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I add my welcome to that already extended to the Secretary of State in his new office. Perhaps the welcome would be less muted if I had detected some glimmers of a change of policy on the part of the Government. Perhaps it is early days to expect such changes, but they may come in the light of experience.
I am bound to tell the right hon. Gentleman that the Opposition have spelt out clearly their thoughts on public expenditure cuts by their opposition to the Community Land Act and to other measures which the Government have put forward. They have all been very costly measures.
I shall say a few words about local government in Wales, which is in a more agitated state than local government in the rest of the United Kingdom. The agitation has arisen largely because of the implications of the Government's devolution proposals. There is general agreement that if the proposals are implemented we shall have one tier of government too many in Wales.
Those who favour devolution argue for further local government reforms, by which they mean, in effect, the abolition of the county councils and the setting up of unitary authorities. It is ironic, to say the least, that the devolution proposals, which were inspired by a desire to bring Government closer to the people, should have as one of their first consequences the corollary that a tier of local government will have to be eliminated which is very much closer to the people than any tier of regional government can ever be.
The fear that the county authorities will have to be abolished in the event of devolution is very real. That will be readily agreed by those who have read the county councils' submissions on devolution. I shall quote the Under-Secretary of State for Wales, the hon. Member for Rhondda (Mr. Jones), who said:
There will be no diminution of local government power and influence."—[Official Report, Welsh Grand Committee, 7th April 1976; c. 91.]
The Welsh Counties Committee takes a very different view. It foresees that the counties' powers will be eroded, and that the powers that might have been given to them will be given to other institutions responsible to a Welsh Assembly.
I feel that the Government will not propose further reform of local government before implementing the devolution proposals. They will be content that we shall be over-governed while the Welsh Assembly is establishing itself. Thereafter, some changes are clearly inevitable if we are not to be one of the most over-governed countries in Europe. The changes are bound to be at the expense of the existing local authorities.
In the past, the Opposition have expressed the view that Wales needs an indirectly elected council which, as one of its functions, has the task of coordinating the local authorities, of bringing them together and acting as an apex for them. There is still a great deal to be said for that proposal. It would certainly help to avoid a conflict between regional and local authorities, a conflict that seems inevitable under the Government's devolution proposals. Such a council might also, if it included Members of Parliament, improve the relationship between Wales and Westminster, a relationship which is likely to deteriorate under the present devolution proposals.
The prospect of devolution overshadows local government, as so much else in Wales. The majority of district councils and county councils are demanding a referendum on the issue. Underlying this concern about constitutional change is a more immediate concern about our economic and social wellbeing. We appreciate the need for cuts in public expenditure and we are willing to bear our share of restraint, but there is a suspicion that we are being manipulated into a financial straitjacket and that an ever-increasing proportion of the financial resources available to Wales is slipping beyond our control.
In the event of the Government's devolution proposals coming into effect, the rate support grant for the Welsh authorities will be part of the block grant for the Assembly. The Welsh authorities will have to haggle with that body for their share rather than directly with central Government alongside their English counterparts, as now.
The Government argue—in my opinion, superficially—that the local authorities will have a more direct influence. Again, I quote from the debate of 7th April in the Welsh Grand Committee. The hon. Gentleman said:
Welsh local authorities would have a more direct influence on their grant allocations than they have now as a small part of the negotiating machinery covering England and Wales as a whole."—[Official Report, Welsh Grand Committee, 7th April 1976; c. 91.]
But the resources of the Assembly will be finite and already negotiated with central Government. The rate support element in the block grant will have been predetermined, and the Assembly and the
local authorities will have very little scope for manoeuvre in their negotiations.
Currently the local authorities are going through a difficult period in Wales as elsewhere. They are subject to a great deal of popular criticism on account of staff increases, rising rates and inadequate services. Undoubtedly, some of the criticism is justified. When I last checked staff increases I found that the two most significant increases were in construction staff and in education staff. Although the increase in the number of teachers was justifiable, I could not say the same of the increase in construction workers, whose jobs could have been done by outside contractors engaged on an ad hoc basis. The Government have surely accumulated enough adverse experience of direct labour by now to convince them that direct labour employment does not generally provide good value for money either to the taxpayer or the ratepayer.
I received Written Answers on 20th February 1976 from the Secretary of State for Education and Science relating to the Soulbury Committee's recommendations for increases in the salaries of education advisers employed by local authorities. The increases were very substantial and came as a shock to my local authority of Gwynedd. The right hon. Gentleman told me that it was not his role to accept or reject recommendations from the Committee. I believe that he should have such a role, especially in stringent times such as these. I should be grateful if the Government considered the possibility of establishing such a role. The cost increases entailed by these recommendations can have a very serious unbalancing effect on a local education authority's budget.
The county precept in Wales for 1976–77 is 66·63p in the pound on average–10·6 per cent. up on last year and about 8½p higher than the average for English counties. Of course, we get a higher domestic rate relief which helps us with our higher water rate as well as the local authority rate. But the business community—the small shopkeeper—is not similarly assisted. There is no doubt that small businesses are suffering badly under the heavy rate burden. That is particularly regrettable in Wales, because we have such high unemployment. Wales, for the most part, is an essential area and there is no doubt that the rate burden is a considerable disincentive to employment.
Generally, the public welcome the attempts which are being made to restrain local authority expenditure. I believe that the public wish to encourage those attempts, and I am sure that they will be looking hard at their candidates in the forthcoming elections from this point of view.
The elimination of waste and the obtaining of value for money in services to which citizens are entitled are the ratepayers' priorities, and I believe that they are popular priorities. We all know of instances of waste in local authority expenditure. Our constituents also know of those instances. I believe that there is a new awareness and anxiety on the part of the public about getting value for money, and we are right to mention that particular desire on the part of the public in our motion. I hope that these priorities will have an even more respected place after the coming elections.
We must appreciate that the demands on local authorities have increased over the years. The Association of District Councils has pointed out that the number of children in care in England and Wales rose by 26 per cent. between 1966 and 1971 and that the number of people over 65 rose from 7·7 million to 9·5 million—an increase of 23 per cent—between 1961 and 1974. There has been a considerable additional demand on local authority services, and Parliament has laid further duties upon local authorities. Therefore, we must not be entirely unsympathetic to the difficulties of local authorities.
The number of council houses has also risen from 4·4 million in 1960 to 6·23 million in 1974—an increase of 42 per cent. I fully support the argument put forward by my hon. Friend the Member for Aylesbury (Mr. Raison) for the sale of council houses to sitting tenants not only because, as a constituency Member, I am constantly under pressure from council tenants who wish to acquire their own homes, but also because those homes are becoming such a burden on local authorities that I doubt whether the taxpayer and the ratepayer can sustain that burden for much longer.
We in Wales have the same problems with our local authorities as the rest of the United Kingdom. But, as I said at the beginning of my speech, we have the added problem that the shadow of the Government's devolution proposals now hangs over us. That shadow has, in turn, produced a significant fear among local authorities that they will be subject to yet further reorganisation. Whatever we may have learned from the last reorganisation, it would certainly gain agreement in this House that it is a costly and difficult business. The main concern of local authorities at present is that they will be subjected to yet further reorganisation in the not too distant future.