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Storm Damage

3.31 pm

Mr. Nicholas Bennett (Pembroke) (by private notice) : To ask the Secretary of State for the Environment if he will make a statement on the storms over the weekend and on what plans he has to assist with any damage caused.

The Under-Secretary of State for the Environment (Mr. Christopher Chope) : I am grateful to my hon. Friend for giving me the opportunity to report to the House about the violent storms that hit many coastal areas of the British Isles over the past weekend. Tragically, it has been reported that eight people lost their lives, and I am sure that the whole House will wish to join me in expressing heartfelt condolences to the relatives and friends of those who lost their lives. I also extend my sympathy to those who have suffered damage to property or have been hurt.

It is apparent that the storms were severe and caused widespread damage, particularly in coastal areas. Obviously it is too soon to assess exactly how much damage has been done, the amount of work necessary and how much it will cost to put it right.

I am grateful to all the emergency and voluntary services who took part, often at great personal risk. The primary responsibility for dealing with emergencies lies with local authorities. They have wide discretionary powers to spend money for such purposes under section 138 of the Local Government Act 1972, and they normally include an amount in their budgets to meet such contingencies. They also have the necessary local knowledge, resources and expertise to deal with such emergencies.

My hon. Friend asked whether the Government will bring additional national taxpayers' money to assist with the costs of dealing with the results of the storm. Under a model scheme designed to deal with the extraordinary costs arising from emergencies, known as the Bellwin scheme, my right hon. Friend the Secretary of State provides special financial assistance to local authorities in certain exceptional circumstances. These are, in an emergency or disaster involving destruction of or danger to life or property ; where, as a result, a local authority incurs expenditure on taking immediate action to safeguard life or property, or to prevent suffering or severe inconvenience in its area ; or where those costs are not normally insurable.

The scheme has been used twice in England recently, following emergencies created by the severe weather during the winter of 1986-87 and the great storm of 1987, and once in Wales in 1987, following floods. We cannot yet tell whether the immediate emergency works necessary to deal with the aftermath of the storm will justify activating the scheme, but I have asked my officials to liaise with the local authorities whose areas have been worst affected to enable a judgment to be made as soon as possible. My right hon. Friend the Secretary of State for Wales will be in touch with local authorities about arrangements there.

Mr. Bennett : I thank my hon. Friend for his comprehensive reply and join him in thanking all the emergency services and local authorities in my area who acted so promptly in response to the flooding during the weekend. I am told that Preseli-Pembrokeshire district council dealt magnificently with the floods at Newgale,

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which were shown on national television, and in which, as far as can be ascertained, we lost a police car. I must also praise the Royal Air Force at Brawdy, which airlifted people out of the Dale peninsula when they were in danger of being drowned. I am sure that the whole House joins the Minister and me in thanking those services for what they have done.

I represent a constituency with a long coast, so we have particular problems. Will specific help be given to coastal authorities in view of the severe damage that has been done? Will he consider assisting local authorities, if severe strain is put on their resources, by giving them extra help over and above that provided through the Bellwin formula?

Mr. Chope : I am grateful for my hon. Friend's kind words about the emergency services and all those who pulled together to improve matters in his area. Coastal protection is the responsibility of my right hon. Friend the Minister for Agriculture, Fisheries and Food. My right hon. Friend the Secretary of State for the Environment will examine any submissions from local authorities under the Bellwin formula.

Dr. Norman A. Godman (Greenock and Port Glasgow) : May I first offer my deepest sympathies to the families of the men who were lost in the firth of Clyde? Skipper Billy Irving was a fine professional fisherman and a member of the Clyde Fishing Association, of which I have the honour to be an honorary president. As Skipper Irving was going about his hazardous business when his vessel, the Destiny, foundered just a couple of hundred yards from Gourock, can the Minister, who is not responsible for these matters, convey to the Minister of State, Scottish Office, who I am pleased to see on the Treasury Bench, the need for a fatal accident inquiry? Can he also convey to Scottish Office Ministers our anxieties about this loss?

Mr. Chope : I shall be very pleased to do that.

Mr. David Harris (St. Ives) : On behalf of Cornish fishermen, I join those who have expressed their condolences, especially as we lost two of our fishermen just a few weeks ago. As my

constituency--the Isles of Scilly and along the arc of Mount's bay--bore the brunt of the storm during the weekend, will my hon. Friend the Minister convey to the Ministry of Agriculture, Fisheries and Food the urgent need to review coastal protection measures, especially in the Porthleven area which, as the whole nation saw on television last night, was especially badly hit by the storm? There is a need for an extension of coastal protection works and possibly a review of their extent. Will my hon. Friend kindly convey that message to the Minister of Agriculture, Fisheries and Food? No doubt I shall be knocking on his door very soon with local authorities.

Mr. Chope : Hon. Members are not the only people who are familiar with that part of the country. I am sure that my hon. Friend's constituents will find solace in my right hon. Friend the Minister of Agriculture, Fisheries and Food.

Mr. Matthew Taylor (Truro) : I also join in sending our condolences to the families of those whose lives were lost. We congratulate on their courage and heroism the emergency and voluntary services, not least in Cornwall and the Isle of Scilly which, as the hon. Member for St.

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Ives (Mr. Harris) said, bore much of the brunt of the storms. In past occurrences, local authorities have encountered problems with getting funds through quickly enough to tackle the problems, particularly given their current financial constraints. Although I accept what the Minister said about the formula, and that it is not yet possible to ascertain whether it will come into play, will he ensure that everything is done to ensure that any funds that are needed are brought into action as quickly as possible with as few bureaucratic problems as possible?

Mr. Chope : I am happy to give the hon. Member that assurance. It is important that local authorities act now to repair the damage, without waiting for any bureaucratic procedures.

Dame Janet Fookes (Plymouth, Drake) : Will my hon. Friend ensure that central Government make a speedy decision about what help is available, because delay adds to the uncertainties and difficulties of local authorities that are faced with the immense bill for capital works for coastal defences?

Mr. Chope : I am grateful to my hon. Friend. We will ensure that action is taken as quickly as possible.

Mr Harry Barnes (Derbyshire, North-East) : May I associate myself with the condolences that have been expressed, and voice my concern about the speed with which the Bellwin scheme is operated? When there was gale damage in the south of England some time ago, when we were in recess, the emergency was handled within five days, but when there was gale damage in Scotland, it was 13 weeks before the Bellwin scheme was applied. Local authorities have not applied the Bellwin scheme to many other cases which it should have covered. I am concerned that it should be applied to this case. The Minister said that the scheme covers amounts that are "not normally insurable". Is that traditionally part of the Bellwin scheme, or has it been added to it?

Mr. Chope : That has always been part of the Bellwin scheme. On the last occasion, there was a five-day gap before my right hon. Friend the Secretary of State was able to report to the House. This time, the delay has been between 24 and 36 hours. The hon. Gentleman will understand that that is why we are not able to say at this stage whether the Bellwin scheme will apply.

Mr. Anthony Steen (South Hams) : As the sea level is rising because of the greenhouse effect, while the Minister is working out his criteria for local authorities under the new community charge, will he give special grant to those areas with coastlines of more than so many miles? My constituency has 88 miles of coastline. Does he agree that some factor should be included in the formula so that, when such a catastrophe occurs, local authorities already have a fund which they can make available to repair any damage which occurs? For example, at Hope cove, a wall was completely destroyed, and at Blackpool sands an entire beach has disappeared.

Mr. Chope : I am pleased to be able to tell my hon. Friend that emergency capital and reconstruction works can be undertaken by local authorities and the National

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Rivers Authority and considered for grant by the Ministry of Agriculture, Fisheries and Food if they meet the normal criteria, even if there is no prior approval.

Sir Patrick McNair-Wilson (New Forest) : Is my hon. Friend aware that part of Lymington in my constituency was very seriously flooded, to a depth of 5 ft? Is he further aware that, thanks to the New Forest district council setting up a control post at 3.30 am on Sunday, and thanks to the tireless efforts of the police, the fire brigade and the social services, many of the problems have been resolved? Is he further aware that Hurst spit, which provides protection not only to my constituency but to all those along the Solent, has been breached in a number of places? Can he confirm that the compensation to which he referred earlier will cover that, should the district council require financial assistance?

Mr. Chope : I cannot decide at this stage whether any particular item of damage would be counted for compensation, but I shall certainly take my hon. Friend's point into account.

Several Hon. Members rose --

Mr. Speaker : Order. I propose to give precedence to those hon. Members whose constituencies have been directly affected.

Mr. David Martin (Portsmouth, South) : Will my hon. Friend confirm that any funds allocated will be extra money and will not affect sanctions on local government expenditure when it is reckoned at the end of any particular financial year?

Mr. Chope : If additional money is payable under the Bellwin scheme, it will be in addition to the normal rate support grant.

Mr. Robin Maxwell-Hyslop (Tiverton) : Will my hon. Friend be making a statement before the House rises for the Christmas recess so that local authorities know what their financial position will be? Clearly, the decisions that they must take about what can be afforded will be related to whether the Bellwin formula will be operative.

Mr. Chope : I hope that local authorities, which budget to deal with such emergencies, will not be inhibited in making the expenditure necessary to put right the damage. We shall take a decision as quickly as possible about whether the Bellwin formula should apply. The ball is in the local authorities' court, because it is for them to make the necessary application.

Mr. Dennis Skinner (Bolsover) : Why is it that one Department cannot pay local authorities, which have lost millions of pounds over the past 10 years as a result of the Government's actions, some money to help them out when there has been a disaster, because the Minister says "It is a complicated formula which will take a long time to work out," but when the Department of Energy has to find £250,000 to pay Lord Marshall a tidy sum for kidding the people--

Mr. Speaker : Order. The hon. Gentleman's question is miles wide of the subject.

Mr. Skinner : Why do the Government have double standards--one for local authorities and another for people such as Lord Marshall?

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Mr. Chope : I am afraid that it is typical of the hon. Gentleman that he should wish to bring party politics into this tragedy.

Mr. James Kilfedder (North Down) : The homes of quite a number of families in Holywood in my constituency were flooded at the weekend. Extensive damage was done to homes, furnishings and personal belongings. Insurance companies will not provide rapid or adequate payment. I therefore appeal to the Government to help to mitigate the emergency in the area by ensuring that prompt compensation is made to help them until insurance companies pay out.

Mr. Chope : It is clear from the comments of hon. Members that speed of action is all-important in this case.

Mr. Tony Banks (Newham, North-West) : While we do not have a seaboard in Newham--or we certainly did not have this morning when I left it--we in the inner city are concerned about the risks that people who supply us with our fish must run. At times such as this, they and their hazardous jobs are high in our minds. It was good of the Minister to praise the emergency services.

As Ministers regularly do so on occasions such as this, would it not be better to pay the emergency services, such as the ambulance workers, the money that they deserve? Will the Minister say whether all the local authorities in the south-east and in London have been fully compensated for the storm damage that he mentioned of October 1987? Certainly in the south- east, there is still much evidence of the damage that occurred on that day.

Mr. Chope : So far as I am aware, all the claims made under the Bellwin scheme for the 1987 storm have been settled. We all praise the emergency services, but it is important to remember that many people work in these circumstances for nothing--particularly, for example, those who work for the Royal National Lifeboat Institution.

Mr. Clive Soley (Hammersmith) : The whole House will unreservedly agree with the Minister's remarks about compassion for those who lost their lives and for their families ; that goes without saying for every hon. Member. We should like to know whether the Government will discuss with insurance companies what they think is a fair assessment for people who are not covered by insurance, including local authorities. That is important, because not all risks are insurable. It falls on the Government to consult insurance companies as well as local authorities.

We are worried about charities. Hon. Members have commented on the important work of the voluntary sector. Will the Government be prepared to recognise its contribution by considering grants for it where it has cost extra money to involve itself in rescue services?

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Will he take this opportunity to congratulate the emergency services--including, specifically, the ambulance service, which at times has not been given the support of management that it deserves? Now is an opportunity for the Minister to associate himself fully with the work done by the ambulance service, despite the current industrial dispute.

My final point is of immense importance--I believe that this is the first occasion when such an issue has been before the House when Conservative Member after Conservative Member has asked for extra money for the local authorities. Most Conservative Members, especially the hon. Member for Pembroke (Mr. Bennett), have spent most of their political careers working out ways in which they can cut, undermine and demoralise the power and resources of the local authorities, yet as soon as there is a bit of trouble in their constituencies, they all want the local authorities to solve it. One answer that I did not hear the Minister give, and which I should like him to give, is in response to his hon. Friend the Member for Portsmouth, South (Mr. Martin) who put his finger on it when he asked, "If the local authorities get any money, will they later lose it?" I want a clear commitment from the Minister now that extra money will be available, not that it may be available. We understand that he cannot say how much, but we need to know that it will be available and that it will not later be taken back, as the Government have consistently taken back such money over the past 10 years, emergency or no emergency.

Mr. Chope : It is a pity that the hon. Gentleman should try to make party political points on this occasion. It is common right across the House that we pay tribute to the work of the emergency services, whether the fire service, the ambulance service, the police or the voluntary organisations such as the Royal National Lifeboat Institution. We genuinely appreciate their work. This Government give generous grants to the voluntary sector. We have recently announced some generous arrangements for rate relief for charities' premises. I hope that local authorities will exercise their discretion to make that relief even more generous. The Government have a good record of commitment to the voluntary services.

I can assure the hon. Gentleman that, if any money is paid to local authorities under the Bellwin scheme, that money will belong to the local authorities and will certainly not be taken back by the Government. There would be no purpose in that. However, no decision has yet been taken on whether the Bellwin scheme applies in this case. We shall have to wait to see the submissions from the local authorities. I hope that they will bring them forward as soon as possible.

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Local Government Finance (Wales)

3.51 pm

The Secretary of State for Wales (Mr. Peter Walker) : With permission, Mr. Speaker, I should like to make a statement on local government finance in Wales. I have already made it clear that, in order to assist local authorities in Wales, I would announce the 1990-91 grant settlement before Christmas. I propose to lay the reports for 1990-91 on Wednesday ; but I am today placing in the Library a paper detailing my settlement decisions. I will be sending copies of the reports and of further technical data to all Welsh local authorities on Wednesday.

In summary, the settlement provides for a realistic level of total standard spending of £2,114.5 million, well up on the equivalent figure for 1989-90. Aggregate external finance at £1,738.5 million is increased by no less than 8.6 per cent. Within this, and as compared with my provisional estimates in November, revenue support grant has been increased by a further £10.4 million to £1,141.3 million, and the distributable amount from the non-domestic rating account has been reduced by the same amount to £443 million.

This is an excellent settlement. It is good for non-domestic ratepayers because a uniform poundage of 36.8p across Wales will provide the certainty and stability they have been seeking and because their contribution of £443 million, which is only 20 per cent. of local government spending, is over £10 million lower than I predicted in November.

It is good for community charge payers because it presents local authorities with an outstanding opportunity to keep community charges down. They know, and their electorate will know, that the burden of overspending is borne entirely by charge payers. This will bring realism to the local authority budgeting process.

The increase in total standard spending should allow authorities to maintain, and where appropriate to develop, services--particularly if councils achieve the efficiency savings which the Audit Commission has identified and which, commendably, they have been seeking. There is no reason for local authorities to budget to exceed total standard spending, and no reason for the average community charge in Wales to be more than £173. This is the true measure of the excellence of this settlement for the Principality.

Charge payers will expect their councils to set their community charges in line with this settlement. They will very quickly appreciate that expenditure increases which exceed this will result in higher charges, and will wish to satisfy themselves that they are not being asked to pay the price of overspending and inefficiency. It will be for councils, particularly those whose spending exceeds their standard spending assessment and who set higher charges, to justify their decisions to their electorate.

Similarly, charge payers will not expect those councils whose spending falls below their standard spending assessment to increase their spending by more than I have allowed for if they are already efficiently providing an appropriate level of service.

I intend to introduce a scheme of community charge transitional relief, carefully tailored to reflect Welsh circumstances. For 1990-91, I am providing £20 million in grant to fund this scheme ; resources will also be made available for the following two years. This scheme replaces

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and improves upon the safety net that I proposed in July. It is carefully targeted and cost-effective. I have placed in the Library provisional details of the communities which may receive additional grant. The scheme is fully funded by the Government and an area safety net will not be required. This additional grant will reduce the average community charge which should be payable in Wales to about £165.

In addition, community charge rebates will be available for those on low incomes, and I urge all charge payers who may be eligible for a rebate to apply for one to their local councils. Those on the lowest incomes in Wales will actually be better off with the community charge than if they had received a 100 per cent. rebate under the old rating system.

Under this excellent settlement, central Government and non-domestic ratepayers will together finance around 85 per cent. of local government revenue expenditure in the Principality. It follows that only 15 per cent. of local government expenditure will be met by charge payers. In the light of this, charge payers have every right to expect their local councils to protect their interests by budgeting sensibly, by containing their spending to affordable levels and by keeping the community charge low.

Mr. Barry Jones (Alyn and Deeside) : I must tell the Secretary of State that, based on the provisional figures announced at the end of November, Mr. Gwyn Davies, the chairman of the Welsh Association of District Councils and Mr. Fred Kingdom, chairman of the Welsh Counties Committee, are of the view that, to cover costs for next year, some 3 to 4 per cent. more money is needed. Is he aware that, when poll tax demands fall through letter boxes in a few months' time, people in Wales will wonder why the amount is so much higher than the £173 that he has widely publicised? The Secretary of State will try to put the blame on local councils but the buck starts, and it stops, with him and his statement today.

Does the Secretary of State not realise that the statement borders on a confidence trick? It is not an excellent statement : it is deplorable. It will destabilise rather than stabilise. There is no room for efficiency savings after 10 years of Conservative Government. Therefore, will he concede that the statement is some 3 to 4 per cent. short ; that the standard poll tax will be not £173 but £210 per year ; that 2 million poll tax payers in Wales will pay £30 to £40 extra per person than he says ; that the valleys communities will be hit very hard ; that expenditure provision is £80 million short of what councils say they need to spend, and that the revenue support grant is £40 million short? The statement ignores persistent high inflation, high interest rates, and salary and wage increases of 9 per cent. which must be funded. The Secretary of State has not found the money to do so.

Does the Secretary of State understand that, if local councils in Wales spend, on average, 4 per cent. more than the provisional allocation, the poll tax charge for two-adult families--according to the district councils, not the Opposition--might increase by 50 per cent. in Dinefwr, Llanelli, Pwllelli, Islwyn, Arfon, Merionnydd and Rhymney Valley ; by 66 per cent. in Merthyr Tydfil, Lliw Valley and Neath ; by 75 per cent. in Port Talbot ; by 90 per cent. in Blaenau Gwent and Cynon Valley ; and by 123 per cent. in the Rhondda. What have the valleys communities done to deserve such a system? This is supposed to be the season of good will, but today the

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Secretary of State for Wales is implementing a deeply unpopular measure. He should know that Wales hates the whole concept of the poll tax.

Does not the right hon. Gentleman agree that the people who will benefit from the poll tax settlement will be those who occupy large, high-rateable- value houses? Has he forgotten that the transitional relief will be phased out over three years, just after the next general election? What a coincidence. I remind the right hon. Gentleman that this statement will not help district councils to increase the number of environmental health officers and their back-up technical staff in a year when Wales has suffered serious outbreaks of listeria and salmonella. Yet again, he leaves our councils short in that sphere.

How can local councils step up their excellent work to encourage new industries if, as a result of the statement, they will be short of the means to create new jobs? How can our councils build new homes when they estimate that their spending will be 13 per cent. down on their current expenditure? The Government have enforced the sale of 72,000 council houses in Wales, but they have not given the councils the means to build new council homes.

Has not the right hon. Gentleman wrapped the poll tax round the necks of the Welsh people? Surely the poll tax in Wales in a Tory tax. It is the Secretary of State's tax, as he has given the poll tax to the people of Wales. Does he understand that, when the general election comes, there will be nobody behind him in support?

Mr. Walker : The hon. Member for Alyn and Deeside (Mr. Jones) has come out with a long statement, most of it totally inaccurate. Without exception, all the percentages he quoted are inaccurate. Let us get one percentage absolutely correct--the one for his constituency. There, on average, the community charge will be 15 per cent. below the average domestic rate charged in the past. Perhaps the hon. Gentleman would like to convey to his constituents the adverse effects of the settlement.

It is nonsense to say that a settlement which is 7.1 per cent. above the budgets of the local authorities for the previous year is a scandalous cut in local government expenditure. If the hon. Gentleman wants to adopt a system under which there were scandalous cuts, he will have to go back to the time when he was a Minister at the Welsh Office. In his final three years at the Welsh Office, there was a cut in real terms in the rate support grant every year. I am glad to say that, in the past four years, there has been no cut in real terms in the rate support grant.

The hon. Gentleman also said that, after 10 years of Conservative Government, there was no room for any improvements in local government efficiency. That is one of the classic quotes from an Opposition Front- Bench spokesman. The Audit Commission recently had meetings with the local authorities, which agreed that a host of improvements could be made in efficiency. It is deplorable that, given his responsibilities, the hon. Gentleman should suggest that local authorities in Wales should not look for further improvements.

I am delighted to say that one of the results of new business rate is that the valleys will pay £11 million less in business rates than under the present system. That is very much to their advantage, and the scheme I have announced this afternoon contains additional great advantages for those valleys. Opposition Members always cite the terrible low incomes of those in the valleys. In the Rhondda, the substantial number of people who have been

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receiving 100 per cent. rebates under the rate rebate scheme will receive 130 per cent. rebates under the new scheme.

Sir Anthony Meyer : I assure my right hon. Friend that I shall be here to support him after the next general election. However, even his legendary skill at extracting blood from the Treasury's stony heart--which has brought such great benefits to Wales generally and ensured that the levels of poll tax in Wales will be appreciably lower than in the United Kingdom as a whole--cannot make sense of this nonsensical system for financing local government. Can it be right that a local authority such as Rhuddlan in my constituency, which has managed its affairs with skill and prudence, should find that its grant has been cut by £750,000--20 per cent. on its last year's grant? This will oblige it to increase the poll tax by 50 per cent. Does not that show that, despite my right hon. Friend's efforts to modify the effect on Wales, the system is preposterous and those who denounced it from the start were absolutely right?

Mr. Walker : I think that my hon. Friend will discover that, when local authorities study the figures and my announcement this afternoon, they will find that the figures he has given are not accurate. Instead of the average rates in Rhuddlan being £201 per adult, as they were under the rating system, they will be £199. As a result of the new system, in the other part of his constituency, the district of Colwyn--a place which has many retired people--there will be rate reductions of about 17 per cent.

Mr. Alex Carlile (Montgomery) : I am sure that the House is grateful to the Secretary of State for telling us how prosperous local government is in Wales. In that context, will he explain why each of us in rural areas meets weekly ever-increasing queues of young people who can no longer find housing in their own area? Will he explain why unmarried mothers with children whom they are looking after increasingly have to go into unsuitable halfway house accommodation where they cannot look after their children properly? Will he explain why, in the context of the prosperity of which he boasts, local authorities can no longer meet those priority housing needs?

Mr. Walker : The hon. and learned Gentleman knows full well that we have substantially increased expenditure on Housing for Wales, which, in turn, is substantially increasing its grant to housing associations throughout the community--that is having a considerable impact. Under the settlement, we have ensured that, under the new statutory arrangements, there will be a substantial increase in expenditure on improvement grants and the backlog of improvement grants, which are important in many rural areas.

Mr. Keith Raffan (Delyn) : Although I appreciate that my right hon. Friend has fought an effective and successful fight to gain a reasonable settlement for Wales as a whole, he will appreciate that I share the concern of my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) because together we represent the borough of Rhuddlan in this House. Is my right hon. Friend also aware of the concern in the borough of Delyn where the settlement appears to have been penalised because of the way in which it finances expenditure on industrial development?

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Mr. Walker : The system that is operated in local authorities has operated for several years. It was discussed with local authority associations as to whether any change should be made, and the associations agreed that the existing system was the right one to keep. Therefore, Delyn's financing process was one that it used knowing what the past rules were and the fact that the local authority associations did not want any change in those rules.

Mr. Roy Hughes (Newport, East) : Will the Secretary of State recognise, as he did a while ago, that our Welsh local authorities are not inefficient, but have a splendid record? Will he also recognise that the unrealistic poll tax figures which he has put out are seen by all local authorities for what they are : simply a red herring to disguise the full implications of what will undoubtedly be an unpopular policy?

Mr. Walker : The hon. Gentleman says that an increase of 7.1 per cent. on the budgets of the local authorities for last year is a red herring. However, it is a perfectly accurate assessment with which, due to the improvements in efficiency which have taken place, the Welsh authorities can certainly cope. I am delighted that in Newport the likely reduction, compared with the rating system, will be about 14 per cent. per adult.

We have not yet heard what scheme of local government finance the Opposition intend to bring in. They announced one scheme and abandoned it due to its unpopularity. Presumably, given reductions like those in Newport and Cardiff, they will not go back to the rating system. The people of Wales need to know soon exactly what the Labour party will do about local government finance.

Mr. Nicholas Bennett (Pembroke) : I congratulate my right hon. friend on his statement and advise him not to shout too loudly in this House about his achievements, in case our English colleagues hear exactly what the people of Wales have managed to achieve. Is it not true that in Wales 67 per cent.--two thirds--of all local government expenditure comes from central Government, whereas the comparable figure in Scotland is 56 per cent. and in England only 46 per cent.? That is an excellent achievement.

Can my right hon. Friend confirm that my ratepayers, who now number 50 per cent. of the electorate, will be pleased to find that in future everyone who has a vote in local elections will make some contribution to the services that they enjoy?

Mr. Walker : Certainly the average community charge in Wales will be £100 per person lower than in England or Scotland. The people of Wales should rejoice about that ; it is something that I find it difficult to explain to my constituents in Worcester.

Mr. Alan Williams (Swansea, West) : Has not the Secretary of State been proved wrong yet again? Does he recollect how dismissive he was in November when he forecast a figure of £173 and I forecast one of £200? He regarded my figure as scaremongering.

The Secretary of State said that the burden of overspending would be borne entirely by the chargepayer, but is it not equally true that the burden of under-provision will also be borne entirely by the charge payer if the gap is offset by cuts? As the figure that the right

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hon. Gentleman announced today--of 7 per cent.--is lower than inflation, has he not announced a formula that will mean savage cuts in Wales in the next 12 months?

Mr. Walker : In November I gave a figure of £174 ; I now give it as £173, which, with the rebate scheme that I have announced, will come to £165.

If the inflation rate for this year proves to be above 7.1 per cent. and if there is no improvement in efficiency, it could be argued that local authorities and charge payers will be squeezed, but that will be as nothing compared with the 8 per cent. drop in real terms that took place when the right hon. Gentleman was a Minister at the Welsh Office.

Mr. Donald Coleman (Neath) : Is the right hon. Gentleman aware that, despite what he has said today, the valley communities, of which Neath is one, will be especially hard hit? Is he aware that we prefer to accept what we are told by local government officials--that there will be a 3 to 4 per cent. shortfall? Is he further aware that, in a two-adult household in Neath, there will be an increase of 66 per cent. as a result of the poll tax? How does he think that we will be able to afford to pay for roads, environmental protection, schools and the promotion of jobs? Is not this testimony to what the valleys initiative has been all about?

Mr. Walker : The hon. Gentleman's figure of 66 per cent. for Neath is not correct. With the interim relief, it will be much lower than he has suggested.

My answer on spending in the hon. Gentleman's constituency is : it depends. If he is arguing that will be a 3 or 4 per cent. gap, he is saying that we should be giving Neath an 11.1 per cent. increase on last year's budget

Mr. Coleman : Yes.

Mr. Walker : If that is what is required in the hon. Gentleman's view, the people of Neath will have to see what it means and compare it with the present system, under which 85 per cent. of all local government expenditure in Wales is met either by the business community or by the Government. In no other part of the United Kingdom is only 15 per cent. of it met by the charge payers.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney) : But is it not true that, stripped of its gloss and technicalities, the right hon. Gentleman's statement, once interim relief is over, will mean that the real poll tax charged to working-class home-owning households in valley communities such as New Tredegar, Merthyr Vale, Aberfan and Brithdir will increase hugely as compared with the position under the present rating system?

How can the Secretary of State possibly justify that? I know that he has nothing to lose in those communities but he has gained nothing politically. However, he has a reputation to lose. He was supposed to be sensitive and caring to the needs of the valley communities, but he will destroy any reputation by implementing this inequitable system.

Mr. Walker : Without the interim relief, which makes quite a contribution in Merthyr Tydfil, the community charge would go to £167, compared with an average of £131 per adult previously. Merthyr will also have the benefit of its share of the £11 million lower rates on businesses in the valley area. There are many people in Merthyr on low incomes and they will get the benefit of

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