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Mr. Speaker-- forthwith declared the main Question, as amended, to be agreed to.


That this House congratulates Her Majesty's Government on the fact that social security expenditure for long-term sick and disabled people has virtually doubled in real terms since 1979, to a total of over £8 billion a year ; notes with approval the greatly improved coverage of disability benefits associated with this achievement, which has increased the number of Mobility Allowance recipients from 95,000 to 615,000, the number of Attendance Allowance recipients from 265,000 to 795,000, and the number of Invalid Care Allowance recipients from 5,000 to 110,000 ; and welcomes the Government's proposals for further improvements, involving net additional expenditure rising to some £300 million in 1993-94, to help some 850, 000 long-term sick and disabled people by measures which include increased premiums in income-related benefits for both disabled adults and disabled children, a new premium for carers, the extension of Attendance Allowance to disabled babies and to people who are terminally ill, the extension of Mobility Allowance to those who are both deaf and blind, increases in Severe Disablement Allowance focused especially on those disabled from birth or early in life, improved coverage of help with the extra costs of disability through a new Disability Allowance, and the introduction of a new Disability Employment Credit to assist and encourage those disabled people who can and wish to work.

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Local Government Finance (Wales)

10.14 pm

The Secretary of State for Wales (Mr. Peter Walker) : I beg to move,

That the Welsh Revenue Support Grant Report 1990-91 (House of Commons Paper No. 53), a copy of which was laid before the House on 20th December, be approved.

Mr. Speaker : With this, it will be convenient to discuss the next three motions on the Order Paper :

That the Welsh Revenue Support Grant Distribution Report (House of Commons Paper No. 54), a copy of which was laid before this House on 20th December, be approved.

That the Welsh Non-Domestic Rating (County Share and District Share) Report (House of Commons Paper No. 55), a copy of which was laid before this House on 20th December, be approved.

That the Distribution of Non-Domestic Rates (Relevant Population) Report for Wales (House of Commons Paper No. 56), a copy of which was laid before this House on 20th December, be approved.

Mr. Walker : The reports confirm that this is an excellent settlement. Total standard spending for 1990-91 is up by 7.1 per cent. over last years' budgets, and by no less than 9.4 per cent. over 1989-90 provision. Aggregate external finance for 1990-91 is increased by 8.6 per cent. over the comparable figure for 1989-90. This means that charge payers in Wales should expect to contribute only 15 per cent. of local government spending, with the balance being met by business ratepayers and Government grants.

Wales has benefited in this way because local and central Government have worked together in partnership. There has been no deliberate challenge to the Government's expenditure plans. There has been no creative accountancy and there has been no rate capping. This has been a remarkable success story from which the whole of Wales has benefited.

Local authorities in Wales know that they have been given a real opportunity to ensure a level of community charge averaging £173. They can achieve it if they budget responsibly in line with the settlement and in the interests of their charge payers.

Opposition Members have claimed that total standard spending of £2, 114.5 million is less than the amount required. They have voiced similar unfounded claims in response to all previous Welsh rate support grant settlements. But where is the evidence? There is none. The fact is that Welsh local government has been given the resources needed to maintain and develop services.

I was very surprised when the hon. Member for Alyn and Deeside (Mr. Jones), in responding to my statement on 18 December, made the extraordinary claim :

"There is no room for efficiency savings after 10 years of Conservative Government."--[ Official Report, 18 December 1989 ; Vol. 164, c. 28.]

It is a remarkable thing that, if today he were Secretary of State for Wales, he would be telling local authorities that, after 10 years of Conservative Government, he did not expect any further improvements in the efficiency of local authorities.

The fact is that the Audit Commission has estimated that some £52 million of efficiency savings are achievable by Welsh councils purely on those services which the Commission has so far examined. Some of these have

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already been realised and Welsh councils are commendably seeking further savings. I hope that the Welsh local authorities will continue to recognise, as I believe they do, the scope for greater efficiency.

The settlement is also an excellent one for non-domestic ratepayers. Their contribution to local government spending has been held at the same level in real terms as in 1989-90. I have honoured my commitment to ensure that the introduction of the uniform business rate will not lead to an increase in the burden on business. As a result of these new arrangements, which will remove the inequitable distortions caused by variations in local poundages, the business sector now has certainty that the maximum increase in its contribution in future years will not exceed inflation. The revaluation will remove the inequity caused by using out-of-date rateable values.

It is important also to recognise that the contribution required from Welsh businesses amounts only to around 20 per cent. of local authority spending and that the transitional arrangements I have introduced will phase in the changes faced by individual businesses over a number of years.

The combined effects of the revaluation and the introduction of the unform business rate will serve to reduce the rates burden on industrial property.

Mr. Alex Carlile (Montgomery) : Does the Secretary of State regard it as reasonable for village shopkeepers in Wales to have to pay 100 per cent. more than they are paying at present? They tell me that that is the consequence of UBR.

Mr. Walker : In any revaluation, careful consideration is given to the value of the buildings. In certain aspects of retailing which have not been revalued for many years, adjustments have been made when the value has increased. Similarly, there has been a reduction for a range of manufacturing and industrial concerns. I have created a system whereby the inequities caused by a lack of revaluation are removed.

I am glad to say that the combined effects of the revaluation and the introduction of UBR will benefit industrial properties. That can only be beneficial for the reinvigoration of Welsh industry, especially in the valleys, where the rate burden of industries will be about £11 million lower.

Mr. Denzil Davies (Llanelli) : Does not the revaluation to some extent benefit manufacturing industry because of the decline in manufacturing industry over the past 10 years? That is not something to crow about--it is something to feel very sorry about.

Mr. Walker : Surprisingly, the right hon. Gentleman is talking a load of nonsense. Quite a lot of manufacturing industry owns elderly buildings. As the right hon. Gentleman knows from his constituency, inward investment has increaed on a colossal scale. I am glad that the industries of the valleys are benefiting from these proposals by £11 million a year.

Transitional provisions will also operate to reduce the effect of the new system on community charge payers. I have provided £20 million for a scheme of community charge transitional relief in 1990-91, over and above aggregate external finance. The overall effect is that the

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average charge actually payable in Wales-- assuming that authorities spend in line with my plans--should be £165, and certainly less than £173. The scheme will continue in 1991-92 and 1992-93. I have today placed my latest estimates of the distribution of these resources in the Library.

The scheme will ensure that all charge payers in communities where community charges implied by the settlement are more than a specified threshold above the average rates bill per adult payable in 1989-90 will have their charges reduced by an amount equivalent to that excess--320 out of 860 communities in Wales will benefit, including all the communities in the Rhondda and a very high proportion of the communities in other valley areas.

Mr. Dafydd Wigley (Caernarfon) : Does the Secretary of State accept that the way that the system works is rough justice? Dwyfor, which the Department has identified as an area of low per capita and family income, has not one community that benefits from this safety net. Why is that happening? What can be done about it?

Mr. Walker : I consulted local authorities, and they were agreed that this was the best way of getting the fullest benefit from the available money. I am very much in favour of the system. It will mean low administrative costs and will be a benefit for charge payers. Some 750,000 charge payers will benefit from the scheme. Because there is extra money outside aggregate external finance, charge payers in areas gaining from the new system will not be required to contribute towards an area safety net.

For those on the lowest incomes, community charge benefits will be available to meet up to 80 per cent. of the charge--although, because of the low level of community charges in Wales, those who are on income support will actually enjoy an effective rate of relief higher than the 100 per cent. rate rebates that they obtain at present. [Interruption.] More than 100 per cent. I have taken steps to ensure that people know about these benefits and are encouraged to take them up. This will bring positive cash benefits to 300,000 of the lowest income people in Wales. There have been a number of reports that some Welsh councils are planning to increase their expenditure very substantially and therefore to set high community charges. Mr. Ron Davies (Caerphilly) rose --

Mr. Walker : No, I will not give way. This is an important point. Those councils mistakenly believe that their charge payers will assume that the Government are to blame.

Mr. Rhodri Morgan (Cardiff, West) rose --

Mr. Walker : Let me remind the House that the settlement allows for an increase in expenditure of 7.1 per cent., but we learn that, among the counties, South Glamorgan, Powys and Gwynedd are planning to increase spending by between 12 and 13 per cent.

Mr. Barry Jones (Alyn and Deeside) : On rates, is not the maximum only 80 per cent? Would the Secretary of State care to think about that? Perhaps there is a note waiting for him on the Bench behind him.

Mr. Walker : The hon. Gentleman is going back to the rebate point. I do not need a note. I am saying that the

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people on the maximum rate rebate scheme, because of low incomes, will be substantially better off financially as a result of what we are doing.

The hon. Gentleman is trying to avoid the serious point that I am making, so I shall repeat it. South Glamorgan, Powys and Gwynedd are planning to increase spending by between 12 and 13 per cent. Among the districts, Newport is planning an increase in expenditure of over 20 per cent. and Cardiff of over 30 per cent. In the latter case, this follows increases in the previous two years of 13.4 per cent. and 19.7 per cent.--well above the average increase for all Welsh districts.

Mr. Morgan rose --

Mr. Walker : No ; I want to continue.

These increases are outrageous and totally irresponsible. They represent quite unjustifiable demands on charge payers, and pre-empt charge payers' decisions as to what they can afford.

Mr. Allan Rogers (Rhondda) : On a point of order, Madam Deputy Speaker.

Mr. Walker : They are, in fact, putting quite unnecessary burdens--

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. There is a point of order.

Mr. Rogers : The business before the House is complicated. I think it would further the debate substantially if the Secretary of State would give way and reply to points of detail--

Madam Deputy Speaker : Order. The hon. Gentleman, if he catches the eye of the Chair, will have his say eventually.

Mr. Ray Powell (Ogmore) : Further to that point of order, Madam Deputy Speaker. It is important. The Secretary of State has said himself that it is a very important matter that he is dealing with. The questions that my hon. Friends want to ask him are about the explanations that he is giving. In regard to your ruling about hon. Members catching your eye, you will appreciate that the debate will last only one and a half hours. All of us have an interest in the issue, so we cannot all hope to catch your eye. Therefore, Madam Deputy Speaker, perhaps you will impress upon the Secretary of State that it is important for him to give way.

Madam Deputy Speaker : May I impress upon the House that points of order, which are not as genuine as I wish, usurp the time of the House? I hope to call as many hon. Members as possible.

Mr. Walker : I hope that the charge payers in Wales will note that two bogus points of order have delayed the debate.

I repeat that the increases are outrageous and totally irresponsible. They represent quite unjustifiable demands on charge payers, and pre-empt charge payers' decisions as to what they can actually afford. They are, in fact, putting quite unnecessary burdens on the charge payers they purport to represent.

Until local accountability takes full effect, I will have to consider how to protect Welsh charge payers from excessive spending and outrageous community charges. Rate capping was never used in Wales : it was never

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necessary to do so. I had hoped that this would be so with charge capping. But if spending is not reduced from this extravagant scale, the councils concerned will force me to consider using my powers to limit charges to reasonable levels in order to protect their charge payers.

Let me make it plain that the crucial difference between England and Wales in recent years has been the better performance of Welsh local government in budgeting sensibly and containing spending to responsible aand affordable levels. That has led to a succession of realistic, indeed generous, settlements that have recognised and rewarded the performance of Welsh authorities. However, on the basis of the figures that I have quoted, I can assure the House that the Welsh local authorities are helping to ensure that, quite simply, such generosity will not be forthcoming in future.

I was shocked to read in the press that the chief financial adviser of one Welsh council has apparently advised it to create a new baseline for spending. In doing so, he is quoted as saying that this might be the last of the favourable years for local authorities in Wales. I have to advise those who might peddle such views that, if their advice results in extravagant spending increases, that could be a self-fulfilling prophecy.

This debate is not just about the reports we have before us ; it is also about the responsibility of the House to ensure that the interests of our community chargepayers are protected from the extravagant and unnecessary burdens that some councils at present seem willing to inflict on them. It is also about the need for local government to avoid taking short-term political decisions. Perhaps some local authorities think that, as there is no election this year, they will put up the charge now and then take advantage when the elections occur. If that is their motive, they will be exposed. There is time for them to think again and for the wiser politicians among them, including members of the Welsh Counties Committee and the Council of Welsh Districts, to curb those who appear to be set on inflicting such damage.

Local government recognises that the Government have delivered a settlement that should be beneficial to Welsh chargepayers, and that authorities can best serve their chargepayers by containing their spending and keeping the community charges low. There is no need for charges to be higher than those I have published, and an average of £173 is achievable. This is an outstanding settlement for Wales, and I commend it to the House.

10.32 pm

Mr. Barry Jones (Alyn and Deeside) : The subject of this debate is important ; it affects our children's education, our housing, the homeless, the care of the elderly and our local environment. The Secretary of State set out only half the story. In a nasty, indeed extraordinary, speech, he launched unjustified attacks upon responsible county authorities. I remind him that he could not have better local authorities with which to deal. He need only ask his officials and they would tell him that that was the case. It is not an excellent settlement. The total standard spending and aggregate external finance are inadequate. The figure of £173 is unrealistic. It is likely to be about £210 ; £173 it is not. After the right hon. Gentleman's recklessly sanguine hymn of praise for his wretched poll tax--a tax that the people of Wales do not want--I can do no better than to quote W. B. Yeats :

"A Statesman is an easy man,

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He tells his lies by rote ;

A journalist makes up his lies

And takes you by the throat".

The right hon. Gentleman can ponder on that.

The Government are engaged in an elaborate exercise in buck passing. Time and again, Ministers cite a misleading and inaccurate standard community charge or poll tax. The figure is an illusion. So when the poll tax demands fall through the letter box in a few months' time, people in Wales will wonder why the figure is so much higher than the figure that the Government have publicised so widely and vigorously.

Already, the Government are trying to pin the blame on local councils, and the aim of the right hon. Gentleman's speech tonight was to furnish the Government with an alibi in advance. I want to tell the Secretary of State that the buck starts and stops with Ministers at the Welsh Office, and with the motions that the Government are trying to railroad through the House.

Mr. Tim Devlin (Stockton, South) : Will the hon. Gentleman give way?

Mr. Jones : No.

The major defect is the shortfall in resources as represented by the figure of total standard spending. The finance directors and treasurers of local authorities in Wales believe that the total standard spending figure falls short, by 4 per cent., of the sum required to maintain existing services and to cope with the considerable volume of added burdens being imposed by the Government under recent legislation--specifically, the implementation of the national curriculum, local management of schools, the proposals contained in the National Health Service and Community Care Bill and the vital requirement to safeguard our assets--our buildings and roads.

Mr. Devlin : Will the hon. Gentleman give way?

Mr. Ron Davies : Will my hon. Friend give way?

Mr. Jones : I shall not give way to the hon. Member for Stockton, South (Mr. Devlin) ; I shall give way briefly to my hon. Friend the Member for Caerphilly (Mr. Davies).

Mr. Davies : I am grateful to my hon. Friend for giving way to an hon. Member who represents a Welsh constituency. He has been speaking with great authority about the problems faced by Welsh valley authorities. Can he explain to us why, according to the figures given by the Secretary of State, the poll tax payers of Rhymney valley will be faced with bills of £166 after discount, whereas, according to the treasurer of Rhymney Valley district council, the council will have to levy a poll tax of about £225 if it is to maintain existing standards of service? Is not the figure given by the Secretary of State an Alice-in-Wonderland figure?

Mr. Jones rose --

Mr. Devlin rose --

Hon. Members : Sit down.

Mr. Jones : I shall not give way to the hon. Gentleman.

Mr. Ian Bruce (Dorset, South) : Will the hon. Gentleman give way?

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Mr. Jones : No.

My hon. Friend the Member for Caerphilly has destroyed the alibi of the Secretary of State for Wales. With his cogent intervention he has exposed the paucity of the right hon. Gentleman's case. My hon. Friend will agree that there are more English Members than Welsh Members on the Conservative Benches. Where are the Welsh Conservative Members?

Mr. Devlin : Will the hon. Gentleman give way?

Hon. Members : Give way.

Mr. Jones : No.

We have about 400,000 dwellings in Wales with a rateable value of less than £100. That is more than one third of the total. In addition, 225,000 dwellings in Wales have a rateable value of £75 or less. Many of the families living in those dwellings will watch their household bill double or quadruple over the next four years. In valley communities and some rural communities with the lowest domestic rateable values, the community charge for one-adult households will be about the same as the present rate bill in four years' time. For a two-adult household it will be double, for a three- adult household it will be treble and for a four-adult household it will be quadruple. Those are the estimates of the much respected Association of District Councils in Wales.

Reaction to the news about the business rate has been understandably angry, to say the least. Even bodies traditionally supportive of the Conservative party, such as the CBI, have voiced alarm. Many economic analysts have warned of the effects that it will have on investment and the fundamental health of businesses. As for the effect of the community charge on the domestic front, there has been hardly a voice of sympathy for the move.

Mr. Devlin rose --

Mr. Jones : No, I will not give way.

John Banham of the CBI has even accused the new business rate of subsidising, as it were, the community charge. That was stated by The Western Mail, which is usually supportive of the Secretary of State's policies. I wish to examine the impact of what is proposed on small businesses and retailers, and I believe that it will be considerable, despite the transitional relief arrangements. In the next few years, businesses face massive increases in business rates. In Cardiff, for example, a newsagent's shop on Cowbridge road faces a 97 per cent. increase in rates, from £1,616 to £3,183 when transitional relief ends. Also in Cardiff, our capital city, a petrol station on Cathedral road faces a massive increase of over 200 per cent., from £3,500 to £10,900 when transitional relief ends. In Newport, the Panasonic electronics factory faces a 24 per cent. increase, to £111,000, with the end of transitional relief. Also in Newport, the Westgate hotel--

Mr. Ian Bruce : On a point of order, Madam Deputy Speaker. I seek your guidance. Will it be in order at the end of this debate for hon. Members who represent English constituencies--even though, as I am, they may be of Welsh birth--to vote on this matter and thereby put British Treasury money into this instrument, bearing in mind that I shall have great difficulty in taking part in the debate?

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Madam Deputy Speaker : That convoluted point of order has nothing whatever to do with the debate.

Mr. Jones : I repeat, there are more English Conservative Members on the Government Benches than there are Welsh Conservatives.

Mr. Devlin : On a point of order, Madam Deputy Speaker. Quite aside from whether the hon. Gentleman wishes to give way, and of course it is his privilege not to give way, will you confirm that it is in order for English Members to take part in the debate and to seek to question the hon. Gentleman?

Madam Deputy Speaker : It is, of course, perfectly in order for English or Scottish Members, should they catch my eye, to take part in the debate.

Mr. Donald Coleman (Neath) : Further to the point

Madam Deputy Speaker : Order. I think that I dealt with that point of order very adequately.

Mr. Coleman : On a point of order, Madam Deputy Speaker. It is clear to my hon. Friends and me that Conservative Members are intent on interfering with a debate that particularly concerns Welsh--

Madam Deputy Speaker : Order. So far as I am concerned, no hon. Member will interfere with the debate. Mr. Jones has the Floor.

Mr. David Wilshire (Spelthorne) : On a point of order, Madam Deputy Speaker.

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