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The Prime Minister : On the latter point, it is the structural fund that deals with regions ; the cohesion fund specifically deals with the four least prosperous countries in the Community. I can confirm that the cohesion fund in no way draws resources away from the structural fund, both of which were increased in the future financing agreement that we made.
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Mrs. Teresa Gorman : (Billericay) : Will my right hon. Friend confirm that in the horse-trading that went on at Edinburgh to achieve the results of the conference, the Danes have been granted their opt-outs, the Germans will get 18 new MEPs and the Spanish will get a handout through the cohesion fund, without which they would have held up the agreement? Does my right hon. Friend agree with me that neither he nor the House has the moral right to grant that money without first consulting the British people about the massive increase in taxation that they will face, which will be necessary to pay for that money?
The Prime Minister : My hon. Friend cannot have looked at the figures with any great care. The effect on the United Kingdom's net contribution to the European Community will be less than 0.1 per cent., and it will not even reach that dizzy figure until 1999. In return for that, our abatement, which is worth £2 billion a year, has been reconfirmed to the end of the century. We will also be eligible for structural funds and we will receive net advantages from the cohesion fund. On balance, my hon. Friend may consider it rather a good deal.
Mr. Dafydd Wigley (Caernarfon) : I welcome the progress made at Edinburgh and I hope that the Maastricht Bill will move forward rapidly to the statute book, so that we can get on with dealing with issues such as unemployment and the economic problems that face us. Can the Prime Minister clarify the position regarding the six additional MEPs? Is there one each for Wales and Scotland? What progress has been made in relation to the Committee of the Regions? Can he clarify whether the new Green Papers, to which he referred, will not just be considered by the Governments of each member state but, in line with the subsidiarity principle, may be discussed at a lower level, including that of regional and local government?
The Prime Minister : On the Green Papers, the Commission has offered to send them to Select Committees of the House and other interested bodies, so there will be wide consultation. The Committee of the Regions was not discussed at the Edinburgh summit, but we are still determining how the composition of that Committee may be finally decided upon. The provision of six extra MEPs will mean that fresh boundaries are set across England, Scotland and Wales, which will be a matter for the Boundary Commission, not the Government.
Mr. Peter Temple-Morris (Leominster) : Does my right hon. Friend accept that he greatly deserves the tributes that he is getting from all parts of the House on the outcome of the Edinburgh summit, which is in Britain's and Europe's best interests? May I ask him to utilise the great support that he has on this issue to press on with the Maastricht Bill to get it through the House sooner rather than later?
The Prime Minister : I am grateful to my hon. Friend for that advice. The Bill will be returning to the House shortly after we return from the Christmas recess.
Mr. Ronnie Campbell (Blyth Valley) : Will the Prime Minister guarantee that welfare benefits and welfare services will not be cut as a result of the agreement that we got at Edinburgh?
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The Prime Minister : There will be no increase either next year or the year after in Britain's net contribution to the European Community ; nor will there be an increase from any other nation state over the next two years--that is the period covered by our press statement. The answer to the hon. Gentleman is yes--I can give him the confirmation for which he asks.
Sir Michael Marshall (Arundel) : Does my right hon. Friend accept that one of the most significant things he said to the House was on enlargement, particularly as it affects the countries of central and eastern Europe? Does he further accept that, for many
parliamentarians in those countries, that opportunity, which I believe is now firmly in place, is one of great significance? Will my right hon. Friend assure us that that matter will be looked at with the greatest possible urgency?
The Prime Minister : I most certainly can give that assurance. When I visited the Visegrad countries earlier this year, it was clear that the opportunity to enter the Community would be a lifeline of hope for them at a time when they face real economic difficulties. They will be delighted that that is now certain in due course and not just an option that may be considered.
Mr. Ron Leighton (Newham, North-East) : Will not yet another superhumanly brilliant, stunningly successful triumph and great victory leave most people in Europe unmoved because it does not address any of their concerns, the main one of which is the 17 million people who are unemployed across the Community? That was caused mainly by the exchange rate mechanism, which was stage 1 of monetary union.
The Prime Minister : I rather fancy that the 17 million people who are unemployed may notice the proposed £24 billion package ; there is surely a relationship between the two, as the hon. Gentleman should realise.
Mr. Michael Ancram (Devizes) : I congratulate my right hon. Friend on the specific successes that were achieved under his skilful presidency at Edinburgh. Does he agree, however, that the main achievement of the summit, which should continue to be emphasised constantly, was to strengthen the move that he began at Maastricht last year from federalism and centralisation towards a broader, more flexible Europe of nations, which would be more acceptable to the peoples of not only this country but most of Europe?
The Prime Minister : Yes, that is entirely right. It is important to bring the European Community a good deal nearer to the people who elect its members and who ultimately pay for the expenditure that it incurs. [Interruption.] That has been sought for many years but, far from being impossible, as the hon. Member for Bolsover (Mr. Skinner) mutters, we are now doing it.
Mr. John McAllion (Dundee, East) : Is the Prime Minister aware that claims of success at Edinburgh will cut no ice with the vast majority of Scots, who will never share his southern and suburban sense of Scotland as a mere appendage of Greater England? Does he realise that the only lasting European settlement will be one founded on democracy and the national right to self-determination and that, although he may have been successful in shutting out Scottish democracy at Edinburgh, Scottish democracy will prevail by winning a Scottish parliament and shutting
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out for ever the minority and undemocratic Government whom he has imposed on our country for the past 14 years?The Prime Minister : What upsets the hon. Gentleman is that his ideals and his party have been a minority for too long. That is his problem.
Sir Richard Body (Holland with Boston) : As a result of the summit, are the French Government now willing to change their mind about the GATT negotiations?
The Prime Minister : They gave no indication either way at the summit, but they certainly made no attempt to prevent the GATT procedure from continuing at Geneva.
Mr. Nigel Spearing (Newham, South) : The Prime Minister has asserted in a number of answers that the nature of the treaty on European union will not be affected by the declaration on Denmark. If so, why must the declaration be in the form of a legally binding international treaty? Is not the European Council in danger of setting itself up as a Caesars' collective that can not only require legislation for the whole Community but change treaties under discussion without ratification by Parliaments or assemblies of the people that they represent? Does that not show that the European Community and union, far from being people's organisations, are a means for top people to impose their will on others?
The Prime Minister : Precisely not. The hon. Gentleman began with a fallacy and moved on from there. What was agreed was an intergovernmental binding decision, not a treaty. There is a clear distinction between the two.
Sir George Gardiner (Reigate) : Is my right hon. Friend correct in saying that, even after the Edinburgh meeting, there is still no legal definition of the concept of subsidiarity that will stand up to test in the European Court?
The Prime Minister : No, my hon. Friend is not correct about that. The legal definition of subsidiarity is in article 3b of the Maastricht treaty.
Mr. Calum Macdonald (Western Isles) : Surely the Government have all the evidence they need of Serbian violations of the air exclusion zone over Bosnia, of which there have been more than 200. Surely the urgent need is not for yet another report but for United Nations action to enforce its exclusion zone.
The Prime Minister : The declaration that was made at the Edinburgh summit made it clear that the United Nations should now look closely at the situation--at the number of violations--and decide how to proceed. That is what the United Nations will now do.
Mr. Robert Hicks (Cornwall, South-East) : Is not one of the most significant achievements at Edinburgh the fact that uncertainty has been removed for the foreseeable future and that we can now see a positive way forward? In that context, should not the decision to proceed with enlargement be welcomed, especially by those who wish to see a change in the character of the Community, which is wholly consistent with the Government's views?
The Prime Minister : I entirely agree with that. I think that it does, over time, change the character of the Community. Equally relevantly, I think that extending the
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borders of the Community is not only right economically, in terms of extending free trade areas ; I believe that it will be seen over the years to be right in security and other political terms as well. I am bound to say that had Yugoslavia, for example, become a member of the Community 30 years ago, I very much doubt that the present difficulties would exist.Mr. Andrew Faulds (Warley, East) : Why are the Government so pusillanimous about intervention against Serbia? Is it not clear that arrangements will have to be made to stop Serbian aggression by taking out Serbian guns and by keeping their planes out of the air? Is it not essential that the Bosnian Muslims should be allowed to get arms and ammunition with which to defend themselves against Serbian massacres?
The Prime Minister : I do not think that I can share the analysis or the conclusions that the hon. Gentleman makes. We are seeking, not least as a result of the London conference on Yugoslavia which was launched under our presidency, a negotiated political settlement to the present difficulties. That does seem to be the right way forward, allied with the no-fly zone which we have imposed, and also with the substantial amount of humanitarian aid. British troops are there delivering humanitarian aid. The hon. Gentleman may know that, far from being a soft option, those soldiers undergo grave risks--indeed, they were attacked by mortars today. It is right for them to be there, but we should acknowledge the danger they face in delivering that humanitarian aid.
Mr. James Paice (Cambridgeshire, South-East) : My right hon. Friend has shown that the most effective way of achieving change is negotiation from within. Does he agree that the most important factor in terms of recovery--not only our recovery from recession but Europe's recovery from its problems--will be the two lists of directives and regulations which he described in his statement and which are to be dropped, reviewed or abolished? Will he undertake that for every European directive or regulation that is abolished, we shall not only abolish the relevant legislation in this country but match it by abolishing another home-grown regulation, thereby giving British business the best opportunity for recovery?
The Prime Minister : I believe that that is a very worthy ambition indeed, and I have charged my hon. Friend the Under-Secretary of State for Corporate Affairs with making himself the most unpopular member of the Government by destroying directives that are beloved of individual Departments. I hope and expect him to do that speedily. The subsidiarity lists released at Edinburgh are, of course, not final lists--they are but preliminary lists, and more will follow.
Mr. Lew Smith (Blaenau Gwent) : Does the Prime Minister accept that his refusal to hold a referendum on the treaty shows that he is treating the views of the electorate with disdain and saying that their views are not important? Does he also accept that his refusal to hold a referendum shows that he recognises that there is no support for the treaty outside the House?
The Prime Minister : My views on the referendum mean no such thing as described by the hon. Gentleman. I believe that, as a parliamentary democracy, we should
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adhere to the traditions of a parliamentary democracy. That is what I was elected to do here, and I thought that was what the hon. Gentleman was elected for as well.Mr. Tim Devlin (Stockton, South) : Given that the increase in the budget will amount to one first-class stamp per family in the United Kingdom in two years' time and that all the new entrants to the Community are likely to be net contributors, can we not press forward with the enlargement of the Community as quickly as possible and, putting the recent past behind us, get the treaty ratified in the House as quickly as possible, even if it means staying up all night, every night for a couple of weeks to do so?
The Prime Minister : I hear what my hon. Friend says about ratification. On getting new entrants into the Community, during our presidency, we have virtually completed the dossiers that will enable negotiations with the Nordic countries to begin very speedily. I very much hope that at least three of them, and possibly four, will join the Community by the beginning of 1995.
Mr. D. N. Campbell-Savours (Workington) : The Prime Minister confidently announced a number of economic initiatives. In the light of Edinburgh, can he now confidently predict a reduction in unemployment over the next 12 months? If he cannot give that guarantee, surely Edinburgh has failed the real test set by the public outside who want a reduction in unemployment. Why was the European emergency programme for jobs not on the agenda?
The Prime Minister : It is not all that long ago that the hon. Gentleman asked me similar questions and asked me to tell him when inflation would be reduced. He will know that it is now down to 3 per cent., and he might occasionally voice his congratulations to the Government on that matter. No Government have ever given estimates on unemployment, as the hon. Gentleman knows very well. Of course our policy is geared to bringing down unemployment and to creating permanent jobs, but we cannot do that without low inflation and without the lower interest rates that we now have. We have set the framework for job creation and we must now ensure, not least by removing many of the burdens on business, that business will expand, grow, invest and create jobs. That is what this summit was about.
Mr. Bill Walker (Tayside, North) : My right hon. Friend's negotiating skills have shown remarkable results. Will he use those negotiating skills to look carefully into the situation in Scotland, where the summit took place? Some 74 per cent. of Scots did not support the Conservative party at the general election. My right hon. Friend has heard some of the comments from the Opposition Benches today, and he has seen the demonstration and heard the speeches made in Scotland. Does he recognise that, if we continue to bypass Parliament and to give powers to Europe, the Scots may end up breaking up the union that really matters--the Union of the United Kingdom?
The Prime Minister : I believe that there is widespread appreciation across the whole of the United Kingdom about the importance of the Union. It is not just a question
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of the Union being important for Scotland, although I believe it is : the Union is equally important to England. Scotland's contribution to the United Kingdom is vital both within the United Kingdom and for the United Kingdom within Europe. There should be no doubt that it is a two-way process.Mr. Robert Hughes (Aberdeen, North) : Does the Prime Minister agree with his Foreign Secretary who said last week before the summit that, whatever the outcome of the summit, the Government would claim that it was what they had always intended? Given that the summit failed entirely to deal properly with unemployment, with social policy and with subsidiarity, is it not the case that the Prime Minister's self-congratulatory glow about his statement today is nothing more than over-egging the pudding?
The Prime Minister : The hon. Gentleman would do well to look at what his right hon. and learned Friend the leader of the Labour party and his hon. Friends were predicting about the summit. When he has looked at their predictions and when he then sees what happens, he will notice a sharp difference between their predictions of failure and the outcome on a whole range of subjects.
Mr. Andrew Rowe (Mid-Kent) : The Prime Minister has clearly enjoyed his visit to one of the great nations of the United Kingdom. Was he able to form a judgment that the partial pooling of sovereignty which took place almost 300 years ago has brought about rather better results for both partners in the United Kingdom than did the endless warfare that preceded it?
The Prime Minister : I certainly agree with my hon. Friend. His remarks chime neatly with the point I made a moment ago about the importance of the Union both to England and to Scotland.
Mr. Jeremy Corbyn (Islington, North) : At the Edinburgh summit, what discussions did the Prime Minister have on the growing feeling that Europe is becoming a fortress against those fleeing from oppression and intolerance in other parts of the world? What discussions took place on the passage of the Asylum Bill in this country and the change in the German constitution to reduce the number of asylum seekers entering Germany, which are widely seen by the Nazi right throughout Europe as victories that they have achieved? Does not the Prime Minister think that it is important to recognise that Europe has a major role to play in accepting and welcoming victims of oppression from wherever they come, rather than slamming the door in their faces?
The Prime Minister : Far from being a fortress, the Heads of Government at the Edinburgh summit agreed over time to open the boundaries of the Community to bring new nations into the Community. There can be no better way of showing that Europe is not a fortress. As to the hon. Gentleman's remarks about right-wing extremism which has occurred in a number of countries in Europe, there is great concern about that among all Heads of Government--none more so than Chancellor Kohl, who has denounced it very roundly and taken action against it.
Several Hon. Members rose --
Madam Speaker : Order. We must now move to the next statement.
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Local Government Finance (Wales)
4.35 pm
The Secretary of State for Wales (Mr. David Hunt) : With your permission, Madam Speaker, I should like to make a statement on local government finance matters in Wales.
On 12 November I proposed the levels of total standard spending and aggregate external finance for Wales. I am pleased to announce to the House today a further increase in TSS and AEF for 1993-94 of £1.6 million, in recognition of the additional responsibilities which local authorities will assume from next April following changes to the independent living fund. This increases the overall levels of TSS and AEF which I propose to provide in 1993-94 to £2,599.8 million and £2,344.2 million respectively.
The levels of council tax set in Wales will depend on the budgetary decisions of local authorities. I am, however, determined that local taxpayers in Wales should be protected from unreasonable council tax bills. I therefore announced in May that, for the first time, for 1993-94 I would issue provisional capping criteria to assist local authorities in their budgetary decision making. I consider capping criteria to be necessary because for both 1991-92 and 1992-93 the overall level of budgets set by local authorities in Wales have exceeded my plans by around 3 per cent., despite settlement packages for those years which together provided for increases in the level of revenue spending of almost 25 per cent.
I am today announcing my provisional capping criteria. However, because of changes in local authority functions in
1993-94--essentially the loss of further education and the acquisition of community care responsibilities--and other changes arising from the Local Government Finance Act 1992, it is not possible, for the purpose of capping, to make a direct comparison between budgets set by local authorities in 1992-93 and the budgets to be set for 1993-94. As a result, I will exercise my statutory powers to specify for each authority in Wales a base position, known as a relevant notional amount, to measure budget increases for the purposes of applying capping.
I intend to allow larger increases for authorities that set budgets closer to their standard spending assessments--SSAs--whose budgets are relatively higher. My intended capping criteria are : first, any increase of more than 2.5 per cent. over the 1992-93 notional amount will be considered an excessive increase if it gives rise to a budget requirement above the authority's SSA ; secondly, any increase of more than 1.75 per cent. over the 1992-93 notional amount will be considered an excessive increase if it gives rise to a budget requirement over 1 per cent. above the authority's SSA ; thirdly, any increase of more than 1 per cent. over the 1992-93 notional amount will be considered an excessive increase if it gives rise to a budget requirement over 5 per cent. above the authority's SSA ; fourthly, any increase of more than 0.5 per cent. over the 1992-93 notional amount will be considered an excessive increase if it gives rise to a budget requirement over 10 per cent. above the authority's SSA ; finally, any budget requirement more than 12.5 per cent. above SSA will be considered excessive subject to certain conditions. An authority that sets its budget at or below its SSA will not be capped.
I have placed in the Vote Office and the Library of the House full details of my proposed capping criteria, a draft of the report setting out each Welsh authority's notional
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amount on the basis of its calculation, and details of each authority's provisional standard spending assessment for 1993-94. Provisional standard spending assessments have been calculated in accordance with distribution formulae that have been agreed with the local authority associations in Wales and ratified by the Welsh Consultative Council on Local Government Finance. Details of my provisional capping criteria and provisional standard spending assessments and a copy of the draft notional amounts report are being sent to every local authority in Wales. Authorities have the opportunity to make representations on notional amounts before I lay the report for the approval of the House.My capping criteria are, of necessity, provisional. I will take account of all appropriate considerations in making my decisions on capping. Local authorities have all the information that they need to make progress in setting their budgets for the coming financial year. In the present economic climate, I consider my proposals for local government revenue spending to be reasonable.
I turn now to capital resources. Following the autumn review of public expenditure, I have decided to issue capital grant and credit approvals to local authorities for 1993-94 amounting to £483.5 million. This, coupled with the use by local authorities of their own resources as enhanced by the temporary relaxation of the debt redemption rules relating to capital receipts, is expected to deliver gross capital expenditure of £620.1 million.
In addition, I have made separate provision of £70.6 million for forecast receipts from the European regional development fund. To the extent that local authorities are successful in their bids for ERDF grant, they can expect to receive matching supplementary credit approvals additional to those in the local authority capital settlement.
Excluding the ERDF grants that it is estimated local authorities will receive in the present financial year, the expected gross capital expenditure of £620 million in 1993-94 represents an increase of £61 million or 11 per cent. on this year. That is a very generous settlement in this period of exceptionally tight control on public spending and complements the Government's strategy for growth in the economy. The continuing high level of investment in infrastructure in Wales will help to ensure that the ingredients for economic growth are in place.
My proposals include support of £23 million over the next three years for investment in 15 new schemes of special or regional significance. The schemes involved include the regeneration of Pembroke Dock ; the introduction of new local rail services between Bridgend and Swansea ; a further phase of development at the Redwither industrial estate at Wrexham ; new headquarters offices for the Snowdonia national park ; a sports and leisure complex at Brecon ; and town centre redevelopment in Swansea and Wrexham.
The capital package also includes provision of £66.6 million for transport grant-assisted road schemes. This allows two important schemes to commence in 1993-94--the Tredegar bypass and the A4067 dualling in the Swansea valley. It will also allow Clwyd county council to spend a further £2 million on preparation work for the third Dee crossing. Further assistance for that scheme, which I will announce next year, will permit a start to the main works for the third Dee crossing in 1994-95.
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Another key element in the package of support for local authority capital investment is the urban programme, for which today I have approved a package amounting to £28.4 million. Of this, I am allocating £26.4 million to 228 projects, 10 more than in 1992-93. The remaining £2 million will be allocated early in the new year. The projects include £500,000 for major infrastructure development at Cwmcynon, £300,000 earmarked for regeneration of Tredegar town centre and £500,000 for crime prevention initiatives across Wales. Five new strategies are approved for Caernarfon, Ely, Barry, Amman valley and Coedffranc near Neath. They will receive a total of £2.5 million in 1993-94. The valleys programme area as a whole will benefit from £15.3 million. The 50 most deprived wards in Wales will receive £8.3 million, or 32 per cent. of the total allocation. Further details of the full capital package and the allocation of resources to individual authorities have been placed in the Library of the House.The proposals I have set out today will enable local government to maintain services and deliver them to the communities that they serve at a reasonable cost. Local taxpapers can be assured that I am determined to protect them from unreasonable levels of council tax, through recourse to my capping powers if necessary. My proposals also encourage local authorities to invest in capital projects that will improve the infrastructure of Wales, promote economic growth and create jobs. I commend them to the House.
Mr. Ron Davies (Caerphilly) : I thank the Secretary of State for delivering his statement. However, I express my firm disapproval of its timing. The Secretary of State knows full well that the Public Accounts Committee is sitting at this precise moment, and is questioning the chairman of the Welsh Development Agency. Therefore, three of my colleagues, my right hon. Friends the Members for Swansea, West (Mr. Williams) and for Llanelli (Mr. Davies) and my hon. Friend the Member for Pontypridd (Dr. Howells) are unable to be here to question the Secretary of State on the financing of their respective local authorities.
Despite the gloss that the Secretary of State puts on the statement, it will mean job losses and cuts in essential services in Wales, and will directly undermine the ability of Welsh local authorities to cope with the tragic consequences of his Government's economic failures. Despite the fact that the statement is supposed to be on the revenue settlement, the Secretary of State took half his allotted time to refer to capital works that he has approved in Wales. He is up to the old tricks of his predecessors--he has rejigged the capital programme and presented it as a new programme.
The detail of what the Secretary of State has done, has three elements. First, he will allow local authorities to borrow money so that they can take advantage of any ERDF grants they get as a result of their own initiative. That is not a Welsh Office programme. Secondly, he is taking credit for allowing local authorities to proceed with schemes that they have developed on their own initiative. Thirdly, he has rejigged the urban programme and presented it as a new programme with increased resources.
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If one compares last year's urban programme with this year's urban programme, one sees that he has cut it by 8 per cent.We have massive problems in Wales which the statement should have addressed, but does not. Let me give two examples. First, at present there are nearly 10,000 homeless families in Wales. For the children of 600 families, Christmas this year will be spent in the back room of bed-and- breakfast accommodation or in a hostel for the homeless. Can the Secretary of State confirm that the statement will do nothing to enable local authorities to tackle that problem?
Secondly, 24 per cent. of 16-year-old school leavers in Mid Glamorgan leave school with no qualifications. The Secretary of State is keen on comparative tables for exam results. Let me offer him a comparison. The figure for Mid Glamorgan is the worst in the United Kingdom, and the figure for Gwent is the second worst in the United Kingdom. The Secretary of State's response has been to reduce in real terms the money available to those counties by giving a disproportionate share of the budget to further education colleges to sweeten their privatisation. In effect, the Government are stealing £14 million from Welsh local authorities.
Will the Secretary of State confirm that both the Council of Welsh Districts and the Association of Welsh Counties claimed in their submission to him that there was major underfunding of local authorities? They estimated that an increase of some 7.5 per cent. was required over last year's budget to meet inflation and their new statutory responsibilities. Will the Secretary of State explain how an increase of only 0.2 per cent. over the 1992-93 adjusted budgets for revenue expenditure provides resources to deal with the £70 million cost of last year's pay award for police and fire services, let alone the new responsibilities : the new national insurance increases, new pension costs, the Children Act 1989, the national curriculum, waste management and unforeseen emergencies such as the recent flooding, for which the Bellwin formula is entirely outdated? The Secretary of State has previously announced the headline figures for the new council tax. Will he confirm that those figures are based on the assumption of a 100 per cent. collection rate and that the inflated house valuations on which the tax is based are not subject to widespread successful appeals? Does he accept that the new tax will be just as unfair as the poll tax and just as capricious and arbitrary in its application? Does not the fact that the Secretary of State is so adamant in his determination to press ahead with capping give the lie to his claim that he has developed a consensual relationship with Welsh councils?
This is a black day for democracy in Wales. It demonstrates clearly the clash between the aspirations of Welsh councils, which know and understand the needs of their communities, and those of a Secretary of State who does not share our concerns, is unaccountable and is hostile to our values. The only way in which he can achieve his objectives is by direction. The wishes of the people of Wales are being overridden. More than 90 per cent. of local authority expenditure is now determined by the Secretary of State. Will he accept his full responsibility for the job losses, declining services and hardships that the settlement will create? If he does not accept responsibility for that, the people of Wales will certainly know whom to blame.
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Mr. Hunt : First, timing of statements is not a matter for me, as the hon. Gentleman knows. Secondly, the hon. Gentleman seeks to drive a wedge between the Welsh Office and local authorities, but he will not succeed. One of the most important features of Wales is that, rather than leaving matters to the initiative of one or the other, the Welsh Office and local authorities work closely together in a positive partnership. That is why I hope very much that I shall not have to use my capping powers. I have not had to do so until now. By announcing the detailed provisional capping criteria, I hope that local authorities will know exactly where they stand and will be able to budget accordingly.
The hon. Gentleman referred to children leaving school without qualifications. We inherited a position which was far worse, as the hon. Gentleman will know from the statistics. We are increasing the opportunities all the time through my right hon. Friend the Secretary of State for Education. The number of people receiving higher education has increased substantially.
As for further education, I was advised by my officials and I carefully examined the figures and concluded that the appropriate deduction was the figure that I announced. The hon. Gentleman will have to await my decision on funding for further education next year to find out whether the figure that has been transferred is the appropriate one. That announcement will be made in due course. I have met representatives of the relevant counties. They expressed anxieties about the size of the sum to be transferred. However, I believe that it will be justified by the announcement that is to be made in due course.
The settlement is a 3.1 per cent. increase in total standard spending for local authorities, following a 25 per cent. increase over the previous two years. In the present economic circumstances, it is a reasonable settlement, although I recognise that the figure that the hon. Gentleman used was for budgets. I am giving the appropriate figure compared to the figure that I announced this time last year.
The hon. Gentleman asked about collection rates. If he recalls, many dire predictions were made about collection of the community charge. They proved to be incorrect in Wales, because Labour Members underestimated the dedication and industry of all those involved in local government, who ensured that there was full collection. Of course, it is up to local authorities to predict the rate that they will collect, but many parts of Wales achieved 100 per cent. of what they budgeted to collect. Local authorities must make their own decisions on the anticipated collection rate.
As for inflated housing values, all the homes in Wales were valued on the same day. There may have been a fall in values in some parts of Wales, but that will apply to all properties in the area. It is unlikely that a property will move from one band to another. However, there is, of course, an opportunity to appeal.
The hon. Gentleman said that it was a black day for local government. I could hardly describe a record level of gross capital spending in times of economic crisis as a black day. I acknowledge that local authorities in Wales will have to make difficult choices about spending priorities and pursue efficiency savings to stay within my expenditure plans, but I believe that the settlement is realistic in the current economic climate.
The hon. Gentleman criticised the Government for funding 90 per cent. of local authority spending through
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aggregate external finance towards total standard spending. At the same time, he says that I am not giving enough money and that I am giving too much. It is about time that he got the message right. Several Hon. Members rose --Madam Speaker : Order. Before we proceed further, I regret the need to inform the House that what we originally heard from the Secretary of State was a statement. This is not a debate. It is a statement following which questions must be asked. I want to call as many Members as possible, but I can do that only if questions are brief. I am sure that we shall receive brief answers from the Secretary of State.
Mr. Rod Richards (Clwyd, North-West) : I congratulate my right hon. Friend on the statement, which is clear and well thought through. It must have been gratifying for him to be described by the hon. Member for Caerphilly (Mr. Davies)-- [Interruption.]-- as up to the old tricks of his predecessor, who secured a firm-- [Interruption.]
Madam Speaker : Order. Other hon. Members have asked questions today. I expect a question from the hon. Gentleman.
Mr. Richards : Is my right hon. Friend aware that his statement will be welcomed on two counts? First, it will be welcomed in my constituency in Clwyd for the urban programme funds which my right hon. Friend has announced for Rhyl, Rhos-on-Sea and Rhuddlan. Secondly, the announcement of an additional £500,000 for crime prevention, which causes some anxiety in Wales, will be widely welcomed throughout the country.
Mr. Hunt : I am grateful to my hon. Friend, who recognises the significance of today's announcement. We have been able to support many projects throughout Wales in partnership with the relevant local authorities. That is good news for all of Wales and in particular for north Wales, as my hon. Friend says.
Mr. Alex Carlile (Montgomery) : For those who are not public finance accountants, will the Secretary of State confirm that the bell now tolls for small rural schools, many of which are excellent but have fewer than 50 pupils, especially as a result of the increase in the lower limit of pupils for the small schools allowance? Although the £500,000 for crime prevention is welcome, as is any money for such initiatives, is it not pretty hollow when one sets it alongside the Home Secretary's refusal to allow any police force in Wales a single extra police constable in the next financial year?
Mr. Hunt : It is for the local education authorities to allocate the funding for small rural schools. However, such schools have opportunities to ensure that they can survive these difficult economic times by, for example, forming clusters.
I welcome what the hon. and learned Gentleman said about crime prevention schemes. Any money that I have allocated today is over and above what has already been announced by the Home Secretary.
Mr. Gareth Wardell (Gower) : On transport grant, why is it that, in Wales, local authorities and claimants for local safety schemes cannot get a grant for traffic-calming measures unless the project costs more than £5 million? In England, one can get grants for schemes costing much less
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than that. Will the right hon. Gentleman consider the matter to find out whether we can take traffic-calming measures to reduce the number of deaths and the serious injuries on Welsh roads?Mr. Hunt : I have a great deal of sympathy with the hon. Gentleman's remarks, but the £5 million cut-off has been agreed with local authorities. It is for them to advise me whether they would like the limit to be reviewed. No doubt the hon. Gentleman will pursue with the local authorities his concerns and their advice to me, but in the meantime I shall consider the matter.
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