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Teachers' Pay

Volume 177: debated on Monday 23 July 1990

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3 pm

On a point of order, Mr. Speaker, about the statement.

Well, how can there be a point of order about a statement which we have not heard?

On a point of order, Mr. Speaker. It is unclear whether the statement applies only to England and Wales or to the United Kingdom. It was the same—

Order. The hon. Member for Dunfermline, West (Mr. Douglas) may have an opportunity to put a question during the statement. I call Mr. MacGregor.

I now order the hon. Gentleman to leave the Chamber for the remainder of today's sitting.

I repeat that I order the hon. Gentleman to leave the Chamber for the remainder of today's sitting.

Order. The hon. Member will put himself in jeopardy if he does not now obey the order of the Chair.

Motion made, and Question put,

That Mr, Dick Douglas be suspended from the service of the House.— [Sir Geoffrey Howe.]

The House divided: Ayes 177, Noes 25.

Division No. 310]

[3.34 pm


Arbuthnot, JamesGreenway, Harry (Ealing N)
Arnold, Jacques (Gravesham)Gregory, Conal
Ashby, DavidHague, William
Baker, Nicholas (Dorset N)Hanley, Jeremy
Baldry, TonyHannam, John
Barnes, Mrs Rosie (Greenwich)Hargreaves, A. (B'ham H'll Gr')
Batiste, SpencerHargreaves, Ken (Hyndburn)
Beaumont-Dark, AnthonyHarris, David
Bennett, Nicholas (Pembroke)Haselhurst, Alan
Blackburn, Dr John G.Hattersley, Rt Hon Roy
Blaker, Rt Hon Sir PeterHaynes, Frank
Boscawen, Hon RobertHayward, Robert
Boswell, TimHicks, Robert (Cornwall SE)
Bowden, Gerald (Dulwich)Higgins, Rt Hon Terence L.
Bowis, JohnHind, Kenneth
Boyes, RolandHoey, Ms Kate (Vauxhall)
Braine, Rt Hon Sir BernardHordern, Sir Peter
Brandon-Bravo, MartinHowarth, G. (Cannock & B'wd)
Brazier, JulianHowe, Rt Hon Sir Geoffrey
Brown, Michael (Brigg & Cl't's)Howell, Rt Hon D. (S'heath)
Bruce, Ian (Dorset South)Hughes, Robert G. (Harrow W)
Buck, Sir AntonyHunt, Sir John (Ravensbourne)
Burns, SimonIrvine, Michael
Burt, AlistairJack, Michael
Butler, ChrisJanman, Tim
Carlisle, Kenneth (Lincoln)Jessel, Toby
Carrington, MatthewJohnson Smith, Sir Geoffrey
Cartwright, JohnJones, Gwilym (Cardiff N)
Clark, Dr Michael (Rochford)Kellett-Bowman, Dame Elaine
Clarke, Rt Hon K. (Rushcliffe)Key, Robert
Coleman, DonaldKinnock, Rt Hon Neil
Coombs, Simon (Swindon)Knapman, Roger
Couchman, JamesKnight, Greg (Derby North)
Cran, JamesKnight, Dame Jill (Edgbaston)
Cunningham, Dr JohnKnox, David
Davies, Q. (Stamf'd & Spald'g)Lawrence, Ivan
Davis, David (Boothferry)Lennox-Boyd, Hon Mark
Dickens, GeoffreyLightbown, David
Douglas-Hamilton, Lord JamesLloyd, Sir Ian (Havant)
Dover, DenMacfarlane, Sir Neil
Durant, TonyMacGregor, Rt Hon John
Dykes, HughMacKay, Andrew (E Berkshire)
Evans, John (St Helens N)McLoughlin, Patrick
Fallon, MichaelMcNair-Wilson, Sir Patrick
Favell, TonyMadel, David
Fenner, Dame PeggyMalins, Humfrey
Field, Barry (Isle of Wight)Mans, Keith
Finsberg, Sir GeoffreyMaples, John
Flynn, PaulMarshall, John (Hendon S)
Fookes, Dame JanetMartin, David (Portsmouth S)
Forman, NigelMates, Michael
Foster, DerekMaxwell-Hyslop, Robin
French, DouglasMichael, Alun
Gale, RogerMiller, Sir Hal
Garel-Jones, TristanMitchell, Andrew (Gedling)
Glyn, Dr Sir AlanMoate, Roger
Golding, Mrs LlinMonro, Sir Hector
Goodlad, AlastairMontgomery, Sir Fergus
Gorman, Mrs TeresaMorris, M (N'hampton S)
Gow, IanMorrison, Sir Charles
Grant, Sir Anthony (CambsSW)Morrison, Rt Hon P (Chester)

Moss, MalcolmSpearing, Nigel
Mudd, DavidSpeller, Tony
Neale, GerrardSpicer, Sir Jim (Dorset W)
Nicholson, David (Taunton)Squire, Robin
Nicholson, Emma (Devon West)Stern, Michael
Onslow, Rt Hon CranleyStevens, Lewis
Owen, Rt Hon Dr DavidStewart, Andy (Sherwood)
Page, RichardSummerson, Hugo
Patnick, IrvineTapsell, Sir Peter
Pawsey, JamesTaylor, Ian (Esher)
Porter, Barry (Wirral S)Taylor, John M (Solihull)
Price, Sir DavidTaylor, Teddy (S'end E)
Raison, Rt Hon TimothyThompson, D. (Calder Valley)
Renton, Rt Hon TimThompson, Patrick (Norwich N)
Rhodes James, RobertTredinnick, David
Riddick, GrahamTwinn, Dr Ian
Roe, Mrs MarionWakeham, Rt Hon John
Rooker, JeffWaller, Gary
Rossi, Sir HughWard, John
Rost, PeterWheeler, Sir John
Rumbotd, Mrs AngelaWiddecombe, Ann
Scott, Rt Hon NicholasWolfson, Mark
Shephard, Mrs G. (Norfolk SW)Wood, Timothy
Shersby, MichaelYeo, Tim
Shore, Rt Hon PeterYoung, Sir George (Acton)
Sims, Roger
Skeet, Sir Trevor

Tellers for the Ayes:

Smith, Rt Hon J. (Monk'ds E)

Mr. Sydney Chapman and

Smith, Tim (Beaconsfield)

Mr. Tom Sackville.

Soames, Hon Nicholas


Ashton, JoeMeale, Alan
Benn, Rt Hon TonyMichie, Bill (Sheffield Heeley)
Bennett, A. F. (D'nt'n & R'dish)Mullin, Chris
Bidwell, SydneyNellist, Dave
Cohen, HarryPatchett, Terry
Cryer, BobRedmond, Martin
Cummings, JohnSalmond, Alex
Douglas, DickSkinner, Dennis
Galloway, GeorgeVaz, Keith
Godman, Dr Norman A.Wise, Mrs Audrey
Hughes, John (Coventry NE)
Lambie, David

Tellers for the Noes:

McAllion, John

Mrs. Margaret Ewing and

Madden, Max

Mr. Harry Barnes.

Mahon, Mrs Alice

Question accordingly agreed to.


That Mr. Dick Douglas be suspended from the service of the House.

I have to direct the hon. Member for Dunfermline, West (Mr. Douglas) to withdraw, in compliance with the order that the House has just made.

The hon. Member withdrew accordingly.

3.44 pm

With permission, Mr. Speaker, I should like to make a statement on new negotiating machinery for school teachers' pay and conditions.

I wrote to the local authority employers and the teacher unions on 26 April setting out proposals for new permanent pay negotiating machinery for settling the pay and conditions of school teachers in England and Wales. Over the past two months I have engaged in full and careful consultations on the basis of those proposals. I am now able to announce the Government's decisions about future machinery for determining the pay and conditions of school teachers. I intend at the earliest opportunity to bring forward to the House a Bill to give effect to these decisions.

Different and incompatible views on the proposals were expressed during the consultations. Most urged on us a restoration of negotiating rights for teachers; others preferred independent review, but they were not willing to agree the establishment of a permanent body similar to the present Interim Advisory Committee on School Teachers' Pay and Conditions. It is clear that we are far from a consensus in favour of independent review on a basis that would be acceptable.

Accordingly, we intend to provide for free negotiations between employers and teachers under an independent chairman. The Government will not be a party to those negotiations. There will be no pre-set financial limit on the negotiations. The employers will know the aggregate external finance that the Government are ready to make available for local authority expenditure as a whole and will consider what they can afford in the light of that. There will be a time limit on the negotiations.

If the negotiators agree recommendations before the time limit, it will fall to the Secretary of State to consider implementation. If the time limit passes without agreement, however, the negotiations will come to an end. The Government will seek recommendations instead from an independent advisory committee, broadly similar to the present interim advisory committee. This will not be arbitration. The Government will set the body a clear and specific remit. Again, it will fall to the Secretary of State to consider implementation.

I hope that it will normally be possible to accept the recommendations that are put to us, but we have also to provide for circumstances in which that is not the case. If the Government are unhappy with aspects of negotiated recommendations on pay and conditions they will be able to refer these issues back to the negotiators, giving their reasons. If agreement does not result from this process, however, the Government will need to be able to resolve the deadlock. We shall provide for that through a power for the Government to substitute their own provisions on matters referred back, subject to negative resolution of each House of Parliament. The Government would intend not normally to refer back recommendations on cost grounds if the overall cost was within the inter-quartile range of private sector settlements for non-manual employees.

Within the negotiating body there will be a separate sub-committee to deal with heads and deputies. Responsibility for initiating proposals for changes in pay and conditions of heads and deputies will rest with the sub-committee. The sub-committee's recommendations will come to me for consideration unless both sides of the main committee agree to refer them back to the sub-committee, and subsequently to change them. The precise machinery for this and other, more detailed, features of our proposals are explained in the paper placed today in the Vote Office and in the Library of the House.

I recognise that some employers—be they local education authorities or the governors of grant-maintained schools—may judge that they could better respond to local needs and circumstances if they settled the pay and conditions of their teachers themselves. As envisaged in the consultation document, LEAs will have the opportunity to apply to me to opt out of the national provisions governing pay and conditions, on the basis that they are able to put in place satisfactory arrangements of their own. Grant-maintained schools, too, will be able to opt out of the national provisions.

Teachers are due a review of their pay to take effect next April. Given the need for legislation to establish the new negotiating arrangements, it would not be possible to deal with this settlement under the new arrangements, and that was accepted by all those whom I have been consulting. None supported the option of dealing with the settlement retrospectively through the new machinery once it is statutorily in place. There was insufficient agreement about the possibility of running the new machinery on a voluntary, shadow basis in advance of legislation. I have concluded, therefore, that I should seek the approval of the House later in the year to extend the Teachers' Pay and Conditions Act 1987 for a further, and final, year, and to invite the interim advisory committee to make recommendations to me for a settlement to cover the year April 1991 to March 1992. The first settlement decided in the new machinery would be that to take effect from April 1992.

The arrangements which I have outlined offer full and fair opportunities for negotiations between teachers and their employers, and a means to resolve deadlock if the negotiators cannot agree. They acknowledge the interests of employers, teachers and Government in the determination of teachers' pay. They afford a basis for the peaceful resolution of questions of pay and conditions, and their adaptation to the changes which face our schools in the 1990s.

Is the Secretary of State aware that the removal of negotiating rights from teachers in 1986 and the continued delay in re-establishing them has in itself been gravely damaging to teachers' motivation and self-respect, and that that is one reason why our schools face greater problems today than at any time in living memory? Will he confirm that by his statement the first negotiated settlement cannot take place until 1992, six years after the last one? Will he give more detail of the veto that he intends to retain?

Will the clear and specific remit to the new advisory committee include cash limits set without reference to the negotiations, notwithstanding the fact that in his statement the right hon. Gentleman said guardedly that there would be
"no pre-set financial limit on the negotiations"?
Does that undertaking cover the exercise of his veto? Given the substantial powers of veto which the right hon. Gentleman is taking unto himself, does he understand the strong case for this to be subject to the affirmative procedure, not to the negative resolution procedure?

Is the Secretary of State aware that his proposal to allow individual local education authorities and grant-maintained schools to opt out of the national pay negotiating machinery will be seen as no more than an attempt by him to appease his critics on the right of the Conservative party and as a cheap dodge to avoid his responsibility for the current nationwide teacher shortage crisis? Why does he not understand that the reason why teacher shortages have risen by 50 per cent. in two years is primarily that teachers' pay nationally has fallen so far behind that of comparable groups, and that in real terms their pay is now even lower than in 1986?

If local authorities are allowed to set whatever salary scales they choose, what additional resources will the Secretary of State give them to back his words with hard cash? Since such an arrangement could work to solve teacher shortages only if it led nationally to leapfrogging and wage drift, how much does the Treasury think that this will add to public spending?

If a local education authority which is poll tax capped opts out of national pay bargaining, does the Secretary of State have the agreement of the Secretary of State for the Environment to lift poll tax capping in respect of such teachers' pay settlements?

Is the Secretary of State aware that, far from this being a new idea, such a system operated before the war and was abandoned because of the damage that it caused to the education service? Is he aware that the proposal is opposed by the Conservative-led Association of County Councils? Is he also aware that his own Interim Advisory Committee on Teachers' Pay and Conditions, under the chairmanship of the Conservative Lord Chilver, gave the issue of differential subject and regional pay the most thorough examination in both its 1988 and 1990 reports and rejected it on the grounds that it would reduce teacher mobility, be unfair and inflexible, would move shortages round rather than solve them, and would be ineffective? Why has the Secretary of State rejected such powerful advice from his own appointed committee? Why does not he build on the wide local discretion within a national framework which the interim advisory committee has recommended?

This proposal is a shallow and damaging trick. It will not provide an extra penny for the system nor guarantee an extra teacher in the classroom. It shows yet again that the Ministers who have so damaged our education service are incapable of improving it. It is not just failed Education Ministers who need to be removed, but failed and discredited policies which must be abandoned forthwith.

I reject all those charges and I shall endeavour to deal with as many of the hon. Gentleman's points as I can. He asked when the new negotiating machinery comes into operation. I made it clear to him, on the assumption that there will be legislation in the next parliamentary Session, that it would be in March 1992. I think that there was general agreement in all my discussions that it would be necessary to have some interim arrangement, and the discussions centred on that. In the light of those discussions, I have concluded that this is the most sensible way forward for one year. Teachers will recognise that, as this is the final year, the proposal is sensible.

The interim advisory committee did an excellent job throughout the period during which it carried these responsibilities. Many of its recommendations were widely welcomed and had a good deal to do with a better career structure and pay and greater local flexibility in the system.

The hon. Gentleman asked about conditions for the use of either referring back or override powers. I shall consider all recommendations from the negotiating body on their merits. I expect that if there are issues that I want to address with override powers in mind, they would be concerned not just with costs but might be concerned—clearly one cannot be specific in advance because the matter is hypothetical—with a range of other factors, including professional duties and the pay structure. One possibility may be cases of disagreement about the pay of heads and deputy heads. As I have said, it is not possible to specify in advance, but I think that I have indicated why the powers are necessary.

The hon. Gentleman asked about a cash limit for any interim advisory committee or committee's recommendations. Clearly, such a possibility must be available to the Secretary of State. I do not know why the hon. Gentleman is so surprised about that because I recently asked him in our correspondence whether he would have cash limits and he replied:
"Cash limits would apply in the normal way … (if we inherited an IAC arrangement)".
A negative resolution offers a simpler procedure which will yield more timely pay settlements. That is clearly important in relation to some of the long delays that occurred in the machinery before 1986.

The hon. Gentleman asked about opting out. As he knows, there are teacher shortages in particular geographical areas, and in some parts of the country, especially in some London boroughs, the shortages are serious. I have been adopting a whole range of measures to try to assist local authorities to deal with that. The overall average vacancy in the country as a whole, excluding Greater London, is 1·3 per cent.

Yes, 5·3 per cent. The proposals that we advocate build on local flexibility and will act in precisely the right way to respond to market conditions in relation to pay. Therefore, what the interim advisory committee has done is already extremely helpful. The hon. Gentleman will be aware that the interim advisory committee recommendations this year, which I have fully accepted and which will be fully implemented by 1 January, came into effect after the collection of the vacancy survey data, details of which I announced recently. The pay recommendations will build on local flexibility and will be extremely helpful, not least in London, in resolving local shortages.

The hon. Gentleman referred to opting out. Precisely what I am doing will be helpful in resolving local teacher shortages and other difficulties. I am building on the local flexibility that we have achieved in the past three years, or so to tackle teacher issues. The proposed new machinery for opting out is a natural extension of that process.

Differential regional pay is also relevant to opting out. My statement today is not a set of proposals for regional pay, but I make it clear, as I have done on many occasions, that it is important to create greater differentials in the pay of individual teachers so as to relieve shortages in certain subjects. Therefore, the increasing flexibility that we have achieved in the system is necessary to recruit mature entrants and people who have a range of skills which command a high market premium. Therefore, the proposals that I put before the House and recommend today will assist us further in addressing those issues. They are positive and constructive.

The hon. Gentleman asked for additional resources, but he will know that the amount of resources from aggregate external finance was settled in the announcement by my right hon. Friend the Secretary of State for the Environment last week and in the decisions about the breakdown of resources into subject areas in the autumn. Local authorities will know before they embark on the pay negotiations what is available from central Government.

It is extremely rich of the hon. Gentleman to keep pressing for additional resources, because each time I ask him about the matter he carefully avoids the question. He knows that the Labour party would not provide additional resources. It is worse than that from his point of view. He will be aware that in his response from the Front Bench on community care last week, the hon. Member for Livingston (Mr. Cook) committed the Labour party to an additional £1·5 billion. Where would that leave the hon. Gentleman?

Is my right hon. Friend aware that his refusal to introduce a Son of Burnham or Burnham mark 2 will be widely welcomed? Is he further aware that his proposals, which will allow local education authorities and grant-maintained schools to opt out of the national pay machinery, will be welcomed by schools, teachers, governors and parents and will do a great deal to answer problems of teacher recruitment and shortages? In short, his statement is widely welcomed, not only by Conservative Members but by people outside the House.

I am most grateful to my hon. Friend. The proposals strike the right balance between the interests of the teachers in restoring their pay negotiating rights, those of their employers, who must take community charge payers into account, and the interests of the Government, who clearly have an interest because the taxpayers fund a considerable proportion of any local authority expenditure. I believe that the balance is right.

I am particularly grateful to my hon. Friend for what he said about the opportunities to opt out. We shall be legislating for some time to come. We shall provide clearly for not only the immediate and early stages of the legislation but the possibility of evolution. It will be for local education authorities and grant-maintained schools to decide if and when they wish to opt out. They should have the maximum flexibility to respond to local needs and circumstances. If they believe that the best way to achieve that is through establishing a local pay framework, they should have the opportunity to propose it. That will be particularly relevant to grant-maintained schools, where the governing body will be able to review the position in the school itself and possibly enjoy additional flexibility and freedom even beyond that which we have already given.

Tower Hamlets has a teacher vacancy rate of more than 10 per cent., compared with the national average of a little more than 2 per cent. How does the Secretary of State propose to prevent what could easily degenerate into a competitive scramble for scarce teaching resources spreading throughout the entire inner London area in particular? If an authority produces plans for paying its teachers more, can the right hon. Gentleman guarantee that it will be able to obtain the resources necessary to meet the cost of those plans?

The new education authority in Tower Hamlets is already tackling the problems that it inherited from ILEA with great vigour and with considerable effect. I believe that we shall see a better position in September than last year, due to the way that that authority is tackling its tasks, the increased flexibility that we have allowed, and the increased possibilities open to London authorities as a consequence of the interim advisory committee's recommendations on teacher pay. As to the right hon. Gentleman's general question, a considerable amount of flexibility already exisits in the system, which education authorities can use if they judge that that is where they should put their priorities. By giving them the additional opportunity to opt out, I am only building on that and allowing education authorities, in the light of their local circumstances, to address that aspect further. As to resources, there is already available to Tower Hamlets, as to many inner London boroughs, a supplement for additional education need from central Government.

I welcome the fact that my right hon. Friend has not been tempted back to the old and discredited Burnham procedure. It must be right to move pay bargaining closer to schools, which is the trend that I detect in the statement. Will my right hon. Friend clarify how that might help with differential pay, in dealing with teacher shortages—which, as he knows, is still a serious and worrying problem?

The proposals represent a considerable advance on the discredited Burnham procedure. I will give two examples of that. There will be a timetable for negotiations, and no possibility of deadlock—both of which were problems in the past. The system that we have been building on for the past three years—thanks not least to the recommendations of the interim advisory committee —allows individual LEAs and schools to offer more flexible pay to recruit not only those offering scarce skills but those whom they particularly want to attract in dealing with specific problems in London. Considerable flexibility, offering significant scope, already exists—but given that that is the right approach, it is proper to build on it. Opting out provides an opportunity to do that.

Teachers will welcome the plans to restore negotiating rights, albeit a year late. Can the Secretary of State explain why that is so? Only recently, he was failing to admit that state of affairs, although it was apparent to all that that was the case. Will not his plans for opting out create a wage war between rich and attractive local authorities and poor and less attractive local authorities—despite the fact that the latter suffer the most teacher shortages? Will not opting out simply ratch up teacher costs and the problems for some local authorities?

The Secretary of State said that local authorities will have to apply to him for permission for their schools to opt out, but will grant-maintained schools have to do so—or will they be free to opt out come what may?

On the first point, it is very clear to me from the fairly extensive consultations that I have had twice with the six unions and with local authority employers that these are complex matters. That is why it is not possible to reach agreement earlier. It became clear that it simply would not be possible to reach agreement because of the wide disparity of views that I was still facing. I have had lengthy consultations which have helped considerably, not least on many of the details in the proposals, and I believe that the time is now right to take decisions. That is what I have done.

As regards the position of what the hon. Gentleman described as "poor" authorities, they already have a higher standard spending assessment allowance per pupil, compared with other areas, and that is reflected in aggregate external finance. For example, the allowance per primary pupil in Hackney is about 70 per cent. more than the allowance in Somerset, and that makes my point clearly. As for applications for opting out, local education authorities will require my approval, and that is clearly laid out in the document which is now in the Vote Office. Grant-maintained schools can apply to me for opting out and they will get it automatically.

Order. I remind the House that there are two other statements, and ask for single questions.

Will my right hon. Friend take the opt-out principle further than he has done, although I congratulate him on the points that he has made today? Has not the time come to assess teachers' salaries individually? Could not that be done under a system of local management of schools throughout the country? Would not that system be more effective in overcoming regional and subject teacher shortages than anything else could be? Is it fair to say that a teacher in deepest Wales must cost less than a teacher in deepest London?

I am grateful to my hon. Friend for his remarks. It will be open to local education authorities to decide whether, if they wish to apply to opt out, they want to put a different arrangement in place. That will be available to them and to grant-maintained schools. It is important to take into account the fact that the extra flexibility in the system now goes a considerable way to enable local education authorities and new governing bodies of schools, under LMS, to have greater flexibility between schools. As my hon. Friend will know, there are may opportunities, such as incentive allowances and paying teachers on different grades of the scale which are now available to schools, but there will be additional opportunities as a result of the proposals.

Is the Minister aware that the worst teacher shortages are in the poorest areas, and that those areas will be least able to opt out and to pay teachers more? Therefore, will not the opting-out proposal that he suggests make things worse as boroughs such as Lambeth and Southwark, which are unable to opt out and pay more, lose teachers, who are siphoned off to Bromley, Surrey and Westminster, which can pay more? Is that not a fraudulent con-trick which will make the position in London far worse?

I have already pointed out to the House, and I repeat it to the hon. Lady, that authorities in the system, in the sort of boroughs that she talked about, already get higher standard spending allowances per pupil. I repeat, as an example, that the allowance per primary pupil in Hackney is about 70 per cent. more than the allowance in Somerset.

With this greater financial independence, is my right hon. Friend encouraging local education authorities, in conjunction with housing authorities, to buy property which they can rent to teachers? That would be useful in many parts of the country where there are high housing costs—I am obviously thinking of Bedfordshire and its neighbouring counties.

Some authorities, especially London boroughs, which are also housing authorities, are considering arrangements, and one or two schemes are now coming through. I was happy to agree a scheme for some of the properties inherited from ILEA earlier this year, to help with the problem of teachers' housing in London.

The Secretary of State has referred to the level of standard spending assessment for Hackney. He will be aware that we get more because we are one of the poorest boroughs in the country. The Minister will also know that we have a teacher vacancy level of 12·5 per cent., which is the second highest in the country. Does the Minister agree that it is nonsense to give boroughs like Hackney facilities to pay teachers more, if he is not prepared to fund that increase? Hackney and parts of east London are increasingly engulfed by a serious teacher shortage crisis. His statement today is a cruel fraud on parents and teachers in Hackney. When will he address the issue seriously, when will he tackle the problem of housing costs and when will he do something to stop the blight of a generation of children in east London?

Hackney gets more through the additional educational needs element. That is the point of it. In addition, a number of new measures have been introduced this year for teachers' pay which London boroughs can use, some of which are specifically directed, as the hon. Lady knows, at London boroughs. We have been assisting the inner-London boroughs in their teacher recruitment campaign. A number of other measures that we have taken on teacher supply are designed to help inner London. The hon. Lady will have noticed that one of the problems in Hackney is that the borough has been unable to pay its teachers so far because of its computer arrangements. I hope that they will be sorted out soon, because the money is there.

I congratulate my hon. Friend on bringing to a conclusion a particularly delicate and long procedure and thank him for keeping his promise to restore negotiating rights to teachers. Will he confirm that the legislation that he outlined, which I shall welcome, will lead to far more open debate about the merits and demerits of teachers' pay than we ever had?

Yes, I believe that that will be one result of the proposals, and I am grateful to my hon. Friend for welcoming them.

Does the Secretary of State realise that one of his statements is entirely wrong? If the present system provides flexibility, why is there a need for additional flexibility? If the present flexibility does not work, what makes the Secretary of State think that additional flexibility will work? Has he not taken into account the fact that staff are already leaving poll tax-capped authorities purely and simply because they find it easier to work for a non-poll tax-capped authority, and that the only ones who will suffer because of his ideas are the children whom we are supposed to educate?

On the hon. Gentleman's latter point, it is interesting that the vast majority of local education authorities were perfectly well able to draw up their education programmes this year without the need for community charge capping at all. On the hon. Gentleman's first point, the sort of flexibility that we have now has come only fairly recently into the system, and since April has been built on considerably. Some of the benefits, therefore, have still to flow through. It is right to allow local education authorities and grant-maintained schools to make their own arrangements, if they think that that is a better way to meet local needs. Their arrangements should be allowed to evolve.

Will my right hon. Friend accept the warm and sincere congratulations of many hon. Members, and of those who are interested in education throughout the nation, on his proposals? Does he agree that the new negotiating procedure—a new chairman, a new sub-committee and a new concept of flexibility—heralds a new era in education, which we welcome?

I am grateful to my hon. Friend. My proposals regarding the negotiating machinery and the restoration of teachers' negotiating rights are a considerable advance on Burnham and overcome some of the difficulties of which everyone had become aware. They will, I am sure, provide a sensible balance between all the interests concerned.

While I welcome the provision that local education authorities and grant-maintained schools will be able to set their own pay levels, which will enable them to respond to local needs and circumstances and to reward good teacher performance in the classroom, does not the Secretary of State recognise that inner-city boroughs such as Greenwich which are poll tax-capped will find it almost impossible to offer improved salaries to attract much-needed teachers, since cuts amounting to £10 million have to be made?

I am grateful to the hon. Lady for her welcome of the new flexibility, but may I point out to her that already there are immense variations in how local education authorities deal with priorities in their budgets. Let me give her one example. We have now moved to local management of schools. As a percentage of the general schools budget, a considerable amount of money is held back by individual local education authorities. Haringey, for example, is holding back 25 per cent., whereas Berkshire is holding back 10 per cent. There is therefore considerable scope for getting the money into the schools. Furthermore, an assessment of the returns that we have already received shows clearly that for administration—for bureaucracy alone—between 2 per cent. and 10 per cent. is held back. There is, therefore, considerable scope for greater flexibility, including in pay.

In welcoming my right hon. Friend's remarks, may I ask him to improve the general standards of literacy by asking the Department of Education and Science not to use the verb "disapply"? As the major Labour education authorities may start leapfrogging on salaries to increase all teachers' salaries, does my right hon. Friend agree that there is a case for taking a firmer line at local school level? Given the disparities that my right hon. Friend has just outlined, will he ensure that the governors in LMS schemes will have a greater say over differentials of pay?

I agree with my hon. Friend's main point. I am looking carefully at the returns that we are getting on the local management of schools from local education authorities to see whether there is justification for such a wide disparities in the amount held back in the centre—

We gave flexibility to local authorities, but the figures are raising some interesting issues, one of which is that there may be more opportunity for getting more money into the schools, and hence teachers' pay, in many authorities. We have created a system where everyone will be able to see the figures and ask the questions.

On my hon. Friend's first point, he will notice that I used the words "opting out" in my statement, but I am advised that "disapply" is the correct legal word for the document.

As a former chief negotiator of teachers' salaries in Scotland, may I ask the Secretary of State, on behalf of the Government, to give a guarantee that no such proposals will be introduced into the Scottish teachers' salary negotiations?

As a former local education authority officer, I welcome the flexibility that my right hon. Friend is giving to the state sector which already exists in the independent sector in other professions. There is no reason why teachers in Totnes and Toxteth should be paid the same. Does he agree that the Opposition have shown a lack of reality—they may believe that teachers would uproot themselves every few months to go to new schools, but schools would be wary about employing such people.

My hon. Friend makes the point that there are considerable opportunities to allow greater responsibility at school and governing body level, which is consistent with all that we are trying to do in the other reforms. Therefore, I agree with him.

Is the Secretary of State aware that the percentage vacancy rate, according to his Department, is 13 per cent. in the London borough of Newham, in the next-door borough of Hackney it is 12·5 per cent. and in Tower Hamlets it is 10·2 per cent.—there is an enormous concentration of teacher shortages in the east end. Newham is not in the Inner London education authority area, but has the highest percentage vacancy rate. Does he not realise that he is perpetrating a heartless fraud on the people of this country, particularly the east end, by suggesting that Newham, Hackney and Tower Hamlets—the three poorest boroughs in the country—are able to deal with the crisis? They simply do not have the resources. Will he make the resources available, because without them, we cannot solve the present crisis?

What is interesting when we look at the London figures is the wide disparity in London itself—Brent's vacancy level is 1·5 per cent. Local issues are involved and we are doing all that we can to deal with teacher supply. It is then for local education authorities to recruit. Not all the issues affecting the boroughs to which the hon. Gentleman drew attention are entirely educational; there are problems of attracting people to those boroughs, which is where we are trying to help.

I know that my right hon. Friend is aware that my local authority keeps 40 per cent. for the centre. Is he also aware that governors will be overwhelmed and delighted at the proposal to enable them to choose first division teachers and put pressure on LEA to choose first division teachers instead of fourth division football clubs.

I am grateful to my hon. Friend, who will know that, as a result of the obligation on local education authorities to publish the arrangements and figures involved in the local management of schools, it will be possible for governing bodies, governers, teachers, staff, parents, the general public and him to see whether the holdback is too great, exert pressure if they think it is, and ask questions.

Does the Secretary of State accept the crisis in education will not be solved by these rather cheap measures, as my hon. Friend the Member for Blackburn (Mr. Straw) described them? Will he address himself to capping? Is he aware that the Tories in Calderdale propose to wipe out in-service training for teachers? If that happens, they will not be trained to fulfil the requirements of the national curriculum. What guarantee will he give local authorities on funding? Is he aware that the 40 per cent. that is kept at the centre by Calderdale is spent on special needs, music and everything else that makes up a comprehensive education system? It is nonsense to suggest that it has anything to do with spending a lot on administration.

Government funding is allocated on a fair basis. Local authorities—and, within them, local education authorities—must decide their priorities.

For counties such as Essex, which is an area of high housing cost and is experiencing increasing problems recruiting teachers, is not my right hon. Friend's announcement about opting out a natural extension of the help that Essex county council has been receiving through education support grant—and on its own initiative—to attract teachers to its employ?

Yes. I am grateful to my hon. Friend, who will know that to recruit back qualified teachers who are not teaching—for example, because they are bringing up a young family—I have increased education support grant from £2 million to £10 million. In Essex and many other parts of the country, much more can be done to keep teachers who are not working—there are about 200,000 such teachers aged between 31 and 44—in touch with education changes so that, when they wish to return to work, they will not fear that education has moved on as a result of the national curriculum.

Will the Secretary of State note that in the House the other day some hon. Members demonstrated the corrupt nature of this year's distribution of central support for local government and therefore have profound anxieties that that corrupt system might continue when the new arrangements come into operation? Does he accept that, whatever some teachers might tell him, those who observe and are interested in British education recognise that the crisis of morale is worse now than at any time since the war and that the proposals of the Government, who have turned the educator into the bookkeeper, will not restore the morale of the profession?

I am aware that every local authority feels disadvantaged compared with every other local authority, but to describe the system as corrupt is ludicrous. We have progressed well in achieving a fairer system. The main issue affecting teacher morale is that they feel that they have an enormous challenge in implementing the national curriculum. More and more of them are aware that I am introducing the national curriculum in a way that will enable them to cope. As I visit schools, I find that that many more, as they get to grips with the national curriculum, are excited and enthusiastic and becoming positive about it.

I congratulate my right hon. Friend on achieving a solution that is well adapted to current reality, but during his consultations how many teaching unions showed a willingness to enter into no-strike agreements to enhance the professional standing of their members in the community at large?

Is the Secretary of State aware that his continual use of the word "flexibility" shows only that his scheme and statement are like a conjuring trick: they do not produce any more money or teachers. The slickness of the word defeats the logic of the news. As the London borough of Newham has £5 million less than it requires for education, what would he do as a councillor in Newham? Would he be unfair to the children or to the poll tax payer? What would he do, given the circumstances that he has produced in the statement?

Community charge payers' interests must also be taken into account in all these decisions. The hon. Gentleman has missed the point that increasing flexibility, which we have already and on which we hope to build, could increase the supply of teachers. I believe that it will do that by recruiting qualified teachers who are not teaching, because they are, for example, bringing up a family, and by encouraging mature entrants to join the teaching profession. There is considerable interest among people in other careers about moving into teaching. This flexibility will enable a pay system to be adopted in schools which can respond to those interests and needs and will thereby increase the supply of teachers.

Will my right hon. Friend confirm the information sent to me in a letter by the National Union of Teachers to the effect that, far from there being a shortage of teachers, 400,000 trained teachers are not practising their profession? Rather than poaching teachers, my right hon. Friend's measures will enable us to attract that enormous unused resource back.

That is precisely the point I made in reply to the previous two questions. There is a considerable supply—sometimes inelegantly described as a "pool"—of people who are not teaching for good reasons, for example, because they are bringing up a family and wish to be with their young children. Many such people will wish to return to teaching. It is important to have arrangements to encourage them to do so, including keeping in touch with them while they are not working as teachers.

Will the Secretary of State accept that his statement is a recipe for chaos and that it is dictatorship under the guise of democracy—if not, why retain an absolute veto? What discussions has the right hon. Gentleman had with the Department of the Environment about money values?

These matters have been fully discussed in the Government as a whole. I do not for one moment accept the hon. Gentleman's initial allegation. We have override powers because the Government must have the opportunity and the powers to take account of taxpayers' needs, should that prove necessary.

Is my right hon. Friend aware that his statement will be warmly welcomed by all those who recognise that national negotiations have created regional shortages? Is he aware also that his statement will be particularly welcome to London local education authorities, which will at long last be able to give realistic London weighting allowances?

I note what my hon. Friend has said. I hope that the statement will be welcomed by the excellent grant-maintained school which I visited in his constituency.

Is not the Secretary of State setting up a Heath Robinson machinery to avoid restoring free and fair negotiating rights to the trade unions? Are not aggregate external financing, the time limit and his veto a three-barrelled gun held at the head of the teachers' unions? When will the right hon. Gentleman realise that the continuation of inadequate pay procedures, which his statement confirms, does nothing to tackle the serious problems of teacher shortages and low morale?

The hon.Gentleman must recognise that aggregate external finance cannot be unlimited; it comes from the taxpayer. I shall again quote from the letter written to me by the hon. Member for Blackburn (Mr. Straw):

"Cash limits would apply in the normal way, as they have in respect of other local authority employees whose salaries are negotiated".

Does the Secretary of State recognise that he has shown amazing ignorance of the way in which the standard spending assessments work? The right hon. Gentleman says that the poorer London boroughs are given more money. Does he understand that they are given additional resources because it costs more to provide education in those boroughs and, without the additional resources, they would not be able to provide an education service?

Is it not a deceit on the children and parents in those boroughs and on people in all parts of the country facing teacher shortages for the Secretary of State to pretend that the resources that are currently available in the SSAs will result in the recruitment of additional teachers? Not one additional resource is made available through this statement. Is not the reality of the right hon. Gentleman's statement that he is merely redistributing resources and teachers from the poorer to the richer boroughs because the Government do not care about the children of Lambeth, Hackney or the other boroughs which are suffering from shortages? This statement is a deceit on all those children and all those boroughs.

I reject that absolutely. I made precisely the same point myself about additional educational needs: the extra resources were going into the boroughs through the additional educational needs budget, because it was recognised that there was such a need.

The statement was about teachers' negotiating machinery; there are other occasions when we discuss resources. I remind the hon. Gentleman that each time that I have asked the Labour party what it would propose to do about the additional money it has always ducked the question. We know why: so many of the hon. Gentleman's colleagues are beginning to make additional spending commitments, and the bill is starting to add up. It is clear what the Labour party's position is.

On a point of order, Mr. Speaker. When the Secretary of State for Education and Science was answering questions on his statement, I asked him to give a guarantee on behalf of the Government that his proposals would not affect Scotland and Scottish teachers' salary negotiations. The right hon. Gentleman said that that was not his responsibility. He may not have a responsibility to Back-Benchers, Mr. Speaker, but you have. My hon. Friend the Member for Dunfermline, West (Mr. Douglas) was expelled from the House today for making a point similar to mine—

Order. Unhappily, the hon. Member for Dunfermline, West (Mr. Douglas) was—I say this with deep regret—expelled from the House for raising a point of order before we knew what was contained in the statement. However, I am now prepared to hear a point of order on what was contained in the statement.

My point of order is this, Mr. Speaker. We have recently heard similar statements from Secretaries of State—representatives of the Government—but when Scottish Members have asked whether the statements are to apply to Scotland, we have been told that they have no responsibility. About an hour later, we have heard that the Secretary of State for Scotland has dealt with the position in Scotland in a written answer, but is not prepared to come to the House to defend his policies against—

Order. In view of the time, I will stop the hon. Gentleman there. I am not aware of any written answer on this matter. The hon. Gentleman's best course—I keep saying this—would be to take up the matter with hon. Members on his own Front Bench to see whether, through the usual channels, a statement relative to Scotland could be made.

No. I have told the hon. Member for Cunninghame, South (Mr. Lambie) that I cannot say any more. Mr. Spearing.

I am grateful to you, Mr. Speaker. In a democratic, accountable body such as the House, is there not a doctrine that all Ministers are responsible and accountable for the Government's actions? When it comes to the question of a time for debate, clearly the Leader of the House must arrange occasions for debates on matters about which debate is agreed to be necessary. What we have heard about this afternoon will be of enormous interest to Scotland, as well as to England and Wales. Is it not the duty of the Secretary of State at least to tell the House whether such a statement is contemplated for another part of the United Kingdom?

Powergen (Hanson Plc)

4.39 pm

With permission, Mr. Speaker, I should like to inform the House that I have been approached by Hanson plc which has expressed a firm and serious interest in making an offer for PowerGen plc.

I shall need to consider this approach. I have therefore informed the chairman of PowerGen about it, and appropriate information will be made available to Hanson.

The Government have taken no final decision to proceed with a trade sale of PowerGen. I have a duty to the taxpayer to get a proper return from the sale of the electricity companies. I therefore propose to pursue discussions with Hanson in parallel with pushing forward preparations for the flotation of PowerGen.

I should make it clear at the outset that, if Hanson decides to make a binding offer, I shall invite other companies to tender for PowerGen on a similar basis. Bids will fall to be considered under the competition legislation in the normal way.

The House will rightly want to know what a sale of this sort would mean for the management and work force of PowerGen and for the electricity supply industry generally. As the owner of PowerGen on behalf of the taxpayer, I would intend to lay down conditions which any single purchaser of the business must abide by. All PowerGen's contractual rights and obligations would continue.

In particular, PowerGen is party to the collective industrial relations arrangements for the industry: any new owner would take on the same rights and obligations as PowerGen has now. PowerGen would continue to participate in and be bound by the rules of the electricity supply pension scheme. There would be no change in the pension arrangements for present pensioners and employees of PowerGen. Arrangements would also be made for PowerGen employees to receive benefits broadly comparable in financial terms to those they would have received in a public offering of the company's shares. I shall be talking to the trades unions tomorrow. PowerGen's fuel purchase and electricity supply contracts would continue.

Further conditions would include a restriction on a purchaser's ability to dispose of all or a substantial part of PowerGen's business and a commitment to carry out certain expenditure on environmental plant. There would also be a provision, in line with my proposals for the rest of the electricity industry, to ensure that the taxpayer shared in profits from later property disposals.

The private sector has always thrived on competition to the benefit of customers, employees and shareholders. I believe that Hanson's approach is a vote of confidence in the company and its management which, however it is privatised, will be a major competitor in the new electricity supply market.

The statement shows that the Government's electricity privatisation programme is now in total disarray. Surely it signals the end of what they used to describe as "popular capitalism". The Government promised wider share ownership but now propose instead to sell PowerGen to the major contributor to the Tory party's funds. That seems to me to be unpopular capitalism. Instead of the eager individuals hoping to buy shares that the Government promised, we have discovered that the Secretary of State has been shuffling around the City like a second-rate ministerial Arthur Daley, offering a nice little earner to his friends, hawking PowerGen round the City basically as a tax dodge.

This secret wheeling and dealing is a disgraceful way to treat valuable assets for which the public have paid. It is an even more disgraceful way to deal with the future of a vital industry and its hardworking, well-trained and committed staff. I am convinced that the people of this country would rather see PowerGen in the hands of its present managers than in the hands of the Hanson Trust, which is notorious mainly as an asset stripper. Hanson is interested in PowerGen because of its real estate portfolio and because it sees its potential as a high-tech tax haven, against which it can set its tax liabilities on other parts of its business. No one with those motives should be allowed to take over PowerGen.

The Secretary of State said that he would like to inform the House that he has been approached by Hanson. Can he confirm that his secret talks with Hanson have been going on since May and that, had I not leaked the information about this at the end of last week, he would have told the House nothing? Can he tell us precisely when the horse trading began? When did the Inland Revenue and the Treasury become involved? Can he tell us whether the Inland Revenue and the Treasury have been offering free expert advice on tax avoidance on this transaction as they did with the despicable Rover transaction? Can he tell us what other sweeteners, as yet undisclosed, are involved? Can he tell us what will be the total loss to the Inland Revenue on this transaction? What price have the Government been quoting for PowerGen in the talks with Hanson? Can he confirm that the price that the Government have quoted in those talks for PowerGen's 18,000 MW of plant is less than the cost of building 1,200 MW of plant at Sizewell B? Can he tell us what sort of fee Sir Michael Richardson of Rothschild will receive for his involvement in the transaction? Can he tell the House whether he would accept a similar proposition for the disposal of National Power or any of the other companies?

To return to the question I asked at Question Time, what has happened to the Government's solemn promise to the House that no individual or company would be allowed to own more than 15 per cent. of any of the electricity companies?

The whole electricity privatisation programme is a sleazy shambles. It is a long endless series: write-off, sell-off, rip-off, tip-off, pay-off and now, for the staff, lay-off. PowerGen is not a plaything but a vital industry supplying light, power and heat to the people of this country. In our view, the Hanson Trust is not fit to own it. The next Labour Government will hold it, like any other shareholders, to a maximum share ownership of 15 per cent., as promised by this Government.

It will not cost the taxpayer a penny.

We will also hold a full-scale, independent inquiry into the whole sleazy process of electricity privatisation in which City companies have already made over £100 million before a share has been sold. Before the Government decided on privatisation, the electricity supply industry was a large, up-to-date, well run and highly profitable public enterprise with a well trained, hard-working and highly motivated staff. Now it is a fragmented shambles and its managers and staff do not know whether they are coming or going.

In his first statement to the House as the Secretary of State, for Energy, the right hon. Gentleman saw sense and withdrew the nuclear power stations from the sale. He should now have the courage to abandon the whole crazy project of privatisation and ensure instead that this vital industry is in the hands of people with the skill, training and responsibility to run it on behalf of the nation and not for private gain.

I agree with the hon. Gentleman this far—this is an important industry. I wish that he had treated an important industry and important matters with a degree of seriousness rather than with the extravagant and nonsensical language in which he addressed most of his remarks. The hon. Gentleman said that the privatisation programme is in disarray but that is far from the truth. As I have told the House, we were on course to complete the privatisation when the approach was received by the Government.

I will come to that. Far from there being something secret about it, I have come to the House to make this statement, as I always intended to do, as soon as I had something which would make a proper and meaningful statement. That position did not appertain until this morning and I have come to the House now. There are no sweeteners or anything of that sort.

As a matter of fact, I have had no discussions with the Inland Revenue in connection with this approach.

Most of the hon. Gentleman's comments arise because he has misunderstood, in spite of my statement, the nature of the position. We have had an approach. No decision has been taken to proceed with a trade sale. If we do proceed with one, there will be a competitive tender. It has not been settled before.

With regard to the hon. Gentleman's comments about wider share ownership, I must point out to him that since the Government have been in power, privatisation has been a great success in widening share ownership and we have increased the number of shareholders in this country from about 3 million to around 11 million. Even if this particular trade sale proceeds, and I have said that that is by no means settled at this stage, 15 out of 16 of the companies, according to our present plans, will be floated and the shares sold to the public. I should also point out that PowerGen has under 10 per cent. of the electricity industry's work force.

The hon. Gentleman's remarks about Hanson plc were absolutely disgraceful. Hanson plc is a highly successful company with more than 90,000 employees. Its approach shows its confidence in PowerGen and the new electricity market. Hanson has hundreds of thousands of shareholders.

With regard to advisers, I must inform the hon. Gentleman that I have appointed J. Henry Schroder Wagg to advise me, jointly with Kleinwort Benson. I am sure that the hon. Gentleman will be pleased to know that if we decide to proceed with a trade sale, the costs are likely to be substantially lower than for a flotation. I should have thought that the hon. Gentleman would welcome that.

The hon. Gentleman asked a question about National Power. My announcement is about PowerGen and it has no direct impact on National Power. I can confirm that, subject to market conditions at the time, the Government's present intention is to offer shares in National Power for sale to the public in February 1991. However, I must consider the interests of the taxpayer. If a serious offer were made for National Power, I should have to look at it. [Laughter.] Would those Opposition Members who are sniggering expect me not to look at it? They had better consider—[Interruption.] That is right. They may not like this, but their cavalier approach to public expenditure will cost them very dear at the next election. That is for sure. [Interruption.] The hon. Gentleman asked me a lot of questions and there is one more that I must answer.

The hon. Gentleman asked about the 15 per cent. and the golden share. The purpose of a golden share and the 15 per cent. trigger is to protect against a change in ownership after a flotation has taken place. The Government believe that, if a trade sale proceeds, a golden share would be inappropriate for a subsidiary. The Government believe that the public interest is better protected by a contractual provision in the sale and purchase agreement than in having an indeterminate special share. We seek the protection that we want, if we go ahead by this route, by the sale and purchase agreement and not by a 15 per cent. trigger and golden share which we do not believe would work.

Can my right hon. Friend confirm what I imagine to be the case, which is that nothing that he has said this afternoon will in any way interrupt the installation of flue gas desulphurisation equipment in PowerGen power stations where such installation is in prospect?

Absolutely. PowerGen, like all owners of large combustion plants in the United Kingdom, will have to comply with the large combustion plant directive. I shall require the retrofitting of 4 GW of FGD as a condition of sale. PowerGen has plans to fit FGD to Ratcliffe on Soar and the Ferrybridge C power stations. I have planning applications before me for those two projects so I must be careful what I say. I am confident that the ownership of PowerGen will not affect those plans.

In a number of respects this recalls the sale of Rover to BAe. Once the negotiations with Hanson have been completed., will genuine competitive bids be allowed and will more information be given to the competitors than was allowed to competitors of BAe? Will the Secretary of State also consider valuation? It will be essential that a proper valuation of all the assets is arranged before the deal goes through. I accept the right hon. Gentleman's move on clawback, but will the clawback provision to ensure that the taxpayer gets the proper value of assets that are undervalued at the time, because of circumstances that have changed, mean that the taxpayer will receive all the advantages or a major part of the advantages that are subsequently shown to have arisen? Has the Inland Revenue had consultations with Hanson over the bid?

I am certainly in no position to know what dealings Hanson has with the Inland Revenue. All I can say is that, quite properly, those have formed no part of my discussions. Unlike some of his Opposition Front-Bench colleagues, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) has had some experience of these matters and he will know that consultations between a taxpayer and the Inland Revenue are confidential, and Ministers would not expect to be informed about them. However, I know of no such consultations and I should be very surprised if they have taken place in what must be considered a hypothetical situation. The right hon. Gentleman will also be aware that the Inland Revenue has enough work to do dealing with actual cases without our asking a series of hypothetical questions.

I agree with the right hon. Gentleman that, if there is to be a binding offer from Hanson plc, it is very proper that the competition that we will see take place is based on providing every other serious contender the same information that is being given to Hanson plc. That is absolutely right and we shall see to it. We shall see that the public interest is properly protected with regard to the sale of assets and proper arrangements will be made. I will ensure that I am properly advised, as I have been very careful to be properly advised in dealing with PowerGen as a public flotation, about a proper value for the assets.

While the Scretary of State will certainly get a premium price for the sale which will be good for the taxpayer, will he consider the implications of what might follow from his statement? My right hon. Friend said that National Power could be sold. However, it could be sold to RWE of Germany or Electricit? de France, in which case most of the electricity manufacturing facilities in the United Kingdom would go to foreign countries. Will my right hon. Friend also consider that one of the principal beneficiaries of a sale of PowerGen to Hanson could be the American Peabody Coal Company and that could lead to the import of more sulphur-free coal into the United Kingdom?

My hon. Friend has read rather more into my statement than I believe it is possible to read into it. I described to the House the nature of the approach that I had from Hanson plc and how I intended to deal with it in the public interest. There has been no approach for National Power and, therefore, we are proceeding with its public flotation as we intended, in parallel with our negotiations on PowerGen.

On the question of the coal contracts with PowerGen, in the event of the Hanson bid becoming binding and its being the top bidder in any bidding arrangements that we make, the terms of the contract between PowerGen and British Coal for the supply of coal until 1993 will be honoured. Thereafter, it will be for British Coal to produce coal at the price and quality to make it the supplier of choice. That will not change. The position will still be the same, whoever owns PowerGen. As my hon. Friend knows, unfair price discrimination by any purchaser of coal would attract the attentions of the competition authorities.

Whether the right hon. Gentleman likes it or not, the statement is a major change of policy in relation to the privatisation of electricity supply—indeed, it is a volte face to some extent. Does the right hon. Gentleman agree that if the present proposition were agreed, it would mean a major increase in coal imports in this country? The right hon. Gentleman has told us that he has had no contact with the Inland Revenue about the proposition. Of course the House will accept what the right hon. Gentleman says, but is he aware that, as a result of the statement which was sneaked through the House on Friday, in the regions it will mean £20 million tax paid to the oil company? Are we discussing today, as a matter of fact, millions upon millions of pounds of tax breaks due to whatever company gets PowerGen, and at the expense of the taxpayer?

I think that the hon. Gentleman misunderstands the statement in two ways. First, as I have said, I have received an approach from Hanson plc, and I have said not that I have accepted it but that I shall consider it and the way in which I shall consider it. To do less would be to fail in my duty to the taxpayer. The tax liabilities of any company, whether it be an oil company or whatever, are not matters for me. Such matters are not a concern of mine and I do not take part in any of the negotiations. I assure the hon. Gentleman that they have not been part of the discussions. There is no proposed change, sweetener or arrangement in the tax laws to facilitate this transaction.

Again, with regard to British Coal's future, British Coal will honour contracts until 1993, and thereafter it will be for British Coal to produce coal of the quality and price that will make it the supplier of choice. That will be the position whoever owns PowerGen.

Does my right hon. Friend agree that the golden share that has been associated with other energy-related companies when they have gone into the private sector is a powerful device, as it ultimately gives the Government the opportunity of ensuring that the taxpayer is protected? Will he ensure, therefore, that the conditions and clauses to which he referred in his statement are comprehensive and can be guaranteed and underwritten by law to ensure that, in this instance too, the taxpayer will be protected?

My hon. Friend is right. Others may not fully appreciate it, so I should repeat that the purpose of a golden share is to trigger something in the event of there being a significant change in the shareholdings in a company. It is not an arrangement to protect a subsidiary, which, in this case, PowerGen would become, of Hanson plc or whoever bought it. The way in which to protect—

The hon. Gentleman really does not understand how these things work.

The way in which to protect the public interest in this case is to make sure that the purchase and sale agreement of the shares in PowerGen to whoever bids covers all the points that are required to be covered in the public interest. That is much more effective than taking a golden share in a subsidiary company, which is not quoted and for which no share transactions will be taking place.

If the Secretary of State opts for a trade sale, would not it mean two reversals of policy? First, there would be the reversal of the policy that believed that flotation would be possible. Has he not received advice that it may not be possible to float PowerGen and National Power next year with any success? Secondly, there would clearly be a reversal of the policy of public participation in asset sales. It can mean no other. Therefore, will the Secretary of State tell the House whether he is prepared to countenance those two further reversals of Government policy? Are there no conditions governing to whom such a business can be sold, no conditions governing whether they should be national or foreign, and no conditions governing, for example, whether they should be contributors to the Government?

Then he should not have asked a question that suggested that he had not listened. I set out at considerable length a range of conditions that needed to be satisfied before we would sell or agree to sell the shares in PowerGen to any purchaser. That protection will exist. The task that the Government have set is to put the electricity supply industry into the private sector. That is what we are seeking to achieve—

No, it is already in public ownership. We are now putting it into the private sector.

I am not saying for a minute that we have determined to go ahead with this trade sale, but, even if we do, as I have already said, 15 out of the 16 companies in the electricity supply industry will be floated and shares will be sold to the public. As I have said, PowerGen has well under 10 per cent. of the electricity work force.

May I thank my right hon. Friend for his guarantee that the coal contracts agreed between British Coal and the power-generating companies will be honoured? Does my right hon. Friend agree that it is a bit rich for the Opposition to go on about importing coal when they had an opportunity to vote down the Associated British Ports (No. 2) Bill, but only 49 Opposition Members bothered to turn up and vote on Second Reading?

That is a matter in which I shall not get involved. The Opposition do not appreciate—if they do, they do not give credit for it—just how much the Government have done to support the coal industry over recent years. As I said in answer to questions today, the Government have given more financial assistance to the coal industry in real terms than all the Governments since nationalisation put together. That is a substantial record. Parliament recently passed a Bill that has written off British Coal's debts and given it a chance for the future. For the first time, we have a long-term contract for British Coal which will enable it to plan for its future and to become competitive in this industry.

Is the Secretary of State aware that, on the edge of my constituency, there are three massive power stations at Cottam, High Marnham and West Burton, on which several thousand families depend for a living? Will he give an assurance that, when he meets the unions tomorrow, there will be no redundancies and that, if there are to be any redundancies, workers will get the same redundancy money as the miners got, and not just an assurance on their pensions? Is it a fact that in the case of Rover and British Aerospace the Government gave the buyers sweeteners to take the company away and that, in this case, the buyer is giving the Government sweeteners for their election fund to rip off the public?

Again, the hon. Gentleman does not want to understand the nature of the transaction which is that, should we have a binding offer, there will be an open competition between Hanson and the others. Questions on the number of employees in the industry and in the power stations are not for me but for the management of the industries concerned. I assure the House that they will continue to deal with such questions as sympathetically as possible and in the proper way, as they would under any management.

Does my right hon. Friend agree that if more than one firm bid is received for the company in the future that would show a welcome show of confidence in the privatisation of electricity generation? The Opposition, instead of threatening an 85 per cent. confiscation of the shares in the company, should support such an offer as in the best interests of the British taxpayer.

My hon. Friend is absolutely right that, contrary to what the Opposition have sought to suggest this is a vote of confidence in the industry. It shows that PowerGen is an attractive company and that sophisiticated investors already see the attractions of it. It is a good omen for the sale of National Power as well as a good omen for the sale of PowerGen, should we decide that, in the end, it is better to go for a public flotation.

Would the Secretary of State give the House and the country an assurance that such pillaging of a public asset will not be subsidised or sweetened through the agency of the Inland Revenue? Will he also relieve my anxieties about this, because his predecessor, in a reply to me at the time of the introduction of the Electricity Act 1989, gave an assurance that that privatisation would not lead to unemployment? In fact the former Secretary of State said that there would be more jobs rather than fewer as a result of that privatisation. Are we not seeing yet another inconsistency in the Government's approach?

The numbers of people employed in the power-generation industry will be a matter for the management, not for me.

As for the continual reference to taxation matters, I can only say that they have formed no part of the discussions I have had. I know of no such discussions. There are no plans to bring into discussions any proposals that bear any relation to taxation. There is no intention, so far as I know, to change the law on taxation to change anyone's liability. Those matters are, of course, primarily for the Chancellor of the Exchequer, but, in so far as I have any knowledge of the matter, there is nothing in those suggestions.

Would it not have been irresponsible if my right hon. Friend has not given serious consideration to this approach from whatever quarter it came? Surely my right hon. Friend is right to give a high priority to the interests of the taxpayer. Can he confirm that on present plans it will, rather unusually in this case, be possible to compare the price-earnings ratio for one company sold through a public flotation with the price-earnings ratio for another sold by a trade sale?

My hon. Friend is absolutely right. If the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the Public Accounts Committee, found, in a subsequent investigation into these affairs, that the Government had treated in a cavalier fashion a serious offer for the purchase of the shares and had not investigated it properly, I would not like to be under the lash of the criticism that would come, quite rightly, from his Committee. The offer has been made by a successful company and the Government believe that it is serious. We have a proper duty to look into it.

As the negotiations have been going on since May, can the Secretary of State clarify the exact nature of the commitment to which he referred in his opening statement to the House—that PowerGen would carry out certain expenditure on environmental plant? Are any costs tagged to what I imagine to be the desulphurisation of plant? What is the value of that commitment? Those who had been talking about it up to May should be clear about what that commitment means, given it was mentioned in the opening statement.

The details of any arrangement have not been talked about—they must be tied up before we have a binding offer, if we get one, from Hanson plc. The sort of conditions that I will require to see in the contract entered into by any purchaser will cover the question of FGD and deal with noxious gases. PowerGen has made a number of commitments in that respect and we shall require that the purchaser gives us a binding undertaking that those commitments will be fulfilled.

Does my right hon. Friend agree that, in his most important statement this afternoon, the shadow spokesman on energy, the hon. Member for Holborn and St. Pancras (Mr. Dobson), committed a future Labour Government to renationalising at least 85 per cent. of PowerGen without compensation—[HON. MEMBERS: "No."]—and at no cost to the taxpayer, he said? Does my right hon. Friend further agree that it is somewhat rich for the Opposition, having spent months complaining at the costs of the privatisation, to criticise my right hon. Friend for finding a way in which to undertake that privatisation while saving those costs?

The hon. Member for Holborn and St. Pancras (Mr. Dobson), whom I have had the pleasure of knowing and working with for a number of years, takes a broad view of such matters, especially when dealing with questions of public expenditure.

The Secretary of State will be aware that Hanson is a formidable bid-and-break-up machine. What assurances can he give us that massive asset-stripping will not take place should PowerGen pass to Hanson?

Again, I refer the hon. Gentleman to my statement, in which I said that the purchase and sale agreement would require binding contractual obligations from the purchaser in respect of such matters. We would have to be satisfied that the public interest would be protected by that agreement.

Is my right hon. Friend aware that his statement will be greatly welcomed on three particular counts? First, he has reaffirmed that the conditions on which power is generated will continue. Secondly, he has taken cognisance of what the PAC said—there will be a proper valuation of the assets and a proper clawback provision. On that point will he confer with the Comptroller and Auditor General on what the proper percentage should be? Thirdly, the statement is welcome because, at last, we have a Secretary of State who is prepared to come early to the House to reconfirm that he is not committed to this course, but that he will do what is in the public interest.

My hon. Friend speaks with considerable authority in these matters. I am grateful to him and I shall note carefully the points he raised.

Is the Secretary of State suffering from midsummer madness? Is he asking the House seriously to believe that the way in which to conduct competitive tendering is to have secret negotiations with a preferred bidder, and then to come to the House when he has been flushed out? He is now pretending that, after months of discussion, when all the information has been available and the bid agreed, he will make that information available to other potential bidders.

If the right hon. Gentleman is serious about competitive tendering even on a trade sale basis, why does not he make an offer to any company interested in buying PowerGen to come to the Government, look at the books and discuss an offer? If that is not the right hon. Gentleman's planned procedure, is not it reasonable to believe that Lord Hanson read the frank interview given by Lord King a couple of days ago when he defended giving money to the Tory party on the grounds that it was good for business? Is the sale to be Lord Hanson's pay-off?

The hon. Gentleman should ponder what he said, as I do not believe that he has the interests of the management or the work force of PowerGen at heart. At this moment I have no firm contract with anyone. I have received a serious offer of interest, which I am exploring. I shall seek professional advice on how best to proceed, but I have given a firm undertaking to the House that I intend to see carried through.

I think the hon. Gentleman had better listen.

I have given a serious undertaking to the House that, should we decide to proceed and a binding offer is made by Hanson plc, any information given to Hanson plc will be made available to any other serious bidder that comes along. In that way we shall have a competitive tender. That is the way in which I intend to proceed, if my advisers believe that that is the best way in which to protect the public interest.

May I preface my question by saying that I own shares in Hanson plc. Can my right hon. Friend confirm that, before the approach by Hanson, the electricity industry had been trying regularly to talk down the value of its assets so that it would end up with a profitable company at a low purchase price and, therefore, show good profits against those assets? Does my right hon. Friend agree that the one certain thing about interest coming from Hanson or any other company is that the taxpayer will end up with greater value for the assets being sold than would otherwise have been the case?

I accept that, in the cut and thrust of negotiations, there are sometimes two different views about the prospects for the future. But my impression of all the electricity supply companies with which I have been dealing—both the generators and the former area boards—is that they have good managements that are anxious to do what is right for their present shareholders—the Government—and for their future shareholders. We have had tough, but, I think, frank and fair discussions on these matters and I have no complaints to make. Nevertheless, I agree that competitive tendering can do nothing other than demonstrate clearly the proper value of the company in the circumstances.

What cost is involved in obtaining the advice of J. Henry Schroder Wagg? Is it under £1 million or over £1 million in round terms? Can the right hon. Gentleman confirm that Hanson plc has given many thousands of pounds to the Conservative party? Can he confirm that, in local government, anyone involved with the receipt of such money by a political party would not be allowed to take part in debates or to vote? Does he agree that the Government can clear up the noxious whiff of political corruption surrounding this whole episode only by refusing to sell to Hanson or to any other organisation that has poured money into Tory party coffers? If they do not, people outside will draw the natural conclusion that what is involved is a pay-off for the bribe that the Tories have received.

I cannot confirm any such thing. The hon. Gentleman indulges in wild fantasies about these matters. I believe that the taxpayers' interests require that, when faced with an expression of interest such as this, a Secretary of State should be properly advised by people who are competent to advise. I am seeking such advice and an appropriate fee will be determined. For a limited time, the hon. Gentleman was a distinguished member of the Labour Government—although I recall that he found the restraints of office rather irksome—and he conducted his negotiations in the same way as we have conducted ours. I can say with absolute certainty that if we proceed with a trade sale, the costs are likely to be substantially lower than those involved in a flotation, and I am sure that the hon. Gentleman would welcome that.

In addition to ensuring that the company realised a higher price at a lower cost, would not the sale of PowerGen by competitive tender, rather than by public offer for sale, be likely to increase genuine competition by reducing the risk of a cosy duopoly?

There are many things in the Electricity Act, in the control of the director-general and in, our competition laws to ensure that we do not run into the difficulties of a duopoly on which my hon. Friend has pondered, although I agree with him that if Hanson plc or some other company purchased the shares in PowerGen, the competitive nature of the industry would be improved.

The Government originally promised special rates to electricity employees and preference to electricity consumers in the buying of shares. How can those promises possibly be honoured in a trade sale to one of the Prime Minister's closest friends? Will the Secretary of State take this opportunity to rule out any possibility of this kind of corrupt practice being applied to Scotland, by specifically rejecting any question of a trade sale for either of the Scottish-based companies?

The hon. Gentleman can hardly expect me to give him any sort of assurances if he asks such unbalanced questions. I said in my statement that, if we proceed with a trade sale, those employees of PowerGen who would otherwise have received shares at a preferential rate will be compensated financially by an equivalent amount and will have the freedom to do whatever they like with their money.

I understand that the Secretary of State is still fairly well connected with the Conservative party. Will he tell us how much money Hanson plc has given to the Conservative party in the past 10 years and how much he knows it will donate to the Conservative party up to the next election? Is not this another case of a company from over here doing very well for hon. Members over on the Conservative Benches? When did the secret negotiations begin? Did the right hon. Gentleman know the truth in May? After all, we have discovered that the truth was known about other matters, such as the British Aerospace affair. Will the right hon. Gentleman now tell the House the truth and will he tell us how much the Government and the Conservative party will make from the deal?

One thing is certain: I have no ministerial responsibility to answer for the finances of the Conservative party and I do not believe that these are proper questions for me to be asked. I have not dealt with that aspect of the matter. I have told the House that I have received a serious offer from a highly respectable company and I have explained to the House how I intend to deal with the matter. I have also told the House that I reported to it as soon as I had something concrete to say. I could not have come to the House before now.

Why does not the Secretary of State admit that Lord Hanson is a favourite drinking companion of the Prime Minister? Why does not he admit that, after 10 years of explosive growth and asset-stripping, it was reported in the financial press last month that Hanson plc had run into trouble with its American interests and had to sell off Smith-Corona? Is not one of the reasons for the proposal announced by the Secretary of State today to bail out Hanson plc? Will the right hon. Gentleman now guarantee that when the company is sold off, no Cabinet Ministers will be given a job on the board? Will he also guarantee, on behalf of the Tory party, that not a single penny will be received by that party if the takeover is completed?

The hon. Gentleman goes on about drinking companions. I do not mind having a drink with him from time to time, but the Prime Minister is probably wiser if she prefers to have a drink with Lord Hanson.

Does my right hon. Friend accept that some of the comments made about Hanson plc are squalid, foolish and narrow minded and that it is sheer nonsense to suggest that a political donation can enter into the sale or purchase of a public asset? Does my right hon. Friend accept, however, that in the sale of any public asset of the size of PowerGen, only a very limited number of companies—perhaps three or four—have the funds available to enter into a private auction? Does my right hon. Friend therefore agree that, if possible, one should enter into such negotiations with great care as there are huge dangers because so few people are involved? Does not he agree that it would be sensible to keep at least 40 per cent. of the shares so that, over a three-year period—this has happened before—we can see whether the prosperity can be shared and some of this foolish criticism can be abated?

I am grateful to my hon. Friend for his suggestions. As they came from him, I shall consider them, but I am not sure that the prospective purchasers of PowerGen are quite as restricted in number as he suggests. I think that there are rather more of them around, but we shall have to see.

I seek clarification of two points. Will the Secretary of State confirm that, far from his coming to the House as soon as he could, these secret talks have been going on since May?

Secondly, we all accept that, as the right hon. Gentleman said in his statement, he has a duty to the taxpayer to derive a proper return from the sale of the electricity companies, but does not he have a parallel duty to ensure that the Inland Revenue does not lose an equivalent amount? Surely it is naive in the extreme to go into these negotiations without considering the tax write-off consequences for Hanson plc?

I have said that I came to the House as soon as I felt that I had something to say to it. This morning I received the last piece of information that I needed before I could make the statement.

I confirm that, in a broad way, discussions on the best way to effect the sale have been going on for a number of weeks, but it was not until last Monday when I saw the chairman of PowerGen that I felt able to give Hanson plc any information that was not already in the public domain. We have moved fairly rapidly since last Monday—

when the first confidential information was given to Hanson.

The hon. Gentleman does not understand the way in which our tax system works. The tax affairs of individual companies—if the hon. Gentleman will not take this from me, he can take it from his right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), a former Treasury Minister with whom I remember debating on a number of occasions—and of individual taxpayers are confidential, and Ministers, quite rightly, have no access to them. I have no knowledge of the tax affairs of PowerGen, or of Hanson plc, or of the hon. Member for Holborn and St. Pancras or of the hon. Member for Bolsover (Mr. Skinner).

Local Government Finance (Wales)

5.32 pm

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 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 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.

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 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 to
"the 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 was
"regressive 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.

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. 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.

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?

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.

The former Member for Vale of Glamorgan was fighting a seat at the general election.

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?

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.

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?

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—

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?

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.

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 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.

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.

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?

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.

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?

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.

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.

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.

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).

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?

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 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.

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?

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.

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.

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.

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?

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.

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?

I do not think that a democrat should protest about the effects of democracy.

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?

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 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.

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?

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.

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?

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.

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?

That is not a matter for me. It is a matter for the Government and the usual channels.

It is not a point of order; it is not a matter for me. The usual channels decide these matters.

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.

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?

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.

On that point, Mr. Speaker, surely that question ought properly to be decided between the usual 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?