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Volume 975: debated on Monday 3 December 1979

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asked the Secretary of State for Wales what representation he has received from local authorities in Wales regarding cuts in governmental grants for development areas, cuts in local authority expenditure during the current financial year and proposed further cut for the next financial year.

Four local authorities, Cardiff city council, Clwyd county council, Cynon Valley borough council and Dwyfor district council, have made general representations about reduction in local authority expenditure, and others have written about the possible effect on specific services in individual areas. Five counties and 13 districts have commented on the changes in regional policy.

Is the Secretary of State aware that there is deep concern in local government circles about the Govment's policy? What effect does he think these cuts will have on local authority rates? Will he tell the people of Wales that they should not blame their borough councillors and their county councillors, but that they must look to the Government who are primarily responsible for the cuts that will come about in social services?

I hope that the hon. Member will not exaggerate the effect on local government of a cut of 2½ per cent. over two years, or argue that that is a justifiable reason for substantial rate increases. I do not believe that that is so.

Does not the Secretary of State realise that the representations that he listed to the House show the real concern of these local authorities, not only for their services, but for the prospects of industrial development in Wales? Will he now come clean and give his estimate of the number of people likely to be unemployed as a consequence of the cuts? When I gave a figure of 110,000 in the Welsh Grand Committee was I too high, too low, or just about right?

I amsure that the right hon. Member will agree that the difficulties we now face make it absolutely right for us to concentrate industrial help on those areas with the greatest problems. I have no intention of giving unemployment forecasts because I do not believe in forecasts of that kind. I well recall that when the previous Government put up their interest rates to a then record level, unemployment fell. These things are difficult to foresee. I told the House of Commons in my first speech from this Dispatch Box that we had inherited a rising trend of unemployment. I do not disguise the fact that I expect unemployment in Wales to rise.

Does not my right hon. Friend find it rather strange that there is so much furore over modest reductions which leave overall public expenditure, in real terms, more or less what it was last year? Is it not a fact that the cuts that were introduced by the previous Government were effectively far more stringent, yet we heard no criticism then?

My hon. Friend is quite right. The previous Government cut local government expenditure by 2½ per cent. in a single year. Now they are complaining because we propose a similar level of reduction over a two-year period.

If the Chief Secretary to the Treasury can indicate in the Government's White Paper that he expects unemployment to rise by 300,000 next year, why cannot the Secretary of State for Wales tell us how many people will be unemployed in Wales?

The Chief Secretary has done nothing of the kind. He has done what his predecessors have done—he has made an assumption for the purposes of calculating social security benefits. The right hon. Gentleman presumably has the mathematical skills to make some kind of calculation based on that, but it would not be a forecast.