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Mr. Ron Davies (Caerphilly): I am surprised that the Secretary of State is so modest about his achievements in moving towards his ideological objectives. After all, we know that he wants to roll back the frontiers of the state and cut public expenditure. From his letter of 7 November to my right hon. and learned Friend the Member for Aberavon (Mr. Morris), we also know that he wants high and ever-increasing levels of council tax. So why on earth does he not admit this afternoon that he has cut £100 million in real terms from the Welsh budget, and that council tax increases in Wales next year will, according to local authorities' latest estimates, average 15 to 20 per cent.?
Perhaps the right hon. Gentleman will not own up to that because he realises that his statement is the Government's latest admission that, after 16 continuous years of office, they have produced an economy too weak to maintain our basic public services, and too small to provide the opportunity for work for all those who want it.
The cuts in the budget will fall most heavily on the capital programmes, especially the building of houses, roads and hospitals, and also on local authorities' regeneration programmes. Will the Secretary of State tell us his estimate of the number of jobs that will be lost to the Welsh economy as a result of those cuts? Will he confirm that the capital spending forecast for next year is 25 per cent. lower than spending this year?
Does the right hon. Gentleman realise the great concern that his budget will raise among those involved with economic development? Is it true that, of the 600 jobs that he is axing at the Welsh Office, about 23 per cent. will be the jobs of people central to the task of attracting inward investment? The department that deals with industry will be hit disproportionately hard, and the proposals that he announced concerning the Welsh Development Agency are little short of pathetic. The proposed increase of £12 million contrasts with the £23 million shortfall for the current year, and the agency is still having to rely on a programme of forced asset stripping, which is leading it to an uncertain and unsustainable future.
Is the Secretary of State surprised that he has still not been able to sort out the shambles of his Department's handling of European grants, and that, as a result, inward
investment in Wales has collapsed from 13 per cent. to 8 per cent. of total United Kingdom investment in the current year?
Does the Secretary of State accept that his statement on the private finance initiative is based more on hope than expectation? The Government have yet to meet any of their targets for the programme or announce one successful significant scheme in Wales. My hon. Friend the Member for Cardiff, West (Mr. Morgan) described the PFI as the "probably fictitious investment scheme". Is that not the most appropriate description?
I welcome the fact that there will be a modest increase in resources for the police, but will the Secretary of State express regret at the fact that 16 years of Conservative policies have produced a society that is so divided and has such record levels of crime that these additional resources are now essential? Does he also accept that the new figures mean that there will be an increase in the police precept on council tax payers of 22 per cent? Is that not another hidden Tory tax on Wales?
Will the Secretary of State confirm that, excluding the ring-fenced new community care resources, the local authority SSA's total, standing at £2,438 million, is a reduction of 1.3 per cent.? Is not the figure £33 million less in cash terms than the current year's budget? Does he realise that inevitably there will be cuts in services, and that his claims of increased spending on education are neither honest nor credible? Expenditure on the popular schools initiative and the nursery vouchers scheme has attracted no public support in Wales whatsoever.
Does the Secretary of State realise how reviled his party has become because of the way in which it is now playing party politics with the education of other people's children? Governors are resigning from schools throughout Wales because they realise that the present problems with class sizes, standards and pupil-teacher ratios will all be made worse by the failure of the Government to meet next year's teachers pay award. Everybody understands the problem--parents, governors, teachers, educationists and pupils. Why cannot the Secretary of State understand it?
The cut in funding to Tai Cymru is particularly unwelcome, given the growing housing problem in Wales. There are 70,000 homes unfit for habitation in Wales, and homelessness has increased by 50 per cent. in the past 10 years of Tory government. Can the Secretary of State explain his strategy to deal with this growing housing crisis, given that the 14 per cent. cut of the £97 million forecast budget of Tai Cymru will mean a reduction in the number of homes built for social housing in Wales next year of 750?
On the question of the £65 million of receipts from the sale of the assets of Tai Cymru, will the Secretary of State confirm that that money will not be available for expenditure in Wales--least of all in the housing programme--but that it will be recaptured by the Treasury?
Finally, will the Secretary of State agree to an early debate on the proposals in the Welsh Grand Committee? Does he realise that, when the people of Wales understand that his "pay more, get less" policies give poorer services and less investment in the future, he will never be able to command popular support?
Mr. Hague:
On a day when job vacancies have reached a record level, unemployment has fallen again and interest
The hon. Gentleman has criticised those areas in which I said that Government spending would be reduced, as he is entitled to do. Does that mean that he is not in favour of the increases which I have announced? Unless we are prepared to make some reductions, it is not possible to make increases elsewhere.
Or does the hon. Gentleman think that £6,865 million is not the right figure for expenditure in Wales? He has not told the House whether he thinks expenditure should be higher or lower, or what the Labour party would have as the total of Government expenditure in Wales. To call for higher spending for programme after programme comes a bit rich from a party that wants to waste millions of pounds of taxpayers' money on setting up an assembly in Wales. I find the hon. Gentleman's general approach extremely unconvincing.
The hon. Gentleman asked about the £65 million that will be raised by the sale of the Housing for Wales loan book. That money will be spent in Wales, which is why it is additional to the Treasury provision of £6,800 million. The two sums added together give the total budget. So the hon. Gentleman is mistaken.
The hon. Gentleman asked about council tax. He claimed that I had said that there should be ever-increasing levels of council tax. I have said that, in some years, it will be necessary for local government to find locally a larger proportion of its revenue. It is not necessary in every year. In that, I have agreed with the stated views of the Assembly of Welsh Counties.
When the council tax was introduced, the minutes of the Consultative Council on Local Government Finance showed that the assembly considered
The hon. Gentleman said that people concerned with economic regeneration would be worried by this statement. I have increased the provision for regional selective assistance, increased the grant to the Welsh Development Agency, and redirected training resources in a way that aids economic regeneration. That is extremely good news for people who want to see continued economic progress and development in Wales.
In relation to the private finance initiative, as I have said, I shall announce the first project to be contracted extremely soon. On the question of local government revenue overall, I am increasing the Government's provision for local government revenue by £51 million in total. In relation to the housing budget overall, I am confident that the budget that I have provided will enable Housing for Wales to meet its stated plans, and that I have maintained a housing budget for Wales that is proportionately far ahead of the budget in England.
If the hon. Gentleman wishes to criticise the reductions in the areas where I have set them out, it is incumbent upon him to say where he would find the money to avoid them, and to tell us how he would square that with the
10p tax rate advocated by his hon. Friend the Member for Dunfermline, East (Mr. Brown). He will find that that is a difficult task.
Sir Wyn Roberts (Conwy):
I welcome my right hon. Friend's statement, and, in particular, its strong thrust towards economic development, not only in the industrial and business sphere but in the rural areas and through the Countryside Council for Wales, which will receive an extraordinary increase in its budget of 24 per cent. next year.
"that the introduction of the council tax provided the Government with an opportunity to enable local government to raise a greater proportion of its revenue from local taxation. At present local Government was able to raise less than 10 per cent. of its revenue locally, insufficient to ensure local accountability".
What I have said is entirely in line with that.
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