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Mr. Freeman: The normal rules governing the propriety of Ministers and decision making will, I can assure the hon. Gentleman, apply.
Mr. Michael J. Martin (Glasgow, Springburn): As Chairman of the Select Committee on Administration, I am deeply concerned. Our Hansard facilities are second to none, and the Minister must know that in Canada the printing facilities were privatised and it was an absolute disaster. I hope that hon. Members will keep our excellent services and that they will vote against this proposal.
Mr. Freeman: My understanding is different from that of the hon. Gentleman. He raised that matter with me before. In Canada there has been no such privatisation, although there are proposals. I shall certainly watch progress on those proposals with great interest, as I am sure will the hon. Gentleman.
Mr. Robert Litherland (Manchester, Central): What consolation does the Minister's statement contain for the work force at HMSO, when privatisation of gas and electricity undoubtedly led to redundancies? Is not that why he cannot give a guarantee?
Mr. Freeman: No Minister should be believed if he or she were to give a guarantee about jobs in either the public or the private sector. I repeat what I said earlier: that, if the market is allowed to grow and if HMSO is allowed to operate on a bigger canvas, more jobs will be created than would otherwise be the case.
Mr. David Winnick (Walsall, North): Is it not interesting that even Lady Thatcher refused to take this step, and she did not need any lectures about privatisation? Does the Minister not realise that one of the reasons--there are others, I know--why the Government are so deeply unpopular and discredited in the country, as shown by every by-election and council election, is that people recognise that the Government base their policies not on common sense but on dogma, indifferent to public
opinion? Does not this decision in the dying days of this Administration show how right people are in coming to that conclusion about this Tory Government?
Mr. Freeman: No one on the Opposition Benches-- perhaps this is not the occasion--has yet dealt with the point of substance, which is that, to safeguard jobs and expand job opportunities, HMSO should be allowed to operate in both public and private sector markets. It can do that only under private sector ownership, and so far I have not heard a coherent argument against that.
Mr. Miller: Is there not a fundamental contradiction between the Minister's response about protection of the rights of the House and his answers to my hon. Friend the Member for Norwich, South (Mr. Garrett)? For example, if the printing works were sold on, let us say to an overseas company, the House would clearly have reservations about continuing that service. How will we deal with those issues? More fundamentally, how will we deal with the issues that the Minister dodged, when two days ago I raised the vexed question of developments of intellectual property rights in a rapidly changing world? Is it not important for those matters to be addressed by the House before this daft privatisation goes through?
Mr. Freeman: I am not sure whether the hon. Gentleman is referring to intellectual property rights that are possessed by HMSO as a printing and publishing house. [Interruption.] If he is referring to that, I can tell him that HMSO, like any other printer and publisher, is entitled to protect its position. In the context of copyright, if that is the thrust of the hon. Gentleman's question, I have explained that the House controls its own copyright and that the Government control the copyright of Departments. We can certainly go into the matter in greater detail if the hon. Gentleman has the time on a more suitable occasion to develop his points, so that I can more fully understand them.
I have two points to make about control over the ownership of the business. First, I have indicated that the House, through its officials, will be involved in the selection of the purchaser of the entire business. Secondly, it is open to the House to put into the contract that any change in the identity of that owner or the structure of ownership could be a precondition for cancellation of the contract.
Mr. Roy Hughes (Newport, East):
Why does not the Minister recognise that, by common consent, Her Majesty's Stationery Office has served the nation and Parliament well over very many years? Would it not be better to accept the old principle "if it works, don't fix it", and to let HMSO develop as a publicly owned concern? Instead, the Government seem to have adopted the rather bizarre approach, "If it moves, privatise it".
Mr. Freeman:
The hon. Gentleman says, "If it works, don't fix it". It does not work--jobs are being lost and the market is contracting. I should not be discharging my job properly unless I addressed those fundamental issues. That is why there has been a protracted review of the
Mr. Harry Barnes (North-East Derbyshire):
For the third time of asking--so far unanswered--is this not a matter for a free vote?
Mr. Freeman:
That is not a matter for me.
Mr. Alan Simpson (Nottingham, South):
Will the Minister tell the House whether the consultants that he used to prepare the proposal were allowed to consider the option of HMSO remaining within the public sector, but with a wider commercial remit? If so, what was the consultants' response to that option? Did they have the freedom to say that privatisation of HMSO was not the most desirable option to bring before the House?
Mr. Freeman:
It is not the policy of the Government to permit the unfettered entry of a state body into the private sector market. That never has been and never will be the policy of the Government. There are certain limited derogations by the Treasury permitting the marginal capacity of HMSO to be used to bid for private sector work, but one should not--in my judgment, ever--allow the taxpayer to subsidise public sector companies competing with the private sector.
Mr. Dalyell:
On a point of order, Madam Speaker.
Madam Speaker:
Points of order come after statements, and I have another statement. However, I will allow the right hon. Member for Bishop Auckland (Mr. Foster) to speak again, as he has requested.
Mr. Derek Foster:
Thank you, Madam Speaker.
I would not wish the Chancellor of the Duchy to mislead the House. He accused the Opposition of not addressing the central issue. Many Opposition Members have said that we want HMSO to be able to sell in wider markets, and we want it to be able to borrow for investment in the private sector. Why cannot that be done within the public sector? Will the Minister put that point to the new Public Service Select Committee, so that it can investigate whether it is a feasible option? That would please everyone at HMSO and avoid the embarrassment of the House authorities.
Mr. Freeman:
We can return to those issues. I would humbly suggest to the right hon. Gentleman that he might check with the shadow Chancellor. We had exchanges on that point during the process of railway privatisation. We cannot permit a publicly owned body with more than 51 per cent. of its equity controlled by the state to borrow and that borrowing not be included in the public sector borrowing requirement. The shadow Chancellor, who has been challenged on that issue in the past, has made it clear that he does not propose any change to those rules. If the shadow Chancellor is also suggesting that state bodies should be allowed to compete freely with the private sector in the provision of services, that would represent a change in policy. Perhaps we should return to that point at greater length at the appropriate time.
The Secretary of State for Wales (Mr. William Hague):
With permission, Madam Speaker, I should like to make a statement on public expenditure in Wales. Copies of my statement, provisional standard spending assessments, provisional capping principles and base budgets for unitary authorities are available in the Vote Office. I will outline today how I propose to allocate money to spending programmes in Wales and what I expect that money to buy. Full details will be published in the departmental report early next year.
I have already announced that the Welsh Office will have the biggest budget ever next year--£6,865 million, including the proceeds from the planned privatisation of the Housing for Wales loan book. That is an increase of 2.2 per cent. on what is expected to be spent this year, compared with 1.2 per cent. for all Departments taken together. The long-established formula arrangements ensure that the need for higher spending in Wales than in England continues to be recognised. It is indisputably a good settlement for Wales.
The money available is a large amount. But I intend to make that money go even further than usual by maximising the use of private finance and making further efficiencies in the cost of government in Wales. I am examining 25 potential projects under the private finance initiative, which together have a total value of £1 billion. In the next three years, I expect the PFI to bring in £360 million of additional capital investment. Private finance has a lot to offer the health service and the roads programme.
We will announce very soon the first major PFI project in Wales to come to fruition. That will be in addition to the large amount of private investment which Welsh Office programmes already lever in. This year, I expect more than £600 million to be generated. I want to see that sum increased in future years.
Next year, the Welsh Office will reduce its running costs as part of the drive for reducing the cost of government across the public sector. Running costs will be reduced by 8 per cent. in cash terms over the next three years. My Department will invest in new information systems to help it to build on its impressive record of securing savings, while still providing a high-quality service to the public. I also expect non-departmental public bodies in Wales to make savings in their running costs. The less money that is spent on delivering services, the more there is to spend on the services themselves.
Since I became Secretary of State for Wales, I have listened to the views of a wide range of people and organisations about what they think should be the priorities for spending. I have concluded that our priority areas should be investment in health to care for the sick and elderly; spending on education and training to ensure that everyone, but especially young people, is best equipped for the future; and protecting the environment and ensuring that conservation and economic development go hand in hand. Above all, I want to ensure that the steady and sure progress made by the Welsh economy is consolidated and encouraged. There will also be a substantial increase in the budgets of the Welsh police forces.
Giving priority to those areas will mean some reductions in others, but difficult choices are unavoidable, if we are to make proper provision for our priority areas.
My decisions are set against the background of an economy which is growing healthily. In the past two years, manufacturing output has gone up nearly 7 per cent., while employment in manufacturing has grown by 13 per cent. over the same period. Productivity continues to rise, and time lost through industrial disputes has plummeted--14 working days per 1,000 employees last year, compared with 1,590 working days per 1,000 employees in 1979. Indeed, the past four years have seen the best performance since 1891.
I recognise that unemployment remains too high in some places, but it has fallen by nearly a quarter during the past three years, and today's figures show that it is continuing to fall. Long-term unemployment is falling even faster. Numbers of new vacancies notified to jobcentres are at record levels, and average wage levels are rising faster in Wales than in Great Britain as a whole.
The Government's stewardship of the nation's finances has laid the groundwork for that success. We have created the conditions in which enterprise and innovation can flourish by keeping taxes, regulation and Government spending down to a level lower than our major European competitors, which is helping to make Britain the enterprise centre of Europe.
As well as getting the basic conditions for growth right, the Government have an additional role in fostering economic development. Offers already made this year, taken together with business in the pipeline, will produce grant offers of £65 million in regional selective assistance, levering in £967 million of capital expenditure by the private sector. The number of applications received so far this year is 30 per cent. up on the same period last year. So, next year, I am making available £55 million,
£12.5 million more than planned provision for this year-- as well as more money to promote innovation and technology in small firms.
I will also increase the central Government assistance to the Welsh Development Agency by 58 per cent. next year to £40 million, an increase of £12 million on the previous plan. That will enable it to maintain its total spending at about this year's level, while it presses ahead with its property disposal programme.
I will maintain the level of grant in aid to the Development Board for Rural Wales at £8 million. That will enable it to sustain an economic development programme of some £18 million.
I am also maintaining the grant in aid to Cardiff Bay development corporation at £51.5 million. That is an increase of £1.2 million on the previous plan, and will enable the corporation to continue to press ahead with the barrage, take forward plans for the development of Bute avenue, and establish a site for a multi-media park at Ely fields. In recognition of the particular importance of tourism to the economy of Wales, the amount of support for the Wales Tourist Board next year will continue at its present record level of almost £15 million. Local authorities also have a role to play. I will be announcing shortly allocations of more than £56 million under the strategic development scheme.
Those are huge sums of money going into economic regeneration. They will lever in even greater amounts of private money to continue the success story that Wales has become.
Training and education are also vital to future economic growth. We must continue to invest in the work force if we are to keep pace with global competition, and if Wales is to continue its outstanding record of success in attracting inward investment. Of the total training budget for next year of £142 million, £53 million will be directed towards training young people. That is an increase of £6.6 million, or 14 per cent., over this year.
This year, about £6 million will be spent on modern apprenticeships, allowing a total of 3,400 starts. Next year, I am providing £16 million, so that, by the end of next year, more than 8,500 young people will have been able to start this programme. That will result in a real and lasting injection of new highly skilled and qualified workers into manufacturing industry in Wales.
Both the Further Education and Higher Education Funding Councils will receive increases next year over planned provision for this year. That will provide for the equivalent of more than 121,000 full-time students--a record level. Almost one in three young people now go on to higher education, compared with one in eight in 1979. In line with that priority, I have also been able to find a further £2 million in the current year to enable the Further Education Funding Council to buy more information technology and capital equipment.
Capital spending on schools will also be increased. Despite the need for reductions elsewhere, I will provide almost £44 million to local authorities for education capital--the same amount as this year. In addition, I am providing £8 million for the popular schools initiative, so that the schools that parents choose have the capital to expand. Within the overall totals, £1.5 million of capital expenditure for education will be spent over the next three years to improve access to schools for disabled children.
I come now to the health service. Spending per head on the health service in Wales is 13 per cent., or almost £100 per person, above the level for England to take account of greater need. For next year, I will make available £2.274 billion, an increase over previous plans, and an increase over this year of almost £84 million. That is a cash increase of 3.8 per cent. and a real terms rise of 1.1 per cent.
There will be more doctors, more specialist staff, fewer administrators and more patients treated. The private finance initiative will supplement that amount even further. I am determined that there should be the best standards of health care in Wales for those who need it. On top of that, I am providing a special package of £4.5 million over the next three years for people with mental illness.
For the central Government roads programme next year, I propose to spend £154 million, which is a reduction of about £33 million on provision for the current year. Provision next year will enable starts to be made on the A40 Fishguard western bypass, the A4060 Mountain Hare to Dowlais scheme, the A55 Waen to Pont Dafydd, the A40 Carmarthen eastern bypass, and the A470 Lledr valley stage 2. In addition, the A55 improvements across Anglesey are important, and I plan to start the first stage of those improvements next year. Preparation work will continue on the A465 dualling between Abergavenny and Hirwaun, which is also of high priority.
I want to seize the opportunities to take forward a number of major road schemes in partnership with the private sector under the private finance initiative. I am looking into the possibilities of the scope for projects to be privately designed, built, financed and operated.
I propose to make £100 million available next year for capital expenditure on local authority roads in Wales. Much of that will be on the 17 transport grant schemes for which I am already meeting construction costs, but work can start next year on the Ceredigion link road in Dyfed and on the eastern bay link, which forms the final section of the Cardiff peripheral distributor road. The Cardiff scheme could be suitable for a private finance approach and my officials will be discussing the feasibility of this with the local authorities. Preparation work can continue on a further six schemes, including improved access to Cardiff international airport, the Port Talbot peripheral distributor road, and the Porth and Lower Rhondda Fach relief road.
I now come to the overall local authority settlement. Provision to local authorities for capital programmes next year will total £508 million, excluding transitional costs of local government reorganisation. In addition, there are many opportunities for local authorities to supplement that through the private finance initiative, and I hope that they will take full advantage of them. Provision for local government reorganisation will be almost £42 million next year, on top of the £41 million provided so far. I am issuing a written announcement today about the distribution of support for compensation costs this year.
The overall local government revenue settlement for Wales provides for a substantial increase. The increase in total standard spending of 3.1 per cent. to £2,867 million recognises the needs of local authorities for increased spending on schools, which I expect to receive a large part of the increase.
On community care, I have confirmed the levels of funding announced last year already, and I now propose a further increase of £21 million for 1998-99 to £190 million. Within TSS, £331 million will be available for police authorities--an increase of 5 per cent. following last year's 11 per cent. increase, which underlines our commitment to combat crime with high-quality, high-visibility policing.
I propose to increase Government support for local authority spending by 2.1 per cent. to £2,517 million. That is around 88 per cent. of TSS, and represents £860 for every man, woman and child in Wales. Within that total of support, I propose to make available £459 million in redistributable non-domestic rates, £237 million in specific grants including police grants, £1,792 million in revenue support grant, and £29 million to damp down council tax increases arising from changes in allocations due to the move to unitary authorities.
Local government must play its part in restraining public expenditure, and capping is an important tool in ensuring that it does. Next year, I propose that an authority's budget should be considered excessive if it exceeds either its standard spending assessment by 12.5 per cent. or its base budget for this year by 3 per cent. An authority cannot be capped at or below its SSA. My capping proposals are provisional. I will make my final decisions in the light of local authorities' budget decisions and all other relevant considerations.
Full details of my capping proposals, local authority provisional SSAs and base budgets are being sent to unitary authorities today. The SSAs have been calculated using the distribution formula developed with the local authority associations and ratified by the Welsh Consultative Council on Local Government Finance. I will announce my final decisions on TSS, central Government support and SSAs in January.
I have noticed some speculation about the impact of this settlement on council taxes in Wales. The actual levels of council tax will be set by local authorities. In some years, it will be necessary for local authorities to raise a greater proportion of their revenue locally. None the less, I expect there to be a large differential between council tax levels in Wales and England for the foreseeable future.
For the second year running, we will maintain the rate of grant for housing association schemes at 58 per cent. I will provide more than £85 million for Housing in Wales. Together with private finance, that represents a capital provision of more than £150 million. It will enable it to provide 3,000 new homes as planned and help 700 families to move into low-cost home ownership, even though it is a reduction in my provision of 8 per cent. That is consistent with planned provision in England.
For local authority capital provision for housing, I will make more than £257 million available next year, of which £180 million will be devoted to housing renovation grants and will allow for a further 17,000 grants. We will maintain this year's spending, which will continue to make an enormous difference to the quality of Welsh housing stock. It is in recognition of this that housing expenditure per head in Wales will continue next year to be at least 50 per cent. higher than in England.
I am also allocating £2 million over the next two years to conduct a comprehensive housing condition survey across Wales. That will help to ensure that the huge amounts we spend on housing are focused on the areas of greatest need.
I shall now deal with provision for the arts and libraries. Revenue provision for the National Museum of Wales and the Arts Council of Wales will be maintained at the current year's levels. With further efficiency savings, I expect those bodies to have more to spend on their objectives than they have this year.
There will be a small increase in revenue provision for the National Library for Wales, so that the third library building can be brought into operation. That will enhance the storage capacity of the library, and strengthen its position as a pre-eminent repository of literature and culture. A modest increase for the Welsh Language Board will enable it to take forward the implementation of the Welsh Language Act 1993, and to develop its longer-term strategy for the language.
I am making provision of about £6.5 million for the Cadw agency. That will enable it to maintain its programme of grants for historic buildings at this year's level, and enable it to meet higher targets for listing.
I am maintaining funding for the Sports Council for Wales, which will enable it to take forward the initiative that I announced in September for the encouragement of sport for young people.
Public Expenditure (Wales)
4.18 pm
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