House of Commons Hansard Debates for 8 Feb 1993

Mr. Walter Sweeney (Vale of Glamorgan) : To listen to Opposition Members, one would think that the Secretary of State for Wales had imposed on Wales the most swingeing cuts imaginable. The reality is that, over the last two years, there has been an increase of 25 per cent. A further increase of 3.1 per cent. is scheduled in the forthcoming year. That is hardly a brutal cut in services. I heard the hon. Member for Caerphilly (Mr. Davies) suggest that a Conservative Member of honour would vote against the Government on this occasion. I make it perfectly clear to him that I thoroughly support the Government's plan and what my right hon. Friend the Secretary of State has said. Given the stringency with which the Government need to approach spending in general, my right hon. Friend's announcement today is suprisingly and reassuringly generous.

Mr. Dafis : I point out to the hon. Gentleman that the difference between the standard spending assessment allowed by the Welsh Office to Dyfed county council and the budget that the council requires to maintain standard services at last year's level is £20 million.

Mr. Sweeney : That makes one wonder how that local authority has run its affairs in the past. The perception of the hon. Member for Cardiff, Central (Mr. Jones) differs from the reality. It is rather like George Orwell's slogan in "Animal Farm" :

"Four legs good, two legs bad."

The hon. and learned Member for Montgomery (Mr. Carlile) referred to a heart-breaking case known to him. I am sure that we could all look into our postbags or reminisce about our surgeries and refer to hard cases that would help to illustrate the difficulties facing local and national Government at the present time.

As Conservative Members are well aware, unfortunately we cannot spend money that we do not have. It is

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because we have been attempting to do that-- [Interruption.] Opposition Members cannot have it both ways. If they do not like us borrowing so much, they must accept that it is natural to take a grip on public spending. Local government must share part of that burden. If local and national Government do not take a grip on public spending, private individuals will have to shoulder the entire burden. People have made it clear to me in correspondence and at my surgeries that they cannot shoulder a growing burden of Government debt. They cannot and will not do that. If they are pushed, the result will be job losses. The wealth creators will be driven under, and that cannot be good for any of us. In the long term, there would be a reduction in the services which Opposition Members complain that we are jeopardising.

This is a fair settlement that is in the interests of the Welsh economy and the Welsh people. To attack my right hon. Friend the Secretary of State for not being Welsh and for not representing a Welsh constituency is cheap in the extreme and irrelevant. The public will appreciate that, as usual, my right hon. Friend the Secretary of State has driven a hard bargain in the interests of the people of Wales, and has done a good job for us today.

6.2 pm

Mr. Llew Smith (Blaenau Gwent) : The best measuring rod of whether local government finance is fair must be whether it responds to people's needs. I have always believed that investment and finance should go where the need is greatest. The Welsh Office has recognised that my constituency of Blaenau Gwent is the second most deprived borough in Wales. If one were to visit my constituency, one would see high levels of unemployment. Those who are employed are on low wages. We have some of the worst housing stock in Wales, and some of the most severe health problems.

I want to highlight the poverty and deprivation in Blaenau Gwent. In 1991- 92, 30 per cent. of the children in Blaenau Gwent received free school meals. In 1990-91, nearly 97 per cent. of the families with children at one school in Blaenau Gwent received income support. The 1991 census showed that pensioners in my constituency were more likely to be without a bath, shower or inside toilet than anywhere else in Gwent.

The unemployment rate in Blaenau Gwent is higher than the Welsh average. Young people in particular have tremendous skills, talents and creativity, but they are not being allowed to use them to benefit the communities that comprise Blaenau Gwent or to benefit the great industries in which they should be working.

Some people might say that local government finance should not concern itself with employment as it is really about providing public services. However, we all recognise that employment and public services are interlinked. I was reminded of that some weeks ago, when the local authority announced that many housing grants were being ended. The authority was approached by building contractors, who highlighted the adverse effect that that would have on housing in Blaenau Gwent. The contractors also stressed that many of their employees would be made redundant.

It is not just the contractors and people who build and repair the houses who are affected. A building supplier told me that, because of the contraction in the building

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industry and the fact that the local authority was ending many housing grants, he would have to make many people unemployed. Many of our services, particularly housing, have been affected. Blaenau Gwent has some of the worst housing stock in Wales. As a result of the Government's policies, Blaenau Gwent has been unable to build one new council house in the past nine years, even though there are 4,000 people on the housing waiting list. As I have said, in recent months the authority has announced that there will be even greater housing problems in future as a result of the cuts in housing grants.

With all those problems and many more, one would have expected the Government to respond positively to the problems of communities like Blaenau Gwent. However, that has not happened. The Welsh Office recently told Blaenau Gwent that its SSA for 1993-94 will be lower than the provisional figure that it issued just a month ago. The borough will now have to make savings of £171,000 in addition to the cuts of £2.1 million that committees are being forced to make on the basis of the provisional spending limit. That equates to approximately £70 per household in the borough of Blaenau Gwent. The people who already face considerable deprivation will experience even more deprivation in terms of job losses and cuts in services. Not only is that unfair : it is the economics of the madhouse. Government cuts in provision to local authorities in the middle of the recession will not save the Exchequer a penny. While the Government take money away from local authorities with one hand, they must with the other hand provide the Treasury with more money to meet the costs of unemployment. We now know that every unemployed person costs the state about £9,000 in benefits and lost taxes. That figure does not take into account the increase in the number of free school meals, housing benefit and many other social problems which increase as unemployment increases.

The Government do not believe in public expenditure. However, I believe in it, and I am committed to it. Public expenditure can be a liberating force which can allow young people to do something useful with their lives. It can bring dignity to the unemployed, the homeless and people experiencing sub-standard education. It gives them the opportunity to do something good with their lives. Public expenditure also helps to transform our communities--the garden festival in my constituency is a classic example. That area would not have been transformed without public investment. The lesson we should learn is that we need a higher level of public expenditure if we are to regenerate those communities. What is more, decisions relating to that public expenditure should be taken increasingly by people who are elected, accountable and as close as possible to local people.

In contrast, over the past decade there has been a process of increased centralisation. In respect of that, there has been an increase in the use of the power of capping. That will obviously affect communities like Blaenau Gwent, which already suffer so much deprivation, adversely in the months to come. In addition to the centralisation of powers, those powers are also being hived off to Government quangos, to unelected and unaccountable business men and, occasionally, business women.

Last week, my hon. Friend the Member for Blackburn (Mr. Straw) quoted the Financial Times, and said that unelected quango boards

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"are now responsible for a fifth of all public expenditure--at £42, 000 million, more than the total spending of local government, and a figure which has increased three times since 1979."--[ Official Report, 3 February 1993 ; Vol. 218, c. 344.]

The movement away from accountability, linked to decisions which are increasingly to be made by bankers under the Maastricht treaty, will increasingly force people to ask, "What is the use of voting if the people we vote for have no real decisions or real influence over decisions that affect our lives?" The system of local government finance, as stated by the hon. Member for Tyne Bridge (Mr. Clelland) last week, is

"unfair, unjust and deliberately tailored to shackle, rather than free, local priorities and local enterprise."--[ Official Report, 3 February 1993 ; Vol. 218, c. 363.]

The hon. Gentleman was speaking about England, but the debate shows that, tragically, the situation is no different in Wales.

6.10 pm

Mr. Roger Evans (Monmouth) : I welcome the settlement. The hon. Member for Caerphilly (Mr. Davies) almost gave the game away by saying in terms that Monmouth had done well this year. He is for once--almost uniquely--correct. However, table 1.6 shows that Monmouth's public expenditure per head of population is still the lowest of any district council in Wales--£123, as opposed to £194 in Blaenau Gwent.

In the peculiar system of standard spending assessments, until this year there has been a bias in favour of urban Wales and against rural Wales. In particular, in Monmouth it was felt very strongly in the past few years that a low-spending rural authority which happens, of course, to be Conservative-controlled, having extra costs as a result of not being an urban authority--for example, it costs much more to collect domestic refuse in the country--has been penalised in the past but not this year. I congratulate my right hon. Friend on his statement and I thoroughly welcome it.

It is not satisfactory to say that, somehow or other, the announcement is miserable and mean and that it will cause enormous anguish, although that argument has been articulated with brilliant skill by various hon. Members. The point at stake, as my hon. Friend the Member for Vale of Glamorgan (Mr. Sweeney) has said, is that we must look at the announcement in the context of the past three years which, including the year that we are discussing, show an increase of no less than 29 per cent.

A few hon. Members who are present happen to represent constituencies other than Welsh constituencies, but my right hon. Friend the Secretary of State for Wales is again to be congratulated on achieving in Wales a better deal than obtains in England. The total standard spending in Wales per head is £901 in the year that we are talking about, as opposed to £856 in England, and the aggregate external finance per head in Wales is £812, compared with £698 in England. That is an enormously important benefit for the Welsh economy and for Welsh local government. It should be recognised as such, and my right hon. Friend should be congratulated.

The hon. and learned Member for Montgomery (Mr. Carlile) addressed us with eloquence and passion, but I fear that in the exuberance of his passion he paused to cast unnecessary scorn upon quadratic equations. The curious feature of the debate among the critics has been an absence of any analytical critique of the way in which standard

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spending assessments have been calculated. The method of calculation has an enormous effect on distribution, which affects each and every local authority in our constituencies.

I am probably more critical than many, but, there is an attempt to measure social and other needs, on analysis, and costs and to average out Government expenditure so that everybody receives a reasonable and fair share. Hon. Members have expressed the needs of their local authorities, but I am most surprised that critics of my right hon. Friend the Secretary of State for Wales have not aimed their fire at the basis of the system. Perhaps that is because it commands general support.

I welcome the second paper, which relates to capping. It is a matter of great regret that it is necessary, but Conservative Governments have or should have learnt from the experience of past years. You will recall, Madam Deputy Speaker, that we had a rating revaluation in 1963 and we lost a general election in 1964 ; we had a rating revaluation in 1973 and we lost a general election in 1974. That was largely because local authorities of another political persuasion proceeded to increase expenditure, exercising their local powers to do so. Indeed, we saw that strikingly with the poll tax in Gwent, when Gwent county council was elected in 1989 for four years. In its first year of poll tax, it showed very little reticence in raising the figure to unacceptable levels.

Local authorities cannot have it both ways. They spend an enormous proportion of public money. There must be some accountability to the Treasury for the burdens on the taxpayer and on the economy. At the same time, local authorities cannot escape responsibility for their spending decisions. It is all too easy to threaten cuts in the most essential, desirable and poignant services when a much more critical examination of how they run their affairs would be appropriate. I support both measures.

6.15 pm

Mr. Roy Hughes (Newport, East) : There appears to be a hidden agenda for Newport borough's finances and rate support grant settlement. Last Saturday morning, as I was thinking of getting ready to go to Cardiff for the international to witness the eclipse of England, I started to open my post. One of the first letters that I opened was from the Welsh Office. It informed me that the Secretary of State had accepted the findings of his inspector, Mr. R. Davies, following a public inquiry in October 1991 into the application by the American concern, Browning-Ferris Environmental Services Ltd., to build a waste disposal plant in the Lliswerry area of Newport. That disgraceful decision was made by a Welsh Office Minister representing an English constituency. The findings on page 40, paragraph 9.226 of the report even seem to acknowledge that Newport in south Wales will be seen as a dustbin for the receipt of waste from all over the world. Page 41, paragraph 9.30 of that report points out that there is a risk of noticeable pollution, but that is qualified by stating that the risk is negligible.

Mr. Sweeney : On a point of order, Madam Deputy Speaker. That remark does not appear to be at all relevant to the debate.

Madam Deputy Speaker (Dame Janet Fookes) : So far as I can gather, the hon. Member for Newport, East (Mr. Hughes) is talking about financial matters which fall within the general ambit of the debate.

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Mr. Hughes : This matter will affect the finances of Newport borough council.

The public will rightly question whether the vapours pouring from the stack at the plant will be cancer-causing. That is a natural fear. What is not in dispute is the company's proposal. The report states :

"The proposal would be a facility for the reception, storage and treatment of aqueous and oily wastes using a variety of well-established non-thermal treatment techniques, such as neutralization, oxidation, reduction, de- watering and chemical demulsification. The wastes would arise from the South-west Region and would include inorganic sludges and oily wastes from the automobile and steel industries food wastes : usually classified into 4 waste types (a) sludges, (b) acidic wastes, (c) oily wastes and (d) other aqueous wastes requiring specialized handling or treatment."

Mr. Llew Smith : Will my hon. Friend confirm that the firm, Browing -Ferris, to which he referred has been taken to court in the United States, prosecuted and found guilty of breaking environmental legislation? Can he also confirm that Browing-Ferris has connections with the criminal world in the United States?

Madam Deputy Speaker : Order. It is clear to me that the hon. Member is starting to go wide of the financial implications. He must stick with that to remain in order.

Mr. Hughes : I appreciate what my hon. Friend the Member for Blaenau, Gwent (Mr. Smith) said. I shall make a brief reference to the point that he made.

I have outlined what I would call a nice cocktail which is close to a heavily built-up area. Then there is the record of the company involved. A while ago, Greenpeace sent me a dossier on

Browning-Ferris. According to that dossier, toxic waste in the United States is closely linked with organised crime, and Browing-Ferris is right in the thick of it.

Madam Deputy Speaker : Order. I am sorry, but the hon. Member is now going out of order. He must return to finance.

Mr. Win Griffiths : Obviously, my hon. Friend is raising a serious issue--the pollution which could be caused by the plant. Does he know whether Newport borough council, in preparing its estimates for the coming financial year, took into account all the extra work which would be required by the environmental health department and other Departments to police the plant? Those departments opposed the plant. More importantly, has the Welsh Office taken any account of that extra work in the money that it is giving to Newport?

Mr. Hughes : My hon. Friend illustrates the point which I am trying to make. What if charges similar to those already made against the company were to happen in Newport? I shall give some examples. In 1984, in Williamsburg, Ohio, investigators charged that Browing-Ferris officials poured contaminated rain water directly into a tributary of local drinking water. In 1985, a grand jury indicted BFI, CECOS and their former employees on 96 counts of violations at the hazardous waste pits. There are many more examples of similar charges made against the company. Such charges certainly impinge directly on the finances of Newport borough council and the revenue support grant settlement. For example, there would be the cost of more environmental health officers and the need for extra police for such a questionable plant.

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I have a letter dated 4 February from Mrs. C. R. Jones at the Welsh Office, authorised by the Secretary of State, to Messrs. Davis Llewellyn and Jones, chartered architects and town planners in Cardiff who act on behalf of Browing-Ferris. Mrs. C. R. Jones says : "A further letter will be sent to you in connection with your clients' claim for an award of costs against Newport Borough Council."

That is relevant to the financial aspect. In rejecting the company's application, the council was merely acting in line with the wishes of the town's charge payers. Their disquiet was expressed through mass meetings, an all-night vigil, petitions, and so forth. Where is the democracy in all that? Will the Welsh Office meet the cost of the public inquiry and so on?

There are many risks involved for farmers with cattle and agricultural products, and there is a traffic hazard in the conveyance of the waste matter. The council has gone out of its way to make Newport a more attractive place to live. At a stroke, that is all being put in jeopardy. Property values will drop and people will want to move out of the area. Are those matters not relevant to Newport borough council's finances and its revenue support grant settlement?

The decision will blight the whole of south Wales. Proud south Wales, which produced the coal that fuelled the industrial revolution, is now to be reduced to a dustbin for the receipt of waste from all over the world. The people of Newport do not want the plant, and neither does the council. This thoroughly undemocratic decision is an indictment of the Government and, more particularly, the present incumbent at the Welsh Office. The Secretary of State has failed to speak up for Wales. If he has any conscience left, he will resign. 6.26 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) : On 12 November 1992, the Secretary of State set the scene for the current settlement. He said :

"I consider my proposals to be realistic in the current economic climate. They give a level of settlement above predicted inflation." For all I know, the Secretary of State might genuinely believe that. If he believes it, it is self-delusion on a grand scale. He also said :

"I recognise that local government in Wales will have to make hard choices about spending priorities if authorities are to stay within my plans."

How right he was. That passage is an absolutely classic understatement.

The Secretary of State said that his capping criteria are designed to ensure that essential services are maintained and taxpayers are shielded from unreasonable levels of council tax. That is all laudable. However, the people of Wales are not reassured when they realise that those were the words of advice and direction of a member of a Government who were, at least notionally, at the helm during the stormy seas of Black Wednesday.

If the millions of pounds that were thrown away on a hopeless exercise were available to local services in Wales, we would be facing a much brighter future. As always, the Government say, "Do as I say, not as I do."

Earlier, when the hon. and learned Member for Montgomery (Mr. Carlile) was referring to the closure of rural schools, the hon. Member for Clwyd, North -West

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(Mr. Richards) was grinning like a Cheshire cat. He can grin ; he sends his child to a public school in England. That shows how much care and concern he has for Wales.

Mr. Richards : I point out to the hon. Gentleman and to the House that all three of my childen have gone to Ysgol Gymraeg Ynisgedwyn in Ystradgynlais.

Mr. Llwyd : Is there a child currently at an English public school?

Mr. Richards : There is a child currently at an English public school and there are still two children at Ysgol Gymraeg Ynisgedwyn primary school in Ystradgynlais.

Mr. Llwyd : The Meirionnydd district council and the Aberconwy district council are the two councils in the constituency which I have the honour to represent. Earlier, the Secretary of State said that councils largely agreed with his criteria. Unfortunately, those two councils are certainly not in agreement. The hon. Member for Caerphilly (Mr. Davies) made the point earlier and I will not dwell on it. The point is well made and I support it.

In discussing the position of Meirionnydd district council, it may assist the House if I mention one or two facts. That council has strong misgivings about the use of standard spending assessments as anything other than a crude way of measuring need and, consequently, about their limited value as a method of determining the level of expenditure.

The formula for calculating the SSA is relatively simple and the number of factors contained in it are relatively few, but it can produce only a general answer. As we know, it affects not only the revenue support grant but the level of expenditure.

Tax capping is both undemocratic and damaging to the interests of the public. The 1993-94 settlement contains a permitted increase of only £59,000 in Meirionnydd's budget. That represents 1 per cent. Is that the only way to ensure adequacy of service? It certainly is not. It may save a few pounds here and there, but it will inevitably mean savage cuts in services. The net effect of the proposals will be to render the district council a mere puppet of central Government. That is in line with the thinking of the Tories, who wish to impose their will on Wales via the Welsh Office.

However, the councillors are at the sharp end. They have to face public disquiet about cuts imposed by this cowardly Government. Undoubtedly, the tax-capping proposals in Meirionnydd will result in a loss of jobs. I am told by officers of the council that there will be job losses of up to 8 per cent. in the non-manual work force. That is a savage and bitter blow to our local economy. Worse still, it is a blow which is entirely avoidable.

As a responsible authority, Meirionnydd raised the matter with the Secretary of State, only to receive a bland reply which was economic in content and negative in tone. I told the Secretary of State on 14 December in this Chamber that members of the local authority who visited him and his officers returned with an overwhelming feeling that the Welsh Office would not listen to them. Perhaps that is what the Welsh Office wants, but it is clearly not what my constituents and the people of Wales want. They all deserve better.

Aberconwy borough council tells me that the criteria will mean a cut in current spending plans of some £1 million. That will inevitably translate into lower levels of

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service, job losses and the cancellation of capital schemes. The council will also have to look to reduce spending. That could affect jobs at the sharp end of service provision--for example, in parks, gardens, maintenance and so on.

Mr. Jonathan Evans : Will the hon. Gentleman give way?

Mr. Llywd : No. I am sorry, but I have limited time.

A major point to consider is that inevitably the level of available finance will be lower. That will cause the council serious problems in fulfilling its statutory duties under the Environmental Protection Act 1990 and all that it entails, the Children Act 1989 and the care in the community provisions which are to be implemented soon. In addition, the commutation of loans for improvements grants does not appear to reflect the intention to be neutral on budgets. It is of the utmost importance to Aberconwy to ensure that the borough is attractive to tourists and visitors because much of the economy relies on tourism. The lower level of provision could easily affect the attractiveness of the area which, in turn, will affect hotels, guest houses and so on throughout the borough. Of course, residents will be adversely affected, too.

The serious problems that district councils face are almost nothing compared with the problems that county councils face. The way in which the SSAs are calculated means that the counties will lose £28 million this year. The county SSAs are set to rise by only 1.6 per cent. That is an average figure for Welsh counties ; the figure for Gwynedd is only 0.4 per cent. The mere £35 million allowance for the introduction of care in the community represents nothing like the real cost.

It is disheartening to note that, during the debate on 12 February last year, my hon. Friend the Member for Caernarfon (Mr. Wigley) and the hon. Member for Cardiff, South and Penarth (Mr. Michael), among others, made a special plea to the Secretary of State for additional funding if care in the community was to be introduced with any confidence. Alas, those pleas and the pleas of others fell on deaf ears. It is evident from the current plans that the Government do not want to listen.

As my hon. Friend the Member for Ynys Mon (Mr. Jones) said during the last Welsh Question Time, as a result of the capping criteria Gwynedd county council will have to cut £3 million from its standstill budget. That is not a measure which will ensure the provision of essential services.

Gwynedd county council has been hard at work in the past two years finding 3 per cent. cuts each year. Only recently it had to face the appalling prospect of closing a specialist home for the elderly infirm when it had no other place to house them. Thankfully, that cut was averted, but I keep thinking of that little boy with his thumb in the breached dyke. How long can the council hold on?

The highly professional team of officers and conscientious councillors in Gwynedd are desperately worried, and rightly so. They must now consider cuts in nursery education. Looming on the horizon we have the appalling spectre of wholesale closures of rural schools, with the consequent damage to countless communities, the culture and the language.

The people of my constituency have had enough. If ever there was an easy time to explain the need for a fully

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accountable and powerful assembly in Wales, this is it. If the Government persist, they will pay for their callousness and folly at the next election.

I wish to raise two specific points. The first is the poundage rate for non -domestic rates in Wales. It is unrealistically high. It means that small businesses in my community and elsewhere are under continuous seige. The so -called party of small businesses is selling those businesses down the river in exactly the same way as the Minister of Agriculture, Fisheries and Food did 18 months ago. He pledged that the hill livestock compensatory allowance payments were safe in his hands, but now he wants to cut them by 26 per cent. They are the kind of Government with whom we are dealing. Why cannot the Government recognise the plight of small businesses and scrap the uniform business rate? In the short term, why do not the Government introduce a more equitable poundage?

The second specific point that I want to raise is the 12.5 per cent. non- collection factor used to arrive at the tax base rate. It is unrealistically low. That means that £261 for band D is too low. That should be revised as a matter of urgency. The Secretary of State's pledge to maintain services at a reasonable cost is an empty platitude.

Support for the Tory party in Wales is at an all-time low. That is no wonder. The day of reckoning will soon be here when Tories disappear completely off the Welsh map. I look forward to that day in the interests of social justice and decency.

Several Hon. Members rose --

Madam Deputy Speaker : I call Mr. Paul Murphy.

Mr. Rogers : On a point of order, Madam Deputy Speaker. When is it possible for representatives of the biggest county in Wales and the one most savagely affected by the cuts to participate in the debate?

Madam Deputy Speaker : There is always a difficulty when more people seek to speak than it is possible to call in the time available.

6.36 pm

Mr. Paul Murphy (Torfaen) : I appreciate, even with an extended debate, the inevitability of the shortness of time for the important issues that have been raised. Certainly the point made by my hon. Friend the Member for Rhondda (Mr. Rogers) about Mid Glamorgan will have been noted by the people in that county and in the Principality.

The debate highlights the constantly shifting sands of local government finance in Britain and Wales. The House should realise that the Conservatives have passed 152 Acts of Parliament affecting local government since they have been in office. Virtually every one of those measures adversely affected the functions and services offered by our councils, and virtually every one was opposed by the people of Wales.

The theme of the debate has been that the Conservative party has no mandate from the people of Wales to impose its will on the local authorities and their budgets. The Government have produced an unstable local government finance system. Within the short space of four years, the

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people of Wales have gone from the rates to the poll tax and then to the council tax. The poll tax was abolished 355 days after it was introduced, yet the Conservative party lectures our local authorities about financial prudence.

The instability of the system, combined with its

super-complexity--with talk of SSA, RSG, AEF and all the rest--have made it inevitable that there is no longer any public confidence in the local government finance system in Wales or England.

During the past few years, there has been tremendous uncertainty over the annual settlements in Wales, which--I am sorry to say--has been made worse by the constant dithering about local government reform. I understand that a report about the transitional costs of such reform has been placed in the Library today, and I am sure that that will not help Welsh councils.

Last year, the district councils were badly hit. My hon. Friend the Member for Newport, East (Mr. Hughes) said that environmental health monitoring of chemical waste plants will be affected. In my constituency, the ReChem toxic waste plant was badly afected by cuts in district allocations last year.

This year, the county councils have been affected. Even though there have been quarrels over the so-called tier split, the Welsh district and county councils are united in their opposition to the settlement and disagree with their increasing lateness. Hon. Members will recall that, four or five years ago, we debated settlements as early as December or November, but it has got later every year. The authorities are also united in thinking that the business rate has been reduced for no apparent reason, which will cost local authorities millions of pounds.

The publication of the original figures that the local authorities received lacked care, and was sloppy and badly managed. The collapse of Municipal Mutual Insurance, which the Government did not aid, has meant that many councils have had to budget for increased insurance costs.

The settlement is inadequate ; it follows the tradition of underfunding Welsh local government, which has led to the long-term neglect of our roads, schools and houses. One county treasurer said :

"The settlement is the most severe imposed on county councils in recent years, and appears to be based on adherence to a formula which penalises budgetary prudence, and rewards those local authorities which paid least heed to Government guidelines in 1990-91." The treasurer of Swansea district council said :

"This is the worst settlement in my 12 years experience as Treasurer."

Both agree that the revenue settlement is at least £132 million short of what Welsh councils need.

The districts have come off better this year, with a 9 per cent. increase, but one third of all Welsh districts will have difficulty in setting their budgets ; five have provisional increases of less than 2 per cent., and seven have increases of less than 5 per cent. Our two greatest towns, Cardiff and Swansea, coincidentally must make cuts of £3.5 million each.

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