secretary of State for Wales is certainly not ignoring local government as the Opposition have suggested throughout the debate, but giving it a fair deal out of his total budget for Wales.
I hear the argument about capping propounded by hon. Members on both sides of the House these days, but hon. Members should remember that about a quarter of total expenditure in the United Kingdom goes on local government. There is no way that one could let that rip if one is serious about inflation and wants to keep it under control as this Government do.
With his experience of Wales, my hon. Friend the Minister made a very good case on the uniform business rate. Will my Front-Bench colleagues tell me why, when it was enshrined in the uniform business rate legislation that it was designed to help manufacturing industry and is required to do so, we do not continually stuff that fact down the throats of the Opposition? For years, all that we heard from the Opposition was, "What are the Government doing for manufacturing industry?" The uniform business rate has been one of our greatest successes, especially where, as around the borders of Wales, businesses in high-rate areas were often siphoned off into nearby lower-rate areas. That compounded unemployment. I know that from my experiences on the Isle of Wight.
One helpful thing about the uniform business rate is that it has created uniformity for businesses. More than that, it allows Welsh business men to plan ahead when they draw up their budgets. The sad fact is that rates are the one form of taxation that have to be paid whether the business is making a profit or a loss. That has always been the case. The other problem was that businesses always had to second guess what local councillors would do and could not properly plan their budgets. My right hon. and learned Friend the Chancellor of the Exchequer has announced the business rate in his Budget. That is helpful, especially for small businesses that work on such tight margins these days because competition is so strong. They know precisely what their business rates will be and allow for them in their budgets.
The hon. Member for Caerphilly (Mr. Davies) has left the Chamber, but he touched on a point about roads that rang a chord with me. I say to the Government that, as
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one gets to extremities of the kingdom, especially with local authorities that have no trunk roads and so do not get assistance from the Department of Transport, road surfaces tend not be as good as they are in other areas.
I bet any Welsh Member a tin of leek soup that he would find much poorer road surfaces on the Isle of Wight because of the way in which our transport supplementary grant has gone recently than he would find in probably any part of the kingdom. That is to some extent true as one goes from England to Wales. I hope that my right hon. Friend the Secretary of State will put forward in Cabinet the fact that we need to consider those authorities that find it difficult to maintain good road surfaces in sparsely populated areas.
Finally, I want to touch on allowances for councillors, a point which has been much vaunted in this debate. Can my hon. Friend the Minister tell the House—or place information in the Library about it—what precisely the allowances are for the new unitary authorities and what the councillors who have been elected to shadow bodies have fixed for themselves in allowances?
My understanding is that a number of councillors in Wales who have been elected to unitary authorities are already councillors on existing authorities. I hear from my friends in the valleys that they are drawing allowances on the old authorities and the new shadow authorities. They are getting a double dose of the taxpayers' money, which should be spent on the local community and not on them. If my hon. Friend the Minister cannot give me the figures when he replies, perhaps he could pop them in the Library or encourage me to table a parliamentary question so that we can discover how many hon. Members represent constituencies where councillors have their trotters in the trough of taxpayers' money.
Unfortunately, the hon. Member for Caerphilly is no longer here, but I have to tell my Welsh colleagues that he is known as Dai for diagnosis. He is all diagnosis and no delivery of the answers. Colleague after colleague has said to him, "Don't tell us how little, tell us how much you would give and how you would fund it." No answer came.
6.23 pm
Mr. David Hanson: I shall not follow the line of the hon. Member for Isle of Wight (Mr. Field). This may be a Great Britain Parliament, but there are Welsh Members who wish to speak about their constituency interests. If the Conservative party is so popular, why is their local council performance in Wales so abysmal? In my local council, three Conservatives were elected with 43 Labour members. We have had the acid test. The hon. Gentleman's philosophy has been tested in many parts of Wales and found to be dramatically lacking. I am sure that many Conservative Members with Welsh seats will find that that will come true at the general election.
I know that my hon. Friends also want to speak, so I shall make only a couple of points. I genuinely welcome the Secretary of State's movement on Theatr Clwyd. It was the least that he could do, given that the abolition of Clwyd county council caused the problem in the first place. The announcement will give a certain kick-start to the local authorities that neighbour Flintshire to enable them to contribute to the maintenance of this excellent facility in north Wales.
I pay tribute to Flintshire county council, which has immediately put £600,000 of local taxpayers' money up front to help support the retention of the theatre and to

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the members of Clwyd county council, the governors and Patrick Gilchrist, the theatre general manager, and his staff. They have had a difficult time over the past few weeks but played a strong role with me in presenting the case to Ministers for assistance.
My local newspapers, the Daily Post and The Chronicle, have also played a magnificent role in generating public interest. I have been overwhelmed with letters of support for the theatre. A sackful of Daily Post clippings awaits the Secretary of State. They will arrive on his doorstep even though he has made his announcement, and show community support for the theatre.
As I said in my earlier intervention, there is still a shortfall of between £300,000 to £400,000 in Theatr Clwyd's funding compared with what was given by Clwyd county council. While I know that Flintshire will make great efforts to make efficiency savings and ensure that more people come through the doors of the theatre and welcome the movement on Theatr Clwyd's debt charges, there is still a major shortfall. I hope that the Secretary of State's initiative will support the local council to find the funding from other sources. I hope that there will be opportunities to raise the matter again because, although I feel fairly confident about the theatre's future, I would still like to ensure that the present funding continues.
The Secretary of State's statement does what Conservative party statements on local government normally do. The Government cut the grant to local authorities, force local authorities such as Flintshire to face massive council tax rises and shift the balance of spending from central to local government and then maintain, despite all that, the charade of the capping system, which mitigates against local democracy. My local authority was elected with certain mandates. It does not behove the Secretary of State to impose a capping limit on my local authority, which may mean real-terms cuts in local authority services.
The Government's grant statement has reduced Government spending still further. In 1993–94, 64 per cent. of local government spending was met by central government. In 1994–95, it was 62 per cent.; and in 1995–96 it is 58 per cent. The reduction continues. Central Government support is being cut and local government's contribution is having to rise. When the council tax bills go through people's doors in April, the increases that have been made to maintain services will be, in large part, because of reductions of central Government grant.
In a written answer to the right hon. Member for Conwy (Sir W. Roberts) on 30 January, the Secretary of State stated:
"inflation remains low and the Government have made it clear that pay increases should be met from efficiency savings and other economies."—[Official Report, 30 January 1996; Vol. 270, c. 682.]`
The Parliamentary Under-Secretary of State for Wales (Mr. Rod Richards)indicated assent.
Mr. Hanson: I see the Minister nodding in agreement. That is all very well, but if teachers are offered a 4 per cent. pay rise it will be a further burden on local taxpayers and will mean that rates are increased or services cut to pay for things outside local authority control.
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The disaggregated budget in Flintshire is £113,729,000. Its SSA is £1.2 million less than that at £112 million. That is a dilemma for local authorities such as Flintshire. The current budgets of Alyn and Deeside district council, Delyn district council and Clwyd county council, which cover the new Flintshire authority, are more than what the Secretary of State has already said they should spend this year. What does he expect Flintshire not to spend money on that it is currently being spent on? Where will it reduce spending next year to meet the SSA target that the Secretary of State has proposed?
The SSA of our near neighbour, Denbighshire, is lower than its notional expenditure—£78 million as compared with £80 million. The SSA of another neighbour, Wrexham, is £98 million while its notional expenditure is £97 million. At current levels, in its constituent parts, my local authority is already spending more than the Secretary of State says that it should spend in the next financial year. That will present my local authority with difficult choices about whether to increase council tax, cut local public services or find alternative means. The problems will be the result of a poor settlement, which I shall be pleased to vote against this evening.
Those difficulties are fairly clear and straightforward. The county council at Flintshire will undoubtedly experience difficulties with its schools budget and its education funding for next year. I have already received representations from the North-East Wales Education Forum which has expressed grave concern over the potential for future funding of education next year in Flintshire. Local schools in my constituency have already expressed their concerns about education funding next year in Flintshire.
Flintshire county councillors are saying that, while they have the choice to determine their priorities and to spend as they will—as the Secretary of State and junior Ministers will no doubt say—they must deal with their notional expenditure level, which is £1.2 million more than the Government say they should spend. That shortfall will fall heavily on a number of services—of which education will be the most important.
Only this week I received a letter from a school pupil in my constituency who said that he had written to the Prime Minister to tell him that his school class is without paper on which to write letters or school material. That case was originally brought to my attention by a supply teacher in the school in Mold. If school pupils have no paper to write on, that is not just a problem for the local authority as it struggles with funding, but for the Secretary of State. It presents a genuine problem of the underfunding of local government services.
I disagree with the Secretary of State on the notion of capping. The idea of local democracy, of having local government reforms and of holding an election last year— where people from all political parties put forward their policies and programmes before local people—is negated by the idea that the Secretary of State, representing Richmond, Yorks, can protect my local ratepayers from the council that they have chosen to elect. That is a fundamental negation of democracy. Whatever the financial arguments about whether the council should or should not spend, the Secretary of State should do what the Conservative party preaches: trust the people. The people of Flintshire and the people of Wales have chosen certain authorities to fulfil certain election promises.

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It is a negation of democracy for the Secretary of State to say that he knows best and that he will put a limit on the council services to which my constituents and councillors can aspire. In his statement, the Secretary of State mentioned a notional amount of £113 million for my local authority and an SSA of £112 million. He should cease the capping regime. I shall vote against the settlement tonight because I disagree with the underfunding of my local authority and the principle of capping.
6.33 pm
Mr. Roy Hughes: We have just had a major reorganisation of local government and the wholesale creation of unitary authorities. Many of the areas that are now designated as unitary authorities do not have the resources to carry out such far-reaching functions. It seems farcical that there are now five directors of education in Gwent, where there was previously one.
The local government reorganisation is expensive, but the Government have willed the ends and we are now entitled to say that they must provide the means. Instead, as my hon. Friend the Member for Caerphilly (Mr. Davies) said, many councils now face increases of 25 per cent. in council tax despite the recent additional £16 million that the Welsh Office has provided. The local government finance system has not withstood the test of local government reorganisation.
The Secretary of State is allowing new councils to spend, and Government support for that spending is being distributed among the new councils in a way that does not match the expenditure on services inherited from the old councils. That mismatch is causing significant variations in council tax increases and will be difficult to explain to council taxpayers throughout Wales.
If Newport spends at the level at which the Secretary of State is minded to cap the authority, Newport's council tax will be among the lowest in Wales. In the borough, the council tax rate is estimated to be about £392 for a band D property. The Secretary of State is minded to cap the authority at its standard spending assessment, which is £117.5 million. But out of the 22 new authorities, 19 are now being allowed to spend in excess of their SSA before reaching their capping level. I am entitled to ask the Secretary of State why Newport has been discriminated against. The Welsh Office is well aware that the SSAs for the new councils are not an accurate reflection of their need to spend. I understand that the Secretary of State has admitted that the SSAs need to be thoroughly reviewed. On the evidence, Newport seems to be being badly treated.
I am sure that none of us would wish to underestimate the complexities of local government finance. One reason for Newport's low capping limit is that Gwent county council drew heavily on reserves in its last year to sustain expenditure on services that could not be sustained within its annual income. The Secretary of State must appreciate that if Newport is to keep its expenditure within the capping limit that he has set, services will have to be drastically cut, particularly education and social services. Surely those two vital services should not be cut—they represent more than three quarters of Newport's total budget expenditure. Will the Secretary of State consider Newport's peculiar and anomalous position?
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We know that Wales is now the most deprived region in western Europe. The time has obviously come for change: we need the return of a Labour Government and the election of a Welsh Assembly.
6.38 pm
Mr. Win Griffiths: Labour Members have given an accurate account of the parlous state in which the underfunding of local government has left Wales—thanks to the Welsh Office. One thing that we know for sure is that everyone in Wales recognises that, despite the fact that total standard spending is to be higher this year than it was last year, once account is taken of inflation and the fact that last year's total made no allowance for factors such as the teachers' pay award, local authorities have already spent as much as the total standard spending that is allocated for the coming financial year that is to start in April. So, at best, there is a standstill.
Last year, local authorities dipped into their reserves to the tune of slightly more than £100 million. My hon. Friends the Members for Alyn and Deeside (Mr. Jones), for Delyn (Mr. Hanson) and for Newport, East (Mr. Hughes) have made a powerful plea for the Government to re-examine the settlement's impact on the services provided by local government in Wales. The one chink of light that we have seen—my hon. Friend the Member for Delyn paid tribute to it—was the action that the Secretary of State has taken in relation to Theatr Clywd in Mold, for which we are thankful. We only wish that he viewed all local government spending in Wales in the same positive and progressive manner.
My hon. Friend the Member for Alyn and Deeside pleaded with the Secretary of State to reverse the settlement's effect on teachers' pay. The Under-Secretary of State for Wales, the hon. Member for Clwyd, North-West (Mr. Richards), said, in a written answer to me, that he expected
"pay awards in the public sector, including those subject to the recommendations of the School Teachers' Review Body, to be met through increased efficiency and other economies."—[Official Report, 18 January 1996; Vol. 269, c. 755.]
The Secretary of State ought to say where he believes those economies might be made. He knows that, during the past few years, local education authorities in Wales have cut their administrative expenditure by millions of pounds. The hon. Member for Ribble Valley (Mr. Evans), who comes from Wales, should be better apprised of that fact. The Secretary of State also knows that every county council in Wales is currently giving more than 90 per cent. of its education budget to its schools. Councils are doing even better in that respect than the Welsh Office has asked them to do.
Mr. Richards: The hon. Gentleman mentioned that local government had been underfunded in Wales. Will he tell the House whether, in his view, the total standard spending should be higher—yes or no?
Mr. Griffiths: I shall return to that point at the end of my remarks. I can assure the hon. Gentleman that I shall examine the issue seriously. After 17 years of disastrous Tory government in Wales, we have serious problems funding the work of local government and other public services. In the past few years, under the Tories, class sizes and pupil-teacher ratios have increased, following

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a long period in which they decreased. The situation in relation to pupil-teacher ratios is deteriorating, according to answers from the Welsh Office.
Mr. Richards indicated dissent.
Mr. Griffiths: It is no use the Under-Secretary shaking his head. His own written answers have proved that that is the situation; he needs only to check Hansard to confirm it. The figures are marginal in both cases: an increase of 0.2 per cent. in primary schools and of 0.8 per cent. in secondary schools. If, however, we examine the impact of those figures on primary schools in terms of class size, we find that, between 1993–94 and 1994–95, there were more than 7,000 children in classes of more than 30, thanks to the cuts.
The truth about Tory rule in Wales during the past few years is a story of cuts all the way. Ministers' parliamentary answers also provide that information. In 1993–94, revenue support grant was 64 per cent. of local government spending. In 1995–96, it has decreased to 58 per cent. The truth was revealed in a letter to my right hon. and learned Friend the Member for Aberavon (Mr. Morris)—[Interruption.] It has been said before, but it is worth repeating because it is the truth, and the truth needs to be rammed home.
The right hon. Member for Conwy (Sir W. Roberts) talked about a wind of change. The wind of change has come from the dales of Yorkshire. It is blowing hard into Wales, bringing easterly winds with the ice and the snow that people in the south Wales valleys are currently suffering. Metaphorically speaking, the world of finance—as my hon. Friend the Member for Caerphilly (Mr. Davies) graphically demonstrated—is having an icy effect on the lives of people in Wales. The Secretary of State wrote to my right hon. and learned Friend the Member for Aberavon:
"I believe that over time local authorities in Wales should raise a higher proportion of their income from council tax. The 11 per cent. increase is the result of this approach."
He said that; there was no doubt about it. He wanted and planned for a minimum increase of 11 per cent. He planned for local authorities either to cut their services or to raise disproportionately their council tax.
Mr. Richards: The hon. Gentleman referred to pupil-teacher ratios. Is he therefore saying that more money should be spent on education in Wales—yes or no?
Mr. Griffiths: I am very happy to answer that question: yes, I do believe that more money should be spent on education in Wales. However, Labour Members are not the people who are examining the books in the Welsh Office, although it will not be too long before we do—and then there will be new priorities. If the Minister is inviting me to come along to the Welsh Office to have a preview of the books, I shall happily take up the offer.
If we are talking about publicly available information about how the Welsh Office is cutting the money it makes available to local government, let us consider revenue support grant which, in constant value terms during the past couple of years, has decreased by more than £37 million. Local government renovation grants have, in
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the past year, decreased in real terms by almost £4 million. Housing capital provision has decreased by almost £16 million.
It is no wonder that my hon. Friend the Member for Alyn and Deeside made an impassioned plea for the Welsh Office to release capital receipts so that councils with housing responsibilities—which they will all, of course, have from April—can modernise their housing stock and install central heating so that when the icy winds blow down from the Yorkshire dales, people will be warm. It is cuts all the way.
A Welsh Office press release of 13 December states that, this year, total capital provision in Wales will decrease by more than £17 million. The Secretary of State has tried to present himself as a latter-day Father Christmas by offering £29.1 million and another £15.9 million to dampen the effects of the redistribution of grant to the new local authorities, and by relaxing the capping criteria to enable authorities to raise more money locally.
The Secretary of State knows that if councils in Wales took full advantage of the generous offer and did not cut the services that they provide, but instead sought to fund everything as though there had been no change, seven councils in Wales would have to raise council taxes by more than 30 per cent. Another four councils would have to increase their council tax by more than 20 per cent.; seven councils would require increases of 10 per cent.; and only four councils would require increases of less than 7 per cent. My local authority, Bridgend, is caught in that trap. It will have either to make a huge increase— of more than 36 per cent.—in council tax or to make really serious cuts in services. There is no room for substantial administrative cuts.
I hope that the Secretary of State will look seriously at changing the formula. He asked where more money could be found. I remind him that it was only a couple of years ago that his predecessor returned money to the Treasury. I notice that, in one year, a £59 million underspend was shown in the accounts presented to the Welsh Office. Does the Secretary of State know whether, this year, he is on course for an underspend or an overspend? If there is an underspend, will he give the money to local authorities?
6.49 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): This afternoon, my right hon. Friend the Secretary of State for Wales set out in detail our settlement decisions for 1996–97 and explained the considerations that have informed those decisions. Notwithstanding the fact that the settlement gives local government a real-terms increase in revenue spending, backed up by an aggregate external support package that covers about 87 per cent. of spending, and notwithstanding the fact that, on a per capita basis, the support is 8 per cent. higher than that proposed for England, we have had a predictable barrage of complaints and criticism from the Opposition.
The hon. Member for Bridgend (Mr. Griffiths) was brave enough to give way when he was asked whether he would increase the local government settlement, yes or no. I shall have to read his speech carefully to try to find the answer. He then criticised my right hon. Friend the Secretary of State for enabling local government to raise

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more of its money locally. That is a peculiar criticism when my right hon. Friend is responding to local government requests to be able to do exactly that.
What I noticed particularly in this year's debate, which is being held a year to the day after the previous one, is the change in the Opposition. What has happened to the laughable, bumbling, clueless Ron we remember from last year? Today, he was still clueless—that does not change—but last year he was at least able to include two welcomes in his speech. He welcomed the increase in total standard spending and he welcomed the increase in spending for the police. This time, he gave a tired, jaded, sour performance.
There may be a clue to the decline of the hon. Member for Caerphilly (Mr. Davies) in his speech last year. He had barely got a paragraph into it when he was pressed by one of his hon. Friends to increase the shadow budget for Wales. Amazingly, he claimed:"There are no restrictions on our shadow budget".—[Official Report, 8 February 1995; Vol. 254, c. 361.]
Throughout his speech, then as now, he told us nothing about the shadow budget. Doing one thing and saying another has become the hallmark of the Labour party; in the hon. Member for Caerphilly we have someone who will take it to the nth degree. He is capable of saying one thing, and then another thing, but no one understands what on earth he means. I shall let everyone into the secret. He does not understand either.
The greatest problem arises when the hon. Member for Caerphilly says something positive. Few have failed to notice that his friends in the BBC have been running a campaign to promote a Welsh Assembly. Only this week, a whole programme was devoted to the subject. It tried to claim that a Welsh Assembly would cost less than £15 million.
How much the hon. Gentleman's friends in the BBC must regret it when his loose cannon goes out. Last week, he admitted that a Welsh Assembly would mean about another 500 civil servants. Such bureaucracy creation would take place before a Welsh Assembly did anything. Taking an average salary with the on-costs, I can easily calculate that, with £40,000 per civil servant, £20 million would be spent before the Welsh Assembly did anything.
Mr. Ron Davies: So that the record is accurate, my statement was that it was my estimate that the establishment of the Assembly in Cardiff would create an additional 500 jobs outwith the civil service.
Mr. Jones: The hon. Gentleman has confirmed the warning as given. He has blown what his friends at the BBC were trying to do out of the water.
I appreciate how difficult it is for the hon. Gentleman when he comes to the Dispatch Box. It is an occasion when he is on the record; such occasions are embarrassing for him. I must, however, try to deal with the points of substance that he raised. He claimed that the inclusion for community care was nothing but a transfer from the Department of Social Security. That is not correct; the money being provided is new money. The additional £25.2 million this year takes the figure to £149.6 million additional money for community care. Next year, the figure will be £190.3 million.
The hon. Member for Caerphilly claimed that the damping provision would mean cuts in the national health service. Again, he was not right. The extra money that
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has been provided for damping is from unallocated resources. In view of his point about cutting the national health service, the hon. Gentleman will not and cannot come clean. "How much more?" is the question that the Opposition constantly face. Where will it come from? They cannot say. However, if they are to be credible when they go into a general election, Labour Members must buy a large sign for the hon. Gentleman. They should hang it in his office where he cannot miss it. The sign should read, "It's the money, stupid." That is the only way in which the point can be brought home to the hon. Gentleman.
My right hon. Friend the Secretary of State has been able to announce £1.3 million for Theatr Clwyd, subject to certain provisions. I am grateful for the welcome that the hon. Members for Delyn (Mr. Hanson) and for Alyn and Deeside (Mr. Jones) have given that announcement. My right hon. Friend and I had very great regard for Theatr Clwyd, and we were much reinforced in that by the lobbying by my hon. Friend the Member for City of Chester (Mr. Brandreth) and especially by my hon. Friend the Member for Clwyd, North-West (Mr. Richards). I am sad that the situation of Theatr Clwyd was precipitated by local government. My right hon. Friend has given the theatre the way forward and it is now for local government to respond properly.
I thank my right hon. Friend the Member for Conwy (Sir W. Roberts) for his contribution. I cannot do better than use the words of the hon. Member for Alyn and Deeside, who described it as a master class. My right hon. Friend's concerns were well expressed. He explained the threats Labour represents in terms of the effect on the business community and the rates that business would have to pay if local government took over business rates. That point was rightly emphasised by my hon. Friends the Members for Ribble Valley (Mr. Evans) and for Isle of Wight (Mr. Field).
Equally, as my right hon. Friend the Member for Conwy asked, would farm land be made rateable? What would the farmers have to fear? What would be the price of ending capping? It is impossible to put a price on all the threats in the unspecific policies of the Labour party. My right hon. Friend did not exaggerate when he talked about the possibility of civil strife in Wales as the consequence of Labour's policies.
Mr. Ainger: Will the hon. Gentleman give way?
Mr. Jones: No, because there is too little time left. The hon. Gentleman has not been here for the whole debate anyway.
The hon. Member for Alyn and Deeside referred to housing. I am sure that he welcomes the substantial provision we have made for housing spending—£1.2 billion for private sector renovation since the current grant regime was introduced and an 84 per cent. higher real-terms spend on capital and revenue for repairs on council housing.
My hon. Friends the Members for Vale of Glamorgan (Mr. Sweeney) and for Ribble Valley welcomed our increase in police spending. I know that that was dismissed by the hon. and learned Member for Montgomery (Mr. Carlile) in his usual elitist way. It is, however, the case, as my hon. Friends said, that the police in south Wales have had to have an approximately

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22 per cent. increase in just over a year because of the appalling underfunding when the figure was decided by the Labour-controlled councils in south Wales.
My hon. Friend the Member for Vale of Glamorgan asked about the changes made in the notional amount figures for the Vale of Glamorgan and Cardiff unitary authorities. The changes arose from the provision of more accurate data by South Glamorgan council for the disaggregation of its spending on education to the new authorities. The Vale of Glamorgan authority knows the reasons for the change and accepts the greater accuracy of the new data. The council is understandably disappointed by the reduction in its base position, but it can increase its budget by 3.9 per cent. in the coming year.
The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) mentioned road mileage lengths being taken into account in calculating Denbighshire's standard spending assessment. The non-financial data that we use in calculating SSAs are carefully validated and verified with all local authorities. They provide the information. We have not received representations from Denbighshire or any other local authority on road lengths. I am surprised that the hon. Member for Newport, East (Mr. Hughes) feels that the settlement disadvantages Newport county borough council. It enables the council to increase its spending by 5.6 per cent.—the second highest percentage increase of any authority in Wales.
The most noticeable aspect of the debate was the absence of any positive policies from the Opposition. I say to the House and to Wales that we should always remember that council taxes are decided by councillors. It is as that rueful expression says—"We get the councillors we deserve." My right hon. Friend the Secretary of State rightly mentioned some of the crazier spending decisions that have been made, and I warn Opposition Members that they treat the public with contempt at their peril.
Last Saturday's South Wales Echo showed the fat cheques that have been paid out to Labour councillors in back pay for the amounts that they have awarded themselves. That has gone down very badly in Cardiff. The mood is changing in Cardiff which, regrettably, is a one-party state, and it is changing elsewhere in Wales.
Question put:—
The House divided: Ayes 268, Noes 196.

Division No. 47]

[7.00 pm

AYES

Ainsworth, Peter (East Surrey)

Bates, Michael

Aitken, Rt Hon Jonathan

Batiste, Spencer

Alison, Rt Hon Michael (Selby)

Bellingham, Henry

Allason, Rupert (Torbay)

Bendall, Vivian

Amess, David

Beresford, Sir Paul

Ancram, Michael

Biffen, Rt Hon John

Arbuthnot, James

Body, Sir Richard

Arnold, Jacques (Gravesham)

Bonsor, Sir Nicholas

Ashby, David

Booth, Hartley

Atkins, Rt Hon Robert

Boswell, Tim

Atkinson, David (Bour'mouth E)

Bottomley, Peter (Eltham)

Atkinson, Peter (Hexham)

Bowden, Sir Andrew

Baker, Nicholas (North Dorset)

Bowis, John

Baldry, Tony

Boyson, Rt Hon Sir Rhodes

Banks, Matthew (Southport)

Brandreth, Gyles

Banks, Robert (Harrogate)

Brazier, Julian

526

Bright, Sir Graham

Hampson, Dr Keith

Brooke, Rt Hon Peter

Hanley, Rt Hon Jeremy

Brown, M (Brigg & Cl'thorpes)

Hannam, Sir John

Browning, Mrs Angela

Hargreaves, Andrew

Bruce, Ian (Dorset)

Harris, David

Burns, Simon

Haselhurst, Sir Alan

Burt, Alistair

Hawkins, Nick

Butler, Peter

Hawksley, Warren

Butterfill, John

Hayes, Jerry

Carlisle, John (Luton North)

Heald, Oliver

Carlisle, Sir Kenneth (Lincoln)

Heath, Rt Hon Sir Edward

Carrington, Matthew

Heathcoat-Amory, David

Carttiss, Michael

Hendry, Charles

Cash, William

Higgins, Rt Hon Sir Terence

Channon, Rt Hon Paul

Hill, James (Southampton Test)

Chapman, Sir Sydney

Hogg, Rt Hon Douglas (G'tham)

Churchill, Mr

Horam, John

Clappison, James

Hordern, Rt Hon Sir Peter

Clark, Dr Michael (Rochford)

Howard, Rt Hon Michael

Clarke, Rt Hon Kenneth (Ru'clif)

Howell, Rt Hon David (G'dford)

Clifton-Brown, Geoffrey

Howell, Sir Ralph (N Norfolk)

Coe, Sebastian

Hughes, Robert G (Harrow W)

Congdon, David

Hunt, Rt Hon David (Wirral W)

Coombs, Anthony (Wyre For'st)

Hunt, Sir John (Ravensbourne)

Cope, Rt Hon Sir John

Hurd, Rt Hon Douglas

Cormack, Sir Patrick

Jack, Michael

Couchman, James

Jenkin, Bernard

Currie, Mrs Edwina (S D'by'ire)

Jessel, Toby

Curry, David (Skipton & Ripon)

Johnson Smith, Sir Geoffrey

Davis, David (Boothferry)

Jones, Gwilym (Cardiff N)

Day, Stephen

Jones, Robert B (W Hertfdshr)

Deva, Nirj Joseph

Jopling, Rt Hon Michael

Devlin, Tim

Key, Robert

Dorrell, Rt Hon Stephen

King, Rt Hon Tom

Douglas-Hamilton, Lord James

Knapman, Roger

Dover, Den

Knight, Mrs Angela (Erewash)

Duncan, Alan

Knight, Rt Hon Greg (Derby N)

Duncan-Smith, Iain

Knight, Dame Jill (Bir'm E'st'n)

Dunn, Bob

Knox, Sir David

Durant, Sir Anthony

Kynoch, George (Kincardine)

Dykes, Hugh

Lait, Mrs Jacqui

Elletson, Harold

Lamont, Rt Hon Norman

Emery, Rt Hon Sir Peter

Lawrence, Sir Ivan

Evans, David (Welwyn Hatfield)

Leigh, Edward

Evans, Jonathan (Brecon)

Lennox-Boyd, Sir Mark

Evans, Nigel (Ribble Valley)

Lester, Sir James (Broxtowe)

Evans, Roger (Monmouth)

Lidington, David

Evennett, David

Lloyd, Rt Hon Sir Peter (Fareham)

Faber, David

Lord, Michael

Fabricant, Michael

Luff, Peter

Fenner, Dame Peggy

Lyell, Rt Hon Sir Nicholas

Field, Barry (Isle of Wight)

MacGregor, Rt Hon John

Fishburn, Dudley

MacKay, Andrew

Forman, Nigel

Maclean, Rt Hon David

Forsyth, Rt Hon Michael (Stirling)

McLoughlin, Patrick

Forth, Eric

Major, Rt Hon John

Fox, Dr Liam (Woodspring)

Malone, Gerald

Fox, Sir Marcus (Shipley)

Mans, Keith

Freeman, Rt Hon Roger

Marlow, Tony

French, Douglas

Marshall, John (Hendon S)

Fry, Sir Peter

Marshall, Sir Michael (Arundel)

Gardiner, Sir George

Martin, David (Portsmouth S)

Garnier, Edward

Mawhinney, Rt Hon Dr Brian

Gill, Christopher

Mayhew, Rt Hon Sir Patrick

Gillan, Cheryl

Mellor, Rt Hon David

Goodlad, Rt Hon Alastair

Merchant, Piers

Goodson-Wickes, Dr Charles

Mills, Iain

Gorman, Mrs Teresa

Mitchell, Andrew (Gedling)

Gorst, Sir John

Mitchell, Sir David (NW Hants)

Greenway, Harry (Ealing N)

Monro, Rt Hon Sir Hector

Greenway, John (Ryedale)

Montgomery, Sir Fergus

Griffiths, Peter (Portsmouth, N)

Needham, Rt Hon Richard

Gummer, Rt Hon John Selwyn

Neubert, Sir Michael

Hague, Rt Hon William

Newton, Rt Hon Tony

Hamilton, Rt Hon Sir Archibald

Nicholson, David (Taunton)

Hamilton, Neil (Tatton)

Norris, Steve

527

Onslow, Rt Hon Sir Cranley

Stephen, Michael

Oppenheim, Phillip

Stem, Michael

Ottaway, Richard

Stewart, Allan

Page, Richard

Streeter, Gary

Paice, James

Sumberg, David

Patnick, Sir Irvine

Sweeney, Walter

Patten, Rt Hon John

Sykes, John

Pawsey, James

Tapsell, Sir Peter

Peacock, Mrs Elizabeth

Taylor, Ian (Esher)

Pickles, Eric

Taylor, Sir Teddy (Southend, E)

Porter, Barry (Wirral S)

Temple-Morris, Peter

Porter, David (Waveney)

Thomason, Roy

Portillo, Rt Hon Michael

Thompson, Sir Donald (C'er V)

Rathbone, Tim

Thompson, Patrick (Norwich N)

Redwood, Rt Hon John

Thomton, Sir Malcolm

Renton, Rt Hon Tim

Thumham, Peter

Richards, Rod

Townend, John (Bridlington)

Riddick, Graham

Townsend, Cyril D (Bexl'yh'th)

Rifkind, Rt Hon Malcolm

Tracey, Richard

Robathan, Andrew

Tredinnick, David

Roberts, Rt Hon Sir Wyn

Trend, Michael

Robinson, Mark (Somerton)

Twinn, Dr Ian

Rowe, Andrew (Mid Kent)

Vaughan, Sir Gerard

Rumbold, Rt Hon Dame Angela

Viggers, Peter

Ryder, Rt Hon Richard

Waldegrave, Rt Hon William

Sackville, Tom

Walden, George

Scott, Rt Hon Sir Nicholas

Waller, Gary

Shaw, David (Dover)

Ward, John

Shaw, Sir Giles (Pudsey)

Wardle, Charles (Bexhill)

Shephard, Rt Hon Gillian

Waterson, Nigel

Shepherd, Sir Colin (Hereford)

Watts, John

Shepherd, Richard (Aldridge)

Wells, Bowen

Shersby, Sir Michael

Whitney, Ray

Skeet, Sir Trevor

Whittingdale, John

Smith, Tim (Beaconsfield)

Widdecombe, Ann

Spencer, Sir Derek

Wilkinson, John

Spicer, Sir James (W Dorset)

Winterton, Mrs Ann (Congleton)

Spicer, Sir Michael (S Worcs)

Wolfson, Mark

Spink, Dr Robert

Yeo, Tim

Spring, Richard

Young, Rt Hon Sir George

Sproat, Iain

Squire, Robin (Homchurch)

Tellers for the Ayes:

Stanley, Rt Hon Sir John

Mr. Timothy Wood and Mr. Derek Conway.

Steen, Anthony

NOES

Adams, Mrs Irene

Church, Judith

Ainger, Nick

Clapham, Michael

Ainsworth, Robert (Cov'try NE)

Clelland, David

Allen, Graham

Clwyd, Mrs Ann

Anderson, Donald (Swansea E)

Coffey, Ann

Anderson, Ms Janet (Ros'dale)

Cohen, Harry

Armstrong, Hilary

Connarty, Michael

Ashton, Joe

Cook, Frank (Stockton N)

Austin-Walker, John

Cook, Robin (Livingston)

Banks, Tony (Newham NW)

Corbyn, Jeremy

Bames, Harry

Cousins, Jim

Barron, Kevin

Cox, Tom

Battle, John

Cummings, John

Bayley, Hugh

Cunningham, Jim (Covy SE)

Benn, Rt Hon Tony

Dafis, Cynog

Bennett, Andrew F

Davies, Bryan (Oldham C'tral)

Bermingham, Gerald

Davies, Rt Hon Denzil (Llanelli)

Berry, Roger

Davies, Ron (Caerphilly)

Blair, Rt Hon Tony

Davis, Terry (B'ham, H'dge H'l)

Bray, Dr Jeremy

Dewar, Donald

Brown, N (N'c'tle upon Tyne E)

Dixon, Don

Bruce, Malcolm (Gordon)

Dobson, Frank

Byers, Stephen

Dowd, Jim

Campbell, Mrs Anne (C'bridge)

Dunwoody, Mrs Gwyneth

Campbell, Ronnie (Blyth V)

Eagle, Ms Angela

Campbell-Savours, D N

Fatchett, Derek

Canavan, Dennis

Faulds, Andrew

Cann, Jamie

Field, Frank (Birkenhead)

Chidgey, David

Flynn, Paul

Chisholm, Malcolm

Foster, Rt Hon Derek

528

Galloway, George

Morris, Rt Hon Alfred (Wy'nshawe)

Gapes, Mike

Morris, Rt Hon John (Aberavon)

Garrett, John

Mowlam, Marjorie

George, Bruce

Mudie, George

Gilbert, Rt Hon Dr John

Mullin, Chris

Godman, Dr Norman A

Murphy, Paul

Godsiff, Roger

Nicholson, Emma (Devon West)

Golding, Mrs Llin

Oakes, Rt Hon Gordon

Gordon, Mildred

O'Brien, Mike (N W'kshire)

Grant, Bernie (Tottenham)

O'Brien, William (Normanton)

Griffiths, Nigel (Edinburgh S)

O'Hara, Edward

Griffiths, Win (Bridgend)

Olner, Bill

Grocott, Bruce

O'Neill, Martin

Hanson, David

Pearson, Ian

Harman, Ms Harriet

Pendry, Tom

Henderson, Doug

Pike, Peter L

Hill, Keith (Streatham)

Pope, Greg

Hinchliffe, David

Prentice, Gordon (Pendle)

Hodge, Margaret

Primarolo, Dawn

Hoey, Kate

Purchase, Ken

Hogg, Norman (Cumbernauld)

Quin, Ms Joyce

Hoon, Geoffrey

Radice, Giles

Howarth, Alan (Strat'rd-on-A)

Randall, Stuart

Howarth, George (Knowsley North)

Raynsford, Nick

Howells, Dr Kim (Pontypridd)

Rendel, David

Hoyle, Doug

Robinson, Geoffrey (Co'try NW)

Hughes, Kevin (Doncaster N)

Roche, Mrs Barbara

Hughes, Robert (Aberdeen N)

Ross, Emie (Dundee W)

Hughes, Roy (Newport E)

Rowlands, Ted

Hughes, Simon (Southwark)

Ruddock, Joan

Hutton, John

Salmond, Alex

Illsley, Eric

Sedgemore, Brian

Jackson, Glenda (H'stead)

Sheerman, Barry

Jackson, Helen (Shef'ld, H)

Sheldon, Rt Hon Robert

Janner, Greville

Shore, Rt Hon Peter

Jones, Barry (Alyn and D'side)

Short, Clare

Jones, Ieuan Wyn (Ynys Môn)

Simpson, Alan

Jones, Jon Owen (Cardiff C)

Skinner, Dennis

Jones, Lynne (B'ham S O)

Smith, Andrew (Oxford E)

Kaufman, Rt Hon Gerald

Smith, Chris (Isl'ton S & F'sbury)

Keen, Alan

Kennedy, Jane (L'pool Br'dg'n)

Soley, Clive

Khabra, Piara S

Spearing, Nigel

Kilfoyle, Peter

Spellar, John

Lestor, Joan (Eccles)

Squire, Rachel (Dunfermline W)

Livingstone, Ken

Steinberg, Gerry

Lloyd, Tony (Stretford)

Stevenson, George

Llwyd, Elfyn

Straw, Jack

Loyden, Eddie

Sutcliffe, Gerry

Lynne, Ms Liz

Taylor, Mrs Ann (Dewsbury)

McAvoy, Thomas

Thompson, Jack (Wansbeck)

McCartney, Ian

Touhig, Don

McCartney, Robert

Vaz, Keith

Maodonald, Calum

Walker, Rt Hon Sir Harold

McFall, John

Walley, Joan

McKelvey, William

Wardell, Gareth (Gower)

Mackinlay, Andrew

Wareing, Robert N

McMaster, Gordon

Wicks, Malcolm

McNamara, Kevin

Wigley, Dafydd

MacShane, Denis

Williams, Rt Hon Alan (Sw'n W)

McWilliam, John

Williams, Alan W (Carmarthen)

Madden, Max

Winnick, David

Mandelson, Peter

Wise, Audrey

Marshall, Jim (Leicester, S)

Worthington, Tony

Michael, Alun

Wright, Dr Tony

Michie, Bill (Sheffield Heeley)

Young, David (Bolton SE)

Milburn, Alan

Miller, Andrew

Tellers for the Noes:

Mitchell, Austin (Gt Grimsby)

Mr. Joe Benton and Mrs. Bridget Prentice.

Morgan, Rhodri

Question accordingly agreed to.
Resolved,
That the Local Government Finance Report (Wales) 1996–97 (House of Commons Paper No. 141), which was laid before this House on 1st February, be approved.
Resolved,
That the Limitation of Council Tax and Precepts (Notional Amounts) Report (Wales) 1996–97 (House of Commons Paper No. 142), which was laid before this House on 1st February, be approved.—[Dr. Liam Fox.]

Local Government Finance (Wales)

  DELEGATED LEGISLATION
  Mr. Deputy Speaker (Sir Geoffrey Lofthouse): With permission, I shall put together the motions relating to delegated legislation.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation).

  DELEGATED LEGISLATION
    NORTHERN IRELAND
    That the draft Business Tenancies (Northern Ireland) Order 1996, which was laid before this House on 15th January, be approved.
    CONTRACTING OUT
    That the draft Contracting Out (Management Functions in relation to certain Community Homes) Order 1996, which was laid before this House on 16th January, be approved.
    AGRICULTURAL HOLDINGS
    That the draft Agricultural Holdings (Fee) Regulations 1996, which were laid before this House on 17th January, be approved.

    LOCAL GOVERNMENT
    That the draft Leicestershire (City of Leicester and District of Rutland) (Structural Change) Order 1996, which was laid before this House on 18th January, be approved.—[Dr. Liam Fox.]
    Question agreed to.

Audit (Miscellaneous Provisions) Bill
As amended (in the Standing Committee), considered.
Audit (Miscellaneous Provisions) Bill
  Clause 5

    PUBLICATION AT DIRECTION OF EITHER COMMISSION
    7.13 pm
    Ms Hilary Armstrong: I beg to move amendment No. 5, in page 4, line 5, at end insert—
    '(1A) The relevant body may publish the information in accordance with a Code of Practice issued by the Secretary of State under section 2(2) of the Local Government, Planning and Land Act 1980.'.
    Mr. Deputy Speaker (Sir Geoffrey Lofthouse): With this, it will be convenient to discuss the following amendments: No. 6, in page 4, line 8, leave out from '(3)' to end of line 9 and insert 'The relevant body'.

    No. 7, in page 4, leave out lines 14 to 25.

    No. 1, in page 4, leave out line 19 and insert

    'distributed to a number of separate dwellings in their area at least equal to the circulation of the newspaper(s) printed for sale and circulating in their area, in which the information would otherwise be published in accordance with subsection 2 above; and'.
    No. 2, in page 4, line 25, after 'to', insert 'at least 80% of.
    Ms. Armstrong: We have reached Report stage of the Audit (Miscellaneous Provisions) Bill. We had a series of interesting debates in Committee and we have brought these amendments to the House in an attempt to make the Government see sense.
    The amendments address the issue of how and where local authorities will publish their performance indicators. Last year was the first year in which performance indicators were published and we learned many lessons from that experience. It is one of the reasons why the Bill is before the House this evening. However, I believe that we have learnt more lessons than are addressed in the Bill, so we are seeking to amend it.
    Amendment No. 5 seeks to approach the issue in a different way. Local authorities are obliged to publish their performance indicators properly so that the majority of local people can read and understand them. They should not be complicated and they should be easily accessible. I am sure that every hon. Member shares that objective. The information must reach as many people as possible and be easily understood. Tonight we are debating the mechanism which will achieve those ends. I do not believe that the Bill has got it right, and that is another reason why we have tabled the amendments.
    Amendment No. 5 seeks to give the Secretary of State power to issue a code of practice to prescribe the way in which local authorities must publish performance indicators. In other words, the Secretary of State will have the power to issue a code of practice so that he can be absolutely sure that local authorities are not using oblique methods in an attempt to avoid meeting the objective. We have taken methods of practice from other pieces of legislation, which we believe will better achieve our aims, and applied them in this case.

    531
    Under section 3 of the Local Government, Planning and Land Act 1980, the Secretary of State may make regulations to enforce the provisions of such a code of practice. There is an existing code which ensures that the objective is met. I am sure that the Minister knows all about it so I shall not take up the time of the House tonight by going through it. However, I believe that the current provisions in the Bill will not meet the objective.
    The provisions of the 1980 Act were introduced by the right hon. Member for Henley (Mr. Heseltine), when he was Secretary of State for the Environment, to ensure that local authorities published the information that the Government thought necessary at that time. That included information to accompany local tax demands, annual reports, staffing levels, information on planning applications, information on land holdings and so on. The amendment would bring performance indicators under a similar regime.
    I appreciate that performance indicators must be published separately and that specific attention must be drawn to them. However, as I understand the code of practice, that would not be a problem under existing legislation. The provisions of the 1980 Act specifically permit
    "any such Code to be prepared by some other person on behalf of the Secretary of State.
    any such Code to specify the steps which authorities are to take to inform the public of the availability of the information".
    In Committee, the Minister interpreted the wording of the Opposition amendment as requiring authorities to distribute the information to every household and business. He thought that it would put authorities at risk of legal challenge and
    "would be too hard on local authorities".
    He was anxious that authorities did not abuse the publication of performance indicators to produce partisan material in a local authority publication.
    We pointed out in Committee that if local authorities did that, they would be breaking the law as set out in the Local Government Act 1986. Notwithstanding that, the Minister sought to make it one of his concerns.
    The Minister objected to our amendment asking authorities to distribute the information to every household and business as he thought that would be too difficult. The Bill requires authorities to "take all reasonable steps" to ensure that a free newspaper is distributed to each dwelling and business. That could be equally onerous and create other difficulties.
    We discussed the problems involved in the distribution of free newspapers in great detail in Committee, so I shall not do so today. However, the wording of the Bill may lead to demands that some local authorities are unable to meet.
    The amendment would permit a wide range of practice in publishing performance indicators. We are asking the Government to reconsider the matter. If the amendment were agreed, the Government would retain every possible means of preventing abuse. I know that the Minister is concerned to stop abuse and to ensure that local authorities are not tempted down that road. The amendment would give him the necessary powers, so he and his right hon. and hon. Friends should be reassured that it is not an attempt to make sure that people do not find out about performance indicators, but to give more people access to them.
    532
    Clearly, a code should be used to encourage best practice and to give authorities maximum flexibility in the publication of performance indicators. It could also incorporate such safeguards as requiring a statutory notice in a paid-for or free newspaper publicising the authority's arrangements for distribution of the material and telling the public where additional copies were available.
    Taken with the Bill as presently drafted, the amendment would present authorities with a menu of options for publishing performance indicators in accordance with a code of practice that would permit own newspapers, leaflets, the use of a paid-for or free newspaper or a combination of those options. It is our responsibility to give local authorities the opportunity to develop means that are appropriate to their areas and meet the objectives set out in the Bill.
    It is also important to provide for diversity. In Committee we discussed the diverse nature of local authorities. Although one newspaper may be distributed throughout an entire city area, that is not always so. In order to uphold the proper relationship between central and local government, there should be a balance between diversity and the adherence to a minimum national standard. The amendments give the Government the opportunity to achieve that balance.
    The other amendments in the group would put amendment No. 5 to into effect. Amendments Nos. 6 and 7 aim to delete the distribution conditions for free newspapers so that they are treated in the same way as paid-for newspapers when placing a statutory performance indicator advertisement.
    In Committee, there were two main concerns with the Bill's provisions permitting the use of a free newspaper for the statutory publication of performance indicators. First, clause 5(4) places the burden on authorities to ensure that a free newspaper is distributed to dwellings and businesses. The Bill sets a test of reasonableness, but that is not much help to authorities that might need to test the circulation claims made by the publishers of a free sheet. The Minister acknowledged:
    "The local authority, in deciding which free newspaper or other newspaper to select, must be reasonably satisfied that the paper is delivered throughout that area."—[Official Report, Standing Committee A, 23 January 1996; c. 48–9.]
    As I have already said, that cannot be assured throughout the country as the distribution and availability of free newspapers is variable. The Bill is likely to deter authorities from using a free newspaper for the statutory advertisement and could effectively vitiate the purpose of clause 4.
    Secondly, the Bill puts paid-for newspapers at a market advantage. Contrary to the Minister's words, no distribution condition applies to paid-for newspapers. A paid-for newspaper with a very small circulation would suffice for the statutory performance indicator advertisement, but a free paper has to meet a very stiff test of being delivered throughout the authority's area.
    The Bill leaves whole issue confused and does not meet our objectives. As it incorporates a minor barrier to free trade, the Bill does not seem consistent with the philosophy and the policy that the right hon. Member for Henley purports to support. The Government seek to make the performance indicators more accessible to the electorate and the council tax payer, but they have drafted the Bill in such a way as to make that objective much

    533
    more difficult to attain. The amendments give the Government a way through and I hope that, even at this late stage, they will consider rethinking the wording of the Bill.
    Mr. Peter Griffiths: I shall not detain the House for long, but I want to express my complete support for what the hon. Member for North-West Durham (Ms Armstrong) has just said. In particular, I agree with her request that the Minister look at this whole matter again. I also agree with her that the Government have not got it right at this stage. Fortunately, however, there will be discussions in another place which will give the Government time to ponder their previous decisions and what has been said tonight. They will also be able to reflect on what is said in another place before the Bill finally reaches the statute book.
    7.30 pm
    I am speaking on my own behalf this evening, but I also want to echo the concerns expressed to me by Portsmouth city council. Just to show that mine is not a party political point, I might add that, over the past few years, the council has been controlled by all the main parties in succession. So I am describing the view of the city.
    Portsmouth city is disturbed by what was intended to be an extension of freedom and widening of opportunity. Whereas in the past it was specified where notices had to be published—in paid-for newspapers—the widening of choice to include free advertising, give-away newspapers was meant to give local councils greater say in how they distribute information. In Portsmouth, however, this idea does not produce more competition or choice. There is only one paid-for newspaper, and that paper also owns the free, give-away newspaper. So the city has no choice but to use the services of that newspaper—and it does not take kindly to that.
    I hope that I will not embarrass the hon. Member for North-West Durham if I say how strongly I agree with what she said about local authorities being able to publish their own broadsheets. Portsmouth has an excellently printed and published broadsheet which gives information about all the council's activities in an entirely proper, non-political way. It has done that under the control of successive parties. Certainly, it would be illegal if the city council presented the information in such a way as to advance the interests of one political party. That is against the law; it would have serious repercussions, including— rightly—the surcharging of those responsible.
    The information can be published by the city of Portsmouth and be attractively presented, on art paper, for instance. It can be illustrated with charts and diagrams. It is of course possible to pay for such services in newspapers, but the cost has to be borne by the city's funds. I am quite sure that Portsmouth is not the only place capable of producing a satisfactory statement that includes performance indicators and tables, and of guaranteeing distribution to every door. After all, the council already distributes information about elections; it distributes the registration forms necessary for voting. It puts them through front, side and back doors—when that is necessary, such as in houses in multiple occupation. This is probably the most efficient distributive system imaginable.
    534
    Portsmouth is also capable of varying the size and type in which the information is presented. Statutory notices in Portsmouth's evening newspaper—from the Queen's harbour master to mariners, for instance—are typed in small print because they need to be read by only a handful of master mariners. But the whole idea of publishing performance tables for the public is that they should be read by the man and woman in the street, not the expert on local government. They are for people who want to know what is going on and who welcome a format that is clear and easily understood.
    It is possible to do all this by paying a newspaper, but that is very expensive. I therefore suggest that the ideal wording for the clause would be along the lines that local councils should be "responsible" for the distribution of the information. The Bill should not specify how they do it; they should simply be responsible for getting the information to every door, in the manner of their choosing. If, in so doing, they break the law: so be it— they must take the consequences.
    The problem remains that, in the absence of competition, the cost of advertising and printing performance tables of this size and on this scale runs into thousands of pounds. That is a heavy burden; hence, I hope that the Government will consider allowing efficient local authorities to produce their own broadsheets in their own way. That will allow them to present information to the very people who will, in time, express their views on the performance of their councils. That is the most democratic way to go about the job.
    I have a great deal of sympathy with amendments Nos. 1 and 2, which the hon. Member for Newbury (Mr. Rendel) may discuss later. Given that there is an all-party consensus on the matter, perhaps the Government will now treat it with care and consideration.
    Mr. David Rendel: I am delighted to follow that speech, which seems to show that there is concern in all parties about the wording of the Bill and the Government's way of trying to ensure that performance indicators are given wider publication than hitherto.
    The Bill is somewhat lopsided as between the way it treats paid-for newspapers and those which are free. I want to speak, not so much along the lines of the previous two speeches, which have dealt generally with the widening of the ways in which these performance indicators are made known to the public, but more specifically about what I believe are faults in the wording of the Bill which mean that, in practice, the Government will not achieve their aims.
    It is clear that any publication in any paid-for newspaper, however small its circulation, meets the requirements of this Bill. On the other hand, if publication is done in free newspapers, then, as the Minister said in Committee, that will meet the requirements of the Bill only if the free newspapers are available to be distributed throughout an entire area. That may happen in some inner-city or inner-town areas, but it will certainly not happen across large parts of the country. That is why the clause is inadequate as it stands.
    In my area, the Newbury Weekly News is the main paid-for newspaper. It covers a large part of the district, but certainly not all of it. It makes no attempt to cover a significant part of the eastern end of the area. So if publication is to be, as it has been hitherto, in the

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    Newbury Weekly News, it will be positively difficult to get hold of the performance indicator information in large parts of the district.
    There are also free newspapers in the area covering large parts of it. Between them they may have a larger total circulation than the Newbury Weekly News. Still, they do not attempt to cover the entire area.
    Equally, the Newbury Weekly News has a small circulation inside north Hampshire, so technically it would be possible for Basingstoke and Deane council to publish its performance indicators in the Newbury Weekly News—and only there. That would mean that the indicators were published to a large number of people with little interest in them and a small number of people with a considerable interest in them, and leaving out a large number of people with an interest in them but not living in the circulation area of the paper. That is the kind of difficulty that the current wording would produce. The two amendments that I have tabled would, to a large extent, overcome that difficulty.
    The Bill should maximise the circulation of performance indicators. In practice, in many areas including my own, the wording of the Bill would make no change to the present situation. In other words, district councils would have to publish their performance indicators in the local paid-for newspapers, because there are not sufficient free newspapers to ensure coverage of the whole area. The Minister made it plain in Committee that many areas would see no change. That might mean that circulation was smaller than it could be, and people who live in those areas might get worse value for money in the information they get about their district councils. We might gain better value for money by ensuring publication in free newspapers that perhaps cover only part of the area, rather than publishing in a paid-for paper which could cover a smaller area.
    The Minister made the point that, if councils are forced to publish in paid-for newspapers, the information is at least available to everyone in the area. That is partly true, although in some districts paid-for newspapers may be quite difficult to obtain. People sometimes have to travel some way into the circulation area of a newspaper. However, free newspapers are also, in almost all cases, available in the local town, if someone is determined to get hold of a copy. So the Minister's point falls, because the free newspapers are as available to those determined to get hold of them as paid-for newspapers.
    Amendment No. 2 makes the point that, as far as possible, the papers containing the relevant information should be distributed to businesses. The Bill, as it stands, suggests that, unless all the business areas are covered by the free newspapers, the publication will still have to be in paid-for newspapers. The amendment would increase the chance that district councils had the opportunity to publish in free newspapers, even if those free newspapers did not cover every business in the area.
    The point of the Bill must be to widen councils' opportunity to publish information in free newspapers as well as in the paid-for newspapers. The Bill does not do that at present. If the Government accepted my amendments, the Bill would do what they want it to do.
    Mr. Ken Livingstone: There is clearly a huge cross-party consensus on this subject. The overwhelming majority of hon. Members believe that
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    local residents have a right to have delivered, through their letter boxes, a proper analysis of what services their councils provide and how well they do so in comparison with others. That is what the performance indicators are all about. The Audit Commission's various publications are clear and simple to understand. They usually have bar charts so that people can see how their local authority is performing against a comparable local authority serving a similar area.
    I wish to speak especially in favour of the amendments which would introduce a real code of practice. Whereas the vast majority of the 450 local authorities operate reasonably honourably and straightforwardly, a small handful of completely corrupt, dogmatic and arrogant local authorities will abuse any system that is placed in their hands. For that small minority, a real code of conduct is necessary. It will come as no surprise to the House to know that my personal experience of what happens in Brent prompts me to speak forcefully about the need for a code of conduct. The Opposition are offering the Government more powers: that must surely indicate the depth of concern that we feel.
    I shall give a couple of examples of the way in which Brent council manages, in effect, to avoid the commitment to reporting their performance indicators to their local electors. Like many local authorities, Brent is not well served by local papers any more. The local papers that we have do their best, but the money is not there, compared with 25 years ago when I was first elected to a local authority. They no longer have long-standing members of staff or a substantial staff who are able to report what is going on in detail. Those papers have had to make so many economies and they are far too reliant on handouts from local authorities.
    7.45 pm
    In my own local authority area, the council has chosen to report performance indicators by giving the local free sheet a special deal. The paper appears with a wrap-around bit, like the wrapping around fish and chips, which one immediately discards and moves on to the real fish in the middle. The long-standing local paper, which has been published for more than 100 years, does not get the benefit of that deal because it is often slightly critical of the local authority.
    If the council buys the service, it is able to dictate the format of what is provided. When, once a year, I get my copy of the Brent Recorder—which Brent council has paid to report the performance indicators to every household in Brent—it thuds through the letter box. I pick it up and instead of the usual colourful cover there is what looks like half a dozen pages of Hansard—dull, dead type that nobody would bother to read unless they had a severe case of insomnia. I can hear what happens all over Brent. The paper thuds through the letter box, and that is followed by a scrunching-up noise which works its way through the borough as everyone tears up the so-called performance indicator report and dumps it in the bin so that they can read the contents of the real newspaper. Other than people such as myself, who pore over the report to see where the corruption and fraud have been hidden, nobody else in Brent has any interest in it whatever.
    The council is prepared to discharge its duty to report in that most minimal way, but it can find thousands of pounds to produce a nice glossy magazine with colour

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    photographs and endless pictures of the leader of the council. Given what he looks like, that is not necessarily a good idea. The magazine contains wonderful stories about the joys of living in Brent, which imply that everyone in Brent is living on some wonderful tropical island where nobody ever has to work and everyone has a life style like the old Greek gods.
    People in Brent pick up that rubbish every few months and they cannot believe the descriptions of the town that they see around them, with garbage in the streets, and so on: we never see a street-sweeper because, as the performance indicators show, that is not Brent's strong suit. The magazine is an attempt to bypass any real duty to report the performance indicators that Parliament has required, with agreement, to be made available so that local residents can monitor their council's performance.
    Brent has two local papers—the Kilburn Times and the Willesden and Brent Chronicle, which are part of the same group. Because they report things such as the ombudsman's reports, they are under constant pressure from the local authority. The system cannot operate if the council puts completely unacceptable pressure on well established local newspapers not to report anything that the council does not want reported. I have found it especially offensive that the chief executive of the council has written to each local department head to tell them not to advertise in those papers because they write critical stories about the council.
    There are bound to be critical stories about the council. If out of 32 London boroughs, a council spends less on education and social services than every other borough, it will occasionally get a tad of criticism. If, out of the whole of south-east England, including Greater London, Kent, Surrey, and East and West Sussex, a third of all complaints to the local government ombudsman are about one council, that will occasionally get into the local press. I should like to see the code of conduct that we are putting into the Government's hands improved to stop intimidation of the press.
    Many local newspapers are always struggling. The threat is issued that advertising will be withdrawn if they print unfavourable stories. That makes a mockery of any suggestion that there can be fair and honest reporting for local people about the performance indicators that the Audit Commission has produced, which no one questions are good guides to relative performance.
    The process can be taken one stage further. The current chief executive at Brent, a guy called George Benham, circulated a memorandum—this is no wild, manic rumour of the sort that might be read in Socialist Campaign Group News—to all departmental heads in the borough. I should explain that they are called business units now. There are about 140 such units. I write to what used to be the director of education asking, "Can you get little Johnny into a school?" The reply refers to "the customer". We are dealing with little Johnny, not a customer, and little Johnny wants to go to a school.
    We have business units with advertising budgets. George Benham writes to the units telling them, "Mr. Livingstone keeps attacking the council." The atmosphere is fetid. He, George Benham, suggests, "It would be useful if Mr. Livingstone were not invited to any function at which councillors might be present.
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    Mr. Livingstone's presence is embarrassing to them." That is the climate in the borough. It is one that puts pressure on local newspapers not to report issues such as performance indicators.
    What happens if an authority gets away with what I have described year after year? I reflect on the past five years. There was a Conservative minority administration, which still hangs on by a casting vote. It has managed to hang on to power. It is helped if it can manipulate information. If an authority gets away with that for five years, it becomes extremely arrogant.
    The ombudsman is undertaking an investigation. Indeed, 17 investigations are being undertaken by the fraud squad, the ombudsman and the council's internal audit. That is going some when there is a Tory group of only 33. Some of the investigations are multiple. Some councillors are being investigated by the fraud squad, the ombudsman and the internal auditors. Everything is being examined from £75,000 grants being handed out in exchange for support in a local government election down to the small stuff such as local builders being employed to clean a councillor's windows. All this stuff builds up.
    At the same time, arrogance increases. There is the example of the AdShop. The issue was discussed in Committee and I was grateful when I was not criticised for raising it. There was no word of support for Brent council from anyone on the Government side. When I reported activities taking place in Brent, no Conservative Member was prepared to stick his neck out by saying, for example, "I am sure that's not true," or to say one word in defence of Brent council. I congratulate the Minister and Conservative Back-Bench Members on their perspicacity and good sense.
    I return to the AdShop. A business unit showed a loss of £400,000. Amazing things were going on. The staff decided that they wanted a meeting. It was thought that it would take an hour. It was decided that everyone should fly to Schiphol international airport at Amsterdam. The VIP lounge had been booked for the staff meeting. Of course, after the staff meetings, the rest of the day was available. These happenings are not reported too well when there is the level of intimidation that I have described. We are offering the Government a code of conduct to enable them to clamp down on abuse. If the code were implemented, local reporting would not be stifled.
    When these matters were raised in council, the committee chair concerned was approached by a reporter from the Willesden and Brent Chronicle, Miss Kamala Hayman. His response was, "If you publish any of this, I shall take you out of the back of the town hall and break your legs." What chance is there of honest reporting of performance indicators when a leading member of the Conservative administration, in front of witnesses at a full council meeting, turns on a young woman reporter and says, "I am going to take you out of the town hall and break your legs"? I rest my case.
    The Parliamentary Under-Secretary of State for the Environment (Sir Paul Beresford): The nicest thing about listening to the hon. Member for Brent, East (Mr. Livingstone) was to note that the tables had been turned on him. I remember reading the Londoner and gnashing my teeth—that is probably an appropriate description—at the gobbledegook and biased propaganda.

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    When I reflect on the propaganda, as the hon. Gentleman describes it, that emanates from Brent council, it is almost always eminently fair, straight and above board. If the hon. Gentleman feels that he is living in the Bahamas, perhaps we should get a psychiatrist to help him.
    I understand the thinking behind the amendments. At one stage I was tempted by amendment No. 5. We share a common objective to ensure that local authorities publish information about performance that is unbiased and informative. The Bill achieves that by providing that publication must be subject to independent editorial control. I understand that the approach of Opposition Members might be used to the same ends. However, my memory does not have to go back too far to when I was in local government.
    That leads me to baulk at what they propose, which would land local government and the Government with more regulation. There would be more intervention. We would need yet another code of practice. That would have to specify what information would be included and what might or should not be included. How could we deal with editorial bias? Would we need a stand-alone document, which would mean more expense for local authorities? I do not think that anyone in this place wants that level of interference.
    The Government's approach is preferable. Local authorities and Parliament will be in no doubt about the publication requirements and will not face the possibility of changes to those requirements from year to year.
    Ms Armstrong: The amendments offer a range of options. If an authority were using the most expensive option, it would fall foul of value-for-money and other regulations that are already in place. We are offering a menu of options to enable each local authority to choose the most effective and appropriate approach in its area. That gives force to the amendments. I urge the Minister to think again. If the amendments are agreed to, the options set out in the Bill could still be implemented by a local authority if that were appropriate.
    Sir Paul Beresford: The hon. Lady has outlined why there was temptation at an earlier stage, which I am now resisting.
    I suspect that amendments Nos. 6 and 7 are tied closely to amendment No. 5. At the same time, they are surprising. The removal of the distribution requirement flies in the face of arguments previously advanced by Opposition Members and would worsen the various situations highlighted in Committee by the hon. Lady, especially that regarding her father. Local authorities would be given complete discretion on distribution and they could satisfy the requirement simply by using a free newspaper that had only a limited distribution. That would undermine opportunity for those who wish to seek a newspaper and to seek the information within it.
    Amendments Nos. 1 and 2, tabled by the hon. Member for Newbury (Mr. Rendel), adopt a different approach to distribution. I understand the hon. Gentleman's reasons for tabling amendment No. 1, but it strikes me as being impractical. How do we assess the number of people who will be reached by a paid-for newspaper? Amendment No. 2 is more onerous than the existing clause in respect of business premises. The amendment would force local authorities to reach 80 per cent. of the business community, whereas the current wording leaves such matters to the judgment of the authority.
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    All the amendments illustrate a misunderstanding of the meaning behind clause 5. That leads me to stress two points from the outset. First, the publication provisions are no more than minimum requirements. That answers my hon. Friend the Member for Portsmouth, North (Mr. Griffiths). It may be that, given its local circumstances, an authority believes that some additional publication over and above the minimum requirements would represent value for money in terms of effective accountability and communicating with its citizens. That was touched on by my hon. Friend the Member for Portsmouth, North.
    If my hon. Friend reflects on the words of the hon. Member for Brent, East and those of some of the authorities that he and I would care to name for having the expertise to get round legislation and codes of practice, for example, he will understand the Government's thinking. In such cases, it is open to an authority to provide such additional publication—for example, including performance information in its own in-house journal delivered to its citizens—and we believe that it would be right for it to do so, particularly in Brent.
    Secondly, there is a simple principle underlying these minimum requirements: whatever forms of publication are chosen by an authority, information about its performance, as measured against the Audit Commission's indicators, is at least available throughout its area in a publication that is wholly independent of the authority. We attach the utmost importance to that information being readily available to all who wish to obtain it, and in a context where an authority cannot seek to put its own gloss on the objective measures of its performance. The hon. Member for Brent, East made that point.
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    The Local Government Act 1992 requires publication of an authority's performance information in a newspaper circulating in its area. Such a newspaper is available in shops in the area; it is thus available to anyone who chooses to purchase it, even if they have to travel some distance to do so, as is the case in some rural areas. Such a newspaper is also edited independently of the authority, and the requirement to publish in a newspaper circulating in an authority's area therefore satisfies our underlying principle.
    We now believe that, in the light of the representations that we have received from the Audit Commission and local government, this underlying principle can equally be satisfied in certain cases by publication in free newspapers delivered to dwellings. These cases are where the free newspapers are wholly independent of the authority concerned, and where the free newspapers are distributed throughout the authority's area.
    Where a free newspaper is wholly independent of the authority, it is edited independently of that authority just like a paid-for newspaper. Equally, where free newspapers are distributed to dwellings throughout the authority's area—the situation that the distribution requirement in clause 5 seeks to describe—these newspapers can be seen to be generally available, even though they might not be available in the shops. I have deliberately referred to free newspapers in the plural; if an authority chooses to go down the free newspaper route, it is immaterial whether availability throughout its area is achieved through one or

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    several such newspapers. We therefore seek in clause 5 to extend the ways in which an authority can fulfil the minimum publication requirement.
    There remains the established way of using paid-for newspapers. We are now seeking to introduce a new option, as requested by local authorities, of using free newspapers in the circumstances that I have just described, where the use of such newspapers would be consistent with our underlying publication principle. The modest increase in flexibility as to how the minimum publication requirement can be fulfilled is all we seek to achieve.
    I trust that Opposition Members will feel that they can now accept the assurances that I have given and withdraw the amendments.
    Ms Armstrong: I am not entirely content with what the Minister said. I hope that the hon. Member for Portsmouth, North (Mr. Griffiths) is right and that the matter will be dealt with in the Lords. I do not wish to press the issue at this stage for that reason, and therefore I beg to ask leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    Order for Third Reading read.

    Motion made, and Question proposed, That the Bill be now read the Third time—[Mr. Knapman.]
    8.3 pm
    Mr. Livingstone: One could probably talk about Brent until 10 o'clock without a note, but as I raised most of my points on Second Reading, there remain only a couple to which I wish to draw the attention of the House.
    The Bill is a missed opportunity. We all welcome the steps forward in social services and the chance to have joint investigations and so on. I make a plea only that the Minister makes it clear to the Audit Commission that we would like it to start with Brent, because out of 32 London boroughs, Brent spends the least on social services, although there is massive need in my constituency and that of my hon. Friend the Member for Brent, South (Mr. Boateng) that is as bad as anything in the east end. I hope that the Bill will allow us to examine that. In any investigation about Brent, what we see is major neglect. An independent assessment was made of social services—
    Mr. Deputy Speaker: Order. I remind the hon. Gentleman that on Third Reading he must refer only to what is in the Bill.
    Mr. Livingstone: I hope that the Minister will ensure that we have a rapid investigation of the social services department of Brent and the studies and joint studies that have been mentioned, and that the Bill will give the Audit Commission the power to get involved. The closest that we have come to any comparative investigation was last year. An independent expert in social services was brought in, and discovered on examining the case files in the register of children at risk that 10 per cent. of all the files were illegible. How can Brent social services department be functioning adequately? I hope that we shall hear from the Minister that he shares that concern.
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    Nobody can be proud of that record. How can one defend children at risk when in 10 per cent. of cases one cannot even read the files?
    Mr. Deputy Speaker: Order. The hon. Gentleman is trying hard, but he is not being successful. He must stick to what is in the Bill, or I shall have to rule him out of order.
    Mr. Livingstone: I made that point because the powers already exist, and I want them used in Brent, which, of all social services departments in Britain, has the most urgent need. I do not believe that any hon. Member would be other than horrified to discover that the constituents whom they represent had to suffer in such circumstances. How does one create such a complete air of neglect? The comparative studies that are now possible and the strengthening of the Audit Commission in social services must give it the ability to step in. Even if it cannot take control, it can at least draw attention through the new powers to areas were one borough council is performing dramatically worse than others.
    As I mentioned in Committee, the question of reporting should have been in the Bill. I shall not repeat on Third Reading everything that I said about it in Committee, but this is a tremendous missed opportunity. I hope that the Bill will be strategically amended in the other place to strengthen the powers that will be given to the Minister. If it is, I hope that the Government will the accept the proposals, because what we have is not adequate.
    My hon. Friend the Member for North-West Durham (Ms Armstrong) made it clear that we are not happy with what we heard from the Minister. If the Bill is amended in the other place, he will have the support of the House to use tougher powers to stop the abuse of the system of reporting on performance indicators. If cannot be right if those indicators are reported in such a way that nobody is interested in looking at them.
    Who would produce an election address of just solid, turgid type? No one would read it. We have nice pictures of ourselves. We have pictures to illustrate local topics. We have graphics. If a council refuses to use those options and just produces dense acres of type, people will not plough through it.
    I hope that, when the Bill goes to the other place, Government amendments will be tabled to strengthen it along the lines suggested by my hon. Friend the Member for North-West Durham. If he did that, he would have the support of the Opposition and, I suspect, the Liberal Democrats as well.
    8.8 pm
    Ms Armstrong: I do not wish to detain the House for much longer, but hon. Members should be reminded that the Government were given an opportunity to clarify their wish to use the Audit Commission more effectively to secure probity and the delivery of high-quality services in local government.
    The Bill deals with two fairly minor matters. It proposes that the social services inspectorate should be able to work with the Audit Commission to inspect whole social services departments, an important new power which I welcome. I have always considered it nonsense that no power to ensure both effectiveness and value for money is enshrined in legislation. I also welcome the

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    Government's recognition that the current regime for the publication of performance indicators does not meet its objectives. However, I still do not think that the Bill has got it right.
    The Government have not faced up to the problems that local government has asked them to tackle. My hon. Friend the Member for Brent, East (Mr. Livingstone) talked about Brent and, on Second Reading, my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) spoke of the delay in solving Lambeth's problems, which was due partly to the fact that the auditor had not the necessary powers and partly to a lack of consistency. In Committee, we had a short debate about the importance of consistency among district auditors, and ways of ensuring that were suggested. I am sorry that the Government did not take the opportunity provided by some of our amendments.
    On Second Reading, my hon. Friend the Member for Holborn and St. Pancras also mentioned Brent and Westminster. He pointed out that in those boroughs, as well as in Lambeth, the public could not feel confident about the way in which matters had been handled, and that the district auditor had continually been thwarted. It is our responsibility to ensure that government at every level is as open, honest and responsive to local people as the House can make it. I am sorry that the Government did not tackle that issue in the Bill.
    Question put and agreed to.
    Bill accordingly read the Third Time, and passed.

Edgware General Hospital
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Knapman.]
8.12 pm
Mr. Hugh Dykes: I am grateful for the opportunity to speak on this topic. As I raised it in April last year, it may seem strange that I have raised it again tonight, but significant developments have taken place in the intervening time. I make no apology for bringing up the subject again, as there is still great public concern about the future of Edgware general hospital.
The issue must be examined again very meticulously: although it is a local issue, it impinges on all the services provided by the NHS in the neighbouring areas of north and north-west London, and, indeed—as some patients are referred from parts of greater London that are a long way away—on services north of the river generally.
I thank my hon. Friend the Under-Secretary of State for Health for his attendance. I hope that he will be able to reassure me. This has been a long campaign: it began when the last Secretary of State for Health made what we regarded locally as a tragic, unnecessary and unjustified decision to allow local agencies to proceed with the closure of the hospital's accident and emergency unit, and it continues in full force.
It is interesting to reflect on the panoply of local campaigns, which seek numerous objectives. I suppose that nothing is more important than the provision of health services—the services of hospitals, GPs and clinicians, and all the other facilities that are provided by a national health service in which we still take enormous pride. Health is one of the most crucial issues, especially for older people.
Experience suggests, however, that—logically and understandably—once a decision has been made, even local people who disagree passionately with that decision may drift away from their previous strong position. Although their arguments retain their validity, they may say, "There is nothing that we can do. The authorities are determined to go ahead, and we must accept their decision even if we still disagree with it."
In this case, however, that has not happened: if anything, feelings are stronger than they were before. That is a remarkable phenomenon, which I cannot recall observing before in many years of becoming involved in local issues. The passions aroused by this unwise decision are still extremely powerful, and the mass campaign continues—supported by most local politicians, both councillors and Members of Parliament. That must be borne in mind; but it is even more important to bear in mind the tangible underlying reasons why the proposed closure is a mistake.
It was in that spirit that, along with other hon. Members from all parties, I tabled an early-day motion on 22 January. The composition of those who signed the motion reflected approximately the percentage of referrals from constituencies in the area surrounding the hospital. The motion asked the Department of Health and the Ministers concerned to ask Barnet district health authority and the other bodies involved, including the Wellhouse trust itself, to look at the matter again.
In early November, in the House of Lords, my noble Friend Baroness Cumberlege—speaking on behalf of the Secretary of State—repeated emphatically that, in a

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process of extensive and thorough consultation, Barnet health authority and the Wellhouse trust had consistently sought to involve the public in their deliberations through a series of public meetings and the distribution of leaflets and articles in the local press. My noble Friend went on to say that the Secretary of State would not be reversing decisions made by his predecessor.
I can understand that. That is the normal basis on which a new Secretary of State takes over a portfolio, which will include all the adjustments that have been made in hospital policy. Conservative Members need no lectures from the Labour party, which many years ago, when it was in government, either closed or savagely cut some 60 hospital units per annum.
It is normal, and natural, for Secretaries of State to say, "I cannot go back on the decisions of my predecessor." Officials present the position in those terms when the new Secretary of State takes over. Dossiers are examined, but there is no suggestion of reconsidering closure proposals. That is understandable, but I nevertheless feel that a fundamental mistake has been made in this instance. Given the importance of the issue to local people, I hope that my hon. Friend the Minister will listen to the details sympathetically.
I was grateful for the opportunity to raise the matter in the lengthy Adjournment debate that took place on 5 April. Once again, tonight's debate has begun before the time when public business normally ends in the Chamber. Let me reassure you, Mr. Deputy Speaker: that does not mean that I shall speak at excessive length. I believe that my hon. Friend the Minister has an engagement, and I shall be speaking at a dinner if I manage to arrive on time.
In the previous debate on the Audit (Miscellaneous Provisions) Bill, the hon. Member for Brent, East (Mr. Livingstone) was, for various reasons, obsessed with the state of Brent council. With even more justification, I am obsessed with the future of Edgware general hospital, although, I hasten to add, it is on the other side of the road shared equally between myself and my hon. Friend the Member for Hendon, North (Sir J. Gorst).
I remind my hon. Friend the Minister of a number of important considerations that, once again, point powerfully to an unusual and demanding position that can irritate any Government, Ministers and officials who, once they have reached a decision, believe that they cannot go back on it. In this case, there are reasons for reconsidering the matter carefully.
I reiterate what I said on 5 April during the previous Adjournment debate. When the accident and emergency facilities at the Royal National orthopaedic hospital in Stanmore were closed about 12 years ago, it was reiterated repeatedly by the local agencies—the Minister will recall that there was a different structure then—and by Government spokesmen—and I can give chapter and verse on this any time the Minister cares to ask for it— that the local public did not need to be concerned about that, because the A and E facilities at Edgware general, which was just down the road, would take care of any substitution.
That important factor persuaded a number of local people reluctantly but gradually to accept the closure of the Royal National orthopaedic hospital's A and E unit—
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a successful unit, and one close to the Ml motorway. That closure was also a mistake, but it happened a long time ago, and we cannot go back on it.
In that Adjournment debate, if I may quote without taxing the House's patience, I said:
"I am worried about all aspects of the closure proposal. That is why others and I will be fighting hard and relentlessly to persuade the Government to change their mind. I am especially concerned about traffic congestion. It is an extremely congested area. If people are obliged to go to Barnet, Northwick Park"—
the main district general hospital in the middle of my constituency, and located alongside the town centre—
"or the Royal Free Hospitals, their journeys will take a great deal of time."—[Official Report, 5 April 1995; Vol. 257, c. 1792.]
There has been no significant reassurance by anyone that I care to recall—unless the Minister can disabuse me tonight—that that would not be so. The local public are extremely worried about that.
The hospital's A and E services are needed as much as the Barnet hospital must be expanded. Because it is in another region, I shall deliberately refrain from commenting too much in detail on Barnet hospital and its build-up, which I also welcome. No doubt there will be some referrals from my constituency to that hospital, although obviously not many. That would be welcomed by the local public, but it does not negate or reduce the primary requirement for Edgware general to remain a major multi-department medical facility in its own right, and not to be truncated drastically and tragically by closing its most important section—the accident and emergency facilities.
There is no reassurance so far on that point. It remains to be seen what the Government and others responsible for the decision will say in detail about these matters. Traffic congestion is one of the main issues that will arise again and again when these matters are considered.
There is no diminution in the force of the local campaign—I emphasise that. I am not at all reassured by any statements so far from the Wellhouse trust, London ambulance service representatives, other people involved and Department spokesmen. There has been no significant tangible reassurance about the provision of the necessary ambulance services that would take care of additional journeys to the other units instead of Edgware general. That is a glaring gap in the range of information that is needed to reassure the local public as the campaign forges ahead, trying to persuade the Government to change their mind on this important issue.
I referred to that matter last June, when there was a further development in the local campaign. There was an enormous expansion in public anger and resentment that the authorities would in no way reconsider the decision. As I mentioned in that Adjournment debate and elsewhere, the local public consultations, including those of the regional health authority, were extremely inadequate and people did not feel that their points were listened to with care and responded to in any way. They were brushed aside—that is the glaring truth of this sad saga.
After a further stage in the campaign, when a number of meetings took place, I suggested In my June statement:
"we have to stick together to try and persuade the Department of Health to change its mind. This is a gigantic task. We should be firmly united, not seeking narrow Party advantage."

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The campaign is of the whole of the people, and has nothing to do with political parties in that direct detail.
The statement continues:
"It needs to be a sober campaign not an historical and emotional one."
In that campaign, local politicians should aim to achieve the central objective of persuading the Government to change their mind on the A and E facility, not seek to score points off each other or indulge in gesture politics, which will not save the accident and emergency facilities.
In that spirit, there were various questions from me and hon. Members in the summer months, seeking to get the Government to persuade Barnet health authority to change its recommendation and to reconsider these matters, as it could within its own powers, but we did not succeed, as is well known.
Autumn came. After continued campaigning, there was still no significant response from the Department to, for example, my question in a letter to the Secretary of State for Health on 21 July about traffic congestion and the excessive time needed for ambulance journeys Northwick Park hospital even with the blue light operating. Some informal tests have been done of those journey times, which were disturbingly long.
I again show to the Minister the local map produced by the Canons Park residents association campaign in its newsletter, an effective document. It produced a series of articles about the issue, continuously, up to the latest editions, showing again how congested the area around the Edgware general hospital is, how relatively uncongested the area around Barnet general hospital is, and the difficulty of those various journey times.
In July last year, the Prime Minister was kind enough to reply to my letter to him. I thought it was right to make some of these points to No. 10 Downing street. At the end of his letter, he confirmed that it was necessary to retain "significant" hospital services at Edgware. He did not go into detail—rightly, he left that to the Department and to his colleagues—but it is what "significant" means that is of major concern.
All the medical experts that I have talked to say in some detail say that, if we excise anything other than just the marginal A and E services in a modern A and E unit such as that at Edgware hospital, we inevitably undermine the provision of services in that hospital and its ultimate rationale. We could turn it into a sort of bucket hospital— if that is the right phrase, without alarming people excessively—that just starts running down.
I am sad to say that there are a few examples of the running down of facilities already as people psychologically start preparing for the ominous moment in May 1997, the scheduled date for the closure of this significant facility. They are starting to think of it as a much truncated unit offering a limited range of services.
There is still time, however, for all this to be reconsidered, without anyone being humiliated into a drastic climbdown or a change that is beyond all reasonable expectations. It would be absurd for anyone to expect the Government to say that they are completely reversing a decision that was taken after, I presume they would suggest, considerable thought, but it is the way in which the issue is reconsidered to try and achieve the right solution for the modern A and E facility that we still want at Edgware hospital in 1997 and beyond that is important.
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That is the key to what the Government can suggest to Barnet health authority and the Wellhouse Trust on how they should handle the matter and reconsider. None the less, I am aware of the absolute need to support the new managers of Wellhouse trust and not to humiliate or embarrass them, or to make them think that their role is being betrayed by a change that goes beyond their expectations for the detailed range of services that the modern hospital will offer.
I acknowledge that Barnet, with its expanded, modern, high-technology facilities, is vital, especially for people in the northern part of that borough. Again, I shall deliberately refrain from annoying my colleagues, if they read my words in Hansard, by commenting too much on what is happening outside my borough of Harrow.
Of course, Northwick Park hospital is central to our requirements in Harrow town centre. It also serves Brent, and takes patient referrals from as far as away as Ealing and beyond. However, Edgware general is in the middle of all those areas, and it should still be a significant major hospital for them, rather than being reduced, as it might be, to a low-facility unit.
The campaign continues. I pay tribute to the enormous power and effect of the Hands Off Our Hospitals campaign, and to all the people who have organised it. They have not given up; they have not reduced their activity and efforts. I shall bring to the Minister's attention information that we received recently through the campaign supporters' newsletter. There will be a campaign consultative meeting on 22 February, and another major rally, to engage the attention of all of the public in that area again, on 19 March, right in the heart of the Edgware general hospital area.
I understand the temptations for Ministers, bureaucrats and officials. If I were in their position, I should probably feel the same, and hope that attrition would account for the campaign, and that there would be a diminution in the intensity of feeling. But that is not happening. I must emphasise that to the Minister as strongly as I can. People want those significant facilities to remain. They want much more than the suggested replacement—that is, the minor accident treatment service now officially proposed by Wellhouse.
The consultations that the trust management said would be undertaken do not seem to have added up to much yet, although my colleagues and I have been offered several meetings. I do not decry that in any way, but I am not sure the trust is doing what it should for the local public.
There was an arresting headline in the local press recently. I hope that I am not showing too many exhibits tonight, Mr. Deputy Speaker, as if we were in a court of law, but we are dealing with a vital issue for the local population, and I am grateful for your indulgence. I should be happy to let the Minister have a copy of the 1 February edition of the Edgware and Mill Hill Times, whose headline is "Closure plans may be illegal".
I have been dealing with many other matters this week, so I have not had the chance to find out whether that charge has been refuted, from whatever quarter, so I quote it subject to those inevitable reservations. Underneath that startling headline is another: "CHC threatens legal action over lack of consultation on Edgware General". The article says:
"Barnet's patient watchdog has accused health chiefs of acting illegally over plans to close Casualty"—

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that is, the accident and emergency facility—
"and has warned it could take the matter to the courts.
Barnet Community Health Council… believes that Barnet Health Authority … is breaking the law by obstructing it in its duty to be consulted over health care changes."
Much more follows, and what the newspaper says must be of significant concern to the Department of Health when it considers what would be the only drastic reduction or elimination of a major facility in a significant NHS hospital on the outer London fringes. That, among other reasons, is why we feel so steamed up about it.
One reason why I have deliberately raised the subject now is that there are now rumours of possible second thoughts from the Department of Health, and of a possible reconsideration of some aspects. The Wellhouse trust management may be trying to engage the attention and sympathy of local GPs, by holding various consultations to try to find possible ways through the problems.
Provided that the present A and E facilities are to be retained in their basic and major form, any suggestion would be considered fairly and fully by the patient representatives, by the representatives and spokesmen of the Hands Off Our Hospitals campaign, by the local parliamentary representatives, by local councillors and by the many thousands of other local people involved.
It is now for the Government to take on board the serious fact that the campaign will not go away. The campaign has no narrow political axe to grind; it represents literal common-sense reality, and what the local public feel, aided by their medical advisors and by a range of powerful voices from GPs, surgeons and consultants, all of which say that the decision must be reconsidered.
A basic mistake was made. The profound consultation necessary was lacking. There was an unwillingness— possibly inadvertent but, unfortunately, probably deliberate—on the part of the regional health authority and the district health authority to consider the many and voluminous representations of local protestors.
Those people were not simply indulging in the normal knee-jerk reaction, without any consideration of the details, when medical facilities are threatened. The very location of the hospital provides the main reason for the continuing concern. There is an overriding need for the Government to think again and to work out how they can accommodate the demands from Members of Parliament and from the local public.
The campaign will not go away. It will continue. If the Secretary of State and his ministerial colleagues can give us comfort and say that the services will be maintained, the public will be reassured, even if there are to be some changes. I am speaking theoretically, because I do not want to raise the subject of change deliberately.
For obvious reasons, I refrain from making any specific suggestions tonight. But even if the main high-technology equipment is to be located at Barnet—one can understand the investment priorities of its new programme—none the less, despite that small reduction at the margin, the whole range of existing A and E facilities could be maintained.
There must be a way forward, a way in which the Government can meet the demands of the local public. If not, the campaign, the agitation—I use that word in a
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respectful sense—and the massive force of the combined voice of the people will continue, and I shall give it my full support all the way, as is my duty as a Member of Parliament.
I hope that my hon. Friend the Minister can say something that will help, because the local press will be waiting for the Hansard report of the debate. I did not suggest that, but that is what I was told. This is a most important occasion. There is still more than a year before the fateful decision is to be made, and before there will be any further damaging rundown of the hospital. Alarming stories are already coming out. I hear messages about them every week, with examples of services that are just beginning to be reduced at the margins, because of the low morale of everybody involved and the plight of the staff, for whom I have much sympathy.
The Government now have a marvellous opportunity to seek to reassure us and to put a new dynamic into the future of the Edgware general hospital, by saying that the important A and E facilities will be kept—because, as I have explained, they make sense. So I look forward with great anticipation to my hon. Friend's words.
8.38 pm
The Parliamentary Under-Secretary of State for Health (Mr. John Horam): I congratulate my hon. Friend the Member for Harrow, East (Mr. Dykes) on his success in the ballot, and I am pleased to have the opportunity to debate what is undoubtedly an important matter. As always, my hon. Friend spoke forcefully and with eloquence in advocating the best possible health care for his constituents. He has, if I may say so, conducted a long and skilful campaign on the matter.
I should mention in passing that my hon. Friend the Member for Hendon, South (Mr. Marshall), who has also been assiduous in this matter, unfortunately cannot be here this evening. I know that he has also played a part in the long-running campaign.
I acknowledge the point that my hon. Friend the Member for Harrow, East made forcibly about the strength of local feeling on the matter, which is probably running as high as it has been at any stage during the whole lengthy business. I can assure him that the Government are concerned about the matter. Ministerial colleagues and I have devoted a great deal of time and attention to the subject in recent months, and we want to ensure the best possible balance for the future provision in the area. I hope that my hon. Friend will take those commitments and assurances in the spirit in which they are given.
My right hon. Friend the Secretary of State has recently met deputations about the future of Edgware hospital— including one led by my hon. Friend—and the matter has been the subject of debate in this House and in another place on a number of occasions. I also assure my hon. Friend that the Government's first priority, and that of the Secretary of State, is to put the interests of the patient first. As decisions are implemented and new decisions are taken, our guiding principle will be that the quality of service should be at the very least maintained, and wherever possible improved.
The changes already agreed at Edgware are designed to provide the people of Barnet and Edgware with a high-quality, improved clinical service for patients. The present split-site arrangements at the Wellhouse

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NHS trust, with the inevitable duplication of facilities between the Barnet and Edgware sites, are not only inefficient, but significantly detrimental to good patient care. That is despite the dedication and hard work of the excellent medical and nursing staff at the Wellhouse trust. To ensure that the best health services possible are provided, patients need modern facilities in hospitals large enough to ensure appropriate levels of staffing and expertise. That is precisely what the development at Barnet general hospital is about.
The changes due to take place at Edgware and Barnet hospitals are part of a long-term programme of improvements to health services provided at the Wellhouse trust. They have been finalised only after an extensive and thorough process of consultation. Barnet health authority has been exemplary in involving the public in its deliberations through a series of public meetings, the distribution of leaflets and articles in the local press. It has gone to great lengths to explain how patients will benefit from the planned changes, and why change is necessary.
Inevitably, when change comes to much-loved local hospitals such as Edgware, there is great public concern. It is also unavoidable that, when changes to any local health services are determined, there will be some who find the new arrangements less convenient. I fully understand that. I say again, however, that we believe that the changes at Edgware and Barnet will lead to an improvement in patient care.
I now wish to refer to the implications for Edgware hospital, which are of such concern to my hon. Friend. Despite any change to its status that may ensue, Edgware hospital will continue to be a significant provider of health care in the area. I note the point that my hon. Friend made about a letter from my right hon. Friend the Prime Minister, which stated that the hospital would be a significant provider of health care. He rightly asked what exactly was meant by the word "significant" in that context.
The Government mean that there will be an extensive provision of out-patient clinics, day-care services, a breast-screening centre and mental health services. These will ensure that the hospital continues to provide an extremely wide range of services. In addition, an accident service will continue at Edgware. My hon. Friend knows that the MATS centre—to use the jargon—was opened by the chief nursing officer in November 1995, and the majority of patients who currently look to Edgware for their health care needs will continue to find them there.
Decisions remain to be taken on the final pattern of services at Edgware. Consultation is under way on various proposals, including the treatment of the elderly and children on the Edgware site. The decisions that have already been taken—never mind those that may be taken following consultation—mean that around four out of every five patients currently attending Edgware will continue to be treated there.
I must also emphasise—quite apart from what I have said about existing and potential services—that the changes at Edgware hospital will not happen immediately. They will only take place once any redevelopment of Barnet general hospital and the expansion of services at Northwick Park and the Royal Free hospital have been completed, and improvements in the ambulance service have started to be delivered. All this is part of a coherent
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plan, and we must ensure that nothing happens until we are perfectly certain that all the other elements are in place.
The House will be aware that the redeveloped Barnet general hospital will provide the full range of acute services. I can assure the House that the facilities being developed there will be of the highest quality. The £29 million first phase of redevelopment work started in November last year. The second and final phase, costing £33 million, can now go ahead. Once this work has been completed, we will in effect have built an entirely new hospital, which will allow local people access to the highest quality specialist acute facilities. The new accident and emergency department at Barnet will be one of the most up-to-date in the country, capable of treating 70,000 patients a year to the highest clinical standards.
As Edgware hospital changes its role and becomes more of a local hospital, so local primary services will need to adapt to the different circumstances. It is an essential element of the plans that primary care services will be developed. Local GPs will need time to develop human and financial resources to manage the shift from secondary to primary care, and will need to be closely involved in the development of services on the Edgware site.
My hon. Friend did not mention the fact that, in order to facilitate these changes, the local primary health care development fund plans to invest £17 million over a five-year period to improve local primary care services. My hon. Friend knows that the Government believe that the health service should be primary care-led, so we attach great importance to bringing together hospital and primary care.
Projects at present under way include the extension of nursing in the home for the terminally ill, improvements in GP surgeries and an outreach ophthalmology clinic. Projects planned for the future include increases in community nursing staff, further training of GPs to carry out minor surgery, and the introduction of community physiotherapy to improve the care of diabetics. I believe that these developments provide an excellent framework in which to ensure the success of the new Edgware hospital.
My hon. Friend also referred to the problems of transport in the area. I am aware that specific concerns have been expressed about the problem. I do, of course, acknowledge that some patients from the Edgware area will have great difficulty in travelling to Barnet. For this reason, a free NHS bus service will operate between the sites for those patients who require services that are being concentrated at the Barnet site. Special arrangements will be made for elderly and infirm patients who are less mobile. It must be recognised, however, that the majority of the services currently provided at Edgware will remain.
Particular concern has been expressed about the problems of transport in relation to accident and emergency provision. To address these concerns, the health authority intends to provide additional investment over and above the significant increase already agreed this year. Two additional ambulances and crews will be funded at an extra cost of £320,000.
As a former Transport Minister, I have considerable sympathy for my hon. Friend's point about traffic congestion in the area. He said that that was a serious matter that had not been fully addressed. We take that

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point seriously, and understand local concern that problems could be caused at the congested bottom end of the Ml. I will look at that point.
Mr. Dykes: We are concerned about the specific length of the journey from Edgware general to Northwick Park. The actual time would be a minimum of 45 to 50 minutes in normal traffic conditions, and that is far too long.
Mr. Horam: I hear what my hon. Friend says, and that adds to my concerns about traffic congestion. I will look at that point.
We believe that the proposals approved for the development of hospital services for Edgware and Barnet will lead to improved health care for the local community.
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They are being brought forward after lengthy consideration and consultation—which has not yet been completed—and will allow Barnet health authority to meet its statutory duty to ensure that residents of the area are provided with a comprehensive health service meeting the full range of their needs.
Some of the current facilities are below the standards that we believe patients should be able to expect. We are engaged in an effort to improve conditions for the people of the Harrow and Barnet area. We believe, therefore, that, if the plans are properly and fully implemented, taking into account the additional consultation, which is in train, that part of London will have facilities that will match the very best in the national health service.
Question put and agreed to.
Adjourned accordingly at eleven minutes to Nine o'clock.