Local Government Finance (Wales)

HC Deb 04 February 1997 vol 289 cc858-908

7 pm

The Secretary of State for Wales (Mr. William Hague)

I beg to move, That the Local Government Finance Report (Wales) 1997–98 (HC 218), which was laid before this House on 3rd February, be approved.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

I understand that with this, it will be convenient to discuss the following motions: That the Special Grant Report (Wales) 1997 (HC 219), which was laid before this House on 3rd February, be approved. That the Limitation of Council Tax (Relevant Notional Amounts) Report (Wales) 1997–98 (HC 220), which was laid before this House on 3rd February, be approved.

Mr. Hague

These motions concern provision for local authority revenue spending in Wales in the financial year beginning in April 1997.

In summary, I propose to set the total standard spending of Welsh local authorities at £2,931.3 million. That is an increase of £66.3 million, or 2.3 per cent., over the current year—slightly more than the forecast rate of inflation. Total standard spending includes £340 million for the four Welsh police authorities, £2,515 million in standard spending assessments for the 22 unitary authorities, and £73 million in specific grant such as national park grant and magistrates court grant.

Under my provisional capping criteria, every local authority in Wales can, if it sees fit, increase its budget in comparison with its previous notional amount by at least 3.7 per cent.

My plans for total standard spending increase the advantage that Welsh local government has over its English counterparts. Welsh TSS represents more than £1,000 of expenditure for every man, woman and child in Wales. It is an increase of £20 per head on the current year, and £70 per head higher than the equivalent figure for England.

That is a good settlement, and I look forward to Labour Members' support for it. They recently announced that they agree with and accept the Government's overall spending plans for the next two years. As the hon. Member for Caerphilly (Mr. Davies) said, quoted in the Western Mail of 21 January: Labour will accept the spending plans for the first two years as they stand. This applies across the board and therefore to Wales. It would be churlish of me not to welcome that statement of support for my budgetary plans, even though Labour Members had previously denounced them. The hon. Member for Caerphilly will no doubt wish to clarify tonight whether that commitment applies to the local government settlement, and, if not, what other Welsh spending would be reduced in order to increase it.

Hon. Members on both sides of the House will also be pleased that the vast majority of local government spending in Wales will continue to be provided from central Government funds. I propose to provide £2,577.9 million in central Government support through aggregate external finance in support of total standard spending. That is an increase of £64.3 million—or 2.6 per cent.—on the current year, about 1 per cent. higher than the increase for England. It amounts to £880 per person, an increase of £20 on the current year, and a massive £150 per head more than the level of support provided in England.

Aggregate external finance will comprise £1,732.7 million in revenue support grant, £584 million in distributable non-domestic rates, £244.5 million in specific grants—including police grants to be paid by the Home Secretary—and £16.7 million for council tax damping measures.

My decisions about aggregate external finance clearly confound the view expressed by some people last year that Welsh council taxes would rise rapidly to English levels. My plans will ensure that, on average, Welsh council tax increases should be no higher than those in England, and that average Welsh council tax levels should be about £200 lower than in England.

I remain of the view that, over the longer term, local government should raise a greater proportion of its income from the local taxpayer—it is difficult to understand how anyone who believes in local accountability can hold a different view. However, I have always made it clear that I would take my decisions, year by year, on the merits of the case, and for the coming year I have decided to hold aggregate external finance at about 88 per cent. of total standard spending. That compares with the much lower figure of 79 per cent. in England.

In addition, I expect to fund 100 per cent. of mandatory local government reorganisation costs and a proportion of discretionary costs in the coming year, amounting to a total of £10.1 million. Overall, the provision that we have made for transitional costs arising from local government reorganisation will amount to £104 million over the five-year period ending in 1999.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

The right hon. Gentleman makes a serious point about the way in which central Government increasingly carries the burden of local spending, so that any marginal change in central Government decisions has a disproportionate effect on taxation at local level. That has happened this year and last year. Is not the problem that we have never managed to devise an effective system of local government taxation?

Mr. Hague

The hon. Gentleman makes a valid point. We have not succeeded in devising a form of local government taxation that would allow local government to raise the vast majority—or all—of its revenue and take all that responsibility. That is why we continue to provide a very large proportion of local government spending from central Government funds. It does not mean that we cannot adjust that amount, but it means that, for a long time to come, unless the basis of local taxation is changed, most of the money will be provided from central Government funds.

Mr. Christopher Gill (Ludlow)

Has my right hon. Friend considered that the only way that we shall put this equation right, so that local government is totally accountable for its expenditure, is to remove the cost of education and social services from the local authority, and assume it as a national responsibility? If we did so, local spending could be almost 100 per cent. funded by the council tax, ensuring greater accountability, greater intelligibility to the electorate and more satisfactory local democracy.

Mr. Hague

In theory, one way to change the equation would be to reduce the total amount and shift responsibility elsewhere. As my hon. Friend knows, we have moved much responsibility for education budgets into schools, and I prefer to think that our future progress will involve greater devolution to local decision making instead of centralisation of decision making. However, Governments of all parties have tried to reform the present system, and have not enjoyed the experience. I believe that, within the existing system, the decisions that I am announcing for the coming year are right.

The standard spending assessment specified in the "Local Government Finance Report (Wales) 1997–98", which is before the House, have been calculated in accordance with a formula agreed with the Welsh Local Government Association. It was developed over a two-year period by the Welsh Office and the local government associations, and comprises objective, largely population-based, indicators of relevant need.

That said, I want to explore all avenues for improving the formula. It is subject to a full review being undertaken jointly by the Welsh Office and the Welsh Local Government Association, which will be completed in time for the 1998–99 settlement. I welcome the fact that local authority elected members are participating in the review working groups. Pending its completion, the Welsh Consultative Council on Local Government Finance agreed that no significant change should be made to the formula for the coming year. The consultative council will consider the review recommendations in the autumn.

Sir Wyn Roberts (Conwy)

It is all very well for the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) to look a gift horse in the mouth when he refers to the 88 per cent. that my right hon. Friend has secured, compared with the 79 per cent. in England, but does my right hon. Friend agree that the real threat to the favourable treatment that Wales receives is from the Opposition's devolution proposals?

Mr. Hague

My right hon. Friend makes two valid points. He draws attention to the advantage that Wales enjoys in local government finance, which we have preserved over many years, with a much larger proportion of local authority spending financed from central Government funds. He is right to say that the threat to the formula which determines the spending of the entire Welsh block, on which these figures critically depend, is a fundamental change in our constitutional arrangements, which could sweep that formula away.

Local authorities are responsible for setting budgets and determining their council tax. In setting budgets, they will need to take account of the effect of their spending decisions on council tax payers.

Mr. Walter Sweeney (Vale of Glamorgan)

I assume that the aggregate external finance figures that my right hon. Friend has given include the provision from central funds for the police and the amount that comes from the Home Secretary. Will my right hon. Friend clarify whether the figures he gave include the additional funds promised by the Home Secretary to fund additional policing?

Mr. Hague

The specific grants, which include £171.1 million in police grant to be paid by the Home Secretary, are included in my figures for aggregate external finance, and that is the total provision from the Home Office for the police in the coming year. It therefore includes all policy initiatives, which my hon. Friend will have heard the Home Secretary announce, and which are now being implemented.

The provisional capping principles that I announced on 12 December enable me to restrain spending by local authorities, if necessary. However, provisional capping limits are ceilings, not targets, and it is open to local authorities to set budgets below their capping limits.

I have taken careful account of representations made to me about potential council tax increases, should authorities exercise their discretion to budget at cap, so I decided to continue for a further year the targeted council tax damping scheme that I introduced for last year. I am making £16.5 million available within AEF to ensure that, excluding any increase in community council precepts and discretionary non-domestic rate relief, no council tax increase can exceed 15 per cent. The great majority of council tax increases will have to be well below that level, and council tax payers in nine of the 22 unitary authority areas will benefit from the scheme.

Mr. Donald Anderson (Swansea, East)

The capping limit in Wales is 1.8 per cent., whereas in England it is 2.6 per cent. What is the logic behind the difference?

Mr. Hague

The capping limit in England is much more complex. It is 2.6 per cent. for certain types of authority but a lower limit for other types of authority. It varies in England because of the introduction of unitary authorities, and because of a different pattern of local government reorganisation from what we have seen in Wales. If one were to allow for all those differences, the hon. Gentleman would find that capping limits are not as generous in England as they are in Wales. I should be happy to write to him with those figures.

Mr. Denzil Davies (Llanelli)

The Minister said that, in an ideal world, he would like to see an increase in local democracy, and more money raised locally. We would all agree with that, although we realise the difficulties. Why, then, does he have capping at all? Why not just put the capping aside and allow local democracy to take its course?

Mr. Hague

As we discussed earlier, we do not have a system in which local authorities take true responsibility for all their decisions. I am interested to hear Labour Members advocate the lifting of all capping restrictions, because it is one of those murky areas of policy that the Labour party has developed over the past year or two. Previously, it was in favour of abolishing all capping limits; now it seems to be in favour of capping limits for the coming year, if I understand the hon. Member for Holborn and St. Pancras (Mr. Dobson) correctly. I expect that the hon. Member for Caerphilly will enlarge on that in his speech.

My answer to the right hon. Member for Llanelli (Mr. Davies) is that the consequences for Welsh council tax payers would be unacceptable if local authorities were left to set the council tax themselves.

There is good news on the local authority front, which Opposition Members and others outside the House often do not care to recognise. Local government reorganisation has worked well, as the Welsh Local Government Association acknowledges. Only last week, Her Majesty's chief inspector of schools in Wales reported a significant and continuing improvement in standards in our schools. Local authorities are playing a full part in attracting inward investment. I am happy to pay tribute to those who have helped to secure some of our recent projects.

Local authorities have increased access to private sector resources for capital investment under the private finance initiative, and a significant number are pressing ahead with schemes. They are beginning to realise that they do not have to depend on central Government capital allocations.

There are a number of ways in which local authorities can take action to help themselves, particularly through the levering in of private finance. Much more can be achieved by innovative partnerships between local authorities and the private sector. That has for a long time been the case with regeneration projects, but now the opportunities extend to a wide field of mainstream service delivery.

Under our PFI, major and radical changes have been made to the capital finance rules over the past two years, which, coupled with new arrangements for revenue support which are not constrained by the normal capping rules, have given local authorities the tools to go about providing services and facilities such as schools, roads, libraries and leisure facilities in radically new ways. Again, I pay tribute to those authorities that are looking seriously at private finance options.

Local authorities should also consider the opportunities for transferring their housing stock, with the consent of their tenants, to a local housing company or an existing housing association. That allows borrowing for improvements in the housing stock outside PSBR constraints, and, depending on the valuation of the stock, it can also generate a usable capital receipt for the authority. Where stock transfers at a positive value, concessions agreed at the time of the budget make the receipt position more favourable than under previous rules.

I am therefore pleased that a number of Welsh authorities are actively considering stock transfer, and I urge all authorities to do so. Experience in England amply demonstrates the benefits to councils and their tenants. Stock transfer should be regarded not simply as a means of dealing with the problems of individual estates, but as a strategic choice for long-term investment in the housing stock. I wish that, instead of decrying as inadequate the resources that local authorities have, Opposition Members and local authorities would take a positive view of the opportunities that those resources and new ideas provide.

I make no apology for stressing the importance of the need for continuing public expenditure restraint. It has been the key to our enviable economic performance in recent years. Local government in Wales continues to receive almost half the resources at my disposal. It must expect to play its full part in keeping public expenditure in check.

Mr. Llew Smith (Blaenau Gwent)

How can the Minister say that he wants public expenditure restraint, while accepting and supporting a £60 million investment in the royal yacht from public funds?

Mr. Hague

Some of the investments that have come into the United Kingdom, and specifically into Wales, in recent years have been partly negotiated or signed because of events held on the royal yacht. I can absolutely assure the hon. Gentleman of that. The royal yacht is worth far more than £60 million in generating new jobs and investment for the UK, and Wales has been one of the principal beneficiaries. [Laughter.] Anyone who laughs about that shows a depressing lack of imagination about the marketing of this country.

Mr. Gill

Does my right hon. Friend agree that the £90 million that the British Government will be called upon to pay for the new European Parliament building is 50 per cent. more than the cost of the royal yacht, and will return no benefit to the United Kingdom?

Mr. Hague

rose—

Mr. Deputy Speaker

Order. The Secretary of State should confine his remarks to the debate on the rate support grant (Wales).

Mr. Hague

I have no plans, Mr. Deputy Speaker, to allow any of the projects recently mentioned to be financed out of the Welsh local government settlement, as hon. Members will be delighted to hear.

Mr. Paul Flynn (Newport, West)

The Secretary of State mentioned the jobs that have come from the royal yacht. Has he noticed that the royal yacht has never visited Japan or Korea? Can he tell us how many jobs resulted from the destinations that it has visited? How many jobs for Wales arose from its visits to the Lesser Antilles, the Azores, the Leeward Islands, the Windward Islands, Gran Canaria, Grand Cayman, the Ivory Coast or Namibia?

Mr. Hague

The hon. Gentleman will be delighted to know that the royal yacht will be visiting Japan and Korea on its current tour. As his constituency is one of the principal beneficiaries of investment from Korea, he in particular should welcome our continued good relations with Korea.

Local authorities must expect to play their full part in keeping public expenditure in check. As large organisations with big budgets, local authorities have scope to prioritise services and to put in place tight, cost-effective administrative and service structures. Reorganisation has given Welsh local authorities the opportunities to do that.

I have seen the predictable press reports that always appear at this time of year speculating on cuts or meltdowns of one sort or another, including teacher redundancies by a number of authorities. One authority seems to be preparing for teacher redundancies while increasing allowances for its members. I am heartened by reports that some authorities have rejected a policy of teacher redundancies, including Carmarthenshire, Denbighshire and Rhondda Cynon Taff. If some authorities can manage not to sack teachers, I question whether any authorities need to take such action.

If local authorities manage their resources prudently and in a way that their residents have a right to expect, there is no reason why they should have to cut front-line services as a result of my settlement proposals.

This morning, the hon. Member for Caerphilly (Mr. Davies) and his Front-Bench colleagues, in their role as the chief gloom-mongers of Wales, were trying to spread despondency about the local government settlement. It is time that they recognised that it is incumbent on those who criticise the level of resources provided to say where they would obtain additional resources. Opposition Members have got themselves into the ludicrous position in which they call for higher spending on a wide range of items in particular, while maintaining that they would spend no more money in total.

Such are the contortions taking place on the Opposition Benches that the hon. Gentleman has even had to resort to defending my budget. He said in the Grand Committee on 4 December that it meant "cuts", the consequences of which "would be dreadful". However, the day after the shadow Chancellor's famous speech last month, the Western Mail said of the hon. Member for Caerphilly: He said the figures were open to debate as to whether there was a cut or an increase. That is the light in which we must judge anything he says about cuts during the debate. Not only does he not agree with me; he does not even agree with himself.

If the hon. Gentleman does not agree with the settlement that I propose, let him say what settlement he proposes. The figures for each local authority which we are debating tonight are the product of two factors, and two alone: the first is the total available for local government spending, and the second is the standard spending formula by which that money is distributed. Anyone who votes against the measures tonight is implying that he is unhappy with the total, or the formula, or both.

Last night, the Opposition voted against the parallel English reports, because they said that they disagreed with the formula by which the money was shared out. Tonight, however, we are debating a Welsh settlement, before which the Welsh Local Government Association, with its clear Labour majority, specifically asked me not to change the formula.

The formula is agreed with Welsh local government, including members of the Labour party. The formula, as I have said, has been worked out by the Welsh Office and the Local Government Association, in close consultation and by agreement. It therefore cannot be the formula which troubles Opposition Members tonight, unless they are telling me that the leaders of all the Labour-controlled authorities were wrong.

The only other factor up for debate is the total sum available. That could be increased only by reducing other Welsh Office programmes, given the cross-party agreement on the total Welsh budget—a budget that already assumes large and continuing reductions in the running costs of the Welsh Office and the non-departmental public bodies.

To vote to increase the settlement, while also stating that the Welsh Development Agency would be a high priority, that the money for an assembly would be found within the block, and yet that the total budget would remain the same under a Labour Government, is ludicrous double-speak. If Opposition Members vote against the settlement while maintaining that they need no compensating reductions elsewhere, people sitting at home in Wales tonight will be able to smell the hypocrisy oozing out of the No Lobby.

I am the first to acknowledge the importance of local authority services to the communities they serve, and to the people of Wales as a whole. That is reflected in my settlement proposals. A 2.3 per cent. increase in standard spending is fair in the context of the overall level of resources available and the needs of other public sector organisations, including the health service. It enables local government to maintain its services, provided that authorities are ready to set clear priorities and to pursue new opportunities to save and raise money. I commend the settlement to the House.

7.26 pm

Mr. Ron Davies (Caerphilly)

I shall deal first with the central thrust of the Secretary of State's argument. I shall vote against his proposal—and encourage my right hon. and hon. Friends to do likewise—because I believe the settlement to be deeply damaging. Let me assure the Secretary of State that there is no agreement whatever on the Welsh Office budget.

It would be dishonest for me or any of my colleagues to urge local government in Wales to spend over budget in the coming financial year in the hope or expectation that an incoming Labour Government could bale them out in the middle of the financial year. I do not propose to be dishonest. That is why I and my hon. Friends have made it clear to local government that, if there is a general election that takes us into the next financial year, and local authorities have overspent, they cannot look to the Welsh Office to bale them out. That is our clear position.

The Welsh Local Government Association has made it clear that it is deeply unhappy with the settlement. I have no doubt that my right hon. and hon. Friends who represent Welsh constituencies have been in touch with their leaders and local authorities, who will have impressed on them the deep dissatisfaction of Welsh local government with the settlement.

Mr. Hague

The hon. Gentleman mentioned the coming year. He was quoted in the newspapers as saying that he agreed to the total Welsh Office spending plans for the next two years. That applied to total Welsh spending and to the Government's total spending plans. Was he misquoted? If not, and if he wanted to spend more on the local government settlement at any time in the next two years, would he not have to reduce other spending programmes?

Mr. Davies

The Secretary of State is deliberately misquoting me. I have never said that I agree with the settlement, but I recognise that it is the settlement that will apply in the next financial year.

After 18 years of Conservative government, if I were Secretary of State I would not expect local government to cope with the burden of cuts that the Government have imposed. I do not agree with the settlement and I do not want it. I can tell the Secretary of State directly: I believe that the settlement is inadequate and unfair to local government. I believe also that the Government are playing politics with local services and the jobs of people in the public sector. Education will bear the brunt of the cuts that the Secretary of State has put before the House this evening, which will result in the loss of 1,000 teaching jobs in Wales in the coming year. How on earth could I, or any right hon. or hon. Member who represents a Welsh constituency, agree with that package?

Mr. Rod Richards (Clwyd, North-West)

rose—

Mr. Davies

I shall not give way to the hon. Gentleman. Many of my hon. Friends wish to contribute to the debate and, if the hon. Gentleman wishes to make his own speech, no doubt he will seek to catch your eye, Mr. Deputy Speaker. If any other right hon. or hon. Members who represent Welsh constituencies wish to intervene, of course I shall consider giving way.

I make it clear to the Secretary of State that I have ambitions for local authorities to become dynamic and independent. I want them to promote economic development, conserve their environment, plan communities, educate children and care for the infirm. Year after year, the Government have undermined the ability of local councils to achieve those goals. The Government have placed duties on councils and then removed the resources needed to meet their obligations.

In the past 10 years, central Government expenditure in Wales has increased by 71 per cent. in real terms, while local government expenditure has increased by only 43 per cent. While central Government expenditure has more than kept pace with inflation, local government expenditure has failed to do so. Local government has experienced a real reduction in available resources, services have been cut, and council taxes continue to rise. It is a typical Tory trick: pay more and get less.

That is precisely what will occur under this settlement. Services throughout Wales—particularly education—will be cut. The Secretary of State is fond of quoting the Western Mail. I refer him to its report of 27 January, which forecast the loss of 750 teaching jobs. If this settlement is approved tonight, there will be an average increase of 8 per cent. in council tax across Wales—or £40 extra tax for every council tax payer in Wales.

The Secretary of State boasted this evening about how well Wales is supposedly doing under his stewardship compared with the rest of the country. I remind him of Westminster city council: it is up to its eyes in sleaze and corruption, and is one of the richest boroughs in London. If Welsh local authorities were funded on the same basis as Westminster, band D council tax in Wales would be reduced by a staggering 33 per cent. Local government has been the Government's whipping boy and, as the British people have voted consistently for Labour councils, the Government have responded by whipping those councils even harder.

At the heart of the argument between us is the performance of the British economy under the Conservatives. The simple fact is that Conservative economic policy has failed and, in typical Tory fashion, the price must be paid in homelessness, crumbling schools, deteriorating health care, and divided and alienated communities. The people of Wales know that only too well. Welsh gross domestic product is 16 per cent. below the United Kingdom average, and it has shown no improvement after nearly 18 years of Tory rule. Economic failure has resulted in an inability to control the nation's finances. Our national debt is almost £400 billion—double the level when the right hon. Member for Huntingdon (Mr. Major) became Prime Minister.

Interest payments last year were more than £25 billion—more than three times the size of the total Welsh block—and the public sector borrowing requirement in 1995–96 amounted to more than £30 billion. Even in the fifth year of supposed recovery, the PSBR is still unacceptably high at £27 billion. The balance of public expenditure is out of control. Instead of investing for the future, improving infrastructure and promoting the economy, education and training, public expenditure is increasingly used to meet the social cost of failed economic policy. Education expenditure in Wales has increased by 36 per cent. in the past 10 years; social security expenditure—largely the cost of idleness enforced by Government policy—has increased by 43 per cent.

The Secretary of State claims that his priorities for the coming year are economic growth and the national health service, but he has provided no details of those additional resources nor of how they are allocated. He has not told us how his decisions will affect other programmes in the Welsh Office total spend. He has not yet published his Department's report, so how does he expect me to propose amendments to it? He and his predecessors have tried constantly to mislead the people of Wales about the true level of Government spending in Wales. They have elevated media manipulation to an art form: they have leaked, briefed and dissembled. Last December, the Secretary of State had the effrontery to announce an inquiry into the publication by the Western Mail of expenditure figures that his own office had leaked.

If we accept that the Secretary of State's stated priorities are economic development and health, will he acknowledge that local government has a vital role to play in enhancing economic growth—including projects such as LG—and in protecting the health of the Welsh people? What share of the alleged resources for economic growth and health has he given to local government? That is a straightforward question, and we are entitled to an answer. I invite the Secretary of State to intervene and provide that answer.

Mr. Hague

I shall intervene, but not on that point. The hon. Gentleman made an entirely unsubstantiated assertion about the source of a leak from the Welsh Office. I have established an inquiry into the matter and the report is imminent. I shall write to the hon. Gentleman about it, and to anyone else who is interested—including the hon. Member for Caernarfon (Mr. Wigley), as he is obviously curious about the findings. There is no evidence for the hon. Gentleman's assertion that the information was leaked by my office. He should therefore back up his assertion or withdraw it.

Mr. Davies

I have no intention of doing so. The figures were prepared by the Secretary of State's Department for his use. They were not divulged to anyone else. How could anyone outside the Department have released those figures? It is a simple matter: they were the Secretary of State's figures and he had exclusive control of them. They were prepared by his office for his use. No one other than officers of his Department could have accessed those figures.

Mr. Hague

When the hon. Gentleman says that the figures were leaked by my office, he clearly implies my personal office. The standard of his accusations and of his debate this evening are a sad reflection on his leadership of the Labour party in Wales.

Mr. Davies

Is the Secretary of State saying that the figures were leaked not by his own personal office but by someone in the Welsh Office?

Mr. Hague

We are having an inquiry.

Mr. Davies

How can the Secretary of State be sure that his private office did not leak the figures if, as he now claims, the inquiry is not complete?

Mr. Hague

I asked the hon. Gentleman to substantiate his accusation regarding civil servants—who cannot answer for themselves in this place—and he cannot do so. That is highly irresponsible conduct, which is exactly what we have come to expect from the hon. Gentleman.

Mr. Davies

I am afraid that the Secretary of State's performance is woeful. The figures were prepared by his Department for subsequent publication. They were available only to civil servants and politicians in his Department—nobody else could have accessed them or leaked them. The Secretary of State is responsible for his Ministers, political advisers, media officers and other civil servants in his Department. Someone in his office leaked the information, deliberately and maliciously, to the Western Mail.

Mr. Richards

On a point of order, Mr. Deputy Speaker. I seek guidance on what the hon. Member for Caerphilly (Mr. Davies) has been saying for some time. Is it in order for an hon. Member—

Mr. Rhodri Morgan (Cardiff, West)

This is a foolish point of order. Sit down.

Mr. Deputy Speaker

Order. I am trying to listen to the hon. Member's point of order.

Mr. Richards

The hon. Gentleman's body temperature is higher than his IQ—on the centigrade scale.

Is it in order, Mr. Deputy Speaker, for an hon. Member to make unsubstantiated accusations in the House against officers of the Crown? [HON. MEMBERS: "Sit down and do not be silly."] I recall Madam Speaker saying that she deprecated attacks on civil servants by hon. Members.

Mr. Deputy Speaker

Hon. Members are responsible for their own speeches.

Mr. Davies

I invited the Secretary of State to give a straightforward answer to my question. What share of the alleged additional resources for economic growth or health has he given to local government? If he cannot answer that question now—I realise that local government finance is complex, and perhaps he has not had time to master it—will he write to me with that information?

Mr. Hague

I am happy to answer the hon. Gentleman's questions all evening. It amazes me that he is so resistant to more Welsh Question Times in the Grand Committee, given that he is so keen to ask questions in the House.

The increased resources for economic development and for health that I announced are channelled through the health authorities, the Welsh Development Agency and the Development Board for Rural Wales. Local authorities often work in partnership with those authorities and agencies, so there are important spin-offs for local government. The resources are not specifically channelled through local authorities. That is the answer to the hon. Gentleman's question, and I am perfectly happy to answer any other questions that he may have about the Welsh Office budget and local authority finance, but that may keep us here for a long time.

Mr. Davies

I am grateful to the Secretary of State, because that is precisely the answer that I knew he would give. His Department fails to acknowledge the crucial strategic role that the Welsh Office and local government could play together in tackling the economic and interlocking problems of our communities, such as unemployment and idleness, under-achievement, poor housing, poor environment, poor standards of public behaviour and poor health. It is the Welsh Office's failure to understand that and to work with local authorities that has caused so much resentment and frustration in Welsh local government under his regime.

We need a coherent, strategic partnership, but that is the last thing that we will get from a Government who are obsessed with short-termism and media manipulation.

Mr. Sweeney

Will the hon. Gentleman give way?

Mr. Davies

No, I have given way to the Secretary of State and I want to make progress.

Mr. Sweeney

rose—

Mr. Davies

I shall give way to the hon. Gentleman in a little while.

The Secretary of State has just claimed that total standard spending has increased by 2.3 per cent., but that is at best misleading. He knows full well that the true increase is only 1.6 per cent., which is below the level required to keep in line with inflation. He tried that trick in the Welsh Grand Committee last year. When challenged by my hon. Friend the Member for Bridgend (Mr. Griffiths), he said: It is no good taking out this or that to make the figures look different. The total figure is rising by 2.6 per cent."—[Official Report, Welsh Grand Committee, 4 December 1996; c. 14.] The Under-Secretary of State for Wales, the hon. Member for Cardiff, North (Mr. Jones), in his letter to the chair of the Welsh Local Government Association on 15 January 1997, admitted that the true increase is only 1.6 per cent. We have the Secretary of State's version—a 2.6 per cent. increase—and his hon. Friend's version, a 1.6 per cent. increase. Which of those two figures represents either the true position or the Government's position?

We all know that a host of adjustments will have to be made before the truth is uncovered. Expenditure provision in the settlement is insufficient, not only to meet pay and price inflation, but to enable local authorities to maintain services at the current level in the face of rising demand, especially in schools, community care and the fire service.

The Secretary of State also claimed that aggregate external finance has increased by £64.1 million. Does he agree that, if both last year's damping schemes are included, external finance for local authorities in Wales increased by only £43 million, which is less than required to keep pace with inflation?

The Secretary of State's decisions will mean yet further council tax increases for the people of Wales. The increases will be 8 per cent. on average, with many Welsh authorities facing increases of nearly double that figure. In Ceredigion, the increase is 9 per cent., which is £49; in Torfaen it is 15 per cent., which is £65; in Merthyr it is 15 per cent., which is more than £74; and in Denbighshire it is more than 16 per cent., which is £80.

Those council tax figures are part of a deliberate, long-term plan to increase the level of council tax in Wales, and there is no use the Secretary of State denying it. In a letter dated 7 November 1995 to my right hon. and learned Friend the Member for Aberavon (Mr. Morris), the Secretary of State confirmed that that is his long-term plan. His very words were: 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. We should have no illusions about this settlement. When council taxes go up, it is because the Welsh Office and the Treasury intend them to go up. The 8 per cent. increase in Wales far exceeds the 6 per cent. increase for England that the Government announced yesterday. Further evidence is provided by the fact that revenue support grant now accounts for 54 per cent. of local government spending, whereas 10 years ago it was 64 per cent.—10 per cent. more.

Mr. Rowlands

My hon. Friend returns to the point with which we began the debate, about the balance between central and local government expenditure and taxation. A marginal change in central Government support to local authorities leads to a disproportionate increase in council taxes. Any increase in local taxation is unfair, especially to poorer communities such as he and I represent. The burden of taxation is heavier on poorer communities.

Mr. Davies

My hon. Friend is right. He represents Merthyr Tydfil and Rhymney, which includes part of my local authority area of Caerphilly. That local authority faces horrendous consequences as a result of this settlement. It is grappling with budget cuts of £8 million, as are other local authorities. The local authority of my hon. Friend the Member for Blaenau Gwent (Mr. Smith) is one of the smallest, but it faces cuts of £6 million or £7 million in its annual budget.

The consequences must rest on the Government's shoulders. There will be real and severe cuts across the whole range of local government services, especially services that are trying to meet the cost of economic and social failure. The settlement will affect local authorities that are trying to invest in and improve their communities to generate wealth and job opportunities, and to build for the future. The Government are so short-sighted that they do not understand the role that local authorities play, and they will not work in partnership with them. It is all part of the Government's strategy to make council tax payers pay more. The 1p cut in the standard rate of income tax in last year's Budget will be more than cancelled out by council tax increases resulting directly from this settlement.

In addition, the capital settlement has been cut by £66 million. That money is needed for investment.

Mr. Sweeney

Will the hon. Gentleman give way?

Mr. Davies

I shall give way in a moment.

The capital settlement has been cut by 13 per cent. in cash terms, and by more than 15 per cent. in real terms. Is that not typical of the Government? They are irredeemably short-termist, and look only as far as the next election: they do not even have the courage to face that election.

Mr. Sweeney

I am grateful to the hon. Gentleman. He said some time ago that he would give way in a moment; then he said that he would give way in a little while; then he said that he would give way in a moment. Since then, he has responded to two other interventions.

I wanted to take up a point in the hon. Gentleman's speech—I hope that he can still recall it—when he contrasted the increase in education spending with the increase in social security spending, implying that the increase in social security spending had been excessive. What cuts in social security does he propose in order to increase education funding? If the hon. Gentleman's party were to take office, and if the social chapter were to be introduced, how much more would he have to spend on social security—or cut benefits?

Mr. Davies

I shall give the hon. Gentleman a direct answer. In Wales, some 30,000 people under 25 are unemployed. I want them to return to productive work. I want them to have the self-respect and discipline that comes from the opportunity to work for a living—an opportunity that the hon. Gentleman and the Government he supports have denied to generations of young people in Wales. When we provide young people with that opportunity—with the ability to be self-sufficient, and to work for themselves—the social security bill will fall.

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

Will the hon. Gentleman give way?

Mr. Davies

No, I will not. Many of my colleagues want to speak. The Minister will be able to speak—he will wind up the debate—and I want to finish my own speech so that the debate can continue.

The reality of the settlement is that total standard spending has been cut in real terms, Welsh Office support has been cut in real terms, and the capital spending programme has been slashed in both real and cash terms. Not only are resources being reduced; responsibilities are being increased. How can the Secretary of State expect local authorities to meet the cost of inflation in pay and prices? Will he confirm that a 3 per cent. increase in teachers' pay—mentioned in leaks in Sunday's newspapers—will cost Welsh local authorities nearly £20 million extra next year, and that the settlement makes inadequate provision for that increase?

Does the Secretary of State acknowledge that the expenditure forecasting group, in which both his officials and local government officials took part, estimated that central Government initiatives, through legislation and policy, will require extra spending of £129 million next year—on top of inflation? Does that not mean that, in real terms, the settlement means a cut of 3 per cent., or even more, in the budgets of Welsh local authorities next year?

Will the right hon. Gentleman confirm that his vacillation, and that of his Department, over the technical adjustment of the notional amounts in the capping rules for the nursery voucher scheme has bedevilled this year's settlement? Why does he not accept that nursery vouchers are wasteful, inefficient and particularly unsuited to Wales, as evidenced by the overwhelming number of representations against the scheme made to him and the single, solitary letter in support?

Does the right hon. Gentleman acknowledge that the new local authorities have had to make substantial savings in the current year to meet the continuing cost of reorganisation, and that they are having to deplete their reserves to maintain existing services—if they can? He should recognise that, and he should admit that this is a dreadful capital and revenue settlement. No doubt hon. Members will wish to illustrate the effect that it will have on their local authorities. It is clear that the Secretary of State does not realise that the financial base of the new local authorities in Wales is already precarious, and it will be weakened further by this harsh settlement.

Mr. Richards

Will the hon. Gentleman give way?

Mr. Davies

No, I will not.

It is time for the Secretary of State to admit that his decision will impose an unmanageable outcome for local government, and to acknowledge that that is bound to result in damage to our local communities. It is time for him to accept that his policies are flawed and lacking in coherence. It is time for him to accept that his budget decisions betray a lack of understanding of, or sympathy for, the needs of the people of Wales.

The settlement reflects the failure of Conservative policies, and itself fails to provide a platform on which to build for the future. Since 1979, local government in Wales has struggled to serve its communities well, despite the handicaps inflicted on it by successive Welsh Office Ministers. Welsh councils have had enough of this tired, incompetent, feckless, dishonest Government. Like the rest of the country, however, they will have to wait for the general election and the next Labour Government. The sooner that comes, the sooner we can start the long climb back to ensure honesty and decency in the provision of public services in Wales.

7.54 pm

Sir Wyn Roberts (Conwy)

I am glad to have the opportunity to comment on the settlement, but I do not know whether to be reassured or perturbed by the fact that the hon. Member for Caerphilly (Mr. Davies) is prepared to accept so much with which he disagrees. It makes me wonder what else he accepts, but disagrees with.

The settlement is, once again, constricted—as it should be, if we are to keep inflation under control and the overall budget deficit within manageable proportions. It is indubitable that there are public pressures to let public spending rip, but we all know that would be wrong, and, if it happened, it would end in tears of contrition.

One of my local councils, Gwynedd, has written to me, commenting—very sensibly, in my view—on the position, as seen by its finance and policy committee. The committee estimated its needs at nearly £120 million next year, if services of the present quality are to be provided; but it will be capped at £115.7 million. Its grant from central Government is £95.3 million—which is not ungenerous, at 82 per cent. Interestingly, the council does not propose to spend to the capping limit, because, it says, that would mean a council tax increase of 11.3 per cent. It is a good council, in the sense that it does not regard the capping limit as a target.

With commendable restraint, the council has expressed a wish to keep its increase to what it thinks will be the Welsh average—between 8 and 9 per cent. That, however, will mean alarming reductions in expenditure, which the council spells out in its letter. It will be interesting to see what final conclusions the full council reaches on 6 March, but one thing is clear: the severity of the cuts that it may impose will depend greatly on the extent to which it is prepared to raise money locally, and, of course, on what it believes it can raise locally—what local people can afford.

With the present Parliament coming to an end and a general election looming, I am more concerned about the future of local government finance than with the past. In particular, I am concerned about the Opposition's proposals to do away with capping and return local business rates to local control. In my view, both moves would be retrograde. One thing is clear from the deliberations of Gwynedd council, and its decision not to spend up to the capping limit: it, at least, has got the message about the need to restrain spending, and I commend it for that. The abolition of the cap, as proposed by Labour's document "Renewing Democracy, Rebuilding Communities"—published in September 1995 and confirmed in yesterday's debate by the hon. Member for Holborn and St. Pancras (Mr. Dobson)—would send local authorities a very different and destructive message.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

The right hon. Gentleman has mentioned Gwynedd council twice. Perhaps he should have told the House that the council had to raise its tax by 25 per cent. last year. To impose a similar tax this year would be totally unrealistic. It could not be paid anyway, could it?

Sir Wyn Roberts

The council managed 25 per cent. last year, but interestingly it has decided that it could not raise the rate by the figure that might have been suggested to it, and that it would rather keep the rate at the Welsh average. That shows responsibility on its part.

I am also critical of the proposal of the hon. Member for Caerphilly to return the business rate to local control, because we all surely remember what happened under the last Labour Government when local councils controlled the rate. Businesses were caned and destroyed by high rates. They were easy to hit, because owners had few votes compared with domestic ratepayers. I hope that the Labour party has grown up even since 1995—I refer again to its document. I shall listen carefully to the winding-up speech of the hon. Member for Bridgend (Mr. Griffiths) for, I hope, a denial of Labour's intention to abolish the national uniform business rate, the burden of which the Government have alleviated in last November's Budget, certainly in relation to small businesses.

The Labour party also proposes, I understand, to end compulsory competitive tendering. That, too, is regressive. The Government are only now beginning to succeed in persuading authorities of the undoubted cost benefits to their consumers of acting in an enabling rather than a direct-provider role. It would be a shame if we were to take a step backwards to the position where, frankly, services were provided primarily for the benefit of local authority trade union employees, rather than the ratepayers who pay for them.

I assure Opposition Members that I am not alone in not wishing for a return to that position, which, I hate to remind them, finally led to the winter of discontent, when there were mountains of uncollected rubbish and even unburied dead, and the last Labour Government fell out with trade union leaders, who refused to listen to them and to their pleas for restraint.

I have been reading Lord Callaghan's "Time and Chance", which contains a first-class account of what I have been talking about. We have always maintained that capital receipts from the sale of council houses and other property should for the most part be used to reduce existing debt, thereby reducing the debt interest burden on ratepayers, but the Labour party believes that those receipts should be spent.

I have read recently that the Labour party is adhering to that policy. If so, it must explain, if it can—I do not believe that it can—how it can allow that without failing to reduce the nation's debt burden as a whole. Welsh local authorities' outstanding loan debts on housing and non-housing services run to hundreds of millions of pounds, as the table on page 17 of "The Local Government Finance Report (Wales) 1997–98" shows.

It is clear that, whatever local authorities' financial problems may be, they will be as nothing compared with the problems should the Labour party gain power. If the Opposition's devolution plans are approved by Parliament, there will be even less money for local government and less power too, as the assembly arrogates to itself more and more of the powers now exercised at local level. That will certainly happen.

It is now of course fashionable to malign the quangos, the non-departmental public bodies, but we should never forget that they were largely the invention of the Labour party, which believed that local authorities were inadequate to perform the nationwide tasks that needed to be performed in different sectors. Tourism and economic and industrial development are good examples.

Latterly, the Labour party seems to have repented and reverted to supporting the local authorities that it controls, but I do not believe for a moment that its repentance will last for long, once it has its party commissars and apparatchiks on the NDPBs.

Mr. Richards

My right hon. Friend has expressed his concern about the Labour party's proposal to create an assembly in Cardiff. Is he doubly concerned about the effect of an assembly in Cardiff on his constituents in north Wales? Is he not alarmed by the statement of the hon. Member for Caerphilly (Mr. Davies), who said that the assembly would not have tax-raising powers initially, which implies that the Labour party's plans are similar to those in Scotland, in that a Welsh assembly would have tax-raising powers?

Sir Wyn Roberts

All parts of north Wales and mid-Wales fear that, because of the sparsity of their populations, they would be dominated by an assembly in south Wales, representing as it inevitably would the bulk of the population, which is located in the south.

On my hon. Friend's second point, I do not think that we have heard the end of the Labour party's plans for an assembly, and I would not be surprised if, even initially, it had tax-raising powers. I am sure that, if there is a Scottish Parliament with tax-raising powers, there will be a cry from the assembly men in Wales that they should have a similar power.

Mr. Ron Davies

I do not know why the right hon. Gentleman keeps raising this argument. We have made it absolutely clear that the Labour party has no proposals to give tax-raising powers to the assembly.

Sir Wyn Roberts

The hon. Gentleman assumes that he and his party can carry any proposal for an assembly through the House without change. Again, I ask him to go back to our debates in the 1970s to find out just how radical the proposed changes were—they were carried in the House, resulting in the defeat of the then Government, so he must not assume that he can dispose whatever he proposes. It is not up to him; it is up to Parliament to dispose.

Mr. Davies

I am not assuming anything. All I propose is to put to the people of Wales the question whether they should have their own assembly. If they vote yes, I am sure that the House will wish to accommodate that wish.

Mr. Deputy Speaker

Order. Passing reference to an assembly is one thing, but talking about it in detail is another.

Sir Wyn Roberts

I accept your guidance, of course, Mr. Deputy Speaker, but the hon. Member for Caerphilly simplifies a complex issue, as he will find it to be.

I was saying that the great danger is that NDPBs, like the Welsh tourist board and the Welsh Development Agency, will do little of value and substance, except pander to the whims of the their political masters.

On the settlement, I have read the police authorities' representations. The reduction in their capital expenditure is compensated for by additional money for extra officers, plus an increase in revenue—not far short, it seems to me, of what they wanted. Their strongest plea is to be included in the formula working group. I hope that my right hon. Friend the Secretary of State for Wales can accommodate them in that wish. Overall, I agree with him that his proposals provide local authorities with a fair level of funding in 1997–98 given the overall level of resources available and other spending needs."—[Official Report, 28 January 1997; Vol. 289, c. 159.] I shall be happy to support him in the Lobby.

8.9 pm

Mr. Allan Rogers (Rhondda)

I have never heard so many "opposition" speeches by Conservative Members. One would think that we were in government, as we shortly shall be, and that the Conservatives were in opposition. The Secretary of State and the right hon. Member for Conwy (Sir W. Roberts) were more concerned with Labour proposals than with their own. The right hon. Member for Conwy introduced the issue of a Welsh assembly. It is an interesting subject and I am sure that there will be many interesting debates on it, but enough of that for this evening.

I was disturbed by the Secretary of State's speech, because only in his last sentences did he talk about the services that are provided by local government. I accept that, in the early part of his speech, it was incumbent on him to outline his proposals and the finance related to them. However, I wish that he had said more about services and about how the money is to be applied to them.

Local government is about providing services to people, whether they live in deprived or in wealthy communities. It is about the direct services that people need. Instead of indulging in yah-boo tactics, we should get down to talking about our communities and the services that they need. I should like to outline the position as it is seen by my local authority, Rhondda Cynon Taff, which covers the constituencies of two of my hon. Friends as well as mine. I shall look at one aspect of local government to highlight what we are debating.

The Government's proposals will have a substantial effect on Rhondda Cynon Taff council. There is no point in the Secretary of State saying, "It is up to the councils to make the cuts," because the reality is that there will be cuts. In my communities they will lead to the loss of 100 teaching jobs, and about 120 jobs will be lost in social services. Social services jobs have to be translated into issues such as the closure of a sheltered employment facility and a children's resource centre and less assistance to the disabled and disadvantaged who are living at home. Those are just some of the effects of the cuts.

The housing service will be forced to reduce support for the homeless. There will be a reduction in child care provision. The peripatetic music service, for example, and other services that should benefit our children will be cut, and that will make the schools much poorer. In discretionary areas, the adult education service will be almost destroyed, as will discretionary awards for students. That will affect mature students who perhaps take advantage of other courses and then want to go to university or college. Figures can be bandied about for ever, but they mean that there will be cuts in services, often affecting the most vulnerable people.

In the second part of my speech, I shall look at the service that is provided for those with learning and disability problems. It is provided jointly by social services, health authorities and local NHS trusts working, in many cases, with voluntary and independent providers such as Mencap. Such services are laid on local authorities by the Government and, in the past 18 years, the Government have put extra duties on local government and have an obligation to fund them. The Government say that they can be paid for from local resources, but they cannot.

The transfer of some local government functions to central Government has been mentioned. There is an argument for that when central Government continually place obligations on local authorities, fund them initially, subsume the funding into the general rate support grant and then squeeze it off.

Disadvantaged people come within the framework of five pieces of legislation: the National Assistance Act 1948; the National Health Service and Community Care Act 1990; the Carers (Recognition and Services) Act 1995; the Chronically Sick and Disabled Act 1970 and the Disabled Persons (Services, Consultation and Representation) Act 1986. Those Acts place obligations on local authorities and they cover the areas that will have to be cut because of central Government settlements such as this. The Mental Health Acts of 1983 and 1985 are also relevant to the provision of services for the unfortunate members of our community.

Beyond the specific legislation passed by this institution, the Welsh Office has laid down guidelines. For example, in 1983 it set out key principles for those with learning difficulties and said that disabled people and those with problems have the right to live an ordinary pattern of life within the community. That is one of the Secretary of State's guiding principles. The guidelines stated that such people had the right to be treated as individuals and to have individual assessment of needs, and added that provision should be made to fulfil those needs.

The 1983 guidance was updated just two years ago, in 1994, by the Welsh Office document entitled "Welsh Mental Handicap Strategy". It reiterated the key principles and stated that there had to be an individual plan for everyone and that a range of care and support should be provided. It stated that there should be help to obtain real jobs for most adults and that there should be a range of accommodation to include provision for the resettlement of people who were living inappropriately in mental hospitals. Such provision will be savagely cut if the provision of accommodation for the whole community is cut.

The people I have mentioned depend on support to live in the community. People who have been incarcerated in mental hospitals, sometimes for many years, cannot be allowed to drift into the community, let loose without proper support. This Government and previous Governments have placed responsibility for that support on local authorities. If they want local authorities to do the job, they should provide resources. Not just this Government, but every Government have to do that.

There is no point in treating local authorities like political footballs. If we are to have a proper system of devolved government, we must allocate to it the resources that are needed to do the job that Parliament has asked it to do. The Secretary of State's proposals are not good enough to allow local authorities to do that. People with learning and disability problems have the right to independence, dignity and the same quality of life as those who have full use of facilities and faculties and are fully able to participate in society. To help them, we must harness the resources not only of local authorities but of other institutions.

We should set up community support teams consisting of social workers, community nurses, psychiatrists, psychologists and occupational therapists. In addition, we must provide proper medical care, including that which people with learning and disability problems require over and above that of the ordinary members of society. Those are the obligations and complexities of providing for those whom we have said should be in the care and responsibility of local authorities. If the Government cannot will that money to local authorities to carry out those functions, they are failing in their duty and in their responsibility to the people of Wales.

8.19 pm

Mr. Walter Sweeney (Vale of Glamorgan)

I should like to pay tribute to my right hon. Friend the Secretary of State for once again securing a generous settlement for Wales, compared with that for England. The aggregate external finance that he has announced represents a 2.6 per cent. increase over last year, and it is about 1 per cent. more than the increase announced for England.

Mr. Donald Anderson

With that generous settlement, how many jobs does the hon. Gentleman expect will be lost in his local authority?

Mr. Sweeney

That will be a matter for the local authority to determine, because my right hon. Friend has left with local authorities the discretion, provided that they do not exceed capping levels, to determine how much council tax people will pay. That discretion will apply in Vale of Glamorgan as it will across Wales. I should expect Vale of Glamorgan to look for ways of getting better value for money and of providing better services for a given amount, and not, for example, to waste money on titivating the reception area of its civic offices, on which an enormous amount appears to have been spent.

When council tax demands are sent, my right hon. Friend and all Conservative Members will no doubt be castigated for not giving enough money to Vale of Glamorgan. Let the local authority put its house in order. If it manages to run Vale of Glamorgan responsibly, I am optimistic that service and job cuts, to which the hon. Member for Swansea, East (Mr. Anderson) has alluded, will not have to be made.

Aggregate external finance for Wales amounts to £880 per man, woman and child in Wales, which is £150 more per head than in England. AEF represents 88 per cent. of total standard spending, which on any reckoning is an extremely high percentage. I shall not be at all surprised if, when Labour-controlled local authorities send out their council tax demands in a few weeks, they attempt to blame the Government for the increases that they will undoubtedly impose; but local authorities will of course be free to set the council tax of their choice.

Mr. Llwyd

Subject to capping.

Mr. Sweeney

Subject, of course, to capping. It is interesting to note that Opposition Members do not seem to like capping. Perhaps that is not surprising, as we all know that Labour-controlled Governments, just like Labour-controlled authorities, tend to act irresponsibly when spending is involved. In the past few days, we have received assurances from some Labour Members, who are not in the Chamber for this debate, that Labour will not attempt to increase spending in the next two years. However, the tone of Opposition Members' speeches today suggests that they assume that central Government are not providing enough money for local authorities. The clear implication is that a Labour Government would provide more.

I agree with my hon. Friend the Member for Clwyd, North-West (Mr. Richards) that we need answers from the hon. Member for Caerphilly (Mr. Davies). We need to know how much extra money he would spend on behalf of a Labour Government this year and in the year after; but, of course, he has said nothing. It is much easier to stand up and rant at the Government than it is to set out one's own policies, for which one could be blamed.

My right hon. Friend the Member for Conwy (Sir W. Roberts) has rightly stressed that Government spending must be kept under control to maintain a strong economy. Indeed, if we are to maintain the sustained growth, low inflation and low interest rates of which the Government are rightly proud, we must reduce borrowing and continue the Conservative policy of lowering income and capital taxes. It is therefore important for the Government to encourage restraint in local government spending. Against that background, the Secretary of State deserves to be congratulated on his success, in what must have been extremely tough negotiations with the Treasury and with his Cabinet colleagues, in driving a hard bargain on behalf of the people of Wales.

In the longer term, I believe that it would be right for a larger proportion of the cost of local government to be borne locally. That would increase accountability and induce a greater sense of financial responsibility, even among Labour councillors not renowned for their careful housekeeping. However, under the current system, it is plainly an important part of the Secretary of State's role to battle for the largest possible share of the taxation cake for the people of Wales. He deserves the thanks of all people living in Wales for screwing an extra £150 per head out of central Government taxes compared with what people in England received.

I am thankful that more hon. Members representing English constituencies are not in the Chamber for this debate, because, were they to realise fully the effectiveness of my right hon. Friend in those Cabinet discussions, I fear that they would be up in arms and would attempt to cut the amounts provided to Wales.

Sir Wyn Roberts

Is my hon. Friend aware—I think that I am right in saying this—that the abolition of capping might result, at a conservative estimate, in the spending of an additional £1.5 billion? Does he agree that that would be very inflationary?

Mr. Sweeney

My right hon. Friend makes a very good point. Opposition-controlled local authorities clearly would like to have us believe that money spent by local government is somehow different from that spent by central Government and that it should not appear in public borrowing figures. Time and again, we hear the argument, "Allow us to spend all our receipts from council house sales," notwithstanding the fact that the authorities borrowed the money to build those houses and have not paid it back.

You, Mr. Deputy Speaker, have already ruled that this is not the occasion for a full-scale debate on Labour's proposals for devolution in Wales. However, it would be wrong for me to conclude my remarks without pointing out that, if we did not have the strong voice that we have in our Secretary of State, we would not have secured this settlement for Wales. If we were to have the assembly proposed by the Labour party, the danger would be either that we would lose our Secretary of State entirely, or that he would be emasculated and no longer able to speak in the interests of the people of Wales with the strong voice that he now possesses.

I can see you, Mr. Deputy Speaker, looking at me as if to say—

Mr. Llwyd

"Shut up".

Mr. Sweeney

Just so. [Laughter.] I shall therefore finish on this note: let us say no to devolution; let us keep our Secretary of State for Wales; and let us look forward to generous and effective leadership in future.

8.27 pm

Mr. Llew Smith (Blaenau Gwent)

I was brought up to believe—my socialism reflects it—that investment should go where need is greatest, and I believe that that should be reflected in the settlement. If such an element of fairness were introduced into the settlement, my constituency of Blaenau Gwent would be one of the greatest recipients. Whatever measuring rod one uses to measure need and poverty, Blaenau Gwent almost certainly would be near the head of the league.

Just last week, the Government's statistical office accepted that Blaenau Gwent has the lowest levels of household income and wages in Wales. We have never recovered from the closure of the coal industry and the rundown of the steel industry. The lost jobs have not been replaced with similar ones. In addition, male unemployment in my constituency is unacceptably high, especially if one examines the real figures rather than those that the Government have fiddled about 30 times. The Government would have done far better to invest in creating jobs than to concentrate their investments in the dole queue.

Linked with unemployment and low wages is the problem of ill health. In Blaenau Gwent, the level of heart and respiratory illnesses and, indeed, cancers is far above the national average. The number of deaths from heart disease is exceptionally high in my constituency—we are not far behind Scotland, which has one of the worst rates in Europe. The 1991 census showed that 41 per cent. of families in my constituency had a member suffering from a long-term illness or a disability which affected how that person lived his life.

The same census showed that some 40 per cent. of the houses in Blaenau Gwent were built before 1919 and were in need of repair. We also have one of the lowest levels of car ownership in any of the valleys in south Wales, which will make it especially difficult for us to take advantage of the LG investment in Newport unless we reintroduce the train service which served that community so well for many a year.

Mr. Rogers

My hon. Friend makes an important point. New industries may come to the coastal areas of south Wales, but people from the valley communities will face a virtual penalty of £20 to £25 per week in travel costs. That means that the jobs are not, in effect, well-paid.

Mr. Smith

It is certainly difficult to get from the north to the south of the valleys, just as there are difficulties in moving from one valley to another. Someone living in an area of high deprivation who cannot afford his own transport will certainly have his chances of finding employment limited.

To digress a little, I remember a past chief executive officer of Gwent health authority drawing up plans for the ambulance service in my constituency. He brought along a map, and although none of us had a PhD in geography, we had to tell him that the map was flat whereas the area had valleys. The same kind of logic applies in relation to the point made by my hon. Friend the Member for Rhondda (Mr. Rogers).

I could repeat the type of figures that I mentioned earlier, but I think that I have said enough to highlight the deprivation faced by many people in Blaenau Gwent. What is the Government's response? It is to treat the most vulnerable people with disdain. That is certainly the case in the settlements that we are debating.

Sir Wyn Roberts

I really cannot allow the hon. Gentleman to get away with that. The standard spending assessment for Blaenau Gwent is £65.268 million and its external support is £62.9 million. He really cannot expect more generous treatment than that.

Mr. Smith

It is convenient that the right hon. Gentleman should intervene at this point, as I am about to deal with the settlements for last year and for this year and how they affect my constituency. My conclusion—and that of the people who make up that community—is, to say the least, somewhat different from the right hon. Gentleman's. For instance, in our first budget as a county borough we had to make cuts of £5 million—and that was in addition to the £2 million that we had to take from our reserves. We also had to increase our council tax by some 25 per cent.

Cuts were made across the board by reducing social services after-care, cutting much-needed building maintenance and closing a cinema. Charges were also increased substantially. This year we have no reserves on which to call. It is estimated that the council tax will rise by 16 per cent. and that cuts of £6.3 million will have to be made. Within the past year, there have been cuts of £11.3 million in the two budgets to which I referred, and we have taken £2 million from our reserves. Clearly, this has hit some of the most vulnerable people.

As the Secretary of State was reminded by the placards that greeted him when he visited my constituency yesterday, those cuts represent about 20 per cent. of the money to be wasted by the Government on the royal yacht. The Government clearly regard the royal yacht as a greater priority than education or social services. In education, social services, economic development, highways, finance and leisure, the effect will be the same: cuts and more cuts. In the forthcoming year, cuts will total approximately 10 per cent. I may be old-fashioned, but I was brought up to believe that it was the task of local authorities to provide local services, whereas the Government believe that the role of local authorities is to dismantle those services.

The Secretary of State visited my constituency yesterday to meet the Heads of the Valleys Standing Conference. Perhaps he would like to return to my constituency and meet some of the people whose lives will certainly be blighted by the cuts. The council has not yet taken any decisions, so the Secretary of State could still examine the options that it faces. They include what is to happen to the elderly and most vulnerable if the home care service is reduced, or to those youngsters in education whose future will be even bleaker if teachers are made redundant and school budgets cut or cash-limited because of increased expenditure on items such as salaries.

Related problems include changes in the cost of school meals and the possible removal of the price subsidy, the rationalisation of nursery schools, a reduction in school buildings maintenance and a reduction in home-to-school or home-to-college transport. Leisure services could be hit by the closure of facilities such as swimming pools and by cuts in highways maintenance. The list of services affected is endless. Although the council has not decided where the cuts will be made, it recognises that all services have to come under scrutiny—none is immune from cuts.

The Government want to create the impression that the cuts are the fault of inefficient Labour-controlled local authorities, but people in communities such as mine are far too sensible to believe such nonsense. They know that the real reason for the cuts is that the Tories do not believe in public services—and even if they did, their expenditure is restricted by the convergence criteria of the single currency. Neither the Tories nor the single currency have any relevance to our communities: that feeling is reflected in the opinion polls, and it will soon be reflected in the polling booths.

8.38 pm

Mr. Roy Hughes (Newport, East)

We are debating the Welsh revenue support grant reports, but it is necessary to consider them in the context of Welsh local government and its structure following the recent reorganisation.

The reorganisation of local government is a costly business, but there have been two major reorganisations in Wales in just over 20 years. They were both carried out by Conservative Governments. I suggest that we have still not got the right structure.

I shall illustrate the absurdity of the present structure with a blatant example. Before the recent reorganisation in Gwent, we had one director of education; now we have five. That is just one example, and I could cite many more. Such arrangements are wasteful, extravagant and unjustifiable. Compare that with the parsimonious revenue support grant settlement that the Government are trying to foist on Welsh local authorities. It all goes to show that the Conservative party has never understood Wales. That is why it has always fared so disastrously at the polls at parliamentary and local government level.

Mr. Sweeney

Will the hon. Gentleman give way?

Mr. Hughes

No, I am not giving way.

Having willed the end, the Government have a moral duty to provide the means, so that adequate and efficient local government services can be provided for the Welsh people. That is not happening.

Mr. Lawrence Nippers, Newport's director of finance, is an experienced and much respected local government officer. He wrote to me on 31 January, pointing out that the RSG settlement for next year has been a massive disappointment to the new unitary councils in Wales. He says: Our spending on both revenue and capital is being squeezed … Newport, in common with almost all other councils in Wales, is being permitted to spend an additional 1.8 per cent. next year". That increase, he says, is insufficient to meet the cost of pay and price inflation. … the pay review bodies are considering awards at over 3 per cent. for some groups of public service employees. Mr. Nippers goes on: For Newport the permitted increase of 1.8 per cent. equates to approximately £2 million extra spending capacity. Of that, £450,000 goes to the new combined fire authority. That more expensive figure replaces what went to the former Gwent fire brigade. Some of us bitterly opposed the break-up of Gwent fire brigade. This is just another example of the Government's feckless handling of public finances and services in Wales.

An additional £1 million or so goes in waste disposal charges for Newport, arising from the enforced privatisation of our waste disposal service and the Government's new Landfill Tax, says Mr. Nippers. One does not need to be an authority on local government finance to realise that there is precious little left to meet the cost of pay and price inflation for all Newport services, let alone any leeway to make improvements.

Newport has a reputation as a well run council, with one of the lowest council tax levels, but its expenditure is capped so low that it has one of the worst primary school pupil-teacher ratios in Wales. Mr. Nippers says: We are unable to maintain the current standard of our services despite major efficiency savings. Serious attempts are being made to reduce expenditure on all services and to give priority to the education service and social services. Education in Newport now seems to be in a desperate plight. Representatives of the council, teachers, governors and professionals in the education service wrote to the Secretary of State on 19 November last year, asking him to meet a small deputation to discuss the difficult situation. In his reply, the Under-Secretary of State for Wales, the hon. Member for Brecon and Radnor (Mr. Evans), said that such a meeting would serve little purpose.

A further letter has now been sent to the Secretary of State. I urge him to respond to Newport's pleas. With the arrival of the LG investment from Korea, with all its likely spin-offs, Newport needs perhaps above all else an efficient, well funded education service.

All manner of cuts are now envisaged in other services, some affecting disadvantaged people. Home care, day care facilities, meals on wheels and school meals are all possible targets, as are school transport, clothing grants to pupils and student grants. One social services residential establishment may be forced to close. Grants to outside bodies are also under threat.

Gwent theatre, for example, which does wonderful work in the community, could lose because of the Government's diktat, as could Newport Women's Aid. Newport's director of finance summed up the position, saying that the Secretary of State has short-changed the new local authorities. I have represented Newport for the past 31 years. I say in all sincerity to the people of Newport, "Don't blame your local authority and its elected representatives for this situation. Put the blame squarely where it belongs—on this sadly discredited Conservative Government."

My constituency straddles two authorities—Newport, which I have already referred to, and what is now known as Monmouthshire county council. Monmouthshire has recently been complimented by external auditors on its prudent financial decisions. It might be called a lean and well-managed authority, but it, too, has been put under great pressure by the RSG settlement.

Monmouthshire county council covers a relatively prosperous area of Wales, but, as council leader Graham Powell pointed out to me, it is expected to provide the same level of services as any other, but with £11 million less than it would receive if it were funded at the Welsh average. A further irritant to the council was the decision of the Welsh Office to cut its provisional settlement by a further £423,000. The cuts will lead to an absurd situation, bringing about reductions in services, likely redundancies and increases in council tax. Is it any wonder that there is so much concern about the situation?

That is not the whole story. The Government are cutting other aspects of local authority expenditure. Last Friday, my hon. Friend the Member for Newport, West (Mr. Flynn) and I were asked to meet the chairman of Gwent magistrates, Mr. David Turnbull, together with his vice-chairman and the clerk of the magistrates, Mr. Brian Forster. They told us of the difficulties they had experienced over the proposed building of a new magistrates court in Newport. It was to be built in a part of Newport that badly needs redevelopment. The area is known as the old coalyard site and is owned by Newport county borough council.

Negotiations had reached an advanced stage when, under the new private finance initiative guidelines, on 29 July 1996, the Lord Chancellor notified the local council that the project was way down the list of new building schemes to be phased into a private building programme. That does not say much for the PFI method of financing public projects.

The present magistrates court is in a 60-year-old building. There are no facilities for the disabled. Witnesses are not separated, due to inadequate facilities. Magistrates are concerned about their safety, because they have no separate entrance. Even possible new recruits to the bench have been deterred by the inadequate facilities.

If there is much further delay, the site could well be used for other purposes. I urge the Minister to notify the Secretary of State, as the principal spokesman for Wales, and ask him to intervene to get the project off the ground.

The current position is most distressing. There should be a partnership between local government and central Government. Instead, after 18 years of Conservative government, local decision making has been eroded, and we have dictatorship from the centre. Local government should be given back the powers it has lost, and I trust that the incoming Labour Government will take early steps to bring that about.

8.50 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

This evening sees the annual ritual of special pleading by hon. Members who are concerned about the finances of their local authorities. However, our ritualistic complaining belies a serious problem—the precarious position of Welsh local authorities. Furthermore, their difficulties are no fault of their own. For the past five or six years, heavy expenditure cuts have been imposed on local government year on year. One is tempted to ask where it will all end.

It is no secret that central Government view local government with distrust and even disdain. That could be because there are so few Tory-controlled councils in Wales. The process has continued for some 18 years, and the House has passed countless pieces of legislation curtailing the powers of local government. There have been more than 100 such measures in the past 18 years, in a steady, unrelenting erosion of local government powers and responsibilities.

It is small wonder, therefore, that that has gone hand in hand with ever-deepening cuts in local government finance. The dead hand of central Government is truly upon local government, and it is time that we all realised what is happening.

It has been said that, if we want people to act responsibly, we should give them responsibility. The corollary to that is that we have witnessed diminishing powers, financial support and morale in local government. This year's settlement, alas, is no exception to the general rule.

Conservative Members may seek to intervene and make the point that some 80 per cent. of standard spending is provided by the Exchequer in comparison with a lower figure for England, but that simply underlines the fact that Welsh local government is even more in the ever-tightening grip of the Exchequer.

Mr. Alex Carlile (Montgomery)

Does the hon. Gentleman agree that, in the neighbouring parts of rural Wales that he and I represent, the big lie that local authorities are to blame for cuts in local services is no longer believed by anyone?

Mr. Llwyd

That is absolutely true, and it will be further understood in the coming weeks and months, and rightly so. There is no doubt that, when people say that central Government have been judged unfairly, they are talking palpable nonsense. If central Government had even a modicum of respect for local government, they would redress that balance. I agree entirely with the hon. and learned Gentleman.

Welsh local authorities are responsible authorities—not for them flagship projects, but rather a real concern for the delivery of everyday essential services. Even the most basic ones are under threat from this year's settlement. When one meets representatives of local government, they often ask where the cuts will stop.

My authority and that of my hon. Friend the Member for Caernarfon (Mr. Wigley) is a case in point. I met the chief executive of Gwynedd council last week. The picture he painted, although realistic, was a dismal one. I shall not repeat what the right hon. Member for Conwy (Sir W. Roberts) said earlier, as his figures were accurate.

Put simply, the council requires £119.9 million in 1997–98. The spending limit set by the Secretary of State is £115.7 million, and the council will receive only 82 per cent. of that, or £95.3 million, in rate support grant. Therefore, the council will need to cut its budget by more than £4.2 million to meet the Secretary of State's figure.

Should Gwynedd spend up to the maximum, £20.4 million would have to be raised from council tax, which would mean an increase of 11.3 per cent. The right hon. Member for Conwy made a reasonable argument. It would be totally unreasonable to expect the council to impose a large increase in council tax following a 25 per cent. increase last year. There is only so much that people can suffer in any part of Wales and throughout the British Isles.

Thankfully, Gwynedd, like many other councils, received a special additional grant of nearly £2 million from the Welsh Office. However, that is for the current year, and it will not be available for 1997–98. Gwynedd has resolved to attempt to keep the council tax increase low, or at least to the average for Wales—between 8 per cent. and 9 per cent. There will be a shortfall of £4.5 million, and the council has resolved to make cuts amounting to £4 million and to find the remaining £500,000 from the balances.

As it is a highly responsible authority, Gwynedd will seek to find as much as possible of the money for the deficit by cutting administration and seeking to be still more efficient. It must be remembered, however, that last year the same council cut £1 million in administrative costs, so the future will be bleak.

The council has agreed that there should be a 6 per cent. cut over all departments, and some departments will have to face additional cuts. I do not like scaremongering, but Gwynedd is considering cutting teaching jobs, which account for a large part of the education budget. That will be inevitable.

I am not trying to make unreasonable points, but Gwynedd will face cuts in teaching staff, leisure, culture, planning, highways and social services. There will be direct cuts of 3 per cent. in the school budgets, cuts in home care services and the closure of some homes for the elderly. The council will also be cutting its attempt to promote the local economy—something much heralded by the Secretary of State earlier, and rightly so. Unfortunately, Gwynedd will therefore have to reverse its enlightened policy in that regard.

It grieves me that, as the hon. Member for Rhondda (Mr. Rogers) said, the least able people in society will come out worse in this spending round. Those with special needs, those who benefit from the community care budget, the elderly and the infirm will bear the brunt of the cuts. Coupled with cuts in education, we are taking a retrograde step in many ways, about which I am very concerned.

The Welsh Office settlement of 1.9 per cent. is, of course, below the rate of inflation—despite what the Secretary of State said. It seems that no effort is being made to ensure a fair, reasonable settlement for Welsh councils. In addition to the drastic cuts that Gwynedd faces to which I have referred, I am very concerned that it will have to make cuts in other areas that are yet to be decided. Such decisions will be made on 6 March.

Another authority that impinges on my constituency and the constituencies of the hon. Member for Clwyd, North-West (Mr. Richards) and the right hon. Member for Conwy is Conwy borough council. I have recently spoken to members and officers of that council and been told that the council will have to find cuts totalling at least 6.5 per cent.—with no service protection—of this year's budget, amounting to £5.2 million.

After taking into account pay inflation and other demands on services, a further cut of £2 million will have to be found to meet the capping target. There will have to be cuts of £2.4 million in education, £1 million in social services, £400,000 in highways expenditure and £1.4 million in other miscellaneous areas. I greatly regret that, inevitably, teaching posts are under threat.

In addition, reductions in maintenance are planned, and, since the capital programme cannot sustain capitalisation of such costs for 1997–98, there will also be a cut of £500,000 from that source. It will not be possible to recognise fully increased demands on social services to offset the proposed cuts, which will result in proposals including increased charges for a wide range of services and reduced grants to the voluntary sector. Again, that will impinge on and affect the most needy people in our society.

It is also envisaged that there will be early voluntary retirement, with staff not being replaced, increased charges, reductions in grounds maintenance, and so on. The balance of savings will undoubtedly be found through further job losses, more increases in charges, and reductions in services.

The increase in the SSA does not seem to come anywhere near recognising demographic changes and normal inflationary pressure—ignoring the fact that no provision has been made for pay inflation. A late change in the SSA has resulted in Conwy borough council having to find even cuts than those anticipated, raising further questions about the SSA model and system. Adjustments in nursery vouchers will cause more problems. Additional aggregate external finance, although much heralded by the Secretary of State, is not a substitute for increased spending power.

After it has saved £7 million, the council tax will be cut by 1 per cent.—not because the council chose to do that, but because more AEF has been put into the system. Conwy's director of finance concludes his submission to me by saying: All in all, the 1997–98 RSG settlement has to be one of the worst ever settlements for local government and, therefore, the local taxpayers. In Ceredigion, the story for the council in the constituency of my hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Dafis) is equally serious, with cuts totalling £4.2 million required to bring the budget to within 1 per cent. of the cash limit, and a projected serious loss of jobs—at least 40 to 45 in central departments, and an inevitable consequent decline in the level of service being offered. As one might expect from a cardi council, a responsible and cost-effective authority is being forced into providing a shoestring service to the public, which is very worrying for and damaging to ordinary people who live there.

Mr. Cynog Dafis (Ceredigion and Pembroke, North)

I am grateful to my hon. Friend for drawing attention to the situation in Ceredigion. It is well understood in Ceredigion that the reduction of 1p in the standard rate of income tax is being paid for by the reduction in the level of service and an unreasonable increase in council tax. That will be worse next year if damping comes to an end without any compensatory increase through an adjustment in the SSA. Will he join me in requiring that the SSA must reflect the higher cost of service delivery in rural areas?

Mr. Llwyd

I agree entirely—that is probably the system's biggest deficiency, and it needs addressing.

Ynys Môn county council is also in a serious position. It will suffer an 11 per cent. cut in standard credit approval, and an 18 per cent. cut in housing. There will be cuts of 2.7 per cent. on the revenue side in education, meaning 20 teaching jobs lost; planning services will be cut by 6.6 per cent.; buses and public transport services will be cut and fares increased; public protection will be cut and public conveniences closed; road sweeping and beach cleaning will be cut; and there will be a 6.6 per cent. cut in social services. It has been decided that the council will try to protect children's services, but people with special needs will be badly hit. To say that the council is between a rock and a hard place is to understate the case.

Mr. Llew Smith

I am sure that, like myself, the hon. Gentleman is totally opposed to public expenditure restraints or cuts, but will he accept that there is logic in the Government's position—that, if one accepts the convergence criteria for the single currency and the restrictions on public expenditure, that must show itself in the amount of money that goes to local authorities?

Mr. Llwyd

I do not want to get into the European argument at this point.

The nursery voucher scheme—ill judged and half-baked—will put further pressure on Ynys Môn's budget, and the much-heralded council tax reduction scheme has had little effect, adding nothing to the council's finances.

The future is therefore extremely bleak. What is unacceptable is that those forced cuts come side by side with the second annual 1p income tax cut. Cutting taxes is fine when necessary services are protected, but can never be justified when education, social services and transport are being ceaselessly cut. The shadow Chancellor has said that he will abide by the present Budget for the next two years, so my question is: why vote Labour?

The Labour party, in its craven urge for power, has sold out, and left thousands of Welsh people in its wake. I trust that the people of Wales will realise that they are being sacrificed on the altar of Labour's dream of power. Labour has taken Wales for granted once too often, and the British Labour party has shown that it is far more interested in city types and the well-off of the south-east than in the ordinary working men and women of Wales.

I trust that, when these dreadful and painful cuts are made throughout Wales, the Welsh people will realise that the British Labour party in Wales has no core values any more and no regard for the interests and well-being of the ordinary people of Wales. I trust that the people of Wales will realise that in the months to come.

It is now clear to the people of Wales that there is only one serious party that opposes these cuts—Labour is not prepared to stand against them, and the Tories are hell-bent on making them. Both Labour and the Tories agreed to cut 1p off income tax last year and this year. We voted against that on principle.

If the people of Wales want a party that is committed to protecting their interests, the choice is clear. If there is a Labour Government and an increase in Plaid Cymru representation in the House, we will bring pressure to bear to force the Labour party to think again about the interests of the people of Wales, which it is now selling down stream.

9.7 pm

Mr. Don Touhig (Islwyn)

For the people of Wales in general, and for my constituency in particular, this financial settlement will prove to be severe in the extreme. It will have dramatic consequences for the level of services that Welsh local authorities provide, and it will mean that my constituents will pay more in council tax for a significantly reduced level of services.

The services provided by local councils such as mine—the county borough of Caerphilly—are vital to sustain the very quality of life itself. When we step outside our front gate, we walk on a pavement provided by the local council; we drive our cars on roads maintained by the local council; our children—or those of most of us—are educated in schools built by the local council; we swim in leisure centre pools operated by the local council; and our elderly relatives receive meals on wheels in a scheme funded by the local council. All those services are now at risk.

Yesterday the leader of Caerphilly county borough council, which cut £12 million from its budget last year, told me that it now faces a further £8.5 million cut in the coming financial year. That means that there will have been £20 million-worth of cuts in the first two years of the authority's existence. Cuts in school budgets in Caerphilly could cost up to 100 teaching jobs, class sizes will increase, and the school meals service is under threat. Young people wishing to go on to higher education may not receive the appropriate grants.

I spent 20 years as a councillor before entering the House, and I have always supported and worked to protect the education service in particular. A council can cut a road programme; a town centre bypass may be deferred; motorists may be angered and frustrated, but at a later date the money may be found, the bypass will be built, and people will be satisfied. We cannot cut a child's education and put something back in five years' time. Yet that is the prospect that the children of the people I represent face in the coming year.

The social services in Caerphilly borough will have to make severe reductions in home care budgets, and those who depend on such services and already have to pay for some of them will face increased charges. There may be cuts in refuse collection services and reductions in council house repairs. Highways and grounds maintenance also face the axe. Despite all that, my constituents face a 15 per cent. hike in their council tax. Other hon. Members have mentioned the damping grant. Without such a grant, my constituents would face a 30 per cent. increase in their council tax this year.

At Question Time last week, in reply to my hon. Friend the Member for Walsall, North (Mr. Winnick), the Prime Minister said: we have the most successful economy, with the highest growth and the best inward investment record, in western Europe."—[Official Report, 28 January 1997; Vol. 289, c. 150.] My constituents' response to that will be to ask, "If the country is doing that well, why are we sacking teachers, cutting social services and asking the public to pay more for services?"

I will tell my constituents why: we are paying the price for the failure of Tory economic policies over the past 18 years—policies which meant that billions of pounds of North sea oil revenue, and billions more pounds in income from the sale of former public utilities, were used not to invest in infrastructure, public services or our children's future, but to give tax-cutting bribes before each general election. There can be no clearer illustration of the failure of Tory economic strategy than the fact that the British people will now be paying more tax than they were when the Tories took office in 1979. The results of the failure to invest those billions of pounds in our country's future prosperity are now being seen throughout the country.

In a recent report to Caerphilly councillors, chief officers said that the Secretary of State's announcements paint a very bleak picture for all local authorities in Wales … It is inevitable that there will be severe reductions in both revenue and capital spending coupled with double figure increases in council tax. The problems faced by my local council can be summed up as follows. The standard spending assessment has been increased by 1.6 per cent. and the capping limit by 1.8 per cent.; yet Caerphilly county borough council believes that it needs an extra 6.5 per cent. in spending for the coming year. Why is that? It is because it faces, among other things, inescapable increases in expenditure arising from demographic and legislative changes.

The council needs £118,000 next year because of increased pupil numbers. It needs £274,000 to comply with transport legislation, such as that on seat belts. It needs £60,000 to administer the nursery voucher scheme and £50,000 as a result of the Disability Discrimination Act 1995. It also needs £500,000 to implement additional legislation affecting social services, and £361,000 for the landfill tax.

Instead, the council will have to make cuts of £8.5 million. Those cuts have yet to be determined in detail, but they will inevitably result in severe reductions across all departments, including sensitive front-line services provided by the education and social services departments, with the consequent loss of jobs. Even so, council tax increases are in prospect: 10 per cent. in the former Rhymney Valley district and 15 per cent. in the former borough of Islwyn. The non-housing capital programme may be cut by 12 per cent., and the council house capital programme by 25 per cent. The urban aid and housing improvement grants scheme part of the capital programme may be cut by 35 per cent. Set against that, the true year on year increase in Government grant is but 2 per cent.—well below the rate of inflation. It stretches credulity to the limit, and it is impossible to reconcile that increase with Government's pronouncements which use terms such as "a good settlement" and "extra funding for education."

I have no doubt that we shaill hear the same old hoary tale from Ministers that there is no need for councils to increase taxes, that the settlement is fair and that if taxes increase it is all the fault of local councils. I say to the Government what any Welsh housewife would say: "You can't spend what you haven't got." The plain fact is that the Tory Government dislike and distrust local government; that is why local government finances are now largely controlled by central Government.

There are three ways in which the Government keep total control of local government finances. Central Government, not local government, now determine the level of public spending and the level of external finance available to support local councils' revenue budgets. Central Government, not local government, determine the maximum level of spend for local councils through the capping regime. Central Government, not local government, determine the allocation of borrowing approvals to finance capital expenditure. It is a case of the old saying, "He who pays the piper calls the tune."

Given those controls, it is central Government, not local government, who must take responsibility for the key public services that my council is being forced to cut and for the hike in council tax. Very soon the public will have an opportunity to pass judgment on the Government. I believe that the people of Islwyn—who sent me here after a by-election two years ago in which the Tory candidate received 3.9 per cent. of the vote and lost his deposit—will have their day, like others across Wales who have suffered under the Tory Government. The Conservative party will pay a price at the polls for its failure to invest in public services. It will be a heavy price, but the Tories will richly deserve to pay it.

9.16 pm

Mr. Alex Carlile (Montgomery)

I begin by apologising for being late for the beginning of the debate. My lateness was the exact equal of the lateness of one of the few direct trains from north Wales. The fact that it is direct does not make it punctual, and regular travellers on that route say that it is extremely rarely punctual. That is just another symptom of what has happened to us in recent years.

I suspect that many of us taking part in the debate feel a sense of deja vu or even of deja vu upon deja vu. We have all been here before, year after year, talking about the Tories' meanness in the local government settlement. This debate is a distant democratic fiction to the people who live in Montgomeryshire, which I represent, in the area represented by the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and perhaps in every other part of Wales. Here we are, supposedly democratically discussing the local government settlement for Welsh communities, without the power to amend it, to examine it in Committee or to scrutinise it in any meaningful way. We have the power to put forward in a few minutes—as we all do, understandably—the views of our constituents, but without the expectation of being listened to.

When I leave this House, as I shall in a few weeks—

Mr. Richards

Hear, hear.

Mr. Carlile

The hon. Member for Clwyd, North-West (Mr. Richards) has abuse in his nature. One of the most offensive things about this House is having to sit opposite him and watch him perform in that revolting way. He is an insult to the intelligence. However, I will return to the subject of the debate, Mr. Deputy Speaker.

Many people in Wales cannot reconcile the fact that they elect councillors and Members of Parliament but apparently have no power whatever—even by logical argument—to influence the outcome of the Government's deliberations as to what local services they are provided. The fact that 90 per cent. of local government finance is provided by central Government is very bad for local government and for democracy in Wales. I am pleased to say that I belong to a party which has always believed that less money should come from central Government and more money should be raised by local taxation, for which locally and regionally elected representatives would be accountable and for which they would answer to their electorate. Surely that is the only logical way of providing democratic local government and making it possible to debate these issues seriously.

I am puzzled by the Government's performance. They tell us that the economy is so successful that we have reached a new prosperity. They tell us that such has been the outstanding ability of the Government that we can have income tax cuts, but with the other hand they are taking away local services. In the rest of my speech I shall tell the House what constituents say to me about the results of the rate support grant settlement.

Mr. Rogers

The hon. and learned Gentleman has advanced the novel idea that local government should be the collector of taxation for central Government. He should bear in mind the fact that most of the functions that local authorities perform are imposed on them by central Government.

Mr. Carlile

The way in which those functions are performed by local government is very much a local issue, and in common with most of our partners in Europe I believe that raising local taxes—such as a local income tax—to pay for local facilities is much more logical than the bizarre system that we have in this country. No doubt we shall be arguing that case in future.

I was about to tell the House what people are saying in rural Montgomeryshire, in rural Powys, about the effect of the settlement. They tell me that there is less money for the elderly and for people with learning difficulties, for the mentally ill and for all those who need assistance from their local council.

The two learning difficulties hospitals in my constituency, Bryn Hyfryd and Llys Maldwyn, are to close shortly. It is right that they should close, but the people with nursing qualifications who have skilfully looked after patients at those hospitals rarely obtain jobs in the new facilities to which those people are sent. It is absurd—even offensive—that the people who have learnt over years the skill of dealing with problems such as bedsores and other physical ailments will no longer be able to provide such nursing care to the people who in the past were judged to need it. The reason? There is not enough money to employ them.

Rural roads are also affected by the settlement. Like many hon. Members, I had some farmers to dinner at the House last night. Almost the first thing that they complained about was the condition of the roads and the way in which it has been affecting dairy farmers this year. It is illustrated by human situations such as the fact that in Powys more milk tankers have skidded off the road this year than last year because there is less money for gritting roads. That is a real effect on people, and it is quite cynically determined by the Government.

Schools are being forced into a vicious circle by the rate support grant settlement. In Newtown in my constituency, the high school, which is far from being one of the worst schools in Wales—it has a pretty good record on the whole—is being forced to cut teachers, partly because many parents are sending their children to more distant high schools which they have chosen. However, as teachers are lost from Newtown high school, the school will inevitably suffer further difficulties, which will make it less popular among parents, and so it goes on. As a result, the high school in the biggest town in my constituency will be forced to become a poorer school, despite the fact that its head teacher has a clear sense of direction.

The contribution made by local government to police and fire services means that they are less able to purchase new technology such as closed-circuit television—which country towns now unfortunately need because of the increase in violent crime—so we have a reduction in our quality of life.

As for other forms of crime prevention, traditionally we have had a good level of probation services throughout north and mid-Wales, but probation services are now running hard even to stand still. A more realistic picture is probably that they are now going backwards and are less able to provide the sort of support services that are needed and which lead to crime prevention.

The real poor relation of local government is consumer protection and trading standards. As it happens, in my legal practice over the past 25 years I have been heavily involved in matters concerning the application of false trade descriptions and other related issues. Even 10 years ago, most Welsh counties could provide a high quality trading standards and consumer protection service. It is now a Cinderella service, and whose fault is that? It is the fault of the Government.

Those are real examples of what real people in Wales—not Ministers blustering from the Dispatch Box at the end of a short debate—see as happening as a result of Government policies. I suspect that, after all these years of Conservative government, the Conservative party has probably visited defeat on itself. There is now a mindset among many people which says that so much has been cut that, whether they like the Conservative party or not—I suspect that most of them do not, and rightly so—there must be a change of Government, because the balance has gone too far in the other direction.

9.26 pm

Mr. Rod Richards (Clwyd, North-West)

The local government settlement was made in a tight financial climate. Given the circumstances, it was fair, and we must remember that all local authorities in Wales agreed to it. As several Opposition Members have said, although the economy is now going strongly and is the strongest in Europe, we must bear it in mind that we have recently come out of a deep recession. The public sector borrowing that was required to maintain services at an acceptable level at that time must be repaid in times of plenty, and those are the circumstances in which the local government settlement has been made.

I therefore compliment my right hon. Friend the Secretary of State on the settlement that he achieved with the local authorities and on his presentation this afternoon. It was in contrast to the presentation of the hon. Member for Caerphilly (Mr. Davies), who I notice has just scuttled out of the Chamber before I reach the key point in his speech—[HON. MEMBERS: "He is here."] He has scuttled to the Back Benches, where he expects to be after the general election.

The hon. Gentleman gave a poor presentation. Indeed, I could have found a much better debate had I gone to Caerphilly Co-op, but that is another matter. He said that, if there were a Labour Government, they would not break the expenditure totals in Wales in their first year in office. Even though pressed by my right hon. Friend the Secretary of State, the hon. Member for Caerphilly would give no such assurance for the second year of a Labour Government. I invite the hon. Gentleman to make his position clear. He said that an incoming Labour Government would not break the expenditure total in Wales in their first year. Is that the case in the second year—yes or no? I invite the hon. Gentleman to say so now.

The hon. Gentleman has declined my invitation. The right hon. Member for Dunfermline, East (Mr. Brown) has made it clear that an incoming Labour Government would stick to the Government's expenditure targets for two years. Does the hon. Member for Caerphilly want me to write to the right hon. Member for Dunfermline, East to tell him that there is a breakaway movement in Wales, and that the hon. Gentleman refuses to give such an assurance? I again invite the hon. Gentleman to make his position on Wales clear. Is it the same as the position stated by the right hon. Member for Dunfermline, East for the rest of the United Kingdom?

The hon. Gentleman may laugh, but the right hon. Member for Dunfermline, East may not. If the hon. Gentleman intends to break the Government's expenditure targets for the second year, and the right hon. Gentleman intends to stick to his statement, the subvention to Wales from England would be increased, which would mean a cut in Government expenditure in England. Is that what the hon. Member for Caerphilly intends? Does he or does he not agree with the right hon. Member for Dunfermline, East that he will stick to the expenditure target in Wales in the second year?

It is evident that the hon. Member for Caerphilly is once again out on a limb in relation to his party leadership. I am sure that we shall return to the matter, and I assure him that I shall return to it when the right hon. Member for Dunfermline, East is occupying the Opposition Front Bench.

9.32 pm

Mr. Donald Anderson (Swansea, East)

It is a sad fact that, when there are two routes to a political destination—the high road and the low road—the hon. Member for Clwyd, North-West (Mr. Richards) will invariably choose the low road.

I shall make but one general point and one point in relation to my constituency. On the general point, of course there is a ritual in these debates: as they sink to their knees, Conservative Members say that we have never had it so good and that Wales is fortunate to have a Secretary of State who has brought back the goods yet again; we point out that, at local level, there is an impact on the services that our people properly expect.

The political context in which we now operate is that there has been an almost complete meltdown in Conservative representation in local government in Wales, so the Government do not have a constant reminder of how the folks at local level are feeling the effect of cuts. The Government live in a vacuum, away from where ordinary folks live, move and have their being. After the general election, there may well be such a meltdown at central Government level in Wales, and there will be no one from Wales on the Conservative side of the House.

I agree with the hon. and learned Member for Montgomery (Mr. Carlile) about one clear fact that I appreciate after many years in the House. In spite of the Government's public relations efforts, the people of Wales point the finger of blame not at their local authorities—which are all non-Conservative—but at central Government. They realise who are the real villains of the piece. They see the reduction in the proportion of rate support grant for local government spending from two thirds in 1993–94 to just over a half now, and the real cuts of 25 per cent. in housing renovation grants over the past three years. Housing capital provision has been cut by a quarter in the past three years. The people of Wales see the impact of the Government's policies in the failure of councillors to provide much-needed services—for example, ridding houses of damp and providing affordable housing for their sons and daughters.

The settlement will impact on Swansea city and county council, which will have to increase council tax by 5 per cent.—4 per cent. of which is a result of damping for the rest of Wales. That is only part of the new burden that the Government have imposed on local authorities. My council faces more than £1 million in additional expenditure as a direct result of legislative changes for which it was not allocated resources. For example, the landfill tax has meant a net expenditure increase of £500,000, and an expensive reorganisation of the fire service has occurred against the wishes of the local authority. That is a double whammy; the council did not want those policies, but must now deal with their financial effects.

The pay increase for teachers looms. The budget does not take it into account, although it will have a substantial impact on local government expenditure. The settlement will mean a loss of about 175 teaching posts in my constituency, and the £11 million reduction will mean cuts in school budgets, home helps and road maintenance work.

There is intense anger in my city because the Government have approved no new transport schemes. That has had a disastrous effect on Hafod in my constituency, which will suffer as a result of the failure to complete the Swansea valley route. Real spending cuts are perceived by the Welsh electorate as a direct result of Government policy, not the fault of local councillors. They will adversely affect the services that our people expect. The Chancellor's claim that things are good will be met with the cry from the Welsh electorate, "If things are so good, why are they so bad for us and for local government services?"

9.36 pm

Mr. Barry Jones (Alyn and Deeside)

I look back fondly to the tenure of my right hon. and learned Friend the Member for Aberavon (Mr. Morris) as Secretary of State for Wales. The shadow Secretary of State for Wales, my hon. Friend the Member for Caerphilly (Mr. Davies), made a shrewd speech tonight, and I am happy to support his remarks. I think that my hon. Friend the Member for Newport, East (Mr. Hughes) made the essential debating point when he said that, within a generation—little more than 20 years—two great reforms of local government were enacted, and the latter reform was totally under-resourced. Those local government reforms were very costly, and their consequences will be apparent for years to come.

I had hoped that the settlement would allow my county of Flintshire to avoid cutting education resources. The council leader, deputy leader and chairman of finance are anxious about the prospect of losing teacher posts. I know that headmasters, staff, governors and parents in my constituency do not want to lose one teacher—they want more, not fewer, teachers.

The housing scene is a battlefield as a consequence of the Secretary of State's cuts. I had hoped that he would release more council house sales receipts, which would generate extra jobs for those who repair and modernise homes in my constituency and throughout Wales.

I emphasise that point, because the poor and the elderly had an extremely rough time during the desperately cold weather that we suffered at the turn of the year. Tens of thousands of houses throughout the Principality were very cold and almost impossible to live in. Those homes require double glazing and new doors, and the whole housing fabric needs to be modernised. The Secretary of State should have made that a priority when he arrived at this grant settlement.

I believe that, when the day comes, the Welsh people will take electoral revenge, unprecedented in its savagery.

9.39 pm

Mr. Win Griffiths (Bridgend)

We have had a wide-ranging debate, in which my hon. Friends the Members for Rhondda (Mr. Rogers), for Blaenau Gwent (Mr. Smith), for Newport, East (Mr. Hughes), for Islwyn (Mr. Touhig), for Swansea, East (Mr. Anderson) and for Alyn and Deeside (Mr. Jones) graphically explained why the local government settlement will result in deep cuts in services, while at the same time forcing local authorities to increase their council taxes beyond the rate of inflation.

The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and the hon. and learned Member for Montgomery (Mr. Carlile) described the way in which their authorities were savagely affected by the local government settlement. The hon. Member for Meirionnydd Nant Conwy spoilt his remarks by his unjustified attack on the Labour party's desire to seek power for the betterment of everyone and not just the few, which is a characteristic of the Government's policies.

Unfortunately, the contributions of the hon. Members for Vale of Glamorgan (Mr. Sweeney) and for Clwyd, North-West (Mr. Richards) and that of the right hon. Member for Conwy (Sir W. Roberts) were characterised by an unnecessary and unjustified attack on my hon. Friend the Member for Caerphilly (Mr. Davies). The personal abuse that one or two Conservative Members sought to pile on him was totally unjustified, because he was showing clearly the dramatic effects that the settlement will have on the provision of services in Wales.

It is all very well for the Secretary of State to talk about the thousands of millions of pounds and the increases of 2.6 or 2.3 per cent. that he has obtained, and about the wonderful job that is being done—his hon. Friends duly backed him up. My hon. Friends the Members for Islwyn and for Swansea, East contrasted his talk about the dynamic, thriving, prospering and wealthy economy of Wales with the impact that the settlement will have on people in Wales.

The rate of increase of the settlement is lower than the inflation rate. It is part of the plan to continue to reduce the revenue support grant and central Government support for local government. In the past three years, the revenue support grant has lost its real value by 7.1 per cent. With the savage capping criteria on top of that—except for last year—virtually every council in Wales has had to increase its council tax above the rate of inflation.

I carried out a survey to which 19 local authorities in Wales responded. In 12 of those 19, the council tax D band was being increased by between 3.5 and 15 per cent. A further four authorities were facing small increases, and three were making cuts, which, perversely, because of the capping criteria, also meant that they were having to cut the services that they provide to their people. This year's local government settlement really is a mess.

Let us look at the impact on the budget, and on services. Many local authorities are trying to protect schools budgets. Six are increasing them; seven have made sure that schools budget cuts are less than the cuts covering the whole authority. My authority of Bridgend will suffer a 2 per cent. cut in the schools budget, but there will be cuts of more than 6 per cent. in other departments. All that is being forced on authorities by the settlement that has been foolishly lauded by some Conservative Back Benchers.

According to the survey, 12 authorities estimated that they were likely to lose about 770 teachers. Four thought that they would have no losses; three had not yet settled the matter, and from three I had no information, but, having looked at press reports, I counted another 299 possible teacher job losses. That amounts to well over 1,000. Not all those losses may come to pass, of course, because some schools may choose to use some of their reserves to keep teachers in post for another year. Nevertheless, class sizes are increasing.

The Welsh Office's own figures show that in 1992, when the Prime Minister was re-elected, 56,411 children in mainstream primary schools in Wales were in classes of more than 30. In the last year for which figures are available, 1995–96, the figure had risen to 69,873. That is an increase of 24 per cent., or more than 13,000 children. That is how efficiency gains are secured in education: more children have to be put in front of teachers. There has been a reduction in the teaching work force, while the number of pupils has increased.

It is not just a case of increases in class sizes, however. Local authorities have not enough money for school maintenance or school security: the Government are not providing any additional funds. Transport costs are also a problem. We are told by the office of Her Majesty's chief inspector that the teaching of Welsh is hampered by a lack of resources, and we are told by the National Confederation of Parent-Teacher Associations that teachers and parents in England and Wales are raising more than £100 million a year for books and equipment. The nursery voucher rule changes have had an adverse effect on many Welsh authorities.

There has been a 20 per cent. increase in pupils with statements in respect of special educational needs. Other costs relate to the teachers' pay award, early retirement, the increasing number of free school meals, the requirements of the national curriculum, school transport, the Welsh Language Act 1993, the code of practice, changes in the superannuation rules and the administration of nursery vouchers. All that amounts to a bill of nearly £80 million, but the Government have taken no account of it.

Housing is also affected. There has been a 24 per cent. real-terms cut in housing renovation grants since 1994–95, and an 18 per cent. cut since last year. There has been a 24.5 per cent. real-terms reduction in housing capital provision over that three-year period, and a 16 per cent. cut since last year. As for homelessness, since 1979—surprise, surprise—the number of cases of people being accepted as homeless in Wales has nearly doubled, from just over 4,500 to just over 9,000.

Local authorities have a direct interest in housing association budgets, because of allocation policies. In December 1995, the Secretary of State said that he was giving Tai Cymru a social housing grant of £85 million, which would "globalise" into £150 million with private sector finance. Last December, he said that he was giving Tai Cymru £60 million, which would "globalise" into £100 million, yet in both years there were going to be 3,000 housing starts with 50 per cent. less money available. The right hon. Gentleman obviously needs to go into housing when he completes his time in Parliament after the next general election.

The fire service in south Wales is badly underfunded. It has problems over the pension scheme. The number of call-outs has been increasing annually at 10 per cent. Capital needs are not being met. It is going to have great difficulty in providing the high service level that is needed, particularly when its training needs under the Health and Safety Executive improvement notice will cost more than £1 million a year for the next five years, and that was following the tragic deaths of two firemen in Blaina. I would have thought that the Government would make provision for those needs, but they plainly have not.

I hope therefore that, even at this stage, the Government will reconsider the total of Welsh Office expenditure and decide that there is a case for giving greater priority to education and other local government services that are provided for people in Wales.

9.50 pm

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

I am grateful for the welcome that has been given to the settlement by my right hon. Friend the Member for Conwy (Sir W. Roberts) and by my hon. Friends the Members for Vale of Glamorgan (Mr. Sweeney) and for Clwyd, North-West (Mr. Richards). I even wish to note a rare appearance by the hon. and learned Member for Montgomery (Mr. Carlile).

The debate has removed what little credibility Opposition Members had. The hon. Member for Bridgend (Mr. Griffiths) argues that a settlement that increases money for local government, providing councils with £1,000 per person to spend and £880 per person in grants to support that spending, is wholly inadequate, yet we are told that there would be no increase in public spending under a Labour Government. When the hon. Member for Caerphilly (Mr. Davies) is asked how much extra he would give local government, he cannot or will not answer. Nor will he tell the House what other expenditure he would cut to give local government more, so as to stay within the reported spending plans of the right hon. Member for Dunfermline, East (Mr. Brown). We must not forget that funding for a Welsh assembly would also have to be found.

Concerns have been expressed about the council tax level and the iniquities of the capping system without any explanation of how council tax and public expenditure would be controlled if capping were abandoned. My right hon. Friend the Member for Conwy speculated on the cost in increased spending and increased council tax. I hesitate to give him an answer on that point. I fear that the sky would be the limit, with Labour local authorities let loose, but I rush to agree with him about the consequences of business rates again being the property of local authorities, as the Labour and Liberal parties want. The rates are going up only 2.2 per cent. this year, and that is for one fifth of small businesses. The rates of the other four fifths are being frozen. We can imagine how much rates would go up otherwise.

My right hon. Friend the Secretary of State for Wales has made it clear that he is providing £16.6 million to limit council tax increases to 15 per cent. The majority of council tax increases will be considerably lower than that. I noticed that the hon. Member for Blaenau Gwent (Mr. Smith) was rightly concerned about unemployment and other social factors in his constituency. I was surprised that he did not welcome the £4 million to damp the increase that his council is imposing on his constituents. After all, the average Welsh council tax for 1997–98 should be about £200 less than in England, but, at 88 per cent. of total standard spending, Government support in Wales is already proportionately higher than in England and in Scotland.

Governments who adopt a prudent approach to public finances cannot operate on the basis of wish lists. That is the only way in which to describe Opposition Members' arguments tonight. As my hon. Friend the Member for Vale of Glamorgan reminded us, the obvious implication of their arguments is increased total standard spending, increased spending unstrained by capping and increased central Government support to keep down council tax levels. If the hon. Member for Caerphilly has any sums, I have to conclude that they do not add up, and the best thing we could do is give him a nursery voucher.

The nursery voucher scheme has been criticised. The scheme furthers our commitment to parental choice and it does not disadvantage local government. Local authorities still retain the discretion to provide pre-school nursery education for four-year-olds, but will benefit from the receipt of voucher income. If parents are content with the provision that is being offered by the maintained sector, there is every reason to suppose that they will send their children to council-owned establishments. There is already evidence to suggest that some local education authorities in Wales are expanding their provision.

The Government's decision to base the nursery voucher adjustment base budgets on the populations of one to four-year-olds in local authority areas rather than on the number of four-year-olds in maintained schools was taken only after two separate consultation exercises. Local authorities differed in their views on the most appropriate basis, but the majority of responding authorities took the view that the adjustment should be based on the one-to-four-year-old population. That is in line with the needs indicators that are used for under-fives in the standard spending assessment formula that was agreed by the Welsh Consultative Council on Local Government Finance and it avoids penalising authorities that have chosen to invest in nursery education.

The hon. Members for Newport, East (Mr. Hughes) and for Alyn and Deeside (Mr. Jones) spoke about education. I am reminded of Labour's stunt today of claiming that 1,000 teachers are to be sacked in Wales. That was a unique criticism by Labour of Labour councillors in Wales. There are exceptions, but they are the people making the decisions. The hon. Member for Rhondda (Mr. Rogers) was concerned about 100 teachers being sacked in his authority, but I fear that he is out of date. He should have read Saturday's Western Mail, because it stated that his council is seeking not to do that. If Rhondda Cynon Taff, Denbighshire and Carmarthenshire can seek to ensure that no teachers are sacked, why should any local authority in Wales choose to make sacking its priority?

I tried to intervene on the hon. Member for Caerphilly because I wanted to question him on statistics that he quoted. He said that local government spending over the years had gone up by only 43 per cent. and that education spending had gone up by only 36 per cent. If he had understood his own statistics, he would have recognised that he was giving evidence of cuts in education that have been inflicted by Labour councillors in Wales. He said that he wanted to help young people. I wanted to ask him why, if he is sincere in that, he does not join in condemning Labour councillors whose first priority is to cut the number of teachers. It is Labour's sacred cows that we should be sacrificing, not our children's future.

My right hon. Friend the Member for Conwy was concerned about representation on the police formula working group. I happily tell him that I welcome such representation and that it is also welcomed by the Home Office. It is now a matter for Welsh authorities to take forward with their colleagues in the convention of local police authorities. Since 1 April, spending on the police in Wales has gone up by some 20 per cent. Before that date, spending was set by county councils, usually Labour. For some, the change over the past two years has been a rescue, especially in south Wales, because Labour starved the police of funding. The chief constable of south Wales has spoken about the extra officers that he could take on with the money that he has available. The commander of the Vale division has been able to point out how he has reduced crime because of extra officers in the Vale of Glamorgan.

I recently attended a demonstration of the closed circuit television that is operated by the police in Cardiff city centre and I soon realised the desirability of extending that facility. On two successive Saturdays, schoolboys from Llanishen high school were robbed in arcades in Cardiff. I must not exaggerate the point, but my son was one of the schoolboys who were robbed. All that reinforces the fact that we were right to take over the funding of the police in Wales from Labour councils, which starved them of money.

The settlement is a prudent but right package that will enable local government to maintain essential functions, if they act responsibly and cost effectively. The hon. Member for Caerphilly has called it unfair and inadequate, but he offered no policy in its stead. We heard a diatribe about failed economic policies. I shall not reply at the same length, but if the hon. Gentleman is concerned to improve the economy how could he dare to impose the social chapter, the minimum wage, the Welsh assembly and all the other job-destroying policies of his party?

Let us consider the difference between what Labour says and what it does when it has power. Labour claims that education has priority, but it cuts teachers. It professes to be interested in law and order, but it starves the police of money. Labour says one thing, but it does another. It is hypocrisy to such an extent that Labour Members cannot even control their own temporal lobes. The Government are presenting the right settlement to the House today, in stark contrast to the absence of policy from the Opposition. I commend it to the House.

Question put:—

The House divided: Ayes 304, Noes 251.

Division No. 67]	[9.59 pm
AYES
Ainsworth, Peter (E Surrey)	Boyson, Sir Rhodes
Aitken, Jonathan	Brandreth, Gyles
Alexander, Richard	Brazier, Julian
Alison, Michael (Selby)	Bright Sir Graham
Allason, Rupert (Torbay)	Brooke, Peter
Amess, David	Brown, Michael (Brigg Cf'thorpes)
Arbuthnot, James	Browning, Mrs Angela
Arnold, Jacques (Gravesham)	Bruce, Ian (S Dorset)
Ashby, David	Budgen, Nicholas
Atkinson, David (Bour'mth E)	Burns, Simon
Atkinson, Peter (Hexharn)	Butcher, John
Baker, Kenneth (Mole V)	Butler, Peter
Baldry, Tony	Butterfill, John
Banks, Matthew (Southport)	Carlisle, John (Luton N)
Banks, Robert (Harrogate)	Carlisle, Sir Kenneth (Linc'n)
Bates, Michael	Carttiss, Michael
Batiste, Spencer	Cash, William
Bellingham, Henry	Channon, Paul
Bendall, Vivian	Chapman, Sir Sydney
Beresford, Sir Paul	Clappison, James
Biffen, John	Clark, Dr Michael (Rochf'd)
Body, Sir Richard	Clarke, Kenneth (Rushcliffe)
Bonsor, Sir Nicholas	Clifton-Brown, Geoffrey
Booth, Hartley	Coe, Sebastian
Boswell, Tim	Colvin, Michael
Bottomley, Peter (Eltham)	Congdon, David
Bottomley, Mrs Virginia	Conway, Derek
Bowden, Sir Andrew	Coombs, Simon (Swindon)
Bowis, John	Cope, Sir John

Cormack, Sir Patrick	Higgins, Sir Terence
Couchman, James	Hill, Sir James (Southampton Test)
Cran, James	Hogg, Douglas (Grantham)
Currie, Mrs Edwina	Horam, John
Curry, David	Hordern, Sir Peter
Davies, Quentin (Starrf'd)	Howard, Michael
Davis, David (Boothferry)	Howell, David (Guildf'd)
Day, Stephen	Howell, Sir Ralph (N Norfolk)
Deva, Nirj Joseph	Hughes, Robert G (Harrow W)
Devlin, Tim	Hunt, David (Wirral W)
Dicks, Terry	Hunt, Sir John (Ravensb'ne)
Dorrell, Stephen	Hunter, Andrew
Douglas-Hamilton, Lord James	Hurd, Douglas
Dover, Den	Jack, Michael
Duncan, Alan	Jackson, Robert (Wantage)
Duncan Smith, Iain	Jenkin, Bernard (Colchester N)
Dunn, Bob	Jessel, Toby
Durant, Sir Anthony	Johnson Smith, Sir Geoffrey
Dykes, Hugh	Jones, Gwilym (Cardiff N)
Eggar, Tim	Jones, Robert B (W Herts)
Elletson, Harold	Jopling, Michael
Emery, Sir Peter	Kellett-Bowman, Dame Elaine
Evans, David (Welwyn Hatf'ld)	Key, Robert
Evans, Jonathan (Brecon)	King, Tom
Evans, Nigel (Ribble V)	Kirkhope, Timothy
Evans, Roger (Monmouth)	Knapman, Roger
Evennett, David	Knight, Mrs Angela (Erewash)
Faber, David	Knight, Greg (Derby N)
Fabricant, Michael	Knight, Dame Jill (Edgbaston)
Fenner, Dame Peggy	Knox, Sir David
Reid, Barry (Isle of Wight)	Kynoch, George
Fishburn, Dudley	Lait, Mrs Jacqui
Forman, Nigel	Lamont, Norman
Forsyth, Michael (Stirling)	Lang, Ian
Forth, Eric	Lawrence, Sir Ivan
Fowler, Sir Norman	Legg, Barry
Fox, Dr Liam (Woodspring)	Leigh, Edward
Fox, Sir Marcus (Shipley)	Lennox-Boyd, Sir Mark
Freeman, Roger	Lester, Sir Jim (Broxtowe)
French, Douglas	Lidington, David
Fry, Sir Peter	Lilley, Peter
Gale, Roger	Lloyd, Sir Peter (Fareham)
Gallie, Phil	Lord, Michael
Gardiner, Sir George	Luff, Peter
Garel-Jones, Tristan	Lyell, Sir Nicholas
Garnier, Edward	MacGregor, John
Gill, Christopher	MacKay, Andrew
Gillan, Mrs Cheryl	Maclean, David
Goodlad, Alastair	McLoughlin, Patrick
Goodson-Wickes, Dr Charles	Madel, Sir David
Gorman, Mrs Teresa	Maitland, Lady Olga
Gorst, Sir John	Malone, Gerald
Grant, Sir Anthony (SW Cambs)	Mans, Keith
Greenway, Harry (Ealing N)	Marland, Paul
Greenway, John (Ryedale)	Marlow, Tony
Griffiths, Peter (Portsmouth N)	Marshall, John (Hendon S)
Grylls, Sir Michael	Marshall, Sir Michael (Arundel)
Gummer, John	Martin, David (Portsmouth S)
Hague, William	Mates, Michael
Hamilton, Sir Archibald	Mayhew, Sir Patrick
Hamilton, Neil (Tatton)	Mellor, David
Hampson, Dr Keith	Merchant, Piers
Hanley, Jeremy	Mitchell, Andrew (Gedling)
Hannam, Sir John	Mitchell, Sir David (NW Hants)
Hargreaves, Andrew	Moate, Sir Roger
Harris, David	Monro, Sir Hector
Haselhurst, Sir Alan	Montgomery, Sir Fergus
Hawkins, Nick	Needham, Richard
Hawksley, Warren	Nelson, Anthony
Hayes, Jerry	Neubert, Sir Michael
Heald, Oliver	Newton, Tony
Heath, Sir Edward	Nicholson, David (Taunton)
Heathcoat-Amory, David	Norris, Steve
Hendry, Charles	Onslow, Sir Cranley
Heseltine, Michael	Oppenheim, Phillip
Hicks, Sir Robert	Ottaway, Richard

Page, Richard	Stewart, Allan
Paice, James	Streeter, Gary
Patnick, Sir Irvine	Sumberg, David
Patten, John	Sweeney, Walter
Pattie, Sir Geoffrey	Sykes, John
Pawsey, James	Tapsell, Sir Peter
Peacock, Mrs Elizabeth	Taylor, Ian (Esher)
Pickles, Eric	Taylor, John M (Solihull)
Porter, David	Taylor, Sir Teddy
Portillo, Michael	Temple-Morris, Peter
Powell, William (Corby)	Thomason, Roy
Rathbone, Tim	Thompson, Sir Donald (Calder V)
Redwood, John	Thompson, Patrick (Norwich N)
Renton, Tim	Thornton, Sir Malcolm
Richards, Rod	Townend, John (Bridlington)
Riddick, Graham	Townsend, Sir Cyril (Bexl'yh'th)
Rifkind, Malcolm	Tracey, Richard
Robathan, Andrew	Trend, Michael
Roberts, Sir Wyn	Trotter, Neville
Robertson, Raymond S (Ab'd'n S)	Twinn, Dr Ian
Robinson, Mark (Somerton)	Vaughan, Sir Gerard
Roe, Mrs Marion	Viggers, Peter
Rowe, Andrew	Waldegrave, William
Rumbold, Dame Angela	Walden, George
Ryder, Richard	Walker, Bill (N Tayside)
Sackville, Tom	Waller, Gary
Sainsbury, Sir Timothy	Ward, John
Scott, Sir Nicholas	Wardle, Charles (Bexhill)
Shaw, David (Dover)	Waterson, Nigel
Shaw, Sir Giles (Pudsey)	Watts, John
Shephard, Mrs Gillian	Wells, Bowen
Shepherd, Richard (Aldridge)	Wheeler, Sir John
Shersby, Sir Michael	Whitney, Sir Raymond
Sims, Sir Roger	Whittingdale, John
Skeet, Sir Trevor	Widdecombe, Miss Ann
Smith, Sir Dudley (Warwick)	Wiggin, Sir Jerry
Smith, Tim (Beaconsf'ld)	Wilkinson, John
Soames, Nicholas	Willetts, David
Speed, Sir Keith	Wilshire, David
Spencer, Sir Derek	Winterton, Mrs Ann (Congleton)
Spicer, Sir Jim (W Dorset)	Winterton, Nicholas (Macdesf'ld)
Spicer, Sir Michael (S Worcs)	Wolfson, Mark
Spink, Dr Robert	Wood, Timothy
Spring, Richard	Yeo, Tim
Sproat, Iain	Young, Sir George
Squire, Robin (Hornchurch)
Stanley, Sir John	Tellers for the Ayes:
Steen, Anthony	Mr. Matthew Carrington
Stern, Michael	and Mr. Anthony Coombs.

NOES
Abbott, Ms Diane	Blunkett, David
Adams, Mrs Irene	Boateng, Paul
Ainger, Nick	Bradley, Keith
Ainsworth, Robert (Cov'try NE)	Bray, Dr Jeremy
Allen, Graham	Brown, Gordon (Dunfermline E)
Alton, David	Brown, Nicholas (Newcastle E)
Anderson, Donald (Swansea E)	Burden, Richard
Armstrong, Ms Hilary	Byers, Stephen
Ashton, Joseph	Caborn, Richard
Austin-Walker, John	Callaghan, Jim
Banks, Tony (Newham NW)	Campbell, Mrs Anne (C'bridge)
Barnes, Harry	Campbell, Menzies (Fife NE)
Barron, Kevin	Campbell, Ronnie (Blyth V)
Battle, John	Campbell-Savours, D N
Bayley, Hugh	Canavan, Dennis
Beckett, Mrs Margaret	Cann, Jamie
Beggs, Roy	Carlile, Alex (Montgomery)
Beith, A J	Chidgey, David
Bell, Stuart	Chisholm, Malcolm
Benn, Tony	Clapham, Michael
Bennett, Andrew F	Clarke, Eric (Midlothian)
Benton, Joe	Clarke, Tom (Monklands W)
Bermingham, Gerald	Clelland, David
Berry, Roger	Clwyd, Mrs Ann
Betts, Clive	Coffey, Ms Ann

Cohen, Harry	Ingram, Adam
Cook, Frank (Stockton N)	Jackson, Ms Glenda (Hampst'd)
Cook, Robin (Livingston)	Jackson, Mrs Helen (Hillsborough)
Corbett, Robin	Jamieson, David
Corston, Ms Jean	Janner, Greville
Cousins, Jim	Jenkins, Brian D (SE Staffs)
Cox, Tom	Jones, Barry (Alyn & D'side)
Cummings, John	Jones, Ieuan Wyn (Ynys Môn)
Cunliffe, Lawrence	Jones, Jon Owen (Cardiff C)
Cunningham, Jim (Cov'try SE)	Jones, Dr L (B'ham Selly Oak)
Dafis, Cynog	Jones, Martyn (Clwyd SW)
Dalyell, Tam	Jowell, Ms Tessa
Darling, Alistair	Kennedy, Charles (Ross C & S)
Davidson, Ian	Kennedy, Mrs Jane (Broadgreen)
Davies, Bryan (Oldham C)	Khabra, Piara S
Davies, Denzil (Llanelli)	Kilfoyle, Peter
Davies, Ron (Caerphilly)	Kirkwood, Archy
Davis, Terry (B'ham Hodge H)	Liddell, Mrs Helen
Denham, John	Litherland, Robert
Dewar, Donald	Livingstone, Ken
Dixon, Don	Lloyd, Tony (Stretf'd)
Dobson, Frank	Llwyd, Elfyn
Donohoe, Brian H	Loyden, Eddie
Dowd, Jim	McAllion, John
Dunwoody, Mrs Gwyneth	Macdonald, Calum
Eastham, Ken	McKelvey, William
Ennis, Jeff	Mackinlay, Andrew
Etherington, Bill	McLeish, Henry
Evans, John (St Helens N)	McNamara, Kevin
Ewing, Mrs Margaret	MacShane, Denis
Fatchett, Derek	McWilliam, John
Faulds, Andrew	Madden, Max
Field, Frank (Birkenhead)	Maddock, Mrs Diana
Fisher, Mark	Mandelson, Peter
Flynn, Paul	Marshall, David (Shettleston)
Forsythe, Clifford (S Antrim)	Marshall, Jim (Leicester S)
Foster, Derek	Martin, Michael J (Springburn)
Foulkes, George	Martlew, Eric
Fraser, John	Maxton, John
Fyfe, Mrs Maria	Meacher, Michael
Galbraith, Sam	Meale, Alan
Galloway, George	Michael, Alun
Gapes, Mike	Michie, Bill (Shef'ld Heeley)
Garrett, John	Milburn, Alan
George, Bruce	Miller, Andrew
Gerrard, Neil	Mitchell, Austin (Gt Grimsby)
Gilbert, Dr John	Moonie, Dr Lewis
Godman, Dr Norman A	Morgan, Rhodri
Godsiff, Roger	Morley, Elliot
Golding, Mrs Llin	Morris, Ms Estelle (B'ham Yardley)
Gordon, Ms Mildred	Morris, John (Aberavon)
Graham, Thomas	Mowlam, Ms Marjorie
Grant, Bernie (Tottenham)	Mudie, George
Griffiths, Win (Bridgend)	Mullin, Chris
Grocott, Bruce	Murphy, Paul
Gunnell, John	O'Brien, Mike (N Warks)
Hain, Peter	O'Brien, William (Normanton)
Hardy, Peter	O'Hara, Edward
Harman, Ms Harriet	Olner, Bill
Heppell, John	O'Neill, Martin
Hill, Keith (Streatham)	Orme, Stanley
Hinchliffe, David	Pearson, Ian
Hodge, Ms Margaret	Pendry, Tom
Hogg, Norman (Cumbernauld)	Pickthall, Colin
Home Robertson, John	Pike, Peter L
Hood, Jimmy	Pope, Greg
Hoon, Geoffrey	Powell, Sir Raymond (Ogmore)
Howarth, Alan (Stratf'd-on-A)	Prentice, Gordon (Pendle)
Howarth, George (Knowsley N)	Prescott, John
Howells, Dr Kim	Primarolo, Ms Dawn
Hoyle, Doug	Purchase, Ken
Hughes, Kevin (Doncaster N)	Quin, Ms Joyce
Hughes, Robert (Ab'd'n N)	Radice, Giles
Hughes, Roy (Newport E)	Randall, Stuart
Hutton, John	Raynsford, Nick
Illsley, Eric	Reid, Dr John

Robertson, George (Hamilton)	Sutcliffe, Gerry
Robinson, Geoffrey (Cov'try NW)	Thompson, Jack (Wansbeck)
Rogers, Allan	Thurnham, Peter
Rooker, Jeff	Timms, Stephen
Rooney, Terry	Tipping, Paddy
Ross, Ernie (Dundee W)	Touhig, Don
Rowlands, Ted	Trickett, Jon
Ruddock, Ms Joan	Turner, Dennis
Sedgemore, Brian	Vaz, Keith
Sheerman, Barry	Walker, Sir Harold
Sheldon, Robert	Wallace, James
Shore, Peter	Walley, Ms Joan
Short, Clare	Wardell, Gareth (Gower)
	Wareing, Robert N
Simpson, Alan	Watson, Mike
Skinner, Dennis	Wicks, Malcolm
Smith, Andrew (Oxford E)	Wigley, Dafydd
Smith, Chris (Islington S)	Williams, Alan (Swansea W)
Smith, Llew (Blaenau Gwent)	Williams, Alan W (Carmarthen)
Snape, Peter	Winnick, David
Soley, Clive	Wise, Mrs Audrey
Spearing, Nigel	Wray, Jimmy
Spellar, John	Wright, Dr Tony
Squire, Ms R (Dunfermline W)
Steel, Sir David	Tellers for the Noes:
Steinberg, Gerry	Ms Angela Eagle and
Stevenson, George	Mr. Thomas McAvoy.

Question accordingly agreed to.

Resolved, That the Local Government Finance Report (Wales) 1997–98 (HC 218). which was laid before this House on 3rd February, be approved.

It being after Ten o'clock, MR. DEPUTY SPEAKER put the remaining Questions required to be put at that hour.

Motion made, and Question put, That the Special Grant Report (Wales) 1997 (HC 219), which was laid before this House on 3rd February, be approved.—[Mr. Peter Ainsworth.]

The House divided: Ayes 254. Noes 124.

Division No. 68]	[10.14 pm
AYES
Ainsworth, Peter (E Surrey)	Burns, Simon
Aitken, Jonathan	Butcher, John
Alexander, Richard	Butler, Peter
Amess, David	Butterfill, John
Arbuthnot, James	Carlisle, Sir Kenneth (Linc'n)
Arnold, Jacques (Gravesham)	Cash, William
Atkinson, Peter (Hexham)	Channon, Paul
Baker, Kenneth (Mole V)	Chapman, Sir Sydney
Banks, Robert (Harrogate)	Clappison, James
Bates, Michael	Clarke, Kenneth (Rushcliffe)
Batiste, Spencer	Clifton-Brown, Geoffrey
Beggs, Roy	Coe, Sebastian
Bellingham, Henry	Congdon, David
Bendall, Vivian	Conway, Derek
Beresford, Sir Paul	Coombs, Simon (Swindon)
Body, Sir Richard	Cope, Sir John
Bonsor, Sir Nicholas	Couchman, James
Booth, Hartley	Cran, James
Boswell, Tim	Currie, Mrs Edwina
Bottomley, Peter (Eltham)	Curry, David
Bottomley, Mrs Virginia	Davies, Quentin (Stamf'd)
Bowden, Sir Andrew	Davis, David (Boothferry)
Bowis, John	Day, Stephen
Brandreth, Gyles	Deva, Nirj Joseph
Brazier, Julian	Devlin, Tim
Bright, Sir Graham	Dorrell, Stephen
Brooke, Peter	Douglas-Hamilton, Lord James
Browning, Mrs Angela	Dover, Den
Budgen, Nicholas	Duncan, Alan

Duncan Smith, Iain	Knox, Sir David
Dunn, Bob	Kynoch, George
Dykes, Hugh	Lait, Mrs Jacqui
Eggar, Tim	Lamont, Norman
Elletson, Harold	Lang, Ian
Evans, Jonathan (Brecon)	Lawrence, Sir Ivan
Evans, Nigel (Ribble V)	Legg, Barry
Evans, Roger (Monmouth)	Leigh, Edward
Faber, David	Lester, Sir Jim (Broxtowe)
Fabricant, Michael	Lidington, David
Fenner, Dame Peggy	Lilley, Peter
Forman, Nigel	Lloyd, Sir Peter (Fareham)
Forsyth, Michael (Stirling)	Lord, Michael
Forsythe, Clifford (S Antrim)	Luff, Peter
Forth, Eric	Lyell, Sir Nicholas
Fowler, Sir Norman	MacGregor, John
Fox, Dr Liam (Woodspring)	MacKay, Andrew
Fox, Sir Marcus (Shipley)	Maclean, David
Freeman, Roger	McLoughlin, Patrick
French, Douglas	Madel, Sir David
Fry, Sir Peter	Malone, Gerald
Gale, Roger	Mans, Keith
Gallie, Phil	Marland, Paul
Gardiner, Sir George	Marlow, Tony
Garel-Jones, Tristan	Marshall, John (Hendon S)
Garnier, Edward	Martin, David (Portsmouth S)
Gill, Christopher	Mayhew, Sir Patrick
Gillan, Mrs Cheryl	Mellor, David
Goodlad, Alastair	Merchant, Piers
Goodson-Wickes, Dr Charles	Mitchell, Andrew (Gedling)
Gorman, Mrs Teresa	Mitchell, Sir David (NW Hants)
Gorst, Sir John	Moate, Sir Roger
Grant, Sir Anthony (SW Cambs)	Monro, Sir Hector
Greenway, John (Ryedale)	Needham, Richard
Griffiths, Peter (Portsmouth N)	Nelson, Anthony
Grylls, Sir Michael	Neubert, Sir Michael
Gummer, John	Newton, Tony
Hague, William	Nicholson, David (Taunton)
Hamilton, Sir Archibald	Norris, Steve
Hamilton, Neil (Tatton)	Ottaway, Richard
Hampson, Dr Keith	Page, Richard
Hanley, Jeremy	Paice, James
Hargreaves, Andrew	Patnick, Sir Irvine
Haselhurst, Sir Alan	Patten, John
Hawkins, Nick	Pattie, Sir Geoffrey
Hayes, Jerry	Peacock, Mrs Elizabeth
Heald, Oliver	Pickles, Eric
Heath, Sir Edward	Porter, David
Heathcoat-Amory, David	Portillo, Michael
Hendry, Charles	Powell, William (Corby)
Heseltine, Michael	Rathbone, Tim
Hicks, Sir Robert	Redwood, John
Higgins, Sir Terence	Renton, Tim
Hill, Sir James (Southampton Test)	Richards, Rod
Hogg, Douglas (Grantham)	Riddick, Graham
Horam, John	Rifkind, Malcolm
Hordern, Sir Peter	Robathan, Andrew
Howard, Michael	Roberts, Sir Wyn
Howell, David (Guildf'd)	Robertson, Raymond S (Ab'd'n S)
Howell, Sir Ralph (N Norfolk)	Robinson, Mark (Somerton)
Hughes, Robert G (Harrow W)	Rowe, Andrew
Hunt, David (Wirral W)	Ryder, Richard
Hunter, Andrew	Sackville, Tom
Jack, Michael	Shaw, David (Dover)
Jackson, Robert (Wantage)	Shaw, Sir Giles (Pudsey)
Jenkin, Bernard (Colchester N)	Shephard, Mrs Gillian
Jessel, Toby	Shepherd, Richard (Aldridge)
Johnson Smith, Sir Geoffrey	Shersby, Sir Michael
Jones, Gwilym (Cardiff N)	Sims, Sir Roger
Jones, Robert B (W Herts)	Smith, Tim (Beaconsf'ld)
Jopling, Michael	Soames, Nicholas
King, Tom	Spencer, Sir Derek
Kirkhope, Timothy	Spicer, Sir Jim (W Dorset)
Knapman, Roger	Spicer, Sir Michael (S Worcs)
Knight, Mrs Angela (Erewash)	Spink, Dr Robert
Knight, Greg (Derby N)	Spring, Richard

Sproat, Iain	Walker, Bill (N Tayside)
Squire, Robin (Hornchurch)	Waller, Gary
Stanley, Sir John	Ward, John
Steen, Anthony	Wardle, Charles (Bexhill)
Stern, Michael	Waterson, Nigel
Stewart, Allan	Watts, John
Streeter, Gary	Wells, Bowen
Sweeney, Walter	Wheeler, Sir John
Sykes, John	Whittingdale, John
Taylor, Ian (Esher)	Widdecombe, Miss Ann
Taylor, John M (Solihull)	Wiggin, Sir Jerry
Temple-Morris, Peter	Wilkinson, John
Thomason, Roy	Willetts, David
Thompson, Sir Donald (Calder V)	Wilshire, David
Townend, John (Bridlington)	Winterton, Mrs Ann (Congleton)
Townsend, Sir Cyril (Bexl'yh'th)	Winterton, Nicholas (Macdesf'ld)
Tracey, Richard	Wolfson, Mark
Tredinnick, David	Wood, Timothy
Trend, Michael	Yeo, Tim
Trotter, Neville	Young, Sir George
Twinn, Dr Ian
Viggers, Peter	Tellers for the Ayes:
Waldegrave, William	Mr. Matthew Carrington
Walden, George	and Mr. Anthony Coombs.

NOES
Adams, Mrs Irene	Griffiths, Win (Bridgend)
Ainger, Nick	Gunnell, John
Ainsworth, Robert (Cov'try NE)	Hain, Peter
Alton, David	Hardy, Peter
Armstrong, Ms Hilary	Heppell, John
Ashton, Joseph	Hill, Keith (Streatham)
Banks, Tony (Newham NW)	Home Robertson, John
Barnes, Harry	Howarth, George (Knowsley N)
Bayley, Hugh	Howells, Dr Kim
Beith, A J	Hoyle, Doug
Bermingham, Gerald	Hughes, Kevin (Doncaster N)
Boateng, Paul	Hughes, Roy (Newport E)
Bradley, Keith	Hughes, Simon (Southwark)
Brown, Nicholas (Newcastle E)	Hutton, John
Burden, Richard	Illsley, Eric
Caborn, Richard	Ingram, Adam
Callaghan, Jim	Janner, Greville
Campbell, Menzies (Fife NE)	Jenkins, Brian D (SE Staffs)
Campbell-Savours, D N	Jones, Barry (Atyn & D'side)
Carlile, Alex (Montgomery)	Jones, Ieuan Wyn (Ynys Môn)
Chidgey, David	Jones, Jon Owen (Cardiff C)
Clapham, Michael	Kennedy, Charles (Ross C & S)
Clarke, Eric (Midlothian)	Kirkwood, Archy
Clwyd, Mrs Ann	Lewis, Terry
Coffey, Ms Ann	Lithetland, Robert
Cohen, Harry	Llwyd, Elfyn
Corston, Ms Jean	McAvoy, Thomas
Cunningham, Jim (Cov'try SE)	Mackinlay, Andrew
Dalyell, Tam	McLeish, Henry
Davidson, Ian	Maddock, Mrs Diana
Davies, Denzil (Llanelli)	Maxton, John
Davies, Ron (Caerphilly)	Meale, Alan
Dixon, Don	Michael, Alun
Donohoe, Brian H	Michie, Bill (Shef'ld Heeley)
Dowd, Jim	Milburn, Alan
Eagle, Ms Angela	Morgan, Rhodri
Eastham, Ken	Morley, Elliot
Ennis, Jeff	Morris, Ms Estelle (B'ham Yardley)
Etherington, Bill	Mudie, George
Evans, John (St Helens N)	Mullin, Chris
Ewing, Mrs Margaret	O'Brien, William (Normanton)
Fatchett, Derek	O'Hara, Edward
Faulds, Andrew	Olner, Bill
Flynn, Paul	O'Neill, Martin
Fraser, John	Orme, Stanley
Gerrard, Neil	Pickthall, Colin
Golding, Mrs Llin	Pike, Peter L
Gordon, Ms Mildred	Powell, Sir Raymond (Ogmore)
Graham, Thomas	Prescott, John
Griffiths, Nigel (Edinburgh S)	Quin, Ms Joyce

Reid, Dr John	Vaz, Keith
Robertson, George (Hamilton)	Walker, Sir Harold
Rooney, Terry	Wallace, James
Rowlands, Ted	Walley, Ms Joan
Simpson, Alan	Wardell, Gareth (Gower)
Skinner, Dennis	Wigley, Dafydd
Smith, Llew (Blaenau Gwent)	Williams, Alan (Swansea W)
Spearing, Nigel	Williams, Alan W (Carmarthen)
Spellar, John	Wise, Mrs Audrey
Steel, Sir David	Wray, Jimmy
Steinberg, Gerry
Sutcliffe, Gerry	Tellers for the Noes:
Thumharn, Peter	Mr. Don Touhig and
Timms, Stephen	Mr. Martyn Jones.

Question accordingly agreed to.

Resolved, That the Special Grant Report (Wales) 1997 (HC 219), which was laid before this House on 3rd February, be approved.

c908
1. Local Government Finance (Wales) 28 words
c908
2. Artists' Resale Rights 54 words