§ The Secretary of State for Wales (Mr. David Hunt)
With permission, Mr. Speaker, I should like to make a statement about my proposals for local government finance in Wales for 1991–92 and about the review of the community charge.
The 1990–91 settlement, which my predecessor outlined in the House 12 months ago, gave Welsh councils an outstanding opportunity to budget sensibly and to offer Welsh charge payers the prospect of community charges averaging only £173. Their response, as every one now knows, was disappointing. Spending in Wales rose on average by 12 per cent.—indeed, for district councils, the increase was no less than 20 per cent.—and by well above any measure of inflation. The result was an average community charge some £60 higher than necessary.
This spending increase, while closer to plans than that of similar English authorities, is far too high. For 1991–92, therefore, while I have taken due account of the views of local authorities and their associations—expressed to me most recently at a meeting of the Welsh Consultative Council on Local Government Finance on 4 July—I have also had regard to the wider question of the level at which it would be right for authorities in aggregate to spend next year in order to deliver an appropriate level of service, and I have considered too the need for a higher level of efficiency savings to be sought.
Taking all these factors into account, I consider it right to propose a level of total standard spending for 1991–92 at £2,436 million. That is about £316 million more than the equivalent figure for 1990–91, and represents an increase of 8 per cent. above authorities' budgets for 1990–91.
I propose to set the level of aggregate external finance, or AEF, at £1,939 million, which is 11.2 per cent. higher than last year, and—after allowing for the financing of the safety net, which applies in England only—that is equal to the increase which my right hon. Friend the Secretary of State for the Environment announced for England lat Thursday. This is a very substantial increase, and I urge councils to recognise that and to pass on the benefits of this injection of funding to their chargepayers, instead of seeking to boost spending still further. In the autumn I will announce details of the split of AEF into its three component parts, namely, revenue support grant; the distributable amount of national non-domestic rates; and certain specific grants towards current expenditure.
Under my proposals the community charge for standard spending in Wales will be £228. This is, I emphasise, an entirely achievable figure given the generous increases that I have proposed in spending and Exchequer grant; but if it is to be the average actual charge in Wales for 1991–92 councils will have to budget responsibly and spend in line with plans. Charge payers will expect them to do so and will quickly realise that a higher average level of charges will be directly attributable to overspending by their local authorities.
Protection for charge payers from unnecessarily high spending and charges will, I hope, be unnecessary. But local authorities should know that I am fully prepared to step in to protect their charge payers by making vigorous use of my charge capping powers. Next year these will be applied both to excessive spending in relation to standard spending assessments or SSAs, and to excessive 53 year-on-year increases in spending by authorities spending above their SSA for 1991–92. I propose specifically for this year to give an advance indication of the criteria that I will use in making decisions about charge capping, so that authorities are aware of them at the time they take their budget decisions.
Members will know that the Government have reviewed the operation of the community charge and have reaffirmed their commitment to the basic principle of the new system: that almost all adults should contribute towards the cost of local services. Within that framework, however, I have proposals for a number of changes in the operation of the system.
For the standard community charge, which applies where a domestic property is no one's sole or main residence, I propose to reduce the maximum standard charge which local authorities have discretion to levy in a number of exceptional cases. I have in mind, for example, those who are required as a condition of employment to live in a particular property; people in houses with an empty granny flat; and those whose home is empty because they have gone to care for someone else. I also propose to help those who are having difficulty selling a property, by extending the period during which a zero charge must be levied.
All my proposals should, subject to consultation, be in operation from 1 April 1991, and I trust that they will be widely welcomed. They are set out in a consultation paper issue to local authorities and to other interested parties last Thursday; copies have been placed in the Vote Office and the Library of the House.
I turn now to the position of small businesses. There has been concern about people who live over the shop, who pay rates on their businesses and who are also liable to pay the community charge. There is no fundamental issue of principle here because all business property is liable to rates, and all adults are liable for the community charge. I do, however, recognise, that this group of businesses may need more time to adjust to the new system, and so I intend to amend the business rate transitional arrangements, for small composite hereditaments only, to limit increases from 1991–92 to 10 per cent. in real terms instead of the current maximum of 15 per cent.
The present exemption from non-domestic rates for people who make bed-and-breakfast accommodation in their own homes available for less than 100 days a year has also, as I know from many of my right hon. and hon. Friends caused some difficulty. I therefore propose to change this rule from 1 April 1991 and will shortly issue a consultation paper outlining a range of options based on the amount of accommodation made available rather than the time for which it is available.
Finally, I have considered again the operation of the distinctively different system of community charge transitional relief in Wales. The £20 million provided for 1990–91 has assisted some 750,000 Welsh charge payers and provided transitional relief in more than 300 qualifying communities, with reductions of up to £93 available to assist charge payers in areas where rates bills were traditionally low. The scheme has been outstandingly successful in channelling relief into those communities where it has been most needed, and thereby cushioning the impact of the new system where that has been appropriate.
It had originally been intended that lower levels of transitional relief would be available in 1991–92 and 1992–93, with the scheme to be phased out by the end of 54 that year. 1 now propose a postponement of that phasing out, so that the sum available will remain at £20 million for 1991–92 and, indeed, for 1992–93. That is an increase of 50 per cent. above planned levels, and the scheme will also be extended to 1994–95. In all other respects the scheme will remain unchanged.
Those are my proposals for the operation of the local government finance system in Wales in 1991–92. The settlement that I have proposed honours the commitment made by my predecessors that no resources would be lost to Wales as a result of moving to the new system. I am, of course, ready to consider all representations on the proposed settlement and I will be consulting the local authority associations in detail on my proposals. I shall then bring forward more detailed arrangements for all aspects of the settlement in the autumn. It is right to emphasise that the settlement offers substantial increases in total standard spending and grant. With greater realism and responsibility from Welsh local government in setting budgets for 1991–92, charges in Wales should average only £228, which is a reduction of £4 in the levels set this year. I remind Welsh authorities that the position of the charge payer—their customer—is paramount, and I look to them to recognise that simple fact.
§ Mr. Barry Jones (Alyn and Deeside)
Before I ask a question on the statement by the Secretary of State for Wales, may I ask you, Mr. Speaker, why the Government's decision to make a statement was indicated at late as 2 pm on the Common's annunciator? That was the first time that hon. Members knew that a statement would be made. When the statement was first announced on the annunciator, it was flagged as the second statement and not the third. Less prudent Members may well have temporarily left the confines of the Palace and, arguably, will have missed the statement. The Leader of the House is in his place and may later seek to explain this extraordinary omission.
I welcome the increases in standard spending and aggregate external finance. Any increase is welcome, because Wales has suffered greatly from the imposition of the poll tax. I deplore the attack on Welsh local authorities because no local authorities are more loyal and co-operative, and the right hon. Gentleman knows that. In that respect his statement was unworthy. Those local authorities warned the Government and the Welsh Office not to put the poll tax in place in Wales. Now we find that it is deeply flawed and that the right hon. Gentleman has had to come to the House to make changes around the edges.
Inflation is running at approximately 10 per cent. Is not the right hon. Gentleman's provision insufficient, given that local authority costs run well ahead of general inflation? Last year the provision was insufficient, and is not this year's provision for inflation a defect in the statement?
How does the right hon. Gentleman propose to assist county authorities on pay and salaries? Those authorities are facing settlements for teachers, lecturers in further education, manual workers and the police and fire staffs. The right hon. Gentleman should spell out his provision for those crucial sectors, because in that context the statement appears to be seriously defective.
Is it not the case that, while transitional relief in Wales remains at £20 million, in England it has increased dramatically? It is not as good as it should be, and the right 55 hon. Gentleman should tell us why. How many communities in Wales will be excluded from transitional relief? Last year in north Wales, 207 communities out of a total of 247 were excluded.
Is it not the case that, throughout Wales, at least 500 communities were excluded from transitional relief? In some instances almost whole counties were excluded. We note that transitional relief expires after the likely date of the general election. How strange, how coincidental, that transitional relief should run beyond the next general election. Does the right hon. Gentleman realise that serious examples of inequity about transitional relief are now manifesting themselves in Wales?
Care in the community is a serious matter and places a major burden of expectation on local authorities. Have not the Government retreated on care in the community because of the implications for poll tax bills? With one eye on the general election, have not the Government resolved to delay the domiciliary care of the most vulnerable citizens in Wales? Has not the poll tax in effect blighted the prospect of improved care for many elderly and handicapped people? It seems that the Government have put themselves in grave difficulty over the poll tax. It is quite disgraceful that vulnerable citizens must now pick up the tab when what they need is our urgent care and help.
Borough and district treasurers are under the gravest pressure from the poll tax, first because they must operate a major means-testing bureaucracy and secondly, because many people are not paying the poll tax, thus contributing to a plunge in the public sector budgetary surplus. Is it not the case that in the first quarter of this financial year some 20 per cent. of our people have not paid the poll tax? What are the consequences of non-collection for the budgets of Welsh local authorities?
In the context of legislation, where in the statement is the extra money to enable the counties to respond to the severe challenge of local management of schools? There are inevitable cost implications, as there are for implementing the national curriculum and improving the fabric of our schools in Wales.
Where in the statement is the extra money to implement the Environmental Protection Bill 1990 with its challenge on street cleaning and, indeed, the many green challenges that it contains? Where is the extra cash to respond to the new Food Safety Act 1990 and the new Water Act 1989 and the new home renovation grants?
In conclusion, I remind the Secretary of State that his hon. Friend the Member for Clwyd, North-West (Sir A. Meyer) referred in the House on 1 March 1989 tothe sheer lunacy of the poll tax … that daft idea."—[Official Report, 1 March 1989; Vol. 148, c. 316.]I also remind him that his hon. Friend the Member for Cardiff, Central (Mr. Grist) said in a debate in the House that the poll tax wasregressive by … nature … a legal nightmare."—[Official Report, 29 January 1986; Vol. 90, c. 968.]Surely his hon. Friends must be right. However the Government wrap up the poll tax and whatever sweeteners they give, the right hon. Gentleman must understand that the people of Wales have rejected and will reject the poll tax. To put it on the record, Labour will abolish the poll tax. Today's statements will not safeguard the parliamentary skins of the Secretary of State's hon. Friends behind him.
§ Mr. Hunt
I counted altogether nine specific questions, which I shall attempt to answer. There was also a 10th question which the hon. Gentleman did not ask, but which I shall presume that he asked. I shall answer it later.
The hon. Gentleman's first question was why the statement was so late. In the hon. Gentleman's words, "Why have the sweeteners been delayed?" That is not a matter for me, as you know, Mr. Speaker. I was anxious to make the statement as soon as possible and my hon. Friends will realise why. It is a good and positive statement for Wales.
The hon. Gentleman's second question was, "Is the provision for inflation defective?" The answer is no. If the hon. Gentleman looks again at the settlement he may find that his eye skipped the percentage increase in aggregate external finance. The figure was 11.2 per cent. That is 11.2 per cent. more external money going into local authorities in 1991–92 than in 1990–91.
The hon. Gentleman's third question was about defective provision for counties in several respects. I closely consult the Assembly of Welsh Counties. If the hon. Gentleman discusses the settlement with that organisation, I hope that he will find that it too regards the settlement as realistic.
The hon. Gentleman's fourth question was on transitional relief. I am not sure whether he realised that my announcement increased the amount of funds already available for transitional relief next year by 50 per cent. We believe that that is the best use of available resources. This year, 750,000 people in Wales will benefit, whereas only 200,000 at most would have benefited if the English scheme applied to Wales. If the hon. Gentleman consults again the assembly and the Council of Welsh Districts, he will find that they agree with me that the transitional relief scheme is the best arrangement and that the associations have agreed it. I should have thought that the best relief for all Wales is the news this afternoon that the actual community charge of £232 will fall to £228 if councils spend in line with my assumptions.
The fifth question was also on transitional relief. The hon. Gentleman asked whether we had extended the scheme to 1994–95 to take it past the next general election. I have news for the hon. Gentleman. I do not know when the election will be but I certainly intend to be Secretary of State for Wales in 1994–95.
The hon. Gentleman's sixth question was on care in the community. By setting a higher average community charge than was necessary this year, local authorities placed an additional burden of some £100 million on charge payers. It would be wrong in Wales as elsewhere to expose charge payers to the possibility of immediate further burdens where they could be avoided.
Our experience under the all-Wales mental handicap and mental illness strategy shows that fundamental changes in the delivery of services cannot possibly be achieved overnight. They take years of careful planning and development. The phased programme of implementation that we now propose will enable all involved to work together to do just that for the many elderly people, those with physical and sensory disability and others in need of social care. Our track record shows that no one should have any doubt about our commitment to making a success of the changes proposed in the White Paper.
The hon. Gentleman's seventh point was that treasurers are under pressure because of the failure to pay the community charge. I do not know what the hon. 57 Gentleman gets up to. I have here the statistics that have been published. The rate of non-payment in Nottingham is 30 per cent., in Birmingham it is 35 per cent. and in Bath it is 39 per cent. In Cardiff, our largest authority, the rate of non-payment is under 10 per cent. I have every confidence that that percentage will diminish still further and that the vast majority of Welsh charge payers are law-abiding and will pay their community charge.
The hon. Gentleman also asked about local management of schools and the counties. I assure him that we took all that into account before I announced the settlement. The hon. Gentleman's ninth question was about extra money for extra duties. All those were carefully taken into account before the announcement today.
Finally, I come to the question that the hon. Gentleman did not ask. It was—[Interruption.] He made a statement towards the end of his speech, that his party would seek to abolish the community charge. For many years, the Labour party tried to find an alternative to the unjust and inequitable domestic rates system. We now know the result of their efforts. The Labour party will go back to the unjust, unfair, domestic rating system. It published a policy document called "Looking to the Future." This is not just "Back to the Future" but backwards into the past.
§ Mr. Nicholas Bennett (Pembroke)
May I congratulate my right hon. Friend on his statement, which is in line with the statement for England and Wales made last week? It will help the community charge payers. I am a firm supporter of the principle that everyone who enjoys local services and has a vote should make a contribution towards the services.
Will my right hon. Friend consider carefully the position of constituents who run bed-and-breakfast accommodation and those who have second homes, such as clergy and teachers who teach in other places? They are an important group who are made to pay two standard community charges, and the matter must be dealt with quickly. Will he confirm that it was only at the last election that the Labour party promised to abolish the rates, yet three years later it proposes to return to the same unfair rating system which three years ago it claimed could not be amended as it suggested?
§ Mr. Hunt
I recognise that my hon. Friend has strong views to express on the system for dealing with bed-and-breakfast accommodation. I should like to discuss that area of policy with him again, because I have an open mind on what we should do.
My hon. Friend is right about the Labour party. At the last election, it promised to abolish the domestic rating system.
§ Mr. Donald Coleman (Neath)
The former Member for Vale of Glamorgan was fighting a seat at the general election.
§ Mr. Hunt
I remember. The hon. Gentleman was not fighting to retain his seat at the last general election.
I recall vividly that, halfway through the election campaign, the right hon. Member for Copeland (Dr. Cunningham) announced that the Labour party intended to introduce capital value rates. Will the hon. Gentleman think through the consequences of his earlier remarks? I understand that Labour has not yet worked out the details. Instead of doing so, will it please drop the whole idea of reverting to such an unjust system?
§ Mr. Speaker
Order. I remind the House that a number of hon. Members have been waiting patiently for the debate on the summer Adjournment motion, so I ask hon. Members representing Welsh constituencies to ask single questions. There will be other opportunities to deal with this matter.
§ Mr. Alex Carlile (Montgomery)
Will the right hon. Gentleman join me in congratulating Montgomeryshire district council on keeping its poll tax below the average level hoped for for last year? Will he be the first Minister for many years to tell the House that he supports the excellence of village schools in rural Wales, and will he express the hope that the settlement will assist in their retention?
If the right hon. Gentleman really wants to be Secretary of State for Wales in 1994–95, will he take up the challenge of giving up his stockbroker Cheshire seat and fighting a seat in Wales at the next general election?
Will the Secretary of State explain why it was decided by the Government's business managers to sneak the statement through on the first Monday of the Royal Welsh show, which is Wales's premier agricultural event, when he knows perfectly well that many hon. Members with a deep interest in agriculture, who knew nothing of the imminence of the statement, could not be present in the House today?
§ Mr. Hunt
Unfortunately, the hon. and learned Gentleman asked five questions. In reply to the last of them, I may say that I wanted to make the statement at the earliest possible opportunity, but the timing of such statements is never a matter for the Secretary of State. I wanted to make it as soon as I could. If I am allowed to visit the Royal Welsh show tomorrow, I look forward to meeting the hon. and learned Gentleman there. May I ask him to get his geography right? My seat is in Merseyside, and I am proud to represent a Merseyside constituency. Finally, without singling out any particular county council, I acknowledge—
§ Mr. John P. Smith (Vale of Glamorgan)
On a point of order, Mr. Speaker. The question of the late announcement of the statement has twice been raised. News of it appeared on the annunciator at only 2 o'clock this afternoon. The Leader of the House has left his place, but are we to receive an explanation of why the statement was announced so late?
§ Mr. Hunt
I will not be drawn into commenting on a specific council at this stage, but I take this opportunity to congratulate councils throughout Wales, and in particular the officials most concerned with the introduction of the new system, on the quality of their professional management, which allowed the system to be introduced so successfully.
§ Mr. Gwilym Jones (Cardiff, North)
I congratulate my right hon. Friend on an excellent statement, which means that there is no justification for an increase in the average community charge in Wales next year. I urge my hon. Friend to spell it out to local councils, particularly those in Cardiff and South Glamorgan, that he will not hesitate to use his charge-capping powers, and on what terms he will use them. I suggest that he should consider capping any council that increases its community charge by more than 59 the rate of inflation, provided that that increase is proportionately reduced by every 1 per cent. that the council's community charge has already exceeded this year's standard spending assessment.
§ Mr. Hunt
I much appreciate my hon. Friend's warm words of welcome, given his distinguished career in local government. I do not want to be drawn on the specific criteria for capping, and it would be wrong for me to do so. I hope that it will not be necessary to use capping powers, although I shall not hestiate to do so if necessary.
Mr. Donald Colman (Neath)
I did not hear the right hon. Gentleman mention inflation in his statement—but it is rising, and additional burdens are being placed on local authorities, particularly in respect of education. How will the right hon. Gentleman's statement ensure the survival of small schools—or is he happy to see them closed?
§ Mr. Hunt
I believe that the settlement is fair and realistic, and that it will allow the specific policies decided by local authorities in conjunction with the Welsh Office in line with the guidance to be fulfilled. As to inflation, I have announced a settlement tha gives an 8 per cent. increase in spending—which is higher than the figure announced for England last Thursday. The external finance that I have also announced will increase by 11.2 per cent.—a substantial rise, and more than enough to cope with any increased spending demands.
§ Mr. Keith Raffan (Delyn)
I join in the congratulations to my right hon. Friend on attaining a very generous settlement and continuing the very strong record of both his Conservative predecessors—in sharp contrast to the record of the Labour party and former Labour Secretaries of State for Wales. Whilst I welcome the extension of the transitional relief system, is my right hon. Friend aware of the concern in my constituency and others that Wales has a different and, in my view, less well targeted transitional relief system? Will he consider issuing a consultative paper, particularly in the light of the obvious differences in view between Labour Members and Labour councils in Wales?
§ Mr. Hunt
I thank my hon. Friend for his kind words of welcome, which I much appreciate. As he will know, my right hon. Friend the Member for Worcester (Mr. Walker) —to whom I pay particular tribute—introduced a well targeted relief scheme that offers assistance to residents in areas where domestic rates bills were low, and who would otherwise be confronted by significant increases in their local tax liability. The scheme is simple to administer an incurs no additional administrative costs. As I said earlier, Welsh associations agree that it offers the best arrangement.
§ Mr. Ray Powell (Ogmore)
We want an explanation of why we were not made aware on Thursday, or as late as Friday, that a statement was to be made today by the Welsh Office concerning poll tax in Wales. I do not know where the Secretary of State gets his information about the views of county or district authorities. I visit most areas of Wales and talk to county council and district council members—but none of them, whatever their political persuasion, shares the views expressed by the right hon. Gentleman this afternoon.
60 The Secretary of State can tinker as much as he likes with the poll tax in Wales, but he will not convince the electorate there of its worth, whether he waits until 1991 or 1992. We would like to know where the Secretary of State obtained the information on which he based parts of his statement and why we were not informed on Friday that a statement was to be made.
Paragraph 2 of the consultation document said that the Secretary of State would review the operation of the poll tax—one must bear in mind the fact that he was then the Minister responsible for winding up the poll tax debate—and identify any anomalies that needed to be addressed. I was convinced that, when the right hon. Gentleman wound up that debate, he knew of all the anomalies, but he said that there were none. We were very disturbed to hear this afternoon's statement.
§ Mr. Hunt
I am almost reluctant to reveal to the House that I regard the hon. Member for Ogmore (Mr. Powell) as an old friend—(Hors. MEMBERS: "Withdraw."] That remark does not need to be withdrawn. I have genuine affection for the hon. Gentleman, but he has been unfair. He was unfair to blame me for the timing of the statement, when, with his tremendous experience of the House, he knows that that matter is not for the Secretary of State. I wanted to make the statement at the earliest opportunity.
I was criticised by some for failing to get in ahead of the Scots, but I understand that my right hon. and learned Friend the Secretary of State for Scotland will not be catching your eye today, Mr. Speaker. I do not know whether or not that is a matter for plaudit, because I have nothing to do with the timing of statements. 1 had nothing to do with the timing of these statements.
As regards the remainder of what the hon. Gentleman stated, for consultation I rely on talking to the elected representatives of the Assembly of Welsh Counties and the Council of Welsh Districts, and I meet them regularly. I met them on 4 July and I am meeting them again today. Of course, local authorities would have liked more money, but when he consults the representatives, I think that they will agree that this is a reasonable and realistic settlement. On his questions about what we might do to alter the system, I have issued a consultation paper. Responses should be in by 28 September, and I look forward to receiving representations from the hon. Member for Ogmore (Mr. Powell).
§ Mr. Donald Anderson (Swansea, East)
The Minister should know that this exercise will be seen in Wales as effectively scapegoating our local authorities and using unreal fairy-tale figures. Is it not clear that this is trying to sugar a bitter pill until after the next election? Can the Minister confirm that the figures that he has given the House today are based on the assumption of a 100 per cent. payment by all poll tax payers in Wales and that even with the best will in the world, there will not be a 100 per cent. payment, so Welsh poll tax payers will have to pay more?
§ Mr. Hunt
The bitter pill is nothing to do with the community charge—it is the pill that the electorate have already spat out by getting rid of the unjust, inequitable, domestic rating system. The hon. Gentleman and his party are now seeking to reintroduce it without any of the basic questions being answered—such as, is it to be reintroduced 61 with the old values of 1973, which is really "Barry in Wonderland"? How on earth can anyone reach any assessment based on 1973 values?
Also, it is not yet decided who will be liable to pay. Apparently there is to be a meeting at each property to decide who should be nominated to pay the new, old-fashioned domestic rates bill. That is the bitter pill, and the sooner the hon. Gentleman spits that one out, the better it will be for the Welsh electorate.
§ Mr. Gareth Wardell (Gower)
How is the momentum for the demonstration projects that have been set up using elderly initiative finance—such as the west Glamorgan staying-at-home initiative which is being used in Neath and Morriston—to be extended throughout Wales, when the Government have postponed their community care proposals?
§ Mr. Hunt
I dealt with some of that in my earlier response, but let me continue because I realise that the hon. Gentleman is not only in a prestigious position as Chairman of the Select Committee on Welsh Affairs, but that, as a constituency Member of Parliament, he has always paid attention to this matter in the past.
Elderly people have benefited from a massive real-terms increase in expenditure on health and social services. In addition, the Welsh Office provides substantial funding to promote best practice under the elderly initiative, and 60 projects have been approved for support for up to five years at a total annual cost of more than £2 million. We are not attempting a radical reshaping of patterns of services, so there is no justification for an all-Wales strategy of the sort that exists for mental illness and mental handicap services, but we recognise the need to develop more flexible forms of domiciliary care and to provide alternatives to residential care where possible; the steady implementation of the White Paper changes will do that.
Also, the carefully targeted new grant schemes will replace the current disparate sources of Welsh Office support, such as urban aid joint finance and the elderly initiative, and I think that that is generally welcomed. The level of resources for 1991–92 will be announced in the autumn.
§ Mr. Allan Rogers (Rhondda)
May I join my hon. Friend the Member for Alyn and Deeside (Mr. Jones) in saying that the statement is most unworthy and a shameful attack on local government in Wales? The Minister came to his present post after being Minister for the poll tax for Great Britain, and he is already known in the south Wales valleys as "Dai Poll Tax". When he attacks local government, he is attacking not its buildings and fabric but its services. The real sufferers as a result are not vague councils—I use that as a general term—but the people they serve: the elderly, the sick, children in schools, those people who are vulnerable and rely upon local authority services.
The settlement is hardly in line with inflation, and certainly does not take into account the year-on-year, end-on responsibilities of local authorities as any service or function develops. Perhaps it would be unusual for a Secretary of State of any party, but instead of his having a flat rate or poll tax capping facility this year, would he study more seriously local authorities and the functions that they provide and say that, if a local authority cannot provide the services that are needed, central Government will function-cap them rather than rate-cap them.
§ Mr. Hunt
I am quite willing to debate at length with the hon. Gentleman the principle of function capping and charge capping but, at the moment, I am minded to continue with my existing policy, and I am not persuaded by his arguments.
As for the poor, the elderly and those who need benefit, the latest figures, which I have here, from the Department of Social Security state that charge payers in Wales who are expected to receive community charge benefit will total 550,000, of whom 320,000 will qualify for the maximum reduction of 80 per cent. So we concentrate help where, it is most needed. As regards services, if the hon. Gentleman will consult the Assembly of Welsh Counties and with the Council of Welsh Districts, he will find that they believe this to be a realistic settlement—although, of course, they would have wanted more.
§ Mr. Alan W. Williams (Carmarthen)
Does the Secretary of State accept that nothing that he has said this afternoon tackles the basic problem of the poll tax—the fact that it is not linked to the ability to pay? Will he accept that tens of thousands of people in each of our constituencies are on low incomes, but have to pay the full poll tax and that they will join us in throwing out the Government at the next election?
§ Mr. Hunt
The present rates at which community charge benefit is payable, especially bearing in mind the enhanced rate for disabled people, are the right level. That is why the figures that I have given are so sizeable when one considers the number of people who will qualify and receive community charge benefit.
§ Mr. John P. Smith
Has the Secretary of State considered the impact of this afternoon's statement on the community councils in Wales? We have an anomaly in Wales, as community councils, as a direct result of the poll tax, can vote themselves out of existence—two community councils have already gone. Surely that was never the intention of the poll tax in the first place. What will the Secretary of State do about it in the future?
§ Mr. Paul Flynn (Newport, West)
The Minister said, quite fairly, that new policies require years of careful planning to put into place. Does he not agree that the new policies that are essential to deal with the environmental challenges of the next few years and of the next century need a great deal of planning to put into place, and that local authorities are in the front line of all those battles? In the Newport area, there is a need to protect against the effects of global warming by putting in the groundwork on sea defences, to look for new ways to recycle materials which were previously thought of as waste, and to look for new solutions to the energy crisis.
Not only does the settlement, allowing for the gearing effect when it is translated into poll tax charges, not take account of legislation that is in place, but it is no foundation for the challenges of the next decade. Is it not the old story of the Government producing strong words but lame action?
§ Mr. Hunt
No, I do not think it is. I agree with the hon. Gentleman that the environmental challenge for us all is to move into the next century with a better environment and a better quality of life in Wales. I agree 100 per cent. with 63 the hon. Gentleman about that. However, I disagree with him about the consequences for local authorities of those costs. I believe that the settlement more than takes into account those additional burdens.
§ Mr. Rhodri Morgan (Cardiff, West)
I welcome the Secretary of State's statement about poll tax concessions to the owners of small bed-and-breakfast establishments. They will be very useful for various Conservative Back Benchers who will lose their seats at the next election.
What exactly will be the position of the disabled in Wales next year? The Secretary of State will remember that, before he became "Dai Poll Tax," he was "David Poll Tax." When he dealt with the matter in England he introduced transitional relief for the disabled. They paid virtually no rates before the poll tax was introduced. Wales has not been granted such a concession.
Is the Secretary of State saying that the position of the disabled will remain as difficult in Wales as it was before? Does he think that it is acceptable that the disabled in Wales should get no relief from the poll tax when they know that the disabled in England are getting such relief and that it came from this Minister?
§ Mr. Hunt
I have always found it difficult to follow the hon. Gentleman's sense of humour, and I find it difficult to follow now, particularly on his first point. I did not understand what he was trying to say, but as he welcomed my announcement I welcome his welcome. If he has any particular views, other than wit and humour, on the whole area of bed and breakfast, I shall be delighted to hear from him.
The disabled will receive, as they do now, an enhanced rate of community charge benefit, but the greatest relief for everybody in Wales will be the news this afternoon that community charge levels in Wales need not rise next year. That will be a great relief to a lot of people. It is good news for Wales.
§ Mr. Paul Murphy (Torfaen)
Does the Secretary of State accept that the poll tax is almost universally detested in Wales? Every single test of opinion in the Principality has shown that it is the most deeply unpopular tax ever faced by our people. Will he therefore be prepared to hold a referendum in the Principality and ask the electorate whether they would prefer the Labour party's new fair rating system or the poll tax? Can he not see that that hatred is reflected in the hundreds of thousands of Welsh men and women who have yet to pay the tax? In Gwent alone, more than 80,000 people have still not paid the poll tax. Has the Secretary of State not been told that the business rate especially has not been paid in Wales? In my authority 43 per cent. have not yet paid the business rate.
Does the Secretary of State still believe that local authority borrowing is bad? If he does, how does he square that view with the fact that all Welsh councils have been forced to borrow because of non-payment? Will he do something for our poll tax payers who will have to face that unnecessary burden?
Finally, does not the Secretary of State understand that no amount of clever tinkering and tampering with the poll tax will fundamentally alter the warped and absurd nature of the tax and that it will not save the few Conservative Members of Parliament who still remain in the Principality?
§ Mr. Hunt
I do not intend to rewrite the hon. Gentleman's brief, from which he has just read so clearly. I have not yet seen details of the Labour party's new fair rating system. The only Labour alternative that I have seen details of—I am delighted that the right hon. Member for Copeland (Dr. Cunningham) is here—[HON. MEMBERS:"Hon."] Yes, the hon. Member for Copeland; it is just that I have high respect for him. I remember the hon. Gentleman standing up at a press conference early in 1988 and announcing Labour's alternative to the community charge. It was capital value rates. I remember it clearly. I read again just a few moments ago the detailed press release that he issued. I do not know what is going on on the other side. All I know is that the Opposition keep changing their views. When the electorate see the Labour party's proposals, I believe that they will turn and run. Nobody wishes to go back to the past.
The hon. Member for Torfaen (Mr. Murphy) is also confused. His hon. Friend the Member for Alyn and Deeside (Mr. Jones) began by accusing me of putting sweeteners before the electorate, of seeming to bribe the electorate, but other Opposition Members have got up and said that it was too miserly a settlement. I think that they had better go away and think out their alternative again. They ought also to think out their approach and welcome the settlement, because it is good news for Wales.
§ Mr. Jones
I shall be very brief, Sir. As the Leader of the House is in his place and as the Secretary of State for Wales gave no answer to our rightful question as to why the declaration that a statement would be made today was made so late, may we ask you to ensure that the Leader of the House now comes to the Dispatch Box to tell us why?
§ Mr. Speaker
That is not a matter for me. It is a matter for the Government and the usual channels.
§ Mr. Speaker
It is not a point of order; it is not a matter for me. The usual channels decide these matters.
§ Mr. Rogers
It is a point of order, Mr. Speaker. I thought that everything that went on in this Chamber was part of your business and under your control.
§ Mr. Rogers
There are certain conventions that you exhort hon. Members to keep to in the House. The Secretary of State said that he did not know that he would be making the statement until 2 o'clock and that it was not his business when a statement was to be made. If it is not his business, is it your business, Mr. Speaker, or is it the business of the Leader of the House?
§ Mr. Speaker
One thing is quite certain—that it is not my business. The Government, not the Chair, decide when statements are to be made. I grant private notice question applications and occasionally Standing Order No. 20 applications for debates, but I do not decide when statements are to be made.
§ Mr. Anderson
On that point, Mr. Speaker, surely that question ought properly to be decided between the usual 65 channels. Is it not clear that on this occasion the usual channels were blocked? If I may mix my metaphors, if the usual channels are blocked can you not be an umpire, or a stop of last resort?
§ Mr. Anderson
Yes, or a plumber. May we therefore call on your services as a plumber extraordinaire to ensure that at least some courtesy is extended to the House now that the person with whom the buck stops, the Leader of the House, is in his seat? He could prevent any further problems from arising by letting us into his confidence as to why it was only at 2 o'clock today that we were told that there would be a statement. Is it not a discourtesy to the House? Will the Leader of the House not answer that question in his capacity as plumber extraordinaire?
§ Mr. Speaker
I shall plumb this matter during the summer recess. I hope that, when we resume in the autumn, there will be no repetition of this kind of thing.