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Mr. Ted Rowlands (Merthyr Tydfil and Rhymney) rose--
Mr. Nigel Evans: He is not giving way.
Mr. Davies: I shall happily give way to myhon. Friend, because he represents a Welsh constituency and I know that this is a matter of great interest to him.
Mr. Rowlands: On behalf of my constituents I should like to draw to the attention of my hon. Friend the fact
that a standstill budget for the new county borough of Merthyr Tydfil will still mean a 25 per cent. increase in the council tax. So much for damping down.
Mr. Davies: That is precisely my point. Myhon. Friend understands very well that 12 local authorities face increases of more than 20 per cent. The cuts mean that a total of £26 million in real terms--33 per cent. of what is necessary to keep in line with inflation alone--will be lost; and we need look no further than the Secretary of State to attribute responsibility for the crisis facing Welsh local government.
What I really do not understand is why the righthon. Gentleman is so reluctant to take responsibility. After all, this is a right-wing agenda and the Secretary of State is a self-confessed right-wing Minister. So why is he so coy? Why does he not boast of his achievements? It is part of a right-wing policy to cut public expenditure to fund a pre-election bribe. No matter that tax bribes are taken back at a stroke by council tax increases.
It is also part of the right hon. Gentleman's right-wing policy to force more public services into the private sector. No matter that the policy itself, like the ill-thought-out nursery voucher scheme, will undermine existing provision. It is part of his right-wing policy to reduce in absolute terms the level and quality of public services--in his own words, to roll back the frontiers of the state. No matter that the price for that is paid by communities whose collective future is made insecure, and by individuals whose private lives are blighted by misery.
I shall offer the Secretary of State just one example of how the life of an individual can be made a misery.On Saturday, the parents of a 15-year-old terminally ill girl came to see me. Her name is Jade Smith, and she lives in Bedwas in my constituency. The girl is mentally and physically handicapped and has been tube-fed for the past five years. At the moment, Mid Glamorgan county council enables her to attend a special school at YsgolTy Coch, which is in the constituency of my hon. Friend the Member for Pontypridd (Dr. Howells).
As from April, however, the new Caerphilly authority, which I have the privilege of representing, because of the cash cuts imposed by the Government, will be unable to buy a place in Ysgol Ty Coch, so the authority has had to reclassify one of the homes in which it provides respite care for adults. As a result, my constituent has to go to Ty Gwilym adult respite care centre and share the facility with 30 to 40-year-old adults.
The first time Jade Smith went there, she had to share the reception area with middle-aged men, over 40, who were mentally disturbed and abusive. The next time she went there, the care assistants were committed to taking out the 30-year-old women who were there for respite care, so there was no one there to look after her except a sitter.
I offer that as a clear example of the impact that the Government's cuts are having on the quality of public services in Wales. The Secretary of State appears anxious to intervene. I would ask him to take the smile off his face just for a moment and, in his intervention, to tellme whether he thinks that the girl I have described is getting the sort of care that he would want if he were responsible for a 15-year-old terminally ill child.
Mr. Hague:
I shall decide on my own interventions. The hon. Gentleman is clearly unhappy with the budget that I have set. Will he tell us, then, by how much he would increase it?
Mr. Davies:
I gave way to the Secretary of State because I had a particular point to put to him. I am sorry that he does not think that the care of a 15-year-old terminally ill child is sufficiently serious to deserve a serious and responsible answer. It is because of such cases that there is so much anger at the Government. They are quick enough to preach to others about personal responsibility; it is a pity that they do not recognise their responsibilities with the same alacrity.
The current settlement has two essential flaws. First, the 2.2 per cent. increase in aggregate external finance from £2.4 billion in 1995-96 to £2.5 billion in 1996-96 falls £26 million short of what is required to keep pace with the 3 per cent. increase in inflation.
Mr. Ian Bruce (South Dorset):
How much extra would the Labour party give Wales?
Mr. Davies:
Secondly, although total standard spending increases by 3.1 per cent., from £2.7 billion to £2.86 billion, the proportion met by AEF falls from88.6 per cent. to 87.8 per cent., a 0.8 per cent. drop.
Mr. Davies:
In practice, that is the transfer of responsibility from central to local government that was slipped out in an answer to my right hon. and learned Friend the Member for Aberavon (Mr. Morris). In a letter to him last year, the Secretary of State said:
There are many local authorities in Wales that would relish the prospect of reducing their increase to11 per cent., but far from protecting Welsh interests in the Cabinet the Secretary of State, like his predecessor, has set in train a deliberate policy of disadvantaging Wales vis-a-vis the rest of the United Kingdom.
Last year, Welsh council tax rose by 11.9 per cent.
Mr. Davies:
Council tax in Scotland rose by5.7 per cent., and council tax in England rose by 5.2 per cent.
Madam Deputy Speaker:
Order. I do not think that the debate is greatly helped by somewhat childish demonstrations, which are not confined to one side of the House.
Mr. Davies:
Now that the hon. Member for South Dorset (Mr. Bruce) has left, I am sure that the quality of the debate will improve.
This year, that unacceptable gap is widening still further. The Welsh average increase of 17.5 per cent. is much higher than the Scottish increase and more than double the figure that the Chief Secretary to the Treasury
mentioned. We know, therefore, that it is now official Conservative policy to force council tax increases, and to force higher increases in Wales than elsewhere.
This year's average increase of 17.5 per cent. has more than wiped out the cut of 1p in the standard rate of income tax in the Budget. The council tax rises will cost Welsh taxpayers about £69 million extra this year. The Conservative party and Conservative party policies have failed Wales.
The dependency culture that has arisen under the Conservatives has placed increasing burdens on local authorities. Reliance on income support has increased by 81 per cent. That is the dependency culture, courtesy of the Conservatives. Reliance on housing benefit has increased by 54 per cent.--the dependency culture, courtesy of the Conservatives. Reliance on council tax benefit has increased by 107 per cent.--the dependency culture, courtesy of the Conservatives. Reliance on family credit has increased by 580 per cent.--the dependency culture, courtesy of the Conservatives.
Sir Wyn Roberts (Conwy):
The speech by thehon. Member for Caerphilly (Mr. Davies) was more remarkable for what he did not say than for what he said. He was on the horns of a dilemma, because much of the speech was devoted to more spending and his approval of that, but at the same time he was not quite sure how that spending was to be paid for. The hon. Gentleman seemed to react with horror to the idea of council tax increases, and so one can conclude that the only remedy in his mind to meet the high spending that he proposed was an increase in the aggregate external finance. That, of course, is composed of grant from the Exchequer--in other words, taxpayers' money--and money that comes from businesses in Wales. Therefore, the only conclusion that we can draw from the hon. Gentleman's remarks, which we did not hear, is that commercial rates would go up in Wales.
We should appreciate the full extent of the support given by central Government and businesses to local authority spending in Wales. My right hon. Friend the Secretary of State referred to the fact that 87 per cent. of the total standard spending is provided by the Exchequer and business rate payers. That amounts to some£864 a person in Wales, compared with 79 per cent. or£732 a person in England. Council tax payers in Wales have a head start of £132, which should not be disdained.Of course, that advantage recognises the different circumstances and needs that prevail in Wales. That advantage will be maintained, if local authorities keep their total spending down to the levels set by the Government.
As well as that advantage, we have the capping regime, which is designed to protect the domestic rate payer against excessive demands. We in Wales are very favourably treated, and long may that continue. I wonder how long it will continue, because there is clearly a
change in the wind. During a debate on local government finance in England, the hon. Member for Holborn and St. Pancras (Mr. Dobson) said:
Some of us remember the days when that was the case. Business people complained bitterly about the rate burden imposed upon them by Labour local authorities.Of course, the business rate was increased, as it was so much easier to sting businesses than domestic rate payers, because business people had fewer votes to cast at local government elections.
We did not hear a commitment to the return of the business rate to local control in Wales, but it was implicit in the speech by the hon. Member for Caerphilly. I have to warn him that there would be dire consequences for businesses. We remember only too well how local control of the business rate had an adverse effect on employment in the past, and there is every prospect that that would happen again in the future. Every commercial rate payer should sit up and take note of what might be in store for them.
If the business rate were returned to local control, there would be enormous disparities throughout Wales. The industrialised areas would be enriched, and the rural areas impoverished, unless there was a very substantial change in the grant system or agricultural land was rated. That is an idea that has never been far from the minds of right hon. and hon. Members of the Opposition, so the farmers had better sit up and take notice too.
The return of the business rate to local control is not the only change proposed by the Opposition. Again, I refer to the speech by the hon. Member for Holborn and St. Pancras, in which he proposed the abolition of compulsory competitive tendering. That can only mean, as my right hon. Friend the Secretary of State suggested, increased staff for local authorities and increased costs for council tax payers. That is what will happen. It is all spelt out in the document entitled "Renewing democracy, rebuilding communities", which was issued by the Labour party.
"I believe that over time local authorities in Wales should raise a higher proportion of their income from Council Tax. The11 per cent increase is the result of this approach."
"The Labour party . . . would return the business rate . . . to local control."--[Official Report, 31 January 1996; Vol. 270, c. 1029.]
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