Wales Bill
Monday 10th October 2016
(8 years, 1 month ago)
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The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I am pleased to be here today to open this important debate on the Wales Bill. It is an open question when Wales began its devolution journey. Some would begin with the creation of the post of Secretary of State for Wales in 1964 and the establishment of the Welsh Office in 1965, but for many Welsh devolution began in earnest with the referendum in 1997. Parliament has legislated on Welsh devolution three times since then, in 1998, 2006 and 2014, with each Act seeing an incremental change to the Welsh devolution settlement.
I think it is fair to conclude that Welsh devolution has never achieved a settled state. On the one hand this dynamism is positive, and has encouraged an ongoing and open debate about Welsh devolution and Wales’s place in the wider United Kingdom. On the other, the fluidity of Welsh devolution has distracted from focusing on the issues that really matter to people—the economy, jobs and public services in particular.
Back in 2011, the coalition Government established a process to develop a stable devolution settlement for Wales for the longer term. They set up the independent Silk commission, led by Sir Paul Silk, to review the financial and constitutional arrangements in Wales. For me personally, this Bill represents at least in part the culmination of those three years of work that began at the time the Silk commission started in 2011, when I was a member, at the request of the then Secretary of State for Wales, my right honourable friend Cheryl Gillan. Many of the recommendations in the commission’s second report are being implemented in the Bill.
After the commission concluded its work, the former Secretary of State for Wales established the St David’s Day process to identify those recommendations in the second Silk report which commanded a consensus across the parties in Wales. The outcome of that process, the Saint David’s Day agreement, published in February 2015, forms the blueprint for the Bill.
At this point, I thank both my right honourable friend Stephen Crabb, the then Secretary of State for Wales, and the noble Baroness, Lady Randerson, who played a significant part in framing the work that has gone into the Bill and taking it forward.
The Bill delivers a clearer and stronger Welsh devolution settlement and an Assembly and Welsh Government more accountable to the people they serve. Welsh devolution will be clearer by implementing a new reserved powers model, providing a well-defined boundary between what is reserved and what is devolved. It will be stronger by devolving further powers to the Assembly and Welsh Ministers in areas such as elections, the Assembly’s internal processes, transport, energy and the environment. The Bill makes the Assembly and Welsh Government accountable for raising more of the money they spend by paving the way for the introduction of Welsh rates of income tax without the need for a referendum.
The Assembly and Welsh Government have come of age. They are now mature institutions and part of the fabric of Welsh political life. The Bill recognises this new maturity in some key ways. First, the Assembly and Welsh Government are recognised as permanent parts of the United Kingdom’s constitutional arrangements, not to be abolished unless the people of Wales decide in a referendum in favour of doing so. This statement recognises what we all know to be true: that the Assembly and Welsh Government are part of the United Kingdom’s constitutional fabric and are here to stay.
Secondly, the Bill gives important recognition to the body of Welsh law made by the Assembly and Welsh Ministers, forming part of the law of England and Wales. Thirdly, it puts the convention on legislative consent on a statutory footing, as is already the case for Scotland, making clear that Parliament will not normally legislate on devolved matters without the Assembly’s consent.
The constitutional debates of recent years demonstrate the need to reset the devolution settlement for Wales. We all want an end to the incessant squabbles over powers between Cardiff and Westminster and to see Welsh devolution set on a firmer foundation, enabling the Welsh Government to focus on the things that really matter to people—improving the Welsh economy, securing more Welsh jobs and improving devolved public services.
We need to move to a new way of thinking about Welsh devolution based on a reserved powers model. By implementing this new model, the Bill provides for a clearer and more stable settlement that will last for the longer term. Anything not reserved to the UK Government is devolved, and the Assembly will be able to legislate on it.
The new reserved powers model of Welsh devolution has been the subject of a great deal of public debate over the last year since the Government published the Wales Bill in draft. My right honourable friend the Secretary of State for Wales, his predecessor, the right honourable Member for Preseli Pembrokeshire, and I have discussed the Bill’s provisions with many who have an interest in the future of Welsh devolution. We listened to the concerns expressed during that debate about aspects of the draft Bill, and we have acted on them.
The Bill before us today is significantly improved from the one we published in draft. It includes a list of reservations that is shorter, with more precisely drawn boundaries. It contains fewer tests for legislative competence, and it gives the Assembly more discretion to enforce its legislation by being able to modify the private law and criminal law for devolved purposes.
A key part of delivering a clear devolution boundary is defining which public authorities are devolved and which are reserved. The Bill defines those public authorities that are devolved public authorities accountable to the Assembly or Welsh Ministers. It describes those authorities as “Wales Public Authorities” and lists them at Schedule 3 to the Bill. All other public authorities are reserved authorities, accountable to Parliament or United Kingdom Ministers. The Assembly can legislate on reserved authorities only with the consent of United Kingdom Government Ministers. It is surely right that the consent of United Kingdom Ministers is sought in order for the Assembly to modify the functions of a body accountable to UK Ministers.
The Bill, and accompanying secondary legislation, will also provide clarity on how so-called pre-commencement Minister of the Crown functions are to be exercised in future. For those noble Lords unfamiliar with this term, let me explain that “pre-commencement” functions are functions exercised in devolved areas by Ministers of the Crown before the Assembly assumed full law-making powers following the 2011 referendum. We want to be clear how such functions are to be exercised under the new reserved powers model.
Last week, I wrote to noble Lords with an indicative list of those functions we intend to transfer by order. Most functions not subject to transfer will be exercised concurrently or jointly by Ministers of the Crown and Welsh Ministers. The Bill lists those functions at Schedule 4. There remain a handful of functions which Ministers of the Crown will exercise alone. Those are listed at paragraph 11 of Schedule 2.
I shall now say something about the single legal jurisdiction of England and Wales, which was an important part of the debate around the draft Bill. There were some who questioned whether a reserved powers model for Wales could work within the shared jurisdiction of England and Wales. There was a great deal of debate about whether Wales would be better served by a separate legal jurisdiction. Some favoured a distinct jurisdiction with largely autonomous arrangements for Wales, although common agreement on what is a distinct jurisdiction proved elusive.
The Government listened carefully to the concerns raised, but we have been clear and resolute throughout that the single legal jurisdiction of England and Wales has served both nations well for centuries and continues to do so. We do not intend to modify that. The single jurisdiction can readily accommodate a growing body of Welsh law without the need for separation, and there are many reasons why separation would be detrimental to Wales.
Of course, Wales has a distinctive legal identity. I think we would all recognise that. It has two legislatures and a growing body of law made by the Assembly and Welsh Ministers—a fact that this Bill recognises formally for the first time. This recognition is important, but let me assure the House that it is set firmly in the context of maintaining the single legal jurisdiction of England and Wales. The Bill enables the Assembly to modify the private law and criminal law for devolved purposes, enabling the Assembly to create offences to help enforce its legislation, as it does now. The Assembly will not be able to modify a small number of the gravest offences, such as homicide offences and sexual offences, ensuring consistency across the England and Wales single legal jurisdiction.
Of course we need to adapt to the growing body of Welsh law created in the Assembly and by the Welsh Ministers. That is why the Government have established a working group of officials to examine how administrative arrangements for justice in Wales can be improved. I look forward to informing the House of the group’s findings later in the autumn. I should also say that I have written to both the Ministry of Justice and the Department for Education, encouraging action to ensure that law schools throughout England and Wales take account of the growing body of Welsh law and that that devolved element is taught as part of law courses and is carried forward into professional courses as well, such as those for the Bar, solicitors, legal executives, and so forth.
The Bill delivers more accountable, devolved government for Wales. With the coming of age that I have already talked about comes renewed responsibility and a need for the Assembly and Welsh Government to become truly accountable. A key element of this is removing the need for a referendum to introduce Welsh rates of income tax, which will mean that the Welsh Government can take on more responsibility for how they raise money as well as how that money is spent. It gives the Government an interest in ensuring that the economy in Wales is performing well. The reward for that will redound to the Welsh Government, who are being given this power to exercise for a purpose consistent with the mandate of a particular Welsh Government.
Tax-raising powers are a key part of the Assembly truly becoming a Parliament. The Wales Act 2014 devolves stamp duty and landfill tax; we took forward the full devolution of business rates in April last year. The devolution of Welsh rates of income tax—not all income tax, of course, just 10p—will complete the process of fiscal devolution for Wales as set out in the 2014 Act, delivering truly accountably devolved government for the first time.
The Bill makes Welsh devolution stronger by devolving a significant package of new powers to the Assembly and Welsh Ministers. These are powers for a purpose, giving the Assembly and Welsh Ministers the tools to improve the day-to-day lives of people in Wales. The Assembly and Welsh Ministers will have strengthened powers over transport in Wales, including speed limits and traffic signs on Welsh roads; the registration of bus services; and the regulation of taxis and private hire vehicles. We are devolving policy over ports in Wales, apart from Milford Haven, which is of strategic importance to the UK state. Welsh Ministers will decide, too, whether energy projects in Wales up to 350 megawatts generating capacity should be built. Decisions on whether fracking takes place in Wales will in future be made in Wales. We have already devolved all onshore wind consents in the Energy Act—that is without limit. Noble Lords will recall that I took that through this House earlier this year.
On the environment, the Bill will devolve new powers over marine licensing and marine conservation zones, as the Silk commission recommended, and we are continuing to consider the outcomes of the work between the UK Government and the Welsh Government, looking at the devolution boundary for water and sewerage, with a view to taking that forward.
Finally, but significantly, the Bill also gives the Assembly control over its own affairs—something that, arguably, should have happened some time ago—including elections to the Assembly itself, the franchise, and the electoral system for Assembly elections and the number of Assembly Members. Importantly, the Assembly will be able to decide what it should be called. If the Assembly wishes to rename itself the Welsh Parliament, for example, as many would consider appropriate, it will be able to do so. That reflects the maturity of the Assembly, which I spoke about earlier. It is only right that the Assembly should be responsible for these issues in Wales, just as the Scottish Parliament now is in Scotland. These new powers deliver a powerful legislature for Wales, irrespective of what it decides to be called. Welsh Ministers will have new levers to improve the economy and public services in Wales, and important new responsibilities over natural resources and the environment.
I know that many here today will want to speak, and I look forward to hearing an interesting and stimulating debate from people who know a great deal on the subject of devolution in Wales. I will conclude by saying that the Bill sets the course for a stable and lasting devolution settlement for Wales. It builds a new Welsh devolution settlement on the solid foundations of a reserved powers model. It is much improved on the draft of a year ago. I commend it to the House.
Baroness Morgan of Ely (Lab)
My Lords, I am a little overwhelmed and daunted by the fact that I am speaking on the Wales Bill from the Front Bench with no fewer than five former Secretaries of State going to participate today, on top of other Welsh constitutional experts who have been involved in Welsh politics since before I was born.
I am also aware that the Minister leading for the Government was the principal architect in ensuring that the Conservative Party dropped its opposition to devolution in Wales and engaged constructively in the process, and for this he deserves to be commended. In addition to this, he made a distinguished and valuable contribution to the Silk reports, which of course were supposed to have served as the basis for this Wales Bill. Because of my great respect for the Minister, I will make every effort to resist the temptation to ask him why he has changed his mind on so many issues since his transformation from being a key member of the Silk committee to becoming a Welsh Minister.
I declare my interest in this Bill as an elected Member of the National Assembly for Wales. I will start by being kind: the Minister is correct that this Bill is a considerable improvement on the draft Bill introduced in October 2015, which was so fundamentally flawed that the Government had to withdraw it in the face of almost unanimous criticism of its viability. The necessity test in relation to private and criminal law has now been removed, there has been a reduction in the number of reserved areas and there is improvement in the system for Minister of the Crown consents. We welcome the fact that the National Assembly for Wales will be permanent, and that it will now have power to determine its own electoral processes, its size and the electoral system for National Assembly elections. We welcome the fact that, among other things that the Minister outlined, the Assembly will have enhanced powers in energy projects, including fracking, and new transport responsibilities. We are also pleased that the changes were made in response to scrutiny of the draft Bill, and I am particularly pleased that social care regulation and inspection will be under the control of the Assembly, following my call for the establishment of a national care service for Wales last week.
But—and this is a huge but—the Bill in its current form is complex, inaccessible, unclear and will not settle the devolution issue for Wales as was the intention. There has been a failure to incorporate any fundamental or firm constitutional principles within the Bill, such as clarity, stability, legitimacy and subsidiarity. It is poorly drafted and ill conceived. The opportunity to introduce a consolidated Bill, which would have meant that there would no longer be a need constantly to refer to previous Government of Wales Acts, has been missed. The lack of clarity means that there are some significant points where there will still be a need to refer to the Supreme Court to seek clarity on where power should lie—a costly and unnecessary exercise.
We believe that the Bill has been rushed, to no clear purpose, and goes against the spirit, expressed in the Bill, of “collaborative working”. It also fails in its aspirations, which were set out in the St David’s Day proclamation, for a durable and lasting settlement. The unwillingness of the UK Government and Whitehall departments to deliver a settlement that matches the clarity and accessibility of other devolution settlements, in Scotland and Northern Ireland, is also disappointing. I am sure that the Minister will have taken note of the severe criticism of the Bill published by the Constitutional Affairs Committee of the National Assembly, most notably, perhaps, its assertion that for the first time ever there is a rollback of current powers vested in the National Assembly.
We are living in extremely turbulent political times. The EU referendum has thrown the whole legislative framework of this country into turmoil. The pressures on the unity of the union will be tested severely in the next few years as we extract ourselves from the European Union. This constant piecemeal approach to constitutional developments in Wales is disrespectful, and the Government need to call a constitutional convention to prepare a route map in order to keep our United Kingdom together. This constant nibbling away at the constitution will ultimately erode the unity of the United Kingdom and will create divisions more emphatic than the ones which we have just witnessed with the EU referendum.
Integral to the Bill is a recognition that Bills proposed by the UK Government which will impact on National Assembly legislative competence will no longer be allowed to pass in both Houses of Parliament unless they receive the consent of the Assembly by means of a legislative consent Motion. Let me be as clear as I can be: the Government absolutely must respect the view of the National Assembly in relation to this Bill, and in particular the outcome of the legislative consent Motion. We know that central to this will be the need to come to a definitive position on the fiscal framework for Wales. This fiscal framework will need to give an absolute reassurance, not just to Assembly Members but to the public in Wales, that the country will not be worse off financially, now or in the future, if we were to adopt some of the measures suggested in the Bill. This is particularly true in relation to the devolution of income tax. We need an assurance that we can borrow significantly against any income tax devolved, and that we would not get a worse deal than Scotland. It would give us a great deal of reassurance if the Minister could today assure us that the opinion of the National Assembly will be respected in relation to this Bill.
Some parts of the Bill require additional work. There is no point in the Assembly being able to make laws if it then has difficulty enforcing them. It would be useful to have greater clarity on the scope of the Assembly’s ancillary powers to enable it to make laws which are effective and enforceable. Areas in the Bill where unnecessary potential interference is suggested simply seem heavy-handed. This will require intensive intergovernmental working with additional bureaucracy and administration, which contrasts with the Government’s own commitment, and that of the Silk commission and the Richard commission, to the need to cut constitutional red tape. There is an urgent need to strengthen intergovernmental and interparliamentary relations, as has been suggested on more than one occasion.
It is a shame that the Bill has not aligned legislative and executive competence more closely, and that there continues to be reliance on transfer of functions orders. We cannot understand this, and we look forward to the Minister justifying why all functions currently exercisable by a Minister of the Crown within devolved areas cannot be devolved and transferred to Welsh Ministers.
I am aware that there is real disquiet on our Benches about the introduction of income tax powers without the need for a referendum. I know that many noble Lords will want to pursue this issue with vigour.
As the Minister suggested, England and Wales share the same legal jurisdiction. Since 2011, however, a body of Welsh law has already been built which is distinct from that of England and Wales. Given the very low number of Welsh-only laws, we believe that currently it is unnecessary to establish a separate legal system. However, we believe that in time complexities relating to the training of judges and lawyers will need to be considered. The accessibility of the law to ordinary citizens is also paramount. We believe, therefore, that it is necessary to insert a clause requiring the UK Government and the Welsh Government to keep the situation under review.
The move to a reserved powers model is something which in principle we welcome. We had hoped, however, that this would deliver the “clarity, coherence and stability” which the Government had announced was the intention of the settlement. While I believe that we have to accept that there are some areas where introducing a reserved powers model would smooth out the creases of the current devolution settlement and give clear lines, the system is more difficult to accept if the consequence is the rolling back of the powers of the Welsh Government in areas which have hitherto been “silent” areas, where the Welsh Government have consequently been able to act.
One of the worrying aspects of the move to the reserved powers model is that, if a matter “relates to” a reserved matter, it is not within the Assembly’s power to legislate. The question of how a provision will be assessed when deciding whether it “relates to” a reserved matter will be determined using a “purpose test”—in other words, whether the purpose of the provision is devolved or not. We will seek a great deal more clarity on the issue of the purpose test in Committee.
As I suggested, while in principle we agree with the move to a reserved powers model, the next question is, inevitably: do we agree and accept all the areas where the UK Government have insisted on retaining power to themselves? We accept and welcome that the list has been reduced since the draft Bill, but we have noted some attempts to reduce the list by lumping some subjects together which were previously counted individually. For example, architects, auditors and health professionals were previously three categories; now all three are included in one category.
We were promised a more comprehensive rationale and justification for why certain areas were reserved, and we do not believe that the Explanatory Notes currently provide the reasoning that we seek. I will do what I can to stop Members on the Labour Benches from putting amendments down on every reservation so that the Government will have to justify each one on the Floor of the House. However, noble Lords might have noticed that I have some pretty heavy hitters on my side, and I may not be able to stop them. Therefore, if the Minister can come up with better justifications for those reservations prior to Committee, we will be grateful.
It is also worth emphasising that it is not simply a matter of reducing the number of reservations on the list in new Schedule 7A; we should like to see some of the reservations redrafted or exceptions added so that the breadth of the reservations is limited, creating more legislative space for the Assembly in which to act. At this stage I will give just a few examples of where we have some concerns: employment matters with regard to devolved public services; licensing and the sale of alcohol; the community infrastructure levy; railway franchises; and water, which I need not emphasise the sensitivity of since the construction of the reservoir at Tryweryn.
In its current form, the Wales Bill is wholly unsatisfactory. We are disappointed that it has been rushed, both in drafting and in the depth of scrutiny, and in some instances we are seeing powers being taken away from Wales. The people and the businesses of Wales have the right to know and to understand the constitutional and legal framework under which they live and work. In these uncertain and unstable political and economic times, now, more than ever, people need a clear understanding of where responsibility lies. The Bill does not give us that clarity. It is a real shame that the democratic will of the people of Wales, as expressed in particular in the 2011 referendum, has been missed, that the opportunity to produce an aspirational settlement has been missed, and that the chance to produce a vision for the future direction of Wales has been missed.
Despite this, I reassure the Minister that we are well disposed to working with him during the passage of the Bill, and we hope that he will accept our interventions in the spirit of ensuring that we produce the best possible Bill for the people of Wales.
Baroness Randerson (LD)
My Lords, we welcome the arrival of the Bill, which is in much better shape than the original draft Bill presented last year.
To those of us closely associated with the devolution process the journey towards an effective settlement—towards my party’s aim of home rule for Wales—is achingly slow. I disagree with the noble Baroness, Lady Morgan; there has not been enough rush over devolution. We are certainly not yet in a situation where we can say that we have a firm, decisive devolution settlement, but we are shuffling steadily down the road towards it. Therefore noble Lords will forgive me for becoming somewhat impatient with what I regard as a slow process. However, I acknowledge that in the big scheme of history, the 17 years since the establishment of the Assembly are just the blink of an eye, and therefore as ever I am pragmatic. Any step forward must be welcomed and built upon.
However, I am disappointed that the Bill still does not provide the clarity, coherence, stability, workability and sustainability set out by the previous Secretary of State for Wales, the right honourable Stephen Crabb. Looking back over the last 17 years, the Assembly that I was elected to in 1999, along with my noble friends Lady Humphreys and Lord German, is almost unrecognisable in comparison with today’s institution. The Minister is well aware of this because of his history in that place and his part in the Silk commission.
I am proud that my party, the Liberal Democrats, has played a fundamental role in the transformation of those powers. In the first Assembly, I was a Minister in the partnership Government formed between my party and the Labour Party. As part of our agreement, the Liberal Democrats insisted on the establishment of the commission led by the noble Lord, Lord Richard. It put forward some bold and imaginative proposals, but several of those remain to be implemented to this day. Sadly, it took far longer than it should have done to implement the recommendation for full legislative powers, which now exist, due to the indignity and bureaucratic nightmare of the legislative competence order system imposed on Parliament and the Assembly. I welcome the indication from the noble Baroness, Lady Morgan, that the Labour Party as a whole is now much more convinced about the importance of devolution than appeared to be when it was in government.
When the Liberal Democrats came to form a coalition here with the Conservatives in 2010, we again made constitutional progress in Wales a priority. The Silk commission was born and many aspects of this Bill owe their origin to the Silk reports. By that time, I was seeing the story from the other side of the fence. As a Minister in the Wales Office it was obvious to me how easy it was to kick reports, such as the Silk reports, around Whitehall and to make frustratingly little progress. No Whitehall department and few Ministers are willing and happy to surrender power, however small and inconsequential that power may be.
However, the ship of devolution in Wales was then blown along in the slipstream of the Scottish independence referendum, and I was confident that we were poised for a big stride forward by St David’s Day 2015. The St David’s Day declaration, on which I worked with the then Secretary of State, was bold, clear and ambitious, and I pay tribute to his sterling efforts to create a cross-party consensus on many aspects of devolution. Of course, there was not 100% agreement—indeed, my own party wanted to go further on some aspects such as devolving powers over policing—but there was a firm basis for agreement.
This Bill fulfils some of the criteria needed to establish the sustainable settlement envisaged in that agreement. The move to a reserved powers model is obviously fundamental but it has not proved to be the easy step that so many imagined. The complex and vague Welsh devolution settlement of 1999, based on conferred powers, has been translated into a less vague but still complex set of reserved powers. I believe that they are still unnecessarily complex and many of them are illogical as well. So, as the Bill goes through the House, I will examine the list of reserved powers and test out why some of those powers are there.
On the issue of the distinct and separate jurisdiction, I do not believe we have come to the point where a separate jurisdiction is desirable or needed. However, we need it to be distinct, and so I am interested in the progress made in the joint working group and what commitments there are on taking forward the outcomes of its deliberations. I am anxious that it will not be used to simply distract us from the main issue. It has to have concrete outcomes that are implemented.
The elephant in the room whenever we discuss Welsh devolution is the issue of fair funding and the Barnett formula. This has been the case ever since the Assembly was established in 1999. I look forward to hearing details of progress on this issue because significant progress is key to the effectiveness of the Bill.
I welcome the additional powers set out in the Bill, but there are more powers that we would like to see. I have already mentioned policing because, after all, the cost of policing is more or less shared equally between the Home Office, the Welsh Government and local government in Wales. It is not unreasonable, therefore, to expect the powers over policing to be devolved. There is no constitutional reason why air passenger duty should not be devolved. If Scotland and Northern Ireland can handle it, it is unjust to say that Wales cannot have that power simply because Bristol airport has run an effective lobbying campaign. We cannot see, for example, why Milford Haven is excluded from the list of devolved ports. I know it is a trust port—that is the technical aspect of it—but I cannot see why it is the exception among all Welsh ports.
We believe that the Assembly’s powers over energy will still be too limited. The 350 megawatts limit is an artificial one. It is based on a Silk commission recommendation, but nevertheless it has possibly been overtaken by events. The figure was picked because it was based on the size of the Swansea tidal lagoon, which I regret to say this Government seem to have abandoned anyway.
There is much to support in the Bill such as the permanence of the Assembly, giving it powers over its own affairs and elections, its size, its name and so on, thus treating it as a grown-up body. I welcome strongly the powers to vary income tax without the need for a referendum, behind which it was clear that the Welsh Government were going to hide. Having worked within the UK Government, I understand some of the caveats. However, I also understand that some of those caveats can be misused and need to be tested in this House.
This Bill is the product of a previous, pro-devolution Government. I do not believe the same can be said of the current Government, with the exception of the noble Lord the Minister sitting opposite. As a pragmatist, I am keen to support the Bill and to push devolution as far as possible, because, after all, this is all we are going to get for a while at least. It brings via the reserved powers model greater clarity. However, it does not bring greater simplicity to the Assembly and Welsh Government’s powers, and it does not widen their powers to the extent that we as Liberal Democrats would wish.
Lord Crickhowell (Con)
My Lords, I begin with some general thoughts, some of which have been touched on by both noble Baronesses who have spoken. The Constitution Committee of this House, in its report The Union and Devolution, drew attention to the way in which power has been devolved to Scotland, Wales and Northern Ireland in a piecemeal fashion, without proper consideration of the cumulative impact of devolution on the integrity of the United Kingdom. The committee concluded:
“The Government needs fundamentally to reassess how it approaches issues relating to devolution. What affects one constituent part of the UK affects both the Union and the other nations within the UK … The new mindset will require abandoning a ‘devolve and forget’ attitude. Instead the … Government should engage with the devolved institutions across the whole breadth of government policy, co-operating and collaborating where possible. In particular, the Joint Ministerial Committee should be reformed to promote co-operation and collaboration, rather than grandstanding and gesture politics”.
That was the view of the Select Committee. It commented that,
“to perpetuate the use of the Barnett Formula, which takes no account of relative need, makes a mockery of the Government’s duty to ensure a fair distribution of resources across the UK”.
In an earlier report, Inter-governmental Relations in the United Kingdom, produced when I was a member, the committee expressed the hope that,
“the increasing complexity of the devolution settlements will spur greater parliamentary scrutiny of inter-governmental relations, aided by a more transparent JMC and improved departmental reporting”.
The Select Committee on Economic Affairs, in its report A Fracturing Union? The Implications of Financial Devolution to Scotland, agreed with the Constitution Committee that,
“retention of the Barnett Formula is the wrong decision”.
It said:
“In future, HM Treasury needs to be much more transparent about how funding is allocated to Scotland, Wales and Northern Ireland and an independent body such as the Office for Budget Responsibility should scrutinise this and the operation of the fiscal framework. There is also too little Parliamentary scrutiny of the funding arrangements. The UK and devolved legislatures should co-operate to remedy this”.
The committee suggested that,
“a decision to devolve nearly all revenue, uniquely amongst countries in a similar position to the United Kingdom, has been adopted with undue haste and little assessment of the economic and political consequences. It may not be clear to people in Scotland”—
I add, “or in Wales”—
“how they fund reserved services and which Government is accountable for them”.
All these conclusions and recommendations form a useful starting point for our consideration of the Bill, along with the thought that almost all modern Acts of Parliament are too long and complex and therefore do not provide clarity where it is needed. However, at this point I pay tribute, as my noble friend Lord Bourne has already, to the former Secretary of State for Wales Stephen Crabb for the role he played in the preparation of this Bill and for the manner in which he consulted and took account of the suggestions and criticisms made in its preparation—a process that has been continued by the present Ministers. We have had the Wales Act 2014, the report of the Silk commission Part 2, the St David’s Day process, the publication of a draft Bill, and pre-legislative scrutiny by the Welsh Select Committee in another place and other interested parties, as well as the passage of the Bill through the Commons, albeit with a somewhat hasty Committee stage. All this represents a great improvement on some of the earlier steps along the devolution trail.
I will refer only to a few matters to which we seem certain to return later. Employment and industrial relations policy has not been devolved. I understand that the noble Lord, Lord Hain, who is to speak immediately after me, is likely to table an amendment to remove devolved public services in Wales from the reservation. I will support the Government if they resist that amendment.
The joint government review of the Silk recommendation that legislative competence for water be aligned with the national border was completed in the summer, and the Government have still to present their decisions. Based on my experience as chairman of the National Rivers Authority, I have considerable doubts about the good sense of the proposal, but I will reserve judgment until I know the conclusions of the review and the decisions taken by government.
The Minister has already made it clear that the maintenance of the single legal jurisdiction of England and Wales remains a red line for the Government. They will have my total support for that position, but the working group of officials, including those from the Lord Chief Justice’s office and the Welsh Government, is considering the implication of diverging Welsh laws within the justice system and the need for distinctive arrangements to reflect the emerging body of law made by the Welsh Government. Once again, I will reserve my final judgement on the detailed arrangements—which, we have been told, will be presented to us later in the autumn.
Another government red line concerns crime, public order and policing. While I understand and am sympathetic to the general principle underlying the Government’s stance, I hope that Ministers will be able to explain why they appear to be giving powers over policing to some English city regions while not granting them to the Welsh Government.
The noble Lord, Lord Rowe-Beddoe, a particularly good friend of mine, may not be pleased when I say that I am also with the Government in their opposition to the devolution of air passenger duty. I suppose that I should declare an interest as I fly more frequently from Bristol than I do from Cardiff—but it would be wrong to distort competition between two airports that are in such close proximity.
The Government say that discussions between HM Treasury and the Welsh Government on the fiscal framework are ongoing and that it would not be appropriate to place block grant adjustments on a statutory basis. I have already referred to the need for openness and parliamentary scrutiny. I hope that we will be given a great deal more information about the fiscal framework before we take the Bill much further.
It is all too clear from what has been said that in Committee and on Report there will be a great deal of vigorous argument about the reservations. We have moved to the reserved powers model, but the number of reservations is still lengthy. Although Stephen Crabb reduced the original list very considerably, I wonder whether we cannot do still more. We have been told that a “roll back” of the Assembly’s legislative competence may have taken place. The National Assembly’s research brief raises legitimate questions that deserve a response. In a letter to the Secretary of State in June, the First Minister wrote:
“You need to press Whitehall Departments to focus on the issues that really do need to be dealt with on an England and Wales or UK level; this requires a laser-like focus rather than a blunderbuss”.
All this takes us back to the general points that I made at the beginning of my speech about the need for simplicity and a new mindset. The Wales Office has done stalwart work, but Ministers must ensure that every government department is equally committed to the process. It will be greatly to the credit of the Government if in the Lords we are able to clarify, simplify and improve the Bill even more than it has been improved already.
Lord Hain (Lab)
My Lords, I agree with a great deal of what the noble Lord, Lord Crickhowell, said, especially on transparency over the proposed fiscal framework. That is a critical issue.
Although I welcome parts of the Bill, and although, as the Minister said, the Government responded to very strong objections to the draft Bill, it still feels that the way in which the reserved powers have been drafted repatriates powers back to the United Kingdom, for there are around 190 exceptions to the reserved powers to be granted to Wales. For instance the Assembly’s Agricultural Sector (Wages) Act 2014 would not be permitted under this Bill. Yet the Assembly not only passed it but also overcame a challenge from the UK Government when the Supreme Court found in their favour, enabling it to be placed in statute. How can this be progress towards empowering the Assembly? It seems more like a Whitehall grab-back of powers, as indeed the Welsh Assembly’s Constitutional Affairs Committee argued last week and as, among others, my noble friend Lady Morgan of Ely and the noble Lord, Lord Elystan-Morgan, recently argued publicly.
However, I wish to focus upon my two main objections at this stage to the Bill—objections I raised with the Minister during the courteous briefing that I thank him for providing before the conference recess. First, there is the question that I and my noble friend Lady Morgan of Ely discussed in detail in this House during the passage of the Trade Union Bill: the undermining of the fundamental workings of the devolution settlement by dictating the manner in which industrial relations within devolved public services in Wales are configured. This Bill reinforces that and it is a matter of dispute with the Welsh Government because the Assembly will shortly have before them a Bill which exempts devolved public services from the Trade Union Act. Since that has been supported by Labour, Liberal and Plaid Cymru Assembly Members it will likely be carried by a large majority. I will return to this matter.
Meanwhile, my other major objection is that Clause 17 of this Bill removes sections of the Wales Act 2014—just two years ago—that retain the requirement which has existed since 1997 that a referendum will be required to implement the powers to vary income tax under that Act. That is constitutionally unacceptable, even outrageous. In September 1997, as a Welsh Office Minister I helped to lead the Government’s campaign to win the referendum to establish the Welsh Assembly. With due respect, I do not recognise the comments of the noble Baroness, Lady Randerson, that Labour has been a back-marker on devolution; we introduced the Welsh Assembly and empowered it in the 2006 Act.
There was only one question before voters in 1997: did they want an Assembly or not? There was no second question on whether they wanted income tax devolved, as was specifically and importantly the case in the referendum on a Scottish Parliament. Ministers at the time took the view that to have such a second question in Wales would be to lose the referendum. Given how narrowly it was won, with just 0.2%, how wise that turned out to be. Leading politicians of all parties, including Conservatives, have been crystal clear in the past: to devolve income tax powers to Wales would therefore need another referendum like Scotland had on income tax. Indeed, just last year the 2015 Conservative Party general election manifesto committed to a referendum before income tax powers were raised. If your Lordships’ House were to amend the Bill to reinstate the referendum requirement, we would be doing so in line with the Salisbury convention on a government election manifesto commitment.
The current Secretary of State for Wales, Alun Cairns, was a Government Whip and voted for the 2014 Act which put into statute the necessity for a referendum just two years ago. He argued for that, as did all his Conservative MP colleagues at the time. So why have he and the Government done a U-turn after such a short time, thereby breaking their own manifesto commitment of just last year? There has been no clear explanation by Ministers. Could it be that they are frightened that, if invited to vote, a majority in Wales—perhaps a large one—would turn down the powers? I suspect so; otherwise, why be afraid of trusting the voters?
Could it be that the Government wish to ram income tax devolution through without addressing the irrefutable evidence that the way the Barnett formula has operated has short-changed Wales—by at least £600 million annually—in contrast to Scotland? Without a new “Barnett floor”, which the First Minister has insisted upon, and without the fiscal framework he wants, it would be pure folly for Wales to have income tax devolved. I note the point made very powerfully by the noble Lord, Lord Crickhowell, that there should be full transparency on the fiscal framework before Parliament enacts this legislation, amended or otherwise.
Could it be that the Conservative Government have an ideological objective to shrink the Whitehall state, offloading as much responsibility as possible on to individual citizens to fend for themselves, outsourcing to private providers and sub-contracting tax and spending to devolved legislatures? Having strenuously opposed political devolution in the past, the Conservatives now see the virtues of economic devolution in neoliberal terms. In that respect at least, the outcomes, if not the ideologies, of nationalism and neoliberalism can converge, because under both the redistributive power of the United Kingdom state is either severed or stunted.
The incontrovertible advantage of modern Britain is its 20th-century innovation: the pooling and sharing of risks and resources across the whole United Kingdom to ensure common welfare and decent standards of life for all citizens, regardless of nationality or where they live. At the heart of that pooling and sharing of resources has been a set of path-breaking decisions throughout the 20th century: common welfare standards first introduced by Liberal Governments and subsequently consolidated by Labour Governments up until 2010, ensuring common economic and social standards; common UK-wide old-age pensions; common UK social insurance—sick pay, health insurance, unemployment insurance and labour exchanges; common UK child and family benefits; a common UK national minimum wage; and a UK system of equalising resources so that everybody, irrespective of where they live, has the same political, social and economic rights, not just equal civil and political rights.
Pooling and sharing the UK’s resources has also enabled redistribution from richer to poorer parts of the UK, whether constituent parts of a nation such as the coalfield communities of the south Wales valleys or regions of England such as the north-east. Although the Holtham commission, in its case for devolving limited tax-varying and borrowing powers to Wales, set out complex compensating arrangements which attempted to ensure that Wales did not fall behind richer parts of the UK, it could not guarantee that the Treasury would always deliver this. We wait to see whether the First Minister has been able to secure that in his negotiations with the Government on a fiscal framework.
With around 40% of UK GDP concentrated in London and the south-east of England, I have seen no answer—whether from Ministers or, indeed, in this respect at least, separatists—to what is at the heart of the case for maintaining the integrity of the UK: redistributing resources from better-off to less well-off parts; and guaranteeing equal opportunity and security for all UK citizens regardless of nationality, race, geography, gender, sexuality, age, disability or faith. That has meant, as former Prime Minister Gordon Brown showed in his book My Scotland, Our Britain, that while inside the European Union the average income of the typical citizen of the poorest country is just 20% of that of the richest country, and in the USA the income of the poorest state is 55% of that of the richest, the average income of the typical Scot is 96% of the average income of an English citizen; for Wales, the figure is 87%.
In a post-World War II settlement subsequently maintained by the Conservatives, at least until recent times, Labour created a set of universal rights: free healthcare across the UK in the 1940s; and in the 1990s a UK-wide minimum wage and a tax credits system which discouraged the regions and nations from undercutting each other in a race to the bottom. A cornerstone of our social rights is the common UK welfare system, which transfers resources between individuals, dependent on their circumstances, right across the union. Pooling and sharing of resources at UK nation-state level must be sufficiently strong so as to continue to guarantee free healthcare, the rights to a pension when elderly, help when unemployed, sick or disabled, a decent family income and universal education, as well as defence and security. There is an implicit UK government guarantee that nobody in the union—whether in Wales, Scotland or elsewhere in the UK—can be prevented from accessing those common social and economic rights, and the services that flow from them, by reason of a shortage of resources.
That is why it is right that all UK taxpayers—English, Welsh, Scottish and Northern Irish citizens together—contribute their taxes at a UK level to fund these common rights and services, thereby guaranteeing that the UK Government and, where appropriate, the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, have the capacity to deliver them. With England constituting 84% of UK population and 87% of UK GDP, it would be mad for Wales to cut itself off from that, just as it would be mad for the north-east of England, with its similar GDP per head and demographic, to cut its income off from the rest of England—especially the south-east, which, as I pointed out earlier, contributes something short of half the UK’s wealth. This is especially serious for Wales, which has a huge net fiscal deficit involving a massive annual subsidy from the UK Treasury, estimated by the Library at £14.7 billion in 2014-15. That total, by the way, is similar to the entire Welsh Government block grant. I believe that this Government are encouraging an offloading of the centre’s responsibility to all its citizens—English, Scots, Welsh and Northern Irish—and, by design or default, encouraging separatism. For if the UK does not offer common rights and resources to enable universal access for each citizen, why should they offer their loyalty to the UK in return?
In making this argument, I remind your Lordships that I have been a consistent devolutionist all my political life. As the author of the Government of Wales Act 2006, I was proud to deliver the full law-making powers that the Welsh Assembly has enjoyed for some five years now, to the great benefit of its citizens. Therefore my objection to Clause 17 repealing the Government’s very own clause of just two years ago, committing to a referendum, is on two grounds. The first is constitutional and democratic. Surely it is not acceptable to move the goalposts from a referendum vote in 1997 by denying Wales the chance to have a vote on income tax, like the Scots did. Why should Welsh voters be treated as second class compared with Scots voters? The second is that, in any case, we step at great peril down the road of income tax devolution, the destination of which could be impoverishment in less prosperous parts of the UK, Wales included. Just in passing, while I certainly do not wish to put any ideas into the Conservatives’ minds, what about VAT if we leave the European Union? Membership of the EU means that it cannot be devolved: what does Brexit mean?
Let me turn to the manner in which the Bill will enable one important part of devolved public services in Wales to be dictated from Whitehall, namely industrial relations. I ask the Government to reconsider the manner in which the Bill reserves all employment law to the UK level in respect of devolved Welsh public services alone—not the private sector but just devolved public services. In doing so, and this may address the concerns of the noble Lord, Lord Crickhowell, let me be clear that I am not asking for employment law as a whole—including strikes, unfair dismissal, health and safety, maternity and paternity rights and so on—to be devolved. I agree that the core issues of employment law should be a reserved matter, not least to prevent businesses or devolved governments competing to undermine basic conditions of work in a race to the bottom.
However, what right does a UK Secretary of State have to impose upon Wales such matters as trade union facility time, training arrangements, arrangements to deduct trade union subscriptions by payroll, the political levy and other industrial relations issues to do with what the Welsh Government, in exercising their statutory powers, deem the best way to deliver effective and efficient public services on the basis of social partnership, which they do? I shall be supporting an amendment to empower the Assembly and the Welsh Government to achieve that, and I ask the Minister to do the same. Otherwise there will be a direct clash with the Welsh Government and the Assembly which will surely undermine the Conservative Party’s new-found and welcome conversion to the cause of devolution. In short, this Bill is fundamentally flawed and could badly short-change Wales. I ask the Government urgently to think again on the matters that I and others have raised.
Lord Elystan-Morgan (CB)
My Lords, I begin by wholeheartedly endorsing what has been said by way of tribute to the noble Lord, Lord Bourne, and the very constructive role he has played for a couple of years now in Welsh devolution. Whatever the Bill’s defects might be—and I believe them to be myriad—he is not responsible for them, and I would not wish him to think that anything I say by way of criticism of the Bill is in any way directed at him.
I shall concentrate my remarks on what might be described as the main constitutional timbers of the Bill. As has already been said, this is the fourth time within the short span of less than 20 years that a major piece of legislation has been introduced in relation to Wales. What distinguishes this Bill and differentiates it from the other three attempts is that, whereas they added to the constitutional powers that Wales had as a land and nation, it turns in the opposite direction. Whereas they were progressive, this Bill is regressive.
I have no doubt that we would not be discussing these matters in the context of this Bill were it not for the decision by the Supreme Court in July 2014. That is the fons et origo of the whole matter. It is not an incandescence of enthusiasm on the part of the Government for Welsh devolution that brings these matters to the fore, but the realisation that a crisis was created by that epoch-making decision.
The House will broadly remember the facts of the case. The Cardiff Assembly was proposing a measure to standardise and define agricultural wages in Wales. There was an immediate objection by the Attorney-General, who seized on this matter like a hungry piranha and said that it was something Wales must not touch. Why was that? It was because it was a matter not of agriculture but of employment. If the Attorney-General’s logic had been correct, that would have been the end of the matter, but the Supreme Court respectfully disagreed with him in a 5-0 decision. Whereas the impression had been carried for a long time that if there had been a transfer of a limited nature within any one of the 20 fields of devolution to Wales, that was it, the Supreme Court said that where there has been a substantial transfer of functions and there are other allied matters that reasonably go with them, unless they have been specifically exempted, they are transferred. In other words, there is a silent transfer mechanism, and that is what caused the whole problem.
Given the situation that confronted Wales the day that judgment was published, it is right that we should consider how the Bill compares with that template. My submission is that the powers that Wales has under the Bill are vastly diminished compared with the decision reached by the Supreme Court. That is the reality. This matter has been touched upon already by one or two noble Lords, and I have no doubt that they are absolutely correct: the gap is very considerable. Yes, the decision to transfer to a reserved powers model has achieved something—certitude, of a certain nature—but it is a certitude for which a high price is paid: the diminution of the constitutional status of Wales. That is the effect of the main parts of the Bill.
The Government reacted fairly swiftly to that decision of 2014 and decided that they would move to a reserved powers model, which was introduced by the St David’s Day agreement of last year. A draft Bill was published, which was scrutinised by a number of distinguished bodies, and following that we have today the legislation proposed in the House of Commons in June of this year. I believe that the Bill is flawed, first in that it does not achieve the purpose that it genuinely should have sought to achieve. Secondly, it is a Bill that is unworthy of the people of Wales. We have a far lower level of devolution now than that which was spelled out by the Supreme Court in July 2014. The consequence is that we are moving backwards when we could have been moving forwards.
The worst part of the Bill is not what is mechanically set out in the reservations—of which there are far too many; more than 190, as we have heard—but the mentality that lies behind them. It is a mentality of monumental negativism. Look at the reservations: the control of axes and knives; the control of charitable funds and philanthropic institutions; and the control of the sale of alcohol, which Wales had devolved to it in the 19th century. I see the noble Lord, Lord Hunt, who well appreciates the history of this matter, nodding. There are many other instances where one could say that these are simple, basic, minor matters, taken against the bundle of responsibilities a nation has. The question I ask the House to consider is this: had such matters as these been raised 50 years ago by the Colonial Office in relation to a colony belonging to Britain, either in the Caribbean or in Africa, would they have dared bring about such reservations? The answer must surely be no. We are placed in a neocolonial situation by this Bill.
My appeal is not so much for a change in the mechanics, but for a change in mentality. I can remember being shocked as a schoolboy—which was many years ago, believe you me—when reading of a decision made by Mr Attlee’s Government in relation to Wales. Herbert Morrison, the then Home Secretary, announced it in these terms: “We have considered the future of Wales very carefully. We have taken advice, broadly, from people who are in a position to give that advice, and we have come to the conclusion that the very best that we can do in relation to Wales is to have a nominated council”. Do your Lordships think that Mr Herbert Morrison and his Government would have suggested a nominated council for a British colony 50 years ago? Most certainly not. To my mind, such neocolonialism shows that the dead hand of Westminster still lies upon Wales.
My appeal is not just for a new mechanism but for a new mentality altogether: a change in the attitude of the mandarins of Whitehall—the Sir Humphreys, Sir Williams and Sir Rogers—who say, “Nothing shall come from my table at all”, and likewise in the dog-in-the-manger attitude of Ministers towards their own powers. There should be a spirit of partnership and mutual respect between Cardiff and Westminster.
The Welsh people should think big in this matter. A distinguished English poet of the 19th century wrote:
“a man’s reach should exceed his grasp,
Or what’s a heaven for?”.
We as a nation have been grasping for small things, but we must think big about the role we can constructively play within the UK. I believe that dominion status is a principle sufficiently supple and mobile to allow Wales, under the 1931 Act of Westminster, to play the most major and constructive part imaginable in the life of the UK. That is the opportunity we now have. Many matters in the field of government are in a state of flux. Wales must react positively to that, as this chance may not come again.
Baroness Bloomfield of Hinton Waldrist (Con) (Maiden Speech)
My Lords, it is the greatest honour to speak for the first time as a Member of your Lordships’ House. I do so with humility and indeed nervousness, this being only the third working day since my introduction—which means, of course, that for the moment I have a 100% attendance record. I am also proud to speak now as part of the Welsh diaspora; it appears that there are very few of us on this side of the House.
I pay tribute to all the staff, officers and Members of the House on all sides who have made me so very welcome. I also thank my mentor, my noble friend Lady Seccombe, whose kindness and wisdom justifies her being held in such enormous affection by all in this place. I also thank my noble friend Lord Attlee, who will help to further my education in the ways of this House.
It was a particular privilege to be introduced by my noble friends Lord Strathclyde and Lord Chadlington. Both have given me enormous support and encouragement in my various roles within the party in London and the Wantage constituency. My noble friend Lord Chadlington and I also share a profound love and appreciation of our Welsh heritage, perhaps at its most evident when we attend the Millennium Stadium. Although not a native Welsh speaker, dw i’n dysgu cwmraeg—I am at least a Welsh learner—so it is a great honour to be making my maiden speech in the context of a subject so close to my heart.
The Statute of Rhuddlan in 1284 was intended to settle the Government of Wales once and for all following the execution of Dafydd ap Gruffydd, Prince of Gwynedd. Over 700 years later, and almost 20 years after devolution, this Bill continues the process of allowing Wales to determine its future priorities through an historic transfer of powers. We value our enormous good fortune to live in a democracy that allows for that evolution.
I was born and brought up in South Wales, and received my most formative years of education at Atlantic College in Llantwit Major. Its strong ethos of community service and international understanding has stayed with me all my adult life. Indeed, it was the resonance of the big society and social action that encouraged me into the political world in support of a party that believes in individual responsibility and the power of communities to help themselves—something to which I have also devoted much of my own time, setting up and supporting a number of charities providing opportunities for local residents as varied as young offenders, cancer sufferers and bored teenagers.
My mother served as a magistrate for more than 30 years in Barry and I, too, spent a number of years on the Bench both in rural Oxfordshire and at Horseferry Road in London. It is heartening to see that the Bill seeks to ensure the maintenance of the single legal jurisdiction of England and Wales, which has served both countries so well for centuries.
Prior to my time in CCHQ, I had worked in both shipping finance and then executive search for many years, so it was natural for me to return to the commercial world after the 2010 general election. I formed a team working towards the delivery of green energy from Iceland to the UK through a 1,500 kilometre seabed cable—a project that I hope will receive the full backing of the Icelandic Government after Iceland’s general election later this month.
This brought to my life full circle, for it was at Atlantic College that I wrote my dissertation on the generation of tidal power in the Severn estuary. I hope that the Swansea tidal lagoon scheme mentioned so recently in my noble friend Lady Finn’s maiden speech will be allowed the chance both to prove the energy-generating potential of our enormous tidal difference and to help in the regeneration of that important industrial heartland.
I hope also that the new powers devolved will make a real difference to people’s lives, allowing Wales to determine its particular needs and spending priorities. I am profoundly grateful for the social care in the community that my elderly parents and parents-in-law have received in Wales, enabling them to continue living at home. I have nothing but admiration both for those who provide such care and for those who have facilitated this choice.
Wales and its singular culture and heritage are to be cherished, and I hope that the provisions of the Bill will empower the Assembly to allow the unique and defining character and capabilities of Wales to flourish.
Lord Wigley (PC)
My Lords, the pleasure falls to me to congratulate the noble Baroness, Lady Bloomfield of Hinton Waldrist, on her eloquent and delightful maiden speech. The fact that she has chosen the Wales Bill for her first speech to the House intrigued me, until I did some homework and discovered that not only has she recently been on a course in Wales to learn Welsh, to which she referred, but she has also obtained a distinction on her first grade on the harp. I understand that this was part of a fundraising endeavour in support of the London Music Masters, which promotes diversity and excellence in music to inspire positive social change, so well done.
I also noted the noble Baroness’s comments about the diaspora. It has always been an ambition of mine to harness the Welsh diaspora much more effectively, and this is an excellent example of the benefits that can come from such an approach. I have no doubt that her education at Atlantic College enabled her to appreciate the place of Wales in an international context—that college most certainly does that. We wish her well for her fundraising—to the extent that it focuses on worthy cultural causes rather than political ones—we welcome her active interest in politics and we wish her well in her career in this Chamber and look forward to her future contributions to our debates.
This is the fourth piece of primary legislation on Wales which various Governments have introduced since 1998. Such a continuous sequence of amendment reflects two things: yes, a view that devolution is a process and therefore will develop over time; but also a widely held feeling that the original legislation was inadequate and needed amendment to make it work in a transparent, effective and democratically answerable fashion.
Along with several other Members in this Chamber, I have had experience as an elected Member of the Assembly. We are fortunate to have here today a former Presiding Officer, my colleague and noble friend Lord Elis-Thomas, and the newly elected Assembly Member, the noble Baroness, Lady Morgan of Ely, both of whom are up to speed with current thinking across party politics in the Assembly as to how its powers should be augmented or modified to make it a more effective body able to hold the Government of Wales to account, while enabling that Government, whatever their complexion, to work effectively for the benefit of Wales.
We have here two former Ministers in the Welsh Government on the Liberal Democrat Benches: the noble Lord, Lord German, and the noble Baroness, Lady Randerson. We have former Secretaries of State for Wales—the noble and learned Lord, Lord Morris of Aberavon, and the noble Lords, Lord Hunt, Lord Hain and Lord Murphy—who over many years have had a deep involvement in several Wales Bills, as have many other noble Lords.
I should also say how glad I am to see the noble Lord, Lord Crickhowell, participating in this debate. We have not always seen eye to eye on matters relating to devolution, but I know that in accepting our National Assembly as an essential part of Welsh governance, he will want to see it made more effective, transparent and answerable. We noted his wish to see the two Governments at each end of the M4 working together more constructively and his trenchant comments on the Barnett formula.
We have here the noble Lord, Lord Morgan, Wales’s most eminent historian on the period from 1868 onwards when questions of greater Welsh autonomy were emerging and, of course, my noble friend Lord Elystan-Morgan, a long-standing advocate of greater Welsh autonomy and of dominion status. We are also fortunate that the Minister taking this Bill forward, the noble Lord, Lord Bourne of Aberystwyth, was a very effective leader of the Conservatives in the two Assembly terms in which he served and was a key member of the Silk commission, which wrote the second report which forms the background to this Bill.
In other words, we have significant experience in this Chamber, whatever its democratic shortcomings, and it would be short-sighted of the Government not to take on board the issues that will be flagged up today, and at Committee and Report stages, which may not have had adequate coverage in another place. Colleagues have already referred to some of these and I shall touch on one or two others.
In doing so, I do not in any way resile from Plaid Cymru’s ambition for Wales to be a member state of the European Union in its own right. We accept that change comes but gradually and sometimes painfully slowly. Questions relating to the interface between Wales and the EU today appear to be in a somewhat different light. The constitutional future of these islands will partly depend on how Northern Ireland and Scotland are allowed to relate to the EU. To that extent, some aspects of this Bill are already dated, and the Bill’s existence reminds us that the United Kingdom Government still pursue separate constitutional proposals for Wales, Scotland and Northern Ireland, and for England, and give little thought to securing a balanced UK-wide settlement that might stand the test of time.
First, I remind the House that this Bill emanates from the Silk commission, which was set up by a Conservative-led Government in 2011. That commission included members of all four parties which then had seats in the Assembly. My friends in the SNP in Scotland have often been criticised at Westminster for not being willing to participate in similar commissions in Scotland—the Calman commission, for example. Plaid Cymru took a full role in the Silk commission’s work, with Dr Eurfyl ap Gwilym playing an outstanding part, as I am sure the noble Lord, Lord Bourne, would immediately acknowledge. Sir Paul Silk worked hard to secure a unanimous report, supported by all four party representatives. That took a good deal of work and compromise all round.
I must say that I think we had every right to expect the Government, unless there were fundamental reasons to the contrary, to accept the report in its entirety and not to cherry pick those items that fitted in with the Conservative agenda and discard others that were deemed to be inconvenient. I have party colleagues in Plaid Cymru who will be reluctant to participate and compromise in this way, given that the Silk recommendations have been diluted and re-engineered to meet prejudices in Westminster and the convenience of Whitehall departments, rather than the agreed needs of Wales.
So as not to be unnecessarily divisive, let me first identify some matters covered by the Bill that I welcome. These include the permanence of the National Assembly, the acceptance of the principle of a reserved powers model, giving the Assembly power over elections to the Assembly, including the electoral system and franchise, and control of fracking in Wales. I certainly welcome all of those.
However, I must also flag up some unsatisfactory aspects of the Bill, which I shall want to pursue at a later stage. I expect that my noble friend Lord Elis-Thomas will refer to the key issue of how to implement the central plank of Silk, namely the need for the powers of the Assembly to be based on the principle of reserved powers rather than the conferred powers model enshrined in the 1998 and 2006 Acts. The version which the Government have brought forward is regarded in Cardiff Bay as inadequate. In fact, it still contains as many as 200 reserved matters. Indeed, in some ways, it makes the position worse in that it actually takes back powers from the Assembly and the Welsh Government.
Furthermore, while the Secretary for Wales, Alun Cairns MP, has been apparently willing to explain his proposals, he has been reluctant in this respect to negotiate an outcome which might meet the needs of both Wales and Westminster. That smacks of government by diktat.
The Report on the UK Government’s Wales Bill, published last Thursday by the Assembly’s Constitutional and Legislative Affairs Committee, of which I have a copy here, states in paragraph 11 that the Bill,
“is a complex and inaccessible piece of constitutional law that will not deliver the lasting, durable settlement that people in Wales had expected”.
Paragraph 14 adds that,
“in our view, significant improvements needed to be made to the Bill … to reflect authoritative criticism … Regrettably, necessary improvements were largely not accepted by the UK Government”.
It is the unanimous view of the committee that the arguments put forward by the UK Government in opposing a more ambitious Bill, “are not convincing”. Paragraph 22 of the report says:
“The Bill we are left with provides a restrictive settlement that over-complicates rather than simplifies and fails to fully empower the National Assembly as a modern legislature”.
The report describes the Bill as,
“the first piece of devolution legislation that takes backwards steps and that is a matter of considerable concern”.
These views were endorsed by all four parties represented on that committee, including the Conservative former Deputy Presiding Officer of the Assembly, David Melding AM, and if the UK Government now state that they will ride roughshod over their representations, it shows how misleading are the assurances given by the new Prime Minister that the wishes of Wales will be taken into account by her Government. Incidentally, I am somewhat surprised that the report is not available in the Vote Office for noble Lords to access.
If I may give a specific example, it might help noble Lords to appreciate the shortcomings of the Bill. I take the issue of compulsory purchase. Under the 2006 Act, it has not been specifically devolved, but neither is it retained. Therefore, legally, the National Assembly could legislate in this matter, provided that it was “incidental”, and not “central” to that piece of legislation. It is an example of what has been referred to as a “silent subject”. In the Bill, compulsory purchase is deemed as a retained matter, so the Welsh Government would in future be unable to legislate as it could under the 2006 Act. This is a clear example of how this Bill is withdrawing powers from the National Assembly, despite claims by Ministers to the contrary.
I refer to some other matters which are not included in this Bill, although they were part of the Silk recommendations, concerning which I hope to table amendments in Committee. These include: the devolution of policing, supported by all four newly elected police commissioners in Wales; provision for the emergence of a distinct Welsh legal jurisdiction, the absence of which has caused much of the complexity for which this Bill has been rightly criticised; powers relating to the youth justice system; and powers concerning the Wales and Borders rail franchise.
I shall also seek to propose amendments that deal with greater Assembly powers relating to energy, to remove veto powers enjoyed by the Secretary of State and to clarify the Welsh Government’s authority in dealing with trade matters relating to the single market of the European Union, in the unfortunate circumstances that the UK Government fail to negotiate unfettered rights for manufactured goods and agricultural produce, free from tariff and technical barriers. I shall also raise questions relating to the repatriation from Brussels to Westminster of matters that are already devolved, so that they can be transferred immediately to the National Assembly if they impinge on devolved functions.
I also flag up my intention to bring forward an amendment in Committee to give the National Assembly full powers to decide on any new proposals for extracting water from Wales. Specifically, this must include the power of veto over any intention of drowning valleys to create new reservoirs, which must be subject to authorisation by the National Assembly, which should have the powers to impose whatever conditions it deems fit on such projects. Sixty years on from when Liverpool Corporation resolved to drown the Tryweryn Valley, against the united opposition of all Welsh MPs bar one, this issue still causes rancour and bitterness. If there was one single step that the Government could take that would recognise Welsh sentiment on this issue, it would be to empower the Assembly to decide on such matters. I have no doubt that every party in Wales would welcome such a step with delight. Associated policy issues, such as land use, flooding, agriculture, the development of natural resources, environmental policy, industrial development, tourism and recreation are already overwhelmingly devolved to the Assembly. I ask the Minister if he will, even at this late stage, take up with his fellow Ministers the possibility of righting a long-standing wrong, and bring forward at least an enabling clause at a later stage that could facilitate such a move.
At a time of great constitutional uncertainty, when the UK Government put so much emphasis on the validity of identity and “taking back control”, and on enabling communities to do much more to help themselves, this Wales Bill should be a beacon that demonstrates how such thinking now applies to Wales. It should project how the principle of bringing power closer to the people is not just a tug of war between London and Brussels; it is equally valid in enabling Wales to decide for itself those matters which—because of cultural diversity, differences in social aspiration and community values, or of geographic or administrative convenience—can best be decided in Wales.
We are united that we need new legislation that enables Wales to do more to help itself in a transparent and effective manner and that overcomes the shortcomings of the tangled mishmash of existing law. We need legislation which has the confidence of Wales’s elected representatives and which the Government of Wales herald as a positive step to overcome current deficiencies in our constitutional settlement. As a number of noble Lords have already indicated, I fear that this Bill falls short of those ambitions. Depending on how the Government respond to proposals from across this Chamber to improve its provisions at later stages, a question must remain as to whether we are better with, or without, the Wales Bill as currently drafted. I support its Second Reading, so that it can be amended at a later stage to enable it to achieve the purpose for which it was meant.
Wales Bill
Monday 10th October 2016
(8 years, 1 month ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 12 September 2016 - (12 Sep 2016)
Lord Howarth of Newport (Lab)
My Lords, this Bill should not have been placed before Parliament in the state it is in. For all the work of the Silk commission, of which the noble Lord, Lord Bourne, was a distinguished member, three successive Secretaries of State, pre-legislative scrutiny of a draft Bill and then scrutiny of this Bill by the House of Commons, it is a mess. It is confused and opaque. The opacity is not just because this legislation is not consolidated, although it is very unhelpful that that is the case. The Bill is based on no discernible constitutional principles. It expresses no clear or convinced vision for Wales or for the United Kingdom or for the relationship between the two. With the fractures exposed by the EU referendum, such a vision has never been more needed.
The Bill is not the product of a concordat between the Governments of Wales and of the United Kingdom. It will not fulfil the aspirations of the people of Wales for full law-making powers vested in the National Assembly as expressed in the referendum of 2011. It will not,
“put Welsh devolution on a stable footing for the long term”,—[Official Report, Commons, 14/6/16; col. 1644.]
which at Second Reading the Secretary of State described as the ambition of Ministers. There is a lack of ambition here for Wales. Rather than seeking to provide for Wales devolutionary parity, or near-parity, with Scotland and Northern Ireland, Ministers have tried to get away with the minimum they can. Power, instead of being shared generously between England and Wales, is being grudgingly contested in a zero-sum game.
My noble friend Lord Hain famously said that devolution is a process, not an event. The process to which this Bill will consign us will be one of frustration for Wales, legal uncertainty and continuing friction. Yet another round of legislation—a fifth go—will soon be needed. That phrase, “a new constitutional settlement”, which the noble Lord, Lord Bourne, used in his peroration—is peculiarly inapplicable to this measure.
The Secretary of State insists that his underpinning principles in preparing the Bill have been clarity and accountability. Whatever accountability there may be for the Welsh Government if they should avail themselves of the new power to vary rates of income tax, there will be no clarity in the absence of a commitment by the Government of the United Kingdom to extend the minimum funding pledge beyond this Parliament and to compensate for the loss of European payments to Wales following Brexit. Without that commitment the Government of Wales are being offered a pig in a poke. Why would they impose an income tax increase on the hard-pressed people of Wales when the Chancellor’s response may be to cut the grant to Wales? I think we should reflect very carefully on the thoughtful speech in this regard about the fiscal framework by the noble Lord, Lord Crickhowell. This Government, like their predecessors, are too scared of Scottish voters to reform the Barnett formula, so they are leaving Wales disadvantaged while giving a meaningless new power to the Welsh Government. They are also scared of Welsh voters and are reneging on their manifesto promise of a referendum in Wales on devolution of powers to raise income tax.
While providing extensions to the legislative powers of the National Assembly, the Bill does not concede a distinct legal jurisdiction for Wales. The noble Lord, Lord Bourne, set his face emphatically against that in his speech. Here I part company with the noble Baroness, Lady Bloomfield, whose maiden speech I enormously enjoyed and admired. After more than 15 years of devolution there is now, as the Bill recognises, a substantial body of Welsh law that has been created within Wales. That body of Welsh law will grow with use of the powers to be newly devolved. Already there are practical problems, with English counsel and judges being insufficiently versed in the parallel corpus of Welsh law. The Ministry of Justice and the courts in England are more than hard pressed to deal with the challenges they face in England alone. It is not sustainable to have two legislatures making law in one jurisdiction. The time has come at least to legislate to provide the ability to accord to Wales the respect and dignity of having its own jurisdiction.
My noble friend Lady Morgan of Ely was generous in her assessment of important aspects of the Bill. She described it as a considerable improvement on the provision for devolution that has so far been in place. Of course we should be grateful for the small mercies that the Bill does provide: powers to develop small ports and small energy projects, and control over aspects of transport and environmental policy as well as over equalities policy and arrangements for elections. While I welcome the Government’s conversion to the reserved powers model of devolution, the version offered in this Bill is, frankly, absurd and insulting to Wales. A studied vagueness in the drafting makes it impossible to be sure of the precise number, but the new Schedule 7A contains 190 or 200 reserved powers—different noble Lords have totted up different totals. Whatever the total may be, it is vastly more than the powers reserved in relation to Scotland. The imprecision of the schedule makes it inevitable that the two Governments will again have to resort to the courts to rule on what precisely is devolved. After the agricultural wages saga, that is what sensible people want to avoid.
It appears that the Wales Office ignored the advice of the Welsh Affairs Committee that it should issue guidance to other Whitehall departments as to the principles and considerations that they should apply in deciding what powers they wished to reserve, and instead has accommodated a dog-in-the-manger stance department by department. The Secretary of State claims that there is a clear rationale for each of the reservations, but what constitutional principle causes the Government to refuse to devolve to an experienced and—as the noble Lord, Lord Bourne, acknowledged—mature Welsh Assembly powers over crime, public order and policing, including specifically such matters as anti-social behaviour, knives, drugs and prostitution? If the Home Office thinks it has a monopoly of wisdom, nobody else does. These are responsibilities devolved to Scotland and to be devolved to city regions in England. Why not to Wales? There is no principled basis for this reservation; it is simply a case of the Home Office saying, “What we have, we hold”.
If the Welsh Government should wish to improve access to justice—fundamental to a liberal society—by reversing some of the UK Government’s disgraceful cuts to legal aid, why are they forbidden to do so? On what principle is Wales not to be allowed competence in the licensing of entertainment or the sale and supply of alcohol, or for betting and gaming? Why should Wales not take responsibility for its own sins? If Wales wishes to be virtuous, why is it not entitled to take that decision? What about advertising, charities or adoption services? Do we need uniform policies on such matters across England and Wales? Are Welsh legislators unfit to determine them for Wales? If Wales can take charge of its planning policy, for what good reason will it not be allowed to determine its own policy on the community infrastructure levy? How can it make sense to separate competence for the two? Why on earth is policy on industrial development in Wales reserved to Whitehall and Westminster? The noble Lord, Lord Bourne, spoke of the responsibility of the Government of Wales to ensure that the Welsh economy performs well.
If the National Assembly is to determine electoral law for Welsh elections, why is it to be precluded from exercising powers in relation to the funding of political parties—an issue which, lamentably, for many years politicians at Westminster have failed to grasp? Since, pace the Secretary of State, the rationale for these and large numbers of other reservations is not clear, we may have to table amendments to delete each reservation individually, so that in the debate on each one the Minister can explain the reason. My noble friend Lady Morgan may or may not seek to strong-arm me to prevent me doing that, but she will have a good wrestle.
It is not just that Whitehall begrudges reasonable freedoms for Wales. Even as the Government are slashing parliamentary representation of Wales at Westminster, they are taking powers from the Welsh Assembly. Bizarrely, in a measure paraded as taking devolution a stage further, Whitehall is actually retracting devolved powers. This is partly because so-called silent areas, where hitherto powers were not specified or were specified ambiguously, and Wales exercised them de facto, are now included in reservations. Of course what the noble Lord, Lord Elystan-Morgan, had to say about the judgment in the Supreme Court in 2014 is highly pertinent here. It is also partly because the vague drafting of reservations, by reference for example to the “subject matter” of large amounts of preceding legislation, enlarges the scope for reservation. With better, more precise drafting, the reserved powers model could have been introduced with no diminution of Assembly competence. As it is, Assembly competence is reduced in regard to, for example, aspects of employment rights and criminal offences against young people, as well as through the tests of competence in new Schedule 7B on modifying the law on reserved matters and Minister of the Crown consents. All this is helpfully discussed in the excellent report of the Constitutional and Legislative Affairs Committee of the Assembly, on which the noble Lord, Lord Elis-Thomas, served. The Bill gives with one hand while it takes away with the other. It gives new meaning to the phrase “take back control”. The Minister should at least tell the House which powers the Government are deliberately removing from Wales and why, and which powers they are removing inadvertently.
Brexit is a new ghost at this devolutionary feast. We now have before us a huge agenda of repatriation of European Union law to the United Kingdom, and then of examination and modification of its components. It will not be enough for the Government and Parliament in London to handle all this on behalf of Wales. The Government of Wales must be a champion for Wales, and the Assembly must play its part in legislation for Wales. The Bill began its passage through Parliament before 23 June, and Clause 19 on implementation of EU law does not appear to meet the point. How will the Government reframe their devolution policy to take account of Brexit?
I have been severe about the Bill because bad law will make good government in Wales more difficult. We must seek, in consultation with the Assembly, and as far as possible consensually in this House, to improve the Bill.
Lord Morris of Aberavon (Lab)
My Lords, perhaps I may put on record my appreciation of the way the noble Lord, Lord Bourne, who takes his title from my home town, has done so much to mould opinion among his colleagues. The Assembly, as he stated earlier, is now a permanent feature of our national life in Wales.
The Bill is another step in the granting of democratic control to the people of Wales, sitting as an elected body in Cardiff. When I introduced a Wales Bill as far back as the 1970s, I got a great deal of flak for using the word “Senedd”, meaning senate; it was a bridge too far for many of my nervous colleagues. How we have moved on since then. This Bill is an improvement on the last offering of the Wales Office, but it still fails to grasp the fundamental point that every opportunity should be taken on the face of legislation to avoid litigation, first by limiting the number of opportunities and secondly by ensuring there is clear water in the demarcation of what Cardiff can legally do and what must be reserved to Westminster. There are, as has been mentioned, more than 20 pages of specific reservations—something of the order of nearly 200, if my arithmetic is correct. This in itself makes the Bill deserving of rejection. The Government should go back to the drawing board and think again.
The reservations have all the fingerprints of every department in Whitehall’s objections, solemnly paraded in statutory form. We had similar problems in the 1970s. The difficulty is that today’s Wales Office has a minuscule staff and very limited statutory drafting experience. Our remedy was to bring in Cabinet Office nominees to knock heads together, which is what Sir John Garlick and Sir Michael Quinlan—both to become outstanding civil servants—did. That is how we eventually got the Bill off the drawing board. As night follows day, this Bill will be the precursor of more Wales Bills and is an unnecessary exercise in constitutional navel-gazing, when the public’s concern is over the quality of government in Wales on the issues that affected my constituents for more than 41 years—health, education, social services and jobs.
The ethos of devolution is that such issues are decided in Cardiff, but we should not be blinded to the successes and alleged shortcomings of the Welsh Government. A wise Government might consider, now that so many years have passed, having some form of independent assessment—a sort of Welsh mini-royal commission—to give a considered view of their record and to suggest possible improvements. I suggest this not as a critic but as a friend of the First Minister and of the Assembly, who are to be congratulated on what they have achieved so far. My personal experience after what could have been a near-fatal motor accident a year ago was, regrettably, questionable so far as hospital care was concerned, which left a lot to be desired when it came to the availability of different forms of treatment and indeed of a ward where one could sleep night after night undisturbed. I have been pursuing my former constituents’ interests ever since and am I grateful for the co-operation of the senior staff at Carmarthen.
The health service in England, too, as we all know, has many problems. It is the provision of comparable health treatment, social services, education, and success in inward investment, that we should be talking about, particularly after the dismantling of some of the machinery that I set up—the WDA, the Land Authority and the DBRW. Our Civil Service, good as it is, can always do with the infusion of expertise from business and trade unions, which are closer to the coalface. With grown-up Governments in Scotland and Wales, do we really need Secretaries of State for Scotland and Wales? They seem to be, at best, claimers of credit for the achievements of other departments—and, at worst, state-paid propagandists for their parties at Westminster. Surely the time has come for more intergovernment negotiations without intermediaries.
I confess to having created a role for the Attorney-General to march up and down Offa’s Dyke to ensure that the Welsh Government did not exceed their powers. It was intended as a nuclear deterrent—a weapon of last resort, not an opportunity for a trigger-happy Attorney-General to rush to court time after time. We know of intergovernment disagreements only when they are aired in court. How much time is spent by a busy Civil Service on those issues that do not come to the public eye? The Bill may give even more opportunities for litigation unless the Attorney-General’s chambers have learned lessons from burning their fingers too many times.
Historically, there are two important milestones in my party’s commitment to devolution. The first was the invitation by Jim Griffiths, MP for Llanelli and deputy leader of the party, to Lord Prys-Davies, whom we miss, to put his thoughts about an elected all-Wales democratic institution on paper, in 1952-53. My party had nothing at the time in writing. He published his pamphlet, An Elected Body for Wales. In the main it dealt with local government powers, but it was a national body that he envisaged. I had no responsibility for that, but I would return home from Cambridge and from the Army in Germany for long and earnest discussions with him on Wales’s future. I had been planning to study the Stormont Government as part of my master’s degree at Cambridge, but there was no other model at the time.
The second milestone was the setting up of the Royal Commission on the Constitution by Harold Wilson—first under Lord Crowther and then, when he died, under Lord Kilbrandon—in 1968-69. The noble Lord, Lord Elystan-Morgan, used his substantial influence to persuade his boss, Jim Callaghan, who was then Home Secretary. The commission and its assistant commissioner for each country comprised persons of exceptional intellectual ability and experience in the affairs of state. It may have been the last royal commission; it is not easy to get such eminent persons together. Regrettably, its conclusions were very divided; each one was hammered out and intellectually well-argued, but the sheer variety gave you room to choose whatever solution you wanted.
Totally unexpectedly, I was appointed Welsh Secretary in 1974—to my amazement and indeed the amazement of Wales. I will never forget the PM’s words to me in the Cabinet Room: “You are a devolutionist and I would be interested in your proposals”. I was given a blank sheet of paper. Despite the absence of its mention in the first draft of the Queen’s Speech—this is not very well known—we became committed to flagship legislation. Given other priorities, the big question was: could there be devolution Bills for both Scotland and Wales in the first Session of Parliament? Could Wales be shunted to the end, as a “tail-end Charlie” option?
I opted for the least radical of the Kilbrandon proposals, hoping to persuade most of my colleagues. There is a rich reward for political students if they read my noble friend Lord Donoughue’s diaries from the ringside at the many all-day away meetings of the full Cabinet at Chequers. There was a different set of objections at each meeting to any form of devolution. In my noble friend’s words, they were “quarrelling like monkeys”. Only the PM’s determination kept the ship afloat. I assure the House that a reserved powers Bill for Wales was not remotely on the cards at that time. That was the realpolitik of our long and exhausting summer days at Chequers. The rest is history.
Because the Scottish Secretary and I had our hands full in running our own countries, John Smith MP was brought in and, after Second Reading, brilliantly piloted the Bill through. I had the able and exceptionally industrious assistance of no more than two Parliamentary Secretaries at any one time—my noble friends Lord Jones and Lord Rowlands, and the late Mr Alec Jones. I particularly record my gratitude to them. I make the point because, according to the Library, there are now 12 Ministers in the Welsh Government—certainly there were on 27 May. Their tasks are of course different from ours, but I would be interested in a comparison of the ministerial costs. When the issue is considered of creating and increasing the number of Back-Bench Assembly Members to scrutinise the Government—and there is a problem of scrutiny—I hope the possibility of reducing and redeploying some of the Ministers is taken into account.
After an 18-year gap, it was a privilege for me as Attorney-General to be a member of the Cabinet committee considering Mr Blair’s Wales Bill, not as a policymaker but as the Government’s principal legal adviser, and to see the Bill through its course. Indeed, it was an unexpected pleasure as Attorney-General to be invited by Mr Alun Michael and his colleagues to the opening of the first session of the Welsh Assembly and to present to Her Majesty a dummy Bill in both languages for her signature.
I hope that some day we will see an end to this parade of Welsh legislation and have a proper reserved powers Bill and—who knows?—a constitutional convention to consider the future constitutions of Wales, Scotland, Northern Ireland and England, too. That is a path I have been treading since 1953.
Baroness Finn (Con)
My Lords, I welcome the Wales Bill, which brings a new era of devolution for Wales by delivering a clearer and stronger devolution settlement. It is a particular honour to speak after the noble and learned Lord, Lord Morris of Aberavon. I knew him as a child growing up in Swansea; he was a great friend of my step-grandfather, Sir Alun Talfan Davies. He will recall that Sir Alun sat as a member of the Royal Commission on the Constitution, which informed the blueprint for Welsh devolution in the 1979 referendum.
It is also an enormous pleasure to speak after the excellent and assured maiden speech of my noble friend Lady Bloomfield of Hinton Waldrist. I have known her as a friend and colleague for a number of years, and share her love of our Welsh heritage and culture. She will bring her considerable experience as well as her formidable energy and enthusiasm to this House. I am also delighted by her support for the Swansea tidal lagoon; I hope to recruit ever more support for this excellent and innovative project.
The key purpose of the Bill is to provide clarity over powers and accountability of those powers. The reserved powers model addresses the patent deficiencies in the current settlement. It establishes a clear line between those subjects that are devolved to the Assembly and those that are the responsibility of the UK Parliament. Too much time has been wasted arguing in the Supreme Court over where powers lie, and the Bill draws a line under those disputes. There is now commendable clarity over who should be held to account for the decisions taken on the public services on which the Welsh people depend.
I very much welcome the Government’s commitment to maintaining the single legal jurisdiction that has served Wales so well for many hundreds of years. The body of Assembly legislation can be accommodated, for now, within the single jurisdiction of England and Wales. A separate jurisdiction would impose significant upheaval and unnecessary costs on the people of Wales. The time and money would be far better spent on front-line services. So much has already been done administratively—for example, moving the Court of Appeal, and it would be excellent progress if more cases were actually heard in Wales.
Devolution has greatly benefited Welsh national life, and the Bill grants an important new power to the Welsh Government: namely, the ability to vary income tax. The devolution of some tax-raising powers will make the Welsh Government more accountable for the public services they provide. There was considerable debate in the other place about whether there was a need for a referendum on the subject. As a general principle, I am not in favour of referendums, and I fully appreciate that, after June, we are all suffering from referendum fatigue. However, although I support the Bill in its entirety, I had some personal disappointment that a referendum will not be on offer for the Welsh people as it was for the people of Scotland. If we expect the people of Wales potentially to pay more tax, we should put the question to them and allow their voice to be heard. I would be grateful if the Minister would consider this position and explain what has changed.
Employment and industrial relations will not be devolved to the Welsh Government. This is consistent with the position in Scotland, and the Government were clear that that would be the case with Wales during the passage of the Trade Union Act earlier this year. If the noble Lord, Lord Hain, tables his amendment to disapply this reservation from devolved public services in Wales, I will join forces with my noble friend Lord Crickhowell to support the Government in opposing that amendment. It would lead to an unwelcome reduction in clarity over employment and industrial relations powers— something that the Bill is designed to avoid.
The Bill devolves further powers to enable the Welsh Government to decide on issues that concern the people of Wales. These include putting Wales’s natural resources in the hands of the people of Wales. The Assembly will, for example, be able to decide on the planning regime for major strategic energy projects, such as whether fracking should take place and, if so, how it should be regulated. As such, decision-making on the use of those resources will rightly rest with the people of Wales, who are best placed to make such decisions. The Labour Party announced at its conference plans to outlaw fracking and reopen coal mines. It would be a shame to ignore the economic benefits of fracking. Shale gas has the potential to power economic growth, support the creation of jobs and provide a new domestic energy source. This in turn will make us less reliant on imports. We should not turn our back on innovation, and I urge the Welsh Government not to do so.
The Wales Bill is rich in opportunity for Wales, and allows us to channel collective effort into delivering a bolder, brighter future for the people of Wales. In my maiden speech, I spoke of my strong support for the Swansea Bay tidal lagoon project. Last week, members of the Government spoke of their resolve to embrace new ideas and industries and to be bold and decisive about our national infrastructure. We are an island nation; we have a safe natural resource in the power of our tides; we can harness that power and, by so doing, nurture a transformative new industry for Wales and the wider UK. As the review undertaken by the right honourable Charles Hendry draws to a close, I urge policymakers at both ends of the M4 to join forces so that Swansea Bay can be the pioneer of this exciting and inherently Welsh industrial opportunity.
The Wales Bill devolves a historic package of powers to the National Assembly. It delivers on its two underpinning principles of clarity and accountability. The new reserved powers model makes clear what is devolved and what is reserved so the people in Wales know who is responsible for what. As such, it enables the Welsh Government to get on with their important task of improving both the economy and devolved public services. It is a welcome settlement for Wales and the people of Wales.
Lord Murphy of Torfaen (Lab)
My Lords, it is a great pleasure to follow the noble Baroness, Lady Finn, and to congratulate the noble Baroness, Lady Bloomfield, on her very fine maiden speech, which we all enjoyed. As an addition to the Welsh Members of the House of Lords, she is indeed most welcome. I also pay tribute to the Minister, the noble Lord, Lord Bourne, who I know is deeply committed to the business of Wales and its prosperity. He has enormous experience in the National Assembly for Wales and as a member of the Silk commission, which provided the basis for the Bill.
I welcome the Bill: it is better—a lot better—than the draft Bill that preceded it. As several noble Lords said, it is the fourth devolution Bill to come to Parliament in two decades. I have been involved in one way or another with all of them. It reminds me of a phrase by a previous Secretary of State for Wales, no longer in the House of Commons, who referred to devolution being a process, not an event. I was not sure at the time that I agreed with that idea, but when I look at my chequered relationship with devolution over the past 30 to 40 years, I understand it. My noble and learned friend Lord Morris gave a very interesting account of the birth of devolution in the Labour Government of the 1970s. I was a rather small but prickly thorn in both his flesh and that of the Labour Government as the treasurer of the Labour No Assembly campaign in the 1978-79 referendum, in which Wales of course overwhelmingly rejected devolution all those years ago.
I began to change my mind for a variety of reasons over the following 18 years and, by the time I became a Minister in Tony Blair’s Government and served on the same committee on devolution as my noble and learned friend Lord Morris, I had become a devo-sceptic—I had been a devo-hostile before. By the time I had finished my course as Secretary of State, I had become a devo-realist. Now I suppose I am a devo-enthusiast, to such an extent that I campaigned vigorously for the extension of the Assembly’s powers in the referendum in 2011.
Incidentally, I see nothing wrong in having this gradualist approach to dealing with devolution, whether it is here or in Northern Ireland or Scotland. There is no rule that you suddenly have to have a great Bill—like the great repeal Bill—which is all that has to be said or done about devolution. Of course, it does not work like that. We have asymmetric devolution in the United Kingdom, which means that it develops differently in different parts of our country. That applies to Wales as it does to Scotland and Northern Ireland.
Does the Bill do the trick? On reserved powers, it probably does—certainly in principle, but whether it does in practice needs to be seen. In Committee and on Report on the Bill, there is plenty of opportunity to examine that aspect of the Government’s commitment to the Silk commission’s report. I think that 200 reservations are too many, even after they have been trimmed down from the previous draft, but I quite understand how they got there.
My experience of Whitehall as Welsh Secretary on two separate occasions is that when Whitehall departments are faced, as they are here, with representations from the Welsh Office, Wales Office or Assembly about different powers and responsibilities, they react grudgingly and with great sulkiness, and I suspect that this has happened here. Government departments have been asked, “What do you want to keep? What do you want to give away?”. They rarely want to give anything away and there needs to be a central power with the Welsh Secretary, but with the help of the Prime Minister, to ensure that those grudging Whitehall departments are, frankly, told what to do. That is what lies at the basis of the inadequate nature of the devolved powers. There are some which have come to Wales which are welcome—for example, those dealing with oil and gas extraction and ports, except for Milford Haven. However, I am bewildered by the air passenger duty decision. If Northern Ireland and Scotland can have air passenger duty, why cannot Wales? If it is simply because of Bristol, that is not a good enough answer and we should have another look at that.
The entrenchment, as far as we can in our constitution, of the Assembly in law and the provision about electoral law for the Assembly and local government are welcome, but, like my noble friend Lord Hain, I have doubts about two issues. One, touched on by the previous speaker, is the question of employment law. I fully understand that, generally speaking, employment law should not be devolved; it should be a reserved matter for the United Kingdom Parliament and Government. But when it touches on policies and services run by the devolved Administrations, that is different. If the Assembly and local government in Wales are, for instance, to be able to deduct trade union subscriptions from wages, why on earth cannot they do that? The world would not fall in on the other side of Offa’s Dyke if that were to happen. It is not about strikes or general issues of employment legislation; it is about practicality and realising that the Assembly and the Welsh Government have a right to deal with those issues that are devolved.
It seems to me ironic that, because of the reserved powers situation, powers that the Welsh Government and Assembly currently have could go back to Whitehall. That cannot be right. I sincerely hope the Minister will have another look at those issues as well.
My noble friend Lord Hain and others also raised the question of the referendum on income tax powers. It depended, of course, not simply on a referendum but on the Assembly agreeing to income tax powers coming to the Assembly in Cardiff. I certainly would not go to the barricades about having a referendum but I remind noble Lords that in 1997, when the people of Wales voted on the whole issue of devolution, they were not asked, as in Scotland, whether they wanted tax-raising powers. I know that it is different if it is a separate referendum, and it is not likely to be very popular, but there is an issue of legitimacy there that needs to be addressed. Certainly the Assembly should give its approval before it decides to take up the issue of income tax powers.
Another vital issue, and something that we saw here in your Lordships’ House during the passage of the Scotland Bill some months ago, is that we cannot really deal with a Bill that, in this case, deals with a referendum on income tax without looking at the fiscal framework. I do not think that it is right for Members of this House to deal with the remainder of this Bill in Committee or on Report until some progress has been made with the fiscal and financial agreement between the Welsh Government and the United Kingdom Government. That is difficult at the moment, I know, because Barnett and the whole issue of the block grant needs to be addressed.
I am rather sceptical about devolving income tax powers, not because income tax on its own is a bad thing, or that the argument about accountability is bad—it is not. However, if all it does is plug the gap in a reduced block grant, that is not right. It should be over and above it. The reason for that is that with Brexit and the loss of European funding for Wales, and with the loss of Objective 1 funding—with which I had a great deal to do all those years ago, and which has benefited Wales enormously—the Assembly needs to be able to borrow money to deal with the great infrastructure projects. The way that it could do that is to have an income stream from income tax and also from other areas, including air passenger duty. I ask the Minister to look very carefully at the progress of these discussions and to keep the House informed on them. I hope that when we come to the Committee and Report stages we can deal with these matters with greater perspective.
I agreed with the noble Lord, Lord Crickhowell, when he talked about joint ministerial committees and interministerial conferences, and about the British-Irish Council, which acts as a means by which the different devolved institutions and the Republic can get together. I do not think that we have used those properly over the last number of years. In my view there would have been no need for the Supreme Court to do what it did if there had been proper discussions at ministerial level and it had been sorted out between Ministers of both the UK and Welsh Governments. The machinery is there, it has been set up for some years now, but it should not simply be a grandstanding or a great gesture. There should be working committees between the devolved institutions and the United Kingdom Government.
This is an opportunity. I think that this Bill should go through but that it needs serious amendment. I hope that, in Committee and on Report, noble Lords will have the opportunity to go into greater detail on some of the issues that I and other Members of the House have raised this evening.
Lord Elis-Thomas (PC)
My Lords, it is a particular pleasure for me to be sandwiched between two Secretaries of State to whom I owe a great debt of gratitude. I worked with the noble Lord, Lord Murphy, twice, when he returned as Secretary of State in my period as Presiding Officer of the National Assembly in Cardiff. The noble Lord, Lord Hunt, who is to follow—I am merely a warm-up act for him—gave me my first public appointment, without which I would probably not be standing here today. He stands guilty as charged.
This has not just been reminiscence therapy for former Secretaries of State. All the contributions we have had from all noble Lords who have spoken have been a relevant contribution to today’s discussion. Those contributions show up the inadequacy of where we are now compared with where we were when we started. The lack of progress in the last 20 years and more, during my political life in the Assembly and in other places, is something that distresses me about this Bill.
I am not one of those “capital N” nationalists, as my colleagues often find to their chagrin. I used to call myself a Welsh European devolutionist autonomist but I am not sure whether one can use the adjective “European” any more in this House. The constitutional development of Wales is something that I have always sought to promote and to work for, often with great difficulty. Sometimes the context was not there and the politics were not right. However, I think that we should have got further than we have at this stage. It is for that reason that my latest contribution as an Assembly Member and a Member of the Constitutional and Legislative Affairs Committee of the National Assembly at the end half of the previous Assembly, and at the moment, has been an attempt to influence the debate in a new way.
We are not supposed to call ourselves noble friends across the House, but the noble Lord, Lord Bourne, who was a great friend of mine when I worked with him in the National Assembly and who is still a great friend, knows that what we have developed in the Assembly is a legislative body of competence and the ability to scrutinise in the same way that Parliament does. The Constitutional and Legislative Affairs Committee will meet later this week with a committee of this House to discuss these issues.
We have gone on at quite some length in this debate but I want to speak briefly about the constitutional principles that concern me and about where we are and why we have not been able to do better at this stage of our devolution pilgrimage, if I can say that, following on from the noble Lord, Lord Elystan-Morgan.
The Constitutional and Legislative Affairs Committee has Bills referred to it by the Business Committee of the Assembly. We operate in a similar way to other Assemblies and Parliaments. When we got this latest Bill we had already done work on the previous draft Bill. We took serious evidence. We opened a public consultation in June of this year and completed it in September and took serious evidence from the most learned legal opinion we could gather together on the constitution in Wales. All this evidence is in the committee’s report. I know that some noble Lords have already read it. My noble friend was complaining that it was not a parliamentary paper. I am not sure whether the Assembly Commission, although I am no longer in charge of it, has the resources to provide all its papers free and in print form. We are, of course, a paperless, digital Assembly, so all Members who do not have a copy can see me later and I will tell them how to print it off the Assembly website. I see that the noble Lord has already done so, and I am grateful to him for that.
We held the consultation, took evidence and had a stakeholder event in which practitioners were involved. The online Loomio platform is still there. That was an attempt to consult in the widest possible way, and we produced this report. I signed up to the report with sadness, because I thought that we should have done better.
We will come back to these issues in Committee and on Report, and there will be amendments. The early clauses of the Bill talk about the permanence of the National Assembly, but I want to know what the legal force of that is. What is the legal force of saying that an institution is permanent? We are here in transient times—we have the great 1662 prayer book, and Prayers at the beginning of our day. We know that we are transient, so what does it mean to legislate for permanence? Even more conflicting and difficult for me is the further clause recognising Welsh law. I am proud to have studied medieval Welsh law at the University of Bangor. I was taught by various scholars, so I know that there is such a thing as Welsh law, because I studied it. Suddenly, we are legislating in Parliament assembled to recognise such a thing as Welsh law. Professor Richard Rawlings is one of the most distinguished constitutional lawyers and persons who has studied devolution, and he told our committee that the clause was a “shocker”. It demonstrates the problem of trying to do something symbolic when you do not really want to do anything at all. I am not saying that that is the Government’s intention, but that is how it has been interpreted by the academic lawyers that we consulted.
I was grateful to my noble friend Lord Murphy for referring us back to the Wales Act 1978, which became the basis, in a reformed way, of the 1998 Act. That Act was an attempt to legislate in a way that did not recognise the clear difference between a legislature and a Government, although we did not use those words in those days. But now we have the reserved powers model, which has been much heralded to be the solution of devolution in perpetuity—yet we have reserved powers plus reservations or exemptions, which is exactly where we were before. For 12 years, which was probably too long, I worked as Presiding Officer, deciding the competence of legislation; it was all about ensuring that it was in the competence, which meant that we had to take decisions about where the boundaries were of the devolution settlement. Clearly, conferred powers with exemptions take us to the same place as reserved powers with further exemptions. So where are we 200 exemptions further down the road? There is no clarity and no constitutional intelligibility here. In particular, where is the intelligibility for the citizen and the electorate? This is what this is about—it is about writing the law of Wales in such a clear way that the people of Wales, in taking decisions about their political life from day to day, will understand what it means. We are nowhere near that.
Having spent all these years trying to legislate in this place and Cardiff, I stand here knowing that I have failed to deliver a reasonable constitutional system for the country that I sought to represent. That is not my fault and not the fault of the present Minister, nor the fault of the parties here. We have been labouring in this vineyard for many years—but there is a failure to realise that Wales deserves better than the present treatment within the family of nations of the United Kingdom. If we are a home nation, it is time that we came home.
Lord Morgan (Lab)
My Lords, the history of Welsh devolution has been a very tortuous one. Since 1999, it has not been a straight run down the piste but a series of slaloms—but we are making progress erratically, and this Bill takes us further. It has a good deal of cross-party support, although that might not have been apparent from what we have heard in the past few hours. As other noble Lords have said, progress owes a great deal to the Minister, a man I have always regarded as a,
“good deed in a naughty world”,
to quote the Bard, perhaps because he was trained in Aberystwyth, although it was slightly before my time there.
Most of the discussion has been around the two main features of the Bill—the reserved powers aspect and the provisions over income tax. I shall deal with those fairly briskly, as so many of the points have already been made. It is profoundly right and long overdue that the Parliament—or, to quote my noble friend, the Senedd—should have reserved powers and not conferred powers. A very strong case for that was made by the Silk report, on the grounds of clarity. It is also important to give greater authority to the Welsh Assembly comparable to Scotland and Northern Ireland. I have never understood why the Welsh Assembly and Government did not have reserved powers from the beginning. We have now got them, although, as noble Lords have said, with a number of limitations.
The Bill has been criticised for its complexity and contradictions. As other noble Lords have done, I welcome many of its features. It is very good to remove the notorious necessity test, which caused a great deal of lack of clarity. I welcome the greater powers and welcome very much the extension of devolution to energy and transport and the running of elections. On the other hand, as noble Lords have said, there are all these many restrictions. As a historian I find it slightly ironic that a measure designed to extend devolution in so many ways goes back on our history. I see that one of the reserved powers is the supply, distribution and sale of liquor. As I tried to explain in a book of mine that appeared—oh dear—52 years ago, and which is still on sale in Aberystwyth in all good bookshops, the principle was admitted in 1880 of the Welsh Sunday closing Act. That is to say, there was a legislative principle accepted for Wales and, accorded through that, the pubs could or should close on Sunday. All these many years later, that is reversed, which is very ironic.
As many noble Lords have said, a lot of progress needs to be made in Committee in that regard. It just shows that over the decades the constitutional and political status of Wales has been unequal. That is what an asymmetrical devolution means—it means that Wales is unequal, and does not have the status in its Assembly or its political authority that the other Celtic nations have.
There has been a lot of discussion about levying income tax. I am all in favour of Wales having the power to levy its own income tax, as Silk recommended. It seems to me, to reverse the famous phrase, you cannot have representation without taxation.
It is unsatisfactory to have your funding based on money that comes from somewhere else that you grumble about, in this case Whitehall and the Treasury. The Labour Party and the Government in Cardiff—and I entirely understand this—have been very critical of many features of this, particularly the fact that it will be yoked to the Barnett formula. They would like to see that removed before Wales has its own income tax: they will have to wait a very long time. The formula was a temporary stop-gap by our dear friend the late Lord Barnett in 1978. There is nothing more permanent than a temporary stop-gap and so it has been with the Barnett formula. I do not particularly like the idea of another referendum. As we have seen with Brexit, the last thing you have with a debate of that kind is a sensible discussion of constitutional and financial principles. There would be lots of wrangling in the press about whether income tax would go up or down and that is all you would have: it would be intellectually worthless. However, the Welsh Government and the Constitution Committee have expressed concerns, so I hope the Minister can give assurances that the overall funding will not suffer and that, in particular, the Welsh Government will have the power to extend their borrowing powers in due course.
I want to talk mainly about three other things. First, it is very important that Wales should have its own legal judicature. It has legislative powers but not a legislative system. We have a growing corpus of Welsh powers coming into being, but we have no structure. There should be a distinct Welsh legal jurisdiction to, among other things, avoid institutional conflict. Again, it is ironic how we have gone back on history. We did rather better under Henry VIII, God rest his soul, than we do now. His Act of Union, as the noble Lord, Lord Elystan-Morgan, will know, created Welsh courts—the Courts of Great Session, which disappeared in 1830. Otherwise, Wales suffers badly in this. We have no designated Supreme Court judge to pay attention to Welsh matters as there is for Scotland. There is an administrative court in Wales, but that is all. Otherwise, the Welsh legal system is administered through London. Therefore we find that Welsh law made in Wales and the wider English and Welsh law administered through the judicial system in London are applied to precisely the same areas of policy. At some stage this is bound to reach confusion and conflict. If you do not take my word for it, there is rather more powerful evidence from, for example, the late Lord Bingham, who spoke very positively in favour of this principle. We have also had very supportive remarks from the Lord Chief Justice. Since his name is Lord Thomas of Cwmgiedd, that may explain his particular way of looking at things.
We do not want a separate Welsh legal system. We are not talking about independence for Wales but devolution: a different political complexion. A separate system would be anomalous and very expensive, but we should and could have a distinct jurisdiction as they do in Scotland, Northern Ireland, the Isle of Man, Jersey and Guernsey. Why not Wales? Why should Wales not have a system which would enable Welsh citizens to feel close to their law and which reflected their deeply felt identity as a nation?
I have two final points. I agreed very much with the peroration of the speech by the noble Lord, Lord Crickhowell: the union. I declare an interest as a member—like the noble Lord, Lord Hunt—of the Constitution Committee. Our report, which the noble Lord, Lord Crickhowell, kindly quoted, was about the union and devolution. This is again an example of piecemeal devolution. I am not criticising the Government particularly on this. It has been happening repeatedly since 1999. Where is the overarching statement of principle about the result of a change of this kind in relation to the union? We reported on this and, as I said previously, a virtue has been made of asymmetry. I do not think it has virtue: it is a way of demeaning Wales. I hope that the Minister, in his response, or the Government, when we look at the Bill at a later stage, can explain the organic relationship of this measure within the overarching union which we wish all these devolution measures to reinforce, not undermine.
My very short final point is that it would be very important to clear up all these issues before we have Brexit. Brexit will have a major impact on Wales in almost every aspect: in agriculture, education, industry, and almost every feature you can think of. It is crucial to have constitutional clarity within the United Kingdom and between all its governmental institutions before the iron curtain comes down.
Lord Hunt of Wirral (Con)
My Lords, in declaring my interests as set out in the register, I reflect on a fascinating and interesting debate with some outstandingly good speeches. I pay tribute to the eminent historian, the noble Lord, Lord Morgan, who joins me in thanking my noble friend Lord Crickhowell for quoting from our committee’s report on this very important subject. Like many other noble Lords who have spoken, I am delighted to give my wholehearted support to the principles of this enabling Bill, changing the basis of the legislative competence of the Assembly, moving from a conferred powers model to a reserved powers model.
The obvious principle behind the Bill is one of which Winston Churchill would certainly have approved—namely, bringing power to the people. It delights me that the modern-day Conservative Party so readily and comprehensively embraces that principle, that philosophy, that policy. Another guiding principle underlying this Bill is to deliver, so far as possible, constitutional certainty. As many noble Lords have outlined, devolution to date has been a journey—always bracing, never dull—but now a destination is in sight. In a world full of uncertainty, that truly is most welcome, to businesses and citizens alike.
The St David’s Day agreement was a magnificent achievement on the part of the political leaders of Wales, which I gladly and warmly celebrate. It took devolution, at last, completely out of the cauldron of inter-party debate and created the prospect of a once-and-for-all settlement. A question which has long divided us, not just between parties but within parties too, setting colleague against colleague, is now being settled with a very considerable degree of agreement across the political spectrum. Let us work hard to retain that agreement as we proceed in the debates on the Bill.
I pay tribute to my noble friend Lord Crickhowell, who, between 1979 and 1987, did so much to initiate a programme of major urban renewal, as set out in his book, Westminster, Wales and Water, which I commend to this House. After 1987, Peter Walker carried forward that ambitious regeneration programme. Then, after three years, I took up the baton from him.
Like my noble friend Lady Bloomfield of Hinton Waldrist, who made one of the best maiden speeches I have ever heard in this House, I am proud of my Welsh heritage, not just as a schoolboy singing the Welsh national anthem in Welsh—which gave me real advantage in later life—but also to have served as Secretary of State for Wales between 1990 and 1993, and then again in 1995, under both Margaret Thatcher and John Major. After that lengthy period initiated by my noble friend Lord Crickhowell, Wales came to be seen as a force in its own right, standing alongside other European “motor regions”. One day I will explain to the House how I managed to persuade the Foreign Secretary that I should be allowed to sign treaties on behalf of Wales, which I did with Baden-Württemberg, Lombardy, Catalonia and Rhône-Alpes.
Inward investment became the driving force of the modern Welsh economy. It still is, and must be. The environment was transformed, too. I am pleased to see in his place the noble Lord, Lord Rowe-Beddoe. I was proud to have secured his appointment as chair of the Welsh Development Agency—not that he took much persuasion. The WDA was reclaiming the equivalent of a football pitch of formerly derelict land every working day. I pay tribute to all that hard work. Yes, we did good work, but there was, in the end, no disguising the democratic deficit that was emerging.
I pay tribute also to the titan of Conservative politics in Wales, whom we miss so much—my friend and colleague, Wyn Roberts, later Lord Roberts of Conwy. Known to friends and opponents—for he had no foes—as the “Bardic Steamroller”, Wyn was a redoubtable fighter for the people of Wales, their culture and their economic and social development. He was responsible for re-establishing the Welsh language at the heart of Welsh life. Throughout my time at the Welsh Office, he was an ever-present source of timeless wisdom, good humour and sound practical advice. As has already been mentioned, Wyn inspired me to make one of the best decisions I ever made—to appoint the noble Lord, Lord Elis-Thomas, as chairman of the Welsh Language Board. I am sure Wyn would feel very proud of all that has happened, were he able to be with us today. As a former political reporter, he had a natural and healthy lifelong scepticism about politicians. As a proud Welshman to his core, he well understood the philosophical arguments for devolution. He always greatly regretted the partisan nature of the debate and also warned, charmingly but firmly, against an endless proliferation of the political class.
Looking back, devolution seemed to be a never-ending matter for debate, a continuing process, even an interminable conversation in its own right—a kind of elevated and ever more abstruse academic seminar, not a concrete reality for the people of Wales. I do not believe this is well known, but in 2008 Wyn produced a report for the then leader of the Opposition, David Cameron, setting out the basis for a long-term settlement, transforming self-government for Wales from that debilitating discussion into a solid, entrenched system that would stand the test of time. That report marked a fundamental shift in my party’s thinking. It is a testament to Wyn Roberts and to David Cameron that here today we are discussing a very similar set of proposals, now with cross-party support.
I join other speakers who have paid tribute to my noble friend Lord Bourne for the leading role he has played in creating this new, more collegiate climate. He has been both visionary and practical, both a diplomat and a politician. As a party, I strongly believe we have to sense that devolution—perhaps even what used to be termed subsidiarity—is the best possible way of bringing decisions closer to the people. My noble friend grasped that from the outset. I believe that we now have a historic opportunity.
There are still one or two loose ends. I wish that so many of them had not featured in this debate, but we have to recognise that they exist. I know that noble Lords have a range of views on matters of varying moment, from the possible emergence of a distinct and distinctive legal system in Wales to the police. If tempted, I may refer in Committee to an agreement I reached with the then Home Secretary, Kenneth Clarke, about the transfer to Wales of powers over the police, but perhaps I should not delve too deeply into that because it was stopped by the bureaucracy of Whitehall. Both Ken and I have several times realised that we face quite a difficult task in taking this further forward and getting it on to the statute book. There are also cross-border train franchises and the allocation of air passenger duty, but let us not get too diverted. We should concentrate on the broad degree of consensus which ought to sustain us through the passage of this Bill.
There was a time when I feared that devolution would be the first step to the break-up of the United Kingdom. The world has moved on, however, and I have moved on, too. I believe that this legislation not only takes forward straightforward decentralisation, bringing power closer to the people, but also draws a line under a long and fractious debate, which has sometimes overshadowed us all and threatened to supplant positive action with hot air.
I look forward to the debates we shall have in Committee and on Report and to the positive and creative atmosphere in which we will have those debates, so different and preferable to the rancorous discussions that I recall only too well, and which I very much hope we have consigned permanently to the dustbin of history.
Lord Thomas of Gresford (LD)
My Lords, I congratulate the noble Baroness, Lady Bloomfield, on an excellent maiden speech. I was delighted to hear of her interest in green energy and that she is a supporter of the Swansea lagoon. But, more importantly, she is a harpist. I thought that I was the only harpist in this assembly. Having learned the instrument for some years, I hope that we can twang from the same legislative hymn-sheet over a number of years.
Fifty years ago, in the autumn of 1966, in a Wales rocked by the Aberfan disaster, I sat down and drafted the Parliament of Wales Bill, which Emlyn Hooson presented in the House of Commons on 1 March 1967. The noble and learned Lord, Lord Morris of Aberavon, will be delighted to know that I decided to call that Parliament a Senedd. It was to have 88 members, be elected by proportional representation, of course, and have powers to legislate,
“for the peace, order and good government of Wales”,
with powers to raise taxes, other than income tax and certain other taxes. The Bill reserved to the Westminster Parliament defence, foreign affairs, currency, international trade, law and order and social security.
I have been looking through the Bill before us in the course of this debate to try to work out how many of the 200 reservations in it could come under those much more simple headings that I put in my Bill. By Clause 9(5) I provided for elected members to be paid £2,250 a year. It happened to be £250 more than I earned at the time as a law lecturer, and I thought that that would suffice. It promoted a ministerial system of government.
The political context of 1966 was that Harold Wilson had won the election and the noble Lord, Lord Elystan-Morgan, had turfed the Liberals out in Ceredigion. I was a bit miffed about that, because I had voted for him in 1964, when he was the Plaid Cymru candidate in Wrexham. In July 1966, Gwynfor Evans won the Carmarthen by-election on a platform which called for Commonwealth status for Wales. How delightful it was to hear dominion status being argued again—Saunders Lewis wanted that when he first set up Plaid Cymru in the 1930s.
Lord Thomas of Gresford
I thank the noble Lord. I did not realise that it had such a long history. At the same time, a small group of us, led by Emlyn Hooson, formed the Welsh Liberal Party, and the first president was Sir Alun Talfan Davies, so I was delighted to hear the reference made by the noble Baroness, Lady Finn, to her relationship with my old friend and colleague. If she belongs to the Talfan Davies family, it is as though she were born into the crachach. Our first task, we thought, was to clarify the Welsh Liberal approach to devolution. That was the purpose of my Bill, and I gave evidence about it to the Kilbrandon commission in 1968, which was mentioned earlier.
Gwynfor was a supporter of our Bill, as was SO Davies from the Labour Benches. However, when in June it was listed for Second Reading, it was objected to by the Labour Government and the Conservatives and it fell. When introduced into the Lords by Lord Ogmore in January 1968, Labour and Tory Peers blocked it in the usual way, by an amendment that it should be heard six months hence. The noble Lord, Lord Murphy of Torfaen, was obviously born into that tradition. It will be no surprise, therefore, that we on these Benches support the reserved powers model contained in the Bill, although the principle could be much more easily expressed. Fifty years on, it is comforting if not a little frustrating, to find that the Constitutional and Legislative Affairs Committee of the Welsh Assembly, with Labour, Conservative and Plaid representation but no Liberal, have concluded in paragraphs 83 and 84 of its report that the words,
“make laws for the peace, order and good government of Wales”,
would indeed confer plenary law-making authority on the National Assembly. I agree. But in one area I disagree with the CLA committee: that of a single jurisdiction, which your Lordships have debated today.
Because I was a purist in 1966, Clause 19 of my Bill set up a separate Court of Appeal and revived the Court of Great Sessions, to which the noble Lord, Lord Morgan, referred, with its own judges and its own Attorney-General, and a single legal profession. This would obviously have involved the creation of a separate Welsh jurisdiction. I topped it with a Chief Justice of Wales, and to tell the truth, I rather fancied the position myself—it was something to work for. As the noble Lord, Lord Morgan, said, the Court of Great Sessions in Wales was set up in 1542 and lasted until 1830. It had full King’s Bench and Chancery civil jurisdiction and full criminal jurisdiction. My Bill proposed the abolition of the assizes, which at that time took High Court judges around Wales, and the creation in Wales of six permanent courts. That in fact happened in any event in the reforms of the court system in 1972.
However, since those halcyon days I have had practical experience of separate jurisdictions. I practised in Hong Kong, Singapore, Malaysia and the Caribbean, which have inherited the common law and the judicial system of the United Kingdom from their colonial past, and it works. Two or three years ago, I was anxious to appear pro bono in a Scottish court on behalf of neighbours in Scotland who were being sued in an intellectual property dispute. I discovered that admission to the Scottish Bar would be at the discretion of the Dean of Faculty and that I would have to pass an aptitude test, which involved—this is two years ago—a written examination paper in the Scots legal system, constitutional and administrative law, written examinations in two of three special subjects, and oral examinations in the criminal law and either contract or delict. Fortunately, the case was withdrawn, with the costs payable to my friends.
In Northern Ireland, the system is that temporary membership may be granted by the Northern Ireland Bar Council committee for a specific case but will be granted for a maximum of three occasions. A glance at the regulations governing the Irish Bar indicate that a European lawyer may have rights of audience before a court in Ireland but only if he appears in conjunction with a full member of the Irish Bar. Therefore the pattern of all these is that despite the EU lawyers establishment directive 1998, which attempted to make legal qualifications interchangeable across Europe, each jurisdiction in these islands is jealously guarded. The creation of a separate jurisdiction for Wales implies not just separate courts but separate qualifications and separate rights of audience. The noble Lord, Lord Howarth, referred to that. If they can, lawyers lose no opportunity to create an exclusive world. At some future point a zealot might even perhaps call for a qualification in the Welsh language for all lawyers licensed to practice in Wales. After all, there is a right to use the Welsh language in every Welsh court.
In my early years, the Wales and Chester circuit included the Birkenhead courts, because Cheshire then extended to Birkenhead. As a result, we charged any members of the Liverpool Bar who had the temerity to cross the Mersey £5 a case. With that money we built up a fine circuit wine cellar for the Chester Bar mess, which served us very well for years—and, of course, an enduring enmity with the barristers from Liverpool.
There is of course a distinctive body of Welsh law, not only the legislation passed by the Assembly but the inheritance of the common law and of existing acts which relate to areas of policy which are not reserved to Westminster. Current laws in those areas will continue to apply as at present in Wales, even though Westminster amends, updates, repeals or changes them. But there is no need for procedural change in the justice system. The principles of statutory interpretation will remain the same and, unlike Scotland, the language of the law will be the same. There will be nothing to confuse any lawyer qualified in the usual way.
Furthermore, as has been pointed out, there is already an administrative court to deal with judicial review and similar applications involving the interpretation of the legislation of the Assembly. The Lord Chief Justice and Mr Justice Wyn Williams are today sitting on an appeal against Welsh Ministers in Swansea Crown Court in the Administrative Court for Wales. No doubt a number of specialists in this limited type of work will emerge, but that is a very far cry from a wide, separate jurisdiction. Noble Lords should beware of lawyers and academics who might call for just such a jurisdiction simply to corner the market.
I would deplore any extension of legislative powers in criminal law and private law in a way that would create significant disparities with the law across the border. I am sure we will examine where the Assembly has a role to create offences or civil remedies to enforce breaches of regulations in areas which are devolved and not reserved, but it must be limited.
No doubt we will discuss the specific reservations of powers. I was interested in the discussion about the Sunday Closing (Wales) Act 1881. I recall emerging from my Welsh chapel Sunday school at an early age to see queues forming at the bus stop in Wrexham high street. Where were they going? They were going to the pubs in Farndon on the English side of the border. The noble Lord, Lord Howarth, said, “Well, if Wales wishes to be virtuous, so be it”. I have never knowingly relinquished my membership of the Band of Hope, so I will fight for the right of the Assembly to turn Wales dry again if that is what the people of Wales want.
The powers relating to water affect me very much. A member of my family comes from Tryweryn. The village was drowned, along with a nearby farm. Lord Hooson and I appeared for the local people when there was an attempt to drown the Dulas Valley. Lord Cledwyn announced at the end of that inquiry that no Welsh valley would again be drowned in order to provide water for England. So I am with anybody who wants to have the powers relating to water devolved to Wales.
I have always believed in, and campaigned for, a Parliament for Wales but we must keep a sense of proportion. We must resist the temptation, for the sake of purity, to grasp and grasp, and grasp again, for a quasi-independent state. This Bill should be about the practicalities of good government. I join in the tributes to the noble Lord, Lord Bourne, to Stephen Crabb and to my noble friend Lady Randerson for all the work that they did in bringing about the St David’s Day agreement. There will never be an end to the process unless we finally sort out the fiscal framework for Wales, and I hope that before the Bill is finished we will hear more about that from the noble Lord at the Dispatch Box.
Baroness Gale (Lab)
My Lords, it is a great pleasure to speak in this debate on behalf of the Opposition. I thank the Minister for opening the debate and for his clear explanation of what the Bill is all about as we take yet another step on the journey of devolving more power to the Welsh people and giving them a direct say in what happens in Wales through the Welsh Assembly.
Many noble Lords who have spoken today have been on that journey for a very long time and they have great experience, as we heard from their speeches. As my noble friend Lady Morgan of Ely and other noble Lords have said, we have had five former Secretaries of State for Wales speaking in this debate, bringing to it a wide range of experience. Some, like the noble Lords, Lord Crickhowell and Lord Hunt of Wirral, and my noble and learned friend Lord Morris of Aberavon, were Secretaries of State before devolution. My noble and learned friend mentioned the word “senedd”, which was highly political in his day. I can tell him that even in the late 1990s it was still a very political word and most people tried to avoid using it, although today we do so quite freely.
My noble friend Lord Murphy spoke about his journey through devolution, which I witnessed. Now, he is a fully paid-up member of the devolution club. He and my noble friend Lord Hain were Secretaries of State after devolution, as well as in the run-up to it, and they played their part in the second referendum campaign. But all our former Secretaries of State for Wales played a big role, whichever side they were on, and all have made a great contribution to Welsh life.
I was very pleased to hear the noble Baroness, Lady Bloomfield, make her maiden speech. It is so good to have another Welsh Baroness in your Lordships’ House and I congratulate her. As she is learning Welsh, I can say llongyfarchiadau—congratulations—on her excellent contribution to the debate. Like me, she is a south Walian, and she attended Atlantic College, as did my noble friend Lady Morgan of Ely. Like, I am sure, all other noble Lords, I look forward to her making further contributions on all matters Welsh.
In the 17 years of devolution a number of Acts beneficial to the people of Wales have been passed. One example was the legislation to bring about the Older People’s Commissioner for Wales, believed to be the first in the world and designed to improve the lives of older people in Wales. The Children’s Commissioner for Wales was the first to be introduced in the United Kingdom, aimed at improving the lives of children in Wales. The Human Transplantation (Wales) Act 2013 was the first measure in the UK to give people the chance of a longer and better life. Other legislation, in 2011, introduced a charge on plastic bags, thus making a contribution to improving the environment. It has cut down the use of plastic bags by up to 90% and has raised money for charity at the same time. The Welsh Assembly was the first legislature in the United Kingdom to introduce such a measure, and it is good to see that the other three countries in the UK have since followed. The ban on smoking in public places in Wales has contributed to better health, and the Violence against Women, Domestic Abuse and Sexual Violence (Wales) Act 2015 was regarded as ground-breaking legislation.
Those measures would not have happened without devolution, proving that, where the Assembly has powers, it acts on them for the benefit of the Welsh people. They are responsible measures, responding to needs of the people of Wales.
The Bill before us gives greater powers and more devolution to Wales but, as many noble Lords have said, it is still flawed. I believe that everyone is aware that much work needs to be done on it. Indeed, Guto Bebb MP, the Parliamentary Under-Secretary of State for Wales, said at Second Reading in another place:
“It is fair to say that this is a complex and difficult Bill”.—[Official Report, Commons, 14/6/16; col. 1726].
I think he is right, and I am sure that many noble Lords agree.
The report of the Welsh Assembly’s Constitutional and Legislative Affairs Committee on the Wales Bill, published in the last few days, says that its,
“overall assessment of the Bill is that it is a complex and inaccessible piece of constitutional law that will not deliver the lasting, durable settlement that people in Wales”,
hope for, but there are elements that the committee does welcome. However, again in contrast, Alun Cairns MP, the Secretary of State for Wales, said at Second Reading in another place that the Bill is one of clarity and accountability. He said,
“the new reserved powers model of devolution draws a well-defined boundary between what is reserved and what is devolved, clarifying who is responsible for what. It is also a major step in extending powers. It will end the squabbles over powers between Cardiff Bay and Westminster, enabling the Welsh Government to get on with the job of improving the economy, securing jobs and improving devolved public services”.
He went on to speak about accountability:
“The second principle is accountability. The Bill paves the way to introduce Welsh rates of income tax. It will make the Welsh Government accountable to people in Wales for raising more of the money they spend. This, again, is a major step in the assembly’s maturity”.—[Official Report, Commons, 14/6/16; col. 1645.]
On the devolution of income tax, during the referendum campaign in 1997, Labour went to the polls with one question on the ballot paper, not two as in Scotland. We made a commitment to the people of Wales that there would be no tax-raising powers unless there was a referendum. Now the Government are proposing that tax-raising powers should be given to Wales without a referendum. We need to be much clearer on what this means, as my noble friend Lord Hain has pointed out in detail, because it is such a change in government thinking from only two years ago in the Wales Act 2014. Other noble Lords have said the same. I have no doubt that we will come back to this point in Committee.
On the reserved powers, many noble Lords have outlined what they are and the concerns around them. We are not sure of the figure but it is around the 200 mark. The noble Lord, Lord Elystan-Morgan, said that this was unworthy of the people of Wales and that we are moving backwards. Others have spoken in a similar vein. I am sure the Minister will agree that there is much work to be done on the reserved powers. I know he is always in listening mode and is prepared for discussions and to listen to what noble Lords have to say. I am sure he will carry on in that way.
Many noble Lords have mentioned the air passenger duty. There is disagreement on this matter in your Lordships’ House, with the noble Lord, Lord Crickhowell, being against giving air passenger duty to Wales and the noble Baroness, Lady Randerson, saying that Wales should have it. The argument the Government are putting forward on this matter is not a strong one and we will have to have more discussions on it.
On elections, which a few noble Lords have mentioned, we welcome the devolution to the Welsh Assembly of local government elections, the number of members, the age at which people have the right to vote in Welsh elections, the number of Assembly Members and constituencies and the name of the Assembly. We called for this when the Wales Act 2014 was being debated but the Government did not agree then. It is good that they have had a change of heart on this matter and now agree that it is a sensible measure to allow these decisions to be made in Wales. If only we could have had that in 2014.
I am sure the Minister will agree that there will be great scrutiny after listening to what noble Lords have had to say today. We will scrutinise and discuss the Bill during its passage through your Lordships’ House and raise amendments, certainly in Committee. As I mentioned earlier, I am sure the Minister will listen to all Members of your Lordships’ House and that we can arrive in the end on a Bill on which we all agree. I look forward to the Minister’s response.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, this has been a debate of rare quality. As has been said, we have had contributions from five former Secretaries of State—the noble and learned Lord, Lord Morris, and the noble Lords, Lord Crickhowell, Lord Hain, Lord Hunt and Lord Murphy—all, obviously, with vast experience of this area. We have also had a contribution of rare quality as a maiden speech from the noble Baroness, Lady Bloomfield. It was truly excellent and I am sure we all look forward to many contributions from her in the future, not only on Wales but focusing very much on it. We have also benefited greatly from the contributions of former Assembly Members, party leaders and former Ministers, from the noble Baroness, Lady Randerson, to the noble Lords, Lord Wigley, Lord Howarth and Lord Elis-Thomas, who also brought their great experience to bear.
I will try to deal with key points that have been made during the course of the debate. Obviously I look forward to engaging in Committee and thereafter on some of the detail. There is a genuine feeling that we want to move forward in a consensual way, as far as possible, and obviously many areas of the Bill have been welcomed pretty much universally—not least in the contribution of the noble Baroness, Lady Gale, on some of the internal workings, elections and so on, which we both agree should have been matters for the Assembly from a much earlier date—probably well preceding 2014.
I thank the noble Baroness, Lady Morgan of Ely, for her kind words in opening. We go back a long way together on devolution matters and I know that she is now adding her wisdom to the counsels of the Assembly. I thank her for what she said and look forward to engaging on some of the issues that she quite fairly set out.
Let me look at some of the key ones. First, on taxation, I can reassure the noble Lord, Lord Hain, that there is no neoliberal assault on the part of the Government. This is a pragmatic approach to an issue that it is high time that the Welsh Assembly—who knows, henceforward perhaps the Welsh Parliament—were able to deal with. It is appropriate that a body of such maturity has the tax powers we are talking about.
It is not, of course, a wholesale tax package. Listening to one or two noble Lords, it sounded as if we were devolving the whole of income tax powers to Wales. That is not the case. We are devolving 10p and there is an ability for the Government of Wales—which is currently the Labour Party, with a Liberal Democrat Minister—to set that at current rates. There is no obligation to vary it. They have to set a rate but they are quite at liberty to set it at the existing rate if that is what they want to do. We have taken away the condition that they are obliged to vary all the rates together. The lock-step has gone, which means that they can be varied quite separately.
That is appropriate now, devolution having come so far. It is nearly 20 years since there was the issue of whether a separate question being put in Scotland should be put in Wales, and a lot of water has flowed under the bridge. We would not be doing Wales any great service by holding things back and saying that there has got to be a referendum on the issue. There is no assault on the state. Listening to the present Prime Minister, it is quite clear that she realises that the state has a powerful role to play. That seems to strike a chord with the electorate because that is where the electorate is, too. That is important. I disagree on this issue with my noble friend Lady Finn. It is appropriate that we move forward on this without greater delay because, in my view, it would hold back Wales.
Moving on to look at that in the wider context of the fiscal framework and the question that the noble Baroness, Lady Morgan, put to me initially about whether we should wait until we have got the legislative consent Motion, I can assure her that I think that that is absolutely appropriate. Although legally we could move this legislation forward without the LCM, that would not be the appropriate thing to do. We are looking for progress from the Welsh Assembly and, as I understand it, discussions between my right honourable friend David Gauke, the Chief Secretary, and Minister Mark Drakeford are going well. I hope that progress continues and that I will be able to give more details to noble Lords as matters progress. That is certainly our intention.
Lord Bourne of Aberystwyth
I anticipate that it will be, but it does not have to be. Obviously we will want to make sure that steady progress is being made before Report. As things progress it is anticipated that we could have agreement on these issues before Christmas, but I will ensure that the House is updated on this. As I said, I certainly anticipate we will not go to Third Reading without it and probably we will not go to Report—but I will want to make sure we are making the progress to which I referred before we commit to taking it to Report.
I move to the question of the single jurisdiction. I think there was broad support for saying that, certainly at this stage, there is no desire to move away from a single jurisdiction. I have spoken to representatives of every single law school in Wales and that is pretty much their feeling. It is also the feeling of many practitioners in Wales. We would not be doing Wales any great favours by differentiating the Welsh jurisdiction from the English jurisdiction. It is quite possible, even at this stage, to accentuate and overemphasise the differences that exist. Historically, they are not great. It is very different from the position in Scotland, where the Scottish jurisdiction historically has been very different. So parallels there are not appropriate.
There is a body that is looking at the legal arrangements. As I have indicated, I will update noble Lords on how that body is getting on, because there is an appropriate interest in making sure we have Welsh judges—when I say “Welsh judges” I mean judges not necessarily of Welsh nationality but with Welsh experience—deciding issues that are steeped in Welsh law. That is quite appropriate and what the administrative arrangements we are looking at should take hold of.
I move on to look at reservations—another key area which overlaps to some extent with the Welsh jurisdiction issues around the separate position on alcohol. I well remember as a student at Aberystwyth that the time I felt most thirsty and in need of a drink was on a Sunday. Inevitably, the only place you could get a drink on a Sunday in Aberystwyth was the student union because it was membership only. Of course, the queue was about a mile long to get there. The alternative in those days was getting a bus into Montgomeryshire, which was a popular thing to do. So I can understand the strong feelings that exist on that issue.
Some of the points made on reservations were somewhat wrongheaded. The noble Lord, Lord Howarth, mentioned the position on knives in relation to the position on devolution to cities. Of course, cities will not have legislative powers in relation to knife crime, so I do not think it is a perfect analogy—but no doubt we can look at this as things develop in Committee. The noble Lord, Lord Elis-Thomas, said that adopting a reserved model is not a solution to all ills. Hear, hear to that. I never thought it would be. Obviously, the discussion on this will be about what is and what is not reserved. I am sure that we will take different views on some of that, but I look forward to discussing it when we come to Committee.
It is great to see the noble Lord, Lord Elystan-Morgan, in his place, firing on all cylinders as always. I thank him for his kind comments. I do not agree with his position on dominion status. I do not hear that as a great clarion call for something that the people of Wales want, but I understand that he has some material points to discuss in relation to reservations and I look forward to hearing them as we move forward.
The conferred model was silent about many issues that nobody would ever anticipate, as opposed to reserved issues such as defence, immigration, the Crown and foreign affairs. Sensibly, nobody was suggesting that therefore these were matters the Welsh Assembly could deal with. It is quite a difficult manoeuvre to go from conferred to reserved. I am very grateful that noble Lords have recognised that we have made progress on this. I look forward to hearing from noble Lords on some of the remaining issues of concern.
I will touch on one or two other aspects raised by noble Lords that are worthy of further investigation. One, brought forward by my noble friend Lord Crickhowell and echoed by the noble Lords, Lord Murphy and Lord Morgan, was the importance of working with existing institutions—perhaps getting the physics right, not just the chemistry, of the relationship between different Ministers to make sure we have some underpinning for when it is necessary for decisions, policies or interactions to be discussed between Cardiff and Westminster. That is a very good point that I will take away and look at to see what we can do on it.
Without getting into the purely philosophical, another issue that the noble Lord, Lord Elis-Thomas, mentioned was the permanence of the Assembly and the strength of the new clause that says the Assembly is permanent. That was something pushed for very hard by the Plaid Cymru representative on the Silk commission—but, on that issue, just as the India Act could in theory be repealed by the Westminster Parliament, I would not overlook the symbolic importance of including the clause that states that the Assembly is permanent because it perhaps underlines the way it is regarded politically. It is a matter of political realities. I am not suggesting that we can alter the Kelsen Grundnorm of the fundamental basis of the constitution, but it is something that has been widely welcomed.
As I said, this has been a debate of rare quality. I thank noble Lords for engaging constructively and I look forward to that constructive approach continuing. Lastly, air passenger duty is not just an issue of the potential unfairness to Bristol, which clearly was and, in the interim, remains an issue relating to the state aid position. It is also a question of fairness within the United Kingdom and in Wales. There is a great danger that we see this as just a tax, the variation of which can help Cardiff Airport. People in north Wales would not consider using Cardiff Airport; they use airports in England. Likewise, in central mid-Wales they would use Birmingham. It is a much broader issue of whether we do something about air passenger duty—as a Treasury issue, that is well beyond my pay grade—across the whole of the United Kingdom, which remains a possibility.
Once again, I thank noble Lords very much for the constructive way they have engaged. I look forward to Committee and continuing to provide information as it becomes available on the way that discussions are proceeding between the Treasury and Cardiff Bay. I beg to move.
Wales Bill
Monday 31st October 2016
(8 years ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 63-I(a) Amendments for Committee, supplementary to the marshalled list (PDF, 131KB) - (31 Oct 2016)
Lord Wigley
“( ) A referendum under subsection (3) may only be held following a vote in the Assembly in favour of holding a referendum for the purpose mentioned in subsection (3).( ) The rules relating to any referendum held under subsection (3) must be drawn up by the Assembly in cooperation with the Electoral Commission.”
Lord Wigley (PC)
My Lords, this amendment goes to the heart of the Government’s intentions relating to the permanence of the National Assembly. The Bill as it stands contains the words:
“In view of that commitment it is declared that the Assembly and the Welsh Government are not to be abolished except on the basis of a decision of the people of Wales voting in a referendum”.
But what is the Government’s intention, and what do they really mean by those words?
I am aware that the introduction of those words follows a similar declaration in relation to Scotland’s Parliament—that it is a permanent part of the governmental system of that country. In Scotland, the demand for that grew from the Scottish assertion of a claim of right: that sovereignty in Scotland comes from the people. That is fundamental to the developments in that country over the past 25 years. It was central, indeed, to the initiative taken by the late John Smith when Labour leader, and it was the background to the Scottish convention which brought the question of a Scottish Parliament back on to the political agenda in the late 1980s.
I believe that this principle should equally apply to the National Assembly. As it was established—and later emphatically confirmed—by referenda of the people of Wales, it is only right that the National Assembly can be abolished only by the democratic vote of the people of Wales.
My amendment deals with the circumstances in which such a referendum can take place. I believe that it would be totally unacceptable if Westminster were to decide, against the wishes of the National Assembly, to hold a referendum on its abolition. That would make a total nonsense of the provisions in Clause 1 about the permanence of the Assembly. It would be a creature only in existence at the behest of Westminster. Equally, if the rules for such a referendum were drawn up by Westminster, there is no knowing what impediments might be contained within them. One has only to think back to the 1979 referendum, with its 40% rule, which meant that on a 50% turnout, there had to be a four-to-one majority in favour of the Assembly for it to be established. That rule applied in Scotland too, where, unlike Wales, there was a majority in favour of the assembly, but it was overruled because of the 40% rule.
My amendment, therefore, does two things. First, it provides that the right and responsibility for holding any such referendum should lie exclusively in the hands of the Assembly itself. Secondly, Amendment 1 provides that the rules for that referendum should be drawn up by the Assembly in co-operation with the Electoral Commission. These two safeguards ensure that this Bill does indeed legislate for the permanence of the Assembly and recognises—as, I think, do all true democrats in this Chamber—that the future of the Assembly should lie in the hands of the people of Wales alone, and not be beholden to the whims and wishes of the Government of the day here in Westminster. As such, this is fundamental to our vision for the status and future of the Assembly. I ask the Government to accept this amendment or, if it is in any way technically deficient, to bring forward their own amendment on Report to reach these objectives. I beg to move.
Lord Elystan-Morgan (CB)
My Lords, I wholeheartedly agree with the submission made by the noble Lord, Lord Wigley. He has adumbrated all the arguments that I can possibly think of in support of this amendment. It goes to the very heart of the question that this is essentially a contract, not inter-institutional in terms of the mechanics of Westminster, but a contract with the people of Wales.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank the noble Lord, Lord Wigley, for introducing this amendment, and the noble Lord, Lord Elystan-Morgan, for his contribution. The amendment seeks to define the trigger for a referendum to abolish the National Assembly for Wales and the Welsh Government, and would provide that the rules for such a referendum be drawn up by the Assembly in co-operation with the Electoral Commission. Clause 1 meets the Government’s commitment in the St David’s Day agreement and delivers the Silk commission’s recommendation that it should be recognised that the National Assembly is permanent so long as that is the will of the majority of the people of Wales. New Section A1(3), in Clause 1, states:
“In view of that commitment it is declared that the Assembly and the Welsh Government are not to be abolished except on the basis of a decision of the people of Wales voting in a referendum”.
As matters stand, referendums are governed by the law relating to referendums, as passed by this Parliament, and I do not consider that there is any suggestion that that should be varied. The principle in the Bill establishes in statute what is already recognised to be the case—that the National Assembly for Wales and the Welsh Government are permanent parts of our constitutional fabric. The referendum provision strengthens this commitment and delivers on the second limb of the Silk commission’s recommendation. Although there has never been a question about whether these institutions are anything but permanent, it is only right that if they were to be abolished that would have to be on the basis of a decision by the people of Wales. Let me be clear that such a referendum is not envisaged, and so the noble Lord’s amendment deals with entirely hypothetical circumstances. I therefore believe that it is unnecessary. On that basis, I urge the noble Lord to withdraw the amendment.
Lord Wigley
Perhaps I may press the Minister to be a little clearer on this matter. Is he telling the House that there are no circumstances in which a Government in Westminster, in this Chamber or the other Chamber, could move to hold a referendum if the National Assembly for Wales were against holding such a referendum? Or is he saying yes, Westminster can pass such a referendum irrespective of the wishes of the National Assembly?
Lord Bourne of Aberystwyth
My Lords, the noble Lord will know that I do not set out the rules on the sovereignty of Parliament. He will be aware, as I am, that very recently we have seen situations that demonstrate the sovereignty of the people and the sovereignty of this Parliament, so nothing I say could obviate the possibility of a Parliament coming forward subsequently and reversing that. For example, it would be open to any Parliament here to repeal the Government of India Act. That would not be a sensible move and would not be politically realistic, but in terms of the sovereignty of Parliament, of course, that remains the case. This is an important declaratory principle that has not existed previously, indicating the permanence of the institution and the fact that it is the belief of this Parliament that it should not be done without the consent of the people of Wales.
Lord Elystan-Morgan
Does the Minister agree that this matter would be caught by the words of new subsection (6) in Clause 2:
“But it is recognised that the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of the Assembly”?
In other words, it is the Sewel covenant. The Government would fall foul of that, it seems, if they were to act in a cavalier way.
Lord Bourne of Aberystwyth
My Lords, I am grateful to the noble Lord for his assistance on this matter. He is right that this provision gives that convention statutory force but, of course, it does contain the word “normally”; therefore it is still subject to the will of the Parliament of the United Kingdom. He is right that in normal circumstances that would be impossible to do.
Lord Elis-Thomas (Non-Afl)
I do not wish to anticipate any major contribution that I may have to make on my own amendment on the word “normally” later on, but I do not believe that the Minister has really answered the question from my colleague the noble Lord, Lord Wigley, who asked whether the Parliament of the United Kingdom could legislate for a referendum on the future of the National Assembly without the consent of the Assembly. It seems to me that if we are legislating, as we are in the Bill, for the convention relating to the legislative consent Motions to be part of Welsh law and devolution law, then surely, in a situation where the future of the Assembly were subject to a referendum, consent should be sought. Or is the Minister allowing a little room for the removal of the Assembly without the consent of its Members?
Lord Bourne of Aberystwyth
My Lords, I think the noble Lord knows me better than to think that that is on my mind at all. I was not the person who brought forward this amendment. I am unable to rewrite the rules on the sovereignty of Parliament; I was merely pointing out the legal position in relation to this. There is a very clear declaration that is consistent with the Silk recommendation which was discussed by the Silk commission. It is not to be anticipated in any way that this Parliament would wish to do anything relating to the National Assembly except celebrate its existence. I make that absolutely clear; it is my position and the position of my party, as the noble Lord knows. I just point out that this cannot overrule the rules of science and of parliamentary sovereignty that exist independently of the amendment.
Lord Wigley
My Lords, I am grateful to the noble Lord, Lord Elystan-Morgan, for his contribution and my noble friend Lord Elis-Thomas for his intervention—I nearly said my erstwhile colleague.
Lord Wigley
I will not in this Chamber.
There seem to be two central points that have not been properly resolved. The first relates to a declaratory statement in legislation. I suspect that that is not something regarded as a strong principle in the systems we run because when we start pressing them we find they do not mean much more than the paper they are written on. Of course this place could pass laws that reverse the force of gravity, but they would not mean anything. The question is what they mean by this, especially, as my noble friend Lord Elis-Thomas said, in the context of the legislative consent orders required for all the legislation where the Assembly is involved. The Assembly is involved in this legislation because it is the Assembly that would be at stake and which would be involved in the undertaking of the practical aspects of a referendum. The legislation would therefore require a legislative consent order. If the Assembly said no, is the Minister then saying that that would be overruled? If it can be overruled in those circumstances, how does the principle apply in others when the Westminster Government might feel ill disposed towards policies put forward in Cardiff? This needs more clarification than the Minister has given so far. I invite him to clarify it.
Lord Bourne of Aberystwyth
My Lords, I am not sure that it is in order that I respond, but I will happily talk to the noble Lord outside the Chamber and report to other Peers. I have to say to the noble Lord that the declaratory statement was something pushed for by his party. I am very surprised that he then says that this does not have any significance, because his party pressed for it very hard. I would have thought he would welcome it being put in legislation.
Lord Wigley
I am grateful for that addition. Of course there are things that one declares. The question is whether one declares them intending them to have the force of law, which is what we are dealing with here—we are dealing with legislation. I will now go on from that; no doubt we can have a private conversation about it.
I believe that the people of Wales are entitled to know where they stand, in particular about the possibility that, if the going gets rough, Westminster can organise a referendum with a view to abolishing the National Assembly. That is not a good basis on which the Bill should be built. I welcome the declarations made regarding permanence. I was just looking for a way to ensure that that is the position in law, as well as in declaration, but we have probably taken this as far as we are going to this afternoon, so I beg leave to withdraw my amendment.
Lord Wigley
“PART A2ESTABLISHMENT OF TWO DISTINCT JURISDICTIONSA2 Legal jurisdictions of Wales and of England The legal jurisdiction of England and Wales becomes two legal jurisdictions, that of Wales and that of England.A3 The law of Wales and the law of England (1) The law of England and Wales is divided into the law of Wales and the law of England.(2) All of the law that extends to England and Wales immediately before the coming into force of this section—(a) except in so far as it applies only in relation to England, is to extend to Wales (and becomes the law of Wales), and(b) except in so far as it applies only in relation to Wales, is to extend to England (and becomes the law of England).(3) In this section “law” includes—(a) rules and principles of common law and equity,(b) provision made by virtue of an Act of the United Kingdom Parliament or an Act or Measure of the National Assembly for Wales, and(c) provision made pursuant to the prerogative.(4) Any provision of any enactment or instrument enacted or made, but not in force, when subsection (1) comes into force is to be treated for the purposes of that subsection as part of the law that extends to England and Wales (but this subsection does not affect provision made for its coming into force). A4 Senior Courts system (1) The Senior Courts of England and Wales cease to exist (except for the purposes of section A8 (3) and (4)) and there are established in place of them—(a) the Senior Courts of Wales, and(b) the Senior Courts of England.(2) The Senior Courts of Wales consist of—(a) the Court of Appeal of Wales,(b) the High Court of Justice of Wales, and(c) the Crown Court of Wales, each having the same functions in Wales as are exercisable by the corresponding court in England and Wales immediately before subsection (1) comes into force.(3) The Senior Courts of England consist of—(a) the Court of Appeal of England,(b) the High Court of Justice of England, and(c) the Crown Court of England,each having the same functions in England as are exercisable by the corresponding court in England and Wales immediately before subsection (1) comes into force.(4) For the purposes of this Part—(a) Her Majesty’s Court of Appeal in England is the court corresponding to the Court of Appeal of Wales and the Court of Appeal of England,(b) Her Majesty’s High Court of Justice in England is the court corresponding to the High Court of Justice of Wales and the High Court of Justice of England, and(c) the Crown Court constituted by section 4 of the Courts Act 1971 is the court corresponding to the Crown Court of Wales and the Crown Court of England.(5) Subject to section A9—(a) references in enactments, instruments and other documents to the Senior Courts of England and Wales (however expressed) have effect (as the context requires) as references to the Senior Courts of Wales or the Senior Courts of England, or both; and(b) references in enactments, instruments and other documents to Her Majesty’s Court of Appeal in England, Her Majesty’s High Court of Justice in England or the Crown Court constituted by section 4 of the Courts Act 1971 (however expressed) have effect (as the context requires) as references to either or both of the courts to which they correspond.A5 County court and family court (1) The county court and the family court cease to exist (except for the purposes of section A8 (3) and (4)) and there are established in place of them—(a) the county court of Wales and the family court of Wales with the same functions in Wales as are exercisable by the county court and the family court (respectively) immediately before this subsection comes into force, and(b) the county court of England and the family court of England with the same functions in England as are exercisable by the county court and the family court (respectively) immediately before this subsection comes into force.(2) For the purposes of this Part—(a) the county court is the court corresponding to the county court of Wales and the county court of England, and(b) the family court is the court corresponding to the family court of Wales and the family court of England. (3) Subject to section A9 references in enactments, instruments and other documents to the county court or the family court (however expressed) have effect (as the context requires) as references to either or both of the courts to which they correspond.A6 Judiciary etc. (1) All of the judges, judicial office-holders and other officers of Her Majesty’s Court of Appeal in England or Her Majesty’s High Court of Justice in England become judges, judicial office-holders or officers of both of the courts to which that court corresponds.(2) All of the persons by whom the jurisdiction of the Crown Court constituted by section 4 of the Courts Act 1971 is exercisable become the persons by whom the functions of both of the courts to which that court corresponds are exercisable except that (despite section 8(2) of the Senior Courts Act 1981)—(a) a justice of the peace assigned to a local justice area in England may not by virtue of this subsection exercise functions of the Crown Court of Wales, and(b) a justice of the peace assigned to a local justice area in Wales may not by virtue of this subsection exercise functions of the Crown Court of England.(3) All of the judges, judicial office-holders and other officers of the county court become judges, judicial office-holders or officers of the county court of Wales and the county court of England.(4) All of the judges, judicial office-holders and other officers of the family court become judges, judicial office-holders or officers of the family court of Wales and the family court of England except that (despite section 31C(1)(y) of the Matrimonial and Family Proceedings Act 1984)—(a) a justice of the peace assigned to a local justice area in England is not a judge of the family court of Wales, and(b) a justice of the peace assigned to a local justice area in Wales is not a judge of the family court of England.A7 Legal professions (1) Every legal practitioner who would (but for this Part) at any time after the coming into force of this Act be entitled to carry on a reserved legal activity for the purposes of the law of England and Wales, in proceedings in England and Wales or before the courts of England and Wales, has at that time the same entitlement for the purposes of the law of England and the law of Wales, in proceedings in England and proceedings in Wales and before the courts of England and the courts of Wales.(2) In this section-“legal practitioner” means every solicitor, barrister, notary, legal executive, licensed conveyancer, patent attorney, trade mark attorney, law costs draftsman, accountant or other person who, in accordance with the Legal Services Act 2007 (c. 29), is entitled to carry on a reserved legal activity;“reserved legal activity” has the same meaning as in the Legal Services Act 2007.A8 Division of business between courts of Wales and courts of England (1) The Senior Courts of Wales, the county court of Wales, the family court of Wales and the justices for local justice areas in Wales are to apply the law extending to Wales (including the rules of private international law relating to the application of foreign law). (2) The Senior Courts of England, the county court of England, the family court of England and the justices for local justice areas in England are to apply the law extending to England (including the rules of private international law relating to the application of foreign law).(3) All proceedings, whether civil or criminal, pending in any of the Senior Courts of England and Wales, the county court or the family court (including proceedings in which a judgment or order has been given or made but not enforced) must be transferred by that court to whichever of the courts to which that court corresponds appears appropriate.(4) The transferred proceedings are to continue as if the case had originated in, and the previous proceedings had been taken in, that other court.SupplementaryA9 Power to make further provision (1) Her Majesty may by Order in Council make provision (including provision amending or otherwise modifying any enactment or instrument, including this Act) that appears appropriate in consequence of, or otherwise in connection with, the provision made by this Part.(2) The provision that may be made under subsection (1) includes in particular provision relating to—(a) courts,(b) tribunals,(c) the judges, judicial officers and other members and officers of courts and tribunals,(d) the Counsel General or other law officers,(e) the legal professions,(f) the law relating to the jurisdiction of courts and tribunals, and(g) other aspects of private international law (including, in particular, choice of law, domicile and the recognition and enforcement of judgments and awards).(3) No Order may be made under subsection (1) unless a draft of the Order has been laid before, and approved by resolution of—(a) each House of the United Kingdom Parliament, and(b) the National Assembly for Wales.””
Lord Wigley
My Lords, I am delighted to have the opportunity to move Amendment 2, which addresses an issue that has been widely debated in Wales: establishing distinct jurisdictions for Wales and for England respectively. I immediately acknowledge that I am not a lawyer by background. It is a matter of regret that Plaid Cymru does not have in this Chamber a Member with in-depth experience in the law. I beg the indulgence of noble Lords, in particular of noble and learned Lords, who are much more knowledgeable than me in these matters.
I also speak to the other amendments grouped with mine. Amendments 4 and 5 in the name of the noble Baroness, Lady Morgan of Ely, calls for a Justice in Wales commission to reveal whether the existing single jurisdiction of England and Wales should be divided in two, one for Wales and one for England. I shall also speak to Amendment 10 in the name of the noble Lord, Lord Thomas of Gresford, which calls for a commission on jurisdiction to examine the desirability of a separate and distinct legal jurisdiction in Wales. I await the cases that will be made by the noble Baroness and the noble Lord relating to their respective approaches to this matter, but should my amendment for any reason not be accepted, I would certainly regard their amendments as steps in the right direction that I would support.
I accept that there are divided opinions among lawyers on these matters. I suspect that a majority of legal people in this Chamber might not initially warm to my proposals. I ask any doubters to consider that there has already been keen debate on this issue within legal circles in Wales—the range of amendments being debated emanating from different parts of this Chamber bears that out. I ask noble Lords to accept that there are leading legal brains, such as Sir Roderick Evans and Winston Roddick QC, who have long campaigned in favour of Wales having its own jurisdiction. In his memorable Lloyd George memorial lecture in 2008, Winston Roddick stated, “My view is that a devolution settlement, by which the Assembly is given full legislative competence but not the responsibility for the administration of justice, would be dysfunctional, constitutionally unsound and demeaning to Wales’s developing constitutional status”.
In fact, the need to address the divergence between Wales and England was recognised long before primary law-making powers were devolved. In the first four years of devolution over 1,100 statutory instruments were approved by the Assembly. A very large proportion of these were unique to Wales or reflected distinct differences to those pertaining to similar instruments operational in England, with these differences reflecting the different circumstances of Wales. As long ago as 2004 Professor Tim Jones and Jane Williams wrote an article in which they stated that Wales was emerging as a separate jurisdiction that needed to be separately recognised. If that was true then, how much greater is that need now and how much greater again will it be in another five or 10 years?
Notwithstanding the force of these points I feel I should address wider and more general questions in justifying the change that I advocate. One might argue that the separate or distinct jurisdiction requires a defined territory, a law-making body within that territory empowered to make laws for it and a judicial system within it to administer those laws. However, discussion of a separate or distinct Welsh jurisdiction must have regard for the wider UK context. England and Wales, and Scotland and Northern Ireland, have their legal jurisdictions, but none of them is separate in a watertight fashion. The Scottish judicial system enforces laws made in Westminster, as it does laws made in Edinburgh. The same is true of Northern Ireland in the Belfast/Westminster context.
In addition, important elements of the tribunal systems that operate in each jurisdiction are organised on a UK or GB basis and function alongside intra-jurisdictional tribunals. There is also the Supreme Court of the United Kingdom, which sits at the pinnacle of the judicial system of each jurisdiction. A Welsh jurisdiction would not be separate in an isolationist sense, but would take its place alongside the other jurisdictions of the UK and therefore perhaps the word “distinct” is more appropriate.
A question concerning the difference between separate and distinct jurisdictions might be exercising some noble colleagues, and I understand that. What does it mean in practice? A distinct jurisdiction will consist of a unified court system, encompassing Wales and England, but applying two distinct bodies of law: the law of Wales and the law of England. The infrastructure is therefore in place, minimising costs. A distinct jurisdiction may over time grow into a separate jurisdiction and that will reflect the evolution of our devolved Government.
As I understand it, the case is based on the need for there to be absolute clarity with regard to the legal rectitude of a legislative action taken by the Welsh Government. This will build up over time in terms of the primary and secondary legislation passed, amended and no doubt sometimes annulled by the National Assembly, and by the plethora of court cases that over time will create the interpretive framework for such laws and regulations.
In the earlier years of devolution—the years through which we are living—there will no doubt be lawyers practising in Wales and England who will be able to keep a focused eye on the law and its interpretation on both sides of the border. As the years go by and the volume of relevant legislation accumulates, it will become increasingly difficult to ride both horses without slips and mistakes. In one sense there is already an embryonic Welsh jurisdiction. There are approximately 15 tribunals that function in Wales. I believe that one was actually created by the National Assembly itself. Responsibility for these rests with the Welsh Government.
A Welsh jurisdiction could have whatever structures and institutions it is decided are needed to best serve the interests of Wales. There is no template that has to be followed and a jurisdiction, once created, is not immutable. It can change and develop as needs dictate; for example, the present Northern Ireland jurisdiction is structurally different from that originally set up. Creating a jurisdiction for Wales is having a clean sheet of paper and deciding on what we need at this stage. It is the opportunity to create a structure that meets the demographic, geographic and linguistic needs of Wales and, most of all, its democratic needs in the context of our devolved legislature and its responsibilities.
I will now address the reasons for creating a Welsh jurisdiction. First, the argument cited most often, as I have mentioned, is that Wales is developing a body of law that is different from the law of England, and those differences will increase as devolution progresses. It is a good, valid and attractive argument but it is not the only one and not necessarily the most persuasive. The differences between the laws of Wales and the laws of England are unlikely ever to be fundamental. There are no differences so fundamental between the laws of Northern Ireland or Canada or Australia and, say, England and Wales that a judge could not come to terms with them.
Secondly, the refinement of the “different law” argument into constitutional terms is, to my mind, far more persuasive. The judiciary, as the third pillar of government, needs to be properly in place in Wales to support the progress of devolution and to act in relation to the Welsh Government as the judiciary in London acts in relation to Westminster. I contend that the joint jurisdiction has not served Wales particularly well. Institutions of the law from the courts to prisons have been developed according to templates set to accommodate the large cities of England and not the needs of Wales. The infrastructure of the administration of justice has never been developed on a whole-Wales basis. It is not acceptable that there is, for example, no Crown Court west of Swansea or between Swansea and Caernarfon, and no Crown Court between Merthyr and Mold. County courts and magistrates’ courts have been closed in a way that would be unthinkable if the jurisdiction was run from Cardiff. Wales is able to decide on the siting of its schools and hospitals but not its courts and prisons.
Thirdly, I contend that legal services are an important economic driver and the development of a jurisdiction in Wales would provide a boost to the Welsh economy, which would by no means be limited to the legal professions. Wales is treated for the purposes of the present jurisdiction as a circuit of England, and work from Wales goes to support employment and career structures in England. We need to maximise the opportunities for the brightest of our young people to work in Wales. That is what devolution should be about and it is as relevant in the context of the law as it is in other walks of life.
Fourthly, many positives could grow out of having a Welsh jurisdiction. It would be small and able to react quickly and effectively to the need for change. It could, for example, develop innovative rehabilitation initiatives, which are linked to responsibilities already devolved to Cardiff. The importance of this was recognised by Gordon Brown a few years ago. Following the Good Friday agreement, criminal law was a reserved matter and it continued to be until 2010. In a speech delivered on 16 October 2008, Gordon Brown, then Prime Minister, sought to encourage the Northern Ireland Assembly to seize the opportunities that the devolution arrangements offered, and he said:
“There is something more vital at stake for your entire society, something that only the completion of devolution can deliver. How can you, as an Assembly, address common criminality, low-level crime and youth disorder when you are responsible for only some of the levers for change, and when you have responsibility for education, health and social development but have to rely on Westminster for policing and justice? The people of Northern Ireland look to you to deal with these matters because to them they are important. Full devolution is the way to deliver better services, tailored to the needs of all communities, regardless of the politics. It is the best way for you to serve them”.
The fifth justification I would advance relates to the Welsh language. Although in recent years attitudes towards the use of Welsh in the administration of justice have changed for the better, nearly half a century after the passing of the Welsh Language Act 1967 we still have a system that is fundamentally English and which accommodates the Welsh language only when it has to. Welsh and those who wish to use it remain in an inferior legal position and this is something that we in Wales have to put right. There is a growing call for a distinct jurisdiction for Wales. Recently, a majority of witnesses at the Welsh Affairs Select Committee in the other place recommended that the diverging body of distinct Welsh law could be best served only by this distinct jurisdiction. Lawyers and constitutional experts alike reiterated the case to that committee that to establish a clear and lasting legal settlement for Wales, a distinct legal jurisdiction is necessary. Academic and constitutional expert Professor Richard Wyn Jones summed it up in a pithy and memorable phrase. He said that a Welsh jurisdiction represents,
“the constitution catching up with the legislative reality”.
The Deputy Chairman of Committees (Lord Dear)
At this stage, I should advise the Committee that if Amendment 2 is agreed to, I cannot call Amendments 3 and 4 by reason of pre-emption.
Lord Crickhowell (Con)
My Lords, I am enormously grateful to the noble Lord, Lord Wigley, for putting forward his amendment in the form that he has. He has produced a very long and complex amendment to be added to a very long and complex Bill—too long and complex, in the view of many of us. It is interesting that, by doing this in Committee, he did not attempt to do as one normally would when introducing a matter of this complexity: to go through the detail of the proposal he was putting forward and the wording that has been suggested, which he told us originated with the Welsh Government.
I am glad that one of the things the present Government have decided to do is to revert to a system where we have Green Papers, White Papers, draft Bills and pre-legislative scrutiny. That is the proper way to proceed with legislation.
Clearly, it is quite impossible in a short Committee stage in this House to go through any process of that kind, so while I understand why the noble Lord wants to put the case for a separate jurisdiction of this kind, I suggest to him and to the Committee that it cannot possibly be sensible to proceed in the manner he suggests. Indeed, the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Thomas of Gresford, have each tabled amendments which seem to try to place in legislation the working party which has already been established by the Government to look at this matter with calm deliberation and come forward with proposals for the future. That seems a sensible way forward. Translating the undertaking already given by the Government into some form of legislative commitment, as suggested by the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Thomas of Gresford, may well be a possible solution, and I am not coming out against that.
I note that in Committee in the other place the Minister replying on behalf of the Government confirmed that the working group had been established and said that it would report in autumn 2016. We are well into autumn 2016. Surely if there is to be a report, it should be produced to this House during the Committee stage, not when we have completed it.
While I understand the fervour and enthusiasm with which the noble Lord, Lord Wigley, has advanced his case, it seems to me that he has produced compelling evidence for why we should not proceed in the way that he suggests in this amendment and that we should follow the line set out by the Government in their working party and possibly consider the proposals put forward by the noble Baroness and the noble Lord to which I have already referred.
Lord Hope of Craighead (CB)
My reason for speaking at all is that I had the privilege of sitting in the Supreme Court of the United Kingdom in the first devolution case that came before that court from Wales. I think I was the first judge ever to use the phrase “Welsh law” because it seemed to me, even at that very early stage, that a body of law was in the process of developing which deserved to be recognised as such. For that reason, I am glad to see new Section A2 inserted by Clause 1, which recognises that there is a body of Welsh law. I am entirely in sympathy with that.
I am also broadly in sympathy with the broad thrust of the points made by the noble Lord, Lord Wigley. I have sympathy with him partly because I come from Scotland, which has its own system of law which was guaranteed when we entered into union with England to create the United Kingdom. It was part of the deal between the two countries that the Scots law that had evolved would continue to exist. We had the advantage of our own body of law, which was developed largely with the assistance of jurisprudence in the Netherlands and France. It was a different system of law from that of England. It was recognisably different, and it required different judges. That is not a requirement for the kind of jurisdiction that the noble Lord, Lord Wigley, is asking us to consider. There is not that kind of difference between Northern Ireland and England; their common law is basically the same. But the fact that they are different jurisdictions recognises the important difference of outlook between these two countries in the way their laws are developed.
Although I have said I am in sympathy with what the noble Lord, Lord Wigley, has said, I am bound to say that I find his amendment goes too far and too fast. It is asking us to take an enormous step without any assurance that there exists yet enough Welsh law to justify what would be done and as to whether we have the manpower and womanpower to create the judicial positions being contemplated. My preference, in sympathy with what the noble Lord, Lord Crickhowell, said, is for Amendments 5 and 10—I am not sure I mind particularly which of them—which would be a step towards considering, in a little more detail and at more leisure, how this matter should be handled. The noble Lord, Lord Wigley, will of course say, “That’s going to mean another Wales Bill”, but I am afraid that might be the price to pay for moving at the proper pace to make sure that the systems are properly designed. I would like to see a development of that kind, but it needs to be very carefully worked out, bearing in mind all the things that other noble Lords will no doubt say about the difficulty of creating a Welsh Bar, which will provide the essential requirements for the judiciary to develop.
I would also like the Government to consider whether their recognition of the body of Welsh law as the law made by the Assembly and Welsh Ministers itself goes far enough. I do not have an amendment to that effect, but the fact is that judges help to make the law too. The Supreme Court of the United Kingdom, which after all looks at Wales through the devolution system and has had Welsh lawyers appearing before it, has its own part to play in creating Welsh law, as I attempted to say in my opening remarks. I intervened really to support the noble Lord, Lord Crickhowell, and I hope, in a way, to support the noble Baroness, Lady Morgan, and the noble Lord, Lord Thomas of Gresford, in what they are about to say.
Lord Elis-Thomas
My Lords, I am happy to follow the noble and learned Lord, Lord Hope, and his references both to the concept of Welsh law and to its meaning in the context of this Bill. I also say to him that I suspect there will be many more Wales Bills as a result of this Bill if it goes through in its present form. Our successors will be here debating these matters further.
The point of my small amendment in this group, Amendment 3, is to clarify that the law of Wales is more than what is made in the National Assembly for Wales, or indeed in this place as English and Welsh law, or by the decisions of the judiciary, since law is developed as the noble and learned Lord indicated. In this sense, the Explanatory Memorandum is much more informative than what is in the Bill itself. Paragraph 25 of the commentary on the provisions of the Bill makes it clear that:
“Subsection (1) confirms that there is a body of Welsh law made by the Assembly and Welsh Ministers. The law made by the Assembly and Welsh Ministers is … only part of the law that applies in Wales”.
I believe the noble and learned Lord, Lord Hope, made that point: the law of Wales is much broader, both historically and currently, than what is set out in the Bill. It is for that reason that I ask the Government to consider whether they can look for a wording that is more explanatory and of greater legal standing than that which they have currently adopted.
I will also quote, as I often do, my friend and mentor, the Reverend Professor Thomas Glyn Watkin. He told the National Assembly’s Constitutional and Legislative Affairs Committee, of which I was then a member, in evidence quoted as part of the committee’s report on the Bill:
“My own view is that there is now within the legal system of England and Wales three bodies of law that can be recognised: a body of law that applies only in Wales, a body of law that applies only in England and a body of law that applies in both countries. I think the legal system needs to adapt itself to that new reality, a reality that is growing as the body of law that applies only in Wales and the body of law that applies only in England increase in size”.
Turning again to the issue of jurisdiction, which my noble friend Lord Wigley so clearly set out in the context of his amendment, there is a link between the complexity of the Bill and the move to preserve a single and undifferentiated jurisdiction. It was made clear to us in the Assembly committee, both in a special seminar convened as part of our scrutiny of the Bill and in evidence, as we stated in our report at paragraph 28:
“It is clear to us that the UK Government’s policy to preserve the single jurisdiction has resulted in much of the complexity within the Bill”.
That is why I believe the Government will have to address this issue either tonight, next Monday or on Report. I absolutely agree with the noble Lord, Lord Crickhowell, that the complexity of the Bill is linked to the whole issue of the lack of flexibility on jurisdiction.
Lord Judge (CB)
My Lords, as a former Lord Chief Justice of Wales and England, I want to make just a couple of points. The word “normally” in Clause 2 is a weasel word. It does not mean anything very much in legislative terms. I am perfectly well aware that it is in the Scotland Act, but what is this supposed to mean:
“the Parliament of the United Kingdom will not normally legislate”?
Who decides what is normal? If the Parliament of the United Kingdom decides, the Assembly is ruled out.
I am particularly concerned about Clause 2 in the context of Clause 53—
Lord Bourne of Aberystwyth
My Lords, with respect, I think that this is the next amendment.
Lord Judge
The Minister may well be right, but I listened to the noble Lord, Lord Elis-Thomas, talking about “normal” in the context of Clause 2. At some stage I want to make the point, so perhaps I may just finish making it, because I do not want to take long about it. Please can we look at the matter in the context of Clause 53 and, in particular, Clause 53(6) concerning statutory instruments, powers vested in the Secretary of State, affirmative resolution, and so on:
“unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament”?
It totally omits reference to the National Assembly for Wales, yet in Clause 2 we are told that the Government will not normally legislate without the consent of the Assembly. Somewhere along the line, this bridge has to be crossed.
Baroness Morgan of Ely (Lab)
My Lords, I tabled Amendments 4 and 5 to establish a justice commission for Wales. Like the noble Lord, Lord Wigley, I apologise for not having the legal background or brilliance of the noble and learned Lords, Lord Hope and Lord Judge, to speak as I would like on the amendments, but I will do my best.
The noble Lord, Lord Wigley, made some relevant and serious points which need to be considered. It is premature to establish a separate legal jurisdiction for Wales, but there is without question an issue that needs to be addressed. I shall briefly summarise the background and explain why the commission is needed and what it would achieve.
There is clear consensus among constitutional and legal experts that there is a problem here that must be addressed. The creation of the National Assembly as a legislature with primary legislative powers, operating within a single jurisdiction of England and Wales, creates a situation which will throw up difficulties in the medium to long term. That single legal jurisdiction, to quote from those who have promoted this Bill in the other place, “has served us well”. Yes, it may have done that, but it has served us well in different times. It served us well when the laws that applied across England and Wales were the same laws—when this place was the only legislature that could enact the laws of the jurisdiction. That is no longer the case and has not been for some time.
It is worth emphasising the point made by the noble Lord, Lord Elis-Thomas. There is no question but that the UK’s Government’s anxiety to protect the joint jurisdiction is the source of many problems in the Bill. We accept that some constraints have been removed, but there remain many reservations and restrictions whose primary purpose is to protect the consistency of law across England and Wales. The problem is that that consistency no longer exists: the horse has already bolted. The reality is that there is already a growing divergence of law which is the inevitable consequence of legislative devolution. The law on education, planning, the environment and social services is now fundamentally different in Wales. Without reform of the jurisdiction to reflect this divergence, there are risks to the rule of law and the administration of justice. By necessity, a single jurisdiction involves a single body of law that extends across its territory. A single jurisdiction implies that the law is the same across that territory. The laws of England and Wales—already vast—must now absorb the increasing divergence between laws that apply only to Wales and those that apply only to England. This is highly complex, so how can we be sure that the citizens will understand the law or even that solicitors, barristers and judges will apply the correct law? This is not a debating point: these are real practical risks and they are increasing.
This issue demands a serious response and the UK Government see no need for concern on the grounds that this single jurisdiction has served Wales well. That misses the point. The shared jurisdiction served Wales well for four and a half centuries when Wales did not have its own legislature. That is no longer the case. The single jurisdiction is out of sync with the way that Wales is governed. It has not caught up with reality. But it is okay, because we have a glimmer of hope. All is going to be fine because the Ministry of Justice has set up a working group—what in Wales we call a committee—of Whitehall officials. The noble Lord, Lord Crickhowell, referred to this. Its birth was not auspicious: it was a party to which the Welsh Government were apparently invited but had not received their invitation. Never mind: it has now met, but we and the Welsh Government are in the dark as to its progress. Will the Minister enlighten us on some key points in relation to that working group? How many meetings has the group held? What engagement has there been with legal practitioners who understand the day-to-day realities of practising law in Wales? What is the work programme and when can we expect to see the report? Will we have it before Report stage?
It is an incredible coincidence that today, when we are debating this, the Welsh Government have received an invitation to the working group’s second meeting. That is great news, but we should be concerned that that progress is not a serious way of demonstrating a commitment to the fundamental importance of this work. This is why we think it is important to bring forward a commission on which the Welsh Government have equal status and to which they are able to bring their expertise and that of those who have real knowledge of the Welsh justice system. We have no confidence that this informal working group will be capable of producing a serious response to the challenges I have outlined. Maybe it will: let us see if we can see something before Report stage. It is important to have a much more credible mechanism for taking this issue forward which will be independent of government and consist of senior judiciary and other practitioners who already have the authority and expertise required. Such a mechanism would provide a forum for developing solutions to problems that cannot be avoided and would be transparent in producing an annual report on progress against an agreed remit.
For all its flaws, one of the positive impacts of this Bill is that we have had to focus our minds on this key issue. It is clear that the single jurisdiction is no longer fit for purpose in its current form. What exactly should come in its place and how it should operate are questions that necessitate detailed analysis of the situation and the evidence of the problems caused. Much thought needs to be given to what is the right way forward. The relevant body should comprise those with most experience of the problems, and legal and constitutional experts adept at finding solutions. These problems will not go away. The proposed commission would provide a mechanism for addressing them. That is the purpose of this amendment. I hope that the Minister will support it.
Lord Thomas of Gresford (LD)
My Lords, those of your Lordships who were here at Second Reading will recall that I told the House that when I was in my 20s and full of ambition and great principle, I thought that it was necessary, when drafting a Bill for the parliament of Wales back in 1967, to have a separate Welsh jurisdiction to determine the laws that that parliament would pass. As I indicated at Second Reading, I have changed my view; I think it is a matter of complete practicality. I disagree with the noble Lord, Lord Wigley, who said that the joint jurisdiction has not served Wales well. There is no joint jurisdiction. There is a single jurisdiction and it has operated over four centuries to provide the same standard of justice in Wales as in England. When he was called on to give an example of where it goes wrong, he talked about courts, as though a Welsh parliament would create new Crown Courts west of Swansea or in mid-Wales and would have the funds, judicial power and practitioners to man such a system. It is purely a practical question. To demonstrate that, I quote from the noble Lord’s amendment. Under the heading “A6 Judiciary”, the amendment states:
“All of the judges, judicial office-holders”,
and others,
“become judges … of both … courts”—
that is, the existing judges would continue to operate in both England and Wales. The amendment then proposes:
“All of the persons by whom the jurisdiction of the Crown Court constituted by section 4 of the Courts Act 1971 is exercisable become the persons by whom the functions of both of the courts to which that court corresponds”.
In other words, practitioners and judges in criminal courts could operate in both England and Wales. Where is the separate jurisdiction in that? Proposed new Section A6(3) states that all the existing judges and others should become judges in the courts of both England and Wales. The same situation is proposed for family courts and the legal profession. Therefore, the proposal put forward by the noble Lord, Lord Wigley, is that existing judges and practitioners should operate in the courts of both countries. How could that be possible if there were such a distinct and arcane system of Welsh law that only Welsh practitioners could understand it? Lawyers are accustomed to dealing with separate parts of the law, whether it is Welsh law, administrative law, the law relating to trusts or whatever. Practitioners and judges deal with differences between the laws passed by the parliament in Wales and those passed by the Parliament in England. There is no problem with judges doing precisely that. At the moment an Administrative Court sits in Wales and deals with legislation passed by the Welsh Assembly quite adequately—the Lord Chief Justice and an old friend of mine, Mr Justice Wyn Williams, sat in such a case last week—and no problem arises from that. However, the hare has been started, and for that reason I have advanced, as a matter of practicality, my Amendment 10.
Lord Elystan-Morgan
My Lords, I support the amendment in the name of the noble Lord, Lord Wigley, with all the Celtic fervour that I can muster. The principle is undoubtedly a proper one, but the technicality is narrow. Some arguments turn upon the existence of Welsh law—its distinctive character—and they are not without their merit. However, that to my mind is not the issue, which is the juxtaposition of a parliamentary jurisdiction and a court jurisdiction. I would go so far as to say that there is something wrong with the constitutional geometry of the situation where more than one parliament operates within the sphere of one legal jurisdiction. That is the essence of it.
Even if there was no difference whatever between Welsh and English law in this matter—and we know there is—it would still be the case, parliaments having the inimitable bent to go their own way, that to have two or more parliaments operating within a single jurisdiction was wrong. I think I heard the noble Lord, Lord Wigley, say that he doubted whether there was any situation in the whole world where that is so, but I ask the Minister—not perhaps in his ministerial capacity but in his capacity as a very distinguished professor of law—whether in any democratic system in the world there is an instance of two parliaments operating within a single legal jurisdiction.
Having said that, I appreciate that there are difficulties, and I have profound respect for what has been said by the noble and learned Lords, Lord Hope and Lord Judge. A great deal has already been started and been done. The Administrative Court has been referred to and it is undoubtedly a success. In addition—I think that the noble and learned Lord, Lord Judge, had a great deal to do with this—the civil and criminal divisions of the Court of Appeal were given every encouragement to meet in Wales, and they did so on many occasions.
There are many trends of that kind; nevertheless, the basic problem still has to be met. We have already heard of the situation in Scotland and Northern Ireland. The Isle of Man, Guernsey and Jersey have their own parliaments and their own jurisdictions. As a matter of legal purity, there should never be a situation where more than one parliament operates within one jurisdiction. Having said that, I appreciate that there are practical difficulties.
Lord Carlile of Berriew (LD)
My Lords, I joined the Wales and Chester circuit of the Bar 45 years and two months ago. I went to chambers in Chester, where my noble friend Lord Thomas of Gresford was already well established, and I confess that I learned a great deal from him, almost all of it good. It is therefore with a good deal of pleasure that I rise to support his amendment.
I have some sympathy with the noble Lord, Lord Wigley, in his aspirations for Welsh institutions, but I fear that I have to come to the same conclusion as my noble friend Lord Thomas—that what he proposes is not needed and nor would it work. Speaking only for myself, I suspect, I have long been in favour of the creation of a separate Wales division of the High Court to cover civil and criminal proceedings. Although a great deal has been done, which I shall mention in a moment, we still do not quite have that formal division. In my view, that would be an excellent measure, well understood, and it would possibly allow Wales to have some appointments that would be appropriate to such a division, such as a presidency of the division—there are presidents of the other divisions of our senior courts. I think that that would be met with approval throughout the legal profession in Wales, although, as I shall set out in a moment, it is not necessarily those in the legal profession who are the right people to decide these things.
I join in the tribute that has been paid to the noble and learned Lord, Lord Judge, who as Lord Chief Justice did a great deal to give the Welsh jurisdiction an identity which previously it had not had for several hundred years. Of course, as I think my noble friend said at Second Reading—I have certainly heard him say it in your Lordships’ House—there used to be a chief justice of Wales. Indeed, he and I appeared at the Chester city quarter sessions, in the building of which there is a large portrait of a former chief justice of Wales—the well-known Lord Jeffreys or Judge Jeffreys. He is not necessarily the best precedent for such an appointment; nevertheless, there is that precedent. There could be a president of a Wales division, although not in a Jeffreys-like way—who, by the way, was not half as bad as history has made him out to be. Of course I will give way to my noble friend.
Lord Thomas of Gresford
Your Lordships will appreciate that I was born in Acton on the Jeffreys estate.
Lord Carlile of Berriew
I am delighted to hear that. My noble friend’s sense of justice certainly does not in any way imitate that of Lord Jeffreys of the Bloody Assizes.
However, what I am suggesting is that the presidency of a Wales division of the High Court would have real attractions within Wales.
I would also like—I know that the noble and learned Lord, Lord Judge, would associate himself with this—to praise the actions of the current Lord Chief Justice, the noble and learned Lord, Lord Thomas of Cwmgiedd, who was born in south Wales and has frequently reminded us of that fact. Indeed, the noble and learned Lord, Lord Thomas, has evolved what was introduced by the noble and learned Lord, Lord Judge, and given further credibility to the respect that is given to Wales as a jurisdiction where relevant and appropriate.
One group who have hardly been mentioned in this debate is the poor old litigants who go to law in Wales. I had the great privilege of representing Montgomeryshire as its Member of Parliament for 14 years. It sits on a long stretch of the Welsh border. It is quite common for a customer to walk into an estate agent in, say, Llanfyllin, and negotiate the purchase of a property in another branch of that estate agency in Shrewsbury. It is very common—I may have done it myself—to go and look at a new car in Welshpool, but negotiate the price of that new car with somebody in Shrewsbury or some other English town. It is important for Wales that we develop as strong a financial services industry and venture capital industry in Wales as possible, but we need those English and foreign investors who want to take part in such transactions to have the confidence that they work in a predictable legal environment.
This is my final example, although I could give dozens. We need to be sure that those who face a trading standards dispute that arises with a company that operates both in Wales and in England are not faced by someone like myself scratching their expensive head in chambers and saying, “Oh, we’ve got a private international law issue here; a conflicts of law issue on which I will have to write you an extremely learned opinion”—at whatever my hourly rate for the time being happens to be. I do not think that we should inflict those disputes and problems on litigants. Inevitably, that is what would happen after time.
There are many common law jurisdictions around the world and they of course pay enormous respect to the decisions of what was formerly the House of Lords and is now the Supreme Court, and pay lower levels of respect to senior courts as you go down the hierarchy of courts. But inevitably there would be judgments in a separate Welsh jurisdiction that would be inconsistent with judgments in the English jurisdiction or any other common law jurisdiction such as the Scottish jurisdiction—which, as the noble and learned Lord, Lord Hope, knows, has a different origin—or for that matter the jurisdiction in Northern Ireland.
While I would not wish to leave things necessarily as they are and I welcome the proposal made by my noble friend of a detailed and one-off review, creating a completely separate set of law for Wales would be to turn the clock backwards rather than forwards and would have damaging effects on potential litigants in Wales and on the economy of Wales
Lord Deben (Con)
My Lords, we are present at one of the most unusual occasions that I can remember. This is an occasion on which lawyers almost universally want to have a less complicated system in which they are less able to find reasons for charging people more money for doing more work. As the House knows, I have a particular penchant for intervening in debates that are largely among lawyers because it is important that they should not be allowed to have unique control over the way in which the law is worked. It therefore pains me to say that I am entirely on the side of the well-argued case put by the noble Lord, Lord Thomas of Gresford. He has explained exactly why there was no need to go down this route.
However, there is one thing that I hope my noble friend will help me with. I do not understand why the Government have set up a working party at this point which it appears will not report in a way that can help this House and which appears to be dilatory in the invitations it has issued. My concern reflects a point raised by my noble friend Lord Crickhowell: this House deserves better. I would like to know what the working party concludes. It would be easier for us to make proper decisions were the working party to give us its information before we make them. The reason I have risen to speak is not only because of my long-standing interest in Welsh affairs but because this House is very often treated rather poorly by the system. If we are to do the job of careful examination of Bills properly, we should have the information beforehand and not be told that there is a working party which will report afterwards. By then we will have missed the opportunity of being informed and doing our job properly.
I hope that my noble friend will not take it amiss, but this is a case which I have had to raise constantly in this House because it has become something of a habit not just of this Government but of previous Governments—to suggest that because they are having discussions, it does not count that we cannot have discussions as a result of their discussions. Discussions between civil servants, however noble, are not the same as discussions between parliamentarians, so we ought to have the information before we finalise our views.
Lord Morris of Aberavon (Lab)
My Lords, I rise to make a brief point which I believe will be of practical importance. Some three years ago I gave evidence to the Constitutional Committee of the Welsh Assembly. It was my view that while there was undoubtedly a growing body of Welsh legislation the time was not yet ripe to deal with it in the way proposed by the noble Lord, Lord Wigley. There will come a time when we will have to grapple with it but it is certainly not a matter of urgent importance now and there are serious practical points of difficulty in moving in that way.
I say this against the background that much has been done in an administrative way; I join in the tributes paid to the former Lord Chief Justice, the noble and learned Lord, Lord Judge, who moved so much of the work of the higher courts to Wales, followed by the present Lord Chief Justice, Lord Thomas of Cwmgiedd. The work has been done and it has met many of the problems, one of which is that more cases of this kind should be set down in Wales. The process should start there as opposed to being started in London.
The serious issue is the consolidation of legislation already passed by the Welsh Assembly. Over the years that the Assembly has been in existence, Act after Act has been passed, particularly during the most recent period. Any practitioner, be they in Wales or in England, who has to advise a client in Wales on a matter arising in Wales concerning property, employment and so on has to turn up a whole host of literature in order to give proper and responsible advice, otherwise he will be accused of being negligent. I hope that before it is too late the Welsh Assembly will use its powers and resources to consolidate the existing legislation and thus make it easier for practitioners and ordinary litigants.
Baroness Randerson (LD)
My Lords, I rise with some trepidation among so many distinguished lawyers to make two brief points about the argument we have been having. The Government have acknowledged that there is a problem by setting up this working party, but I am not persuaded that they have done anything other than offer the working party as a sop to those who are concerned about this issue. If the working party was going to be rigorous and reach any kind of useful conclusion for us, it would have met several times by now. Otherwise it is up to the Government to say to us today that it will not be reporting this autumn but, rather, at some point in the distant future because it has discovered that there is a great deal of work to do. I therefore support the amendment tabled by my noble friend Lord Thomas because I believe that three years is a reasonable timescale for a commission to look rigorously and thoroughly at all the aspects of this.
I also endorse the comments of the noble and learned Lord, Lord Morris of Aberavon. The consolidation of Welsh law is becoming increasingly urgent. I know that the Minister is aware of it, having been a Member of the Welsh Assembly. Because the Assembly puts things on its website on the internet, they are not available in the printed format in which most law is available. People can find it difficult and complex to seek out legislation in order to find out which is the most recent version of the law. That issue needs to be discussed. Moreover, something that no one has mentioned so far in the debate is EU law, much of which has been incorporated into Welsh Assembly legislation. Once we have the great repeal Bill, I would ask the Minister how it is anticipated that this will be recognised within the single jurisdiction and whether the working party is considering the issue of EU law.
Lord Bourne of Aberystwyth
My Lords, this has been a wide-ranging debate on what is clearly an important matter. I turn first to the contribution of the noble Lord, Lord Wigley, who put his case very passionately, as he always does. He addressed some of the important issues in this. Perhaps I may make several points, the first of which relates to a matter he raised and which, I think, was touched on by the noble Lord, Lord Carlile, or perhaps it was the noble Lord, Lord Thomas of Gresford. The administration of the courts is quite separate, I think, from the issues of the actual sources of law and separate jurisdiction. The second point I would put to him and indeed to other noble Lords is that to some extent this is a question of semantics. We can say now that we have a separate jurisdiction because we have separate arrangements in relation to Wales. That is undoubtedly the case and some of them are already in place. So I appreciate the points that are being made, but there are shades of grey here. It is not as if it is all or nothing or as if separate arrangements are not being made for Wales now in relation to cases and judicial process; that is certainly the case.
I should also say that what the noble Lord is putting forward represents a massive change which I do not think is necessary. If you speak, as I have done, to people in the law schools of Wales and ask them how many students are actually opting to study devolved law as it is at the moment, you will find that it is a handful. I was stunned because I thought that far more would do so. I do not say that with any pleasure, but it is an indication of the fact that this is an evolving situation and as things stand we do not really have a pressing need for a separate jurisdiction in the way that he has talked about. I do not think that that is the case. Having spoken to practitioners and independent members of the Silk commission, I know that they, too, believe that there is a danger of throwing out the baby with the bathwater. The law schools of Wales recruit students not only from England but from overseas, which is a massive market for them. I know that the noble Lord would not want to jeopardise that. Practitioners, too, talk about the importance of the legal system that we have at the moment. That was exemplified by the noble Lord, Lord Carlile, in talking about the porous nature of the border and the fact that we have to recognise that.
It is right that the working party has met only once so far—I think that it is in Cardiff as we speak and is meeting legal practitioners and lawyers tomorrow. That was not suddenly set up; one cannot suddenly issue invitations in that way. The noble Baroness, Lady Morgan of Ely, was right to say that there is a forthcoming meeting—I think that it is on 7 November, although I am not absolutely certain of that date. The Welsh Government are invited to it, as they were to the first meeting—I think that they attended the first meeting, but I stand to be corrected on that . I will endeavour to ensure that ahead of Report—I will come back to the question of Report in a minute—noble Lords have a summary or details of what has happened so far and of the people on the working party.
All I can say about Report is that we do not know when it will be. I was rightly pressed to say that we would not get to Report because of the need for an LCM from Cardiff. I am not a magician; I cannot say with absolute certainty when Report will be, but I will endeavour to ensure that insofar as we have information, noble Lords are apprised of it as soon as possible and ahead of Report.
Turning to points made by others, I am grateful for the contribution of my noble friend Lord Crickhowell on the complex and detailed nature of the proposal, and to the noble and learned Lord, Lord Hope, who spoke of sympathy with the general point but acknowledged that we are not at this stage in a situation of wanting a separate jurisdiction. We need to ensure that separate arrangements exist for cases that have a Welsh dimension and that practitioners and judges are steeped in Welsh law if such cases involve Welsh law. I accept that and we are looking at it. I take the point that we should look at this matter on a continuing basis, because it is right that it is an evolving picture. I do not think that we are currently at the stage of wanting a separate jurisdiction, but we need those separate legal arrangements and to make sure that the interests of Welsh litigants, Welsh witnesses, Welsh practitioners and Welsh law schools are all taken care of.
I will take away the points made about the commission. I do not think that a statutory commission is the right answer, but we need a body that looks at this matter on an ongoing basis—I have sympathy with the point made by the noble Baroness, Lady Morgan, that it is an evolving picture. I have sympathy, too, with the points made by the noble Baroness and the noble Lord, Lord Elis-Thomas, about the sources of Welsh law. I shall take those away and reflect on them before Report.
I thank the noble and learned Lord, Lord Morris of Aberavon, who has vast experience not just of Wales but of the law, for his comments about the need for administrative arrangements and the consolidation of legislation—it was a point well made. My noble friend Lord Deben assured me that he was not being mischievous in putting forward his point; I did not think for a minute that he was. It is absolutely right that we need the evidence from the working party ahead of Report. As I have said, we know that Report is a little way ahead because of the need for an LCM from the Welsh Government before we can proceed, so I hope that we have that in place. The noble Lord, Lord Elystan-Morgan, speaks with great experience, both judicial and political. I take his point about the symmetry of a separate judicial system where one has a separate Parliament and can understand his cri de coeur as a Welshman, but, as he rightly said, we have to recognise that we need to address practical issues in relation to ensuring proper protection for Welsh practitioners, As to Welsh students and Welsh lawyers, we want the best Welsh lawyers to be able to serve in Wales rather than be encouraged over the border because they feel that a separate system has been set up. All those points need to be taken into account and I do not want to shy away from them in any way. We have to do what is right for Welsh law, but, as I have said, it is an evolving picture at the moment rather than one that demands a separate jurisdiction. With the assurances that I have given, I urge noble Lords not to press their amendments.
Lord Wigley
My Lords, I am grateful to the large number of colleagues who have participated in this debate: the noble Lords, Lord Crickhowell, Lord Elis-Thomas, Lord Thomas of Gresford, Lord Elystan-Morgan, Lord Carlile and Lord Deben; the noble and learned Lords, Lord Hope, Lord Judge and Lord Morris of Aberavon; and the noble Baronesses, Lady Morgan of Ely and Lady Randerson. A common thread that appeared to run through it was a recognition that, in the Minister’s own words, we have an evolving situation. It is a situation that is under scrutiny by virtue of the body that is looking into the matter. As the Select Committee on the Constitution, of which the noble and learned Lord, Lord Judge, is a member, reported last week, there is a need for the Government to keep a constant eye on this evolving situation to see how it is working out. As the Silk commission recognised, there may be a need in due course for a change in law to accommodate the structures that are necessary so that there is a system working in Wales that reflects our own legislation and growing body of law. To the noble Lord, Lord Carlile, who cited cases, I say that, irrespective of the complexity of crossing the border, decisions will be taken within the framework of one set of laws or the other. The body of law in Wales is there; it is growing and it will continue to grow. Therefore the need to accommodate it will be there, however it is done. It may not be possible to do it by virtue of my proposals here, although the Welsh Government have also supported it. As the noble Lord, Lord Thomas, recognised, there is a need for a perhaps one-off review along the lines that the noble Baroness, Lady Morgan, proposes in her amendment. In other words, there is a general acceptance that it will need to be accommodated.
I hope the Minister will be able to tell the House that if it is not possible to do it within the framework of this Bill, as it seems it will not be, given the timescale for Report, the Government will be open to the possibility—if legislation is needed, and as the noble Lord, Lord Elis-Thomas, said—of further Wales Bills. I would rather that this could be dealt with now, but there may be a need to legislate by virtue of the facts that have been presented to this Committee. The point made by the noble Lord, Lord Elystan-Morgan, that we are the only place in the world that will have its own separate legislature but not its own system of jurisdiction to run in parallel with it, was not refuted. That must tell us something, and it should inform us, as experience unrolls in Wales with regard to the workings of the Assembly and the body of our law, that we may need to do something about it. I hope the fact that it has been raised today will serve to ensure that a focus is kept on these issues and is not allowed to die away, and that at the appropriate time—and there will come a time when this needs to be acted on—there will be no shying away from the needed legislation if that is what best serves Wales and these islands generally. I beg leave to withdraw the amendment.
Wales Bill
Monday 31st October 2016
(8 years ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 63-I(a) Amendments for Committee, supplementary to the marshalled list (PDF, 131KB) - (31 Oct 2016)
Lord Wigley
Lord Wigley (PC)
My Lords, the amendment stands in my name and that of the noble Lord, Lord Elis-Thomas. As your Lordships can well imagine, it is a probing amendment which, depending on the response that we receive in this short debate, may escalate into something more substantial. The Bill reads:
“But it is recognised that the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of the Assembly”.
So what does “normally” really mean?
I have searched through the Bill and have failed to find any definition. I am not aware that the term is so commonly used in other legislation that there is a generally accepted meaning as far as use in legislation is concerned. In an attempt to seek clarification, my colleagues in the other place contacted the House of Commons Library, which confirmed that there is no legal status for “normally”. In this instance, it is inherently vague and asking for trouble, because it leaves every interpretation open to the courts—at least potentially so.
I am aware that questions on this matter arose also in the Commons and that the only response which Ministers were able to give was:
“The ‘not normally’ element of both the convention and clause”—
in relation to legislative consent—
“is essential as it acknowledges parliamentary sovereignty”.—[Official Report, Commons, 5/7/16; col. 784.]
Following a further check with the Library, it confirmed that every Act which requires the assent of the Assembly already contains a clause that confirms parliamentary sovereignty. Including “normally” here achieves nothing but confusion. That is simply unsatisfactory. We cannot make a law on such a basis. “Normal” is an immensely subjective term. What is deemed normal by one person may be regarded as highly abnormal by another.
Noble Lords may be aware of my work in the field of learning disabilities. At one time, people with such disabilities were referred to as “mentally abnormal” or “educationally abnormal”. That carried a huge stigma and was rightly consigned to the dustbin of history. The concept of normality is loaded with preconceptions and it should never be enshrined in law, certainly not without a very tight definition.
The word “normally” is a Trojan horse at the heart of this legislation. It is totally at the whim of Ministers at Westminster as to what it means. It enables them to use this loophole exactly as they might wish. It would have been more honest to write into the Bill that a Westminster Minister may intervene just when and how he or she wishes on matters falling into this category of Assembly powers.
This is just not good enough. I ask for the support of the House in removing the term if the Government cannot bring forward an acceptable term or some believable explanation for its existence in the Bill. I beg to move.
Baroness Morgan of Ely (Lab)
My Lords, I shall speak to Amendments 7 and 8. These amendments are designed to clarify the circumstances in which the National Assembly’s legislative consent is required for parliamentary Bills. As drafted—as the noble Lord, Lord Wigley, has suggested—the Bill provides that Parliament will not “normally” legislate with regard to devolved matters without the Assembly’s consent. He has just pointed out the difficulties in the definition of “normally”, but neither is there any definition of “devolved matters”. Indeed, elsewhere, the Bill speaks of “reserved matters” or matters that are “not reserved”. It does not use the language of “devolved matters” at all.
This provision closely follows an equivalent in the Scotland Act 2016. Your Lordships might recall that the equivalent provision in the Bill leading to that Act was the subject of rather anxious debate. The concern was that the provision was incomplete in specifying when the Scottish Parliament’s consent was required for UK parliamentary legislation. The provision had been included, following a recommendation from the Smith commission that the Sewel convention be given statutory underpinning. Unfortunately, the Government, in implementing that recommendation, gave the narrowest possible interpretation of the convention in writing it into the Bill.
While it is true that, as originally formulated, the convention proposed that a devolved legislature’s consent was required only in respect of a provision within its devolved legislative competence, it soon came to be accepted that consent should also be required if a parliamentary Bill proposed a modification of that very competence. I will simplify this: if the UK Government wanted to bring in a law on an issue where the Assembly already had the power to legislate—so on agriculture or education—the understanding is that that would not be possible without the Assembly’s agreement. However, if the UK Government proposed to change the Assembly’s powers to legislate, it is not clear that that Assembly agreement would be necessary.
Demonstrating that this was not a matter of controversy, the Government have repeatedly said—and the Minister himself has said on this Bill—that a Bill that radically modified the National Assembly’s legislative competence could not be passed without the Assembly’s formal consent, even though that might not appear obvious from the language of devolved matters. This issue is highlighted in the report on this Bill by the Constitution Committee of this House:
“There were important differences between the Sewel Convention as referred to in the Bill and the Sewel Convention as understood in practice. The Bill framed the Convention in terms narrower than those in which it is usually understood, by failing to refer to that limb of the Convention that is concerned with UK legislation that adjusts the scope of devolved competence”.
It should not be a matter of dispute between the UK and Welsh Governments. The difficulty is that, although the two Governments agree on the circumstances in which the Assembly’s consent is required for parliamentary Bills, the Bill does not reflect that common understanding. The purpose of the amendment, therefore, is simply to define what is meant by “devolved matters”. In so doing, it sets out the agreed circumstances in which the Assembly’s legislative consent is required for parliamentary Bills. Those circumstances importantly include the situation of the present Bill, which modifies the Assembly’s legislative competence.
This is quite a useful clarification that could be achieved without raising any new issues of principle that might be of concern to the Government. I hope at least that the Minister will be able to reaffirm that when a parliamentary Bill comes forward with proposals for modifying a devolved legislative competence, such a Bill—as he has promised with this Bill—can proceed only with the relevant legislature’s formal consent.
Lord Murphy of Torfaen (Lab)
My Lords, I support both the noble Lord and my noble friend in their remarks. My noble friend Lady Morgan has outlined very well what “devolved matters” means in the Bill, and the noble Lord, Lord Wigley, quite rightly spoke about the sloppiness of the term “normally”. I think that it opens up huge possibilities for rift between Cardiff and Westminster unless there is a proper definition, if the Government want this, as to when the Assembly is not allowed to pass its comments upon legislation going through this Parliament which affects so-called devolved matters. Is it for the Secretary of State for Wales or a Cabinet committee to decide what is “normal”? No, this is an absolute recipe for conflict between the Assembly and Parliament, and between the two Governments. I hope that the Minister will take this back and either strike it completely from the legislation or, if they insist that there should be qualifications as to when the Assembly cannot utilise its powers, these should be defined very precisely indeed.
Lord Crickhowell (Con)
My Lords, I spoke at Second Reading and earlier today about the need for clarity in the Bill, and I must say that I share the concerns about the word “normally”. Those concerns were reinforced earlier today by the remarks of the noble and learned Lord, Lord Judge, who produced what seemed to me a pretty devastating analysis and related it to a subsequent clause—I think it was Clause 53. It seems to me that the Government would do very well to ponder what has been said today very carefully. I also have some sympathy with the noble Baroness on the Opposition Front Bench about the use of the word “devolved” when we are dealing with reserved powers. It seems to me that that, too, is likely to be a cause of some confusion. I am not sure that I followed all her arguments, but I am not speaking about those; I am simply seeking clarity. I hope that my noble friend will not dig his heels in tonight, but will take these comments away and give them much careful thought before coming back at a later stage.
Lord Elis-Thomas (Non-Afl)
My Lords, I am pleased to follow the noble Lord, Lord Crickhowell, and I am confident that the Minister, whom I have known in another place—if I can call the Welsh Assembly that—at the other end of the line, is not someone who digs his heels in. He successfully danced a fine tune to move his party, the Welsh Conservatives, into a stance on devolution which brings us to where we are today.
I come to the amendments in my name, which I am pleased to share with my noble friend, Lord Wigley, and the noble Baroness, Lady Morgan, my sister in the Assembly. Amendment 9 attempts to define “devolved matters”. This is another issue that was addressed by the Constitutional and Legislative Affairs Committee in the National Assembly. The Minister will no doubt say that “normally” occurs in the Scotland Act and that the Welsh devolution settlement does not require any definition of “devolved matters”. I am not very enamoured of the argument that empowering the National Assembly to be able to legislate for devolved matters is somehow an overruling of parliamentary sovereignty, as if the traditional constitution of the United Kingdom, of Parliament assembled in these two Houses, could somehow be undermined or be in any sense overruled by legislative activity in Cardiff.
Lord Thomas of Gresford (LD)
My Lords, I was in this Chamber when this issue first arose in 1998 in the then Scotland Bill. I heard Lord Sewel produce his sentence, which was hastily cobbled together. There was no thought behind it. It was not part of the government programme at that time, but he was under great pressure from Scottish Peers to define when the Westminster Parliament would act where Scotland had competence. He came out with his phrase, using the word “normally”, in that context. It has found itself into the Scottish legislation and has been adopted for the purposes of this legislation.
It is an unsatisfactory solution. There are no doubt exceptional circumstances, such as a declaration of war or something of a really serious consequence, when the Westminster Parliament may wish to overrule the Welsh Assembly or act in its place, but the word “normally” does not cover that. It is open to huge misinterpretation and the sort of litigation to which the noble and learned Lord, Lord Judge, referred in his contribution before the adjournment. The Government ought to excise the word altogether. I seem to recall it was still in contention as to whether it was a satisfactory phrase in consideration on the recent Scotland Bill.
I also support Amendment 8 in the name of the noble Baroness, Lady Morgan of Ely. I prefer it to the amendment tabled by the noble Lord, Lord Elis-Thomas, because it is disjunctive whereas his is not. An “or” at the end of his proposed new paragraph (c) might have made it a bit clearer.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank noble Lords who participated in the debate on this amendment. I turn first to the comments of the noble Lord, Lord Wigley. Clause 2 places the existing convention on legislative consent on a statutory footing. As the noble Lord, Lord Thomas of Gresford, just indicated, this is not something that the Government have suddenly dreamed up. It is an existing convention and something we committed to do in the St David’s Day agreement. As has been noted by various noble Lords, it is also in line with Section 2 of the Scotland Act 2016. The convention states that Parliament will not normally legislate on matters devolved to the National Assembly for Wales without the consent of the Assembly, or in the case of Scotland the Scottish Parliament. These amendments seek to broaden the convention in two ways. They seek to remove the “not normally” requirement and also seek to expand the circumstances in which Parliament would not legislate without the consent of the National Assembly for Wales.
That said—the noble Lord, Lord Elis-Thomas, is right that I am going to refer to the doctrine of the sovereignty of Parliament—I can, nevertheless, understand the points that have been made. I am grateful for comments about this from other noble Lords, including my noble friend Lord Crickhowell, and earlier from the noble and learned Lord, Lord Judge, who is not in his place at the moment. I will go back and have a look to see whether we are able to do something by guidance, but the whole nature of the “not normally” is that that there will be circumstances that are difficult to foresee.
The nature of this signals that they are not justiciable, because it is left to Parliament. However, in line with comments from noble Lords and in the interests of ensuring that we look at this from all angles, I will go back and see whether there is something that we can do in relation to guidance on the two issues in relation to devolved matters as raised by the noble Baroness, Lady Morgan of Ely, and the noble Lords, Lord Elis-Thomas and Lord Wigley. I urge the noble Lord to withdraw the amendment.
Lord Thomas of Gresford
I understand the Minister is saying that it is not justiciable as to whether the word “normally” is applicable in a particular case. However, it could be subject to judicial review if a Minister brought forward a Bill that was the subject of contention as to whether the circumstances were normal or abnormal. To say that it is not justiciable is not, I think, correct.
Lord Bourne of Aberystwyth
My Lords, I do not think that I said that. I said that it signals that it is not justiciable. I am making the point that noble Lords have been making about the generality of the phrase and that it is difficult to define, and it means that if Parliament decides something it can decide that this is not normal. That is the point about it. As I say, I will take it back and see whether we can accomplish what noble Lords are seeking in guidance.
Lord Elystan-Morgan (CB)
My Lords, does the Minister accept that there are two problems here? First, the bar is set at a very low level—a level of “normality”. Secondly, as far as the word “normal” is concerned, although of course it appears in the two Scotland Acts, it does not seem ever to have been judicially interpreted in the courts. That is a considerable weakness. I take the Minister’s point that in a way it is a matter for Parliament to define itself—to define its own metes and bounds—which bearing in mind its absolute sovereignty are untrammelled, but nevertheless it is a crucial word in an Act of Parliament and as such it must be interpretable by the courts. I am afraid that, if the matter were raised before the higher courts now, they would say that “normal” means something that is not abnormal and they would leave us in the mists of uncertitude in that way.
Lord Bourne of Aberystwyth
My Lords, I am grateful to the noble Lord for his comments and for clarifying what I was intending to say, and I apologise if I had not made that absolutely clear. I have taken on board the points that are being made. I said that we will look at this in guidance, but as I have indicated there is a need for room for manoeuvre here, so I will take the points back and look at them.
Lord Wigley
My Lords, we are making progress. This is a good omen perhaps for a future amendment that is coming forward. I am grateful to the Minister for agreeing to take it back and look at it. It is always better to have something spelled out in the Bill quite clearly than to depend on guidance notes. Of course the objective of this Bill is to clarify and simplify the problems that have arisen over the past few years, not to dig more holes for ourselves. But in the spirit in which the Minister has offered to look at this again, I am happy to withdraw the amendment.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
The instruction of 26 October suggests that Clause 3 will be dealt with later.
“ The advisory committee for Wales established under section 5 of the Food Standards Act 1999.”
Lord Bourne of Aberystwyth
My Lords, I will begin with government Amendments 19, 79 and 80, which relate to four cross-border health authorities. These are: NHS Blood and Transplant; the NHS Business Services Authority; the Joint Committee on Vaccination and Immunisation; and the Human Tissue Authority. The purpose of these amendments is to allow the Assembly to legislate to confer functions on these authorities in devolved areas without requiring the consent of a United Kingdom Minister. In recognition of their status as bodies serving both England and Wales, ministerial consent will apply in relation to any changes to these authorities’ constitutions.
Government amendments 11, 12, 15 and 16 add four authorities to the list of “Wales public authorities” in Schedule 3. Because they are now listed as Wales public authorities, the restrictions placed on the legislative competence of the Assembly in relation to “reserved authorities” will not apply to these bodies. The authorities being added are: the Welsh Food Advisory Committee to the Food Standards Agency; the Flood and Coastal Erosion Committee; the Independent Groundwater Complaints Administrator appointed under the Cardiff Bay Barrage Act; and the person appointed by Welsh Ministers under Section 3 of the Local Government and Housing Act 1989. My office has been working with the Welsh Government to produce a complete list of Wales public authorities when the Bill is passed. The inclusion of these four authorities in the list is one outcome of this work. Amendment 18 replaces the reference in the list to the Residential Property Tribunal Wales with a fuller legal description of the bodies covered by this umbrella term. Again, my office has worked with the Welsh Government on this change.
In Amendments 13, 14 and 17, the noble Baroness, Lady Randerson, and the noble Lord, Lord Thomas of Gresford, are seeking to remove the governing bodies of further and higher education institutions, the Higher Education Funding Council for Wales and regulated higher education institutions from the schedule of Wales public authorities. The noble Baroness and the noble Lord seem to be seeking to address concerns that have been raised with the Wales Office that the categorisation of these authorities as Wales public authorities will undermine the private sector status or the charitable status of higher and further education institutions in Wales.
I reassure your Lordships that the definition of Wales public authorities in the Bill does not affect the legal status of these institutions as both private sector corporations and charitable institutions. The purpose of new Schedule 9A is to set out an illustrative list of public authorities that fit the definition of Wales public authorities in Clause 4 of the Bill. It delivers a key part of the clarity we are seeking to deliver through the Bill by setting out clearly the public authorities that the Assembly and Welsh Ministers can legislate on without consent.
By removing these educational institutions from that list, the amendments would make their status within the Welsh devolution settlement unclear. This would cast doubt on the status of these institutions when the Government’s position is perfectly clear: education is a devolved matter and so the Assembly should be able to legislate in respect of educational institutions in Wales in an entirely unfettered way. However, I am happy to look in more detail at the precise concerns that are being raised. Welsh universities and further education institutions, as authorities exercising functions of a public nature in Wales, have been appropriately categorised in the Bill, but I will look to see how we can reflect their special position in the title of the schedule in order to stress the fact that they are different from other public authorities. On that basis, I beg to move government Amendment 11 and look forward to hearing from the noble Baroness and the noble Lord about their amendments, which I hope they will not move.
Baroness Randerson (LD)
My Lords, I shall speak to Amendments 13, 14 and 17. I must declare an interest as a governor of Cardiff Metropolitan University and an honorary fellow of Cardiff University.
As the Minister has outlined, these amendments reflect concern expressed by Universities Wales, which represents the Welsh higher education sector, about inclusion in the list. It gave evidence of that concern to the Assembly’s Constitutional and Legislative Affairs Committee, whose report has been circulated to noble Lords. The basis of the concern is that this may lead to inclusion as a public sector body by the ONS. Noble Lords may recall that a reclassification of this kind occurred for Network Rail. That reclassification was undertaken with the full agreement of the Treasury but its impact on Network Rail has been to have a huge effect on its ability to borrow.
Higher education institutions are clearly concerned about their ability to borrow. They are currently classified by the ONS as non-profit institutions serving households; they are therefore part of the private sector and, along with most other charities, enjoy that status. This reflects the extent of public sector control, as set out in EU accounting requirements. I must stress that universities regard themselves as independent organisations. They value their academic and institutional autonomy and are treated as public bodies for only a small number of very specific purposes—for example, for freedom of information purposes. It is true that higher education provision and fees are highly regulated but in Wales, less than 10% of university income comes from direct public funding. The ONS is already reviewing the classification of Welsh universities in the light of the Higher Education (Wales) Act 2015.
In England, the proposed higher education and research Bill will address complexities for those higher education institutions established as corporations, but that Bill will not affect Wales. So the potential reclassification by the ONS will badly affect higher education in Wales because all Welsh HEIs are charities. The Charity Commission is clear in its guidance, which says that a charity,
“must exist in order to carry out its charitable purposes, and not for the purposes of implementing the policies of a governmental authority”.
A breach of this rule could of course impact on governors as well, who could be held personally liable. It would obviously have a massive impact on Welsh higher education’s ability to raise funding for research and to assist poorer students, and on those institutions’ tax status.
Understandably, Welsh universities do not welcome their inclusion as public authorities, but neither should the Welsh Government nor the UK Government. If they are reclassified by the ONS, their debts and spending will go on the Government’s balance sheet. They will go first on the Welsh Government’s balance sheet and affect their ability to borrow because universities in Wales have a significant borrowing requirement of their own, which would of course detract from the ability of the Welsh Government to borrow in addition to that. In turn, it would go on the Treasury’s balance sheet.
I am surprised that the Welsh Government have indicated that they do not feel this is a problem and are not concerned about the inclusion of universities in this list. When I think of it, it is perhaps not entirely surprising because there has been a tendency over many years for the Welsh Government to seek greater control over the public sector, which the Minister will be aware of as an ex-Assembly Member. However it is important to remind noble Lords that the international reputation of our universities rests on their independence from government. Many were established as charitable foundations, and all continue to rely on charitable funding and on funds that rely on their charitable status. Universities in Wales are part of the devolved settlement, as the Minister said, and are hence subject to rules that are slightly different from those in the rest of the UK, but they are very definitely part of a UK-wide sector and of an international market, so they must not be undermined by incorrect classification in the Bill. This is a probing amendment, and I am glad to hear from the Minister that he will consider this matter further. I will be grateful for his further comments when he has time.
Finally, and briefly, the further education sector was also established autonomously in the 1990s. The FE sector has higher levels of direct government funding, but it values its independence, its ability to respond to the market and its flexibility. I will be grateful if the Minister looks at both sectors in detail before we discuss this issue again.
Lord Murphy of Torfaen
My Lords, I understand what the noble Baroness said about the charitable status of Welsh universities, and it is important that the Minister goes back and examines whether it is put at risk by this part of the Bill.
I cannot for the life of me understand Amendment 14, which excludes the Higher Education Funding Council for Wales from the Welsh public authorities list. It is not a university; it is a body that administers funding to the universities. It gets all its money from the Welsh Government, so I cannot quite understand the amendment, particularly because a recent review of non-compulsory post-16 education in Wales indicated that this body will be replaced by a new body dealing with funding for higher education and further education, which is a good thing. The amendment is an incongruous insertion when the argument is about universities and, to a certain extent, further education colleges somehow losing their charitable status, independence, right to borrow and so on. I would value the Minister’s comments on why the Higher Education Funding Council for Wales is part of this scene.
Baroness Morgan of Ely
My Lords, Schedule 3 will provide some welcome clarity about competence in relation to Welsh public authorities. So long as Assembly Bills meet the competence tests in the Wales Bill, the Assembly will be able to legislate in relation to Welsh public authorities without needing to seek the consent of the UK Government.
Most of the UK Government’s amendments add to or clarify the list, and we support them. We are also very content with the removal of special health authorities. I understand that they will be treated differently and need not be in Schedule 3. I beg to differ with Liberal Democrat Peers who suggested removing from the list of institutions in Wales a reference to the further or higher education sectors, the Higher Education Funding Council for Wales and the regulated institutions under the Higher Education (Wales) Act, to which my noble friend referred.
We do not think it appropriate to support any amendments which might act in such a way as to restrict the legislative competence of the National Assembly in respect of these further and higher education bodies. Having said that, I am very grateful to the noble Baroness, Lady Randerson, for outlining the real concerns of the institutions, which need to be addressed. I thank the Minister for agreeing to clarify this issue and for looking at attempting to reflect that special position and ensure that they can continue with their current status.
However, I am afraid that removing these institutions could create uncertainty in the future over the need for ministerial consent where a provision of an Assembly Act confers functions on such a body or removes them from it. No such uncertainty exists in relation to the current legislative competence of the Assembly, and the uncertainty would not arise in the future if these bodies remained on the list.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords for participating in the debate on this group of amendments. In response to the noble Baroness, Lady Randerson, and the noble Lord, Lord Thomas of Gresford, I will just perhaps restate some of the points I made earlier. Very much on the basis that we will still cover these institutions, if there is a way of looking at the nomenclature, such that we can seek to ensure that they have the continued strength and independence that they enjoy at the moment, we will do that, as that is very much in the best interests of Wales. We have first-class educational institutions at university and further education level, and we want to maintain that but at the same time ensure that they are brought within this part of the legislation.
I take the point that the noble Lord, Lord Murphy, made about the Higher Education Funding Council for Wales and agree it does not seem to be in the same category as the universities. I think the noble Baroness, Lady Randerson, agrees with that. That is different in nature, but if there is a way of protecting the universities and the further education bodies and their charitable status, at the same time as covering them within the Welsh public authorities, universities and so on, I am keen to do that, and will ensure that we look at the Bill in that regard. I thank noble Lords who brought forward these amendments but urge them not to press them at this stage.
“The Flood and Coastal Erosion Committee or Pwyllgor Llifogydd ac Erydu Arfordirol.”
“The Independent Groundwater Complaints Administrator.”
“ The person appointed by the Welsh Ministers under section 3 of the Local Government and Housing Act 1989.”
“A rent assessment committee constituted in accordance with Schedule 10 to the Rent Act 1977 (including a leasehold valuation tribunal and a residential property tribunal).”
“Candidates at general elections
In section 7 of the Government of Wales Act 2006 (candidates at general elections), before subsection (1) insert—“(A1) At a general election a person may not be a candidate to be an Assembly member unless the person is recorded on the electoral register as living in Wales.””
Lord Hain (Lab)
My Lords, in moving Amendment 20, I will speak also to Amendment 21. Both stand in my name and that of my noble friend Lord Murphy of Torfaen, and assert the fundamental principle that to represent Wales in its legislature, an elected Assembly Member should actually live in Wales—the same principle asserted by the amendment of the noble Lord, Lord Wigley, which I also support. In doing so, I find myself in the ironic position of seeking to amend my own Act, the Government of Wales Act 2006, which I took through Parliament as a Bill as Secretary of State for Wales. It never occurred to me until the last few weeks that any Welsh Assembly Member would, or indeed could, live outside Wales.
Amendment 20 makes the acceptance of formal nomination as an Assembly candidate contingent on living within Wales. However, if it is felt that is too prohibitive a requirement, since no candidate can be certain of election in advance, Amendment 21 instead makes the membership of the Assembly—that is, for an elected candidate—contingent on living within Wales. That is to say, disqualification would follow without residence within Wales and registration to vote within Wales. Either way, the principle is put in statute, as it would be by the amendment of the noble Lord, Lord Wigley, Amendment 22.
At the most recent Assembly election, 21 candidates stood who did not live in Wales. Fourteen were from the Monster Raving Loony Party, four were Conservatives, one was a Liberal Democrat and one an English Democrat. There was one UKIP candidate, Neil Hamilton, who was elected as a regional Assembly Member and who, I understand, still does not live in Wales but has nevertheless claimed and been granted appropriate expenses, in the same way as those Assembly Members who actually live in Wales. I am not suggesting that there is anything improper here, just that it is an anomaly.
To deal with another question that has been raised, I am informed that to be a Member of the Scottish Parliament or the Northern Ireland Assembly, there is similarly no requirement to be resident in Scotland or Northern Ireland, but that is no reason for Wales not taking the view which I advocate. Since devolution, Wales has been the first to adopt policies subsequently followed by other parts of the UK in a number of areas; for example, establishing an Older People’s Commissioner and free bus transport for pensioners. There is no reason why Wales cannot be innovative in this matter either. Indeed, I have been notified that there is widespread cross-party support in the Assembly for the amendment, including from Welsh government Ministers.
On the substance of the amendment, it is an insult to voters in Wales not to live in Wales, within the nation you are seeking to represent and may find yourself representing in the Assembly. Personally, I have always believed that a constituency Assembly Member, like a Member of Parliament, should live in or, at the very least, very close to their constituency, as I did as Member of Parliament for Neath.
Of course, regional Assembly Members have different duties and no constituents in the same way, but surely they should at least live in Wales as well. How can any Assembly Member living outside Wales possibly keep in touch with public opinion in Wales? How can they keep in touch with issues that arise day to day in the political culture, public life or civic life of Wales? How can they spot new problems or opportunities as they arise in the course of their daily experience living as normal citizens of Wales do? How can they reflect Welsh culture without living within it, as I have been privileged to do? How can they really understand the evolution of Wales’s young democracy as it very quickly develops?
It is fundamental, to me at least, that in a democracy, representatives are of the people and for the people, whatever your political party. I hope that the Government will agree with this principle and accept at least one of these three amendments. I beg to move.
Lord Crickhowell
My Lords, I preface my remarks with a story I was told long ago by Sir John Rodgers, who lived in Kent and was elected for a Kent constituency just a little way from his home. He decided to consult a neighbour, Winston Churchill. Winston replied: “Never live in your constituency”. That is not my position, but I have real practical objections to what is proposed, particularly for candidates.
I have two objections. Let us consider candidates first. Someone may have been born and brought up in Wales and his family live in Wales, but he is at present working in, say, London, perhaps as a civil servant or in business. He decides that he wishes to fight an election. If the amendment were passed, he would be forced to move back to Wales and give up his employment before standing.
I know of at least one very distinguished individual who in the war was in a reserved occupation in the Foreign Office and was determined to serve in the Armed Forces. He promptly got himself chosen as a candidate and immediately had to leave the Foreign Office. He became a founding member of the SAS, served with immense distinction in the Baltic states and later became a very distinguished Member of Parliament. One can also think of someone serving in the Armed Forces—perhaps in the royal regiment of Wales—encamped outside the Principality. He is about to leave the Army or decides that standing as a candidate forces his removal from the Army list. He is perfectly happy, after the election, to move to his constituency and live in it but, as this amendment is drafted, that would not be possible.
I have a second objection. In recent years, I have moved to Monmouth. Take an individual who has been born and brought up in Monmouth. He lives and works there; he worships there; his children go to school there; he goes to a doctor there. However, it chances that he lives just across the Wye bridge and is therefore living in England. He is disqualified from standing. My present Welsh home is on a road that leads up out of Monmouth and virtually every house in it is in the town, but if you go three-quarters of a mile up the road from me to my next-door neighbour, that house is in England. Its occupant may live, work and do everything he has to do in Monmouth but he would be disqualified. This situation is not unique to Monmouth. It happens that a considerable number of Welsh towns straddle the border, starting in the north with Bangor-on-Dee. On Saturday afternoon I passed through Knighton on my way to a memorial service in Presteigne. Someone might live and spend their whole life in Presteigne but it just happens that the house they live in, which is still part of the town, is 100 yards across the border and in England. They are therefore disqualified from standing for election in the county of Powys. Going south, there is Hay-on-Wye, and I could name a whole string of other little towns and hamlets up the border which would be disqualified for entirely the same reason.
Broadly, I have slightly more sympathy with the amendment in the name of the noble Lord, Lord Wigley, which at least allows them to stand as candidates but says that they then have to be living in Wales before they take their seats. However, that worries me too. Going back to my example of Presteigne, can it really be right that the person who lives, works and carries out all their business in that Welsh town is forced to sell their house 200 yards, say, across the border, in order to qualify for membership of the Assembly? It does not seem to me that this is a reasonable proposition.
I wonder too whether there may not be difficulties when boundary changes take place that force people suddenly to move their homes. However, I will not dwell on that. I have voiced my objections. I do not think this is a reasonable set of amendments and hope that it will not be passed.
Lord Wigley
My Lords, the noble Lord, Lord Crickhowell, has certainly given us cause to consider this issue further. As I speak to my amendment, I will deal with some of the points that he raised. Amendment 22 standing in my name is grouped with Amendment 20 moved by the noble Lord, Lord Hain. As he said, my amendment has a similar purpose to his—namely, to ensure that those who legislate for the future of Wales and those who decide the priorities of public expenditure in our country should do so on the basis that they actually live in Wales, know the needs of our communities and genuinely represent the people among whom they reside. I would have thought that was a fairly fundamental principle. I go further and say that ideally each representative, both constituency Members and regional list AMs, should live within the area they represent. In that way, they know the feelings and priorities of their constituents, friends and neighbours and appreciate the tensions which sometimes arise. During the 27 years I represented Caernarfon, a fundamental element in the way in which I undertook the job was that I could feel I was part of the community. I realise that cannot always be achieved and that some people living a couple of miles outside the constituency may be fully integrated into the community they represent. I also realise that there will be times when boundary changes may work in a way that takes the home of a sitting AM or MP marginally outside the constituency in which they were previously living. These amendments do not address those circumstances. They arise from the incredible fact that there is an AM, as has been mentioned, elected to the Assembly by way of the regional lists, who not only did not live in the region when he stood for election, but did not even live in Wales. What is more, he has indicated that he has no intention of moving his main home to Wales. Frankly, that is appalling and should not be tolerated. If our country is good enough to give him a job and pay his salary and expenses, it is good enough for him to accept that he should live there in order to undertake the work. Nobody is forcing him to come to the Assembly. If he chooses to do so, conditions go with the job, and I believe this is one of them.
I have tabled a slightly different amendment from that of the noble Lord, Lord Hain, as I can see circumstances where his wording could cause difficulties. There has to be a date at which a residency requirement applies. It could be the date a candidate is selected to fight a constituency, the date of the election or the date on which the AM in question takes up his or her responsibilities. I personally believe that the date should be that on which the Member takes up the seat, and should be geared to the point at which he or she takes the oath of office, although the qualification date will need to be geared to some existing verifiable location and date—my amendment suggests the electoral register in force at that time—but I realise that that, too, has shortcomings. If the date is that on which the election is declared, in the circumstances of a by-election, candidates from outside the area would effectively be debarred. Applying the rolling electoral register could possibly overcome that. I am not sure how this might have worked in the Neath by-election in 1991, for example, in which the noble Lord, Lord Hain, was first elected.
Lord Wigley
Yes, it was a very good by-election. I enjoyed it very much but then I was not standing. I should declare a past interest in that when I fought the Meirionnydd seat in 1970, which was then taken over by my noble friend in the subsequent election, I was working for Mars in Slough and living in the Thames Valley. There are many similar cases where people who have had to leave Wales to seek work might want to return, whether to a non-political job or to stand for election. The danger is that by having a rule as suggested in the amendments of the noble Lord, Lord Hain, there could be widespread avoidance, with prospective candidates renting an address for the period of the election, with everyone knowing that the address is merely a scam to give the impression that they are highly integrated local people. The address on the nomination paper for election should be the one at which they are registered to vote and to pay tax. If that is outside Wales, so be it; the electors can take that into account. However, once they are elected, they would be in danger of not being paid their salary or expenses if they had submitted a fraudulent address. Remember, these days there is a need to note for council tax purposes whether one’s address is permanent or a second home.
Lord Norton of Louth (Con)
My Lords, my noble friend Lord Crickhowell has raised practical objections to the amendment. I do not wish to raise practical objections but I have an objection of principle. Amendments like this immediately concern me in so far as they restrict the choice of electors. Any amendment that places a restriction on candidates is in effect a restriction on the choice of those who have to do the election. It may be that, as the noble Lord, Lord Hain, said, candidates may not know the problems of the local area or may not know the culture. That is for the electors to decide and not elect them as their representatives. It is not for us to say to the electors, “Sorry, you can’t elect them because we think they aren’t suitable to represent you”. That is fundamentally an issue for the electors. I am for widening choice for electors; if they want to elect whoever, that is entirely a matter for them. It is not for us to impose a statutory requirement.
I accept the point that the noble Lord, Lord Wigley, made about the problems that derive from the particular electoral system in respect of some candidates, but the problem there is the electoral system. My point is one of principle; therefore, one would need to look at the structure and the process of the electoral system to enable the electors to have a better choice, so that they are choosing those whom they wish to represent them. If one wishes the candidates to live within the area, that is a political issue. It is for them to promise electors, rather like Members here can say to their constituents, “If elected, I will live in the constituency”. However, this is fundamentally a relationship between electors and those they choose to represent them. I am therefore wary of any amendment that restricts choice; various amendments have come up in different contexts that do that, and in the Bill I am particularly wary of moving in this direction. I hope the Minister will resist it.
Baroness Randerson
My Lords, I have great sympathy with the amendment in the name of the noble Lord, Lord Wigley. Although I understand the principle of the amendment in the name of the noble Lord, Lord Hain, I fear that it takes rather too hard-line an approach to an important issue of principle. I disagree with the noble Lord, Lord Crickhowell. The principle here is not the individual convenience of candidates who stand for the Assembly or those who are elected to the Assembly, but the fundamental principle that you should not be a member of a legislature to which you are not subject yourself. You should not pass laws that you yourself do not have to obey and take heed of. That supersedes anything that can be said about the practical problems, which undoubtedly exist, for people who live on the border. I think the amendment of the noble Lord, Lord Wigley, deals with that issue in that you do not have to go through the upheaval of moving to Wales if you live a couple of hundred yards over the border. Indeed, if you live in the middle of Surrey, you do not have to go through that upheaval until you are elected.
Until this Assembly term, it has always been taken for granted that you would live in Wales. I recall that when the current Assembly Member for Cardiff Central was first selected as the Labour candidate, she lived in Islington, but she felt obliged to obtain a small flat in Cardiff when she became the Labour candidate—and rightly so. It is important that people feel obliged to live in Wales, that they feel part of the Welsh culture and that they understand Welsh media and Welsh issues. Without living in Wales, that cannot be so. Therefore, I support the amendment of the noble Lord, Lord Wigley.
Lord Murphy of Torfaen
My Lords, I agreed to put my name to the amendment of my noble friend Lord Hain because it is both timely and relevant as the Wales Bill passes through this House. It is not all about Neil Hamilton but it is a bit about him in the sense that he is, as far as I am aware, the very first Member of the National Assembly for Wales who has not lived in Wales. Not only has he not lived in Wales but he lives a long way from Wales, and it highlights why we, as a Parliament, should address this issue—it is different from the franchise that we have known in our country for generations. We are talking about a country; we are not talking about a constituency. I think it is important that you live in your constituency but that is another issue; sometimes it is not practicable or reasonable to do so. However, we are talking about a country that now has a legislative Assembly which passes primary and secondary legislation for that country and which runs the country in many different ways.
The noble Lord, Lord Crickhowell, asked, very relevantly, what happens if you live in a town or village bang on the border. Of course, the border between England and Wales is very different from, for example, the Northern Ireland and Ireland border and it is different from the Scottish/English border, which has lots of built-up areas on it. However, there is a big difference between being a few hundred yards away in Monmouth and being in Wiltshire, and that in a way—
Lord Crickhowell
I say straight away that I entirely agree with that. I am not arguing for someone who lives in Wiltshire; I am merely pleading the case for those who have worked all their life in a Welsh town but, because of the geography, perhaps live a couple of hundred yards outside the town.
Lord Murphy of Torfaen
I think that can be addressed if, in dealing with this amendment, the Government look at what happens in local government. You can be a member of a local authority and live within, I think, three or four miles of the boundary of the local council, and I suppose that could happen with the Welsh situation. Thus, if you lived within a mile or two of the border but felt very much part of a town or village in Wales and you felt Welsh, the accident of the border could be overcome by applying local government laws to the Welsh Assembly.
I turn to the point made by the noble Lord, Lord Norton, about the ability of electors to elect an individual to represent them in the Welsh Assembly. There is an awful lot of merit in that. People should be given that choice but, again, there is a difference. The only example of someone living in England and not in Wales is the UKIP leader in Wales. He was elected as a top-up Member. He does not represent an individual first past the post constituency; he is part of a top-up regional list.
The difference is that on that regional list, one generally elects the party and not the individual. When people voted as they did in that region in Wales, they voted for Mr Hamilton not as Mr Hamilton but for UKIP. Therefore, they did not really have a choice of saying, “I don’t want this person because he doesn’t live in Wales”. They did not get a choice in that. In one form or another, I represented people in Wales for 43 years. People then had the option of saying, “I don’t want him on the local authority or in Parliament”, because, perhaps, the candidate did not live in the constituency, ward or whatever. They had that chance, but they do not have that chance with regard to the top-up seats.
Lord Norton of Louth
Surely, the argument, therefore, is that they should be given that chance—that one changes the system so that they have that degree of choice.
Lord Murphy of Torfaen
If I had my way I would change the whole system—probably not to what the noble Lord, Lord Wigley, wants, but to the alternative vote system, for example. The point I am making is that the people in that part of Wales did not get the opportunity to say, “I don’t want that person because they do not live in Wales”. They were voting for a party instead of an individual. I cannot see any reason why, when we set up a Parliament or an Assembly in one of our devolved parts of the United Kingdom, a person should represent it without living in it. All the arguments that have been addressed are valid and I hope that the Minister will look favourably on these amendments.
Lord Thomas of Gresford
My Lords, this debate takes me back to 1981, when I applied to be a candidate in a constituency not very far from my home. It was impressed on me that I should buy a cottage in this constituency, to which my reply was that I lived half an hour away and had a fast car. That was one factor that meant I was not chosen as the candidate. The other was that I was competing against my noble friend Lord Carlile of Berriew. That was much more important.
I support the amendment of the noble Lord, Lord Wigley. We had problems in my party in the Assembly election before last where two candidates could have been disqualified by being members of public bodies at the time they filed their nomination papers as candidates. One was in a paid office and one was not paid. But they could have been disqualified. One of them succeeded, as noble Lords will recall, in gaining entrance. The other did not.
My recollection is that in the last Wales Bill we adopted a similar provision to that of the noble Lord, Lord Wigley; namely, that they should have ceased to hold those public offices by the time they were sworn in as Members of the National Assembly for Wales. I think that is fair. A candidate does not know, particularly in my party, whether he is ever going to be elected. Accordingly, to ask him to move his house and family, even if it is only half an hour away and he has a fast car, is not a sufficient reason for disqualifying that person from being a candidate. Therefore, I support Amendment 22.
Lord Carlile of Berriew (LD)
My Lords, there has been an unusual noise of breaking bottles outside your Lordships’ House this evening. It rather reflects what I personally would like to do with the Welsh Assembly electoral system. In my view, it has two quite incompatible electoral systems to it. The constituency Members are elected in the normal way to which we are accustomed. The top-up list of 20 is not really elected by the public at all. The truth of the matter is that the candidates who come top of the list of those of the political parties involved are selected by the members of those political parties. Those political parties can have their own selection process, which might well have absolutely nothing to do with residence in Wales or the interests of Wales. We have a fine example in one person who has been mentioned, who actually represents the riff-raff and detritus of our political system. It is very unfortunate for the Welsh Assembly that we have such a person within it.
I listened with great respect to the noble Lord, Lord Crickhowell, as I always do. I understand absolutely the point he is seeking to make. In my old constituency of Montgomeryshire there is a main trunk road that goes through the village of Llanymynech. One side of that road is in Wales and the other side is in England, and indeed there is a public house that is well known to the local residents which has a bar in England and the rest of the pub in Wales, which was of great importance at the time of Sunday closing of pubs in Wales. However, that said, there is no God-given right to be a candidate in an election in Wales. My noble friend Lord Thomas of Gresford just mentioned the two Liberal Democrats who were affected by their membership of public bodies in a way that was reasonably clear if you had gone to a lawyer to analyse the point before the election took place but was not totally clear otherwise.
Baroness Gale (Lab)
My Lords, I thank my noble friends Lord Hain and Lord Murphy and the noble Lord, Lord Wigley, for bringing these amendments before us tonight. I am sure that we all agree that we have had a very good debate on them. I think that this is the first time we have ever debated the qualifications of candidates for the Welsh Assembly. It is something that we should all be looking at. The current qualifications for candidates are wide. A candidate has to be at least 18 years of age, be a British citizen, an eligible British Commonwealth citizen or a citizen of any member state of the European Union—but I suppose that that could change in the near future. There is also no requirement in law for a candidate to be registered as an elector in Wales. I believe that the qualifications for those who stand for the House of Commons are very similar.
That is very different from the qualifications required to be a local government candidate in Wales and England. Some of them are similar to those for standing for the Commons and the Welsh Assembly, but with one big difference. Candidates have to meet at least one of four criteria. They must be registered as a local government elector for the local authority area in which they wish to stand from the day of nomination onwards, or occupying as the owner or tenant of any land or premises in the area during the whole of the 12 months prior to the day of nomination and on the day of the election. The local government area must be the main or only place of their work during the 12 months prior to the day of nomination and on the day of the election, or they must have lived in the area during the whole of the 12 months before the day of nomination and on the day of the election.
It is clear that local government candidates must have some links with the area which they represent. That makes sense and is in line with the amendments before us. What is good enough for local government candidates must surely be good enough for Welsh Assembly candidates. However, it is important that there should be more than one qualification. It should not be just a case of whether you are an elector and live in Wales; you should have wider qualifications. Of the four or five qualifications, or however many there are, a person should meet at least one of them.
This has been a very good debate and it is important that we should have had it. As other noble Lords have said, it has been brought about because of this year’s elections to the Welsh Assembly, which made us all think about the issue—I do not think that any of us had thought about it previously, because nobody believed that someone elected to the Welsh Assembly would not be Welsh or not be living in Wales. It has never happened before.
The matter requires further discussion, but I ask the Minister whether it could be included in the devolution of election matters to the Welsh Assembly as laid out in the Bill or whether it is a matter for the UK Government to determine. We believe that it should be for the Welsh Assembly to decide on qualifications of candidates. Let it decide what it believes are the right qualifications for candidates. It would probably agree that there should be more than one qualification to stand for election to it.
We need clarity, which I am sure the Minister will give us. If the matter is to be devolved, it is right that we should have had this debate. I am sure that Welsh Assembly Members and the Welsh Government will look what at what we have said. I look forward to hearing from the Minister.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on these amendments. I thank the noble Lord, Lord Hain, for bringing the matter forward and, indeed, for admitting to a degree of “mea culpa” on earlier provisions.
The amendments would prevent individuals not resident in Wales, and not recorded as such on the electoral register, being Members of the National Assembly for Wales. As the Government committed to in the St David’s Day agreement, the Bill devolves powers over its own elections to the National Assembly for Wales. This includes the eligibility to stand as a candidate at such an election and the criteria under which a candidate may be disqualified from being an Assembly Member. These would be matters for Wales and the National Assembly for Wales. There is a slight irony in the fact that earlier we debated what “not normally” covers, yet here are seeking to legislate in areas that will now be presented to the National Assembly for discussion and decision. It is absolutely right that this area relating to electoral practice should be a matter for the National Assembly for Wales. I indicated to the noble Lord, Lord Hain—and I have had lawyers look at this—that these matters will be transferred to the National Assembly for Wales and it is right that it considers them.
Very good points have been made by noble Lords in relation to the arguments. The noble Lord, Lord Crickhowell, spoke about the residency requirement for those who may live just over the border at Knighton—close to the station perhaps, which is in England—rather than in the town of Knighton, and so on. They are issues that the Assembly will want to look at, just as it will no doubt want to look at the point made by my noble friend Lord Norton of Louth on the choice for electors. I speak as somebody who as an Assembly Member was determined to live in the area I represented; certainly, it was true then that everybody who was in the National Assembly for Wales lived in Wales. These are valid points for the Assembly to look at; they are not matters that we should pontificate on. With respect, I therefore ask noble Lords not to press their amendments.
Lord Hain
My Lords, I am grateful to the Minister. I will briefly respond to his points at the end of my remarks.
When I moved this rather innocent, inconspicuous amendment, I had no idea that it would provoke such a rich debate about political principles, political theory and the nature of democracy; it has been very instructive and valuable indeed. My noble friend Lord Murphy really came to the nub of the matter when he said that this was about a country’s parliamentary legislature. This is something very precious to Wales and which needs to be given proper respect. That, in a way, links to the point made by the noble Baroness, Lady Randerson, which she expressed very eloquently indeed. She said that Assembly Members should—by living in Wales, in this case—be subject themselves to the laws that they are passing and subject themselves to the policies that they are instrumental in enacting.
The noble Lord, Lord Crickhowell, made a number of interesting points, but at one point he was almost saying that there should be no restrictions at all on candidature, or at least on Assembly Members. The main gist of his argument was about candidates, and I anticipated that, with my noble friend Lord Murphy, with our Amendment 21, as did the noble Lord, Lord Wigley, with his amendment. I do not think that this is the same issue as that about Members of Parliament, because the constituency boundaries are not being changed by the change in the parliamentary constituencies at all. Of course, the parliamentary constituencies do not cross the border of Wales. The new legislation, if eventually enacted, does not do that either.
I agree with the noble Lord, Lord Wigley, about his amendment. Frankly, I could not have done as effective a job as MP for Neath as I hope that I did without living in the constituency. That means living and breathing the life of the local rugby clubs, the local businesses and the local schools and hospitals, as I did for nearly a quarter of a century. He made a series of fair points in relation to pressing his amendment, by which I am rather persuaded. We can happily concede that. He asked about the Neath by-election. I had actually bought a house in the constituency five months before that by-election, although I must admit that I had a crazy mortgage, in retrospect. That was an important principle that I, like the noble Lord, Lord Carlile, felt was right.
The noble Lord, Lord Norton, raised some very interesting points, but he seemed to offer no restrictions on where one must live in order to stand for, or be a Member of, the Assembly. You could be living anywhere—hundreds of miles away from Wales. I simply do not think that that is acceptable. My noble friend Lord Murphy made the point that, in practice, Welsh voters do not have a real choice about the particular Assembly Members they get through the regional lists, and I do not think that he addressed that point. It is, as my noble friend Lord Murphy said, a question of voting for the party.
Lord Norton of Louth
My point was that one should change the system so that the electors actually have a choice. The noble Lord is quite right about the point I was making. I would make it as open as possible for electors to choose whoever they want. I am all for eroding the restrictions on candidature. It is fundamentally a matter for the electors, so if a candidate does live hundreds of miles away, that is a matter for the electors. I remind him that, many years ago, it was actually a Labour Member who listed his address as Greece.
Lord Hain
I did discover all sorts of anomalies when I was Leader of the House of Commons about what was actually going on in terms of people’s residence, and I will not embarrass the noble Lord by mentioning where some of the Conservative MPs lived—that is another matter entirely. I am, as I say, more persuaded by the amendment in the name of the noble Lord, Lord Wigley, than by my two, if I have not dropped my noble friend Lord Murphy in it, so I am happy to withdraw our amendment in his favour.
I also think that my noble friend Lady Gale made an important point about the Assembly having the right to do this and I would like the Minister to look at actually inserting into the Bill a power explicitly conferred to the Assembly to make provision for the eligibility of candidates. On that basis, and agreeing with the point of the noble Lord, Lord Carlile, that the principle at stake here has to be addressed one way or another—if not by this Parliament, then I hope by the Assembly, though it is a matter for that body—I beg leave to withdraw the amendment.
Wales Bill
Monday 7th November 2016
(8 years ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 63-II(a) Amendment for Committee, supplementary to the second marshalled list (PDF, 52KB) - (7 Nov 2016)
Lord Wigley
“Apprenticeship levy
(1) In Part 4A of the Government of Wales Act 2006, after Chapter 4 insert—“CHAPTER 5Apprenticeship levy116O Apprenticeship levy(1) The Treasury must make separate provision in regulations for apprenticeship levy charged to a person in Wales with a pay bill.(2) The Treasury must lay an annual report before the Assembly and the House of Commons on the amount of apprenticeship levy raised in each tax year from persons in Wales.(3) The Treasury must consult the Assembly before setting a levy allowance or a relevant percentage applicable to persons in Wales.””
Lord Wigley (PC)
My Lords, after that rush of enthusiasm for the Wales Bill, I rise to move Amendment 23, which stands in my name and the name of the noble Lord, Lord Rowlands. It relates to the devolution of the funds generated through the apprenticeship levy. The issue has been raised with me because of the uncertainty experienced by employers based in Wales regarding this matter. The Government’s rather chaotic and haphazard approach to the apprenticeship levy has left all the devolved Administrations scratching their heads. Although the specifics are clear for businesses in England, the way in which businesses and organisations in Wales will be able to access and benefit from the money generated by the levy remains completely opaque.
Of the projected £3 billion in the 2015 Autumn Statement, the Treasury specified that £2.5 billion would be spent exclusively on England while the remaining £500 million would be divided among Wales, Scotland and Northern Ireland. We were told we would have our fair share. Despite the fact that this levy is due to be introduced in April, just five months away, we are left facing more questions than answers on the matter. What is our fair share? Are the receipts going to be Barnettised? What happens if the levy yields less money than projected? Will England’s funding be prioritised at the expense of that which is promised for Wales? The lack of transparency in the Treasury’s funding formula for Wales, Northern Ireland and Scotland is creating practical hurdles for those Governments as they prepare for their own apprenticeship schemes.
Apprenticeships are a devolved matter. So are education and training. Operating at a UK level a levy that is meant to directly fund the devolved function has every potential to cause confusion. I am told that an employer-led institute of apprenticeships is to be set up in April 2017 to advise the Department for Business, Energy and Industrial Strategy on the administration of funding and apprenticeship standards in England. Is this institute specifically for England? If so, where does that leave Wales? Surely a similar institution for each of the devolved areas should have a parallel role in advising the Secretary of State. Are the devolved Governments expected to set up their own bodies analogous to the institute or are they expected to relate directly to an institute whose remit extends only to England?
Online services will apparently be provided to employers in England but will not be available to Welsh employers. Another issue that remains unclear is how the levy will work in relation to companies that have headquarters situated in one country but employ people across the border in the territory of a devolved Administration. Plaid Cymru MPs were given assurances in the other place that the Treasury is working in co-operation with the Welsh Government to determine the implementation of the levy. We are yet to see any development on that front.
The apprenticeship levy status in Wales is reduced to a mere link on the UK Government website directing readers to a nondescript Welsh Government webpage that provides no clarity to those in Wales seeking information. What discussions took place between the UK Government and the Government of Wales before that link was advertised? With apprenticeships and businesses keen to take advantage of the levy in Wales in the immediate future, it is not right that they are left guessing while their English counterparts are able to plan in advance.
The UK Government are introducing legislation that pays no regard to the specific needs of the corresponding system in the devolved Governments. They are England-centric in their planning and implementation and appear to be progressing the matter without any co-ordination with the devolved Governments. More broadly, the patchwork devolution settlement being offered to Wales in the Bill will result in confusion and mismanagement. One solution to this problem, as my amendment today sets out, would be to devolve the apprenticeships levy in its entirety to Wales. This would allow the Welsh Government to administer and control the money raised and to align it with apprenticeship policies. Put simply, it would clarify any doubts over Wales’s fair share of the money raised, and would enable employers and apprenticeships to plan their programmes in a co-ordinated fashion. This is a constructive proposal to address a very real problem. I appeal to noble Lords on all sides to indicate their support for the amendment and I appeal to the Government either to accept it today or to undertake to return on Report with their own amendment to answer these very real difficulties. I beg to move.
Lord Rowlands (Lab)
My Lords, I declare an interest as honorary president of the National Training Federation for Wales, and in its early years I was one of its advisers. The federation brings together many or most of the training providers that deliver the apprenticeship and skills policies and funding from the Welsh Assembly Government. I am grateful to the noble Lord, Lord Wigley, for tabling this amendment and bringing to our attention the peculiar and now very difficult situation that has arisen as a result of the introduction of the levy.
I say nothing about the merits of the levy. Frankly, it is a fascinating piece of interventionist politics in the labour and employment market. In fact, it reminded me—although I make no direct comparison—of when I was first in the other place in 1966 and a Chancellor of the Exchequer introduced something called the selective employment tax. I am not sure how many Members still remember that or it its fate. It was a novel tax which did not last; I wonder how long this novel levy will last.
Baroness Gale (Lab)
My Lords, we have had a very interesting debate. The noble Lord, Lord Wigley, and my noble friend Lord Rowlands have spelled out the difficulties of the apprenticeship levy. I believe that the noble Lord, Lord Wigley, is proposing that it should be a Wales apprenticeship levy, devolved to Wales in its entirety, and that it should be collected and administered in Wales. My noble friend Lord Rowlands pointed out quite a lot of the difficulties and the lack of transparency around this issue.
The UK Government have said that the new apprenticeship levy, when it is implemented in April 2017, will apply to all UK employers and that the levy will be charged on those employers with a pay bill of more than £3 million, with a levy set at 0.5% of the pay bill. The Welsh Government have rightly raised concern about the introduction of the levy, and noble Lords have spelled that out today. I understand that the Welsh Government were not consulted about this, and perhaps they should have been before the initial announcement was made, bearing in mind that the apprenticeship levy funding policy is devolved and it will be for the Welsh Government to decide how they use it.
Last year, the Welsh Government consulted extensively on aligning their apprenticeship model to the needs of the economy in Wales and the wider UK. They published consultation responses in July 2015 and, since that time, have delayed publishing their apprenticeship implementation plan, as they want to have the opportunity to properly consider the impact of the UK Government’s proposals for the operation of the apprenticeship levy in England and the associated changes in apprenticeship standard.
We are several months away from the levy being implemented, and there is a lot of confusion and a lack of transparency. Can the Minister ensure that the UK Government will continue to work with the Welsh Government on the implementation of the levy? The Government should ensure that Wales receives a fair share of the revenue raised by it so that it can continue with its very successful apprenticeship programme. At present, it is funded by the Welsh Government with the support of the European Social Fund, which will probably disappear in a few years’ time.
Can we get a much clearer picture than we have at the moment so that there is transparency and the Welsh Government will know how this is going to operate? It seems that they are a bit on hold at the moment, as other noble Lords have pointed out. I am sure that the Minister will be able to clarify the position.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank noble Lords who have participated in the debate on the amendment. I thank the noble Lord, Lord Wigley, for moving it.
To fund the step change needed to achieve 3 million apprenticeship starts across the country by 2020 and to improve their quality, the Government are introducing an apprenticeship levy so that spending on apprenticeships will be double the level that it was in 2010-11 in cash terms. I think that that is something that noble Lords across the House will welcome. I recognise that some employers have concerns over the design of the levy. Following the announcement at the summer Budget of 2015, the Government consulted on its design; the consultation that took place during the autumn of that year revealed overwhelming support for the levy to be as simple as possible to operate across the United Kingdom. For this reason, it was decided that the apprenticeship levy would be based on the UK-wide definition of earnings as used for class 1 secondary employer national insurance contributions. Not only is the definition one that employers are familiar with but it is applied consistently to employers wherever they operate within the United Kingdom’s single market and is information they readily have available in their payroll. The definition also avoids considerable practical difficulties that would arise if there were different rates and thresholds of the apprenticeship levy in different parts of the United Kingdom, which appears to be the purpose of this amendment—or at least a consequence of it. However, because the charge is on the employer, it would be necessary to determine how such a system would operate for organisations working across borders or with plants in different parts of the country, such as Toyota. This would create additional and significant administrative burdens for businesses that we believe are best avoided.
That said, I can recognise the points that are being made by the noble Lords, Lord Wigley and Lord Rowlands, and the noble Baroness, Lady Gale. I thank her for her comments. It is certainly the intention for work between the Treasury and the Welsh Government to continue, as she suggested. Policy on apprenticeships is devolved to the Welsh Government; once there has been a discussion on how we ensure that Wales has a fair share of the money, it does not necessarily follow that it will be Barnettised. I rather suspect that it will not, and presumably they will look at the number of employees in different parts of the country. I am not sure that Barnett would present the right answer. But once it has been done, it is a matter for the devolved Governments of Scotland, Northern Ireland and Wales as to how they operate the apprenticeship policy. They could presumably add more money in if they wanted to, or put in a smaller amount—that is a matter for them.
I have heard the contributions to this debate, and I understand that noble Lords want to ensure that Wales’s corner is being protected; I do too. I will ensure that a note is sent round to noble Lords who have participated in the debate so that they can see the state of play as things stand at the moment.
Lord Rowlands
My understanding is that the way it is going to be delivered in England is through this so-called digital voucher. First, can the Minister confirm that that is the case? Secondly, is it also the case that Wales and other Administrations have all rejected that process? If it is not going to be that, what will the process be by which Welsh companies can claim on the levy?
Lord Bourne of Aberystwyth
The noble Lord is right in the sense that the essence of devolution is that if the policy is devolved to Scotland, Northern Ireland and Wales it is a matter for those Administrations as to how the apprenticeship policy is rolled out. The apprenticeship levy discussion will be happening between the Treasury and the devolved Administrations. I will get noble Lords an update on how that is progressing. It will then be for them to decide how the money is spent. The discussion on how the cake is being divided up will be led by the Treasury with the devolved Administrations. That is my understanding of how it will operate.
Lord Wigley
My Lords, I will press the Minister further on this. Does he accept that, for the Welsh Government—or, for that matter, the Scottish or Northern Ireland Governments—to roll this out they need to know how much money they are getting; the mechanism for delivering it; the timing of it and the conditions that may be placed on it? It is now over 12 months since this thing was kicked off. Without knowing those details they cannot, with all the good will in the world, meet what is required. Inevitably, companies in Wales are going to be in an inferior position to those in England. Will the Minister also clarify the position of those who are employing people across the border: companies which may be based in England but employing in Wales, or vice versa?
Lord Bourne of Aberystwyth
My Lords, this was precisely the point that I was dealing with. As I said, I will get a note round about how the discussion is going on how the policy will be rolled out in terms of the amount of money that will be given to the devolved Administrations. The discussion will go on at that level on how that is being sorted out. As I understand it, the basis on which the policy is rolled out is that the place of employment will be where the policy applies. If a business is in Wales it will be a matter for the Welsh Government to decide a policy which is relevant to it. All the Administrations will want to bear in mind businesses which are on both sides of the border and ensure that there is some consistency in approach. However, that is a matter for them.
Based on my assurances that I will write to noble Lords on how the discussion is going now and that it is a matter for the devolved Administrations to decide the relevant policy—
Lord Crickhowell (Con)
My Lords, I am sorry to interrupt. It is, of course, satisfactory that the Minister will write to noble Lords, but this is yet another example of where discussions have been going on for some time since the Bill passed in another place and yet the up-to-date position on them has not been presented to this Committee. Like the noble Lord, Lord Deben, who made the point in an earlier sitting, I do think this is very unsatisfactory. We really should be updated in adequate time on all these discussions and not told that we will be given the information at some stage, perhaps before Report.
Lord Bourne of Aberystwyth
My Lords, I am not quite sure what my noble friend wants me to say, other than that, as I have just said, I will endeavour to ensure that noble Lords will have the information that is being requested ahead of Report. With that, I ask the noble Lords to withdraw the amendment.
Lord Wigley
My Lords, I am grateful to the noble Lord, Lord Bourne, for his response, but he must be feeling a little uneasy with the quality of the brief that he has been given on this. It is recognised the length and breadth of Wales that this is a totally unsatisfactory position which is causing problems for employers and those employees who are hoping to gain benefit from apprenticeship schemes. It is causing problems for the Welsh Government as they forward plan their budget for the coming year. We are talking of a sum of money that may be, let us say for argument’s sake, in the order of £150 million—a significant sum. Whatever the detail on the way in which these schemes are rolled out in Wales, Scotland or Northern Ireland, none the less, if this is the funding arrangement that has been agreed, there should be transparency. We are now in November, and the budget will be coming in April. It is totally unsatisfactory for the UK Treasury and Government to place the devolved Administrations in this position. Whereas the note that no doubt will be sent round will give the fullest information that the Treasury is willing to make available, it none the less may well not answer the serious questions that have been raised.
I am grateful for the contribution of the noble Lord, Lord Rowlands, with his expert knowledge in this area, and to the noble Lord, Lord Crickhowell, for intervening. We need to know. I realise that it is not the tradition to divide the House in Committee. However, if there is not a satisfactory answer from the Treasury and the Minister, I most certainly intend to come back to this on Report and, at that point, to press it. It is just not acceptable that we in Wales are placed in this position. It is not the fault of the Minister personally, but it is certainly the responsibility of the Government and the Treasury. I hope that between now and Report the Minister will have serious discussions with the Treasury, and that if he in his heart recognises that there is a serious problem here, he himself might choose to come back on this. On that basis, however, I beg leave to withdraw the amendment.
Lord Murphy of Torfaen (Lab)
My Lords, I beg to move that Clause 17 does not stand part of the Bill and in so doing apologise for the absence of my noble friend Lord Hain, who is unable to be with us today. I am glad to say that my noble friend Lord Kinnock, who has also signed this Motion, is with us this afternoon.
It is just over 20 years ago now that the people of Wales voted in the referendum to establish a Welsh Assembly. It is just over 20 years ago that the people of Scotland voted to establish a Scottish Parliament. It was at that point, two decades ago, that the people of both countries were asked about the nature of the devolution that they wanted. In Wales, income tax was not an issue. In 1997, when the people of Wales voted, as they did, narrowly for an Assembly, it was not to have a system of income tax. On the other hand, the people of Scotland voted in favour not just of a Scottish Parliament but also of powers to vary income tax in that country, even though they have never done that.
The purpose of this probing amendment—and it is a big probe—is to find out why the Government have changed their mind since the previous Wales Bill. That Bill, just a couple of years ago, said that if income tax powers were to be introduced in Wales then the people of Wales would be asked their views. I suppose, in a way, we have had a lot of referenda of late, which have caused all sorts of difficulties and problems. Nevertheless, the principle of asking the people of Wales whether they want income tax powers for Wales is no different from what was asked in 1997 of the people of Scotland. Now, however, we have a proposal in this Bill to abolish that question. The people of Wales will not in fact be asked to decide whether they want income tax powers for their Assembly or whether they want the Assembly itself to agree to the principle of income tax raising powers for the Welsh Government and Assembly. I want to find out from the Minister why this change took place and, indeed, what mandate there is for this change to occur.
The second reason why this issue is important is that there is a good, sound economic and financial reason why the people of Wales should not be burdened by an extra income tax. I understand the issues of accountability, and that was the main principle that the Government and others have argued: that there should be this income tax provision. However, given the Minister’s vast experience in this area, I am sure he will understand that Wales is not a wealthy country by comparison with England. Probably thousands more wealthy people live in the county of Surrey than in the whole of Wales. Therefore, the resource base in Wales for income tax is very low indeed, but the burden upon the people would be high were an income tax to be raised in Wales alone.
My noble friend Lord Hain is keen to expostulate that, if income tax is levied at a United Kingdom level, it is properly and fairly distributed among the less wealthy parts of our country. Therefore, Wales benefits from that fair distribution because we are not as wealthy as the south-east of England. That is an important issue to consider when we look at whether income tax should be devolved. Also, if income tax were to be raised in Wales—whatever the levy, be it 2p or 3p in the pound—if all that did was plug a gap because the block grant had been reduced, that, too, would be pointless. If income tax is to be raised, it should be extra and above the block grant allocation—the Barnett formula, flawed as it is—as my noble friend Lord Rowlands indicated.
The third and final reason why the Government should say why this change has been introduced is that they are in the middle of negotiations with the Welsh Government on a fiscal framework for Wales. That is a vital discussion and an important negotiation. If income tax is to be partly devolved to Wales, the onus lies on the Government to ensure that the fiscal framework is so devised that that inequality between Wales and the rest of the United Kingdom is recognised and any block grant or Barnett formula ensures that Wales has a fair deal. For those reasons, I ask the Government to rethink this measure and I shall be interested to hear the Minister’s reply.
Baroness Humphreys (LD)
My Lords, before contributing to this Clause 17 stand part debate, I apologise to the Committee, and to the Minister in particular, for not having taken part in the debate at Second Reading.
I welcome the Government’s decision to remove the requirement for a referendum before devolving powers over income tax to the National Assembly for Wales. I am afraid that I have to take issue with the noble Lord on the Labour Benches, who still sees the need for a referendum.
Our democratic institution, the National Assembly, commenced 19 years ago and successive Bills have conferred increasing powers on it. The aim of this Bill should surely be to further build that democratic institution by providing it with the powers it needs to do its job. Along with those powers, there must also be a means of providing the Assembly’s electorate with the opportunity to hold the institution to account. For me, these two factors—power and accountability—are the basis of democracy. Providing the Assembly with powers over partial income tax devolution, which brings with it the opportunity for transparency and accountability without holding a referendum, should be a mark of the confidence of this House in the Welsh Government’s ability to carry out their functions. The Bill should be about indicating a clear way ahead for the Assembly to provide the people of Wales with the mature and confident democracy we want and deserve, not about placing further obstacles in the path of their progress.
I am tired of living in a country which has had to hold out the begging bowl to the Treasury to enable it to receive funding via its annual block grant. I am tired of hearing Welsh Ministers blame the UK Government for every shortfall in funding. But, most of all, I am tired of there being no means by which I, as a Welsh elector, am able to hold the Government of my country to account for the way they raise and spend their revenue.
Lord Wigley
My Lords, I am grateful for this opportunity to speak on Clause 17, which the noble Lord, Lord Murphy, opposes. On many matters concerning devolution, the noble Lord, Lord Hain, were he here, would accept that we are usually in agreement. I was a great admirer of the way that he succeeded in getting the 2006 Act on to the statute book, notwithstanding its shortcomings.
Tomorrow is election day in the USA. “No taxation without representation” was the phrase coined in 18th-century colonial America. Today, in 21st-century Wales, we have representation but we do not have powers over taxation. We need both.
As the noble Baroness said a moment ago, the devolution of fiscal powers to Wales establishes an intrinsic democratic link between citizens and the policymakers they elect. Devolving income tax means that we can create better Welsh solutions to the challenges faced by Wales, in both the economy and the delivery of public services.
Although I understand the background to the wishes of the noble Lord, Lord Hain, described by the noble Lord, Lord Murphy, for a referendum on income tax powers, I suspect that another referendum is not really what either of them dreams about at night. Indeed, if they do, they probably have nightmares about the use of this ostensibly democratic tool of government. They both know, as I do, how easily a referendum can transpose itself into a verdict on anything but the issue on the ballot paper. It should be used for only the most clear-cut matters, which the electorate clearly understand and know what the consequences would be. It may be fine for deciding locally whether pubs open or close on a Sunday but it is not an appropriate tool for deciding on taxation policy.
From what the noble Lord, Lord Murphy, said, I think he agrees with me on the need for the Assembly to have some tax-varying powers at the appropriate time for reasons that are becoming increasingly apparent. One of the major challenges for the Welsh Government now is to trigger a substantial capital expenditure programme to develop our industrial infrastructure. Plaid Cymru has called for a national infrastructure commission for Wales, which would enable the Welsh Government to borrow up to £7.5 billion over a 10-year period, and we need a tax-raising facility to fund such a programme. It does not have to be income tax—it could be other taxes, which we will discuss later—but income tax should be available for the Welsh Government, in their wisdom, to decide whether or not to use it.
It has been estimated that the servicing cost of that £7.5 billion would amount to £165 million a year, and it is unrealistic to believe that such a sum could be funded from the minor taxes alone. This is why the devolution of income tax is essential. We cannot call for an expenditure programme without accepting the need to fund it. The two go hand in hand and are essential to build a new forward-looking economy for Wales.
Income tax devolution will be the dawn of a new era of accountability for the National Assembly, reflecting the need for a mature public policy to balance the requirement for resources with the practicality of raising them. It is all too easy—and politically far too facile—for politicians of any party to call for greater spending on this or that element of public services without saying how the money is to be raised. It is equally irresponsible for politicians on the right to call for lower taxes without explaining which public services would lose funding. The acceptance of both as obverse sides of the same coin is a reflection of political maturity. Giving tax-varying powers to the Assembly represents another step to it becoming a genuine home of Welsh democracy. For that reason, I support Clause 17 remaining part of the Bill.
Lord Morgan (Lab)
My Lords, I had not intended to intervene in this debate but I should like to make two points. First, I am not persuaded, after what we have experienced in the past few months, that referendums are a source of clear, unambiguous decision. They are disastrous. We have seen that in connection with larger matters than Wales. To have a referendum on the deeply technical issue of the relationships of finance between local and central authorities—a very complicated matter—would resolve into the popular papers of the Welsh press, such as we have, debating whether it would mean income tax going up or down. The idea that fiscal principles would be subject to deep and profound scrutiny is not credible. We have had quite enough referendums as a substitute for democratic decision. They are a bogus form of democracy for the reasons we have seen and I would not want one for this.
Apart from a referendum being an unsatisfactory source of clarity and wisdom, as has been said by other noble Lords, it is an imperative of devolution that the Welsh Government should have some fiscal powers. The Scottish Government have had them since 1997, although they have not used them, and that is perhaps significant for whether the Welsh Government would use them. We do not know.
A devolved democracy that depends on handouts from somewhere else inevitably provokes complaints—as it has done in the history of Wales for decades; Westminster never offers or does enough—and will produce unsatisfactory responses. On the references to the American revolution, the reverse of what was said is profoundly true: if you do not have tax powers or the ability to raise your own revenue, you are not really a democracy because you are in a position of subservience. The whole history of Welsh devolution and other parts of the Bill show—in spite of the excellent intentions of the Minister and others on the Conservative side—that Wales has been treated in an inferior sense. Its status has not matched that of Scotland or Northern Ireland. That is riddled throughout the Bill, nullifying its good and noble purposes. So it is with regard to taxation.
It has been said that we should wait until things sort themselves out and the Barnett formula is removed. Let us wait. It is a temporary stop-gap, as we were correctly told by the noble Baroness. Lord Barnett himself explained what a very bad idea it was, because it was designed to plug what was thought a short-term problem in, I think, 1978, when the distinguished noble and learned Lord, Lord Morris of Aberavon, who is sitting in front of me, was in Cabinet—if I am wrong he can contradict me. Like other stop-gaps, it has survived the decades. It looks remarkably healthy for a stop-gap. A proposal to wait until the Barnett formula is resolved is a way to put off a decision completely. I very much hope we will not have a referendum and that we will bring to further completion the process of democracy in Wales.
Lord Crickhowell
My Lords, I find myself agreeing with the noble Lord, Lord Morgan, on the subject of referendums and, indeed, with the noble Lord, Lord Wigley. I hope Clause 17 will stay part of the Bill. It would be particularly unfortunate to remove it when, as I pointed out at earlier stages, we still do not know what the financial arrangements will be. My noble friend has helpfully pointed out that we hope to know more about that before Report. In all the circumstances, it seems an extraordinary proposal that we should remove Clause 17. I hope very much, for the reasons given by the noble Lords, Lord Wigley and Lord Morgan, that it stays as it is.
Baroness Randerson (LD)
My Lords, the powers on income tax are one of the most important aspects of the Bill. As the Minister knows better than I, the Silk report recommended a referendum as a compromise on income tax. There were those members of the commission who were very keen for the Welsh Government to have those powers and those who were not keen at all. The compromise position was that they should have the powers, but only after a referendum. I am sure the Minister will correct me if I am wrong—otherwise, I am equally sure, he will remain discreetly silent on the issue.
However, the devolution story has moved on a very long way since that recommendation. We have had the Scottish referendum, the St David’s Day agreement, and, as the noble Lord, Lord Murphy, reminded us, the previous Wales Act, which I took through this place. So a referendum requirement is well out of kilter with the times. Forgive me: along with several other noble Lords who have already expressed their views, I am a little out of love with referenda. They do not always answer the question on the ballot paper.
I also remind the noble Lord, Lord Murphy, that powers over income tax could possibly mean that income tax could go down as well as up, or that the Welsh Government could choose to do as the Scottish Government have done for nearly 20 years: to have that power but not to vary the rate of income tax. But there are many reasons associated with the principle of powers over income tax that make it essential that the Welsh Government are given those powers.
There are reasons associated with certainty and transparency. The Welsh Government have evolved from being a purely executive body within the Assembly to being a full legislative body. As those powers have developed, they have lacked the right to levy taxes generally. Gradually, in the previous Wales Act, they were given some of those powers. Clause 17 would increase them.
Lord Kinnock (Lab)
My Lords, in a tiny way this is a historic occasion: it is the first time in my recall that I diverge ever so slightly from the view of my noble friend Lord Morgan, and it is on the issue of the relevance and applicability of referendums. It is clear from what several noble Lords have said that bruises are borne as a result of the fact that we in this country having recently been through a referendum—indeed, I have not only bruises but scars to show for the experience. Nevertheless, the reality is that in a parliamentary democracy referendums are justifiable when there is a proposal to change the way in which we are governed.
That was the basis for the justification of the 23 June referendum, just as it was for those of us who campaigned for a referendum on entry to the European Communities and those of us who campaigned for referendums on Scottish and Welsh devolution back in 1979 and greeted with satisfaction the proposal in the 1990s that referendums should determine whether a Welsh Assembly and a Scottish Parliament were introduced. The same joy stirred our hearts when we saw an enacted proposal for referendums to determine whether major conurbations in England should have elected mayors. I use these references only to demonstrate the realism and the relevance of using referendums when there is a proposal to change the way in which a democracy or part of a democracy is governed.
Such is the case if there is a proposal to offer to the Welsh Assembly the power to levy income tax. That would profoundly change the way in which Wales was governed. It is on that basis that there is a straightforward justification for a referendum on such a fundamental constitutional and economic decision that has immense social, commercial and personal implications for every family, every community, every business and every employee in the whole of Wales.
Left at that, it could be dismissed as an academic, almost arcane argument—but it is not. It is much more prosaic than that. I join with my noble friends in objecting to the removal of the undertaking to give a referendum on the issue of the introduction of income tax-raising powers for the Welsh Assembly. That undertaking was not only given by several political parties representative of and represented in Wales, it was the subject of statute. It remains the subject of statute unless and until this Bill is enacted. For many years—indeed, decades—most political parties offered to the people of Wales the utter reassurance that they would have the final determining word on whether the elected Welsh Assembly is to have the power to levy income tax. Clause 17 should be removed from the Bill to ensure the continuity and integrity of those previous, voluntarily offered undertakings to the people of Wales.
There is a further consideration: we have a model to consider. It has been referred to already. It is, of course, the fact that the Scottish Parliament, from its inception, has had the power to vary income taxation in Scotland and has never seriously considered—let alone debated or proposed—in any formal manner such a variation. Why is that? Because of the utter unacceptability and impracticality of such an idea, even for a substantially devolved institution in a unitary state. I will certainly give way in a moment but will just finish this particular reference. The proposal that the Welsh Assembly should have this additional power in the absolutely certain and cynical knowledge that it would not be exercised is like offering me a car with the capacity to travel at 200 miles per hour and I buy it in the knowledge that the speed limit in the United Kingdom is 70 miles per hour.
Lord Hope of Craighead (CB)
It might be helpful to recollect that when the referendum on devolution took place in Scotland, there were two questions. One was on the principle of devolution but the other was whether a devolved Assembly, as it was called in those days, should have tax-varying powers. That was separated out in the case of Wales but in Scotland, where I was, we had a vote on both at the same time. On exactly the point that the noble Lord was making, we had the democratic decision with a substantial majority that the Assembly, as it was then called, should have tax-varying powers. We got it all achieved in one.
Lord Kinnock
I am grateful to the noble and learned Lord. At the time, I almost rejoiced in the full implementation of the long-standing Labour Party policy—developed under my leadership, as it happens, on the basis of continued representation from my comrades in Scotland—that a specific opportunity should be given to the people of Scotland to decide on that issue. Equally, and with substantial force, there were representations from Wales that that offer should not be made. Influences, parties and opinions in Wales suggested that that should not be the case. But their views were set aside—while undoubtedly being recognised and respected, as is our manner in Wales—and the issue was never put, and it never generated the merest scintilla of a spasm of objection.
Almost on the contrary, at that time in the 1990s and at this time in the second decade of the 21st century, there was and is no evident support among the public for the idea of income tax-raising or income tax-varying powers to be allocated to the Welsh Assembly. In this era, when all of us, if we have any sense at all, must be aware of the feeling of distance that exists between the general electorate and those who are elected to govern them, we should be sensitive to the idea that when there is no measurable support for a proposition that is as significant as the varying of taxation powers, and yet the recognised elected authority and the Executive go ahead and grant that power, on the best day it will be greeted as an irrelevance. On a less good day, it will be greeted with cynical dismissal.
Lord Crickhowell
The noble Lord said that it was a great constitutional change and dismissed the argument advanced—I thought very convincingly—by his noble friend Lord Morgan about the unsuitability of the question to be put in a referendum. However, will not the Welsh Government, or parties in the Welsh Assembly, have to put before the electorate the proposal in their manifesto that they will introduce or intend to introduce or change taxation? If they do so, will they not afterwards face the judgment of the Welsh electorate if the electorate disagree with what they have done and the way they have done it? Surely, therefore, we have a constitutional arrangement that allows the Welsh electorate to make their judgment both before and after a general election.
Lord Kinnock
I agree with the noble Lord. Certainly we have not only a constitutional but an electoral arrangement, which is of at least equal relevance. We speak of course in 2016, the year in which—indeed, just a few months after—an election of a new Assembly took place in Wales. I do not recall any proposition from any party—outside Plaid Cymru, which has been entirely and honourably consistent in its proposals—that said, “If you elect us, we will work to ensure that the United Kingdom, in a change of legislation, will allocate to us the power to vary income taxation in Wales”. I know that that is a political point, but it is worth taking into account. On this central issue of accountability, I noted what the noble Lord, Lord Wigley, said when he advanced the idea that the allocation of powers to the Welsh Assembly to levy and vary income tax would enrich accountability in Wales. I say to him, and in part I respond to the noble Lord, Lord Crickhowell, that accountability must relate not to abstract, desirable, mooted, arguable or deluded powers, but to exercisable powers. What we see in Scotland is a myth of accountability. When they have the power to vary taxation, as they have had for the best part of 20 years, and have not even begun to consider the implementation of such powers I simply do not see how accountability—the central principle of democracy—is enhanced by having a power but never exercising it, and never daring to exercise it. Where is the enhancement of accountability there?
Lord Hope of Craighead
Perhaps I might correct the noble Lord on a point of slight detail. The Scottish National Party, which is the governing party in Scotland, has made it clear that it intends not to follow the Chancellor of the Exchequer in England on the level at which the 40% tax rate comes in. I think that the proposal in England, and indeed in Wales for the moment, is that there should be a rise of that level at which 40% becomes payable. The Scottish Government have said that they are not prepared to go along with that, so for the Scots the level will remain as it is at present. I grant the noble Lord that this is under a different power which has been given in a later enactment but to say that there is no desire by the governing party to make changes is a little excessive, with great respect.
Lord Kinnock
I accept the point entirely. I can respond to it only by saying that I await, without bating my breath, for the implementation of this proposition. I can see the attractiveness of it, especially to a party which is self-confessedly populist and has gained great strength by means of offering simple answers to complex questions. That has served that party well for several years—astoundingly well. I await that exercise of the variation under the supplementary powers granted to them and on that occasion, I will withdraw all speculation about Scottish inclinations to vary taxation powers.
Lord Wigley
The noble Lord very kindly talked of our consistency on these matters; I also respect his consistency on them from 1979 onwards. Can I press him on the point that he made about exercisable powers? The next bank of amendments will talk about a new exercisable power to have a capital investment fund. Without some ability to vary taxation, how does the noble Lord square that circle or does he not support the demand for a greater capital expenditure fund?
Lord Kinnock
I say to the noble Lord, Lord Wigley, who I respect greatly, that it would be—without oversimplifying this—on the same basis as borrowings are undertaken now. He will know of the generous and immensely useful support given to a variety of projects in Wales by the European Investment Bank. Nobody has required the allocation of tax-varying or tax-raising powers to the Welsh Assembly to enable that support. Since there is also a guaranteed income for the Welsh Assembly—inadequate and stunted by the application of the Barnett formula, as he and I would agree—but nevertheless significant, as he and I would agree, nobody lending money for major capital investment projects in Wales, within reasonable limits and according to the required fiscal disciplines, should worry about it because they will be guaranteed a return on their investment. It is not necessary to add to the obligations of the Welsh Assembly to facilitate that—within limited confines, as I say. I will give him an example, which I will pluck out of the air.
If, for instance, a sensible proposal was made for establishing a link between Rhoose international airport and the main train line from London to Swansea, I would certainly support it, or, indeed a spur road from the M4 or even a direct road from the A48 into Rhoose airport in order to enhance the attractiveness of this major infrastructure advantage, substantially, and rightly, supported by the Welsh Government. There is no reason why a guarantee of return on the investment should not be made by the imposition of a small toll on the road or the railway line. It is not unprecedented across continental Europe. If we want to know how successful such arrangements can be, the noble Lord only has to look that the second Severn crossing. A huge capital sum, vastly in excess of anything that would be needed to link Rhoose airport, has been paid off with, in my view, excessive and unfair impositions—I am speaking of the degree, not the principle. The same thing could be done elsewhere. I am not advocating it; I am simply saying that there is a variety of ways of guaranteeing a reasonable return on long-term capital investment without requiring the allocation of fund raising through income tax-raising powers for the Welsh Assembly.
If this removal of a requirement for a referendum is to have a real justification, it has to have evident support from people across Wales. They have expressed no significant demand for, or preference for, the further allocation of such a power to the Welsh Assembly. The maxim employed earlier by the noble Lord, Lord Wigley, which was coined by a Welshman at the time of the American Revolution, “No taxation without representation”, bears an addition in this century. It is: “No further allocated powers of taxation without at least consultation, without at least deliberation, without at least endorsement and, finally, without at least agreement”. That brings us back to the referendum because where there is an absence of demand for this change in the way in which the people of Wales are governed, there has to be a supreme additional justification for allocating a power that is not only not demanded but that we have every reason to assume would not be exercised, a power that would not lend itself to extra accountability or enhance transparency or enrich democracy. I wait to hear from the Minister a justification of the dismantling of the undertakings previously given by all parties and enacted for a referendum as a prerequisite of the allocation of income tax-raising powers to the Welsh Assembly.
Lord Thomas of Gresford (LD)
My Lords, I wonder whether I can assist the noble Lord, Lord Kinnock, in his final question by telling your Lordships about my brother-in-law, who is Welsh, but who has lived in Aberdeenshire since the 1970s. In 1979, like the noble Lord, Lord Kinnock, he was wholly against devolution to Scotland. In 1998, he had not changed his mind, unlike the noble Lord, Lord Kinnock, and in the referendum he voted no to devolution to Scotland, but yes to tax-raising powers if a Parliament should be formed. At the time, we thought this was slightly odd. But what he was saying was that you should not have a parliament unless it is accountable—fully accountable. That is the point.
A lot of water has flowed under the bridge since the Welsh Assembly was constituted, and the Labour Party has, one way or the other, exercised power in Cardiff since its inception—it still does. The purpose of a proper Government is to raise taxes and to spend them, and to be accountable to the people from whom they raise those taxes as to how they handle their money. It is a perfectly simple proposition, but for the last 20 years, we have heard from the Labour Government in Cardiff that if they are incapable of providing adequate services in Wales—for example, in the health service or in education—it is because they do not have enough money sent to them from Westminster.
It does not require a referendum now. The reason why a referendum was provided for in the last Bill and why it appeared to be a good idea was that we were following the Scottish practice of 1998. But we moved on; devolution has moved on. We were tired, as my noble friend Lady Humphreys said, of the excuse that we are failing as a Government because Westminster does not give us enough money. It is time that income tax is devolved to Wales and that proper accountability should occur.
Lord Howarth of Newport (Lab)
My Lords, I will briefly emphasise a point strongly implied by my noble friend Lord Kinnock but perhaps not yet made fully explicit in this debate, which is that there is an issue here about trust between people and their politicians. As has been noted, the Labour Party, the Conservative Party and others have promised a referendum on this question of income tax-varying powers over many years. Indeed, if I am not mistaken, it was a manifesto pledge by the Conservative Party at the last general election, and we need to look at that question of whether it is acceptable and politically prudent for a Government to slide away from a manifesto commitment that was so very clearly made.
I understand, and in large measure agree with, the point made by my noble friend Lord Morgan about the unsuitability of the referendum as a device for resolving technical and complex political issues. I also accept what has been said about income tax-varying powers being a mark of the maturity of the Welsh Assembly, which may call itself a Welsh Parliament. It is desirable in principle that a parliament should have those powers and be held accountable to the people on whom it would propose to levy income tax. It is perhaps desirable that these powers should be created, but one must also recognise that if the people of Wales are asked in a referendum whether they favour the introduction of powers that they would anticipate will be used to raise income tax, they might well say no. Taxable capacity in Wales is decidedly limited, and people on the whole do not vote for higher taxes. But none the less, if they have been offered the opportunity to make that choice for themselves, it may well be rash and improper to take that choice away from them.
The alternative will be that this legislature will impose on Wales an income tax-varying power for the Welsh Assembly. It has been assumed in this debate that that power to raise income tax would be most unlikely to be used in the foreseeable future. But I do not entirely share that confidence, because we have no long-term fiscal framework and no settlement. The Barnett formula has not been reformed, and I agree with those who have said that to wait to move on this until that formula is fully and satisfactorily reformed is to wait for ever. It is not beyond the bounds of possibility that, after 2020, we could see a future Government of the UK reducing the block grant for Wales—indeed, if the Government have their way in this Bill, we will see borrowing powers for Wales very severely curtailed—and in those circumstances Wales would need to increase the proceeds of income tax and to use those powers.
Baroness Morgan of Ely (Lab)
My Lords, I was 12 in 1979 when we had the first referendum on whether we wanted devolution to come to Wales, and I have had a little taster this afternoon of what it must have been like during that campaign. But we have had a different result from that in 1979; the Assembly has been established for 19 years and it is maturing and developing.
I thank my noble friends Lord Murphy and Lord Hain for tabling this amendment because this issue is worthy of debate. I am afraid the people of Wales were told when we established the Assembly that we would put the issue of income tax-varying powers to them in a referendum. We have heard today what a risky business referendums are; I concur—I also have the scars from the recent referendum—and, let me tell you, I am no longer a fan of referendums.
It is worth repeating the question asked by my noble friend Lord Murphy: what has changed since the last Bill that the noble Baroness, Lady Randerson, brought through the House, and what is the difference between that Bill and this one? What has made the Government change their mind on this issue? It is worth drawing attention to the fact that Wales is not a rich country. My understanding is that only about 6,000 people in Wales pay the highest rate of income tax, those who earn over £150,000, while only one in 16 pay the 40p higher rate of income tax. We are not talking about people that it is easy to tax, so it is worth remembering and understanding that this is not going to be a power that is easily exercisable.
However, I beg to differ with my colleagues on this issue, because times have changed. As the noble Baroness, Lady Randerson, said, the Assembly has moved a long way during those 19 years. On top of that, we have the issue of austerity. The IFS said recently that, by 2020, there will have been an 11% cut since 2010 in funding coming to Wales. That is hitting some of the poorest members of our society. Austerity is hitting not only our revenue budgets but our capital budgets. It is all very well to talk about borrowing money from the European Investment Bank, but we do not even know whether we will be able to access that kind of funding in future.
Why do I support the amendment? I support the amendment because, at this difficult time, borrowing against this income stream will be essential if we want to invest in our infrastructure in Wales. There is demand for better infrastructure. People want improvements in Wales. That demand is there. However, it is important to understand—we will come to this in the next amendment—
Lord Bourne of Aberystwyth
I am grateful to the noble Baroness for giving way. I do not think that she is speaking in favour of the amendment; she might want to clarify that.
Baroness Morgan of Ely
I am not speaking in favour of the amendment because of the next amendment. We need an increase in the borrowing powers because of the funding stream and the devolution of taxation. That is critical to investment in Wales.
We know that the Welsh Government and the UK Government have an understanding and that there will be an agreement on the fiscal framework before we enter the next phase of the Bill. It is important that, in that fiscal framework, we have an offset to the block grant in return for that tax revenue. We need to see how that offset will interact with the Barnett formula, and we need the funding floor to be made permanent. It is critical that we should not accept a situation where Wales will be materially worse off as a consequence of devolving taxation. That would not be good for the people of Wales?
We expect the Minister to negotiate that with the Finance Minister in the Assembly, but can he can assure us that that fiscal framework will be resolved before we have an understanding? We will come in the next amendment to the amount that may be borrowed, but can he assure us that we will be able to have an increase in borrowing powers as a result of the fiscal autonomy that will be coming to Wales?
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in this debate. For the sake of clarity—I correct myself as well—this is a clause stand part debate rather than a debate on an amendment to Clause 17.
I thank the noble Lords, Lord Murphy and Lord Kinnock, for moving and speaking to the Motion that the clause do not stand part. I disagree with their intent. As the noble Lord, Lord Murphy, said, we have been here for nearly 20 years since the first successful referendum in 1997. Circumstances massively changed in that time, as the noble Baroness, Lady Morgan of Ely, said.
Let me try to deal with some of the points. Circumstances have changed since the Silk commission’s first report. The noble Lord, Lord Wigley, has been consistent on this topic, as has the noble Lord, Lord Kinnock. I confess that I have not. I am more like the brother-in-law of the noble Lord, Lord Thomas of Gresford: I have changed my mind on some of these issues. I should set that out first. In the Silk commission, all four parties recognised the need for income tax powers for the National Assembly for Wales. If it was to become a full legislature in the proper sense, it was accepted that it needed income tax powers. Some noble Lords have used the phrase as if it meant all income tax powers; of course, it does not; some income tax powers remain with the United Kingdom. We should make it clear that this is not transferring all income tax powers; it is transferring some. It is a significant change, I agree, but the suggestion made by the noble Lord, Lord Kinnock, for example, that it is a fundamental, apocalyptic change to the way things happen but that it will not be exercised is somewhat inconsistent. It cannot be both apocalyptic and not be used.
I very much hope that it will be used. We cannot necessarily draw conclusions from what has been happening in Scotland. I hope that the National Assembly for Wales will be more imaginative. I was there for 12 years, and there was evidence of a lot of free thinking on many issues, not least in this area, so I do not accept that the power will not be used. We must realise that it is a limited power; it is not transferring all income tax powers to Wales.
I agree with the points made by the noble Baroness, Lady Humphreys, and the noble Lords, Lord Wigley, Lord Crickhowell and Lord Morgan, about circumstances having changed, that perhaps we make use of referendums too freely, and that they are not always appropriate. I feel that if we were to insist on a referendum, it is arguable that we would be holding Wales back. In some quarters—I certainly exempt the noble Lord, Lord Kinnock, from this—it is being put forward as a means of trying to defeat the proposal or slow things down. We would not be doing Wales a great service if we did that. This is a power for a purpose, as was identified by the Silk commission. It is bringing in accountability. It is making what I hope becomes the Welsh Parliament, in name as well as reality, a real Parliament with this element of tax-raising power on income tax.
Lord Kinnock
I asked the noble Lord for justification of the change in the law that would be implied by the enactment of the Bill, and he seems to suggest that times have changed and that the Silk commission has made recommendations. Does he believe that times have changed enough to give the Welsh people a real appetite for their Assembly to have the power to impose income tax additions? Does he think the Silk commission was really so conscious of the true economic condition of Wales and the distribution of incomes, referred to by my noble friend Lady Morgan, that it would permit a change that altered the law, removed the requirement for a pre-income tax allocation referendum and justified the introduction of new law? I do not think times have changed that much.
Lord Bourne of Aberystwyth
My Lords, I disagree with the noble Lord on this point. I remember the same argument being put forward when we had the 2011 referendum. People were saying that it would not pass and that opinions had not changed in Wales. I remember people on my own side arguing that it would be defeated in all parts of Wales, up and down the country. That did not happen. It was won decisively in every local authority bar one—Monmouthshire, where it was marginally defeated. Do I think that circumstances have changed so that we do not need a referendum? Yes, I do. The noble Baroness speaking for the Labour Party thinks similarly, as do the other political parties. There is probably one political party that does not think that—UKIP—but I disagree with it. Opinion has changed and we would be doing Wales a massive disservice by having a referendum that I do not believe is necessary in the changed circumstances of devolution in 2016.
Lord Kinnock
Does the noble Lord recognise that to justify his contention about the movement of opinion in Wales, he referred to the 2011 referendum? Does he not consider that that makes my point for me?
Lord Bourne of Aberystwyth
No, it does not. Rather the reverse, it showed that opinion in Wales had changed much more than people thought. The noble Lord put a fair question to me: whether I thought that opinion had changed in Wales such that we did not need a referendum. I hope I have given a very fair answer. It is a truthful one—I think opinion in Wales has changed to that degree.
Arguments were put on various issues in relation to this, not least in the area of borrowing. I agree again that, to have significant borrowing powers, there has to be a separate stream of revenue. This would present a separate stream of revenue, and even if the income tax rates were retained exactly as they are in England, it would give that separate rate of revenue. So, there is that as well. I know that we are coming on to a subsequent amendment on this issue. In view of the fact that I do not believe that this change is necessary and the strength of opinion from noble Lords around the Chamber, I urge the noble Lord to withdraw the amendment.
Lord Crickhowell
On a point of detail, it was suggested that there was a Welsh Conservative manifesto commitment. I have taken the trouble during the debate to read the Welsh Conservative manifesto, which I confess I had never read before, and there is no such commitment.
Lord Bourne of Aberystwyth
My Lords, I am most grateful for that clarification. I do not think I had read it either. It is always useful to hear these things from someone who speaks with authority, and I thank my noble friend very much. Of course, I am not urging noble Lords to withdraw the amendment; I am just urging that the clause stand part of the Bill.
Lord Murphy of Torfaen
Obviously, I shall not oppose the clause standing part, but I shall make two points in response to the debate. First, I have never felt particularly deprived as a Welsh taxpayer and citizen by not having extra income tax for Wales. In the 30 years that I represented a Welsh constituency, not a single representation was made to me about this issue. In the five years when I was Secretary of State for Wales, not one Welsh Minister ever made representations to me about the need for income tax. However, the issue is not about the need for income tax—it is about the need for a referendum. That is what this resolution is about.
Lord Thomas of Gresford
The noble Lord seems to think that this is about additional income tax but we are talking about tax-varying powers. They could go up or down or they could stay the same, but they would give a separate stream to the income of the Welsh Assembly, which would assist in borrowing. What disappoints me in the Minister’s reply is not to hear some idea of the fiscal framework. I wonder whether the Welsh Government have ever put forward a variation on the Barnett formula. We all oppose the Barnett formula in one way or another, but I have never heard the Welsh Government suggest an alternative way in which to raise money, other than the Barnett formula. Can the Minister say something about the broader picture?
Lord Murphy of Torfaen
I had not quite finished my remarks—I thought the noble Lord was intervening on me. The issue is about the principle of a referendum. Right from 1997, the people of Wales agreed on a devolution settlement. In 1979, my noble friend Lord Kinnock and I disagreed with the idea of a Welsh Assembly. Twenty years later, we agreed with it—and, as the Minister himself said, in 2011 there was a referendum to change that settlement. I approved of it, I agreed with it and I supported it. That gave legitimacy to the change, because at the end of the day the people of Wales agreed.
I suspect there has been a change in the past 18 months because, after all, this is about a change in the current law. It is not about introducing something but about abolishing something: the right of the people of Wales to have a referendum on income tax. My guess is that it has nothing to do with the spread of devolution or the other issues to which the Minister referred; it is about their thinking that they would not win it. But the principle of the referendum would give it that legitimacy. Indeed, if the Government and others thought it would be hugely popular, what is wrong with a referendum on it? If we had one on the powers, we can have one on income tax. The Minister has not explained why the Government have changed their mind about the principle of a referendum in under two years. That is a pretty rapid change, and there must be other reasons lying behind the Government’s views. At the end of the day, if the people of Wales want income tax variation—and, by the way, it is not extra money. I reject that idea; I do not think for one second that any income tax powers will produce a penny more for the people of Wales, because the block grant will be reduced. That imposition has been put on a country that is poorer than England. Having said all that, I shall not push this to a vote this evening.
Lord Thomas of Gresford
In Committee, I think I am entitled to speak as many times as I wish. I apologise to the noble Lord, Lord Murphy, for interrupting him in full flow, but I still look to the Minister to give us some idea at this stage of how he sees it. What is the future fiscal framework? What does he have in mind? Will it be a deduction from the block grant, as the noble Lord, Lord Murphy, suggests, or will it not?
Lord Bourne of Aberystwyth
My Lords, I am very happy to supply the information that I gave previously at Second Reading, when I said that I would update noble Lords, before Report, on the progress of the fiscal negotiations that are going on between the Welsh and United Kingdom Governments. As I indicated then, the discussions are progressing well. The ministerial Joint Exchequer Committee has met twice and, according to reports I have had from both the Welsh and UK Governments, it is going well. I am not all over the detail; it would be unwise to be so until they are nearer to a conclusion. There will obviously be a reduction in the block grant because 10p income tax will be raised at the Welsh level. So the discussion is about exactly how we do what is right for Wales and for the United Kingdom within that context. It is good news that progress is being made.
Lord Wigley
I will press the Minister for clarification. Of course, if 10p is transferred over there will be a netting off, but if there is an increase of 1p in income tax there would not be a reduction in the block grant because of that.
Lord Bourne of Aberystwyth
That is absolutely right. The National Assembly for Wales doing something imaginative to raise income will be to the benefit of the Assembly and of Wales. That is the whole point of what is going on. I take issue with the noble Lord, Lord Murphy, in suggesting that there is something sinister in the change of heart here. Other parties have had this change of heart; it is a recognition that we do not need a referendum. I suspect that many of the people urging it are hoping to delay things—I exempt the noble Lord from this—or, indeed, defeat it. That should not be the aim. The aim should be to do what is right for Wales. I strongly and sincerely believe that if we were to have a referendum, it would be carried.
Lord Kinnock
On the issue of taxation levied on the people of Wales, will the Minister spend a moment explaining the logic, or lack of it, of a fiscal regime that has ensured, as he will acknowledge from his own experience, huge reductions in the public resources available to local authorities throughout Wales, with awkward consequences for some services and tragic ones for others? These include adult social care and post-16 educational opportunity. Where is the rationality in imposing such a fiscal regime nationally—for purposes I disagree with, but nevertheless that is the law of the land—and simultaneously introducing legislation that would, without a referendum, or further ado, allocate to the Welsh Assembly the power to vary, including raising, income taxes?
Lord Bourne of Aberystwyth
My Lords, we are being taken in a direction completely off the particular provision in the Bill. As I made clear before, this is a power which, as the noble Lord has just indicated, would enable the National Assembly for Wales to vary income tax up or down, or to ensure that it stays the same if that is what it wants to do. I myself dislike the word “imposing” on the National Assembly or people of Wales. Discussions are going on between the Finance Minister and his team in the National Assembly for Wales—for whom I have the greatest respect—and the Chief Secretary to the Treasury and his officials. I believe that an agreement will be reached. If it is not, we do not get the legislation, because the LCM will only come forward if an agreement is reached to the satisfaction of the National Assembly for Wales, and presumably the Welsh Government as part of that. That will carry things through. I do not see that the local government position is anything to do with this.
Baroness Morgan of Ely
“Lending for capital expenditure
(1) In section 122A of the Government of Wales Act 2006 (lending for capital expenditure), in subsections (1) and (3), for “£500 million” substitute “£2 billion”.(2) In section 161(2) of the Government of Wales Act 2006 (commencement), after “120(3) and (7)” insert —“section 122A(1) and (3),”.”
Baroness Morgan of Ely
My Lords, to me this is one of the key clauses in the whole Bill. I have made no secret of my lack of enthusiasm for the way the Bill has been written, but we are now living in very difficult financial times. The IFS has claimed that there will be a 3.2% cut, in real terms, in the Welsh budget over the next three years. We have little confidence that the UK Government are going to make up the losses that Wales will face as a result of Brexit. The IFS has said that if they do not make up the losses, that will lead to a doubling of those cuts if EU aid is not replaced after Brexit. I am aware that there has been a promise until 2020, but nothing beyond that.
The devolution of tax powers through the Wales Act 2014 will also enable the Welsh Government to borrow in order to invest in capital infrastructure. That will benefit the economy and communities across Wales. The current level of capital borrowing permitted to the Welsh Government is £500 million. That is based on the devolution of two fairly minor taxes: stamp duty land tax and landfill tax. In the Command Paper published alongside the Wales Bill in March 2014, the UK Government committed to reviewing the level of capital borrowing available to Wales if income tax is partially devolved. This Wales Bill will result in the transfer of an additional £2 billion in tax revenue to the Welsh Government, and so will significantly increase the size of the independent revenue stream available to the Welsh Government. In line with the commitment given in 2014, the Bill provides an opportunity to give Welsh Ministers a more meaningful degree of borrowing power to reflect the significant increase in devolved tax revenues under their control.
The Silk commission, of which the noble Lord, Lord Bourne, was a member, recommended that the Welsh Government’s capital borrowing limit should be at least proportionate to the limit agreed for Scotland, taking into consideration the relative lack of exposure to PFI in Wales. With comparable devolved tax powers, the UK Government agreed a capital borrowing limit of £2.2 billion in the Scotland Act 2012. In line with the recommendation from the Silk commission, a capital borrowing limit of £2 billion would therefore be proportionate to that agreed for the Scottish Government, after taking into account the Welsh Government’s lower exposure to PFI. The UK Government’s position that a limit of £500 million is appropriate, as set out in the Government of Wales Act, is contradictory to the approach taken for the Scottish Government in the Scotland Act. At a time when there are significant economic uncertainties, the ability to bring forward additional capital investment would provide a much needed economic stimulus to Wales. With a capital borrowing limit of £2 billion, the Welsh Government would have the fiscal tools available to support the level of investment needed in Wales.
The Welsh Government and Assembly are anxious to grow up, but it is as if the UK Government still want to treat them like children, telling them how much money they can spend and that they are allowed to borrow only if they tell “daddy” what they are going to spend the money on. An increase in the Welsh Government’s borrowing capacity is absolutely critical, and I for one would find it very difficult to support the Bill without that increase. We understand that this will form part of the discussions on the financial framework, but we strongly recommend that both the Welsh Government and the UK Government come to an agreement on this critical area. I ask the Minister to give a commitment that there will be a revision of the amount that is currently in the Government of Wales Act.
Lord Wigley
My Lords, I will speak briefly to Amendment 24 moved by the noble Baroness, Lady Morgan of Ely, which seeks to raise the limit on capital expenditure lending from £500 million to £2 billion. We touched on this issue in our debate on the previous group of amendments.
In the economic climate we find ourselves today, with further uncertainties ahead of us, it is more necessary than ever to have available to the Welsh Government a facility to boost jobs and stimulate growth by way of capital investment—in particular, in capital expenditure on infrastructure projects. Many expect the Chancellor to reflect that sentiment in his Autumn Statement later this month. The Bill imposes on capital borrowing the disappointing limit of only £500 million, which is not enough even to pay for the Welsh Government’s M4 relief road scheme—unless they were to adopt a more sensible route than that currently being advocated.
Lord Crickhowell
My Lords, I am not sure that I know what the upper limit should be. However, I sympathise with the view of the noble Baroness who moved the amendment that the present limit seems on the low side. The Treasury has published a very useful paper setting out the allocations in England, Wales and Scotland. The noble Baroness referred to the comparison with Scotland. I would like to know the logic behind the Government’s views in setting this limit and the differences that appear in that Treasury paper. I will withhold my judgment until I have heard the case advanced by the Government.
Baroness Randerson
My Lords, undoubtedly £500 million is an anachronistic figure. As has been said several times this afternoon, devolution has moved on, and time has moved on. However, I draw noble Lords’ attention to another aspect of the Silk recommendations—namely, the fact that the report said that the borrowing limit should be subject to review at each spending review. Therefore, it is my view that, rather than putting a bald figure in the legislation, we need not just a figure but a mechanism in law which requires the regular review of that figure. Further, the Explanatory Notes should at the very least give some kind of rationale for how the figure was arrived at as the appropriate figure. I ask the Minister to address that issue in his reply.
Having said that, the key point is that borrowed money has to be paid back out of future spending—so the more the Welsh Government borrow, the more they eat into their spending capability in future years. I am rather cautious about this figure of £2 billion, because the Scottish Government have a right to borrow £2.2 billion. Therefore, to balance this properly, we need to look in great detail at other borrowing obligations that the Welsh and Scottish Governments have.
Given that the Bill clears the way for income tax powers, it is obvious to me that the £500 million figure needs to be looked at—but we need more clarity on the figure that is there and a proper mechanism for future revision.
Lord Howarth of Newport
My Lords, the figure of £500 million, set as the limit for borrowing by the Welsh Government, is so small as to be well inside the margin of error in any computation of UK Government borrowing. Will the Minister say what £500 million is as a percentage of the UK Government’s present borrowing requirement? To set the figure so low is contemptuous of Wales. With the powers to vary income tax devolved, the Welsh Government will have the capacity to service a higher level of borrowing, even if interest rates rise. I agree with those who have said that it seems very odd to fix a figure in legislation. Will the Minister also explain why that fixed figure of £500 million is in the Bill? I think that the Government should be more generous towards the people of Wales and allow them the opportunity to invest as they need for the future of the economy of Wales.
Lord Berkeley of Knighton (CB)
My Lords, if EU investment in south Wales suffers, as some of us fear it might, we could find ourselves with some very dire unemployment problems. Therefore, we will need every penny possible to reinvest in that area.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lords who have participated in the debate on Amendment 24, and I thank the noble Baroness, Lady Morgan of Ely, for moving it.
The amendment seeks to quadruple the Welsh Government’s capital borrowing limit set in the Wales Act 2014 from £500 million to £2 billion. As the noble Baroness is of course aware, borrowing falls within the scope of the funding discussions between the United Kingdom Government and the Welsh Government that are proceeding alongside the Bill. As we know, the Bill cannot proceed without the legislative consent Motion, which is dependent on those discussions being successful.
I refer noble Lords to the communiqué published following the Joint Exchequer Committee meeting in September. The two Governments discussed the rationale for the existing capital borrowing arrangements and agreed to consider changing them. Therefore, I can give the noble Baroness the undertaking that she seeks, and I think it is consistent with what I said in the previous debate. It is unthinkable that the matter would not be raised. However, I think she will understand that I cannot give a specific figure. Indeed, the comments of the noble Baroness, Lady Randerson, perhaps indicate that we do not want to constrain the figure in case the discussions lead to it going higher than that. I have given noble Lords an undertaking, which I will repeat: ahead of Report I will give a summary of where we are on the fiscal discussions, which are going well—including, as I understand it, in this area.
As noble Lords have indicated, there are two key considerations in relation to the borrowing limit. The first is ensuring that borrowing is affordable for the Welsh Government. Of course, the transfer of the taxation powers that we have just been looking at will certainly help in that regard, as will the smaller taxes that have already been transferred. The second is ensuring that borrowing is appropriate within the funding arrangements for the United Kingdom as a whole. I am sure that those two points are being borne in mind during the discussions—which, as I said, seem to be going well.
In relation to Welsh Government affordability, as I have indicated, we need to ensure that the Welsh Government have sufficient independent revenues to manage their borrowing costs. As I said, the new taxation powers that are being carried forward by the Bill will help in that regard. In relation to the wider United Kingdom funding arrangements, it is important to recognise that, within any given fiscal position, additional Welsh Government borrowing will mean less spending in the rest of the UK, including in relation to some of the issues funded for Wales from United Kingdom taxation.
Those are the issues being looked at, and I can give two undertakings: first, we will not get the legislation without the LCM; and, secondly, I repeat the undertaking that I gave at Second Reading—I appreciate that not all noble Lords were here for that—to give a summary of where we are so that noble Lords will be aware of it ahead of Report.
I understand the points that are being made and I think all noble Lords who have spoken—the noble Lord, Lord Wigley, my noble friend Lord Crickhowell, and the noble Lords, Lord Howarth and Lord Berkeley—recognise the need for these powers in order that the Welsh Government can borrow. Of course, it is then for the Welsh Government to decide how they borrow and how they spend the money—that is within their devolved competence.
Given the undertakings I have given, I ask the noble Baroness to withdraw her amendment.
Baroness Morgan of Ely
I thank the noble Lord for those undertakings. I was particularly pleased to hear that the amount could even go above £2 billion. We will certainly underline and take note of that. I beg leave to withdraw the amendment.
Wales Bill
Monday 7th November 2016
(8 years ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 63-II(a) Amendment for Committee, supplementary to the second marshalled list (PDF, 52KB) - (7 Nov 2016)
Baroness Morgan of Ely
Baroness Morgan of Ely (Lab)
My Lords, many amendments have been put together in this group, but I will focus in the first place on the so-called purpose test. Here we come to the crux of the constitutional issues with the Bill, and an area which has been criticised by some of the top constitutional experts of this country. I will raise some general questions about how the so-called purpose test works, in order to determine the scope of the Assembly’s legislative competence, because if we do not get clarity on this, the chances of ending up in the Supreme Court are extremely high.
The Bill appears to operate in a binary way. If a provision in an Assembly Bill is exclusively concerned with non-reserved matters, such as agriculture or health, it is of course within the Assembly’s legislative competence. If, conversely, a provision in an Assembly Bill “relates to” a reserved matter, the Bill is outside the Assembly’s legislative competence. Whether a provision relates to a reserved matter is, as the Bill has it, to be,
“determined by reference to the purpose of the provision, having regard (among other things) to its effect in all the circumstances”.
This is the purpose test that I would like to explore.
Of course, in the real world, matters can never be so black and white. Any Assembly Bill seeking to address the complications of modern life is unlikely to be able to do so by making provisions exclusively about non-reserved matters. It may be necessary, for entirely sensible reasons, to touch on reserved matters as well as non-reserved matters.
The question that I am exploring is how far the Assembly can do that before stepping outside the scope of its competence. Does the fact that a specific provision in an Assembly Bill deals in some way with a reserved matter automatically take the Bill outside the Assembly’s legislative competence? If so, that could present some major practical problems for the Assembly. The Minister will know that in the agricultural case, under the current devolution settlement the essence of the matter was that what the Assembly had done could be characterised either as relating to the conferred matter of agriculture or, as the Government contended, to some other matters entirely that were effectively reserved. The Supreme Court held that under the present settlement, provided that the provision fairly and realistically relates to a conferred matter, it makes no difference that it could also be described as relating to a matter on which the 2006 Act is silent—it would still be within competence. On that basis, a certain degree of flexibility is inherent in the current settlement.
Additional flexibility is also available under the present settlement as, where a provision falls within one of the exceptions to the Assembly’s competence, it can still be included in an Assembly Bill where it is incidental to or consequential on another provision within the Assembly's competence. What flexibility is implicit in the settlement envisaged by the Bill before the House? I invite the Minister to address that question. In so doing, I simply make the point that, given the inordinate length of the list of reserved matters that the Assembly will face, this is far from being a theoretical matter. The Constitution Committee’s valuable report on the Bill points out that,
“this test may have the effect of reducing the scope of the Welsh Assembly’s legislative competence, and perhaps lead to further referrals to the Supreme Court. We would welcome”—
again, this is what the Constitution Committee of this House said—
“an explanation from the Government as to whether this was the intent of the legislation and, if not, what steps they intend to take to ensure that the competence of the Welsh Assembly is not inadvertently reduced”.
I ask the Minister to address that issue. We need to know whether the Assembly could be hopelessly constrained from taking action on important social concerns by being unable in its legislation to touch on reserved matters in the course of addressing issues that otherwise would clearly be within devolved competence.
There are a whole load of other amendments in this group, and I would like to deal also with the issue of “ancillary”. Section 108 of the current Government of Wales Act enables the National Assembly for Wales to pass legislative provisions that are ancillary to devolved matters—or, to use the exact terminology, provisions that are,
“incidental to, or consequential on”,
devolved matters, or which,
“provides for the enforcement”,
of such matters to make them effective. But no such express provision is made in the equivalent clause of the Bill, which, coupled with the overlapping issue of the necessity test imposed on modifying the law on reserved matters, is a cause of deep concern. The issue of enforcement is more allowable in the current system than in the one that the Minister envisages with the Bill.
When this issue was raised in the other place, a somewhat confusing response was given. On the one hand, it was said that making such a provision would,
“drive a coach and horses through the key principle underpinning the new model, which is a clear boundary between what is devolved and what is reserved”.—[Official Report, Commons, Wales Bill Committee, 11/7/16; col. 87.]
On the other hand, it was claimed that the ability to make ancillary provision is “simply not needed” as it was already provided for. I find that response as confusing as the Bill itself.
Those promoting the Bill could also have said that it is in this respect merely following the precedent of the Scotland Act 1998, which has a similar provision. But blindly following those provisions in these very different circumstances is unwise. The approach taken in the Bill is uncertain and obscure. It is by no means clear that the National Assembly can make ancillary provision, as no express provision is made in the Bill; it is merely implied.
Why can the Minister not deal with this clearly by making express provision, as is done in the Northern Ireland Act 1998? If, as the Government claim, it is clear that the manner in which the purpose test operates means that ancillary provision is not reserved, why is there a need to state in Schedule 7A that it is not reserved where it,
“is ancillary to a provision of any Act of the Assembly or Assembly Measure”?
Such a provision should be unnecessary if ancillary provisions are not reserved.
The ability to make ancillary provision is vital for Welsh law because of the narrowness of the devolution settlement. The mechanisms necessary to enforce the law, such as police and the courts, are all devolved in Scotland, which they are not in Wales. Put simply, the obscure way in which this is dealt with in the Scotland Act and the attached necessity test is of little practical importance, while in the Government of Wales Act it is crucial to enable the National Assembly to legislate freely. Again, lessons can be learned here from Northern Ireland, where such matters as policing were not initially devolved. It is no doubt for this reason that clear provision is made to ensure that ancillary provision is within competence.
This is not a minor, technical matter worthy of debate only by lawyers and academics. This goes to the heart of whether the Welsh devolution settlement is workable. As has been alluded to by the Delegated Powers Committee and the Constitution Committee in their excellent reports, the particular reserved powers model adopted by the Government risks further reducing the legislative competence of the Assembly, and the failure to make express provision for ancillary matters and the constraint of the necessity test is in the same vein.
Amendment 75 provides for an exception for ancillary provision on certain justice matters for the purpose of enforcing legislation on a subject matter that is not reserved, so that the Welsh Government can give effect to such legislation. Unless this is allowed, it may be difficult for the Assembly to enforce provisions in Assembly Acts.
Finally, I touch on Amendment 81, which restates the existing powers of the National Assembly to modify Minister of the Crown functions within devolved areas where doing so,
“is incidental to, or consequential on”—
another provision in an Assembly Act. I will give one example of how absurd the law could become if something is not done.
Wales was one of the first places to ban smoking in public places. Last year, the Welsh Government hoped to introduce a law under the Public Health (Wales) Bill to ban the use of e-cigarettes in the workplace in Wales. They planned to impose duties on workplace managers in Wales to police the new ruling. The problem is that the UK Government in London would be required to give their consent in workplaces under their authority, such as the DVLA and the Crown Prosecution Service. If the Government refused to grant consent, we could have legions of Welsh people traipsing over to the DVLA to smoke their e-cigarettes.
Can the Minister give us clarity on the situation and how we can resolve what I believe is a serious matter?
Lord Elis-Thomas (Non-Afl)
My Lords, my amendments in this group are all focused on attempting to ensure that the legislative competence of the Assembly is not reduced by the movement from conferred powers with exceptions, to reserved matters with even more exceptions.
I was always concerned about this matter when I had responsibility for presiding over the Assembly because I had to make decisions about the competence of legislation. I often found it difficult to assure myself that there was clarity about the boundaries, although I was advised by excellent lawyers. The current Presiding Officer of the Llywydd has published a series of amendments to enable us to study the question of the constitutional propriety of where we are heading. What particularly troubles me—I am sure the Minister will understand this—is that the UK Government seem to have no intention of publishing an explanation or rationale, if there is such a thing, across the whole 200 or so reservations that would help us to understand the constitutional principles at work here.
Although we were promised by a previous Secretary of State that the pause in the Bill would give an opportunity for these matters to be considered, and there would be a response, this does not seem to have happened. My amendments would restore or maintain the current competence of the Assembly by enabling it to legislate in an ancillary way in relation to reserved matters. I know the Minister will say that ancillary matters are a minority interest but they are of great constitutional import. In my view, this is a clear example of how the move from the current form of legislative powers to the new form is narrowing the Assembly’s competence.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I am very grateful to the noble Baroness, Lady Morgan of Ely and to the noble Lord, Lord Elis-Thomas, for tabling the amendments. I am particularly grateful for the careful way in which they have spoken to them.
I understand the importance of the issues that have been raised, and I shall try to address them in general terms by giving some examples of how the purpose test should operate in practice. First, on the wording, I say to the noble Baroness that the legislative competence in proposed new Section 108A(3) is a dual test. It allows the Assembly to legislate if it,
“is ancillary to a provision of any Act of the Assembly or Assembly Measure or to a devolved provision of an Act of Parliament, and”—
so there is the additional requirement—
“(b) has no greater effect otherwise than in relation to Wales, or in relation to functions exercisable otherwise than in relation to Wales, than is necessary to give effect to the purpose of that provision”.
So, it is a dual test. It is not simply ancillary but has to be “necessary”, under proposed new subsection (3)(b) of the provision.
These are important issues but they are not novel. Exactly the same sort of questions arose in respect of the Scotland issue because both in Scotland and Wales we are relying on the so-called purpose test to help define the scope of the relevant legislature’s legislative competence. We now have the benefit of guidance, as has been stated, from the Supreme Court, on the proper interpretation of these provisions. The guidance, although given in a Scottish case, will be highly relevant to the Welsh matters provided for in the Bill before us.
The starting point is that whether a provision in an Assembly Bill could be said to “relate to” a reserved matter is dependent on its purpose. As has been pointed out in the Supreme Court,
“the expression ‘relates to’ indicates more than a loose or consequential connection”.
I stress that the application of the purpose test in a reserved powers model should be interpreted as meaning that a provision that merely refers to a reserved matter, or has an incidental or consequential effect on a reserved matter, will not relate to that reserved matter. In other words, to fail the “relates to” test, an Assembly Act provision must have a reserved matter as its purpose. The purpose of a provision must be established by having regard to its legal, practical and policy effects in all the circumstances. The Assembly Member bringing forward the Bill cannot simply assert a purpose for one of its provisions. The purpose must be assessed by considering how the provision has been drafted and what it actually does, as well as the wider context, including the other provisions of the Bill of which the provision under scrutiny forms a part.
It is also important to say that the move from the current conferred powers model to one based on reserved matters reverses the operation of the purpose test. It shifts the burden, which is important. Whereas under the current settlement an Assembly Act provision needs to satisfy the purpose test by positively demonstrating that it relates to one of the subjects conferred in Schedule 7 to the 2006 Act, the reserved powers model instead requires that such a provision must not relate to a reserved subject matter. In other words, the case would need to be made that an Assembly Act provision is outside competence because its purpose relates to a reserved matter. As I say, it shifts the burden of proof. If such a case could be made, the provision would satisfy the requirements of the proposed new Section 108A(2)(c) and would be within competence, provided, of course, that it satisfied the other legislative competence requirements of new Section 108A.
To demonstrate how the purpose test ought to be applied in practice, I thought it would be helpful to give some examples. However, it is important to bear in mind in each of these hypothetical examples that it would depend on how the provision was drafted and what it actually did. As I have mentioned, the purpose test requires assessment of the effect of the provisions, including all the circumstances, in the round. An Assembly Bill which required tenants to insure their residence could relate to the devolved subject of housing and not to the insurance limb of the financial services reservation in Section A3. Rather than aiming to amend the law of insurance, the provision’s purpose would be to ensure the quality of housing stock in Wales. I think that most people would appreciate that that was the purpose.
A further example is that an Assembly Bill provision creating competitive tendering requirements for local authorities would be to improve their efficiency and cost-effectiveness, and would therefore not relate to the competition reservation in Section C3. Furthermore, the jurisdiction of the Agricultural Land Tribunal is set out in the Agricultural Holdings Act 1986. This Act also specifically excludes certain matters from the jurisdiction of the ALT—for example, disputes between landlords and tenants of agricultural land. An Assembly Bill may seek to alter this position by bringing such disputes within the jurisdiction of the ALT and no longer subjecting them to arbitration. This would not engage the arbitration reservation in Section L4 because the purpose of the provision would be to facilitate the smooth and economic operation of the agricultural sector by providing a practical, accessible and cost-effective way of settling disputes about agricultural land. The effect on arbitration would be incidental to, or consequential on, that purpose.
Lastly, an Assembly Bill provision requiring information-sharing between schools and Estyn which supported more general provisions aimed at improving the operation of the education sector in Wales would not relate to the reservation for the protection of personal data in Section L6. I hope this explanation of how we see the purpose test working, and these hypothetical practical examples, are sufficient to reassure the noble Baroness and that she feels able to withdraw her amendment. It is not possible to go through every conceivable example. I think that lawyers would accept that, as drafted, this would serve to answer particular cases that may be brought forward.
Through his Amendments 39 to 41, the noble Lord, Lord Elis-Thomas, is seeking to broaden the circumstances in which the Assembly could legislate in relation to reserved matters, and in that respect he is probing similar issues to those raised in Amendment 38. I therefore hope that the explanation I have given is reassuring.
As I have said, unlike under the current settlement—where an Assembly Act provision needs to satisfy the purpose test by positively demonstrating that it “relates to” one of the subjects conferred in Schedule 7 to the 2006 Act—the reserved powers model instead requires that such a provision must not relate to a reserved subject, so that the burden is shifted. In other words, the case would need to be made that an Assembly Act provision is outside competence because its purpose relates to a reserved matter. If such a case could be made, the provision would satisfy the requirements of the proposed new Section 108A(2)(c), and would be within competence, provided, of course, that it satisfied the other requirements. I do not therefore see a need for the Bill to be amended in the way that these amendments propose. Indeed, a side effect of the noble Lord’s amendments would be to prevent the Assembly being able to legislate otherwise than in relation to Wales for ancillary purposes—currently an important part of its competence that allows for enforcement provisions to apply in England. This is something that I know the noble Lord does not intend.
Government Amendment 42A is a minor change to ensure that the wording of the test in Section 108A(5) coincides with the wording in paragraph 12 of Schedule 7B. Both provisions ensure that, when considering the legislative competence of the Assembly in the context of an Act of Parliament, any requirements for the consent of, or for consultation with, a Minister of the Crown, are not relevant. This makes sense on the basis that it would be clearly inappropriate to require a Minister of the Crown to consent to, or be consulted about, an Act of Parliament. This is a technical amendment ensuring consistency throughout the Bill.
I turn to Amendments 47, 75 to 78 and 81 and 82. Paragraph 6 of Schedule 7A reserves the core elements of the single legal jurisdiction of England and Wales. These include the courts, judiciary and civil and criminal proceedings. Sub-paragraph (2) provides an exception to this reservation to enable the Assembly to provide for certain appeals or applications in relation to a devolved civil matter where it is ancillary to a provision of an Act of the Assembly or an Assembly measure.
Amendment 47 seeks to remove the ancillary requirement from this exception and allow the Assembly to directly place devolved functions on to civil courts. This ancillary requirement is crucial in that it enables the Assembly to enforce its legislation and to allow appeal decisions on devolved matters to be heard in a court on civil proceedings, yet it maintains the clear boundary that the single legal jurisdiction is a reserved matter. Paragraph 1 of Schedule 7B restricts the Assembly’s ability to modify the law on reserved matters. This includes any enactment whose subject matter is reserved. Paragraph 2 sets out the exception to this restriction. It allows the Assembly to modify the law on reserved matters where the provision is ancillary to a provision on a devolved matter and has no greater effect on reserved matters than is necessary to give effect to the provision. This provides the Assembly with the flexibility to legislate with regard to the law on reserved matters in a limited way to give effect to provisions that are within its legislative competence. However, such a provision cannot go further than required to achieve its objective.
Amendments 75 and 76 seek to remove the second limb of this exception—that the provision must have no greater effect than necessary—from Assembly provisions that seek to modify the law in relation to paragraphs 6 and 7 of the new Schedule 7A. These are the reservations for the single legal jurisdiction and tribunals. Amendment 77 seeks to remove the necessity element of this test altogether. This would allow an Assembly, through on Act, to amend the law on reserved matters without a requirement for it to act proportionally to meet its objective. The law on reserved matters is, by definition, not an area of the law that should be open to wide-ranging alteration by the Assembly in this manner. This is vital to effect a clear boundary between what is devolved and what is reserved.
The matters within paragraphs 6 and 7 to Schedule 7A specifically are fundamental to the maintenance of the single legal jurisdiction of England and Wales. The Government’s position on the maintenance of the single jurisdiction is clear. Allowing the Assembly to modify these areas puts at risk the uniformity on which the single jurisdiction is based. Removing the requirement that Assembly modifications to the law on these matters should go no further than necessary would give the Assembly a significant increase in competence. The constraints represent an appropriate and balanced limitation on the Assembly’s competence. This gives the Assembly the same powers to modify the law on reserved matters as the Scottish Parliament has in relation to Scotland.
Lord Wigley (PC)
Amendment 82 was discussed in the other place and the Minister gave the same assurance to my colleagues there that the powers would not be exercisable on Acts of the Assembly that had already been passed, and therefore it was not a question of rolling back any existing legislation. However, is it not totally perverse that there should be a different set of circumstances relating to legislation that has been enacted in the past and identical legislation that may be enacted in the future, but they are handled in different ways?
Lord Bourne of Aberystwyth
I do not think I follow the noble Lord’s point. It is obviously a hallmark of good legislation that it is not retrospective. Therefore, anything that we are doing here will not, as it were, undermine anything that has already happened. But I think what we are doing otherwise is fairly clear for the future, so I do not quite understand what he means by perverse in that context.
Lord Bourne of Aberystwyth
I shall be very happy to discuss it further with the noble Lord.
The inclusion of exceptions to the Minister of the Crown consent process would undermine the whole principle of providing clarity within the devolution settlement over who can legislate for what.
The remaining government amendments in this group—Amendments 78A to 78D and 80A—build upon Clause 13, which is an important part of the Bill. Through that clause we are devolving competence to the Assembly so that it can set up its own regime for the audit and accounting of the Welsh Government and its public bodies, similar to the arrangements made by this Parliament for the UK Government and by the Scottish Parliament for the Scottish Government. Clause 13 has been the subject of detailed discussions between the United Kingdom Government, the Welsh Government, the Assembly Commission and the Wales Audit Office, and these amendments are the result of those discussions.
Through Amendment 78A we are devolving competence to the Assembly to amend Section 146A(1) of the Government of Wales Act 1998. Amendment 78B replaces paragraphs 5(2) to 5(6) of new Schedule 7B, as inserted by Schedule 2 to the Bill, with simpler drafting without changing the effect of the provisions in any way. The effect of these two amendments is that the Assembly will be able to modify Section 146A(1) of the Government of Wales Act 1998, which allows the Welsh Ministers to delegate or transfer supervisory functions to the Auditor-General for Wales, provided that that amendment is a provision about the oversight of the Auditor-General for Wales.
Through Amendments 78C and 78D we are devolving competence to the Assembly to amend sections of Part 5 of the Government of Wales Act 2006, other than those that are already listed in paragraph 7(2)(d), without the consent of the Secretary of State provided the amendments are incidental to, or consequential on, provisions relating to budgetary procedures or devolved taxes.
Finally, Amendment 80A will put in place key safeguards in paragraph 7 of new Schedule 7B so that the Assembly will be able to amend Treasury functions in Sections 138(2) and 141(4) of the Government of Wales Act 2006 only with the consent of the appropriate Minister.
Section 138(2) allows the Treasury to appoint another member of the staff of the Assembly as principal accounting officer for the Assembly Commission if the Clerk is unable to discharge these responsibilities or the post of Clerk is vacant. There are already arrangements for dealing with the replacement of an Assembly Clerk in certain circumstances, such as incapacity, and the accounting officer appointment should follow from that process. If these arrangements are changed, it is only reasonable that the Treasury gives consent because it is the guardian of the overall accounting officer system in the UK.
Section 141(4) ensures that the Treasury may continue to determine the form in which the Welsh Government submit their returns for the whole of government accounts. Although we are content for this to change in principle, the Treasury quite rightly wants to make sure that any change aligns with the arrangements for the Scottish Government, and so a requirement to seek Treasury consent is sensible.
These are technical but important amendments that build upon the important provisions in Clause 13. I therefore commend government Amendments 42A, 78A, 78B, 78C, 78D and 80A to the Committee and I urge the noble Baroness to withdraw her amendment.
Lord Thomas of Gresford (LD)
My Lords, the noble Lord, Lord Elis-Thomas, in introducing his Amendments 77 and 78, did not expand very much on what they mean. I support the Government on the necessary test for the law on reserved matters, and I think it is essential that it be confined in that way.
I would be extremely concerned if there were an attempt to have a different criminal law applying in Wales, save in matters concerned with the enforcement of regulations or Acts of the Welsh Parliament. However, any modifications to the criminal law that dealt with, for example, the meaning of intention, recklessness, dishonesty, and so on or “secondary criminal liability” would cause great conflict. I have to tell your Lordships that I was involved in the definition of “recklessness” in the House of Lords Judicial Committee 25 years ago. My argument was dismissed but 25 years later their Lordships overruled the previous decision. It was similar with secondary criminal liability. My argument about that many years ago was dismissed but in very recent times has been accepted. These are difficult concepts and they should not be interfered with in any way.
Baroness Morgan of Ely)
My Lords, I thank the Minister for his comprehensive answer. There is a lot to digest.
It gives me a degree of comfort to understand that the amendment will fail the relate test if it has reserved matters as its purpose—that was clearly underlined by the Minister. The shifting of the burden of proof is also useful. I find that examples tell the story more readily than heavy legalese. However, it would have been useful to have heard examples of where it would have failed. We may be able to look at that in future. We need to be clear about where the lines are.
It was useful to understand that there will not be a need for consent by a UK Government Minister in relation to reserved bodies if it relates to general duties. I am again comforted by that.
As I say, there is a lot to digest and we will need time to look in detail at the Minister’s answer to see whether it meets some of our concerns. At this point I reserve judgment on whether he has answered all of my concerns and beg leave to withdraw the amendment.
Lord Wigley
“(c) relates to the Welsh Government’s provision of support for the furtherance of the Welsh language and culture in the Argentinian state of Chubut where the provision has the agreement of the UK Government and the Government of Chubut.”
Lord Wigley
My Lords, Amendment 42 relates to the Welsh community in Patagonia, which is located entirely within the Argentinian state of Chubut. I declare an interest in that I was president of the 150th anniversary celebration committee, which last year stimulated a programme of events to mark the occasion, and in particular to create a legacy which will help stimulate and sustain Welsh language and culture in Chubut.
Over the past 50 years, there has been a growing interest in matters relating to Welsh culture in Chubut, and there are today about 7,000 Welsh speakers there, of whom about 1,100 are learners of the language. Over the past 20 years, practical help and support has been given by way of helping teachers from Wales to work for two or three years in Patagonia to assist with the teaching of Welsh. The Welsh language school Coleg Camwy has been teaching Welsh in Gaiman, the most Welsh of the towns in Chubut. There are schemes to expand this school currently under consideration. A new Welsh school, Ysgol yr Hendre, was opened in Trelew, the largest city in Chubut, some 10 years ago, and this year a new Welsh school has been opened in Trefelin in the Andes. Welsh language and culture is also taught in dedicated classes in the town of Esquel.
This is relevant to the Wales Bill because since the opening of the National Assembly, the teacher scheme, which was originally established by Welsh Office Ministers back in the 1990s, has been taken over by the Assembly. Indeed, two First Ministers have visited Chubut—first Rhodri Morgan and last year Carwyn Jones—and other links between the National Assembly and the Welsh community in Patagonia have been established. These activities and links are associated with the National Assembly’s responsibility for Welsh language and culture. Although the Assembly and the Welsh Government have no direct responsibility for overseas activities and relationships, it has been recognised that such overseas links can be accepted as being within their competence because they are ancillary to safeguarding the broader interests of the Welsh language and culture.
However, with the new, tighter approach which seems to be taken by the UK Government in the context of this Bill, with “silent issues” being seen as reserved matters, words along the lines proposed in this amendment are needed to ensure beyond all doubt that these powers continue to be available to the Assembly and that nothing in this Bill should be seen as undermining such activity. I suspect I can carry the whole House with me in these aspirations. If the Minister can assure the House beyond peradventure that these powers will continue to be exercisable by the Welsh Government, the amendment may be unnecessary, but if there is any doubt whatever, such words should be added to the Bill. I hope the Minister can respond positively on this matter. I beg to move.
Lord Crickhowell (Con)
My Lords, a good many years ago I and my wife visited the Welsh settlement in Patagonia. We were greatly impressed and moved by what we found there. We met a large number of people with Welsh names. Indeed, we stopped to picnic by the roadside and an individual in a truck drove up and asked what we were doing. We told him why we were there. He said, “Oh, he’s Welsh”, pointing to the nearest farm, the owner of which had a Welsh name. He pointed at another farm and the owner of that one had a Welsh name. We found wonderful examples of Welsh culture and the Welsh language, and an enthusiasm for Welsh culture and language that I, for one, found greatly moving and was very impressed by.
I know that, a good time after our visit, the support described by the noble Lord began. It has continued and has been very successful and influential. I hope it can be continued. It may be that my noble friend will be able to tell us that the amendment is not needed, but if by any chance it is it has my warm and wholehearted support.
Lord Howarth of Newport (Lab)
My Lords, while I share the aspirations of the noble Lord, Lord Wigley, I would like to ask him a couple of questions. The condition of his amendment is that the provision should have,
“the agreement of the UK Government and the Government of Chubut”.
Can the noble Lord tell us that he has squared the Government of Argentina, or is that not necessary because competence in this matter has been devolved from Buenos Aires to Chubut?
Lord Wigley
Indeed. Education in Chubut is a wholly devolved matter in Argentina. The state legislature of Chubut has been very positive on these matters. It contributed to the opening of Ysgol yr Hendre 10 years ago, which I mentioned. It is now actively involved in the possibility of expanding the school at Gaiman. In other words, there is a good working relationship between the Government of Wales and the Government of Chubut. The central Argentine Government have been very supportive. Indeed, they have provided funds to safeguard all 16 of the Welsh chapels in Patagonia to ensure they all remain open, provided there is one service once a quarter in each of the chapels. In other words, whatever other dispute there may be—disputes do arise in Argentina on various matters—on this issue there is harmony that is well worth building on because of its interest not only in Argentina and to Wales but to the United Kingdom in our relationship with Argentina.
Lord Morgan (Lab)
My Lords, what the noble Lord, Lord Wigley, said is totally correct. Y Wladfa, the Welsh community in Chubut, rather benefited from the Falklands War, because the Argentine Government were rather anxious to show that they were solicitous of the needs of cultural minorities in their country. I feel, on behalf of Welsh historians everywhere, that I should support this. I have not been to Chubut, as the noble Lord, Lord Crickhowell, has, but I have taught Chubut students in Swansea. I twice published articles by historians from that community in the Welsh History Review when I edited it. They have a very living contact; it is not an antiquarian matter. All Welsh people should strongly support it.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord, Lord Wigley, for introducing the amendment and other noble Lords who have participated in the debate. Through the amendment, the noble Lord seeks to extend the Assembly’s competence so that it could legislate otherwise than in relation to Wales to support the Welsh language and Welsh culture in the Argentinian province of Chubut.
Of course, the history of the Welsh settlement—“settlement” in a sense that I hope I will be allowed to use here—in Patagonia is one of the great stories of human migration and holds a special place in the hearts and minds of people in Wales. It is a story of typical Welsh tenacity and fortitude that led settlers to travel thousands of miles, driven by the desire for a better life and the dream of establishing a new Wales.
In Patagonia today, interest in the Welsh language and Welsh culture is flourishing, more than 150 years on from the first settlement. Members of the Welsh Affairs Committee in the other place saw this for themselves when they visited Patagonia in 2014, a year early, to mark the 150th anniversary of the arrival of the first Welsh settlers. Although the anniversary was in 2015, typical Welsh efficiency and promptness meant that they were there a year early. The settlement is of course a part of Argentina and, while Welsh culture thrives there, it is wonderfully intermixed with the rich culture of South America. I, too, have taken an interest in the settlement. When I was on the British Council committee, access to finance and help were certainly provided to Chubut.
When the amendment was tabled, my reaction was, “Surely, the National Assembly has the power to do this already”—and that is our conclusion. The common law-type powers that we are devolving to Welsh Ministers will ensure that they can continue to act in the way that they are doing in support of the Welsh language in Chubut. I will have another look at it to ensure that that is the case and will be happy to speak to the noble Lord if that is helpful, but I am sure that we would all want to see this continue. With that, I ask the noble Lord if he would kindly withdraw his amendment.
Lord Wigley
My Lords, I thank everyone who contributed to this short debate and am grateful for the positive spirit and in particular for the response of the Minister. I had hoped that he would say that the powers that already exist are not in any way diluted or diverted by virtue of the Bill. The Minister mentioned legislation. I should clarify that it was not my intention that the National Assembly should legislate for what happens in Chubut—obviously not—but there are Executive actions which support the language, and it is the continuation of those that I wish. Given the assurances that the Minister has given, and assuming that he does not find any snag that he has not seen so far, I beg leave to withdraw the amendment.
Lord Elis-Thomas
Lord Elis-Thomas
I have always believed that constitutional legislation in any state should be intelligible, or as intelligible as possible, not only to the practitioners of public life but to the general public. This is particularly the case with the constitution of Wales. The episode that we are now involved in is a further obfuscation of the constitution rather than its opening out to intelligibility, which is why these amendments on consolidation are important. I am grateful for the support of the noble Baroness, Lady Finlay, who will no doubt want to speak to them.
The question of how a constitution is made accessible was highlighted in the outstanding judgment of the High Court last week. In their judgment, their Lordships said:
“The United Kingdom does not have a constitution to be found entirely in a written document. This does not mean there is an absence of a constitution or constitutional law. On the contrary, the United Kingdom has its own form of constitutional law, as recognised in each of the jurisdictions of the four constituent nations”.
But because the constitution of Wales is currently spread over four pieces of legislation, it hardly meets the test of being intelligible to the population or to any of those active citizens who wish to participate in understanding their constitution.
This has been a persistent theme of the National Assembly’s relevant committee dealing with constitutional matters. That is why the predecessor committee of the current one, of which I was also a member for a period, recommended that a clear commitment should be given to consolidating the constitutional legislation of Wales and to having this done in the current parliamentary term. If for good reasons of their own the UK Government did not feel able to undertake such consolidation, there should also be a clear provision—or at least there should not be any hindrance—in any Bill so that the National Assembly itself could undertake it. Amendments to this effect were tabled in another place and in the debate the UK Government said this was not necessary because the constitutional settlement for Wales is the Government of Wales Act 2006 as amended—a matter to which I alluded earlier. Quite simply, the urtext that is the basis for our understanding of the constitution of Wales is the Government of Wales Act 2006 as amended, but it does not meet the test of consolidation and intelligibility.
Is it not now time to give the people who are most concerned about this matter—those of us who must live and work through the constitution we are given by courtesy of the Houses of Parliament of the United Kingdom—responsibility to make that consolidation? It is not an attempt to amend legislation, merely to consolidate it. This approach should recommend itself to all who are concerned about constitutional clarity and democratic principles. All that Amendments 43 and 44 would do is permit the National Assembly to consolidate the devolution statutes relating to Wales in both its languages. This is not to blow my own trumpet because I happened to be born bilingual, but we are officially a bilingual legislature. We work actively and daily in two languages. To allow us to legislate and provide consolidation in this area would mean that we were able to serve our citizens much more effectively. I beg to move.
Lord Howarth of Newport
My Lords, I have huge sympathy with what the noble Lord, Lord Elis-Thomas, just said. Why have the Government not presented this legislation to Parliament in consolidated form? That would have greatly facilitated scrutiny and, more importantly still, as the noble Lord suggested, it would be for the benefit of the people of Wales and all our fellow citizens who are interested in and care about the development of our constitution, by enabling them much more readily to understand the Government’s constitutional proposals. I cannot see why we must wade through these thickets of legislative obscurity to try to get the measure improved and an adequate and comprehensible piece of legislation presented to the world.
Lord Crickhowell
My Lords, I have every sympathy for what has been said about consolidation. My difficulty is more fundamental. I am not a lawyer, and I know I am a bear of very little brain, but quite frankly, I do not understand what lines 5 and 6 mean. I should be grateful if the Minister could tell me, in simple language, what on earth they mean, because it is far from clear to me.
Baroness Finlay of Llandaff (CB)
My Lords, I have added my name to the second of these amendments, but I should have added it to both. I have felt strongly that law should be accessible to the people to whom it applies. You cannot expect a population to understand the law that surrounds it and the way it lives unless it is intelligible and accessible. Ever since the Assembly came into being, divergence of the systems, particularly in education, health and social care and planning, has meant that we have an increasingly complex range of legislation. Cardiff University was where Wales Legislation Online first started as an attempt to provide some kind of solution to this. I was pleased to be part of the campaign at that time to get that instigated. That subsequently evolved into Law Wales and is now more formalised.
This requirement and request for consolidation came through quite clearly in the report of the Constitutional Affairs Committee, which made clear that we need consolidation. I cannot see that the Government in Westminster will ever feel particularly motivated to consolidate, but I can see that the Assembly would feel motivated to do so.
Lateral to that, this all fits with a quiet campaign I have had over the years. In 2004, I asked the Government to make sure that the Explanatory Notes accompanying each Bill provided a table listing all the provisions to give powers to the National Assembly. The response I had from the Lord President of the Council was that:
“It will be suggested to departments that they present this in a tabular form where appropriate”.—[Official Report, 11/10/2004; col. WA 1.]
During the passage of the Government of Wales Act 2006, I further pursued the need to be able to track legislation, particularly because of this effect of divergence. I stressed that solicitors and other professionals in Wales, such as healthcare professionals, educators and so on, need to know and understand the law which governs the way they function and live and their everyday activities such as their professional duties with regard to the rest of the population.
Can the Government therefore explain what they lose by giving such powers to the Assembly? I cannot see that they would lose anything at all. Why could they not seek to adopt this amendment, which might provide a solution to a problem which will probably get worse over the years, as further constitutional changes come through in other pieces of legislation?
Baroness Gale (Lab)
My Lords, by now, after the contributions that have been made, the Minister will be quite clear that there is a need to consolidate the Welsh Acts of Parliament. We believe that the Wales Bill would be appropriate and without doubt could consolidate matters so that the Welsh constitution is accessible as a single piece of legislation.
The Bill as it stands constantly refers to or amends many previous pieces of legislation, in particular the Government of Wales Act 2006. As such, reading and understanding where power lies in relation to Wales can be needlessly complicated. As noble Lords have said, we should therefore aim to bring as much clarity as possible to what could be a landmark piece of legislation.
So far, however, the UK Government do not seem to want to consolidate the Welsh devolution settlement into one authoritative piece of legislation. I believe they have said—perhaps the Minister can confirm this—that it is “not necessary”, because the constitutional settlement for Wales is in the Government of Wales Act 2006. We should strive for more than what is just necessary; rather, we should aim to produce a Bill that all of us in Wales will be proud of.
The Welsh Government have already drafted an alternative Wales Bill, drawing together many pieces of legislation into one self-contained whole. In that sense, the hard work has been done. Could the UK Government not simply follow the approach of the Welsh Government, and what I believe is the wish of noble Lords tonight? This would be an opportunity for us to forge clear, accessible and ambitious legislation. I am sure that the Minister has been listening to what all noble Lords have said, and I hope that he will come forward with some positive responses.
Lord Thomas of Gresford
My Lords, I am a lawyer, but I have no idea what Clause 3(5) means. I look forward to the Minister explaining it because what is being referred to if,
“power to make laws other than that of the Assembly is disregarded”?
I have no idea at all.
On Amendment 44, I believe in consolidation but I do not know that I believe in this particular amendment. The law affecting Wales will be what one might call Acts of the Assembly, subordinate legislation under Acts of the Assembly and legacy law—that is to say, if in devolved areas the law in England moves on, the provisions which previously applied to Wales will continue. In devolved areas, the Westminster Government may decide to change the law as a result of policy, leaving Wales with the legacy. Proposed new Section 108B says on consolidation that:
“Nothing in this Act prevents the Assembly restating … the provisions of any enactment that provide for the government of Wales”.
What does that refer to? Is it the legacy law and, if so, how does the Assembly restate it?
Subsection (2) of the proposed new section in Amendment 44 really makes me puzzle. It says that the Secretary of State—presumably, the Secretary of State for Wales—
“may by regulations repeal the provisions of any enactment … restated by the Assembly in accordance with subsection (1)”,
so whatever mechanism restatement is supposed to be, the Secretary of State here in Gwydyr House can repeal it. The Assembly may make this pronouncement: “We are following the law that previously applied to England and Wales but England has moved on. We are continuing the law as it was previously stated in Wales”. Then the Secretary of State for Wales comes along and repeals it, not by any legislation but simply by statutory instrument on an affirmative resolution by each House of Parliament. I really do not know what this consolidation means. I agree with my noble friend Lady—
Lord Thomas of Gresford
My noble friend Lady Randerson. I was getting my names mixed up for a moment. She said the other day that it is—as a matter of fact, I have forgotten what she said so I shall leave it at that.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords for their participation in this part of the Bill. Through these amendments, the noble Lord, Lord Elis- Thomas, is seeking to provide the Assembly with the competence to consolidate the law as it applies in Wales. Through Amendment 43, I think that he seeks to broaden the circumstances in which the Assembly could legislate other than in relation to Wales. However, the amendment as drafted would actually narrow the Assembly’s competence to legislate otherwise than in relation to Wales by making the “no greater effect than necessary” test more restrictive. I am sure that this is not the noble Lord’s intention.
Through Amendment 44, the noble Lord and the noble Baroness, Lady Finlay, seek to give the Assembly a wide-ranging power to restate without modification any law that provides for the government of Wales. I think the noble Baroness, Lady Gale, was referring to an alternative Bill that is not a consolidation measure. We would hesitate to accept an alternative Bill which is nothing to do with consolidation.
Nevertheless, let me answer the question about consolidation because it seems to me that the consolidation of United Kingdom legislation can realistically take place only in the United Kingdom Parliament, and no more could or should the United Kingdom Parliament consolidate legislation of the Welsh Assembly or, for that matter, the Scottish Parliament.
The noble Lord, Lord Howarth, asked why we have not consolidated previously. The reason is that we have been under continuous pressure—I think that probably applied to the previous Government as well—to change the laws in relation to Wales because it has been a fast-moving position. There has been understandable pressure to make amendments, and it is difficult to consolidate the law at the same time as the law is being changed. In relation to an area that I know something about—company law—before the consolidation in the Companies Act 2006, which was then and I think still is the largest piece of legislation ever to go through the UK Parliament, there had not been a substantial consolidation measure since 1948, although there had been consolidation to some extent in 1985. That is why these things get postponed.
Before we get too exercised by this, I remind noble Lords that this does not alter the law. The law is there. I would need to be convinced, as I think others would too, that people in Wales are hanging about for a consolidation measure and that they want the law somewhere neatly. I do not think they are particularly exercised about this. I would have to be convinced that this is something that is exercising people up and down Wales or, indeed, in England. There was a suggestion—I am characterising it slightly—that this primarily concerns Wales, but it concerns England too, and Scotland, because it carves out the constitutional position within the United Kingdom.
That is not to say that it may not be necessary at some stage, but when it is done, it is important that it is done in the UK Parliament. In the meantime, it is important that we get the law right. I appreciate that we have got some way to go on some of that, but it is more important to get the law right before we consider consolidating it, so I ask the noble Lord to withdraw the amendment.
Lord Thomas of Gresford
I apologise to my noble friend Lady Randerson. What she said on the first day in Committee, which I now recall, was that there should be an easy way of access to Welsh law, and so far nobody has put together any form of loose-leaf book or anything of that sort that shows the current law in Wales. That is the point she made, which I follow.
Lord Bourne of Aberystwyth
My Lords, there is a commercial opportunity there. I commend the noble Baroness, Lady Randerson, for her good idea.
Lord Crickhowell
I am sorry to intervene again, but I thought I was being pretty stupid at a late hour at night when I asked what subsection (5) meant. When a leading Welsh lawyer got up and asked exactly the same question, I decided that perhaps I was not quite as stupid as I thought. I would love to know what it actually means.
Lord Bourne of Aberystwyth
My Lords, I believe it means—and I will write to noble Lords if I am incorrect in this, as I may be—that, in determining what is necessary for the purposes of subsection (3), which relates to the test of ancillary and necessary, you cannot allege that it is necessary that the law is passed unless it is necessary that it is an Assembly law. It cannot be necessary for another legislative body. I think that is what it means. If I am wrong, I will write to the noble Lord and copy the letter to other noble Lords. I may be wrong.
Lord Elis-Thomas
I am, of course, disappointed by the Minister’s response, but I should be disappointed at least once in a debate in this Parliament. I am grateful for the support from the noble Lord, Lord Howarth, and the noble Baronesses, Lady Finlay and Lady Gale, and for the interventions by the noble Lords, Lord Thomas of Gresford and Lord Crickhowell.
The consolidation of the law is about the intelligibility of the law and the transparency of political activity. I will continue to pursue this with greater vigour and will call upon my distinguished academic colleagues throughout the Principality and beyond to get on and do it. I beg leave to withdraw the amendment.
Lord Elystan-Morgan
“Working group on constitutional development
The Secretary of State for Wales shall, within the period of three years following the principal appointed day referred to in section 55(3), establish a working group to study the possibilities for Wales, as a land and nation, of constitutional development within the terms of and consistent with the principles of the Statute of Westminster 1931, and developments thereafter, and shall within the said period of three years present a report of its study to Parliament with such recommendations as it deems appropriate.”
Lord Elystan-Morgan (CB)
My Lords, these two amendments, Amendment 45 and Amendment 46, are intended to stimulate thought—particularly the first of those amendments, which relates to dominion status—and to try and deepen and broaden the whole issue of the constitutional future of Wales. The second, which deals with the constitution of reserved powers, is intended to seek to repair and ameliorate some very serious flaws which, in my submission, exist in this part of the Bill.
Dominion status is not about a rigid pattern of government. The principle is enunciated in the Statute of Westminster 1931 and has developed politically, broadly and indeed fruitfully over the 85 years thereafter. It is full of possibilities for meeting different situations in different parts of the world. Obviously, when one is speaking of dominion status in the context of Wales, one is not speaking in any way of a replica of the constitutional situation of New Zealand or Australia. Nevertheless, the common refrain which runs through it all is that it involves a territory that was once under direct British rule and which still accepts the sovereignty and the titular authority of the Queen. Beyond that, the possibilities are almost illimitable. Indeed, my appeal in this situation, when we are thinking of the future of Wales, is to think big. If you think big, you will achieve something worth while; if you think small, what you will achieve will be small, or even perhaps smaller than that which you have set out to obtain. That is the situation that confronts us now.
The possibilities of dominion status are almost illimitable. It is an open secret that about 10 years ago the Government of the United Kingdom and the Government of Spain almost came to an understanding—this is hardly believable—about the future of Gibraltar, with a plan for some form of dominion status. In other words, the concept is so flexible, so malleable and so adaptable that it was possible for the ancient conflicts there to come very near to a friendly settlement. That is an illustration of exactly how pliable dominion status can be. It is in that context that I would ask for imagination to roam and for the spirit to be broad and liberal and inspiring in relation to the possibilities here. There are endless plans and changes that can be considered, but within them there is the possibility of Wales playing a full, dominant, honourable and splendid part in the life of the United Kingdom. Who knows what the situation will be in five to 10 years’ time? It is a situation of total flux, and it is therefore incumbent upon us as Welsh people, and indeed upon all of us as British people, to consider exactly what this possibility should be, side by side with many other possibilities.
I turn to the second matter, the question of the creation of a reserved powers constitution for Wales. Normally I would jump with joy at this development because it places Wales upon the same constitutional basis as Scotland and Northern Ireland. It also tidies up a great deal of what is now in a state of confusion and, if I may so describe it, confetti. When you deal with a long period of transferring small powers, day in and day out, coming from hundreds of different sources, you create a situation that almost guarantees some constitutional neurosis on the part of many generations of Welsh lawyers. Avoiding that would in itself be utterly worth while.
However, I am far from happy with the situation because I believe it is deeply flawed and a blueprint for failure and disaster. The fact that there are 200 or more reservations—I am wrong, actually; it is about 198 or 199—and the very nature of the reservations themselves makes the matter a nonsense. Consider the matters that are reserved, though I touched on this at Second Reading so I will not go into all the detail: licensing, something that Wales had devolved to it in 1881; dangerous dogs; sharp axes and knives; hovercraft; prostitution; charitable collections—one could go through dozens of examples here of what are mere trivia, matters that are clearly domestic in their nature. The inclusion of them by way of reservation is to my mind an insult to the people of Wales.
It is on that basis that I ask the House to consider very carefully whether in any way this can fit in with what I have described as the moral and constitutional geometry of the situation. By that, I mean that when you have a settlement such as we are now seeking in relation to Wales, one that one hopes should last for a long time or at any rate be a basis upon which further development can be built, there has to be mutual trust and some sense of balance. The subsidiary parliament states straight away, “We are not concerned with the question of succession to the Crown, defence or foreign policy and perhaps three or four allied questions of that nature, but we are concerned with matters that are purely and classically domestic in their character”. If the current Parliament refuses to accept that, the whole moral geometry of the situation is affected.
How did this come about? Not, I think, on account of any mendacious conspiracy on the part of Ministers against Wales; I do not think there is any conscious machination at all in regard to it. It came from a long history of prejudice that has formed what you might describe as a permafrost of attitude towards Welsh devolution. I do not believe that the situation was anything different from this: the Secretary of State for Wales, perhaps rather deferentially, went to various colleagues and said, “What would you like reserved, my dear chap, from your department?”. Each one said, in his mind and his heart if not indeed in actual words, “Practically everything. It doesn’t matter how meagre, niggardly, small or utterly local it might be, we will reserve it if we possibly can”.
Why? I believe that it has a lot to do with the fact that Wales was England’s first colony. That was the situation in the 13th century. In the Act of Union of 1536, Wales was said to be part, inevitably and as it always had been, of the United Kingdom, and its affairs were to be assimilated, incorporated and included within the greater realm of England. We have not broken through that mould.
On Second Reading, I made this—I think, not invalid—point. When you think of some of these reservations—there are dozens which, to my mind, are utterly ludicrous—can you imagine the Colonial Office of the United Kingdom 60 years ago, particularly when James Griffiths was the head of that department, going to a British Caribbean or African colony and saying, “These are the reservations that I demand of you”? It simply could not happen.
It is against that template that one has to consider this matter. For that reason, I have drafted this new clause, which of course I shall not press to a Division tonight, but it could well be revisited before we finish with the Bill. It calls on the Secretary of State to be responsible for setting up a working party to report to Parliament within three years on the question of how the reserved powers are operating in each case. The purpose of that—allied, no doubt, with recommendations from the working party—would be, first, to narrow the gap between the situation now and that which existed on the very day in July 2014 when the Supreme Court gave its judgment in the agricultural workers case. The gap is immense. The powers that we have under the Bill are, strictly speaking, immensely inferior to what we had then, when it was discovered that silent transferred powers, which no one had ever appreciated, had given immense authority to Wales.
I think that the Government were reluctant to accept the reserved powers constitution that they had enforced on them; their hands were forced. I do not believe that there is even now a messianic commitment, and most certainly there is no incandescent enthusiasm for this reform. It is something to which they feel that they must surrender.
The effect will be, secondly, to get rid of many of these anomalies; and, thirdly, to set out a coherent pattern, for in fact there is no theme—no coherence—to this. For that reason, I beg to move.
Lord Wigley
My Lords, I support my friend, the noble Lord, Elystan-Morgan, on Amendment 45, which he moved so eloquently, and Amendment 46, which is coupled with it. The noble Lord has throughout his political life been a strong advocate of the merits of dominion status, as defined by the Statute of Westminster 1931. In his way, tonight, he has, even at this late hour, elevated the debate above the uninspiring contents of a rather unambitious Bill.
Since the United Kingdom became a member of the European Community in 1973 and now—at least for the time being—of the European Union, I must admit that I had tended to look at Wales’s future in European terms more than in terms of the Commonwealth. I had no difficulty in regarding Wales as both an historic nation in its own right and a European region. As the EU grew to its present strength of 28 member states, with eight of them smaller in population than Wales, now including in their own right small countries such as Slovenia, Estonia, Latvia, Malta and Luxembourg, I looked on our legitimate aspiration as being a member state of the EU in our own right.
That was not in any sense a separatist argument. If England, Scotland, Northern Ireland, and indeed, the Irish Republic, were also member states, we could co-operate within a new relationship covering Britain and Ireland. We would have our own presence in Europe. It was indeed the converse of a separatist approach. I regarded a pooling of sovereignty on a European level, subject to the principle of subsidiarity, where decisions are taken as closely as possible to the community on which they impact, as being most appropriate to the modern world, in which the physical barriers between nations should be regarded as a thing of the past.
Lord Murphy of Torfaen (Lab)
My Lords, I yield to no one in my admiration for my noble friend Lord Elystan-Morgan, but although I agree fundamentally with one of his amendments, I disagree fundamentally with the first. Dominion status is about the shedding of British governance. The 1931 statute of Westminster gave the dominions power over their own affairs, effectively making them semi-independent. I do not want to give up British governance in Wales; I am glad that we have it—and I am also glad that we have Welsh governance in Wales. I like the two, which is why I believe that we are in the right position in the United Kingdom whereby we have devolved Governments in those places that require them—Wales, Scotland and Northern Ireland. I hope that we can extend the same system of government to parts of England, too. I have always believed that, and I think we are heading towards it.
I cannot agree with the first of the amendments, but I fundamentally agree with the second—that a working party should be set up to look at the operation of Schedule 1 to the Bill. The noble Lord, Lord Elystan-Morgan, is absolutely right and put his finger on it when he asked why this particular list has come to fruition. It has come to fruition because individual government departments have made a wish-list of what they wanted to keep. It was not about looking at the bigger picture of what should happen in this new dispensation for Wales. So to have a body that looks at the operation of the new situation in Wales, with the reserved power Assembly, with this schedule, is absolutely right and I support it.
Lord Thomas of Gresford
It is really heart-warming to hear my noble friend Lord Elystan-Morgan—and I call him that—go back to the dominion status which was the lodestar of the early days of Plaid Cymru. Saunders Lewis did not want total independence; he wanted dominion status. I have no doubt that 1931 was very much on his mind at the time, having regard to the date of the statute of Westminster. I have always regarded that as totally unrealistic, requiring as it does that Wales should look after its own defence, foreign affairs, social security and so on. That is what dominion status means, and always has meant. So whereas I have always been a supporter of devolution, I rather go along with the Gordon Brown argument, which was so successful in the Scottish independence referendum, when he reminded his fellow countrymen that the United Kingdom is united because it shares risks and wealth. Those areas that are depressed at one time in history can be supported by those that are successful.
At the beginning of the 20th century, the highest wages were paid in the Rhondda valley, and as a result it attracted in the Irish and people from all over the United Kingdom. It was the Aberdeen of its day, if you like. Aberdeen has attracted people from all over and is currently suffering because of the fall in the price of oil and the possible diminution of oil resources in the North Sea. But it will be balanced by another part of the United Kingdom—and that is the important point. We are not really concerned with going back in history and talking about a British colony. I recall that Henry Tudor came from Wales and brought with him the Cecil family, who played a very big part not only in the proceedings in this House but in British history ever since. Although he had a Donald Trump attitude towards sex, he was nevertheless favourable towards Wales. His introduction into Wales of the assize judicial system and his formation of the counties of Wales was for their good, not in order to conquer them as his predecessors tried to do.
I do not go along with the idea of the English colony. As a Welshman, I do not feel, and never have felt, that I am in any way subject to the colonial oversway of the English. We have provided leadership in the United Kingdom over the years with our politicians—some great men who, as the noble Lord will no doubt recall, have held the highest offices in this country. For example, I will refer not to Lloyd George but to Aneurin Bevan. Many, many Welshmen have played their part in the governance of the United Kingdom as a whole. We have to stay with that and not go back to what I consider to be, with the greatest respect to my noble friend, the rather romantic aspirations of dominion status. I therefore support the basic proposition in the Bill that the Welsh Parliament—as I hope it will be—should have all the powers it needs but on a reserved powers model, not a conferred powers one. We should work towards that.
Although I have some sympathy for the second amendment which the noble Lord has put forward, it is our duty to try to deal with these issues here and now, as the Bill goes through, not simply kick them into the hands of a commission. That would, no doubt, be made up of great Welshmen but would sit in Cardiff or elsewhere and chunter over the provisions of the reserved powers set out in the Bill. In my Second Reading speech, I argued that we should not have 190 separate reservations. One effect of the Agricultural Wages Bill was that we became very interested in detail, whereas one could describe the powers which should be reserved to the Westminster Parliament in much broader terms, such as defence, foreign affairs and so on. I am very sorry: although I voted for the noble Lord in 1964 when he was a Plaid Cymru candidate, I cannot go along with his interesting and reminiscent arguments for dominion status.
Lord Elystan-Morgan
Will the noble Lord accept my word for it that I am not in any way advocating any jurisdiction for Wales over foreign policy or defence? The point I was seeking to make was that you can make dominion status whatever you wish it to be in the particular context and circumstances of that case. No doubt the noble Lord will, over the years, have studied the position of Newfoundland, which was a dominion for some years. It started off with direct rule, then became a dominion, then ultimately became part of the dominion of Canada. It is an illustration that you can make dominion status be whatever you wish it to be.
Lord Howarth of Newport
My Lords, I will not embark on a personal excursion into Welsh history. However, apropos the excellent Amendment 46, in the name of the noble Lord, Lord Elystan-Morgan, which would establish a working group to review the operation of Schedule 1, I hope that the members of that group would follow the example articulated by the Silk commission and the Welsh Affairs Committee, both of which recommended that, in determining what matters should be reserved and what not, principle guidance should be issued so that there are criteria against which all can judge whether a reservation proposed by a department in Whitehall could be justified. Unfortunately, that guidance as to principle, and the questions that departments should ask themselves, was not issued.
The consequence is that we have this ragbag of reservations which have been accumulated all around Whitehall, apparently on no better basis than what we have we hold or, if in doubt, we will hang on to. That is a very poor basis for the institution of a reserved powers model for devolution, so I hope that all of us welcome the proposition of the noble Lord, Lord Elystan-Morgan, that such a working group should be set up. I simply want to see added to its terms of reference as set out in his amendment that principle guidance should be provided for that working group, or that that working group itself should develop the principles. But we must have criteria against which judgments can be made on whether particular reservations are appropriate or not.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on this part of the Bill. I particularly thank the noble Lord, Lord Elystan-Morgan, for moving the amendment with such fluency and commitment, although he will know that I disagree with him fundamentally, particularly on the first of the two amendments in this group.
Through their Amendments 45 and 46, the noble Lords, Lord Elystan-Morgan and Lord Wigley, seek to place new duties on the Secretary of State for Wales to review the constitutional arrangements for Wales and the operation of the Wales Bill that we are putting in place. Indeed, through Amendment 45—at least on the wording, although I accept what the noble Lord, Lord Elystan-Morgan, has said—they seem to be proposing that the Secretary of State of State be required to review Wales’s readiness for independence. I can act only on the basis of how the dominion status has operated in the past. The Statute of Westminster 1931 is expressly referenced in the amendment. There is no appetite for this proposal in Wales. Both noble Lords will know that that is shown in opinion polls and at the ballot box.
The Statute of Westminster established the dominions as sovereign states and enshrined in law the principle that no legislation made in this Parliament could apply to the dominions unless a dominion requested it. We cannot possibly agree to that. It also provided that the Parliaments of the dominions would have the power to amend or repeal any previous legislation made by this Parliament. Therefore, we cannot possibly agree to what is proposed. As a representative of a London-based polity, as it is called, I do not believe this proposal is wanted in England and it is certainly not wanted in Wales either.
Through Amendment 46, the noble Lords are seeking to place a new duty on the Secretary of State for Wales to establish a working group to review Schedule 1, which sets out the reservations, as soon as possible after it comes into effect and to report on reservations that should be removed within three years of the principal appointed day—the day on which the new reserved model comes into force under Clause 55.
Once again, we have a measure in front of us to set up yet another commission or working party to look at constitutional arrangements. I do not believe that would be welcomed in Wales. We have a duty to get on with the job on this Bill. I ask the noble Lord, Lord Elystan-Morgan, to withdraw his amendment.
Lord Elystan-Morgan
My Lords, on the question of dominion status, I was tempted to make the mischievous point that for many centuries Wales was a dominion in law. The actual wording of the Act of Union of 1536 refers to the,
“dominion, principality, and country of Wales”,
so that wording has been there for many centuries. However, that is a mischievous point, probably made much too late at night.
Some years ago, a good friend said to me, “You could be a very nice chap if you did not tilt at the English so often”. I am not sure what a nice chap was intended to mean in that context, or whether I would ever qualify within that definition. However, as far as the second part of his proposition was concerned, I have never tilted at the English. I have immense respect and, indeed, often, admiration for our neighbours. I conceive nationalism in the context of Wales as being a patriotism that knows not the hatred of any other nation. That is what Welsh nationhood and Welsh nationalism at their very best should be and are. I beg leave to withdraw the amendment.
“(a) welfare advice to courts in respect of family proceedings in which the welfare of children ordinarily resident in Wales is or may be in question;(b) representation in respect of such proceedings;(c) the provision of support (including information and advice), to children ordinarily resident in Wales and their families, in respect of such proceedings;(d) Welsh family proceedings officers.”
Lord Bourne of Aberystwyth
My Lords, turning to the next group of amendments, I am pleased to speak, first, to government Amendment 47A, which was tabled as a result of discussions with the Welsh Government.
Paragraph 6(5) of new Schedule 7A provides for an exception from the reservation for courts and civil and criminal proceedings as part of the single legal jurisdiction of England and Wales. The exception is for the,
“provision of advisory and support services in respect of family proceedings in which the welfare of children ordinarily resident in Wales is or may be in question”,
so that the provision of such services is not reserved by paragraph 6(1). This exception was intended to reflect the existing exception for what may be described as the functions of CAFCASS Cymru.
The Welsh Government have argued—in our view with some force—that the wording of the exception is too broad and does not sufficiently closely reflect the Assembly’s current competence in respect of CAFCASS Cymru. Amendment 47A seeks to insert into paragraph 6(5) modified wording which, I understand, the Welsh Government support.
Government Amendment 47B would remove sub-paragraph (2) from the defence reservation. It would have no effect on the substance of the defence reservation but it would remove a tautology. Removing this sub-paragraph would not change the powers that Welsh Ministers have under the Marine and Coastal Access Act 2009 to appoint marine enforcement officers, who then enforce legislation in relation to sea fishing; nor would it change the automatic appointment of certain members of Her Majesty’s Armed Forces as marine enforcement officers under the same Act. I am pleased to say that UK Government and Welsh Government officials have worked together closely to come to the conclusion that this sub-paragraph should be removed.
Government Amendment 52A is a technical amendment. It seeks to provide clarity in relation to Section C2 in new Schedule 7A by providing a definition of “business association”. There is already such a definition in Section C1, but interpretation provisions in the schedule cannot be read across to apply to other sections.
Government Amendments 53A and 53C would make minor adjustments to the consumer protection and product standards reservations to ensure that the Assembly’s competence in these areas remained unaltered from the current position.
Amendment 48, tabled by the noble Lord, Lord Wigley, proposes the devolution of policing. As the noble Lord will know, the Government have been clear that, in the absence of a consensus around the Silk commission’s proposals in this area, policing is not being devolved. We believe that the current England and Wales arrangements for policing work well, and the proponents of devolution have failed to adequately address some of the risks that would arise if these arrangements were disrupted.
Lord Crickhowell
On this very point, at Second Reading I asked the Minister to explain why it appeared that powers over policing were being given to some English regions while they were not being given to the Welsh Government. I am entirely in favour of a general reservation and I would simply like an explanation of that apparent difference.
Lord Bourne of Aberystwyth
My Lords, I shall deal with that briefly before I resume. I recall my noble friend raising this at Second Reading and I will write to him. The devolved arrangements that I think he is referring to in relation to some of the city regions in the United Kingdom, specifically in England, do not involve devolution in the way that it is being talked about here. They do not establish separate lines of authority within national boundaries, for example. I will write to him with details on that but I think that the form of devolution is rather different in that respect.
There are factors that I think I should touch upon in relation to why policing is being retained within the England and Wales system under the Bill. First, policing is inextricably linked with the criminal justice system. It is a key component. The criminal justice system’s priorities and ways of operating have a direct impact on other parts of the criminal justice system and vice versa. This can be seen, for example, through quality of evidence gathering and the mutual role played in crime prevention and reducing reoffending. Secondly, existing governance and partnership arrangements provide a significant level of integration and autonomy. The establishment of police and crime commissioners has already devolved policing to the local level. Thirdly, there would be cost and complexity in separating out the existing national structures and arrangements. Fourthly—although admittedly this is a factor that is more easily accommodated—police forces in England and Wales are responsible for tackling a range of crimes and other threats that go beyond the boundaries of a single police force.
At the national level, the strategic policing requirement which applies to police forces in England and Wales sets out the threats which are considered of particular national significance. These include terrorism, organised crime, public disorder, civil emergencies, cyberattacks and child sexual abuse. These threats can require a co-ordinated or aggregated response in which resources are brought together from a number of police forces. Devolution could lead to a weakening of both the regional and national response to these serious crimes. In short, the devolution of policing could lead to a disjointed criminal justice system, adding costs for both the people of Wales and the rest of the United Kingdom.
Amendment 49 would remove the reservation in relation to anti-social behaviour. This would remove our ability to legislate to prevent and address anti-social behaviour through coercive methods such as the tools and powers introduced by the 2014 Act. The subject matter in the Act is intended to reserve coercive responses to anti-social behaviour generally, whatever its form, rather than the detail of the specific orders contained in the Act. The whole approach to anti-social behaviour set out in the Act is intended to encourage the police, councils and other partners to work together to deal with problems quickly. The legislation provides local agencies with a range of different powers and measures and it is for front-line professionals to develop jointly solutions which address the causes of the behaviour and protect victims and communities.
I will listen carefully to the arguments made in this debate. The noble Baroness, Lady Morgan, and the noble Lord, Lord Wigley, seek through Amendment 50 to devolve responsibility to the Assembly for private security. I appreciate the view that private security should be a devolved rather than a reserved matter. I understand those who question why bouncers in, say, Merthyr, Swansea or anywhere else in Wales should be regulated on an England and Wales basis but there are sound reasons why private security is a reserved matter.
First, the security industry is regulated in England and Wales by the Security Industry Authority, an effective regulator which provides consistent standards across borders. In an inherently mobile industry it promotes consistency, maturity and professionalism through, for example, the approved contractor scheme. The licensing regime operated by the authority provides reassurance that those who work in the private security industry have the appropriate qualifications and training and have been subject to rigorous criminal records checks.
Secondly, there are close links between private security and the police, particularly in relation to the night-time economy. The Security Industry Authority has an investigative arm which, in co-operation with the police and other government bodies, tackles criminality in the private security sector, including organised crime. All Security Industry Authority-approved qualifications also include counterterrorism awareness, for example, in looking out for hostile reconnaissance, and the industry is playing an increasingly important role in being the eyes and ears to potential terrorist threats. These current arrangements work well.
Amendment 51 seeks to remove the reservation for the sale and supply of alcohol and the provision of entertainment and late night refreshment. These activities are regulated under the Licensing Act 2003 and the proposed paragraphs preserve the current devolution settlement in respect of all matters covered by that Act. Regulated entertainment includes live and recorded music, plays, films, indoor sporting events, boxing, wrestling and dance performances.
Baroness Morgan of Ely
I think the noble Lord has decoupled that amendment. We will deal with heating and cooling at a different time.
Lord Bourne of Aberystwyth
I apologise. I am grateful for the intervention. In that case, I have dealt with our amendments. I am grateful to the noble Baroness for her timely intervention. I beg to move.
Lord Wigley
My Lords, I have great personal respect for the Minister, as he well knows, but it is absolutely outrageous that he should be replying to a debate before the arguments have been put forward relating to the amendments. Amendment 48 in my name, to which he has responded comprehensively before I spoke to it, was the lead amendment in this group on Thursday afternoon when I left Westminster. When I came down here at 1 pm today it had been tacked on to the government amendments, which means that the very substantive issue of devolution of police in Wales has been tucked away without an opportunity for a proper debate.
Lord Bourne of Aberystwyth
I apologise to the noble Lord. Had he got up at an earlier stage I would have happily given way to him, but our amendment was the lead one in the group. I certainly would have given way to him if he had asked.
Lord Wigley
I accept entirely the Minister’s point that they have been grouped in this way, but when I realised they had been coupled in this way it was too late for me to get the decoupling done. That means that devolution of the police, which was a major issue for the Silk commission, is being tucked away at this hour of the night and has been responded to before the arguments have been put. I intend to put those arguments, even at this late stage of the night, and I shall not truncate what I had to say.
Amendment 48 would remove a reservation and subsequently devolve matters relating to the police in Wales to the National Assembly. As noble Lords will be well aware, the Silk commission, of which the Minister was a member, recommended unanimously the devolution of policing and related matters of community safety and crime prevention. Given that the Minister was so keenly in support of that in the Silk commission, it beats me how he was able to say what he said a few moments ago. It is my contention, shared by many people in Wales, that this Bill should have enacted the Silk recommendations—or at least the unanimous recommendations and in these matters in particular.
To put it simply, Wales, like the other nations of the United Kingdom, should have responsibility for its police forces. I cannot see any reason why police priorities in Wales should be dictated by the UK Parliament and not by the National Assembly. Given that policing is devolved to Scotland and Northern Ireland, I can see no reason why it cannot be devolved to Wales. What makes Wales an exception?
The four police forces are unique within the United Kingdom. They are non-devolved bodies operating within a largely devolved public services landscape. They are thus required to follow the dual and diverging agenda of two Governments. Additionally, all four forces in Wales accept the need to provide a service in Welsh and in English. North Wales Police does this with great effectiveness and is held up as a model among public sector organisations in Wales for its language training support and initiatives. This has largely broken down barriers which were at one time widely felt within Welsh-speaking communities in northern Wales and has created a new climate within which police and public co-operation have flourished.
All four police and crime commissioners, the Welsh Government, the Official Opposition in Wales and even the Welsh Conservatives are in favour of devolving policing to Wales. In fact, the only elected body of people in Wales who share the view of the UK Government are the UKIP AMs elected in May—I am not sure whether they are now unanimous on this matter either.
Transferring responsibility to the Welsh Government would not be the tectonic plate shift that many in this Committee might be inclined to believe. Relationships between the Welsh forces and the UK services, such as the police national computer and the Serious Organised Crime Agency, would continue as at present, as is the case with Scotland. I remind the Committee that many of the public services which are directly relevant to policing work are already devolved. That is the case with regard to highway matters, social services, local government, the ambulance service, youth services, education and training. It makes practical good sense to devolve policing, so that a synergy can be developed with these other devolved services.
Why should the people of Wales not be given the same democratic freedom enjoyed by the people of Scotland? Doing so would lead to greater clarity and efficiency by uniting devolved responsibilities, such as community services, drug prevention and safety partnerships, with those currently held by the UK Government.
The Silk commission was established by the Tories and comprised all four main political parties in Wales, including the Conservative Party. Its members spent two years consulting the public, civil society, academia and industry experts on the powers necessary to strengthen Wales. It received written evidence, heard oral evidence and visited every corner of Wales. It heard evidence from the police themselves and from the Police Federation calling for the devolution of policing, and the report recommended accordingly.
Budget cuts to Welsh police forces have been severe. We have seen a reduction of 1,300 in police officer numbers in Wales since 2010. It is true that these cuts have been across the board, but, as Plaid Cymru has recently discovered, they may well have been more manageable had the formula used to fund the police in Wales been according to population and not to crime figures.
A policing grant consultation launched in July 2015 by the then Home Secretary, Theresa May, was abandoned earlier this year after Policing Minister Mike Penning admitted that there had been a “statistical error” on which several police and crime commissioners threatened legal action. Last year’s formula would have resulted in a £32 million cut to Welsh forces, which. as everyone can imagine, would have caused the Welsh police severe difficulties.
The 43 police forces of Wales and England often have different needs and challenges. Policing is a field for which sophistication and complexity are needed in the funding formula to properly account for the relative needs of each force. The review last year sought to place greater emphasis on socioeconomic data and more general crime figures. Such a formula does not properly consider the workload differences in each constabulary. Figures provided by Dyfed-Powys Police indicate that funding our forces in line with population would result in an additional £25 million for the four forces in Wales. That is the Dyfed-Powys Police figure, not mine.
Of course, if policing were devolved to Wales—a position supported by all four police and crime commissioners—the overall Barnett formula would be applied as for the funding of all devolved public services and based on our population. So by retaining police as a non-devolved service controlled from Westminster, Welsh forces face the prospect of these very significant cuts. This is particularly relevant when we consider that policing is devolved to Scotland and Northern Ireland. Consequently, that new formula will not apply to them. Policing is the only emergency service not to be devolved. I am yet to come across any convincing argument, even after listening to the Minister tonight, for not doing so.
Even at this late stage, I beg the Government to think again and show that they are sensitive to widespread feelings in Wales on the issue, particularly within the police forces themselves, and add this provision to the Bill. It would then start to garner a critical mass which parties in the National Assembly would see as a significant step forward and create a logical framework of devolved services that could better serve Wales. There is no point in me adding more now: the reply has already been given. I write that into the record and I emphasise that I am very unhappy about the way this debate has been handled.
Baroness Randerson
My Lords, I greatly regret that we are discussing one of the key features of the Bill at this very late hour but there are things that certainly need to be said on this issue.
I share the concerns of the noble Lord, Lord Wigley, about policing. My party has been firmly committed to the importance of devolving policing to the Welsh Assembly for many years. That is simply a recognition of the reality of the situation. If you talk to senior—and junior—police officers in Wales, you see and hear their feeling of identity with the Welsh Assembly. It is to the Assembly that they look for the structures within which they work on a day-to-day basis. Devolving policing would not prevent them from linking in with, for example, training facilities or on rules and regulations across Britain. I have observed the way in which the police force in Northern Ireland manages to do that very successfully in a very difficult situation, and at a much greater distance from England. It works well.
In addition, it is very important to remember that the funding of policing in Wales comes predominantly from local sources within Wales one way and another. Therefore, it is important that the Welsh Assembly has more than a guiding hand on that.
In addressing the amendments in my name, I also share the Assembly’s serious concern about the impact of reservation 37 on the prevention, detection and investigation of crime. That illustrates the complexity of this situation and the way in which these issues are interwoven. For example, think of the ability within the Assembly’s power to deal with domestic abuse and sexual violence. The Assembly passed its own violence against women Act so clearly has competence within that area. However, it seems that the reservation I just referred to would make it very difficult for the Assembly to act in that area. It is important that we bear in mind the responsibilities of local government in this area as well as those of the police. The whole thing is an interlinked whole, and by not devolving these responsibilities you make it difficult for work to be done as effectively as possible.
Baroness Finlay of Llandaff
My Lords, I know that the hour is late. I want to endorse the sentiment expressed so clearly just now by the noble Baroness, Lady Randerson. Although it is late, we have to cover these topics because there is no other opportunity to do so and I am concerned. I have already heard that the Minister is not going to accept the amendment looking at alcohol licensing but I hope that he will at least listen to what I say and agree to meet me after this, because it is terribly important. The noble Lord, Lord Elystan-Morgan, eloquently described the moral geometry and the problem of an utterly local issue being held in a reserved power. I suggest that that applies exactly in terms of alcohol licensing because the health and well-being of the Welsh population require some control over the way that alcohol is sold and supplied. It is widely acknowledged that that is one of the most effective ways of tackling alcohol harms.
The wording of the Bill would appear to be even more restrictive than the current exemption, which would mean that the proposals in the draft Public Health (Minimum Pricing for Alcohol) (Wales) Bill would be a reserved matter, and therefore outside the legislative competence of the Assembly itself. It would seem only sensible to add the protection of health and well-being to the four points listed by the Minister in relation to licensing.
Alcohol remains a major cause of preventable death: the Public Health Wales Observatory has reported that:
“Every week in Wales alcohol results in 29 deaths; around 1 in 20 of all deaths”.
This impact of alcohol puts enormous pressures on health systems. Every week, hospitals handle as many as 1,000 admissions related to alcohol. Emergency departments are straining. When people in Wales go into those emergency departments and see them full of alcohol-fuelled harm and its effects, they ask: “Why isn’t the Assembly doing something about it?”. The answer is that it cannot because the thing that it wants to do—to look at the sale and supply of alcohol—comes outside its powers.
We know, sadly, that alcohol consumption in Wales remains a problem. In the latest Welsh Health Survey, 40% of adults still reported drinking more than guideline amounts in the previous week. There is a pressing need to tackle alcohol misuse, using every tool available to government. That means policies that control the licensing and supply, which are the only way that we can promote sensible drinking. It would also require licence holders to offer a ratio of non-alcoholic drinks to alcoholic drinks on their premises to give people a wider choice—to be social but not to get completely destroyed by the adverse effects of alcohol.
The Bill should provide an opportunity to address health and well-being. The sad thing is that Wales bears the costs of the alcohol abuse, particularly in expenditure on health and social care, yet it is not being allowed to have control over licensing and supply as part of its national strategy. When tackling alcohol harms in Wales, the Assembly is operating with more than one hand tied behind its back. It just seems a completely inexplicable state of affairs.
Lord Howarth of Newport
My Lords, it is simply demeaning for Wales that public order and policing should not be devolved. Why should Wales, which has a mature Assembly and is a nation anxious to take more responsibility for its own affairs, not be allowed the same level of responsibility as Northern Ireland and Scotland? I have not heard a good reason. I do not believe that there is any greater necessity to have a single system embracing England and Wales than there is for other parts of the United Kingdom.
If the Government would be a little bolder and allow devolution of responsibility in such matters as drugs and alcohol, everybody might benefit because Wales would have the opportunity to experiment with policy. In the field of drugs and alcohol, for example, we know very well that the existing orthodoxies, practices and policy are not working particularly well. Often they are working downright badly. We have huge problems with regard to drugs and alcohol. Surely it would be better to allow Wales to pioneer and develop policies of its own. Wales would obviously have to take responsibility and a degree of risk, but it is surely better that it should be able to take responsibility and to experiment than that we should simply carry on in Wales with orthodoxies that have failed in the United Kingdom as a whole. No harm has been done by Wales having a degree of independence in education policy—in schooling, for example—so surely that is the right principle.
There will, of course, be questions of resources if more responsibilities, particularly the major responsibility for public order and policing, are to be devolved. In consideration of that we have again to go back to the question of the devolution of income tax-varying powers. We debated that issue earlier this afternoon. I shall very gently make a point to the noble Lord, Lord Crickhowell, who disputed whether a manifesto commitment was being broken by the Government. If he looks at the Second Reading debate in the House of Commons on 14 June, at col. 1653 he will see his Conservative colleagues Mr David Jones, the former Secretary of State, and Mr Chris Davies, the Member of Parliament for Brecon and Radnorshire, bemoaning the fact that the Government have, in fact, broken a manifesto commitment in that regard. I do not want to labour the point, but it ought to be corrected for the record. Certainly we have to consider, in conjunction with the question of what reservations are appropriate and what reservations the Government may decide after all to abandon, the associated question of resources—because it is no good willing the end without enabling the Government of Wales to have the means.
Baroness Morgan of Ely
My Lords, I know it is very late, but this a critical group of amendments. This is the first time we have discussed the reservations, and it worth pausing a moment to think about them and the way the Government have approached this issue.
There are a number of reasons why I think the Government’s approach to how they have included certain reservations is lacking. I shall refer to some key quotations. The first comes from a letter from the First Minister to the then Secretary of State for Wales after the Secretary of State announced in November 2014 a programme of work designed to produce a new devolution settlement for Wales. The First Minister expressed his support and said that,
“previously, under administrations of both political colours, the development of a clear and robust settlement has … been hindered by a nit-picking reluctance on the part of particular Whitehall Departments to acknowledge the case for further transfers of responsibilities. It will be important that that reluctance should not re-emerge”.
However, I am afraid we have seen it again.
Lord Bourne of Aberystwyth
My Lords, once again I apologise to the noble Lord, Lord Wigley, in particular. I was a victim of the way in which the grouping was set out; because the government amendments were put first, that was the way I felt was appropriate to tackle it. I shall try to respond to points that have been made on these various amendments.
First, no noble Lord should have been taken by surprise by the Government’s attitude on policing. We made it very clear that we have a set agenda, which I have set out. I do not accept that this was somehow a surprise.
I am happy to meet the noble Baroness, Lady Finlay, about the alcohol reservation, to see whether we can meet her concerns. I have spoken to the noble Baroness, Lady Morgan, about the Pubs Code levy—so it did not just come up this evening—and explained that one reason why we do not think it appropriate for devolution is that the way that the levy operates would not be affordable in Wales. I said when speaking to those amendments that that would be to the detriment of Wales, but I am happy to look at it further with her if she wants to revisit it. I am very happy to speak to the noble Baroness, Lady Randerson, about the issue of ticketing and bus services that she raised, to see what we can do.
I accept that a lot of issues are involved here, from bouncers to alcohol the Pubs Code and so on. I accept that it is late at night and that we have covered a lot of territory, although there was considerable discussion on an issue where I think that virtually the whole House was united. We spent a great deal of time discussing that on an earlier amendment, which was certainly not of my choosing, although I was happy to respond for the Government on it.
I hope that noble Lords will feel able not to press their amendments in the group—which is, I appreciate, a considerable number of amendments. The reason for some of the government amendments is that we have been listening and are responding—on teacher’s pay, the community infrastructure levy and so on. I hope that noble Lords accept when they say that the number of government amendments indicates that it is a fluid area that that is because we have been listening. I am happy to indicate that we will listen further, and I hope that that has been my approach, but I am duty bound to let noble Lords know what are regarded as red lines for the Government, where we are unable to meet the wishes of some—perhaps a majority—of noble Lords. However, where we can help and where powerful arguments are being made—as I have indicated have been on a number of amendments this evening—we are happy to move.
With that, I ask noble Lords who have tabled amendments in this group not to press them.
Wales Bill
Tuesday 15th November 2016
(8 years ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 63-III Third marshalled list for Committee (PDF, 228KB) - (11 Nov 2016)
“ExceptionIn the case of a betting premises licence under the Gambling Act 2005, other than one in respect of a track, the number of gaming machines authorised for which the maximum charge for use is more than £10 (or whether such machines are authorised).”
Lord Griffiths of Burry Port (Lab)
My Lords, I have listened to so many speeches and suggestions on this Bill. Mine is a tiny contribution to that debate. I make even my tiny contribution with some perplexity; I find it difficult to consider, or to hear being considered, proposals that will have considerable costing elements to them while we are being told that a fiscal framework is being debated somewhere else. That makes the nature of the contributions that we make a little recondite. Nevertheless, we carry on.
I have read a few Bills since I have been a Member of your Lordships’ House and this one seems so extraordinary—a bit of a dog’s breakfast—with all these reserved powers, enumerated one after the other, 10 after 10 and almost 100 after 100, which makes us wonder whether there is any coherence at all at the heart of this Bill. Others will debate significant and large issues before we exhaust the consideration of these reserved powers. Mine is a very small issue, as I say, yet it will test the good will of the Government and allow us to test whether the Government are prepared to consider these issues at all. If they cannot for the issue that I shall present in a moment, I cannot see how they will begin to deal with some of the bigger things under discussion.
We recognise that gambling is a prevalent aspect of contemporary culture and takes many forms. There is no suggestion in this humble amendment of ours that we should take powers to the devolved Government stretching across all the complex picture that represents the gambling industry in this land of ours. But when I look at the Gambling Act 2005 to identify the major thrust that it seeks to put out by way of policy, I see that there are three points—and they are quickly enumerated. First, it mentions,
“preventing gambling from being a source of crime or disorder”.
There is no problem there. Secondly, it talks about,
“ensuring that gambling is conducted in a fair and open way”.
Again, surely that is not problematical for any of us. But it is the third,
“protecting children … from being harmed or exploited by gambling”,
that concerns me here.
The amendment relates to gaming machines. Of all the gambling opportunities available to people, threatening them and tempting them, gaming machines are the most obviously accessible forms of gambling and might be the most obvious temptation for children. That is where children might be most vulnerable; when they go into a premises either licensed or licensed for a different activity, but having machines within it, there might be a danger that we should seek to mitigate as far as possible.
The amendment does not seek even to control gaming machines of all descriptions. Some noble Lords will remember, from the debate in 2005, that there are four categories of gaming machine, ranging in financial levels at which gambling can take place from A to D. Here, we are referring to those where the maximum charge for use is more than £10, which is perhaps more than most children have as pocket money. However, we are not only concerned about children; we just cite them as being likely to be in the presence of these alluring machines as much as adults are. Why should this aspect of gambling not be controlled by the devolved Government of Wales, since it is so easy to identify where they are, recognising that the application for licensing premises to include and use them is a fairly mechanistic affair? There is nothing complicated here. Nor would this complicate any issues that would imperil a coherent policy across the United Kingdom. Scotland has such powers already; why not Wales?
For this humble part of the gambling industry, some sort of oversight might be devolved to the Welsh Government. In 2012, the Gambling Commission gave a lot of statistics about gambling, including some that one can extract as applying to Wales. It seems that billions of pounds are spent on gambling in Wales every year. I say “it seems” because there is no real, empirical evidence that we can tie down convincingly in a debate such as this. The Welsh Government have felt that there were other priorities than conducting statistical research in this area. However, anecdotally—and in my experience of visiting a number of communities across Wales where I hear people talk—this is a real social problem. Consequently, it seems logical to invoke the principal of subsidiarity so that control of this aspect of gambling should be as near to where the gambling takes place as one can conceive of. It is not rocket science: this is a fairly easy conclusion to reach. The problem is whether Her Majesty’s Government will be prepared to single this aspect out from the welter of other gambling activities that take place in order to allow it to be controlled elsewhere than here at Westminster.
I hope that the gentle way in which I have moved this amendment will be heard. Gentle though it is, it may be a test of the Government’s readiness to take into consideration activities which are part of the prevailing culture in Wales, where ordinary people involved in ordinary activity are sometimes easily taken out of their depth and run into danger. I beg to move.
Lord Howarth of Newport (Lab)
I support the amendment and, indeed, only wish that my noble friends had gone further and tabled an amendment that would have devolved legislative powers and policy-making on gambling in its entirety to Wales. Gambling is a social and moral issue and of its essence should be determined by the local community which is affected. Will the Minister say why it is the Government’s view that they must hug gaming machines to their bosom? Why are they not willing to allow the people of Wales their will, as expressed by their own Assembly in Cardiff, to go to perdition or to grace in the way of their own choosing?
Baroness Finlay of Llandaff (CB)
My Lords, I would like to ask the Minister a couple of questions in relation to this amendment because it is a good example of an area which remains a reserved power but may be subject to different types of legislation in the future in either direction. The Government of the day might decide to loosen regulations around gaming to create a Las Vegas-type area somewhere in the UK, or they might find that the evidence on gaming, and the harm it causes society, is so great that they clamp down on it. What is the alert mechanism to update the Bill if any legislation or a statutory instrument is changed in relation to a reserved matter, this issue being an example of that? How will that happen? What will be the mechanism for updating the reserved powers? How will the Assembly be consulted if it feels strongly that it wants to go in a completely different direction, or will this be down just to the powers of persuasion of Ministers, particularly the Secretary of State for Wales?
Baroness Morgan of Ely (Lab)
My Lords, I thank my noble friend Lord Griffiths for introducing this very important amendment. As he outlined, fixed-odds betting terminals are devices normally found across the country in betting shops that allow players to bet on the outcome of various games and events with fixed odds. I must admit that I am not much of an expert in this field. In fact, the nearest I have come to some serious betting is the odd game of bingo and the 2p slot machines on Barry Island. While we have to recognise that betting probably goes back to the age of the ark, we should be aware that the scale—the ability to lose serious money very quickly—has changed exponentially in recent years.
I make it quite clear that we are under no circumstances here advocating the wholesale devolution of gambling regulation to Wales. With the advent of internet gambling, it is extremely difficult to regulate gambling even at the UK level, let alone at the Welsh level. However, a particular aspect of gambling is causing social havoc in families and leading to ill health. Fixed-odds betting terminals allow players to stake up to £100 every 20 seconds on touch-screen machines—a significantly higher stake than the £2 maximum bet on a fruit machine. Many, often vulnerable, people are attracted by the prospect of high payouts of up to £500. Evidence suggests that these machines are highly addictive, causing real and lasting damage to gamblers. They have become a huge problem in communities that are often struggling to cope with underinvestment and high unemployment, exacerbating problem gambling more than any other form of betting. There are more than 1,500 fixed-odds betting terminals in Wales today, and more than £1.6 billion is staked annually. That is £1.6 billion in Wales alone.
I am ashamed to say that I believe that deregulating this industry was one of the worst things that Labour did while in government. Betting is creating vast social problems and health problems in our communities, but it is not the UK Government who are having to wipe up the mess; it is the Welsh Government. This amendment would confer legislative competence over fixed-odds betting terminals on the Welsh Assembly—a matter which is already devolved to Scotland. Therefore, once again, I ask the Minister: if it is good enough for Scotland, why is it not good enough for Wales? Devolving the regulations would allow the Welsh Government to introduce appropriate restrictions on content and operation and would shape responsible gambling initiatives.
In 2014, the Assembly adopted a Back-Bench Motion drawing attention to the social problems arising from the growth of gambling in Wales. It is important to note that this was supported by all four political parties then represented in the Assembly. By ensuring that betting shops remain the safest place to gamble and that people enjoy their leisure experience without betting more than they can afford to lose, the Welsh Government could take action to alleviate the negative consequences of gambling addiction, such as insurmountable debt and poor health, which at present have a detrimental knock-on effect on the Welsh budget. I ask the Minister to consider very seriously this extremely grave problem in some of our most deprived communities.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank the noble Lords who have participated in the debate on these amendments. In particular, I thank the noble Lord, Lord Griffiths of Burry Port, and the noble Baroness, Lady Morgan of Ely.
With these amendments, the noble Lord and the noble Baroness are seeking to devolve legislative and executive competence to the Assembly and Welsh Ministers to regulate the number of high-stakes gaming machines authorised by new betting premises licensed in Wales. Betting, gaming and lotteries is currently not devolved in Wales and is reserved under the new reserved powers model provided for by the Bill.
As has just been demonstrated, Westminster, too, is concerned about some of the addiction and social harm issues that the noble Baroness has referred to. Until recently, this matter was also wholly reserved in Scotland, but earlier this year the Scotland Act 2016 devolved certain powers in relation to high-stakes gaming machines in new licensed betting premises. Apart from that, however, the reservation ensures a coherent framework for gambling across Great Britain, as well as a single regulatory environment covered by the Gambling Commission.
The Silk commission made no recommendations on the devolution of betting, gaming and lotteries, so the subject was not considered by the all-party St David’s Day process. However, in the St David’s Day agreement the Government committed to consider whether non-fiscal Smith commission proposals should be implemented for Wales. One such proposal, which we implemented for Scotland in the Scotland Act, would devolve certain powers in relation to so-called fixed-odds betting terminals. I understand the strength of feeling expressed by noble Lords this afternoon about the proliferation of high-stakes gaming machines in Wales. I also thank the noble Baroness for her candour about the last Labour Government in relation to this issue. It was very candid and courageous to state that.
The noble Lord, Lord Howarth, asked why the Government did not bring this measure forward. The answer is simply that it was not put forward by the all-party Silk commission and therefore was not picked up by the all-party St David’s Day process.
The noble Baroness, Lady Finlay, asked about the alert mechanism in the Bill for updating reserved powers. As with all reservations, the list of reservations can be modified by primary legislation made by Parliament or by order under Section 109 of the Government of Wales Act, where the order is subject to affirmative resolution in both Houses of Parliament and the Assembly. With regard to any alteration of reservations, we would of course seek the agreement of the Assembly under the process put forward in the Bill and under the convention that is in place.
Due to the strength of feeling that I have picked up in the House, I should like to look at this matter again, to reflect on the points made by noble Lords and to bring it back on Report. On that basis, I ask the noble Lord to withdraw his amendment.
Lord Griffiths of Burry Port
My Lords, such graciousness! How happy I am that the first amendment that I have tabled has met a response of that kind. Therefore, I am pleased to beg leave to withdraw the amendment in favour of the further discussion that we are now promised.
“Interpretation“Business association” has the same meaning as in Section C1.”
Baroness Morgan of Ely
“Section C5AC5A Sea fishing69A_ Regulation of sea fishing outside the Welsh zone (except in relation to Welsh fishing boats).Interpretation“Welsh fishing boat” means a fishing vessel which is registered in the register maintained under section 8 of the Merchant Shipping Act 1995 and whose entry in the register specifies a port in Wales as the port to which the vessel is to be treated as belonging.”
Baroness Morgan of Ely
My Lords, this amendment, which concerns sea fishing, is a little bit complicated, so I hope that noble Lords will bear with me.
The Welsh Government already have executive competence for fisheries functions in the Welsh zone. In other words, it is now up to Welsh Ministers to determine what happens in relation to fishing anywhere within the 12-mile zone of Wales. This power is now extended to allow Welsh Government Ministers to have executive powers over Welsh fishing boats, whether they are in Welsh waters or UK waters. Take a Welsh fishing boat that is fishing off the Norfolk coast, which is within British fishery limits and would currently be subject to the licensing rules set out by UK Ministers. In future, when this power is transferred, it will be up to Welsh Ministers, by their rules, to license those Welsh fishing boats, whether they are in Welsh waters or in UK waters—obviously excluding Scottish waters.
That is all very nice and dandy for Welsh Government Ministers. However, there will be no oversight of Welsh Ministers because the Assembly—not the Government but the Assembly Members, like me—would not have any say on or sight of what is happening because the Assembly lacks the legislative competence to regulate fishing activities beyond the area of the Welsh zone. These are currently UK Minister powers, and so we come back to the issue of the alignment between legislative and executive functions.
This will become increasingly more important with Brexit on the horizon, because fishing is, of course, an area of devolved competence. The executive powers that are being transferred are the powers to require Welsh fishing boats to have a licence before they can fish outside the Welsh zone. For example, the licence could specify that you cannot fish for certain types of fish or that you must use approved fishing methods. At the moment, these fall under the EU common fisheries policy. Scotland currently has the legislative competence in relation to both the Scottish zone and Scottish fishing boats outside that area. The proposed amendment seeks simply to bring the Welsh Assembly’s legislative competence in line with the Scottish legislative competence and help align the Assembly’s legislative competence with Welsh Ministers’ executive fisheries functions. I hope that that is clear. I beg to move.
Lord Elis-Thomas (Non-Afl)
My Lords, I support this amendment from my noble friend Lady Morgan. It is in line with a more general issue that I raised earlier about the relationship between the executive competence of Welsh Ministers and the parallel competence, where it currently applies, of UK Ministers, and the competence of the Assembly itself and its ability to legislate and scrutinise. This is a fundamental issue and flaw in the Bill that we are now discussing. It is particularly reprehensible in the case of fishing.
I had the proud duty of trying to represent the northern part of Cardigan Bay. This will be well known to the Minister because he was based in the middle of Cardigan Bay for a very long time and, as far as I know, may still have a bolthole somewhere in the region—I will not pursue that in this debate. He also had a role further south-west in Milford Haven and so will know well the nature of the Welsh fishing industry and how it has been denuded over the years as a result of the reduction in the number of vessels and, more recently, the activity undertaken by the Welsh fisheries association with strong support from the Welsh Government in restoring and developing inshore fishing in order to ensure that we have product to promote Welsh fisheries as part of the Welsh food and drink initiative, which is currently the flagship policy of the Welsh Government. Therefore, I ask the Minister to take a further look at this.
It is essential, in my view, that we should be able to have direct oversight of our natural resources and not be in a situation where the oversight of the natural resources of Wales—in this case, the increasingly important marine resources—is located elsewhere.
Lord Deben (Con)
As the longest serving Fisheries Minister—the longest serving in history, I think—and with my Welsh connections, I warn the Minister that it would be a good idea to do as is suggested by the amendment but also to be extremely careful. The fisheries issue is going to be one of the most difficult that we face, because the fishing industry has been misled into believing that if you remove yourself from the common fisheries policy you are somehow perfectly free to do what you like. In fact, almost every fishery that we have is a common fishery with one other European nation, if not more. We are therefore going to have to deal with these things on a common fisheries policy basis anyway. It is thus crucial that our structure internally provides no possibility of any misunderstanding. I rather like this amendment because it removes what would otherwise be a misunderstanding.
I hope that the Minister will understand and perhaps mention to his fellow Ministers that this is a long and hard row to hoe, if you can hoe rows in the sea. We will have to learn that we still have to live with each other even outside the European Union. Whatever you think about the policy, it is going to have to be common because there will be no other way of doing it. Therefore, getting it right internally will be crucial if we are to get it right externally, assuming that we continue with this disastrous policy.
Lord Crickhowell (Con)
My Lords, I plead total ignorance of the licensing regime. Are we satisfied that whoever is in charge of it, the fishing boats are actually going to be Welsh? I ask only because I seem to recall that long ago, when I was the Member of Parliament for Pembroke, Spanish fishing boats registered in the port of Milford Haven and somehow avoided the licensing regime. The licensing regime may now have dealt with that effectively but I should like confirmation that that is so.
Lord Elystan-Morgan (CB)
I support the amendment for the reasons that have been placed before the House. I raise one question that is common to this and to all the other matters involving the reserved elements of the Bill. I ask the Minister not so much as a Minster of the Crown but also as a distinguished professor of law who understands these issues well. Harken back to the undertaking that was given solemnly, and I have no doubt sincerely, by the then Prime Minister on the day after the Scottish referendum result when he said that Wales was at the very heart of devolution. To my mind, those were not intended to be empty words of adulation but to be an undertaking solemnly given to the people of Wales. I take them in that spirit. My question applies to this and to all the matters reserved that we regard as being trivial and unworthy of reservation. It is this: how does being at the heart of devolution square first with the principle of home rule, secondly with the concept that every decision should be taken at as local a level as possible and thirdly with a healthy interpretation of the concept of devolution? Those are not three different matters at all. At some point they seem to coalesce.
Ships in olden days took their position at noon, but nowadays with sophisticated technology that is no longer necessary. I would like to know what the position is at noon, as it were, in relation to Welsh devolution. I put that to the Minister with very great respect knowing that he will react reasonably to it.
Lord Bourne of Aberystwyth
My Lords, I thank all noble Lords who have participated in the debate on Amendment 53, in particular the noble Baroness, Lady Morgan of Ely, who moved it. It seeks to reserve sea fishing outside the Welsh zone but makes an exception to that reservation for Welsh fishing boats. The notional effect of the amendment would be that the Assembly would have legislative competence for Welsh vessels outside the Welsh zone. However, in practical terms the amendment would have no effect because it seeks to reserve a power which the Assembly could not have. Under the Government of Wales Act 2006 and under this Bill, the Assembly’s legislative competence extends to the landmass of Wales and the sea adjacent to Wales out as far as the seaward boundary of the territorial sea; that is, 12 nautical miles, so as drafted it could have no effect. The Assembly has no legislative competence beyond that 12 miles—
Lord Elis-Thomas
The Minister will remember of course that before 2006 Wales did not even have a sea.
Lord Bourne of Aberystwyth
My Lords, I am going on to tackle the point made by the noble Lord. The Assembly has no legislative competence as things stand although Welsh Ministers can exercise executive functions in that part of the Welsh zone beyond 12 nautical miles in so far as these have been conferred by United Kingdom enactments.
I take the points that have been made in relation to fishing, but as drafted we would need to look at the amendment. It proposes something fairly fundamental to the extent that it would vary the geographic extent of the Assembly’s competence. I would want to go away and have a look at that to see how it could be refined, if that is possible. This is not something that was considered by Silk or by the St David’s Day agreement and, as drafted, the amendment goes well beyond the issue of fishing licences.
My noble friend Lord Deben referred to some of the ramifications in relation to fishing policy as it exists at the moment through Europe and as it will exist in the future outside of Europe, but that is obviously still something to be refined. I want to reflect on that as well.
My noble friend Lord Crickhowell asked about the licensing of fishing vessels and the position in his former constituency of Pembroke—Preseli Pembrokeshire as it now is. I can well remember as an elected representative in the Assembly for that area going at about four o’clock in the morning to the fish market at Milford Haven to speak to electors. All the electors there were Spanish electors, although they did have vehicles that were licensed in Wales as part of the United Kingdom. I think that that remains the position at the moment, but how it will pan out post-Brexit I do not know.
If I may I will take the amendment away and look at it, but based on the fact that there are far more ramifications to this than just fishing, and even in relation to fishing there are of course considerable ramifications—beyond 12 miles it is an economic zone for the state of the United Kingdom and we would exercise powers in relation to that for the whole country. On the points made by the noble Lord, Lord Elystan-Morgan, I thank him for his always gentle and complimentary approach which has me doing things I would probably not normally agree to; I recognise the dangers. I hope that we have looked at things in relation to this legislation on a pragmatic basis because that is the way to approach it. Any general rule is going to have to give way to exceptions because as we can see there are always difficulties in these things. Sometimes they look much more straightforward than they are. My door is always open and we have set up meetings with many noble Lords. I am happy to do that, but as I say our approach to the legislation is a good British pragmatic one. I will look without prejudice at what I think is a much more difficult area than perhaps it looks on the face of it. With that, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Morgan of Ely
I thank the Minister. His reply reminded me of the time when I was an MEP and I went to meet the head of the sea fishermen’s association of Wales, Mr Gonzalez. Times have changed; we will see what happens.
I am delighted that the Minister is happy to look at this again. We would be happy to redraft the amendment. I do not quite understand why, if Welsh Government Ministers have this competence, the Welsh Assembly cannot be allowed it. Perhaps I need to go away and think about it. We come back to the issue of aligning legislative and Executive competence. If the noble Lord could look at that, I will of course withdraw my amendment.
“Agricultural and horticultural produce, animals and animal products, seeds, animal feeding stuffs, fertilisers and pesticides (including anything treated as if it were a pesticide by virtue of an enactment).”
Lord Bourne of Aberystwyth
My Lords, in this group there are government amendments and non-government amendments. To try to ensure the proposers of the non-government amendments have an adequate opportunity to present their cases, I will try to extrapolate the two, although I appreciate that for Amendment 65 and government Amendment 65A it might be a little difficult as they are very much in the same territory. That apart, if I stray into non-government amendments, I would be grateful if noble Lords could gently tell me.
Government Amendment 53D modifies Section C14 of new Schedule 7A to set a more accurate devolution boundary relating to the Export Credits Guarantee Department, the ECGD. The department, acting as UK Export Finance, is the United Kingdom’s official export credit agency supporting United Kingdom exporters. Amendment 53D makes the ECGD a particular authority, thereby prohibiting the Assembly from legislating about it in any way. It replaces the existing wording, “subject-matter of” reservation, removing any uncertainty about how that reservation relates to the devolved matter of economic development, including providing advice and assistance to Welsh businesses. Its effect, therefore, is to allow the ECGD to continue to offer support, which we would all welcome.
On government Amendment 65A, the Government recognise that the Assembly has legislative competence over council tax reduction schemes. We accept that council tax reduction schemes are an integral part of the local government finance system, which is devolved. To that end, the Government have tabled Amendment 65A to remove the words,
“or liabilities for local taxes”,
from sub-paragraph (c) of the “social security schemes” definition under Section F1 of new Schedule 7A. This would remove any reference to local council tax and have the same effect as the amendment proposed by the noble Baroness, Lady Morgan.
We are content to devolve legislative competence to the Assembly as it is now an integral part of local government finance. I trust the amendment will satisfy the noble Baroness, but I look forward to hearing from her on that point.
Lord Howarth of Newport (Lab)
It is a good thing that the Government have decided to devolve powers relating to council tax benefit, but are they also proposing to devolve the financial resources necessary to enable the National Assembly and, if the National Assembly chooses to do so, local authorities in Wales to exercise these powers usefully and constructively?
Lord Bourne of Aberystwyth
My Lords, the noble Lord will know that the financial arrangements are those of the Barnett block, which has existed for some time. That is currently subject to a floor and being considered in terms of fiscal arrangements. Obviously, it would not be an integral part of any devolved system to allow a devolved Government to bring forward laws and then say that the system should be funded by the centre; it has to be funded by the package that exists, whatever that may be.
Government Amendment 67B makes an addition to the list of matters which are treated as exceptions to the reservation for prisons and offender management. As drafted, Section L11 of new Schedule 7A treats the provision of healthcare, social care and education and training as exceptions to the general reservation. On consideration, the Government have come to the view that libraries should also be an exception to the reservation so that the Assembly has legislative competence over libraries in prisons in Wales. Welsh Ministers already have the power to make rules in relation to prison libraries, and libraries more generally are a devolved matter, so that clearly makes sense.
I am pleased to propose Amendment 67D, which seeks to address concerns expressed by the Welsh Government that the present wording in Section L12 of new Schedule 7A would have the effect of reserving some matters which are currently within the Assembly’s competence. That present competence is by virtue of the conferral of the protection and well-being of children, other than in relation to family law and proceedings, within the devolved subject of social welfare. The concern is that the wording of the reservation would arguably include, and so reserve, matters such as local authorities’ duty to investigate under Section 47 of the Children Act 1989 and applications for secure accommodation orders made by local authorities. This was not the Government’s intention. The amendment therefore modifies the reservation to resolve the concerns and provide a clearer devolution boundary. It does so by focusing on proceedings and orders made under Parts 4 and 5 of the Children Act 1989 rather than “the subject-matter of” that Act.
On Amendments 119B and 119K, the Wales Act 2014 imposed a requirement on the Welsh Government to share land transaction information with HMRC. This information is vital for HMRC’s compliance work, for policy work across government departments and for the Valuation Office Agency’s work. The Welsh Government have since established the Welsh Revenue Authority, which will administer the taxes devolved to Wales by the Wales Act 2014, including land transaction tax, and will be the body with which HMRC needs to share land transaction information. New legal gateways are therefore required to share information in both directions between HMRC and the WRA. The amendments do not represent any change in policy but enable the existing policy to be implemented, and are fully supported by the Welsh Government. On that basis, I commend the government amendments in this group.
Baroness Randerson (LD)
My Lords, I shall speak to Amendments 66A, 67A and 67C in my name. Amendment 66A refers to job searches and careers. Paragraph 141 of the new schedule relates to “job search and support” and,
“arrangements for assisting persons to select, train for, obtain and retain employment, and to obtain suitable employees”.
Careers services are an exception to this reservation, which are devolved to the Welsh Assembly.
The Delegated Powers and Regulatory Reform Committee of this House queried what this means and how it would work in practice. It asked:
“Does this mean that the Assembly will have power to legislate as regards the provision of a service to assist persons in choosing a career, but that service could not include helping persons find a job in their chosen career?”.
This is clearly nonsensical. The Minister is undoubtedly well aware of this criticism in the committee’s report, so I look forward to his clarification, but I point out to everyone that there has been a long-standing issue of lack of connectivity and co-operation between the Welsh Government’s services and the UK Government’s services on job search and benefits, and a confused situation is not in the interests of people searching for careers or jobs.
Amendment 67A leaves out reservation 161 on the safety of sports grounds. It seems that the safety of sports grounds is currently within the Assembly’s competence, so this is the Government reducing the competence of the Assembly in the Bill. Why are the Government doing this? What is the key strategic reason that the Government feel ensures that they have to keep the safety of sports grounds in Wales within their control? After all, sports issues are devolved and have been since 1999. Through the Sports Council, through local authorities and through lottery funding, over which the Welsh Government have considerable influence via the Sports Council for Wales, the Assembly and the Welsh Government can fund sports facilities, right up to the level of the Principality Stadium. However, they are apparently not now considered capable of dealing with safety at those grounds. Once again, there is a lack of thinking through here—after all, who are you co-operating with in dealing with safety issues? Obviously, with the police, but also with the local authority on issues such as road closures and other facilities for crowds at sports grounds.
Finally, Amendment 67C relates to adoption. Reservation 175 relates to parenthood, parental responsibility, child arrangements and adoption. There is a lack of clarity about what this means generally, but I am specifically concerned about adoption. This is clearly a reduction in the Assembly’s current legislative competence. Other than intercountry adoption, adoption services are currently entirely devolved. This includes the recruitment of adopters, their training, matching and post-adoption support. As written, the only function that the Assembly would retain on adoption would be in relation to adoption agencies. Why have the Government decided to reduce the Assembly’s powers in this field? It is a field where it is essential that the various agencies work really closely together and that there is a seamless service for adopted children and those who are adopting. It is important that those services—social services, local authorities, education and the health service—are overwhelmingly part of the devolved picture. Adoption goes along with that very clearly.
Lord Howarth of Newport
My Lords, this group of amendments gives the Minister the opportunity, if he chooses to take it, to explain to the Committee what consistent principles have animated the choice of reservations that the Government have made in drawing up this legislation. We have a ragbag of reservations—as has been noted in previous debates, some 200 different reservations across an extraordinarily diverse range of policy areas—and in this group of amendments we have dealt with a miscellany of topics, including council tax benefit, careers services, sports grounds, libraries and adoption. It may be difficult to achieve consistency of principle in considering such a range of topics.
As I mentioned in an earlier debate, the Welsh Affairs Select Committee recommended that as the Government came to draw up this legislation providing for further devolution to Wales and introduced the reserved powers model, guidance should be issued to Whitehall departments as to the principles they should adopt in deciding what powers they wished to reserve to the centre—to the Government of the United Kingdom —and what questions they should ask themselves as they were judging these matters. I know that the Minister always seeks to achieve the best devolution settlement that he can for Wales. He cares about good government in Wales. He is a good representative and champion of the people of Wales and he wishes to achieve a devolution settlement that is coherent, commands wide acceptance and will endure. But it is difficult to achieve that if there is, apparently, no basis of principle for the reservation of powers.
It would be helpful if the Minister could tell us something about the process that has been adopted by the Government, partly in consultation with the Government of Wales—but I am thinking particularly of the process of consultation within Whitehall—as they came to decide that these 200 or so different powers should be reserved. Why have they chosen them? Is there any consistent principle lying behind that choice? If not, why not? Of course, the pressures of pragmatism are always very strong and one respects and understands that, but it may also be that there has been, as has also been said before in our debates, something of a dog in the manger attitude at work—that departments have not thought through with any thoroughness or care what is appropriate to devolve and what is appropriate to reserve but rather have said, “I think we’ll hang on to this”; essentially, “What we have we hold”. It would be a shame if we were driven to conclude that that was the basis on which the reservations have been chosen by the Government.
I hope the Minister can tell us about the process and encourage us to think that this has been done on a considered and principled basis and, for that reason, that these are decisions that should be respected and will stand the test of time for good, practical reasons.
Lord Hain (Lab)
My Lords, in supporting the persuasive case made by the noble Baroness, Lady Randerson, I want to press the Minister on the question of job searches, which are automatically part of the careers service—careers being devolved, as has been mentioned. Has the Bill been drafted with a view to DWP questions, which of course are reserved? Jobcentres, in managing benefits, are also concerned with getting people into work and therefore job searching and providing skills and so on. Are the Government looking at this matter from a DWP and therefore a reserved perspective, but not taking account of the fact that careers are devolved and job searches are by definition part of a supportive, active, flexible careers service?
Perhaps the Minister could clarify this when he responds. If the DWP dimension is the reason that this is not being devolved in the way that the noble Baroness, Lady Randerson, has argued should be the case, will he look at it again to see whether it is possible to reconfigure this part of the Bill?
Baroness Morgan of Ely
My Lords, I will follow up on my noble friend Lord Howarth’s point on the principles that guided the determination of what should be reserved. To be fair to the Minister, we asked this question before but it was past 10.30 pm so I will give him another opportunity to state on what basis those principles were set—why have they been determined in this way? I underline the point made by many other noble Lords: we know the Minister to be a friend of Wales and that he is doing his very best for Wales. However, it would be interesting to understand why and on what grounds the other departments are making their case on the basis of reserving quite so many powers.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords for speaking to the non-government amendments in this group and the noble Baroness, Lady Morgan of Ely, for saying that she will not move her amendment. The three remaining non-government amendments were spoken to by the noble Baroness, Lady Randerson, and I turn first to Amendment 66A.
The reservation at Section H3 of new Schedule 7A covers the provision of advice and support to assist people to select, train for, obtain and retain employment or to assist employers to recruit suitable employees, including by providing assistance for disabled persons. The intention behind this reservation is to reserve legislative competence in relation to all work-related programmes for which the Secretary of State is responsible under the Disabled Persons (Employment) Act 1944 and Section 2 of the Employment and Training Act 1973 —for example, Access to Work and Work Choice. Under the Disabled Persons (Employment) Act 1944, the Secretary of State may make arrangements to facilitate severely disabled people to obtain employment or work on their own account and to train for such employment. Welsh Ministers exercise concurrent executive functions in relation to certain sections of the Employment and Training Act 1973, and these are included in the Bill in the list of concurrent functions in Schedule 4.
The Government accept and recognise that the provision of careers information, advice and guidance is devolved and falls to Careers Wales, whereas employment is a reserved matter. The noble Lord, Lord Hain, is right in relation to that. In practical and operational terms, the DWP works with Careers Wales, which often has a presence in the DWP’s jobcentres. I am very happy to look at improving co-operation between the two in the light of what the noble Baroness said so that services run in a smooth, dovetailed way and are not duplicated so there is no friction. I suspect there will inevitably be a degree of overlap, but this is perfectly understood on the ground.
On that basis, we cannot see any reason for the amendment tabled by the noble Baroness, but I will look at the issue of co-operation which she raised. There are two areas, one devolved, one reserved, coming together and inevitably there will be a degree of blurring. I am very keen that where this sort of thing happens we have protocols to ensure that there is co-operation, so I will look at that.
Baroness Randerson
Will the Minister look again at this situation? My amendment was based on the judgment of the Delegated Powers Committee of this House, which looked at it from the outside, being unfamiliar in general with the operation of the devolution settlement in Wales. It found it confusing. It is therefore worth looking at it again and testing it out against the practicalities of what happens in relation to the careers service.
Lord Bourne of Aberystwyth
My Lords, I hope I indicated that I want to be aware of what is happening on the ground. The information I have is that it is working successfully and has been doing so for quite some time. However, I will have a look at it and write to the noble Baroness and other noble Lords who participated in debates on the Bill.
Amendment 67A relates to two areas, one of which is devolved—sport and recreation. The other is not—safety at sports grounds. That is a health and safety issue and is currently reserved. Health and safety is an explicit exception to competence in the current settlement, and it is on that basis that we resist this amendment.
Safety at sports grounds is of paramount importance to the Government, and it is often determined at a European level. It is through the work of the Sports Grounds Safety Authority that we have robust and effective procedures in place across England and Wales to ensure that spectators are as safe and secure as possible when watching sport. The current arrangements, which were brought in following the stadium tragedies at Ibrox, Bradford and Hillsborough, ensure a consistent approach to sports ground safety across England and Wales to ensure the continued safety of spectators. I recently visited Bradford City’s stadium, so I can speak of the work that was done there after that tragedy.
The multiagency approach overseen by the Sports Ground Safety Authority brings together all the emergency services—the police, ambulance and fire services—stadium management, local authorities and stewards. There have been no major incidents at sports stadia since the current arrangements were put in place some 27 years ago.
However, we face new threats to spectator safety in the form of terrorism, as seen in the tragic events a year ago at the Stade de France, and from new technology in the form of drones that can infiltrate stadia and expose spectators to danger. The Sports Grounds Safety Authority is providing support and guidance to sports grounds, clubs and other stakeholders and disseminating messages from the United Kingdom Football Policing Unit and National Counter Terrorism Security Office to help meet these new challenges. It is working to ensure that spectator safety remains a priority whatever the threat. It is on that basis that we are resisting this amendment.
Amendment 67C, in the name of the noble Baroness, Lady Randerson, relates to adoption. We cannot accept this amendment as drafted, as it would not only devolve the functions of adoption agencies—which are already within the competence of the Assembly and an exception to the family relationships and children reservation in Section L12 of new Schedule 7A—but have the effect of devolving the substantive law on adoption, which is not of course currently devolved. The reservation does no more than reflect the current competence of the Assembly, which does not include any of the substantive law on adoption. However, I am aware of concerns on the part of the Welsh Government, and the noble Baroness made a powerful case about the extent of this reservation. I would like to reflect on the issue further, although I can say that that will not include reconsideration of the reservation of adoption law as such, which is probably not something that the noble Baroness was seeking.
The noble Lord, Lord Howarth, asked about the basis for reservations. I have tried to cover this by saying that our approach has been pragmatic. It has obviously been influenced heavily by the Silk commission, of which I was part, and by the St David’s Day agreement. Both of those were consensual processes, and I applaud all political parties for taking part in them. We then had a draft Bill, which I think by common accord has been improved. We now seek to improve the legislation further as it goes through this House, and I think noble Lords will acknowledge that on some of the issues that have been of concern around the Chamber—teachers’ pay, fixed-odds betting terminals and so on—we have moved to accommodate some of the feelings expressed. On that basis, I ask the noble Baroness, Lady Randerson, not to press her amendment, as I think the noble Baroness, Lady Morgan, has agreed not to do.
Lord Wigley
Lord Wigley (PC)
My Lords, Amendment 54 stands in my name and that of the noble Baroness, Lady Morgan of Ely. I will also speak to Amendments 103, 105 and 107A, which also stand in my name and are grouped with my lead amendment. Some of them also stand in the name of my noble friend Lord Elystan-Morgan and the noble Baroness, Lady Randerson. I am grateful to these and other colleagues for their support in this matter.
The Committee today has an opportunity to put right a great historic wrong which has been the subject of much misgiving and dismay for a period of half a century and more. It concerns the drowning of valleys in Wales, usually with the compulsory eviction of farmers from their homes and land, sometimes with the destruction of whole villages and rural communities. I hope that in this matter I am knocking on an open door.
It would be stupid to assert that we should never construct reservoirs to supply water for domestic or industrial purposes, or to control the flow of water in our rivers. Some such projects have of course been built to supply water to our own conurbations in Wales, while some have been to provide water for English cities such as Birmingham. Some have been undertaken with the acquiescence of local people and with reservoirs so located that they do not cause massive disruption. Some projects have been handled with sensitivity and common sense, sometimes the reservoirs have helped to avoid flooding in Wales, as well as down river in England, and adequate compensation has been provided to those affected. But there have been other projects which have, to say the least, been handled in a cack-handed manner and, at worst, have ridden roughshod over local communities and their interests.
The best known of these, with the greatest ill repute, was the Tryweryn valley case, about which I shall say more in a moment—but it was not the first. The drowning of Llanwddyn and the valley in which the village was located to create Llyn Efyrnwy, the Vyrnwy reservoir, in the 1880s was probably the first to generate rancour. The poet Cynan, later Archdruid of Wales, wrote Balaad Dyffryn Ceiriog, which sums up the deep feelings. With noble Lords’ permission I shall quote just one verse in the original Welsh:
“Beth waeth fod dychryn dan fy ais?
Beth waeth fod deigryn ar fy ngrudd?
Wrth synfyfyrio ar y trais
A llwytho ‘nodrefn? Daeth y dydd
I ffoi o flaen y llid a fydd.
Pwy ydym ni, i gadw stwr?
Ffarmwr neu ddau, a gof a chrydd,
Cleddwch ein cartref dan y dwr”.
Lord Crickhowell (Con)
My Lords, during earlier discussion on the Bill, many criticisms were made of the lack of information available to us, and I am enormously grateful to my noble friend the Minister for the letters that he has sent us that deal with a great many of those issues, give us a lot of information and promise us more when it becomes available—preferably before Report.
I do not intend to speak about Amendment 105, although the noble Lord, Lord Wigley, spoke almost entirely about it—the one about reservoirs. I entirely understand the strength of feeling and his determination that what happened in the past should not happen again, and I am in no way critical of any proposal that he may put forward under that amendment.
However, Amendment 54 goes a good deal further. It talks about water. I speak with a good deal of experience because, for eight years, I was chairman of the National Rivers Authority and had to deal with some of the issues. We took great care about how we dealt with them. We had a Welsh region, but we were extremely careful to ensure that its work was carried out in the closest possible consultation and co-operation with the English regions that faced it across the frontier.
That was because, whatever the noble Lord may say, rivers do not exactly comply with national boundaries in a helpful way. The water that runs down them, the silt that it carries, the pollution that may be involved, and the fisheries and recreation are all affected, one way or another, by decisions taken on both sides of the water. Therefore, the closest co-operation and discussion is essential.
I refer first to the issue of drinking water and start with the river Severn, which, like the Wye, rises on Plynlimon. It does not originate in reservoirs; it is not, therefore, the subject of most of the points made by the noble Lord; but the water flows across the border and happens to provide a great deal of the drinking water for the midland region of England. Indeed, more than that, because the Severn-Trent River catchment area, an integrated system, carries the water on into eastern England and East Anglia, it is equally important for drinking water in those counties. Therefore, it is crucial that the closest possible co-operation happens on both sides of the border.
The other two main rivers with which we were—and I am—concerned are the Rivers Dee and Wye. The noble Lord, Lord Elis-Thomas, referred in an earlier debate as a keen fisherman to the importance of the Dee, which flows in and out of England, as does the Wye. But for quite considerable stretches they form the border. As I say, the management of that border is of crucial significance in terms of pollution control, flood defence, fisheries and recreation—and the way in which it is managed is of equal importance to those who live on either side of the border.
At an earlier stage in our discussions, we were told that a working party was discussing the exact way in which these matters are handled between the Welsh Assembly Government and the Government at Westminster. I am sure that that is the right way in which to proceed. I hope that by the time we get to Report we will know exactly what the outcome is and will be able to form a view as to whether they meet entirely my concerns and those of the noble Lord, Lord Wigley. But until we have those conclusions presented to us, the noble Lord’s initial Amendment 54 makes no sense at all.
When I was chairman of the National Rivers Authority, I depended enormously on the wisdom of a great Welshman and a great scientist, Professor Ron Edwards. He chaired our Welsh region. Ron Edwards, whose departure and death many of us deeply lament, would have regarded the proposal in its present form with the powerful criticism of which only he was able, and which I could not match. He would regard it as an absurdity, because he would want to have seen in place the kind of arrangements that I hope are now being discussed and which we will know about by the time we get to Report. For that reason, I am opposed to Amendment 54 but full of sympathy for Amendment 105.
Lord Elystan-Morgan
I wholeheartedly support everything that has been said with such eloquence and conviction by my noble friend Lord Wigley. My feelings on what the Minister’s attitude might be are summed up in one sentence by a Welsh poet of many centuries ago, Dafydd Nanmor, “Gobeithiaw a ddaw ydd wyf”, “My hopes are for the future”. I am confident that the Minister, who I know has shown himself to be extremely sensitive to the rights and wrongs of situations such as these in Wales, will achieve a solution here that will be just and practicable.
In so far as the past is concerned, I remember very vividly the Tryweryn issue, although it is now more than half a century ago. There was a great deal of humbug involved and less than total honesty in the case put forward by Liverpool, which said, “The people of Tryweryn are deeply religious—they go to church on Sundays but they will not allow their neighbours in England to have a cup of cold water. Fie upon them”. Those are the exact words. But it was all bunkum; it was not drinking water but industrial water that Liverpool wanted, run down the River Dee and diverted from Queensferry to its own ends. It was sold to over 21 other authorities fringing Liverpool and they made millions upon millions out of it, because they chose to rape a Welsh valley. There is no other way of putting it. They stole the land of the living and desecrated the graves of the dead. I feel very strongly about this, even after half a century. I hope that I can forgive, but I doubt whether I can ever forget. However, that all now belongs to the past: Tryweryn must never happen again. I am confident that the Minister’s decision will be such that Tryweryn will not happen again. This does not mean to say that those privileges—call them what you will—that are entrenched in favour of English cities will be changed at all; they will remain as previously.
Lord Thomas of Gresford (LD)
My Lords, in the 1970s, I was engaged in the case made by the Birmingham corporation to drown the Dulas valley, near Llanidloes. I was led by Sir Tasker Watkins VC and by Lord Hooson but unfortunately they could not stay more than a day or two so the full force of the inquiry fell on me for some three weeks. I was, of course, representing the objectors in the local community. I shall never forget the community hall in Llanidloes packed every day by the people from that valley. To the English eye, the valley seemed deserted. Such was our concern about that that we commissioned a report from the University of Aberystwyth. Some noble Lords may remember its great pre-war study of Llanfihangel-yng-Ngwynfa which indicated the strength of the Welsh community in a rural area. The study produced for the Dulas inquiry established the strong community links within that valley: the chapel, the school, the pub—two pubs actually—and how the people there came together far more than you would find in some housing estates in the sort of area that I came from. It was a strong and living community and we put that case to the inspector at the inquiry.
Birmingham corporation was represented by Michael Mann, later Lord Justice Mann, a man of great integrity. He presented the case for the corporation along the lines that Birmingham needs the water, but the ultimate result was that the inspector held against his case and for the community. One memory which I carried away from that was of the service of thanksgiving in the chapel afterwards. The community came together and I was there. The minister gave a prayer and a sermon in which he described the inquiry and the finest moment in it. I hoped he might mention my final speech, but he did not. It was when Michael Mann finished, on behalf of the Birmingham corporation. He had presented his case so fairly—and the result was not known at that stage—that the 400 people in the Llanidloes community centre applauded him. It was a spine-tingling moment.
As a result of the inquiry you can drive through the Dulas valley today, enjoy its scenery and meet its people; it is not the dank lake that I referred to in my closing speech. It is still there and still alive. Also, Lord Cledwyn, who as Cledwyn Hughes was Secretary of State for Wales, made a pronouncement in Parliament that no other Welsh valley would be drowned for the purposes of supplying water to England. That was his commitment. Your Lordships can imagine the sort of emotions that were felt at that time, and to which the noble Lord, Lord Elystan-Morgan, has just referred. It was a wonderful inquiry to be involved in. I support these amendments with all the emotion shown by my noble friend but I bear in mind the commitment given by the Labour Government of the day that no Welsh valley would ever be drowned again. These amendments are essential: it must be for the Welsh Assembly—the Welsh Parliament as I hope it will be—to have the responsibility of determining the water resources in Wales.
The noble Lord, Lord Crickhowell, talked about the River Dee. I am familiar with that river: in July I rowed some 14 miles up it in a quad. On one side was England and on the other was Wales. The only part of England that was ever on the other side of the Dee is the Grosvenor estate. The Grosvenors came in in 1066 and captured that little parcel of Wales. There are very important flooding issues affecting both sides. If the rain falls this winter, very shortly you will not be able to see where the boundary is because the whole of the area around Holt, Farndon and Almere Ferry always floods. There are problems, but the reservoirs have to be in the hands of the Welsh Assembly.
Lord Hunt of Wirral (Con)
My Lords, as we turn the pages of history, I share the view of the noble Lord, Lord Wigley. Having been born and brought up in the Ceiriog valley, I went through the controversy which took place, to which he referred most eloquently. As a Liverpudlian as well, I can recall the great debates that took place. We have to learn from the lessons of history, but there is no doubt in my mind that water is by far the most complex aspect of Welsh devolution. In many ways, it is what my great friend and colleague, Wyn Roberts, used to call Welsh water: dagrau o Dduw— the tears of God. It falls in all the wrong places, and as many noble Lords have already conceded, the devolution boundary follows water catchment areas rather than the England/Wales border and that is the extent of the problem. However, as my noble friend Lord Crickhowell pointed out, we have to confront that problem and find a solution. I strongly support the concept of a reserved powers model. My noble friend Lord Morgan and I had the honour to sit on the Constitution Select Committee. Although we applauded the setting up of a reserved powers settlement determining which powers should be devolved and which should be reserved to the centre, we said that it was a “complicated and challenging process”. This debate has demonstrated how complicated and challenging it can be.
I pay tribute to my noble friend Lord Bourne of Aberystwyth, who has adopted the right approach to finding a solution by listening carefully to what has been said. I think the solution is there. We ought to take the opportunity to remind ourselves once again what the Silk commission determined because it outlined the way in which we can solve this problem. I am sure that my noble friend will know it off by heart but I think that it is the common-sense way forward.
I hope that my noble friend will say how far he can go on this issue. We have already had yesterday’s announcement, which I believe is a step in the right direction. I hope that we can find a solution by drawing the boundaries in the right place, or at least by making sure that the powers of intervention are limited. The noble Lord, Lord Thomas of Gresford, with his great eloquence, won the day for the communities which he represented. We must make sure that communities are never neglected in the same way ever again. Areas determined as being slums were ignobly swept away and their communities were forgotten about. The communities wanted to be relocated, if they were to be swept away, but they would have preferred to stay where they were and have their homes improved. Those communities in the valleys wanted to see the areas that they had lived in all their lives preserved. I do not know what my noble friend will say but if he follows his normal course, which I warmly applaud, I am sure that we will find a solution.
Lord Morgan (Lab)
As a historian, I agree with a great deal of what has been said, including the speech of the noble Lord, Lord Hunt. However, the view of the Bill will be fundamentally prejudiced if a substantial move is not made towards accommodating the amendment of the noble Lord, Lord Wigley. The events at Tryweryn were a monumental injustice and a rural community in my own county of Meirionnydd was treated with contempt, about which I still feel great bitterness. It seems to me that it is, as it were, the Tonypandy of rural north Wales and is fundamental to how Welsh people feel their community has been dealt with. If something so fundamental and endemic to the concept of Wales is not substantially recognised by accepting this amendment in broad terms, the Bill will not receive the acclaim it otherwise deserves.
Baroness Morgan of Ely
My Lords, we have heard some very passionate speeches and we are all very aware of how emotional the issue of water can become in Wales. The Minister is aware of how sensitive this issue is, especially following the travesty of the development at Tryweryn, which the noble Lord, Lord Wigley, mentioned. In fact, the Secretary of State, who is present —we welcome him to this Chamber—was clear in his public announcement yesterday that a second Tryweryn could never happen. The events at Tryweryn occurred in 1965, before I was born, but the fact that it has left an impression even on my generation says something about the powerful message that was sent at that time. I do not want to be churlish but I was fairly confident about this issue, having sought assurances from Welsh Government officials, who suggested that current planning laws already devolved to Wales could probably have stopped that scandal being repeated. I hope the Minister will confirm whether that is the case. As I say, I do not want to be churlish, so I cautiously welcome the announcement made yesterday by the Secretary of State for Wales in relation to water. However, I will reserve my judgment until we have seen the detail. On the face of it, the announcement should be a positive move but, as always, the devil is in the detail. Until we have had a chance to scrutinise that proposal, I intend to press ahead with our amendments.
The Bill amends Section 114 of the 2006 Act by limiting the grounds on which the Secretary of State can intervene to prevent the Presiding Officer submitting an Assembly Bill for Royal Assent. That section currently allows an intervention, so I look forward to the government amendment to remove it. The Minister should be aware that anything other than a complete deletion of this section will be looked on unfavourably.
Notwithstanding the points made by the noble Lord, Lord Crickhowell, I stand by Amendment 54, which would require the full devolution of water and sewerage to be aligned with the geographical boundary with England, as set out in the Silk report and the St David’s Day Command Paper. The work of the joint Governments’ water and sewerage devolution programme board, which was established following the St David’s Day paper to consider the alignment competence, found that changes can be achieved with minimal impact on consumers of water and sewerage services. I was delighted to see that in the letter to Peers that the Minister sent last week, he suggested that he was looking at this issue. Therefore, we hope that he will look favourably on this amendment.
The third amendment relates to the regulator. Ofwat, the regulator for water and sewerage providers in England and Wales, should be fully accountable to the National Assembly for Wales in respect of the functions it exercises in relation to Wales to better reflect the current devolution settlement on water matters. The amendment would make it a requirement for Ofwat to produce a report to Welsh Ministers and for that report to be laid before the National Assembly in respect of the functions it exercises in relation to Wales. The amendment would require the nomination of a board member as a joint appointment between the Secretary of State and Welsh Ministers to reflect a new arrangement which the Welsh Government consider necessary consequent to full legislative competence for water and sewerage.
Amendment 104 is proposed to amend Section 27 of the Water Industry Act to require the Secretary of State to seek the consent of Welsh Ministers before issuing general directions to Ofwat in respect of matters where functions are exercised by water and sewerage undertakers in Wales, or where licensed activities are carried out using the system of a water or sewerage undertaker wholly or mainly in Wales.
These changes are necessary so that Ofwat is fully accountable to the National Assembly for Wales and Welsh Ministers for those functions to be exercisable in relation to Wales. It is therefore important that we apply appropriate Assembly procedures to regulations which make provision within the Assembly’s competence. Scotland has great scope on environmental powers, including the regulation of water. It is only right that Wales is awarded equal authority in this respect.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lords who have participated in the debate on these amendments, which relate to water. I particularly welcome the contribution of the noble Lord, Lord Wigley, who moved his amendment with sensitivity and fairness on an issue which I know is very close to his heart. The Government are determined that never again should there be a Tryweryn. That is at the back of all our thinking on this issue.
I welcome the contributions from around the Committee. My noble friend Lord Hunt of Wirral spoke with passion of his time in north Wales, and the noble Lord, Lord Morgan, talked of his home county of Meirionnydd. I also welcome the contribution of the noble Lord, Lord Elystan-Morgan. I could not agree more with the sentiments that they expressed. I also thank my noble friend Lord Crickhowell—with his background and experience as chairman of the National Rivers Authority—for bringing his authority to this issue: aligning the border is not necessarily straightforward.
Water is of symbolic importance as well as practical significance to Wales. It evokes more passion and debate than probably any other issue relating to Welsh devolution. It is not just about Tryweryn; as the noble Lord, Lord Thomas of Gresford, reminded us, it is about the Dulas Valley as well, and there have been other issues. I thank noble Lords for contributing to the debate from the viewpoint of their own experiences. The strength of feeling has been amply demonstrated in their speeches.
In announcing the Government’s intention to devolve pay, my right honourable friend the Secretary of State for Wales signalled that the Government were exploring other aspects of the settlement to ensure that it is as clear and fair as possible. Yesterday, my right honourable friend Alun Cairns announced the Government’s intention to remove the Secretary of State’s powers to intervene on water and to replace them with a statutory protocol on water between the United Kingdom Government and the Welsh Government. Work will be done on that, and we hope to have the detail ready for Report.
That is a highly significant announcement. Water has been a challenging issue, as anyone familiar with recent Welsh history will know. The replacement of the intervention powers with a formal protocol marks a step change in the history of Welsh devolution—one that resolves past differences and provides clarity for the future. The move also removes any last impediment that there may be—at least in terms of this Bill; I hope the noble Baroness will be able to clarify this—to the Assembly giving its approval to the Wales Bill, subject of course to agreement on the fiscal arrangements.
The existing intervention powers were put in place in the Government of Wales Act 2006, when Peter Hain—now the noble Lord, Lord Hain—was Secretary of State. Since then, there has been a great deal of development in relation to devolution. This Bill marks a move to a new, durable and lasting devolution settlement, underpinned by a recognition of the maturity of the Assembly and the Welsh Government. In keeping with this, it is time to replace the Secretary of State’s powers to intervene on the Assembly and Welsh Ministers in relation to water with a statutory protocol between the United Kingdom Government and the Welsh Government which defines how the two Governments will work together on water-related issues—in particular, cross-border issues.
I confirm that the Government intend to bring forward amendments on Report to put in place the requirement for a formal agreement and to remove the intervention powers. In doing so, it will be important to respect the interests of water users in both Wales and England. As my noble friend Lord Crickhowell exemplified, this is not necessarily straightforward in every respect.
Lord Elis-Thomas
I am excited not just by the environmental and political aspects of this but by the constitutional implications. Can the Minister help us by indicating whether establishing a protocol in relation to powers between the Assembly and this Parliament, and indeed between the Welsh Government and the UK Government, is something that he would consider in other areas of policy in the Bill?
Lord Bourne of Aberystwyth
My Lords, as I have indicated, working together between the Government in Cardiff and the Government of the United Kingdom is of interest to all of us who believe in an effective United Kingdom and an effective Wales. So, yes, I am certainly in favour of that, as I have indicated. In so far as we can provide for that, the Government are open to looking at it. With the excitement of that intervention, I have lost my place.
Lord Bourne of Aberystwyth
I fully understand.
It will be important to put in place a protocol with bite. Both Governments will be subject to a duty to act in accordance with the new agreement and, once it is in place, both will need to agree any changes to it. The agreement will also need to include a process for resolving any disagreements that both Governments will sign up to.
It is as yet too early to say how soon the new arrangements will be agreed, but the Government will repeal the Secretary of State’s water intervention powers once an agreement is signed and sealed. This historic commitment to remove the intervention powers paves the way to conclude the Government’s consideration of the wider devolution issues relating to water and sewerage, including the sewerage intervention powers currently in Clause 46 of the Bill and the question of whether powers over water and sewerage should be aligned with the England-Wales border.
The Silk report recognised that water and sewerage devolution was complex and that further work was needed to consider the practical implications of implementing the commission’s recommendations. Following the St David’s Day agreement, the Government set up the joint Governments’ programme board with the Welsh Government to look at these issues and report on the likely effects that implementing the recommendations would have on the efficient delivery of water and sewerage services, on consumers and on the water undertakers.
That work has concluded and the Government have been considering the evidence that has been collected. In doing so, it has been particularly important to consider carefully the interests of customers and businesses on both sides of the border before reaching a decision on the recommendations. It remains the Government’s intention to bring forward provisions to implement the recommendations, if such a thing is achievable, and I hope to be able to return to this on Report.
I will now turn to other water-related amendments that are not Silk recommendations. Amendment 104, tabled by the noble Baroness, Lady Morgan of Ely, seeks to amend the Water Industry Act 1991 as it relates to Ofwat. Part of this amendment would require the Secretary of State to seek the consent of Welsh Ministers before making directions to Ofwat, outlining her priorities for keeping the activities of water companies under review. This would occur where these directions apply to Welsh water companies and licensees carrying out activities in the areas of those companies. This requirement for consent would cover all of Ofwat’s functions, including those applicable to policy areas reserved to the Secretary of State, such as those relating to competition law, insolvency and mergers. This would give the Welsh Ministers considerable influence over policy areas that are not devolved.
The noble Baroness’s amendment would also place a requirement on Ofwat to make its annual report to the Assembly rather than just send it a copy, as is currently the case. At present there is nothing to prevent the Welsh Ministers laying before the Assembly the annual report that Ofwat sends them or publishing it in any manner they see fit.
The amendment requires appointments to Ofwat’s board to be made jointly by the Secretary of State and the Welsh Ministers. Other amendments seek to grant Welsh Ministers joint powers with the Secretary of State over board members’ terms and conditions. Currently, the Secretary of State makes all appointments following consultation with the Welsh Ministers and consults them on some other aspects. In practice, this means that the Secretary of State writes to the Welsh Ministers to seek their views on an applicant before confirming the appointment. However, the Welsh Government are also invited to sit on the appointment panel, which is chaired by Defra. This, along with the various requirements to consult Welsh Ministers, already provides the Welsh Government with considerable influence over the process and final appointment decisions.
Amendment 105 in the name of the noble Lord, Lord Wigley, concerns the abstraction of water from Welsh reservoirs. As I think I have indicated, I share the views expressed by noble Lords today: the events of some 50 years ago which resulted in the flooding of Tryweryn were some of the darkest and most regrettable days in modern Welsh history. Never again.
In answer to the question raised by the noble Baroness, Lady Morgan—I am delighted to note that she did not wish to be churlish; I welcome that very much—decisions about the construction of new reservoirs and environmental controls are already devolved to the Assembly. However, we are going further—and rightly so. The Assembly exercises legislative competence in relation to both issues: construction and environmental controls. The Welsh Ministers would need to issue a compulsory works order to allow the construction of a new reservoir to take place. It is within the competence of the Assembly to give itself a role in the issue of consent orders.
Natural Resources Wales is the environmental body which regulates abstraction in Wales. Again, the Welsh Minsters and the Assembly can legislate to change or add to its powers. Nevertheless, as announced yesterday by my right honourable friend the Secretary of State, the Government intend to remove the Secretary of State’s powers to intervene on water and replace them with a protocol. I think that that is in the spirit of where we need to be in relation to this totemic and practically significant area of water. On that basis—
Lord Wigley
I have listened very carefully to the response that the noble Lord, Lord Bourne, has given us. Quite clearly, there is an intention to make considerable movement in what I and many others would regard as the right direction on this matter—but we cannot come to a judgment on that until we see what comes forward on Report. However, can he confirm one thing? Notwithstanding that there are powers in planning, and the other powers that he has mentioned, will he consider between now and Report to have it written on the face of the Bill, so that there is no doubt whatever, that the construction of the reservoirs in Wales is a function of the National Assembly, in the same way that it is spelled out that the control of fracking is in the control of the National Assembly? Can he give us an assurance that he will be looking for words by which to achieve that between now and Report?
Lord Bourne of Aberystwyth
My Lords, I can certainly give the noble Lord the assurance that if it is not on the face of the Bill, a protocol that contains it will be referred to on the face of the Bill—that is important. It is perhaps something that we can return to. I am meeting the noble Lord and I appreciate the sensitivities in this area. I want to ensure, as I think we all do, that there can be no future Tryweryn. If it is helpful to put that on the face of the Bill, we will do so, and I am very happy to discuss that with the noble Lord ahead of Report.
Baroness Morgan of Ely
I am pleased that there will be movement on the intervention powers of the Secretary of State. That is a very positive move. I am also very pleased the Minister has clarified the fact that we could have stopped what happened at Tryweryn with the current powers—that has come across clearly. But he did not say, in relation to Ofwat, whether he is minded to move on that issue. The impression I got was that he was not, but perhaps he will clarify that.
Lord Bourne of Aberystwyth
My Lords, I am happy to clarify that point. I believe that the existing powers in relation to the Welsh Government and Welsh Ministers are sufficient, but I am very happy to look at that issue and cover it in the protocol, which could extend to that if it is something that we should be doing. I will happily discuss that with the noble Baroness.
Lord Elis-Thomas
The Minister will recollect that we worked together in the National Assembly. I looked at this issue at the time and I can reassure him and the House that the way in which he described the current position in planning and environmental law is indeed the position. But of course that does not mean that we cannot strengthen it by making indications about the intervention powers of the Secretary of State. On that, I think we are all agreed.
Lord Bourne of Aberystwyth
I am very grateful to the noble Lord for reminding me of the years of co-operation we had in the National Assembly for Wales and for clarifying that issue in the way that he did. On that basis, I hope that the noble Lord will consider withdrawing his amendment.
Lord Wigley
My Lords, I am very grateful to everyone who has participated in this debate, including two former Secretaries of State for Wales—we had four in the Chamber and one adjacent to it at one point; a remarkable situation—and for the expertise that they have brought to our consideration. I also thank the noble Lords, Lord Elystan-Morgan and Lord Thomas of Gresford, for their passion and background, which added to our understanding, and the noble Lord, Lord Morgan, from Aberdovey, for his historical knowledge and appreciation of the importance of this issue to the people of Wales. I thank also the noble Baroness, Lady Morgan of Ely, for her contribution and her amendments, which I think should be considered along with the others between now and Report—perhaps we can discuss those. I am grateful for the intervention of my noble friend Lord Elis-Thomas, who represents in the National Assembly the area that includes the Tryweryn valley.
I think that we are making progress. We have not got there yet but there is much to be considered and built upon between now and Report. If the Minister can deliver what he seems to want to deliver, and if his colleagues in the Wales Office can do likewise, then quite possibly we can, once and for all, put this issue to bed by making it quite clear that control of these matters is in the hands of the elected National Assembly for Wales. There is a need for co-operation, but there is also a need to appreciate the importance of communities and the significance of this issue to our nation. On that basis, I beg leave to withdraw the amendment.
Baroness Morgan of Ely
“ExceptionConsent for—(a) the construction, extension or operation of devolved generating stations, and(b) the installation of devolved associated lines, or keeping such lines installed.Interpretation“Devolved generating station” means an electricity generating station that is or (when constructed or extended) is expected to be—(a) in Wales and—(i) generates or is to generate electricity from wind, or(ii) has or is to have a maximum capacity of 350 megawatts or less; or(b) in Welsh waters and has or is to have a maximum capacity of 350 megawatts or less.“Welsh waters” means so much of the internal waters and territorial sea of the United Kingdom as are adjacent to Wales, and the Welsh zone.“Devolved associated line” means an overhead electric line that—(a) is associated with a devolved generating station, and(b) has or is (when installed) to have a nominal voltage no greater than 132 kilovolts.”
Baroness Morgan of Ely
My Lords, this Bill proposes that the Assembly will gain competence over all renewable energy generating projects of up to 350 megawatts in Wales and in Welsh territorial waters. Amendment 55A suggests that the UK Government have gone too far in their intention to reserve their power to legislate over electricity, including the generation, transmission, distribution and supply of electricity. Although of course we recognise that it is important to have a single market in energy, ideally not just in the UK but across the EU as a whole, we contend that under the system proposed by the UK Government opportunities for the development of energy production in Wales will be stifled.
Here, I should probably declare an interest. It is not a current interest but an interest that I had in the past while I was working for an energy company in Wales. Part of my remit was to help develop a significant wind farm in mid-Wales. Let me tell you that the legislative process was chaos. The Welsh Government had more or less invited wind farm companies to develop wind farms in specific areas in Wales, but the decision as to whether permission could be given to develop a large wind farm was the responsibility not of the Welsh Government but of the UK Government.
On top of that, the wind farm needed to be connected to the grid. A 132 kV line—that is, a small electricity line on a pole—from the wind farm to the main national grid needed to be approved, not by the national Government but by the local authority. This could be called in by the National Assembly. These little electricity lines then needed to be connected to a large electricity substation—the places where you see the twirly bits in areas where the electricity goes in. That would convert the voltage from 132 kV to 400 kV, which is for the national grid. The responsibility to allow the building of the substation lay with local government, which again could be called in by the Welsh Government. Responsibility for the national grid and the decision as to whether to build the large power lines on pylons rested with the UK Government.
The whole system was chaos. It was no wonder that, in the end, the company threw up its arms in horror and walked away from the project, having already invested a not insignificant amount of money. Unless the associated consents for devolved electricity generation rest in Wales, the chaos is likely to continue.
I will touch briefly now on the limitation of the level at which Welsh Government approval in relation to electricity is set. The Bill proposes that the Assembly will gain competence over all renewable energy generating projects of up to 350 megawatts in Wales and in Welsh territorial waters. Our concern is that this figure is arbitrary. The Silk commission attempted to provide justification for this limit, but the situation in Wales has moved on considerably since those days. Since the Silk commission looked at the issue, we have seen ambitious projects such as the tidal lagoons progress and proposals for huge tidal lagoons introduced. I know that we are still waiting for the green light—and I will be extremely interested to hear what the strike price will be eventually on this project—but, whether you are a supporter or not, these plans are very far advanced.
In this amendment we suggest that the limit should be increased to 2,000 megawatts. I accept that that is just as arbitrary a figure. Therefore, will the Minister confirm why a level of 350 megawatts was suggested and why we cannot increase it? What is the rationale behind that? If we do not change it now, would there be any scope for us to change it in the future? What would the process for that be? I beg to move.
Lord Elis-Thomas
I am grateful to the noble Baroness, Lady Morgan, for moving this amendment. Her description of what happened with the history of substantial onshore wind projects in Wales was absolutely correct. For much of that period I had responsibility as chair of the environment committee of the National Assembly, which produced a substantial report on energy and planning. My difficulty is the difficulty to which she alluded; yet again we are placing a cap on the potential development of natural resources in Wales that does not make sense in terms of energy policy or indeed in terms of the potential for development of natural resources for the future.
There is a separation of generation capacity at different levels. There is the grid, as we have already heard, for the over 400 kilovolt—but there is also the separation of powers in relation to the internal grids provided by the electricity distribution companies. This affects potential smaller generation projects with individuals and small communities whether of hydro power, wind power, turbines, solar power or any other developing form of renewable energy. It means that the potential for development is being stifled because no one is taking a clear view of how these projects could be developed.
Unfortunately for the whole project, the Welsh Government intervention seeking to identify areas for development—mainly on land in public ownership—was not helpful. So for 10 years at least we lost potential capacity for energy generation and also capacity for having a proper grid connection throughout Wales. That is something that we shall have to revisit. I look enviously to Scotland, which has clear guidelines and clear demarcation in terms of the devolution of energy.
I have a particular interest in other forms of low-carbon energy, notably the potential development of small modular nuclear power that could replace the decommissioned nuclear power station at Trawsfynydd in my own part of the world. Currently nuclear power is with the UK Government in totality. But the actual capacity in terms of generation of a single modular power station is probably less than 350 megawatts. Obviously one would look for more than one unit at such a development where you have, as at Trawsfynydd, a full grid connection, land and water availability for coolant and of course a very skilled labour force that has worked in the energy industry. So the Minster needs to look again at the way in which these aspects of the Bill have been set out. In areas of natural resource, it is essential that we look to future capacity and not settle for arbitrary figures on present capacity.
I shall not ask whether the Minister is interested in introducing a protocol for energy policy, but if a protocol for natural resource in relation to water makes sense, it makes even more sense in relation to energy. I have not even mentioned the energy arriving increasingly now in Wales and as part of the Welsh grid from Ireland, where I am assured that the future development of renewable energy both onshore and offshore is likely to continue. That capacity can join the mainland European grid effectively only through Wales. All these aspects need to be considered. I hope that the Minister will be able to give the noble Baroness, Lady Morgan, me and others some optimism as to the potential for future development of this natural resource.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I have spent much of the past five years involved with energy matters both here and abroad, albeit specifically interconnection and the generation of green energy. A nation's energy supply is so important a part of both industrial strategy and national security that in many countries the energy ministry is second in importance only to the Prime Minister’s office. It is surely right therefore that central government retains responsibility for determining the strategy that will ensure the security of supply for the whole nation through our common national grid.
The Silk commission recommended an increase in the threshold for devolved energy consenting for new projects from 50 to 350 megawatts—and this level I thought was agreed by all parties. Further, the Energy Act 2016 granted localised decision-making for all onshore wind projects. Surely the two together strike the necessary balance between devolving authority for many renewable energy schemes, for example the Swansea tidal lagoon, and allowing the Government to retain responsibility for larger schemes of more strategic significance to electricity infrastructure stretching beyond the confines of Wales.
Most of you will be aware that this is the first Bill that I have seen coming through this House. What a meaty one it is. I cannot hope to match the eloquence of the noble Lords, Lord Wigley and Lord Elystan-Morgan, but it did bring to mind the final two lines of the poem commissioned from the national poet for the opening of the fifth Assembly in Cardiff this year:
“Sooner may two men meet than two mountains”.
Lord Wigley
My Lords, once again it is a delight to follow the noble Baroness, Lady Bloomfield of Hinton Waldrist. I had the pleasure of speaking after her when she made her maiden speech a few weeks ago on an earlier stage of this Bill. On this occasion, I am afraid that we shall not see exactly eye to eye on the question of the limitation, since I shall speak briefly to Amendments 99 and 101, which seek to remove the 350 megawatt limit on the devolution of energy projects to Wales.
Having given Scotland complete control over its natural resources—with no limits, so for those looking for a United Kingdom policy, that has already been given away—the Government are proposing to devolve energy in Wales only up to a limit of 350 megawatts, with anything above that threshold being reserved to Westminster. This arbitrary constraint on the ability of Wales to control its own natural resources has stirred many emotions in Wales. It seems archaic and contrary to the spirit of devolution that Whitehall will still decide how and when Wales can harness many of its most precious natural resources.
I shall outline what this means in practical terms by reiterating an example highlighted by my colleagues in another place. Responsibility for the 320 megawatt Swansea Bay tidal lagoon would be devolved under the current Bill. However, the proposed Cardiff and Colwyn Bay tidal lagoons, which are identical apart from scale, will be reserved to Westminster. This does not stand up to any test in logic.
The Government have chosen to use the cover of the Silk commission’s recommendations—which, I recognise, also suggested a possible limit of 350 megawatts. However, if they are going to do so, does the Minister not agree that all of the Silk recommendations must be treated with the same respect? The Government most certainly are not doing this in other instances, so why pick out this one? As the Minister will undoubtedly recall, the 350 megawatt limit was agreed to in a cross-party Silk commission discussion on the understanding that other parties would support the devolution of policing and broadcasting. Does he recall that meeting? I have the references.
I conclude by noting that this is once again an example of how we are asked to accept second best in terms of devolution of energy. We are asking only for the same deal that is afforded to other nations. The 350 megawatt limit that the Bill imposes stops Wales effectively harnessing its world-class renewable resources —its wind, its coastline and sometimes even its sun. As my noble friend Lord Elis-Thomas emphasised, these are important ingredients for the future of the Welsh economy. Our resources belong to the people of Wales and now is the time for the law of the land to recognise that.
Baroness Randerson
My Lords, we on these Benches have felt for a long time that the constraint on the Assembly’s current control over energy is ridiculously low and the suggestion that it should rise to 350 megawatts is better, but by no means good enough. The noble Lord, Lord Wigley, has outlined the foolish situation that we are likely to find ourselves in if the 350 megawatt limit is adhered to. We all know it was picked as a limit by the Silk commission because it would encompass the Swansea Bay tidal lagoon. But as the noble Lord pointed out, the problem is that the sister projects in Cardiff and Newport, if they are built, will be larger than 350 megawatts, so by what measure would the Swansea lagoon not be considered to be of strategic importance but one built in Cardiff would be?
It is absolutely essential that the Welsh Government and the Assembly are able to take a stronger position on energy development. They should also be able to take a distinctive and different position on it. We fully accept that nuclear developments would not be appropriate for devolution because of their massive scale, but we do not believe that artificial limits should be put on the ambition of the people of Wales, the Assembly and the Welsh Government to provide a larger share of the energy they consume, and to find new, different, innovative and environmentally sound ways of doing so. I think that this is one of the most important series of amendments which have been put forward to the Bill so far.
Baroness Finn (Con)
My Lords, Wales can play a pivotal role in the rewiring of the UK electricity system, which of course means that the rewiring of the UK electricity system can play a pivotal role in the renewal of employment, industry and infrastructure investment in Wales. Larger energy projects by their very nature must be assessed against a complex set of UK-wide system, strategic and security objectives.
Let us take the case of tidal lagoon infrastructure in Wales. Wales is blessed with a phenomenal natural tidal resource and the time has come to tap into it to bring more jobs, investment and industry for Wales. The Hendry review of tidal lagoons is imminent. We had hoped to see it this week and I hope that it will not be long before it sees the light of day. As my noble friend Lady Bloomfield has pointed out, the first project at Swansea Bay would have fallen below the Silk commission threshold, had one been in place at the time. But it was not and the project has already been awarded development consent, thereby paving the way for much larger projects in Wales that can be assessed only in the context of a UK-wide energy strategy.
It is my belief that the 350 megawatt limit, as recommended by the Silk commission, is the right one in devolution terms. It provides more certainty for the developers of energy projects in Wales about who is responsible for consenting to energy generation projects. Rather than wasting time debating arbitrary jurisdictional limits, efforts would surely be better placed in supporting a development that would be hugely beneficial to the Welsh economy. My hope and expectation are that the Hendry review will challenge officials and nay-sayers to engage with the real value-for-money arguments. It is dismissive and lazy to claim out of hand that the Swansea Bay tidal lagoon is just too expensive. The value-for-money case is compelling: this is a project that asks for less than 0.5% of all the money available each year to low-carbon projects in the UK and which in return will start a new British power and manufacturing industry. What other UK energy project promises to spend 84p in every pound in the UK while simultaneously stimulating the regeneration of coastal communities around Wales? This could include a hugely welcome stimulus to the beleaguered Welsh steel industry. It is of vital importance for Wales and we must accept and encourage the clear role that policymakers at both ends of the M4 need to play in nurturing this new industry through its infancy.
Lord Crickhowell
My Lords, I hesitate to get involved in an argument with the two noble friends on my left about what should be the upper limit, but I am bound to say that my instinct is that it seems to be on the low side, for the reasons set out by the noble Lord, Lord Elis-Thomas. However, I want to raise another issue, and that is the curious situation in which we find ourselves in the management of onshore wind-powered generating stations. The Energy Act 2016 contains provisions for the transfer of onshore wind out of the Planning Act 2008 development consent regime and to return responsibility for decision-making about these projects to local planning authorities in Wales. This would have meant that when the provisions of the 2016 Act come into force, decisions on larger onshore wind developments in Wales above 50 megawatts would have fallen to be determined by local planning authorities, whereas smaller onshore wind developments from 10 megawatts to 50 megawatts would have been determined by Welsh Ministers as developments of national significance. The Developments of National Significance (Specified Criteria and Prescribed Secondary Consents) (Wales) Regulations 2016 have now captured the onshore wind projects above 50 megawatts as developments of national significance. That means that onshore wind projects of 10 megawatts to 50 megawatts and those over 50 megawatts will be dealt with by that process. I find this rather extraordinary and very unsatisfactory.
In England, things have been taken the other way. The smaller schemes are essentially being given to local authorities and local planning authorities, and local communities are being given a real say in whether they should go ahead. I suppose it could be argued that the National Assembly for Wales and the Welsh Government are a local authority, but I do not see them in that way, having been rather influenced by events. I am not sure if the noble Baroness, Lady Morgan, was referring to a particular project in mid-Wales, but we did have a big wind farm project which would have decimated one of the most beautiful valleys in Wales and would have spread problems across the border into Shropshire. That was eventually dealt with by planning authorities and local people were able to make their views known, so the situation was substantially saved.
I feel that we should be in a situation in which, where smaller local schemes are concerned, people have the same kind of opportunity to comment on and criticise them as is the case in England. I suspect that my noble friend will say in reply that he shares my view and hopes that that is what the Welsh Government will decide, but that it is entirely a matter for the Welsh Government. I have to say that I am not happy about that. If that is the answer, I should say that I had toyed with the idea of putting down some kind of amendment at Report stage to give local people a say, but I suspect that it would be thrown out on exactly the grounds that I have cited, which is that the whole matter should be decided by the Welsh Government. But if this is to be their responsibility, I hope that the Welsh Government will take the view that the smaller schemes, which really cannot be described as developments of national significance in the same way as the big schemes, should be taken in such a way that local communities are able to form a view about them and can express that view locally.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on devolution of energy to the National Assembly for Wales. I turn first to Amendment 55A, moved by the noble Baroness, Lady Morgan of Ely, which seeks to add an exception to the reservation in new Schedule 7A relating to the,
“Generation, transmission, distribution and supply of electricity”.
It is an amendment that needs to be considered in the context of Clauses 37 and 40, and of reservation M4 on “Development and Buildings”.
The Silk commission recommended that there should be further devolution to Wales—it is further devolution, as the noble Baroness, Lady Randerson, recognised—of responsibility for consenting electricity generation projects, and that there should be a more streamlined approach to consenting ancillary developments required to sit alongside those projects. Those were points well made in the debate. There was cross-party consensus to implement these recommendations taken forward under the St David’s Day agreement. Without looking at the Silk process, although I accept that it is important for the legislation, this is essentially based on the St David’s Day agreement.
We achieve the expanded role that Silk envisaged through the combined effects of Clauses 37 and 40, which clearly set out the parameters of the new devolution settlement in this area. The extent of that settlement is further reinforced by the terms of reservation M4, which provides that the very instances referenced at Clauses 37 and 40 are carved out of the range of planning matters that are reserved.
To provide further clarity on this point, the consenting of a generating station or an overhead line is a planning matter. While I accept that the proposed amendment is well intentioned, it would be not only superfluous but, as an addition to reservation D1, misplaced. Section D1 relates to the regulation and licensing of the process of generating electricity and to what subsequently happens to that electricity. This is the regime administered on a GB level by Ofgem, which includes Scotland. It does not concern itself with the planning for, or the construction of, the means of generating electricity.
Further, as drafted, the reservation would add confusion to the particular reservation and potentially the schedule in general. The Assembly’s legislative competence is limited to Wales—the counties forming Wales and the territorial waters adjacent to those counties. The amendment talks about planning in the “Welsh zone”, which includes seas beyond the territorial waters and outside the legislative competence of the Assembly, as we touched on earlier about the issue beyond the 12 miles of territorial sea. I hope the noble Baroness, Lady Morgan, will take those points on board.
As I said, the Bill already devolves matters relating to the planning for developments of up to 350 megawatts. This is not a point that has been covered, but the Energy Act 2016 has already devolved all onshore wind consents without limit to local authorities in Wales. At the same time, we devolved power to the Assembly to change that to the Welsh Government if it wanted to do so. In response to my noble friend Lord Crickhowell, I recognise his view that this should be a matter for local people, which I share, but at the same time, with this being a devolved issue, it would be for the Welsh Government to alter that if they wanted to do so. We have indicated our intention by giving the power to local authorities. The Welsh Assembly could alter that. There is no limit to the power relating to onshore wind. That might reassure noble Lords who were unaware of that.
The noble Lord, Lord Elis-Thomas, asked about a protocol. I will certainly go this far: it is important that Ministers talk together. Many of these projects are happening at a UK level. We should not consider that there is always malign intent on the part of the UK Government towards Wales. As we know from the Swansea lagoon project and others, important infrastructure projects are being moved forward by the UK Government, who are talking on a regular basis to officials and Ministers in Wales. Those points were covered by my noble friends Lady Bloomfield and Lady Finn. It is right that some of these important decisions are discussed between Wales and the United Kingdom.
I also say to the noble Lord, Lord Elis-Thomas, that I know, because I was a Minister in the Department of Energy and Climate Change, that BEIS is looking at small modular reactors. Trawsfynydd’s interest has obviously been noted, but I have to say to him that if it had been in Scotland it would not have got off the ground because of the nuclear element. Sometimes there are unintended consequences to these things. To come back to the issue we are looking at, the amendment as drafted would not achieve what it seeks to do, in any event.
Amendments 99, 100, 101 and 102 seek to reopen a key recommendation of the Silk commission and the St David’s Day commitment: that the devolution threshold for future consenting for electricity generation in Wales should be 350 megawatts and below. That threshold gives the Assembly and Welsh Government substantially more autonomy in determining the shape of Wales’s future energy structure than was previously the case.
I accept that any level is, in a sense, arbitrary. It has to be a matter of judgment where it is set as to what is appropriate for the UK Parliament and what is appropriate for Wales—hence the importance of the dialogue between the two Governments and the two Parliaments. It respects the fact that Wales and England are, and will remain, intrinsically linked through a common electricity transmission system that depends on inputs from a broad range of generating sources. The Government remain firmly of the view that, the larger the capacity of those sources, the greater their significance beyond the confines of Wales and to the United Kingdom as a whole. Those points have been made by noble Lords as the debate has progressed.
Consensus was reached during the St David’s Day process about the cut-off point. The noble Lord, Lord Wigley, said that if the Swansea lagoon is within this process for Wales—as I accept it is—it is simply an issue of scale. I agree that it is an issue of scale; that is where the cut-off comes in, because the cut-off has to be arbitrary. I cannot see that it can be any other way. It is a matter of judgment as to what is strategically significant for the United Kingdom and what is appropriate for Wales.
Lord Wigley
On that point, with regard to Swansea Bay being just below the threshold and Cardiff and Colwyn Bay being just above it, does it not make all sense for this limit to be adjusted at least enough to take those together, so the expertise in handling these matters is all in one place?
Lord Bourne of Aberystwyth
My Lords, I say two things to that. First, I am certainly not going to get into a Dutch auction as to what should come within on that basis. Of course I understand the point he makes, but my second point takes me back to one I have already made: we need a ready and willing dialogue between the Welsh Government and the National Assembly, as I think is happening, and between BEIS and Parliament. There is no reason to suppose that there is a malign intent regarding these projects. I know the noble Lord is not suggesting that.
Government Amendment 119G is a minor and technical change to Schedule 5. Under Clause 37, Welsh Ministers will have the ability to consent to electricity generating stations of up to 350 megawatts in waters adjacent to Wales. The vehicle for doing so will be Section 36 of the Electricity Act 1989, and Schedule 5 to the Bill gives Welsh Ministers the ability, by regulation, to amend the Section 36 application processes to suit their purposes. The Bill currently also extends that regulation-making power to Section 37 of the Electricity Act, which relates to the consenting of overhead power lines. However, as Section 37 consenting powers are not being devolved in the Bill, the power is ineffective and it makes sense to remove it.
Government Amendment 121 amends Clause 55. Further to the one-stop-shop philosophy for energy consenting advocated by the Silk commission, Clause 41 provides the Secretary of State with the ability to consent associated developments along with the principal consent for nationally significant infrastructure projects in the field of electricity generation and transmission. This will deliver significant streamlining improvements to a system which, at present, can require developers to assemble consents from a plethora of different authorities. It is wholly consistent with the Government’s policy of encouraging infrastructure development for these changes to be introduced as soon as it is practical. The amendment will achieve that by commencing the relevant provisions two months after the Bill’s Royal Assent.
On that basis, I urge the noble Baroness to withdraw the amendment, and for her and the noble Lord not to press the other amendments in the group. I intend to move the government amendments.
Baroness Morgan of Ely
My Lords, I thank those who have participated in this debate. I recognise that my amendment on electricity generation, distribution and supply was imperfect; it was meant to generate a debate of this kind. I understand that there are no limits in terms of power over onshore wind and certainly do not want to imply any malign intent on the part of the UK Government, but the complexity of the current model means that it is extremely difficult for Wales to compete in a global investment energy market. If it is much easier to go through a planning process in Denmark than in Wales, why would you not go to Denmark? It is a shame that we have not come to any conclusion on this, but it is an issue that we need to look at. We may need to look at how we streamline the process. It may be another issue where we could put a protocol in place, because we like protocols as a way of moving things forward.
On the cap beneath which we should be allowed to determine energy consents in Wales, I am not sure how much further we have gone. Dialogue is good, as the Minister suggested, but I am not sure what kind of commitment that represents. I hope to retain our ability to come back to discuss both amendments on Report, but for now I beg leave to withdraw Amendment 55A.
Baroness Morgan of Ely
Baroness Morgan of Ely
My Lords, Amendment 56 relates to the proposal by the Government to reserve provision relating to heating and cooling energy systems at the UK level. I shall speak also to Amendment 57, on retaining energy conservation at a UK level.
The reservation in respect of heating and cooling is broad in its scope and risks impinging on existing legislative competence in the fields of planning, economy, environment and, crucially, energy efficiency, all of which are already devolved and under the control of the Welsh Government. Not devolving heating and cooling has the potential to prevent delivery of climate change targets across a number of devolved sectors. Heating networks are inherently local—there is no national heat network—so it seems clear that this is better delivered at a local or regional level. The case for retaining the power at a UK level has not been made.
Let me give you an example. Cardiff Council has helped to facilitate the development at Trident Park which converts residual waste into renewable energy. The project also has the potential of supporting a city-centre district heating scheme. Why do the UK Government need to be involved in what is essentially a local initiative? The Government of Wales Act is silent on heating and cooling, while the Scotland Act has no such reservation. I hope that the Minister can enlighten us on why this issue has been retained at a UK level.
The current Bill also reserves energy conservation at the UK level but accepts that energy efficiency other than by prohibition and regulation is devolved. The Explanatory Notes refer to the Energy Act 1976, which relates to energy security and the conservation of fuel stocks. That was drafted in a different era when we had little awareness of climate change, an era of miners’ strikes—it was just after the three-day week. At that time, energy conservation meant a very different thing.
Furthermore, the Bill refers to both “energy conservation” in a reservation and “energy efficiency” in an exception. Are these synonymous? If not, can the Minister explain the difference? The drafting of the reservation could lead to confusion and disputes between Administrations. Let us remember that the cheapest and most efficient way of tackling climate change and fuel poverty is not to use energy in the first place.
These reservations could place restrictions on the ability of the National Assembly to meet its climate change targets and deliver on its priorities across a number of devolved areas. It makes no sense to have a UK reservation for something that is inherently local in its delivery. I am of course willing to be enlightened by the Minister on the justification for retaining the power at the UK level.
Baroness Randerson
My Lords, I support the noble Baroness in those comments; the amendment is in my name as well. I should declare an interest as someone who has solar panels on their roof and has therefore benefited from policy on renewable heat incentive schemes. That illustrates how locally we are talking now; we are at the other end of the scale from the previous debate, when we were wondering whether 350 megawatts was the right level for strategic national developments. We are now looking at schemes that are very local indeed.
I am particularly concerned that the reservation on heating and cooling has suddenly popped up. It was not in the draft Bill, so perhaps the Minister will explain why the Government have suddenly become concerned about such developments. My experience of combined heat and cooling networks as defined in the interpretation in Section D5 of the new schedule relates to the Llanedeyrn district heating system in Cardiff, which existed back in the 1960s. It was not terribly effective, being a pioneering system. People were either boiling hot or freezing cold because it was not sensitive to flexibility. It was therefore abandoned and the boiler house in which it was based was turned into a very useful community centre. That system was installed on what was then the council estate of Llanedeyrn at the initiative of the local council, which is where such a power should lie. It is very much a local thing.
On incentive schemes for renewable heat and for energy conservation, the policy has diverged within the UK between Scotland, Wales and England, and will continue to do so even more than now. Renewable heat incentive schemes and the encouragement of energy conservation are appropriate for local action and local schemes, because when they work best they engage the local community. It is difficult for large-scale, national schemes to appeal to and work effectively within local communities. In the USA, such incentives are provided at local council level. However, because in the UK we do not normally do these things at local council level, the Scottish Government have had a different policy. My reading of the outcome of that is that they have made significant progress, particularly in engaging communities to work effectively together on such schemes. I urge the Minister in his usual understanding manner to agree to look again at this aspect of the Bill.
Lord Howarth of Newport
My Lords, the Government’s contention that energy policy-making powers, even on such intrinsically local issues as heating and cooling and energy conservation, should be reserved to the Government of the United Kingdom, because they are essential to our country having a national energy strategy, would be the more impressive if our country had a national energy strategy, but the truth of the matter is, notwithstanding the no doubt valiant efforts of the noble Lord, Lord Bourne, when he was a Minister at the Department of Energy and Climate Change, we do not have a national energy policy.
Since 2010, energy policy has consisted of prolonged dithering in the face of major decisions that it was necessary to take, particularly on nuclear power, and on the creation of incentives for renewables, which were then removed as the Government did a complete volte-face in their attitude to green issues and green values. The consequence is that we now have unaffordable energy prices, a dangerous dependence on energy imports from politically unreliable parts of the world and energy insecurity. If the Government of the United Kingdom have proved themselves incapable of developing and maintaining an energy policy for England and Wales together, why will they not at least allow the Government of Wales to develop and maintain an energy policy for Wales?
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who participated in the debates on heat and cooling and on energy conservation. Amendment 56 seeks to remove the reservation that deals with the supply of heat and cooling. It is important to be clear that the reservation is concerned with policy on heat supply, which is analogous to the supply of every other type of energy. Heat is strategically significant and represents almost half of our energy use and around one-third of carbon emissions. I can tell the noble Lord, Lord Howarth, that the Government have a very definitive energy policy—not just when I was Minister, I hasten to add—very much signing up to the climate change targets internationally, along with many other countries, as he will know; a commitment to nuclear, which I do not think is shared, certainly, by his party leader; and a commitment to diverse sources of energy. Let us put that canard to rest: there is a very definitive energy policy.
The policy in relation to heat is significant. Heat represents, as I say, almost half our energy use and around one-third of carbon emissions. The reason that we are seeking to reserve this is because it is a relatively new technology; it is about supplying heat, through policies such as the renewable heat incentive, the heat networks investment project, the combined heat and power quality assurance scheme and innovation support, and through initiatives such as the smart systems and heat programme, all of which are part of the United Kingdom’s energy policy. I accept that rollout and delivery will always be at a local authority level, but it is question of how the framework is set. These policies already exist and benefit the people of both Wales and England. It seems clear that devolving this area would increase costs, due to a loss of economies of scale, and would add complexity and confusion for businesses and householders and add to bills. The noble Lord, Lord Howarth, touched on affordability, which is certainly a prime concern of the Government, along with security of supply and ensuring that energy is green.
Heat is not simply a local issue. There are strategic decisions to be taken over the coming years, including options that would require action at a national level, such as decarbonisation, possibly even decommissioning, of the existing gas grid. These emerging national-level heat issues mean that it would be far more effective to maintain consistency between England and Wales, and it is why grid and infrastructure issues relating to oil, gas and electricity are also reserved in Scotland as well as in Wales. I hope I have explained the Government’s reasons for this reservation and why I am not able to accept the amendment.
Amendment 57 seeks to remove the reservation that deals with energy-efficiency requirements. The reservation uses the term “energy conservation” to reflect the language in the existing devolution settlement. It is our contention that energy efficiency is a subset of energy conservation. I will write to the noble Baroness, Lady Morgan of Ely, with some of the technical detail on that, if it would be helpful. The settlement provides for the Assembly and Welsh Government to have powers on energy efficiency, except via the use of regulation or prohibition. It is not as if there is no power in relation to energy-efficiency; it is just in relation to regulation or prohibition. For example, it would allow schemes to advertise energy-efficiency measures—I think that is probably something the Welsh Government already do, although I stand to be corrected on this.
The reservation in this amendment, however, covers home and business energy-efficiency measures that are imposed by regulation, and so have been implemented by, or under, legislation or equivalents, such as licence conditions imposed on gas and electricity suppliers. Having separate energy-efficiency obligations for England and Wales would be likely to increase the complexity and costs for organisations involved in delivering the obligations, with an impact on consumer bills. That is something the Government cannot sanction and, on that basis, I urge the noble Baroness to withdraw her amendment.
Baroness Morgan of Ely
I thank the Minister. I find it quite odd when, in one breath, there is a suggestion that we need to meet decarbonisation targets and yet there is an understanding that climate change targets also have to be met at local levels. I think the Welsh Government have targets on that. I do not think you can have it both ways. On grid and infrastructure, of course there is a recognition that there needs to be a UK grid and infrastructure, but I contend that that does not make sense in terms of local heat networks. I would be very interested to see a little more detail on what the Minister suggests in relation to energy conservation, but the fact that energy efficiency is already largely devolved is perhaps something that has not been recognised in the way we had hoped. With that, I beg leave to withdraw the amendment.
Baroness Randerson
Baroness Randerson
My Lords, Amendment 57A covers a small and detailed issue, in contrast to the big issues also addressed in this group concerning the railway system and rail funding in Wales. I will not pre-empt the speeches of other noble Lords on those amendments, other than to say that it is essential that Wales has clear accountability, funding and control in running the railway system if we are to have an effective one here in Wales.
Amendment 57A would omit training, testing and certification from reservation 104, covering driver licensing. Schedule 7 to the Government of Wales Act 2006 refers only to driver licensing. In other words, the Bill introduces a much tighter wording than that in the current devolution settlement for Wales, as set out in the 2006 Act. The wording in the Bill is narrower. The inclusion of the word “training”, in particular, concerns me, because it could discourage or prevent the Assembly from providing training in road safety. If the Government do not encourage the Assembly to do this, why should it provide the funding and the resources? It is essential that it is absolutely clear that the Assembly has control over issues such as road safety training. That is the kind of local issue that is best organised at a Wales level. Very often it is organised via the school system or the training system and therefore it sits appropriately with other devolved issues. I urge the Minister to look again at this reservation and the exceptions. I beg to move.
Lord Wigley
My Lords, my Amendments 59, 60 and 70 in this group seek to devolve responsibility for the funding and specification of the rail infrastructure in Wales. I shall not move Amendment 97 relating to the Wales and Borders rail franchise as the Government have, I believe, already accepted the changes in principle on that matter.
Only 1% of Network Rail funding has been spent on the Welsh rail network since 2011, according to the latest Welsh Government estimates. This is despite Wales being home to no less than 11% of the total England and Wales rail network. Deals struck between the Welsh and UK Governments for specific projects, such as the electrification of the Valleys lines, are of course very welcome, but they do not address the fundamental issue that the current arrangement for rail infrastructure planning and development does not work in Wales. There is a simple and widely supported solution to this problem: to devolve the funding and specification of the rail infrastructure to the National Assembly. I say “widely supported”: there is a plethora of people and organisations from across the professional and political spectrum who support the devolution of the rail infrastructure.
As is often the case with this Bill, the Silk commission is my first port of call on this issue, which is appropriate since the Minister was relying on Silk in an earlier group of amendments. The commission agreed that devolving the rail network in Wales is both “possible and desirable”. This sentiment was echoed by the previous Assembly’s cross-party Enterprise and Business Committee, which in one of its final reports before the 2016 election concluded that responsibility for Welsh rail infrastructure was best placed in the hands of AMs in Cardiff Bay. Only last month, the Economy and Infrastructure Cabinet Secretary, Ken Skates AM, told the Welsh Affairs Committee that he would like to see responsibility for the rail infrastructure and Network Rail devolved.
These statements of support from across the political spectrum are bolstered by comments from numerous figures in industry, including the passenger campaign group, Railfuture Wales, and a pre-eminent expert on Welsh transport, Professor Stuart Cole. Both have said that devolving rail services without rail infrastructure is just not logical. Even the UK Government’s own review of the structures of Network Rail, conducted by Nicola Shaw, concluded in March this year that a more devolved route structure is necessary for Network Rail to adapt to the challenges of developing a modern rail network. This must be matched in policy terms to allow the National Assembly for Wales to be accountable and to be able to facilitate the development of Welsh rail infrastructure fit for the needs of a modern Wales.
It is indeed anomalous that the Welsh Government will bear the responsibility for rail services but not the infrastructure. The obvious issues that this creates for infrastructure planning are matched by concerns over the apportioning of accountability that this unbalanced devolution settlement will trigger. Passengers—and, ultimately, voters—will lack clarity about where responsibility for meeting transport needs should lie. What they care about is a transport system that works. Devolution of rail infrastructure is a step towards delivering a rail network that works in a fair and accountable way.
The National Assembly for Wales is the last devolved national Parliament that has not been afforded the powers to manage its nation’s rail network. These powers have long been held in Scotland and Northern Ireland. It is inconsistent and ineffective for this aspect of transport policy not to be devolved. I therefore urge the Government to support these amendments and to heed the call of AMs and MPs across the party divisions, as well as those from industry who want to see this happen. I ask the Minister whether he would be prepared to look again, between now and Report, at whether it would be possible to get some sensible further devolution on this matter.
Lord Wigley
As I understand it, the Government have moved on the Wales and Borders franchise. Perhaps the Minister can respond and there will be an opportunity for the noble Lord, Lord Hain, to intervene.
Lord Hain
I was going to say that I strongly support Amendments 58 and 97, in the absence of an assurance from the Minister to the contrary, because there is a strong case—following the St David’s Day agreement, the work of the Silk commission and, indeed, the logic of the case—that responsibility for this franchise should lie with the Welsh Government. To avoid taking up any more time, I hope the Minister will confirm that it will be devolved and the Government will bring forward an amendment to that effect at some point, presumably on Report.
Baroness Morgan of Ely
My Lords, as currently drafted, reservation 183(c) removes the ability of the National Assembly to introduce town and country planning legislation relating to the development of railways. This aspect of the Bill clearly rows back on the existing devolution settlement, as the National Assembly currently has the ability to legislate on town and country planning matters, which can include the construction of railways.
The Welsh Government are clear that the development and use of land for such infrastructure falls within the current devolved planning system. This is supported by the fact that, since devolution, subordinate legislation has been made by the Welsh Government under the Town and Country Planning Act 1990 to make provision for railway development, and that such development can be, and has been, given consent under the planning system.
More recently, the Welsh Government made regulations under the Town and Country Planning Act 1990, as amended by the Planning (Wales) Act 2015, to make provision for railway development to constitute development of national significance in Wales. At no point during the scrutiny of the Planning (Wales) Act was the issue of legislative competence raised in the context of railways by stakeholders, which included the UK Government. The inclusion of railways in the reservation would restrict the National Assembly’s ability to legislate further for railway development in the context of developments of national significance. There is a clear need to preserve the existing devolution settlement, which Amendment 70, in deleting reservation 183(c), achieves. I urge the Committee and especially the Minister to support this amendment.
Amendment 109 deals with railway franchising. At present, the majority of rail services in Wales are provided under the Wales and Borders franchise operated by Arriva Trains Wales. This was concluded following the joint parties’ agreement in 2006, which set out the division of responsibility for the management of the Wales and Borders franchise between the two Governments. From early 2017, the Welsh Government will become a franchising authority in their own right, with responsibility for awarding the next Welsh rail franchise, due to start in October 2018.
The current Railways Act does not allow the Welsh Government to permit public sector organisations to bid for rail franchises—a matter which was conceded for Scotland following Smith commission recommendations. We on this side of the House do not have ideological objections to the nationalisation of railways, unlike the UK Government. In fact we think that the German nationalisation model, which has been allowed to run franchises in the UK, has simply stuffed UK taxpayers’ money into the pockets of German taxpayers. The French nationalised railways run a much cheaper and more efficient system than any of our current players in the UK. We would like to see flexibility so that if the Welsh Government wished to bid for that franchise, they could do the same for Welsh people. The Welsh Government have stipulated time and again that they may be interested in applying for such a franchise or allowing a not-for-profit organisation to bid. Again, we would like the UK Government to explain on what grounds they justify this discriminatory action.
Lord Hain
I strongly support my noble friend’s case. Would she also say that the model of Welsh Water could be a very good one for the Wales and Borders franchise? That is not least because, being a not-for-dividend company, Welsh Water is able to raise capital at a far cheaper rate than on the open markets in the City, as other water companies are required to do. It is therefore a better model and that option should be available to the Welsh Government, should they choose to pursue the franchise in the future on that basis. I do not think that the existing Bill allows for that.
Baroness Morgan of Ely
The noble Lord is quite correct in his assessment. One of the problems is that the Welsh Government have indicated that they would be interested in looking at some kind of not-for-profit model, such as that of Dwr Cymru. But one of the real problems here—the real shame—is that the timing on this issue is very bad because while we hope that the Government will accede to our request on this matter, if they agree to do so it will come too late for the current procurement round. That round has already opened, so the earliest that we could see a Welsh public sector bid or a not-for-profit franchise bid on this matter would be 2028. I suppose that would be better late than never; at least we will be ready for the next time. I hope that the Minister will be able to give us some comfort on this issue.
I support the views of the noble Baroness, Lady Randerson, in relation to devolving the training, testing and certification of driver licensing to Wales.
Finally, I ask the Minister for clarification on a point regarding the regulation of bus services in Wales. Traffic management is already devolved, in addition to the regulation of transport facilities. These will continue to be devolved, thankfully, under the Bill by virtue of the fact that they are not reserved. Under the new settlement, there is new scope for the Assembly to legislate concerning local bus registration. Ministers currently have limited executive powers in respect of local authorities co-ordinating bus operations, as set out in the Local Transport Act 2008, including voluntary and statutory quality contracts.
I believe that there should be scope in the Bill to allow for the regulation of buses in Wales. I hope that the Minister can confirm that this is indeed the case. Can he confirm whether the associated benefits of regulation, include the possibility of capping and regulating fares and integrated ticketing, will also be possible? It is unclear to me whether reservations concerning competition and consumer protection could prevent these important issues being pursued. Some assurance on that would be helpful. Can he also confirm that the Bill in its current form does not prevent the Assembly legislating in relation to the registration of bus services and franchising, or indeed other areas covered by traffic management and regulation in addition to other transport facilities and services, such as parking, street works and the blue badge parking scheme?
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on these issues relating to transport. I turn first to Amendment 57A, moved by the noble Baroness, Lady Randerson. Section E1 of new Schedule 7A lists the road transport powers that are reserved. Amendment 57A would give the Welsh Government responsibility over driver training, testing and certification. The words “including training, testing and certification” are intended to clarify further what is meant by driver licensing, which is an exception to the Assembly’s competence under the current devolution settlement. It is not intended to modify the Assembly’s current competence; I can confirm that and it will of course appear on the record. It is important for business and road safety for there to be a consistent approach across Great Britain. It would be impractical and costly for the transport industry to follow different rules on how drivers should learn to drive and have a different driving test from the rest of the country. I do not think the noble Baroness was suggesting that. Moreover, road safety is reinforced by all road users having to observe the same rules so that everyone is able to fully understand the consequences of not observing those rules.
Amendment 57B, as tabled by the noble Baroness, Lady Morgan, would except the registration and regulation of bus services from the road transport reservation. The Welsh Government already have the ability to determine a number of aspects of bus policy including concessionary fares, smart ticketing and the provision of subsidies. The devolution of the registration of local bus services—a St David’s Day commitment—is already provided for in the Bill and will complement the Assembly’s existing powers. Welsh Ministers will have the power to legislate in respect of bus franchising, quality contracts and quality partnerships. I will write to the noble Baroness more specifically on some of the exceptions and issues that she raised. I am sure she realises that one or two of those were fairly technical. I do not have the information to hand.
Amendment 97 will not be moved, as I understand it, but I will refer to it briefly— notwithstanding that I think the noble Lord, Lord Wigley, said that to confirm his understanding. Perhaps I could turn first to Amendment 58, which was spoken to by the noble Lord, and seeks to extend the legislative competence of the Assembly in relation to railway services to include the Wales and Borders rail franchise. It is not clear what the intended geographical scope of these powers would be, nor what particular functions potentially relevant to the procurement and operation of the franchise the Assembly would have competence over. This is somewhat like the issue relating to water; at issue is that the railway line is partly in England and partly in Wales. On railway services, the Assembly currently has legislative competence only in respect of financial assistance relating to railway services, subject to limited exceptions in relation to the carriage of goods, railway administration orders and compensation of passenger service operators for public service obligations, under EU Regulation 1370/2007.
Extending the Assembly’s legislative competence in relation to the provision of railway services was not recommended by the Silk commission and so was not considered in the St David’s Day process. The Bill therefore seeks to preserve the existing devolution settlement in relation to legislative competence for railway services. It may also be helpful if I confirm that an amendment to the Assembly’s legislative competence is not necessary to give effect to our agreement with the Welsh Government to take forward the devolution of executive franchising functions for Welsh services to Welsh Ministers.
Amendments 59 and 60, tabled by the noble Lord, Lord Wigley, seek to extend the Welsh Assembly’s legislative competence in relation to rail infrastructure in Wales and the specification and funding of Network Rail’s operations in Wales. As he will no doubt be aware, the Silk commission recommended the transfer of executive functions in relation to the specification and funding of Network Rail’s operations in Wales. This recommendation was considered as part of the St David’s Day process but there was no political consensus to take it forward. The Government do not intend to revisit this issue, given those discussions. I can however assure the Committee that the Department for Transport continues to liaise closely with the Welsh Government on the specification and funding of Network Rail’s operations in England and Wales for each five-year railway control period, to ensure that requirements in Wales for increased capacity on the network are reflected. The Government also welcome the significant investments made by the Welsh Government in the rail network in Wales to support the Welsh economy. These complement the significant investments in the strategic capacity of the England and Wales rail network that have been, and will continue to be, made by the UK Government that benefit Wales.
Amendment 70, which was tabled by the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Wigley, seeks to remove planning in relation to railways in Wales from the list of reservations. The underlying issue is the interpretation of the current devolution settlement set out in the Government of Wales Act 2006. The UK Government and the Welsh Government interpret the extent of current devolved competence in relation to this issue differently. This again emphasises the lack of clarity that exists under the current devolution settlement. It also points to the need to ensure that the Bill removes any uncertainty and provides clarity going forward. Establishing a clear boundary between what is devolved and what is reserved is, of course, a key objective of this Bill. However, Amendment 70, without further clarification, has the potential to introduce further uncertainty to the devolution boundary by creating a conflict with the “railway services” reservation in Section E2 of new Schedule 7A. As such, we need to be able fully to consider the issue and the most appropriate approach to adopt.
However, I am aware that the Assembly has already exercised competence in this area, as referred to by the noble Baroness, Lady Morgan, under the Planning (Wales) Act 2015. In the circumstances, I therefore propose to take this issue away for detailed consideration and to return to the House and set out the Government’s position on Report. With that assurance, I hope the noble Baroness will not press the amendment.
Amendment 109, in the name of the noble Baroness, Lady Morgan of Ely, seeks to press the UK Government to a decision on a matter they committed to consider in the St David’s Day Command Paper. That matter is whether to legislate for Wales in a manner similar to provision in the Scotland Act 2016 regarding the powers of Scottish Ministers, as committed to in the Smith commission agreement, to enable Welsh Ministers to invite United Kingdom public sector operators to bid for rail franchises for which they are the responsible franchising authority. I say in parenthesis that, as my right honourable friend the Secretary of State set out in other place, the Railways Act does not prevent not-for-profit bidding for franchises but prevents public sector bidders.
I recognise that the Welsh Government are keen to have such flexibility, in addition to that available under current legislation, to encourage bids from other sector organisations. The Government consider it would be premature to reach a decision on this matter in advance of final agreement with the Welsh Government on the terms for future devolution of executive franchising functions. At present, Welsh Ministers do not have any statutory powers to procure rail franchises. The effect of the proposed amendment would be to confer discretion to allow public sector bidders for franchises consisting of, or containing, Wales-only services on the Secretary of State. This would be inconsistent with the United Kingdom Government’s policy not to allow UK public sector operators to bid for rail franchises.
As the noble Lord, Lord Wigley, indicated, I am committing to the progress made between the United Kingdom Government and the Welsh Government in preparing for the transfer of franchising functions to Welsh Ministers. That is something we are seeking to do and are committed to do. As part of reaching final agreement, we will be able to reach a decision on the issue raised by this amendment regarding Welsh Ministers’ ability to invite bids from public sector operators in future procurements.
Baroness Morgan of Ely
Can the Minister give us a timetable for when those decisions will be made? Will it be before Report or is it an issue that will be resolved after the Bill has left this House?
Lord Bourne of Aberystwyth
My Lords, to some extent I am in the hands of noble Lords as to when we complete Committee stage—a subtle hint if ever there were one. I hope and intend that we should be in a position to bring this forward on Report, but certainly during the passage of the Bill. I hope it will be before Report.
Amendments 83A, 83B, 119C, 119D, 119E and 119F amend Clause 27 and Schedule 5 so that all the Minister of the Crown powers in Sections 6, 6A and 6B of the Transport Act 1985 are transferred to Welsh Ministers by the Bill, which I am sure noble Lords will welcome.
As a result of the complexities involved in the traffic commissioner being a reserved body but exercising some devolved functions, the original clause transferred the regulation-making powers in Sections 6 and 7 of the Transport Act 1985 that related to the traffic commissioner. This was to provide clarity in the Bill, with the remaining powers to be transferred via a subsequent transfer of functions order. Following discussions with the Welsh Government, we have agreed to transfer all the regulation-making powers relating to the registration of local bus services in Section 6, 6A and 6B of the Transport Act 1985 in the Bill.
On the basis of that information and the assurances and responses I have given, I urge the noble Baroness to withdraw her amendment.
Baroness Randerson
My Lords, I fear that the longer I sit here and listen to the detailed debates, the less confidence I have that the Bill will provide the certainty that we on all sides believe should be provided.
On the specific issues, devolution is the name of the game in railways at the moment. I regret that that rule does not apparently apply to Wales in the fullest sense. I entirely accept that railway services in Wales do not run neatly within the country only. That is a specific challenge. I fear that there is a failure here to provide sufficient incentives to the Welsh Government to invest in the railway system in Wales because they are not being given sufficient control over it.
In relation to Amendment 57A, I agree with the Minister that it is necessary to have a consistent approach to road safety across the country, not least because the road along the border weaves in and out of the border so any other approach would not be workable. In the light of the Minister’s comments, I shall withdraw my amendment, but I ask him to consider clarification of the Assembly’s powers on training in road safety matters because I fear that, as written, the Bill could be taken by the Assembly and the Welsh Government to mean that they do not have to involve themselves in it any more, and that would not be an appropriate result. I beg leave to withdraw the amendment.
Wales Bill
Tuesday 15th November 2016
(8 years ago)
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“Terms and conditions of employment and industrial relations in Welsh public authorities and services contracted out or otherwise procured by such authorities.”
Lord Hain (Lab)
My Lords, Amendment 66 stands in my name and that of my noble friends Lord Murphy and Lord Kinnock, and the noble Baroness, Lady Randerson. As Secretary of State, I took through the Government of Wales Act 2006 and I begin by commending the Minister for his empathy, skill and civility in our collective purpose, which is to get a Bill that does the very best for Wales. I hope he will see what we are doing as support for him in battles in Whitehall with some of his colleagues who I do not think really understand the Wales devolution settlement.
This amendment will come as no surprise to your Lordships. Not only did I explain at Second Reading that I would be tabling it, but I and my noble friend Lady Morgan of Ely also explored in detail the issues it raises during the passage of the Trade Union Bill through this House at the beginning of this year. At that time there were many references to the UK Government’s insistence on ignoring their own legal advice, ignoring a legislative consent Motion voted through by the National Assembly for Wales and ignoring the ruling of the Supreme Court in 2014 in relation to the Agricultural Wages Board. The Government’s insistence on pushing ahead with measures that interfere with the functioning—I stress this to the Minister—of the devolved public services in Wales demonstrated an intention to override the devolution settlement. I am sure that the Minister is concerned about that and I hope that he, with his known support for devolution, will change that policy in the Bill and accept the amendment.
The Minister may insist that this reservation amendment is unique: it is the only amendment in which we are seeking to go further than the Scottish settlement. I concede that. This should not, however, be taken out of context. It is precisely because the Government of Wales Act that I took through Parliament in 2006 has allowed the National Assembly for Wales and the Welsh Government to develop and foster unique relationships with public sector employers and trade unions that we find ourselves in this position. The UK Government are making a clear and in some ways remarkably transparent move to go beyond overriding decisions that the Welsh Government have taken since 2011 and deliberately take back powers because they are unhappy about decisions taken and the judgment of the Supreme Court—a matter to which I will return. I believe that this is an attack on the heart of the Welsh devolution settlement. The employment reservation is only one of many that other noble Lords have raised on this deeply flawed Bill—but it is an important one.
Over the past nearly 20 years, the Assembly has earned its place in the public consciousness. As we know from the referendum in 2011, the Welsh public have overwhelmingly endorsed the approach taken by the Assembly and confirmed their desire for public services in Wales to continue to be run from Wales. The Conservative Party supported the 2011 referendum, and the public were asked in that referendum whether they wanted the Assembly to make laws on all matters in the 20 subject areas it had powers for. At the top of that list were education, health, housing and local government—the very devolved areas specifically affected by this reservation. It is incongruous in the extreme to think that the argument put forward in another place by the Secretary of State that—I paraphrase—the 2006 Act never intended to give powers over employment matters in the devolved public services is a reason now to claw them back.
There have been many positive developments by the Welsh Government in their relationships with their social partners in the public services, including the Partnership and Managing Change agreement, signed up to by all public service employers and trade unions, the memorandum of understanding in local government and the implementation of the two-tier workforce code. We have been fortunate in Wales not to have seen a difficult and divisive strike by junior doctors. We might think that to be no accident. It comes out of precisely the culture made possible by the circumstances that flowed from the 2006 Act that this Bill now seeks to reverse.
All of these things have been possible because of the social partnership structures in place to ensure that the difficult decisions facing our public services at a time of austerity are worked through from the beginning with employers and trade unions round the table. All of this has been possible because the legislative framework has permitted this flexibility.
The legislative competence over the delivery of public services is undoubtedly devolved to the Assembly. There is no question about that. The Government’s own legal advice during the passage of what is now the Trade Union Act demonstrated that. The differentiation that must be drawn here is between collective bargaining over employment law matters—which it is widely agreed should be maintained at an England and Wales level—and industrial relations that intimately impact upon the day-to-day discussions to enable change and flexibility in the delivery of the services that affect the people of Wales.
I turn briefly to the Trade Union Act, for it is here that the UK Government appear to have developed their principled opposition by allowing the Assembly to retain its current legislative competence over industrial relations. During the passage of that Act in this House I referred to the Supreme Court judgment on the Agricultural Wages Board in 2014. Their Lordships made crystal clear their view that even though employment law was a reserved matter—I am not contesting that in this amendment—nevertheless the operation of services devolved to Wales, in this case agriculture, was a matter proper to the Welsh Assembly to legislate upon. The Supreme Court upheld that view.
The Welsh Government have made clear their intention to legislate in relation to three devolved aspects of the UK Trade Union Act 2016. The first is the administration costs of check-off, the means by which trade union subscriptions are automatically checked off in the payroll system in devolved public services—and in those services exclusively. The other aspects are the 40% overall support threshold for important public services and powers to regulate facility time. These are all matters that affect industrial relations in Welsh public services. They do not impinge upon employment rights and duties. In other words, the main contours of employment law remain a reserved matter. Rather, the Government are interfering with the legislative competence of the National Assembly and the Welsh Government to deliver effective public services through social partnership. Surely that cannot be right.
The effect of this amendment would be to provide an exception to the legislation as drafted to ensure that the Assembly retains its legislative competence—a competence it now has—over terms and conditions of service for employees in devolved public services and over industrial relations in such services. It is consistent with both the Wales TUC and the Welsh Government’s stated policy, which is not to break up England and Wales collective bargaining and to agree that employment rights and duties remain an area reserved to the UK Government—I stress this point. But it seeks to ensure that the Assembly maintains the legislative flexibility that it currently has to influence employment and industrial relations in the devolved public services over which it and the Welsh Government maintain legislative policy and fiscal control.
I hope that the Minister is listening carefully. I repeat that the amendment does not challenge the Government’s position that employment law covering such matters as strikes, unfair dismissal, health and safety and so on should be reserved. Indeed, it does not challenge the reserved status of any of the 17 employment Acts listed in Section H1 of new Schedule 7A on pages 68 and 69. They are all listed, ranging from employers’ liability to pneumoconiosis, the Trade Union and Labour Relations (Consolidation) Act 1992, the Employment Rights Act 1996 and so on. It does not seek to challenge any of them or to contest that they are reserved matters. I appeal to the Minister to reconsider the Government’s policy and to adopt a practical, common-sense stance in line with that of the Welsh Government and the Assembly.
When the Government claim to be marching in step with the Assembly on progressing greater devolution, surely there is nothing to be gained by confrontation on the matter of how public services in Wales are run. For confrontation between the Assembly and Westminster there will certainly be if the Bill is not amended—almost certainly also leading to another unedifying dispute in the Supreme Court. I hope that the Minister will accept this point and be conciliatory in his response so that we can move forward together, reserving properly reserved matters of employment law to the UK level but ensuring that the Welsh Government can run their public services and the industrial relations that are so crucial to those services in the way they choose to do in keeping with the devolution settlement.
Baroness Finn (Con)
My Lords, the key purpose of the Wales Bill is to provide clarity over powers and accountability of those powers. The introduction of the reserved powers model makes clear what is devolved and what is reserved so that people in Wales know who is responsible for what. It is worth emphasising that the need for clarity lies at the heart of the Bill.
Employment law and industrial relations law are clearly reserved matters. It would be unworkable to have different employment laws applying in the different jurisdictions of Great Britain. This issue was also considered by the Smith commission for Scotland, and both the Smith commission and the Silk commission recognised the importance of having a single employment regime. Both concluded that employment and industrial relations law should remain reserved and neither recommended any sort of exceptions.
I appreciate that the noble Lord, Lord Hain, is not asking for the devolution of all employment law, the core issues of which will remain reserved, and I apologise to the noble Lord if I was not clear on this point when I spoke at Second Reading. The noble Lord and the noble Baroness, Lady Morgan, explained during the passage of the Trade Union Act 2016 that industrial relations law in devolved public services is a devolved matter. That Act is about employment law and industrial relations. The Government have consistently argued that these are reserved matters and that the Act will apply consistently across the whole of Great Britain.
This amendment would lead to the unwelcome creation of a two-tier system of employment rights in devolved public services as well as a regrettable reduction in clarity over industrial relations powers. The Wales Bill introduces a reserved powers model precisely to bring more clarity to the Welsh devolution settlement and the effect of the amendment would undermine that primary intent. I therefore urge that the focus now should not be on yet more interminable wrangling about where powers lie. The focus should instead be on the efficient delivery of quality devolved public services on which the Welsh people rely.
Lord Elystan-Morgan (CB)
My Lords, I very much regret that I must disagree respectfully with the submissions of the noble Baroness. Looking at it in a very narrow constitutional context, the issue is a massive irony. On the day the Supreme Court unanimously gave its judgment in the agricultural workers’ wages case, there was an epoch-making decision that changed the whole face of Welsh devolution. Until then, people had thought devolution was a fairly limited matter, limited to the specific expression of matters transferred, minus matters that were reserved. Nobody had conceived of what we might call the massive silent transfers, with which the decision of July 2014 was involved.
The irony we face is that that is the state of the law. It was the unanimous decision of the Supreme Court. There is no appeal from it. That is the state of the law at present. If the Bill passes in its present form there is a massive row-back, diminution of status and deduction of authority as far as Wales is concerned compared with the decision. I know I need not press the point with the Minister, who is an excellent lawyer and well understands this matter. If there is no change in this matter, there is a massive diminution of authority for Wales compared with that decision. That is the irony.
When the then Prime Minister, Mr Cameron, stood, as noble Lords will remember, in the grey dawn in Downing Street after the Scottish referendum—which was after the Supreme Court decision we are referring to—and said that Wales is at the very heart of devolution, what if he had said, at the same time, “Mind you, there’ll be far fewer rights for Wales when we’ve finished with the Bill than there are at present”? What would people have said? That is exactly the situation I put to the House. It is so plain and obvious that I do not think there can be any controversion regarding it at all. Although one may say it is politic to change the situation, it means doing so in such a way that would diminish the rights of Wales relating to devolution massively.
Lord Murphy of Torfaen (Lab)
My Lords, I support the points made by my noble friends Lord Hain and the noble Lord, Lord Elystan-Morgan. I, too, spoke during the passage of the then Trade Union Bill. I hope the Minister will reply to the debate with greater knowledge of the devolution settlement than his colleague did. Inevitably, his ministerial colleague looked at it from the point of view of employment throughout the whole of the United Kingdom. This is not about that, however: my noble friend made it absolutely clear that employment law is reserved. This is about public services in Wales and how industrial relations operate within them.
Since these public services are wholly and exclusively devolved, so should be the modest industrial relations consequences that flow from that. We are talking not about strikes, but about the possibility of public bodies allowing their workers to have their wages docked for trade union subscriptions and about allowing public workers to have full-time officials paid for in those organisations. These are not revolutionary or tremendously difficult issues; they are issues that affect public services. The constitutional point that the noble Lord, Lord Elystan-Morgan, made is crucial to this, because it strikes at the heart of the devolution settlement in Wales. That is why the Welsh Assembly is taking it so seriously that it has promised it will legislate to change the trade union law in so far as it affects public services in Wales. That could be avoided at a stroke were the Government to agree to my noble friend’s amendment. They probably will not, but they will cause a huge amount of trouble to build up in the months and years ahead.
In the agricultural workers’ case, the Supreme Court made it clear that the service was devolved to Wales and that the industrial relations aspect of it was therefore devolved as well. Nothing could be clearer than that, so why are we entering a war with the Welsh Government and the Welsh Assembly on this issue? It is a pointless war which will not be won. I hope the Minister will give some hope to us. If he does not, I am sure the issue will be raised again on Report. If the amendment is unsuccessful then, the Welsh Assembly will pass a law and the Supreme Court might become involved. Why are the Government doing this when there is no need for it? The public services are devolved. I urge the Minister to think carefully about his reply.
Baroness Randerson (LD)
My Lords, I have put my name to the amendment because we need to establish a clear principle here: if the Welsh Government and Welsh Assembly are funding a service, they should have an element of control over the terms and conditions of their employees who are running it. It should come as no surprise to anyone here that I hold that view, because I spoke on this matter during the passage of the Trade Union Bill.
The Welsh Assembly has long had considerable powers —for example, over doctors’ pay, terms and conditions. The doctors’ contract could in principle be completely different in Wales from that in England. It is not, for reasons of pragmatic certainty and manageability, but it could be. I see that the Government have signed an amendment tabled by my noble friend Lady Humphreys on teachers’ pay and conditions. That is very much along the same lines as the issues that we raise in this amendment.
The Assembly effectively gained such powers after the agricultural wages issue was referred to the Supreme Court. I was in the Wales Office at that time. I am sure I came to this House and told noble Lords that we firmly believed that the issue of agricultural wages was not devolved, but the Supreme Court found otherwise. The noble Lord, Lord Hain, was probably quite surprised by the Supreme Court’s judgment, too; I do not think he believed that he had devolved agricultural wages or any other issue of that nature in the 2006 Act. The Supreme Court’s interpretation of it is not in some way unmanageable or at odds with everything else; it can be viewed as completely consistent with other aspects of the Assembly’s work.
I ask the Minister to think about the issue of trust, of what it will look like in Wales, if the Government try to row back on what has now been accepted as part of the powers of the Assembly. I urge the Government to think again.
Baroness Humphreys (LD)
My Lords, I shall speak to Amendment 74 in my name and that of my noble friend Lord Thomas of Gresford. I am grateful to the noble Baroness, Lady Morgan of Ely, and the Minister for adding their names to the amendment, which will see power over teachers’ pay and conditions transferred to the National Assembly. I draw the Committee’s attention to my interests as a former teacher and my current membership of a teachers’ union.
I am sure that all noble Lords agree that the present system of teachers’ pay and conditions has served us well, with a clarity on pay scales that a single system has bought across both England and Wales. However, the system is a creature of its times. It was created in the days before devolution when a single system of education operated across England and Wales. Now our two education systems have diverged, with England moving to academisation and free schools, resulting in a system where English schools are no longer required to comply with the school teachers’ pay and conditions documents. It is more than likely that the Government’s announcement that they intend to introduce more grammar schools in England will contribute to further differentiation in salaries, as the new grammars attempt to recruit the very best teachers. Meanwhile, a fully comprehensive system still exists in Wales and the Cabinet Secretary for Education has vowed that there will be no grammar schools in Wales on her watch. Also, of course, Wales still fully complies with the teachers’ pay and conditions documents.
However, this places restrictions on the ability of the Welsh Government to respond to circumstances which arise. There are difficulties, for example, in recruiting head teachers in rural Wales and retaining staff in village schools. Devolving powers over teachers’ pay to the National Assembly would allow the Cabinet Secretary for Education and the Welsh Government the flexibility to begin to address these and other concerns.
My party has long been in favour of the devolution of teachers’ pay and conditions and, following our submission to the Silk commission, we welcomed the commission’s clarity in 2014 when it determined that teachers’ pay and conditions are an integral aspect of the school system, that they should be closely related to the devolved education function and that they should be devolved to the National Assembly. In recent days there has been some speculation in the Welsh media about the outcome of this debate today, with a teachers’ union voicing some doubts about the wisdom of the devolution of this power. I remind your Lordships, though, of the words of the general secretary of the Welsh teachers’ union, Undeb Cenedlaethol Athrawon Cymru—and here I declare an interest as someone who has retained her membership of that union. Speaking after the publication of the Silk report, she said:
“At a time when education policies in Wales and England are diverging at an increasing rate there’s little point in preserving a joint system of pay and conditions. It’s a power that’s already devolved in Scotland and Northern Ireland, and we’re extremely pleased that the Commission has made an unambiguous recommendation on the matter”.
It appears to me that that is the crux of this debate. We cannot continue to treat Wales differently from Northern Ireland and Scotland. The time for parity in these powers over teachers’ pay and conditions for all three devolved nations has surely arrived. In the debate on the second day in Committee in the other place, my honourable friend the Member for Ceredigion, among others, spoke to a similar amendment, which made the case for the devolution of powers over teachers’ pay and conditions. The Secretary of State’s response gave some comfort to those who spoke in favour of the amendment. He said,
“in principle I am in favour of devolving teachers’ pay and conditions, but there is a case for further discussions between the UK Government and the Welsh Government about how that can best be achieved”.—[Official Report, Commons, 11/7/16; col. 91.]
I would be very grateful if the Minister, when he speaks to this amendment, would outline the discussions that have taken place between the two Governments on this matter. I would like to give him the opportunity to formally inform the House whether the discussions have resulted in an agreement that the powers over teachers’ pay should be devolved to the National Assembly for Wales.
Baroness Morgan of Ely (Lab)
My Lords, I support the amendment moved by my noble friend Lord Hain. The Welsh public sector workforce is the linchpin in ensuring that Welsh public sector authorities carry out their functions and provide services to the public. There is a well-recognised link between good employment practices and industrial relations within authorities and contractors and the quality of the services they provide to the public.
Since devolution, the Welsh Government have led with a distinct vision for public services, rooted in the principles of social partnership. These principles have guided the development of public service delivery in Wales, which is now distinct from that of England. As many noble Lords have noted, this amendment would not undermine the shared framework and protections in respect of employment and industrial relations, but would allow the Assembly to augment these where appropriate to support the effective delivery of devolved public services by Welsh public authorities. I ask the Minister how he thinks people based in London can have the first inkling of what is happening in our schools and hospitals, which are devolved.
For devolution to be meaningful, the Welsh Government must be able to continue to pursue social partnership, defining the relationship between public service employers and employees with integrity, transparency and trust. In proposing this reservation, the UK Government are seeking to divorce the terms of employment and industrial relations in public services from the delivery of those services. The reservation will fundamentally weaken the existing powers of the Government of Wales Act and will prevent Welsh Ministers exercising their legitimate functions prescribed by the Bill on public services. We know this because a leaked letter from the government legal opinion suggested that we currently have the rights over these powers.
I echo the point made by my noble friend Lord Murphy: let us avoid a future reference to the Supreme Court. This was supposed to be the final full stop in the whole legislative framework for the devolution settlement for Wales. If this goes through, I assure your Lordships that this will be not the full stop but the beginning of another battle.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank noble Lords who participated in the debate on this part of the Bill concerning employment law. I thank the noble Lord, Lord Hain, for his very kind words in opening the debate.
To put this in perspective, I think it is common ground between the noble Lord, Lord Hain, and I that employment and industrial relations law is a reserved area. I am not sure that that view is shared by the noble Baroness. She seemed to be suggesting that somehow our reservation meant the end of civilisation as we knew it. It is fundamental to the country that we live in. The UK Government believe that the underlying legislative framework concerning rights and responsibilities in the workplace must be reserved. I believe as much as anyone does in good employment practice. I worked in the public sector in Wales before I went into the Assembly. I was a member of a trade union. I do not think I can still be a member of that trade union or I would be. It is imperative that we have good employment law and good industrial relations. I would not contest this. This is a very important area, but we want a simple, unified system in Great Britain. As the noble Lord acknowledged, this is not something that is devolved to Scotland. It was not considered by the Smith commission or the Silk commission and it was not part of the St David’s Day process.
The system we have allows workers to be clear on their rights, whether they are in the public sector or the private sector, in England or in Wales. This is a fundamental principle and I cannot accept that the law underpinning the terms and conditions of public sector workers should be different from the law that underpins the rights of other workers. Whether that leads to better rights, more rights or worse rights, it seems fundamentally wrong. It is important to have common minimum standards which apply to all workers throughout Great Britain to minimise uncertainty and cost for both workers and employers. This is a matter of employment law; it is not about public service delivery.
Furthermore, it seems clear to me that if public sector employers in Wales, which would include the Welsh Government and public sector authorities, want to grant more favourable wages or more holidays then they are able to do so. They can do that presently and there is no question of it being taken back. Also, the judgment on the agricultural wages Act in the Supreme Court is an exception to the reservation. There is no question of that being clawed back as that specific piece of law remains.
If we had a diversified system of rights, workers might be reluctant to pursue the best progression opportunities in their organisation because they could get better rights in the private sector or the public sector—one or the other. They may find it more difficult to undertake collective bargaining and make their voice heard in isolation from colleagues in similar roles in Wales or the rest of Britain. I certainly believe in having strong industrial rights and strong employment rights—and obligations, too—but this has to be unified. As I said, both the Silk and Smith commissions came down in favour of a single employment regime, such as this, and there is nothing to prevent the Welsh Government or devolved public authorities agreeing specific arrangements with their staff, provided that they meet the requirements of employment and industrial relations legislation which apply across Great Britain.
The noble Lord, Lord Murphy, suggested that this amendment did not concern strikes. I am sure that I heard the noble Lord, Lord Hain, say that it related to altering the threshold, so it is about strikes and, as drafted, would certainly include the possibility of doing that. The Government could not sign up to that, nor to different rights on check-off or facility time. The rights should by all means be generous, but they should be unified across the country. I do not see that insisting on this is somehow apocalyptic in the way that some noble Lords suggested. The reservation of employment law ensures that there is a minimum floor of rights to offer workers key protections. At the same time, it recognises that each workplace is unique by allowing employers to provide additional pay or holidays in the public or private sector, if they want to do so.
Amendment 74 was put forward by the noble Baroness, Lady Humphreys, for the Liberal Democrats, and I have added my name to it for the Government. I am not sure whether that makes it an additional government amendment, but we are in agreement with removing the reservation relating to teachers’ pay. This has been a key priority for the Welsh Government and we are very happy to support this amendment. We have been listening on teachers’ pay and are content to support the noble Baroness’s amendment.
In relation to employment law, because we see specific difficulties regarding different rights in the public sector, some of which relate to the calling of strikes but do not affect pay and holidays—which the public sector can negotiate quite separately, as it does now—I urge the noble Lord, Lord Hain, to withdraw his amendment.
Lord Hain
My Lords, can I express my severe disappointment at the change of tone in the Minister’s delivery? The rest of his responses to the amendments moved by my noble friends have been genuinely positive. He has conceded where he could and stood his ground where he could, but within the framework of the devolution settlement in which he believes, as I do. On this amendment, I do not mean to sound insulting, but the way that he came across was, I felt, like he was reading out a prepared text—no doubt supplied by the Wales Office in Whitehall—that simply does not recognise the reality of this amendment.
The noble Baroness, Lady Finn, said along with the Minister that there would be the creation of a two-tier system of employment rights. How is that possible, when the 17 Acts and regulations which are already listed as reserved matters on pages 68 and 69 of the Bill would remain reserved under the terms of this amendment? How is it possible that we would create a two-tier system of employment rights when all the employment rights would remain reserved? We are discussing the operation of industrial relations practice in Welsh public services, not in the Welsh private sector. There is no exception provided for the Welsh private sector, which is the largest area of employment in Wales. The amendment is simply about devolved public services and reserved matters and many others matters covering all the issues. I can read them out to remind the Minister, but they are there.
Lord Bourne of Aberystwyth
The amendment would insert:
“Terms and conditions of employment and industrial relations in Welsh public authorities and services”,
so the amendment is not just about industrial relations.
“Terms and conditions of employment”,
is also contained in the amendment.
Lord Hain
I understand that. I understand my own amendment. It refers to public services.
The Minister is saying that there should be common standards. Wales already has entirely differently configured public services. That is the beauty of devolution. There is a learning experience between the different constituent parts of the United Kingdom about where best practice occurs. In some areas, it is in Wales. We have not had a doctors’ strike. I do not think we have had the same teachers’ disputes. We have not had the same local government disputes. We have not had the same firefighter disputes. Why is that? It is because these are devolved public areas run in a different way in Wales, with a different system of employee/employer relations provided for—we believed until this Bill tried to overturn the provisions of the Supreme Court ruling—in the devolution settlement. I echo the great eloquence and legal authority of the noble Lord, Lord Elystan-Morgan, in saying that this is massive diminution—to use his phrase—of the authority of Wales. Indeed, it is a direct challenge to the Supreme Court, where it may well end up. As my noble friend Lord Murphy said, I do not think that is where the Minister wants to be in his private view of the future, even if that is where he is going to end up if he sticks to this stance.
The noble Baroness, Lady Randerson, underlined that the Supreme Court caught the UK Government by surprise. She was very frank about that. It perhaps even caught me by surprise by interpreting the devolution settlement in the way that it did in a very convincing way. I hope that the Minister recognises that he is now seeking to undermine that.
I remind the House of what my noble friend Lady Morgan of Ely said; she said that the terms of the Bill will prevent Welsh Government Ministers exercising their legitimate functions in public services in how they treat their employees and how they operate their industrial relations from training time to facility time to all the matters that are essential to running public services in Wales effectively.
My legal advice is that the Minister’s position is flawed. He may deploy government lawyers to contest that, and then we will see in the courts. We will have the Wales TUC and the Welsh Government and, I suspect, all the people of Wales right behind them challenging the UK Government’s position.
The question I shall conclude on is: are public services in Wales devolved or not—not just the policies, but the delivery, which depends on employees and the relationships between employees in the public sector and their managers being very good? That requires good industrial relations, and Wales has been able to achieve that. Wales would continue to be able to achieve it under the devolution settlement if this amendment were accepted.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
I am not clear whether the noble Lord wishes to withdraw the amendment or press it.
Lord Wigley
“ExceptionWelsh language broadcasting and other Welsh language media.”
Lord Wigley (PC)
My Lords, Amendment 67 seeks to devolve Welsh language broadcasting and Welsh language media to the National Assembly. There is currently an anomaly in that the Welsh Government have responsibility for and powers relating to the Welsh language, but no powers whatever over S4C or Welsh-language media, which are perhaps the most significant tools in promoting the Welsh language in this day and age. I should perhaps mention that I served on the S4C Authority’s board for three years during the last decade.
The survival of the Welsh language is a miracle, but it is a struggle that has to be perpetually refought and re-won from year to year. The language is important not just for its own sake but because it is the transmitter of our history, folk memory and culture from generation to generation, and a conveyor of our values and experiences as a nation. Welsh belongs to all of Wales—to those who speak it and those who, by accident of geography and history, do not. Its associated culture depends, in part, on language transmission, and its survival as a living part of our identity. It is no coincidence that our national anthem, so much loved by Welsh speakers and non-Welsh speakers alike, concludes with the line:
“O bydded i’r hen iaith barhau”—
“O that the old language should flourish”.
Lord Morgan (Lab)
My Lords, I strongly support the amendment. Language is of course central to the Welsh identity. More than that, this television channel is almost alone. In so many ways, Wales is less adequately prepared in terms of cultural media than Scotland is. There is effectively no Welsh press; there is certainly scarcely a Welsh-language press. I think Y Cymro still appears once a week but the Welsh-language press is minimal. Therefore the television service, particularly Sianel Pedwar Cymru, the Welsh channel, is central in a way that is true for no other sub-nationality.
What my noble friend Lord Wigley is proposing is precisely what Silk proposed. Some time after 2006, when we had the previous system, I remember sitting through a debate discussing whether Welsh-language matters were a competence of the Welsh Assembly and thinking, “Who in heaven’s name does have competence other than the elected representatives of the Welsh people?”. This seems a central matter that goes to the heart of devolution and preserving and celebrating difference in Wales. I strongly support the amendment.
Baroness Randerson
My Lords, I have always felt that Welsh-language broadcasting should be part of the general broadcasting pool, not isolated from the rest of broadcasting. That way, I felt, there would be cross-fertilisation and Welsh-language broadcasting would not be seen as out of the usual in broadcasting.
On balance, though, it is clear that S4C has been under threat in recent years. Year after year, the Wales Office has to ride to the rescue of S4C by explaining to a Minister elsewhere in government why Welsh-language broadcasting is important and significant, and why it has a totemic importance in Wales well beyond the relatively small amounts of money that the Government are trying to cut from its annual amount. Indeed, if the control of S4C were devolved to the Welsh Assembly, I think S4C would still find itself under threat because it is responsible for spending a significant proportion of the total amount of money spent every year on the Welsh language. There are lots of other aspects of huge importance to the development of the Welsh language that would want part of that total amount of funding.
I do not think devolution is necessarily the answer but there needs to be a new settlement, a new concordat, or at the very least some kind of agreement between the UK Government and the Welsh Government to ensure that, year after year, the position of S4C is secure, not just in law and in theory but financially. The financial position of S4C should be secure so that there is not this constant fire sale going on. I therefore urge the Minister to look at a suitable solution to what I am sure he will acknowledge is a recurring problem.
Lord Murphy of Torfaen
My Lords, on more than one occasion, I probably rode to the rescue of S4C myself, and I very much agree with the noble Baroness, Lady Randerson, about the financial dangers unless we have guarantees. At the moment, the Welsh language is rightly devolved to the Welsh Assembly, so it would seem logical—would it not?—that Welsh-language broadcasting should be also. There are two issues that we should consider. First, Welsh-language radio broadcasting would presumably stay with the BBC. More significantly, were S4C to be devolved to the Welsh Assembly and the Welsh Government, there should be a proper financial settlement to go with it. At the moment, the United Kingdom Government provide the funds for S4C; were it to be devolved, that financial settlement absolutely must be devolved with it.
Baroness Morgan of Ely
My Lords, I shall speak briefly on the issue of devolution of S4C. In this rapidly evolving digital environment, it would not be sensible to attempt to devolve responsibility for broadcasting in its entirety to Wales. Broadcasting institutions play a vital role in creating that common cultural citizenship for people across the UK. That would not be strengthened by any attempt to define responsibility for them among its constituent parts. We should acknowledge that the broadcasting landscape is changing very rapidly and that there is no guarantee that the current structures will remain in future. In the meantime, it is vital that the UK role is reinforced by measures aimed at strengthening the particular contribution which broadcasters make in each of those constituent parts: improving the accountability of UK broadcasting institutions to the National Assembly and to Welsh viewers and listeners is vital. This improved accountability can best be delivered by strengthening the position of Welsh Ministers with regard to appointments made to the regulatory bodies governing broadcasting in Wales—I am sorry if I have veered off the point of S4C directly, but that is an important point to underline.
I now turn to the issue of devolving responsibility for S4C to the National Assembly. At first glance, it seems an absolute no-brainer. Like the noble Lord, Lord Wigley, I have worked for S4C: my first ever job was to be responsible for photocopying the “Fireman Sam” scripts. However, unless there are strong safeguards for the continued overall funding of the channel, devolution carries great risks. That overnight decision to remove the vast majority of S4C funding from the Department for Culture, Media and Sport to the BBC with absolutely no discussion with the channel was an immense insult. As the BBC is not devolved, S4C’s fate now lies to a large extent with the BBC. The current system is certainly unsatisfactory but, until we have a clear financial commitment from the Government to give the Welsh Government the money, it would be unwise to risk this great institution of broadcasting in Wales.
Lord Elis-Thomas (Non-Afl)
My Lords, as we have heard, we currently have substantial change in the structure of broadcasting. The BBC is going through major changes. The BBC Trust is moving out as a way of managing the BBC; personally, I welcome that. Ofcom is now playing a far stronger role in the whole question of content at the BBC. As part of the BBC structure, there will be from now on not only a director for Wales but also a member of the BBC board. So we have a new system of devolution internally inside the BBC. I was there at the time of the discussion with the noble Lord, Lord Crickhowell, and we were surprised at what we were offered by the then Government, which was the model of a traditional broadcasting authority. I have never believed that that was what was really required, and I still believe that we need to look at some stage at the governance of digital platforms in Wales and the rest of the UK, as well as internationally. We need to look at these issues in a new way.
I am anticipating what the Minister is going to say. Far be it from me to disagree with my noble friend on this issue, with his experience as someone who was a member of the S4C board, but now is not the time to disrupt relationships; now is the time to strengthen them—and to strengthen the relationship practically between S4C as a production body and BBC Wales and the other platforms active in digital production in Wales.
Lord Thomas of Gresford
My Lords, most of the debate has so far referred to the necessity to devolve control over Welsh broadcasting to the Welsh Assembly, and the arguments have all been made in structural terms, but I want to put in a word for S4C. It is very good. Its children’s programmes in the morning are outstanding and are carried worldwide in various languages. Its farming programmes and programmes about the natural world are also outstanding, and the sporting coverage probably takes up more of my weekends than anything else on television. In fact, I spend quite a lot of time in Scotland, and when I am there my wife is amused to see that, much of the time, I am watching S4C. I am saying nothing about Scottish broadcasting, but there we are. It is not just the sport, of course—it is the musical tradition as well. It is heartening to see so many young people taking part in classical music and choral works, as well as in much more modern music. It is excellent, and we cannot allow this debate to come to an end without making that clear.
Lord Elystan-Morgan
My Lords, I greatly appreciate the kind and generous words of the noble Lord, Lord Thomas of Gresford, on S4C. I support the amendment completely, but there is a possible compromise, if I may be so bold as to suggest it. Many months ago, when the question of the BBC charter was mentioned, I asked the Government whether they would be prepared to have in-built in the charter a guarantee on the adequate financing of S4C as well as on its independence and future. The reply that I received was somewhat anodyne, but I was assured that so great was the affection of Her Majesty’s Government for the Welsh language that I had nothing to fear at all. It may be that that is a compromise that would guarantee effectively the future of S4C, its independence and its finance, and I commend it to the noble Lord.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord, Lord Wigley, for moving this amendment on Welsh language broadcasting and other Welsh language media—and I note that that is the exception that is set down. I do not think that it is limited to S4C, as some noble Lords have assumed. It is not. I join other noble Lords in applauding the work of S4C; it is an extraordinarily strong and effective institution that does marvellous work for Wales in relation to the language and more broadly, and it has totemic significance and real significance and generates jobs in the Welsh media sector, which is important.
As the noble Lord said, it is absolutely right that the Silk commission recommended that funding the public expenditure element for S4C should be devolved to the Assembly. It was part of its recommendations but was not taken forward in the St David’s Day proposals: I understand that it was considered in that process but there was no consensus round it. It is also worth noting that as recently as June last year, the Welsh Government said, through Minister Ken Skates, that they could not support the devolution of broadcasting. Admittedly, that was said across the piece but it was the general position.
Where does that leave us? I will try to give an update on the financial commitments made by the Government, in response to the noble Lord, Lord Elystan-Morgan, and other noble Lords. The Government have agreed that funding for S4C—as opposed to Welsh language broadcasting—would be protected in 2016-17 at its current level of £6.8 million. The settlement for Exchequer funding in following years was set out at the 2015 spending review, and in September the BBC confirmed that it will protect licence-fee funding for S4C at £74.5 million until 2022. That is beyond the length of this Parliament, as noble Lords will be aware. The Government then committed to a comprehensive review of S4C in 2017, covering its remit, funding and governance to ensure that the broadcaster can continue to meet the needs of Welsh-speaking audiences in the future. I will endeavour to find out if we have any further details on the process and will write to noble Lords to update them on what the timetable is.
Broadcasting is different from almost any other area of activity in that it is international, national UK and national Wales. I am conscious of the fact that, historically, many people have been quite keen to see S4C’s budget settled in Westminster because they thought it was safer here that it would be in Wales—I had better be careful what I say. I notice a change of tenor in that position. Given that the Welsh Government do not seem to be seeking this, and given that there was no consensus in the St David’s Day process, I will have a look at it. I am very content to discuss this with the noble Lord, Lord Wigley, and others to see if there is anything we can do to strengthen the position of S4C and the involvement of the Welsh Government—a point raised by the noble Baroness, Lady Morgan. I appreciate what the noble Baroness, Lady Randerson, has said on the issue of the difficulty of broadcasting. As I said, it is internationalised in many ways so is unique among activities.
I am very conscious of the fact that the noble Baroness, Lady Morgan, was photocopying “Fireman Sam” scripts at S4C, so spoke with great authority. My first job in life was loading Britvic bottles on a production line. We had very different experiences: the noble Baroness was more clerical and managerial than I was in those heady student days. I appreciate that this is an important area and I will have another look at it and speak to the noble Lord, Lord Wigley, to see if there is anything we can do to strengthen this position. I hope that, with that, he will be content to withdraw the amendment.
Lord Wigley
My Lords, I am grateful to all noble Lords who have taken part in this debate, which has brought out a number of issues relating to S4C. I am grateful to the Minister for his undertaking to look again at some aspects of this. On that basis, I beg leave to withdraw the amendment.
“176_ Proceedings and orders under Part 4 or 5 of the Children Act 1989 or otherwise relating to the care or supervision of children.”
Baroness Morgan of Ely
Baroness Morgan of Ely
My Lords, I draw the attention of the Committee to the immense overcomplexity that has been introduced in the Bill by the Government insisting on the arbitrary reservation of powers. This amendment refers to the reservation of births, deaths and places of worship.
The first thing that will strike your Lordships is the fact that the other great milestone in life, marriage, is not covered here, nor is civil partnership. These are covered by a different clause—Clause 174. Nor, indeed, is adoption mentioned in this clause. That is mentioned in Clause 175. I do not know about other noble Lords, but I always understood that registrars covered births, marriages and deaths. The separation of these functions conducted by the same registrars is another example of the unnecessary complexity of the legislation as drafted. It would have been just as valid to introduce an amendment to remove all the reservations of arrangements for registering births, adoptions, marriages, civil partnerships, deaths and places of worship. This would have brought Wales into line with Scotland and Northern Ireland, where these matters were not reserved in the 1998 Acts, reflecting the decision of Parliament to legislate separately for these matters in those jurisdictions since the introduction of such registration in the 19th century.
Although the basics of registration arrangements in England and Wales are the same, there are already significant differences between the two countries. The use of the Welsh language in registration is a distinctive feature of arrangements in Wales. At those key points in life’s journey at which legal registration is required, to be able to use one’s mother tongue is clearly a matter of great importance. Registrars are appointed by local authorities and work within their structures, and legislative responsibility for local government is, of course, devolved to Wales.
My amendment, however, focuses on removing the reservation of the registration of places of worship. This registration is different from the others in two respects. First, it relates to the registration of buildings used for a particular purpose—places of worship—rather than to the registration of life events of individuals—birth, marriage, death. Secondly, it is voluntary. We do not in England and Wales require that places of worship be registered, and the Places of Worship Registration Act 1855 makes that clear. However, such registration is required if a place of worship is to be registered for the conduct of marriages or civil partnerships, or to gain exemption from council tax or business rates.
Places of worship have always played a vital role in Welsh society, but since the Welsh Church Act 1914, which led to the disestablishment of the Church of England in Wales, now the Church in Wales, in 1920, the law of England and Wales has acknowledged that the religious situation in Wales is significantly different from that of England. The Welsh Church (Burial Grounds) Act 1945 continued that separation of law regarding ecclesiastical property in England and Wales. The law in Scotland and Northern Ireland has always been different from that in England and Wales, and so these matters were rightly not reserved in the Acts of 1998 relating to those jurisdictions. The removal of the reservation of legislative responsibility for the registration of places of worship in Wales is therefore an entirely logical step now that there is a National Assembly to legislate for Wales, when it is surely no longer appropriate for Parliament to continue to legislate for Wales alone on such matters.
The Church in Wales is not an established church, unlike the Church of England. However, its incumbents retain the role of registrars for marriages conducted in their premises, and its church buildings remain exempt from registration, as in England. These matters remain governed by the Welsh Church Act 1914 and subsequent legislation of this Parliament which relates only to Wales. Moreover, in spite of its being disestablished in 1920, the Church in Wales still retains a historic obligation in common law to marry parishioners simply on the basis of residence, whether or not they are members of the Church. Now that there is an elected National Assembly, which can legislate for Wales, again it would seem appropriate that the Assembly should decide whether—and, if so, how—to amend these arrangements in the future.
In 2001, the Welsh Government established the Faith Communities Forum, which enables them to consult all religious faiths and not just Christian churches in a formal way. An excellent relationship has been established through that forum. This Parliament has no such consultative mechanism specifically with faith groups in Wales, and the UK Government are regarded by many as rather remote when it comes to such matters. If these reservations are removed, we can be confident that the Welsh Government and the National Assembly will have the mechanisms in place to ensure that any future changes are made in consultation with faith groups and others, such as humanists, with an interest in these matters. I beg to move.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Baroness for moving this amendment in relation to the civil registration of births, deaths and places of worship. I have listened carefully to her argument. Civil registration functions, including the registration and administration of births, deaths, marriages, civil partnerships, adoptions and associated functions, and the registration of places of worship, are overseen by the Registrar-General for England and Wales, and the Government do not have plans to devolve any of these functions. Perhaps I may try to explain some of the difficulties that would arise in relation to devolution and answer some of the issues raised by the noble Baroness.
First, the noble Baroness raised the issue of the Welsh language, which is obviously very valid in relation to registration. However, it is already possible to register events in both English and Welsh where the events take place in Wales. The registration Acts, as extended by the Welsh Language (Wales) Measure 2011, the Welsh Language Act 1993 and the Welsh Language Act 1967 enable any person who can speak and understand Welsh to make a bilingual registration. Welsh local authorities, by virtue of their obligations under their Welsh language schemes, should provide registration staff who can speak, write and understand Welsh to accommodate citizens who desire this service.
The current position is that the Places of Worship Registration Act 1855 extends to England and Wales. Amendments 68 and 69 seek to separate civil registration functions by specifically devolving responsibility for the registration of places of worship to the Assembly. There are clear efficiencies in administering the responsibilities across England and Wales, and the inevitable cost of separating after over 150 years would appear to be disproportionate to any wider benefit.
The Registrar-General is an independent statutory officeholder—appointed under Section 1 of the Registration Service Act 1953—who exercises functions through the General Register Office, set up under Section 2 of that Act. As the arrangements are well established, there are significant links to, and dependencies on, the provision of civil registration in a unified system across England and Wales, including the use of a single computer system for all registrations. It works well in its current form and it does not make sense to separate out one element of it. I have not heard of any particular groundswell of support for a change in the law in relation to marriage in Wales. It is, in any case, not a devolved matter, and it is a very complex issue, as one can imagine, with the diverse faiths that we have in this country.
However, I can reassure the noble Baroness on one specific point. Looking at faith and integration in the devolved Administrations, I have already been in contact with the devolved Ministers in Scotland, Northern Ireland and Wales. I have arranged meetings so that we can discuss issues such as this, and I have had a positive response from Minister Carl Sargeant in Wales and from the other Ministers. We will be looking at issues such as this in the devolved forum, although I have to say that the issue of marriage law is not specifically a matter for the Department for Communities and Local Government; it is a matter for the Ministry of Justice.
However, it is a very wide-ranging issue because of the nature of the conduct of marriages. Some faiths’ marriages are recognised automatically if they take place in particular religious buildings—specifically, those of the Church of England, the Church in Wales and the Society of Friends, and synagogues—but that would not be true of other faiths as things stand. At some stage, this whole area probably will be looked at. However, as I say, this is not my specific ministerial responsibility, so I say that without being certain whether it is proposed at the moment. I do not think it is, but no doubt at some stage it will be looked at.
I am happy to discuss this further with the noble Baroness but, as I say, the Government have no plans to devolve this function. Therefore, I ask the noble Baroness to withdraw the amendment.
Baroness Morgan of Ely
My Lords, I will be very brief. I am not quite convinced by the argument that the separation would not lead to efficiency and cost savings—we could say that about almost all devolved areas of policy. The whole point here is that you need to respond to local needs. I am very happy to hear that the Minister has initiated the devolved forum to look at this, and I look forward to hearing more about that. It would perhaps be an idea for us to discuss this further. It is just another one of those things for which I can think of no good reason to retain it nationally. I have not been convinced that there is a good reason and so we will just have to agree to differ on that point. I beg leave to withdraw my amendment.
Baroness Morgan of Ely
Baroness Morgan of Ely
I am sorry, my Lords, but I seem to be monopolising things a little this evening. In moving Amendment 71, I will speak to all three amendments in the group. The first relates to the community infrastructure levy—a planning charge that was introduced by the Planning Act 2008 as a tool for local authorities in England and Wales to help deliver infrastructure to support the development of their area.
In Wales, local planning authorities currently have the power to charge a levy. These authorities all prepare local development plans for their areas, which include an assessment of their future infrastructure needs, for which the levy may be collected. The authority can set charges based on the size and type of the new development. It can set different rates for different geographical areas and for different intended types of development. The levy is intended to encourage development by creating a balance between collecting revenue to fund infrastructure and ensuring that the rates are not so high that they put development across the area at serious risk. The levy can be used for a variety of infrastructure projects, such as roads and transport, schools and educational facilities, and even flood defences, medical facilities and sports and recreation facilities. As long as these have been identified in the authority’s local development plan then it can address this issue and appeal to the fact that it can have a community infrastructure levy.
The Welsh Government argued for the devolution of the community infrastructure levy in their evidence to the Silk commission in 2013. The issue was not addressed by the commission and thus did not feature in the UK Government’s St David’s Day document. However, the levy is inextricably linked with the delivery of already devolved responsibilities. The Secretary of State has not, to my mind, made the case for reserving the community infrastructure levy and we believe that this reservation should be deleted.
On the issue of compulsory purchase orders, these are an essential facet of highways and planning, both of which are devolved matters. In addition, compulsory purchase orders are essential to education services, to housing provision and to the NHS. Again, these are all devolved. The reservation of compulsory purchase of land in the Wales Bill would constitute yet another rolling back of power on what was previously a silent subject. The proposed reservation, if implemented, would cause unnecessary difficulties across a range of devolved activities that are underpinned by powers of compulsory acquisition of land.
Reserving the whole subject of compulsory purchase of land would risk rolling back, or at least creating uncertainty about, powers over the range of legislative competences already noted. Reform proposals across all these areas that may require adjustments to land acquisition powers would be likely to run into concerns about whether such powers are ancillary and necessary within the meaning of paragraph 2 of new Schedule 7B, issues upon which we have already touched. As it stands, the reservation is wholly unjustified and wholly unexplained. In this context, we need more laser-like focus on the more limited set of issues on which a common England and Wales approach is really necessary.
Finally in this group, I address the issue of buildings. Executive functions to set standards for the design, construction and demolition of buildings through binding regulations have already been transferred, with some exceptions, to Welsh Ministers under a 2009 transfer of functions order. Reservation 186 narrows the current competence of the Assembly, while Clause 47 extends the executive functions of the Welsh Minister. Removal of this reservation would therefore achieve a closer alignment of executive functions and legislative competence in Wales. As things stand, should Welsh Ministers wish to change current primary legislation governing Wales in relation to building standards, a request would have to be made to the UK Government, proposals agreed with them and time found in the parliamentary calendar. This would be a sledgehammer to crack a nut.
I am wholly unclear as to why the UK Government think that the legislative framework for buildings in Wales can be amended only at Westminster. Again, this seems a wholly unjustified and narrow approach to the Welsh devolution settlement. Prior to this, a renowned constitutional expert said that the previous Wales Act covered everything except the kitchen sink. He added while considering this report that in this Bill, the Government have even reserved the kitchen sink. I hope that your Lordships agree that the Government have simply gone too far in pushing back Assembly powers. Will the Minister explain in particular why he thinks that,
“the regulation of … services, fittings and equipment provided in or in connection with buildings”,
needs to be devolved? I beg to move.
Lord Howarth of Newport (Lab)
My Lords, in warmly endorsing the case made by my noble friend Lady Morgan of Ely on the three amendments in this group, I shall add a word on Amendment 73 concerning the regulation of the design and construction of buildings. I shall illustrate why it would be unfortunate if this reservation were to be retained and why my noble friend is right to propose that this should be devolved. We have seen extraordinary vagaries in building regulation policy on the part of the Government of the United Kingdom. For example, the Government committed themselves to a requirement that all new homes should be designed to be lifetime homes by, I think, 2013. That was a commitment made in 2008, but when the moment came in 2013 and it had not been met, when the change to the building regulations was announced in 2015, the lifetime homes criteria were so diluted as to be rendered almost useless and ineffectual.
Let me explain what this is all about. Originally the Joseph Rowntree Foundation and subsequently the Habinteg Housing Association developed 16 design criteria to ensure that the design and construction of new homes is such that they can be easily adapted at minimal cost to become more accessible to people as their lives go on, as they become older or as they become disabled. It makes eminently good sense economically and socially, yet we have seen a reneging on the commitment that had previously been made. The same has happened with another commitment by government to require that new homes should be designed and constructed so as to be carbon neutral; this was to be achieved by 2016. It was hailed as a very progressive and excellent policy in the interests of the environment, but again in the same set of announcements in 2015 the Government reneged on the commitment, and of course it was a turning point that was deplored by everyone who cares about the environment. So what we have seen is a set of decisions on housing design made in Whitehall and at Westminster which have been detrimental to the environment, the construction industry, the architectural profession and surveyors, and detrimental to the interests of disabled and elderly people, all of which will add costs to social services and the health service because the longer you can keep people in their own homes, the better.
I do not want to elaborate on or labour the point any further except simply to say that whereas it is clearly the right of the Government of the United Kingdom, but regrettable when they use it, to march people up the hill and down again and to do these about-turns on policy, and to retrogress in terms of social and environmental policy, I cannot see why these processes should be inflicted on Wales. If Wales wishes to pursue a project to create carbon-free homes and build lifetime homes for the people of Wales, why on earth should it not be entitled to do so? This is just an instance of where I think it would be greatly to the detriment of Wales if the Government insist with the rigour they are applying at present on denying Wales sensible discretion on matters that on any reasonable basis could well be devolved and where we have actually seen the practical effect of policy as made in London being seriously detrimental.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Baroness, Lady Morgan, for proposing these amendments.
Amendment 71 would devolve to the Assembly competence to legislate for how infrastructure funding should be collected in relation to development. This is currently accomplished through the community infrastructure levy, which applies across England and Wales, and the mechanisms we use to raise funding for infrastructure to support development are undoubtedly important. I appreciate the points made by the noble Baroness and I am aware of the issues raised on the matter in the other place. In addition, the Welsh Government have argued persuasively in discussions with the UK Government that the community infrastructure levy should be devolved. I can therefore confirm that, as the Secretary of State announced on 31 October, we are content to devolve competence over the levy to the Assembly and I expect to table a government amendment on Report to achieve this. I hope that that is reassuring to noble Lords.
The noble Baroness, Lady Morgan, made some interesting points, when speaking to Amendment 72, about why she believes that the compulsory purchase law in its entirety should come within the legislative competence of the National Assembly and not be reserved to the United Kingdom Parliament. The debate has highlighted the lack of clarity that exists in the current devolution settlement. As compulsory purchase is a so-called “silent subject”, the United Kingdom Government and the Welsh Government have formed different views on the extent of the Assembly’s legislative competence in this area.
This reservation has been the subject of detailed and productive discussions between the United Kingdom Government and the Welsh Government. The United Kingdom Government consider that legislating on the general rules and framework of the compulsory purchase system, such as the compensation regime in the Land Compensation Acts, falls outside the Assembly’s current legislative competence. However, we accept there are arguments that the Assembly could confer or modify powers in legislation for bodies to acquire land by compulsion for devolved subjects. These would include powers for local authorities to acquire land for housing, planning or education purposes, among others.
I assure the noble Baroness that discussions between the two Governments on this reservation are at an advanced stage and appear to be going well. Discussions are fruitful. I would therefore like to reflect further on her points as the Government conclude their consideration of the extent of this reservation.
Amendment 73, also tabled by the noble Baroness, Lady Morgan, seeks to remove the reservation concerning building standards and building regulations. The noble Lord, Lord Howarth, also spoke with effect on this. Before responding to the amendment, I note that, through earlier transfer of functions orders and Clause 47 of the Bill, Welsh Ministers will have powers to make building regulations in respect of almost all buildings in Wales. There will now be parity in England and Wales as to buildings for which building regulations may be made by the Secretary of State and Welsh Ministers respectively. As drafted, the noble Baroness’s amendment goes considerably wider than this to devolve competence to the Assembly over building standards. I am aware that this devolution is being sought by the Welsh Government. There are some genuinely difficult issues here in terms of organisations currently exempted from the application of building standards in England and Wales. I am none the less happy to reflect on this further, with a view to returning to it on Report.
I hope I have been able to provide reassurance to the noble Baroness and I ask her not to press her amendments.
Baroness Morgan of Ely
My Lords, things are getting much better. We have had three positive replies. I thank the Minister for his constructive approach on those issues. We look forward to working with him much more closely on them in the next few weeks, and to new amendments coming, we hope, on Report. I beg leave to withdraw the amendment.
Baroness Humphreys
“(2) A provision of an Act of the Assembly cannot, unless it is an oversight provision, make modifications of—(a) section 146A(1) of the Government of Wales Act 1998, or(b) sections 2(1) to (3), 3(2) to (4) or 6(2) and (3) of the Public Audit (Wales) Act 2013 (anaw 3),or confer power by subordinate legislation to do so.(3) A provision of an Act of the Assembly cannot, unless it is an oversight provision and also a non-governmental committee provision—(a) make modifications of section 8(1) of the Public Audit (Wales) Act 2013 so far as that section relates to the Auditor General’s exercise of functions free from the direction or control of the Assembly or Welsh Government, or (b) confer power by subordinate legislation to do so.(4) An “oversight provision” is a provision of an Act of the Assembly that—(a) relates to the oversight or supervision of the Auditor General or of the exercise of the Auditor General’s functions, or(b) is ancillary to a provision falling within paragraph (a).(5) A “non-governmental committee provision” is a provision conferring functions on a committee of the Assembly that—(a) does not consist of or include members of the Welsh Government, and(b) is not chaired by an Assembly member who is a member of a political group with an executive role,or a provision conferring power by subordinate legislation to do so.(6) A person designated under section 46(5) to exercise the functions of the First Minister is treated as a member of the Welsh Government for the purposes of sub-paragraph (5)(a).”
“(d) the Joint Committee on Vaccination and Immunisation;(e) the Human Tissue Authority;(f) the NHS Business Services Authority or Awdurdod Gwasanaethau Busnes y GIG;(g) NHS Blood and Transplant or Gwaed a Thrawsblaniadau’r GIG.”
“(h) the Joint Committee on Vaccination and Immunisation;(i) the Human Tissue Authority;(j) the NHS Business Services Authority or Awdurdod Gwasanaethau Busnes y GIG;(k) NHS Blood and Transplant or Gwaed a Thrawsblaniadau’r GIG.”
“(f) any function of the Treasury under section 138(2) or 141(4),”
Lord Wigley
“Assignment of VAT
(1) The Government of Wales Act 2006 is amended as follows.(2) In section 117 (Welsh Consolidated Fund), after subsection (2) insert—“(2A) The Secretary of State shall in accordance with section 117A pay into the Fund out of money provided by Parliament any amounts payable under that section.” (3) After that section insert—“117A Assignment of VAT(1) Where there is an agreement between the Treasury and the Welsh Ministers for identifying an amount agreed to represent the standard rate VAT attributable to Wales for any period (“the agreed standard rate amount”), the amount described in subsection (3) is payable under this section in respect of that period.(2) Where there is an agreement between the Treasury and the Welsh Ministers for identifying an amount agreed to represent the reduced rate VAT attributable to Wales for that period (“the agreed reduced rate amount”), the amount described in subsection (4) is payable under this section in respect of that period.(3) The amount payable in accordance with subsection (1) is the amount obtained by multiplying the agreed standard rate amount by—10/SRwhere SR is the number of percentage points in the rate at which value added tax is charged under section 2(1) of the Value Added Tax Act 1994 for the period.(4) The amount payable in accordance with subsection (2) is the amount obtained by multiplying the agreed reduced rate amount by—2.5/RRwhere RR is the number of percentage points in the rate at which value added tax is charged under section 29A(1) of the Value Added Tax Act 1994 for the period.(5) The payment of those amounts under section 64(2A) is to be made in accordance with any agreement between the Treasury and the Welsh Ministers as to the time of the payment or otherwise.”(4) The Commissioners for Revenue and Customs Act 2005 is amended as follows.(5) In subsection (2) of section 18 (confidentiality: exceptions) omit “or” after paragraph (j), and after paragraph (k) insert “, or(l) which is made in connection with (or with anything done with a view to) the making or implementation of an agreement referred to in section 117A(1) or (2) of the Government of Wales Act 2006 (assignment of VAT).”(6) After that subsection insert—“(2A) Information disclosed in reliance on subsection (2)(l) may not be further disclosed without the consent of the Commissioners (which may be general or specific).”(7) In section 19 (wrongful disclosure) in subsections (1) and (8) after “18(1)” insert “or (2A)”.”
Lord Wigley
My Lords, in view of the time, I shall try to truncate my comments. The amendment would give the National Assembly as of right a proportion of VAT revenues and so give Wales the same tax power in this regard as enjoyed by Scotland. It would also open the possibility, post Brexit, for some variation of VAT levels in Wales to help provide the cash stream needed to service capital investment programmes, as discussed earlier in Committee.
It is widely acknowledged, by the Institute of Welsh Affairs and others, that devolution of public spending responsibilities should be accompanied by the assignment of significant own sources of revenue. Wales’s funding framework has been highly unusual from an international perspective: there are not many Governments in the world with significant legislative and spending powers who do not also have a correspondingly important responsibility for raising tax revenues. If the UK Government are serious about securing a lasting devolution settlement for Wales, the devolution of VAT should be considered as part of a package of devolved fiscal powers.
The Scotland Act 2016 stated that revenues from the first 10 percentage points of the standard VAT rate would be devolved by 2019-20. The current UK VAT rate is 20%, so half of all the VAT raised in Scotland will be kept in Scotland. A recent article published by the Wales Governance Centre states that:
“Welsh VAT revenues have been far more buoyant than other major taxes, such that VAT has become the largest source of revenue in Wales (in contrast to the rest of the UK and Scotland, where income tax remains the largest source)”.
The report entitled Government Expenditure and Revenue Wales 2016 concluded that around £5.2 billion was raised in VAT revenue in Wales in 2014-15. With a similar deal to Scotland, around £2.6 billion would be assigned to the Welsh Government. There would of course be an offset from the Barnett block for however long that remains in its obsolete and unfair current format. Based on the report’s figures, it would mean that more than a third of total devolved expenditure would be financed by devolved and assigned taxes, up from 21% with currently proposed devolution.
I hope that the House will agree that this fiscal lever is essential to secure the success of the Welsh economy. I beg to move.
Lord Hain
My Lords, I normally agree with my noble friend on devolution matters, but I want to question the consequences of the amendment. If we look at change in income tax take in the UK and Wales during the past few years—indeed, since 2010-11—we see that income tax receipts have grown across the UK by 6% and in Wales by only 2%. Notwithstanding the noble Lord’s point that VAT represents a much larger proportion of tax receipts in Wales, I would be very surprised given the lower GDP and lower spending per head in Wales if Wales did not do badly out of the devolution of VAT. I have to oppose the noble Lord on that basis. Given his belief in an independent Wales, I understand ideologically why he would want just about everything devolved, but this measure would be folly in the context of the economic, financial and tax realities of Wales’s economy relative to that of the UK.
Lord Wigley
VAT is very much more stable and would be less likely to go down by the nature of the expenditure and the pattern of finances in Wales. There is that problem with income tax, but VAT has a much better prospect and I believe that we really should have it.
Lord Hain
The noble Lord may have a point in the sense that more VAT proportionately is paid by people on low incomes, and there are relatively low incomes in Wales, but I would want to see the figures. I would want to have the drains up on this proposal before I went anywhere near it, because I would not want Wales to be short-changed by such a reform. On that basis, I oppose the amendment.
Lord Rowlands (Lab)
I support my noble friend because I worry about taxation. It can be very regressive in an individual context. There is a history of it, and it could be not only in income tax but in VAT. We should be very careful before we proceed down that road.
Baroness Morgan of Ely
I endorse the views of my two colleagues on the Labour Benches. I think it would increase budget volatility for the Welsh Government without enhancing their powers in any meaningful way. I underline one other point, and that is that we would, potentially, have different rates in England and Wales. Imagine the chaos that that could cause communities and businesses on both sides of the border. The economies of England and Wales are closely integrated and I am mindful that having varying rates applied on opposing sides of the border could pose significant issues in the long run, so I am really sorry—it always pains me not to agree with my noble friend Lord Wigley—but I cannot support this amendment.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord, Lord Wigley, for moving Amendment 83, which seeks to assign a share of the VAT revenues generated in Wales to the Welsh Government in the same manner that a share of VAT raised in Scotland will be assigned to the Scottish Government following the Smith commission agreement, given effect through the Scotland Act 2016. In parenthesis, I may be wrong but I do not think that Scotland has the right to vary the rate, so it is possible to protect that element.
It is important to understand the purpose of VAT assignment, which is to increase the link between the Scottish Government’s policy decisions and their budget, and thereby further increase their accountability and give them power for a purpose. While assignment does not, as I said, enable the Scottish Government to change VAT policy in Scotland, they have a wide range of policy levers at their disposal which can affect the performance of the Scottish economy and can therefore impact VAT revenues in Scotland. For example, the Scottish Government’s approach to skills, planning, housing and transport all have an effect on the performance of the economy and therefore on VAT—as, of course, can their approach to taxation. The impact of these decisions on the Scottish economy, and in particular on VAT revenues, will in the future feed through into the Scottish Government’s funding.
Of course, these arguments can also be made in relation to Wales. The Welsh Government have a similar range of economic policy levers and one of the Government’s key aims is to increase their accountability and to give them power for a purpose. However, I share some of the caution urged by the noble Lords, Lord Hain and Lord Rowlands, and by the noble Baroness, Lady Morgan of Ely. The independent, cross-party Silk commission gave full consideration to the case for assigning a share of the VAT receipts generated in Wales and, while it recognised some of the arguments I have set out, it ultimately recommended against VAT assignment in Wales. Unlike in Scotland, there is therefore no clear consensus of support for the proposition. Our focus at this time should be to work with the Welsh Government to implement the Wales Act 2014 and to look at the main thrust of this legislation and take it forward on that basis. I therefore urge the noble Lord to withdraw his amendment.
Lord Wigley
I am grateful for the contributions made by my noble friends on this side, and for the response of the Minister, of course. All I say is that it is bizarre that we have devolved income tax, which is in Wales a relatively low-take tax, while we do not have a proportionate amount of the VAT. If we do not have the right to vary the VAT percentages, there will not be the effect on the poorer people in the community that has been referred to. However, we are not going to get very far with this tonight, and since it is getting late, I beg leave to withdraw the amendment.
“( ) In section 6A (applications for registration etc where restrictions are in force), after subsection (12) insert—“(13) The power to make regulations under subsection (11), so far as exercisable in relation to Wales, is exercisable by the Welsh Ministers (and not by the Secretary of State).”( ) In section 6B (applications for registration where quality contracts scheme in force), after subsection (8) insert—“(9) The power to make regulations under subsections (5) and (7), so far as exercisable in relation to Wales, is exercisable by the Welsh Ministers (and not by the Secretary of State).””
“( ) section 1 of the Harbours (Loans) Act 1972;”
“( ) In section 43 (provisions with respect to loans made by Minister)—( ) after subsection (1) insert— “(1A) Any loans which the Welsh Ministers make under section 11 of this Act shall be repaid to them at such times and by such methods, and interest thereon shall be paid to them at such rates and at such times, as they may from time to time direct.”;( ) after subsection (2) insert—“(2A) Such sums as are necessary to enable the Welsh Ministers to make loans under section 11 of this Act may be issued to them out of the Welsh Consolidated Fund.”;( ) after subsection (4) insert—“(4A) Any sums received by the Welsh Ministers under subsection (1A) of this section shall be paid into the Welsh Consolidated Fund.”;( ) after subsection (5) insert—“(6) The Welsh Ministers shall, as respects each financial year, prepare an account of sums issued to them under this section and of the sums to be paid into the Welsh Consolidated Fund under subsection (4A) and of the disposal by them of those sums respectively, and send it to the Auditor General for Wales not later than the end of November following the year; and the Auditor General for Wales shall examine, certify and report on the account and lay copies of it, together with his report, before the National Assembly for Wales.”;( ) in the heading, at the end insert “or the Welsh Ministers”.”
Lord Rowe-Beddoe
“Tax on carriage of passengers by air
In Part 4A of the Government of Wales Act 2006, after Chapter 4 insert—“CHAPTER 5TAX ON CARRIAGE OF PASSENGERS BY AIR116O Tax on carriage of passengers by air(1) A tax charged on the carriage of passengers by air from airports in Wales is a devolved tax.(2) Tax may not be charged on the carriage of passengers boarding aircraft before the date appointed under subsection (6). (3) Chapter 4 of Part 1 of The Finance Act 1994 (air passenger duty) is amended as follows.(4) In section 28(4) (a chargeable passenger is a passenger whose journey begins at an airport in the United Kingdom), for “England, Wales or Northern Ireland” substitute “England or Northern Ireland”. (5) In section 31(4B) (exception for passengers departing from airports in designated region of the United Kingdom) for “England, Wales or Northern Ireland” substitute “England or Northern Ireland”.(6) Subsections (3) to (5) have effect in relation to flights beginning on or after such date as the Treasury appoint by regulations made by statutory instrument.””
Lord Rowe-Beddoe (CB)
Amendment 96 stands in my name and those of the noble Baronesses, Lady Morgan of Ely and Lady Randerson, and the noble Lord, Lord Wigley. I refer noble Lords to my register of interests, specifically as past chair of Cardiff Wales Airport. Your Lordships will be pleased to know that I do not intend to repeat what I have said in the past on this vexed issue. The Minister is well versed on the subject as a result of his previous membership of the Silk commission, before his ennoblement, on which he sat with distinction—and which recommended that this particular tax be devolved.
As a brief background, the tax was introduced in 1994 at a rate of £5 per passenger for travel within the United Kingdom and the European Union and £10 per passenger for travel elsewhere. Over the past 22 years, there have been several increases and changes in the structure. Since April this year, band A is levied at £13 per passenger at the reduced rate and £26 per passenger at the standard rate. For journeys of more than 2,000 miles—band B—the reduced rate is £73 and the standard rate is currently £146. These are significant amounts, I am sure your Lordships will agree.
Despite some small changes in structure, these taxes continue to be the highest in the world and represent a growing barrier to tourism, trade and investment in our country. Internationally, the tax is currently either being frozen or, in many cases, abolished. It is worth noting that, for domestic flights within the United Kingdom, air passenger duty is twice the amount of that paid for travel to and within Europe. This has a significant impact on domestic air services and, of course, regional connectivity—something which we hear a lot about on the development on new runways in the south-east. One must never forget the congestion on the roads or the slowness of our rail building. Air connectivity in the regions is very important and becoming increasingly so.
However, this tax—it is my favourite subject, really—is another example of the asymmetrical devolution of powers that has been thrust upon Wales continuously. In January 2013, the Government devolved APD to the Northern Ireland Executive on all direct long-haul flights there, which set the tax at £0. That still pertains. In January 2015, as part of the Scotland Bill, air passenger duty was devolved and the Scottish Government have since announced that they will reduce the level of APD by 50% between 2018 and 2021 and abolish the tax completely when public finances allow. In February 2015, in line with the St David’s Day agreement, the Government announced that they were considering the case—or recommendation, call it what you will—and the options for devolving this tax to Wales. Is the deliberate omission of this provision from the Bill therefore the result of the Government’s consideration?
It is clearly recognised that the devolution of APD could provide a much-needed boost to the Welsh economy through the growth of inbound tourism, additional trade links and a much-needed increase in destinations from Cardiff Airport, particularly for long haul. Abolishing this tax in Wales on long haul alone could bring an increase of 27% in jobs within aviation-related employment at Cardiff and indirect support employment in the greater area. This would give rise to a 28% increase in the GVA impact for the Welsh economy, which would clearly include the anticipated 41% increase in inbound tourism. I am sorry that it is so late an hour to give the Committee these numbers and percentages, but the abolition of this tax could be significant for the economy of our country.
In the other place, the honourable Member for Carmarthen East and Dinefwr posed this question on Report, which I repeat:
“Why would the Wales Office seek to deny Wales the same powers as Scotland and Northern Ireland?”.
Again, he asked a little later,
“why would it deny the ability of the Welsh economy to grow?”.—[Official Report, Commons, 12/9/16; col. 701.]
Wales needs parity with Scotland and Northern Ireland. It is in the interests of the development of our economy and therefore clearly in the interests of the people of our country. I beg to move.
Baroness Randerson
My Lords, I was very pleased to put my name to this amendment. This is a tale of two airports—the rivalry between Bristol and Cardiff airports—but someone listening to this debate who is not familiar with the geography that lies behind the arguments within it could be forgiven for thinking that these two airports are near neighbours. The argument is always put forward that, if you devolve responsibility for APD to the Welsh Assembly, it will cut the level of the duty and that will put Bristol Airport at a disadvantage. However, these airports are 102 kilometres apart, and they are not easy kilometres. They include driving along the M4, with its congestion, over the Severn bridge with its tolls and over very poor road links around Bristol to the airport, so it frequently takes in excess of two hours to go between the two airports. If you try going by public transport, you have an extremely complex journey involving trains and buses.
Lord Murphy of Torfaen
I agree very much with the noble Baroness, Lady Randerson. Over the past three days in Committee, the Minister has been very helpful. He knows his stuff. He probably knows devolution better than any other Minister in the current Government. I rather suspect that he might not agree with us on this but I hope he can. I think this debate is about Bristol, not air passenger duty. As the noble Baroness rightly said, if it is about devolution, there is no reason whatever that the treatment should not be the same for Wales as it is for Scotland and Northern Ireland.
It seems to me, too, that Cardiff is our Welsh national airport and should not be disadvantaged because of people who lobby for Bristol Airport. As good an airport as Bristol is, that is not the issue. This is about devolution, not about Bristol Airport.
Lord Wigley
My Lords, I will speak briefly in support of Amendment 96, so ably moved by the noble Lord, Lord Rowe-Beddoe. We are glad to hear his expertise in this particular debate.
The amendment provides for the devolution of air passenger duty to the National Assembly for Wales. As has been mentioned, long-haul air passenger duty is already devolved to Northern Ireland and Scotland. It was included as a key part of a carefully crafted package of devolved measures in the recommendations of the Silk commission—of which the Minister was a central part—and would be used to give competitive advantage to Wales.
Plaid Cymru MPs attempted several times to include APD devolution in the other place, but this was met by a deluge of England-centric counterarguments from the Secretary of State and his Ministers. They seemed more interested in the possible effects of devolving APD to Wales on airports in Liverpool and Manchester than the benefits to Wales. I exclude the noble Lord from this criticism, which is based on what was said on 11 July in another place, but I am dumbfounded as to how Wales Office Ministers, who are meant to be working in the interests of their constituents, can justify their position in prioritising English airports. In this instance, I gently say to government Ministers that their job is to stick up for Wales—goodness knows, there are enough other people in the Palace of Westminster to argue England’s corner.
A recent Western Mail poll found that 78% of Welsh people are in favour of devolving APD, showing that public opinion is clearly on that side. Increasing footfall at the airport would generate substantial revenues elsewhere in Wales, and enable Wales to better market itself for trade, tourism and inward investment purposes, which will become a top priority in the post-Brexit world which we, sadly, will soon inhabit. Let us also remember that Cardiff Airport is owned by the people of Wales. It should be a matter for Welsh Ministers to decide on an aviation strategy that best serves those people. Airports in England should not have the power to determine government policy and block a beneficial Welsh devolution settlement. I support the amendment.
Lord Hunt of Wirral (Con)
My Lords, I have to start with an apology. I think this is the first occasion on which I have ever disagreed with my noble friend Lord Rowe-Beddoe. I cannot agree to his proposed new clause—“Tax on carriage of passengers by air”—for three reasons. I hope that when I say what I am about to say, he will recognise that I worked very closely with him in attracting inward investment to Wales and, indeed, in and around Cardiff Airport.
My first point is that, sadly, this debate, like so many debates about the great country where I was born, is centred on south Wales. There has been no mention, apart from a sudden reference just now by my noble friend Lord Wigley, to Liverpool and Manchester airports. I view the airports of England and Wales as a whole, and I will come to a solution in a moment, but Cardiff is certainly not the airport of choice for people living in and around where I was born. It is certainly not the airport of choice for those in central Wales. Indeed, the needs of a large part of the geographical territory of Wales are not met by Cardiff.
Secondly, I have never been a strong supporter of air passenger duty. No doubt, when all the volumes are written and all the Cabinet papers published, it will be seen that I was never a supporter of APD or insurance premium tax. However, I have to acknowledge that it is a very clever way of raising revenue—so much so, as the noble Lord told us, that I think it now totals £3.1 billion a year. The noble Lord seeks, with the best of intentions, at one single airport, to make it possible for the owners of that airport—by the way, I think there is a conflict between owning the airport and setting the tax—to be able to move the duty up or down. Because it is such a clever way of raising money, if the Welsh Government were ever a little short of revenue—and I think they usually are—it would be perfectly possible for them, under his proposed new clause, to raise the amount of revenue from APD. I just do not think I want to go down that route.
Thirdly, there is an urgent need to develop a better policy for regional airports. I am aware that the Government published a consultation paper—last year, I think—looking at the future of regional airports. We are, after all, the Parliament of the United Kingdom, so I would have thought we had to look at regional airports across England and Wales to find the best possible policy for ensuring their success.
I think there are three possibilities. The first is to devolve air passenger duty within England and Wales, a possibility that, if I recall correctly, was raised. Secondly, rates could be varied from airport to airport, with a view to strengthening the claims of that particular airport. Thirdly, we could give much more aid to regional airports. I recall, and the noble Lord may remember this, that several of the companies that decided to make substantial inward investment in Wales cited the efficiency of Heathrow Airport as the reason they were able to come to Wales.
As the Parliament of the United Kingdom, we ought to look at the policy for regional airports as a whole. I do not know whether the Minister can give us any idea when we will see a policy applying to regional airports in England and Wales, but I hope we will soon. In the meantime, do not let us go off in one direction or another in favouring or disfavouring one particular airport. We have to strengthen regional airports in England and Wales as a whole.
Baroness Morgan of Ely
My Lords, I agree with the case eloquently put by the noble Lord, Lord Rowe-Beddoe, and others. A reduction in air passenger duty would help air passengers, support growth and jobs and cut costs for businesses. I urge the Minister to support this amendment.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in this debate on air passenger duty, specifically the noble Lord, Lord Rowe-Beddoe, who has served with distinction in so many areas of public life in Wales, not least in relation to Cardiff Airport. His very good work is being carried on by Roger Lewis.
As we committed to in the 2015 St David’s Day agreement, the Government have considered the case and options for devolving APD to the Assembly, informed by consideration of the impact this would have on regional airports in England, as they happen to be; as things stand, Wales has only the one international airport, in Cardiff.
It is clear from the debate that noble Lords are aware that Cardiff and Bristol airports are about an hour apart, and the population density of the border area there means that more than 4 million people live in the overlapping catchment areas of the two airports. I must take issue with the noble Baroness, Lady Randerson, with whom I am normally in agreement as she is normally very fair: the distance from Cardiff and Glasgow airports to the English border is not the relevant one. There is no international airport in Berwick-upon-Tweed. It is a long while before you get to an international airport, which is Newcastle.
Baroness Randerson
I understand that difference, but anyone who can get from Cardiff Airport to Bristol Airport in an hour is not obeying the speed limit.
Lord Bourne of Aberystwyth
My Lords, I think the last time I made that journey was with the noble Lord, Lord German, who was driving, but we will gloss over that.
As noble Lords will be aware, those airports are close together, although I accept that it is not always an easy journey, because of the build-up of traffic. However, the nature of the England-Wales border has led to a number of English regional airports raising serious and legitimate concerns about lower APD rates in Wales. As my noble friend Lord Hunt suggested, the rates could go up as well as down; we need to realise that they would not necessarily go down, at least not all the while.
The Government must ensure that devolution does not lead to undue market distortion. Currently we are bound by the state aid rules of the European Union, in any event, which was something that the Silk commission considered long and hard in looking at this issue. I do not have the Silk report in front of me, but I seem to remember that we recommended the devolution of tax on long-haul routes, not overall. It is true that we looked at the analogy of Northern Ireland—which is different because people there have the option of going to Dublin which, being in a different member state, could vary the rates anyway—and we were persuaded just in relation to long haul. I think I am right in saying that no long-haul flights currently take place from Cardiff; I appreciate that that that could make a difference. I am looking at the noble Lord, Lord Rowe-Beddoe.
Lord Rowe-Beddoe
There are long-distance flights and they are being negotiated all the time. They go on as charter flights right through the year, so there are long-distance flights. While I am on my feet, may I say that your commission recommended that long haul be devolved? I apologise to the noble Lord, but that was your position.
Lord Bourne of Aberystwyth
I am grateful for the clarification on the existing charter flights. I am aware of our recommendation for long haul, although the scope of the amendment is probably broader.
As I said, the position in Scotland is very different because the airports are a long way from the next international airports, so the competition and fairness argument cannot apply. The United Kingdom Government have to look at these things in the context of fairness, and it would genuinely not be fair to an airport in England, which is unable to vary the rates, to compete with an airport that could. Noble Lords must surely see that point.
The point made by my noble friend Lord Hunt, speaking with a north Walian voice, was that this tax, if we were to adopt it, would not help the people of north Wales, for whom the nearest international airport would be Manchester or Liverpool; or, indeed, the people of mid-Wales, for whom it would be Birmingham —I am not sure that this is a plea for Birmingham, but I thought I would get in before it.
Lord Thomas of Gresford
I take issue with that. We have always wanted to develop our connectivity in Wales. There have been attempts to use the Broughton airstrip from time to time; I have flown on a regular service from Broughton to Cardiff in the past, and a very good service it was. Unfortunately, it did not pay.
If it were possible to reduce air passenger duty, Broughton would make a very good place from which to start flights, and I am sure it would be very popular in north Wales. Liverpool and Manchester are closer than Cardiff and Bristol. Edinburgh and Glasgow are closer than Cardiff and Bristol. They do not complain; they compete.
Lord Bourne of Aberystwyth
The point being, my Lords, that they are either, in the case of Glasgow and Edinburgh, both able to vary the rates or, in the case of Liverpool and Manchester, both unable to vary them, so they are on an even playing field, which would not be the case between Cardiff and, for example, Bristol. The noble Lord talks about the possibility of Broughton, but that would not give rise to long-haul flights. If noble Lords will allow me to go down memory lane, I remember going out on the roadshow with the Silk commission, and this was not a popular suggestion in north Wales. I remember people in the audience across the political divide saying that this would be a tax that would help people in south Wales, not people in north Wales.
Lord Wigley
The Minister made references to north Wales. I hope that he is not starting to play the old game of playing north against south, because it is to the benefit of the whole of Wales if the Welsh economy flourishes. It is essential that we use these levers to benefit Cardiff and the economy around there. If it has benefits in terms of tourism, that is a benefit to the whole of Wales. We have a number of small airports around Wales. The service from Cardiff up to Valley, for example, is a valuable one. We have an airport in Caernarfon and other airports. What is essential is that we get a coherent policy to work for the whole of Wales and not to have it happen, as is happening again tonight and happened in the House of Commons, that we play the hand for the sake of English airports at the expense of Cardiff Airport and the strategy of the Welsh Government.
Lord Bourne of Aberystwyth
My Lords, that is an unfair suggestion. I am certainly not playing north Wales against south Wales—I am informing noble Lords of what happened when we were out on the road. There is only one international airport in Wales. If we are talking about APD in relation to long-haul flights, that means only Cardiff in relation to Wales, as things stand; that is undoubtedly the case. I am the first person to stand up for Wales, as I hope that the noble Lord will accept, but we cannot do that in isolation from what is happening in the rest of the country. If the measure being talked about is unfair, I am afraid that it will not see the light of day in the context of looking at what is fair for the United Kingdom. Yes, we must stick up for Wales, but it has to be done in the context of fairness.
I shall progress the argument a little to see if there are other things that we can be doing. As I have said, we do not want to look at the position of market distortions, but we want to help Cardiff Airport if we can. We looked at a review of this to see whether it would be possible to devolve APD to Wales while supporting English regional airports against the impacts of reduced APD. However, there are no obvious options that could mitigate against the impacts on regional airports elsewhere, if devolving the tax to the Assembly meant that Bristol could face 25% fewer passengers. That is significant. I shall ensure that I circulate full details of our review into these options to noble Lords so they can see it.
I hope that noble Lords will accept that this is not a desire not to do what is best for Wales, but a desire to do what is best for Wales while recognising that we cannot fail to be fair to the rest of the country. If that happens in this case to be England, I make no apologies for that. Bristol Airport does not have the ability to vary APD, and we cannot do that in the context of the Bill.
I have listened carefully to the debate, and I shall circulate the details of the review, when we had a look to see if there was anything that we could do. There was a long debate in the Silk commission, and it was not along party-political lines; it was generally divided on the issue of what we could do for Wales, partly because of fairness and partly because of the issue that still exists about state aid and the fear of action in relation to that—valid action. On that basis, I ask the noble Lord to withdraw his amendment. As I say, I shall circulate details of the review that we had to see whether there was anything that we could realistically do to help Wales—and, in this context, that means Cardiff Airport.
Lord Rowe-Beddoe
I thank the Minister for his response and thank all noble Lords and noble Baronesses who have participated in this short debate. I thank the noble Baroness, Lady Randerson, who mentioned 102 kilometres. It is an important number because under current EU regulations 100 kilometres has associations with state aid, which the Minister brought up. In Cardiff we have been fighting allegations about state aid—successfully, I am happy to say. I am also very pleased that the elephant in the room was mentioned, not by me but by everybody else. Yes, of course it is Bristol—and this is a pure political gesture. We know it and feel it in ourselves. If we look at the constituency make-up around the city of Bristol and in the south-west, we will understand why. However, I am sorry that the noble Lord, Lord Hunt, disagrees with me for the first time—or I disagree with him.
I will come back on just two points. Cardiff is our international airport, whether it is situated in Ceredigion or in south Wales. We cannot have them all over Wales. We can put up little airports and support ones like Valley and Broughton so we can use them, but Cardiff is our international airport. The status of long-haul flights is under heavy negotiation at the moment and regular routes will be announced soon.
I say to my noble friend Lord Hunt that there is a little group called the Regional and Business Airports Group which represents 32 regional airports in the United Kingdom. In September 2015, it wrote a discussion paper, in which it advocated on behalf of the regional airports in the United Kingdom the devolution of this,
“market distorting tax which impacts far more heavily on smaller airports than larger ones”.
That is quite an interesting document—it was addressed to the energy and transport tax team—and perhaps the Minister could take a look at it.
I thank all noble Lords. It is late at night and I will withdraw the amendment, but I will have to come back at some stage.
“Financial assistance for inland waterway and sea freight
(1) Section 272 of the Transport Act 2000 (financial assistance for inland waterway and sea freight) is amended as follows.(2) For subsection (4) substitute—“(4) So far as it relates to inland waterways that are wholly in Wales, the power conferred by this section is a power of the Welsh Ministers.(4A) So far as it relates to— (a) the carriage of goods by an inland waterway that is partly in Wales, or(b) the carriage of goods by sea where the carriage concerned is wholly or partly by sea adjacent to Wales,the power conferred by this section may be exercised concurrently or jointly by the Secretary of State and the Welsh Ministers.”(3) For subsection (6) substitute—“(6) In this section—“inland waterway” includes both a natural and an artificial inland waterway;“sea adjacent to Wales” means the sea adjacent to Wales out as far as the seaward boundary of the territorial sea.(7) An order under section 158(3) of the Government of Wales Act 2006 determining, or making provision for determining, any boundary between waters which are to be treated as parts of the sea adjacent to Wales and those which are not applies for the purposes of the definition of “sea adjacent to Wales” in this section as it applies for the purposes of the definition of “Wales” in that Act.””
Wales Bill
Wednesday 23rd November 2016
(8 years ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 63-IV Fourth marshalled list for Committee (PDF, 142KB) - (21 Nov 2016)
“PART 2AWELSH TRIBUNALSThe Welsh tribunals
(1) In this Part “Welsh tribunal” means—(a) the Agricultural Land Tribunal for Wales or Tribiwnlys Tir Amaethyddol Cymru;(b) the Mental Health Review Tribunal for Wales;(c) a rent assessment committee constituted in accordance with Schedule 10 to the Rent Act 1977 (including a leasehold valuation tribunal and a residential property tribunal);(d) the Special Educational Needs Tribunal for Wales or Tribiwnlys Anghenion Addysgol Arbennig Cymru;(e) a tribunal constituted in accordance with Schedule 3 to the Education Act 2005 (registration of inspectors in Wales: tribunals hearing appeals under section 27);(f) a tribunal drawn from the Adjudication Panel for Wales or Panel Dyfarnu Cymru;(g) the Welsh Language Tribunal or Tribiwnlys y Gymraeg.(2) Her Majesty may by Order in Council amend subsection (1)—(a) so as to remove or revise a paragraph,(b) so as to add or substitute a tribunal whose functions— (i) are exercisable only in relation to Wales, and(ii) do not relate to reserved matters (within the meaning of the Government of Wales Act 2006), or(c) so as to make amendments (to provisions of this Part or other enactments) that are consequential on an amendment within paragraph (a) or (b).(3) No recommendation is to be made to Her Majesty in Council to make an Order in Council under this section unless a draft of the statutory instrument containing the Order in Council has been laid before, and approved by a resolution of, the National Assembly for Wales.(4) Subsection (3) does not apply to a statutory instrument containing an Order in Council that only makes—(a) provision for the omission of a paragraph in subsection (1) where the tribunal concerned has ceased to exist,(b) provision for the variation of a paragraph in consequence of a change of name or transfer of functions, or(c) amendments within subsection (2)(c).Such an Order in Council is subject to annulment in pursuance of a resolution of the Assembly.”
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, the government amendments in this group demonstrate the pragmatic and progressive approach that the Government are taking in this Bill to the interface between devolved matters and the wider justice system of England and Wales. The amendments are designed to do two things. First, they will create a statutory office of President of Welsh Tribunals to oversee the work of the devolved Welsh tribunals. Secondly, they will allow for the movement of judges between different Welsh tribunals and between reserved Her Majesty’s Courts & Tribunals Service tribunals in England and Wales and the devolved Welsh tribunals, to share expertise in a way that cannot happen under current legislation.
These measures are the culmination of discussions with the Welsh Government, the Ministry of Justice and the senior judiciary. Although the clauses and accompanying schedules are fairly lengthy, reflecting some technical but necessary aspects of the provisions, the overriding purpose is simple: to improve the way in which the workload of the devolved Welsh tribunals is managed and to maximise flexibility in the deployment of judicial resources in the Welsh tribunals.
I will deal with the creation of the statutory office of President of Welsh Tribunals before moving on to discuss the flexible deployment measures in more detail. As noble Lords may be aware, there are currently seven devolved tribunals which are the responsibility of the Welsh Government. The full list is set out in Amendment 107C and includes, among others, the Special Educational Needs Tribunal for Wales and the Welsh Language Tribunal.
Each tribunal currently has its own chairperson, but Mr Justice Wyn Williams has undertaken an informal, presidential-style role in respect of the relevant tribunals, acting as a central point of contact for all leadership judges in them. By putting the role of President of Welsh Tribunals on a statutory footing in Amendment 107DA, we acknowledge the important work that Mr Justice Wyn Williams has done, while bringing greater consistency to operations and the provision of pastoral support to the leadership judges in the relevant tribunals. The fact that Mr Justice Wyn Williams has performed this role on an informal basis for some time is perhaps the best indication that there is a need for a permanent statutory position.
Noble Lords will be aware that the Lord Chancellor and Lord Chief Justice have legal duties to increase diversity in the judiciary. For that reason, the Government consider that the selection and appointment process should be as open and transparent as possible.
The new schedule inserted by Amendment 119AA provides for a two-stage process for the appointment of a person to this new statutory role. At the first stage, the Lord Chief Justice can recommend a candidate for appointment. If the person chosen is a current or former judge of the High Court or the Court of Appeal, and the Welsh Ministers and the Lord Chancellor agree with his recommendation, the appointment can go ahead. Where those conditions are not met, for example because there were two or more promising candidates, the Lord Chief Justice would be required to ask the Judicial Appointments Commission to recommend somebody for appointment. This is similar to the two-stage process that exists in relation to the Senior President of Tribunals, who carries out a similar role in relation to the First-tier and Upper Tribunals that exercise jurisdiction across England and Wales. If the Judicial Appointments Commission was invited to carry out a recruitment campaign, the new schedule created by Amendment 119AA makes it clear that its guiding principles of selection on merit and promotion of diversity would apply, just as they would in any other campaign carried out in England and Wales.
On flexible cross-deployment, the measures in Amendment 107FA are related specifically to members of the Welsh tribunals being deployed from one Welsh tribunal to another, giving the president greater flexibility in the way judicial resources are managed and the ability to respond effectively to peaks and troughs in the workload of the tribunals. In addition, the Welsh Government agreed with the Lord Chief Justice, the Senior President of Tribunals and the Lord Chancellor that it might be beneficial if judges could move between reserved HMCTS tribunals and the devolved Welsh tribunals, if this were needed to meet urgent business needs. Amendments 107GA and 107H would provide the legal basis for cross-deployment to occur. They would allow judges from the Welsh tribunals to sit in the First-tier Tribunal and for judges from the First-tier and Upper Tribunals to sit in the Welsh tribunals, subject to the agreement of the senior judiciary on both sides. In reality, the Government anticipate that it is more likely that judges would be deployed from HMCTS tribunals into the Welsh tribunals than vice versa, but these amendments would permit movement in either direction. I hope the Committee will agree that both the creation of the office of President of Welsh Tribunals and the measures on cross-deployment are worth while.
There is also an opposition amendment in this group. I look forward to hearing from the Opposition on that and will then respond to the points made. I beg to move.
Lord Wigley (PC)
My Lords, I shall speak to Amendment 108 in my name, which seeks to devolve the youth justice system in Wales. The amendment is perhaps slightly incongruously linked with this bank of amendments before the House.
The ineffective and complex mix of devolved and non-devolved bodies that manage the Welsh youth justice system means that a fragmented approach is the best we can hope to achieve. The argument for the devolution of the youth justice system has been made by many experts in both policy and practice, including former Youth Justice Board chair, Professor Rod Morgan, who noted that it is illogical to have a system where factors linked to youth offending are often related to devolved services, such as education and training, social services and health, while youth offenders are dealt with through non-devolved services such as the police, youth offending teams and youth courts.
My party colleague, North Wales Police and Crime Commissioner Arfon Jones, highlighted how a devolved youth justice system would provide an integrated and coherent children’s policy for Wales. Through a clear devolution settlement, the accountability, opportunities to innovate and the simplification of the way the youth justice system operates in Wales would lead to significant improvements for vulnerable children and young adults.
Understandably, the English youth justice system, on to which elements of the Welsh system continue to be tacked, is concerned with English problems, particularly gangs and urban violence. In Wales, rural issues and poverty underpin the challenges faced. By creating a clean break between the two systems, we could enhance outcomes for children at risk in both nations, allowing policies and practices to be targeted and focused on the issues of greatest importance in both places.
As another party colleague of mine, Liz Saville Roberts, highlighted in the other place, the Howard League for Penal Reform found out about our efforts to devolve youth justice and provided us with the following statement:
“When it comes to Welsh children in trouble with the law, Wales should be able to come up with a Welsh solution to a Welsh concern. This is particularly the case because both social services and education policy are already devolved and it is a welfare-led approach which will prove most effective for troubled children. The Welsh Youth Justice Board already recognise this in their ‘children first’ approach and there is an opportunity to build on that distinctiveness and protect it from any Westminster-led reforms that fail to take into account the specific needs of Welsh children”.
Coming from where it does, that quote ought to carry a lot of weight.
The practical benefits of devolving the youth justice system are clear. It is outlined in the recommendations of the Silk commission, as I am sure the Minister will readily recall. It is exemplified by the fact that it is already devolved to Scotland and Northern Ireland, and it is reinforced by the fact that the Government already said they are looking to devolve aspects of youth justice to areas of England. Can the Minister explain to the people of Wales why establishments such as the Greater Manchester Combined Authority are set to gain increased competence over youth justice but the established National Assembly for Wales, with a track record on closely related issues, is not?
I hope the Minister will listen to the advice of those involved in the sector and either support this amendment or bring forward an amendment on Report that will devolve the remaining aspects of the youth justice system to Wales.
Lord Howarth of Newport (Lab)
My Lords, there is a mass of important material in this substantial group of amendments but I draw attention to one particular issue arising from government Amendment 107H, which would introduce a new clause. It appears that that would allow the Lord Chancellor to amend a section of primary legislation, so this clause would create a new Henry VIII power. Parliament ought always to be on the alert when new Henry VIII powers are proposed by the Government. It would be appropriate and helpful if the Minister explained the Government’s justification for this. I see the noble and learned Lord, Lord Judge, in his place but do not know whether he is minded to deploy his forensic powers in examination of this particular amendment. If he is, it would be otiose for me to say more.
Lord Thomas of Gresford (LD)
My Lords, I support the Government’s approach on tribunals. The position on tribunals has been sorted in England and I was party to the discussions that went on at that time. The provisions put forward by the Government seem very sensible. I note in particular the question of cross-deployment of members of the tribunals, not merely within Wales from tribunal to tribunal but also with English counterparts. That indicates something I have said in earlier debates: there is nothing so arcane about Welsh law passed by the Welsh Assembly that it would be impossible for those brought up in the same traditions in England and Wales to be able to cope perfectly adequately with the issues that may arise.
I also support Amendment 108, to which my name is attached. The Welsh division of the Youth Justice Board has operated very successfully in Wales and created new partnerships with social services, education and health—which are all devolved matters. There is a consensus view across what I hesitate to call the “stakeholders” in Wales in this area that it should be a devolved service. As the noble Lord, Lord Wigley, pointed out, the opportunities for its improvement and for experimentation would no doubt then be possible.
Baroness Gale (Lab)
My Lords, this group of amendments relates to Welsh tribunals. We welcome the fact that the UK Government have brought forward these provisions. The new role of President of Welsh Tribunals will provide judicial leadership in support of the Welsh Government’s programme of tribunal reform. The ongoing reform of the Welsh devolved tribunals is designed to strengthen judicial independence and provide service improvement and consistent standards across England and Wales.
Another amendment in this group relates to youth justice. There is a great deal of good practice in terms of Welsh public services working closely with the UK Youth Justice Board for the benefit of the child affected, but it is worth noting that this is one of the few areas of policy relating to children and young people that is not devolved to Wales. There is a danger that services may be commissioned for young people generally in Wales, while those in the youth justice system will not be able to access them. This is one of the reasons why the Welsh Government would like to see the youth justice system devolved. But the view on our Benches is slightly different, in that we believe that we should wait for the full publication of the report by Charlie Taylor who is investigating this matter, and we believe that this is one of the areas on which our proposed justice commission should focus. I look forward to what the Minister has to say on these amendments.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on this group of amendments. I shall first deal with the points made in relation to Welsh tribunals and the President of Welsh Tribunals. I thank noble Lords for the general welcome for provisions that strengthen Welsh tribunals and their operation in Wales.
In relation to Amendment 107H, I say to the noble Lord, Lord Howarth, that I do not see anything irregular in this because the power to be exercised by the Lord Chancellor in relation to adding tribunals and so on to the list is subject to affirmative resolution in new Section 107H(3). So that would be entirely regular—but perhaps I misunderstood the noble Lord.
Lord Howarth of Newport
The provision to provide power for the Lord Chancellor by statutory instrument to amend primary legislation is—or ought to be —exceptional and needs some justification.
Lord Bourne of Aberystwyth
I stand to be corrected on this, but under new Section 107H(3) it is subject to an affirmative resolution of each House of Parliament, and that is entirely appropriate.
Opposition Amendment 108 was ably moved by the noble Lord, Lord Wigley, and supported equally ably by the noble Lord, Lord Thomas of Gresford. As we have discussed on many occasions during the passage of the Bill, the Government’s position is clear: the justice system, including youth justice, should be a reserved issue. I am sure the noble Lord will not be surprised by that response.
Under this model, the Assembly will continue to exercise legislative competence over key areas that impact on youth offending in Wales, such as health, children’s services and education. The Assembly and the Welsh Government will continue to be heavily involved in the management and rehabilitation of young offenders through partnership with the police—I note the comments made by the noble Lord, Lord Wigley, in relation to Arfon Jones the police and crime commissioner for North Wales—and devolved services under the Children and Young People First joint strategy, while a single system for managing young offenders across England and Wales is maintained.
In short, there is a very effective partnership at the moment. I appreciate that that is, to some extent, dependent on the chemistry of the people involved, so I will write on this issue to explain how it is operating at the moment—because it appears to be operating more than satisfactorily, as far as I can see. I note the comments by the noble Baroness, Lady Gale, in relation to the Charlie Taylor review. I agree that it is an important review that obviously the Government will look at.
The noble Lord, Lord Wigley, referred to the Silk commission and my role in it. The commission’s second report found that youth justice services work well and that there is close working between devolved and non-devolved partners. Its recommendation on devolution was aimed at promoting greater integration. It is quite true to say that there was a recommendation regarding devolution, but it was in the context of devolving more than youth justice. The noble Lord will know that the St David’s Day agreement that followed did not present any consensus on devolving justice. Accordingly, it is the Government’s position that all aspects of the justice system, including youth justice, should be reserved. However, we recognise the need for the close working relationship which appears to be working very well at the moment.
Lord Wigley
Will the Minister address my point that there is devolution of a different kind going on with youth justice being devolved to areas such as Manchester, yet they are not having a totally separate Home Office or judicial structure of their own? In these circumstances, and given the fact that the Labour Party, the Liberal Democrats, a lot of Cross-Benchers and ourselves support this movement and the Silk commission’s recommendation, will he look at this matter between now and Report to see whether there is room for greater devolution, at least of large parts of this, to the Assembly in order to get a coherent service in Wales?
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord for that contribution. I was coming on to deal with devolution to areas of England, to which the noble Lord referred, and to say that I will cover that in the letter that I am writing in relation to the current arrangements in Wales. My understanding—I have had a look at this—is that it does not involve devolution of policy issues in the way that this would to the Welsh Government. It will not allow English cities or regions to have separate policy arrangements, which I think is what the noble Lord is seeking. But I will cover that in the letter, as well as the arrangements that are likely to be in place in the areas of England where we are looking at devolution—Manchester, Liverpool, the West Midlands and so on. But, in short, I think that it is devolution of a different sort.
I shall move on and talk about some of the cost implications that would be involved in replicating some of the functions that appear to be working well, partly by the purchase of custodial places in England owing to the lack of, for example, secure establishments in North Wales and secure training centres across the whole of Wales. That would be a necessary part of any devolution package. Perhaps more importantly, reserving legislative competence for youth justice ensures that the Government can apply a coherent approach to criminal justice and the management of offenders across all age groups, while enabling the joined-up working that is happening at the moment in Wales on the issues affecting youth offending.
I recognise the significant and continuing role of devolved authorities in delivering youth justice services, as happens now, and the level of co-operation which already exists on the ground between devolved and non-devolved organisations. I put on record my thanks to the devolved and non-devolved organisations that are making it work. However, it is the Government’s view that not accepting the amendment will ensure that we have the most efficient, effective and consistent way to deliver youth justice services across England and Wales within the single legal jurisdiction.
“President of Welsh Tribunals
(1) The Lord Chief Justice of England and Wales may appoint a person to the office of President of Welsh Tribunals or Llywydd Tribiwnlysoedd Cymru.(2) The President of Welsh Tribunals is not a Wales public authority for the purposes of the Government of Wales Act 2006.(3) Schedule (President of Welsh Tribunals) makes further provision about the President of Welsh Tribunals and about appointments under subsection (1).(4) A holder of the office of President of Welsh Tribunals must, in carrying out the functions of that office, have regard to—(a) the need for the Welsh tribunals to be accessible;(b) the need for proceedings before those tribunals—(i) to be fair, and(ii) to be handled quickly and efficiently;(c) the need for members of those tribunals to be experts in the subject-matter of, or the law to be applied in, cases in which they decide matters;(d) the need to develop innovative methods of resolving disputes that are of a type that may be brought before those tribunals.(5) The President of Welsh Tribunals is responsible—(a) for the maintenance of appropriate arrangements for the training, guidance and welfare of members of the Welsh tribunals within the resources made available by the Welsh Ministers;(b) for representing the views of members of the Welsh tribunals to the Welsh Ministers and to other members of the National Assembly for Wales.”
“Directions as to practice and procedure
(1) The President of Welsh Tribunals may give directions as to the practice and procedure to be followed by the Welsh tribunals.(2) The president or chairman of a Welsh tribunal may give directions as to the practice and procedure to be followed by that tribunal.(3) A power under this section to give directions includes—(a) power to vary or revoke directions made in the exercise of the power;(b) power to make different provision for different purposes (including different provision for different areas);(c) (in the case of directions by the President of Welsh Tribunals) power to make different provision for different tribunals.(4) Directions under this section may not be given without the approval of the Welsh Ministers.(5) Subsection (4) does not apply to directions to the extent that they consist of guidance about any of the following—(a) the application or interpretation of the law;(b) the making of decisions by members of the Welsh tribunals. (6) Subsection (4) does not apply to directions to the extent that they consist of criteria for determining which members of the Welsh tribunals may be chosen to decide particular categories of matter; but the directions may, to that extent, be given only after consulting the Welsh Ministers.(7) Before the President of Welsh Tribunals gives directions under this section he or she must consult the president or chairman of each Welsh tribunal to which the directions relate.(8) Before the president or chairman of a Welsh tribunal gives directions under this section he or she must consult the President of Welsh Tribunals.(9) A person giving, varying or revoking directions under this section must publish the directions, or the variation or revocation, in whatever way the person thinks appropriate.”
“Cross-deployment of members of the Welsh tribunals
(1) In Schedule 9 to the Agriculture Act 1947 (Agricultural Land Tribunal etc), in paragraph 15A, after sub-paragraph (1) insert—“(1A) A member of a tribunal listed in section (The Welsh tribunals) of the Wales Act 2016 (the Welsh tribunals) who is not a member of the Agricultural Land Tribunal may, at the request of the Chairman of the Agricultural Land Tribunal and with the approval of the President of Welsh Tribunals, act as a member of the Agricultural Land Tribunal.”(2) In Schedule 10 to the Rent Act 1977 (rent assessment committees), after paragraph 5A insert—“5B_ A member of a tribunal listed in section (The Welsh tribunals) of the Wales Act 2016 (the Welsh tribunals) who is not a member of a rent assessment committee in Wales may, at the request of the president or vice-president of the panel and with the approval of the President of Welsh Tribunals, act as a member of such a committee.”(3) In Schedule 2 to the Mental Health Act 1983 (Mental Health Review Tribunal for Wales), in paragraph 5—(a) after sub-paragraph (1) insert—“(1A) A member of a tribunal listed in section (The Welsh tribunals) of the Wales Act 2016 (the Welsh tribunals) who is not a member of the Tribunal but who is eligible to decide any matter in a case under this Act may, at the request of the President of the Mental Health Review Tribunal for Wales and with the approval of the President of Welsh Tribunals, act as a member of the Mental Health Review Tribunal for Wales.”(b) in sub-paragraph (3), after “sub-paragraph (1)” insert “or (1A)”.(4) In section 333 of the Education Act 1996 (Special Educational Needs Tribunal for Wales), after subsection (4) insert—“(4A) A member of a tribunal listed in section (The Welsh tribunals) of the Wales Act 2016 (the Welsh tribunals) who is not a member of the Tribunal may, at the request of the President and with the approval of the President of Welsh Tribunals, serve as a member of the Tribunal.”(5) In section 75 of the Local Government Act 2000 (Adjudication Panel for Wales), at the end insert—“(12) A member of a tribunal listed in section (The Welsh tribunals) of the Wales Act 2016 (the Welsh tribunals) who is not a member of the Adjudication Panel for Wales may, at the request of the president or the deputy president (if any) and with the approval of the President of Welsh Tribunals, act as a member of a tribunal drawn from the Panel.”(6) In Schedule 3 to the Education Act 2005 (registration of inspectors in Wales: tribunals hearing appeals under section 27), in paragraph 1, after sub-paragraph (3) insert—“(3A) A member of a tribunal listed in section (The Welsh tribunals) of the Wales Act 2016 (the Welsh tribunals) who is not a member of a tribunal constituted to hear an appeal under section 27 may act as a member of such a tribunal at the request of its chairman and with the approval of the President of Welsh Tribunals.”(7) In Schedule 11 to the Welsh Language (Wales) Measure 2011 (nawm 01) (the Welsh Language Tribunal), after Part 2 insert—“PART 2ACROSS-DEPLOYMENT OF TRIBUNAL MEMBERS9A A member of the tribunal listed in section (The Welsh Tribunals) of the Wales Act 2016 (the Welsh Tribunals) who is not a member of the Tribunal may, at the request of the President and with the approval of the President of Welsh Tribunals, act as a member of the Tribunal.””
“Cross-deployment of tribunal members and judges
(1) A member of a Welsh tribunal may act as a member of the First-tier Tribunal if—(a) the Senior President of Tribunals asks the member to do so, and(b) the President of Welsh Tribunals agrees to the request being made.(2) A judge or other member of—(a) the First-tier Tribunal, or(b) the Upper Tribunal,may act as a member of a specified Welsh tribunal if the President of Welsh Tribunals asks the member to do so and the Senior President of Tribunals agrees to the request being made.(3) Subsection (2) does not apply to a tribunal member who is a relevant judge.(4) A relevant judge may act as a member of a specified Welsh tribunal if—(a) the President of Welsh Tribunals asks the judge to do so, and (b) the Lord Chief Justice of England and Wales agrees to the request being made.(5) In subsections (2) and (4) “specified” means specified in the request.(6) In this section “relevant judge” means—(a) a judge of the Senior Courts;(b) a deputy judge of the High Court;(c) a Circuit judge;(d) a deputy Circuit judge;(e) a recorder;(f) a district judge;(g) a deputy district judge;(h) a District Judge (Magistrates’ Courts);(i) a Deputy District Judge (Magistrates’ Courts);(j) the holder of an office listed in—(i) the first column of the table in section 89(3C) of the Senior Courts Act 1981 (senior High Court Masters etc), or(ii) column 1 of Part 2 of Schedule 2 to that Act (High Court Masters etc).(7) A reference in this section to—(a) the President of Welsh Tribunals,(b) the Senior President of Tribunals, or(c) the Lord Chief Justice of England and Wales,includes a reference to an individual designated by that person to exercise the person’s functions under this section.(8) A designation made by a person under subsection (7) that is in force immediately before the person ceases to hold the office in question continues in force until varied or revoked by a subsequent holder of that office.”
“Power to amend section (Cross-deployment of tribunal members and judges)
(1) The Lord Chancellor may by regulations amend subsection (2) of section(Cross-deployment of tribunal members and judges)—(a) so as to add a tribunal to those listed,(b) so as to remove or revise a reference to a tribunal added under paragraph (a), or(c) so as to make amendments (to provisions of this Part or other enactments) that are consequential on an amendment within paragraph (a) or (b).(2) Regulations under this section may not add a tribunal whose functions—(a) are exercisable only in relation to Wales, and(b) do not relate to reserved matters (within the meaning of the Government of Wales Act 2006).(3) No regulations are to be made under this section unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.(4) Subsection (3) does not apply to a statutory instrument containing regulations that only make—(a) provision for the omission of a reference to a tribunal that has ceased to exist, (b) provision for the variation of a reference in consequence of a change of name or transfer of functions, or(c) amendments within subsection (1)(c).Such an instrument is subject to annulment in pursuance of a resolution of either House of Parliament.”
Lord Rowlands
“( ) If a statutory instrument containing regulations under subsection (2) includes provision within devolved competence or provision modifying a devolution enactment, the Secretary of State must send a copy of the instrument or, if subsection (7B) applies, a draft of the instrument to the First Minister for Wales and the First Minister must lay it before the Assembly.”
Lord Rowlands (Lab)
My Lords, this amendment is in my name and those of my noble friend Lady Morgan and the noble Lord, Lord Wigley. It is the first of a group of nine amendments dealing with the issues that arise from Clause 53. I also acknowledge that in this group are amendments in the name of the noble Lord, Lord Elis-Thomas.
Before I turn my attention to the substance of the amendments, I remind the Committee that their established provenance, as it were, comes from amendments drafted and promoted, in some cases, by the Welsh Government and, in other cases, by the National Assembly. Given that, I hope that due weight will be attached to the amendments because of where they have come from and what they propose. I also draw attention to the fact that concerns about this clause have been brought to our attention not only by the National Assembly and the Welsh Government but by two reports from this House—one by the Delegated Powers Committee and a further one by the Constitution Committee. I shall draw to the attention of the Committee what those two reports say in their concerns about this clause.
It is not surprising, mind you, that this clause has attracted such attention. As we have just been reminded, yet again here is a clause that introduces a Henry VIII power. We have been seeing an increasing tendency to use Henry VIII powers. The phrase “Henry VIII power” harks back to the fact that similar provisions can be found in early Tudor statutes—for example, a Statute of Sewers in 1531 and, more interestingly, the statute of Wales of 1542-43, have such powers in them. I need not tell anyone in this Committee what a Henry VIII power is, but we might as well remind ourselves: it is a power that allows the Secretary of State to modify, amend, repeal or revoke any piece of primary legislation through a statutory instrument.
I suggest that the power in Clause 53 is a Henry VIII power-plus because of the way in which, in subsection (8), the clause defines primary legislation:
“In this section ‘primary legislation’ means … an Act of Parliament”,
or,
“a Measure or Act of the National Assembly for Wales”.
In other words, the clause will allow the Secretary of State to modify, repeal or amend any Measure or Act of the National Assembly for Wales. As the clause stands, the Secretary of State can do so unilaterally. There is no provision in the clause to involve, in any meaningful way, either the Welsh Government or the National Assembly, whose Measures and Acts are their property. I strongly believe we should look at a process by which the National Assembly could scrutinise and approve any such proposed statutory instrument.
I therefore turn to the first of the reports from this House and the comments of the Delegated Powers Committee on this clause. I have a feeling that the Delegated Powers Committee is getting increasingly exasperated by the way in which these Henry VIII powers are being introduced and, for that very reason, by Clause 53 in particular. I remind the Committee what the Delegated Powers Committee said about Clause 53:
“a Bill should not as a matter of routine confer a Henry VIII power such as that in clause 53”.
That is the first of its exasperated comments. The second is, as that committee has repeatedly said on other Bills that have included Henry VIII powers, that,
“where a Henry VIII power is included in a Bill, it must be fully explained and justified in the delegated powers memorandum”.
No such full explanation or justification has been included in the memorandums on this clause.
Lord Elis-Thomas (Non-Afl)
My Lords, it is a delight to follow my noble friend Lord Rowlands, whom I first met as an extremely enthusiastic Welsh Office Housing Minister in 1974. He is as enthusiastic as ever, and his enthusiasm for devolution and for protecting and developing it and everything to do with Welsh administration has not waned since that time.
As is often the case with our parliamentary Bills, the description of Clause 55 and Part 4 as “consequential provision” is totally inappropriate. I shall mainly address the amendments in my name in the group. Whenever I see the name of the Secretary of State for Wales—the name of the office, I should say, because there are distinguished former Secretaries of State present—referred to in devolution legislation, as a former Presiding Officer, I always ask why. I particularly ask why here for the reasons already set out and on the basis of the evidence given not just to committees of this House—we have heard about the Constitution Committee report—but to the Constitutional and Legislative Affairs Committee of the Assembly. As I announced in the previous debate, I am now returned to that committee, although with a different affiliation.
As we know, it is the responsibility of such committees to look at legislative proposals from a constitutional point of view and assess their validity and constitutional propriety. The discussions of the National Assembly committee included one with the erudite and experienced Constitution Committee of this House. I was delighted that we met together, because it confirmed everything we had thought for ourselves. Therefore, we have the full support and authority of this House in what we are saying, and the authority of the distinguished lawyers I have cited before and will no doubt cite again when we debate these issues.
Professor Thomas Glyn Watkin, in evidence to the Constitutional and Legislative Affairs Committee of the National Assembly on 22 June this year, emphasised that he was just as concerned about the provisions that now appear in Clause 53 as he was when they first appeared in the draft Bill; they have continued or been revived in the current Bill. It is a basic constitutional principle that a United Kingdom Secretary of State should not change legislation made by the elected Assembly of Wales. I would argue that Clause 2 is contrary to that principle. To go back to a discussion that the noble and learned Lord, Lord Judge, and I had in a previous sitting in Committee, how can we state that normally, Parliament will not legislate on behalf of the Assembly on matters which are in the competence of the Assembly, and yet give powers to a Secretary of State to change legislation?
Professor Thomas Watkin’s view is very clear: any power which changes the law of the Assembly should be exercised in the Assembly. It is the Assembly that should be able to say whether it is acceptable to change the law. He goes further: he says that the approach in the clause,
“highlights the fact that the powers of Westminster—even in devolved areas—are still superior in terms of their voice”.
That was said by a senior legal academic in Wales, and those views are shared by Professor Rick Rawlings. There should be further amendment to this clause, as I seek in the amendments in my name, to ensure that the consent of the National Assembly is always required when such a power is exercised. These amendments have the support, as I indicated, of the Constitutional and Legislative Affairs Committee; the imprimatur, if I may so describe it, of the Llywydd, the Presiding Officer; and the advice of the Assembly legal services.
We have to emphasise that in this House we are dealing with absolutely clear constitutional principles. Regulations that seek to change the law but which apply only in Wales and are made by the National Assembly must always be approved by the National Assembly. That is a simple case of constitutional propriety, as has been argued so eloquently already by my noble friend Lord Rowlands. I would regard any attempt by another legislature to change National Assembly law without consent as constitutionally unsound. As I have already said, it goes against the principles of Clause 2.
I know what the Minister will say because we have discussed these matters. He will not accept my amendments, but I ask him to consider whether it is appropriate sometimes that he should apply his well-known constitutional skills and excellence as an academic lawyer to his practice of politics—even in this House—as he used to apply them so effectively when we both developed devolution in those early days together. I know that this is an unfair argument. It is an argumentum ad hominem, which is inappropriate, but I plead with him, even at this stage of our discussions, and certainly between now and Report, to reconsider. I will not say to him what I said once to a senior politician in Wales—“Go and pray”—but I ask him to pray in aid all the legal advice that we have given him in this House.
Lord Judge (CB)
My Lords, I have the privilege of being a member of the Constitution Committee, but I speak on my own behalf. I do not have the privilege of being a Welshman but I have the privilege of looking at a statute; I have the privilege of remembering what a baleful influence Henry VIII was on the history of Wales, and his baleful influence looks as though it will continue. The 1536 Act was intended to crush the Welsh nation and the Welsh language. The devolution process was intended to row back hundreds of years of history.
We are being invited to give Henry VIII powers to a Minister, by secondary legislation, to amend, modify, repeal or get rid of—whatever language we care to use—primary legislation. I have a very strong view on this, and shall address the House interminably about the besmirching effect on our constitutional arrangements of such clauses. However, I do not have to stop there in this instance. If Parliament chooses to give Henry VIII powers to the Minister, that is Parliament’s choice, but here it is giving Henry VIII powers to a Minister to reject, modify, get rid of or dispose of the legislation of the National Assembly—in other words, to eradicate, nullify or replace a statutory provision, enacted by a democratically elected legislature of our United Kingdom, on which the people living in Wales will have acted while the particular legislation has been enforced, and all without any consent from the Assembly. That seems an astonishing insult to the democratic process. The affirmative procedure that will undoubtedly be suggested as the solution does not—I say this with great respect—address the democratic deficit.
The solution to the problem involves having another look at Clause 2 and transposing it into Clause 53. I do not need to spell this out. It is perfectly obvious that the consent of the Welsh Assembly is needed. I reject in Clause 2 that weasel word “normally”, which has all sorts of connotations that are not helpful to the analysis. There is another word beginning with “n” which should take its place: never.
Lord Hain (Lab)
My Lords, I shall speak to Amendments 120 and 120A, first to Amendment 120, standing in my name and those of my noble friends Lord Murphy of Torfaen and Lord Kinnock and the noble Baroness, Lady Randerson. It is a very straightforward amendment. Clause 2 introduces a new requirement that Parliament,
“will not normally legislate with regard to devolved matters without the consent of the Assembly”.
That was at the heart of the amendments that have just been addressed. It is an admirable clause, and its logic should surely apply to the Bill as well. In other words, the Bill should not come into effect—which is what the terms of Amendment 120 spell out—without the legislative consent of the Assembly. That is all it is asking for. I know that the Minister has worked very closely with Welsh Government Ministers, and his officials with theirs, so it seems to me that there should be no objection on his part to this amendment. Indeed, I hope he will respond in a conciliatory way because in that way, I think, he will also expedite progress on the Bill.
I turn to Amendment 120A, standing in my name and that of my noble friend Lord Murphy of Torfaen. It will ensure that the Bill cannot come into force unless the Treasury has laid before each House of Parliament a document which sets out a fiscal framework for Wales agreed by the United Kingdom Government and the Welsh Government. As Your Lordships are aware from my speech at Second Reading, I am deeply sceptical that Wales will benefit from income tax devolution and fearful that Wales will actually lose out. The Treasury will not permit much-needed borrowing powers for Wales unless these are set against the revenue-raising powers that this Bill provides for. The First Minister desperately needs that borrowing to invest in infrastructure—from new roads and rail links to relieve chronic congestion, to new hospitals and schools. What is more, the Treasury will not otherwise provide the cover it could so easily do at such minuscule interest rates as currently exist for that infrastructure investment. I think this is financial smoke and mirrors—Treasury subterfuge. Yet the Government have trapped Wales between a rock and a hard place.
I am suspicious that Wales is being badly short-changed by this income tax devolution, which is what I seek to address in this amendment. It is not about the substance of devolution, because that has already been debated, but about the fiscal framework that accompanies it. We do not yet have sight of the fiscal framework to accompany tax devolution, though we are grateful to the Minister for promising, in answer—and on the record—to my question on Second Reading, that we would be able to scrutinise it very carefully by Report. I am also grateful for his recent letter on the subject. All I can say is that it will have to be a mighty, mighty generous fiscal framework to Wales to persuade me to support it. The Treasury in a generous frame of mind will be a novel experience for us all. I speak as someone who, like my noble friend Lord Murphy, has negotiated with the Treasury as a Cabinet Minister on behalf of Wales.
Therefore I wish to put a series of arguments to the Minister which will need to be fully addressed by the fiscal framework. In the time that he has left to tidy up that framework, I hope he will address them.
I draw first on the authoritative 2010 report of the Independent Commission on Funding and Finance for Wales, chaired by Gerald Holtham. The key point is that Holtham acknowledged explicitly the risk that Wales’s income tax base might grow more slowly than the United Kingdom’s income tax base—that is to say, the risk of differential tax base growth. If that happened, the Wales budget would shrink relative to the UK as a whole and the degree of redistribution to Wales from richer parts of the UK would reduce.
Holtham noted that one option could be to index deductions from the block grant to the growth over time of the devolved tax base in Wales. This would completely offset a devolved income tax in Wales and eliminate any risk arising from differential tax base growth. Other options would only partially eliminate this risk. So Holtham came up with a compromise, concluding in paragraph 5.25 that the,
“best compromise appears to be very infrequent reviews of the tax bases of the devolved administration and a consequent adjustment to deductions from the block grant”.
Such reviews and adjustments would require negotiations between the Wales Government and UK Ministers. Holtham suggested reviews every 12 to 15 years. Frankly that is far, far too long a period in my view, especially with the outlook for the British economy looking so uncertain with Brexit, as the Chancellor confirmed in his Statement today.
Holtham made no recommendation for any kind of Treasury assurance to ensure that Wales did not lose out. The Holtham report simply recommended that the block grant should be reduced by an equivalent amount in the first year of the new system and that in,
“subsequent years, the size of the block grant deduction should be calculated to reflect the growth of the relevant income tax bases across the UK as a whole”.
That leaves the Wales budget open to being squeezed due to the Wales income tax base growing at a slower rate than that of the UK as a whole, with no guarantee that the Treasury would top up the block grant to fill the gap, meaning that Wales could certainly lose out. Holtham recommended that the block grant should be based on a needs-based formula that would determine budgets across England, Wales and Scotland. The three most relevant factors determining need would be demography, deprivation and costs.
Based on past spending in England, Scotland and Wales, Holtham recommended that Wales should receive £115 per person to spend on devolved activities for every £100 per person spent on comparable activities in England. Will that be achieved by the fiscal framework—I hope that the Minister will reassure me—or will Wales be left with a funding gap? Holtham acknowledged that, had his needs formula been applied in 2010-11, Wales would have received only £112 for every £100 spent on devolved activities in England, due to weaknesses in the Barnett formula. This would have left Wales with a shortfall, a funding gap of about £400 million. Will the fiscal framework eliminate that gap?
I also refer to the report by the respected Wales Governance Centre, Income Tax and Wales, published in February this year. On page 4 of the executive summary, it chillingly warns that,
“the method chosen to reduce the Welsh block grant to account for the additional Income Tax revenues has the potential to cause losses of hundreds of millions of pounds each year to the Welsh budget”.
Hundreds of millions each year—that is a massive risk, surely; a serious risk of hospitals and care homes closing, teacher numbers being cut, and local government budgets being savaged still further on top of the current round of austerity. Those issues need to be addressed in the fiscal framework.
The Wales Governance Centre draws attention to important developments since the Holtham and Silk commissions. UK Government decisions to raise the personal tax allowance have drawn disproportionately more of Welsh incomes out of the income tax base than across the UK as a whole. So while UK income tax receipts have grown by 6% across the UK since 2010-11, the equivalent figure for Wales is only 2%—worryingly, only one-third of the UK figure. That is because Wales has income levels below the UK average. Fifty-five per cent of all taxpayers’ income in Wales comes from individuals earning less than £30,000 per annum compared with 42% across the UK.
When in November 2015 the previous Chancellor of the Exchequer announced the Government’s decision to drop the referendum requirement for income tax devolution to Wales, he also declared that they would protect the Welsh budget by introducing a floor underneath Wales’ relative per capita funding, to save it from any so-called “Barnett squeeze”. But lack of clarification about this proposed Barnett floor has prevented the Wales Governance Centre from checking in detail how it might interact with income tax devolution and subsequent block grant adjustments—so we just do not know. The floor may be flawed, but nobody can tell.
Lord Howarth of Newport
My Lords, I would like to ask a question of the noble Lord, Lord Elis-Thomas, about his Amendment 117. I am puzzled as to why in the last line of that amendment he has used “or” and not “and”. As drafted, his amendment would allow either House of this Parliament a veto on a statutory instrument made in Wales, and the role and power of the Assembly would be discretionary. That would seem to frustrate his own purpose. I am the more puzzled because in his Amendment 114 he uses “and” and not “or”. I would be intrigued to know why he has altered the drafting between one amendment and the other.
I turn to the amendments just now proposed by my noble friend Lord Hain. I say simply that I strongly support his proposition that the Bill should not become law until a legislative consent Motion has been passed by the Welsh Assembly. It would be ironic in the extreme if these powers were to be imposed upon the Welsh Assembly. I know that the legislation is the product of an enormous amount of consultation between the Government here, the Government in Wales and the National Assembly. None the less, it would seem at the very least a courtesy and clearly appropriate, within the proper spirit of devolution, that the legislative consent Motion should be expected and required from Wales to endorse this legislative enactment.
I also want to say a word about my noble friend Lord Hain’s Amendment 120A. He has given a very serious, important and compelling warning as to the dangers for Wales of being charged with income tax-altering powers—and perhaps coming under pressure actually to use them—without there being a reliable guarantee by the Government of the United Kingdom that Wales will have the resources to enable it to take advantage of those powers towards rates on income tax, without it leading to the fiscal impoverishment of Wales and the wider impoverishment of the Welsh economy and people. I give my strong support to my noble friend’s suggestion that none of the legislation that we have been debating in the Bill should come into force until that fiscal framework is in place. Indeed, I would go further. I suggest to the Minister that we should not proceed to Report on the Bill until we have that fiscal framework, because it seems very difficult for the House rationally to take decisions about what powers should be reserved and devolved in the absence of any clear picture of what resources will be available to Wales from 2020 onwards, following the expiry of present undertakings.
In our debates on the reserved powers, the Minister has been highly constructive and very generous again and again in his willingness to take away the proposals made in various amendments and consider them further. We know that he seeks to provide a decent, generous and sustainable provision for devolution in Wales and it would be helpful to the House, and I dare say even helpful to him, if we did not proceed to a further stage in the passage of this legislation until the Government have also resolved these internal discussions that are taking place. In my view, the Bill was introduced prematurely to Parliament. A huge amount of work had gone into it: there have been many iterations and radical revisions of legislative proposals for devolution to Wales in this phase, and the Minister has always played a constructive part. It would be better, if there is time within this Session of Parliament, if we did not move hastily to Report until both issues have been clarified. What will be the fiscal resources in the longer term and what will be the formula or pattern of fiscal resourcing for Wales? We should not proceed further with the legislative process until the Government are much clearer than they have been hitherto on what exactly it is that they want to devolve.
Lord Elis-Thomas
May I extend to the noble Lord the courtesy of responding to his question relating to the amendment standing in my name? In the absence of an effective form of co-legislating between this House and the National Assembly for Wales, what I have sought to do in the process of Committee is to present to this House under my name—because there was no other way of doing it—a series of amendments which have been debated within the work of the constitutional affairs committee. They emanate from the Presiding Officer and in some cases I have even borrowed wording from the Welsh Government, with their permission, and wording from within the committee itself. We are thereby offering the Minister, as he sits before me, a whole choice—a menu—of alternatives to deal with the issues that he has created for himself. I hope that he will be able to take some of them up and that that answers the question.
Lord Howarth of Newport
The noble Lord, Lord Elis-Thomas, is not only a master of procedure both in the Welsh Assembly and in this Parliament; he is also most ingenious politically.
Lord Murphy of Torfaen (Lab)
My Lords, I support my noble friend Lord Rowlands on his tidy amendment, which comes from a tidy friend. I have had the great pleasure of knowing my noble friend for 46 years; in fact, I was still in the sixth form when he first became a Welsh Member of Parliament. I know that the Minister has been hugely constructive during proceedings on the Bill. I hope that he will listen carefully to the points made by my noble friend, the noble and learned Lord, Lord Judge, and others with regard to Amendment 111.
I also support my noble friend Lord Elis-Thomas on his amendments, particularly on what he said about the role of the Secretary of State for Wales having changed dramatically. When he was a new Presiding Officer and I was a new Secretary of State, I had a desk and a seat in the National Assembly. I also had an office there. When I had finished some years later in 2009, I had lost both my seat and my office. That was a measure of the Assembly growing up and beginning to understand that we do not want Secretaries of State interfering any more in what it does.
Lord Elis-Thomas
I am sure that my noble friend will want to explain to the Committee that this happened with the full consent of the holder of the office of Secretary of State, and that our relationship was always one of positive development.
Lord Murphy of Torfaen
I am grateful to my noble friend. I want in particular to support my noble friend Lord Hain and his two amendments. For the whole of the Labour Government—from 1999 onwards, anyway—he and I held the position of Secretary of State for Wales between us. Two things emerged which were themes in that job—he has already touched on this. One was ensuring that there were good relations between the Assembly in Cardiff and the Government and Parliament in London. It seems to me that Amendment 120, which talks about the legislative consent Motion, is a vital link. I do not think that this Bill would be worth anything unless the Welsh Assembly agreed with it. It would be a pointless, meaningless Bill.
More particularly, on Amendment 120A, with regard to the fiscal framework, the Minister—and his boss—will know that relations between spending departments and the Treasury are never easy. Most of my time as a territorial Secretary of State was spent in negotiations with a less than benevolent Treasury, even when we thought that there was a lot of money about. It would try to stop and, occasionally, it would try to obstruct. I will not rehearse the arguments that we had some days ago on the devolution of income tax and a referendum but the danger with the devolution of income tax is that the Treasury will do its best to ensure that it keeps as much money as it can in negotiations between the Welsh Assembly—and the Secretary of State and Minister acting on the Assembly’s behalf—and the Treasury. There is an important issue here that, if the way in which the Assembly gets its money is to be dramatically changed—it is a dramatic change; I expressed earlier that I am quite dubious about the good effects of that—it will not necessarily be in terms of the democratic nature of income tax but the practical, realistic figures that result from its introduction. The people of Wales must not lose out upon the introduction of income tax powers for Wales and, ultimately, there should be a benefit to the people as a consequence of this new fiscal framework.
I know that we cannot hold up a crystal ball, but my noble friend made a very powerful case with regard to the resource base in Wales. We are not a rich nation and the amount of money that we can raise in income tax is low, as has been indicated even today in the figures that the Government have put out with the Autumn Statement. The amount that comes from every penny raised in Wales is effectively much less than can be raised in the rest of the United Kingdom, because of the need to ensure—as my noble friend rightly said—that we share and distribute our resources.
This amendment asks the Minister to tell us—on Report I assume, by which time there will hopefully have been an agreement on the fiscal framework—that the Bill should not proceed unless that fiscal framework is such that it is, at worst, neutral, and, at best, an improvement for the people of Wales in terms of what they get out of the settlement. There is no point in having a Bill that introduces the devolution of income tax if the Welsh people are going to be worse off because of the interrelationship between that and the block grant.
I have great pleasure in supporting all the amendments that have been proposed this evening.
Lord Elystan-Morgan (CB)
My Lords, I, too, support fervently and earnestly these amendments. I admire very much the eloquence and force with which those main arguments have been articulated, particularly, if I may say so, the magisterial rebuke that was delivered by my noble and learned friend Lord Judge.
It is not enough just to safeguard legislation in Cardiff. That of course, has to be done; it would be a nonsense to create a sister parliament—as it was described by Speaker Martin when the Cardiff Assembly was established—and, at the same time, to treat it as a meaningless plaything. But that is not the whole point. Most of the legislation they let into Wales is Westminster-based so that, in so far as protection is concerned, it would have to be protected not just in Cardiff but here as well, otherwise the main thrust of this issue would be missed.
I endorse everything that has been said by those who have held up this question of the template, as it were, of Clause 2. The Sewel protection, which was endorsed in Scottish legislation, has been perpetuated in this Bill. There is the danger that if nothing is done at all, the powers that we are discussing could make meaningless everything that is contained in Clause 2. I deliberately say “could make meaningless”, because there is the possibility that Clause 2 is meaningless already. In other words, if it were a case of Clause 2 being inserted in order to build a shield or carapace to protect the constitutional entity of Wales, it would be a very severe attack upon that protection. But, if in fact it were nothing more than merely declaratory of what was happening in any event, with the sovereign power of the Westminster Parliament deciding what was or was not necessary, it would of course be utterly meaningless. I do not think it necessary for us to dwell any further on that matter but it should be held up as a template for this piece of legislation.
My third point is that Henry VIII was no great benefactor as far as Wales was concerned. The whole purpose of the Acts of Union was not only to say that Wales should not exist but that it never had existed. It was said that,
“the dominion, principality, and country of Wales … is and ever hath been incorporated, annexed”,
and included within the greater realm of England. We never were there at all. Certainly, as far as Henry VIII clauses are concerned, they should be dealt with very carefully, because they erase the authority of Parliament —or they are, at any rate, in a position to threaten that, at their very worst.
I remember reading a book when I was a student by Sir Gordon Hewart, who was Attorney-General in, I think, the late 1930s. The book is called The New Despotism; it is an examination of the vast growth in powers delegated to Ministers by way of regulations. He saw this as a very great threat to parliamentary sovereignty. He was not talking about Henry VIII clauses but about the positive powers given to Ministers from day to day by way of regulations. If there was a new despotism then, now—three-quarters of a century and more later—that despotism has grown enormously. I would urge that thought be given to the exercise of delegated powers to Ministers. More and more are given every year and Parliament, even with the help of the massive effort of this House to scrutinise, finds it more and more difficult to sieve everything that goes through. And those powers are increasing. What Sir Gordon Hewart would have said of these negative powers I know not but, if there was a despotism three-quarters of a century ago, there is potential for very considerable despotism now.
I urge the House to accept the arguments put forward so magnificently by my noble and learned friend Lord Judge and indeed by those powerful bodies, the Delegated Powers Committee and the Constitution Committee of this House. They are dangerous powers to use. We should use them with very great circumspection in any event. However, in Wales there is a principle involved—namely, that you do not set up a parliament which you intend to be a genuine devolved Assembly, and then treat it as a meaningless plaything.
Baroness Morgan of Ely (Lab)
My Lords, we have heard some stunning contributions this evening on an incredibly important aspect of the Bill. We have heard a devastating critique of Clause 53, in particular by my noble friend Lord Rowlands. I thank him for giving so much attention to an extremely difficult aspect of the Bill for the Assembly to live with. I urge the Minister to think very seriously about this clause, which is about repealing provisions in primary legislation. Within this House, there is an ability to look at those provisions, as the noble and learned Lord, Lord Judge, said. Both Houses can have the opportunity to look at what is being proposed. However, that opportunity is not available to the Assembly. That needs to be underlined. It is deeply discourteous to the Assembly and wrong in principle.
If the Secretary of State proposes by order to modify parliamentary legislation or tidy it up, as my noble friend Lord Rowlands suggested, quite rightly he cannot do that without Parliament’s express agreement. In the same way, the Assembly’s legislation should be protected from modification up to and including repeal unless the Assembly is first asked to give its approval to a draft order proposing such a modification. The consent of the Assembly is needed, as the noble Lord, Lord Elis-Thomas, suggested.
Secondly, we seem to be continually going back to the problems with Clause 2. I again urge the Minister to listen to what the noble and learned Lord, Lord Judge, and the noble Lord, Lord Elystan-Morgan, said about that clause. I know that the Minister was not persuaded that there was a need to amend it as we suggested. But I think it was common ground that a parliamentary Bill modifying the Assembly’s legislative competence could proceed only with the Assembly’s consent. That is an important feature of the devolution settlements. But the problem is that Clause 53 envisages that the Secretary of State can, with the approval of each House of Parliament, modify any Act of Parliament in consequence of provisions in this Bill.
Given the subject matter of the Bill, the Acts vulnerable to such modification are most likely to be the earlier Welsh devolution legislation—the 2006 Act and the 2014 Act. If modifications to those Acts were proposed by way of a parliamentary Bill, the Assembly’s consent would be required. But the Government apparently envisage that, if the modifications are to be given effect by a Secretary of State’s order under Clause 53, it can proceed without the need for Assembly consent. That cannot be right.
Amendments 111, 113 and others in this group address the two points that I have outlined. Their effect in summary is that, if the Secretary of State proposes to use his order-making powers to modify Assembly legislation, that should be subject to prior Assembly consent. That requirement for prior Assembly consent in respect of a proposed Secretary of State order is also to apply if the order envisages a modification of a devolution enactment—in other words, a provision of either the 2006 Act or the 2014 Act. In that way, the fundamental principle that Assembly consent is required before its functions or competence can be modified is preserved. I urge the Minister to think very carefully before proceeding any further with the Bill. This fundamental principle undermines the democratic integrity of the Assembly.
I thank my noble friend Lord Hain for drawing attention to the point that a legislative consent Motion needs to be passed by the Assembly, and the financial framework settled. I hope that Treasury Ministers were listening to what he had to say, but I will make sure that the Assembly Minister who will negotiate this issue hears what my noble friend had to say, because he underlined some important issues. We cannot see Wales lose out financially as a result of the Bill.
I know that we have previously had reassurance from the Minister on the need for a legislative consent Motion before the Bill is passed. If he could underline that once more for us, it would give us confidence. When the Minister replies to the debate, I hope that he will talk us through the final sequencing of the next part of the consideration of the Bill. What will the sequencing be? When will the financial framework be necessary? When will the legislative consent memorandum be put before the Assembly? When will the Motion come before it? If the Minister could talk us through that sequencing, it would be very useful.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on the amendments in this group. I shall first discuss Amendments 111 to 119, and thank the noble Lord, Lord Rowlands, for moving Amendment 111. I understand the points that he made. He was ably backed up by the noble Lord, Lord Elis-Thomas, the noble and learned Lord, Lord Judge, and others. I think that the arguments basically boil down to two strands. The first is the type of issue that is subject to this tidying-up exercise, as we see it. The second issue concerns equality of treatment of the Assembly in relation to Parliament. I will deal with both points.
First, it is not anticipated that the provision in Clause 53 will be used for anything more than minor consequential amendments. I urge noble Lords to be very careful about what they wish for in relation to this. I will double-check examples and write to noble Lords about them. But if, for example, the issue is one of tidying up an enactment to provide that a parish council in England is a community council in Wales, I suggest that that sort of issue is best dealt with in the way set out in the Bill. However, given the understandable concerns that have been raised, I will write to noble Lords giving examples in relation to that.
Lord Howarth of Newport
On the point the Minister has just made, would it be possible to amend the Bill to make it clear that this power is intended to deal only with minor, consequential amendments? If the Bill were able to say that in terms, it might be helpful. It might also be helpful to the courts in future if they found themselves attempting to construe the legislation.
Lord Bourne of Aberystwyth
My Lords, I am grateful for the intervention of the noble Lord, Lord Howarth. I also thank him for his very kind comments earlier. I will cover these issues in a letter, if I may, as I would like to go away and have a look at this. I am certainly not making any commitment on that but I would like to give examples of how this has been used and how we anticipate that it will be used in the future.
The second issue is in many ways a more serious concern, certainly for somebody who has been a Member of the Assembly and knows that it has to be dealt with in a proper constitutional and respectful way—so I listened very carefully to what was said there. This has been a very considered debate. However, if we were to provide a role in approving regulations such as was suggested, it would be anomalous and would introduce unnecessary complexity into the process. I will explain why that is the case. In reality, we would discuss with the Welsh Government any proposed changes that impacted on Welsh legislation.
To illustrate the anomaly, the Assembly acts in exactly the same way as Parliament does. For example, the Assembly has recently passed the Renting Homes (Wales) Act 2016. Section 255 of that Act includes a power for Welsh Ministers to make consequential amendments to any enactment. “Enactment” is defined in Section 252 of the Renting Homes (Wales) Act to include Acts of Parliament and secondary legislation made under Acts of Parliament. Further, in the last two years two-thirds of Assembly legislation has had similar provisions. So, in relation to the equality argument, we are dealing in exactly the same way here as in Parliament. Noble Lords may say that that does not answer the first point, and it does not—but it certainly answers the point about equality.
Lord Elis-Thomas
I do not think that it does. There is a difference between a legislature which is developing new legislation within the framework previously laid down by this Parliament because there is no other legislative framework, and making provision—which therefore distinguishes itself from the rest of the United Kingdom—and what a United Kingdom Parliament might seek to do, and for what reason, to intervene in the legislative process of what might be regarded as a subordinate legislature. Those are the differences, and that is where the concerns come from.
Lord Bourne of Aberystwyth
My Lords, much as I have the greatest respect for the noble Lord, that is not a tenable argument in law, as I am sure he knows. I take the point about the political dimension, as he knows, but on the legal aspect, the two bodies operate in just the same way. However, as I say, I will write to noble Lords on that. I understand the arguments being put forward, by the noble Lord, Lord Rowlands, in particular, as well as his point about the evolving devolution process, which makes this type of arrangement sensible where there is reciprocity. I will write to noble Lords on that point.
Amendments 120 and 120A were spoken to effectively by the noble Lord, Lord Hain, who took us through some of the financial aspects that have to be considered. I understand that. First, on something I have stated many times, although I will certainly state it again, we will not move to Third Reading—as I said at Second Reading—until there is a legislative consent Motion. So, if there is no legislative consent Motion—and there may not be; that is an issue for the National Assembly for Wales and the Ministers of the Welsh Government—we will have no Third Reading.
In relation to Report, I understand from discussions with officials—this may well be confirmed by Members of the Opposition Front Bench, who obviously have had discussions with Welsh Ministers—that there is a desire for us to move to Report so that we are closer to the sort of Bill that we will see at the end and so that the Welsh Government can then move to the legislative consent Motion, content that we are moving in an appropriate way. So we are keeping in touch on that, but I understand that there is a consensual element here to having Report, the first date of which is already public and will take place before Christmas.
We will have two days on Report to reflect on many of the important issues we have dealt with, and the second day will be soon after we come back in the new year. As I understand it—the noble Baroness pressed me on this issue—we are hoping for a legislative consent Motion in the middle of January before moving to Third Reading shortly after that. That is the suggested choreography, but of course we are in the hands of the Welsh Government and the National Assembly for Wales in relation to the legislative consent Motion. I cannot be definitive about that but I can be definitive, as I think I have been in the past, that we will not move to Third Reading until we have the legislative consent Motion. I should also say that there is pressure elsewhere in the legislative programme, as I am sure noble Lords will accept.
Lord Hain
Just briefly, given what the Minister has just said, does that mean that the fiscal framework will not be available to be scrutinised before the Assembly has given its legislative consent Motion? In other words, if he is promising it only by Third Reading, is he saying that the legislative consent Motion would have to be passed by the Assembly without the fiscal framework being agreed—or, indeed, without both Houses having had a look at it?
Lord Bourne of Aberystwyth
The noble Lord raises a point about my stating that we would not proceed until Third Reading. That is a restatement of what I said at Second Reading—I checked that before coming to the House. As I have indicated, the precise timing of the legislative consent Motion is not dependent on me, the Government, the House of Lords or on the House of Commons but on agreement between the Treasury and Welsh Government Ministers and then the agreement of the National Assembly for Wales.
On the fiscal framework document, the noble Lord will know that the Bill has already been through the other place and will go back there for consideration of government amendments—we have many government amendments that are measures that we all agree upon. But I am not sure that in any event that would give the opportunity for consideration of the fiscal framework as it will be only Commons consideration of Lords amendments: so they will only be able to consider any amendments we make on Third Reading.
I will endeavour through representations to see what additional information we can give on the discussions. Another meeting is due on 1 December, and from what we can gather, discussions are going well—I have heard this from both the Welsh Government side and our own Treasury side. I will endeavour to give an update as to where we are on 1 December. If we are able to give additional information, I will be happy to do that—but to some extent that will depend on the consent of the Welsh Government as well as our own Government. I do not foresee any problem on that, but obviously that is for them to determine. The date of the legislative consent Motion is dependent not just upon having the fiscal framework agreed, as I understand it; it then has to be considered by the Constitutional and Legislative Affairs Committee of the National Assembly—I can see that the noble Baroness, Lady Morgan, is indicating agreement to that.
Lord Elis-Thomas
My Lords, I understand that the committee is about to begin consideration.
Lord Bourne of Aberystwyth
I am most grateful to the noble Lord, who I know sits on that committee and plays a leading part in it. I assure the noble Lord that if I can help and be forthcoming with any information, it will be made available.
On the other issue raised by the noble Lord, Lord Hain—the fiscal framework and the discussions on it—first, it is not for me to enter into these negotiations. They are going on between the Treasury and Welsh Government Ministers, and whatever my political differences with Carwyn Jones, Mark Drakeford and others, I have no doubt about and in fact have the highest opinion of their abilities and insight. This is a consensual arrangement. If they do not want an agreement on proposed terms, they have the option of not saying so—and if there is no legislative consent Motion, there is no Bill. So there is no question of a pistol being applied to anybody’s head; the issue is for the National Assembly to determine.
Having been there, I have the greatest respect for the Ministers and officials. That is being hammered out, I gather that robust discussions are taking place and I am sure, and hope, that they are considering the best interests of Wales. But any representations by noble Lords opposite should be made to the First Minister, the Finance Minister and others in those discussions. It is not for me or for us to shadow manage what they are doing—and, I am sure, doing very effectively.
That probably summarises the Government’s position. I have given the undertaking sought; I will do my best to make information available on the fiscal discussions as they become available. I understand what noble Lords say about protecting Welsh interests, but under these devolved Administrations and in these devolved days, it is for the Welsh Ministers and the National Assembly for Wales to bring forward the legislative consent Motion. With that, and with those undertakings, I urge the noble Lord to withdraw his amendment and other noble Lords not to press their amendments.
Lord Rowlands
My Lords, I listened carefully to the Minister, as always, and I am fascinated by this concept of “reciprocal” and the promise of a letter that will describe to us how this will work or has worked. Does the Welsh Assembly exercise such power to intervene to change English legislation?
Lord Bourne of Aberystwyth
My Lords, I am not sure whether it has, but I will try to give the noble Lord that information. The material point is that it can, just as we can. I am not sure how many times that has been exercised, but I will endeavour to cover that in the letter.
Lord Rowlands
Again, I shall look forward to that letter. I do not know how other noble Lords feel but I just find it very difficult to believe that there should not be a provision of the kind we have been trying to introduce. If the United Kingdom Parliament chooses, unilaterally, to seek to amend legislation that belongs to the National Assembly, it has to have some form of consent or approval. That is a fundamental principle of constitutional propriety and property.
Lord Bourne of Aberystwyth
Another point that I had meant to mention—again, I will cover it in the letter; I appreciate that it does not fully answer the point but I shall try to give examples—is that the identical power exists in relation to Scotland.
Lord Rowlands
I am looking forward to this collection of letters—a few have already been mentioned. I am happy to beg leave to withdraw the amendment but I warn the Minister that we will come back to this issue on Report.
“PRESIDENT OF WELSH TRIBUNALSPART 1APPOINTMENTDuty to fill vacancies
1 (1) If there is a vacancy in the office of President of Welsh Tribunals, the Lord Chief Justice must appoint a person to that office.(2) Sub-paragraph (1) does not apply to a vacancy while the Lord Chief Justice, the Lord Chancellor and the Welsh Ministers all agree that it may remain unfilled.(3) In this Schedule “the Lord Chief Justice” means the Lord Chief Justice of England and Wales.The two routes to appointment: agreement under this paragraph or selection under Part 2
2 (1) The Lord Chief Justice, before he or she may appoint a person to the office of President of Welsh Tribunals, must consult—(a) the Lord Chancellor, and(b) the Welsh Ministers.(2) Sub-paragraphs (3) and (4) apply if—(a) the outcome of consultation under sub-paragraph (1) is agreement between the Lord Chief Justice, the Lord Chancellor and the Welsh Ministers as to the person to be appointed, and(b) the person holds or has held office as—(i) an ordinary judge of the Court of Appeal in England and Wales, or(ii) a puisne judge of the High Court.(3) The Lord Chief Justice must appoint the person to the office of President of Welsh Tribunals, subject to sub-paragraph (4).(4) Where the person—(a) declines to be appointed, or does not agree within a time specified to him or her for that purpose, or(b) is otherwise not available within a reasonable time to be appointed,the Lord Chief Justice must, instead of appointing the person, consult afresh under sub-paragraph (1).(5) If the Lord Chief Justice has consulted under sub-paragraph (1) but sub-paragraphs (3) and (4) do not apply following that consultation, he or she must make a request to the Judicial Appointments Commission (“the Commission”) for a person to be selected for appointment to the office of President of Welsh Tribunals.PART 2SELECTION BY THE JUDICIAL APPOINTMENTS COMMISSIONEligibility for selection
3 A person is eligible for selection in pursuance of a request under paragraph 2(5) only if he or she satisfies the judicial-appointment eligibility condition on a 7-year basis.The selection process
4 (1) On receiving a request from the Lord Chief Justice under paragraph 2(5) the Commission must appoint a selection panel. (2) The panel must have an odd number of members not less than five.(3) The members of the panel must include—(a) at least two who are non-legally-qualified,(b) at least two judicial members, and(c) at least two members of the Commission.Contributions to meeting more than one of the requirements may be made by the same person’s membership of the panel.(4) The panel must—(a) determine the selection process to be applied;(b) apply the selection process;(c) make a selection accordingly.(5) As part of the selection process the panel must consult—(a) the Lord Chancellor;(b) the Welsh Ministers.(6) One person only must be selected for the appointment to which a request relates.(7) Sub-paragraph (4) applies to selection under this paragraph and to selection under regulations made under paragraph 7.(8) A selection panel is a committee of the Commission.Merit and good character
5 (1) This paragraph applies to any selection by a selection panel appointed under paragraph 4.(2) Selection must be solely on merit.(3) A person must not be selected unless the selection panel body is satisfied that he or she is of good character.(4) Neither “solely” in sub-paragraph (2), nor Part 5 of the Equality Act 2010 (public appointments etc), prevents the selection panel, where two persons are of equal merit, from preferring one of them over the other for the purpose of increasing diversity within—(a) the group of persons who hold offices for which there is selection by panels appointed by the Commission, or(b) a sub-group of that group.Encouragement of diversity
6 (1) A selection panel appointed under paragraph 4, in performing its functions under this Part, must have regard to the need to encourage diversity in the range of persons available for selection.(2) This paragraph is subject to paragraph 5.Regulations about selection
7 (1) The Lord Chancellor must by regulations made with the agreement of the Lord Chief Justice and the Welsh Ministers—(a) make further provision about the process to be applied in a case where the Commission receives a request under paragraph 2(5);(b) make further provision about—(i) membership of selection panels appointed under paragraph 4, and(ii) the process that is to be applied in a case where a selection panel is required to be appointed under that paragraph;(c) secure, subject to paragraph 8 and any provision within paragraph (2)(d) that is included in the regulations, that in every case referred to paragraph (a) or (b)(ii) there will come a point in the process when a selection has to be accepted, either unconditionally or subject only to matters such as the selected person’s willingness and availability, by or on behalf of the Lord Chief Justice.(2) The regulations may in particular— (a) provide for process additional to the selection process applied under paragraph 4(4), including post-acceptance process;(b) make provision as to things that are, or as to things that are not, to be done—(i) as part of the selection process applied under paragraph 4(4), or(ii) in determining what that process is to be;(c) provide for paragraph 4(4)(c) not to apply where, or to the extent that, the Commission decides that the selection process applied under paragraph 4(4) has not identified candidates of sufficient merit for it to comply with paragraph 4(4)(c);(d) give powers to the Lord Chief Justice, including—(i) power to require a selection panel to reconsider a selection under paragraph 4(4) or any subsequent selection,(ii) power to reject a selection under paragraph 4(4) or any subsequent selection, and(iii) power to require the reconsideration of a decision mentioned in paragraph (c);(e) provide for particular action to be taken by the Commission or a selection panel after the panel has complied with paragraph 4;(f) provide for the dissolution of a selection panel appointed under paragraph 4;(g) provide for a person to cease to be a member of such a panel where the person’s membership of the panel ceases to contribute to meeting a requirement about the panel’s members;(h) provide for a person to become a member of such a panel where another person ceases to be a member of the panel or where another person’s membership of the panel ceases to contribute to meeting a requirement about the panel’s members;(i) make provision for or in connection with assessments, whether pre-acceptance or post-acceptance, of the health of persons selected;(j) provide for the Lord Chief Justice to nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise functions given to the Lord Chief Justice by the regulations;(k) make provision as to the meaning of “non-legally-qualified” and “judicial member” in paragraph 4(3).(3) Regulations under this paragraph—(a) may make different provision for different purposes;(b) may make transitory, transitional or saving provision.(4) The power to make regulations under this paragraph is exercisable by statutory instrument.A statutory instrument containing regulations under this paragraph may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.(5) This paragraph is subject to paragraph 8.Withdrawal and modification of requests
8 (1) The Lord Chief Justice may withdraw a request under paragraph 2(5)—(a) with the agreement of the Welsh Ministers, or(b) if, after consulting Welsh Ministers, the Lord Chief Justice considers the selection process determined by the selection panel is not satisfactory, or has not been applied satisfactorily.(2) The Lord Chief Justice may modify a request under paragraph 2(5) with the agreement of the Welsh Ministers. (3) If a request is withdrawn in part or modified, the selection panel may, if it thinks it appropriate because of the withdrawal or modification, change any selection already made pursuant to the request, except a selection already accepted.(4) The Lord Chief Justice may not withdraw a request under sub-paragraph (1)(b) if a selection made pursuant to the request—(a) has been accepted unconditionally or subject only to matters such as the selected person’s willingness and availability, or(b) in exercise of power conferred by regulations under paragraph 7, has been rejected or required to be reconsidered.(5) Any withdrawal or modification of a request must be by notice in writing to the Commission.(6) In the case of a withdrawal of a request, the notice must state whether it is under sub-paragraph (1)(a) or (b).(7) In the case of a withdrawal under sub-paragraph (1)(b), the notice must state why the Lord Chief Justice considers the selection process determined by the selection panel is not satisfactory, or has not been applied satisfactorily.(8) If or to the extent that a request is withdrawn—(a) the preceding provisions of this Part of this Schedule cease to apply in relation to it;(b) any selection made on it is to be disregarded.(9) Withdrawal of a request to any extent does not affect the power of the Lord Chief Justice to make another request in the same or different terms.Effect of acceptance of selection
9 (1) Subject to the following provisions of this paragraph, where the Lord Chief Justice accepts a selection made under paragraph 4(4) he or she must appoint the person selected.(2) Before making the appointment the Lord Chief Justice may direct the Commission to make arrangements in accordance with the direction—(a) for any assessment of the health of the person selected that the Lord Chief Justice considers appropriate, and(b) for a report of the assessment to be made to the Lord Chief Justice.(3) Sub-paragraph (4) applies in any of the following circumstances—(a) the Lord Chief Justice notifies the Commission that he or she is not satisfied on the basis of a report under sub-paragraph (2)(b), having consulted the Welsh Ministers, that the health of the person selected is satisfactory for the purposes of the appointment;(b) the person selected declines to be appointed, or does not agree within a time specified to him for that purpose;(c) the person selected is otherwise not available within a reasonable time to be appointed.(4) Where this sub-paragraph applies—(a) the selection accepted and any previous selection for the appointment are to be disregarded;(b) the request pursuant to which the selection was made continues to have effect;(c) any subsequent selection pursuant to that request may be made in accordance with the same or a different selection process.PART 3TERMS OF OFFICETenure, removal, resignation etc
10 (1) If— (a) a person is appointed to the office of President of Welsh Tribunals on terms that provide for him or her to retire from the office at a particular time specified in those terms (“the end of the fixed term”), and(b) the end of the fixed term is earlier than the time at which the person is required by the 1993 Act to retire from the office,the person shall, if still holding the office at the end of the fixed term, vacate the office at the end of the fixed term.(2) Subject to sub-paragraph (1) (and to the 1993 Act), a person appointed to the office of President of Welsh Tribunals holds that office during good behaviour, subject to a power of removal by Her Majesty on an address presented to Her by both Houses of Parliament.(3) It is for the Lord Chancellor to recommend to Her Majesty the exercise of the power of removal under sub-paragraph (2).(4) In this paragraph “the 1993 Act” means the Judicial Pensions and Retirement Act 1993.11 A person who holds the office of President of Welsh Tribunals may at any time resign that office by giving the Lord Chief Justice notice in writing to that effect.12 (1) The Lord Chief Justice, if satisfied by means of a medical certificate that a person holding the office of President of Welsh Tribunals—(a) is disabled by permanent infirmity from the performance of the duties of the office, and(b) is for the time being incapacitated from resigning the office,may, subject to sub-paragraph (2), by instrument under his or her hand declare the person to have vacated the office; and the instrument has the equivalent effect for all purposes as if the person had on the date of the instrument resigned the office.(2) A declaration under sub-paragraph (1) with respect to a person is of no effect unless it is made with the concurrence of—(a) the Lord Chancellor, and(b) the Welsh Ministers.Remuneration, allowances and expenses
13 The Welsh Ministers may pay to the President of Welsh Tribunals whatever amounts they determine in respect of—(a) remuneration;(b) allowances;(c) expenses.Oaths
14 (1) A person appointed to the office of President of Welsh Tribunals must take the required oaths in the presence of—(a) the Lord Chief Justice, or(b) another holder of high judicial office (as defined in section 60(2) of the Constitutional Reform Act 2005) who is nominated by the Lord Chief Justice for the purpose of taking the oaths from the person.(2) Sub-paragraph (1) applies whether or not the person has previously taken the required oaths after accepting another office.(3) In this paragraph “the required oaths” means—(a) the oath of allegiance, and(b) the judicial oath,as set out in the Promissory Oaths Act 1868.”
“6A In section 116M (duty to disclose information on Welsh land transactions to HMRC), in subsection (1), for “A person who is a member of the Welsh Government” substitute “The Welsh Revenue Authority”.”
“( ) section 6A(11);( ) section 6B(5) and (7);”
“( ) section 6A(11);( ) section 6B(5) and (7);”
“Judicial Pensions and Retirement Act 1993 (c. 8)
48A In Schedule 5 to the Judicial Pensions and Retirement Act 1993 (retirement provisions: the relevant offices), after the entry for the Senior President of Tribunals insert—“President of Welsh Tribunals”.”
“52A In section 77 of that Act (adjudications) omit subsection (5).”
“Constitutional Reform Act 2005 (c. 4)
55A In section 109 of the Constitutional Reform Act 2005 (disciplinary powers: interpretation), in subsection (5), after paragraph (da) insert— “(db) President of Welsh Tribunals;”.”
“Commissioners for Revenue and Customs Act 2005 (c. 11)
56A In section 18 of the Commissioners for Revenue and Customs Act 2005 (confidentiality), in subsection (2)(j), for “the Welsh Ministers” substitute “the Welsh Revenue Authority”.”
“Tribunals, Courts and Enforcement Act 2007 (c. 15)
59A(1) Section 47 of the Tribunals, Courts and Enforcement Act 2007 (co-operation in relation to judicial training, guidance and welfare) is amended as follows.(2) In subsection (4)(a) and (b), after “the Senior President of Tribunals” insert “or the President of Welsh Tribunals”.(3) In subsection (5)(c)—(a) omit “or” at the end of sub-paragraph (iii);(b) at the end insert “, or(v) a judge, or other member, of a tribunal listed in section (The Welsh tribunals) of the Wales Act 2016 (the Welsh tribunals).””
“Welsh Language (Wales) Measure 2011 (nawm 1)
82A In the Welsh Language (Wales) Measure 2011 omit section 124 (practice directions).”
“The Special Educational Needs Tribunal for Wales Regulations 2012 (S.I. 2012/ 322 (W.53))
83AA In the Special Educational Needs Tribunal for Wales Regulations 2012 omit regulation 28 (general powers).”
“(1A) Subsections (2) to (7) are subject to subsection (1B).(1B) The following provisions may not come into force until the Welsh Assembly has passed a legislative consent motion in respect of this Act—(a) sections 1 to 52,(b) section 53(1), and(c) Schedules 1 to 5.”
“(e) section 41, and sections 37(4) and (6) and 40(4) for the purposes of section 41.”
Wales Bill
Wednesday 14th December 2016
(7 years, 11 months ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 77-I Marshalled list for Report (PDF, 155KB) - (12 Dec 2016)
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, before we begin our Report stage scrutiny of the Bill, I would like to say a few words on the wider context and timing of the Bill’s remaining stages. This House has undertaken very effective scrutiny of the Bill. On our part, the Government have listened to points that have been made and concerns raised, and have brought forward amendments where we believe this will improve the Bill’s provisions and put in place a more robust and lasting new devolution settlement. The amendments that the Government are bringing forward for debate today, and for consideration by this House on the second day of Report in the new year, are testament to this.
There is a need for the Assembly to consider an LCM on the Bill before our Third Reading, which we will certainly do. Should the Bill then be subsequently different from the one agreed to by the Assembly, a new LCM would be needed. A different Bill post 17 January would need a new LCM. I feel duty-bound to mention this difficulty and this pressure, although the attitude of noble Lords is of course entirely a matter for your Lordships’ House.
On the amendments in this first group, Clause 1 gives important statutory recognition to the existence of a body of law created by the Assembly and Welsh Ministers which forms part of the law of England and Wales. In Committee, I committed to reflect further on the spirit of an amendment tabled by the noble Lord, Lord Elis-Thomas, that sought to clarify that the body of Welsh law made by the Assembly and the Welsh Ministers forms part of the law that applies in Wales. Having done so, I am pleased to bring forward government Amendment 1, which clarifies that the body of Welsh law made by the Assembly and Welsh Ministers forms part of a wider body of law that applies in Wales. In considering the wording of this government amendment, I am extremely grateful to the noble Lord, Lord Elis-Thomas, for his wise counsel, drawing on his expertise and experience as a former Presiding Officer of the National Assembly.
On Amendment 2, a non-government amendment, noble Lords will recall that we debated a similar amendment from the noble Lord, Lord Wigley, on the first day in Committee, and this issue was also considered in some detail in the other place. It is clear that is there a strong appetite to keep under review the operation of the justice system in Wales as a result of continuing divergence in the laws that apply in England and in Wales, and to ensure that the distinctiveness of Wales is properly reflected under the settlement provided by this Bill.
The Government have been clear throughout the passage of the Bill that we consider the most effective and efficient way to administer justice in England and Wales is through a single jurisdiction. The distinctiveness of Wales can be, and indeed already is, reflected within the single jurisdiction, for example through the National Offender Management Service in Wales and Her Majesty’s Courts & Tribunals Service in Wales. This enables, for example, the National Offender Management Service in Wales to work closely and directly with the Welsh Government and with health and education providers to ensure appropriate provision of services for offenders. It allows the courts to be administered directly in Wales by staff in Wales, while ensuring that a consistent approach is taken on justice policy.
There is undoubtedly a distinctive legal identity in Wales. It has two legislatures and a small but growing body of law made by the Assembly and Welsh Ministers which lawyers and judges will have to specialise in and apply appropriately in relation to devolved matters. Even with increased divergence, the vast majority of laws will, however, continue to apply across England and Wales. A separate jurisdiction would therefore create significant upheaval and huge cost for no good reason.
In Committee, I agreed to take away the points made about establishing a commission to review the functioning of the justice system in relation to Wales, recognising the points made by the noble Baroness, Lady Morgan, that it is an evolving picture and the points made by the noble Baroness and the noble Lord, Lord Elis-Thomas, about the sources of Welsh law. But for the reasons that I have just outlined, such a review should be within the framework provided under the Bill; that is to say that it should review the functioning of the justice system in Wales within the single legal jurisdiction. I was also clear that a statutory commission would not be the appropriate solution. This would be unnecessarily costly and complex, and would be constrained in how it approached its task.
The principle of reviewing the functioning and operation of the justice system in Wales is sensible. That is why we established the Justice in Wales Working Group to consider the administrative and practical implications for the justice system of diverging law. The group will report to Ministers and the Lord Chief Justice within the next week. I wrote to noble Lords yesterday with an early overview of its recommendations, and consideration is being given as to how best to inform Parliament and stakeholders of its findings.
The group has met a range of people involved in the justice system in Wales, including the judiciary, academics, legal practitioners, professional bodies and those directly responsible for the delivery of justice, including NOMS in Wales, HMCTS Wales, Youth Justice Board Cymru and the Crown Prosecution Service. Those discussions have yielded an invaluable source of information on the current processes as well as providing sensible, pragmatic solutions for managing the justice system as the law continues to diverge in Wales. But the work will not finish there. There will be a continuing need to ensure that justice operational arms and devolved authorities work closely together to deliver effective justice in Wales, building on existing examples of good practice and co-operation.
I understand that one of the group’s main recommendations is likely to be the establishment of a committee to undertake periodic reviews of the operation of the justice system as the law continues to diverge. My right honourable friend the Secretary of State has written to the First Minister proposing that such a non-statutory group be established to keep the operation of the justice system in Wales under review on a permanent basis as the administrative arrangements continue to evolve to reflect Wales’s distinctiveness within the single jurisdiction.
The committee will have a focused remit, and will be chaired by a senior official from the Cabinet Office. It will include a representative from the Ministry of Justice and from the Welsh Government. The committee would report periodically to the Lord Chancellor, with both the First Minister and the Secretary of State for Wales receiving copies. Further consideration will be given to the membership and terms of reference of the committee, and to issues such as how regularly it will report and when it should be established. I understand that my right honourable friend the Secretary of State and the First Minister are meeting tomorrow to discuss this issue, among others. However, the committee will not consider issues relating to the jurisdiction or the devolution boundary that this Bill puts in place. I trust that noble Lords will agree that this committee provides a solid basis through which to ensure that the justice system in Wales keeps pace with the dual influence of Assembly and parliamentary lawmaking within the single jurisdiction.
I turn now to Amendment 3. Clause 2 places the existing convention on legislative consent on a statutory footing—
Lord Carlile of Berriew (LD)
I am most grateful to the noble Lord and I hear what he says about jurisdiction. If that is to be the case, can he confirm that although the committee will not deal with jurisdiction, it may make recommendations about the administration of parts of the joint jurisdiction so that, for example, a Wales division of the High Court, for instance, might be established which is separate in devolution terms from the Queen’s Bench Division of the High Court, so that the High Court could be fully administered within Wales?
Lord Bourne of Aberystwyth
My Lords, I am sure that the noble Lord will understand that I do not want to be drawn into the specifics but, having said that, I understand that that would be within scope. As I say, my right honourable friend the Secretary of State and the First Minister are meeting tomorrow to discuss the terms of reference more fully, but as I say I understand that that would be in scope.
Again, I turn to Amendment 3, dealing with the convention on legislative consent which we are seeking to place on a statutory footing as the Government committed to do in the St David’s Day agreement. This is also in line with Section 2 of the Scotland Act 2016. The convention states that Parliament will not normally legislate on matters devolved to the National Assembly for Wales without the consent of the Assembly. Through Amendment 3, the noble Lord, Lord Wigley, is seeking to broaden the convention by removing the word “normally” from it, and I understand that he will come to address the points on this later.
The use of the word “normally” reflects the convention as it is set out in devolution guidance and its removal from the clause would fundamentally change the nature of what is understood by the convention. That is not what was recommended by the Silk commission or what was set out in the St David’s Day agreement and it is therefore not what we are doing in this Bill.
It is a fundamental principle of our constitution that Parliament is sovereign. As such, it can legislate for matters devolved to the National Assembly for Wales as it can for those devolved to the Scottish Parliament. The convention does not seek to fetter this ability. What it does is make clear that Parliament would not normally do so without the consent of the relevant devolved legislature. The inclusion of “not normally” is essential as it acknowledges parliamentary sovereignty. It also signals that it is not intended to be justiciable, because the courts would recognise that it is for Parliament to determine what is and is not normal in this context.
There may be occasions when it makes sense to legislate on a UK-wide basis. Since the convention was established, a legislative consent Motion has always been sought before Parliament passes legislation applying to Wales which, in the Government’s view, relates to the conferred matters within the Assembly’s legislative competence. I can confirm that this is part of the normal working arrangements between the UK and Welsh Governments that work well, and I expect that to continue.
I turn now to government Amendment 9. Clause 5 inserts new Section 13A into the Government of Wales Act which gives the Secretary of State the power to make regulations to combine the polls at certain Assembly elections with certain UK parliamentary elections and European parliamentary elections. The exercise of this power is subject to the agreement of Welsh Ministers. We consider that it is appropriate for the Secretary of State to be required to consult the Electoral Commission on any regulations made under Section 13A of the Government of Wales Act. This is consistent with the requirement to consult under Section 13 of that Act. Government Amendment 9 achieves this by adding Section 13A of the Government of Wales Act to Section 7(2)(f) of the Political Parties, Elections and Referendums Act 2000.
Government Amendments 10 and 105 relate to the current limit placed on the number of Welsh Ministers. Section 51 of the Government of Wales Act provides that no more than 12 persons are to hold relevant Welsh ministerial office at any time. A relevant Welsh ministerial office is defined in this section as the office of Welsh Minister appointed under Section 48 of the Government of Wales Act or the office of Deputy Welsh Minister. Noble Lords will be aware that the Bill provides significant powers to the Assembly to be able to increase its size if it so wishes. In this context, it is only right that the Assembly should also have the power to increase the size of the Executive. Amendment 105 devolves power to the Assembly to be able to modify or repeal this limit.
Amendment 10 provides that any Assembly legislation which sought to modify this limit would be subject to a supermajority; that is, it would need to be supported by at least two-thirds of Assembly Members. Given the current size of the Assembly in relation to the Welsh Government, we believe that this provides a sensible safeguard to ensure that any modification or repeal of the limit would have broad support among Assembly Members. We have worked closely with the Welsh Government and the Assembly Commission in preparing these amendments.
Lord Elis-Thomas (Non-Afl)
My Lords, perhaps I may respond positively to the amendment introduced in response to the discussion that we had during our first day in Committee on the notion of so-called Welsh law. I commend the Government on their simplicity as well as their inclusiveness by invoking the terms of the law that applies in Wales and pointing to the various bodies of law that apply in Wales, which include the growing body of Welsh law produced by the National Assembly and Welsh Ministers, the law of England and Wales as enacted in this Parliament, the context of European law and the law that is made by precedents and the decisions of the courts. All that is very welcome and I am grateful to the Minister for his response.
It coincides with an equally important statement made in the National Assembly yesterday by Mick Antoniw, the Counsel General, who indicated that to pursue the greater public understanding of the law in Wales, and Welsh law as defined, he intends to instigate a project of consolidation and codification as a pilot. I warmly welcome that statement as well. Therefore, there is a willingness on the part of the legal profession in Wales and its senior government officer in the form of the Counsel General to ensure that the Law Commission’s recommendations for the creation of a dedicated legislative code office and the greater consolidation and codification in an intelligible form of Welsh law are pursued. I particularly welcome as well the decision to publish on the Cyfraith Cymru/Law Wales website further discussion and evaluation of the advantages of consolidation and codification.
That brings me to the other issue I want briefly to touch on: the ongoing response of the UK Government and the Minister to how we progress the analysis and measurement of the effectiveness of the combined jurisdictions and the administration of justice in Wales. I have seen the letter from the Secretary of State to the Welsh First Minister and I had the benefit of a short discussion before I left Cardiff this morning with the First Minister about this, but it is not for me to stand up in this House and purport to represent the position of the Welsh Government. That would be severely out of order.
What the Minister has announced in response to the discussions we have had here and elsewhere has indicated a willingness to understand that there is a balance between the sovereignty of Parliament as understood historically and the increasing democratic accountability and lawmaking potential of the National Assembly. I am looking for a way in which we can move beyond a rather sterile debate where red lines are drawn between various approaches. I am not sure that the committee or commission that the Minister is outlining goes quite far enough on the kind of road I envisage.
I also point the Minister and this House towards the remarkable case presented to the Supreme Court by the Welsh Government which emphasises that, whatever the history of the United Kingdom has been historically, in terms of the relationship between the nations, the only way to operate is by treating the United Kingdom as an association of nations that is now not so hierarchical but more equal. Therefore, in looking for ways we can work within frameworks, is it not time to try to ensure greater equality of representation on commissions, committees or working groups that study these issues? I am not sure that the chairing of a committee by a senior person from the Cabinet Office meets the case. This requires equal representation from practitioners and stakeholders in Wales and in the United Kingdom, and an independent chair.
Lord Morris of Aberavon (Lab)
My Lords, I want to add one word to what the noble Lord, Lord Elis-Thomas, has just said. I very much welcome what he has told us about the intentions of the Assembly, through its Counsel General, to consolidate the laws of Wales as they emerge. I raised this point earlier in the passage of the Bill. I was a consumer once, as a practitioner. Consumers generally, whether lawyers in Cardiff, Swansea, Caernarfon, London or elsewhere, want easy access to the law of Wales as it emerges from Cardiff; otherwise, they could be sued for being negligent in the advice they give. I welcome it very much and I am grateful to the noble Lord for telling us of those intentions.
Baroness Morgan of Ely (Lab)
My Lords, I have tabled Amendment 2 relating to the establishment of a justice in Wales commission. I am very pleased to hear that there has been a degree of movement by the Government on this matter. We emphasised in Committee that we were largely dissatisfied, as I think are the Welsh Government, with attempts by the UK Government to address the fact that over time there will be this increasing disparity between English and Welsh laws, albeit they will both still be dealt with under the single England and Wales jurisdiction.
We have heard about this working group and I am glad that we have had a letter to inform us of the Government’s suggestions. We have not had as much time as we would have liked to deliberate on those, but I am pleased that the Government have recognised the need for some kind of ongoing committee or representation to make sure that they are constantly taking the temperature of the changes that will be happening. We made it clear that we were unhappy with this working group; we did not think it had been thought through in agreement with the Welsh Government but had been imposed on the Welsh Government, who certainly did not feel that they necessarily needed to respect any outcomes of it. That is why we are pleased to see the move to a more equitable system in which the Welsh Government will be respected.
Whether the committee outlined by the Minister goes far enough is questionable. We wanted a commission rather than a committee, but I am not going to nit-pick on that point; it is more important to look at the purpose of this group. I am glad that the Minister recognises that there will be, and is already, a distinct legal identity to Welsh laws but a number of points need to be addressed in relation to this committee. The noble Lord, Lord Elis-Thomas, just made the point that it needs to be seen to be more independent—equidistant from the UK and Welsh Governments. We have moved from the Ministry of Justice having the chairmanship to the idea that it might be somebody from the Cabinet Office but, given that it could be chaired by a representative from the UK Government, we wonder whether it would be better to have a more independent representative chairing the committee.
However, what is more important to me is the need to be clear that the people on the committee should be senior individuals, with the independence and expertise required to carry weight with both Governments. In that sense, it is crucial that both Governments are involved in making sure that they can agree on its membership. Can the Minister give us a commitment today that that will be respected—that there will be a joint agreement on who those experts will be? I should like it to be absolutely clear that this will be an ongoing group, because the body of Welsh law is likely to grow over time. It should not be a task-and-finish group; it needs to be ongoing. I am anxious to hear the terms of reference for this group. Can the Minister give us some indication of them? Would they also be agreed with the Government of Wales? If we are not to get an independent chair, those terms of reference need to be agreed by both Governments.
I hope the Minister will listen to those few requests on this issue. I am very pleased to see that he has come a long way towards us on it. A few tiny paces further would be very welcome but there have been a number of changes, as he suggested in his opening statement. On the new definition of Welsh law and in other areas, the Government have once again kindly listened to the changes that need to be made to the Bill. I thank the Minister for that.
Lord Wigley (PC)
My Lords, I had intended to speak in support of the noble Baroness, Lady Morgan of Ely, on her Amendment 2, but I am not sure whether she will now pursue Amendment 2 or seek to find a common way forward with the Minister. I will therefore truncate some of my comments on Amendment 2, but I also have Amendment 3 standing in my name in this group.
None the less, will the Minister confirm the permanent nature of the committee he has in mind? The noble Baroness raised that point herself. The difference between a statutory provision and an ad hoc provision is that the latter can easily run like water into the sand and disappear over time. A statutory commission not only would have the permanence that statute gives it but is also likely to have its terms of reference fairly clearly defined in an open way that people can respond to. A far greater degree of attention would also be given to drawing up the body’s terms of reference when it is set up. There is therefore a strong case for it to be a statutory body. But if it is not to be, I would certainly be interested in knowing what safeguards the Minister proposes to ensure that this is not something that is granted now but then disappears. As we know, and as I think the Minister accepts, there will be an evolving context for Welsh law and there will occasionally need to be adjustments to respond to it.
Lord Morris of Aberavon
My Lords, I agree with the noble Lord, Lord Wigley, and my noble friend Lady Morgan of Ely. I firmly believe that a statutory commission is highly preferable to a non-statutory one. I learned that lesson many years ago when I was sorting out the problems of the various bodies that operated in mid-Wales. I introduced an Act in order to ensure that there was a statutory commission. I learned that at the feet of a very great Welshman, Huw T Edwards, who believed that a statute has permanence unless and until it is abolished. It has to make reports. This amendment deals with that issue. A report to Parliament is a great signal to anybody in that field that it has to consider and reflect on the observations of those who come before it. In due course, that report may be debated in London. That is a vital safeguard. I support very strongly the need for a statutory commission.
Baroness Finn (Con)
My Lords, at Second Reading, I spoke in support of the maintenance of the single legal jurisdiction in England and Wales. I argued that the body of Assembly legislation can be accommodated for now within that single jurisdiction and that a separate jurisdiction would impose significant upheaval and unnecessary costs on the people of Wales, and that remains my view.
There has been a lot of change in administrative terms. There is already an administrative court to deal with judicial review and similar applications involving the interpretation of the legislation of the Assembly. However, this is a far way off from a wide separate jurisdiction. I agree with the noble Lord, Lord Thomas of Gresford, who argued that there was no need for procedural change and that the principles of statutory interpretation will remain the same. I would just continue to urge that more cases be heard in Wales.
However, although this is the position for now, I appreciate that the body of Welsh law will grow, with diverging Welsh laws over the years. My noble friend the Minister has listened to concerns that it is sensible to keep under review the functioning and operation of the justice system in Wales. I welcome his announcement that there should be a non-statutory committee— I have to disagree with the noble and learned Lord, Lord Morris—within the justice system that will undertake periodic reviews as the law continues to diverge. I believe that this is a proportionate and considered response that allows for a sensible evolution of the system.
A non-statutory review with a clear remit is the right way forward. The proposed statutory commission would have a broad remit and be unnecessarily expensive and complex to administer. Therefore the proposal from my noble friend the Minister is a sensible way through the issue. It recognises that the vast majority of laws will continue to apply across England and Wales and that there is no great appetite at the moment for a separate jurisdiction, with all the attendant cost and disruption. At the same time, it addresses the concerns of the noble Baroness, Lady Morgan, and of other noble Lords that it is important to keep the situation under review as the body of Welsh law grows and the system evolves.
Baroness Humphreys (LD)
My Lords, I will speak to Amendment 2, in the name of the noble Baroness, Lady Morgan of Ely, to which I have added my name. Although the amendment does not perfectly achieve the objectives of those of us on these Benches, I welcome the opportunity it brings to debate this important issue and to allow me to place our objectives on record.
The amendment itself reflects the views of the Silk commission, which recommended that, along with the devolution of youth justice, prisons and policing to the Welsh Assembly, a review of the legislative devolution of other aspects of the justice system should be carried out over a period of 10 years. Sadly, this Bill has not gone far enough to meet any of these expectations, although we have of course seen some movement on the matter of justice today.
Let me make this point and make the opinion on these Benches clear. We have followed and taken part in the debate over whether there is a need for a separate or distinct legal jurisdiction for many years and feel strongly that, sooner or later, the current system will require substantial reform to cope with the growing distinctions between the bodies of law produced by the two Governments. However, we have been cautious over whether now is the time for Wales to have a fully separate system from England. At this stage in the devolution process, we call for a distinct legal jurisdiction for Wales, but while the English and Welsh jurisdictions are still similar, we would support sharing the judicial framework, so as not to wastefully duplicate resources. The consequential massive savings on costs, at a time when Wales would be finding its feet as a legal jurisdiction, would be valuable.
Alan Trench, who drafted a report on behalf of the Wales Governance Centre and the Constitution Unit called Delivering a Reserved Powers Model of Devolution for Wales, said:
“Establishing a Welsh jurisdiction would be a major political decision, and have cost implications if the courts were to be devolved as well”.
We share this view. Our concern is how this can or will be achieved. We cannot allow this Bill to pass to its final stages without setting up a mechanism for further discussions on this vital issue. We owe it to the Welsh Assembly and the people of Wales to begin to sketch out a road map for the future of justice in Wales—a future which will highlight the relevance of the body of Welsh law which exists now and the additional Welsh laws which the Assembly will undoubtedly pass in the future.
I welcome the contents of the Minister’s letter, which I received today, concerning the emerging findings of the Justice in Wales working group. I was particularly pleased to note its anticipated focus on a periodic review of the operation of the justice system under the framework of the Bill, and its likely recommendations on the need to be more effective in considering the distinctiveness of how justice is delivered in Wales.
I am grateful to the Minister for providing further details of the way in which these recommendations will be put into operation. I look forward to reading the details of this debate in Hansard and giving further thought to how the committee that he proposes will operate. I hope he will be able to provide us with further details about the operation of that committee.
Lord Morgan (Lab)
My Lords, I think this is an occasion on which we should not speak for more than a minute and a half, and that is my intention. I support the Government’s amendment, and I thank the Minister for his consideration, but I make it clear that I regard it as an interim statement—something that will not stand the test of time. As Welsh law develops, the case for a Welsh jurisdiction will become overwhelming. There is an old Welsh song that asks, “Who will be here in a hundred years’ time?”—“Pwy fydd yma mewn can mlynedd?”—and perhaps that is the view that one should take.
At the moment we have a Bill that gives the Assembly reserved powers. The legislative competence of the Assembly is growing, yet we have two different legislatures passing laws for the same small territory. That is a situation unique in the UK and in Europe, and it seems bound to result in confusion and perhaps, in due course, conflict.
The idea of a distinct Welsh jurisdiction is supported by the legal professions in Wales. University law departments see Wales as lacking a legal identity, which actually it had for 300 years after Henry VIII’s Act of Union, so we have to catch up with Henry VIII. The idea is supported strongly by the Lord Chief Justice, Lord Thomas of Cwmgiedd; his wording is careful but he has said that it is perfectly possible to have a single justice system with two separate jurisdictions within it. Similar views were expressed by the great Lord Bingham in his work The Rule of Law.
So this is a well-meant interim settlement, a stopgap, that will not last. There is a void in the devolution settlement and eventually we will need a permanent principal settlement, both for the sake of devolution in Wales and, frankly, for the sake of the union of the UK.
Lord Hope of Craighead (CB)
My Lords, I shall raise two short points. One is to commend the Government’s Amendment 1 and the skilled drafting that is revealed by it. However, there is no doubt that the wording that it seeks to replace was too tightly drawn. It looked only at the legislative part of the body of law that makes up, if one likes to put it this way, the body of England and Wales and, looking into the future, following the point by the noble Lord, Lord Morgan, it was designed to follow the law of Wales itself as it built up its own common law. What was missing was an acknowledgement that there is a body of law outside legislation that applies in both jurisdictions as part of the great heritage of the common law that England and Wales has exported around the world. It would be very sad if the common-law element was not accepted. So the word “include”, as the noble Lord, Lord Elis-Thomas, pointed out, carries with it a great deal. That is not expressed at length, thank goodness, because, as he put it, the simplicity and exclusivity of the language chosen does it all for us. It is very nice to see simple language being used so effectively in legislation, so this is an excellent amendment and I warmly support it.
As for Amendment 3, I recall long arguments during discussion on the Scotland Bill—which the noble Lord, Lord Wigley, may have listened to but I am not sure took part in—when we tried to persuade the Minister, the noble and learned Lord, Lord Keen, to drop the word “normally”, but he refused. The passage that the noble Lord, Lord Wigley, quoted from what was said in the Supreme Court last week was just a repetition of the points the noble and learned Lord made in response to those who were seeking to effect that change in the wording.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in debate on this group of amendments. It was a debate of considerable weight. First, I thank the noble Lord, Lord Elis-Thomas, for his kind words and agree with him about the need for institutions in general to work together, but particularly in the context he mentioned of the legislatures in Wales and here, and his comments about the work of the Counsel General for Wales, Mick Antoniw—his work is much welcomed.
I turn to points made by the noble Baroness, Lady Morgan of Ely, about the committee—it is the Government’s view that it should be non-statutory—that will look at the judicial arrangements within the jurisdiction of England and Wales. Points were also made by the noble Lords, Lord Elis-Thomas, Lord Wigley and Lord Morgan, the noble and learned Lords, Lord Morris and Lord Hope, and my noble friend Lady Finn.
First, let me reassure noble Lords that, as I think I indicated, it is intended that this should be a permanent body. We await the recommendations of the working group as to how often it should report. It has been suggested that it could be annually; others have suggested every three or five years. Let us look to see what the committee says. The Government have an open mind on this; we will await the recommendation. The important point is that it will be permanent. I accept the point made by noble Lords that this is an evolving picture; indeed, this is an interim arrangement, as the noble Lord, Lord Morgan, said. In a sense, it is interim between different reports. When the reports come, they will come with advice. It is an advisory committee, but Governments, unless there is good reason, listen to advice—and this will be advice from people with expertise in this area.
I return to the point that there is good will between the UK Government and the Welsh Government as to how this should operate. My right honourable friend the Secretary of State is meeting the First Minister to discuss this. I hesitate to say that it is a reserved area or that we feel that there is some veto on it by the Welsh Government, but we can progress only by consensus. I think it is accepted that it needs willing participation by both parties—and that is there, so let us see what evolves.
I should perhaps remind noble Lords that the LCM has not yet been passed, so if the Welsh Government are not happy with it, it will be open to them to turn it down. The LCM is not just about the fiscal framework—although that is clearly an important part—but about the Bill in general.
Welsh law is different in many respects now from English law—I recognise and accept that, and have said so myself before—but the noble and learned Lord, Lord Hope, referred to the common law of England and Wales. It is a point worth making that this is not exclusively the property of England; the common-law system belongs to both countries and will no doubt remain a bedrock of the legal system. That is what practitioners in Wales want—and what the law schools there want, so far as I can tell from my conversations. However, they recognise that this is an evolving picture, as do the Government. We need the expertise of practitioners and academics as well as the views of the Welsh and UK Governments in moving this forward. We have sought to craft something balanced. There is a general desire to do something in this area and, although opinions may differ to a degree, we are in the same territory, so I hope that this is acceptable.
I turn to the points made by the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Hope, in relation to “normally”. I accept that putting something into legislation is very different from having it as a convention. Obviously, we await the judgment of the Supreme Court for all sorts of reasons, as noble Lords know. I indicated—perhaps I should have reiterated it earlier—that we are looking at guidance notes, which will be the focus of attention after the Bill has passed. In the light of the Bill, we will obviously need to look at them anyway. I give an undertaking that we will flesh out “normally” in the context of guidance notes, which is probably a better way of proceeding than legislation.
I hope that I have covered the main points in relation to the non-government amendments and thank noble Lords for participating in this debate. I thank my noble friend Lady Finn for welcoming some of the changes that we have made, and the noble Baroness, Lady Humphreys, for her points about permanence; I certainly give reassurance on that.
Lord Elis-Thomas
May I pursue the point that the Minister just made about the non-statutory proposal for this commission between the legislatures and the Governments of the United Kingdom and Wales? Would he like to reflect further on the nature of that proposal? When we come to Third Reading, he might be able to tell us a little more. Does he intend to publish a report from the working group in time for us to be able to discuss it further at that stage?
Lord Bourne of Aberystwyth
My Lords, I indicated on the latter point that I certainly intended that we would publish, in some form, the findings of the group on this matter. Yes, I will reflect on what has been said and say more on Third Reading, when we will be further forward in discussions, to provide extra reassurance. I come back to the point that obviously we want to move by consensus in talking with the Welsh Government and, more broadly, with the National Assembly for Wales. Again, I remind noble Lords that the LCM is a requirement before we can move to Third Reading, so the membership of the National Assembly has to be happy with what is proposed—otherwise, presumably, no LCM will be forthcoming.
Lord Hain (Lab)
My Lords, I apologise for not being here for the whole debate. The Minister mentioned the fiscal framework in the context of the LCM. I would be grateful if there were a prospect of that being published soon, as he kindly indicated to me, so that the House will have a chance to look at it before considering any amendments to be tabled for 10 January.
Lord Bourne of Aberystwyth
My Lords, in relation to the fiscal framework, things continue to move in a very satisfactory direction in the discussions between the UK Treasury and Government and the Welsh Government. I certainly anticipate and hope that we will be in a position to say much more about the fiscal framework before we rise next week. That is not an undertaking, but it looks promising. If it is not the case, I will write to noble Lords and indicate the timetable.
Baroness Morgan of Ely
My Lords, it was heartening to hear that the committee can go forward only through consensus—that was a welcome commitment. I am assuming that that means that the terms of reference would be agreed by consensus as well. Can the Minister confirm that that will be the case? He also did not address the issue of the membership of the group and whether that would be agreed by both the UK and Welsh Governments. That would be welcome. It is also worth underlining that this is a matter of critical importance for the Welsh Assembly in its broadest form—not just for the Welsh Government. I know that the Government are keen to see the Bill passed, and there is a need for a legislative consent Motion. I wonder whether we can keep open that opportunity to keep talking until Third Reading, just to give the flexibility that the Government may need to ensure that they can get the legislative consent Motion.
Lord Bourne of Aberystwyth
First, as I have said, these things are best done by consensus but it is a two- way street—both sides have to come to it in a consensual way. So I hope that that is the case when these matters are discussed subsequently.
I have gone as far as I can in relation to the discussions that are being conducted by the Secretary of State and the First Minister. They will discuss these things, and I do not want in any way to give an indication from here as to how those discussions will proceed—but I have undertaken to say more on this when we come back at Third Reading. If there is additional information in the mean time that I can convey in written form to noble Lords who have participated in the debates, I shall certainly do that. I ask the noble Lords and noble Baronesses not to press their amendments.
Lord Bourne of Aberystwyth
My Lords, the amendments in this group relate to universities and public bodies. Their purpose is to address concerns expressed by universities in Wales that their classification as Wales public authorities in the Bill could have wider consequences in terms of categorising them as public authorities. The ministerial consent restrictions do not apply to legislation relating to “Wales public authorities”. This expression is defined in Clause 4 of, and Schedule 3 to, the Bill. The Wales public authorities expressly include the governing body of an institution within the higher education sector within the meaning of Section 91(3) of the Further and Higher Education Act 1992 and a regulated institution within the meaning of the Higher Education (Wales) Act 2015, other than the Open University.
I am very grateful to the noble Baroness, Lady Randerson, and the noble Lord, Lord Thomas of Gresford, for raising this issue in Committee. During our debate on their amendments, the noble Baroness and the noble Lord expressed concerns which had been raised by universities based in Wales. They sought to reverse the universities’ classification as Wales public authorities because of concerns that this might suggest that they should be classified more widely as public authorities. This was not the intention of the Government, and the relevant provisions did not purport to have any wider effect—but I had considerable sympathy with the points made, as did my right honourable friend the Secretary of State, and I agreed to reflect on the wording before Report. Having done so, I am pleased to bring forward these government amendments— I appreciate that there are many of them—to rename “Wales public authorities” as “devolved Welsh authorities”. The amendments also move universities out of the list of public authorities in Schedule 3, because Clause 4 makes it clear that the listed authorities are public authorities.
Instead, separate provision is being made for governing bodies of an institution within the higher education sector in Wales, so that they are classified as devolved Welsh authorities and the Assembly can continue to legislate in relation to them without requiring ministerial consent. At this point I should also make clear that this will not apply to the Open University, because its activities are not principally or wholly carried out in Wales. It will be a “reserved authority” and the United Kingdom Minister’s consent will be required for the Assembly to legislate in relation to the Open University.
Although we have responded to the particular concerns of universities, I should clarify that it is not our intention that the definition of devolved Welsh authorities and the list of authorities should have wider meaning. They apply only for the purposes of the Bill. Another effect of the amendments is that universities will be taken to be in Wales even if they carry out some activities outside Wales, so long as their activities are carried out principally in Wales. This is to ensure consistency with the approach taken in the Higher Education and Research Bill.
These amendments again demonstrate that the Government have listened to concerns expressed by noble Lords in Committee and, where we believe that there is good reason to modify the Bill’s provisions, we are bringing forward amendments to address the concerns. I commend the government amendments in this group and beg to move.
Lord Thomas of Gresford (LD)
My Lords, I must express our gratitude to the Government for clarifying this position. I also echo the noble and learned Lord, Lord Hope, in saying that there was some rather neat draftsmanship involved. The officials are to be congratulated on the way that this has clarified the situation.
Lord Morgan
My Lords, I was once vice-chancellor of the University of Wales and I think that this is a distinct improvement. It will strengthen the status of Welsh university institutions and I am grateful for it.
Baroness Randerson (LD)
My Lords, I start by declaring an interest as a governor of Cardiff Metropolitan University. I echo other noble Lords by referring to Amendments 5 and 7; I am really pleased to see that the Government have clarified that they had no intention of changing the status of Welsh universities. It is a status that is rightly prized and valued, not least because it gives them charitable status, which is extremely important from the funding perspective.
Government Amendment 8 deals with the Open University, which the Minister referred to in his remarks. Does he believe that this clarification is adequate and fully addresses the concern of the Open University that it should be seen as operating equally in all four constituent countries? Obviously it would not be seen appropriately as a Welsh institution, but it does not want to be seen as an English institution. It wants to be seen as bestriding all the countries of the United Kingdom. It would therefore be helpful if the Minister could clarify that he believes those concerns are fully addressed.
Lord Crickhowell (Con)
My Lords, as for expressing thanks and congratulations, may I, as the first president of Cardiff University, add to those thanks and congratulations from these Benches?
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on the second group of amendments and I particularly thank the noble Lord, Lord Thomas of Gresford, for reminding me that I had not thanked the noble and learned Lord, Lord Hope, for his very kind comments about the drafting. Obviously they will have been picked up by the people who were responsible for that drafting, as will be the case for the drafting of these amendments.
I also thank the noble Lord, Lord Morgan, who has very distinguished service in the education sector in Wales, and the noble Baroness, Lady Randerson, for their comments. I thank my noble friend Lord Crickhowell for his kind comments, too.
On the specific point raised by the noble Baroness, Lady Randerson, in relation to Amendment 8 in this group about the status of the Open University, I have looked at this quickly, since it has been raised. I take the point that she made. I would like to take it away and have a look at it. It is open to us to do something in this regard on the second day of Report, as I think it is within the scope of the list of reserved and devolved bodies, and, indeed, mixed-function bodies, which this may well be. Therefore, I will, if I may, take that away without prejudice and have a look at it to see whether we should bring something back on the second day of Report. With that undertaking, I commend the government amendments in this group.
“(1) In this Act “devolved Welsh authority” means—(a) a public authority that meets the conditions in subsection (2),(b) a public authority that is specified, or is of a description specified, in Schedule 9A (whether or not it meets those conditions), or(c) the governing body of an institution within the higher education sector (within the meaning of section 91(5) of the Further and Higher Education Act 1992) whose activities are carried on, or principally carried on, in Wales.”
“(3) In section 7 of the Political Parties, Elections and Referendums Act 2000 (Commission to be consulted on changes to electoral law), in subsection (2)(f), after “64(3)” insert “or regulations under section 13A(1)”.”
( ) the number of persons who may hold the office of Welsh Minister appointed under section 48 or the office of Deputy Welsh Minister.”
“(3A) Welsh legislation may make further provision for the purpose of ensuring that devolved Welsh authorities that receive sums derived from the Fund are accountable.That provision may, in particular, include provision for a devolved Welsh authority to which subsection (1)(a) does not apply to be accountable for its expenditure and receipts in respect of functions for which it receives sums derived from the Fund.”
Lord Bourne of Aberystwyth
My Lords, these new clauses and amendments in my name mainly take forward the recommendations of the Silk commission in relation to water and sewerage.
The Silk report recognised that water and sewerage devolution is a complex issue and that further work to consider the practical implications was needed. Following the St David’s Day agreement, the Government set up the joint Governments’ programme board with the Welsh Government to look at practical issues around Silk’s recommendations and the effect they would have on the efficient delivery of water and sewerage services across England and Wales. It is widely acknowledged that the devolution arrangements around water and sewerage are incredibly complex, and they are not necessarily made any simpler by devolving legislative competence and executive functions along the border. This was recognised, not least by my noble friend Lord Crickhowell, in Committee.
The Silk recommendation on the devolution of sewerage was, of course, included in this Bill when it was introduced in another place. However, these provisions would devolve sewerage policy on a “wholly or mainly” basis, and Clause 46 includes a power for the Secretary of State for the Environment, Food and Rural Affairs to intervene where an Act of the Assembly or any action or inaction of the Welsh Ministers or a public body could have a serious adverse impact on sewerage services in England. This was to mirror the equivalent existing devolution arrangements for water.
Amendment 39 will amend Schedule 7A to the Government of Wales Act 2006, which is inserted by Schedule 1 to this Bill, to devolve both water and sewerage policy as it relates to Wales. While on paper this simplifies the devolution arrangements, it will involve the unpicking of a considerable number of provisions in both primary and secondary legislation to align respective ministerial powers and duties with the England-Wales border. Clause 21 currently provides the necessary powers to deliver this aspect of Silk’s recommendations through secondary legislation by changing the extent of previously transferred provisions. Given this is quite a broad power, Amendment 40 will replace Clause 21 with an order-making power limited to making changes to previously transferred functions relating to water and sewerage. These amendments address a recommendation by the Delegated Powers and Regulatory Reform Committee in its report on the Wales Bill, and I am very grateful to the committee for its scrutiny of the Bill.
Amendment 41, tabled by my noble friend Lord Crickhowell, seeks to extend this list of “water-related” functions to include those relating to “fisheries” and “recreation”. These matters are not devolved on a wholly or mainly basis and there are no plans to change any ministerial functions on these matters using this power.
Amendment 39 also places a requirement on Ofwat to make its annual reports to the Welsh Ministers rather than just sending them a copy, as is currently the case. The Welsh Ministers will be required to lay the annual report before the Assembly and publish it. This reflects the current duty on the Secretary of State to lay Ofwat’s report before Parliament and is similar to one part of Amendment 43, tabled by the noble Baroness, Lady Morgan of Ely. The noble Baroness’s Amendment 43 also seeks to amend other provisions in the Water Industry Act 1991 as it applies to Ofwat. I appreciate that the noble Baroness will address this later. Part of the amendment would require the Secretary of State for the Environment to seek the consent of the Welsh Ministers before making directions to Ofwat outlining her priorities for keeping the activities of water companies under review. This consent would include directions relevant to reserved matters, such as those relating to competition law, insolvency, mergers and so on. This would therefore give the Welsh Ministers considerable influence over policy areas for which they do not have legislative competence or executive functions.
The amendment requires appointments to Ofwat’s boards to be made jointly by the Secretary of State and the Welsh Ministers and seeks to grant Welsh Ministers joint powers over board members’ terms and conditions with the Secretary of State. There is already a duty on the Secretary of State to consult the Welsh Ministers before making any Ofwat appointment. However, joint appointments would be unprecedented and could prove problematic where the Ministers could not agree.
Amendment 42, tabled by the noble Lord, Lord Wigley, would devolve legislative competence for all water policy, including the licensing of water supply and sewerage licensees. The Government believe that legislative competence for licensing should remain with the United Kingdom Parliament. There would be no obvious benefits for licensees or customers should the Assembly seek to introduce its own separate licensing regime for Wales.
I said in Committee that I would bring forward amendments to replace the controversial Secretary of State intervention powers relating to water. Amendments 45 and 53, tabled in my name, will repeal the water intervention powers and replace them with a power for the Secretary of State for the Environment and Welsh Ministers, to agree and lay before Parliament and the Assembly a water protocol. This will enable both parties to challenge any action or inaction by Ministers or relevant public bodies that could have a serious adverse impact on water on either side of the border. We have gone further than Silk recommends by giving the water protocol statutory backing and making it reciprocal so that the interests of water consumers in Wales, as well as those in England, are protected. However, Amendments 46 to 48, tabled by my noble friend Lord Crickhowell, seek to extend the scope of the water protocol to cover all water-related functions, not just those relating to water resources, water supply and water quality. I know that my noble friend has unrivalled expertise in this area but the amendments go much further than Silk recommends on the replacement of the existing intervention powers with a water protocol. As I have already mentioned, my noble friend appreciates the challenges around changing the devolution arrangements as they relate to Wales. I fear that the amendments are unnecessary and would no doubt be seen by the Welsh Government and the Assembly as a retrograde step.
Amendment 50 introduces new duties on the Secretary of State which, in practice, will fall on the Secretary of State for Environment, Food and Rural Affairs and on the Welsh Ministers, to have regard to the interests of water consumers across from their respective borders when carrying out their water functions. The amendment mirrors the definition of consumer interests in Section 2 of the Water Industry Act 1991. This defines the interests of consumers as being the interests of those that receive water and sewerage services from the networks of water companies. It is not affected by, and does not affect, the consumer objective set out in the 1991 Act. The new duties will require both Governments to consider the likely impacts of their policies on customers outside of their respective jurisdictions. This additional check will help ensure that, like the intervention powers, the disputes process contained within the protocol may never need to be used by either Government.
Amendment 44, tabled by the noble Lord, Lord Wigley, on the extraction of water from reservoirs, is the same as one tabled in Committee. I acknowledge the massive role that he has had in looking at this area. The Assembly already has legislative competence for environmental controls over abstractions in Wales. It therefore has the ability to introduce such a provision for Welsh reservoirs, should it require one.
The amendments in my name provide a significant package of water devolution to Wales. They deliver a stable, mature and effective devolution settlement by aligning powers over water and sewerage with the national border and replacing the Secretary of State’s intervention powers relating to water with an inter- governmental protocol. Again, this illustrates the capabilities of mature institutions developing these things together. These new arrangements are in the best interests of water consumers on both sides of the border.
I look forward to hearing noble Lords speak to their amendments. I beg to move.
Lord Crickhowell
My Lords, I refer in passing to Amendment 42, in the name of the noble Lord, Lord Wigley. I spoke about it at a previous stage and explained why I did not think it was workable, and I do not propose to add to my remarks on it today. I am a good deal more sympathetic to his Amendment 44, which my noble friend said was not necessary because it could be dealt with by the Welsh Assembly Government. However, it still seems a perfectly reasonable amendment.
I will concentrate my remarks on government Amendments 40, 45 and 50 and my amendments to them. I was delighted to see the amendments in the basic form they are in. I thought that we would probably only hear at this stage about the outcome of discussions between the Assembly and the Government on the arrangements for water in a kind of informal concordat form. I am delighted that the Minister has decided to introduce them all in statute, as that seems a considerable step forward. I will explain why I think that having made that great step forward, it is rather sad that he is not making them as comprehensive and effective as they could be. I will speak from my considerable experience—not always easy in this field—as the chairman of the National Rivers Authority, when I had to deal with exactly these issues on both sides of the border.
Amendment 40, which introduces the modification of water-related functions, as my noble friend explained, refers to “previously conferred or transferred” water-related functions. However, it happens to contain an extremely useful definition, I think taken from the 2006 Act, of what water-related functions mean. Because I want to use this definition later, I inserted something in it—which it is probably not appropriate to do at this stage—because we are dealing with matters previously conferred or transferred. I think that is what the definition confines itself to, although new subsection 2B refers to,
“provisions contained in or made under this Act or any other enactment”.
I therefore raise the question of whether those words in fact apply to the matters I will refer to on the later clauses. My reason for inserting the important matters of fisheries and recreation into the definition here is not so much where it refers back to previously conferred or transferred functions but because I want at this stage to produce a definition of water-related functions, which would be extremely useful in the later clauses. I therefore leave my point with a question about the wording and a comment about why I have inserted fisheries and recreation into the definition.
When we come to the later amendments, this becomes really important. It is equally important in both the later government Amendments 45 and 50, which deal with different aspects of the management of the water environment. When we come to the water protocol, which goes into statutory form, we refer only to water resources, water supply and water quality in England, but equally, we apply the same in Wales. The great thing about the protocol and all the government amendments is that they are of benefit equally to both parties, working both ways. Therefore I do not quite understand my noble friend’s point that if we alter the Silk commission recommendation, which in my view is incomplete, we will somehow upset the Welsh Government. The reality is that the Welsh Government ought to be equally pleased.
On both this and the later amendment, which deals with the way in which we manage these affairs, it makes no sense at all to pick just one or other of the water matters. In managing the water environment and what is going on in the rivers, we are dealing with the whole package, so usefully defined by the definition I extracted from the earlier clause. I seek only to bring together and complete what seems to be an admirable, initial partial proposal from the Government to provide effective management for both England and Wales of the water environment, comprehensively, covering all the things they ought to be looking at, not just water supply and water resources but flood defence and other matters such as the purity of water supply.
I will enlarge for a moment on fisheries and recreation. Fisheries are extremely important here. The main rivers we are talking about, the Severn and the Dee, are both important fishery rivers, as important for Wales as they are for England. Recreation is important in both; recreation and fisheries are related, because canoeists can have an impact on the fishermen, and in the past there have been disagreements and quarrels between canoeists and fishermen. I am happy to say that they are usually resolved, but it may be useful for those managing the affairs to have them involved in the total package of water functions so that they can play a part for the benefit of both Wales and England.
The Government have set about doing an excellent thing in statutory form in giving partial effect to the proper management of water as it ought to be managed, on a catchment management basis, covering all aspects of water management. In a sense, they have baked a cake—I do not know whether it will be a very nice cake—but it is missing a central ingredient. My proposals are trying to be helpful and positive. They ought to be welcomed equally on both sides of the border, and I hope that the Minister will not simply reject them because Silk did not cover them adequately. That is rather a bad reason to reject them. If they can be improved on, it is our job, proceeding with statute, to do so here and now.
I therefore hope that the Minister will at least not reject what I suggest at this stage. I hope that with his usual good sense and courtesy he will say, “I will go away and consider very carefully what my noble friend has said and see if we cannot come back with something”. He may not fully accept my amendments because Governments always say that amendments drafted from the Back Benches are likely to be imperfect in some way.
I thought that I would have to criticise my noble friend’s partial set of proposals on the grounds that officials in his department have simply not given adequate thought to providing the most comprehensive and complete answer, but I find that that is not so. They were studiously obeying Silk. I know that my noble friend played a crucial role in the Silk commission and therefore the St David’s Day agreement, but I suggest that if he is to do a complete, good and effective job, he should listen to my proposals and, I hope, accept them. If he cannot do so now, perhaps he can bring them back in a new or improved form at a later stage of the Bill.
Lord Wigley
My Lords, I am delighted to follow the noble Lord, Lord Crickhowell, whose interest and involvement in matters relating to water, and particularly water in Wales, has been known to us all for many years.
I wish to speak to Amendments 42, 44 and 49, which stand in my name and deal with water issues. I shall also speak to the other amendments in the group that impinge on these matters.
I say at the very start that, although the noble Lord, Lord Bourne, has rightly been praised for the way in which he has handled aspects of the Bill in Committee and, now, on Report, I am bitterly disappointed that we have not been able to get on to the face of the Bill substantive clauses that deal adequately with the three main issues in contention: an unambiguous statement that the National Assembly has total legislative control over all aspects of the creation of reservoirs in Wales, raised in Amendment 44; for the Assembly to have legislative control over all matters relating to water in all of Wales, with powers coterminous with Wales’s border, addressed in Amendment 42; and the unqualified removal of the powers of the Secretary of State to intervene, which I provide for in Amendment 49.
A few weeks ago, we were treated to a fanfare of triumph by the Secretary of State—whom I see standing at the back of our Chamber—who asserted that these matters had been sorted and the vexed issue finally put to bed. I welcome that statement, accepting it at its face value. Even today, I am willing to believe that not only were Alun Cairns, Guto Bebb and the noble Lord, Lord Bourne, sincere in that declaration but they genuinely aspired for these changes to happen, knowing how sensitive in Wales are matters relating to water. It would indeed have been a feather in their cap had they been able to deliver what they claimed to have achieved.
Today, at this last opportunity to get these three principles firmly embedded in the Wales Bill, we come to the reality of the situation—that they have, so far, failed to deliver on all these details. There is nothing whatever in the Bill or in any of the Government’s many amendments on Report that states unequivocally that the National Assembly has full legislative power over all aspects of authorising, building and controlling reservoirs in Wales in all their many guises. Yes, we were told in Committee that this would be contained in a protocol and, yes, Amendment 45 provides for a new clause entitled “Water protocol”, but we did not have the opportunity in Committee to see a copy of such an intended protocol and we still do not have one on Report. I assume of course that the detailed protocol will go way beyond the bare framework in this Bill to which the noble Lord, Lord Crickhowell, referred. We do not even have a draft protocol—not even an outline draft protocol—yet we are asked to confirm in legislation a provision about which we have next to no substantive knowledge whatever. We are being asked to rubber-stamp a pig in a poke.
In so doing, we are not even certain that the poke is there. Proposed new subsection (1) in Amendment 45 states:
“The Welsh Ministers and the Secretary of State may make an agreement (the ‘water protocol’) for the purpose of”—
which it goes on to define in outline but not in detail. It does not state that they “shall” produce a water protocol; it just states that they “may”—or, indeed, they may not. What a weak basis on which to build policies which the Wales Office Ministers paraded as being our salvation. There is no guarantee that there is in fact, in the murky room marked “Wales Office Water Policy”, any poke whatever. It may exist at some time; equally, it may never come into being.
Even if we have this undefined poke of a protocol, what sort of a pig do we find inside? The clause goes on to stipulate that the provisions that will be facilitated by law are to safeguard the well-being of English consumers. It gratuitously adds that the protocol may also safeguard the well-being of Wales—something that would not be needed in any protocol whatever if full control over water in Wales were in the hands of the National Assembly. It gives the impression of being a charter for the meddling by English Ministers and English authorities in matters relating to water in Wales. That is what we have suffered in Wales down the years and it is something that the National Assembly was expected to bring to an end, although now it may not be able to do so. We do not know for certain for the very reason that we do not have a protocol or a draft protocol before us to examine the implications.
Lord Morgan
My Lords, I very strongly agree with what the noble Lord, Lord Wigley, has just said. To leave these matters uncertain and vague, and potentially as, yet again, a source of future bitter conflict, is quite contrary to what the Minister is doing in the Bill.
Two points occur to me. First, it seems that giving the Assembly authority over water is fully consonant with what we are doing in the rest of the Bill—that is, strengthening the regulatory powers of the Assembly over the natural resources of Wales. Secondly, and perhaps more fundamentally, we are—perhaps unintentionally —bypassing this enormous emotive issue in Wales. I would like it to be felt and seen by the citizens of Wales, who are not always clear on the point, that devolution is making a difference. I would like it to be felt that devolution means that there will be no more Tryweryns in Wales and no more treating with contempt the small rural communities for the benefit of others. I expect the Minister to listen with sympathy and I hope very much that the amendments of the noble Lord, Lord Wigley, will be supported.
Lord Thomas of Gresford
My Lords, to follow on from what the noble Lord, Lord Morgan, has just said, I have looked at the government amendments with some care and notice that Amendment 45, which sets out the proposed water protocol, refers to a,
“serious adverse impact on water resources in England, water supply in England or the quality of water in England”,
and, conversely, water resources in Wales. What is not contained there is the impact on the social and environmental character of Wales from any proposal that may be brought forward for the extraction of water from Wales. When the Minister referred to Amendment 44 in the name of the noble Lord, Lord Wigley—that the extraction of water from Welsh reservoirs shall require the legislative consent of the National Assembly for Wales—he said that we need not worry about that because there is already environmental law that will protect the people of Wales from the building of reservoirs that would have such an environmental or social impact. I would like the Minister to state quite clearly that there will be no reservoirs built in Wales without the consent of the Welsh Assembly. I think that that must be said. Whether it is due to the existing position or the proposals he has brought forward in these amendments, I do not care. I just want it to be absolutely clear what the position is.
Lord Elystan-Morgan (CB)
My Lords, I take exactly the same view and support completely everything that has been said by the noble Lord, Lord Wigley. I have, as the House well knows, spoken with bitterness and rancour on many previous occasions about what happened 50 years ago in Tryweryn in Wales. I make no apology for that. However, I jumped with joy when I had the impression—as I think every other Member of the House had the impression—that this matter had been settled once and for all on the previous occasion. I would have preferred it to have been included in an Act of Parliament as a matter of primary legislation, but I was perfectly prepared to accept the word of the Minister, a most honourable and splendid Minister whom we greatly admire, that this matter would be settled on the basis of a protocol. Now, it seems that that is left drifting in mid-air.
The noble Lord, Lord Wigley, speaks of a pig in a poke. I have no doubt that he is perfectly correct in that. There is no certitude at all now in relation to this matter. I feel that I acted rather foolishly when, some weeks ago, I, like many others, joined the choir of those on radio and television who revelled in the fact that this matter had been solved and a long-standing injustice had been righted. Although clearly there should be some further undertaking with regard to a protocol, I hope that the Minister will say tonight, in strict terms, that there will be no further Tryweryn—never, never, never.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I defer to my noble friend Lord Crickhowell’s specialist knowledge on fisheries and will restrict my comments to the general. I will also happily endeavour to follow the suggestion of the noble Lord, Lord Morgan, to limit contributions to under two minutes.
I spoke in Committee in support of reserving powers on consents for energy, on the basis that energy policy is so important as to be part of a national strategy determined by Westminster. On this occasion, however, I am delighted to support the devolution of matters relating to water and sewerage to the Welsh Government. As I hope will be mentioned today, and as was so passionately and eloquently referred to in the last debate on the Bill by the noble Lords, Lord Wigley and Lord Elystan-Morgan, this decision should put right a long-standing injustice following the flooding of the Tryweryn valley in 1965.
I welcome the positive steps that the Government have taken to put in place a comprehensive devolution settlement for water and sewerage in Wales. The amendments on this subject brought forward today reflect a clear devolution boundary on these matters. This, in turn, reflects the clearer boundary between devolved and reserved powers which underpins the new model of devolution set out in the Bill. Importantly, it includes a new statutory agreement, the water protocol, between the UK Government and the Welsh Government, setting out how they will work together in future on water and sewerage matters and how any disputes will be resolved. This replacement of intervention powers with a statutory intergovernmental agreement reflects the maturing of the relationship between the two Governments, one that is based on working together and resolving issues by discussion, rather than relying on powers of intervention. I particularly welcome the move to make this agreement reciprocal, with the same duties on the Welsh Ministers and the Secretary of State to have regard to the interests of consumers in both England and Wales respectively in exercising functions relating to water resources, water supply or water quality.
We must all hope that, as predicted by the noble Lord, Lord Wigley, on the last occasion, these decisions will be welcomed by every party in Wales and will put to rest any lingering rancour and bitterness that the tragic drowning of the Tryweryn valley created.
Baroness Morgan of Ely
My Lords, I was reflecting on how passionate and moving some of the speeches about water were in Committee, and then I remembered that we are also dealing in these provisions with sewerage, and we do not really get quite as excited about that.
I will speak to my Amendment 43, which would introduce a new clause to amend Section 27 of the Water Industry Act 1991. I acknowledge that there has been a degree of movement on the issue of Ofwat and its accountability to the Welsh Assembly. My amendment would require the Secretary of State to consult Welsh Ministers before giving general directions to Ofwat, the water regulator. Obviously, these directions would be in connection with matters relating to water and sewerage operators in Wales or where licensed activities are carried out using the supply system of water or sewerage operators in Wales. At an earlier stage of the passage of the Bill, I explained why these changes are necessary and I listened very carefully to the Minister’s reply. I have therefore changed the amendment I proposed at that point so that his concerns relating to any non-devolved areas of Ofwat functions, which he alluded to again in his opening statement today, would be taken out so that there can be no question of the Assembly interfering in areas beyond its competence in relation to giving guidance on what Ofwat should do in Wales.
It should be emphasised that we are not interested in trying to step beyond the Welsh Assembly competence here. However, we believe that Ofwat should be accountable to the National Assembly for Wales and Welsh Ministers for the function that it exercises in Wales. Without this new clause, Welsh Ministers will find themselves in the bizarre situation of regulating water and sewerage operators in Wales but with the Secretary of State being able to exercise his function of giving a general direction to Ofwat without any consultation whatever with the Welsh Ministers. We do not think that that issue has been addressed yet.
I support the point made by the noble Lord, Lord Wigley, on the need for an unequivocal statement on the face of the Bill that Wales is now responsible for matters relating to water. We have not got that and it would be good to have it. Sometimes, when it is such a politically sensitive issue, it makes sense to write it into the Bill to make sure that people understand the politics of what is going on; it is not all about law. That is probably true also in relation to reservoirs. I have heard what people have said before, and yes, the Welsh Assembly has the ability through the laws that it has even now to stop reservoirs and a future Tryweryn happening. But let us do it because it is the right thing to do, and because it is politically sensitive and something that people in Wales would really appreciate.
I will deal now with the Government’s amendments that relate to water. Noble Lords will recall, as we have just heard, the much-heralded announcement and fanfare in the media that everything was going to change in relation to water and that we were all thrilled. Yes, the idea that an intergovernmental protocol should be established on cross-border issues including water is a good thing. But it was also made clear that the Secretary of State’s existing legislative and executive powers of intervention in relation to water should be removed in favour of mechanisms under the intergovernmental protocol. The Secretary of State cannot now use those interventionist powers with regard to water. That is a good thing because we can deal with it through this protocol.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords for what has certainly been an impassioned debate on an area that I agree deserves passion. I will try to deal with the various issues that have been raised. I turn first to the package of provisions raised by my noble friend Lord Crickhowell in relation to his proposals for fisheries and recreation to be brought within the definition of water-related functions in Section 58 of the Government of Wales Act as amended. I obviously listen very carefully to everything that my noble friend says on any subject, but particularly in this area, where I know he has great expertise. I will look carefully again at this area and write to him. But I return to the basic point as I see it, which is that fisheries and recreation are already devolved matters, so there is no issue in relation to intervention in those areas. To use his analogy, the ingredients of the cake have already been passed to the Welsh Government. But I will take another look at it and write to the noble Lord.
Lord Crickhowell
The only thing that worries me about that is that they may have been passed to the Welsh Government when the fish are in Wales, but fish pass up and down the border, in and out of England and Wales, and affect both England and Wales—so there is an issue about cross-border arrangements.
Lord Bourne of Aberystwyth
My Lords, as I said, I will look at the issue, but my understanding is that if the fishing is taking place in England it will be a matter for England and if in Wales it will be a matter for Wales—but I will take a more detailed look at that and write to my noble friend and other noble Lords who have participated in the debate.
I turn now to the serious issue about the protocol and Tryweryn. I have said on more than one occasion—I feel that I have said this so often—that Tryweryn is not affected by this legislation. Tryweryn could not happen now. The power in relation to reservoirs in every respect is already with the National Assembly for Wales. I could not have been clearer on that. I understand the importance of the issue as part of our folklore, but it is unaffected by this legislation. One would not expect this legislation to claim to be doing things that it is not doing. That is the basic point—although I understand the passion in relation to this area. I give that reassurance to the noble Lords, Lord Wigley, Lord Thomas, Lord Elystan-Morgan and Lord Morgan. Tryweryn cannot happen—or if it does, it is a matter for the National Assembly for Wales.
Lord Wigley
I am grateful to the Minister, who is repeating—quite understandably—the points he made in Committee. However, I pray in aid the comments made by the noble Baroness, Lady Morgan of Ely, with regard to the benefits of having something written in the Bill. Other declaratory points are included in the Bill—for example, the permanence of the Assembly. That is a declaration and there is no reason at all why there should be not that clear declaration. But it goes further than that. It goes to the question of the total control of reservoirs in Wales—every aspect of them should be under the control of the Assembly. Is the Minister saying that they are?
Lord Bourne of Aberystwyth
My Lords, I am saying that. The noble Lord is not often unfair, but I think that he is being unfair on this occasion. The issue in relation to the permanence of the Assembly is an aspiration and a declaration that was sought by his party and agreed by others. This is a very different issue. It is a statement of what this particular Act will do. This Bill as it is at present does not do anything in relation to the situation he is referring to—so it would be most extraordinary to claim that it did.
Turning to the broader issue of the protocol, once again I am conscious that the protocol is clearly important, but the Government have not claimed anything that is untrue or indeed misleading. We have said that the existing intervention powers will be substituted by a protocol. That remains the case. I understand noble Lords wanting information on what the protocol will cover, and perhaps some timetable for how it will be agreed, but noble Lords cannot have thought that I would be able to produce an agreed protocol at this stage of proceedings when we have only just agreed across government that this will be the way forward. I certainly undertake to write to noble Lords with a timetable for how the protocol will proceed and what it will cover, but I hope that they will accept that there has been no misleading in relation to the protocol. What we claimed is what we are delivering.
Lord Wigley
I am sorry to intervene again—I do not want to be a nuisance—but the Bill says that the protocol “may” be introduced. Why does it not say “shall”?
Lord Bourne of Aberystwyth
That is a drafting point. The noble Lord makes a fair point, but I can give the reassurance that there is certainly no intention on the part of the Government that this should not happen. It is something that is proceeding. I can confirm that it is the Government’s intention. We want this to happen and I believe that it will happen. I am not taking a pessimistic view of this. The noble Lord makes a fair point about the drafting, which I had not picked up—but sometimes these things are referred to as “may” and sometimes as “must”. From our point of view, we regard this as imperative.
Lord Elystan-Morgan
From what the Minister says, it seems pretty obvious that the protocol will not be in existence before the Bill receives royal assent. So one will be left with some sketch on the part of the Minister. That is not the ideal way of doing things, but I am sure that we would be prepared to accept the word of the Minister on what the basic content of the protocol will be.
Lord Bourne of Aberystwyth
I thank the noble Lord, Lord Elystan-Morgan, for that intervention. I cannot be certain, but I anticipate that the protocol will not be decided before Third Reading on our current timetable; that is most unlikely. But as I said, I will write to noble Lords giving an indication of what it will contain and some timescale ahead of Third Reading. I hope that that will be before the second day of Report. Once again I say that I do not think that there has been any misleading on this at all. We said that there would be a protocol to replace the intervention powers. That is the intention. We have good will and we want to get this agreed. We will do it with due expedition, as quickly as we can, but it may take longer than the middle of January, which is what we are looking at. With that, I ask noble Lords not to press their amendments.
Lord Wigley
Lord Wigley
My Lords, I shall speak briefly to Amendment 14 and the other amendments in the group which have been tabled by the noble Baroness, Lady Morgan of Ely, seeking to devolve the trust ports to the National Assembly for Wales. I have added my name to Amendments 14 to 22.
The noble Baroness’s amendments were debated at the previous stage of the Bill, and I would like to remind the House of a point on which we were all agreed: the fact that Milford Haven is of strategic significance. It is unique in that it has a deep-water facility and handles 62% of all our liquefied natural gas, and as such it is of economic importance to Pembrokeshire. It was included in the Silk report and the St David’s Day agreement. To my mind, the reasoning behind this reservation is totally unclear. On the previous occasion, the Minister implied that the Government were unwilling to compromise on this matter, stating that reserving Milford Haven was an essential part of the Bill. He went on to assure noble Lords that he would take another look at the arguments set out and report back on his conclusions. I look forward to hearing them.
I want to reiterate that I am in full agreement that Milford Haven should be devolved. There is, however, one deeply troubling comment that I wish to raise again, and that is that Milford Haven trust port was at one stage being suggested by the current First Minister of Wales as a base for the UK nuclear fleet. He went on to say that the Government are not considering that option, but using the hosting of Trident as a way to emphasise the strategic significance of the port immediately rang alarm bells. Devolved or reserved, Trident is not welcome in Wales, and I urge both the Government and the Opposition to put on the record today that they do not intend to acquire powers in order to justify locating it there. However, I am very much in agreement with the main points made by the noble Baroness, Lady Morgan, in Committee. I beg to move.
Baroness Morgan of Ely
My Lords, I shall speak to Amendments 14 to 22 in my name and that of the noble Lord, Lord Wigley, and to Amendments 23 to 26 in my name, on the devolution of ports to Wales. The difference between my amendments and the Government’s position is that I believe that all ports in Wales should be devolved. The Bill as currently drafted does not conform with the recommendation of the Silk commission on the devolution of ports to Wales, as the noble Lord, Lord Wigley, has just emphasised.
To be fair, the Bill allows the Assembly to legislate on ports and harbours, which is a welcome move, but there remains this category of reserved trust ports on which the Assembly cannot legislate and over which Welsh Ministers cannot exercise any powers. That category seems to be arbitrarily defined by a certain turnover in relation to ports. In fact, only one port in Wales falls within the category, and that is Milford Haven in Pembrokeshire. It strikes me as very odd that the UK Government are seeking to control this one particular port.
So far, the justification given is that Milford Haven is a strategic energy port because it handles 63% of all the liquefied natural gas that comes through UK ports. As I mentioned in Committee, this justification is particularly odd as the UK Government made no attempt to cite energy security as a policy driver for investment in Milford Haven to support the sale of the Murco refinery in 2014. Equally strange is the fact that the UK Government did not seek to control the trust port of Aberdeen, which has significant strategic energy value due to the importance of North Sea oil to the United Kingdom. There are definite double standards in this. In Scotland, all ports and harbours are devolved, while Wales is once again being treated as a second-class country.
I would also argue that devolving powers over the trust port at Milford Haven is incredibly important for the economic development of the area, and it should be within the power of the Assembly to help promote growth in Pembrokeshire. It is the Assembly which has responsibility for economic development.
Some powerful points were made in Committee by noble Lords, including one by the noble Lord, Lord Crickhowell, on the issue of safety at the port. Indeed, the very fact that so much fuel comes through the port makes safeguarding an essential issue. The emergency services, both ambulance and fire, are already devolved. I want noble Lords to recall the “Sea Empress” oil tanker, which in 1996 ran aground just outside the port of Milford Haven. Protecting our environment is equally as important as the safety issues, as is the policing of the legislation for both safety and the environment at the port. In order to have a truly holistic response to accidents, whether on safety or environmental grounds, it should be acknowledged that one umbrella of responsibility makes more sense.
Noble Lords can imagine that, if an accident such as that involving the “Sea Empress” happened today, there would be a great deal of passing the buck between the UK Government and their accountable body, the port authority, and the Welsh Government, who are responsible for environment and safety. This was not an issue in 1996 because the Assembly did not exist. I am always concerned that, when there is not an absolutely clear line of responsibility, where does the buck stop? In a case like that of the “Sea Empress”, noble Lords can imagine how the bodies would pass the responsibility for it between each other for years.
The interrelated issues of the economy, the environment and safety, together with the interaction of local communities and the local authority, all need to be co-ordinated. Surely it would be easier and more effective to co-ordinate them at the Wales level. I hope that the Minister will reconsider this point and allow the port at Milford Haven to come under the control of the Welsh Assembly, as recommended by the Silk commission.
Baroness Randerson
My Lords, it really rankles that, yet again, something which is taken for granted in Scotland is viewed as not appropriate for the Welsh Assembly and the Welsh Government. There is no logic to this decision. There might be an excuse, but that is different from logic. There is every reason to take a comprehensive approach to managing the ports in Wales on very good strategic and economic grounds, along with developing a strategy in relation to them as a whole. Moreover, as the noble Lord, Lord Crickhowell, mentioned in Committee, there is the importance of the safety aspects of this issue. So I would say to the Minister, who I realise understands only too well the importance of ports to the Welsh economy and who understands extremely well the economy of that part of Wales, that even at this late stage of our consideration of the Bill he should give this matter further thought and come back at Third Reading.
Lord Crickhowell
My Lords, I had not intended to intervene again on this issue. I have long experience of dealing with the port authority and sometimes the relationships were very good. One particular person was running the authority during my early years as the local MP with whom I had an absolutely first-class relationship. However, they were not always as good. What people ought to understand about the port authority is that it will not be the Welsh Government, or indeed the UK Government, actually operating and controlling things; that is very much for the port authority, which has extensive powers. I once had a profound disagreement with the authority over a campaign that I and others fought on the safety issue because we were deeply concerned about some of the actions being taken not by the Government but by the port authority for its own commercial or other reasons.
I wonder whether there is not some solution here. I understand entirely the crucial fact that the gas terminals are at the end of pipelines that carry gas into England and form an important part of our energy package. Surely it would be possible for some agreement to be reached by the Government with the Welsh Assembly that would take the authority for dealing with the strategic link and the gas facility out of the specific responsibility of the Welsh Government and make it a separate strategic effort, while somehow allowing the Welsh Government much more involvement for the reasons that have been outlined in the handling of such matters as safety within the port.
The fact is that the town of Milford, the oil facilities and the people who live around them on the south of the haven, as well as Neyland and Pembroke Dock, are all close to areas where, if an accident occurred, the impact would be enormous on the local population. So there is a real issue here, and I have a good deal of sympathy with the view that these matters should not necessarily be in the hands of a trust port whose powers were established a long time ago in very different circumstances. I wonder whether the powers and authority of this port should not be looked at again, perhaps jointly, by the Welsh Government and the UK Government, because there are practical issues here that go back to the original creation of this facility, when the circumstances were wholly different.
I understand the vital strategic issue, which needs to be covered and dealt with adequately, but I hope that the Government will give at least some further thought at some stage—whether they can do it during the passage of this Bill I am not sure—to the way in which these issues are managed and handled in the port of Milford Haven.
Lord Hain
My Lords, following that very interesting contribution from the noble Lord, Lord Crickhowell, perhaps I may ask the Minister to explain exactly how all the other issues to do with Milford Haven port are devolved to the Welsh Government. Economic development—which is crucial in the area—environmental questions, safety issues and matters relating to the sea are all devolved, yet, uniquely, Milford Haven port is excluded. If the sole reason for that is the energy question—one can understand the strategic importance of the LNG capacity there—surely the vehicle to address that might be a protocol. Since the Minister has wheeled out the protocol—I do not mean that pejoratively—in a way that is meant to satisfy the legitimate demands for control over water within Wales, why could that not be the vehicle for addressing the strategic energy question, while ensuring that the Welsh Government have full control over Milford Haven as they have over all other ports?
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on these amendments. Obviously, the Government have some amendments in this group as well, which I will move in due course.
Amendments 14 to 26 and Amendments 86 to 89 are opposition amendments. We debated amendments that were very similar to Amendments 14 to 26 and Amendments 86 to 89, tabled by the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Wigley, in Committee on 7 November. The amendments would remove the reservation of reserved trust ports from the Bill and so transfer functions to the Welsh Ministers and devolve legislative competence for these ports to the Assembly in the same way as the Bill does for other ports wholly within Wales.
During that debate, in light of our discussion and the points raised by noble Lords, I undertook to take another look at the reservation of reserved trust ports without prejudice—that is, not saying that I would come along with revised proposals. I am now convinced of the strategic case for excluding Milford Haven and will seek to explain why.
Trust ports have unique governance arrangements. They are run by independent statutory bodies whose role is to manage, maintain and improve a harbour. Trust ports operate on a commercial basis, generally without financial support from government. Harbour authorities for trust ports have no shareholders but are accountable to, and run for the benefit of, their stakeholders, who include port users, local communities and local economies as well as local government and national Governments. Any profits are reinvested by the harbour authority in the port for the benefit of those stakeholders. Indeed, it is the duty of a trust port board to hand on the harbour to succeeding generations in the same or better condition. There are five trust ports in Wales, at Caernarfon, Milford Haven, Neath, Newport and Saundersfoot.
In light of the unique governance arrangements that I have just outlined, the Government believe that trust ports that have a nationally significant role in Wales should continue to be accountable to UK Ministers, which is what the reservation of reserved trust ports in the Bill achieves. During our debate on 7 November, all noble Lords who participated were in agreement about the importance of the port of Milford Haven. The significant volume of liquid bulk cargo—that is, oil and oil products, and liquefied natural gas—passing through the port each year is a clear testament to that. The oil refinery and fuel storage facilities at Milford Haven, which are dependent on the port, play an important national role in securing supplies of road and aviation fuel in Wales and England.
Perhaps I may at this stage take issue with something that the noble Baroness, Lady Morgan, stated in relation to the Murco refinery. I am in a position to say something from direct experience because I was chair of the Haven Waterway Enterprise Zone when the Murco refinery was threatened with closure, which sadly came to pass. The two Governments, the Government in Wales and the Government at Westminster, worked closely and amicably in relation to this; there was no disagreement. As chair of the enterprise zone, I had frequent discussion with the Department of Energy and Climate Change, as it was at the time, and the Minister there. There were also discussions with the relevant Welsh Minister. It was all perfectly amicable. So on matters relating to Milford Haven, I would not want noble Lords to think that the two Governments are always at loggerheads on these issues; that was certainly not the case in relation to the Murco refinery and on other issues that came up while I was chairman there over a period of some two years.
It is because of the importance of the oil refinery and fuel storage facilities at Milford Haven, dependent on the port, that we take the view that it is of strategic significance. The turnover threshold in Clause 32, referred to by the noble Baroness, is used to determine which trust ports in Wales are reserved trust ports and is based on a turnover threshold in the Ports Act 1991. Although the context is different, it seemed to be a suitable test for determining which trust ports in Wales are nationally significant and so should be reserved.
I accept—I note the spirit of contributions made by the noble Lord, Lord Hain, and others—that Welsh Ministers will remain a very important stakeholder for Milford Haven given their devolved responsibilities for other matters, such as for economic development, surface transport and marine licensing. I say once again that it is wrong to anticipate that every time a serious issue arises the two Governments will not work together. I refer noble Lords by way of example to the situation in relation to foot and mouth. That would no doubt be the case if there was some national emergency involving both Wales and the rest of the United Kingdom. The two Governments would work successfully together again where there was a need for it.
Lord Bourne of Aberystwyth
My Lords, if I have understood the point correctly, this is in the context of our firm belief that the port is of strategic UK significance but that there are occasions when it is absolutely right that the Welsh Government need to be involved. They are a significant stakeholder in the port at the moment and—again, I can speak from experience of chairing the enterprise zone—are involved very much in issues there. It is not that the two Governments were at loggerheads; that is far from the case. It seems that we always anticipate that the two legislatures and the two sets of Ministers will always be at each others’ throats; that is far from the case. These two mature institutions very often—indeed, most often—work very successfully together. That is the point I am seeking to make.
Lord Bourne of Aberystwyth
May I just develop this point? I remind noble Lords that the rule on Report is that they should speak only once—but I will give way since I am sure that it is a relevant contribution. I shall write to noble Lords on issues that have been discussed to explain how the relationship with the Welsh Government works, the matters they are involved in and, perhaps, how we can move that forward to ensure that we have harmonious relationships.
Lord Hain
I am grateful. Incidentally, that was an intervention, not another speech. If the Welsh Government and the UK Government will not be at loggerheads on things, why would the Welsh Government be at logger- heads with the UK Government on the supply of LNG, which is just as important to Wales, proportionately, as it is to the rest of the UK? I do not understand the logic of the Minister’s point.
Lord Bourne of Aberystwyth
My Lords, we could disagree on this issue until the cows come home but the basic point, which I think the noble Lord would accept, is that some matters are rightly retained as reserved matters for the United Kingdom Government while other matters are appropriate for the Welsh Government. It is our belief that the significance of this port in UK terms means that this should be a reserved port and not a devolved port. We disagree on that, but that is the basis on which we are moving forward, recognising that the Welsh Government have a role to play in relation to Milford Haven—a role that they fulfil at the moment. As I say, I will endeavour to ensure that I write to noble Lords to explain how that relationship is working at the moment.
In our debate on 7 November, some noble Lords questioned the matter of the devolution of strategic ports in relation to Aberdeen, which has been cited, quite appropriately, I acknowledge, in relation to Scotland. That was, of course, a devolution arrangement that was put in place in 1998. The Government’s thinking has developed since then and the Wales Bill includes the important concept of reserving to the United Kingdom Government trust ports that are nationally significant. I repeat to the noble Lord, Lord Hain, and others that that is the reason we seek to retain Milford Haven as a reserved port.
Government Amendments 27 to 35 are concerned with reciprocal requirements for the consent of the Secretary of State and the Welsh Ministers imposed by Sections 42C and 42D of the Harbours Act 1964. These requirements relate to harbour orders and schemes made under that Act which amend existing harbour orders and schemes made by the Secretary of State or the Welsh Ministers. The amendments are needed because the consent requirements are not consistent with the new devolution settlement for harbours in Wales set out in the Bill.
The amendments remove the reciprocal consent requirements. The transfer of harbour functions to the Welsh Ministers in the Bill will mean that the Welsh Ministers, not the Secretary of State, will exercise these harbour order and scheme-making functions for all harbours wholly in Wales, apart from reserved trust ports, which I shall refer to as “devolved harbours”. This would cover issues such as improvements to harbour facilities in relation to devolved harbours. The Secretary of State or his delegate could make such orders or schemes relating to devolved harbours only in very limited circumstances. In all such cases, the Secretary of State or his delegate will have a duty to consult the Welsh Ministers before making such a scheme or order, including under new provisions in the amendments.
Also, it would be unduly restrictive if Welsh Ministers were required to obtain consent from the Secretary of State when making, for example, a harbour revision order for a devolved harbour that alters the effect of a harbour revision order made for the harbour by the Secretary of State before the new devolution settlement. Other amendments in the group contain consequential amendments applying to Clause 36—provisions supplementary to Clauses 34 and 35—covering the Secretary of State’s new consultation obligation introduced by the amendments.
Lastly, Amendment 31 removes wording from Clause 36(1) which carries an exception from the duties to consult where consultation is not reasonably practicable. This amendment has been requested by Welsh Ministers.
Government Amendments 54 and 110 to 114 fulfil a commitment I gave in Committee to examine further the fisheries management functions being transferred to Welsh Ministers to regulate fishing vessels outside the Welsh zone. Amendment 54 introduces a new clause that transfers additional fisheries management functions to Welsh Ministers. The functions replicate, to a large extent, those already exercisable in the Welsh zone which were transferred under the Welsh Zone (Boundaries and Transfer of Functions) Order 2010. The effect of the amendments is that Welsh Ministers will have available to them the functions they require to manage Welsh vessels wherever they are. They also preserve the United Kingdom Government’s requirement to retain a symmetry between the concurrent functions available to the Secretary of State in relation to Scottish and Welsh fishing vessels operating outside their respective zones. Welsh Government officials worked with their colleagues in the Wales Office and in the Department for Environment, Food and Rural Affairs to recommend these amendments, which we are pleased to present.
Finally in this group, Amendment 55 requires the Secretary of State to consult Welsh Ministers while setting strategic priorities in relation to the Secretary of State’s delivery, in Wales, of functions under two pieces of primary legislation: the Coastguard Act 1925 and the Merchant Shipping Act 1995. In practice, each of these functions is carried out by the Maritime and Coastguard Agency, an executive agency of the Department for Transport. While day-to-day operational and incident response decisions are, quite properly, the responsibility of the chief executive of the Maritime and Coastguard Agency, the Secretary of State is responsible for setting its strategic priorities. Areas covered include the 24-hour search and rescue helicopter service provided by the coastguard and the promotion of seafarer health and safety standards.
Noble Lords will be aware that statutory provision has been made for consultation between the Scottish Government and the Secretary of State in the Scotland Act 2016, and in Committee I agreed to reflect on the case for making similar provision for Wales, in line with the amendments brought forward in Committee by the noble Baroness, Lady Morgan, and the noble Lord, Lord Wigley, and by the Smith commission in respect of Scotland. I am pleased to say that we can make such provision, and this amendment is the result. I commend the government amendments in this group and urge noble Lords not to press their amendments.
Lord Wigley
I thank those who have taken part in this debate, including the noble Baronesses, Lady Morgan and Lady Randerson, the noble Lords, Lord Crickhowell and Lord Hain, and, of course, the Minister. On Milford Haven, I think that there is a feeling across the House that there is a greater role for the National Assembly and the Welsh Government in this matter, particularly when one considers that they have responsibility for the safety and civil emergency aspects. There are questions of coherence in manpower planning, in transportation and road planning and in the economic infrastructure of the whole area. None the less, we note the points that the Minister made and it appears that we will have to agree to differ on this. I thank the Minister for government Amendments 54 and 55 on fisheries, which are a response to amendments we tabled in Committee and which will be welcome in Wales. On that basis, I beg leave to withdraw the amendment.
“( ) Where the Secretary of State or the Welsh Ministers have made an order under section 42A of the Harbours Act 1964 delegating the function of making a harbour revision order, the duty in subsection (1) or (2), so far as it relates to the function mentioned in subsection (4)(c), applies to the delegate as it applies to the Secretary of State or the Welsh Ministers.”
“Exercise of functions in relation to two or more harbours
(1) Where—(a) a Minister of the Crown proposes to exercise a relevant function in relation to two or more harbours, and(b) at least one of those harbours is a harbour that is wholly in Wales and is not a reserved trust port, the Minister of the Crown must first consult the Welsh Ministers (except where section 36(1) applies).(2) Where a Minister of the Crown has made an order under section 42A of the Harbours Act 1964, the duty in subsection (1) applies to the delegate as it applies to a Minister of the Crown.(3) In this section—“relevant function” has the same meaning as in section 34;“reserved trust port” has the meaning given in section 32;“Wales” has the same meaning as in section 34.”
“Consequential amendments to consent requirements in Harbours Act 1964
(1) In section 42C of the Harbours Act 1964 (consent of Welsh Ministers for certain orders and schemes), after subsection (2) insert—“(2A) The references in subsections (1)(c) and (2) to a statutory provision of local application do not include a harbour revision order, a harbour empowerment order or a harbour reorganisation scheme.”(2) In section 42D of that Act (consent of Secretary of State for certain orders and schemes), after subsection (2) insert—“(2A) The references in subsections (1)(c) and (2) to a statutory provision of local application do not include a harbour revision order, a harbour empowerment order or a harbour reorganisation scheme.””
Lord Wigley
Lord Wigley
My Lords, here we go again. I rise to move Amendment 36 and to speak to Amendment 37, which is coupled with it. I shall speak to Amendment 60 a little later.
I welcome the Minister’s acknowledgement in the previous stage of the Bill that the limit placed on energy projects is in fact arbitrary. However, he failed to outline in any way why such a low arbitrary limit is necessary. I am sure that I will catch his eye, or his ear, in a moment so that he will be able to respond to that point in due course. The Minister rightly made the point that if you have to put a limit somewhere it will always, in some respects, be arbitrary. An obvious solution is to remove the limit altogether, as is the case in Scotland. Does he not think it bizarre that the Government are happy to use words such as “arbitrary” to justify their imposition of a regime which means that Welsh people will not decide how and when Welsh resources are developed? I do not want to replay the battles already fought. However, I am keen to respond to some points that he made during our last discussion on this matter.
First, as he knows well, and as I have already made clear, the Silk commission serves as no cover to justify the failure to enhance the Bill, since the Government have blatantly ignored unanimous Silk recommendations on other matters. The Minister cannot have it both ways. Although I accept that the 350 megawatt limit was agreed in the cross-party commission, that was in the context of an understanding that other parties would support the devolution of a range of policies in other areas and part of a carefully constructed compromise, as he will well recall, several aspects of which are now being sidelined. The Government have ignored the recommendations of the commission on policing, youth justice and rail infrastructure, among other areas. Just to cherry pick from the commission’s recommendations makes a mockery of the process.
Secondly, I am pleased that the Minister has agreed that I was right to highlight the absurd situation of the tidal lagoons, which means that the already approved 320 megawatt Swansea Bay lagoon would be within the threshold, while almost all the other proposed lagoons would not be within the competence of the Assembly. That makes it impossible for the Assembly to develop a coherent expertise, recognised by all people in such matters. Since we already have projects on the stocks in this area and close to each other in size, it really begs the question: seeing that it is arbitrary, why should it not be so at a slightly higher level?
I do not agree with the Minister that the 350 megawatt limit is the only way to do things, as he said, even when it comes to tidal lagoons. He justified the arbitrary 350 megawatt limit by intimating that some strategically important energy projects were not safe in the hands of Wales—at least, that was the implication. Of course, it is the policy of my party that the people of Wales should decide on how all its resources are utilised, regardless of technology or size. However, I emphasise that the Minister need not be concerned about strategically important energy projects being scuppered by Wales. Nuclear energy is already listed in the reservations. A limit well in excess of 2,000 megawatts would still fail to capture much of what is considered as strategically significant by way of energy generation. Fundamentally, a more sensible and pragmatic approach to these energy limits would create a clear, lasting devolution settlement. Even more importantly, in practical and pragmatic terms it would be easier for the developers and for the expertise within the Assembly.
The amendments in my name, unlike the previous ones tabled by Plaid Cymru MPs, recommend a 2,000 megawatt cut-off offer. This would still not encapsulate many of the projects which I had hoped the Government would recognise should be decided on by the Welsh people. But I hope that it offers a more amenable arbitrary limit—yes, arbitrary, as the Minister put it—which would increase Welsh people’s ability to decide how Welsh resources are utilised and give the Assembly a coherent role. The 2,000 megawatt figure, although undoubtedly arbitrary, has been inspired by the Labour amendment in Committee; I readily acknowledge that it proposed the same figure. I therefore hope that I can count on their support for this amendment. Can the Minister outline how any arbitrary limit, be it 350 megawatts or 2,000, can be increased without the need for primary legislation in a pragmatic and sensible fashion, or adjusted in any way that circumstances require, to ensure that we get to a point where Wales’s natural resources are decided on by Welsh people to the maximum possible extent?
Baroness Morgan of Ely
My Lords, I shall speak to Amendments 57 and 58, which seek to amend government Amendment 56. These amendments have been bizarrely grouped with the amendments to which the noble Lord, Lord Wigley, has just spoken. These amendments are about fixed-odds betting terminals. We were really pleased when the Minister suggested in Committee that he would be minded to devolve the regulation of fixed-odds betting terminals in Wales, and we are grateful that an amendment has been tabled by the Government on this issue. However, a detailed reading of the amendment reveals that it does not go nearly far enough in addressing the issue of concern to us.
The government amendment will enable the Welsh Government to address fixed-odds betting terminals in Wales under the Gambling Act 2005. It states that Welsh Ministers may legislate for the number of machines in the betting establishment for which the maximum stake exceeds £10. In other words, the only machines that would come under this provision are those where you have to spend at least £10 every time you play. At least, that is my understanding of the Government’s amendment; perhaps the Minister will correct me if I am wrong on that point.
Under the current Gambling Act, up to four machines are authorised per betting premises. Our amendment would enable the Welsh Government to make laws that would affect machines where anything over £2 could be gambled. I am not saying that we need to regulate the 2p slot machines in Nessa’s Slots in Barry Island where, like thousands of others, I frittered away my coppers in years gone by, but we need to lower the amount that can be gambled at a time. This is something which has exercised many experts in the field. We are aware that a review of betting machines is being undertaken by the UK Government, and this issue has been taken up by the All-Party Parliamentary Group on Fixed Odds Betting Terminals. There seems to be all-party support to reduce the maximum bet to £2. Will the Minister give us an assurance that the amount could be reduced if the matter is devolved? It would be good if the Minister could indicate that to us. If the amount could be amended here, that would be the ideal situation, but if not, will he give us an indication about how it could be done in future?
However, that is not my biggest concern with this amendment. My real concern with the Government’s amendment is that it would apply only to new betting premises. In other words, all the betting shops that exist in Wales today would be entirely unaffected and the Welsh Government would have no powers whatever over fixed-odds betting terminals currently in Wales. I know what the Government will say. They are going to say that that is what the Scotland Bill said. That is not good enough. Just because the SNP was not keeping an eye on its Bill does not mean that we will wave this Bill through when it is fundamentally flawed. It is important that we take note and the Scots should take note as well. They were not keeping an eye on their Bill. They flagged through the Henry VIII clauses as well. A message should be given to the SNP that it should step up and keep an eye on things.
Gambling is causing massive social, economic and health problems in Wales, and we want the tools to deal with them. Research conducted by the Gambling Commission identified 1.1% of the Welsh population as problem gamblers. Figures show that nearly one-fifth of problem gamblers in the UK have reported debts of between £20,000 and £100,000, while counselling sessions increased by 29% between 2013 and 2015. This is happening now, it is an epidemic and we need to do something to stop it. These machines are phenomenally popular. It is estimated that on average £3,000 a day is wagered on the 1,500 terminals in Wales. You can lose up to £100 every second on these machines. The gambling prevalence survey, a major study of British gambling, found that these machines are most popular among young, male, low-income gamblers, particularly the unemployed, as well as among students and those from ethnic minorities. Where have bookmakers decided to concentrate their efforts? They are putting them in high streets in poorer areas. To date, the UK Government have not done nearly enough to curtail the proliferation of fixed-odds betting terminals, so if the UK Government are reluctant to act, they should give the Assembly the freedom to act to reduce the maximum stake to £2 and make sure that the Assembly can act retrospectively, not just in the future. The problem exists now, and the Assembly is expected to wipe up the mess.
I guess I should be grateful that the Government have brought something forward, but I am afraid that, in its current form, I am disappointed with the amendment. I hope the Government will take on board our amendments on this important issue.
Lord James of Blackheath (Con)
I believe that the noble Baroness, Lady Morgan, has been led astray by a very faulty piece of wording here on which I have written to the Minister. I think it is not a question of a minimum bet of £10. I believe you can nominate any value you want down to 20p on any machine. It is not a minimum bet; it is a minimum bank that you have to open to have the right to play on the machine. That is £10. Then you can have any value of stake you want within it down to 20p, even perhaps 10p in some instances. The confusion comes from the difference between a minimum stake and a minimum bank that you can buy into on any machine. If we could get that clear once and for all, this problem would largely go away.
Baroness Randerson
My Lords, I start by making clear that I do not share the views of the noble Lord, Lord Wigley, on the value for money of the repairs to Buckingham Palace, which I see as a major tourist attraction and therefore well worth the investment.
I agree, however, with his views on the limits to the Assembly’s powers on energy and support his amendments to increase them. For many years, it has been Liberal Democrat policy to give the Assembly power over energy, with the exception of nuclear energy. It is essential that we keep pressing this issue because it is so illogical to have this 350 megawatt limit plucked— I understand why—out of the air.
Will the Minister supply us with further information on fixed-odds betting terminals? We have had some very interesting suggestions. The noble Baroness, Lady Morgan, said that she is unclear about issues associated with gambling. It is certainly not something on which I can speak with any authority, but I am sure we need to make sure that the powers given to the Welsh Assembly are sufficient to be meaningful. The only reason for giving it powers over this would be to allow it to exert those powers in a way to change behaviour and deal with a very serious problem. I would be very grateful for any further information that the Minister can give us about the intention of this amendment and about, for example, the percentage of terminals that would be affected and the percentage of gamblers whose activities would be affected by this amendment.
I am very grateful that the Government have made a concession on this. It is something that has been pressed by many noble Lords, and not just in the context of this Bill. However, it is important that it should be a meaningful concession.
Lord Griffiths of Burry Port (Lab)
My Lords, I will intervene for a short moment, with real apologies for not having been here at earlier stages in these discussions—I fear that I have duties that do not make it possible to be here all that often. I take the definition of the £10 bank very seriously to heart, but that is not the issue for me. I congratulate the Government and the Minister on recognising that there is a problem and bringing forward a government amendment that reflects that. The curious paradox for me is that having recognised there is a problem, on the basis of fixed-odds betting machines as they currently exist, the one area that devolved responsibility does not address is the very part of the problem that creates the discussion in the first place. To have an amendment that provides powers for the Welsh Assembly to look after what happens in the future, when the problem that has generated the debate cannot yield a similar level of control, seems to me a curious paradox. So while thanking the noble and genial Lord the Minister, who has handled things so magnificently in these debates, I just urge him to think about something that is paradoxical but could be tidied up. If retrospective responsibility could be introduced, that would make it a much better amendment from the Government.
Lord Howarth of Newport (Lab)
My Lords, my noble friend Lord Griffiths of Burry Port is rather charitable, indeed flattering, to the Government in referring to their creation of a paradox. I would say that this is simply confused and bad policy-making and endorse what my noble friend Lady Morgan of Ely said at the outset. First, it is not a good way to treat the House for the Government to insist on mixing up, in one group, amendments on this variety of topics—energy, the Crown Estate and gambling. This is not a basis for rational scrutiny of legislation and it should not have happened.
I want to dwell on the gambling issue for only a moment, as much more important is the confusion in the handling of it. To make this distinction between different sizes of bank or stake—I am grateful to the noble Lord, Lord James, for his elucidation of the issue—and to attempt to make a distinction between responsibility for supervision of machines that are already in Wales and for machines that may in future be in Wales is to fragment responsibility. If the Government are going to devolve responsibility for a very important social issue, they should devolve it properly and produce a coherent solution. Fragmenting responsibility can only make for confused and ineffective policy-making. This issue matters far too much to Welsh society, and in particular to the prospects for significant numbers of young people in Wales, and we need a coherent and proper policy for it.
Lord Bourne of Aberystwyth
My Lords, I will address the remarks on this group of amendments and I thank noble Lords who have participated in the discussion. First, I will deal with a point raised by the noble Lord, Lord Howarth, in relation to the grouping of amendments by pointing out that it is entirely possible through the usual channels to decouple amendments. That has happened in at least one other group, so I do not think the accusation was entirely fair. It is open to other parties to challenge that.
Initially, I will address government Amendment 38 to Clause 37, as well as Amendments 36 and 37, tabled by the noble Lord, Lord Wigley. The government amendment is a technical one to address concerns raised by the Welsh Government. Consistent with the principle of establishing a lasting settlement, it simply acknowledges that future Acts of the Assembly may prove relevant factors in the exercise of consenting powers under the Electricity Act 1989. This addition simply amends that Act accordingly to allow for that possibility.
The noble Lord’s amendments seek once more to reopen the basis on which the Government endorsed a key recommendation of the Silk commission. I note what the noble Lord said about the commission, but he will know that the legislation is essentially based on the St David’s Day agreement, which took forward a lot of the Silk commission recommendations but not all of them. What is in the Bill is essentially based on the St David’s Day consensus rather than on the Silk recommendations, although in this context they are the same.
As I said in Committee and have subsequently reiterated in writing to your Lordships, the Bill has been carefully drafted to give effect to that political consensus around the devolution of new powers which will give Wales a substantially greater degree of autonomy in determining the shape of its future energy structure. To use a word that has been used recently, it would be paradoxical if the Government ignored that consensus and came up with a figure that was not part of it. Key to that consensus was recognition that Wales and England are, and will remain, intrinsically linked through a common electricity transmission system which depends on the inputs from a broad range of generating sources.
The Government continue to be firmly of the view that the larger the capacity of those sources, the greater their significance beyond Wales and to the United Kingdom as a whole. Consensus was reached around 350 megawatts being the appropriate watershed, and I do not believe that the landscape has changed to such a degree since then as to necessitate exploring an alternative approach. The noble Lord, Lord Wigley, I think, and possibly others asked whether we already have the powers if we were to subsequently seek to increase that. Yes, we have the powers, without fresh primary legislation, under, I think, the Electricity Act. It might be under a planning Act, but I can assure the noble Lord that those powers exist in relation to upping the figure. That is not to say that factors might not emerge in the future which would give us pause for thought on this front. I do not believe, however, that now is the time to alter the 350 megawatts figure, but as I have indicated, the power is there if it should be needed.
Government Amendments 117, 118 and 119 relate to generating stations and provide Welsh Ministers with greater flexibility for the future around the exercise of their new electricity generation consenting functions in Welsh waters and in relation to the amendment of existing onshore consents up to 350 megawatts under the Electricity Act 1989. They simply and sensibly provide Welsh Ministers with the ability to delegate the exercise of their new functions to a person they appoint for the purpose. This is a flexibility which the Welsh Government have asked for, and I am happy to provide it.
Government Amendments 56 and 83, and opposition Amendments 57 and 58, relate to fixed-odds betting terminals. I confess that I am not acquainted with these either, although I understand that the noble Baroness, Lady Morgan of Ely, has been experiencing them in the last week or so to see how they work, in addition to Nessa’s Slots in Barry Island. In Committee last month, I committed to reflect further on the arguments in favour of devolving powers over fixed-odds betting terminals. Having done so carefully, I am pleased to bring forward Amendment 56, which will transfer the power on fixed-odds betting terminals in exactly the same way as has been done for Scotland. I am very grateful for the intervention from my noble friend Lord James, indicating that the amount relates to a bank rather than a stake. I hope that gives some reassurance to the noble Baroness opposite and ties in with her experience on this issue.
The noble Baroness, quite fairly, raised the issue of whether, if the amount were to change in England, it would translate across to Wales. I can confirm it would. As she rightly says, this is a serious problem which has been exercising the all-party group and others. If it were to be altered in England, that would have the effect of transferring that same amount to Wales. I thank the noble Lord, Lord Griffiths, as well for his contribution. I know he feels strongly about these issues and has spoken on them forcefully and persuasively in the past.
The amendments would devolve legislative and executive competence to the Assembly and Welsh Ministers to regulate the number of high-stakes gaming machines authorised by new betting premises licences in Wales. It is right that they are new betting premises, as the noble Baroness confirmed. Once again, I think the Government have been given rather a raw deal here; having come up with something that has been welcomed, we have then been accused of not going as far as noble Lords thought we had gone. I thought I was absolutely clear that we have gone as far on this as we did with Scotland. I note the comments and this is a serious issue, but I hope I have given some reassurance that if there is some movement in England, that would affect the position in Wales as well.
The Silk commission made no recommendations on the devolution of betting, gaming and lotteries, but we agreed as part of the St David’s Day process to consider non-fiscal recommendations by the Smith commission and it was in that context that we decided it would be appropriate to take this forward in relation to Wales. We reflected on it and mirrored the provisions in the Scotland Act 2016. The noble Baroness, Lady Morgan, has proposed going much further than the position in Scotland in the Scotland Act but I am afraid we cannot agree to that. I take issue with her on one point on which she spoke passionately in relation not just to gaming machines but to the SNP. The Scotland Act is not an SNP Act—it is an Act of Westminster to which we all contributed. I think we can all reflect on that.
Amendment 60, tabled by the noble Lord, Lord Wigley, seeks to devolve the management functions of the Crown Estate commissioners in relation to Wales to Welsh Ministers or a person nominated by them. This broadly reflects a provision in the Scotland Act 2016 that devolves management functions of the Crown Estate commissioners in relation to Scotland to the Scottish Ministers or a person nominated by those Ministers. The devolution of the Crown Estate in Scotland was recommended by cross-party consensus in the Smith commission report. It was not part of the Silk recommendations and I am not aware that such a consensus exists in respect of Wales.
The Crown Estate works closely with devolved services in Wales; for example, it has agreed memorandums of understanding with the Welsh Government and Natural Resources Wales. I believe the Crown Estate commissioners are doing an excellent job. Last year the Crown Estate recorded a record profit of £304 million, which was returned to the Exchequer. This is not revenue retained by the Crown. The revenue from the Crown Estate is used to fund public services across the UK, including in Wales. This means that Wales is already directly benefiting from the management of Crown assets by the Crown Estate. I urge the noble Lord, Lord Wigley, to withdraw his amendment.
Baroness Morgan of Ely
Before the Minister sits down, I should like to be clear on this point. The suggestion is that there will be no possibility for the Welsh Government to look at fixed-odds betting terminals that currently exist, despite there being this incredible social problem in Wales. If the UK Government will not allow the Welsh Government to deal with this, do they have any intention of bringing forward something that would address this issue, which is devastating communities not just in Wales but across the UK?
Lord Bourne of Aberystwyth
My Lords, I acknowledge that this is a serious issue. I am grateful to the noble Baroness for exaggerating my powers in relation to the Government as a whole regarding what legislation is forthcoming. I will have to write to her on that, but I acknowledge that it is a problem and I have given her an indication that if we deal with it in Westminster, of course any consequent changes would apply in Wales as well.
Lord Wigley
My Lords, I am grateful to everyone who has taken part in this debate. I have noted the replies given to the various subjects that have arisen. I still feel very strongly that some of the powers that Scotland has regarding the Crown Estate are powers that we should have as well, but clearly we are not going to make much progress on that today. I also suspect that we will come back to the diverse matters that we have discussed, including the gambling questions and possible legislation. On the basis of the debate, though, I beg leave to withdraw the amendment.
“( ) in the definition of “statutory provision”, after “Scottish Parliament” insert “and an Act of the Assembly”;”
“Water and sewerage
(1) In Schedule 7A to the Government of Wales Act 2006 (substituted by this Act), in section C15 (water and sewerage)—(a) omit paragraph 90;(b) in paragraph 91 omit “and regulation”;(c) omit the two exceptions (and the heading “Exceptions”);(d) omit the definitions of “supply system of a water undertaker” and “sewerage system of a sewerage undertaker”.(2) In section 192B of the Water Industry Act 1991 (annual and other reports)—(a) in subsection (1), after “the Secretary of State” insert “and the Welsh Ministers”;(b) after subsection (5) insert—“(5A) The Welsh Ministers shall—(a) lay a copy of each annual report before the Assembly; and(b) arrange for the report to be published in such manner as they consider appropriate.”;(c) in subsection (7) omit “the Assembly,”.”
“Modification of water-related functions
In section 58 of the Government of Wales Act 2006, after subsection (2) insert—“(2A) Her Majesty may by Order in Council—(a) make provision modifying (by reference to geographical extent or otherwise) a previously conferred or transferred water-related function;(b) provide for such a function to be exercisable—(i) concurrently or jointly with a Minister of the Crown or the Welsh Ministers, or(ii) only with the agreement of, or after consultation with, a Minister of the Crown or the Welsh Ministers.(2B) In subsection (2A)—“previously conferred or transferred function” means a function exercisable by— (a) the Welsh Ministers, the First Minister or the Counsel General,(b) a Minister of the Crown, or(c) any authority or other body,by virtue of provision contained in or made under this Act or any other enactment;“water-related function” means a function exercisable in relation to water supply, water quality, water resources management, control of pollution of water resources, sewerage, rivers and other watercourses, land drainage, flood risk management or coastal protection.””
“Water protocol
(1) The Welsh Ministers and the Secretary of State may make an agreement (the “water protocol”) for the purpose of ensuring that—(a) actions or inaction of the Welsh Ministers, or public bodies exercising functions in Wales, do not have a serious adverse impact on water resources in England, water supply in England or the quality of water in England, and(b) actions or inaction of the Secretary of State, or public bodies exercising functions in England, do not have a serious adverse impact on water resources in Wales, water supply in Wales or the quality of water in Wales.(2) The water protocol must—(a) provide for a procedure for resolving matters of disagreement between the Welsh Ministers and the Secretary of State;(b) make provision about whether, or to what extent, functions relating to such matters may be exercised pending the outcome of the procedure.(3) The water protocol may be revised by agreement of the Welsh Ministers and the Secretary of State.(4) The water protocol, and any revised protocol, must be laid before both Houses of Parliament and the National Assembly for Wales.(5) The Welsh Ministers and the Secretary of State must exercise their functions in accordance with the provisions of the water protocol, unless it is revoked by agreement of the Welsh Ministers and the Secretary of State.”
“Reciprocal cross-border duties in relation to water
(1) In exercising functions relating to water resources, water supply or water quality—(a) the Welsh Ministers must have regard to the interests of consumers in England;(b) the Secretary of State must have regard to the interests of consumers in Wales.(2) In subsection (1) “the interests of consumers” has the same meaning as in section 2 of the Water Industry Act 1991.”
“Repeal of intervention powers relating to water
(1) In the Government of Wales Act 2006—(a) in section 114 (power to intervene in certain cases) omit paragraph (b) of subsection (1);(b) omit section 152 (intervention in case of functions relating to water).(2) Regulations under section 62 bringing this section into force may not be made until an agreement under section (Water protocol) has been laid before both Houses of Parliament and the National Assembly for Wales.”
“Transfer of functions in relation to fishing vessels
(1) The functions to which this section applies, so far as exercisable in relation to Welsh fishing boats beyond the seaward limits of the Welsh zone, are transferred to the Welsh Ministers.(2) This section applies to —(a) functions of a Minister of the Crown or the Marine Management Organisation under the Sea Fish (Conservation) Act 1967,(b) functions of a Minister of the Crown under the Sea Fisheries Act 1968,(c) functions of a Minister of the Crown under Parts 2 to 4 of the Fisheries Act 1981, and(d) functions of a Minister of the Crown or the Marine Management Organisation under the Sea Fisheries (Wildlife Conservation) Act 1992.(3) But this section does not apply to—(a) functions conferred on the Board of Trade by section 8 of the Sea Fish (Conservation) Act 1967;(b) functions listed in paragraph 2(2) of Schedule 3A to the Government of Wales Act 2006 (inserted by this Act) (functions concurrently exercisable with the Welsh Ministers).(4) In this section—“Welsh fishing boat” means a fishing vessel which is registered in the register maintained under section 8 of the Merchant Shipping Act 1995 and whose entry in the register specifies a port in Wales as the port to which the vessel is to be treated as belonging; “Welsh zone” has the meaning given in section 158 of the Government of Wales Act 2006.”
“Maritime and Coastguard Agency
(1) In section 1 of the Coastguard Act 1925 (transfer of the coastguard to the Board of Trade), after subsection (4) insert—“(5) The Secretary of State must consult the Welsh Ministers about the strategic priorities of the Secretary of State in exercising functions under subsection (1) in relation to activities of Her Majesty’s Coastguard in Wales.(6) In subsection (5) “Wales” has the same meaning as in the Government of Wales Act 2006.”(2) In section 292 of the Merchant Shipping Act 1995 (general functions of the Secretary of State), after subsection (4) insert— “(5) The Secretary of State must consult the Welsh Ministers about the strategic priorities of the Secretary of State in exercising functions under subsection (1) in relation to the safety standards of ships in Wales and protecting the health and safety of persons on them.(6) In subsection (5) “Wales” has the same meaning as in the Government of Wales Act 2006.””
“Gaming machines on licensed betting premises
(1) In section 172 of the Gambling Act 2005 (gaming machines), in subsection (12) (definition of “appropriate Minister”), after paragraph (a) insert—“(aa) the Welsh Ministers, so far as, in the case of a betting premises licence in respect of premises in Wales and not in respect of a track, the order varies—(i) the number of gaming machines authorised for which the maximum charge for use is more than £10, or(ii) whether such machines are authorised;”.(2) In section 355 of that Act (regulations, orders and rules)—(a) in subsection (1), after “the Secretary of State” insert “, the Welsh Ministers”;(b) in subsection (3), after “the Secretary of State” insert “or the Welsh Ministers”;(c) after subsection (8) insert—“(8A) An order of the Welsh Ministers under section 172 shall not be made unless a draft has been laid before and approved by resolution of the National Assembly for Wales.”(3) The amendments made by this section do not apply in relation to a betting premises licence issued before this section comes into force.”
Wales Bill
Wednesday 14th December 2016
(7 years, 11 months ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 77-I Marshalled list for Report (PDF, 155KB) - (12 Dec 2016)
21:03 - Division on Amendment 59 - Ayes: 58 / Noes: 153 - Amendment 59 disagreed.
Baroness Morgan of Ely
“Rail: franchising of passenger services
(1) Section 25 of the Railways Act 1993 (England and Wales: public sector operators not to be franchisees) is amended as follows. (2) In the heading, omit “and Wales”.(3) At the end of subsection (2A) insert “or a franchise agreement in respect of services that are or include Wales-only services.”(4) After subsection (2A) insert— “(2B) For the purposes of this section a “Wales-only service” has the same meaning as in section 57 of the Railways Act 2005.”(5) This section does not have effect in relation to any invitation to tender under section 26(2) of the Railways Act 1993 issued before the day on which this section comes into force.”
Baroness Morgan of Ely (Lab)
My Lords, this week, with the chaos caused on Southern rail, we have seen how poorly run railways can impact on people’s lives. I know this to be true because the shadow Chief Whip has told me to get a move on as he needs to catch a train—a Southern rail train, which is even more difficult.
One of the key ambitions of the Welsh Government is to establish and develop a dynamic economy in Wales. Central to this is the fact that we will need to ensure that it is supported by an effective integrated transport network—including, crucially, the rail network. The question we are addressing in our amendment is: who should be allowed to bid for the franchise to run the railways in Wales?
With ambitious milestones envisaged for the delivery of the public transport network in Wales, such as electrification, the introduction of the South Wales Metro and widespread structural improvements, it is important to make sure that all possibilities are open in relation to who can run our railways. That is essential for the implementation of our ambitious plans for improved passenger services across Wales. We need to ensure that the development of that franchise and the ability of anyone to bid for it are married with the economic ambitions for the area.
The current franchise saw a surge from 18 million annual passenger journeys on the network in 2003 to 29 million journeys by 2013. With the numbers forecast to grow by a further 74% by 2030, it is imperative that we plan for that growth in a more integrated and responsive way. If we leave it to the UK Government, we will be in trouble, because only about 1% of the money spent on rail infrastructure enhancements across England and Wales from 2011 to 2015 was spent on Network Rail’s routes in Wales. I repeat: 1%. And we wonder why there is disparity in the way that people respond to government in this country. That has to be addressed, and we want to address it. However, that is not what I want to talk about here. I am sorry but I needed to say that, because I am really angry about the fact that only 1% was spent in Wales. It is important that that is understood.
The Welsh Government are currently undertaking a franchise round to decide who will be responsible for running the Wales and Borders franchise, including the operator for the planned Metro. In theory, we understand that a not-for-profit organisation could have bid for this franchise round. But we would like to see the possibility in a future franchise round for the Welsh Government themselves to be able to bid for the franchise if they wish to do so. This is something that has been allowed for in Scotland and was agreed in the Smith report, but it is being denied to Wales.
Let me underline the absurdity of the situation by telling noble Lords about the current bidders for the franchise. The preferred bidders to build the South Wales Metro and run the next Wales and Borders franchise have just been announced. The choices reflect the injustice of British railway politics. Abellio is a subsidiary of a Dutch state-owned rail company; Arriva forms part of a German state-owned company, Deutsche Bahn; Keolis belongs to the French state-owned rail service, SNCF; and the only truly private bidder is MTR, a Hong Kong-based rail company. It is illogical to allow a foreign state-owned company to run a franchise in Wales while prohibiting public sector organisations from running the Welsh franchise. Wales should not be maintained as another nation’s rail colony. It is purely a matter of logic that the Welsh Government should be granted the opportunity to bid if they wish in future to run that railway network.
We understand that the next franchise will run from 2028 but we believe that this is an important matter of principle. We believe that the Government are being ideologically blinkered in their objection to the public sector in Britain being allowed to deliver rail services. I beg to move.
Baroness Randerson (LD)
My Lords, I look forward to the Minister’s response to this because he is not on a good wicket at the moment. This is not a good week to be defending privately run franchises or arguing that railways run by the private sector are automatically the solution to all our problems. I reassure the Minister that on these Benches, we are not massive fans of nationalisation either—we are fans of what works. As you study franchises across Britain and railways across Europe and the world, you will see that all sorts of configurations work in different circumstances and that similar configurations do not work in other places. There is no one solution.
I do not think it is necessarily appropriate for the Welsh Government to be trying to run a railway service. However, it is conceivable that the Welsh Government might wish, for example, to enter into a partnership with the private sector on some kind of joint venture, or to set up some sort of novel structure, of which they would be a part, perhaps on a not-for-profit basis. I remind the Minister that Transport for London is a real success story in many respects, and has a structure that quite clearly includes a government element. I also remind the Minister that when the Government were forced to take over the east coast main line from a failing private sector franchise, they did rather a good job of running the railway and saving the situation. Therefore, we support in principle the idea of giving the Welsh Government the freedom to decide what shape of franchise they want and to participate in that process if they wish to do so.
I realise that the Minister will say that there are practical difficulties because the railway runs not just in Wales but in England. If the rail franchise is run by the Welsh Government, it might be regarded as slightly irregular, I suppose, for the service in England, but no more irregular than the private sector franchise being run by the Dutch state railway company, which is what happens in England at the moment. I also realise that we are talking about a long way into the future, because the processes for the next franchise will not be prepared until 2028. For that reason, I hope the Minister will listen and think about this. There is value in playing the long game on the railways and in looking at how we can get the best investment in services in the long term. One thing that would persuade the Welsh Government to invest in railways in Wales would be to give them a little more power and control over them.
Lord Hain (Lab)
My Lords, in supporting my noble friend Lady Morgan’s excellent speech, I make one brief point. The Welsh Government are not seeking to have their civil servants run the rail franchise—I do not believe anybody thinks that that would be a good idea—but to configure the right package for Wales. We can take the example of Welsh Water. To be precise on this and, I hope, not pedantic, Welsh Water is a not-for-dividend company. It is not a not-for-profit company. It has to make profits to invest. Any entity taking over the Wales rail franchise would have to do the same. But Welsh Water is run much more efficiently than privatised water companies in England because it can raise its capital at a far cheaper rate on the market than private companies—noble Lords can look at the figures—because it does not have to satisfy the shareholders’ speculative roundabouts. The amendment would give the Welsh Government the opportunity to invite bids of that kind.
Finally, if the Minister is serious about his support for devolution to Wales, why does he not respond to the Welsh Government’s specific request to have this amendment carried into statute?
Lord Hunt of Wirral (Con)
My Lords, I have a great deal of sympathy with the amendment and the wise words of the noble Baroness, Lady Randerson. Having listened to the discussions on the Bill, however, I strongly support a step-by-step approach. I can see the arguments on either side and recognise that the Silk commission recommended devolution. My recollection is that it recommended that the executive responsibility for the Wales and border passenger rail franchise be fully devolved. But it did so with a number of conditions and safeguards. The Government confirmed in the St David’s Day Command Paper that they would consider which non-fiscal parts of the Smith commission agreement might be implemented for Wales, including the commitment to amend Section 25 of the Railways Act 1993 to permit public sector operators to bid for rail franchises, for which Scottish Ministers are responsible.
As I understand it, the commitments that have been made have now caused the two Governments to work together on the detailed arrangements for the next franchise, including how cross-border routes could be procured and managed and signalling the likelihood that services primarily serving English markets would be transferred to other franchises for which the Secretary of State is responsible, all of which is welcome. I suppose my main question for the Minister is: can he please give us an update on exactly where we are because I would not want us to accept the amendment if it flies in the face of the careful consideration between the two Governments of how this could all be brought into effect in time for the next franchise, but in particular during the course of next year?
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I am very grateful for the build-up from the Benches opposite. I thank noble Lords who have participated in the debate on the railways. Perhaps I may say first, although I do not think the noble Baroness, Lady Morgan of Ely, referred to it, that although Amendment 91 is in this group, I would like to return to it on the second day of Report, in the new year. I see that the noble Baroness is content with that.
I turn to Amendment 59 moved by the noble Baroness, Lady Morgan of Ely. She is seeking to press the Government to a decision on a matter that we committed to consider in the St David’s Day Command Paper, as my noble friend Lord Hunt of Wirral has just indicated. That matter is whether to legislate for Wales in a similar manner to the provision in the Scotland Act 2016 regarding the powers of Scottish Ministers as committed to in the Smith commission agreement to enable Welsh Ministers to invite UK public sector operators to bid for rail franchises for which they are the responsible franchising authority. Let me deal first with the point about not-for-profit and not-for-dividend organisations. They are currently able to bid and there is no proposal to alter that, so the likes of Dwr Cymru, as I indicated in Committee, would be able to bid in relation to this.
I know the Welsh Government are keen to have this power, but I have to tell noble Lords that we have no proposal in this area, particularly given that it will be 2028 before it could kick in. I think that by common agreement the current border franchise contract will be agreed in 2018. We do not propose to permit public sector bidders in the interim because we do not see any urgency about this. On that basis, I cannot give the reassurance that is sought.
Baroness Morgan of Ely
I am very disappointed with the Minister’s response. I do not understand why we cannot have the same rights as Scotland for the public sector to be able to bid for the franchise. We are not asking to be given it; we are asking for the right to submit a proposal, which, as the noble Lord suggested, is allowed in the Smith commission agreement. It is a double standard to allow German, Dutch and French state-owned companies to bid for the franchise but not Welsh state-owned companies. The noble Lord will understand that when talking about railways you need a long-term approach. That is why we do not think it is premature to be pushing this. I am afraid I am not convinced by the arguments put forward by the Minister and I would like to test the opinion of the House.
Lord Judge
Lord Judge (CB)
My Lords, I shall not speak to Amendments 63 or 64, but I shall speak to Amendment 65. As the noble Lord, Lord Wigley, reminded the House, I had the privilege of being Lord Chief Justice of Wales for some time and I regard this as a constitutional question. I also recognise that at this time of the night, a speech like that of Welsh-born Henry V before the Battle of Agincourt—or before the walls of Harfleur—will not do very much for anybody, so I will confine myself to a few choice words, but maybe more than I intend.
I make this speech because this provision is simply a constitutional aberration. Here we are in the mother of Parliaments, an institution where the principles so movingly crafted by Abraham Lincoln on the blood-soaked field of Gettysburg, about government for the people by the people and of the people—democracy—is embodied. Yet we are to provide a Minister of the Crown with powers to amend, repeal, revoke and modify—perhaps I can use the word “disapply” to cover all those—any primary or secondary legislation. We do it all the time in what are called Henry VIII powers and we all let it happen. We should not, but we do—so let us face the fact that there are Henry VIII powers in this provision.
Secondary legislation can overrule primary legislation, but this is the malevolent ghost of King Henry VIII wandering through the valleys of Wales because, at least in the provision as it stands, if the primary legislation of this Parliament is to be overruled there are going to be regulations which would empower this House to overrule it. I disagree with the process but it is up to Parliament, and Parliament provides it. The necessary regulations are subject to parliamentary approval or annulment, but—this is the crucial but—the regulations that would empower the Minister to disapply legislation of the National Assembly for Wales are not subject to the equivalent control by that Assembly. We seem to have been discussing this legislation all day yet any part of it—primary, secondary, tertiary or whatever it may be—can be wiped out by a Minister without any consultation with anyone at the National Assembly for Wales. In other words, we would wipe out the enactments of a democratically elected Parliament that we call the National Assembly.
If I may say so, I find a ministerial diktat that is given such powers quite astonishing. It is astonishing that it is considered here in the mother of Parliaments. There is not a scintilla of control of the Executive envisaged in these provisions, which is why I describe them as a constitutional aberration. I am sorry to use strong language and I know I am not before Harfleur, but it is an insult to the democratic process which this Parliament created when the National Assembly for Wales was created. That is my prime concern, but I am concerned, too, about the legislation itself.
Can we just remember that this is open to question as a piece of legislation? Clause 60 as it stands is inconsistent with the spirit and arguably, I suggest, with the precise language of Clause 2. If Parliament is normally precluded—as it would be for the reasons we have discussed this afternoon—from legislating about devolved matters without the consent of the National Assembly, why on earth should a Minister or the Executive, not Parliament, be given wide-ranging powers, including powers to disapply primary legislation of the Assembly by secondary legislation without any consent, without so much as a “by your leave”? There may be political consequences, but in law that is what we are being asked to consider.
I know that the Minister, who has dealt with me with the greatest possible courtesy, will no doubt point out that that is what happens in Scotland. So it does. We should be embarrassed that we allowed it to happen. The fact that it happens in Scotland does not alter the fact that it was an aberration there and will be an aberration here. I beg to move.
Lord Wigley (PC)
My Lords, I am delighted to follow the noble and learned Lord, Lord Judge, in his excellent opening statement on Amendment 63 and the amendments grouped with it. I shall speak to my Amendments 64 and 71 and to Amendment 65, to which I added my name.
Amendment 65 may be the most effective amendment in this group. The amendments seek to ensure that the National Assembly for Wales has primacy when it comes to secondary legislation in areas of devolved competence and to removing Westminster’s powers to undermine Welsh devolution through what are known as Henry VIII powers. It is worth reading out the amendment:
“Page 49, line 7, at end insert—
‘(2A) The Secretary of State may not make regulations under subsection (2) unless the National Assembly for Wales has passed a resolution approving a draft of the regulations”’.
That seems a very reasonable thing to do. When these points were put forward in Committee, I found the Minister’s response, particularly to the points raised by the noble and learned Lord, Lord Judge, to some extent disappointing and perhaps a little misleading. The Minister argued that Acts of Parliament and Acts of the Assembly should be treated equally in areas of devolved competence. The Minister characterised the argument as being about equality, although no one appeared to be using that word to describe the intentions of these amendments. It is not a matter of equality; it is about establishing the supremacy or primacy of laws created by the Assembly in Wales for Wales. The Minister argued that a number of Welsh Assembly Acts require amendments to Westminster Acts and that a statutory provision to create more accountability for secondary legislation would shift the balance too far in favour of the Assembly. However, as my noble friend Lord Elis-Thomas highlighted, we are talking about two very different scenarios. The Assembly is simply amending Westminster Acts, which are the legislative framework on which Welsh law has been built for centuries. In contrast, unwanted attempts by Westminster to amend Assembly Acts are simply interventions in what should be an area of unquestionable authority for the National Assembly for Wales. It therefore seems quite a misnomer to say that any attempts to use Henry VIII powers to undermine Welsh law are a matter of equality. The issue is about ensuring that Welsh Assembly Acts have the respect and legal standing that they deserve.
I shall also briefly address a further point raised by the Minister. He argued that Clause 53 will be used to address “minor” or “consequential” issues only. It was argued that any wholesale changes to this process would create unnecessary complexities for these necessary but uncontentious pieces of secondary legislation. He will be able to see from Amendment 64 that by including the word “minor” in the appropriate line of the clause, I have addressed that issue. I hope he will acknowledge that and perhaps accept the amendment.
I understand that, as with primary legislation, AMs are afforded the right to vote on a consent Motion for any changes to Westminster orders and regulations which infringe into areas of devolved competence. This is called Standing Order 30A and is referred to by the abbreviation SICM for statutory instrument consent memorandum. However, this is only agreed to by convention, and recognised only in Assembly standing orders. It has absolutely no legal standing—even less than the somewhat pathetic standing given to the Sewel convention by including the word “normally” in the Bill.
The Assembly cannot rely on the kindness of Westminster to ensure that it can continue to exercise the powers we have fought so hard for it to have. Will the Minister therefore accept the advice of so many legal and constitutional experts and recognise that it is no longer acceptable to have these arcane and undemocratic clauses in the Bill—or, for that matter, in any Bill of this nature? A way out of this totally unnecessary mess would be to require the National Assembly’s agreement to the use of any statutory instrument by Westminster. At a stroke, that would resolve the issue. If the matters are as uncontentious as the Minister claimed them to be, there would be no difficulty in getting that Assembly agreement.
As things stand, I can well see this matter becoming a dominant one, which could well lead to the National Assembly refusing to pass a legislative consent order in relation to the Bill. If that were to happen, it would be a direct consequence of the Government refusing to apply even-handed common sense and instead running terrified of upsetting the Scots by giving Wales this additional power. We have been told time and again that just because something is appropriate for Scotland, it is not necessarily appropriate for Wales. In this instance, the boot is on the other foot, and for the sake both of the self-respect of our National Assembly and of the even-handed resolution of disputes between Westminster and Cardiff Bay, I urge the House to accept this amendment.
Lord Thomas of Gresford (LD)
My Lords, Clause 60 is an example of the encroachment of the Executive on the privileges of Parliament that has increasingly come to the forefront in the last two or three years. It is necessary to look at the provisions of that clause very carefully. In subsection (2), it says:
“The Secretary of State may by regulations make such consequential provision in connection with any provision of this Act as the Secretary of State considers appropriate”.
Parliament passes primary legislation, and a Secretary of State introduces regulations. The control that Parliament has is by way of statutory instrument—sometimes by the affirmative procedure, sometimes by the negative procedure. This is an issue that has troubled the Delegated Powers and Regulatory Reform Committee, of which I am a member, for some time. Every time this provision appears, a statement is made which the Government have, in the last two or three years, ignored. Subsection (3) says that “Regulations under subsection (2)” made by the Secretary of State “may amend, repeal”—and these are the important words—
“revoke or otherwise modify … an enactment contained in primary legislation, or … an instrument made under an enactment contained in primary legislation”.
That is the Henry VIII clause which permits a Minister to bring forward a statutory instrument to amend an Act of Parliament passed by Parliament.
There are two ways of doing that, as I have already indicated: by affirmative resolution, whereby the amendment does not take place unless the instrument has been laid before, and approved by a resolution of, each House of Parliament; or by the negative procedure, whereby a draft is produced and subject to annulment in pursuance of a resolution by either House of Parliament. Your Lordships are familiar with the bringing forward of Motions in the House to seek to annul regulations that are subject to the negative procedure. However, this clause, at subsection (6), says:
“A statutory instrument containing regulations under subsection (2) that includes provision amending or repealing any provision of primary legislation may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament”.
That is the affirmative procedure, but the words are “amending or repealing”. It is not necessary to have an affirmative resolution if the purpose of the regulations is to revoke or otherwise modify the Act of Parliament that is under consideration. So whereas subsection (3) refers to amending, repealing, revoking or otherwise modifying, an affirmative resolution is required only if the provision amends or repeals. If it revokes or otherwise modifies an Act of Parliament, the negative procedure is enough, according to this clause.
Lord Rowlands (Lab)
My Lords, I support the amendments, which are similar to those that I had the pleasure of moving in Committee. Since then, we have had a most interesting and informative letter— yet another Bourne letter, I may say; the collected correspondence of the noble Lord, Lord Bourne, is becoming voluminous—that is extraordinarily revealing. It appears that if we have bad habits, other Assemblies, including the Welsh Assembly, are now catching them. The letter tells us:
“In 2015 and 2016, eight out of the twelve Acts passed by the Assembly included a power for Welsh Ministers to make consequential amendments to Acts of Parliament”—
that is, our Parliament—
“without any role for Parliament to scrutinise such secondary legislation”.
It turns out that the Assembly is doing exactly what we are threatening to do. It is bringing in legislation, including Henry VIII powers, that will then be used to amend legislation, primary and secondary, that this House has passed. That is a constitutional absurdity and we have to put a stop to it at both ends.
In fact, not only has the Welsh Assembly taken these Henry VIII powers in eight of its 12 Acts, it has exercised them already. In three cases it has amended our primary legislation without our knowing or being consulted. I do not know who was asked. I ask the Minister to elaborate on this, because it is all in his letter. Another four pieces of secondary legislation have been made by the Assembly that amend SIs made by the UK Parliament. So there are three pieces of primary legislation and four secondary that have been amended by the Welsh Assembly, using their Henry VIII powers, without either this House or the other House knowing.
I have the privilege of serving on two committees of this House that spend a lot of time on secondary legislation, as well as the Joint Committee with the Commons. They are most impressive committees. An enormous amount of effort is taken and thorough, diligent work is done by the legal advisers and the members of the Committees. We pore over our draft statutory instruments and report if there is any special reason—if we need to draw attention to defective drafting, in the case of the Joint Committee on Statutory Instruments, or to vires issues or broader issues in the case of the Secondary Legislation Scrutiny Committee.
I am astonished that we spend all this time making sure that we bring to this House statutory instruments that are fit for purpose, yet I now find that another Assembly—the Welsh Assembly—has amended the statutory instruments that we have so carefully prepared. I do not know how it has amended them; I do not know the nature of the amendment—I will press the Minister to explain in a minute—but this is the sort of situation that we get into. It is a sort of inter-ministerial legislative stitch-up: “You can amend it in your legislation —it is sufficient, it saves time and it is convenient”. Neither House should be interested in ministerial convenience. It is our job to be inconvenient at times, and I believe we should be in this case.
Will the Minister now tell us, based on the letter he has sent us, which sections of which Acts of Parliament—primary legislation—the Assembly has amended? I do not have a clue; none of our committees seems to have found out about it. Secondly, which statutory instruments have been amended by the National Assembly and which paragraphs of our statutory instruments have been changed? We have to put a stop to this; we have to put our foot down. I will read the last paragraph of the letter:
“There was no requirement for Parliament to scrutinise any of this legislation”.
It appears that Parliament was not party to any of this legislation, only Ministers. That is not true. Acts of Parliament and statutory instruments belong to this Parliament as much as they belong to Ministers; they are as much our constitutional property as they are that of Ministers. We need to put our foot down and find ways and means to ensure that this will not happen again. It is now happening to us, as we threatened to do it to National Assembly legislation. Let us put a stop to it, please.
Lord Elystan-Morgan (CB)
My Lords, I wholeheartedly agree with the submissions made by everyone who has spoken on this matter. If I may say so, my heart swelled with pride at the wholly magisterial and superb condemnation of the situation by my noble and learned friend Lord Judge.
This provision has no place in the mores or principles of the 21st century. It is a remnant of a monarchical diktat. Although it does not seem to have been abused by government at all in recent years, but used only for something utterly mechanical, it is still the letter of the law—a law that, I submit, is indefensible. I hope the Minister will not seek to defend the indefensible when he replies.
In Committee, I cited a book written by a former Attorney-General, Sir Gordon Hewart, in the late 1930s, entitled The New Despotism. He was worried about the powers being exercised daily by Ministers in such a way as to circumvent Parliament. He was not dealing with this problem but with positive powers allowing Ministers to make regulations in a wide field. What he would have said of this, I just do not know. It is an anachronism that we must get rid of, because it has no place whatever in the fundamental basis of our parliamentary system in the 21st century.
My name is down to Amendment 68, which covers this situation and goes a little further. It deals not just with the Cardiff Assembly but Westminster. I appreciate there is a distinction between them, as my noble and learned friend pointed out, but I thought it proper to include both for this reason. Most of the legislation that affects Wales and creates devolutionary powers for Wales does not come from Cardiff—it comes from here. For that reason, I should have thought it entirely proper to include it in the condemnation, which should be regarded as utter and absolute, of these Henry VIII powers.
I therefore ask the Minister to say yes. It may well be that there is no abuse of these powers and that no modern Government would dream of abusing them, but that is the letter of the law. It is a dangerous law and one that has no place in our day. Let us get rid of it as soon as possible.
Lord Murphy of Torfaen (Lab)
My Lords, I support the amendments. The noble and learned Lord, Lord Judge, referred to Henry V as a Welshman; indeed, he was a Monmouthshire man like myself. Of course, Henry VIII was a Welshman too, and he was less benign to Wales than the other Henry, just as the situation described by noble Lords is not benign.
Over the past 20 years, the way in which legislation has been made in Wales has developed enormously. When it started in the late 1990s, the Welsh Assembly was effectively a big county council, and all it could legislate on initially was secondary legislation. Then my noble friend Lord Hain introduced the 2006 Wales Act, under which we had a sort of hybrid situation with legislative competence orders. Now, as the House knows, primary legislation can be, will be and is being made by the National Assembly for Wales. Those of us who live in Wales are subject to the laws of two parliaments and the diktats of two sets of Ministers.
Over the past two decades, the relationships between the two Governments and the two parliaments have themselves developed. At times, it has been very difficult, as my noble friend Lord Hain and I as Welsh Secretaries knew only too well. But now my noble friend Lord Rowlands has revealed—and the Minister himself revealed it in his letter to Members of this House—that a deeply unpleasant and unconstitutional situation is growing that allows Ministers in one Government to change the laws of another assembly or parliament. That is very wrong.
I rather suspect that the Minister will say that these amendments should not appear in the Bill for various reasons—not least of which is “It doesn’t happen in Scotland”, but that was a major oversight when the Scotland Bill was going through. In previous constitutional Bills, very often a Minister has indicated in the House what the consultation process can be. If the Minister cannot assure us that such provisions will appear in the Bill, perhaps he can reassure the House that there will be proper consultation between the two Governments and the two assemblies and parliaments, whenever the changes are made. That is not as good as putting changes in the Bill, but at least it would be something.
Baroness Morgan of Ely
My Lords, we have heard how Clause 60 allows for consequential provisions on Assembly Acts to be made by the UK Secretary of State. In other words, if there is a need for a tweak to be made to a new law introduced, or if there is a need to change a different government Bill as a result of the introduction of a new Bill, it could be done without going through the whole rigmarole of a full-on legislative parliamentary procedure.
We can all see the sense that now and again that is necessary. That is not an unusual state of affairs; it is not unusual for a Minister to be able to make consequential orders in relation to laws made and enacted in the United Kingdom. However, as we have heard, if a consequential law were to be introduced in Westminster, there would be that opportunity for both Houses to approve such changes before they could be enacted. If I may say so, I think that this House carries out that role very well; it is the House that really takes that seriously. As has been underlined, the major difference in relation to Wales is that the opportunity to approve consequential changes is not available to the Welsh Assembly on laws that affect it. That has been criticised vehemently by the Delegated Powers Committee.
My amendments would limit a requirement that statutory instruments would have to be approved by the Assembly so that it applied only if they related to provisions that would be within the Assembly’s competence or would amend the Government of Wales Act 2006. So it is a restricted responsibility. The Assembly would not be trying to grab power in any way—it is just making sure that the Assembly is able to do the work that it has responsibility for.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who participated in the debate on the amendments in this group relating to Clause 60. First, I understand the points made on the powers that are being brought in, specifically in relation to legislation that is having an effect beyond the particular legislature. Secondly, as a general point, I am grateful for the acknowledgement of the reams of letters that noble Lords are receiving, but I fear that probably more attention is being paid to the letters than to the debates, because the situation as regards the Assembly’s power was something that I made great play of in Committee. So the letter was not saying anything new—I mentioned this issue in Committee, so that particular point should not have taken noble Lords by surprise, as it appears to have done.
Lord Rowlands
But the Minister was not capable of telling us that, in fact, the Assembly had actually exercised these powers and actually had amended primary legislation and statutory instruments. He was not able to tell us that in Committee.
Lord Bourne of Aberystwyth
I am grateful to the noble Lord—indeed, I did go further in the letter, that is true. There would have been little point in sending it otherwise. But I was underlining the point that I thought that noble Lords were saying that I had not mentioned this in Committee, which I had.
On the situation, I can say this—and I hope that it will meet with general approval—and pick up particularly the points made by the noble Lord, Lord Murphy. I am very grateful for his wise words in developing some way forward in relation to this matter. I have spoken to my right honourable friend the Secretary of State for Wales, who has written to the First Minister and the Presiding Officer—I think significantly—in the National Assembly, to give two assurances. First, any intention to exercise the power in Clause 60 in respect of legislation made by either the Assembly or Welsh Ministers would be discussed between officials well in advance of regulations being laid. I think that this is common practice in any respect and, in relation to the particular point made about elections, this is something that is already happening. I think that sometimes noble Lords do not realise the good will that exists between officials, and indeed between the Administrations, in taking things forward.
Secondly, the Secretary of State will write to the First Minister and Presiding Officer, informing them of any intention to make regulations which affect legislation made by the Assembly or Welsh Ministers and to do so at the earliest stage before regulations are laid. It will then be for the National Assembly to act as it considers appropriate in relation to that information. I will be urging my right honourable friend the Secretary of State to seek some assurance that the Welsh Government will act in the same way in relation to matters that are decided at the Assembly which affect our legislation. It seems to me that this is only fair and deals with the issue that the noble and learned Lord, Lord Judge, was referring to in reverse. I do not think that, in essence, there is any difference between the two practices.
I hope that this will give the reassurance that is being sought in relation to the practice. I recognise the points that are being made and I think that this deals with them in that it alerts people at the earliest reasonable opportunity. I thank noble Lords for contributing to the debate. I understand the points that are being made but, in relation to that undertaking of some institutional underpinning at National Assembly level, I hope that noble Lords would accept these assurances and not press their amendments.
Baroness Morgan of Ely
Before the Minister sits down, I thank him for the suggestion that there will effectively be some kind of early warning system. But he suggested that it would allow the Assembly to act appropriately. What does he mean by that? What would the Assembly acting appropriately mean?
Lord Bourne of Aberystwyth
My Lords, I am too old a hand at devolution to suggest what would be appropriate for the Assembly; that would be a matter for the Assembly in the particular circumstances of the case. I do not think that I can second-guess what it would want to do; it would depend very much on the circumstances and the view of the Assembly on a particular matter, not to me as Minister at the Wales Office here.
Baroness Morgan of Ely
What tools are available for the Assembly to use in order to act appropriately? What tools does it have?
Lord Bourne of Aberystwyth
Again, the noble Baroness is a Member of the National Assembly; I am not. I would expect her to have a better idea of that than I do.
Lord Rowlands
Could they possibly be subject to legislative consent Motions, for example?
Lord Bourne of Aberystwyth
My Lords, I appreciate the point that the noble Lord is making, and indeed the point that the noble Baroness is making, but I suspect that this would be part of the response of the Presiding Officer to the Secretary of State now that she has the letter—or hopefully has the letter, because it has only just been sent. That would be a matter for dialogue between the Presiding Officer, First Minister and Secretary of State.
Lord Wigley
Before the Minister sits down, can he address one point that I raised with him? If the matters under consideration for the use of these orders are generally small, consequential, almost trivial sortings-out, why on earth is it not possible to have a consent order in the Assembly for any orders being made here and vice versa, so that everybody is built in? If they are not controversial there would be no difficulty in getting them.
Lord Bourne of Aberystwyth
My Lords, again, I do not want to second-guess what will happen in the discussion subsequent to the letter being received. It is a fair point, but I suppose it does raise the question of when something may be minor to one person but not another. I think that it may be easy to identify but more difficult to define what is minor. I take the point but, sometimes, there may be a need to act with great facility. The point here is that the approach that I have suggested—indeed, the approach that we are carrying forward—involves a dialogue between the National Assembly and our own Parliament, through the Wales Office, which can hopefully drive this matter forward. That is what I have been seeking to do and I hope that noble Lords will accept this as a way forward in relation to what could otherwise be a difficult issue.
Lord Judge
My Lords, I thank the Minister. I think that the proposals that he has put forward are politically very wise but, legally—and I mean this with no discourtesy —they are completely irrelevant. But I beg leave to withdraw the amendment.
Wales Bill
Tuesday 10th January 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 77-II Second marshalled list for Report (PDF, 176KB) - (6 Jan 2017)
18:21 - Division on Amendment 81 - Ayes: 90 / Noes: 223 - Amendment 81 disagreed.
Amendment 90 disagreed. - Ayes: 0 / Noes: 0 -
Lord Taylor of Holbeach (Con)
My Lords, in the absence of my noble friend Lord Bourne, I propose that the House do adjourn for five minutes during pleasure.
“Lending for capital expenditure
In section 122A of the Government of Wales Act 2006 (lending for capital expenditure), in subsections (1) and (3), for “£500 million” substitute “£1,000 million”.”
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, first, I apologise humbly and unreservedly to the whole House for not being here when the business was called.
In moving government Amendments 72A and 143B, I remind the House that I wrote to noble Lords before Christmas to set out the details of the United Kingdom Government’s and Welsh Government’s agreement of a historic new fiscal framework which sets out how the Welsh Government will be funded alongside further tax devolution. This agreement ensures that the Welsh Government have a fair level of relative funding in the long term which is fair to both Wales and the rest of the United Kingdom. This is the view of the United Kingdom Government and it is also the view of the Welsh Government, whose Finance Secretary, Mark Drakeford, has said that he regards this agreement as ensuring,
“fair funding for Wales for the long term by implementing the funding floor recommended by the Holtham Commission”.
This agreement also sets out that the Welsh Government’s overall capital borrowing limit will be increased to £1 billion, thereby doubling the existing limit as set out in the Wales Act 2014. This increase is in line with the commitment made by the Government during the passage of the Wales Act 2014 that we would increase the capital borrowing if the Welsh Government took on income tax powers.
The fiscal framework agreement sets out that Welsh rates of income tax will be devolved in 2019, and so government Amendments 72A and 143B seek to put this agreed increase into statute and provide for its commencement two months after Royal Assent, alongside the provisions in Clause 17 that provide for the removal of an income tax referendum. Alongside the statutory increase to the overall capital borrowing limit, the Welsh Government’s fiscal framework also sets out that the non-statutory annual capital borrowing limit will be increased to £150 million a year from 2019-20, which is equivalent to 15% of the overall cap. This limit aligns with that agreed in Scotland as part of the Scottish Government’s fiscal framework. As is also the case in Scotland, there remain no restrictions on how the Welsh Government can use their borrowing powers to deliver their devolved responsibilities.
The noble Baroness, Lady Morgan, and the noble Lord, Lord Wigley, have, through their Amendments 73 and 144, which were tabled before the two Governments had made this historic announcement, sought to increase the Welsh Government’s capital borrowing limit to £2 billion. I look forward to hearing the arguments that the noble Baroness and the noble Lord have in support of their amendments shortly.
Amendment 143A in the names of the noble Lords, Lord Hain, Lord Kinnock and Lord Murphy, seeks to make the majority of this Bill conditional on the Secretary of State providing an assessment of the impact of the Welsh Government’s fiscal framework and the effect this will have on differential tax receipts in Wales. Ahead of hearing what the noble Lords have to say, I would point out that as part of the Wales Act 2014 there is already a requirement on the Government to provide an annual report to both Houses on the implementation and operation of the finance elements of that Act. The Government have published two such reports already, the most recent just before Christmas, and the fiscal framework agreement restates this commitment to these reporting arrangements. The next report is expected to be published in December of this year, which I expect to be before the reserved-powers model is brought into force.
In the light of the amendments that have been put forward, I have ensured that as far as the Wales Office is concerned we will seek to provide the information that is being sought here. I remind noble Lords that there is a requirement that Government Ministers in Wales also report on this separately. That would be part of that annual report. We have sought to provide an agreement that is fair for Wales and for the rest of the United Kingdom, as I indicated, so I hope that noble Lords are reassured by what I am saying. I will of course await the contributions that are to be made.
I turn briefly to Amendment 74 in the name of the noble Lord, Lord Wigley. In advance of his comments, let me indicate that the Government’s thinking is that it is important to have a standard approach throughout England, Wales, Scotland and Northern Ireland—across the whole of the United Kingdom. As things stand, because contributions from the private sector in Wales are limited to larger employers, they are smaller than those from the rest of the country, so Wales is a net beneficiary of the way this is organised.
I turn briefly to the amendment of the noble Lords, Lord Rowe-Beddoe and Lord Wigley, and the noble Baronesses, Lady Randerson and Lady Finlay, on air passenger duty, which we also considered in Committee. The Government’s view remains that there can be no separate powers as things stand in relation to the devolved arrangements for Cardiff Airport. Obviously, I wait to hear what the noble Lords will say on that issue. In due course I will also formally move government Amendments 72A and 143B. I await contributions from the noble Lords on the other issues. I beg to move.
Baroness Morgan of Ely (Lab)
My Lords, I wish the Minister a happy new year. It is extremely good news that the Welsh Government were able to come to an agreement with the UK Government on the impact of partial income tax devolution to Wales and the other taxes due to be devolved as a result of the Wales Act 2014. We were all aware that there was no chance that this Bill could be passed if there were no agreement.
As financing of the Assembly is central to this Bill, it is worth pausing on the matter for a while, as it is crucial to the deliverability and provision of services in Wales. I turn first to the effective change in the method of financing Wales as a result of partial income tax devolution. It has long been argued that due to its relative degree of poverty, Wales has been short-changed over a relatively long period, in particular when compared to Scotland, on the basis of the Barnett formula. In this new deal Wales will have access to around £2.5 billion in new tax revenues from the people of Wales. The Treasury will of course be anxious to cut the Welsh block grant to an equivalent amount.
If income tax receipts were to stay constant in both Wales and the UK over the long term, this would not be a problem. However, the fact is that in future years this block grant adjustment will go up or down depending on what happens to revenues in the rest of the UK. Unless Welsh taxes are to grow as quickly as England’s, we could be in trouble in future years. I am afraid that the chances of this happening are quite remote, not because Wales is incapable of raising its game but because it starts off with much lower incomes and does not have the tools to change the situation if the UK Government implement certain policy decisions which may make sense in England but do not make sense in Wales. Fiscal responsibility on the whole remains at the UK level.
To take as an example the UK Government’s policy of increasing the level at which taxpayers start to pay income tax—the personal allowance—this is great news for people on low incomes. But, because proportionately more Welsh taxpayers than English taxpayers are taken out of paying tax altogether, less tax will be collected in Wales to pay for our schools and hospitals, and Wales will have no control whatever over this decision. To be fair to the Treasury, and to its credit, it has recognised this and has agreed to make separate block grant adjustments for each of the three bands of income—so that was a good win for Wales.
I will heap even more praise on the Treasury—which I assure noble Lords does not occur often. It has been agreed that the Barnett floor will be made permanent, which means that Wales should not lose out under this deal either now or in the future. In the past, the system has worked because, ironically, the more public funding is spent in England, the worse off Wales becomes in terms of expenditure relative to England. This led Gerry Holtham to claim in his report that Wales was being short-changed to the tune of around £300 million a year.
However, the fact is that in recent years we have had an extended period of austerity. Wales has also had relatively slower population growth, which means that for every £100 per head spent in England, the Welsh Government now receive approximately £120 per head—higher than Holtham’s suggestion that Wales needs around £115 per head to respond to the needs of the Welsh people. Of course, we are not dancing in the streets in Wales, because this really reflects a reduction in the role of the state—a principle to which we are opposed, not just in Wales but across the UK. We will start believing Theresa May’s rhetoric on the shared society when she stops shrinking the state and starts expanding it. That is worth noting. We are also aware that this situation is likely to change at some point in the future, and we need to focus on this issue.
In accepting that the Barnett floor will be made permanent, Wales will always be assured of 115% funding for its devolved public services. This is extremely welcome news, and I hope that it will go some way towards alleviating the concerns that my noble friend Lord Hain and others expressed in Committee. The slight concern I had in relation to the impact of population change, over which of course the Welsh Government have little say, has been addressed by the Barnett bonus that has been agreed to, which is a 105% multiplier to any Barnett consequentials from 2018.
On the amendments which relate to borrowing powers—my Amendment 73 and government Amendment 73A—we made it clear at Second Reading and in Committee that one of the key requirements, if there should be a partial income tax devolution to Wales, was that there should also be an increase in the amount the Welsh Government are allowed to borrow. We, along with the Welsh Government, are intensely aware of the restrictions that austerity, along with the potential serious loss of European funding, will put on our ability to invest in infrastructure in particular. We are aware that, despite having the lowest unemployment rates in the whole of the UK for the first time ever, low productivity rates are a real curse on the Welsh economy, and that infrastructure investment would go a long way towards improving the situation and increasing the GVA of Wales.
In our amendment we request that the amount allowed to be borrowed should be £2 billion. This is based on the Holtham recommendations, which take into account the fact that Wales has borrowed very little under the PFI initiative compared with other parts of the UK. The amount offered by the Treasury is £1 billion. This is £500 million more than the current amount but £1 billion less than we had hoped.
I have spoken to the Finance Minister in the Assembly and he suggested that, in the current circumstances, as we have to use revenue from the Welsh budget to support any capital borrowing, the amount we can borrow is limited because we would have to divert money from the regular running costs of the NHS, education et cetera to support that borrowing. This underlines how flawed and self-defeating the policy of austerity being pursued by this Government is.
Lord Wigley (PC)
My Lords, I am glad to follow the noble Baroness in addressing these questions. First, let me say how glad I was to see the Minister arriving in the Chamber. I was fearful that we might be losing all the last few months’ work if we stumbled at this last stage.
Before I address the amendment in my name, I would like to comment that everyone must be glad that progress is being made on the fiscal framework and that there has been some agreement, but only time will tell whether that agreement is adequate. One problem is that, over the past 17 or 18 years since the establishment of the National Assembly, there has been a shortfall of more than £5 billion due to the effect of the Barnett formula on the Assembly’s funding, and therefore we are starting from a position where we will have to work very hard indeed to make up that loss. Clearly, the formula now forthcoming may or may not work in the future, but it does nothing to recoup that loss. Also, a central question in relation to the capital programme, which I will talk about in a moment, is the availability of a revenue stream to fund the interest on capital borrowing, and I suspect that that has not been adequately dealt with within the framework.
Amendment 73, which was spoken to by the noble Baroness, Lady Morgan of Ely, seeks to raise the Welsh Government’s capital expenditure limits to £2 billion, in line with other devolved settlements. The arguments on this issue are well rehearsed. We know that, as in many other areas, the UK Government have failed to honour the wording of the Silk commission and have given Wales a settlement that is less than adequate when compared with those of the other devolved nations. Therefore, perhaps I may once again outline precisely what we seek in these amendments.
The independent Silk commission, on which the Minister sat, agreed that the Welsh Government should have borrowing powers comparable to those of their Scottish counterparts. As outlined by the noble Baroness, Lady Morgan, taking into account considerations relating to PFI, this would take us to around £2 billion. As noble Lords will know, the recently agreed fiscal framework, which sits alongside the Bill, is seen by some as making progress on this issue, but under the framework £1 billion will be the Welsh Government’s capital expenditure upper limit. The lead amendment in this group—government Amendment 72A—incorporates this figure into the Bill. However, it is difficult to see how that represents anything like adequate progress. The Welsh Government will be short-changed by £1 billion compared with what they should have, and Plaid Cymru Members, both in another place and in the Assembly—regard this as totally unacceptable.
Although the parsimony of the UK Government on this matter is staggering, I am afraid that some of the blame must be laid at the door of the Government of Wales. If the noble Baroness, Lady Morgan of Ely, who spoke to the amendment, really believes in what it says—that the limit should be £2 billion—why did her Labour colleagues in the Assembly settle on the figure in the fiscal framework? Surely we should be fighting for £2 billion from the Assembly end as well.
That said, I shall conclude my remarks on this amendment by highlighting some rather remarkable comments made by the Minister on Report. He urged us not to push an identical amendment to a vote on the basis that,
“we do not want to constrain the figure in case the discussions lead to it going higher than that”.—[Official Report, 7/11/16; col. 927.]
Was the Minister deliberately leading us down the garden path, or had he himself been led down that path by Treasury officials promising to write cheques which they knew they would never cash? Perhaps he knew that a higher figure was never going to be delivered as part of the fiscal framework—a carrot that in his heart he knew could not be delivered. If that was the case, it was somewhat reprehensible, although I might say out of character. If he himself had been misled into believing that the money was there, he has surely been put into a totally impossible position. Some explanation is needed and some Treasury heads should roll. However, if he was indeed right that such money was available but the Welsh Government made an inadequate case to secure it, then Wales needs to know. Whichever it was, it seems that Wales will not get the resources it needs to stimulate investment-led economic growth and, compared with Scotland, it is getting second-class treatment.
I now turn to Amendment 74, which stands in my name and concerns the apprenticeship levy. The amendment relates to the devolution of the funds generated through the apprenticeship levy and the way in which it will be implemented. It seeks complete transparency surrounding the levy and how it is rolled out in Wales by making separate provision for the levy in Wales in consultation with the Assembly. We debated this issue in Committee and, although I got the impression that the Minister recognised that there were some problems, particularly in cross-border circumstances, he does not appear to have brought forward any proposals to tackle the issue. The amendment seeks greater clarity regarding the implementation of the levy in Wales and how the Government intend to work with the Assembly to ensure that this tax, which straddles not only national boundaries, but also both devolved and non-devolved areas of policy, works in practice. Greater clarity is essential so that the levy works effectively in both countries to provide high-quality, effective apprenticeships.
I am grateful to the noble Lord, Lord Bourne, for his letter, which he sent to all noble Lords on 14 November, attempting to shed some light on the Treasury’s intentions. This confirmed that the agreement would,
“provide the devolved Administrations with a population share of the Office for Budget Responsibility’s latest apprenticeship levy forecast”,
meaning that the Welsh Government will receive £128 million in 2017-18, £133 million in 2018-19 and £138 million in 2019-20.
“Beyond 2019-20, once the levy is embedded, the normal operation of the Barnett Formula should provide a similar outcome”.
It went on to say that the Welsh Government would then,
“decide how to allocate this funding to their devolved responsibilities”.
I thank the noble Lord for this note confirming the Treasury’s intentions, although this has left it rather late for the Assembly to consult widely and to formulate an apprenticeship policy in tandem with the commencement of the charges being imposed on organisations when it comes into force in April.
However, in the previous debate, the noble Lord, Lord Bourne, when questioned regarding the Barnettisation of the levy to Wales, conceded that he was,
“not sure that Barnett would present the right answer”.—[Official Report, 7/11/16; col. 904.]
If the intention of the levy is for companies to be able to “get out” what they “put in”, then this should have been communicated from the start. Now we are left in a position where organisations in Wales are waiting for the Welsh Government to play catch-up and announce how they intend to allocate their revenue in a race against time before April. Due to this lack of communication, several organisations in Wales which will be eligible to pay the levy are still in doubt as to whether or how they will benefit from the levy. There is a danger that some organisations may wish to relocate their training operations over the border to England, where they may have greater certainty and where they will be more certain of securing direct benefit from the levy that they pay.
I acknowledge that some of the blame lies at the other end of the M4, with Ministers in the Welsh Government dragging their feet as to how they intend to use the funds. In a letter to the Assembly’s chair of the Economy, Infrastructure and Skills Committee in November 2016, the Welsh Retail Consortium expressed concern that,
“Levy-payers in Wales will not have any opportunity to see a direct return from their contribution to the Apprenticeship Levy”.
The consortium contrasts the situation in Wales with that in Scotland, where the Scottish Government have consulted extensively with stakeholders, whereas the Welsh Government have given very few assurances. It is clear that the UK Government are introducing legislation that has been England-centric in its planning and implementation and as the noble Lord, Lord Rowlands, eloquently put it during the last debate,
“This levy has added confusion and uncertainty, and sadly is a terrible example of a non-consultation with devolved Administrations on issues that are fundamental to such Administrations”.—[Official Report, 7/11/16; col. 903.]
I hope that our experience with this levy will serve as a salutary lesson about the need to formulate clear and distinct devolution, where it is transparently clear as to where responsibility lies and not to be fudged, as in this instance. This half-devolved, half-reserved policy is an example of how the UK Government should not conduct their business in future.
Finally, I turn briefly to Amendment 80 on air passenger duty. I support Amendment 80, which is tabled in my name and the names of the noble Baroness, Lady Randerson—I am not sure whether she will be moving it—the noble Lord, Lord Rowe-Beddoe, who as I understand is indisposed and unable to take part in this debate which is so close to his heart, and the noble Baroness, Lady Finlay, who I am glad is here with me to support it. On the third day in Committee, we had a vigorous debate on this issue, in which an amendment previously tabled by my party colleagues in the other place was moved by the noble Lord, Lord Rowe-Beddoe. I am glad to see that he has put his name to this slightly narrower amendment. I say narrower because, whereas the previously tabled amendment on APD sought to devolve the whole tax, this amendment, as the noble Baroness, Lady Morgan, stated, would devolve powers over air passenger duty only for long-haul flights. Although I would like to see power over the whole tax devolved, as is the case in Scotland, I can appreciate that this narrower form of devolution for APD was the recommendation of the Silk commission.
Lord Hain (Lab)
My Lords, I will address Amendment 143A standing in my name and that of my noble friends Lord Kinnock and Lord Murphy of Torfaen. The amendment expresses concern about, and seeks an impact assessment on, the problem of differential tax receipts. Over the past few years, as the Minister will know, tax receipts in the UK have increased at a rate three times that of those in Wales. A gulf is opening up and Wales needs to be protected.
After the concerns on these and other matters that I and fellow Labour Peers have repeatedly expressed about the dangers to Wales of being short-changed by the devolution of income tax, I nevertheless congratulate the Secretary of State and the First Minister of Wales on reaching agreement on a new fiscal framework. It seems that they may have found a pragmatic path forward, one which both rejects the status quo and assures Wales of fairer funding for the future—though perhaps not quite as far over the horizon as the noble Lord, Lord Bourne, claimed when he announced the agreement. The new framework prolongs the life of the 115% funding floor for Wales, guaranteed in 2015 for the current Parliament. It accepts the assessment of Welsh needs relative to England made by the Holtham commission, while deftly sidestepping Holtham’s recommendation to adopt an entirely new formula for linking funding to relative needs across all parts of the UK. Instead, it embraces our old friend the Barnett formula, and thereby delivers the latest instalment in a long success story. By injecting a new needs-based factor into the Barnett formula and setting a welcome floor under the Welsh budget, the new fiscal framework goes a long way to protecting Welsh needs. I welcome that and I welcome the Minister’s role in it.
The Holtham Commission on Funding and Finance for Wales found the unvarnished Barnett formula distinctly unfit as a means for matching the funding allocated to Wales with Welsh relative needs. It judged it to be unsustainable over the medium term, but it also acknowledged that Barnett, with its modifications, gets the job done, as it is done again in this new fiscal framework. In his covering letter announcing the agreed fiscal framework on 19 December 2016—and we were grateful for notification of that—the noble Lord, Lord Bourne, claimed that the agreement,
“provides Wales with a fair level of devolved funding for the long term”.
Only time will tell whether that ambitious claim proves true. If by “the long term” the Minister means the 40-plus years that the Barnett formula in its various manifestations will have lasted by the time this new fiscal framework comes up for its first review, that will mean that the annual block grant to Wales in the 2020s will be derived from what it was at the end of the 1970s. I wonder how many Members of this House feel comfortable at such a prospect—basing budgets on spending patterns set 40 years ago, albeit with some adjustments along the way.
Let us hope that the Barnett formula, with this new 115% Welsh floor, does not set in stone the definition of Welsh needs regardless of how things change in the years that lie ahead. For example, we welcome the many new residents settling in Wales from parts of England, but they tend to be of a certain age and will create increased burdens for Welsh social care and the health service in the future. Let us hope that the Barnett formula, therefore, does not set this situation in stone.
For all its positive features, the new framework has its limitations. I will mention four. First, I acknowledge that it does respond to the call that I made seven weeks ago, when this House last debated these issues, for clarification about how any funding floor would interact with income tax devolution and block grant adjustments. While it lasts, the 115% funding floor limits the damage that the differential growth in tax receipts that we have seen between Wales and England can do to the Welsh budget. That is a bit like having third-party fire and theft insurance; it is valuable but falls short of comprehensive cover and is subject to change on renewal in the 2020s. The claim in paragraph 32 that the framework applies the same population figures to both tax and spending in calculating changes to the Welsh block grant does not persuade me that the ongoing threat from differential tax growth after the transitional period has been met.
I was also troubled and not a little bemused by the Written Answer given on 5 January by the noble Baroness, Lady Neville-Rolfe, to my Question:
“To ask Her Majesty’s Government what assessment they have made of the extent to which the agreement on the government of Wales’ Fiscal Framework published on 19 December compensates for the lower percentage increase in income tax receipts in Wales compared to the UK since 2010–11”.
I remind the House that the UK has seen a 6% rise in tax receipts since 2011. Wales has seen a 2% rise, which is a significant difference. The noble Baroness’s Answer was opaque, to say the least:
“As set out in the Welsh Government’s fiscal framework, the UK and Welsh governments have agreed to apply a block grant adjustment for each band of income tax separately. Doing so will fully account for the different proportions of basic, higher and additional rate income tax payers in Wales and the rest of the UK. This means that the Welsh Government will hold an appropriate set of risks and opportunities regarding their new income tax powers, as part of a wider funding agreement that the UK and Welsh governments agree is fair for Wales and fair for the rest of the UK”.
To be frank, that is Treasury-speak for not answering the Question. Does that mean that the lower percentage increase in income tax receipts in Wales compared with the UK will be specifically compensated for or not? Perhaps the Minister can enlighten us on this crucial matter, which could otherwise see Wales short-changed in this Bill.
Secondly, the framework does not deliver on the grand claims that have been made about tax devolution increasing financial empowerment and enhancing accountability—which is supposed to be what it is all about. The initial baseline adjustment to the block grant in 2019-20 will be set at the receipts that would have been generated by Welsh rates at 10%, whatever rates the Welsh Government actually choose to set. That is what Annex B of the agreement states. If the Welsh Government choose in that year or subsequent years to raise income tax rates by more than 10% and to spend the extra revenue, the effect would be to boost Welsh GDP via the standard Keynesian balanced budget multiplier. But it would distort rather than enhance political accountability, just as central government manipulated council tax for years to deter local authorities from raising council tax to fund extra spending on local priorities.
Thirdly, the new framework shows no sign of having given any consideration to indexing block grant adjustments in Wales to changes in comparable regions in England rather than to England as a whole. Holtham found that the two English regions Wales came closest to in 2010 were the north of England and, perhaps surprisingly, London. Wales’s needs were around 15% above the England average while the south-east of England excluding London had needs that were nearly 15% below the England average. Comparing Wales to England as a whole, including its better-off regions rather than to the closest equivalent English regions, does a disservice to Wales.
Fourthly, the only provision the new fiscal framework makes for updating estimates of relative needs at some future point is to say that things will be looked at again by both the UK and Welsh Governments when Welsh funding begins to reach 115% of equivalent spending in England, expected to be at some point in the 2020s. This will be towards the end of a transition period during which Welsh funding will be deliberately driven down towards 115% from its current 120% level. By the way, it has reached 120% only because Westminster-driven cuts in public spending have converged in line with the Barnett formula imperatives after years of Labour Government public spending rises, and should a future UK Government increase spending, that convergence would resume; hence the need, I believe, for an impact assessment. The Minister helpfully mentioned in his opening remarks that this could be provided in the annual report to which he referred. If he can reassure us on that point, that would give me some encouragement in terms of whether to press this amendment or not.
Baroness Finlay of Llandaff (CB)
My Lords, I want to speak briefly to Amendment 80 in the group, to which I have added my name. There are two specific categories, the first being the structure of Cardiff Airport itself for taking long-haul flights and secondly its relationship to other airports and the benefits for the region of south Wales.
The Cardiff Airport runway is particularly long, so it is often used as a diversion runway for flights that cannot land at other airports for a variety of reasons. For many years it has received the largest aircraft when they need to come in for servicing. Another advantage is that Cardiff does not have a major crosswind problem because the airflow around the Sully cliffs is not severe enough to cause any difficulties when landing large aircraft. The airport is therefore particularly suited to long-haul aircraft. This narrow amendment poses a question that is different, in that it would allow Wales to determine its future in this area.
The other aspect is Cardiff Airport’s relationship with other airports in the region. It is extremely convenient for people in west and south Wales who face problems in conducting commercial relationships in other parts of the world, so the development of the airport would certainly be invigorating. It would also help areas around Bristol and Hereford. Moreover, the skies over London are very crowded. Anyone who has been on an aircraft going round in circles as it stacks to land, and seeing other aircraft both above and below, knows that that can feel scary. One is aware of just how crowded the skies can be. Aircraft coming in to land at Cardiff Airport do not pass over populated areas because the approach is over the Bristol Channel, thus there are no problems with noise affecting residential areas. Because of Cardiff Airport’s position, passengers can travel away easily along roads that are not prone to congestion or major traffic jams. People can move on to other destinations or approach the airport with relative ease.
I hope that the Minister will think again and I wonder if we could come back to this issue at Third Reading, even if the amendment has to be made narrower still, so that we do not miss a really important opportunity to do what is right for the region and right for air travel, and would meet what was a core recommendation of the Silk commission.
Lord Thomas of Gresford (LD)
My Lords, I apologise for the absence of the noble Baroness, Lady Randerson, who is heavily engaged in the Moses Room on the High Speed Rail Bill. I therefore stand in her place.
My experience with Cardiff Airport is somewhat limited. I have flown into it only once, in an eight or twelve-seat plane from Harden, in north Wales. In those days there was no gap between the passengers and the pilot. As we came over the hills and the valleys and headed into Cardiff Airport, the co-pilot said to the pilot, “Do you think we will make it?” This did not fill his passengers with a great deal of confidence.
I support, as I always have, the concept of devolving air passenger duty in order to improve the use of Cardiff Airport and to provide a facility for the people of south and mid-Wales. I did a little research this morning on Bristol, because Bristol seems to be the problem, and discovered that it has only one flight that goes any distance: a weekly flight to Cancun, in Mexico, which is not one of the major long-haul trips. As the noble Baroness, Lady Finlay, pointed out a moment ago, the major airports in the south of England are overflowing. We are looking for solutions to the planes that are stacked and the passengers who fill the terminals in Heathrow and Gatwick. Here we have the possibility of a facility which will take long-haul traffic. If a proper incentive were given by a reduction in air passenger duty, then I am quite sure that the people of south Wales and indeed of the borders would flock to Cardiff Airport. It is common sense that this possibility should be allowed to develop. Bristol Airport, on the other hand, does not have any longer flights and does not have the capacity for such regular long-haul flights.
We have always supported air passenger duty devolution and I hope that the Minister, even at this stage, will give further thought to it. I do not think we have heard a positive rationale for not devolving it, save its impact on Bristol Airport. Its impact would be nil.
We very much welcome Amendment 22A. The increase in borrowing powers is one of the key points in the agreed fiscal framework. I congratulate the Government and the Welsh Government for coming to a sensible agreement on this before the Bill reaches its conclusion. It seems a reasonable basis for Wales to be ambitious in its capital projects. As for Amendment 73, it is ambitious—perhaps a little bit too ambitious, because, although you can pluck a figure from the air, debts do have to be repaid, and interest on them is a heavy burden and a drag on current expenditure. Therefore, a balance has to be struck. We believe that, for the moment, the Government and the Welsh Government have struck the right balance.
Lord Crickhowell (Con)
My Lords, I had not intended to intervene but I am prompted to do so by one or two things that have said. I particularly want to have a word about the much tighter amendment on Cardiff Airport, which shifts my position.
First, I congratulate the Government on the way they have dealt with the fiscal framework. Acknowledgment has been given from around the House to the real progress that was made in reaching what inevitably is a compromise deal but one which represents a very considerable step forward. Yes, things do change with time. When I was Secretary of State of State, long ago, it just happened that the Barnett formula was rather favourable to Wales, so I avoided criticising it. But of course it has changed—and we have heard how things change over time—and the Government, and the Welsh Government as well, deserve some credit for the deal that has been done.
I turn to this more restricted amendment about Cardiff Airport. I suppose that I should declare two matters. Long ago, at Second Reading, I supported the Government and declared an interest as a frequent flyer from Bristol. I did not declare another, even more remote interest—that long ago I was part of a consortium that bid for the management of Cardiff Airport. We did not bid enough, but I like to think that, if we had won, we would never have allowed that airport to be pushed downhill as rapidly as its subsequent managers did. That is the past history, which is very regrettable. I am sad that my noble friend—I always regard him as my noble friend, because he is a very good friend of mine—Lord Rowe-Beddoe, is not here, because he did great work in trying to rebuild the airport from the state in which it has been.
The new amendment would change things. Long haul is a very different matter, and the airport is not in my view a competitor with Bristol, as I feared that it would be in the past. So I hope that the Government will be sympathetic to this much narrower amendment. I withdraw the hostility that I previously expressed for the wider amendment and the wider campaign that was originally fought.
Lord Rowlands (Lab)
I shall speak to Amendment 74, proposed by the noble Lord, Lord Wigley, to continue to clarify the issue of the apprenticeship levy. I express my gratitude to the Minister for his letter on this issue in November, which was extremely informative and helpful. It spelt out how the Treasury was going to Barnettise the levy, which was very helpful, but I would like to press him a little more on the mechanics of this arrangement. I put this in the form of a question, because it has been hard to get anything factual. Under the Barnett formula before the levy, am I right in thinking that it was the budget of the department for business that was responsible for expenditure on apprenticeships? Are we now going to see an exchange—a replacement of BIS with Revenue and Customs—which is not an addition but just a transfer of responsibility for organising the Barnett formula in relation to apprenticeships? Am I right in thinking that that is the mechanics of this case?
Of course, the apprenticeship levy came out of the blue and without consultation—a point that we made very forcefully in an earlier debate—when the Assembly had already devised a very positive and constructive apprenticeship policy, envisaging no fewer than 100,000 places over the Assembly period and a budget of some £110 million. Now I understand that—and I am grateful if this is the case—as a result of the announcements and the fact that the Assembly knows that some of the apprenticeship levy money is going to be Barnettised, it has increased the present budget from £110 million to £125 million. That is a significant and important additional contribution to the Welsh economy. So on that side, I can welcome what has happened. But alongside that, we still do not know what the cost of the levy will be to the companies, public bodies and major utilities operating in Wales and how much of it they will be able to recover, one way or another. Yet again, I put the point in the form of a question because I have heard of some of these figures only at second hand. I hope the Minister, when he comes to reply, will be able to give us a much more authoritative account.
As I understand it, one assessment has been that the apprentice levy is going to cost the public sector in Wales some £30 million. In fact many organisations, public utilities, public bodies and companies, frankly, are treating the levy as an employment tax. They cannot see how they can retrieve the sorts of sums they are going to be levied with in any form of apprenticeship scheme that is going to be available. For example, what is the cost of this levy going to be to our 22 local authorities? Am I right in thinking that a county such as Pembrokeshire is going to pay some £750,000 a year as a result of the levy, and Powys about £600,000 a year? Multiply that by the 22 local authorities and you wonder how those authorities can possibly reclaim, through the levy, anything like the amounts of money they will pay. Can the Minister clarify and identify for us what the cost will be to a whole range of public bodies, utilities—I am going to refer to utilities in a minute—local authorities, the National Health Service and the Welsh Government themselves, which are all going to pay this levy? I fail to see how, somehow or other, we are going to be a beneficiary of this arrangement.
I raise one other major anomaly. We have very large national utilities that stretch across Scotland, Wales and England. According to one figure I have seen, some 75% of the employees of these major utilities—the energy companies, et cetera—are in the devolved Administrations. That means they can claim only 25% of the apprenticeship levy that they are going to pay through the English voucher system. Again, I would like to know how this is going to be sorted out. The situation is muddled and lacks the transparency the noble Lord, Lord Wigley, spoke about. We are flushing out greater transparency but it is still not sufficient, and I hope that we can use the opportunity of debating this amendment to seek much greater clarification.
Lord Kinnock (Lab)
My Lords, I shall follow on from my noble friend Lord Rowlands on the issue of the apprenticeship levy and very briefly and simply make the case for reconsideration of the policy being implemented now by the Government in both the public and private sectors.
I believe that within the formulas currently being employed—and this applies very particularly to Wales because of our substantial local government and public sector, for various historic and structural reasons—there should be better treatment for both private and public employers who are already proven good trainers. There is insufficient discrimination in the way the system is intended to operate now to give higher rebates or greater inducements to improve apprenticeship training, numerically and in qualitative terms, because those who are already good trainers, who have the custom and habit of making substantial provision for the training of new generations of skilled personnel, are simply not getting rewarded as they should for good performance, and for their strong intention to continue with that good performance, by comparison with employers who are and will be levy payers who have a much weaker record of the employment and development of apprenticeship skills. I make that plea in the context of this Bill because it has direct relevance.
There was a time, a very long time ago, in the early 1990s, when I had various obligations in my mid-life crisis of being leader of the Labour Party. We developed an apprenticeship levy scheme that was deliberately constructed in order to reward public and private sector companies and institutions with good records of apprenticeship performance and to finance their bonus, as it were, out of the levy on those with weaker performances. So there was a dual spur of inducement to improve apprenticeship performance in rewarding those who had good records—and intended to improve upon them—and in the minor penalty, but nevertheless a penalty, on those who had no such record of good performance. There was an inducement for them to reduce their levy obligations by improving their performance.
Lord Murphy of Torfaen (Lab)
My Lords, as a co-signatory to my noble friend Lord Hain’s amendment, I support everything that my noble friend Lord Kinnock just said about the need to review the operation of devolving some income tax to Wales.
I congratulate the Minister and the Welsh Government on producing the fiscal framework. I defy anyone to understand it on their first or indeed second reading of it, but by the time you get to the third you get the general impression that it is an improvement in the finances for Wales over the last number of years. An improvement indeed: I have been living with the Barnett formula for three decades, and there is no question in my mind that the fiscal framework now before us is an improvement. However, there is no point in improving on the block grant if you then start losing out because of the income tax side of it, and that is the point that my noble friends have put. The important issue, as I am sure the Minister would agree, is that in the annual review of financing for Wales the impact assessment of this change will be very seriously examined. I am convinced that the comparisons between Wales and the whole of England mean that Wales could be disadvantaged unless we redress that in some way.
I support noble Lords who have dealt with the issue of Cardiff Airport. My noble friend Lord Kinnock, a former European Commissioner for Transport, put it distinctly: if we could give some advantage to Cardiff with regard to long-haul flights, that would not just be a benefit for Wales; it would benefit a whole swathe of England as well. I cannot for the life of me understand why the Bristol versus Cardiff argument applies in this case. Bristol has no runway capable of taking these long-haul flights. Cardiff has, and it is a very good runway. That could help the rest of the country as well as Wales, and I think the Minister must be persuaded that right across the House today people have said that this is a reasonable amendment that would not affect the Government’s position with regard to air passenger duty generally. I think the Government are wrong on that, by the way; if you devolve it to Northern Ireland and Scotland, you should devolve it to Wales too. Still, if Bristol is blocking this proposal, in the case of long hauls there is no block that the Government can actually agree to.
I hope the Minister will look favourably on all the different points that have been made today because they are made with the knowledge that over the last weeks and months the Government have accepted different points that have been put by Members of the House across the political spectrum. The Government have conceded on many issues, and I see no reason why they could not concede on this small but important point.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on the amendments in this group. Much of their contribution has been persuasive and helpful.
I thank those who have acknowledged the progress made in relation to the fiscal framework and the agreement. I stress that the agreement has been made between the UK Government, by the Treasury, and the Welsh Assembly Government, via the Finance Minister and the Welsh Ministers in the Welsh Government. To that extent, this is something that the Welsh Government have welcomed. The noble Lord, Lord Hain, in a very fair analysis, said I had welcomed this agreement for the long term, which indeed I have. More importantly, perhaps, it was welcomed for the long term by Mark Drakeford, who said he regards the agreement as ensuring there will be,
“fair funding for Wales for the long term by implementing the funding floor recommended by the Holtham Commission”.
Those are his words. He is yet to give a full analysis, to be fair, but that is the press statement that he put out and it is notable that that is the view of the Welsh Government. I also stress that the Welsh Assembly will of course be having a say on the legislation in general when it considers the LCM, so no doubt we will be giving a view on this important part of the legislation, as well as the rest of the legislation, when it delivers that view. That is something that we anticipate.
I turn to Amendment 143A in the names of the noble Lords, Lord Hain, Lord Kinnock and Lord Murphy, which all three noble Lords have spoken to very persuasively. As I have indicated, we have a requirement under existing legislation, which we will take forward in relation to this new legislation, of an annual report that happens in November/December each year. We will seek to ensure that the impact assessment—the information that the noble Lords are seeking—is incorporated in that report. As I have indicated, it is partly the Treasury, partly the Wales Office and partly the Welsh Government; all three contribute separately to that report. I will seek to ensure that that information is there because noble Lords have made a very fair point. The Government have already published two such reports, so there is a template. Of course, I appreciate that the significance of the new income tax powers makes the next report somewhat different in nature.
Lord Rowlands
I apologise for interrupting the Minister but can he publish exactly which public bodies, which local authorities and which companies are going to pay this levy and what amounts they will pay?
Lord Bourne of Aberystwyth
I am sure I can and I will make endeavours to do so. Clearly, this is related to the way in which the levy operates. This is a matter being conducted from Westminster, so I will endeavour to get this information for noble Lords. What I cannot do is indicate how it will be spent. This is a matter for the Welsh Government and the National Assembly for Wales.
I turn now to Amendment 80 on air passenger duty. In doing so, I wish to say how sorry I am that the noble Lord, Lord Rowe-Beddoe, is not in his place because of indisposition. I am sure we all wish him a speedy recovery. I know that he has very strong views on this issue; I have discussed it with him on many occasions. The amendment was spoken to formidably by the noble Baroness, Lady Finlay, with other noble Lords speaking in support.
The Government have considered the case and options for devolving APD to the Assembly, as we committed to do in the 2015 St David’s Day agreement. From extensive debates in Committee, noble Lords will be aware that there is an issue about state aid, particularly in relation to but not limited to Bristol. The noble Lord, Lord Kinnock, correctly indicated a competitive element with Birmingham. There is a competitive element with airports in the United Kingdom which is obviously accentuated with those that are geographically proximate. While we remain members of the European Union there is clearly an issue with regard to state aid rules that cannot be lightly ignored. I assume that that will not be the position once we complete the Brexit discussions and implement it, but that is some way into the future. I put that important issue on one side.
Lord Murphy of Torfaen
Is it not the case, though, that the state aid argument would apply equally in Scotland and Northern Ireland?
Lord Bourne of Aberystwyth
The rules certainly apply equally throughout the EU but you have to establish that there is a competitive element. The distance from Edinburgh to Newcastle, which would be the next nearest airport where there is no devolution of APD, is considerably longer—and, I think, is a considerably tougher journey—than that between Cardiff and Bristol. I think noble Lords would accept that. I suspect that it is longer than the distance from Cardiff to Birmingham as well, so there is that difference. In Northern Ireland there is a different issue. The issue there concerns the presence of an airport in a different member state rather than within the same member state. Therefore, the rules are the same but obviously the geographical issue is somewhat different.
Lord Kinnock
I say to the Minister as a matter of record that I would gladly continue with the situation of the UK being subject to the state aid rules of the European Union, and retain membership, than have any other kind of relationship. That being said, however, the point made by my noble friend is absolutely valid; namely that within the United Kingdom a disparity of treatment is allowed under state aid rules because the authorities concerned have been able successfully to argue—rightly, in my view—that the market is not distorted by having arrangements in Scotland and Northern Ireland which differ from those in the remainder of the United Kingdom. Given the argument to which I referred in passing about the area to be served particularly by Cardiff if it were able to dispense with the passenger levy, I believe that under the current state aid rules it could certainly be argued that there is no distortion of the market because the form of competition that exists between international airports is not such as to be distorted by the operation of a different levy system in Cardiff.
Lord Bourne of Aberystwyth
My Lords, I hear what the noble Lord says. I think he would accept that it is a case of defining where there is a competitive market. The point I was making is that I think it would be much more difficult to suggest that there is a single market between Edinburgh and Newcastle in relation to air travel than there is between Bristol and Cardiff. I think that, factually, that must be the case. If you live in a suburb of Edinburgh, I do not think you would lightly consider going to Newcastle to catch a flight whereas, if you live in a suburb of Bristol, you might consider going to Cardiff and vice versa.
However, as I say, that is not the only argument that I am deploying. The point about giving a special tax status to Cardiff is the issue here. The Government cannot subscribe to that. However, we acknowledge that we will revisit air passenger duty at some stage. It may be appropriate to do so and decide how we approach it across the whole country as Brexit approaches, and in the light of decisions made on Heathrow and Gatwick. However, in relation to the specific issue, I am afraid that I cannot give any comfort to noble Lords who want me to move further than I have indicated.
Baroness Finlay of Llandaff
It sounds as if the Minister, in winding up on the airport aspect, is dismissing the arguments we have made that the type of flight going into Cardiff would be quite different from the type of flight going into Bristol. They are not competitive but compatible. Given that, and the arguments we have made, will the Minister undertake to meet a few of us before Third Reading? Listening to the arguments, I do not quite understand why the Government are saying anything other than that they do not want to do it and that that is it—that is what I am hearing—rather than that there is true competition between the two.
Lord Bourne of Aberystwyth
My Lords, if I may say so, that is a somewhat unfair caricature of what I am saying. I am saying that we want to look at this in the round. We do not want to look at it just in terms of Wales, because there is a broad issue about what we do with air travel throughout England and Wales, and that is part of a much broader consideration. So I am not dismissing it out of hand and saying that this is something that the Government do not want to look at. We want to look at it in the round and not, in this legislation, in isolation, which we cannot undertake to do.
I believe that that has dealt with the mass of the issues here. I thank my noble friend Lord Crickhowell for his contribution, and particularly for what he said about the fiscal framework and the hard work that has been put in by officials from the Welsh and UK Governments, and indeed the work of the Welsh Treasury as well as of the Treasury here. It is a signal achievement that has been welcomed in the United Kingdom and in Wales—and, noting that we have Governments of different complexions, that is no small achievement in itself. So while it may not be perfect, it is a way forward. Of course, it is subject to review. Some noble Lords perhaps hinted at what happens now. The noble Lord, Lord Hain, indicated that there would be a review once there is convergence to 115%, which is the case, but thereafter there would be one no more than once in every Parliament; we anticipate that that would be looked at within every Parliament. That is important as well, and is something that has not happened previously.
With that, I ask noble Lords and noble Baronesses not to press their amendments.
Baroness Morgan of Ely
Baroness Morgan of Ely
My Lords, there are a number of huge and very different amendments to be considered in this grouping, so I hope that the House will be tolerant as I address the many key issues that need to be discussed under the broad heading of reservations.
Much of the debate on and scrutiny of the Bill have focused on whether particular subject areas should be devolved and form part of the legislative competence of the National Assembly for Wales. The tussle over exactly what the responsibilities of the UK and the Welsh Governments are is the focus of this Bill. Nevertheless, I am keen not to lose sight of the slightly more abstract and structural issues in the Bill, and of the lack of underlying principles—underlined by the Constitution Committee in the Lords—as to what should be reserved. The failure to have a Bill based on sound constitutional principles has created further complexity rather than simplifying and clarifying the approach, which is what the move from a conferred powers model to a reserved powers model was meant to deliver.
The Delegated Powers Committee and the Constitution Committee in the Lords have drawn attention to the broad interpretation that the courts have taken to the “relates to” test. The committees suggested that applying this test to a lengthy list of reservations—far longer than for other regional parliaments—could have significant implications for devolved competence. At best this will lead us back again to the Supreme Court and could reduce the competence of the National Assembly, often in areas where it already holds that competence.
The Minister sought to reassure the House of the impact of the purpose test, which determines whether a matter relates to a reserved matter, but we have no way of knowing how effective this will be. Never before have we seen a reserved powers model with as many reservations as we have in this Bill. My fear is that while many thought that the shift to the reserved model would facilitate the progress of devolution, it might turn out to have the opposite effect.
Lord Wigley
My Lords, we are again dealing with a very disparate group of amendments. Amendments 76 and 77, which stand in my name, seek to ensure that the National Assembly can continue to legislate on ancillary matters. My amendments have a similar objective to that of the amendments tabled by the noble Baroness, Lady Morgan of Ely, about which she has just spoken and which I certainly support. They are based on amendments recommended by the National Assembly Llywydd, or Presiding Officer, Elin Jones. In Committee similar amendments were tabled and forcefully supported by the former Assembly Llywydd, my noble friend Lord Elis-Thomas.
This is undoubtedly a hugely complex, intricate and fundamentally confusing area of legislation. It is so confusing that, as was outlined earlier, we have seen a whole range of answers from a variety of Government Ministers on the issue. In the Commons, my colleagues were initially told that including a provision to legislate in an ancillary fashion would,
“drive a coach and horses through the key principle underpinning the new model”.—[Official Report, Commons, Wales Bill Committee, 11/7/16; col. 87.]
Later they were told that their amendments were simply not needed as they were already provided for.
Lord Elystan-Morgan (CB)
My Lords, I rise to speak to Amendment 78. However, before so doing, I want to say first how delighted we are that the Minister is safe and sound with us. I must say that a doleful bell rang in my memory. In 1968, I was a Minister in the Home Office and on that particular day had Question 77 to answer. I was assured by somebody who might have known better that there was no prospect whatever of it being reached. However, in my nonconformist ignorance, I had not realised that it was Epsom week and that a large swathe of a particular party was disporting itself at Epsom. I still regard other persons as having some responsibility for that. On the other hand, there was a high degree of contributory negligence on my own part. However, we are very delighted that the Minister is with us. I doubt whether any Minister has ever attended a Bill with greater integrity, enthusiasm and candour as has the noble Lord, Lord Bourne, in this matter.
I wholeheartedly support everything that the noble Baroness, Lady Morgan of Ely, put forward as a background to the matter my proposed amendment deals with, which is demarcation. It is an attempt to try to draw a clear and understandable line between the authority of this Parliament and the authority of the Cardiff Assembly. As one brought up in the countryside, I have always espoused the adage: good fences make good neighbours. I have no doubt that there is massive truth and realism in that in relation to constitutional matters.
Devolution is both an end in itself and a means to an end. Essentially, what it means to me is that it is possible for a number of communities within the same kingdom and the same sovereign state to be able to share responsibilities of an administrative and, more particularly, legislative nature. That can be done only if there is a clear understanding of where the equitable point of balance—the watershed—exists in relation to the division of the two bodies. How do you find that? You do not find it in any criteria set down by a court of law or in an Act of Parliament; nor, if I may say so, do you find it in the learned writings of eminent jurists. You find it in each case by using instinctive common sense and an understanding of the justice of the situation.
If we look at European sub-Parliaments, there is no clear, consistent rule as to exactly where the boundary is drawn, but they have all espoused a common approach to the problem. It has been an approach that they accept, historically and socially: that there is what might be called a watershed and that certain matters flow inevitably to the general sovereign Parliament, while others inevitably and physically flow to local decision. That is the way that we should approach this matter in relation to Wales.
Of course, that has simply not happened. It is not as if the Government had set out their criteria for deciding what was local and what was general. As far as the outside world is concerned, it is a wholly haphazard ragbag of reservations—197 of them. I have looked carefully at the situation in Scotland and Northern Ireland and there is nothing approaching that concentration of reservation in either of those countries. Indeed, it is not just a question of the number of reservations, but the sheer triviality. One could spend many doleful hours going through those lists.
I shall not repeat what I have said on more than one occasion in the House on that, but I will say that the Minister, as an able and distinguished professor of law, will know full well that under certain local public health Acts and local government Acts over the last century and a half, it was possible for local authorities of a modest nature to adopt certain modest rules. They effectively became local law. That happened on scores and scores of occasions. The Minister is probably in a better position to advise the House than anybody else, but interestingly, many of the 197 exceptions that we have would have been included in those very provisions. Is that not a massive irony?
My case therefore is this. The Government, intentionally or unintentionally, have managed to make a thorough and chaotic mess of this situation. There is no rationale as to why certain matters are reserved and others are not. No criteria are suggested at all. In so doing, a very great disservice has been done both to the principle of devolution and to the principle of subsidiarity, if there is a difference between the two. One may very well argue that one is talking about the same central principle. But as the matter now stands Her Majesty’s Government have devalued the whole principle of devolution and trespassed on the noble principle of subsidiarity, cynically reducing it to something wholly ineffective.
The purpose of the amendment is to seek not so much to cure the situation in which we now find ourselves, because that would take something much more fundamental, but to start a process of examining it in detail. The amendment would impose on the Secretary of State for Wales the obligation to set up a working party to report within three years on the operation of each and every one of the reserved matters, and to report to Parliament regularly on such progress. That would not answer the question altogether, but it would be a helpful way of approaching the problem. That working party should represent as broad a social and political spectrum as is humanly possible.
Perhaps I may make a suggestion to the Minister. If the Secretary of State wants to use something off the shelf to address this matter, he could do far worse than ask the Silk commission to sit again and consider this point. The Minister knows more than anyone else in the House about the commission, having for many years been one of its most distinguished members. The commission has reported on two occasions in a mature, diplomatic and thorough manner on Welsh constitutional matters, and it could do so again. On that basis, I urge the House to consider that this amendment is of real constitutional importance. It does not completely cure the problem but it is a hopeful way of setting about resolving it.
Lord Thomas of Gresford
My Lords, it is always a great pleasure to follow the noble Lord, Lord Elystan-Morgan. As I have told your Lordships before, I voted for him in 1964 when he was a Plaid Cymru candidate. I know that he has recovered from a serious illness to play an important part in this Bill and we are all very pleased to have him with us today. When he talked about the advantages of building a fence between neighbours, I wondered whether he was proposing to build one between England and Wales. I would support him in that—particularly if the English have to pay for it.
In preparation for this debate I spent the new year viewing five or six episodes of S4C’s excellent series “Y Gwyll”—“Hinterland”—kindly provided by S4C at its Christmas party before the break. It is a somewhat grim picture of policing in a rural Welsh community. I had some interest in that because my first five years were spent in Llangollen police station where my father was the station sergeant. His territory covered a large area of rural Denbighshire.
In one of the episodes of “Y Gwyll”, Chief Inspector Matthias has to confront a man armed with a shotgun in a remote cottage high up in the hills. It rang a bell since my father had to do precisely that. As my father approached him, the man shot himself rather than my father. In the denouement of the series, broadcast over the Christmas season, the retired chief superintendent turned out to have murdered the policeman investigating his past while his replacement, the current chief superintendent, murdered his predecessor in turn—which did not accord with my memory of the Denbighshire constabulary of those days.
The series depicts the Welsh language, the people, the way of life, the rural remoteness and the stretched facilities, emphasising the different society and community in which we live. It is not surprising that a significant majority of Welsh people, when asked for the purposes of an opinion poll in connection with the Silk commission, were of the view that the Welsh Assembly and the Welsh Government should have responsibility for policing in Wales. Indeed, devolution of policing was supported by the Welsh Government, the chief constables, the majority of police commissioners, the Police Federation and other professional police bodies.
The Silk commission reported in favour, although it was careful to say that the devolution of the governance and administration of the police would not involve the devolution of legislative competence for police powers or the criminal law. It also did not recommend devolution of matters dealt with at the UK level by the National Crime Agency—serious and organised crime, fraud, cybercrime and child protection. However, proposed new Section B5 of Schedule 1 to the Bill reserves policing to the Home Office—and that is an argument for another day.
My Amendment 81 deals with subsidiarity, leaving out the reservation of anti-social behaviour to the Westminster Government which the Bill proposes. Anti-social behaviour is essentially a matter for the local community. That is what is reflected in all the parts of the Anti-social Behaviour, Crime and Policing Act 2014 that are specifically reserved in proposed new Section B6 of Schedule 1 to the Bill.
Under Part 1 of the 2014 Act, which deals with injunctions, applications for an injunction may be made by a list of bodies, the first of which is the local authority. The next one is a housing provider, and only third on the list is the chief officer of police. Other bodies which may apply for an injunction include the Natural Resources Wales body and Welsh Ministers exercising security management functions.
Similarly, under Chapter 1 of Part 4, community protection orders, the initiative to issue a community protection order against an individual or a body lies with the local authority, where it is satisfied on reasonable grounds that the conduct of that person is having a detrimental effect of a persistent or continuing nature on the quality of life of those in the locality, and that the conduct is unreasonable. It is for the local authority to apply for the order and to take action if the individual or body fails to comply with the notice.
Your Lordships will see that anti-social behaviour is already dealt with at the local authority level. In Chapter 2 of Part 4, it is the local authority alone which may make a public spaces protection order if it is satisfied on reasonable grounds that activities carried out in a public place within the authority’s area have had a detrimental effect on the quality of life of those in the locality and that the activities are unreasonable and of a persistent or continuing nature. Again, the local authority applies for the order, the local authority enforces it.
Under Chapter 3 of Part 4, power to make and exercise a closure notice for premises associated with nuisance or disorder rests with either a police officer of at least the rank of inspector or the local authority.
Part 5 gives power to landlords to recover possession on anti-social behaviour grounds, and Part 6 is headed “Local involvement and accountability” and lays down requirements for the police to consult with local authorities and community leaders in the preparation of community remedy documents, the purpose of which is to require an individual to carry out certain specific actions.
The whole of Parts 1 to 6 of the 2014 Act is concerned with what a local authority, in the main, or a local policeman does in relation to problems within the community. It indicates how localised the legislation is. It is only sensible because other agencies which are concerned with the same sort of thing are devolved—the health service, education, ambulance and fire services, and so on.
The other powers reserved to Westminster in Section B6 refer to dangerous dogs or dogs out of control. It is a perfect example of why this should be devolved—devolution works. I am sure that many of your Lordships will recall the Dangerous Dogs Act 1991. It was regarded as an example of knee-jerk legislation and has always been thought to be utterly unsatisfactory. After toying with the idea of pet anti-social behaviour orders, an idea first put forward in the satirical political show “The Thick of It,” the Government passed Part 7 of the 2014 Act, which made some patchwork reforms. It is still not satisfactory.
Meanwhile, up in Scotland, the Scottish Parliament passed the Control of Dogs (Scotland) Act 2010, which dealt with the whole question comprehensively and sensibly. The initiative in Scotland lies not with the police but with an authorised officer who is defined as an officer appointed for that purpose by a local authority. Each local authority in Scotland must appoint at least one such officer, skilled in the control of dogs and with the capacity to instruct and advise others in matters relating to the control of dogs. The Act deals with the control of dogs and with the prosecution and punishment of owners of dangerous dogs in Scotland. Why does Westminster want to reserve to Westminster power over dangerous dogs and their control when Scotland has legislated so effectively? We have passed—or, rather, the Welsh Assembly has passed—the Control of Horses (Wales) Act 2014. If the Assembly can be allowed to legislate for the control of horses, why not dogs?
When I was living in the Llangollen police station, we had a Pembrokeshire corgi called Rex who, having been reared by my aunt, only understood Welsh. He was not one of those brown and white royal jobs—he was a proper dog, black and white with a long tail. During the last election, my wife, the noble Baroness, Lady Walmsley, and myself were canvassing near Pistyll Rhaeadr, the famous waterfall in Montgomeryshire, one of the seven wonders of Wales. She came to me rather disturbed and said that there was a dog in the next farm and that it was a bit snappy. I patted her rather condescendingly on the head, said leave it to me and went through the gate. Sure enough, there was a black and white Welsh collie, which kept jumping up at me. I said, remembering my youth, “Steddwch”, which means “Sit”—and the dog bit me. Surely, that was an issue not for Whitehall but one for Cardiff.
Lord Hain
My Lords, how to follow that? I shall speak to Amendment 90 in my name and in those of my noble friends Lord Murphy, Lord Kinnock and Lady Morgan. I begin by expressing my disappointment that the Minister has not been able to persuade the rest of the Government to think again on this issue and that they continue to press ahead with their transparent move, not simply to go beyond overriding decisions that the Welsh Government have taken since 2011, but deliberately to claw back powers from the National Assembly. From everything the Minister has told your Lordships, and much of what the Bill contains, this is supposed to be a pro-devolution, not an anti-devolution, Bill. But in the way in which devolved public services are configured, and especially their staff relations organised, it is repatriating powers that are already the preserve of the Assembly. Surely, that cannot be right.
When we considered this amendment in Committee, the Minister acknowledged our shared belief that employment law is, and should remain, a reserved matter. He said that,
“the underlying legislative framework concerning rights and responsibilities in the workplace must be reserved”.
I agree with that. He went on to say that the,
“system we have allows workers to be clear on their rights, whether they are in the public sector or the private sector”.
Again, I agree. However, he then said that this,
“is a fundamental principle and I cannot accept that the law underpinning the terms and conditions of public sector workers should be different from the law that underpins the rights of other workers”.—[Official Report, 15/11/16; col. 1384.]
On that point, we diverge.
My noble friend Lady Randerson spoke previously about the fact that the Welsh Assembly has long had considerable powers—for example, over doctors’ pay, terms and conditions. The principle has been conceded and accepted by the Government, ironically, as it has been in this very Bill in another respect. A government amendment to give the Assembly legislative competence over teachers’ pay and conditions has been accepted as part of this Bill. For the Minister to somehow then argue that it is impossible to disentangle fundamental employment rights from the terms and conditions of employees in the devolved public services seems somewhat irrational and contradictory, to say the very least. For the sake of clarity, I hope the House will permit me a short time to highlight the four different elements of this and to unpick a number of aspects that have been conflated during previous debates.
Lord Morris of Aberavon (Lab)
My Lords, I will confine myself to Amendment 78 in the name of the noble Lord, Lord Elystan-Morgan. I am not going to repeat my Second Reading speech, in which I complained vehemently of the inclusion of such a huge number of reservations. I welcome the words of my noble friend Lady Morgan on the announced changes by the Government so far in, as I understand it, limiting them. The Wales Office has only limited experience in legislating, in drafting and in fighting its own corner to get its own way with other departments in Whitehall.
In drafting the original Welsh devolution proposals in the 1960s, I faced the same dilemma of how to deal with the self-interest of many departments in Whitehall, for which, “Devolution is all right provided it does not encroach on my back yard”. What we did then was to set up a Cabinet committee, meeting twice a week under the chairmanship of deputy Prime Ministers, and to have seconded to it rising stars from the Cabinet Office to guide it through and ensure that the Minister got his own way. In the fullness of time each of these two gentlemen became Permanent Secretaries in major departments in Whitehall—that indicates the weight of the input. The combination of such people as Ted Short and Michael Foot in turn knocked heads together. We knew what we wanted and got our Bills into shape. My advice on this occasion is for the Wales Office to enlist someone from the Cabinet Office to knock heads together. Regrettably, this Bill has the finger marks of every department in Whitehall trying to preserve its own corner.
It takes a combination of the resolve of a Secretary of State and his advisers to get the right Bill and not succumb to the blandishments of other departments in Whitehall, enumerated by the great number of reservations in the Bill. I fear that the first result will be a field day for litigants, particularly if we have again a trigger-happy Attorney-General. It will not be the end of the matter. The noble Lord, Lord Wigley, illuminated at least one of the instances where we can face litigation. The second result, as sure as God made little apples, is that we will return to this issue time and again in order to seek a permanent settlement, which we all wish for, for Welsh devolution. Hence, the best line of defence for the Government is a committee, as proposed in Amendment 78 in the name of the noble Lord, Lord Elystan-Morgan, to report on the functions and powers and see how we are getting on; whether I and others are right or whether the Government are right. At least, within a period of three years, we shall know and report to the House, possibly for a debate on the developments that have taken place. Then perhaps, after that cooling-off period, as it were, we might have a more mature and resilient approach to Welsh devolution, which will then be a permanent one. That is my hope.
Baroness Finlay of Llandaff
My Lords, I have Amendment 82 in this group. It is a question, as my noble friend Lord Elystan-Morgan said, of flow. The problem for Wales is the flow of alcohol: Wales does not have the ability to control how that flow starts and how that supply chain moves. We in Wales are lumbered with the costs of alcohol abuse, both direct and indirect. There are direct costs in health and social care and indirect ones in damage to other people, either directly to another person or secondarily, through bereavement and so on. There is a real problem of culture around alcohol consumption in Wales. We should remember that while Scotland has the same culture of drinking, it has been given a degree of control. I fear that it is not always a pretty sight. Things have improved greatly but the Welsh Government does have to have the powers to do something about it.
There is another aspect of this that needs to be considered. We understand very little, really, about the way that alcohol interacts on the brain and on the reward centre, on people developing cravings. It is quite possible that the epigenetics mean that when you have a background culture of a family where there has been drinking, an individual’s reward centre responds differently. It may just be that people in Wales, having been born into a culture of drinking are more predisposed, more likely to develop an addictive tendency towards alcohol. It seems bizarre, when this is such a social problem and when the costs are really all borne at a local level, that the ability to control it is not given to the very Government that have responsibility for dealing with those problems.
Lord Balfe (Con)
My Lords, I would like to say a few words about Amendment 90. I will not stray into the internal affairs of Wales but this matter came up in debating the Trade Union Bill last year. The noble Baroness, Lady Morgan, mentioned the need for sound constitutional principles. I think that supporting sound constitutional principles should lead us to resist Amendment 90—which, to use a term of the noble Lord, Lord West, represents mission creep.
The amendment looks fairly innocuous and can be split into two parts. On “Terms and conditions of employment”, we keep hearing how Wales has managed to escape difficulties with doctors and has an excellent education system—although I am not sure whether the recent OECD figures bear that out—thanks to its ability to deal with terms and conditions. But, when you move on to the next bit of the amendment, “and industrial relations”, you open up a Pandora’s box. Given the Explanatory Notes accompanying the Bill, once you admit that industrial relations in Welsh public authorities are a devolved matter, you open up a huge area of debate as to what constitutes a public authority or industrial relations. For instance, could you have a different minimum wage for public servants in Wales or would you then get disputes between the private and public sectors?
Lord Hain
I acknowledge that the noble Lord represents Conservative trade unionists, which must be a noble and valiant role to play, but the definition of public services is in the legislation passed by this House. It is set in statute; there is no question of redefining it or inventing new public bodies. It is all defined and the amendment repeats that.
Lord Balfe
I thank the noble Lord for his intervention, but I am sure that there would be plenty of room for disputes; this would not end the dispute. Perhaps the Supreme Court is needed to rule on this, but the proposed clause would not help us to go forward in any way. It is a slippery slope. We have a difficulty and clearly it needs to be defined. If this clause were passed and added to the Bill, it would not be the end of the matter; it would actually complicate matters and make them more confused. I make a practice of reading absolutely every scrap of paper that comes to me from the TUC—not a week goes by without something arriving—and, if this were such an important matter, I wonder why no one has asked me to support or even consider supporting this clause. It is sheer opportunism.
Baroness Morgan of Ely
My Lords, the point is that, under the conferred powers model of governance at the moment, we already have this power. It is in the move to the reserved powers model that we are losing this power. That is why we are so outraged by this move.
Lord Balfe
Well, some see it as that. I see it as a clarification that was needed—something that became quite clear last year. I suggest that we resist this amendment. It will not take us anywhere further forward and I am not sure that it is useful. It will open up many further legal cases and I hope that the House will reject it.
Lord Elis-Thomas (Non-Afl)
My Lords, I will make clear my strong support for Amendment 90, for the reasons that have been made clear on both sides of this debate, and from my own experience as a trade union member and a manager in the public sector in Wales at different periods of my life. I will confine myself, as I have during the course of the Bill, to the constitutional principles—if I may use the term again—rather than discussing specific subjects.
This is where I have to disappoint three of my noble friends. The noble Lord, Lord Elystan-Morgan, is a very old friend—I mean old in terms of our association, since I believe I first met him in a Crown Court in Ruthin in the very early 1960s. I hasten to add that I was not the defendant; my father was a witness there. With the noble and learned Lord, Lord Morris of Aberavon, I had the pleasure of discussing issues as soon as I arrived in the other place as a very young Member of Parliament. The noble Lord, Lord Wigley, of course came in with me at that time. I shall disappoint all three by expressing my considered view that we no longer need working groups chaired by Secretaries of State—although I recognise that a Secretary of State is present at the Bar of the House today, along with one of his ministerial colleagues.
Lord Elystan-Morgan
Does my friend, the noble Lord, Lord Elis-Thomas, accept that whatever might be said about the purity of the principles that he puts forward—principles which the late Professor Dicey might very well have approved of—there is nevertheless a huge gap to be made up between the situation that existed on the day in July 2014 when the judgment was given in the agricultural workers’ cases, and the consequences of the Bill? To my mind, the gap in terms of actual devolution might be 20%, 30% or 40%. It is massive and until that gap is made up the noble Lord’s theory, for all its general attractiveness, does not really apply.
Lord Elis-Thomas
I appreciate being given the authority of Professor Dicey but the real situation is that these issues will be resolved through the public political debate that will continue about the constitution of Wales and all other constitutions, because that is the sign of a vibrant democracy. It is therefore not an appropriate subject for a working group, led by a Secretary of State or whomever—and I would say the same thing about a working group led by the First Minister of Wales or the Presiding Officer of the Welsh Assembly or the Lord Speaker or the Speaker of the House of Commons. The issue is not about how that debate takes place: it is whether we need to place in statute, on the face of the Bill, the creation of a working group that would somehow have responsibility for delivering Wales from any constitutional weaknesses that it has as a result of the Bill.
Baroness Finn (Con)
My Lords, I speak against Amendment 90 in the names of the noble Lord, Lord Hain, the noble Baroness, Lady Morgan, and other noble Lords. The purpose of this amendment is to devolve in part legislative competence for employment and industrial relations to the Welsh Assembly. The noble Lord and others argue that this is consistent with the Supreme Court judgment in respect of the Agricultural Sector (Wales) Bill. In this instance, the court held that the case related to multiple subjects, and thus fell within the competence of the Welsh Assembly. It should be pointed out that the Supreme Court ruling concerned a situation where the devolved subject of agriculture was specifically in play. Indeed, in another Supreme Court case involving the Welsh Government’s competence in relation to recovery of medical costs, the court followed the same approach as in the agricultural sector but came to a completely different conclusion, deciding that the area in play was not devolved.
It would be unworkable to have different employment laws applying in different jurisdictions in Great Britain. As we have previously pointed out, the Smith commission in Scotland recently considered this issue and concluded that employment and industrial relations law should remain reserved. I appreciate that the noble Lord, Lord Hain, has argued that the amendment is not intended to change the reservation of employment law, and we all agree that employment and industrial relations law must remain reserved matters. However, in principle, “terms and conditions” derive from all aspects of employment law—for example, the national minimum wage, parental leave, and dismissal laws—and I believe that there is sufficient flexibility under the statutory framework of employment law for employers to configure their own terms and conditions.
The purpose of bringing in a reserved powers model for Wales to replace the conferred powers model is to bring greater clarity to the respective responsibilities of the UK Parliament and the Welsh Assembly. It is therefore somewhat dismaying that the noble Baroness, Lady Morgan, has told the House that the Welsh Assembly intends to pursue a Bill under the conferred powers model that will only diminish such clarity and cause legal wrangling. My fear is that Amendment 90 will reduce the very clarity that this Bill seeks to achieve. In effect, it could also create a two-tier system, with different employment and industrial relations legislation applying to public, as opposed to private, services in Wales, and, indeed, the whole public and private sectors in England and Scotland. I therefore support the Government in opposing the amendment. There is already a lot of flexibility for employers, but employment and industrial relations law must remain reserved matters to ensure clarity in the free flow of labour across Great Britain.
Lord Kinnock
My Lords, there are many issues on which I find myself in agreement with the noble Lord, Lord Balfe. There used to be more, it must be said, in a different political lifetime, but I greet with some dismay the fact that I have to diverge from him on this issue, simply because he is wrong. I particularly pursue the point made in her intervention by my noble friend Lady Morgan. The noble Lord, Lord Balfe, used the term “mission creep” to describe Amendment 90. Of course, that can be employed as a derogatory description of any development. If we put it in the context of devolution, however, we could categorise devolution entirely as “mission creep” because the whole proposition on which it has been based in this country—and perhaps, indeed, in biology, from which it derives—is that there will be an accretion of competences as time passes and the sophistication of devolved Administrations and legislatures takes place.
Lord Balfe
I wonder if the noble Lord recalls our jointly campaigning on the Welsh referendum in the 1970s. We were on the same side, of course, but presumably where he is now is the definition of mission creep.
Lord Kinnock
No, it is the definition of the fact that when confronted with reality, I try to make it work. Consequently, while I retain some reservations about the whole way in which devolution is taking place in the United Kingdom, I am utterly in favour of decentralisation of administration and decision-making, which any democrat must be, but would quarrel with the sectional and selective form of devolution that is taking place. I would argue on another occasion that, had we undertaken in 1979, let alone in the 1990s, the form of devolution that I and some of my colleagues, including my noble friend from Pontypool, were then advocating, there would have been devolution throughout the whole of the United Kingdom. Perhaps we would not be confronted with the constitutional mismatches and disequilibria that confront us now, especially when we are faced with the prospect of the disaster of Brexit. I will return to that on a different occasion.
I say to the noble Lord, Lord Balfe, that the accretion of competencies that has taken place is in the nature of devolution. Indeed, the Minister could take justifiable credit for producing a Bill that assists in the clarification and strengthening of the whole devolution process. I hope that the noble Lord, Lord Balfe, will welcome the redemption of the Conservative Party, which, back in 1979, took a view that was almost as enlightened as mine on the issue. The most important point—and it is fundamental to this amendment and this Bill—is that the argument in favour of Amendment 90 is that those powers currently exist and they manifestly work. I am therefore employing, in a sense, a conservative argument in saying, “If it works, don’t fix it”.
What happens in Wales—and has happened for several years past—is that the powers advocated for retention in this current set of arrangements for devolution should remain: not that there should be mission creep, but restoration of the status quo. I say to the noble Lord, Lord Balfe, that surely, in his changed political prism, he would recognise and wrap his arms around the principle of the maintenance of the status quo that works. It is on that basis that I hope the Minister will give further consideration to these arguments and retain a set of arrangements that work, that are warmly endorsed by everybody involved in Wales, and that do not constitute the difficulty of definition suggested by the noble Baroness, Lady Finn, in discriminating between public and private employers. The terms on which this measure, if accepted, would be retained, properly describe where the responsibilities and obligations would lie and be exercised. It works now; do not fix it.
Lord Bourne of Aberystwyth
My Lords, I thank all noble Lords who participated in the discussion on these amendments. I will begin with Amendments 75 to 77 and 79, which seek to broaden the circumstances in which the Assembly could legislate in relation to reserved matters. I will first deal with an issue that was raised by the noble Lord, Lord Wigley, concerning the phrase,
“ancillary to a provision of any Act”.
I took him to mean that this was not provided for in the Bill. It is in fact expressly provided for in Clause 3, in subsections (3)(a) and (b) of new Section 108A. It says,
“subsection (2)(b) does not apply to a provision that —
(a) is ancillary to a provision of any Act of the Assembly or Assembly Measure or to a devolved provision of an Act of Parliament, and
(b) has no greater effect otherwise than in relation to Wales, or in relation to functions exercisable otherwise than in relation to Wales, than is necessary to give effect to the purpose of that provision”.
So there is express provision in relation to “ancillary to” and how that would operate, and I hope he finds that of some comfort.
Lord Wigley
I am grateful to the Minister. He will see that my amendment in fact applies to subsection (2)(c) of new Section 108A, in Clause 3, and therefore extends the provision.
Lord Bourne of Aberystwyth
I appreciate that, but I think the noble Lord made a broader point about “ancillary to” not being provided for. I shall move on, if I may, to deal with some of the issues that noble Lords raised about this part of the Bill.
The amendments tabled are similar to those debated in Committee where, as has been acknowledged, I provided noble Lords with a detailed explanation of how the purpose test in the new model is intended to operate. As I made clear then, for a challenge of ultra vires under the reserved powers model to succeed, a case would need to be made that an Assembly Act provision was outside competence because its purpose related to a reserved matter. I think it is common ground among noble Lords that that much is appropriate. If such a case could not be made, the provision would satisfy the requirements of new Section 108A(2)(c) and would be within competence, provided that it satisfied the other requirements of new Section 108A.
In response to the noble Baroness, Lady Morgan, I want to clarify the important issue of how the Assembly can legislate in a way that is ancillary to a non-reserved provision but affects the law on reserved matters. As I set out in Committee, the purpose test is crucial to determine whether a provision in legislation is within the Assembly’s competence. Only once a provision’s purpose has been determined as not relating to a reserved matter would an assessment need to be made of whether it modifies the law on reserved matters and, if so, whether it is ancillary to a matter that is not reserved. If a provision is ancillary, it will also, as I have indicated, be subject to an additional test of having no greater effect on reserved matters than is necessary to give effect to the provision’s purpose in order to be within the competence of the Assembly.
In Committee I gave the House some examples of how the purpose test might be applied, and in particular how a provision that could engage reservations would be within competence if it had a devolved purpose and was ancillary to that purpose either by being appropriate for the enforcement of such provision or otherwise to give effect to it, or was consequential or incidental. Those examples were hypothetical but included: a requirement for tenants to insure their residence; the creation of competitive tendering requirements for local authorities; an extension to the jurisdiction of the Agricultural Lands Tribunal for Wales; and information sharing between Welsh schools and Estyn. In each case we argued that, as the purpose of the provision was devolved and the provision could be characterised as ancillary, it was within devolved competence if it had no greater effect than necessary on the reserved matter. Potentially any provision in Assembly Bills about enforcement would engage the reservation for the courts and their jurisdiction, or that for civil or criminal proceedings, but provided that it is required to enforce or give effect to a devolved purpose, such provision will be within competence even though it impacts on the law on reserved matters, subject always to the test that it has no greater effect than necessary on the reserved matter.
Comparisons have been made with the settlement in Scotland and how this “greater effect than necessary” test applies to it but, when considering that, it is important to note that the restriction on legislating about the law on reserved matters in paragraphs 1 and 2 of new Schedule 7B gives the Assembly wider scope to modify the law on reserved matters than the Scottish Parliament is afforded under paragraphs 2 and 3 of Schedule 4 to the Scotland Act 1998. That is because issues such as private law and criminal justice are reserved in Wales, but we recognise that the Assembly needs to be able to enforce its laws by amending the law in relation to these and other reserved matters.
We have used the same definition of “ancillary” throughout the Bill. If a provision falls within that definition then the Assembly can legislate about England by virtue of the exception to the competence test in Section 108A and can modify the law on reserved matters if it complies with the restriction in Schedule 7B. The Government do not accept the argument that the test of “no greater effect on reserved matters than is necessary to give effect to the purpose of the provision” is of less consequence in Scotland. It is true that Schedule 7A in the Wales Bill contains more reserved matters than Schedule 5 to the Scotland Act 1998, but in Scotland this test nevertheless provides an important but proportionate limitation on competence. The large number of orders made under Section 104 of the Scotland Act 1998 is in part a result of the UK Government and the Scottish Government recognising how far modification to the law on reserved matters can go in Acts of the Scottish Parliament, and that modifications to the law on reserved matters that fall outside the definition can and should be made only by the UK Government and this Parliament.
Concerns have been raised that defendants will always be able to challenge the validity of Assembly Act provision as a basis for an enforcement action on the basis that this has a greater effect than necessary. We believe that, provided that the response is proportionate, this will not be the case. The frequency of such challenges and their merits will of course depend on how the Assembly chooses to legislate in future, and indeed the view of the courts if these matters were subject to challenge. Nevertheless, we consider that the legislative competence constraints set out in the Bill give the Assembly sufficient latitude to create and enforce devolved policies within the shared legal system of England and Wales.
I turn to government Amendment 78B, which is technical and is proposed in the light of issues raised in particular by the First Legislative Counsel for Wales. Sub-paragraphs (2) and (3) of paragraph 6 of the new Schedule 7A to the Government of Wales Act 2006, as inserted by Schedule 1 to the Wales Bill, sought to clarify that the Assembly is able to provide for devolved decisions or orders to be appealable to a court or to require a court order or be made by a court on application. These were included in order to provide helpful clarifications about the Assembly’s powers in respect of the courts, following the removal of the so-called necessity test and the subsequent application of the purpose test. Having examined these provisions in more detail, the First Legislative Counsel has argued that the reservation for courts, including their jurisdiction, might have the effect of restricting the ability of the Assembly to legislate for the procedural effectiveness of a new sort of order, or decision, related to a devolved matter.
The First Legislative Counsel’s analysis identifies paragraph 6(2) and, with it, paragraph 6(3) as unnecessary. Although the provision was intended to address a specific problem, I am persuaded by that very helpful analysis provided that it does not in fact require bespoke provision to address it. I accept the argument that the purpose test would encompass the sort of legislative provision that would otherwise be captured under paragraphs 6(2) and (3) and that, accordingly, they would arguably cast doubt on the breadth of the purpose test. I am satisfied by the First Legislative Counsel’s argument, and government Amendment 78B therefore proposes their removal. In light of that amendment, I think Amendment 79, proposed by the noble Baroness, Lady Morgan, becomes unnecessary, but of course that is a matter for the noble Baroness.
Amendment 78 is an opposition amendment seeking to place a new duty on the Secretary of State for Wales to establish a working group to review Schedule 1 in relation to reservations. I am most grateful for the comments and guidance on that from the noble Lord, Lord Elis-Thomas, who has very broad experience of this as Llywydd and as a Member of this House. We have had bodies a-go-go looking at the area of devolution. I served with the noble Baroness, Lady Morgan, some 20 years ago on the National Assembly advisory group, and since then there have been other bodies: the noble Lord, Lord Rowlands, sat on the Richard commission; there has been the Emyr Jones Pary review; the Holtham commission; the Silk report and the St David’s Day agreement. I agree with the noble Lord, Lord Elis-Thomas, that at the very least we have reached the end of this chapter and now is the time for us to concentrate on the things that I am sure the people of Wales, and indeed its Assembly Members, want to concentrate on—the delivery of public services and a sound economy. Some powerful arguments were put forward by the noble and learned Lord, Lord Morris of Aberavon, and the noble Lord, Lord Elystan-Morgan. I thank the noble Lord for his kind comments and hope that I would be half as charitable if someone else should appear late as he was to me. I am most grateful for his comments.
I turn to government amendments to Schedule 1, which establishes a clear boundary between the devolved matters that are the responsibility of the National Assembly for Wales and the Welsh Government and those that are the responsibility of this place and the UK Government. I can confirm, however, that I intend to bring forward amendments at Third Reading to change the status of the Open University. The noble Baroness, Lady Randerson, is not in her place at the moment, but I thank her in particular for her assistance on this issue. I acknowledge and recognise the important role that the Open University plays in Wales and therefore propose that it is dealt with in relation to devolved areas in the same way as universities and higher education institutions in Wales.
I turn to amendments to reservation M4 on developments and buildings. I will deal first with an issue raised by the noble Baroness, Lady Morgan, in Amendment 91 on the legislative competence relating to railways. I thank the noble Baroness for her comments. We propose that planning in relation to railways that start, end and remain in Wales should be devolved. I should also like to bring forward Amendment 91B giving the Assembly legislative competence in relation to the community infrastructure levy. The noble Baroness also kindly acknowledged this. Turning to Amendment 92A—I understand that the noble Lord, Lord Wigley, did not speak to Amendment 92, so I will not spend too much time on it—we are proposing that such compensation should be devolved, except in relation to the calculation of the compensation, which I think the noble Lord appreciates.
The noble Lord also indicated that he would not speak to his amendments on water and sewerage, so I will not deal with that area.
Regarding changes to the reservation in Part 1 on Crown property, I will just formally move those amendments, as I do not think they were the subject of debate.
On the issue of anti-social behaviour orders and the provisions of Part 5—which the noble Lord, Lord Thomas of Gresford, indicated he felt should be devolved—I was persuaded by the noble Baroness, Lady Morgan of Ely, in relation to this and to the Dangerous Dogs Act and so on, and by the more general comment from the noble Lord, Lord Kinnock, that, where something is working, one should not to seek to overturn it unnecessarily. I think this area is working very well. We are proposing to devolve ASBOs in relation to housing. This has been acknowledged. Elsewhere—and I regret that some noble Lords will be disappointed—we shall not be going further.
The noble Baroness indicated that there has been movement on heating and cooling, so I will formally move those amendments.
The opposition amendment from the noble Baroness, Lady Finlay, seeks to remove the reservation for the sale and supply of alcohol regulated under the Licensing Act 2003. Section B17 of new Schedule 7A to the Government of Wales Act 2006 in the Bill preserves the current devolution settlement in respect of all matters in the 2003 Act covering the sale and supply of alcohol, the provision of regulated entertainment and of late night refreshment. The 2003 Act provides a framework for licensing based on the promotion of four licensing objectives: the prevention of crime and disorder; public safety; the prevention of public nuisance; and the protection of children from harm. As such, alcohol licensing is inextricably linked to policing and the criminal justice system. While they are reserved, alcohol licensing should also continue to be reserved.
The police have a crucial role in the licensing system, including in decisions to grant or refuse applications for licences, to review licences and to close problem premises. The police and criminal justice system bear a significant proportion of the costs associated with alcohol consumption—£11 billion of the £21 billion overall annual cost to society. That said, the noble Baroness is widely, and quite rightly, recognised for her campaigning on the effects of alcohol misuse. Of course, these affect people in England too—in parts of England in a very similar way to parts of Wales. I should like to place on record my enormous respect for the work she does and express the hope that she will continue to campaign on this issue. However, we feel that this is something that should be reserved to the Westminster Government.
Baroness Morgan of Ely
My Lords, I do not wish to detain the House for too long. We have spent a lot of time on this group, so I will focus on just two issues.
The first is the matter of ancillary provisions. I thank the Minister for stating on the record that the ability to enforce Welsh laws should be proportionate and not just be the minimum necessary. We need a suite of options to be able to deliver policy. However, that is not what it says on the face of the Bill, and I am sure that lack of clarity will lead in future to problems and references to the Supreme Court. I ask the Minister not to dismiss the ideas of the noble Lord, Lord Elystan-Morgan, and reassess the impact of that move to being a reserved matter in the future.
We are also disappointed that the Government have not listened on the matter of devolving industrial relations in public services to Wales. We believe that the Welsh Government currently have the power to act in this area under the conferred model and the Government have attempted to claw back this power in the move to the reserved model. This is not acceptable. We have a good track record on partnership working in Wales. We have not had a junior doctors strike and Whitehall has no idea of how health, education and many other public services are run in Wales. It is a great shame that the Minister has not moved on this issue. We shall be pushing this matter to a vote at the appropriate time. With regret, I beg leave to withdraw Amendment 75.
Lord Elystan-Morgan
“Working group to review reserved powers and functions
(1) The Secretary of State for Wales shall, within three months of the day on which this Act is passed, set up a working party to report upon the operation of each and every power and function reserved to Parliament under Schedule 1 to this Act.(2) The working party established under subsection (1) shall, within three years of its establishment, report to the Secretary of State upon the operation of each and every power and function reserved under Schedule 1 to this Act, and make such representations as are appropriate as to whether the continued operation of such reservations is appropriate in the current context of devolution.(3) The Secretary of State shall publish the report and recommendations made under subsection (2).”
Lord Elystan-Morgan
My Lords, I shall beg leave to withdraw the amendment, but at the same time I want to—
The Deputy Speaker (Lord Brougham and Vaux) (Con)
Are you withdrawing the amendment, or do you want to speak to it?
Lord Elystan-Morgan
With the leave of the House, I beg leave to withdraw the amendment.
“2A(1) Paragraph 1 does not reserve property belonging—(a) to Her Majesty in right of the Crown,(b) to Her Majesty in right of the Duchy of Lancaster, or(c) to the Duchy of Cornwall.(2) Paragraph 1 does not reserve property belonging to any person acting on behalf of the Crown or held in trust for Her Majesty for the purposes of any person acting on behalf of the Crown.(3) Sub-paragraphs (1) and (2) do not affect the reservation by paragraph 1 of—(a) the hereditary revenues of the Crown,(b) the royal arms and standard, or(c) the compulsory acquisition of property—(i) belonging to Her Majesty in right of Crown;(ii) belonging to Her Majesty in right of the Duchy of Lancaster;(iii) belonging to the Duchy of Cornwall;(iv) held or used by a Minister of the Crown or government department.2B_(1) Paragraph 1 does not reserve property held by Her Majesty in Her private capacity.(2) Sub-paragraph (1) does not affect the reservation by paragraph 1 of the subject-matter of the Crown Private Estates Acts 1800 to 1873.”
Lord Thomas of Gresford
Lord Thomas of Gresford
My Lords, I have already spoken to this amendment and do not intend to say anything further except to state, in reply to the Minister, that an important principle of subsidiarity is involved here. Comments have been made from the very moment this Bill came before the House that the reservations in Schedule 1 are a ragbag of items collected from various government departments. I have commented on this issue of anti-social behaviour, which should really be dealt with at a local level. Accordingly, I seek the opinion of the House.
“ExceptionIn the case of a betting premises licence under the Gambling Act 2005, other than one in respect of a track, the number of gaming machines authorised for which the maximum charge for use is more than £10 (or whether such machines are authorised).”
“Marine licensing and the regulation of works that may obstruct or endanger navigation, so far as relating to searching or boring for or getting petroleum under such a licence.”
“ExceptionsHeat and cooling networks, but not the regulation of them.Schemes providing incentives to generate or produce, or to facilitate the generation or production of, heat or cooling from sources of energy other than fossil fuel or nuclear fuel.”
“The reference to maritime search and rescue does not reserve participation by Welsh fire and rescue authorities in maritime search and rescue responses.”
“The deferral of payment due to a local authority from an individual in respect of costs of, or financial assistance for, meeting that or another individual’s needs for care or support.”
“Terms and conditions of employment and industrial relations in Welsh public authorities and services contracted out or otherwise procured by such authorities.”
The Deputy Speaker
My Lords, there being an equality of votes, in accordance with Standing Order 56, which provides that no proposal to amend a Bill in the form in which it is before the House shall be agreed to unless there is a majority in favour of such amendment, I declare the amendment disagreed to.
“Parental discipline.”
“M1 Registration of land180_ Registration of—(a) estates, interests and charges in or over land, and(b) associated actions, proceedings, writs and orders.ExceptionFees for the registration of local land charges.”
“185_ Compensation in respect of—(a) the interference with rights in land by exercise of a statutory power;(b) depreciation in the value of land as a result of works or land provided or used in the exercise of a statutory power.”
“but only in relation to specified Crown land and specified undertaker land.”
““Specified Crown land” means land—(a) belonging to Her Majesty in right of the Crown;(b) belonging to Her Majesty in right of the Duchy of Lancaster;(c) belonging to the Duchy of Cornwall;(d) held or used by a Minister of the Crown or a government department.“Specified undertaker land” means land held or used by a statutory undertaker in the exercise of a statutory power that relates to a matter in paragraph 94, 95(f) and (g), 97, 115, 119 or 123.”
“Council tax precepts198A_ This Schedule does not reserve council tax precepts.”
“Energy Act 2008 | Section 100 and regulations under that section.” |
“( ) section 51;”
Wales Bill
Tuesday 10th January 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 77-II Second marshalled list for Report (PDF, 176KB) - (6 Jan 2017)
“( ) Paragraph 8(1)(c) does not apply to a provision to which paragraph 8(1)(a) applies or would apply but for sub-paragraph (2) of this paragraph.”
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, the first amendment in this group, Amendment 106A, is a technical one. It responds to a concern raised by the Welsh Government about the way in which the restrictions on the Assembly legislating on reserved authorities in paragraph 8(1) of new Schedule 7B apply to the seven reserved authorities listed in paragraph 9 of the new schedule.
The Assembly is prohibited from legislating to confer or impose functions on a reserved authority without consent by virtue of paragraph 8(1)(a), and from legislating to confer or impose functions that are specifically exercisable in relation to a reserved authority without consent by paragraph 8(1)(c). Paragraph 9(2) excepts a small number of reserved authorities from the paragraph 8(1)(a) restriction, but there is no similar exception in relation to paragraph 8(1)(c). That could create an anomalous situation where the Assembly could impose functions in devolved areas on any of the authorities listed in paragraph 9(2), but could confer a power on Welsh Ministers to do so only with consent.
To think of a tangible example, the Assembly could confer on Welsh Ministers a power to issue guidance to any of the seven reserved authorities listed in paragraph 9. The authority would be subject to a duty to have regard to any such guidance when exercising its devolved functions. As the Bill stands, the ministerial consent requirement would not apply to the provision in so far as it concerns the duty on the reserved authority to have regard to the guidance. But the ministerial consent requirement would apply to the provision in so far as it concerns the conferring of a power on Welsh Ministers to issue the guidance. The effect of the amendment is that the requirement for UK ministerial consent does not apply if the relevant provision has the effects described in both paragraphs 8(1)(a) and 8(1)(c) of new Schedule 7B. Following our example, the Assembly would not require consent to create a power for Welsh Ministers to issue guidance to an authority listed in paragraph 9 or create a duty on such an authority to have regard to the guidance.
Government Amendments 136 to 141 extend the application of paragraph 6 of Schedule 7 to a public authority. Paragraph 6 currently preserves the validity of, and provides continuity for, actions taken by a Minister of the Crown in respect of functions which are transferred to Welsh Ministers by the Bill. This includes actions taken by a public authority exercising delegated functions of a Minister of the Crown. However, there are functions currently conferred directly on rather than delegated to public authorities such as the Oil and Gas Authority and the Marine Management Organisation which are being transferred to the Welsh Ministers in the Bill. Such functions are not currently covered by paragraph 6. At the point of transfer of these functions to the Welsh Ministers, there may be actions in progress which will need to be continued and completed post-transfer. The amendments made to paragraph 6 preserve the validity of actions taken by a public authority before the date of transfer and provide continuity for anything that is in the process of being done by a public authority at that point.
I look forward to hearing from the noble Baroness, Lady Morgan, and the noble Lord, Lord Wigley, on their amendments in this group. I beg to move.
Lord Wigley (PC)
My Lords, I listened with great interest to the rationale given by the Minister. I will need to read it again in Hansard to comprehend it fully, but I am sure that it does what he hopes it does.
My Amendment 108 was tabled following concerns expressed to us by the Welsh Language Commissioner, Meri Huws, regarding the Bill’s potential effect on the National Assembly’s power to legislate on matters pertaining to the Welsh language. It was raised in Committee, but I am concerned that there appears to be a lack of appreciation of the points put to us by the commissioner, and which have been addressed by the amendments put forward by my colleagues in Plaid Cymru. The commissioner herself is frustrated that the Government do not seem to have engaged with the substance of the case, which she has made to them as well as to us.
The possible effect of Schedule 2 to the Bill is that, when the National Assembly wishes to legislate for the Welsh language, it will require the consent of the relevant UK Minister to confer, impose, modify or remove within that legislation the Welsh language functions of Ministers of the Crown, government departments and other reserved authorities. Under the current settlement, ministerial consent is required only when legislating to impose Welsh language functions on Ministers of the Crown. The ministerial consent provisions of the Wales Bill in relation to the Welsh language apply to a wider range of persons than is currently the case. The new legislation is therefore more restrictive on the Assembly’s powers than is the status quo and this represents a retrograde step.
Let us consider a practical example. The Welsh Language Commissioner is already engaged in the statutory processes that would result in placing a duty on bodies such as Her Majesty’s Revenue & Customs, the Crown Prosecution Service, Ofcom and the BBC to adopt Welsh language standards. This amendment removes the requirement for ministerial consent for Acts of the Assembly affecting functions of reserved authorities, public authorities and Ministers in circumstances where the Act of the Assembly relates to a Welsh language function. I am sure that the House will agree that such a provision is fair and reasonable, given that the Welsh language is quintessentially a devolved issue. Allowing Ministers and public authorities based outside Wales to second-guess National Assembly policy on the Welsh language in Wales, a policy area on which they have little if any informed opinion, is a formula for acrimony and dispute and would reopen language tensions which have abated to a significant extent over recent years.
In the House of Commons debate on the Bill, the Government claimed to offer some clarity and reassurance on the issue by saying that there is nothing in the Bill which affects the Welsh language retrospectively, and that of course is true. However, the Minister went on to confirm that if a future Welsh language measure were to be proposed, it would have the effect which we have pinpointed. Consent would be required to add new public authorities other than Wales public authorities. It would therefore affect any future Welsh language legislation applicable to those areas. The Minister’s words offered no reassurance or indeed any justification as to why this Bill should include such a retrograde step.
A briefing paper produced by the National Assembly for Wales research service confirms our fears and outlines that, under the Bill as it currently stands, there will be a loss of legislative power relating to the Welsh Language (Wales) Measure 2011. My colleagues in the National Assembly are furious about this, and it is not only Plaid Cymru AMs who feel strongly about the matter. I shall quote from that briefing paper: “Part 4 of the Welsh language measure allows Welsh language standards to be imposed upon public bodies. Some of the bodies captured by Part 4 would be reserved authorities under the Wales Bill. This means that UK Government consent would be needed before Welsh language standards could be imposed upon them”. There is a consensus that this is yet another blatant rollback and a significant reduction in the ability of the National Assembly for Wales to be able to legislate on its own language—a subject matter that is, for very obvious reasons, devolved.
Perhaps I may say in conclusion that on item after item that we have raised today, including the industrial relations amendment moved earlier by the noble Lord, Lord Hain, and lost in a tied vote, the Government have not been willing to move one inch to reduce the powers rollback being instituted by this Bill. The Bill started its passage with a lot of good will, in the belief that the Government would seek to find common ground. Failure to do so has led to a growing bitterness across the parties, which I greatly regret. I urge the Minister to reconsider the Government’s position even at this late stage and to rid the Bill of this devolution rollback and to accept our amendment today, even if they need to amend it themselves when the Bill returns to the Commons.
Baroness Morgan of Ely (Lab)
My Lords, my Amendment 109 provides for the transfer of all functions currently exercisable by Ministers of the Crown—UK Government Ministers—in relation to areas which are within the devolved legislative competence of the Welsh Government to be transferred to Welsh Government Ministers. Let me start by saying that, given the Government’s intention of producing a Bill that will provide clarity and coherence to the Welsh devolution settlement, it is difficult to understand why such a simple provision as the alignment of executive and legislative competence has not been included.
In providing evidence to the Silk commission, the Welsh Government made clear that a move to a reserved powers model should be accompanied by a blanket transfer of all executive functions within the devolved areas. The Silk commission agreed and recommended:
“In order to reduce complexity and increase clarity, we believe that a future Government of Wales Act should include a general transfer to the Welsh Ministers of Minister of Crown functions in devolved … areas”.
I thank the Minister for writing to me and setting out his understanding of the situation and for clarifying the three categories of executive functions. I will start with the area about which I am most concerned: the pre-commencement functions.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord, Lord Wigley, and the noble Baroness, Lady Morgan, for speaking to their amendments, which I shall deal with in turn. I therefore turn first to Amendment 108 tabled in the name of the noble Lord, Lord Wigley. In beginning my response I should say that I did not recognise the caricature of the Government not listening and not responding during the course of this legislation; I think that that was uncharacteristically unfair of the noble Lord. We have listened very carefully and in many areas have given ground, as he himself has previously acknowledged. Perhaps I may also say in opening that we are certainly happy to engage with the Welsh Language Commissioner, Meri Huws, for whom I personally have massive respect. I do not think that we have failed to engage, but if there is any issue that she wants to discuss further, I will be more than happy to talk to her about it.
The amendment seeks to remove the requirement for an appropriate Minister to consent where the Assembly seeks to amend, remove or impose new functions on a reserved authority or a Minister of the Crown where those functions relate to the Welsh language. I think that there is agreement between us on the intent of the clause in the Bill.
Throughout the development of the Bill, we have given careful thought—absolutely correctly—to the Welsh language and taken steps to minimise the effects of the new reserved powers model on the Assembly’s legislative competence for the language, but obviously there are issues in relation to reserved bodies. For example, while paragraph 197 of new Schedule 7A reserves the functions of authorities named or described in that schedule, we have inserted an exception for Welsh language functions in paragraph 199. This means that, under the new model, the Assembly will be able to legislate to confer Welsh-language functions on particular authorities, such as the BBC and police and crime commissioners, as the noble Lord, I think, indicated in his speech, subject to the consent of a Minister of the Crown.
We would anticipate that this is not going to be unreasonably withheld, but I think the noble Lord will understand that, where we have a process of reserving issues, and in relation to every other area, we have a provision that devolved areas are quite distinct, so we need to make provision for the Welsh language to make sure that reserved authorities are not put in an invidious position. The noble Lord’s amendment would cut across one of the underlying core principles of the Bill: the Assembly should not be able to impose burdens on non-devolved bodies without agreement. This goes to the core of the legislation. To add a specific exception to the consent process for the Welsh language would undermine that principle.
The noble Lord is absolutely right in relation to the Welsh Language (Wales) Measure 2011. It does not affect matters that are already settled, but he is right that in so far as there were to be new regulations under the measure, they would be subject to the new provisions of the clause if it is part of subsequent legislation.
Lord Wigley
Am I understanding correctly that the Minister is in fact confirming the fact that, compared to the position when the 2011 measure was passed, there is a rollback of powers as far as the Assembly is concerned in relation to imposing Welsh language conditions on such bodies?
Lord Bourne of Aberystwyth
My Lords, we are not comparing like with like. There is a significant amount of legislation here that is actually devolving new powers to the National Assembly. As I have indicated, the noble Lord’s analysis of what the legislation is seeking to do is correct; I am not seeking to deny that.
Amendment 109, moved by the noble Baroness, Lady Morgan, again seeks a blanket transfer of pre-commencement Minister of the Crown functions and prerogative functions exercisable in devolved areas to the Welsh Ministers, an issue we debated in Committee. I hope noble Lords have read my letter of 12 December to the noble Baroness which explained the Government’s approach on this issue. This has not changed.
I will give an outline of what happens next, which I think may provide some reassurance to the noble Baroness. In preparing the Bill we have undertaken substantial work with departments across Government to identify the remaining functions exercised by Ministers of the Crown in devolved areas. Noble Lords will appreciate that most such functions have already been transferred by transfer of functions orders made since 1999. In the light of the existing transfer of functions orders and the outcome of this work, we have concluded that the blanket transfer proposed would not deliver the clarity that we are looking to deliver through the Bill. New Schedule 3A to the Government of Wales Act 2006, inserted by Clause 20 of the Bill, sets out the Minister of the Crown functions in devolved areas that will in future be exercised concurrently or jointly with the Welsh Ministers.
A handful of pre-commencement functions will continue to be exercised by a Minister of the Crown solely. These are set out in paragraph 11 of new Schedule 7B. I agreed in Committee to take a further look at these functions, and as a result we have, through Amendments 107B and 107C, narrowed the range of functions in the Marine and Coastal Access Act that require consent for modification. As a corollary to this, in Amendment 114A, we have added some functions under this Act and regulations made under it to the list of functions jointly exercisable by Ministers of the Crown and Welsh Ministers, reflecting the interconnectedness of decision-making in the Welsh zone.
The remaining Minister of the Crown functions in devolved areas will be transferred to Welsh Ministers by order, and we intend to make that order once this Bill has been enacted. I shared a draft list of the functions that will be included in this order with noble Lords before Second Reading, and we are continuing to discuss this list with the Welsh Government so that we can include any further functions that we identify. Any such order will be subject to the affirmative procedure in both Houses of Parliament, so noble Lords will be able to debate the content in more detail at that stage.
Once we have made this order it will be absolutely clear which functions have been transferred to Welsh Ministers, something that a blanket provision would not achieve. In addition, a blanket provision would not provide the benefits of concurrent exercise of some powers—for example, enabling Ministers in both Governments to give grants. I will write to the noble Baroness about the issue she raised concerning Scotland, about which I am uncertain, and copy that to other noble Lords who have participated in the debate.
The amendment also includes prerogative functions in so far as they are exercisable in devolved areas. On examining the range of those functions, we concluded that none applied to devolved matters, and therefore have not acted on that.
The noble Baroness talked about the 35 more functions identified by the Welsh Government. As I said, we are looking at additional functions as identified by the Welsh Government and discussing those with them. We will consider them in light of the order that will need to be made. As I said, this will be subject to debate.
In conclusion, regarding the Welsh language, I am very happy for the Wales Office to engage with Meri Huws and perhaps provide her with more certainty about how this would be carried forward. I can assure the noble Lord, who knows my approach to the Welsh language, that there is no malign intent here at all. The language is central to everything that happens in Wales, and thank goodness it is no longer the party-political football it once was. The Wales Office, as you can imagine, is at the moment very much wedded to that view.
I will endeavour to update the noble Baroness on the Scotland issue, but I will also write to her and to noble Lords more generally about how the discussion with the Welsh Government is going regarding those functions. With that, I ask the noble Lord to withdraw the amendment.
Baroness Morgan of Ely
Before the noble Lord sits down, may I be clear? There is going to be this transfer after the Bill, but what if we find some more things down the back of the sofa later on? Is there a facility for us to transfer later on the things that we may not have found in this initial sweep-up? It is a big place, the Civil Service.
Lord Bourne of Aberystwyth
My Lords, I am trying to speculate what the noble Baroness might be finding behind the sofa at that stage. I hope that the process would have delivered most of the important issues, but in so far as something is discovered later on, I am sure we will be able to engage with the noble Baroness—or whoever else discovers it behind the sofa—and come to some measure of agreement. It is difficult to anticipate what that issue would be, but if it clearly should be the subject of an order, then I do not see any problem.
Lord Wigley
If in fact there is something that has not been foreseen, do we have the order-making facility that can cover matters that have not been specified in the Bill?
Lord Bourne of Aberystwyth
My Lords, I am not sure whether the noble Lord is referring to the specific order that would come forward, in which case there would be the ability—subject to affirmative procedure, presumably—to withhold consent, unless we were in listening mode, if that should happen in an extreme position. But if it happens after that procedure, as I have indicated to the noble Baroness, I would be very happy to engage and discuss how we could deal with that. I am uncertain whether there is a particular procedure, but I would anticipate that there is. There must be a way to transfer functions by order, which we have done during the course of successive Governments. So I think the procedure is there, and if I can give that undertaking, I am very happy to do so.
“( ) Paragraph 8(1) does not apply in relation to the funding of police and crime commissioners through council tax precepts.”
“( ) This paragraph does not apply in relation to the funding of police and crime commissioners through council tax precepts.”
“(a) functions of a Minister of the Crown under the following provisions of the Sea Fish (Conservation) Act 1967—(i) section 1(3), (4) and (6) (size limits for fish carried by fishing boat);(ii) section 3(1), (3) and (4) (regulation of nets and other fishing gear);(iii) section 5 (power to restrict fishing for sea fish);(iv) section 15(3) (order by Ministers as to powers of British sea-fishery officers for enforcement of the Act);(b) functions of a Minister of the Crown or the Marine Management Organisation under the following provisions of the Sea Fish (Conservation) Act 1967—(i) section 4 (licensing of fishing boats);(ii) section 4A (licensing of vessels receiving trans-shipped fish);(c) functions of a Minister of the Crown under the following provisions of the Sea Fisheries Act 1968—(i) section 5(1) and (2)(a) (regulation of conduct of fishing operations);(ii) section 7(1)(g) and (2) (appointment of British sea-fishery officers); (d) functions of a Minister of the Crown under the following provisions of the Fisheries Act 1981—(i) section 15 (schemes of financial assistance);(ii) section 16 (administration schemes by Sea Fish Industry Authority);(e) functions of a Minister of the Crown under section 30(2) of the Fisheries Act 1981 (enforcement of Community rules).”
“4 Functions specified in the table below are exercisable jointly with the Welsh Ministers.
Act or instrument | Functions |
Crime and Disorder Act 1998 | Functions of the Secretary of State under section 6 in relation to strategies for combatting crime and disorder or re-offending in areas in Wales. |
Marine and Coastal Access Act 2009 | Functions of the Secretary of State under sections 45, 46 and 47 (preparation, review and amendment of marine policy statement) in relation to a marine policy statement prepared by the Secretary of State and the Welsh Ministers acting jointly (or by the Secretary of State, the Welsh Ministers and one or more other authorities acting jointly). |
Functions of the Secretary of State under Schedule 5 (preparation or amendment of marine policy statement) that are exercisable jointly with the Welsh Ministers by virtue of paragraph 2(2)(b) of that Schedule. | |
Functions of the Secretary of State under subsection (6) of section 70 (inquiries) that are exercisable jointly with the Welsh Ministers by virtue of subsection (7) of that section. | |
Marine Strategy Regulations 2010 (S.I. 2010/1627) | Functions of the Secretary of State under regulation 19 (directions to, and assistance from, public authorities) that are exercisable jointly with the Welsh Ministers by virtue of paragraph (5) of that regulation. |
Functions of the Secretary of State under regulation 20 (guidance) that are exercisable jointly with the Welsh Ministers by virtue of paragraph (5) of that regulation.” |
“8A_ In section 158 (interpretation), in subsection (1), at the appropriate place insert— ““property” includes rights and interests of any description,””
“property | section 158(1)” |
“10A_ In Schedule 3 (transfer etc of functions: further provision), in paragraph 3(2), for “section 58” substitute “section 58(1)”.”
“(8B) The Welsh Ministers may by regulations make provision for applications in respect of which they are the appropriate authority to be determined by a person appointed by them for that purpose.””
“45A_ In section 36C of the Electricity Act 1989 (variation of consents under section 36), after subsection (5) insert—“(5A) Regulations may provide that, where the Welsh Ministers are the appropriate authority, applications under this section are to be determined by a person appointed by the Welsh Ministers for that purpose.””
“( ) section (Water and sewerage)(2);( ) sections (Water protocol) and (Reciprocal cross-border duties in relation to water).”
Lord Wigley
“ Before making regulations under this subsection, the Secretary of State must consult the Welsh Ministers and the Presiding Officer of the National Assembly for Wales.”
Lord Wigley
My Lords, this is the last amendment on our list today, Amendment 146 in my name, which seeks to ensure that UK Ministers may use regulations to commence a number of provisions of the Bill only after consultation with Welsh Ministers and the Presiding Office of the National Assembly for Wales. Incidentally, harking back to what we were talking about a moment ago, order-making capacity, I understand that unless there is a specific order-making capacity in primary legislation it is not possible to bring forward orders. However, we can look at that outside the Chamber.
From the outset, I concede that this amendment would not, in isolation, achieve what I am seeking to do. It is, broadly speaking, part of a series of amendments that I have tabled at earlier stages, which aim to stop UK Ministers riding roughshod over the National Assembly for Wales by using secondary legislation to commence, amend or repeal legislation affecting our national Parliament without its consent. It is that question of establishing a system of prior consent that is central to this amendment.
The issue that triggered my concerns, and the concerns of many Peers across these Benches, was the inclusion of Henry VIII powers within this Bill. Since the Minister has felt the full force of the former Chief Justice of England and Wales, the noble and learned Lord, Lord Judge, not once but twice on this issue, I know that he is well aware of the arguments. I will therefore keep my comments on this matter to a minimum. However, I want to use the amendment to call on the Minister to hold true to his word, and the word of his colleagues, to create a permanent devolution settlement, which means that the democratic Parliament of Wales in Cardiff Bay has the absolute authority over the laws that it makes.
I shall not press the amendment to a vote, but I remind the Minister of the comments made regarding Henry VIII powers in our previous debate. In particular, I remind him of the response of the noble and learned Lord, Lord Judge, to the Minister’s two assurances—that any regulations would be discussed by officials well in advance of coming into force and that the Secretary of State would write to the First Minister and Presiding Officer notifying them of the intention to bring forward regulations. Undoubtedly, these are welcome concessions, although they will not appear in the Bill. However, this Bill, in the Government’s own words, is meant to be about creating a clear, working, legal settlement between two Parliaments. As the noble and learned Lord, Lord Judge, noted during our last debate, the Minister’s so-called solutions to our concerns regarding Henry VIII powers are,
“legally ... completely irrelevant”.—[Official Report, 14/12/16; col. 1350.]
I shall shortly ask leave to withdraw this amendment but, before doing so, I ask the Minister to consider once again removing or amending all clauses in this Bill which allow Westminster to take steps that can be interpreted as riding roughshod over the democratically elected Parliament of Wales—in other words, the need for consent, discussion and agreement prior to using powers that can have quite a draconian effect. I beg to move.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord, Lord Wigley, for moving the last amendment for business today. First, on the point that he made in relation to orders, I believe that there is an order-making power in Section 58 of the Government of Wales Act 2006 that can be used—but I shall cover that in writing to noble Lords if I might, because there are a variety of issues on which I want to write to noble Lords.
I understand the point that the noble Lord made on the need for partnership working between the two Governments, which, if I may say so, has been exemplified in relation to the fiscal framework, where there has been a very successful partnership which may have confounded expectations. But yes, of course, we need to extend that across the piece so that it does not apply just in relation to that issue, important though it is. It needs to be done on a broader front. The other point is, when we have had parties of different political complexions in government here and in Wales, it has been illustrative of the fact that we have been able to move things forward in a demonstrable way—not always agreeing on everything, clearly, but agreeing on an awful lot, and the way forward in relation to the legislation.
I take to heart very much what the noble Lord said about Henry VIII powers, which certainly need to be limited in scope. I think that the noble and learned Lord, Lord Judge, said that it was politically astute but legally not worth the paper that it was going to be written on, to be absolutely fair. That was his judgment—and of course he has great authority and knowledge on these matters, as I regularly acknowledge.
The amendment seeks to require the Secretary of State to consult the Welsh Ministers and the Assembly’s Presiding Officer before making regulations to commence provisions under Clause 62(4). Clause 62 provides for those provisions which need to be brought into force quickly after the Act is passed to come into force on the day the Act is passed, through subsection (1), or two months after it is passed, through subsection (2). The Assembly will, for example, early on, if it wants to do so, be able to change its name at any time after two months from Royal Assent.
Of course, Clause 62(3) already imposes a duty, which the noble Lord did not mention, on the Secretary of State to consult the Welsh Ministers and the Assembly’s Presiding Officer before commencing the new reserved powers model—that is already in the clause—on the “principal appointed day”. That is already there and of course there are good reasons for that. The new devolution model will fundamentally alter the landscape within which the Welsh Government make policy and the Assembly makes legislation. It will require policymakers and legislators to get to grips with a new settlement, framed in a very different way from the current one. It is only right, therefore, that the Bill places a statutory duty on the Secretary of State to consult both the First Minister and the Presiding Officer before bringing the new model into force.
For other provisions in the Bill, we will of course work closely with the Welsh Government, as we are doing, and the Assembly Commission to ensure that the transition is as smooth as possible as the Assembly takes on the important new powers that the Bill will deliver. Of course, the majority of these provisions devolve further powers to the Assembly and Welsh Ministers and are intrinsically linked to the new reserved powers model. I anticipate—although clearly this will be subject to discussion with the Welsh Government—that most if not all of them, other than those limited ones I have indicated, will come into force on the same day as the reserved powers model. But that is a matter for discussion.
I believe that a separate consultation on the commencement of these provisions would be unnecessary as it is something that is either provided for, as it is in relation to the important issue of reserved powers, or will be included in that discussion in practice between the two separate Governments as things progress. On that basis I ask the noble Lord, Lord Wigley, to withdraw his amendment.
Lord Wigley
My Lords, I am grateful to the Minister for that considered response. I accept entirely that there are broad-brush consultation provisions in the Bill for when the first steps are taken to bring in the new order that will follow the Bill coming into force. There will, however, be cases that arise from time to time when new orders are forthcoming and when there will be a necessity for there to be at least a notification—I hope there will be a consultation—before that happens. I hope, therefore, that in the initial consultation to which the Minister referred a moment ago, there might be established a procedure—a protocol, if you like—for the way in which such orders will be handled in future, and, built into that procedure, an agreement that there will be advance warning and consultation and that views can be taken on board. That would be a very helpful move forward. Having said that—I note that the Minister is thinking carefully about it, judging by the look on his face, and I will be very grateful if he does—on that basis I beg leave to withdraw the amendment.
Wales Bill
Wednesday 18th January 2017
(7 years, 10 months ago)
Lords ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 89-I Marshalled list for Third Reading (PDF, 62KB) - (17 Jan 2017)
Lord Taylor of Holbeach (Con)
My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Wales Bill, has consented to place her interest and prerogative, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Clause 4: Devolved Welsh authorities
Amendment 1
Baroness Randerson
Baroness Randerson (LD)
My Lords, my amendment seeks to make crystal clear the constitutional position of the Open University. The OU itself still has a shadow of doubt, despite the welcome amendments from the Minister, which seek to clarify that the Open University is a cross-UK institution that belongs to no one country but to all countries of the UK. One intention of the amendment, which is simple and straightforward, is to ensure that it is clear that the Open University is not a devolved Welsh body, as referred to in Clause 4, on page 3 of the Bill. That clause relates to devolved Welsh authorities and refers to higher education institutions; the intention is that the Open University be excepted from that.
I am grateful to the Minister for looking again at how the Open University should sit within the Bill, because it is a unique institution in how it has opened up access to higher education for adults. It is nearly 50 years old, was way ahead of the time in how it delivered distance learning and so on, and remains unique in the way it delivers part-time distance education. It is also unique in being the only university in the United Kingdom to receive public funding from, and therefore have formal obligations to, the four nations of the UK. It is a UK university. I know that, as a hugely successful university attracting adult learners from some of our most disadvantaged communities and working with employers across Wales and the rest of the UK, it is very familiar to noble Lords across the House. But it is important to emphasise that it should not be seen as an English institution just because its headquarters are in England, any more than it should be seen as a Welsh, Scottish or Northern Irish institution because it has a base in each of those countries. It is a UK institution and belongs to all of those countries—a category all of its own. The amendment serves to clarify this aspect of its status; I am grateful to the Minister for seeking to do so. I make it absolutely clear at this point that this amendment will not pushed to a vote. I am hoping that the Minister will take the opportunity to make it clear that the structure, activities and status of the OU within the Higher Education (Wales) Act 2015, where it is treated as a distinct and special case, is consistent with this Bill.
Lord Puttnam (Lab)
My Lords, very briefly, I support what the noble Baroness has just said. I am a former chancellor of the Open University and officiated at a number of graduation ceremonies in Cardiff, and there is no question but that the people of Wales consider the Open University to be a thoroughly national institution and not an English institution.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I am grateful for those two contributions. Before I speak to the government amendments, I begin by welcoming yesterday’s vote in the National Assembly to approve the legislative consent Motion for the Bill. In particular, I thank Assembly Members, the First Minister and the Welsh Government for their support for the Motion. It stands as testament to how far we have come. Noble Lords’ careful and thorough scrutiny has served to strengthen the Bill greatly and I thank them for their participation as the Bill has moved through this House.
The Government have listened carefully to the issues that have been raised throughout these debates and have brought forward amendments to address many of them. I thank my officials, led by Geth Williams, Peter Newbitt-Jones and Victoria Miles-Keay, and their team for their hard work on the Bill and for working closely with the Welsh Government and the Assembly Commission to resolve outstanding areas of concern. I have brought forward some amendments to address issues that have arisen from these discussions as well.
The Bill we have before us now is a better Bill as a result of the scrutiny of the House and the vast experience of noble Lords across the House. I place on record my personal appreciation for the diligent and constructive way in which noble Lords have approached the debates at each stage. In particular, I am very grateful for the engagement and constructive approach of the noble Baroness, Lady Morgan of Ely. Nearly 20 years ago, we served together on the National Assembly Advisory Group; I do not think we could have expected that we would be here today—nearly 20 years on —discussing this Bill.
As we have also discussed, the historic agreement of a fiscal framework last month was also key to the Assembly’s consideration of the legislative consent Motion. I pay tribute to my right honourable friend Alun Cairns, the Secretary of State; my right honourable friend David Gauke, the Chief Secretary to the Treasury; and the Welsh Government Cabinet Secretary for Finance and Local Government, Mark Drakeford, for their work on that fiscal framework. I also pay tribute to the considerable work undertaken by my right honourable friend Stephen Crabb, who did much of the heavy lifting before Alun Cairns became Secretary of State. Taken together, this Bill and the fiscal framework deliver the clearer, stronger and fairer settlement we set out to deliver.
The government amendments before noble Lords today are largely minor and clarify a small number of outstanding issues. Clause 29(6) provides a signpost to related provisions later on in the Bill, including those requiring consultation between Welsh Ministers and the Secretary of State before certain harbour functions are exercised. Government Amendment 3 adds a new provision to that clause to signpost the consultation requirements in the new Clause 36, which was added at Lords Report stage. It concerns the exercise of functions by the Secretary of State in relation to two or more harbours, at least one of which is devolved to Welsh Ministers.
Government Amendment 2 is a drafting amendment that aligns the wording of Clause 29(6)(a) with the new paragraph added by government Amendment 3.
Clause 62(7) inserts new Part 2A into the Welsh Language (Wales) Measure 2011 in relation to the cross-deployment of tribunal members. Government Amendment 4 would insert the equivalent Welsh language text into that Measure. Government Amendments 5, 6 and 7 update references to “public” authorities in Schedule 1 to reflect the revised title of “devolved Welsh authorities”.
Lord Wigley (PC)
My Lords, I wish to say a few words as we reach the end of the Bill’s passage through the House. Before I do, I have one question for the Minister on the amendments to which he has just spoken with regard to electricity. Will the changes that he has made have any effect whatever on the Swansea Bay project that is going forward? I hope that he will respond to that point.
We have given the Bill considerable scrutiny over recent weeks, which has led to some welcome adjustments but has also focused attention on many issues that we regard as missed opportunities. We feel that the opportunity to enact the carefully balanced Silk package as a whole has been partly lost because of the way it has been approached. The Bill is consequently a bit of a parson’s egg and, as the Minister knows, the reaction in the National Assembly reflects that.
Lord Elis-Thomas (Non-Afl)
I think that it is a curate’s egg. I am a Welsh Anglican; I know these things.
Lord Wigley
My noble friend is of course far better versed than I am in these matters. It may well be, as the noble Baroness suggests, that the parson’s nose is coming to the fore in my consideration of some of the more controversial aspects of the Bill.
As the Minister knows, the Plaid Cymru group in the Assembly voted against the legislative consent Motion yesterday, for the simple reason that the Assembly is losing some powers, as we noted in a number of debates in the Chamber in Committee and on Report. Some of those powers may well have been assumed or unclear, but none the less they were used, some for substantive pieces of legislation. The existing legislative powers of the Assembly were endorsed by a 2:1 majority in a referendum in Wales in 2011 and some of the powers implicit in that vote are now being retracted. Some of the legislation enacted by the Assembly since that referendum was made using powers that will no longer be available to the National Assembly when the Bill becomes law. That is a perfectly valid basis on which to register a protest vote, as the Plaid Cymru group did in the Assembly yesterday. None the less, I hope that the Government of Wales will make full use of the powers now available to them under the Bill.
Sadly, the Bill does not provide the long-term settlement to which the Minister referred. No doubt in the fullness of time another Wales Bill will clear the uncertainties left by this Bill and address the issues, many covered by the Silk report, that were avoided in this Bill. Undoubtedly, for example, the devolution of police, prisons and justice will drive that demand, as well as more coherent powers over energy. By the way, I noted something that did not come to the fore during our early debates: the Home Office, which was then under Theresa May as Home Secretary, failed to give evidence to the Silk commission on these matters. I am sure that the Minister will recall that from his work on that committee. A whole new debate will arise, post-Brexit, on financial levers and further tax-varying powers.
Finally, I will say a word of tribute to the noble Lord, Lord Bourne, for the way in which he has conducted the passage of the Bill. His has been a stalwart performance—single-handed most of the time—and we admire the way in which he has kept on top of his brief throughout, although at times we disagreed with that brief. His experience, both as a key member of the Silk commission and a former party leader in the National Assembly, undoubtedly stood him in good stead in this matter. Many of us feel that there were times when he had to defend a government line when, in a previous incarnation, he may well have taken a different line. None the less, I hope that he will be recognised by his colleagues for the work that he has done and I hope that they will take note in future of the advice that he gives on matters relating to Wales. I hope that the Bill will help to the extent that that is possible within its limitations. I therefore wish well those who will live within the framework that is now being enacted.
Lord Hain (Lab)
My Lords, I echo the remarks of the noble Lord in thanking the Minister for the way in which he has handled the Bill. Its passage would have been a lot bumpier without his conciliatory approach. I also echo what he said about his officials, including the excellent Geth Williams, who once had the dubious privilege of working for me. I am glad that he survived to serve on the Bill, although what he makes of the dog’s breakfast that it serves up we will never know, his being a professional civil servant.
Finally, I appeal to the Minister. In the light of the Division on the question of employment and industrial relations last week, on which there was a tied vote, I have said to him privately and I repeat publicly that there is a way in which the Government could, even at this late stage, when the Bill goes back to the Commons, bring forward an amendment to tweak the amendment that was moved. As I said, there was a tied vote in the Lords last week. He could do that in a way in which the Government could overcome their reservations and satisfy everybody concerned. He will know that the Assembly has since voted on a Bill in this area. The issue is on its way to the Supreme Court. He can avoid that. It is not too late.
Lord Crickhowell (Con)
My Lords, I do not intend to speculate about what might be done in another place as we debate this issue at Third Reading here. Nor do I think that I will follow the noble Lord, Lord Wigley, in looking far into events that may or may not happen in the future. I very much welcome the amendments moved by my noble friend.
Before I pay some very well-deserved tributes, perhaps I might be allowed to voice just one regret about the way in which we legislate these days. If practical and possible, it would be much better if, instead of having a Bill that amends previous Bills so that we finish up with something almost unbelievably complex and difficult to interpret, we produced an entirely fresh Bill that everyone would be able to follow and understand without a degree of expertise that might be difficult to find even among those who guide the Welsh Assembly and this Parliament. I think that that would be a much better way of legislating.
I think that it was during Report that the noble Lord, Lord Kinnock, who is not here today, commented that he had once taken a different view about devolution, and I acknowledge that I had, too. When the final decision was taken by the narrowest of margins to go ahead, I said that I believed that when one crossed the Rubicon one should go on and make a success of it. I subsequently thought about that remark and realised that it was not very wise, because when Caesar crossed the Rubicon we had conflict, murder, civil war and the end of the empire. I am glad to say that that has not been the history of devolution in Wales or of the creation of the Welsh Government.
On this occasion it is right to pay considerable tribute to two Secretaries of State for Wales—the previous and the present ones—for their strong initiative in taking things further forward and producing a settlement that I believe will last for some considerable time. I believe that they and the Government deserve credit for the role that they have played in carrying devolution forward.
I pay a special and particular tribute to my noble friend Lord Bourne of Aberystwyth, whose performance on the Front Bench has been simply heroic and which he has combined with his responsibilities in other departments. I simply do not know how he manages to do it—and do it so well. However, I thank him. I believe that all those who have taken part in the debates on the Bill will at least share in that tribute. His role has been totally outstanding.
Lord Berkeley of Knighton (CB)
My Lords, having observed the passage of this Bill from the Welsh Marches, as it were, I, too, thank the noble Lord, Lord Bourne, for the way in which he has led his team through. I want to make one small plea—that he might be enticed to taste the menu put forward by the noble Lord, Lord Hain, regarding that tied vote. I know that it has come at a late stage in the day, but I feel that it has much to commend it.
Lord Morgan (Lab)
My Lords, I am, I think, the only historian of Wales present, and I think that this has been a historic event and process, for which the Minister and our Front Bench deserve great credit. I am perhaps among the last of the generation of Welsh children who was brought up to regard the House of Lords—to quote the Daily Mail—as the enemy of the people, hostile to the aspirations of the people of Wales on devolution, land, education, church matters and many other issues. It is historic because in this case, of course, the House of Lords has been enormously positive. Many of us were asked by political figures in Wales to be helpful and to try to resolve some of the needless quandaries in the Bill, which purported to extend devolution but in some respects seemed to restrict it, and clear things up. I think that we have succeeded to a considerable extent in so doing. Very important principles have been enunciated, which, again, are historic; particularly those that elevate the status, if not always the powers, of the Welsh Assembly, making them more comparable—although still not comparable—to those of Scotland.
I will not labour the point but, as has been said, we owe thanks to the Minister, who has been extraordinarily helpful and considerate. He has handled this matter in a model way and I conclude by suggesting a new role for him. I believe that one thing we need in all these measures—I recall that this point was made by the noble Lords, Lord Crickhowell and Lord Hunt, as well as by me—is some kind of statement of how they relate to the overarching vision of the union. Just as in the higher education Bill we put in some important points of general principle the other day, I feel that that would be valuable here. We have an unwritten constitution, and so perhaps the best way of achieving this kind of insertion would be to have a constitutional supremo to take it over. I can think of no Member of the Government more qualified to act in that, at the moment, untested role than the Minister. I thank him very much.
Lord Elis-Thomas
My Lords, I add my thanks to the Minister, who is an old colleague of mine—sorry, not an old colleague but a former colleague—in the National Assembly. His great achievement then, which I have alluded to before, even in this place perhaps, was converting the Welsh Conservative Party into a Welsh Conservative Party and a pro-devolution Conservative Party, as we saw most firmly yesterday in the National Assembly vote. He has excelled that contribution in the way that he has taken this legislation through this House. If I may, I want to link him to what is a very important memory for many of us. He ranks up there with the late, great Gareth Williams QC, who took us through the very early stages of devolution in this House. I cannot pay him a higher compliment than that.
The Minister kindly referred to our debate yesterday. I am not going to rise to the bait and have a spat with my noble friend about the way that the parties voted. However, it did strike me as interesting that the United Kingdom Independence Party and the party of Wales ended up in electronic harmony—we do not have Lobbies in the National Assembly—voting against a measure of Welsh devolution, even if it was for different reasons. The debate we had there was reasonable and reasoned. It was necessary to have that debate and that vote because, as the Minister has told this House before, we could not have proceeded to complete our stages without that legislative consent Motion.
That leads me to another conclusion that we can, I hope, take from our proceedings on this legislation, both in the National Assembly and in this House. Last week, I ventured to mention that we had perhaps finished a chapter of doing things in a certain way in relation to Welsh devolution. I believe we have now, potentially, reached a level of consensus, certainly between the main parties of devolution, as we saw in yesterday’s debate in the Assembly.
Perhaps we can now move, in the spirit of the agreement for legislative consent and the agreement that this House has achieved through reasoned discussion with the Welsh Government and the Constitutional Affairs Committee of the National Assembly, towards a form of co-legislating. Certainly we should look for early drafts of any proposed future developments in devolution, rather than this hand-me-down form of Westminster legislating on behalf of Wales. I put that suggestion forward not in a spirit of controversy but because I believe it is the way to achieve the consolidation championed by one of the most distinguished former Secretaries of State for Wales.
On that point, the noble Lord neglected to include himself in the list of the promoters of devolution. Although he tries now to present himself as an anti-devolutionist, during his period as Secretary of State he achieved more Executive devolution than did any other Secretary of State. It is important that we remember those days because, without the Executive devolution led by the Conservative Party in Wales, we would never have had the basis for the powers now devolved further in this Bill. I am afraid I include him as well in the pantheon of devolutionists, where he likes it or not.
I add my own thanks to Geth Williams. I remember working with him and my right honourable friend the Secretary of State in a previous Government. I recognise the quality that he and the officers and lawyers of the Wales Office bring. I also thank the lawyers of the Welsh Government who participated in these discussions and the lawyers of the National Assembly Commission, particularly those advising the Constitutional Affairs Committee of the Assembly, of which I am proud to have served as a member in two Assemblies—although not for the whole time, for reasons which I will not go into tonight.
I pay tribute to the present Constitutional Affairs Committee in the Assembly for its rapid turnaround in producing those “critical friend” reports on the Bill; to its current chair, a former Member of the House of Commons, Huw Irranca-Davies; and to its previous chair, David Melding, who has been such a distinguished Member of the Assembly, and among the deep, caring, great Conservative constitutionalists of Wales. I thank the First Minister for his constant support on these matters and the Counsel General. In addition, I pay tribute to my noble friend Lady Morgan. It is not an easy job to work both sides of the railway line but we had the happy experience of sharing the same train this morning, so were able to congratulate each other, and the Minister in his absence, on the progress we have made together on this Bill. I link with that my friend the noble Lord, Lord Wigley, and the noble Lord, Lord Elystan-Morgan, whose contributions have always been philosophical and sometimes prophetic—a great Welsh tradition.
We thank all noble Lords for their contributions. We know that through the progress of this Bill we have achieved a further significant milestone in the progress of devolution. I am not here to speculate as to what will happen next but, whatever does happen, will be on the firm basis of the reserved powers model, which is constitutionally congruent even if not as extensive as what happens in the rest of the United Kingdom, and for that I thank the Minister and this Government deeply.
Lord Thomas of Gresford (LD)
My Lords, some 3,000 years ago, Homer wrote in the Iliad that after the battle men like to reminisce about their prowess in the fight. Some 10 or 15 years ago the tributes and thanks were getting so extensive that the decision was taken that such tributes would no longer be heard at Third Reading. However, just as referring to people at the Bar is now commonplace—any Member of Parliament or Minister who comes to the Bar tends to get a mention these days—so that tradition, in which I firmly stand, has been eroded. Therefore, I confine myself to thanking the noble Lord, Lord Bourne of Aberystwyth, who has done a brilliant job in listening to all the complaints, some of which were completely without foundation. He has reacted very well. Lastly, I thank my noble friend Lady Randerson, who was part of the team in the coalition Government when the Bill was in its infancy. She played an important part in framing the way it progressed.
Lord Elystan-Morgan (CB)
My Lords, I strike a concordant note in joining with all others who have expressed so genuinely their appreciation of the Minister’s efforts in this matter. He has been a model of courtesy and accommodation in so far as it has been humanly possible for him to be so. Had he been invited to draft the Bill we would have had a very different piece of legislation before us, but that was not to be.
Although the Welsh Assembly yesterday gave its seal of approval to the Bill, although a reserved constitution has placed Wales technically in the same field as Scotland and Northern Ireland—a matter of constitutional significance—and although this is the third occasion when there has been a very thorough examination of the Welsh constitutional position in the short space of 19 years, nevertheless the Bill cannot be regarded as a great leap forward in the field of devolution at all. I say that because it seems to me that, compared with the situation Wales found itself in two and a half years ago after the agricultural workers’ wages case was decided by the Supreme Court, we are far behind where we were on that occasion in so far as the sum total of legislative and devolutionary authority is concerned.
When the Scottish referendum concluded and the Prime Minister, in the grey dawn of that morning, walked to a microphone in Downing Street, he uttered the words that Wales will be at the very heart of devolution. I was stirred and cheered by those words, but had they been followed with the prophecy, “But bear in mind that 27 months from now the range of devolution will have been very severely cabined, cribbed and confined by a Bill called the Wales Bill”, I am not sure my attitude would have been exactly the same.
There is no doubt that there has been a faint tinge of old colonialism relating to this situation—something I have referred to ad nauseam. I make no apology for that. It is the attitude somewhere or another that small, insignificant powers that are wholly classically local in their character must somewhere or another be withheld from Wales. I hope that will change. I hope future Governments will accept that we are no longer in a colonial era—that:
“The old order changeth, yielding place to new”.
It may well be that the Government think they have thrown away many of the difficulties relating to devolution in Wales, but not all things thrown away stay thrown away. There is a tale that David Lloyd George used to tell of one of his erstwhile colleagues, a person who had changed his attitude very considerably to former policies. Somewhere or another they came back to him again and again. Lloyd George likened it to the position of an old Aboriginal chief who was utterly fed up with his boomerang and threw it away. It did not matter whether he threw it in a sharp curve or in wide curve; back it came again and again. I end with the admonition to government: never forget the boomerang.
Baroness Morgan of Ely (Lab)
My Lords, I thank the Minister for presenting the amendments and for taking on board and dealing with these extra issues in the Bill, in particular that of the Open University. He has been generous in the way he has listened to us during the passage of the Bill.
Yesterday, like the noble Lord, Lord Elis-Thomas, I participated in my capacity as an Assembly Member for Mid and West Wales in the vote on the legislative consent Motion in the National Assembly for Wales on whether to accept the Wales Bill. The Minister had made it clear on a number of occasions that the will of the Assembly would be respected in relation to the Bill.
I and many others in the Chamber in Cardiff yesterday made it clear that we were still deeply unhappy about aspects of the Bill and believe that it remains complex and flawed in many ways. We had hoped that there would be a clear delineation of where responsibility lies in the move to the reserved model, but this has not been delivered in the way we had hoped. Many warned that this could lead to constitutional conflict between the two institutions in future.
Nevertheless, I encouraged my colleagues in the Senedd to support the Bill, partly because I believe that we need to batten down the constitutional hatches before we are battered around in the political flux that is about to engulf us with Brexit. I also believe that we have made substantial progress in the course of scrutiny of the Bill in the House of Lords.
The amendments that we have before us are additional to the areas where we have already seen movement in the Bill. It is worth noting and setting on record the areas where we have seen concessions: a clearer definition of Welsh law; a redrafting of the concept of Wales public authorities; an ability of the Assembly to change the limit on the number of Ministers; an increase in the Welsh Government’s borrowing powers; a narrowing of the power to amend transfer of function orders; the removal of the Secretary of State’s intervention powers in respect of water and sewerage and an extension of the Assembly’s legislative competence in respect of water to the national boundary; the devolution of powers relating to fixed-odds betting terminals; the right of the Welsh Ministers to be consulted on the strategies of the Maritime and Coastguard Agency; a narrowing of the reservation in respect of anti-social behaviour; an extension of powers in respect of Welsh boats fishing outside the Welsh zone; a narrowing of the reservation on heating and cooling; a narrowing of the reservation on planning for railway developments; the removal from the reservation of the community infrastructure levy; the narrowing of compulsory purchase orders; the narrowing of the building standards regulations; and an assurance that the Welsh Government will be involved in a commission to assess the impact of new Welsh laws on the single jurisdiction. That is quite a list and we should be proud of ourselves.
I am delighted that a clear majority of my colleagues in the Assembly agreed with the decision to pass the legislative consent Motion and that the next phase of devolution can now begin. However, I endorse the point made by my noble friend Lord Elis-Thomas that Bills should in future be discussed and negotiated with the Assembly prior to their being presented to the Houses of Parliament.
I want to pay tribute to the Bill team, in particular to Gethin but also to a number of people who have been helpful in the Assembly. I thank Kirsty Keenan, Gareth Ball, Jane Runeckles and Gareth in the legal team. I want also to give a special mention to a man who has been involved in every Wales Bill since the establishment of the Assembly, who was the principal adviser to the National Assembly advisory group on which both the noble Lord, Lord Bourne, and I sat, and who will soon be retiring having given years of dedicated service to the Civil Service in Wales. He has become one of the foremost experts on the Welsh constitution and he will be missed: I thank Hugh Rawlings for all the work that he has done on behalf of Wales over the past few decades.
I also thank Peers from all parties for their co-operation on the Bill. I particularly thank my noble friend Lady Gale, who has proved so patient with me, not just on this Bill but throughout my political life. She has been a mentor to me since I was first elected, practically as a child, to the European Parliament back in 1994. She will go down in history as an unsung hero of the establishment of the Welsh Assembly when she was general secretary of the Labour Party in Wales, particularly for ensuring a revolution in the gender balance of politics in Wales.
Finally, I thank the Minister. On several occasions during the passage of the Bill he has been commended for his commitment to the cause of devolution in Wales. Above all, he has changed the Conservative Party’s attitude towards Wales. I thank him for responding so positively to our many concerns and for being willing to co-operate with us on so many occasions. The Bill is another small step on the devolution road for Wales.
It is my intention now to focus on my responsibilities in the National Assembly. I thank noble Lords for their co-operation, not just on this Bill but throughout my time here over the past few years.
Baroness Randerson
My Lords, I thank the Minister for the clarity he has provided on my amendment. I echo others in thanking him and the Secretary of State for their courtesy and helpfulness. I thank their officials—Geth Williams and his team—because they have been truly exceptional in the amount of assistance they have been prepared to give. They have all been unstinting with their time for discussions, and have been willing to amend the Bill on a number of matters to deal with issues raised here.
Many noble Lords will know that the Minister, the Secretary of State and I served together in the National Assembly for very many years. We can be confident that they both fully understand how devolution works. The Minister has long been a stalwart supporter of greater devolution. As others have said, he has been responsible for the journey that the Conservative Party has taken. He has led that journey in Wales to making it a devolutionist party. That being so, and as a member of the Silk commission, he must be a little disappointed with the Bill, as I am. There is no need for him to respond to this—I do not expect him to admit it in this Chamber—but in his heart of hearts I dare say he is disappointed.
Although the Bill brings us the reserve powers model, it is not the clear-cut devolution settlement that the Silk commission called for; nor is it quite the bold vision outlined in the St David’s Day agreement in 2015, when Stephen Crabb was Secretary of State. Although it brings welcome additional powers—for example, over elections, energy, the way in which the Assembly can manage its own affairs, and so on—they are not the radical step forward I envisaged as a Wales Office Minister when this plan was hatched. I believe that the Government will come to regret the lack of a sharp edge defining the separate powers of the Welsh and UK Governments. That will probably come to haunt them in the corridors of the Supreme Court in months and years to come.
I do not want to imply that the Wales Office has not tried—far from it. I am sure that the Wales Office has tried as hard as possible on the Bill. As I recall clearly, Welsh Ministers going round Whitehall asking for more powers for Wales are not always greeted with open arms. That was even the case in the coalition days, where devolution was the name of the game.
However, I am a pragmatist and I accept that under the new regime this is as good as it gets. It is definitely a step forward because it includes particularly important key powers over income tax and because it is twinned with the fiscal framework, which is hugely important. I am very disappointed that Plaid Cymru voted against this yesterday because, personally, I could not vote against additional powers for Wales, whatever the downsides to the settlement. We particularly welcome the constructive approach of both Governments in coming together on the Bill. It is part of a package which should make a big change to the political rhetoric of Wales and a real step forwards.
Only two years ago, I took a Wales Bill through this House; that, too, was just a modest step forward but we are going in a particular direction. I welcome that direction and I am sure that the Minister will forgive me for saying that I just wish we could walk a bit faster. I am happy to withdraw my amendment.
“( ) the exercise, by a Minister of the Crown, of certain functions in relation to two or more harbours where at least one of those harbours is wholly in Wales and is not a reserved trust port.”
(a) in the Welsh text, after Rhan 2 insert— “RHAN 2ATRAWS-LEOLI AELODAU’R TRIBIWNLYS9A_ Ar gais y Llywydd a chyda chymeradwyaeth Llywydd Tribiwnlysoedd Cymru, caiff aelod o dribiwnlys sydd wedi’i restru yn adran 59 o Ddeddf Cymru 2017 (Tribiwnlysoedd Cymru), ac nad yw’n aelod o’r Tribiwnlys, weithredu fel aelod o’r Tribiwnlys.”;(b) in the English text, after”
“( ) the Open University.”
“( ) the Open University.”
Lord Bourne of Aberystwyth
My Lords, I wonder if I may answer one or two points that were made in relation to that group of amendments before formally moving—
Lord Bourne of Aberystwyth
There were issues raised that I would like to address, if that is permissible.
Lord Bourne of Aberystwyth
I will write to noble Lords in relation to the points made.
Wales Bill
Tuesday 24th January 2017
(7 years, 10 months ago)
Commons ChamberRead Full debate Wales Act 2017 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Amendments as at 24 January 2017 - (24 Jan 2017)
16:37 - The House divided: - Ayes: 170 / Noes: 281 - Question accordingly negatived.
Madam Deputy Speaker (Mrs Eleanor Laing)
The National Assembly for Wales passed a legislative consent motion on 17 January, copies of which are available with the Bill documents online and in the Vote Office. I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendment 9. If it is agreed to, Mr Speaker will cause the customary entry waiving Commons financial privilege to be entered in the Journal.
After Clause 17
Lending for capital expenditure
The Secretary of State for Wales (Alun Cairns)
I beg to move, That this House agrees with Lords amendment 9.
Madam Deputy Speaker
With this it will be convenient to discuss Lords amendment 44.
Alun Cairns
I am pleased to open the debate on the amendments made to the Wales Bill in the other place. Given the number of Members who wish to speak in this relatively short debate, I shall aim to keep my comments relatively brief.
First, I place on record my gratitude to the peers who contributed to the scrutiny of the Bill during its passage through the House of Lords. It would be dangerous to try to name them all for fear of forgetting some, but a number who regularly attended briefing sessions and gave feedback throughout the process helped to get this important Bill through the other place without any Government defeats. I thank in particular Lord Bourne of Aberystwyth for steering the Bill so ably through the other House on behalf of the Government, supported by Baroness Mobarik as Whip for the Bill.
I also take the opportunity to place on record my thanks to a number of right hon. and hon. Members of this House. My right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) started the process when she established the Silk commission in 2011. My right hon. Friend the Member for Clwyd West (Mr Jones) expertly guided through Parliament the Wales Act 2014, which implemented the Silk commission’s fiscal recommendations. I pay particular tribute to my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb). In his time as Secretary of State he took a number of bold decisions, most notably the establishment of the cross-party St David’s day process, which put in place the framework of the Bill. That was a bold move, as I have suggested—one that sought to bring all parties together to make a constitutional agreement that would bring both Houses together, understanding the politics of both sides of this House and of the other place.
My right hon. Friend was unstinting in his belief in the importance of the Bill and subjected himself to immense scrutiny with respect to its contents. I pay tribute to his work in setting the framework that has allowed my hon. Friend the Under-Secretary of State for Wales and I to take it through the Chamber.
It is also appropriate to pay tribute to Members on the other side of the House who played an important part in the scrutiny of the Bill, especially the former shadow Welsh Secretary, the hon. Member for Newport West (Paul Flynn), and his predecessor, the hon. Member for Llanelli (Nia Griffith), who was involved in the work, negotiations and discussions throughout the process, as well as the current Opposition Front-Bench team.
I wanted amendments 9 and 44 to be spoken to separately, to give right hon. and hon. Members the opportunity to consider the fiscal framework agreed between the UK Government and the Welsh Government. The amendments are directly linked to that agreement.
The agreement reached between the UK Government and the Welsh Government is an historic agreement that is fair for Wales and fair to the rest of the UK. During scrutiny of the Bill last summer, this House approved the removal of the requirement for there to be a referendum before Welsh rates of income tax were implemented, and the fiscal framework paves the way for the devolution of those historic tax powers from April 2019.
The block grant adjustment mechanisms that will take account of the devolution of stamp duty land tax and landfill tax are also part of that agreement, ensuring that the replacements for those taxes in Wales, which the Welsh Government are already legislating for, come on stream in April 2018.
Nick Thomas-Symonds (Torfaen) (Lab)
While the Secretary of State is talking about the fiscal framework, may I welcome the lifting of the cap on borrowing for capital expenditure to £1 billion? That is not quite the £2 billion that Front-Bench colleagues in the other place asked for, but I welcome it as a step forward. Does the Secretary of State agree that that measure will give the opportunity to continue investment in infrastructure in Wales, both digital and physical, and can also contribute to increased productivity?
Alun Cairns
I am grateful to the hon. Gentleman for the scrutiny he provided at previous stages, and for his comments just now. I will come to the numbers later, but I hope he recognises that there was a mature discussion between two institutions, and he is absolutely right that this measure paves the way for the Welsh Government to use their new borrowing powers to legislate for and finance things that really matter to the Welsh people.
The agreement ensures that, when tax powers are devolved, the Welsh Government will have fair funding for the long term, taking into account Welsh tax capacity and treating population change consistently across tax and spending. In doing so, we are delivering on the independent Holtham commission’s ambition of a long-term fair funding settlement and agreement for Wales.
Indeed, I spoke to Professor Holtham only last week, and he is clear that this is a “very fair settlement” and that there is now no case to argue that Wales is underfunded. The Government previously stated that Wales receives a fair settlement. This cements that in place and enhances the settlement.
Paul Flynn (Newport West) (Lab)
Does not the Secretary of State agree that the fiscal framework is already out of date because it is pre-Brexit and we now know that Wales will suffer severely if we come out of the single market? Is it not true that the Bill is just another stepping-stone on the way to a new Bill, which we will get when the terms of Brexit are declared?
Alun Cairns
The hon. Gentleman is well aware that we have a positive dialogue with the Welsh Government on the nature and framework of the process and the ultimate outcomes of exiting the EU. I was happy to receive yesterday from the Welsh Government a paper outlining their proposals, and we will of course give it close consideration. It will be subject to a future Joint Ministerial Committee for the European negotiations.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
No doubt, then, the Secretary of State would disagree with the hon. Member for Brecon and Radnorshire (Chris Davies), who said yesterday in an interview with me on ITV Wales that Wales should simply get in line with the Brexit process and just kowtow to the Prime Minister’s agenda?
Alun Cairns
I did not hear my hon. Friend’s comments, but should there be any attempt to frustrate the process of exiting the EU by the Welsh Government, the Welsh population would not expect or want it. After all, Wales voted to leave the EU, and it is only right and proper that we act on that instruction and direction, which came from the public in Wales. I would hope that the Welsh Government continue to engage positively in the way that they have.
Owen Smith (Pontypridd) (Lab)
Given the respect that the Secretary of State says there is between the institution of the National Assembly and the Government here at Westminster, should he not be disappointed that the Supreme Court has not ruled today that there should be a formal consultation with Wales via the National Assembly?
Alun Cairns
We have maintained that the views of the Welsh Government are important, but the views of other stakeholders in Wales are also relevant to the discussion. The Welsh Government will rightly form their view, and the UK Government will come to a conclusion that serves all parts of the United Kingdom, including other stakeholders in Wales, as part of the process. The legal action that the Welsh Government took was a matter for them. We have had the judgment, and we need to respect and act on it.
I shall return to the fiscal framework and the funding settlement for Wales. I have already mentioned Professor Gerry Holtham, but it is appropriate that we pay particular tribute to him for the work that he did. We should also pay tribute to my right hon. Friend the Chief Secretary for the part he played in the negotiations, and to the way the Welsh Government and Mark Drakeford, the Cabinet Secretary for Finance and Local Government, went about the negotiations with my right hon. Friend, whereby two mature institutions discussed serious matters that will have long-term positive consequences for Wales.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Does not the Secretary of State share my concern that the needs-based factor will be based on sums ascertained in 2009-10, which will be effectively 10 years old when it comes into effect? There should be a review before it starts.
Alun Cairns
I am grateful to the hon. Lady for her intervention, and for the scrutiny and interest she has rightly given the Bill, but I hope she recognises the significance of the fiscal framework. The needs-based factor to which she refers is 115%, and the current level is well above that. It will fall to 115% over time, recognising the fair settlement that Wales gets because of its needs. It is significant that that needs-based factor is being introduced into the Wales settlement for the first time. It is something for which the hon. Lady and her party have been calling for some time, but it took a Conservative Government to deliver it.
Stephen Crabb (Preseli Pembrokeshire) (Con)
My right hon. Friend has done a fantastic job of steering the Bill through its Commons stages. The hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) says that the figures are out of date, but when I sat down with Professor Holtham to think about how to scope out a fair funding floor for Wales, he was absolutely clear that there was no reason to think that just because of the passage of time the figures that he had in mind were somehow incorrect. The level that has been set by the Treasury is exactly right for Wales’s needs at this time.
Alun Cairns
My right hon. Friend played an important role in ensuring that we have the needs-based factor by framing the debate in such a way as to make possible a successful conclusion. Ultimately, the Welsh Government would understandably have rejected the Bill unless it was associated with an appropriate and fair funding settlement. I hope that Opposition Members will recognise the significance of the settlement, because it really does matter to the long-term funding of public services in Wales.
Stephen Doughty
Does the Secretary of State accept that, as the First Minister set out yesterday in the White Paper published with the support of Plaid Cymru and the Liberal Democrats, there is a difference between the Barnett funding formula and funding arrangements of the sort that we currently have under the common agricultural policy and the structural funds? As things are moving on very rapidly, will he make a commitment that Wales will not be left a penny worse off as a result of leaving the European Union?
Alun Cairns
The hon. Gentleman tempts me to go down a route for which no decisions have been taken. We are keen to engage and discuss those matters and, as we have already said, we are keen to engage with the Welsh Government and the other devolved Administrations on future funding arrangements. I hope that the hon. Gentleman will recognise the fairness of the way we have approached the Barnett settlement and the fiscal framework, and that that will give him confidence that, as we hope, we will achieve a fair settlement for Wales and all parts of the United Kingdom as we exit the European Union.
Alun Cairns
I would like to make a little progress, but I will happily give way later if time permits.
We have agreed a fair way for the block grant to be adjusted to take account of tax devolution and the devolution of a portion of income tax, and a transitional multiplier of 105% in the Barnett formula that will give the Welsh Government additional money, over and above current levels, whenever we increase spending in a devolved area. That 105% demonstrates the even longer-term transition to getting down to the floor of 115%. We are doubling the Welsh Government’s capital borrowing limit, so that they will be able to borrow up to £1 billion —as the hon. Member for Torfaen (Nick Thomas-Symonds) pointed out a moment ago—to invest in infra- structure throughout Wales.
Lords amendment 9 puts the new capital borrowing limit in place now, so that it will be available as soon as the Welsh Government start to raise revenues through the taxes we are devolving. Lords amendment 44 ensures that Lords amendment 9 comes into force two months after Royal Assent, thereby putting the new borrowing limit into place well in advance of the devolution of tax powers. As the hon. Member for Torfaen rightly highlighted, that will allow the Welsh Government to get on with things that matter, and to legislate and use the new financial capacity that the Bill will grant. Taken with the Wales Bill, the agreement paves the way to making the Welsh Assembly a more powerful, accountable and mature institution, with greater powers and responsibilities to grow and support the Welsh economy.
The fiscal framework agreement resolves once and for all the perceived issues of underfunding that have overshadowed political debate in Wales for so long. It provides the Welsh Government with a powerful new borrowing limit to deliver much-needed infrastructure investment, and it ensures that the devolved Government in Wales can become truly accountable to the electorate by raising around a quarter of the money that they spend. Gone are the days when poor levels of public service in Wales could be blamed on perceived underfunding. For too long, funding was used as an excuse for poor outcomes, but not any longer. If they want big government, the Welsh Government could even raise taxes to pay for it. Or, if they want to reduce income tax levels, they could look to drive out inefficiencies and allow Wales to be seen in a new entrepreneurial light. I urge the House to agree to the Lords amendments.
Jo Stevens (Cardiff Central) (Lab)
In the spirit in which the Bill has so far developed, we will this afternoon see something of a rarity in my life: I will, on occasions, agree with the Government and some of the measures they are taking. Before the Secretary of State gets too excited about that, though, it has to be put on record that the Bill has had a chequered history. It started out very badly—so badly that the Government had to take it away and start all over again. The second attempt was better, and we have now reached a point at which although it is still far from ideal, there has been considerable movement by the Government as a result of pressure from the Opposition and in the other place.
I put on record my thanks to my predecessors, my hon. Friends the Members for Llanelli (Nia Griffith) and for Newport West (Paul Flynn), and their Front-Bench teams, for their work during the Bill’s passage. I particularly thank my colleague Baroness Morgan of Ely and our team in the other place for the sterling efforts they made to secure numerous improvements to the Bill through debate and discussions with the Government, who took a largely constructive approach to concessions. We therefore support the Bill in its current, improved form, and will not attempt to frustrate its passage.
I shall not detain the House longer than necessary on matters on which there is agreement, but I wish to make substantial points on the Opposition amendments at the tail end of the selection list, on which I may wish to test the will of the House. We are hopeful that we can make good progress and reach those amendments.
Given the importance of the consequences of Lords amendments 9 and 44, it is right to put something on the record about them. They will raise the Welsh Government’s overall capital borrowing ability to £1 billion, and from April 2019 the annual capital borrowing limit will rise to £150 million—15% of the overall figure. As the Secretary of State pointed out, all that stems from the fiscal framework agreed by the Government here in Westminster and the Welsh Assembly Government. It is welcome news; I congratulate the Welsh Government. Like the Secretary of State, I particularly congratulate the Cabinet Secretary for Finance and Local Government, Mark Drakeford, for working so hard to seal this important deal with the UK Government. I also pay tribute to the Government for moving on this issue.
The increase in borrowing ability is so important because the austerity that successive Conservative Chancellors have imposed on Wales has had severe consequences for the Welsh Government’s ability to invest, particularly in infrastructure. As has been pointed out, with the loss of European funding that Wales will experience once we leave the EU, the ability of the Welsh Government to invest in infrastructure becomes even more critical. Therefore, moves to enhance the Welsh Government’s ability to invest in and develop infrastructure for the future are of course welcome. It is all about investing in Wales and boosting our economy, and this measure will go a significant way towards doing that.
Sensible infrastructure investment led by the Welsh Government will help improve productivity rates in Wales and increase the gross value added of Wales. However, as Members will hear me say several times today, the Government plans do not go far enough. In the other place, my Front-Bench colleague, Baroness Morgan, tabled an amendment to raise the borrowing cap to £2 billion based on the Holtham recommendations. We accept £1 billion as a step forward, but it is clearly not enough to properly meet the demands of the Welsh economy. Before the Minister responds to that point, I caution the Government against viewing the cap as a target. The point is to see the flexibility and dynamism provided by the higher limit, rather than to look at only how much is borrowed.
Many successful businesses do not use 100% of their borrowing facility, but leverage their borrowing to a sensible percentage of the facility based on the economic context in which they are operating. The higher £2 billion that was sought would not necessarily have been used, but would have allowed greater flexibility and freedom for the Welsh Government to invest in a greater number and a greater scale of critical schemes and infrastructure projects.
I make these points to the Minister to put them on record and to push his conversations with the Treasury ahead of the forthcoming Budget, but, as I have said, we do welcome the step forward that Lords amendments 9 and 44 provide and we will not vote against them.
Paul Flynn
May I say that it is a matter of some pleasure to see this Bill going through the House? It started off, as my hon. Friend the Member for Cardiff Central (Jo Stevens) said, as a dreadful and ugly Bill. This is not the slap of firm Government, but the timid, limp wrist cringe of a weak, uncertain Government, who do not know in what direction they are going. None the less, the result is generally beneficial, and a step forward—a stuttering step forward and not one of which we can feel greatly proud. We also know that we will have to come back to it because the world has changed after Brexit.
I accept that there has been some improvement in this Bill. I am talking about the £1 billion in the amendment, but it should have been £2 billion. The Welsh Assembly has a very good record of investing in infrastructure and other projects, but we do need more investments in the future. The purchase of Cardiff airport was a great success.
Craig Williams (Cardiff North) (Con)
Much has been made of this £1 billion cap, but, as the hon. Gentleman knows, the M4 relief road, which is on his doorstep, has been talked about a lot. Access to borrowing has been available to the Welsh Government to crack on with scheme, but they have done nothing. The £1 billion is a sensible amount. Will he comment on the broader use of these powers?
Paul Flynn
The hon. Gentleman well knows why the delays have taken place on that scheme. Obstacles are in the way of the scheme going through the system of appeals and the public inquiry, but, certainly, there is unlimited enthusiasm. It is nice to see him sitting there among half an acre of empty green leather seats today. I noticed that, on a previous reading of this Bill, one party took great advantage, taking a video swipe that showed the Opposition Benches empty, apart from the three Members of Plaid Cymru. The visual image was that the Member who was speaking—a Plaid Cymru Member—was someone who habitually empties these Benches as people stampede to the Tea Rooms whenever he speaks. People should not lie by using these misleading pictures of the House.
What we have before us is an unprecedented challenge to Wales. We must understand what leaving the single market will do for Wales, for Welsh industry, for Welsh farming and for the health service. It will hit us much harder in Wales than in England, and we must make allowances for that. However, we are not doing anything of the kind.
The hon. Member for Cardiff North (Craig Williams) talked about roads, and we do have a great problem there. I am talking about the highway robbery of the Severn Bridge tolls. We have had 52 years of double taxation of local people, and that is set to continue. Perhaps the Welsh Assembly could look into that infrastructure project. It is an outrage that people are paying twice for the tolls: we pay our share of the national road scheme in Wales and the west of England, and we pay over again for the tolls.
Stephen Crabb
I had not planned to say much this afternoon, but I thought that I would take the opportunity to contribute. First, let me put on the record my thanks to the Secretary of State and congratulate him on the fantastic way he has steered this Bill through its Commons stages and on the way he has handled very sensitive discussions with the Welsh Government, peers and the Opposition parties to bring it to fruition.
I also wish to put on record my thanks to Lord Bourne and to Baroness Randerson, who has not been mentioned this afternoon. Baroness Randerson was a Minister in the Wales Office when I was Secretary of State, and she was a fantastic rock of wisdom and support on matters relating to devolution. The amendments before us really give effect to the fiscal framework agreement, and represent the culmination of all those original aims that we set out for this next stage of devolution.
I remember sitting down with the then Prime Minister David Cameron two and a half years ago in the lead-up to the Scottish referendum—we all felt that it was a moment of unique constitutional history—and saying, “Well, where does this leave Wales? Do we need to do something further on Welsh devolution?” We had already had the Silk reports. To be honest, they were on the shelf. My feeling was that it was not good enough to leave Welsh devolution in limbo. Yes, there was a bit of pressure coming from some of the opposition parties in the Welsh Government to give effect to Silk 2, but there was no overwhelming pressure. Conceivably, we could have resisted that pressure, but I thought that moving on to the next stage of Welsh devolution was the right thing to do.
I am immensely grateful to my right hon. Friend the Secretary of State and to Baroness Randerson who were with me at the time in the Wales Office. We really talked about the matter to see what we should do. Comments have already been made this afternoon about how the Bill has changed, but it has followed an entirely appropriate and correct process, including a draft Bill, a consultation, the taking of advice and guidance, and amendments. The tone throughout has been one of listening. However, the original objectives have not changed. We wanted to create a stronger, clearer devolution settlement for Wales to end the constant arguing that resulted in the UK Government and the Welsh Government trotting off to the Supreme Court to debate which Administration are responsible for which policies—it was absolutely ridiculous. We also want to create a fairer devolution settlement, which is where the financial aspect comes in.
Mr Mark Williams (Ceredigion) (LD)
I pay tribute to the right hon. Gentleman for what he has done. My colleague Jenny Randerson greatly enjoyed working with him. He has pushed this agenda forward. One test that he employed at the time was to see whether the settlement would stand the test of time and whether a chapter would be closed—would Wales get used to its new constitutional settlement and would we not have to return to devolution in future? Has that test been met?
Stephen Crabb
To be absolutely honest, I do not think that this represents the end of the book on Welsh devolution, but we need a prolonged period in which the Welsh Government learn to deploy their powers and use their competencies in a way that benefits the people of Wales. We were talking about the M4 upgrade earlier; an early deal that I did when I was Secretary of State for Wales involved making new money available to the Welsh Government to crack on with it. The project had been talked about for years. I remember taking a question on it during Welsh questions and William Hague leant across to me and said that people were talking about it 20 years ago when he was Secretary of State for Wales. We are still waiting for any substantial action despite the money being available. That is the challenge that risks corroding public support for devolution in Wales—the sense that the Welsh Government, despite their additional powers, seem unable to crack on and take big, bold decisions to improve the lives of people in Wales.
Returning to my previous point, the Bill meets the core objectives that we set out. The reserved powers model and additional powers for the Assembly and for the Welsh Government create a stronger devolution framework. Amendment 9 will create a clearer and fairer settlement as a result of the fiscal framework and the funding floor for the Welsh Government’s new borrowing powers. I remember being told two and a half years ago that the four things that we wanted to achieve had no chance of success. I was told that the Treasury would not agree to them, that the Welsh Government would not agree to take tax-raising powers—income tax powers—and that my own Back Benchers would not agree. However, all the parties worked together to sketch things out while respecting each other’s’ differences. Plaid Cymru has long-standing aspirations and ambitions for Welsh devolution that, frankly, no Wales Bill has met, but the tone was constructive and that has laid a good foundation and has provided smooth passage for a reasonably good Bill. It is not the end of the story, but I hope that it is the end of an interesting chapter for Welsh devolution.
Liz Saville Roberts
I am sure that the House will join me in wishing the best to my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards), who is expecting the imminent arrival of the latest member of his family. [Hon. Members: “Hear, hear.”] I sympathise with all MPs who have to balance family life and parliamentary duty.
I, of course, welcome to an extent the fact that a fiscal framework is on the verge of being in place, giving the Welsh Government a degree of financial accountability that is intrinsic for any functioning democratic Parliament. Judgment is still very much out, however, on whether it can really deliver the economic accountability and levers for growth that are required in this tumultuous time. I therefore want to start with a few brief comments about the framework’s ambition, or lack thereof. I then want to ask the Minister a specific question about how the framework will operate before finally discussing the capital expenditure limit outlined in amendment 9.
Despite finally having this fiscal framework in place, we still lag behind every other devolved Administration in terms of powers and responsibilities. Earlier today—like most days—we were embroiled in the Brexit conundrum and all its unravelling economic implications, but the Government’s insistence on a patchwork approach to devolution means that Wales will not have the real levers for growth that it needs at this most difficult of economic times. If the Conservative party wants to talk about the real opportunities that a single market and customs union exit brings for Wales, it should be looking at the fiscal levers for growth, including VAT, the most important tax for Wales, and how it could be devolved. I hope the Minister will indicate that he plans to review the framework in the light of recent developments to ensure that Wales has such fiscal levers.
I briefly want to touch on a technical point that my party colleague, Adam Price AM, has already raised with the Welsh Government’s Cabinet Finance Secretary. The much trumpeted relative need provision of the fiscal framework—the 115% rule, which is referred to as the Holtham floor—was based on a set of criteria that determined Wales’s relative need in 2009-10. There seem to be no plans to conduct a review of that relative need when the floor is set to be implemented approximately three years from now, meaning that those relative needs will be based on figures that are 10 years out of date. This was discussed briefly in earlier interventions, but the 115% rule surely cannot be set in stone for all time, so I ask the Minister to propose a review to investigate that.
Alun Cairns
I am happy to clarify that the fiscal framework agreement, which is supported by the Welsh Government, includes opportunities for periodic reviews.
Liz Saville Roberts
I welcome those comments about periodic reviews as opposed to using 10-year-old statistics. I also have some concerns about the framework’s dispute resolution mechanism, but there may not be the time to discuss them here. We may be able to resolve that problem in future discussions.
I want to finish by emphasising the fact that both Governments lack ambition. In the Lords, Plaid Cymru called for a £2 billion capital expenditure limit, which was supported by Labour. However, under pressure from the devo-sceptic Tory party, we can see in amendment 9 that we are left with a capital expenditure limit of exactly half that. Although I am pleased that a fiscal framework is finally in place, I cannot avoid the observation that Wales is once again being short-changed through a lack of vision and ambition.
Glyn Davies (Montgomeryshire) (Con)
Thank you, Madam Deputy Speaker, for calling me to speak in a debate that is hugely important to me. As someone who served as a Member of the National Assembly for Wales for eight years before my six years here, almost all of my political life has been dogged—if I can use that word—by Wales Bills of one sort or another. I do not know whether I will still be a Member of this Parliament when the next round comes but, as my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) said, I am sure that there will be one.
It is a great honour to debate a particularly important Wales Bill, which makes devolution much more stable than it has been since it was first established in 1999. I could speak about a host of matters and on some of them there would be disagreement across the Floor of the House, but two principles are hugely important to me. The first relates to the fiscal issues, which I will come to, but I believe also that moving to a reserved powers model is of fundamental importance. There will be disagreements about what should be reserved to the Westminster Parliament, but, generally speaking, moving to a reserved powers mode will be a big step forward. People—including me—have been calling for it since 1999, and we should not forget that in the discussions about finance.
This debate is about financial issues, one of which relates to borrowing powers. I greatly support the measure, which gives the Welsh Government new and important borrowing powers. Other Members have suggested that the ceiling is not high enough, but I have heard Mark Drakeford, the responsible Minister in Cardiff, say that the Welsh Government will probably not borrow the £1 billion allowed in the first instance. I believe that the borrowing power will make a significant difference to the way the Welsh Government can operate.
The Parliamentary Under-Secretary of State for Wales (Guto Bebb)
I beg to move, That this House agrees with Lords amendment 10.
Madam Deputy Speaker (Mrs Eleanor Laing)
With this it will be convenient to discuss Lords amendments 28 to 32, 46 and 137.
Guto Bebb
The amendments deliver a comprehensive and lasting devolution settlement for Wales on water and sewerage. As right hon. and hon. Members know, water is of great symbolic importance as well as practical significance in Wales. Throughout the Bill’s passage, few issues have evoked more passion and debate. There is no question but that there cannot be a clear and lasting devolution settlement for Wales without resolving the issue of water devolution. The Government have therefore been determined to grasp the nettle and resolve the matter once and for all.
I was therefore delighted last autumn, when we were able to announce that we would replace the Secretary of State’s powers to intervene on water with a statutory agreement between the UK Government and the Welsh Government—in other words, a water protocol between the two Governments. Replacing the intervention powers with a formal protocol represents a clear break with the past, and is another landmark in the history of Welsh devolution.
The existing intervention powers were put in place in the Government of Wales Act 2006, when the Labour party was in government. Since then, they have taken on almost totemic status, despite having never been used. Their removal is another important change—alongside many others in the Bill—that marks the coming of age of devolved government in Wales. Amendments 30 to 32 give effect to this historic change.
Amendment 30 sets out the statutory requirements for the protocol that will be agreed between the two Governments, and we are absolutely clear that the protocol will have teeth. Both Governments will be subject to a duty to act in accordance with the new agreement, and once it is in place, both will need to agree any changes to it. The agreement will also need to include a process that both Governments sign up to for resolving any disagreements. The new arrangements will need to be negotiated, and that may take some time, but the Bill, as amended in the House of Lords, ensures that the Secretary of State’s water intervention powers can be repealed once an agreement is formally entered into.
Amendment 31 is also a crucial part of this package, as it imposes a duty on UK and Welsh Ministers to have regard to consumers on either side of the border when exercising functions relating to water resources, water supply or water quality.
The removal of these intervention powers ensured we were able to conclude our consideration of the wider devolution issues relating to water and sewerage, including the questions of whether powers over water and sewerage should be aligned with the England and Wales border and whether the sewerage intervention powers that were in clause 46 of the Bill when it left this House could be removed.
Amendment 30 removed the sewerage intervention powers from the Bill, and a great deal of work has gone into the question of whether the devolution boundary should be aligned with the geographical boundary of Wales.
Nick Thomas-Symonds
I welcome the giving up of the intervention power, but does the Minister remain concerned, as I do, that there will be no direct line of accountability between Ofwat and Welsh Ministers?
Guto Bebb
I dispute the view that there will be no direct line of accountability between Welsh Ministers and Ofwat. There will be an opportunity to consult and work through the Secretary of State. The protocol that is being put in place will also address that issue in more detail in due course. However, hon. Members should welcome the fact that we are moving in that direction on the mature basis of a protocol between the two Governments.
Ian C. Lucas (Wrexham) (Lab)
Will the Minister clarify the position on the Competition and Markets Authority? Its regulatory role is very relevant to water. Will it be accountable to the Welsh Government and the Assembly?
Guto Bebb
It is important to highlight that the Bill is not devolving competition power; it is being reserved. Therefore, the Welsh Government—and this place, obviously—will have the ability to ensure that the views of electors in Wales on this important issue are taken into account.
Of course, the Silk report recognised that water and sewerage devolution is complex and that further work was needed to consider the practical implications of implementing the commission’s recommendations. Immediately after the St David’s day agreement, the Government set up the joint Governments’ programme board with the Welsh Government to look at these issues and to report on the likely effects implementing the recommendations would have on the efficient delivery of water and sewerage services, on consumers and on the water undertakers themselves.
After considering the conclusions of that work, the Government brought forward amendment 28, which provides for new schedule 7A to the 2006 Act, which is inserted by schedule 1 to this Bill, to be amended to devolve water and sewerage policy as it relates to Wales. While, on paper, this simplifies the devolution arrangements, it will involve the unpicking of a considerable number of provisions in primary and secondary legislation to align respective ministerial powers and duties with the England and Wales border.
Amendment 29 provides an order-making power limited to making changes to previously transferred functions and to functions directly conferred by primary legislation relating to water and sewerage, so that we will be able to make the various associated changes through secondary legislation once the Bill has been enacted.
The amendments in this group provide a significant package of water devolution to Wales. They deliver a stable, mature and effective devolution settlement by aligning powers over water and sewerage with the national border and replacing the Secretary of State’s intervention powers relating to water with an intergovernmental protocol. These new arrangements are in the best interests of water consumers on both sides of the border. I urge the House to accept these Lords amendments.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The devolution of water and sewerage matters to the Welsh Government is welcome—and, if we are honest, somewhat overdue. The tragedy of Tryweryn will never be forgotten, but the amendments in this group should, I hope, be another step forward in ensuring that something like it will never happen again. More broadly, while some cross-border aspects of water regulation will remain, we are pleased that the Secretary of State has given up his ability to intervene on this issue. Like my hon. Friend the Member for Cardiff Central (Jo Stevens), I find myself in the somewhat strange place of thanking the Government for their movement on this issue, albeit after some prodding both here and in the other place.
However, also like my hon. Friend, I still believe that these amendments do not go far enough. While they correct some problems, there remain discrepancies. As my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) said, there is the issue of Ofwat’s accountability to the Welsh Government. When Ofwat is discharging its functions in Wales, surely it ought to be accountable in some way to the National Assembly for Wales and Welsh Ministers. As it stands, Welsh Ministers regulate water and sewerage operators in Wales, but with the Secretary of State being able to exercise his function of giving a general direction to Ofwat without any legally mandated consultation with Welsh Ministers. To be clear, we would argue that only Welsh Ministers should be able to provide directions in connection with matters relating to water and sewerage operators in Wales, or where licensed activities are carried out using the supply system of water or sewerage operators in Wales. Does that not seem a very reasonable and straightforward request? Surely it is not a step beyond imagining for the Minister that the regulator for a sector should be mandated to consult and speak to the politicians dealing with the implementation of that sector.
As my hon. Friend the Member for Wrexham (Ian C. Lucas) may well detail, it is not sufficient to believe that regulation from London will always work in the interests of communities in Wales. I will let him expand on that point and the ramifications of these amendments for the campaign he is fighting in his community. I pay tribute to him for his work in raising the issue, and assure the House that we support him on it.
Echoing my hon. Friend the Member for Cardiff Central, despite the gaps in these amendments and the problems we have with them, we will not vote against them. However, I would like the Minister to provide a substantive response to the points I have raised, to give us an assurance that the issue of Ofwat and the Welsh Government could be looked at, perhaps through some mechanism outside the Bill, and to keep the House informed of his progress on that.
Ian C. Lucas
I, too, welcome this Bill. As a firm believer in the adage that there are no coincidences in politics, I would go so far as to say that its existence is having an impact before it hits the statute book, because just as these amendments were being proposed in the Lords, the news came to my constituency and that of my hon. Friend—my very good friend—the Member for Clwyd South (Susan Elan Jones) that our local water company, Dee Valley Water, was the subject of a takeover bid from Severn Trent Water. I suspect that the takeover bid is not unconnected to the existence of the clauses that will give more powers and a greater role to Wales, the Assembly for Wales and the Welsh Government. I suspect that, with the transfer of regulation and accountability from the UK Government to the Welsh Government, it will be much more difficult to advance the present policy course as the Severn Trent bid is being made.
Liz Saville Roberts
I rise to speak to the second group of amendments, led by amendment 10. My noble Friend Lord Wigley originally welcomed the Government’s announcement that they would devolve power over water, and in Committee he eloquently outlined how an historic wrong could be righted. He set out in great depth how the drowning of Welsh valleys has motivated his politics and the emotions of so many people in Wales, and how 50 years ago in Capel Celyn the compulsory eviction of families from their homes and land meant the destruction of whole communities. Llyn Celyn and Afon Tryweryn are in my constituency.
The high-handed way in which Westminster treated the people of Tryweryn still has repercussions in this place, as well as in communities across Wales. Amendment 30, in which the so-called water protocol is outlined, embodies the entrenched Tory resistance to addressing this injustice in any meaningful terms. What format the so-called protocol may take has never been fleshed out. In this Bill, we do not have a protocol or a draft protocol, and for that matter we do not have an outline of a draft protocol or a protocol by which to arrive at a protocol. However, despite that lack of clarity, the Government are willing to include clauses watering down this already thin provision.
Lords amendment 31 explicitly charges Welsh Ministers with the interest of English consumers when it comes to any changes to our water supply. It is important to note that the amendment specifically references English consumers. We are not concerned with communities or individuals even, but consumers matter and Wales’s natural resources are still not ours to dispose of to our best advantage. That is because the Government are prioritising the primacy of competition over the interests of Wales. The amendment refers us to the Water Industry Act 1991 to define consumers, but that Act was based on promoting competition. Does this mean that the protocol will be based on the Thatcherite dogma that the wellbeing of the consumer—in this case, the water consumer—is tied up with the tenets of free market competition?
Liz Saville Roberts
I thank the Minister for explaining this earlier, but perhaps he will explain it further.
Liz Saville Roberts
The Minister explained earlier that competition is a reserved matter. In this case, that prompts the question, what does such a dogma have to do with the reserved powers model for Wales, in relation to this most emotive of all subjects? My party and many people in Wales feel cheated. When the Minister played the card of water devolution, we were led to believe that this would be a real game changer, but I am afraid it is no more than smoke and mirrors.
We considered pushing Lords amendment 30 to a vote, but we will spare the Chamber such an exercise, given that we might only manage to tweak the wording of something we have already opposed. I want the record to reflect, however, that my hon. Friends and I will not be taken in by empty words dressed up as substance from the Government. This remains a cynical political sleight of hand—endeavouring to gain capital from an historical event of deep emotional significance in Wales.
Susan Elan Jones
As much as two words can ever encapsulate a feeling or a sense, the two words “Cofiwch Dryweryn”—“Remember Tryweryn”—probably do so. I hope that we will not look back at this year and think of another four words, “Cofiwch Dwr Dyffryn Dyfrdwy” —“Remember Dee Valley Water”—as encapsulating the spirit of our age.
My hon. Friend the Member for Wrexham (Ian C. Lucas) spoke very powerfully about a difficulty in our part of north-east Wales that threatens the livelihoods of many people working for the local water company. In a sense, it is a David and Goliath battle, but there is real fear that David may not win on this occasion. David is in the courts tomorrow, so we cannot speak about many of the intricacies of the situation. We can say, however, that one of the UK’s smallest water companies—indeed, it may be the smallest, but I need to check that—which has the fourth lowest bills of any water company in the United Kingdom, is in court against its Goliath on issues involving the votes of shareholders.
In north-east Wales, we have seen what used to be called the unacceptable face of capitalism, with a nasty, large predator coming in and trying to take over a local company quite against the will of the local workforce and the local consumers. That, I fear, is a cause of great regret. I will not repeat what my hon. Friend said about the issues concerning us—the role of the Competition and Markets Authority, and its lack of linkage in terms of devolution to the Welsh Assembly, and that of Ofwat—but he made some very serious and important points about the future of water in our area. I know that great symbolism attaches to Tryweryn, and rightly so. The chair of the action committee of Tryweryn, T. W. Jones, was also a resident of my constituency. T. W., as he was known, fought valiantly for that campaign.
I urge this House and Ministers, as we approach the welcome devolution of water, to think carefully about what is happening with Dee Valley Water and to look carefully at aspects of company law. Surely this cannot be right, given the views of local people, shareholders and the employees of the company. If local ownership matters to us, surely a predatory takeover is in nobody’s interests, other than the large predator itself. I urge the Minister to give thought to the points that my hon. Friend and I have made. I welcome the proposals that devolve water to the Welsh Government. I agree that it is totemic and symbolic, but most of all, I want something that works, especially for people in north-east Wales.
Mr Mark Williams
I will say a few words about clause 46 and Lords amendment 30 on the water protocol.
Every time I travel south in my constituency, I go past a famous piece of graffiti that says “Cofiwch Dryweryn” on the outskirts of the village of Llanrhystud. Intermittently, that acceptable bit of graffiti has been vandalised by others. No sooner has it been vandalised than it is restored to glory, as it should be. As the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) and the Government have acknowledged, such issues need to be dealt with sensitively and history does not always dim those sensitivities.
In that spirit, I reflect on the long gestation of the water protocol. It was recommended by Sir Paul Silk in February 2015. I remember being my party’s representative, alongside the predecessor of the hon. Member for Dwyfor Meirionnydd, Elfyn Llwyd, in the Wales Office when we went through the Silk recommendations and came across the devolution of water and sewerage responsibilities. It was altogether easier to dispense with sewerage than water. The officials were charged with looking at this issue because it was complex, not least because the responsibilities of water companies had to be assigned across national boundaries.
I am pleased that the Government—my party in association with the Conservative party—acknowledged in the St David’s day agreement that there should be a water protocol. On paper at least, the protocol makes eminent sense, although it would be a lot easier for us to pass judgment on it if we had a draft or, indeed, any assessment of the criteria under which it will work. Their lordships made the point that more detail would have been helpful, and so too would a timescale. We are dependent on the Bill being passed, and then the protocol will swing into action. I look to the Minister to give us some indication of the timescale.
Concerns were raised in the other place, right up to the end of proceedings. I will summarise them, and again I look to the Minister to assure me that these matters will be dealt with. Their lordships were looking for a clear statement that the National Assembly has total legislative control over the creation of reservoirs in Wales and for the Assembly to have legislative control over all matters relating to water in all of Wales, coterminous with Wales’s border. Is the Minister satisfied that those questions will be adequately addressed by the protocol once it is enacted?
Madam Deputy Speaker (Natascha Engel)
With this it will be convenient to discuss the following:
Lords amendments 2 to 8, 11 to 27 and 33 to 35.
Lords amendment 36 and amendments (a) and (b) thereto.
Lords amendments 37 to 43, 45, 47 to 136 and 138 to 177.
Alun Cairns
As I stated earlier, we have engaged constructively with peers, the Welsh Government, the Assembly commission, colleagues on both sides of the House and a range of other interested parties on the issues raised, and we have made changes to improve the Bill where there is a good case to do so. The Bill today is a better one as a result. The large number of amendments in the group is testimony to the fact that the Government have been open to improving the new devolution settlement where possible. I do not intend to discuss each amendment in detail, but I will draw some of them to the House’s attention.
We have amended the Bill to deal with concerns about how universities are treated in the new reserve powers model. During the Bill’s passage through the other place, concerns were raised by the higher education sector that defining universities as “Wales public authorities” might suggest that they should be classified more widely as “public authorities”. This was not our intention. Amendments 3, 4 and 115 resolve this issue by renaming “Wales public authorities” as “Devolved Welsh authorities”. This responds to calls from universities and Universities Wales. We have also ensured that the Open University will be defined as an authority that carries out a mix of devolved and reserved functions, reflecting its status as a UK-wide institution. This will allow the Assembly to legislate to confer functions on the Open University in devolved areas without requiring the consent of a UK Minister. We have also expanded the list of devolved Welsh authorities in response to concerns raised by the Welsh Government and others.
The Government have introduced several amendments relating to tribunals that resulted from extensive discussions with the Welsh Government, the Ministry of Justice and the senior judiciary and which are intended to improve the management of the workload of devolved tribunals and to maximise flexibility in the deployment of judicial resources in Welsh tribunals. The amendments tabled in the other place will create a statutory office of president of Welsh tribunals to oversee the work of the devolved Welsh tribunals. New schedule 5 provides for a two-stage process for the appointment of a person to this new statutory role. The new clauses will also allow for the deployment of judges between Welsh tribunals and reserve tribunals in England and Wales so that they might share expertise in a way that cannot happen under current legislation. These are important amendments that are the product of constructive work with the Welsh Government, the Ministry of Justice and others.
The Government’s key aim in introducing the new reserved powers model is to deliver clarity on the boundary between the Assembly’s competence and the competence of this Parliament, particularly in the light of the Supreme Court judgment on the Agricultural Wages Board settlement. Many amendments therefore either alter or remove altogether reservations contained in new schedule 7A to the Government of Wales Act 2006.
The Government have tabled a number of amendments to deal with the planning system and the law that governs the construction of buildings, responding to concerns raised by the Welsh Government. Amendment 71 devolves competence for planning in relation to railways, making it consistent with the position in Scotland. We have also brought forward amendments that replace the full reservation of compulsory purchase with one that covers only compensation. This was again in response to discussions between the UK Government and the Welsh Government.
As for amendments to schedule 1 more widely, we have demonstrated our willingness to devolve significant further powers to the Assembly where a clear rationale can be made for doing so. Amendment 80 removes the reservation relating to teachers’ pay and conditions. This was something that I was keen to devolve from the outset, but I recognised concerns that were expressed by colleagues on all sides of the House as well as by the teachers’ unions. Following constructive engagement with the First Minister and discussions between officials, we are pleased that we both came to the same conclusion—that education is a devolved matter and that it makes more sense for the Assembly and Welsh Ministers to decide the pay and conditions of teachers in Wales, particularly in the light of the greater divergence between the education models that exist in England and the education model that exists in Wales. It is sensible to devolve teachers’ terms and conditions.
Amendment 72 devolves the community infrastructure levy in Wales. That was a priority for the Welsh Government, and has been for a number of years. We have listened to the case that they made and we are again delivering on a demand made by them. We were happy to respond positively and constructively to these calls.
Finally, amendments 36 and 52 devolve legislative and Executive competence to the Assembly and Welsh Ministers to regulate the number of high-stake gaming machines, authorised by new betting premises licences in Wales. This is an issue in which the hon. Member for Swansea East (Carolyn Harris) showed particular interest and passion during the earlier stages of the Bill’s scrutiny. The Silk commission made no recommendation on the devolution of betting, gaming and lotteries, but we agreed as part of constructive dialogue with the St David’s day process to consider non-fiscal recommendations made by the Smith commission that it would be appropriate to take forward in Wales.
Nick Thomas-Symonds
I, too, place on record my congratulations to my hon. Friend the Member for Swansea East (Carolyn Harris) on the success of her campaign on this issue. Does the Secretary of State agree that when statistics show that an average of £3,000 a day is being staked on these machines, it is very important to devolve these powers and for the regulations to be implemented?
Alun Cairns
I will come on to that specific point, because a review is being conducted by the Department for Culture, Media and Sport which will address the specific issues that the hon. Gentleman raises. For the moment, I shall stick to explaining the rationale behind the amendments on fixed odds betting terminals.
One proposal was for the powers to be devolved to stop the proliferation of these so-called fixed odds betting terminals. We concluded that these powers should be devolved in Wales, as they are in Scotland, coming out of the Smith commission. Amendments 36 and 52 therefore ensure that the Bill mirrors the provisions in the Scotland Act 2016 in respect of high-stakes gaming machines. The amendments apply to sub-category B2 gaming machines, and would provide the Welsh Government with a means to address public concerns in Wales regarding the proliferation of these machines. These machines were regulated by the Gambling Act 2005, which was introduced when the Labour party was in power.
The Opposition amendments would go much further than what is already devolved in the Scotland Act by extending this provision to all existing gaming machines with a stake of more than £2, and by devolving powers over existing licences. We did not believe that that was appropriate. As I mentioned a moment ago, the Government have already announced a review into the issue because we recognised the flaws in the 2005 Act. As a result, we are carrying out a thorough process to examine all aspects of gaming machine regulation, including the categorisation, maximum stakes and prizes, location and number of machines, and the impact that they have on players and the communities in relation to, for instance, problem gambling and crime. All those factors are potentially relevant and interrelated. The powers that we have agreed to devolve are intended to enable the Welsh Government and the Assembly to take action to prevent the proliferation of fixed odds betting terminals.
The review that we have announced is the appropriate mechanism for consideration of all those issues in a far more holistic way. I urge Opposition Members not to press their amendments to a vote, but if they pursue them, I shall do my best to respond to some of the issues that concern them. I urge Members to support the Lords amendments.
Susan Elan Jones
I support Labour’s amendment (a) to Lords amendment 36, which would reduce the relevant stake for fixed odds betting terminals to £2. I welcome the review that is being carried out by the Department for Culture, Media and Sport, and I also welcome the move to devolve this power to the Welsh Assembly. My reason for doing so is very much in line with all the work that has been done by my hon. Friend the Member for Swansea East (Carolyn Harris), but I fear that we could find ourselves in a ridiculous position. All of us—apart from certain advocates for the betting industry—know that what is happening with fixed odds betting terminals is deeply concerning. Figures as high as about £1.7 billion have been quoted as the profits made on these horrible machines, which cause so much devastation in our communities. We all agree that something must be done fairly urgently, but I fear that the House of Commons could collectively vote to put in place a stake of below £10 but then, if we pass the Lords amendment as it stands, the stake could be reduced only to a minimum of £10 in Wales. That does not seem right to me.
Let me put it another way. Collectively, the House could vote for a maximum stake of £2 in England and Wales, but once the matter is devolved to Wales, the Welsh Government would be limited to £10 and then the House of Commons could not go for a lower stake here, simply because the Government would tell us that that this was a case of English votes for English laws and we would be banned from lowering the stake.
All we are asking for is something very pragmatic—something that would give us the right to decide the level of the stake and benefit communities. Let us make no bones about it: these machines, and what is happening in the gambling industry, are hitting our poorest communities the hardest. We see the impacts of it in our industrial villages and in our towns. Let us say once and for all to the harder elements of the gaming industry, some of whom I am sure will be e-mailing us all later, that the nonsense of what is happening with FOBTs must come to an end. Let us say, “Do not think you can intimidate us, or those in the communities who are fed up with the hold that you have on them.”
It is time for us to act firmly. It is time for us to give the Welsh Government full devolution in this regard. It is time for us to lower the stake even further, if possible. It is time for the Welsh Government to have the power to do that, and, hopefully, this place will as well.
Jo Stevens
As the Secretary of State has pointed out, there are a lot of amendments in the group, many of which are welcome and deal with important issues. Given the limited time that is available, however, I shall focus on Lords amendment 36 and our amendments to it.
We welcome the Government’s Lords amendment, as we did when it was moved in the other place, but, as has already been said, we want it to go further. Today gives us the opportunity to achieve that. Our main point of contention with the amendment is that it limits the powers that are being devolved to the Welsh Assembly to regulate fixed odds betting terminals. That ability to regulate will apply only to machines licensed after the Bill becomes law that have a stake of £10 and above.
The Campaign for Fairer Gambling has been campaigning on this issue for some time. It has been an invaluable source of help in our work on the amendments, so I want to put on record my thanks to it. I also thank the all-party group on fixed odds betting terminals, which is so ably chaired by my hon. Friend the Member for Swansea East (Carolyn Harris). It has just completed its inquiry into the machines and is due to publish its report very shortly.
Chris Elmore (Ogmore) (Lab/Co-op)
The Secretary of State mentioned how the Government are devolving teachers’ pay to the Welsh Government because education is devolved. FOBTs are now being devolved, but not full regulation, which simply means that we will be coming back with another Wales Bill to introduce the necessary regulations. Does my hon. Friend agree that if the Government concede this point, it would simply mean we would have the measures in place now and would not need to return to this point in future Wales Bills?
Jo Stevens
My hon. Friend is absolutely right. The Government have the opportunity to accept that we could lead the way in Wales. The Secretary of State has already pointed out that he is aware of the social and economic problems that these machines cause, and despite the Department for Culture, Media and Sport’s review, the Bill represents an opportunity. We know what the problem is, and we know we could deal with it right now.
The Secretary of State says that the Government’s intention is simply to match the powers given to Scotland, but the devolution arrangements for Wales, England and Scotland are already different—they are not in alignment—so there is no reason why the Government could not accept our amendments today and agree to the lowering of the stake and that all current and future machines should be covered. Anything less than that would be a bureaucratic nightmare for the Assembly and only half a solution to an already accepted problem. It is unacceptable for the Government to refuse to give the Welsh Assembly the full powers that it needs to deal with this problem simply because Scotland does not yet have them.
There has been a 50% increase in betting shops in Welsh town centres since 2004, but that overall statistic masks the true story. The Campaign for Fairer Gambling shared with me some research from Geofutures showing what many Labour MPs already know: there are four times as many betting shops in areas of high unemployment than in areas of low unemployment. The machines are deliberately placed so that people who are least able to cope with the drain on their finances that problem gambling can cause are subjected to the highest exposure to those machines most likely to cause it.
These terminals allow players to stake up to £100 every 20 seconds, which is why, although only 3% to 4% of the UK population use FOBTs, those players account for 66% of all UK gaming machine losses. Already massively profitable bookmaking companies benefit even more from the losses on those terminals, to the tune of £1.7 billion just in the last year across the UK.
It is not only Opposition Members who think that this is a problem. Polling carried out by 2CV for the campaign showed that 82% of betting shop customers perceived the use of fixed odds betting terminals as an addictive activity, with 32% of those borrowing cash to feed their habit. It also showed that 72% had witnessed violent behaviour emanating from players using the machines. Other research has backed this up, consistently showing that fixed odds betting terminals are one of the most addictive and problematic forms of gambling. One study published in a journal from the Cambridge Health Alliance, a Harvard Medical School teaching hospital, found that the terminals had a fourfold correlation with problem gambling, which is higher than any other gambling product available in the UK.
The machines are already causing real and lasting damage to some gamblers and they exacerbate problem gambling more than any other form of betting. If the UK Government will not tackle this issue now, they need to give the Welsh Assembly the power to do that in Wales. The power to regulate existing machines is crucial to tackle the harm that they are causing in many communities across Wales, and our amendments would help to ensure that all such machines were regulated. I urge the Minister to follow his own logic, to be innovative and to accept our amendments. If he does not do so, I am ready to test the will of the House, certainly on amendment (a).
Carolyn Harris (Swansea East) (Lab)
I welcome the consideration that colleagues in the other place have given to this matter. I declare an interest as chair of the all-party group on fixed odds betting terminals, which are affectionately known as FOBTs. As many colleagues know, I have campaigned on this issue for more than a year. Sometimes I feel that it has taken over my life. There are 35,000 FOBTs located in high street bookmakers up and down the UK. These high-stakes, casino-style games are in low-supervision environments and are easily accessible to those who are most vulnerable to gambling-related harm. In Wales, there is a growing problem with FOBTs in local communities. According to the latest statistics, more than £50 million was lost on FOBTs in Wales in 2015.
The Lords amendment is welcome, but it does not go far enough. Powers should be devolved to the Welsh Assembly to allow local authorities to deal with existing clusters of betting shops in deprived areas. The most effective way to do that would be to reduce the maximum stake playable on a FOBT to £2, but the power to achieve that is not included in the Bill. There are growing calls for a reduction in the maximum stake, with more than 93 local councils across the UK, led by Newham Council, having now petitioned the Government to reduce the stake to £2.
The all-party group has concluded its inquiry into the machines. We found beyond reasonable doubt that the maximum stake on a FOBT should be reduced to £2 on a precautionary basis, in line with the objectives of the Gambling Commission. The full findings of the report are due to be published shortly, and we have been encouraged by the willingness of Ministers at the Department for Culture, Media and Sport to work with us on this issue. I very much hope that they will respond positively by reducing the stake and properly regulating FOBTs. I eagerly await the result of the current stakes and prizes review.
These machines are directly linked to problem gambling, with four out of five FOBT gamblers exhibiting problem gambling behaviour at stakes in excess of £13 a spin, compared with one in five when stakes of £2 and under are involved. FOBTs cause significant economic and social problems. In particular, they lead to increased incidence of money laundering in bookmakers, as the gambling activity is largely unsupervised and it is therefore relatively easy for fraudsters to use it as a way to clean their money. They are also leading to more problems as players take out payday loans to sustain their FOBT usage. Increasing crime levels have also been reported, with betting shops now accounting for 97% of all police call-outs to gambling venues. Up to September 2014, there was also a 20% increase in police call-outs to betting shops. There has been a clustering of betting shops on Britain’s high streets, with a 43% increase in the number located in towns and city centres. This is destroying the health and vibrancy of our high streets.
The most effective way to limit the harm of such machines is to reduce the stakes, which are currently set at up to £100. A substantially lower stake would bring FOBTs into line with machines in other low-supervision environments such as adult gaming centres and bingo halls. The Gambling Commission itself says that if stakes were being set now, it would strongly advise against £100 stakes on a precautionary basis. A lower stake of £2 is the level that the previous Government said would bring adequate public protection. I encourage the Government to support amendment (a) to the Lords amendments, to devolve powers to Wales and to allow local communities to tackle the problems caused by FOBTs. Such a proactive move not only would recognise the danger of these addictive machines and establish good practice to protect our communities from it, but would be a positive step towards ensuring that we, as a society, take our moral responsibility seriously.
Hywel Williams (Arfon) (PC)
The third group of Lords amendments is wide-ranging and covers a variety of subjects. Some of those subjects are more welcome than others, and I regret to say that some resulted in my party voting down the Bill in the National Assembly. I will not address each amendment, as time is limited, but I will focus on key amendments that are salient to my colleagues’ decision making in the Assembly.
Under scrutiny, the Government have conceded on certain issues, for which I commend them. Those include areas where Plaid Cymru has pressed the Government in both places, resulting in Government amendments—that work should be noted. Lords amendment 73, for instance, devolves compulsory purchase, which was mentioned earlier. A previously silent subject, the National Assembly will now, without question, have the power to legislate to enable important infrastructure projects to go ahead. However, those are only small concessions that skirt around more substantive policy areas that could really make a difference.
Lords amendment 38, for instance, adds a new clause creating a statutory office for the president of Welsh tribunals; Welsh tribunals are already devolved. Although that is a welcome move on a practical level, it does little to satisfy those of us, including the Welsh Government, who have been calling for a separate legal jurisdiction to ensure a truly lasting devolution settlement. Without a strong and definitive legal jurisdiction of our own, surmounting the challenges that we all face in unpicking European law in the great repeal Bill will be even more difficult.
I would go so far as to say that the whole Wales Bill has been overtaken by Brexit. Leading constitutional lawyers and academics, and even the leader of the Welsh Tories, agree that the constitutional future of the British state is in flux. There are many possibilities and opportunities for both those, such as ourselves, who champion devolution and those who are sceptical about devolution. Famously, devolution is a process not an event, and we should be clear about the dangers of substantial rollbacks.
That brings me to the main focus of my speech, a series of Government amendments—all variations on Lords amendment 3—that will give Wales public authorities a different name, that of “devolved Welsh authorities.” The wording clarifies what constitutes a devolved public authority. Although, in isolation, the amendment is not a concern, it alludes to a more worrying aspect of the Bill, in which there are substantial rollbacks.
Throughout the scrutiny of the Bill, we have tabled amendments following concerns expressed to us by the Welsh Language Commissioner regarding the Bill’s potential effect on the National Assembly’s power to legislate on matters pertaining to the Welsh language. The effect of schedule 2 is that when the National Assembly wishes to legislate for the Welsh language, it will require the consent of the relevant UK Minister. Under the current settlement, ministerial consent is required only when legislating to impose Welsh language functions on Ministers of the Crown.
Ministers in both Houses have confirmed that if a future Welsh language measure were to be proposed, it would no longer be applicable to many more reserved authorities, such as Her Majesty’s Revenue and Customs and the Crown Prosecution Service. Consent would be required to add to the list of devolved public authorities, which are contained in the Lords amendments before the House today. The Minister’s words offered no reassurance, or indeed any justification, as to why the Bill should include such a regressive step.
Alun Cairns
With the leave of the House, Madam Deputy Speaker, I would like to respond to the points that have been made. I thank all those Members who have made contributions today, and throughout the Bill’s passage through the House and the other place.
I am disappointed that the Opposition want to divide the House on the proposals we introduced in the other place on fixed odds betting terminals. Those proposals responded positively to calls that were made by colleagues on both sides of the House and by the Welsh Government. The Silk commission made no recommendations in that area, but having considered the Smith commission recommendations for Scotland we believe it is right to put the Assembly on the same footing as the Scottish Parliament and allow it to legislate on the proliferation of fixed odds betting terminals in Wales.
Albert Owen (Ynys Môn) (Lab)
The Secretary of State asserts that only Members on this side of the House oppose the proposals, but Conservative Members of the Welsh Assembly oppose what the Government are proposing and have supported my hon. Friend the Member for Swansea East (Carolyn Harris), including Darren Millar from north Wales. Has the Secretary of State consulted his Assembly Members on this point?
Alun Cairns
The hon. Gentleman makes a relevant point. We take the issue of problem gambling seriously. As I mentioned, we are committed to looking at all aspects of gaming machine regulations as part of a wide-ranging review of gambling. The regulation of fixed odds betting terminals is covered by the Gambling Act 2005, and we recognise that flaws exist in the current regulatory arrangements. They were introduced by the Labour party and it is time that they were reviewed. That is what my right hon. Friend the Secretary of State for Culture, Media and Sport is doing. We will act when that work has been completed, so I hope hon. Members will vote against the Opposition amendments and in support of the Lords amendments tabled by the Government.
The hon. Member for Newport West (Paul Flynn) suggested that the Bill showed a half-hearted approach to devolution. In the positive spirit in which the Bill has progressed through both Houses, I remind him that legislative competence orders were in place when we came into power in 2010 and started this process. A conferred model was in place then; the Bill introduces a reserved model. We have in place a needs-based funding settlement—something that has been called for for decades—and we are devolving significant tax powers. We have removed the water intervention powers and extended the Welsh Government’s powers in a significant range of areas, such as energy, fracking, elections and running their own affairs. A host of positive steps have been taken.
We all know that Members in the other place rightly pay close scrutiny to matters of constitutional importance in Bills such as this. Despite being in a minority in the other place, the Government were not defeated on the Bill, so I hope that Members from both sides of the House, and all Opposition Members, will recognise the significance of the Bill and, once and for all, welcome it because of the positive steps it takes in bringing about a devolution settlement that will last for a long time to come.
Lords amendment 1 agreed to.
Lords amendments 2 to 8, 11 to 27 and 33 to 35 agreed to.
After Clause 48
Gaming machines on licensed betting premises
Amendment (a) proposed to Lords amendment 36.— (Jo Stevens.)
Question put, That the amendment be made.
Royal Assent
Tuesday 31st January 2017
(7 years, 9 months ago)
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