House of Commons

Monday 31st March 2014 Commons Chamber

Monday 31 March 2014

The House met at half-past Two o’clock

Prayers

Monday 31st March 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 31st March 2014 Commons Chamber

The Secretary of State was asked—

[David Mowat (Warrington South) (Con)]

2. What assessment he has made of the Office of Fair Trading’s recent recommendations on the creation of independent governance committees in defined contribution pension schemes.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The Government announced last week that pension providers will have to implement new independent governance committees to oversee workplace pension schemes. This is part of the Government’s package of measures to ensure that workplace pension schemes are well run and deliver value for money.

[David Mowat]

I thank the Minister for that answer, and I congratulate him again on his brilliant announcement last week of a 0.7% cap, which is 50% of the cap that the Opposition imposed on stakeholder pensions. But the OFT report identified other governance issues with smaller pensions where trustees and fund managers come from the same organisations, and it suggested that these independent governance committees be set up quickly. Will he confirm that that will happen before auto-enrolment goes much further?

[Steve Webb]

I am grateful to my hon. Friend for his support for our robust action on pension scheme charges. On governance, we recognise that there is potential for conflict of interest in some master trusts. Therefore, in last week’s Command Paper, which I am sure he will have studied, we proposed that master trusts should be subject to the same independence requirements as independent governance committees. We are now consulting on that proposal.

[Kevin Brennan (Cardiff West) (Lab)]

What does the Minister make of the Government’s new Financial Conduct Authority’s first foray into the area of defined contribution pension schemes?

[Steve Webb]

The FCA will shortly announce details of plans to look at a raft of old pension and life assurance products, some of which have exit fees and high charges, and I think consumers will warmly welcome such an investigation.

[Mr Julian Brazier (Canterbury) (Con)]

I commend progress on this as well as the amazing wider package of pension reforms for which my hon. Friend is responsible. On the balance that trustees will look at, may I urge him to bear in mind existing people in the system, not just pensioners themselves, because with Sheerness Steel people who were still working were almost wiped out in order to protect those who had retired?

[Steve Webb]

My hon. Friend is quite right. As he knows, we have both the Pension Protection Fund and the financial assistance scheme to help those whose sponsoring employer has become insolvent. It is important that we make sure that sponsoring employers are in a robust position and that regulation is proportionate, which is why we are changing the remit of the Pensions Regulator so that it has regard, in its actions, to the sustainable growth of the sponsoring employer.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Last week, the Minister announced that the Government were adopting lock, stock and barrel Labour’s policy on the pension cap. That is welcome news for savers, but the Minister and the hon. Member for Warrington South (David Mowat) both know that governance is key to ensuring that savers get value for money all the way through the pensions system. Does the Minister therefore agree that allowing big insurance companies to appoint independent governance committees themselves is a little like allowing the home team to pick the referee in a football match?

[Steve Webb]

The hon. Gentleman raises an important point about governance and independence. He should know that the proposed terms of reference for IGCs include requirements that providers go through open and transparent recruitment processes, and that members be appointed for fixed terms, with limited numbers of reappointments. The requirements are designed to avoid any possibility that IGC members have incentives not to challenge providers in order to remain in post.

[Mary Macleod (Brentford and Isleworth) (Con)]

3. What assessment he has made of recent trends in employment figures.

[Nick de Bois (Enfield North) (Con)]

8. What assessment he has made of recent trends in employment figures.

[Alun Cairns (Vale of Glamorgan) (Con)]

16. What assessment he has made of recent trends in employment figures.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

We have record numbers of people in work, and the numbers are rising. Youth unemployment has fallen for six consecutive months. There are record rates of women in work and increasing numbers of people setting up in business. We are most definitely seeing a new enterprise generation.

[Mary Macleod]

Since 2010, unemployment in Brentford and Isleworth has reduced by 21% and youth unemployment by 29%. Will the Minister join me in welcoming this, and in inviting everyone in west London to my third jobs and apprenticeships fair on Friday at West Thames college?

[Esther McVey]

I would indeed invite as many people as possible to go along to my hon. Friend’s job fair—her third one. She does so much to help her young people to get into work, and she works to support women into work, which must be acknowledged, particularly as we are now seeing record rates of women in work.

[Nick de Bois]

In my constituency, there have been 60 new enterprise allowance take-ups, and there have been 200 across the borough of Enfield. Will the Minister update me on her plans for continuing that scheme? Will she also update the House on the scheme’s progress across the country?

[Esther McVey]

My hon. Friend makes a good point. The new enterprise allowance has been a huge success. The latest figures, which came out last week, show that 40,000 people have set up businesses in that way. It is now running at 2,000 new businesses a month. That is because we support those businesses financially, but it is also because we support them with strong mentoring. Equally, at the very beginning, they must have a good business plan. New enterprise allowances are here, and they are staying.

[Alun Cairns]

Unemployment in the Vale of Glamorgan has dropped by more than 27% since the general election. Does that not demonstrate that UK employment growth is happening in all nations and regions? We should be celebrating the fact that the economy is growing outside London and the south-east as well as growing in that region.

[Esther McVey]

I totally agree with my hon. Friend. He is right. As I have said, new enterprise generation stretches across the UK. Long-term youth unemployment in his constituency is down by 28%. I hope it will go down a little bit more and reach the national average—youth unemployment is down by 32% nationally—but a lot of good things are going on across the country.

[Sheila Gilmore (Edinburgh East) (Lab)]

22. Despite all the talk of new jobs, 2.3 million people are still unemployed, only 58% of whom are on the jobseeker’s allowance claimant count, which suggests that it is not the generosity of benefits that is keeping people out of work. What steps are the Government taking to get that number down?

[Esther McVey]

I do not know whether the hon. Lady was smiling when she was describing all the good news that is happening. There is a record number of people into employment—over 30 million—youth unemployment has gone down for six consecutive months, and there is a record number of women in work. Perhaps she did not hear that, which is why I have repeated the good news that our long-term economic plan is working.

[Mr Stephen Hepburn (Jarrow) (Lab)]

But in reality, is it not true that long-term unemployment is rising, and that youth unemployment has doubled in the past six months, all because the Government are carrying out a policy whereby, at the next general election, good, secure, well-paid and skilled jobs in the public sector will have been slashed by 1 million, all with the goal of getting a low-wage economy in which insecurity is rampant?

[Esther McVey]

The hon. Gentleman spoke with gusto, but that was all he spoke with, because those are not the facts. Long-term unemployment has gone down and more people are in work than ever before. Perhaps he should have read the figures before he stood up to speak.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

The Minister spoke of more women than ever in work, which is actually a reflection of the fact that there are more women of working age. She should look at other figures. For the first time in more than 15 years, the gender pay gap is rising, not falling. That is a reflection of women working below their pay grade, training and education, in part-time, low-paid work. What will she do about that?

[Esther McVey]

I have two figures for the hon. Lady. She is correct that there are record numbers, but I also said that there are record rates for women, which is different. That shows that our long-term economic plan is working. There are more women in work than ever before.

[Nigel Adams (Selby and Ainsty) (Con)]

4. What assessment he has made of recent trends in youth unemployment. [R]

[The Minister of State, Department for Work and Pensions (Esther McVey)]

Thanks to the Government’s long-term economic plan, youth unemployment is falling. I am particularly pleased that long-term youth unemployment has fallen by 38,000 over the last year. In my hon. Friend’s constituency, long-term youth unemployment has gone down by 38% in the past year.

[Nigel Adams]

Will the Minister congratulate, with gusto, local businesses, Jobcentre Plus, Selby college and York college for their efforts in ensuring that tremendous fall in youth unemployment since the last election in Selby and Ainsty?

[Esther McVey]

My hon. Friend said that with such gusto that I do not think I could top it. Employment and enterprise is important to him—at age 26, he set up his own telecommunications company with the aid of a Government enterprise grant, so he knows what he is talking about—and he is helping lots of people in his constituency.

[Alison McGovern (Wirral South) (Lab)]

Of the young people the Minister just mentioned who have a job, how many have gone on to work on zero-hours contracts?

[Esther McVey]

As the hon. Lady will know, the number of zero-hours contracts has remained fairly stable since 2000. They are called zero hours or casual hours, and they are used by Liverpool city council and Wirral council, which are Labour run. The worst council for using them is Doncaster.

We are having a full review of zero-hours contracts, and if they are exploitative we will bring about changes. Our report is due in July—something that Labour did not do for 13 years.

[Greg Mulholland (Leeds North West) (LD)]

Thanks to the new enterprise allowance scheme, more than 1,000 people in Leeds have met a business mentor and 490 have set up a new business, including 40 in my constituency. Does my right hon. Friend agree that that shows small businesses driving our economy and getting people back to work?

[Esther McVey]

I agree with my hon. Friend. New enterprises are starting up because of the new sense of confidence and optimism in the economy. The extra support that we are putting in place—checking business plans and providing support through mentors—is really paying dividends.

[Mr William Bain (Glasgow North East) (Lab)]

Some 180 young people in my constituency have been out of work for one year or longer. Can the Minister explain to the young man I met two weekends ago—he has been out of work for 18 months and is desperate to find a job—how the Government were so quick to give the banks a tax concession in the Budget, but are so slow to introduce a proper jobs guarantee plan for young people across the country?

[Esther McVey]

I would like to have a word with the young chap you are talking about, because I would like to give him hope and optimism, which is something that you are distinctly not giving—[Interruption.] I apologise, Mr Speaker. I do not mean your good self: I mean the hon. Gentleman. That young chap needs hope and optimism, and he needs to know what is happening in the rest of the country, because other people are getting jobs. Youth unemployment—including long-term unemployment—has gone down, and if the young chap sticks with it and gives it a go, he will get there in the end. That is the best news that I can give him. It is far better under this Government than it was under the Labour Government, when youth unemployment went up by 45%.

[Damian Hinds (East Hampshire) (Con)]

5. What steps his Department is taking to promote financial inclusion and to help families to budget.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Through universal credit, the Department for Work and Pensions is investing £38 million in expanding credit union services to help more people to access affordable credit. A budgeting support package will be available to all those who need it through universal credit. At the same time, the Government are clamping down on loan sharks and doorstep lenders who have taken advantage of vulnerable people for too long.

[Damian Hinds]

In this 50th year of credit unions in Britain, may I commend the Secretary of State for what he continues to do to support the sector? Will he update the House on what is being done to tackle the excesses of the payday lenders he mentioned?

[Mr Duncan Smith]

The Financial Conduct Authority will limit continuous payment authorities, which allow payday lenders to take money out of people’s bank accounts, to two payments. The FCA will keep that under review. It is also preventing CPAs if a person would be left without money to buy essentials or for priority debts. We have already seen some payday lenders leave the market because it is being restricted in the right way. It is worth saying that before the last Government came to power, payday lending did not exist, but it spiralled to £1 billion-worth under them.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Has not the source of the pressure on family budgets been policies such as the freeze in child benefit and the cuts to tax credits, which have left families hundreds of pounds worse off?

[Mr Duncan Smith]

The biggest pressure on family budgets was the fact that far too many people lost their jobs as a result of the crash in the economy, in which GDP fell by 7.2%. Since then, we have reformed welfare. It is difficult when people are out of work, but we are doing huge amounts to get them back into work. As my hon. Friend the Minister of State has said, more people are in work, more women are in work and more young people are beginning to get into work, so we are getting more people into a position to look after themselves.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Financial resilience for families in my constituency can be a real challenge. One of the biggest impacts on the family budget can be the loss of a loved one. Does the Secretary of State think it is now time to consider whether social fund funeral payments should be index linked to inflation to ensure that they keep pace with the cost of funerals?

[Mr Duncan Smith]

I am certainly prepared to discuss the matter with my hon. Friend if he wants to come and see me about it. I keep that area of the social fund under review, as he knows. We localised about £200 million of the social fund to councils so that they could deal with the problems people face directly. We also kept the remaining money, so a total of about £1 billion goes out to all sorts of things, such as funeral payments, support for loans and support for people in hardship. This is a big push by the present Government to help people ahead of payday lenders.

[Kate Green (Stretford and Urmston) (Lab)]

Last week the BBC reported that just 6% of households affected by the bedroom tax had managed to move. Also last week, a report from Real Life Reform showed that nearly eight out of 10 tenants hit by the bedroom tax were in debt, with borrowing increasing by an average of £52 each week and families increasingly relying on loan sharks. Rather than preaching about careful budgeting, why do Ministers not just scrap this hated and unworkable tax, which is sending people spiralling into debt?

[Mr Duncan Smith]

It is interesting that the Opposition and the hon. Lady take the view that people moving is a bad thing. Let me just tell her—[Interruption.] It is interesting that they say that, but 30,000-plus people—I will repeat that: 30,000 people—who were in overcrowded accommodation have now had the opportunity for the first time to move into houses where they are not overcrowded. The hon. Lady and the Opposition left us with a quarter of a million people in that position—250,000—so in 10 months over 10% have had the opportunity to move and we are saving over £1 million a day. I call that a success.

[Karl Turner (Kingston upon Hull East) (Lab)]

6. What steps he plans to take to tackle long-term unemployment.

[Ben Gummer (Ipswich) (Con)]

13. What steps he plans to take to tackle long-term unemployment.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

Those at risk of long-term unemployment are given personalised support through the Work programme. Industry figures show that it has moved half a million people into work. Jobseekers returning from the Work programme will get extra support through our new help to work scheme.

[Karl Turner]

Through the hard work of the Labour-led council and the three Hull MPs, Siemens has now said, “Hull, yes,” to a joint investment, with Associated British Ports, of £310 million, which will create 1,000 jobs, but this is not a silver bullet. We have a long-term unemployment crisis in my city. Will the Minister now support Labour’s job guarantee for the long-term unemployed?

[Esther McVey]

I am glad to see that the hon. Gentleman is taking full credit for the Siemens move, but I would like to think that the long-term economic plan and everything this Government have done for the last year should take some credit too. Equally, long-term unemployment in his constituency is down 20% on the year, while long-term youth unemployment in his constituency is down 34%, so I would say that what we are doing is right. Our long-term economic plan is right and I am glad that Siemens is in his constituency.

[Ben Gummer]

It is a fact that every Labour Government since the war have left office with unemployment higher than when they came in. That is why I am particularly proud that unemployment, both youth and total, is lower than when we came into office in 2010. We have a particular issue with long-term unemployment in Ipswich. What will my right hon. Friend do to ensure that when we leave office—in the long distant future, I hope—long-term unemployment will be lower than when we took office?

[Esther McVey]

My hon. Friend is correct, and he is meticulous in his homework and his figures and in everything he does. I would also like to explain to the House that long-term unemployment in the UK is half that of the eurozone—the figure is 2.7%—so what we are doing is right. Let us not get out of office, because when we are in office we run the country a lot better.

[Stephen Timms (East Ham) (Lab)]

The hon. Member for Ipswich (Ben Gummer) is absolutely right. Last year, the number of people who had been unemployed for more than two years reached a higher level than at any time since 1997. It then started to fall, but last week—contrary to what the Minister said a minute ago—it went up again. Does she accept that long-term unemployment is a terrible waste of human and economic potential, and will she now introduce a compulsory job guarantee for those who have been receiving jobseeker’s allowance for more than two years?

[Esther McVey]

It seems that the Opposition never really learnt anything. They want to introduce the future jobs fund and traineeships, for instance, because they enable them to manipulate the figures. They can take people off long-term unemployment and start the clock ticking again, but the figures that they give are unreal and untrue. We are ensuring that we measure the levels correctly, and that there is an honest assessment of what is happening to unemployment, including long-term unemployment. I can tell the Opposition, without fiddling any figures, that it is coming down.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

The corollary of long-term unemployment is the problem of hard-to-fill job vacancies. Can my right hon. Friend give me the most recent figures for the Thirsk, Malton and Filey travel-to-work area, and can she tell me what the Government are doing to place people in the care jobs which are so important to the community but so difficult to fill?

[Esther McVey]

My hon. Friend will be pleased to know that we are introducing sector-based work academies. When people are nearly job ready, and when businesses in the care sector have jobs to provide, we bring young people together and give them work experience and training, and a guarantee of a job interview at the end of that. Forty per cent. of those young people are being given jobs in the care industry.

[Ian Swales (Redcar) (LD)]

7. What assessment he has made of the effectiveness of the benefit cap.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

12. What assessment he has made of the effectiveness of the benefit cap.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The benefit cap is working. The latest statistics show that 39% of those who are no longer subject to the cap have since moved into work. We will evaluate the policy thoroughly, and expect to publish the findings in the autumn.

[Ian Swales]

The average yearly pay in my constituency is about £21,000 before tax and national insurance. Does the Secretary of State think that a benefit cap of £26,000 gives people outside London an incentive to work?

[Mr Duncan Smith]

The introduction of the benefit cap meant that, for the first time ever, people who were out of work could not end up with more than the average earnings of people who work hard and try to make their way in the world. That was the first stage of the process. Obviously, as with all our policies, we continue to look at it, but I currently have no plans to change the existing levels.

[Stephen Metcalfe]

Given that Members in all parts of the House have now supported a cap on benefit spending, will my right hon. Friend tell us whether he has received any representations on how it is possible to promise to repeal some welfare reforms such as the benefit cap while at the same time avoiding a breach of the overall cap?

[Mr Duncan Smith]

Interestingly, the Opposition voted against the imposition of the benefit cap, which they subsequently claimed to support. Last week they did a U-turn and voted for the welfare cap, which is the overall setting of the level of welfare. They plan to get rid of the spare room subsidy, but they have not told us where they will find the money. So here we go again: it will mean more money in taxes, more money in spending, more money in borrowing, and a bust economy once more.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

9. What progress he has made on the mesothelioma compensation fund scheme; and if he will make a statement.

[The Minister of State, Department for Work and Pensions (Mike Penning)]

I am proud to say that the Diffuse Mesothelioma Payment Scheme Regulations 2014 were passed by the House on 17 March, and the scheme administrator is in place. Applications will be accepted from next month, and we will make the first payments in July, as planned.

[Alison Seabeck]

Can the Minister explain why this morning, following an earlier inquiry on my part, there is nothing on the Department’s website, nothing on the gov.uk website and nothing on the website of Gallagher Bassett, the scheme administrator, although the scheme is intended to be up and running early in April? My constituents who suffer from this disease want to know how to apply. I think that the Minister is cutting it a bit fine.

[Mike Penning]

We may be cutting it a bit fine, but we want to get it right. We do not want people to try to apply before it is possible for them to do so. I find it difficult to understand why any Opposition Member should deny that this is a wonderful scheme that gives hope to people with a disgusting, horrible disease. Those people received nothing previously, which is why the scheme is so important.

[Guy Opperman (Hexham) (Con)]

In a previous profession I represented many victims of this terrible disease and I welcome the fact that the coalition has managed to get approval for the mesothelioma fund on the statute and also secured enhanced damages. Does the Minister agree not only that this will make a very big difference in the north-east, where there is a high prevalence of this disease, but also that the focus now must be on enhanced publicity so all the victims know just what they have to do to get the compensation?

[Mike Penning]

I could not agree more and I was very proud to be able to announce that we will be raising the benefit to 80% of average civil claims. That will give £123,000 to the claimants and their loved ones, plus £7,000 in legal fees, which if they do not spend they can keep; it will not be clawed back in any shape or form. People have waited for this scheme for many years and we will do everything we can to make sure that people who deserve it get it.

[Diana Johnson (Kingston upon Hull North) (Lab)]

10. What assessment he has made of the effectiveness of (a) the Work programme and (b) Universal Jobmatch.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

The Work programme is a success, and industry figures show it has moved half a million people into work. Universal Jobmatch revolutionises the way jobseekers look for work and it has already helped many jobseekers find the jobs they want through the millions of vacancies posted since 2012.

[Diana Johnson]

We recently heard that 60% of jobs on the failing Universal Jobmatch programme are bogus, such as the one for an MI6 “target elimination specialist”, and many of my constituents have been ripped off by criminal scams. With the Jobmatch programme set to be axed, will MPs now get the monthly constituency figures on the number of jobseekers chasing each job, which was removed in 2013, or will that information still be withheld?

[Esther McVey]

Opposition Members just love to run everything down despite the fact that all these things we have put in place have helped a record number of people into work. We introduced a brand-new scheme that was in addition to what people could already do to look for work. More than half a million companies have opened up a scheme within Universal Jobmatch, which is helping millions of people to find work. Whenever we find any businesses that are not correctly adhering to terms and conditions—it is a tiny number—they are removed, but I have to say that this is a terrific addition to help people look for work. Shame on you!

[Chloe Smith (Norwich North) (Con)]

The Minister knows of my passion for directly tackling youth unemployment in my constituency. Could she also tell me a little bit about what she is doing to help older workers find work, particularly using the tools referred to in the question?

[Esther McVey]

My hon. Friend does so much in her constituency to try to find young people jobs, such as setting up a scheme to find 1,000 of them jobs. She is doing that incredibly well and that task has nearly been completed. She is right that we have to help people of all ages. Yes, we put a £1 billion Youth Contract in place to help young people, but we have got to help people of all ages to get into work, which we are doing, whether through a new enterprise allowance, sector-based work academies, job clubs or Jobs First, and I can only reiterate that record numbers of people are in work.

[Mr Frank Field (Birkenhead) (Lab)]

As somebody who supports Jobmatch, may I ask the Minister whether she shares my concern that some of our constituents have been ripped off by those who are acting fraudulently? What steps has she taken to safeguard this scheme, which most of us support?

[Esther McVey]

The right hon. Gentleman, my constituency neighbour, is right in saying that 14 job- seekers —out of the millions a month who are looking for jobs through the scheme—were asked to pay for a Criminal Records Bureau check. The DWP is now working with them. Ten have put in for a compensation claim, and we are helping them to sort that out. If there is a bogus job or one that does not adhere to the terms and conditions on Universal Jobmatch, it is removed immediately. However, despite that one company, more than half a million companies are putting jobs up on the scheme to help people into work. I think we can all say that this is a resounding success.

[Lorely Burt (Solihull) (LD)]

The Work programme provides tailored support to the people who are most at risk of becoming long-term unemployed, at a fraction of the cost of Labour’s flexible new deal. Companies such as EOS in my region have been successful in helping people in that way. Does my right hon. Friend agree that we should be supporting the programme, rather than criticising it as the Labour party is doing?

[Esther McVey]

My hon. Friend is right. Of course we have to support schemes that work and of course we have to support businesses that want to get involved with our scheme. What is interesting is that we have got industry signed up to everything we do. All the big companies and all the small companies are signed up to what we want to do. The Opposition have come forward with a job guarantee, but not one business has signed up to that.

[Steve Baker (Wycombe) (Con)]

11. What recent assessment he has made of the effect of withdrawing crisis loans on homeless people wishing to raise rent in advance to secure housing.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Crisis loans have been withdrawn, but DWP budgeting loans are still available for rent in advance. There is also a range of support available through local authorities, including discretionary housing payments and local welfare provision, and, as I am sure my hon. Friend knows, there is a rent deposit scheme in his constituency administered by Wycombe district council.

[Steve Baker]

I am most grateful to the Minister for his answer. Unfortunately, Wycombe Homeless Connection has stated categorically that the withdrawal of crisis loans has made it much harder for homeless people to get into flats and homes. Will he write to me to tell me exactly what he expects from Wycombe district council, so that we can ensure it is properly guided? May I also point out that I would support the Department restricting certain benefits to the wealthiest pensioners if that would enable homeless people to get off the streets and into homes?

[Steve Webb]

I am sure that my hon. Friend would want us to stick to the terms of the coalition agreement, which commits us to protecting pensioner benefits for the lifetime of this Parliament. However, he is right to say that we have to do right by homeless people, and I welcome the fact that the December quarter’s homeless acceptance figures were down by 5% compared with a year earlier. That covers the period in which the change was made, and there are now about 50,000 homeless acceptances a year, which is about half the level that we saw in the early years of the Labour Government.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Minister find, as I do in my constituency, that when people in his own constituency get into a real crisis, the help that they used to be able to draw down is no longer there and that the community and third sector groups and charities are underfunded?

[Steve Webb]

On the contrary, the money that we were spending on crisis loans and community care grants, amounting to more than £170 million a year, has been devolved in full to local government. The hon. Gentleman should take the matter up with his local authority if is not spending it properly.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

14. How many IT specialists are working on the digital solution to universal credit.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

We continue to build up the Department’s digital capability, having launched the Government’s first digital academy and brought in a man called Kevin Cunnington, who was previously global head of online at Vodafone. Some 370 people are working full time on the universal credit change programme. The aim of any multidisciplinary team is that individuals should come and go, reflecting requirements at each stage. A team of 50, of which 25 are digital specialists, is currently working alongside other experts, and it is steadily building and on track.

[Chi Onwurah]

It is my understanding that the Secretary of State plans to continue the development of the existing, discredited universal credit IT system while building a new system in parallel, on the recommendation of the Government Digital Service. Will he confirm whether that is the case, and set out how much extra that double development is going to cost? Also, how is he going to recruit the skills he needs, given the current shambles?

[Mr Duncan Smith]

First, on the skills side, we have been recruiting and we have also been educating internally at the DWP, which has been a big success. The digital process, which is about improving this, will carry on. It is the development that was recommended for the longer term. In the meantime, the live service is running, and the system is not discredited. It is working, with the pathfinder rolling out through the north-west, and it will continue to roll out. The vast majority of the equipment being developed in that will be used within the digital system, so those who say that the money being spent on that is being wasted are simply wrong. It will be used in the medium and longer term for all of the universal credit roll-out.

[Charlie Elphicke (Dover) (Con)]

In developing universal credit and its IT system, what lessons have the Government drawn from IT projects conducted by the previous Government?

[Mr Duncan Smith]

The reason why we are doing this in a way that tests it at each stage, so we make sure we have got it right before rolling it out and taking more numbers on board, is because we want to make sure that taxpayers’ money is protected through this process and that the system works. I recall, as I am sure my hon. Friend does, that when the Labour Government launched tax credits it was a total disaster; we had loads of people in our surgeries with real problems relating to payments. This Government will never revisit that, which is why I will never accept any advice from the lot who wasted billions on failed IT programmes.

[Chris Bryant (Rhondda) (Lab)]

I know the Secretary of State loves to argue that black is white and white is black, but how on earth can he possibly stand here and suggest that this project is “on track”? The Government promised that 1 million people would be on universal credit by tomorrow—by 1 April this year—but how many are on it? He said at the beginning of the month that there were 6,000, but the figures given by the Minister of State, the right hon. Member for Wirral West (Esther McVey), show that fewer than 4,000 are. So precisely how many people are working on the IT? Is it 50, as the Secretary of State just said, or is the figure eight, as the Minister of State said earlier this month?

[Mr Duncan Smith]

I know the hon. Gentleman likes to get up and speak, but sometimes he needs to be aware of the facts that have been given to him. I have just given those facts, but because he was not listening I will give them again. Of the team of 50 working on the digital system, 25 are digital specialists—there will be more as we develop it and report back. May I simply say that instead of moaning about this system, Opposition Members might like to visit it, as many other MPs have done, because they will see how successful its rolling out has been? Some 90% of the claims for JSA as a result of universal credit are now made online, and 78% are monthly payments—these are people confident to receive those payments. [Interruption.] The reality is that the systems the Labour Government implemented were failures, whereas this will succeed and change many people’s lives.

[Mr Speaker]

Order. Mr McCann, I say to you in all courtesy and in all charity that the role of the Parliamentary Private Secretary—you are sitting in the PPS slot—is to nod and shake the head in the appropriate places, and to fetch and carry notes, not to shriek from a sedentary position or gesticulate in an unseemly manner.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will my right hon. Friend confirm, and remind the House, that universal credit is set to deliver £35 billion of benefit to our economy?

[Mr Duncan Smith]

Yes, I agree with my hon. Friend on that. The National Audit Office report said that a minimum of £38 billion would actually be the positive elements brought to the UK economy and those who are in need. The real problem is that the Opposition say they support it, but they carp about it. The reality is that every change they ever brought in was a failure. They wasted billions of pounds of taxpayers’ money. We will implement this carefully and because of that, people will benefit, rather than suffer, as we all recall they did when Labour introduced tax credits.

[Mark Pawsey (Rugby) (Con)]

15. What recent assessment he has made of the effect of universal credit on employers.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The Department has consulted widely with employers over the past 12 months to ensure that universal credit works in the best way possible for them. The Minister with responsibility for welfare reform recently met national employers, trade bodies and employer representative groups, and we know that universal credit will have a positive impact on employers through the flexibility it brings to their work force—unlike tax credits.

[Mark Pawsey]

I thank the Secretary of State for that answer. He will be aware the Rugby jobcentre is among the first six offices to introduce universal credit. Will he join me in complimenting the staff there on achieving a successful roll-out in a complicated procedure? Given recent concerns about child care, will he reassure the House about the availability of child care support under universal credit for families in work?

[Mr Duncan Smith]

I am grateful to my hon. Friend for raising that issue, because under universal credit we will increase the child care level to 85% of the cost. We will be investing a further £400 million a year in a steady state, and 500,000 families will gain. These are positive incentives to go back to work. Child care costs are now paid up to a maximum of £646 per month for one child and £1,108 for two or more children. In universal credit we are removing the 16-hour rule, which exists in tax credits and is a major disincentive for many lone parents and others to take jobs—that has been abolished, and some extra £200 million will help 100,000 families back into work.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

17. What recent assessment he has made of whether the UK will meet the 2020 statutory child poverty target.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The Government are committed to the Child Poverty Act 2010 and to ending child poverty by 2020. It is not possible accurately to project child poverty figures, but already we are seeing progress in tackling the root causes. Just last week, we learned that there are now 290,000 fewer children living in workless households compared with 2010, and that has a net impact and effect on child poverty.

[Catherine McKinnell]

The Secretary of State mentions reducing the number of children in workless households, but today child poverty is overwhelmingly a problem for working families. Since 2010, the number of parents who work part time but who want to work full time is up 45%. What are the Government going to do about the prevalence of low-paid insecure work that is trapping families in poverty?

[Mr Duncan Smith]

The last figures that covered people who were in work and in poverty were misrepresented by those who talked about them. In truth, those figures reflect what happened under the previous Government, when we saw an increase of 500,000 families who were in work and in poverty. That has been flat since the election. We are working on that to ensure that we get as many people out of poverty as possible. The reforms that we are changing and making to get people back to work, which the Minister of State, my right hon. Friend the Member for Wirral West (Esther McVey) has talked about, will have a huge impact on those who are in poverty now.

People are better off in work. Despite what Labour did, people have more chance now to change their circumstances and more likelihood of coming out of poverty. Let me remind the hon. Lady of one little fact. Labour spent £175 billion of taxpayers’ money on one benefit—chasing a child poverty target that it simply did not achieve. That was wasted money.

[Mary Macleod (Brentford and Isleworth) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

We were pleased this week to find elements of—that new families formed were no longer breaking up. These figures came out last week to ensure that we are making our programmes work for very good reasons. Families are now staying together. Stable families in households being able to—[Interruption.]

[Mr Speaker]

Order. May I gently interrupt the Secretary of State? I thought that he was going to give a brief rundown of his departmental responsibilities in answer to the first topical question.

[Mr Duncan Smith]

I was talking about the figures that came out last week on new families forming and staying together.

[Mr Speaker]

That is what the right hon. Gentleman was seeking to do?

[Mr Duncan Smith]

indicated assent.

[Mr Speaker]

We are grateful. We will leave it there for now.

[Mary Macleod]

May I thank my right hon. Friend for the work that he and his Department are doing in transforming lives and getting people back into work? In preparation for my jobs and apprenticeships fair on Friday, will he confirm the job vacancy figures for both London and Brentford and Isleworth?

[Mr Duncan Smith]

At the end of last week, there were 927 active vacancies and 1,493 active jobs in the Brentford and Isleworth constituency. The vacancies were largely in retail, travel, transportation and tourism. The jobcentre has also worked with Asda and Premier Inn to deliver work experience and sector-based work academy opportunities.

[Rachel Reeves (Leeds West) (Lab)]

Just 46% of disabled people are in work, while 40% of disabled people not working report that they want to work. Helping disabled people into work provides them with security and dignity as well as helping control the costs of social security. Will the Secretary of State tell the House what proportion of disabled people referred to the Work programme get a job?

[Mr Duncan Smith]

The Work programme has been successful for those who are furthest from the labour market. The group of people the hon. Lady is talking about who suffer from sickness and disability have, for the first time, been worked with and helped back into work. The figures that we are seeing now are slower than we would have wished, but they are, none the less, improving all the time. Let me remind the hon. Lady that no one has ever attempted to get these people back into work. The Work programme is succeeding in helping into work those who were never in work before.

[Rachel Reeves]

The truth is that just 5% of disabled people on the Work programme end up in work. If that is a success, I would like to know what failure is. It is worse than doing nothing. It is a disgrace to let disabled people down in such a way. In the Budget, spending on employment and support allowance was revised up by a staggering £800 million because of delays, incompetence and the complete failure of the Work programme. Will the Secretary of State now agree to take action to help disabled people and give them the support they need and reform the failing Work programme?

[Mr Duncan Smith]

Let me remind the hon. Lady that, as I said earlier, for these people, and the previous Government made no effort whatsoever to get them back to work—[Interruption.] No, 2.5 million people were written off on sickness benefits under the previous Government. No one worked with them and about 1 million were left without anybody seeing them for nearly 10 years. That is the record of the previous Government. I simply remind the hon. Lady that since we came to power, some 22,000 have started a job for the first time and many thousands more have worked with the Work programme to get ready for work without a requirement to go to work. The programme is succeeding and improving all the time and this is the first time that the thousands who are going back to work have ever had help—they got none from the previous Government.

[Henry Smith (Crawley) (Con)]

T2. What is my right hon. Friend’s assessment of how the Government’s triple lock guarantee for increases in the state pension has benefited thousands of pensioners in my constituency and across the country?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I am grateful to my hon. Friend for flagging the fact that we have increased the basic state pension by whichever of earnings, prices or 2.5% gives the best outcome for pensioners. Compared with the earnings link, which we think the Opposition would have restored from 2012, that is an extra £440 a year in state pension for pensioners in our constituencies.

[Gavin Shuker (Luton South) (Lab/Co-op)]

T3. A constituent of mine who is on jobseeker’s allowance wrote to me to ask for financial support to get feedback on her interview technique to find where she was falling down at interview. Instead, I gave her a mock interview and, I hope, some helpful feedback. She says of the jobcentre, “I have asked umpteen times for interview practice, but all I get is directed to tips on the web.” Why can that not be provided by the jobcentre?

[The Minister of State, Department for Work and Pensions (Esther McVey)]

I would like to know which jobcentre that was. I know, as I go to jobcentres all the time, how caring and supportive the advisers are. They take as much time as necessary, particularly with the claimant commitment we have rolled out across the country, to find out what skills, tips and support claimants need. I know that that is working, which is why we have record figures. I shall take the issue up, however.

[Dr Julian Huppert (Cambridge) (LD)]

T8. A number of my constituents have contacted me to say that they are having to wait six months or even longer for an assessment for employment and support allowance or the personal independence payment. Surely that is unacceptable. What will the Minister do to make sure those people get assessments that are both accurate and prompt?

[The Minister of State, Department for Work and Pensions (Mike Penning)]

There are two separate answers to that question. On WCA, Atos is leaving and we will bring in a new contractor before moving to multiple contractors to ensure that the suppliers can do what is said on the tin, all without paying a single piece of compensation to Atos—[Hon. Members: “Hear, hear.”] Exactly the opposite, actually—Atos will be paying it to us. Secondly, PIP is being rolled out. We need to ensure that we get it right, as the hon. Gentleman said, and we will make sure that we get it through quicker. We need to make sure that the assessments are correct rather than making mistakes.

[Julie Hilling (Bolton West) (Lab)]

T4. My constituent, Lyn Ward, has had a lumpectomy, a mastectomy, chemotherapy and radiotherapy. Eleven months later, she is still waiting for her PIP assessment and in desperation has gone back to work, even though she is not yet fit. When will that be sorted out?

[Mike Penning]

As I said to the hon. Member for Cambridge (Dr Huppert), we need to make sure that we get it right as we roll out PIP. The hon. Lady can give me the details of the case if she would like. Thousands of cases have been handled correctly, and if there are mistakes we must ensure that they are addressed.

[Steve Baker (Wycombe) (Con)]

T9. What recent assessment has the Secretary of State made of the innovation fund in helping disadvantaged young people?

[Mr Duncan Smith]

The innovation fund, which started with £30 million put in by my Department, has helped to build up the concept for social impact bonds, which will help to invest in the sort of projects that my hon. Friend is talking about. The trials have been to help children from the ages of 14 to 16 to get remedial education and to be job-ready. That has been a huge success and we will in due course publish the figures, but it opens the marketplace to new money from private investors and trusts.

[Dame Anne Begg (Aberdeen South) (Lab)]

Last week, the Select Committee on Work and Pensions published a report that recommended that the backlog for the PIP assessment should be cleared before the Government continued with the migration from the disability living allowance to PIP. Will the Government accept that? Will the fact that Atos has now lost the contract for the WCA have an impact on PIP? What action has the Minister taken to speed up new claims for PIP?

[Mike Penning]

Atos leaving the WCA contract will have no impact on the PIP part of the contract. We are making sure that we speed it up as we go. Interestingly, as the Chair of the Select Committee knows, I have turned off the tap on reassessments so that we get the initial backlog done first. The backlog is taking too long, in my own Department as well as in the two providers, but we will get it right.

[David Rutley (Macclesfield) (Con)]

Given the German Government’s determination to clamp down on EU migrant benefit abuse, does my right hon. Friend agree that there is growing support among key EU member states for this Government’s agenda on this vital issue?

[Mr Duncan Smith]

Yes, there is huge support in other countries. Recently, Mrs Merkel, the Chancellor of Germany, said:

“There is a need for clarity: who is entitled to claim social security in Germany, and under what conditions.”

The Deputy Prime Minister of the Netherlands, among others, has said exactly the same. I am in discussions with many of my counterparts across Europe to make sure that we, as individual independent nations within the EU, will be able to impose the conditions we require to stop migrants coming here just to get better benefits than they would in their own country.

[Mrs Mary Glindon (North Tyneside) (Lab)]

With thousands of PIP claimants waiting six months or more for even their medicals before they get anywhere near any money, will the Minister say exactly what penalties he is imposing on Atos and Capita for failing so abysmally?

[Mike Penning]

As I said in my previous answer, it is not just Atos and Capita that are too slow. They are under a contractual obligation to the Department and I am enforcing that contract, so where they are asked for compensation we will get that compensation.

[Tim Loughton (East Worthing and Shoreham) (Con)]

One of the most satisfying ways for people to get into work is often by setting up their own businesses. I am always impressed by the young entrepreneurs mugging me in my constituency to buy something from their new business. Will my right hon. Friend update us on the progress of the new enterprise allowance, in particular on how it is helping our younger entrepreneurs?

[Esther McVey]

My hon. Friend obviously has very enthusiastic young constituents with vibrant businesses. He is right that the new enterprise allowance is helping young people aged 18 to 24, some 7% of whom have set up their own businesses. I have said that we are creating a new enterprise generation, as shown by the 2,000 new businesses a month, 7% of which are set up by those aged 18 to 24.

[Mr Dave Watts (St Helens North) (Lab)]

Following last week’s Budget, will the Minister assure me that if people exhaust their pension pots they will still be entitled to the full range of pensioner income-related benefits?

[Steve Webb]

Unlike the Labour party, we actually trust people with their own money. The people we are talking about have saved frugally for their retirement; they are not the sort of people to blow the lot. We will, of course, look at all the rules on capital in our Department and in the Department of Health in the light of the announcement to ensure that they are up to date, but I think the hon. Gentleman’s view that older people will blow the lot is far from the truth.

[Robert Halfon (Harlow) (Con)]

Is my right hon. Friend aware that unemployment in Harlow is now 600 lower than it was at the general election, and that the number of apprenticeships in the past year has gone up by 86%? Will my right hon. Friend pay tribute to the Jobcentre Plus and the agencies that are working well with the Government’s Work programme to improve the unemployment and skills situation in Harlow?

[Esther McVey]

My hon. Friend is right to mention the people who work tirelessly to help people into work. All the staff at the Jobcentre Pluses, all the benefit staff and all those who work on the Work programme dedicate so much of their time to something that they believe in: getting people into work.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Frankly, the answers that Ministers have given so far on the Work programme defy belief. How can Ministers be satisfied with a Work programme where the latest data show that only one in five people, having spent two years on the programme, go on to secure a job that is sustained?

[Esther McVey]

I will give the hon. Gentleman the figures: 1.5 million people are now receiving support that they have never received before, and half a million of those have got a job. More than 252,000 of those who have been long-term unemployed now have a lasting job. The hon. Gentleman might not think that that is very good progress, but I would say that it is revolutionary: it is turning people’s lives around. I meet those people and they say, “You know what, I thought the world had given up on me, but not now. I’ve got a job and I can support my family.”

[Duncan Hames (Chippenham) (LD)]

I congratulate the Pensions Minister on the radical reforms he announced last week, which will be warmly welcomed by the retired secondary cancer patient whose case I raised with him before the Budget. How soon will people like her be able to get their hands on what is, after all, their own money?

[Steve Webb]

I am grateful to my hon. Friend, who did indeed raise the issue with me before the Budget. Short-term changes came into effect last week to raise the limits on things such as draw-down and, in the jargon, trivially commuting small pension pots. Legislation will go through for much greater liberalisation to come into effect in April 2015.

[Natascha Engel (North East Derbyshire) (Lab)]

We read in The Guardian—it must be true—that the Secretary of State is considering charging for appeals against DWP decisions. If someone has their benefits stopped, with what money are they supposed to pay to get justice?

[Mike Penning]

That is a matter for the Secretary of State for Justice, but we have no plans whatsoever to charge for appeals or tribunals.

[Mr David Nuttall (Bury North) (Con)]

Does the Secretary of State agree that, when it comes to a jobs guarantee, in the real world there is no such thing as a guaranteed job and that new, genuine jobs can be created only by growing companies?

[Mr Duncan Smith]

What is interesting about the Opposition’s view of a jobs guarantee is that their future jobs fund failed. We have introduced work experience, which costs a tiny proportion of what the future jobs fund cost—some £300, as opposed to £6,000 or nearly £7,000 a job—and as many people get into work and come off benefit as did under the future jobs fund. Labour’s make-work schemes do not work, but our schemes, which get private sector employers to help, do. We are getting people back to work.

[Bill Esterson (Sefton Central) (Lab)]

More than 15,000 people in my constituency, which is over 40% of those in work, earn less than the living wage. For millions of people the employment figures hide the reality of underemployment, zero-hours contracts and part-time, low-paid and insecure work. I wonder whether the Secretary of State can tell me how many of his constituents earn less than the living wage.

[Mr Duncan Smith]

I never heard Labour Members moan much about the living wage when they were in government, but all of a sudden it becomes an issue. The reality is that we are doing more to get people back to work, which gives them a chance to improve their living standards and incomes. The reality is that I took the decision to ensure that my Department pays the living wage, including to the cleaners. The Opposition never did that. I think that we stand ahead of them in that matter.

[Philip Davies (Shipley) (Con)]

Has the Secretary of State noticed that when the spare room subsidy was first removed the Opposition and their mouthpiece of choice, the BBC, complained that too many people would be removed from their homes, yet last week Labour BBC was complaining that too few people have been removed from their homes? In the interests of fairness, surely taxpayers not on housing benefit who cannot afford a spare bedroom should not be expected to pay for a spare bedroom for people on housing benefit.

[Mr Duncan Smith]

The first and principal point is that this programme is saving over £1 million a day for hard-pressed taxpayers, many of whom, as my hon. Friend said, cannot afford a spare room themselves but were paying taxes to subsidise those who had spare rooms. The second point is that over 30,000 people who were once in overcrowded accommodation, left behind by Labour in terrible conditions, are now moving into better houses. This programme is a success. The Opposition did nothing about those people the whole time they were in government.

[Mrs Anne McGuire (Stirling) (Lab)]

In my constituency the waiting time for PIP assessments is now 26 weeks. [Interruption.] After further investigation, I discovered that that is because of a lack of suitable accommodation in which to carry out assessments. Why was a contract signed with Atos when there were no suitable premises in my constituency in which to carry out PIP assessments?

[Mike Penning]

I find it very hard to listen to that from a former Minister in the Government who signed the original contracts with Atos, and who seemed very happy with it at the time. We have removed Atos from that work. I will look into the particular situation the right hon. Lady refers to, but I find it very difficult when Opposition Members hark on about what to do about Atos when it was they who employed it in the first place.

[Mr Speaker]

I cannot identify the individual involved—I would not be in a position to do so—so I will simply tell the House collectively that blowing one’s nose underneath a microphone is a distinctly risky enterprise.

Petition

Monday 31st March 2014 Commons Chamber

Jacob Rees-Mogg (North East Somerset) (Con)

- Hansard - - Excerpts

I am very pleased to bring to the House a petition brought to me by the mayor of Midsomer Norton, among others, that has been signed by so many people, so numerous as the stars in the heaven and as the sand which is upon the seashore.

The petition states:

The Petition of residents of North East Somerset,

Declares that the Petitioners believe that while the principles of the National Planning Policy Framework (NPPF) are worthy, its implementation has led to negative consequences that were not anticipated; further that the Petitioners believe that when the Planning Committee of a local authority, which has a draft Core Strategy, refuses a planning application on strategic grounds, the application is often allowed on appeal by the Planning Inspector on the basis of non-strategic, site-by-site considerations; and further that the Petitioners believe that as a result, unsustainable development in the Somer Valley is being approved on sites often remote from employment and transport infrastructure, in accordance with the priorities and interests of developers rather than the carefully researched and democratically agreed plans of the Local Authority.

The Petitioners therefore request that the House of Commons urges the Government to take the necessary steps to allow Planning Inspectors at appeal hearings to take into account and give great material weight to the cumulative effect of proposed developments; further that the House requests that the Government allows Planning Inspectors to interpret the sustainability principle in the NPPF on an area rather than merely on a site specific basis and further that the House requests the Government to take the necessary steps to allow Planning Inspectors at appeal hearings to give weight to the strategic proposals of a draft Core Strategy while it is going through the lengthy approval process.

And the Petitioners remain, etc.

[P001340]

Yarl’s Wood Immigration Centre (Detainee Death)

Monday 31st March 2014 Commons Chamber

15:35

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

(Urgent Question): To ask the Home Secretary to make a statement about Yarl’s Wood.

[The Minister for Security and Immigration (James Brokenshire)]

I am sure that the whole House will join me in offering our very sincere condolences to the family of the woman who died at Yarl’s Wood yesterday. This was tragic news, and I was certainly very sorry to receive the information. The House will understand that what I can say at this stage is limited.

The established procedure in this situation is to bring in the police to look at the circumstances. Bedfordshire police are currently leading that work. No cause of death has yet been established. Once police inquiries are concluded, the established process is that the prisons and probation ombudsman will begin an investigation. That will happen in this case. However, our focus in the immediate aftermath must be to support the family and to keep public comment to a minimum until the circumstances of yesterday’s sad news become clearer.

Following any death in detention, we ensure that detainees are offered counselling and access to a support plan. We review the detention of any individual in the centre who is considered to be vulnerable and ensure that they are given appropriate support. That also applies to staff working in the detention centre.

What I can say, in general, is that the operation of immigration removal centres is a serious responsibility that falls to the Home Office. Nobody involved in this work is in any doubt about the seriousness of the role. In taking on my role as Minister for Security and Immigration, I made it an early responsibility to visit an immigration removal centre to help me understand fully the range of issues connected to detention in such an environment; I visited Brook House and Tinsley House in February.

Like other immigration removal centres, Yarl’s Wood is subject to oversight from Her Majesty’s inspectorate of prisons, whose most recent report was published last October. There were some key recommendations for the Home Office to review. However, the assessment of the regime in general was that it was improving. I commend to the House Nick Hardwick’s overall introduction to the report, which succinctly highlights the difficult circumstances of women in detention and the improvements that have been made to the regime. The report, and the Home Office’s response to its recommendations, have both been placed in the Library.

The responsibility for the detention of immigration offenders is taken seriously by everyone involved; I underline that it is a personal responsibility. I hope that the House will understand that it is far too early to draw conclusions at this stage and that to indulge in speculation would be distressing to the family and irresponsible, given the seriousness of the issues involved.

Detention and removal are essential elements of an effective immigration system. It is important that our centres are well run, safe and secure and that our detainees are treated with dignity and respect, and provided with the proper facilities. Detainees’ welfare is extremely important, which is why are committed to treating all those in our care with such dignity and respect. The House will be as distressed as everyone to hear of this news and will want the family and loved ones of the lady involved to know that they are in our thoughts and prayers at this difficult time.

[Yvette Cooper]

The whole House will agree with the Minister that the news of a 40-year-old detainee dying in Yarl’s Wood is extremely sad. All our thoughts must be with the family and friends, and it is important that they should get appropriate support.

I welcome the Minister’s response that a full investigation is in place. He will be aware that there are unconfirmed reports that the detainee was initially denied medical assistance. Can he assure the House that all those reports are being fully looked into as part of the police and wider investigations? He will also be aware that there are reports that Yarl’s Wood had turned down offers of help from the local NHS for other women detainees who were distressed after witnessing the death. Is that the case, and what further support was provided to others at Yarl’s Wood yesterday?

The whole House will agree that immigration rules need to be enforced, and that does require deportations. Some people need to be detained in advance of deportations, and that is never easy. The House will also agree that this must always be done humanely, with high standards and safeguards in place. Last October’s prisons inspectorate report on Yarl’s Wood referred to some dismissive responses from health staff within Yarl’s Wood, and research by Women for Refugee Women says that many women detainees felt that they were not believed by health staff and raises concerns about physical and mental health support. What action has been taken about that?

What action have Ministers taken since last year’s deeply disturbing reports of abuse of vulnerable women by Serco employees at Yarl’s Wood, including having sex with women detainees and sexual bullying? We have not yet seen a full investigation into what happened and what action has been taken to prevent it from ever happening again.

The inspectorate has also said that women who had been abused or trafficked are still wrongly detained in Yarl’s Wood. These are clearly very vulnerable women who need support, so what is being done to stop them being detained?

The Minister will be aware of the case of Yashika Bageerathi, who is being placed in Yarl’s Wood just before her A-levels despite the Home Office guidance about not separating families and not moving teenagers just before exams. In the light of the concerns raised, will he personally review Yashika Bageerathi’s case?

Given the continuing concerns about Yarl’s Wood, will the Home Secretary commission a joint inquiry on its operations and the Serco contract by the prisons inspectorate and the independent chief inspector of borders and immigration, and will she then report swiftly back to the House?

I welcome the Minister’s response to the question. He and I both agree that while immigration rules must always be enforced, detainees must be treated humanely, and it is the Government’s responsibility to ensure that both take place.

[James Brokenshire]

I thank the right hon. Lady for the tone of her comments and the points she has made about this tragic incident. I certainly agree that it is important that we have a system that is firm but fair and treats those who are in our immigration removal centres in a humane and appropriate way. That is certainly the standard that I expect, and I know that that view is shared by the Home Secretary and all of us who have responsibility in this regard.

The right hon. Lady asked about the level of support provided to those at the centre. I have spoken to the centre director, John Tolland, about that. He has underlined the fact that there has been increased staffing, increased counselling is being provided, and additional pastor support has been arranged for those at the centre.

I am not in a position to comment on the specific points that the right hon. Lady raised, but I can assure her that they will have been heard by those with responsibility in the police and the inspectorate. Certainly, I would expect all issues to be thoroughly analysed and investigated appropriately, given the nature of this incident.

The right hon. Lady highlighted the issue of medical support and the overall regime at Yarl’s Wood. She will be aware that the chief inspector of prisons, Nick Hardwick, conducted an unannounced inspection of Yarl’s Wood, and it is worth highlighting his concluding remarks. He said:

“Yarl’s Wood has had a troubled past, punctuated by serious disturbances and controversy surrounding the detention of children. This inspection found that the improvements we have noted since the detention of children ended have continued. Nevertheless, despite the good progress made, improvement continues to be necessary.”

I entirely endorse that. There is a need for continued focus to ensure that we see further changes and improvements at Yarl’s Wood. That is something that I will continue to focus on.

On health service support, specific recommendations that were contained in the inspector’s report have been pursued and there has been further analysis of the health support required there. That has been sent to the NHS commissioners.

I reassure the House of the seriousness that we attach to the incident. We expect all issues to be properly investigated and pursued.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Given what we have heard about Yarl’s Wood today, how does it make sense for my constituent, Yashika Bageerathi, to have been detained there for nearly two weeks now, away from her traumatised mother and family? Her plight has been championed by the students at Oasis Academy Hadley school and by over 170,000 people in an online petition. They want her back to continue her studies and to complete her A-levels in May. Given that Home Office policy says specifically that someone who is three months away from sitting a major exam will not be removed, will the Minister order the release of Yashika today and allow common sense and compassion to prevail?

[James Brokenshire]

I know that my hon. Friend has raised concerns about this case and I commend him for his customary focus on supporting his constituents, which he has underlined again in respect of this individual case.

We consider every claim for asylum on its individual merits and this particular applicant was not considered to be in need of protection. The case has been considered carefully not simply by the Home Office but by the courts and tribunals, and has gone through the proper legal process. The decision has been upheld and supported by the courts. Given those circumstances and the extent and level of judicial and other scrutiny, the Home Secretary has indicated that she does not feel that it is appropriate to intervene. That remains our position.

[Keith Vaz (Leicester East) (Lab)]

I associate myself with the comments made by the hon. Member for Enfield, Southgate (Mr Burrowes). The Minister is right to have started an investigation and to await its outcome, but the deaths of Jimmy Mubenga and Alois Dvorzac remind us of how careful we need to be in these matters. Last year the chief executive of Serco wrote to me to say that seven of his employees had been dismissed for inappropriate conduct at Yarl’s Wood over the past few years. Does the Minister agree that even before the inquiry concludes, he needs to contact the private sector companies to remind them that they have a huge responsibility when dealing with people’s lives, that they ought to treat those lives with great care and that they must have staff who are properly trained?

[James Brokenshire]

The right hon. Gentleman has highlighted some significant issues. There have been some shocking and disturbing cases in the past few years and he has referred to them. He will know that there are ongoing police investigations and criminal proceedings in those cases, which makes it difficult for me to comment on any specifics. I underline to him that the Home Office has conducted a review of the methods of restraint and the use of force in the difficult circumstances of removal. The development of new bespoke training packages for escorts during the removal process has been undertaken by the National Offender Management Service. An independent advisory panel for non-compliance management, chaired by Stephen Shaw, a former prisons and probation ombudsman, was appointed to assess the restraint techniques and the safety of the proposed systems. That panel’s work is literally due to conclude in the next day or so and I look forward to its recommendations, because it is important that staff are fully cognisant and trained. Certainly, I underline the key message of holding responsibility for managing those in detention.

[Sarah Teather (Brent Central) (LD)]

During my various visits to detention centres, I have been alarmed by the number of times I have heard from detainees that they have difficulty accessing health care, usually in direct contradiction to the reports being put out by management. The situation is particularly alarming given the number of detainees with serious health problems. The Opposition spokesperson, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), has referred to a report by Women for Refugee Women that highlights the number with particular health difficulties, and we know that those in detention often find that things get worse. What is the Minister doing to get underneath the skin of the data that management put out about access to health, and what is he doing to ensure that those with serious mental health and physical problems are not in detention at all?

[James Brokenshire]

I know that the hon. Lady has taken a close interest in these matters for some time, and I welcome her involvement and question. On the chief inspector’s recommendations for Yarl’s Wood, a health-needs assessment was conducted on behalf of the NHS last August. It has been shared with the NHS more broadly and I will certainly pursue the issues involved. I reassure the hon. Lady that those in detention are held there for the least amount of time practical and possible. Indeed, the advice and guidance on rule 35 reports —with which she will be familiar—have been refreshed and underlined. I certainly take the issue of medical support for those who are in need of assistance extremely seriously, and we will continue to focus on ensuring that appropriate medical support is provided in our immigration removal centres.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

May I also associate myself with the comments of the hon. Member for Enfield, Southgate (Mr Burrowes)?

The Minister talks about the importance of treating detainees with dignity and respect. He will know that, before yesterday’s tragic incident, there has been a growing chorus of concerns about the experience of women in particular at Yarl’s Wood: there are stories of sexual harassment and a number of the women detained have experienced rape or sexual violence in their home countries and have mental health problems. Given those concerns and what happened yesterday, will the Minister commit to meeting Women for Refugee Women so that he can hear at first hand its concerns about its work with the women at Yarl’s Wood?

[James Brokenshire]

Certainly, I would be pleased to have such a meeting to hear the concerns and see whether any specific issues can be applied more broadly to the immigration removal centre system in general. I underline the fact that the chief inspector’s summary report notes that there are daily “individual needs” meetings at Yarl’s Wood to help discuss detainees who are vulnerable or otherwise of cause for concern before removal and they facilitate information sharing about risk. So much of this is about managing risk and highlighting need. Clearly, I want to see further improvements. It is right that there have been changes and advancements at Yarl’s Wood, but more needs to be done and that is why we will continue to keep that in focus.

[Mark Reckless (Rochester and Strood) (Con)]

The House will understand the Minister’s reluctance to comment on particular cases, but does he agree that the general record of the police and the Crown Prosecution Service in these matters shows that there is no culture of impunity in this country for those involved in immigration detention, whether they are in the private or public sector?

[James Brokenshire]

That is why I have underlined the need to focus attention on how removals are conducted. They must be done in the right and proper way, with a sense of respect for those involved. It would be inappropriate for me to comment further in respect of individual cases, but I expect the highest standards to be undertaken. That is why we are also strengthening the training and guidance for those involved, to make sure that the highest standards are met.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

How many of the women detained at Yarl’s Wood have been held for a period of three years or longer?

[James Brokenshire]

I am afraid that I do not have the details to hand, but I am very happy to write to the hon. Gentleman with further information on the duration of detentions at Yarl’s Wood.

[Richard Fuller (Bedford) (Con)]

May I thank the Minister for his thoughtful responses to questions? Many outside observers of Yarl’s Wood would say that its management has improved in the recent past, but however good it is, we are still dealing with some very vulnerable women. Many of them have sought asylum here because they were victims of rape or abuse, and just because they could not prove that to an immigration official does not mean that it did not happen. The current process for detaining women for immigration purposes seems to me to be ineffective, costly and unjust. Will my hon. Friend take the opportunity, after this tragic incident, to bring a fresh pair of eyes to the whole process of the detention of women for immigration purposes?

[James Brokenshire]

I respect the close interest that my hon. Friend takes not simply in Yarl’s Wood, but more generally. I underline the fact that there have been improvements at Yarl’s Wood, and he referred to them. We are seeking to speed up decisions while maintaining high standards in asylum cases and more generally in the immigration system. That is why we took the decision to split the old UK Border Agency, with visas and immigration as a specific command in the Home Office—responding to and accountable to Ministers—to ensure that we improve our decisions and their timeliness.

[Kate Green (Stretford and Urmston) (Lab)]

When previous reports of abuse against women in Yarl’s Wood surfaced, a number of women believed that witnesses and victims were deported early to avoid their cases being followed up properly. Will the Minister absolutely assure the House that all relevant evidence, including witness evidence, will be gathered in the inquiries that he has instituted? When deportations are envisaged of people who might have evidence to offer, will the process be looked at very carefully so that the information is obtained properly?

[James Brokenshire]

It is right and proper that the ongoing police inquiry is pursued, and that the police should follow the evidence where it takes them. That is the right process. Clearly, we will support them in their ongoing investigations to ensure that they reach appropriate conclusions and, once they have finished their criminal investigations, that subsequent investigations are also concluded. I am certainly very clear that that needs to be pursued robustly and clearly to get to the facts of what has happened.

[Bob Stewart (Beckenham) (Con)]

All Members of the House are greatly saddened to hear about the death of a woman in Yarl’s Wood. Many of the people in Yarl’s Wood are likely to be victims of the criminal gangs who got them into this country illegally. What measures is my hon. Friend taking to try to identify and deal with those criminal gangs?

[James Brokenshire]

My hon. Friend highlights an important point about immigration, crime and the trafficking of people into this country, which I have described as the trade in human misery. That is why we will introduce a modern slavery Bill. It is also why the immigration enforcement command in the Home Office is working with the National Crime Agency and others to secure the best intelligence for pursuing the organised criminals exploiting and trafficking people into this country so that they can be brought to justice and feel the full force of the law.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Before the news broke on Sunday morning, someone called me to describe the scene that had been reported to them when talking directly to detainees. This person told me that the mood was panicked and that other women detainees had passed out from shock at what had happened. Will the Minister give me an assurance that additional resources were deployed to help with the situation as early as Sunday morning?

[James Brokenshire]

I can only say that the centre director, to whom I have spoken, has said that additional resources were deployed and that additional support has been given to those in detention. I am sure that all the facts of the case will be pursued and investigated, and that will certainly cover the manner in which the incident was handled after the news broke. The centre director has told me that, recognising the distress caused by this tragic news, reassurance was given to those in detention and that further ongoing support is being provided.

[Dr Julian Huppert (Cambridge) (LD)]

I add my support to the condolences and the plea for common sense in the case of Yashika. There is no doubt that Yarl’s Wood has improved, not least with the ending of child detention, which was simply inhumane—I am glad we have stopped it. However, this country continues to be unique in routinely detaining migrants without any time limit, at huge expense—according to one estimate, it is £75 million. Will the Minister look at alternative, community-based solutions such as in Sweden, which gets a higher returns rate, costs less and is more humane?

[James Brokenshire]

We always look at ways in which detention is minimised. However, in a system in which we seek to remove, detention can and should be a means of managing that process. Certainly, we continue to monitor the situation carefully. I hear the point the hon. Gentleman makes, but there are no easy solutions. Sadly, we need to detain in some circumstances to ensure that our removals process operates effectively.

[Mr Jim Cunningham (Coventry South) (Lab)]

What assessments are made of those women before they go into detention? Is there a medical check on their physical or mental status? How are they assessed?

[James Brokenshire]

Medical support is provided at each immigration removal centre and, when someone arrives, risk assessments are conducted. That was the process I saw on the visit I undertook to an IRC a few weeks back. It is about managing risk and ensuring that issues that need to be identified are picked up at the outset. I hope I can assure the hon. Gentleman that steps are taken when new arrivals appear at IRCs to ensure that issues or any support required are appropriately identified.

[Henry Smith (Crawley) (Con)]

Will the Minister confirm that the Government are making improvements to the way in which the immigration detention centre estate operates, particularly at Brook House, Tinsley House and the family Cedars centre in the Gatwick area?

[James Brokenshire]

I have been to Brook House and Tinsley House to see for myself the operating environment and conditions there. I have seen the focus given to ensuring that immigration removals centres are humane places to be, and that appropriate standards are undertaken. An inspection regime underpins that, but I can assure my hon. Friend of the focus, seriousness and weight of responsibility that the Government feel on such matters to ensure that the regime is continually monitored. Improvements can be made—significant improvements have been made over the past few years, but we need to do more.

[Andrew Gwynne (Denton and Reddish) (Lab)]

In an earlier answer, the Minister referred to a review being conducted by the National Offender Management Service, which is welcome, but on the allegations of inappropriate sexual contact at Yarl’s Wood, what examination is the Minister undertaking of Serco policy, management and staff supervision?

[James Brokenshire]

As I have highlighted, and as the chief inspectorate of prisons report highlights, further improvements are required. Steps have been taken, but serious reports have been made in the past. Yarl’s Wood has a troubled past, but steps have been taken to move it forward. I can assure the hon. Gentleman that I, as a relatively new Minister for Security and Immigration, am focused on seeing that standards are further improved, and on ensuring that our immigration removal centres, which are necessary, do their work in a humane and fair way as part of supporting our immigration policy.

[Greg Mulholland (Leeds North West) (LD)]

The appalling treatment of my constituent, Enid Ruhango, and her room-mate, Sophie Odogo, led to the damning 2006 report by Her Majesty’s inspectorate of prisons. I am delighted to say that the courageous Enid is now living, as she should, as a member of the community in Leeds. Will the Minister tell me and the House exactly what was learned from that report in terms of access to medical treatment and humane treatment during transportation?

[James Brokenshire]

Significant changes and improvements have been made, including to the commissioning functions that the NHS has in respect of providing appropriate medical support in immigration removal centres. We constantly learn from cases as we seek to prevent further tragic incidents. I assure my hon. Friend that we will continue to do that, and I will focus on these issues of medical support in respect of Yarl’s Wood. A report has been commissioned, and I will pursue the matter.

[Charlie Elphicke (Dover) (Con)]

In reviewing this tragic case, will the Minister consider carefully the strong and passionate case that has been made over a long period by my hon. Friend the Member for Bedford (Richard Fuller)? Does the Minister also agree that too many people are in these institutions for too long, including the Dover removal centre, and we should hurry up the processing as much as we can?

[James Brokenshire]

I agree that we should always seek to minimise the time that someone spends in detention, but appeals can often delay matters. The Immigration Bill will reduce appeals from 17 to four. We want to ensure that we have a firm but fair system, and that is what we will deliver.

[Duncan Hames (Chippenham) (LD)]

I wholeheartedly support the appeal made by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes). How can a Government who are rightly proud to have ended child detention for immigration purposes keep an 18-year-old, who is a star pupil at her school, out of the classroom and in detention at Yarl’s Wood? What lessons should her fellow pupils learn from this episode?

[James Brokenshire]

I understand the concern my hon. Friend has expressed. I should just mention that the individual is 19, not 18. This case has been considered carefully by the Home Office and the courts, and it has been ruled that humanitarian assistance is not appropriate. The Home Secretary has indicated that it is not appropriate for us to intervene in such circumstances.

Bill Presented

Recall of Members of Parliament

Presentation and First Reading (Standing Order No. 57)

Zac Goldsmith, supported by Mr Douglas Carswell, Mr Graham Stuart, Mr Dominic Raab, Nick de Bois, Mark Reckless, Mr Frank Field, Kate Hoey, Mr Michael Meacher and Caroline Lucas, presented a Bill to permit voters to recall their Member of Parliament in specified circumstances: and for connected purposes.

Bill read the First time; to be read a Second time on Friday 6 June, and to be printed (Bill 193).

Wales Bill

Monday 31st March 2014 Commons Chamber

[Relevant documents: Fourth Report from the Welsh Affairs Committee, on the Pre-legislative scrutiny of the draft Wales Bill, HC 962, and the Government response which has been deposited in the Library.]

Second Reading

16:07

[The Secretary of State for Wales (Mr David Jones)]

I beg to move, That the Bill be now read a Second time.

The legislation before the House today delivers an ambitious package of devolved powers for Wales, including powers providing incentives and opportunities for the Welsh Government to grow the Welsh economy and increase prosperity; powers making the devolved institutions in Wales more accountable for raising some of the money they spend; and powers that make devolved governance in Wales fairer.

The Government have a strong record on Welsh devolution. We have delivered a referendum on full law-making powers, established the Silk Commission on Devolution in Wales, which has since published two comprehensive reports, and have now introduced the first Wales Bill in more than eight years. The Bill implements most of the recommendations that the Silk commission made in its first report. I wish to record my thanks to Paul Silk and his commissioners for the dedication and hard work with which they reviewed the case for devolving fiscal powers to the National Assembly.

The powers devolved to Wales by this Bill will, for the first time, make the devolved institutions in Wales—both the Welsh Government and the Assembly—directly accountable to the electorate for raising some of the money they spend. The Bill will give the Welsh Government more levers to enable it to deliver sustainable economic growth in Wales. It will also deliver borrowing powers that will allow the Welsh Government to invest more in critical infrastructure, not only in transport links such as the M4 and the A55, but in schools and hospitals.

The Silk commission included commissioners from all four political parties in the Assembly, and reached unanimous agreement on its recommendations. I hope that the same spirit of co-operation and broad consensus will extend to all parts of this House today in respect of the Bill.

Let me turn to the detail of the legislation. The Bill provides that the Assembly will assume responsibility for devolved taxes. These are, initially, a tax on land transactions and a tax on disposals to landfill, replacing stamp duty land tax and landfill tax in Wales. The commission recommended the devolution of both taxes. This will put new economic levers in the hands of the Assembly and the Welsh Government.

[Geraint Davies (Swansea West) (Lab/Co-op)]

What does the Secretary of State say to the Mayor of London, Boris Johnson, who has now asked for stamp duty to be devolved to London, which would give him £1.3 billion? Is this not a charter for the proliferation of all sorts of competitive taxes across different parts of the United Kingdom?

[Mr Jones]

It seems to me that that is a concern of the Mayor of London and does not really fall within the scope of today’s discussion.

Our proposal will put new economic levers in the hands of the Assembly and Welsh Government, while also providing independent streams of revenue to facilitate borrowing. It will help Welsh Ministers to grow the Welsh economy and ensure that its performance has a direct impact on their budget.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

In devolving those minor taxes, the UK Government are conceding the principle of fiscal empowerment for the Welsh Government. Why does the Secretary of State therefore feel the need to require a referendum on devolving income tax?

[Mr Jones]

Simply because it is an important constitutional step. It was given to the Scottish people in 1997, and we feel it is necessary to pay equal respect to the people of Wales on the occasion of the proposed devolution.

[Hywel Williams (Arfon) (PC)]

Is it the principle of devolution or the practice—the specific nature of income tax devolution—that requires a referendum?

[Mr Jones]

Clearly it is the devolution of income tax, and I would remind the hon. Gentleman that this was specifically recommended by the Silk commission.

[Jonathan Evans (Cardiff North) (Con)]

Has my right hon. Friend noticed in recent days—not just from the interventions so far, but from some Labour Back Benchers—the idea that there should not be a referendum and that the matter should be left to a general election, depriving the people of Wales of a vote?

[Mr Jones]

Yes, I have heard that, certainly from those on the Plaid Cymru Benches. I would simply repeat that it is appropriate that the people of Wales have their voices heard on such an important matter.

The Bill also provides a mechanism for additional taxes to be devolved in future, with the approval of both Houses of Parliament and the Assembly. I am pleased that the Bill delivers new borrowing powers to the Welsh Government—again, as recommended by the commission. As for capital borrowing, we are providing the Welsh Government with the ability to borrow up to £500 million to invest in capital infrastructure in Wales. That is a generous limit, allowing the Welsh Government to get going on the much needed upgrade of the M4 around Newport. It also reflects the independent funding streams for which the Welsh Government will assume responsibility through the two devolved taxes and is a limit that can be increased in future if the Welsh Government become responsible for additional taxation, including income tax.

[Alun Cairns (Vale of Glamorgan) (Con)]

Does my right hon. Friend not agree that the project for a new motorway around Newport is essential? There has been far too much delay—it was cancelled by the Labour Administration back in 1997, despite the previous commitment. Today’s announcement is basically the green light for the project to go ahead.

[Mr Jones]

Indeed. I think that everyone in the south Wales business community recognises that the M4 is indeed a foot on the windpipe of the economy and we are anxious to see it upgraded. The competence that we shall be giving the Assembly Government—in fact, we have already extended it to them—will enable them to proceed as quickly as possible with that essential upgrade.

[Chris Bryant (Rhondda) (Lab)]

While we are on infrastructure improvements, the Government here have much boasted that they will be electrifying the valleys lines. Every time they seemed to suggest that they would pay for it, but now it seems they are refusing, so who will actually be paying for the electrification of the valleys lines?

[Mr Jones]

We are skiing somewhat off piste, because that is not within the competence of this Bill, but there is clear correspondence between the Assembly Government and the Department for Transport on how the upgrade would be funded, and it is absolutely clear that the Welsh Government were paying for the upgrade of the valleys lines.

[Owen Smith (Pontypridd) (Lab)]

Does the Secretary of State wish to deny that he said on several occasions that it was his Government who were paying for the electrification of the railways in Wales, including the valleys lines?

[Mr Jones]

What I will say is that we made it absolutely clear that this Government were paying, directly and indirectly, for the upgrade of the main line as far as Swansea and for the valleys lines. I think that if the hon. Gentleman has a word with his friend the First Minister, he will find that there was an exchange of correspondence between the two Administrations which made the funding arrangements very clear, as did an e-mail from the Office of Rail Regulation.

[Geraint Davies]

Will the Secretary of State give way?

[Mr Jones]

No; I will make some progress.

The Bill also provides for a referendum to be held in Wales on the devolution of an element of income tax, should the Assembly decide to call one. The Silk commission recommended that income tax devolution should be subject to a referendum, as it was in Scotland in 1997, and the Government agree with that recommendation. As I have said in the House on several occasions, I should like the Assembly to call a referendum as soon as it is able to do so, and I personally would support a yes vote in such a referendum. It would make the Welsh Government, and the Assembly, significantly more accountable to the people who elect them.

[Stephen Mosley (City of Chester) (Con)]

Has my right hon. Friend been able to give any consideration to the impact that changing tax rates in Wales will have on cross-border regions, particularly the economic sub-region that covers Chester and north-east Wales? Has any assessment been made of what would happen if the rates on the two sides of the border were different?

[Mr Jones]

Indeed. As my hon. Friend will know, there was a separate consultation on that very issue. It is another element that will be taken into consideration during the debate on the referendum.

[Wayne David (Caerphilly) (Lab)]

The Secretary of State has put it on record that in his view the Barnett formula is coming to the end of its life. What progress have the Government made in reforming it?

[Mr Jones]

We have made it very clear that we need to rebalance the finances of this country before we will consider that. Let me remind the hon. Gentleman, however, that in October 2012 there was a specific agreement between the Welsh Government and the Treasury that on the occasion of each spending review there would be an assessment of the issue of convergence, and that is indeed what happened on the last occasion.

[Owen Smith]

The Secretary of State said a moment ago that he would be voting yes and campaigning for a yes vote in a referendum on tax-varying powers. May I take him back to the time when he was a Member of the Welsh Assembly? In his maiden speech, he said:

“We have no tax-raising powers—long may that state of affairs continue.”

When did he change his mind?

[Mr Jones]

That was some 12 years ago, and, of course, we all change our minds. I am sure that the hon. Gentleman changed his mind in the light of his experiences in the Blaenau Gwent election, the first election that he fought.

[David T. C. Davies (Monmouth) (Con)]

As one who has not changed his mind, may I ask whether the Secretary of State was as surprised as I was to read in the Western Mail that Opposition Members are offering to give the Assembly the power to raise income tax by up to 15%—and this only a few years after they all seemed to agree that the Assembly had the tools with which to do the job?

[Mr Jones]

Indeed: a Damascene conversion. The hon. Member for Pontypridd (Owen Smith) is a particular enthusiast—he now believes that 15p should be devolved to the Assembly, whereas as recently as 5 February he clearly stated that he did not believe in any tax devolution at all. He will clearly have some interesting explaining to do later in the debate.

[Owen Smith]

I think that the Secretary of State has just misquoted me. He will know that what I have said previously in the House on several occasions is that I do not believe in tax competition.

[Mr Jones]

The hon. Gentleman changes his mind with astonishing regularity. For example, on 5 February, in a Welsh Grand Committee debate, he said:

“I do not believe for a moment that having additional responsibility for tax-varying powers would confer any extra degree of accountability on the Welsh people.”—[Official Report, Welsh Grand Committee, 5 February 2014; c. 18.]

However, during last weekend’s speech to the Welsh Labour party conference, he spoke glowingly of the prospect of devolving 15p in the pound and said that that would

“increase both the accountability of the Assembly and its borrowing capacity too.”

He is clearly a bit at odds with himself, and we look forward to hearing what he has to say later on.

[Mr Peter Hain (Neath) (Lab)]

Will the Secretary of State explain how, with income tax devolution, Wales will continue to benefit—like, for example, north-east England, a comparable area, does—from the redistribution of income and wealth that comes through the Barnett formula, albeit imperfectly, from the 40% of GDP that exists in London and the south-east of England if income tax is devolved?

[Mr Jones]

That is an important point and it is a matter that would have to be debated in a referendum. My own view, as the right hon. Gentleman knows, is that Wales would benefit from a modest reduction in the rate of income tax, but I have to remind him that all we are talking about is a referendum that would empower the Welsh Government to decide on the rate of tax they want to charge the Welsh people. If they decided they did not wish to do that, there would be no compulsion on them to do so. However, it would provide Wales with an additional borrowing stream referable to the level of income tax devolved. It would also provide a powerful incentive to the Assembly Government to grow the Welsh economy, because clearly the more the economy grows, the more would be the revenue.

[Mr Hain]

I understand the Secretary of State’s point. However, I find it very interesting that he has not got an answer to my question—namely, how would Wales continue to benefit from the vast wealth that exists in a relatively limited area and is redistributed right across the UK? The fact that he does not have a clear answer makes me extremely sceptical about this entire proposal.

[Mr Jones]

Clearly, Wales would not be deprived of Barnett consequentials; the right hon. Gentleman knows that. We would have an additional tool for the Welsh Government to use, should they decide to do so, in growing the Welsh economy. I would have hoped he would be bold, because he has spoken in the past of the need to grow the private sector in Wales. I would have thought a small differential in the rate of tax would be a significant incentive to that private sector growth.

[Mr Hain]

The Secretary of State is being generous in giving way, but this is an important point. The Barnett consequentials will continue to come through from that portion of income tax which remains reserved to the Treasury, but the bit that is devolved under the scenario the right hon. Gentleman proposes would not, unless there was some kind of compensating mechanism which is not described. That is what makes me extremely sceptical about this.

[Mr Jones]

Some of what is passed to the Assembly would be subject to indexation every year. This would take into account both growth and contraction in the wider UK economy, so there is a mechanism built into the Bill that addresses the right hon. Gentleman’s point.

[Mark Tami (Alyn and Deeside) (Lab)]

As the hon. Member for City of Chester (Stephen Mosley) has made clear, this is not just about the Welsh economy; it is about the cross-border economy. Changing tax rates, whether personal or business, will obviously have an impact both sides of the border.

[Mr Jones]

The hon. Gentleman is entirely right, which is why the Government went out to further consultation before announcing their response to the commission’s recommendations. Again, these are points he would no doubt raise in the context of a referendum debate, and given the view he has just expressed, he would clearly be voting against the proposal.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

I congratulate the Secretary of State on introducing this Bill. I approve of virtually all its contents. I was reading a document produced by the Government in March this year on financial empowerment and accountability, and I was greatly heartened to read that if the Welsh rate of income tax is implemented following a referendum, the Government have accepted the Silk commission’s recommendation that the block grant adjustment should be determined using the index reduction mechanism originally proposed by the Holtham commission. If I remember correctly, those proposals were supported by the Labour party. It goes on to say:

“The detailed operation of the system will be discussed with the Welsh Government.”.

Surely that is the assurance that we need to hear and that will make sure Wales gets its fair share.

[Mr Jones]

My right hon. Friend is entirely right. The indexation proposals would amount to a damp, which would effectively smooth out any peaks and troughs in relation to overall UK income and act as a strong reassurance to the Assembly Government. While I am on my feet, I would like to thank my right hon. Friend for her part in commissioning the work of the Silk commission in the first place.

[Wayne David]

Has the Secretary of State resolved his differences with the leader of the Conservative group in the Welsh Assembly on income tax devolution?

[Mr Jones]

The leader of the Conservative group in the Welsh Assembly, and indeed the group as a whole, fully support the legislation before us.

[Owen Smith]

Will the Secretary of State explain how the indexation method works? Has the Treasury done any analysis on whether the Welsh people would be better or worse off if the rates were not amended at all in Wales? At the moment, that is unclear.

[Mr Jones]

It should be entirely clear to the hon. Gentleman, because the Under-Secretary of State for Wales, my hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) took the trouble to write to the Chairman of the Grand Committee, the hon. Member for Gower (Martin Caton), on 10 February, setting out these matters in great detail. I know that a copy of that letter was sent to the hon. Gentleman, and he will know, having read it, that the provisions are as follows:

“In the first year of operation (and any transitional years) the block grant adjustment will equal the amount of tax revenue generated by the Welsh rate of income tax set at 10p. It is important to note the following:

This is the amount of income tax forfeited by the UK Government as a result of reducing the main rates of income tax by 10p in Wales. If the Welsh Government sets a rate of 10p then there will be no impact on their budget compared to current arrangements. By setting a rate of, for example, 11p or 9p the Welsh Government can increase or decrease its budget (respectively) compared to current arrangements, as the block grant adjustment will still be based on the 10p forfeited by the UK Government. That means that the higher or lower revenue resulting from a rate of 11p or 9p (rather than 10p) would not be netted off the block grant.”

[Chris Bryant]

Riveting.

[Mr Jones]

Well, the hon. Member for Pontypridd had not read this letter, so I am reading it out to him. It goes on:

“In subsequent years the initial deduction is indexed against movements in the UK NSND”—

that is, not savings, not dividends—

“income tax base. That means that if the UK NSND income tax base contracts by 2%, the block grant adjustment will decrease by 2%; if the tax base grows by 2%, the adjustment will increase by 2%.”

That should have been absolutely clear to the hon. Gentleman, but he clearly did not read the letter, so I am glad to have had this opportunity to acquaint him with its contents. It clearly contains the reassurance that he seeks.

[Owen Smith]

Will the Minister give way?

[Mr Jones]

No, I will not give way.

Subject to the outcome of a referendum, the legislation provides for the introduction of a Welsh rate of income tax. The main UK rates of income tax would be reduced by 10p for Welsh taxpayers, and the Assembly would be able to set a new Welsh rate—a whole number or half a whole number—which would be added to the reduced UK rates. The rest of the income tax structure would remain a matter for this Parliament.

The Silk commission estimated that reducing the Welsh rate of income tax by 1p would cost the Welsh Government around £185 million, without taking account of any gains resulting from people moving to Wales to take advantage of lower tax rates. That is not an insignificant amount of money, but lower rates of income tax would boost the spending power of working people in Wales and bolster growth in the Welsh economy. Stronger economic growth in Wales could deliver a real boost in tax revenues, providing the Welsh Government with more resources to invest in devolved services and infrastructure across Wales.

Some Opposition Members, most notably the hon. Member for Pontypridd, have suggested that the devolution of an element of income tax is some sort of unspecified coalition trap, set to ensnare the Welsh Government.

[Geraint Davies]

May I ask for clarification on something, because my right hon. Friend the Member for Neath (Mr Hain) talked about the levels up to the current rate? At a marginal tax rate of one extra penny, the gross value added in Wales is 70% that of the UK. My understanding is therefore that the extra penny charged locally in Wales would generate less income than an extra penny charged across the UK and then transferred over to Wales—so we would lose out, would we not?

[Mr Jones]

For the reasons I have explained, there would be no loss. May I remind the hon. Gentleman, as I reminded the right hon. Member for Neath, that there would be no compulsion on the Assembly Government to change the rate of tax? This is simply an issue of whether or not the competence should be devolved. Once it is devolved, it is then a matter for the Assembly to decide what the Welsh rate of tax should be.

[Jonathan Edwards]

The Secretary of State mentioned that one of the main reasons for devolving income tax was to incentivise the Welsh Government, yet he handcuffs them with his proposed lockstep, which was not included in the Silk recommendations. In the unlikely event of a no vote in Scotland, does he expect the lockstep to remain in Scotland following its referendum?

[Mr Jones]

I am not here to speculate on what will happen in Scotland in September, but I will talk about the lockstep in a moment—no doubt the hon. Gentleman will be paying close attention and intervening as he considers appropriate.

The reality is that this legislation—income tax devolution following a referendum—is a real opportunity to be seized with both hands by the Welsh Government. It is an opportunity to make Wales more competitive and to make the Welsh Government more accountable, as the hon. Member for Pontypridd now agrees. Our challenge to those who view the devolution of income tax negatively is not to shy away from this opportunity, but to seize the moment with enthusiasm and support the proposals in this Bill for a referendum on income tax devolution.

The Silk commission recommended that the Welsh Government should be able to set separate Welsh rates of income tax for each of the three income tax bands, but the Government believe that a single Welsh rate for all three bands—the so-called “lockstep”—is the right system for Wales. The same system is being introduced in Scotland under the Scotland Act 2012. The Government have a responsibility to take a UK-wide view: to consider the interests not only of Wales, but of the United Kingdom as a whole, including Wales. If the devolution of income tax is supported in a referendum, the lockstep mechanism would be the best way to maintain a progressive tax system that redistributes wealth across the whole of the UK but does not unnecessarily benefit one part of the UK at the expense of another.

The Bill also devolves responsibility to the Assembly for its own budgetary arrangements, so that it can establish new procedures for scrutinising and setting the annual budget. That was also recommended by the Silk commission, and by the Welsh Affairs Committee following its pre-legislative scrutiny of the draft Wales Bill. The Bill before us today and the Command Paper the Government have published alongside it have benefited greatly from the Select Committee’s thorough and rigorous scrutiny, and I am grateful to all hon. Members on that Committee for their hard work.

Although the majority of the Bill is devoted to fiscal devolution, the legislation also implements a number of other important reforms: it permanently moves the Assembly to five-year terms; it removes the prohibition on dual candidacy; and it makes provision to preclude Assembly Members from simultaneously being Members of this House. Those are all changes which we consulted on in our Green Paper in 2012. The move to permanent five-year terms will make it less likely that Assembly elections will clash with UK general elections, now that the length of Parliaments is fixed at five years. It is important that Assembly elections should be contested, wherever possible, on issues specific to Wales, and the Bill ensures that they will not be overshadowed by the wider issues that often dominate elections to this House.

[Chris Bryant]

The Secretary of State has used the word “accountable” 14 times so far in his speech and has talked about how this Bill will make politicians in Wales more accountable, but it is going to mean that there will be fewer elections. Does that not make them less accountable?

[Mr Jones]

I would not have thought so. By the way, I am grateful to the hon. Gentleman for counting how many times I have used the word “accountable”. That now makes 15. I would have thought that he would be concerned to ensure that Assembly elections were not overshadowed by general elections, and that in my book makes for accountability.

[Mr Mark Harper (Forest of Dean) (Con)]

I am surprised by the hon. Gentleman’s intervention. When the Fixed Term Parliaments Act 2011 was going through this House, it was Labour’s First Minister in Wales who agreed that the date of the Assembly election in Wales should be moved to 2016 so that it would not coincide with the general election. The hon. Gentleman does not seem to be joined up with his own party.

[Mr Jones]

My hon. Friend was involved in that Bill, and he is of course entirely right.

[Chris Bryant]

The thing is, it is the former Minister who is not very joined up with his own memory. At the time, Labour voted for a four-year fixed-term Parliament in here, which would have meant a four-year fixed term for Wales as well. In that way, we would not have had to coincide and we would have had greater accountability. Let us have a general election now, shall we?

[Mr Jones]

As we have five-year terms for general elections, we take the view that we should also have five-year terms for Assembly elections.

The removal of the ban on dual candidacy restores the position to how it was in the Government of Wales Act 1998. I believe that the change is supported by all parties other than the Labour party, which introduced the ban in the first place. The ban on so called “double-jobbing” between the Assembly and this House addresses legitimate concerns about whether it is possible for someone adequately to represent constituents’ interests in two elected legislatures at the same time.

The legislation also implements several changes that have been specifically requested by the Welsh Government, including formally enshrining that name—the Welsh Government—in statute, as it has been common parlance for the Welsh Assembly Government to be so referred to for several years now.

In responding to the Silk commission’s recommendations, the Government made it clear that we were unconvinced by the case for devolving air passenger duty to Wales, so the Bill makes no provision for that. Neither does it make provision for the full devolution of business rates. That is because, in terms of legislative competence, business rates fall within the devolved subject of local government finance and so we need make no further provision in this Bill. In order fully to devolve business rates, the Government are amending current funding arrangements so that the Welsh Government benefit directly from revenues raised by that tax in Wales.

Finally, as I said in my written statement to this House on 3 March, we do not see this Bill as an appropriate vehicle for implementing the recommendations made by the Silk commission in its second report. The commission’s second report raises crucial questions about the future governance of Wales within the United Kingdom, and it would not be right to rush into implementing its recommendations without careful assessment. It is essential that we take the time needed to get things right. Consequently, the Bill is focused on devolving the package of tax and borrowing powers to Wales recommended by the commission in its first report. Including a whole raft of other powers would merely serve to delay the Bill and jeopardise its enactment before the 2015 general election.

The Government believe that devolution should be used to give a competitive edge to Wales, and that powers devolved should be used to grow the Welsh economy and make Wales a more prosperous place. The Bill will deliver that. It will make devolved governance in Wales fairer, more accountable and better able to support economic growth. I hope, and I believe, that we can achieve a broad consensus in this House around this Bill, and make rapid progress. I commend the Bill to the House.

16:38

[Owen Smith (Pontypridd) (Lab)]

This is an important debate and an important Bill. There are four broad issues under discussion. The Secretary of State has described some of them—some in more detail than others. I shall explain to the House why he glossed over some of them. The four areas I want to discuss are the electoral arrangements, the devolution of the minor taxes, the borrowing powers—the amount of borrowing in particular—and the devolution of income tax varying powers for Wales.

Let me start with electoral arrangements, which the Secretary of State glossed over in just a few phrases. The reason for that will become clear. The changes in the Bill include a reversal of the Government of Wales Act 2006 ban on candidates standing both under first past the post and on the proportional representation list in Wales. The reason that the previous Labour Government decided to introduce that ban ought to be well understood by the Secretary of State, as it stemmed from a Tammany hall-style example of an election that took place in his constituency of Clwyd West in 2003. On that occasion, the winning Labour candidate was elected on first past the post, while the losing Liberal Democrat, Conservative and Plaid Cymru candidates were also all elected, by the back door and on the back list—Tammany hall in Clwyd West. The system was designed by an earlier Labour Government, but we decided that it was clearly at odds with democracy in Wales. We decided that the people of Wales would not understand how losers could become winners.

[Jonathan Evans]

How can the hon. Gentleman say that that was by the back door? In essence, he is saying that those people who serve on regional lists are lesser Members of the Assembly than constituency members under a system that his Government introduced.

[Owen Smith]

No, I was not saying that for a moment. I was saying that I thought that the people of Wales looked askance at losers standing on two separate tickets— first past the post and on the list—to get themselves elected. We have seen why the Opposition oppose that; we believe in democracy and we believe in democracy being seen to be done. We also know why the Government want to reintroduce it in Wales and to allow people to stand both under first past the post and on the list. That reason is captured clearly in the explanatory notes to the Bill, which say explicitly that the measure will benefit smaller parties with a smaller pool of candidates—that is, the Tory party in Wales.

[Wayne David]

Does my hon. Friend agree that the proposed change is in danger of giving the impression that there is somehow a political elite whose members are nevertheless elected even when they lose elections?

[Owen Smith]

That is precisely the impression that it gives. The rationale, as I say, is very clear. The policy only benefits the minority parties in Wales—the Tory party, of course, is a minority party in Wales. It specifically benefits Leanne Wood, the leader of Plaid Cymru in Wales, who intends to stand under first past the post and on the list. I put it to the Secretary of State that the people of Wales will not look well on his gerrymandering elections in Wales in this fashion.

[Hywel Williams]

As we have a unified British Labour party, did the hon. Gentleman make those arguments to the Labour party in Scotland, where a Minister was elected on a dual mandate? Did he campaign to get that Minister sacked?

[Owen Smith]

I am not talking about Scotland today; I am talking about Wales. I am talking about the Clwyd West scandal, which the Secretary of State oversaw. I am talking about the fact that this measure is clearly in the interests of the Tory party and nationalist allies, which is why our nationalist colleagues are so keen to intervene.

[Mr David Jones]

rose—

[Owen Smith]

Clearly, the Secretary of State is going to explain it differently.

[Mr Jones]

In the first place, let me say that I object quite strongly to the hon. Gentleman’s suggestion that I would ever be involved in gerrymandering, particularly given that it was his party that introduced this atrocity in the first place in the 2006 Act. May I refer him to what Professor Roger Scully said in his written evidence to the Welsh Affairs Committee:

“If parties that are defeated at constituency level can still win representation through the list, then it is difficult to see why that should not also apply to individuals”?

Individuals represent parties; where they happen to be standing makes no difference at all.

[Owen Smith]

I am just getting over the fact that the Secretary of State referred to what we thought was a fairly simple safeguarding of democracy as an “atrocity”. I am pleased that I let him intervene, because he chose to read out a piece of evidence given to the consultation on the measure. I note, however, that the Secretary of State failed to inform the House that the overwhelming majority of respondents to the consultation were opposed to the measure. Clearly, this is a nakedly partisan reversal by the current Government. Let me be clear with the House: if we get the opportunity to win back power in this place, we will reverse the measure.

[Glyn Davies (Montgomeryshire) (Con)]

The hon. Gentleman is making the point forcefully against the proposed change. Can he put to us any independent evidence—there is Labour party evidence, yes, but any authoritative independent evidence—that supports what he is saying?

[Owen Smith]

I put to the hon. Gentleman the impact assessment and the explanatory notes from his own Government. They make it clear that this is a partisan measure that will only benefit the minority parties in Wales, among which we count the Conservative party. That is what this is about.

[Chris Bryant]

Is it not particularly irritating that Leanne Wood can stand in Rhondda? She has done it before: she stood in 2001 for the parliamentary seat and lost very heavily. The people of Rhondda will, I am sure, return Leighton Andrews in the next Assembly elections, because he is the best Assembly Member in Wales. They cannot prevent Leanne Wood from being elected, however, because they have no means of affecting the order on the Plaid Cymru list. She gets two goes.

[Owen Smith]

Absolutely. The only thing I would contest in my hon. Friend’s intervention is the suggestion that Leighton Andrews is the best Assembly Member in Wales. That particular accolade goes, of course, to Mick Antoniw, the AM for Pontypridd.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. It is best if in this Chamber we discuss principles, rather than the party political chances of individual candidates.

[Owen Smith]

I am very grateful to you, Madam Deputy Speaker. I simply point out that the explanatory notes referred to the rationale behind the measure as being to help the party political chances of the minority parties in Wales. That is clearly what this is about.

[Mr Harper]

This is not on personalities, Madam Deputy Speaker. I just wanted to pick up on the point helpfully made by the hon. Member for Rhondda (Chris Bryant). Will the shadow Secretary of State tell us whether the Labour party is proposing, for both Westminster and Wales, to revert to elections in four-year terms, or whether it will stick to the five years in the Fixed-term Parliaments Act 2011?

[Owen Smith]

My hon. Friend the Member for Rhondda made Labour’s position clear. We are opposed to the gerrymandering shift from four years to five years to maximise the amount of time the coalition can hang on to power. However, we accept that the First Minister of Wales and the Welsh Government would like to see the term extended to guarantee, as the Secretary of State put it, that there will not be a clash between elections in Wales and Westminster. In explaining Labour’s position, my hon. Friend the Member for Rhondda is entirely right. We still feel that four years is preferable, and that five is far too long and diminishes accountability. That said, we will accept this shift and we will support this aspect of the Bill.

On double-jobbing, the third aspect of the electoral arrangements, Labour has always been clear. It has always had an internal party position whereby it does not support people having dual mandates, standing for election and holding office in the Assembly and in Westminster. We are therefore pleased that the Government are moving into line with Labour on this and we will support this aspect of the Bill.

[Ian Lucas (Wrexham) (Lab)]

I am interested in my hon. Friend’s observation on double-jobbing. Does he agree that it is inappropriate for Assembly Members to stand as prospective parliamentary candidates while, at the same time, serving as AMs? In particular, is it not inappropriate for them to open up constituency offices in the seats that they are fighting? Will he support an amendment to prevent AMs from standing as prospective parliamentary candidates?

[Owen Smith]

I will have to look carefully at my hon. Friend’s proposal and take it into consideration. I would not want to discourage Members from moving back and forth between the Assembly and Westminster, which I think is a positive state of affairs that should be encouraged, but I note the point he makes so eloquently.

[Mark Tami]

Further to that point, the offices the candidates opened are also funded by the taxpayer. Does my hon. Friend think that is right?

[Owen Smith]

That is a very good point that we ought to consider. I would, of course, not support parliamentary or Assembly expenses being deployed for party political reasons.

I will move on to the minor taxes, particularly stamp duty land tax and landfill tax. We heard very little detail from the Secretary of Sport—[Interruption.] Well, there was very little sport there for anyone to have, to be perfectly honest. Hopefully we will have a bit more sport with the Secretary of State now. We will support the devolution of stamp duty land tax and landfill tax to Wales. However, there are many questions about how that will be implemented, so we will seek clarification during the passage of the Bill. Perhaps he will take note of some of these points now so that his Minister can respond to some of them later.

The first point concerns the suggestion that properties on the border between Wales and England would somehow be split, with stamp duty land tax being charged on the English portion and whatever its successor tax is being charged on the Welsh portion. It is an interesting concept. Will the Secretary of State tell us at some point during the passage of the Bill how many such properties there are on the border, given how populous it is? Will he tell us how the Government propose splitting those properties, as in many instances they are houses straddling the border? Will there be a number of bedrooms in England and a number in Wales? We know that the Government are keen on taxing bedrooms.

The second point relates to the cost of devolving that to Wales. We understand from the Bill that the Welsh Government will be asked to pay for the administration of any new tax, which is fair and just, and that that will be offset by any reduction in the cost to Her Majesty’s Government of administering the taxes as they had previously done in Wales. Given that the Secretary of State and the Treasury—this was confirmed by the Exchequer Secretary—have conducted little or no analysis of the impact of those various schemes in Wales, will he tell us how much he thinks it will cost the Welsh Government to administer and how much the offset will be?

On the even more important question of the reduction in the block grant that will come about as a result of the changes—it will be reduced by around £200 million and reviewed periodically—will the Secretary of State comment at some point during the Bill’s passage on the volatility associated with stamp duty land tax, because that figure of £200 million varies radically over time? Will he also tell us how he will calculate any differential in the rise and fall of house prices in England and Wales? By way of illustration, stamp duty land tax revenues in Wales have varied wildly over the past 20 years. They were £20 million in 1997, up to £95 million in 2003 and £130 million in 2005, and then down to £55 million in 2008-09 and £65 million last year. It is an extremely volatile tax, so I would be intrigued to know how the Treasury will account for it in any indexed reduction in the block grant, because that will have a significant impact on both the borrowing powers and, potentially, the revenues of the Welsh Assembly Government.

[Geraint Davies]

As I am sure my hon. Friend knows, over the past year house price inflation has been 13.2% in London and 6.8% across the UK. As I mentioned earlier, Boris Johnson is asking for stamp duty in London, where historically prices have always gone up faster. Is my hon. Friend at all concerned about the differential impact of stamp duty revenues, which he has alluded to already, plus pressure from elsewhere in the UK to have that tax resulting in a less fair and more complicated and confusing situation?

[Owen Smith]

That is a legitimate question. I have said previously that although we will support the devolution of stamp duty land tax and landfill tax and the putting of the income tax question to Wales, we remain concerned about tax competition. Over time, that might result in other parts of Britain wishing for similar degrees of autonomy, thereby reducing the ability of the central Exchequer to pool resources, share risk and redistribute from wealthier to less wealthy parts of Britain. That abiding concern of mine needs to be considered.

[David T. C. Davies]

Will the hon. Gentleman clarify his point? If he believes that the Assembly should have the power to vary income tax by up to 15p in the pound, there will inevitably be some form of tax competition—unless he wants to give the Assembly the power to prevent anywhere else from varying its levels of income tax.

[Owen Smith]

That is not inevitable at all. I shall discuss the issue later in my speech, when I will answer the hon. Gentleman in full.

[Jonathan Edwards]

In Scotland, the hon. Gentleman’s party proposes to devolve responsibility for 40% of the Scottish block grant in terms of tax revenues. How does that sit with the doomsday scenario of tax competition that he has just outlined?

[Owen Smith]

As I will explain later, and as I am sure the hon. Gentleman knows from my speech yesterday, we propose to replicate in Wales what is suggested by my party for Scotland. Wales will have exactly the same powers under a Labour Government. We can trust a Labour Government not to want to cut the top rate of tax and increase the unfairness of our tax system—unlike Plaid Cymru, whose economic adviser, much like the Secretary of State for Wales and the Tory leader in Wales, would like to reduce the top rate of tax.

[Stephen Mosley]

Tax competition will, of course, have an impact on both sides of the border. That impact will depend on whether the Welsh Assembly Government increase or decrease taxes. Does the Welsh Labour party want higher or lower tax rates in Wales?

[Owen Smith]

We want fair and equitable tax rates across Britain. That is why we propose to amend the Bill so that, if a Tory Government in Westminster continue to increase the injustice and unfairness of our tax system by making further cuts to taxes on the wealthiest, Welsh values and Welsh beliefs about social justice can implement a decent and equitable rate of taxation.

[Alun Cairns]

rose—

[Owen Smith]

No, I am going to move on. If the hon. Gentleman holds his water, I shall come back to income tax later.

Landfill tax is relatively uncontroversial save for the link to borrowing, to which I shall come later. There is also the link to the landfill communities fund. We heard nothing from the Secretary of State about that, but it is paid to communities with landfill sites within their boundaries. Has the Secretary of State done any analysis about the value of that fund to Wales? How much is collected and how much has been spent in Wales? How many landfill sites are there in Wales in comparison with England?

The Secretary of State is proposing that the landfill tax community fund also be devolved to Wales and that Wales should become responsible for meeting the costs of implementing a revised Welsh landfill scheme. Given that elsewhere in the Bill, the Secretary of State proposes that HMRC duties should not be replicated in Wales, why does he think the implementation of the landfill communities fund should be devolved? Is that yet another example of his wishing to pass responsibilities to Wales without there being the requisite resources?

We absolutely support the extension of borrowing powers to Wales. They are vital to make up for the £1.7 billion cut in funding for Wales—an almost 40% cut in capital funds—that the Government have implemented since 2010.

It is crucial that the Welsh Government be given the ability to borrow in order to try to back-fill the enormous holes in their budget left by the Secretary of State and his colleagues.

There are two measures relating to borrowing in the Bill, both with limits of £500 million—one to cover volatility in tax receipts and the other to cover capital. I wish to talk about the latter. The Silk commission, whose recommendations the Secretary of State keeps telling us he has largely stuck to, said that £1.3 billion should be devolved to Wales for capital borrowing, but the Bill limits it to £500 million. The Secretary of State says, as he repeated earlier, that the rationale for that is to draw a connection between the amount of money devolved to Wales—the volume of taxes—and the volume of money that might be borrowed. The Secretary of State says, as does the Command Paper on the Bill, that that is just like the position of Scotland. In fact, the Command Paper goes further than he did in saying that the Bill is generous given that in Scotland over £5 billion of taxes are devolved and £2.2 billion of borrowing is allowed—£220 million each year—and that if a similar ratio were applied to Wales, then Wales would get not £500 million but £100 million.

The problem with that rationale is that it is not true. The Scotland Act does not draw a connection, as the Secretary of State suggests, between the amount of taxes devolved to Scotland and the amount of borrowing. The Command Paper associated with the Scotland Bill said:

“Scottish Ministers will be allowed to borrow up to 10% of the Scottish capital budget any year to fund capital expenditure”—

that is, £230 million of an overall stock of £2.2 billion. The Scotland Act drew a clear correlation between the size of the capital budget and the amount that could be borrowed. The Command Paper for the Wales Bill, which the Secretary of State said was just like that for the Scotland Bill, reads:

“Specifically, the Scottish Government’s capital borrowing limit is £2.2 billion while it is taking on responsibility for tax revenues that are currently worth around £5 billion. Hence the ratio between the two is slightly less than 1:2. Applying the same tax/borrowing ratio in Wales would have given the Welsh Government a limit of around £100 million.”

The crucial question is why the Government have moved the goalposts for Wales. Why cannot Wales have the same rationale for its volume of borrowing as the Scots? That would give us about £1 billion-worth of borrowing—between £1 billion and £1.5 billion—rather than the paltry £500 million on offer.

Moreover, given the volatility of all tax returns, how sensible is it for the Government to draw a direct line between the receipts that Wales receives and the amount it can borrow? What if those receipts declined? What if we were in another recession? We would therefore see, I presume, a reduction in the amount of borrowing that Wales could undertake, which would frankly be economic stupidity.

[Geraint Davies]

Does my hon. Friend agree that there is a danger of moving the focus from Wales having its fair share of capital investment—for example, on transport, where there is £5,000 per head for transport in London and about £500 in Wales—because as soon as we get more borrowing powers the Government will say, “You pay for the valleys line electrification—you can borrow the money”? Is this not an excuse for making Wales pay out more from less?

[Owen Smith]

That is absolutely right. That is what we have been most concerned about throughout the passage of this Bill, and we describe it as a trap. The Tory party is seeking to wash its hands of Wales, and it is not interested in funding capital expenditure properly in Wales. We have therefore seen that the valleys line promise was not worth the paper it was written on, and the words of the Prime Minister and the Secretary of State were equally worthless. We are deeply concerned that this will be an excuse for the Tory Government to ask the people with the shallowest pockets in Britain to put their hands deepest into them to fund things that traditionally would have come through general taxation and from the wider benefits of our economic union.

On income tax, let me be clear: we are and remain opposed to tax competition across Britain. We believe in an economic and social union and in the ability of the central state to pool resources, share risk, and share rewards. That is especially true in Wales, as we are a net beneficiary—indeed, the greatest one—of that principle of progressivity and risk-sharing across Britain. That is why we remain opposed to the principle of undercutting one part of Britain with lower taxes in another, which is what the Secretary of State is proposing. We agree with the Government that the principle of progressivity ought to be retained. That is why we agree, broadly speaking, with the notion of the lockstep to tie bands together. But we have deep and abiding concerns about the hidden agenda that the Conservative party has, along with its nationalist colleagues, for greater tax competition in Britain.

We have reason for that concern, because the plans are not terribly well hidden. We have already heard that the leader of the Welsh Conservative group wishes to cut just the top rate of tax and that the economic adviser to the leader of the nationalist party in Wales wishes to do the same, and cut taxes only for the wealthiest in Wales. If we need any further illustration, we simply have to look at this Government’s record: they introduced a millionaire’s tax cut even as they increased VAT, which is paid, regressively, by the least well-off people in Britain.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

indicated dissent.

[Owen Smith]

I presume the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) is pleased, is he, that the poorest of his constituents in Shrewsbury pay more as a proportion of their income as a result of the VAT increases that his party brought in? Or is he not pleased that they are paying that? [Interruption.] If he wants to intervene, I will happily sit down. I give way to his colleague.

[David T. C. Davies]

I am genuinely confused by what the hon. Gentleman is saying. On the one hand, at the Labour party conference, he went out and said that a Labour Government would give the Assembly the powers to vary tax by up to 15%, which is 15p in the pound. He also made that point earlier on. But now he is saying that he does not believe in any sort of competition and so one would presume that he does not think that the Assembly should be able to vary taxes at all. Unless he is suggesting that the Assembly should now have the power to tell central Government the level at which to set taxation, I do not see how he can hold those two completely contrasting positions. Will he please explain?

[Owen Smith]

With the greatest respect to the hon. Gentleman, it is not hard to get him confused—I say that with full respect and friendship, of course.

We have reason for our concern, because of the way in which the Tory Government have cut taxes. Labour believes that taxes should be fair and progressive, and accepts that it is not unreasonable for the Government, as they hand over borrowing powers to Wales, to draw some connection between the amount of borrowing and the amount of taxes devolved to Wales, especially given the massive cut to the capital budget. That is why we have decided that we will support the question of the devolution of taxes being put to the people of Wales, subject to what we have called a triple lock.

First, there must be an agreement that there will be fair funding for Wales, and an acknowledgment that, as Holtham has pointed out, convergence is a disbenefit for Wales. Secondly, we need an agreement that the proposal will leave Wales better off, not worse off. The Secretary of State read out the mechanics of indexation earlier on, but failed singularly to address the question I asked, which was whether the Government have conducted any sort of analysis as to whether Wales will be better or worse off, over time, given the volatility of taxes in both places. I suspect that he has not done that analysis and that is why he could not answer my substantive question of whether Wales will be better or worse off.

[Mr Harper]

I will tell the hon. Gentleman if he gives way.

[Owen Smith]

If the hon. Gentleman is going to tell us whether Wales will be better or worse off, I will be very grateful to him.

[Mr Harper]

I was listening carefully to the shadow Secretary of State about being better off and worse off, particularly with regard to those on lower incomes. In the Budget of my right hon. Friend the Chancellor we increased personal allowances for everyone, including those on the lowest incomes. Why did he and his party vote against those tax cuts for low and middle-income earners?

[Owen Smith]

We will take not a single lesson from any Government Members about how to provide for the most vulnerable people in Britain, because this Government have left people in Wales £1,600 a year worse off and they have overseen the largest reduction in living standards since the 1870s. The last time living standards fell this far was during the time of the Paris commune and the Franco-Prussian war—that is how disastrously this Government have handled the economy in Wales. We will take no lessons—absolutely none—from them.

Given the opportunity, we would put a different question with regard to income tax varying powers for Wales, and we will seek to amend the Bill in order to do so. It would be different in two regards. First, as several Members have suggested, we would increase the amount of money by which tax might be reduced in Wales from 10p to 15p. The two reasons for doing so are very simple. First, we believe it would increase borrowing, given the causal link the Government are drawing between the volume of taxes and the amount of borrowing. Secondly—I would have thought that Members from the nationalist party in Wales would be pleased with this—it would provide a far neater degree of symmetry between what we are proposing for Wales and what we are proposing for England. We remain concerned that constant chipping and changing of the constitution, which the current Government seem keen to allow to continue, is not in the interests of the stability of Britain or Wales. We will seek to legislate to introduce symmetry between Wales and Scotland, both on the model of devolved powers and on taxation.

[Jonathan Edwards]

We welcome the fact that the hon. Gentleman is proposing to increase the level of income tax, but my understanding of what he said over the weekend is that he wants to keep the lockstep but remove the ability to vary the rate up or down such that it would only to be able to move up. Would he, therefore, label his new policy “lockstep-plus”?

[Owen Smith]

No, I would label it as a progressive change and I will explain why we feel the need to introduce such a change.

The second way in which we would change the question relates to our concerns about the fact that this Tory Government and an increasingly right-wing nationalist party in Wales are proposing to cut the top rate of tax. [Laughter.] Nationalist party Members laugh, but the economic adviser to their leader says he wants to cut only the top rate of tax. I do not know what we are meant to conclude from that, but it sounds pretty right wing to me. An alliance between the nats and the Tories in Wales seeks to reduce taxes just for the wealthiest, but we feel that that would be entirely out of step with the progressive values of Wales. That is why we will give the Welsh Government the ability to set a progressive rate for Wales, to guard against further Tory tax cuts for the wealthiest and to ensure that those Welsh values of social justice and fairness in taxation can be preserved by the Welsh people in the event of the Tories wishing to increase the injustice and unfairness of the tax system in Wales and across Britain.

[Alun Cairns]

The shadow Welsh Secretary is giving out so many conflicting messages that I am finding it difficult to follow him. He says that he wants to extend the tax-varying powers by 15%, but he also says that he is against tax competition, and then he says that he only wants to put taxes up. We can have lots of debates about those inconsistencies, but there is one very serious point: every nation and region of the UK is seeking to attract investment. What sort of message is being sent when the shadow Chancellor—[Interruption.] What sort of message is being sent when the shadow Welsh Secretary, who presumably hopes to be a future Welsh Secretary, says that he wants to increase taxes on higher earners?

[Owen Smith]

It is not too hard to confuse the hon. Gentleman sometimes, either, but I thank him for the promotion. Our position is very clear: we are not in favour of tax competition; we are in favour of increased borrowing powers. The way in which the Government have framed the Bill to draw a connection between borrowing powers and the devolved amount of money paid in tax means that we favour increasing that amount so as to increase borrowing powers for Wales. However, the progressive rate is only to be put up in the event of a Tory Government choosing to deepen the unfairness by making further cuts to the top rate. We should worry about that because the Tory party has form on it. It has already cut taxes for the wealthiest, and we know that it will continue to do so.

[Alun Cairns]

Will the hon. Gentleman give way on that point?

[Owen Smith]

No, I will not.

Our proposal to allow the Welsh Government to set a progressive rate of taxation in Wales would allow power to be transferred to Welsh people to guard Wales against the damage to social justice done in Britain by a Tory Government who propose to cut taxes further. The motivation is similar to that for devolution in its first inception: a Tory Government in Wales exercising—in the miner’s strike, the poll tax and other measures—a political strategy that reveals how they turn their face against social justice in Britain and use Wales as a means to exercise such injustice. We have recently seen that in the war on Wales, and the way in which Grant Shapps, the chairman of the Tory party, and the Secretary of State—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. [Interruption.] Order. The hon. Gentleman must not appear to be concerned or to question when he is called to order. [Interruption.] Order. I must say that if Conservative Members are not quiet, the shadow Secretary of State will never get to the end of his lengthy speech. In doing so, I trust that when the shadow Secretary of State refers to a Member of this House he does so, as is proper, by their constituency, not their Christian name and surname.

[Owen Smith]

I am very sorry, Madam Deputy Speaker. I was not, of course, rolling my eyes at your good self, but at the Secretary of State. I put on the record that my inability to recall the name of the constituency of the Minister without Portfolio, might have something to do with the multiple aliases that he deploys outside this House and which make it very difficult to recall how to refer to him within it.

[Mr David Jones]

I would not want the hon. Gentleman to have wasted his eye rolling. Just for clarification, is it his case that the Labour party wants devolved income tax competence to be able to increase the rate of tax for the 4,000 or so who pay the additional rate of tax in Wales, but not to cut the standard rate of tax for the 1 million-plus who pay the standard rate?

[Owen Smith]

I have already made that very clear in this House. I take your admonition that I should be coming to the end of my speech in the spirit in which it was intended, Madam Deputy Speaker, although I believe that I have spoken for slightly less time than the Secretary of State. [Interruption.] If it is significantly longer that is perhaps because I have addressed more of the substance of the Bill than the Secretary of State, who glossed over most of the gerrymandering and the other reasons for it.

Let us be very clear that our proposals to allow the Welsh people, if they so choose at a referendum, to give powers to the Welsh Government to set a progressive rate of income tax would guard against a Tory Government with malign instincts reducing the justice of our taxation system in Wales and increasing the outrageous targeting of Wales that has been described and exposed in other areas in recent days. We will not allow such exposure on the economy to be passed on to Wales. We will not allow Wales to be worse off as a result of the measures, and we will scrutinise the Bill extremely carefully.

17:19

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

Rising to my feet to participate in the debate gives me a heavy attack of déjà vu. I hope my words will be slightly less curmudgeonly than those of the hon. Member for Pontypridd (Owen Smith). I give this small and elegant Bill a warm welcome, because I believe it takes Wales forward. It does so in a small, incremental step, rather than in one of those steps that allows Wales to fall into a large hole and disappear without trace. The Government are looking after the interests of Wales and the people of Wales in the Bill. Long may that continue.

As many hon. Members know, for me, the Bill is part of unfinished business that stretches back not to when I was Secretary of State for Wales, but to my appointment as shadow Secretary of State. I pay unreserved tribute to Paul Silk and members of the Silk commission. The Calman commission did not attract the Scottish National party to sit alongside other members, but I was really pleased when Plaid Cymru accepted the invitation to join the Silk commission. The participation of all the parties involved in the governance of Wales in the Silk commission has made its results more credible. I believe it will contribute towards Wales remaining part of the Union, on which most Opposition Members agree with Government Members. I also believe that the commission will contribute to Wales having increasing self-determination in certain matters, which will be good for the people of Wales and for the devolved Administration.

The trend towards more local democracy must not be at the expense of effective governance. That brings me to a point that became apparent to me over the seven years in which I carried responsibility for Welsh policy in my party. In future, I believe that a confident Wales and a confident Westminster Government should not hesitate to contemplate not only the devolution of powers, but the return of areas of competence to the supra-national Parliament, if it is the wish of those areas or institutions. There is a valid and compelling case for that course of action. That was not apparent in the Silk commission report, but by way of example, it was expressed to me while in opposition and in government, particularly from the university sector—albeit often behind closed doors for fear of repercussions—that a body of opinion wanted the re-coupling of Welsh and English universities in the interests of Wales and of education in Wales.

As we have been reminded, the constitutional position in the Bill is that we are extending the Assembly’s term of office to five years. That is probably sensible given the circumstances, but, for me, the jury is out on five-year terms. I was persuaded by the First Minister that that was the way to go because the UK Parliament introduced a five-year term and we need to avoid a clash of an Assembly election with a general election. However, I question the wisdom of that. All hon. Members know how expensive democracy and elections are. I would have liked to have seen the cost savings that would have resulted from running those elections together and any effect on turnout. It does not matter which part of the UK people are in, there is no doubt that they are being turned off by democracy—we are seeing diminishing returns of voters going to the ballot box. Perhaps running those elections at the same time would have increased participation at the ballot box. It might also have been easier to explain the relationship between the Assembly and the UK Parliament.

[Chris Bryant]

I am grateful to the right hon. Lady for giving way because I rather agree with her. Voters would probably prefer to have two elections on the same day. That would make far more sense—I have argued for it since 2010. Historically, general elections have tended to be every four years, even when we had seven-year terms, because either a Government had run out of steam or it felt right to move on and have an election. We are now moving everything towards five-year terms. My anxiety is that that is less democracy and less accountability.

[Mrs Gillan]

The hon. Gentleman makes a good point—it is unusual for us to agree on anything, as he will attest —but we need to examine the matter before we set everything finally in concrete. Those on both Front Benches and anybody involved in the business of government should keep an open mind. Rather than saying, “It will be five or seven years for ever,” we should agree to revisit the matter at some stage. Constitutional arrangements are important, but the engagement of the electorate is perhaps one of the most important aspects of democracy.

[Albert Owen (Ynys Môn) (Lab)]

The right hon. Lady talks about holding elections on the same day, but I believe she voted for the police and crime commissioner elections to be held in the autumn, leading to a low turnout. Her stance on this issue is unclear.

[Mrs Gillan]

The fact that we had those elections on a separate day and the turnout was low is part of the experience that informs what I am saying now. I want to maximise engagement with the electorate, as I am sure does the hon. Gentleman. Unlike much of the debate so far, I am not making a partisan point on this issue. It is more a question of democracy and engaging with the electorate.

[Jonathan Evans]

In the United States, the electorate does not find it difficult to elect insurance commissioners, sheriffs and a range of public officials while also choosing members of the Senate and House of Representatives.

[Mrs Gillan]

My hon. Friend is right. The trouble is that in Wales we never get a breathing space from elections. We have an election almost every year. When we looked at the timetable over the past four or five years, we were relieved of an election in only one year. There is much to be said for putting the elections on one day, but particularly the Assembly elections and the general election.

My right hon. Friend the Secretary of State will not be surprised to hear that I am sad about one particular omission from the Bill, although I will probably attract howls and squeals from both sides of the House. I am sorry that we did not take this opportunity to reduce the number of Westminster constituencies in Wales. When Scotland gained its additional primary legislative responsibilities, the Labour Government reduced the number of MPs in Scotland, and that should have happened in Wales. The job that is done at a cost of £66,396 in an English constituency is done by an MP, an Assembly Member and half a list Assembly Member in Wales, at a cost of some £147,000 in salaries alone. Democracy is expensive, but the boundary changes should have been made and the number of MPs from Wales reduced.

[Mr Hain]

Is the right hon. Lady saying that somehow Welsh MPs work less hard than they used to, or do not work as hard as she and others with English constituencies do?

[Mrs Gillan]

The former Secretary of State and I have engaged on this topic before. A constituency such as Arfon has only 41,138 electors and Chesham and Amersham has 70,000, so—in the interests of fairness and equality, the need for which is often spouted by the Opposition—we should look at equalising the number of constituents across constituencies. Democracy costs dearly—

[Mr Hain]

The right hon. Lady has not answered my question. All she has to say is yes or no. Do Welsh MPs work harder or less hard than she and her colleagues in English constituencies do?

[Mrs Gillan]

The right hon. Gentleman knows that many Welsh seats have fewer constituents than many English seats, and he also knows that many of the responsibilities are devolved—

[Mr Hain]

Yes or no?

[Mrs Gillan]

Well, the right hon. Gentleman can answer yes or no to my question. Does he think that the salary costs alone for every Welsh constituency— amounting to £147,00 compared with just over £66,000—are fair? Yes or no?

[Mr Hain]

The right hon. Lady has not answered my question. She has changed the question. She has traditionally been hostile to devolution, so she is now inventing all sorts of other issues. The simple fact is that we are not second-class MPs because we are from Wales: we are on the same level as she is, until her Government change that.

[Mrs Gillan]

I am not going to trade insults with the right hon. Gentleman. He has 57,823 constituents on the roll, as of 1 December 2010. I have never, ever said that a Welsh MP was a second-class MP, as well he knows. However, if he chooses to go down that line, I have to say that the boundary change and the reduction in the number of MPs should have been carried out and I am sorry it was blocked by vested interests.

Let me turn to the financial provisions in the Bill. I have long thought that the Welsh Assembly Government—soon to be known as the Welsh Government—should understand better and share the responsibilities of tax raising that go with the luxury of spending taxpayers’ money. I therefore welcome the steps in the Bill to bring that sense of responsibility and stronger financial accountability for Welsh Assembly Ministers, as well as the option for Welsh residents to make their views on tax powers known through a referendum.

[Geraint Davies]

I have already made the point that the secret plot is to reduce the overall block grant and then give the powers to Wales, but is not part of that plot, as the right hon. Lady is now revealing, to reduce the number of MPs, lower the voice of Wales in this Chamber asking for a fair share of national assets and say, “You can have fewer MPs and you can raise your money yourself,” so that we have a gagged set of Members here? That is all part of what she is saying, is it not?

[Mrs Gillan]

I said that there would be squealing about what I was about to say before I started that passage of my speech, and indeed there has been. The hon. Gentleman really does not do me justice with those remarks.

It has always been the case that no matter how the annual financial settlement fell, it was always possible for the Assembly to aim criticism at Westminster for tightening the purse strings. No matter where the responsibility actually lies for the poor outcomes, the finger has always been pointed towards Whitehall and Westminster. The provisions in the Bill move towards reducing the opportunity for abrogating responsibility, which, particularly in the fields of health and education, lies squarely with the Labour Administration in Cardiff Bay.

The new funding framework moves from almost exclusive block funding to two revenue streams. The block grant part will remain dependent on the Barnett formula, which, even though I believe it is nearing its sell-by date, should remain firmly in place as long as we are required to continue reducing the deficit left by the last Labour Government, particularly in the light of the convergence arrangements from the October 2012 agreement. The new funding stream of business rates and the Welsh landfill and land transaction taxes—coupled with a Welsh rate of income tax following an affirming referendum—means that the Assembly will now have a real incentive to grow the economy and more responsibility for funding its spending. However, it also means that the Assembly will have an independent revenue stream to support capital borrowing—a welcome flexibility, particularly for making decisions on infrastructure funding.

I also welcome the flexibility that the Treasury is giving to the Welsh Assembly Government on borrowing to start the much-needed improvements to the M4, as well as the cash reserve powers. The UK Government will provide the Welsh Government with the ability to pay surplus tax revenues into a cash reserve that can be drawn on when future revenues are lower than forecast. This will provide the Welsh Government with a mechanism to manage the volatility in their budget resulting from the new tax powers.

I also welcome some of the inter-governmental arrangements that spring from the Bill, including the Government’s response to the Silk commission’s part I report, in recognising the need to ensure that institutional and governance arrangements continue to be appropriate as changes are made to the financial powers of the Assembly and Welsh Government—in particular, the fact that the Office for Budget Responsibility has agreed to the Government’s formal request that it starts to forecast Welsh taxes in the autumn statement 2014 and biannually thereafter. I look forward to the Wales Office letting us know the details of the OBR’s relationship with the Assembly and the Welsh Government, which I understand will be subject to further discussions.

The Government have also agreed with the Welsh Government to set up a bilateral ministerial committee to oversee the transfer of these financial powers. I was pleased to note that an early priority for the Committee would be the consideration of further details relating to the operation of the new budgetary arrangements—including the block grant adjustments—that will accompany tax devolution, and the cash management arrangements.

I have long believed that there should be better co-operation between the Assembly and the Government, and I hope that in the future the Wales Office will consider better arrangements both inter-departmentally, within the Government, and with the Assembly. One of my great hopes is that there will eventually be a forum in which Assembly Members and Members of Parliament could sit at the same time and debate subjects that are of interest to Wales. I give the Bill a warm welcome, and I shall be following its progress in the House, because it is a major constitutional Bill for Wales.

Let me end by paying a very special tribute to a man who for many years was my “shadow” in the House of Lords, Lord Roberts of Conwy. Back in 2008, he was asked by the Prime Minister and me to conduct a review of devolution in Wales. Wyn Roberts was a terrific colleague, and he carried out that review painstakingly and after consulting a broad spectrum of opinion. The genesis of much of the Bill, and indeed the Silk commission, was in his work. Following the publication of the report, he said:

“The question of governance in Wales will eventually be settled in the broad public interest and not in anyone's partisan interest.”

I think that the Bill is another building block of Welsh governance, and it has, I hope, been presented to the House in the spirit of Wyn’s wish that the broader interest be served. I wish it a speedy passage through the House, and I offer my congratulations again to the Ministers, the Department’s officials and the Silk commission, who have, I believe, produced it in the interests of Wales.

17:36

[Mrs Siân C. James (Swansea East) (Lab)]

Labour Members broadly support the Bill, but, along with others, I shall seek to make improvements to it in Committee. It is an important Bill which gives vital borrowing powers to the Welsh Government, and paves the way for Welsh control of business rates, stamp duty and—if it is voted for—a referendum on income tax. It is also the first piece of Wales-specific legislation that the Tory-led Government have produced in four years.

There is a great deal to welcome, but I want to concentrate on the proposed borrowing limits. I am keen to establish a clear blueprint in relation to the borrowing powers and the consequences for the Assembly Government: a business plan, as it were, providing the flexibility that is necessary to meet the requirements of a modern financial system, especially given the maturing role of the Welsh Assembly.

The capital budget of the Welsh Government has already been reduced by nearly 40%, which has resulted in even greater hardship for the citizens of Wales and further swingeing cuts in public services. Borrowing powers are essential to the Welsh Government, and will be increasingly important to future Administrations. They must have the flexibility that will allow them to react to changing markets, and to make the long-term adjustments that will be required if they are to meet the challenges ahead. The M4 relief road is just one example of the infrastructure projects that the Welsh Government might choose to fund if they were in a position to borrow appropriate moneys; adequate borrowing powers will ensure that other equally important projects can be funded.

Labour Members recognise that some limited powers are on offer, but they are just not enough. We have serious reservations about the amount, the rules governing the settlement, and the unfavourable comparisons to other devolved bodies. Along with my colleagues, I shall be keeping a watching brief on the borrowing powers settlement as the Bill progresses. The Bill states that a limit of £500 million will be imposed for current spending, to cope with the fluctuations in, for instance, tax receipts, along with another limit of £500 million for capital projects. Again, that is simply not enough. The settlement for Northern Ireland, whose population is less than half that of Wales, gives it the capacity to borrow up to £2 billion, a sum that is a great deal larger than the one that is considered appropriate for Wales. That, too, is unacceptable.

As the Minister will no doubt recognise, I am very sceptical about the proposed borrowing levels. In evidence to the Welsh Affairs Committee the Minister said the borrowing limit would increase to £1 billion if further income tax powers were devolved. In addition, further clarification was sought at a recent Welsh Grand Committee. At the morning sitting on 5 February this year, several of my colleagues sought clarification of how the £500 million borrowing limit had been reached. Despite being given ample opportunity to share the formula for how this limit for Wales was reached, the Welsh Secretary avoided giving a definitive answer. It appears there is still some vagueness in this key area.

I feel like one of these children in a classroom: did any other Member sit with a child next to them who had his hand around his work because he did not want to show his workings out so we could copy them? The Minister is a little bit like that. We would like to see how he did his workings out—how he reached those numbers, how they are going to affect us in Wales and how we can improve them.

It has been suggested by the Silk commission that the borrowing settlement for Wales be based on the Scottish model, but we have again heard today that Scotland has a higher limit: it can raise up to £2.2 billion. It is not right to say that we are on a similar level to Scotland or Northern Ireland. We are at a disadvantage and there seems to be some confusion.

[Mr Harper]

I looked at the Wales Bill financial empowerment and accountability document published by the Government and I think the Secretary of State set out his workings here very clearly. According to my reading of it, the borrowing level relative to the revenues is more generous than that applicable to Scotland. I may have misread it, but that is my reading of the document. Perhaps the hon. Lady should take a look.

[Mrs James]

I thank the hon. Gentleman for his intervention and I will look at those figures again. I must say they were a bit of a challenge and I do not consider myself an unintelligent person. I think there are questions we have to ask, and this is the place to ask them. Again, we come back to the Northern Ireland question: why can Wales not be trusted to raise the money it vitally needs and will be needing in the future? When the formula is applied to Wales, the sums simply do not add up. I seek further clarification from the Minister on this matter.

I appreciate that when stamp duty and landfill tax are devolved, that will provide the Welsh Government with an independent revenue stream worth around £200 million a year. However, these taxes will not be devolved until April 2018, four years from now. We have to have the borrowing powers now. We have to have them set at a level that is appropriate for us in Wales and that will allow us to grow and develop. We need those resources as soon as possible to mitigate the effects of Tory cuts to the Welsh budget. As the party of devolution, we cannot accept a settlement that places us in a restrictive position regarding borrowing.

[David T. C. Davies]

I thought I heard the hon. Lady say that there had been Tory cuts to the Welsh budget, but as far as I am aware there have not been any cuts whatsoever to the Welsh Assembly budget; it has remained at the same level over the last few years.

[Mrs James]

Well, out there on the streets life is very tough and I think the hon. Gentleman is wrong. I disagree with him: we are living every day with the effects of Tory budget cuts—long term, every day—and perhaps we should discuss this further in a different debate under different circumstances. I disagree with the hon. Gentleman on that matter.

Wales deserves the very best settlement, so we shall address this Bill positively while being ever conscious that it needs to reflect the evolving demands of an emerging Government. Welsh Labour and the Labour-controlled Welsh Government always have served, and always will serve, the needs of the people of Wales, encouraging greater self-determination for our citizens and ensuring that adequate powers are devolved whenever possible. I welcome the Bill, and I will support aspects of it, but I ask the Minister to address the issue of the borrowing powers.

17:44

[David T. C. Davies (Monmouth) (Con)]

I am not going to be able to give a warm welcome to the Bill; a slightly frosty and formal welcome is probably the best I can manage at the moment. However, I would like to thank the members of the Welsh Affairs Committee, who worked extremely hard throughout January to scrutinise the Bill in time for the Secretary of State to introduce it. I would also like to thank the Secretary of State and his colleagues for accepting some of our recommendations. None the less, we are in a slightly depressing cycle at the moment, in which Members of the Welsh Assembly demand extra powers, a range of non-governmental organisations and other bodies—many of which get some or all of their funding from the Assembly—go along with those demands, then the press jump in, followed by politicians from all the parties.

I was amazed to hear the hon. Member for Pontypridd (Owen Smith) at the Welsh Labour conference the other day making a promise that the Welsh Assembly would have even more powers to raise taxation if he had his way. Today, however, he has come to the Chamber to say that Labour does not like what is on offer, it does not think that there will be a referendum and it does not like tax competition. There is clearly ambiguity there. He is promising greater powers to the Welsh Assembly but at the same time trying to reassure others that those powers would never be implemented. Most people will be able to see through that. At least most parties are able to set out a position.

My own position is clear: I do not want the Assembly to have any kind of tax-raising powers. Members of Plaid Cymru also have a clear position: they want it to have as many powers as possible. We have a right to know what Labour actually stands for in this regard. This worries me, because I know that Labour Members are Unionists, but they do not seem to realise that we are sleepwalking into a disaster. One day, perhaps 10, 20 or 30 years hence, we are going to wake up and discover—[Interruption.] Yes, I will come to the Conservative party in a minute. Hon. Members must contain themselves. We will wake up and discover that we have created de facto independence in Wales simply by giving it one power after another, without making provision to take any of them back.

I am well aware that there are members of the Conservative party, and other parties, who support that course of action. A kind of auction process appears to be taking place, in which one person says, “Let’s give the Welsh Assembly this power”, and all sorts of other people who do not want to be perceived as being opposed to Wales jump on the bandwagon and agree with them. There are members of the Conservative party for whom I have the utmost affection but with whom I completely disagree on this. They seem to take the view that if we give the Assembly enough powers it will hang itself, after which we will be in power. I have a horrible feeling that we might end up dangling alongside it, however, because the Labour party will remain in power to misuse those extra powers, and we will be no better off as a result.

[Susan Elan Jones (Clwyd South) (Lab)]

I hate to see the hon. Gentleman looking so unhappy. I suggest that the solution comes in the form of two excellent words used by the leader of the UK Labour party at the Welsh conference: “reserved powers”.

[David T. C. Davies]

There is a solution. It is one that we all need to think about, and I hate to say this, but it comes from the Liberal Democrats. It takes the form of a fully federal system. The only way to stop this march towards ever greater powers going to the Welsh Assembly and to Scotland is to draw a line in the sand and say, “Okay, we’re going to give certain powers to Wales, Scotland and Northern Ireland, and maybe to London and other regions of England, but we will not go beyond that line. There will be a federal Parliament in London with fully laid-out powers and a constitutional court to deal with any issues over who has what.” That is the only way of stopping this process. If we do not stop it, I can guarantee that we will wake up in 20 or 30 years’ time to find that the whole of the United Kingdom will have fallen apart. At least Scotland is getting a vote on this. It is having a fully fledged debate on the pros and cons of independence. We are not having that in Wales. Instead, the Welsh Assembly is being given a little bit more power every couple of years, and there is no way of getting any of that power back.

[Wayne David]

The hon. Gentleman has been called early in the debate, so would he be kind enough to clarify whether he is speaking as an individual Back Bencher or as Chair of the Welsh Affairs Committee?

[David T. C. Davies]

Obviously, I am speaking as an individual Back Bencher; it was hard to get any agreement on certain of these issues from the Welsh Affairs Committee. Let me make it clear that I am not speaking for anyone in the Conservative party either—I am entirely on my own on this one, and probably always will be.

I would like to see one improvement that can be made to this Bill. If we consider the powers the Welsh Assembly has already been given, we can see that it has not done terribly well. We have had the sight of the Welsh Minister for Education and Skills apologising, on Boxing day, I believe it was, for the lamentable state of education. As someone who has been through the state school system there, and who has three children in that system, I feel that very strongly. Nor have we seen a good performance from our national health service. Large numbers of people in cross-border areas such as Monmouthshire are desperate to be treated by the coalition Government-run NHS in England. We have even had the spectacle of a Labour Member of Parliament being banned from going before the Health and Social Care Committee in the Welsh Assembly because she was likely to tell a few home truths that members of that Committee did not want to hear. There has thus been a failure even to carry out the proper scrutiny role.

What I would like to see from this Bill is the opportunity not to take powers away from the Welsh Assembly, but to recognise that where there are problems, individuals ought to be given the choice. Somebody in Wales who is ill and wishes to be treated in England should have the right to access the NHS in England, with the cost of treatment being deducted from the block grant. Similarly, if someone in England was happy to wait twice as long as they needed to and be treated in Wales, they could be treated in Wales, with the cost of their treatment being added to the block grant. That would be an excellent way for us to maintain the commitment to devolution while allowing everyone to enjoy the benefits of a national health service.

[Chris Bryant]

The hon. Gentleman thinks it would be much better to move to a federal system. My problem is that that denies the history of all the different parts of the United Kingdom: the whole of Ireland was a kingdom until the partition and so on; Scotland had a completely different legal system even when the Crowns were joined together; and Wales never had a separate legal situation. Asymmetric devolution is actually the most sensible way of progressing.

[David T. C. Davies]

That is a reasonable intervention from the hon. Gentleman. I respond simply by saying that a federal approach is not a perfect solution, but it is probably the least worst solution, and it is better than waking up in 20 years and finding that we have fully fledged independence. Wales has had a slightly separate legal system; I believe that Henry VIII allowed Wales a measure of independence, except for Monmouthshire, which was brought into the Oxford assizes—we do not need to go into that now.

[Hywel Williams]

I do not want to detain the House, but Wales did have a separate legal system for many centuries, codified by Hywel Dda.

[David T. C. Davies]

You rightly told me off last time, Madam Deputy Speaker, for misusing the privilege of being called early and I do not wish to be told off again. What I would say is that I am a democrat and I recognise that much of what has been given to Wales has come about as a result of referendums. What is on offer in the Bill regarding stamp duty and land tax is not that significant. As for giving borrowing powers, I am a pragmatist and if they are going to be used for the M4, I would very much like to see an M4 relief road, so I will willingly go along with that. And of course, income tax powers will not be devolved without a further referendum. I would certainly be encouraging people to vote no in such a referendum, and perhaps for the first time I would be on a different side of the argument from the Secretary of State. Nevertheless, I recognise democracy and I recognise that he is offering a referendum. I appreciate the changes in the Bill which he has made as a result of the scrutiny by the Welsh Affairs Committee. My welcome, frosty and formal as it is, stays in place and I look forward to seeing the Bill progress through the House.

17:54

[Mr Peter Hain (Neath) (Lab)]

I rarely agree with the hon. Member for Monmouth (David T. C. Davies), but I always get great entertainment from his sincere and intelligent extremism. He made a very thoughtful speech, for which he deserves credit, but may I correct him on one point about the national health service? I think he will find that more people cross the border from England to be treated in Welsh hospitals than go the other way.

[David T. C. Davies]

That is true, but these people do not do that by choice; they have no choice, and many of them are actively campaigning to be treated back in England and do not want to be treated in Wales.

[Mr Hain]

The facts seem to speak for themselves. We can have an argument about the degree to which people can express a preference, but the hon. Gentleman and his colleagues, led by the Secretary of State and the Prime Minister, persistently rant against the Welsh national health service as part of their war on Wales and completely distort the facts on the ground.

[Mr Harper]

rose—

[Mr Hain]

I will give way, although my speech is not about the Welsh NHS; I am merely responding to a point made by the hon. Member for Monmouth.

[Mr Harper]

I was not going to respond, but I cannot let what the right hon. Gentleman just said stand. Thousands of my constituents live in England and passionately want to be treated by the English NHS, according to the rules and the rights they have in law, but because their GPs based in England are registered with the NHS in Wales they are forced to be treated in Wales according to the NHS rules. They do not like that prospect and I am doing my best to change it, so please do not pretend that they have run away from the English NHS by choice, because they absolutely have not.

[Mr Hain]

In that case, I think the hon. Gentleman will find that the same applies for Welsh citizens on the Welsh side of the border. All I am saying is: let us have an intelligent debate about this, rather than rantings based on a misrepresentation of the facts on the ground.

Let me get down to my speech. In focusing on clause 2 of the Bill, I wish to record my pride at taking the Government of Wales Act 2006 through Parliament as the then Secretary of State, not least because it provided for the full law-making powers the Welsh Government are now using to protect the people of Wales from this Government’s disastrous policies, including on tuition fees and on the creeping privatisation of the national health service, which is not being applied by the Welsh Government. The fact that the Conservative party, the only party in this House to vote against the 2006 Act, now seems to have accepted that devolution is a sign of progress—I welcome that—but on the question of dual candidature it has sadly regressed. In section 7 of the 2006 Act, I amended one clause from the Government of Wales Act 1998 in order to prevent candidates from simultaneously standing both in a constituency and for a region, whether as a list candidate or as an individual—this Bill will disgracefully reverse that reform.

[Alun Cairns]

On that point—

[Mr Hain]

I am going to develop the point and then I will take an intervention. I want to remind colleagues of the reasons for the 2006 change. I did not act for politically partisan reasons, as was alleged by opponents of the change; I acted for democratic reasons. As one of the Ministers who also took the original 1998 Bill through the Commons permitting dual candidature, I never imagined for a moment then the abuses it would produce and the antipathy it would create among voters in Wales. Voters have never understood the widespread practice that has occurred since the Assembly was established in 1999, whereby candidates rejected by a particular constituency then secured back-door election as Assembly Members through the regional list and were even able to claim to represent the very constituency that had rejected them. Three of the four defeated candidates in Clwyd West in 2003 were subsequently elected to the Assembly through the regional list. Those very three people in Clwyd West—in the Secretary of State’s constituency—who were booted out by the electorate ended up as Assembly Members, competing against winning Assembly Member Alun Pugh.

[Alun Cairns]

The right hon. Gentleman talked about the Welsh electorate’s antipathy to the arrangements. Will he remind us what the Electoral Commission’s view was, following its long consultation on whether or not there was a need to change policy? What advice did it give him as the then Secretary of State for Wales?

[Mr Hain]

The Electoral Commission disagreed with me, and, not for the first time from my personal experience, it was wrong.

[Jonathan Edwards]

Does the right hon. Gentleman recognise that the Labour party has also had candidates that stand on the list and in constituencies? In 2003, on the North Wales regional list, Sandy Mewies Lesley Griffiths, Carl Sergeant and Karen Sinclair stood both in constituencies and in the region. In South Wales Central, Rhodri Morgan, Lorraine Barnett, Sue Essex, Jane Davidson, Jane Hutt and Leighton Andrews stood in both the region and the constituencies, and in Mid and West Wales, Christine Gwyther stood in both.

[Mr Hain]

Yes, indeed. That is my exact point. I am not making a politically partisan point; I am making a democratic point. The practice clouded political accountability and denied voters their right to reject a particular candidate at the ballot box. A change made by the Government of Wales Act 2006 requiring candidates to choose whether to stand for a constituency or on the regional list put the voters back in charge. It cannot be right for losers to become winners through the back door, despite having been rejected by voters. That is an abuse of democracy.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

Surely the rejection is of the party in question. The system is there to get a little bit of equality across the parties. It is not about the individuals.

[Mr Hain]

That intervention interests me. Is the hon. Gentleman saying that whoever stands for whichever party, even if they are deeply opposed by the particular constituents whom they seek to represent, cannot be challenged because they are standing on a party label?

[Chris Bryant]

Is not the point also that Wales is not the only place in the world that has a top-up system to enable diversity within the legislature, but it will be the only place in the world where that practice of standing both on the list and for the first-past-post seat is used?

[Mr Hain]

I bow to my hon. Friend’s superior experience and knowledge. I think that the system applies in Scotland.

[Chris Bryant]

It does in Scotland, but I mean outside the United Kingdom.

[Mr Hain]

It may well be the case that it exists outside the United Kingdom.

[Mr David Jones]

I am grateful to the right hon. Gentleman for giving way. The hon. Member for Rhondda (Chris Bryant) is entirely wrong. Is it not the case that Wales is the only country in the world where, under this electoral system, dual candidacy is presently banned?

[Mr Hain]

I am not sure about that, but what I can say is that we should look at the experience in Wales. If there is no such bar in other countries, then perhaps there was no such abuse there. There was widespread abuse in Wales, practised by 15 of the 20 list Assembly Members who used taxpayers’ money to open constituency offices in the very seats in which they were defeated. They then used those resources to try to win at the following election by cherry-picking local issues against the constituency AMs who had beaten them.

[Alun Cairns]

rose—

[Mr Hain]

I will not give way, because I want to make some progress. While all that was going on, someone in Wales said to me:

“If I want to defeat constituency candidates because I don’t like them and I succeed and they are defeated, why should they pop up on the list claiming to represent me?”

That is the point. There is an honourable, constitutional and necessary role to be played by list Assembly Members across the whole region that they represent. There is no justification for seeking to abuse the system by getting involved in local constituency matters to try to win back a seat at the following election using that position and that resource. That is the fundamental point.

[Guto Bebb (Aberconwy) (Con)]

Will the right hon. Gentleman give way?

[Mr Hain]

Not for a moment, no. The Government of Wales Act 2006 put the voters back in charge. If they did not want to elect somebody, they did not have to do so. The Act stopped the prevailing situation before then in which Assembly candidates could decide to place a “both ways” bet, by standing in both categories in order to win, even if they were kicked out by the electorate. To his shame, the Secretary of State is seeking to reintroduce that both ways bet.

There was an unholy coalition of Conservatives, nationalists and Liberal Democrats opposed to abolishing that abuse. Now they have reincarnated that unholy coalition in defiance of the popular will. Why are they so afraid of taking their choice to the people? Why are they so afraid of losing constituency elections that they need the lifebelt of standing on the lists as well?

[Guto Bebb]

rose—

[Mr Hain]

Perhaps the hon. Gentleman can answer that question.

[Guto Bebb]

It is the case that the Welsh system of electing Members to the Assembly is replicated in many parts of the world, but the only country that has a similar ban is Ukraine. The Bevan Foundation, a Labour party think-tank, is of the view that the ban should be withdrawn.

[Mr Hain]

I have no idea whether the abuse that we have seen in Wales, which I am now documenting for the House, applied in Ukraine as well. Lord Richard chaired the commission—[Interruption.] I will now present a lot of detailed evidence on that abuse for the sake of the hon. Members who are seeking to intervene and the whole of the House. Lord Richard chaired the commission that reported in 2004. He recommended the extra powers for the Assembly, which my 2006 Act delivered. He told the Welsh Affairs Committee:

“There is something wrong in a situation in which five people can stand in Clwyd, none of them can be elected, and then they all get into the Assembly. On the face of it, that does not make sense. I think a lot of people in Wales find that it does not.”

That is not me, a former Secretary of State who banned the abuse, speaking, but Lord Richard who carried through an eminent report.

The eminent Welsh Academic, Dr Denis Balsom—again, not a politically partisan figure—said in his evidence to the Richard commission:

“Candidates use the list as an insurance against failing to win a constituency contest. This dual candidacy can also confuse the electorate, who may wish to consciously reject a particular candidate only to find them elected via the list. It should remain a basic democratic right not to elect a particular candidate or to be able to vote a Member out.”

That is a right that the Government, supported by Conservatives and members of other parties in Wales, are seeking to deny the electorate. That is not democratically defensible.

[Mr Harper]

I am listening to the right hon. Gentleman’s argument, but I do not follow it at all. When we get a ballot paper in a first-past-the-post election, we have to choose a candidate—we have to vote for somebody. There is no option to say I do not like this person and to cast an anti-vote. I do not follow the idea that someone can vote against someone. They are choosing to vote for who they want to represent them in the Assembly or in Parliament. I do not follow the argument.

[Mr Hain]

I do not know what happens in the Forest of Dean, but in every other constituency if a candidate loses, they lose. If the electorate rejects them, if the voters vote against them, they lose. They do not find themselves parachuted back in to the Assembly, from which the voters have barred them, via another route.

[Mrs Gillan]

It was the right hon. Gentleman and I who sparred across the Dispatch Box on that very subject. I think he has a selective memory when it comes to the Richard commission. As I recall it, Lord Richard not only objected to the list system, but recommended that there should be 80 AMs and that Wales should move to that system and employ the single transferable vote, neither of which the right hon. Gentleman chose to take up. That is almost proof that the direction in which he took it was indeed partisan.

[Mr Hain]

Wait a minute, Madam Deputy Speaker. Far be it from me to question whether the right hon. Lady was in order with that point, but the questions about numbers of Assembly Members and a proportional representation system are not within this Bill. They have nothing to do with this Bill. What is in this Bill is restoring the ban on the abuse of dual candidature which was in the 2006 Act, and it is that point that I am addressing.

[Wayne David]

Does my right hon. Friend agree that there is a telling comment tucked away in the impact assessment produced by the Government? It says that the smaller parties want to change to a dual candidacy rule because they

“may have a smaller pool of high quality candidates”.

[Mr Hain]

I could not possibly comment, but since the Government say that, perhaps it is true on this occasion.

I have quoted a Labour figure, Lord Richard, in support of my case, so I shall now quote a Liberal Democrat. Lord Carlile, the former Welsh Liberal Democrat leader, said in June 2005 that

“many in Wales will welcome...the removal of the absurd dual candidacy opportunity.”

In the same debate in the Lords, the former Conservative Secretary of State for Wales, Lord Crickhowell, said:

“The present arrangements are really pretty indefensible“.—[Official Report, House of Lords, 15 June 2005; Vol. 672, c. 1216-1217.]

A Liberal Democrat, a former Labour Member and a Conservative former Secretary of State all agree with me. I think that that helps my case.

I recall, as Secretary of State for Wales, receiving on 9 January 2006 a press release from Helen Mary Jones, in which she described herself as a Llanelli-based Assembly Member, although she was on the list. In it, she complained about money being spent on a hospital in Carmarthen instead of one in Llanelli. However, as the list Assembly Member for Mid and West Wales, she represented both towns and should really have been supporting both hospitals. Had she been discharging her list Member’s duties properly, she would not have discriminated between the two towns or their hospitals.

[Owen Smith]

Why did she?

[Mr Hain]

Indeed, why did she? Why, of all the parts of the list area that she represented, did she target the one place where she had only been very narrowly defeated in 2003, invariably describing herself as the Llanelli-based Assembly Member? As it happens, I admire Helen Mary Jones for her ability and commitment, although not for her belief in an independent Wales. The 2006 Act stopped her describing herself as the Assembly Member for Llanelli, because there was one and it was not her. In the meantime, she campaigned hard and won the seat back in 2007.

The list Assembly Member for South West Wales, Bethan Jenkins, is often described as the Neath-based Assembly Member and is more active in the Neath constituency than anywhere else in the region. She has not yet had the courage to stand in the Neath constituency, but if the Bill goes through with clause 2 remaining within it, perhaps she will do so, safe in the knowledge that being defeated in Neath will not prevent her from being elected—[Interruption.] I will not respond to that intervention from the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards).

In a leaked memorandum written in August 2003, a Plaid Cymru list Assembly Member—now the party’s engaging young party leader—Leanne Wood, was embarrassingly blatant in encouraging abuse of the system using taxpayers’ money. Let me quote from that memorandum for the benefit of the House and my case. She urged Plaid Cymru Assembly list Members to concentrate tens of thousands of pounds of their local Assembly office budgets in their party’s target seats. She urged her party’s list Members to do casework only where it might benefit Plaid Cymru in those target seats and to attend civic or other events the constituency only if they thought there were votes in it.

I will now quote directly from that memorandum, entitled “What should be the role of a regional AM?” It perfectly illustrates the problem we faced before the 2006 Act banned dual candidature in Wales. Leanne Wood was hardly shy about her objectives:

“Each regional AM has an office budget and a staff budget of some considerable size. Consideration should be given to the location of their office—where would it be best for the region? Are there any target seats…within the region?”

She went on:

“We need to be thinking much more creatively as to how we better use staff budgets for furthering the aims of the party.”

She finished off with a refreshing burst of honesty:

“Regional AMs are in a unique position. They are paid to work full-time in politics and have considerable budgets at their disposal. They need not be constrained by constituency casework and events, and can be more choosy about their engagements, only attending events which further the party’s cause. This can be achieved by following one simple golden rule: On receipt of every invitation, ask ‘How can my attendance at this event further the aims of Plaid Cymru?’ If the answer is ‘very little’ or ‘not at all’, then a pro forma letter of decline should be in order.”

I could not have presented my case better than she revealingly did.

[Huw Irranca-Davies (Ogmore) (Lab)]

I am absolutely astonished at what I am hearing from my right hon. Friend. Would he, like me, welcome an intervention from the two Plaid Cymru Members present in the Chamber to distance themselves from that startling abuse of taxpayers’ money?

[Mr Hain]

That is not a matter for me, but I take my hon. Friend’s point with acclamation.

[Wayne David]

Is not my right hon. Friend’s case substantially weakened by the fact that nobody seriously believes that Leanne Wood can be party leader for much longer?

[Mr Hain]

I think I shall move on from that point, despite the great respect I have for my hon. Friend.

All the arguments and evidence I have cited demonstrate conclusively that the ban was not partisan but enhanced democratic standards among Welsh Assembly Members. Indeed, I reminded the House that six Labour Assembly Members, including three Ministers, could have been defeated in the 2007 Assembly elections by a swing of 3% against them—a very small swing. They would no longer enjoy the safety net of the regional list and two subsequently lost. The reform affected Labour candidates, just as it applied to candidates from other parties.

[Alun Cairns]

rose—

[Susan Elan Jones]

rose—

[Mr Hain]

I think I really ought to conclude my remarks.

Surely the principle behind the 2006 Act is right: namely, candidates must make their choices and then voters will make theirs. My right hon. Friend the Member for Torfaen (Paul Murphy), also a former Secretary of State for Wales, put it well in a debate on the then Bill in January 2006:

“The additional member system that we have as a result of the 1997 settlement is fundamentally flawed. People do not understand it. They do not understand how an individual can stand in two ways for the same body on the same day in the same election and be defeated, then get elected a matter of an hour or two later. Equally if not more confusing is the fact that, in my constituency and in those of my right hon. and hon. Friends in the south Wales valleys, thousands upon thousands of people vote Labour on their second vote, yet none of those votes is counted. I do not understand the logic of that. I can understand the technicalities, because I taught the subject many years ago when I was a teacher in a college of further education, but as an elector or as an elected representative, I think that it is terribly confusing and ought to be changed.”—[Official Report, 9 January 2006; Vol. 441, c. 63.]

My hon. Friend the Member for Aberavon (Dr Francis), as the then Chair of the Welsh Affairs Committee, said in the same debate:

“Electoral reform should not get caught up in internecine party politics...the present system is an unloved and confusing creature that causes more grief than it is worth.”—[Official Report, 9 January 2006; Vol. 441, c. 69-70.]

My hon. Friend the Member for Alyn and Deeside (Mark Tami) said:

“Following the last Assembly election, many people asked me how candidates who stood at the election and were defeated—and, in many cases, defeated by a country mile—could find themselves sitting in the Assembly, claiming not only to represent constituents but having equal status with the people who defeated them. How would we feel if a third of this Chamber”—

by which he meant this Chamber—

“were made up of candidates that had stood against us”

before appearing on the list

“they would not have come up with such a system even in North Korea”,

although I confess to having come up with it as a Wales Minister in the 1998 legislation. My hon. Friend continued:

“Once getting into the assembly via the back door, these characters spend much of their time cherry-picking issues and targeting seats that they or their party are looking at for future elections.”—[Official Report, 9 January 2006; Vol. 441, c. 96-97.]

Those are some of the reasons why I introduced the bar on dual candidature. It is astonishing that, for narrow partisan party reasons, the Secretary of State is assisting his own party members in Wales and those of other parties who complained about the ban. After the 2006 Act banned dual candidature, the well-known democratic abuses that had occurred before were not repeated. I find it astonishing that the Secretary of State is reinstating a regime that brought democracy in Wales into such popular disrepute. If he persists, I hope the House of Lords will delete clause 2.

I want to pick up on an earlier point relating to the interesting exchange I had with the Secretary of State. I will read the exchange in Hansard carefully. I was not at all convinced by his answer. Indeed, I remain very concerned, on the question of income tax devolution, that Wales will be cut adrift from richer parts of the United Kingdom and lose out. There have been a lot of warm words about indexation, but I do not find the answers we have been given, or the references in the associated financial documents, to be at all compelling or convincing. I respect the Holtham commission and I respect Gerald Holtham. I understand his points on indexation, but I do not trust a Conservative-led Treasury to honour the commitments in the Holtham commission.

I would be more reassured—this is a cross-party point, because we all want to see Wales doing the best it can—if a clear and absolute commitment was embedded in the proposed legislation for Wales to continue to benefit, regardless of income tax devolution, from the wealth of the United Kingdom. My politics come from a belief in fairness, and the redistribution from richer to poorer regions and from richer to poorer individuals. I do not see how tax accountability, which the Secretary of State exalts, can be a two-way bet. I do not see how having devolved income tax and giving, in the main, the Assembly greater accountability to local voters, will then be protected, according to the Secretary of State’s reassurance, by a kind of indexation that undermines that accountability. That makes me even more suspicious of it. I will be extremely sceptical of, if not opposed to, income tax devolution until I am absolutely sure that Wales will not lose out, for the reasons I have described.

18:23

[Mr Mark Harper (Forest of Dean) (Con)]

I will add one or two extra points. This has been an interesting debate so far, and it has taken me back to the enjoyable debates we had during the passage of the Parliamentary Voting System and Constituencies Bill, which had much the same cast of characters. Indeed, we debated some of the same issues in relation to the Fixed-term Parliaments Act 2011—but I will dwell on the Bill before us.

I am pleased to support the Bill and the process that has led to its introduction. The shadow Secretary of State, who is no longer in his place, criticised the Secretary of State for Wales, for this being only the first, as he described it, Welsh-specific Bill, but I want to thank my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) and my right hon. Friend the Secretary of State for taking a very thoughtful approach. They set up the Silk commission and produced a draft Bill. The Select Committee, ably chaired by my constituency neighbour my hon. Friend the Member for Monmouth (David T. C. Davies), was asked to undertake pre-legislative scrutiny, and the Bill was then brought before the House.

It is important to think these matters through and to get them right. I speak as an English Member representing a constituency on the England-Wales border. The devolution delivered by the previous Government was not very well thought through. I have tried to address the example of cross-border health care in a reasonable way. I am sorry that the shadow Secretary of State is not here, because what he said in response to my question in Wales questions last week was simply not right. All I did was ask a question of the Secretary of State that reflected the fact that thousands of my constituents, who live in England and have the right, under the existing devolution settlement, to be treated according to the rules in England, are currently forced, because their GP in England is registered with the NHS in Wales, to be treated according to NHS Wales rules. That was the only point I raised.

My constituents are concerned when they read about mortality statistics being worse in hospitals in Wales. [Interruption.] I hear someone on the Opposition Front Bench saying that they are smearing Wales. In raising the issue of mortality statistics, I was merely quoting the right hon. Member for Cynon Valley (Ann Clwyd), who said in this House:

“The second warning sign, said Francis, is the level of mortality statistics. In fact, they appear to be dangerously high in many hospitals in Wales.”—[Official Report, 5 March 2014; Vol. 576, c. 930.]

Those are not my words; they are the words of someone who I would have thought that most Members accept is a very loyal and honourable member of the Labour party. I raise the point because, when considering further devolution to the Welsh Assembly Government, it is sensible for this House to ask itself whether existing devolution has worked well and has been properly thought through.

[Alun Cairns]

My hon. Friend refers to his question on mortality rates in Wales and the criticism from the Opposition. May I specifically state that this was a letter—

[Hon. Members]

It’s not in the Bill.

[Madam Deputy Speaker]

Order. Hon. Gentlemen must not shout from a sedentary position. If the hon. Member for Vale of Glamorgan (Alun Cairns) is not in order, I will tell him that he is not in order. I am sure that he will remain in order.

[Alun Cairns]

Thank you, Madam Deputy Speaker. I will do everything I can to remain in order. I want to refer briefly to a point made by my hon. Friend, who was criticised by Opposition Members. It related to a letter from the chief medical officer in England to her counterpart in Wales on the powers of devolution in Wales, seeking an investigation. How could that ever be interpreted as an attack on Wales, when it was from one clinician to another?

[Mr Harper]

I agree. All I did at Wales questions last week was raise a perfectly reasonable point on behalf of my constituents. I quoted something that the right hon. Member for Cynon Valley, a valued Opposition Member, had said—it is in Hansard—and then the shadow Secretary of State suggests that I asked something I did not, and pretends that it is all a smear. That is simply not the case; I am a Member of Parliament raising concerns on behalf of my constituents. The previous devolution settlement was not well thought through and I want to ensure that this one is. I am grateful to my right hon. Friend the Secretary of State for taking a great deal of care with the Bill.

[David T. C. Davies]

As a proudly Welsh MP, I am very grateful for all the support we can get in drawing attention to the state of the NHS in Wales. What does my hon. Friend think of the proposal to amend the Bill to allow Welsh patients who wish to be treated by the coalition Government-run NHS to cross the border, with the funding taken off the Welsh block grant?

[Mr Harper]

I have not had time to study that proposal in detail, but on the face of it allowing patients anywhere in the United Kingdom to have choice is very sensible. That is not a policy that the Welsh Government prefer. I think they said in a letter they sent to me that they prefer “Patient voice, not choice.” They will not allow people to have choice, but they can have a voice, which will then be ignored as the Welsh Government proceed as they want to anyway.

[Geraint Davies]

Will the hon. Gentleman give way?

[Mr Harper]

I will make a little progress before giving way again.

Let me divert a little to address the points on which the right hon. Member for Neath (Mr Hain) focused his speech, which relate to clause 2. I did not follow his argument at all. Although he was making a point about the amendment in the Bill, the thrust of his speech seemed to be a criticism of how the list system operates in Wales. He said that it was a system that we could find only in North Korea, but then he rather shot himself in the foot when he had to admit that he was the system’s author. I know that he is a supporter of proportional representation—

[Mr Hain]

I am not, actually.

[Mr Harper]

Oh, he is not a supporter now; I thought that he was. The system is the one he invented. Given that the Electoral Commission, which is independent of any party, and three of the four parties in the Assembly are perfectly happy with what is proposed in the Bill, I do not think that he can claim that this is being done for partisan reasons.

[Mr Hain]

I was one of the authors, under the Secretary of State at the time, Ron Davies, of the Bill that allowed candidates to stand in both the lists and the constituency, which the Secretary of State is now seeking to reinstate, but I had no idea of the abuse that would take place, for which I think I have provided more than ample evidence. That is the point.

[Mr Harper]

The right hon. Gentleman made two points, one of which I agree is an abuse, from the way he outlined it. Of course, parliamentary resources—I presume the same is true for the Assembly—are given to us by the taxpayer for parliamentary work, not party political campaigning. If that was the thrust of the Plaid Cymru document he quoted, that would have been quite wrong. He suggested that there is something wrong with candidates standing for a constituency and then being elected from a list, but that simply reflects the fact that in a list system, and certainly in the one that was put in place in Wales, it is the party label that gets a candidate elected, not their individual qualities. It seems to me that candidates getting elected by virtue of their place on a list might be a good reason for not having a list system, but it is not particularly offensive or undemocratic.

On voting for or against people, about which the right hon. Gentleman and I had an exchange, perhaps I am naive, but I happen to think that when people vote in a general election they are voting for somebody. I certainly conduct my election campaigns by trying to give people reasons to vote for me at a constituency level and reasons to vote for my right hon. Friend the Member for Witney (Mr Cameron) as Prime Minister, for example, rather than by thinking up lots of reasons why they should not vote for my opponents. I hope that is how my opponent in my constituency will conduct himself as well. That might not be what happens in Wales, but it is how I try to conduct things in my constituency.

[Mrs Gillan]

I recall that there was some reliance on work done by an organisation called the Bevan Foundation, with which Labour Members will be familiar. Part of the qualitative work it did at the time pointed out that, rather than objecting to candidates standing in a constituency and through the list system, people did not understand the electoral system itself. That was the fundamental problem at the heart of the whole electoral system that was set up for Wales.

[Mr Harper]

I suspect that my right hon. Friend, as ever, is spot on. The right hon. Member for Neath, in his lengthy speech, gave some anecdotes about one or two people who did not like the fact that a candidate who had stood in the constituency was then elected on the list, but I heard no evidence of a wider view.

[Mr Hain]

With all due respect, I represent a Welsh constituency, which is not the case for either the hon. Gentleman or the right hon. Member for Chesham and Amersham (Mrs Gillan), I was Secretary of State for Wales and I travelled the length and breadth of Wales, and that matter was raised with me all the time. He mentions the Electoral Commission, which often adopts a kind of academic approach to these matters. That contrasts with the findings of Denis Balsom and other sources of credible evidence from Wales.

[Mr Harper]

Based on what the right hon. Gentleman has just said, it sounds as if he has a number of anecdotes, but in my experience the Electoral Commission, with which I worked closely when I was the Minister with responsibility for political and constitutional reform, takes positions based on evidence. It carries out thorough research and is always scrupulous about not taking a position that could be portrayed as partisan, and it guards that reputation jealously. It does not agree with him, as he acknowledges—I have not always agreed with it—but I would put rather more weight on its views than on his.

[Mrs Gillan]

During the seven years that I was shadow Secretary of State and then Secretary of State, I travelled the length and breadth of Wales, too—usually in much less comfortable conditions—and I talked with many thousands of people right across Wales, including our candidates, and this was not at the top of their list of asks.

[Mr Harper]

As I thought, we have competing anecdotes. I suspect that my right hon. Friend, particularly as she describes the more modest circumstances in which she travelled across Wales, was rather closer to the people, so I put more weight on what she says.

Before that constitutional interlude, I was referring to the fact that my right hon. Friend the Secretary of State has taken a lot of care with this Bill. I want to put on the record my appreciation for the Welsh Affairs Committee’s excellent pre-legislative scrutiny report. The Government have obviously taken the trouble to respond to it and, as the Secretary of State said in his written ministerial statement, have accepted most of its recommendations. I think that was an excellent job. Doing pre-legislative scrutiny on a constitutional Bill is very sensible and likely to lead to a more accurate position.

[Nia Griffith (Llanelli) (Lab)]

I wonder whether the hon. Gentleman, who is so keen to praise the Committee’s report, agrees with its statement that

“as a point of principle, we consider it unadvisable for electoral systems to be changed frequently. Successive changes to electoral systems risk being perceived as partisan by the public.”

That is precisely on the point of dual candidacy. In other words, the Committee is saying, “Let’s keep the status quo.” Does he agree with that?

[Mr Harper]

No. I read the Committee’s report very carefully, and it did not say that we should keep the status quo at all; it said what the hon. Lady just read out. All that the Secretary of State’s proposals will do is return the system to the position that existed before the Labour party changed it in the Government of Wales Act 2006. All that we are doing is reversing it and putting it back to the original position. I read the report carefully and I am sure, knowing how Select Committees work—its Chair confirmed that it was quite hard to get agreement—that those words were chosen very carefully, and it absolutely did not say that we should stick with the status quo. My guess is that if someone had suggested that it said that, it would not have received cross-party agreement.

[Guto Bebb]

As a member of the Welsh Affairs Committee, I did indeed agree to the sentence the hon. Member for Llanelli (Nia Griffith) just read out, because I thought that it referred to the possibility of a further change if Labour won power any time before 2025.

[Mr Harper]

My hon. Friend makes a good point. Notwithstanding that point, the hon. Lady’s Front-Bench colleague, the hon. Member for Pontypridd (Owen Smith), committed at the Dispatch Box to reversing the provision, if I heard him correctly. Her admonition against frequent change should be aimed at him as much as the Secretary of State.

[Chris Bryant]

Will the hon. Gentleman give way?

[Mr Harper]

I will give way one last time before moving on to tax powers.

[Chris Bryant]

I knew that the hon. Gentleman would never be able to turn me down. Most countries in Europe have a fixed constitution, which means that they cannot play around with their electoral arrangements. In recent years we have changed the date of the Assembly elections and the local elections, and then we had to change them again because we had already changed the Assembly elections. The voters of this country must surely feel that we play around with the electoral system far too much.

[Mr Harper]

That does not fit my recollection. Let me think about the change of date for the Assembly election. It was carefully thought through. We consulted the leaders of the parties in the Assembly; I recall that I found out the views of the presiding officers before we amended the Fixed-term Parliaments Bill.

The hon. Gentleman might not agree with the system, but all the parties in the Welsh Assembly agreed to it. The change was made for what was argued to be a sensible reason—to prevent the two elections from coinciding, so that the important issues facing the people of Wales would be properly debated rather than being overshadowed by other issues facing the people of the whole United Kingdom. My right hon. Friend the Member for Chesham and Amersham put the alternative view that the elections should be held on the same day, and the hon. Gentleman has put forward the same view today. However, having separate election dates seems to me perfectly sensible, and that was the view taken by the Government and this Parliament.

[Chris Bryant]

The thing is that we never shorten the mandate; we always lengthen it. Now local authorities in Wales will end up having five years—possibly six—and that will be the second time they have had five years during my time as an MP in Wales. The Assembly is also going on to five years. It feels as if the political class is constantly saying, “Let’s give ourselves a little more time.” That undermines the democratic sense of British politics.

[Mr Harper]

I have listened carefully to both the hon. Gentleman’s points and the one made by the shadow Secretary of State. It seems to me that they were both taking the brave point of view—presumably, it was a commitment from the shadow Secretary of State—that if the Labour party were, God forbid, to win the next election, it would amend the Fixed-term Parliaments Act and reduce the fixed term to four years. I am not sure whether the shadow Secretary of State has consulted his party leader about that, although I hope he has, for his sake. That seemed to be a clear commitment from him. If the Labour party wins the election, we will see whether it reduces its time in office. I know that the hon. Member for Rhondda (Chris Bryant) says that his party voted for a shorter term when in opposition, but I am pretty confident—I said this at the Dispatch Box, I think—that if his party returns to government, it is highly unlikely that it will vote to shorten its term of office. I might be proved wrong, but I doubt it.

I welcome in general the Bill’s proposals on the devolution of tax powers for the clear reason of accountability. As someone with a constituency on the border, I think it wrong that the Welsh Assembly Government, like the Scottish Government, can spend money on enticing business across the border, but are not accountable for raising the money that they use to do that. Proposals to devolve some of the taxes are sensible; it makes absolute sense for there to be more accountability.

On the issue of capital borrowing, I should say that I am sorry that the hon. Member for Swansea East (Mrs James) is not in the Chamber any more. Let me elaborate a little on my short intervention on her. I looked at the “Wales Bill: Financial Empowerment and Accountability” paper that the Government laid before the House. It is a strange plot, to use the word of the hon. Member for Swansea West (Geraint Davies), that is published and laid before Parliament; I thought plots were conducted in secret, but obviously things have changed.

The paper seems clear: it sets the statutory capital borrowing limit at £500 million. That is linked to the £200 million or so of revenue that is initially being devolved. The limit is higher than if it had been set solely by reference to the same tax borrowing ratio that applies to Scotland. In Scotland, there is a £5 billion responsibility for tax revenues, but only a £2.2 billion capital borrowing limit. If my right hon. Friend the Secretary of State had used the same limit in Wales, there would have been a £100 million capital borrowing limit instead of a £500 million one.

My right hon. Friend has met the challenge to show his workings, which were in the paper presented to the House and available to all Members before this debate. He has clearly set out how the Government reached the £500 million limit. As my hon. Friend the Select Committee Chairman said, the limit was increased to £500 million to allow the Welsh Government to proceed with improvements to the M4, should they choose to, in advance of that element of income tax being devolved. The Government judged that such borrowing was affordable for both the Welsh Government and in relation to the UK’s overall position. That seems a sensible position, which has been transparently laid out in the paper.

[Hywel Williams]

For the sake of completeness, I should say that a Treasury Minister gave the same evidence to the Welsh Affairs Committee. As the hon. Gentleman says, it would be a strange plot that advertised itself so comprehensively.

[Mr Harper]

I am grateful for that point, which shows that the Government position is joined up across not just the Wales Office but the Treasury. The right hon. Member for Neath showed an astonishing lack of trust in the Treasury led by my right hon. Friend the Chancellor, whose excellent recent Budget cut taxes for those on modest incomes. The Labour party voted against those—against the fuel duty cut and the tax cuts for modest earners. I find that surprising.

[Mr Hain]

I do not trust the Treasury whoever is in power.

[Mr Harper]

I defer to the right hon. Gentleman, who has been a spending Minister in a number of Departments. For much of that period, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was Chancellor, so perhaps it is not surprising that he takes that jaundiced view. Having dealt with my right hon. Friend the Chancellor, I have a more positive outlook on Treasury Ministers, and I have yet to be proved wrong.

[Mr Hain]

The only Treasury Minister I trusted was Madam Deputy Speaker, when she was in that Department.

[Mr Harper]

Madam Deputy Speaker, I shall not draw you into the debate. I am sure that, for the sake of your reputation at the Treasury, you would, if allowed, cast off that foul calumny. If the right hon. Gentleman thought that highly of you when he was a spending Minister, you could not have been doing your job as a Treasury Minister properly. We all know that you absolutely were; otherwise you would not have found your way into that Chair. I will close this aspect of the debate just there, before I find myself cut off against my will.

I have some questions for my right hon. Friend the Secretary of State, although I do not necessarily want him or the Minister to respond today; perhaps we can touch on the issues when the Bill returns to the Floor of the House in Committee. If the income tax provisions were devolved, how would they work? I looked carefully in the Bill at the definition of an individual Welsh taxpayer; it is to do with their usual place of residence. How complex will operating the system be for businesses, particularly for small and medium-sized enterprises? In a constituency such as mine, businesses will have staff resident in both England and Wales. If income tax varying powers were to be used by the Welsh Government, I would want to make sure that the burden placed on employers of English and Welsh residents was not significant and that the system was as easy as possible to operate—preferably with as little burdensome administration as possible. I will return to that issue in Committee, to make sure that it has been properly thought through.

I also want to check on the issue of stamp duty land tax. The shadow Secretary of State touched on it in a slightly facetious way when he discussed properties that straddled the England-Wales border. I want to make a serious point about the quality of the mapping involved. May I make a plea for us not to use postcodes in determining which nation the land is in? It is not the Post Office’s fault, but a lot of organisations are sloppy and do not use postcodes properly. They assume that everybody with an NP postcode lives in Wales, including my constituents in the southern part of my constituency. A lot of my constituents, who live in England, get bilingual letters from all sorts of organisations that assume they live in Wales. I hope that my hon. Friend can assure me that we will use a proper mapping system when looking at stamp duty land tax so that we make the right decisions about whether property is in England or in Wales and do not have the sorts of cross-border issues that I have seen as a result of devolution so far.

I support the proposal to move to fixed-year terms offset against the terms for this place. On balance, it is better to have elections in Wales that focus on the issues important to the people of Wales—and ensure that those running the Welsh Assembly and those wanting to be elected to it are properly held accountable—than elections that take place on the same day as a UK general election, because then the arguments would blur. One can argue it both ways—the hon. Member for Rhondda, who is no longer in his place, did so, as did several others when we were passing the Fixed-term Parliaments Act 2011—but I am pleased with the measure.

I have already said that I am happy with the proposal to reverse the change made by the right hon. Member for Neath, and I will say no more about that. We have had a lot of debate about it already, and I do not want to provoke any more.

I notice that the borrowing powers are already available to be used for the M4 development. That is a helpful proposal. I have been having an ongoing debate with some Labour Members about the Severn bridge tolls that is driven by the desire for improvements on the M4 to improve the economic benefits from that corridor. I have proposed a third Severn crossing, although that is not welcomed by all Labour Members if it means an extension of toll revenues. Some of the borrowing powers could enable improvements to the M4 link, which is very important for the economies not only of south Wales but of constituencies such as mine. The proposal is very welcome.

Overall, I welcome the Bill. I am glad that it has been well thought through as a result of the proposals from the Silk commission and that it had pre-legislative scrutiny in this House. I will certainly support it, and I look forward to debating it further on the Floor of the House.

18:52

[Wayne David (Caerphilly) (Lab)]

I will support this Bill, although I have to say that it is very disappointing because it is, I am afraid, a bit of a shoddy compromise. Everyone realises that the Secretary of State for Wales is no enthusiast for devolution—indeed, some people might go further than that—and we know that the Liberal Democrats are quite enthusiastic, so we have a cobbling together of two different opinions, and the Bill suffers as a consequence. Its main proposals, which are modest and relate to the tax-raising capacity of the Welsh Assembly, are very limited. It also has strangely attached to it some new arrangements with regard to the electoral politics of the Welsh Assembly.

Although the first part of the Silk report has been quoted in support of the Bill, there is a great deal of difference between what Silk proposed and what the Government have put before us. For example, Silk states very clearly and boldly that

“for the financial accountability and empowerment of the National Assembly for Wales to be improved sufficiently, it should be responsible for raising a more substantial proportion of its spending.”

That is the core of its proposal. What the Government have given us on income tax-raising powers is a long way from the aspiration articulated by Silk. It is important to recognise, too, that a genuine and fundamental concern has been expressed by many people, including those in the Welsh Assembly, that there is no significant movement on Barnett. This proposal is a real runner only if there is a cast-iron commitment to, and a firm set of proposals on, modifying the Barnett formula as it applies to Wales. Under Barnett, as we all know, Wales is short-changed to the tune of £300 million per year, and that situation will not be addressed by this Bill.

[Alun Cairns]

I am interested in the sum of £300 million because it was presumably derived from the Holtham report, which is now some years old. Gerry Holtham also pointed out that as public spending contracts proportionately, the Barnett formula will protect Wales and the £300 million will decrease. Does the hon. Gentleman agree?

[Wayne David]

The £300 million figure, which is quoted widely and not just by me, is the most accurate figure that we have to go on at the moment. It is widely used by a number of academics as the main basis for the calculation.

[Alun Cairns]

My point is that the figure is several years old. There has been a change in the scale of public expenditure since then, and it is therefore nowhere near £300 million any more. Does the hon. Gentleman accept that, given that Holtham said it in the report?

[Wayne David]

Not necessarily, because an added scenario that Gerry Holtham did not take into account is the austerity package that has been put together by this Government, which has led to huge cuts in the Welsh Assembly Government’s budget. To begin with, those cuts have not kept up with inflation, but all the indications are that they will be significantly deeper. That is an important backdrop to the whole matter that we are tackling.

[Jonathan Edwards]

I totally disagree with the hon. Gentleman. I do not believe that there is a link between the Barnett formula and devolving financial powers, but that is the position that the Labour party has taken, and it is a roadblock. Will he confirm that at the next Westminster election Labour’s manifesto will include a commitment to review the Barnett formula, because last week his colleagues in Scotland were saying that they would rather die in the ditch before Barnett was reformed?

[Wayne David]

The Labour party had in its previous general election manifesto a commitment on modifying the Barnett formula, with the introduction of fair funding and a floor. That is currently Labour’s policy, and I have every confidence that it will be taken forward.

Given the possibility of a referendum on the income tax powers—although that is not very likely—it is rather disappointing that the Government have not learned lessons from previous experience of referendums across the UK, especially in Wales. The Electoral Commission has made the valid point that we need to learn one lesson, in particular, from the previous referendum on whether the Assembly should have law-making powers, when there was no coherent, registered no campaign and therefore there could not be a registered yes campaign. As a result, we did not have the kind of debate on the Assembly’s powers that we should have had, and that is partly why we had such a relatively low turnout. I am slightly concerned that the Government have not learned that lesson and have not reflected it in their legislative proposals.

[Hywel Williams]

I rather agree with the hon. Gentleman. I was very disappointed that the no campaign did not organise sufficiently last time. The question about the referendum that I have asked a number of times is how on earth we formulate a question about lockstep, because given that, with all due respect, many hon. Members, and even right hon. Members, might not quite understand it, I do not know how we are going to present it to the Welsh public.

[Wayne David]

That is a fair point that is worthy of debate.

Another significant constitutional measure is the electoral mechanism by which Assembly Members are elected. A number of Members have already referred to that.

[Glyn Davies]

Will the hon. Gentleman give way?

[Wayne David]

I have not made a point yet. Hang on a second—I will make a few points and then I will give way.

[Glyn Davies]

It is on the Barnett formula.

[Wayne David]

I have moved on from that. The hon. Gentleman has to learn to pay attention. But, I will be generous.

[Glyn Davies]

I was waiting until the hon. Gentleman finished his point before intervening. It was only when he moved on to the next point that I realised he had finished. Is he telling us today that a Labour Government would actually reform the Barnett formula and would then support putting the proposition for income tax powers for the Assembly to a referendum?

[Wayne David]

I do not think I said that. The hon. Gentleman has put forward an interesting hypothesis and I am sure we will consider it at the appropriate time, but it is not relevant to the discussion we are having here.

As I was saying before I was interrupted, one of the most significant constitutional changes in the Bill is the proposition that we should change the method of election for the Welsh Assembly—that there should be a revision of what was agreed in the Government of Wales Act 2006. Like other Members, I have been travelling around Wales listening to what members of the public have to say. Reference has been made to a report from the Bevan Foundation. I remember that report well, as I was one of the Members who commissioned it. It came to the objective conclusion on the basis of a representative cross-section that, as the right hon. Member for Chesham and Amersham (Mrs Gillan) said, most people in Wales did not understand the system. They also thought it was intrinsically unfair that individuals who put their names forward for election but lose the election should suddenly appear in the Welsh Assembly—most people would assume that, as those people had lost, they would not be elected.

It is fundamentally impossible to explain the rationale behind that or to argue that it is fair. Whatever special pleading we make for small parties because of how difficult it is for them to get together a sufficient number of candidates, it is an unfair proposition.

[Alun Cairns]

Will the hon. Gentleman give way?

[Wayne David]

Yes—do your best to explain it.

[Alun Cairns]

Will the hon. Gentleman inform the House why he thinks that either his anecdotal evidence or his summary of the Bevan Foundation’s reasons for its recommendations are more independent or fair than the work of the Electoral Commission, which was challenged legally to come up with a full consultation, based on evidence, and ultimately to give the Secretary of State a recommendation? The commission did so, and found in favour of the measures in the Bill.

[Wayne David]

It is basic common sense. If someone loses an election, they do not get elected—it is as simple as that. I challenge the hon. Gentleman to explain to anybody in the street why that is not fair. I guarantee that he will fail. Go on—have a go.

[Alun Cairns]

I do not want to labour the point too much, but I remind the hon. Gentleman that in the 2003 election every Labour Assembly Member topped the regional list. That suggests that there is yet another inconsistency. Even the then First Minister, Rhodri Morgan, who I suspect was highly unlikely to lose, topped the list. The Opposition used the system in their interests, in spite of what has been stated now.

[Wayne David]

I am at a loss to understand the rationale behind that. We live in a democracy and have to accept the system that Parliament agrees. That does not mean that we think it is right, because it is not—it is fundamentally wrong. What is being suggested in the Bill amounts to gerrymandering.

I will give a couple of examples of how the regional list system as it stands at the moment is being abused in an immoral way. There is the case of Mohammed Asghar. He was elected to the Welsh Assembly as one of Plaid Cymru’s regional list Assembly Members, but having been elected as such, then decided to cross the House and join the Conservatives. Why did he join them? Was it a great matter of political principle? No. It is said that there was a disagreement about the employment of his daughter, so he decided to cross the House and use the system.

Another, more relevant and contemporary example is that of an Assembly Member called Lindsay Whittle. Lindsay Whittle was elected to the Welsh Assembly as a Plaid Cymru list Member for South Wales East. However, Mr Whittle is also a member of Caerphilly county borough council. He lives in Caerphilly and appears to spend a disproportionately large amount of time in Caerphilly. [Hon. Members: “He lives there.”] He does live there, but he works there as well, irrespective of the rest of his constituency. I put this to the House: can it be that Mr Lindsay Whittle is so interested in the council and in his own particular locality because he wants to stand in the Caerphilly constituency at the next Welsh Assembly elections in 2016? I think that is quite likely. The point I am making is that democracy in this country is based on representation. If someone does not represent people properly, but instead represents their constituents selectively and picks out who they are going to focus on, it is undemocratic and unfair. It is reprehensible for the individual to behave in that way, but it is also reprehensible that they are able to do that under the political system.

If Mr Whittle does indeed stand for re-election in 2016, his calculation will be, “Yes, I’ll have a go at Caerphilly but I don’t need to worry if I lose because I still have the old regional list system to fall back on.” That is a practical example of this unfairness. I challenge any Member to explain to the people of south-east Wales how that can be justified and how it is an example of democracy as we understand it—it clearly is not.

[Hywel Williams]

I am slightly curious. The hon. Gentleman seems to be complaining about Lindsay Whittle doing his job effectively, given that, from what I understand, he is a councillor and he lives in Caerphilly. It reminds me of Lord Foulkes’s remarks about how the Scottish National party is going around deliberately improving services in Scotland in order to be popular.

[Wayne David]

The essential point is that this individual is a councillor representing his small ward on Caerphilly county borough council, but what about the other wards and local authorities in the region that he is also supposed to be representing? What about the other parts of south-east Wales that he is supposed to be representing? The fact is that he has chosen to represent only some people and to pursue their interests for his political advantage. That is not fulfilling a democratic mandate properly.

[Hywel Williams]

There is a well-established principle in American politics that if someone does not do their job right, they are kicked out—it is the “kick the bums out” principle. If Lindsay Whittle is not doing his job representing people as a list Member, surely the electorate will kick him out.

[Wayne David]

The whole point is that people cannot pick and choose who they want on the list. The list is drawn up by the party machines—a closed list. That in itself is undemocratic in my view. People cannot pick and choose. If people are not satisfied with the way that somebody on the list is doing their job, they cannot get rid of that person because the system works to ensure that the vested interests of elites are maintained. Most of those are in the smaller political parties.

[Roger Williams (Brecon and Radnorshire) (LD)]

I am sure that the hon. Gentleman will be voting against this part of the Bill, but does he think that there could be an amendment so that we do not have closed lists but open ones? Would that be an improvement?

[Wayne David]

There is a lot to be said for that, yes. I would take it further. The elections for the European Parliament have closed lists, and there has been a debate about whether those lists should be open. Speaking personally, I think there is a lot to be said for that. Democracy is about fairness, openness and transparency. Those qualities are sadly lacking in the proposals in the Bill.

In an intervention on my right hon. Friend the Member for Neath (Mr Hain) I referred to the fact that in the impact assessment the Government have said that they want to change the 2006 Act because smaller parties say that they have difficulty in coming forward with a sufficiently large pool of

“high quality candidates to represent them in elections.”

That is what it says. [Interruption.] That is what the Government say. In other words, they are saying that, because Plaid Cymru and Conservative party candidates are not sufficiently attractive to the population, the electoral system must be changed to allow those inadequate people to get elected. That is absurd. It is not a definition of democracy. It is an indictment of the paucity of the Government’s arguments.

As I said earlier, I will support the Bill but, as Members will have gathered, I will not do so with any conviction or determination and certainly not with any enthusiasm. Frankly, it is better than nothing, but not much better. I assure the House that we will argue strongly in Committee about many of the issues that I and others have raised, and I hope to goodness that Members will have the common sense and decency to think again.

19:10

[Roger Williams (Brecon and Radnorshire) (LD)]

It is a great pleasure to speak in this debate. Many great political figures in the history of devolution will be very pleased that it is taking place. My predecessor Richard Livsey, Rhodri Morgan, Ron Davies, Lord Wigley and Lord Elis-Thomas will be delighted, although Richard Livsey is in a more elevated chamber than those in the Palace of Westminster.

Although the Conservatives did not embrace devolution to begin with, their contribution has been substantial. I thought that Lord Bourne, who was a regional Assembly Member, might have been based in Brecon and Radnorshire, but he actually lives in Aberystwyth and is now Lord Bourne of Aberystwyth. It is a tribute to this Government that this Bill has been introduced, and that is to be celebrated. I congratulate the Government on moving quickly with the Bill so as to ensure that part I of the Silk proposals can be acted on in this Parliament. That shows real commitment to devolution and I commend it.

My party, both in Wales and across the UK, believes that power and authority derive and flow upwards from the people and that power must be exercised at the most appropriate local level. We have long supported a federal system as part of our vision for the UK’s constitutional future. In order to ensure that our central principles of dispersing power as widely as possible and ensuring that Wales’s distinct challenges can be addressed, we have advocated and supported devolution strongly. We have argued consistently since the establishment of the National Assembly that it should possess additional financial and legal competences. The key to that has been the need to increase the Assembly’s accountability, and I believe that this Bill goes a very long way to doing that.

It is true that a lockstep, which other Members have mentioned, will put some constraint on the ability of whichever Government are in office in Cardiff Bay to use those powers. Although I would prefer not to have the lockstep, the acceptance of the principle of giving income tax powers to the Welsh Government is such an important step that it should not be dismissed.

In their reasoning on the inclusion of the lockstep, the UK Government have argued that the devolution of power to set different rates

“could distort the redistributive structure (or progressivity) of the income tax system and could potentially be detrimental to the UK as a whole.”

I do not want this Bill to be used as a means of establishing tax competition between Wales and the rest of the UK, but we must accept that tax competition is an inevitable consequence of devolution. If we are arguing that Wales should be able to borrow and raise what it wants to spend, it should have the power to tax as it sees fit.

Overall, although I cannot pretend that I would not prefer it if there were no lockstep, under the circumstances I am willing to accept it, if it means the increased accountability and responsibility for the Welsh Assembly that this Bill will deliver.

[Hywel Williams]

I agree entirely with the hon. Gentleman about the lockstep, but if taxes were reduced across all bands we would retain a certain amount of progressivity. The progressiveness of the system itself can vary depending on whether the rate goes up or down, so the lockstep is not a full answer to the question of progressivity in respect of income tax.

[Roger Williams]

I accept the hon. Gentleman’s argument, but that is the form in which the Bill appears, and rather than take the risk of losing the powers, my party is prepared to accept it.

On borrowing powers, I share some of the concerns outlined by my hon. Friend the Member for Ceredigion (Mr Williams), who will speak later, on the issue of writing a borrowing figure into the Bill. In the Welsh Liberal Democrat submission to the Silk commission, we argued for borrowing powers equivalent to those proposed for the Scottish Parliament—a capital borrowing limit of 10% of the total capital budget each year, with a cap at about 10 times the amount. We also asked for a very small amount of revenue borrowing, which would be a better, more sustainable approach to the borrowing arrangements.

In addition to the Bill’s financial measures, I welcome a number of constitutional moves, including those on double-jobbing, five-year terms and the lifting of the ban on dual candidacy. The move to five-year terms will help ensure that issues relating to the Assembly will receive the hearing they deserve during election campaigns. In the 1999 Assembly elections, I stood at both constituency and regional level but failed to get elected in either, so it is not a fail-safe system. Those Assembly elections took place at the same time as local government elections and Carmarthenshire had multi-member wards. There were polling booths with the words, “Remember you can vote for two candidates,” written above them. Obviously, that referred to the local government election, but it confused a lot of electors and resulted in an enormous number of spoilt ballots, because they were not aware of the complexity of the system. I think that having separate election days is very important.

When legislating on a ban on dual candidacy in 2006, the then Labour Government said that the process

“devalues the integrity of the electoral system in the eyes of the public and acts as a disincentive to vote in constituency elections.”

However, in reality it has reduced voter choice and undermined the credibility of the electoral system by punishing parties for being successful. I believe that the Opposition’s often used argument that turnout would diminish because voters would be unprepared to vote in elections in which some losing constituency candidates were likely to be elected as regional candidates is unfounded. Dual candidacy is accepted by the electorate in Scotland and, indeed, for the London Assembly.

We heard from Labour’s Welsh conference over the weekend that Labour would like to see Wales’s powers brought into line with those in Scotland and move towards the reserved powers model. I and my Liberal Democrat colleagues would wholeheartedly support that, but I remind the Opposition that they had 13 years to address those issues. In its 2011 manifesto, Labour made a commitment

“not to seek powers to vary income tax”.

That was a straightforward rejection, so I am very pleased to hear that Labour has changed its view and I look forward to the passage of this Bill through Parliament.

19:19

[Hywel Williams (Arfon) (PC)]

I am very pleased to speak in this debate, because we in Plaid Cymru welcome the chance—at long last—to debate the Wales Bill, modest as it is. We particularly welcome the fact that the Bill is a vehicle for implementing greater financial powers for Wales. Those powers need to be looked at very carefully in Committee, and I look forward to such a debate, as does my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards). However, we cannot help but feel that the Bill is a lost opportunity to implement the full recommendations of the cross-party Commission on Devolution in Wales, chaired by Paul Silk.

I first want to reflect for a moment on the process and the time that it has taken to get to the Bill today. Following the overwhelmingly successful referendum in 2011—we in Plaid Cymru, as part of the One Wales coalition Government, had pushed for it—and realising the growing appetite of the people of Wales for greater control of their lives, as well as perhaps mindful of the growing appetite across these islands for constitutional change, the Westminster Government set up the Commission on Devolution in Wales to consider the devolution of further powers. Each of the main four parties nominated a commissioner. Eurfyl ap Gwilym served with distinction for Plaid Cymru, and I commend his work and that of the other commissioners.

The commission was instructed to produce two reports—the first on financial powers, and the second on wider policy issues. It was specifically instructed not to look at the issue of funding, namely the Barnett formula. As we have already heard, the independent commission headed by Gerry Holtham noted that Wales loses out on about £300 million each year. I take the point made by the hon. Member for Vale of Glamorgan (Alun Cairns), who is no longer in his place, that the figure varies, but if the UK economy takes off, as we all fervently hope and as the Government certainly hope, the loss will be increased.

The commission produced a highly commendable piece of work in November 2012. Its first report was a complex package of recommendations. I use the word “package” advisedly, because part of our concern about the Bill is that the whole package has not been adopted. We in Plaid Cymru wanted more, as our submission to the commission attests, but we gathered round the compromise that had a chance to work precisely because it was a package of reforms. I know that the commission came to its conclusions after a great deal of hard bargaining.

[Albert Owen]

The hon. Gentleman is making a very interesting point about the balance on the commission, but surely it is the place of Parliament to debate and decide changes in laws, not just to rubber-stamp commissions.

[Hywel Williams]

I take the hon. Gentleman’s point entirely. However, the commission was set up by the Government to look very closely at the question and it came to a unanimous judgment, but they then decided to adopt only some parts of its report. My point is that I wanted them to adopt the entire recommendations of part I of the Silk report. It is disappointing that they did not, because we can see the package of reforms that the commission came to as its conclusion.

It is also massively disappointing that the Government waited so long to respond to the report. We were told that they would respond in the spring of 2013. Then it was pushed to the summer. I remember making the point in the Welsh Grand Committee, when the Secretary of State said that spring officially ends in June, that July in Welsh is Gorffennaf—gorffen haf—which means the end of summer. We waited, and autumn came. The nights were drawing in, the countdown to Christmas began and, eventually, a full year after the commission produced its report, the Government responded.

[Glyn Davies]

I am listening to the hon. Gentleman’s speech with great interest, but does he accept that moving forward with a Bill to recommend tax-raising powers for the National Assembly for Wales is a huge advance in devolution that will, if such powers are granted, transform the Assembly’s authority? Does he agree that introducing those powers in a Bill as quickly as the Government have done—we are debating it today with a view to taking it through in this Parliament—is quite a creditable performance?

[Hywel Williams]

I am indeed very glad that the Bill is before us, as I said at the start of my speech, but I am contrasting the time between the commission reporting and the Government responding. We suddenly have the Bill before us today. I certainly welcome that, but I have no idea why it has appeared so quickly; it is not for me to comment on the lack of other Government business.

I know that the term “a slap in the face for Wales” is very well used, and I hope that it will be reported tomorrow by our friends in the BBC, but I must say that to ignore such a fundamental report—as the hon. Gentleman has just pointed out—for so long is somewhat disrespectful. More importantly for us in Plaid Cymru and for other hon. Members, it is also damaging to the political and economic progress that our country can make. The Welsh Government continue to be denied the powers that they should be able to exercise—they are also denied the funding that they should have—and that were recommended by Gerry Holtham. However, we are where we are—but where are we?

Towards the end of last year, the Prime Minister swept into the Senedd building in Cardiff Bay to a media fanfare and the flashes of cameras, and announced new financial powers for Wales, but the proposals were rather light on detail. Indeed, the Prime Minister had discovered “anti-gravitas”, as I called it at the time, in making a proposal that then seemed to float away. It was not until some weeks later that we learned that all was not as it seemed. The Government had cherry-picked the cross-party Silk commission’s recommendations—accepting some, but only in part, and even omitting others.

The draft Wales Bill was published in January, and the Welsh Affairs Committee, of which I was a member, was tasked with its pre-legislative scrutiny, with a tight turnaround for producing a report. I must say that I enjoyed the process of scrutinising the Bill, and I pay tribute to all Committee members and to the hon. Member for Monmouth (David T. C. Davies), for his chairmanship. Contrary to his rather fierce, if not sometimes eccentric, persona in this Chamber, he was the model of a balanced Chairman, and I was very glad, if slightly surprised, that he acted in that way.

To return to the narrative, the Government then seemed to be in a hurry, and we now have the Bill. The Welsh Affairs Committee sessions took evidence from a variety of independent academics, civil society groups and even elected politicians from both this place and the National Assembly for Wales. Interestingly, even Opposition party leaders from Cardiff graced the Committee’s sittings. That move was not uncontroversial, because the Committee’s purpose is of course to scrutinise the Government at Westminster. Having the party leaders from Cardiff caused a certain amount of head scratching, because it was something of a first. However, it indicated that this was not some humdrum scrutiny exercise of a small Whitehall Department or a minor Bill because, as was pointed out by the hon. Member for Montgomeryshire (Glyn Davies), the Committee was considering part of the blueprint for the next stage in our national political development, and it deserved such a level of scrutiny.

The consensus that began to emerge was that borrowing powers were vital to allowing the Government of Wales, formed of whichever party or parties, to be able to borrow for investment to boost our economy and create jobs. However, the consensus was that the lockstep on income tax rates meant that the provision could not realistically be varied, because the power was unusable. Other than the duo of the Secretary of State for Wales and his Treasury colleague, the Exchequer Secretary—unsurprisingly—all agreed that it would be far better to have the ability to vary each individual income tax band rate.

During sittings of the Welsh Affairs Committee, I pointed out a paradoxical effect of raising or lowering tax rates with a lockstep. If we raise the tax rates with a lockstep, the higher rates are then less progressive than the lower ones: if we raise tax by a penny on the 20p band, we increase it by a twentieth, while if we raise it by a penny in the 40p band, we increase it by a fortieth. We should bear that slightly obscure ratio issue in mind. Equally, a decrease has a similar effect.

The cross-party Silk commission recommended in the first place that we should not have a lockstep. I proposed an amendment in discussions on the Welsh Affairs Committee report—I proposed that the Committee recommended dropping the lockstep. Unsurprisingly, our three friends from the Tories voted against my amendment; the hon. Member for Ceredigion (Mr Williams) and I voted for it; but, unaccountably, Labour members of the Committee managed to abstain. Even though they have publicly declared opposition to the lockstep in the Committee, they did not step up to the plate.

[Jonathan Edwards]

How baffled is my hon. Friend on the Labour party’s position on the lockstep? The First Minister says he wants to get rid of it. The shadow Secretary of State said today that he supports it. Who speaks for Labour?

[Hywel Williams]

I remain baffled—that is all I can say. Irrespective of Labour party internal divisions and wrangling, Labour has said that greater financial powers should have been granted, but now it is possibly saying that they should not be. The Tories remain divided on the lockstep. The greater part of the group in the Assembly complains that income tax powers with the lockstep are unusable, but the other part supported the London party and was given the sack.

I referred to the referendum when the hon. Member for Caerphilly (Wayne David) was in his place. The formulation of the question, if we ever have a referendum, will be extremely difficult, but rather than make the point myself, I shall but quote from the widely respected economist, Gerry Holtham, who told the Welsh Affairs Committee that Welsh politicians are being asked to

“fight a highly losable referendum. Tax is not popular, and, to be frank, neither are politicians at the present time. It is most unfair, but there it is. You are asking them to fight a losable referendum for a tax power they can’t use. It doesn’t look like a high-odds proposition to me.”

I tend to agree with him, particular given the possible complexity of the question, and the possible lack of a no campaign, which has been referred to.

The hon. Member for Nottingham North (Mr Allen), the constitutional expert and Chair of the Political and Constitutional Reform Committee, urged members of the Welsh Affairs Committee to seek to amend the legislation so that the lockstep is removed. He has said that the requirement for a referendum on the limited income tax powers is “ridiculous”. The Secretary of State, however, sung the praises of the lockstep, saying that it could be used to vary all rates and would put Wales at a competitive advantage. He has also noted his opposition to the devolution of long haul air passenger duty, as that would put Bristol airport at a competitive disadvantage. On the one hand, he argues against a competitive advantage, but, on the other, he refers to a competitive disadvantage. That does not seem particularly coherent to me, but there we are. In evidence to the Welsh Affairs Committee, the First Minister seemed to say that he wants Wales both to have a tax competition advantage and not to have one, as expertly adduced in a telling question asked by the hon. Member for Aberconwy (Guto Bebb). That incoherence shows that the cherry-picking of the Silk recommendations falls apart. It is a whole package.

On Labour’s new-found conversion to the need for reform of the Barnett formula, Plaid Cymru has been pointing out the consistent underfunding of Wales through the block grant for well over a decade, but successive Labour Secretaries of State have assured us that

“the Barnett formula serves Wales well”.

I am sorry that the right hon. Member for Neath (Mr Hain) is not here, because those are his words. I know them by heart because I have heard them so often. His consistent standpoint is that the formula serves Wales well and we meddle with it at our peril. I will not intrude on Labour’s private grief and confusion, and the further inconsistency on Barnett that Labour’s leader in the Scottish Parliament seems to generate so effectively and so unconsciously. After 13 years in power when Labour could have sorted the formula, it now cries for fair funding—the hon. Member for Pontypridd (Owen Smith) says that income tax powers without fair funding is a “Tory trap”.

Wales should be fairly funded, as Plaid Cymru has long argued, because every day we lose around £1 million in additional funding. Those figures change, as the hon. Member for Vale of Glamorgan has said—he would no doubt jump up and remind me were he in his place. We lose around £1 million every day, which we could spend on improving our health service, tackling the scandal of poverty or building new schools. For now, the Labour position is no fair funding and no income tax powers for Wales. We know why. That is Labour’s position because it fears that, if we address Barnett, its anti-independence campaign in Scotland will be finally scuppered. Oddly, therefore, the Labour party says in Wales that we must reform Barnett, but the very same unified and indivisible Labour party says in Scotland that we must not reform Barnett.

Meanwhile, the UK Government water down the Silk recommendations to conform to their fundamentally anti-devolutionist view that Wales cannot possibly have something that Scotland does not have. As we have seen this past week, events in Scotland may overtake them all.

[Albert Owen]

May I ask the hon. Gentleman what the view of Plaid Cymru’s sister party in Scotland is? If there is a no vote, which I hope there is, in the referendum in Scotland, will he and the sister party—the Scottish National party—argue for reform of Barnett in Scotland, which could reduce Scottish revenues from the UK Government?

[Hywel Williams]

My job is to represent Wales. The Labour party advertises itself as the unified, indivisible Labour party in England, Scotland and Wales. The hon. Gentleman’s point is bogus.

It is important that we now move forward, whatever the weaknesses hon. Members on both sides of the House might find in the Bill. Realistically, income tax might not be varied for some time, or ever, depending on what happens in the referendum, but the Bill will give access to vital borrowing and investment powers.

The Silk commission produced its second report earlier this month. Plaid Members say that Wales should be moving to a reserved powers model as swiftly as possible. We believe it would make more sense to have a referendum on the Silk part II recommendations. That larger and more substantive referendum would consider both true income tax-varying powers and wider policy powers. We will table amendments to preserve the integrity of the Silk report recommendations. Given that the principle of fiscal devolution has been conceded in respect of the other tax-varying powers, we say there is no need for a referendum on a simple income tax-sharing model. I agree with the hon. Member for Islwyn (Chris Evans), who is in his place, who said today that that should be the case. We will seek to amend the Bill accordingly.

[Mr David Jones]

At the risk of appearing to carp, I should point out to the hon. Gentleman that, a moment ago, he accused the Conservative party of cherry-picking the recommendations of the Silk commission. Is he not cherry-picking, too, when he says that we should dispense with the referendum, which, after all, was recommended by the commission?

[Hywel Williams]

Our argument is on a package of measures, but the Government have cherry-picked. Our ambition—I make no apology whatever for it—is to have both Silk I and II and even more implemented.

[Jonathan Edwards]

The Secretary of State has cherry-picked the Silk commission’s recommendations on the ability to vary income tax. Because he has cherry-picked, why does he not devolve the lockstep without the referendum, and then have a referendum on removing the lockstep? That would be a practical way of moving forward, and of preserving the Silk commission proposals and recommendations.

[Hywel Williams]

That might be a way forward, but I have no idea how we would formulate a coherent question on the lockstep, as I have said. We should work towards all parties committing to a tax-sharing model in their 2015 manifestos, so that that could be achieved without the need for a costly referendum. Then in the future we could possibly have a referendum on the power to vary income tax, along with the wider powers expected as part of Silk II.

Plaid Cymru believes that constitutional change should not happen simply for its own sake, but because it represents the means to create a better society in Wales—more prosperous, more just, more equal and more democratic. That is our positive case. The financial powers recommended in the first report by the Silk commission represent some of the means to achieving that. They empower, but with them comes responsibility—a responsibility that Plaid Cymru would welcome.

Most of the debate has been focused on Wales. As a nationalist, I am pleased to quote an English Member—the hon. Member for Nottingham North again. He said:

“I start from the premise that the UK is the most massively over-centralised of all the western democracies and I find that deeply unhealthy.”

That point is about England and devolution all round—if I may use that 19th century phrase. He continued:

“I welcome this Bill very strongly because it is a step, not a leap—it is a step in the right direction.”

19:41

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

I welcome the Bill, which contains much that will benefit the residents of west Wales in particular. The more I listened to the speeches today, especially from the right hon. Member for Neath (Mr Hain), the more I came to the conclusion that we must be doing the right thing, given the level of opposition that he expressed.

I probably have more in common with my hon. Friend the Member for Monmouth (David T. C. Davies), the Chairman of the Select Committee, than I should perhaps readily and publicly admit. That is because I am not an anti-devolutionist but I am a reluctant devolutionist. I am pragmatic about it and I accept that we are where we are. I am reluctant because, in the time that I have lived in and represented my area, I have never had a business—small, medium or anything in between—come and tell me about the need for further devolution or for further powers to be devolved to Cardiff. In many cases, I have been on the end of contrary suggestions. Very few people say that the one thing standing between them and sustainability and profitability is more politicians, more devolution and more of the confusion that can sometimes result.

Nor have I heard from many members of the public about the need for further devolution. I suppose that that is a contradictory comment, because when put to the test in a referendum the result is somewhat different, but not many people talk to me about the need to devolve the criminal justice system, the police or other such matters. I therefore come at the issue from a very schizophrenic position, knowing that we are where we are—as the hon. Member for Arfon (Hywel Williams) has just said.

My hon. Friend the Member for Monmouth and I come into step on the danger of mission creep. I do not always admit to sharing the views of the former Prime Minister Mr Blair, but I will on this occasion, because he said:

“I was never a passionate devolutionist. It is a dangerous game to play. You can never be sure when Nationalist sentiment ends and separatist sentiment begins.”

That was not entirely different from what Donald Dewar had said at the time that the Scottish Parliament was set up. He very explicitly said that he saw it as the end of the debate about independence—but a few short years later we are on the eve of a referendum on Scottish independence. That troubles me because—as other hon. Members have said—we appear to be travelling in one direction only, towards independence in all but name. The Bill is a chance to put all that to bed. It strikes the correct balance between practical considerations and ideological objectives. Above all, it is a Bill that has the voter, the ratepayer and the business man and woman in mind, rather than the ambitions of politicians, either here or in Cardiff.

I want to touch on one and a half issues—both constitutional—and I shall be as brief as I can, because the afternoon seems to be dragging on into the night. The first issue is fixed-term Parliaments. When I was on the Political and Constitutional Reform Committee, we looked at this in some detail, and there was very little objection to the notion of fixed-term Parliaments. They were felt to have the potential to reduce uncertainty and instability, to give a clear timetable for the next election, and to provide more effective forecasting and the ability to prioritise more effectively. All of that is a given. There was not quite so much consensus on whether the term should be four years or five. The general view is that we are one of a relative minority of countries across the globe that have opted for five years. Nobody considers it to be much of a problem except when a collision of dates occurs, perhaps between elections to this Parliament and to the Welsh Assembly. Even then, the Electoral Reform Society was not particularly alarmed by the fact that the public may have to make a choice between candidates in Cardiff and candidates in Westminster. I agree: plenty of evidence suggests that people are capable of making an informed and intelligent decision in two simultaneous elections.

I am concerned that if boundaries were to change as a result of future legislation, asking people to vote for candidates on different boundaries might cause confusion, and we would need to guard against that. People ask how likely that is to happen, and it is probably some way off, but there is a more immediate problem. If there were to be—God forbid—a yes vote for Scottish independence in September, the whole basis of our future government could be affected by people who will spend only a few months in this House. The question is—and I suspect that Plaid Cymru Members will sympathise, and perhaps even Members from other parties—whether we could legitimately have an election in May 2015, the outcome of which was decided by people who would not be in this House for very many weeks thereafter. That is an argument—I put it no more strongly than that—for deferring the general election until after those matters have been resolved, which would then bring us into collision with the Welsh Assembly elections, now set for May 2016. Although I do not have too much of a problem with a dual election, we need to consider that that might be an inevitable outcome of a result in favour of independence—albeit unlikely—in Scotland later this year.

I do not intend to say much about double-jobbing, although it is an area of the Bill that I was concerned about until I heard the speech by the right hon. Member for Neath, who compelled us to accept his arguments even though they were at odds with the independent evidence available. As I result, I came to the view that I must be wrong and the Bill must be right. It is a bit rich—and I would say this if the right hon. Gentleman were in his place—for a former Secretary of State, who was partially responsible for the legislation and the problems that he highlighted, to go against the only authoritative independent evidence that is available to us from the Electoral Reform Society and the Electoral Commission. To suggest that they are wrong and he is right is taking the House for fools, so I am completely confident that the inclusion of double-jobbing in the Bill is the right approach.

I shall conclude, as I know that other hon. Members wish to round off the evening with a flourish. The tax position is more an area of expertise for my hon. Friend the Member for Aberconwy (Guto Bebb) than it is for me, but the situation is confused, and it would be further confused if we were to expand—perhaps post boundary reviews and all the elections we have mentioned, and taking into account the evidence provided to the Select Committee on our various visits around the country—the number of Members of the Welsh Assembly. It is an extraordinary suggestion that the Assembly in its current form does not contain sufficient expertise to deal with tax-varying powers, if that is what the Welsh nation wishes. Yet academic after academic, witness after witness, has come to us over the last few months suggesting that that is an inevitable consequence of the passage of the proposal. I think that would cause considerable concern in the minds of the business and voting community in Wales. It would be poor timing to suggest that what Wales needed was more politicians rather than fewer. There are cost and electoral implications and all sorts of economic and social considerations. I very much hope that the Secretary of State or the Minister can reassure us that such an outlandish and inappropriate proposal will not come into effect during our lifetime.

[Mr David Jones]

rose—

[Simon Hart]

I was going to finish on that point, but I will take an intervention.

[Mr Jones]

Before my hon. Friend resumes his perch, he will recall that the First Minister indicated that he felt that the Assembly as currently constituted, with 60 Members, could cope comfortably with new powers.

[Simon Hart]

I thank the Secretary of State for his intervention. The First Minister did, and a number of other canny politicians in the Welsh Assembly also came to that conclusion, but the academic and independent evidence tended to point in a different direction. We used the expression “direction of travel” earlier and there seemed to be a slightly surprising thirst for a larger institution in Cardiff than I was comfortable with. I think the First Minister was just guarding against an unhelpful headline in the Western Mail and was being über-cautious, whereas his academic colleagues who gave evidence to the Committee were a little more forthright.

19:51

[Chris Evans (Islwyn) (Lab/Co-op)]

It is always a pleasure to follow the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart). He is always badgering us—ha, ha, ha!—about the Welsh Assembly.

This Bill is a missed opportunity. It is a Bill of nothing but smoke and mirrors. For too long—since 1999—we have been running around having no satisfaction with the Assembly. We had the Government of Wales Act 2006, which did not settle the constitutional argument. We have had Assembly after Assembly and Welsh Members of Parliament wasting their time talking about constitutional matters. Constitutional navel gazing is okay in the ivory towers of academia, but when the cost of the Silk commission is £1 million, the cost of the Williams report is £155,000 and the cost of the 2011 referendum was £5.89 million, it is time to draw a line. This Bill was our opportunity to do that, but we have had a timid response from a Government who have never, ever secured support in Wales.

[Hywel Williams]

I am slightly surprised that the hon. Gentleman is talking about constitutional navel gazing when all I have heard from Labour Members is speech after speech about the complexities and even the theology of list membership and constituency membership.

[Chris Evans]

I can only speak from my own experience. I use the Blackwood high street test when I go to Islwyn. If I walked down that street now and asked people what they thought of the Assembly, unfortunately I would be met with disinterest from most of them. If I talked about the constitutional arguments we have had today or to anybody tuning in today, they would wonder why we were talking about the Wales Bill. They would be more concerned about health, education and transport than debating giving further powers to the Assembly. That is the simple fact.

What we see in this Bill is an anomaly. On the one hand, we see the Government lifting the ban on dual candidacy, yet they are also banning double-jobbing. It seems to me that there is something fundamentally undemocratic about the way the Welsh Assembly operates. If there is a vacancy or a resignation under the first-past-the-post system, there is a by-election. That is correct; that is the model we follow in this place. However, as the Secretary of State for Wales will know, if there is a vacancy or a resignation from the list, people move up one. That is not democratic; there is no looking for a further mandate.

There are serious problems with our electoral system. First, it is difficult to understand. People in Gwent will say to me, “Why are thousands of Labour votes thrown away and I have a Tory”—or someone from the nationalist party—“representing me, but I’ve not voted for them? What is the point in voting Labour in the first-past-the-post system, yet voting Labour in the top-up system but getting no Labour AMs?” That is the situation we have to face and we are not talking about it. When we talk about dual candidacy, I think basic fairness says that in a race of four people, somebody has got to win and somebody has got to lose. Nobody gets the consolation prize of going to the Assembly.

The most damning case against dual candidacy appears in the impact assessment, which says:

“The Government of Wales Act 2006 modified the original devolution settlement to ban candidates at an Assembly election standing simultaneously in both a constituency and on a regional list. This provision has been considered unfair on smaller parties in Wales who may have a smaller pool of high quality candidates to represent them in elections.”

What the impact assessment is saying is that smaller parties in Wales, such as the Liberal Democrats or the nationalists, might not have enough high-quality candidates to stand; therefore, we should relax the rules on dual candidacy.

I do believe it is right to end double-jobbing. It makes no sense and it does not allow MPs or AMs to represent their constituents effectively. That part of the Bill is right, but the worst thing about the Bill is that we will have to come here again in a couple of years’ time and debate the constitutional settlement. That is turning people off not only the Assembly, but politics in Wales, because all that Wales is dominated by at the moment is constitutional arguments.

And so we come to the great part of the Bill: the devolution of income tax. The Government accepted the Silk commission recommendation that Wales should have the power to vary income tax, subject to a referendum. However, they did not accept the model presented by the Silk commission, which would allow bands to be varied independently. Instead, they would need to be changed in lockstep. If the Government want to commission a report at a cost of £1 million in these economic circumstances, surely they should have included all the Silk recommendations and we could have debated them on the Floor of the House. The devolution of tax-raising powers is not a priority—we can see that in our constituency postbags every week. We need a triple test. We need to talk about the issue of fair funding and a period of assignment to see whether it is in the interests of Wales and the UK to devolve income tax.

We already know that Wales is underfunded to the tune of £300 million, but varying income tax powers will not address the issue of fair funding. Once the power to partially set income tax rates is devolved, the block grant will be reduced by an amount equivalent to the Welsh share of current tax receipts. To accept this power while the block grant underfunds Wales would be irresponsible and lock in underfunding for ever. The Wales Bill does not commit to reform of the Barnett formula either, even though the Secretary of State himself has said that the formula is coming towards the end of its life. Again, that proves that this is only a piecemeal Bill and that we will unfortunately be back here on the Floor of the House, however boring and irritating we find these constitutional debates.

If we are to devolve tax powers, there needs to be further examination by the Treasury and Her Majesty’s Revenue and Customs to see how that will affect tax rates on both sides of the border. When we talk about jobs and the economy, it is also important to note that they are being created only by private sector businesses. We should therefore be speaking to those businesses and asking how their PAYE and payroll systems would be affected by the devolution of tax, but we are not. When we are varying tax powers, we also have to bear in mind that many more people live close to the Wales-England border and have to cross that border than live close to the Scotland-England border. Nearly half the Welsh population lives within 25 miles of the English border, while 10% of the English population live within 25 miles of the other side. That is 6.3 million in total. In contrast, just 4% of the Scottish population live within 25 miles of the English border.

[Jonathan Edwards]

The hon. Gentleman is quoted in the Daily Post today as saying that Wales should have the same fiscal package as Scotland. Is that his position or is it not?

[Chris Evans]

Yes, it is.

The fact that the Welsh border is significantly more densely populated than that of Scotland means that the complexity associated with different tax rates is much greater in Wales, for both employers and employees. Again, however, very little Treasury analysis has been conducted. Members may talk of a Scottish model, as the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) did, but I think that more work must be done. We must have a report. We must know the facts and figures before we proceed further. We must seek a fair system for the whole of the United Kingdom. We cannot allow tax powers in Wales to be different from those in Scotland and England. The one thing that we have to realise is that, for all our constitutional debates, there is not an economic border on the Bristol channel, or to the north-west on Offa’s dyke. Business does not operate in that way. Business will go where business costs are lower.

[Glyn Davies]

The hon. Gentleman is making a very interesting speech. However, I should like him to clarify one point. On the one hand he tells us that he supports the Labour proposition that the Welsh Assembly should be given the same fiscal powers as Scotland and, on the other, he seems to be arguing the complete opposite. Which is it to be?

[Chris Evans]

Perhaps, when I was in full flow, the hon. Gentleman missed the point that I was making. I believe that, before we proceed, there must be a report—an impact assessment, giving facts and figures—on what will happen if we devolve tax-raising powers. That is the way in which business works. An impact assessment is the most effective and efficient way of putting the facts across.

I have spoken for a long time, but let me finally say something about borrowing powers and the devolution of minor taxes. Like many members of my party, including the First Minister, I have called for more borrowing powers. The Welsh budget has been cut by 10% during the current Parliament, and the Welsh Assembly’s capital budget has been reduced by nearly a third. I therefore welcome the borrowing powers in the Bill. As was agreed in intergovernmental talks last year, initial borrowing will be available before the devolution of minor taxes in order to finance improvements to the M4, and those of us who have to travel up the M4 every week will welcome those improvements. The amount must be agreed between the Welsh Assembly and the United Kingdom Government.

Borrowing powers linked to the minor taxes when they are devolved will be limited to £500 million for current spending and £500 million for capital projects. I hope that that will be looked at. If, or when, income tax is devolved, the borrowing limit will increase to £1 billion. If the Government underwrite that, it can be arranged now. The devolution of stamp duty and landfill tax will give the Assembly an independent revenue stream worth about £200 million a year, and it will be interesting to see how that money is spent. However, those taxes will not be devolved until April 2018, three years into the next Parliament.

I believe that we could have had a wide-ranging debate about the devolution settlement, not only in Wales but in this country, but the Government have been timid in their response to the Silk commission, and we are now faced with the inconvenience of having to revisit the Bill. I fear that, instead of talking about the bread-and-butter issues that affect my constituents, we are once more boring them silly with talk of constitutional matters and constitutional reform, which simply switches people off. I support the Bill, but I believe that there is more work to be done on it, and I hope that it will be improved by amendments tabled in Committee.

20:03

[Mr Mark Williams (Ceredigion) (LD)]

It is a privilege to be called to speak in the debate. I was going to say that it was a privilege to be called at an early stage, but it has been a lengthy debate, and we may be here for much longer still. I do not think that the remark made by the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) about the debate drawing to a close is quite appropriate yet. In any event, I am delighted to have an opportunity to reiterate Liberal Democrat support for the Bill, which represents another important milestone in the process of devolution. I pay tribute to the initiatives taken by the right hon. Member for Chesham and Amersham (Mrs Gillan), a former Secretary of State for Wales—although she is not in the Chamber at present—and by the present Secretary of State.

At the beginning of his speech, the hon. Member for Caerphilly (Wayne David) described the Bill as a ragbag and a compromise. Of course it is a compromise in part, because two political parties—the Conservatives and the Liberal Democrats—have been working together. That compromise, if it was one, appeared in the coalition document, in which we spoke of delivering the referendum that was a leftover from the previous Labour Government. We also spoke of establishing the Silk commission and enabling it to deliberate, and we spoke of introducing legislation. On all three counts, the coalition Government have delivered what we said we would deliver immediately after the last general election.

I think that it would be a huge lost opportunity if the National Assembly Government did not take advantage of the powers that the Bill provides. Based on the recommendations of the Silk commission, it follows on from the work of Lord Richard, Gerry Holtham and the All Wales Convention, and devolution in Wales has been thoroughly and forensically tested through their reports. The hon. Member for Islwyn (Chris Evans) spoke of the need for a report and the need for more detail, but we have spent the last 10 years constructing the case for fiscal devolution and the devolution of powers. The evidence base is there, which is why the Government are introducing the Bill. It takes us further along the devolution journey to the end of the road—a place where, I believe, we shall have a steady and strong constitutional settlement that will be good for Wales and for the United Kingdom as a whole.

Party politics aside, I think it important to remember that all the great steps forward in devolution have been made when progressive forces in all parties have come together. The referendums of 1997 and 2011 came about because parties worked together in constituencies to promote the cause. As the Secretary of State said, the Conservative party is committed to a referendum if given the opportunity, and I should be pleased to share a platform with him to illustrate the consensus that exists on the issue.

As was said earlier, the success of Silk part I—and, indeed, part II—has been the consensus that was arrived at between all four parties. The contributions of Sue Essex and, more recently, Jane Davidson, along with Rob Humphries from my party, Nick—now Lord—Bourne, Dr Eurfyl ap Gwilym and the other commissioners have been huge, and the outcomes have been achieved on the basis of consensus. Long may that continue—although I am not entirely hopeful, having endured four hours of this debate.

Those of us who embrace localism believe that the key argument for the Bill is about promoting accountable devolution, and establishing a renewed sense of the legitimacy of the Assembly and its Government. I do not deny the legitimacy of any elected Assembly Member—that is a key principle—but I will sometimes deny Assembly Members the capacity to justify their decisions on the basis of the financial decisions of others. The accountability argument is compelling: a Government who spend money but have no responsibility for raising it cannot make their voters bear the full burden of their decisions. That seems to me a very clear and straightforward principle.

I believe that the conspiracy theory that we have heard from Labour Members has no place in the debate. I am sad that the hon. Member for Swansea West (Geraint Davies) is not present. When we were sitting, as we often do, in the Welsh Affairs Committee, I thought that the conspiracy theory was limited to him, but it seems to be remarkably infectious among Labour Members. I think that the principle is clear: if we want our Government to be legitimate, we must link the decisions that are made with the money that is raised.

As the hon. Member—my hon. Friend the Member—for Arfon (Hywel Williams) pointed out, that logic causes my view to diverge slightly from those of some of my hon. Friends when it comes to the issue of the lockstep; but that is a debate to be had in Committee. Perhaps the parameters of devolution in my mind are a little broader than those in the minds of some Government Members, but I do not believe that anything that I have heard from Opposition Members, or anything that we discussed in the Select Committee, should deviate from support for the Bill this evening and in the future. I simply want the Government in Cardiff to have the tools to do the job—to have their hands on the economic levers—which inevitably means the release of borrowing, for instance. This Wales Bill gives the Welsh Government additional tools to grow the Welsh economy and help Wales compete in the global race and create a stronger economy.

I have always considered Paul Silk’s work to be a package, which is how he has described it in one or two briefings to Members of Parliament. I am glad that most of the recommendations have been adopted by the Government, although they have not been adopted in their entirety and there have been allegations of cherry-picking. I also respect what he said about the need for a referendum, and I respect the point made by my right hon. Friend the Secretary of State about how the referendum question on fiscal responsibility was presented to the Scottish people. I just express a slight fear and concern about referendum fatigue. We had the initial referendum in 1997, and we had the referendum in 2011, mercifully scrapping the dreaded legislative competence order process. There were Members who are now on the Opposition Benches who told us that the LCO process would be written on a tablet of stone and would be there for generations. In 2011, we got rid of that, which was one of the worst kinds of sticking-plaster solutions to devolution.

There is the prospect of more referendums after this one, however. Some of us subscribe to the reserved powers model, and some of us very much hope our party manifestos will be strong on Silk part II recommendations, but the pressure will be on for another referendum, and I just express the concern about referendum fatigue. I am not going to be charged with creating the wording of this referendum question, but it would be much better if those varying issues of critical importance to Wales could be bound together in one general question.

[Susan Elan Jones]

I am interested in what the hon. Gentleman is saying about referendums. I well remember the referendum in, I think, February 2011—it was certainly cold enough. Having been told by rather a lot of people in north-east Wales that north-east Wales would vote no, it strengthened the process in terms of full law-making powers that north-east Wales voted very conclusively yes. I think sometimes referendums can do that.

[Mr Williams]

I share that sentiment and referendums can also lead to people in different parties working together to make a compelling case. We would all applaud that, and I think even the good people of Monmouthshire voted yes?

[David T. C. Davies]

No.

[Mr Williams]

Sorry, not quite, but the vote was much better than before. I think there was a bit of a swing of opinion. We certainly welcome the fact that people along the borders voted in bigger numbers for this, although I stand corrected. I am still slightly shocked by the glowing appraisal my hon. Friend the Member for Monmouth (David T. C. Davies) gave of Liberal Democrat policy on federalism; he commended us on that. However, I take on board the point made by the hon. Member for Clwyd South (Susan Elan Jones).

[Mr David Jones]

It would appear that my hon. Friend’s sole, or at least principal, concern about the Bill is the issue of the referendum, but does he agree that when we are talking about whether Wales should have a different tax basis from the rest of the country, that is something that concerns every resident of Wales and people should have their say on that?

[Mr Williams]

I do agree with that. I should, perhaps, make it clear that I was warning about referendum fatigue in the future. I have signed up to the Silk package and he has made that recommendation very clearly, as has my right hon. Friend the Secretary of State. We must be very mindful of that fatigue in the future, however.

The hon. Member for Islwyn talked about the Blackwood high street survey that he unofficially—or maybe officially—makes when he is back in his constituency. He said that nobody raises these issues. I would just say that there is a case to be made in respect of our business community. People come to talk to me about business rates and the lack of clarity on responsibility over business rates, and there is a case for fully devolving them to the National Assembly. Over the past nine years I have dealt with many cases involving this subject. I can think of many constituents who have come to me struggling with issues about where responsibility lies. Therefore, I am particularly pleased that decisions will, because of this Bill, be made closer to Wales and that rates can be more responsive to the needs of Welsh businesses.

The Federation of Small Businesses in Wales agrees that businesses in Wales are facing the most onerous business rates of any constituent nation of the UK. We do not have many options available to us, such as using different multipliers for different-sized firms, and it hits our small businesses hard. Small businesses are the backbone of the Welsh, and particularly the Ceredigion, economy.

The Select Committee addressed that issue. Now that the Government have made their position on it clear, I would like to know how they intend to take forward their policy on devolving business rates completely. We need a clear settlement of business rates, which gives politicians the incentive to be creative on business rate policy and to be accountable for it.

I am also pleased about the Government’s views on the full devolution of stamp duty and landfill tax. It is true that those taxes are not massive generators of revenue; they generate about £200 million a year out of an overall budget of £15 billion, which is 0.3%. However, I welcome the fact that stamp duty and landfill tax could be used to encourage inward investment and business generation in Wales, providing a much needed boost to the economy.

Moving on to the key issue of borrowing powers, the Select Committee urged in our pre-legislative scrutiny report that by the time of the publication of the Bill the Government should have set out how they decided the limits of the £500 million current account and the £500 million for capital account borrowing. That was an incredibly worthwhile report, and I think that the Government should acknowledge that there is a need for pre-legislative scrutiny of all Bills of this nature. Comparing the lobbying and transparency Bill with this Bill, the work we have undertaken on the Select Committee will serve the process very well. I remember that the Welsh Liberal Democrat leader, Kirsty Williams, came before the Select Committee and made the comparison between the settlement for Scotland and the settlement for Wales.

We also talked about, and sought clarification on, the issue of bonds, and I am encouraged that the Government seem willing to consider further whether it might be appropriate for the Welsh Government to issue bonds alongside the other measures.

[Jonathan Edwards]

The hon. Gentleman is reading out a range of measures included in the Bill, which were included in Silk. One measure that was in Silk that was not included in the Bill is the devolution of airport duty tax. How disappointed is he that that has not been included, especially considering that our airport is now owned by the people of Wales?

[Mr Williams]

I know the hon. Gentleman has worked vigorously on this issue. I think that argument is very much in flux. I think there is some way for the hon. Gentleman to convince us that that needs to be included, although I appreciate what he says about Silk being clear on that and the Government having taken a different view.

Many local bodies can issue bonds, such as local housing associations, and, to reference Scotland again, the Scotland Act 2012 allows for the UK Government to devolve bond-issuing powers without any further primary legislation. I believe that there should be parity.

On the subject of borrowing, above all else I think it would be very strange if a national Parliament did not have the borrowing powers enjoyed by the most menial of local authorities. The capacity to do that is important, but important though the question of borrowing is—in particular for the work that needs to be undertaken around Newport and the M4—we should not kid ourselves that borrowing is the sole panacea that will lead to stimulation of the economy. Borrowing ultimately means paying back, with interest. Successful borrowing will be dependent on the competence of the Government doing the borrowing, and it will not solve all the problems.

As I said earlier, we should be striving for a reserved powers model for Wales, rather than facing the spectre of holding a referendum each time a section of policy is handed down from Westminster on a piecemeal basis. That is not to understate the huge strides forward that we have made in the Bill, however. I commend the Secretary of State and the Financial Secretary to the Treasury, my hon. Friend the Member for Bromsgrove (Sajid Javid) for everything they have done to ensure that this issue has been pursued to this point. For a Liberal in Government, this represents a proud moment. There will be an even prouder moment when we have the opportunity to put the Bill on to the statute book.

As I have said, the work of Silk has been a consensual process, with parties from all sides working towards an effective and beneficial devolution process for Wales. I sincerely hope—although I am not totally hopeful—that as we all play our part in passing the Bill through Parliament, the level of consensus that we achieved at the beginning of the process will be resurrected. I do not know what the weather was like in Llandudno at the weekend—it was sunny and clear on the west Wales coast—but it strikes me that a haze might have descended on the town. There is clarity on the Liberal Democrat Benches, and clarity among our Friends on the nationalist Benches, but I have to say that there is deep fog on the other side.

20:21

[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to participate in the debate. When this matter was last discussed in the Welsh Grand Committee, I was the Chair of the Committee, so I had to remain impartial. I listened to a lot of the arguments, however, and this is my opportunity to express my views on the Bill and the devolution settlement.

I am a proud devolutionist, and I am proud of my party’s record on devolution. That process did not begin with the setting up of the National Assembly for Wales. One of my predecessors, the late Cledwyn Hughes, was one of the architects of devolution. He was the second Secretary of State for Wales after Jim Griffiths, but before Labour came into Government in 1964 he worked in opposition to establish the first Welsh Office and to devolve powers and responsibilities. Democratic devolution then came into being with the setting up of the National Assembly.

I am pleased to follow the hon. Member for Ceredigion (Mr Williams), and I agree with a lot of what he said. He asked about the weather in Llandudno. It has not been widely reported that unity broke out among members of the Labour party in Llandudno. Whether he perceived clarity or not, we certainly had an excellent conference, with unified speeches from the leader of the Labour party in Wales—[Interruption.] The hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) seems to disagree with me on that. I do not think he was there, although I am sure he takes a great deal of interest in the matter.

At our conference, we saw a First Minister and a future Prime Minister agreeing on huge policy issues, including reserved powers. That was radical, and in the tradition of Labour pro-devolutionism. It was an excellent conference, and coming after the Plaid Cymru conference, it is not difficult to compare a good one with a car crash. We heard that Plaid Cymru members had fallen out over issues such as what constituted Welshness. By contrast, we were talking about the economy and the constitutional measures that a Labour Government would introduce, so if the hon. Member for Ceredigion wants reserved powers, I suggest that he tell the good people of Ceredigion to vote Labour. A Labour Government would deliver that. We would deliver on our promise, just as we delivered on our promise to establish a National Assembly for Wales.

The Secretary of State for Wales and I go back a long way politically. When we were debating the setting up of the National Assembly for Wales, we were on different sides of the argument, and I remember that we were on a panel with Lord Dafydd Elis-Thomas. Of the three of us, only two agreed with devolution; the third did not. I welcome the fact that the Secretary of State has now progressed in the right direction, however.

[Jonathan Edwards]

Is the hon. Gentleman saying that the First Minister now supports the lockstep proposals of the UK Government, which the shadow Secretary of State advocated earlier? That is not what the First Minister has been telling the people of Wales for the past three or four months.

[Albert Owen]

The shadow Secretary of State set out the Labour party’s position in Llandudno on Sunday, and that is the position that we will proudly put to the electorate in a forthcoming election. I understand that Plaid Cymru does not support devolution per se; it supports it as a vehicle for independence. That is the difference between us. Yes, we have grown-up conversations in Wales, but the people of Wales elect more Labour representatives than Plaid Cymru representatives. Plaid Cymru is the “party of Wales” in name only. Yes, the Labour party has differences of opinion within it—any modern democratic party does—but we now have a clear position, following our conference, and I hope that we will go on to get a majority Government in this place so that we can change the laws to best reflect the views of the people of Wales.

I agree with my hon. Friend the Member for Islwyn (Chris Evans) to an extent. Whether we like it or not, the people of Wales are not that interested in Silk; they are not that interested in constitutional issues. I and many others have supported devolution for many years, but I understand that not everyone is interested in it. Politics is the art of the possible. I would have liked an Assembly to be established in 1979, but the proposal was defeated convincingly by the people of Wales. I would have liked to see a stronger Assembly in 1997, but I was far more pragmatic and mature by then, and I realised that we pro-devolutionists needed to compromise in order to get the measure through.

I do not accept what the hon. Member for Ceredigion said about referendum fatigue. It is fundamentally important, when we are proposing major constitutional changes such as the setting up of new bodies in Scotland, Wales and other parts, including London, that we should have a referendum. Equally, it is right to hold a referendum when we are proposing to give more law-making powers to the National Assembly for Wales. We should also have one to decide the changes on taxation. I would have liked to see those powers established in 1997, but I know that we would have lost the referendum if we had proposed them at the time.

[Mr Mark Williams]

The clear case for a referendum on this issue was made in the Silk report. How many referendums does the hon. Gentleman envisage us having to endure as we head along the devolution road?

[Albert Owen]

I tried to answer that question earlier when I said that a referendum should be held when we are proposing a huge political or constitutional change. These taxation measures constitute such a change, as did the devolution of law-making powers and the setting up of the Assembly itself. When it comes to significant constitutional changes, I believe in trusting the people. I did disagree with the hon. Member for Arfon (Hywel Williams) when he said, “We’ll just take the recommendations of a commission.” We are a democratic body; we are elected Members of Parliament; we represent people and communities, and we are here to represent their views. Again, I think Plaid Cymru has been caught out slightly, because it is saying, “We want all the bits of the Silk commission, but we do not want the referendum.” Either you want it all or you do not want it all—it is pretty simple.

[Jonathan Edwards]

Surely the powers cannot be used on the lockstep. That is Labour’s position: those bands cannot be varied because of the lockstep. The referendum should therefore be on the need to remove the lockstep to allow the bands to be varied. Surely that should be the basis of the referendum; it should not be a referendum on devolving the lockstep.

[Albert Owen]

That is the hon. Gentleman’s position. I have made my position clear: when there are major changes on taxation, there should be a referendum. I am therefore supporting that measure in the Bill. We would lose most of the people of Carmarthen and Ynys Môn if we started talking about the lockstep. The serious problem we have is that when we eventually go to the people of Wales on a taxation referendum, we have to boil it down—[Interruption.] If he stops chuntering from a sedentary position, I will try to give an answer on a simple question that we understand in the first place. The beauty of a referendum is that we need to boil things down. The question as it is framed now would not be easy, which is what we have to work towards. That is where I am coming from on this issue.

It is very logical that the Bill proposes borrowing powers for the National Assembly for Wales. The hon. Member for Ceredigion talked about the abilities of community councils and town councils to borrow in a way that the Assembly cannot, so this is a natural progression. Many things such as stamp duty and landfill tax can produce the revenue streams to help with that borrowing. It is eminently sensible that that happens.

I repeat that we need to consult the people of Wales and have a referendum on the income tax issues in the Bill, so I support that approach. Not having those things would be out of sync with what we have done in the past, when we set up the Assembly and when we had a referendum on increasing its law-making powers. I supported both those referendums and I would support this one, too, but we have to get it right. I am as confused as anybody who has spoken in this debate about exactly what we are going to be telling the people of Wales. I know this is only a Second Reading and it is right that we debate these issues, but in Committee—that is the place to do it—we shall deal with the nitty-gritty of what the taxation actually means. The figures produced in the explanatory notes and in the Government’s various Command Papers are not easy to digest, so we need to have that scrutiny, which this House of Commons does best, before we finalise things.

There has been much debate about the position outlined by my Front-Bench team, and on that I agree slightly with the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards); those details need fleshing out just as much as any others. The purpose of parliamentary democracy is to have that debate and that parliamentary scrutiny, so that is the way we need to move forward. I have been consistent on the referendums issue, and I believe we must have a referendum if we are to move to being able to vary income tax powers or whatever the end result is of this Bill going through both Houses of Parliament.

I wish to discuss the electoral arrangements, as I am slightly confused as to why these provisions have been bolted on to this financial measure, other than to suit a deal done between the coalition parties and Plaid Cymru to try to get the Bill through. We have heard about the Government of Wales Acts. I supported doing away with the dual candidacy because I thought it was unfair and undemocratic that a person who stands for election in a seat and loses, often comfortably, can then arrive in that democratic institution through another means—that is fundamentally wrong.

When we had a debate in this House some time ago—I cannot cite the Hansard reference—the Under-Secretary told us about the consultation exercise, when people were in favour of keeping the ban on dual mandates.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

rose—

[Albert Owen]

I am happy to take an intervention if the hon. Gentleman wishes to be helpful.

[Stephen Crabb]

I am glad the hon. Gentleman will take an intervention on that. He will be as aware as anybody that a significant number of the people responding to that consultation saying they were in favour of the ban were Labour Welsh Assembly Members.

[Albert Owen]

I do not know who the people were. The hon. Gentleman may well be right, but Labour is obviously the biggest party in Wales and has a strong voice there, unlike some other parties. It was a consultation exercise—[Interruption.] I am getting chuntering remarks from the hon. Member for Carmarthen East and Dinefwr again, but perhaps Plaid Cymru should also have had enough intelligence to do standard letters to put its view across in this open consultation. The point I am making is that this coalition proposal, supported by Plaid Cyrmru, is on the wrong side of the argument. These parties are doing it for their own political reasons. Nobody has said to me, “Wasn’t it terrible what you did in 2006 when you banned the dual mandate?” Nobody has raised the issue and it is right to leave things as they are. I shall be voting against the measure when the time comes, for the reasons I have given.

Individuals have been mentioned, which is wrong, but I must mention the leader of Plaid Cymru who, when she was elected, made a bold statement that she was not going to stand on the list. She made the brave decision to go before the electorate as an individual and leader of her party. She chose the seat for Rhondda, which she had every right to do, but now she has the jitters. She no longer feels secure in her statement, so she wants the lifeboat of a list place to get her into the Assembly for Wales; that is what this is all about. That is why I point to a deal being done. I smell a dirty deal here between the coalition parties and Plaid Cymru.

[Mr David Jones]

I have to say that the hon. Gentleman has raised a red herring there. I assure him that there has been absolutely no deal with Plaid Cymru. He knows me well enough to know that of all the parties in this House, Plaid Cymru is probably the last one I would ever do a deal with.

[Albert Owen]

I will take the Secretary of State’s word on that, but he is pandering to its views and helping it out. I certainly will not be doing that when it comes to voting on this Bill.

There are lots of things in this Bill that I do support. I have mentioned some already including the borrowing powers, the landfill tax and the stamp duty measures. I will support the Bill on Second Reading if there is a Division, but I will be working with Members from across the House to scrutinise it so that we get to a position where it is sellable to the people of Wales in a referendum, because I am, first and foremost, a democrat and a devolutionist, and a proud one too.

20:36

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to speak in this important debate. I will be brief, as most of what I had intended to say has already been said, and said quite eloquently. It is important to touch on some of the arguments that have been made today.

Let me start with the issue of double-jobbing. We have had a degree of confusion from the Opposition Benches over the issue of whether or not a list Member can stand in a constituency. Such confusion ill becomes this Chamber, because the argument we have heard is basically one against the d’Hondt system of electing Members to any Assembly, which is one with which I have some sympathy. The decision to choose that system was taken by the Labour Government, by the right hon. Member for Neath (Mr Hain) who is no longer in his place. It is odd to argue that that system is being used in a way that allows people to stand in individual constituencies and on the list in almost every single country that operates it apart from Ukraine and Wales. It is difficult to argue that Wales should be following the lead from Ukraine rather than from any other democratic country in Europe.

That argument is a red herring, and it is undoubtedly the case that the gerrymandering happened in 2006 when the ban came into place. If Opposition Members, who have given us a number of anecdotal stories about the issue, were to go to mid-Wales, they would hear plenty of people talking about the loss they felt when my hon. Friend the Member for Montgomeryshire (Glyn Davies) failed to be returned to the Assembly, because of the change in the legislation by the Labour party. He was a fine Assembly Member, and would have continued to be so if it were not for the gerrymandering of the system. It is clear that this Bill aims to address that matter, and it addresses it in a way that represents the views of the civic society and three of the political parties in Wales. It is a shame that the parochial and partisan nature of the Opposition means that they cannot support this much-needed change.

It is also important to point out that I sympathise with some of the comments made by the hon. Member for Rhondda (Chris Bryant), who is no longer in his seat, in relation to the issue of five-year terms. As a member of the Welsh Affairs Committee, I have supported the recommendation as it stands, but I have some reservations. It is not necessarily the case that I am opposed to an extension to five years to the Assembly term; it is more that I have reservations about taking a five-year term as a norm. I would be fairly relaxed if we decided to move to four-year terms in Westminster and the Assembly.

I fully accept that the argument for a five-year term for the Assembly is to ensure that the two elections do not clash, but I have reservations about whether five years is, in any way, shape or form, better than four. As things stand, the intention of the legislation is to ensure that Assembly elections can be held separately from Westminster elections, which is something that I support. However, I also agree with the hon. Member for Rhondda that we always seem to extend terms rather than reduce them, which is a shame.

Let me turn to the issues of importance in the Bill. My personal view is that the key issue is financial and fiscal accountability. We can talk about all the elements of the legislation, but in truth we are considering an attempt to ensure that the Welsh Government and the Welsh Assembly are accountable for fiscal decisions made in Wales. It is here that we see the confusion in the Opposition’s argument.

Yes, it certainly was a sunny Saturday in Llandudno. As I did not want to impose myself on the Welsh Labour party conference, I was personally in Llanfairfechan, where the weather was also suitably good. However, we should reflect on the confusion that came out of the Welsh Labour conference. When I argued in not one but two Welsh Grand Committees for the concept of fiscal accountability, I was informed in fairly robust terms by the hon. Member for Pontypridd (Owen Smith) that the Welsh Assembly did not need any further accountability. Indeed, I can quote the hon. Gentleman, who is no longer in his seat, directly:

“I have just made the point that I do not believe for a moment that having additional responsibility for tax-varying powers would confer any extra degree of accountability on the Welsh people.”—[Official Report, Welsh Grand Committee, 5 February 2014; c. 18.]

I am delighted to see that he has just returned to his seat. He made those comments on 5 February, yet at the conference on Sunday we had his new Llandudno declaration. Clearly, a road to Damascus conversion occurred somewhere along the A470 between Pontypridd and Llandudno.

[Albert Owen]

It will come as no surprise to the hon. Gentleman that we are a democratic party and our conferences are the places where we make such decisions as a democratic body. I know that he has been a member of other parties, but that is the position of the Labour party. If he wants clarification, perhaps he should ask questions rather than giving opinions.

[Guto Bebb]

I am grateful to the hon. Gentleman for that intervention. I am sure that the Labour party is a democratic institution; it also believes strongly in the hereditary principle, as we have found out from Aberavon.

The hon. Member for Pontypridd made a clear statement in the Welsh Grand Committee on 5 February that there was no need for fiscal devolution for the Welsh Government to have any further accountability, yet in his speech in Llandudno on Sunday he clearly made the point that the further devolution of income tax varying powers so that they were on a par with those in Scotland was necessary to give that accountability.

[Mr David Jones]

I think I ought to tell my hon. Friend that I ventured into Llandudno on Saturday and it was reasonably quiet there. Does he not get the impression, as I do, that far from its being a damascene conversion on the part of the shadow Secretary of State, it is more likely that he has been leaned on by his bosses in London and Cardiff?

[Guto Bebb]

I would not want to offer an opinion on whether the hon. Gentleman has been leaned on or not. There is clearly a significant difference between the comments made in the Welsh Grand Committee on 5 February and the speech delivered in my constituency on Sunday and those differences need to be reflected on, because ultimately I agree with the speech that he made on Sunday. There is clearly a need for fiscal accountability for the Welsh Government. If we are to have grown-up politics in Cardiff Bay, it is important that decisions about spending and raising money should be taken by the elected politicians there. It is a step in the right direction to have a proposal in the Bill that will allow the Assembly, if it so desires, to trigger a referendum to allow a degree of control over income tax to be devolved to the Welsh Assembly in Cardiff. That is the key point about this legislation, which attempts to work with the grain of Welsh public opinion. The income tax variation is not being imposed on Wales; the Welsh Government, or the Welsh Assembly for that matter, are being allowed the ability to ask for those powers and trigger a referendum. The challenge for the Welsh Government will be to ask themselves whether to trigger that referendum or not.

Let me make a brief final point about the tax accountability issue, as I am aware that the debate has gone on for quite a while. The Select Committee had a significant and long discussion about whether we needed a lockstep or not. As some Opposition Members may wish to remind me, we had that debate in the Welsh Conservative party too. My own view is that the lockstep is something I can comfortably live with. The hon. Member for Arfon (Hywel Williams) made an interesting point on the arguments about whether the progressive nature of our tax system would be affected by the lockstep. He argued about whether, if we increased taxes by a penny on the standard rate and a penny on the 40p rate, we would make the system less progressive. The reverse argument can be put. For example, if we reduced the standard rate by 2p and the 40p tax rate by 2p, that would in effect be more progressive because it would give a 10% cut to the standard rate taxpayer and a 5% cut to the 40% taxpayer. As a Welsh Conservative who believes in lower taxes, I am confident that those powers will be necessary to reduce taxes in Wales. If we reduce taxes using the lockstep, the result will be a more, rather than a less, progressive system. The principle of fiscal accountability justifies the imposition of the lockstep at this point in time. As such, I am happy to support the Bill as it stands.

20:45

[Geraint Davies (Swansea West) (Lab/Co-op)]

It is always a pleasure to follow the hon. Member for Aberconwy (Guto Bebb). It is interesting that he should mention Ukraine at a time when Victor Yanukovych is recommending referendums across Ukraine for more autonomy for its regions.

The Bill is, at best, a pig’s breakfast, but when there is nothing else on the table I guess that the parties will coalesce around it. To be fair, one reason why it is a pig’s breakfast is that the constitutional settlement across the United Kingdom is diverse. The settlements in Northern Ireland, London and Wales—

[David T. C. Davies]

rose—

[Geraint Davies]

I am coming to Monmouth in a moment—and Scotland are very different. It is worth bearing in mind that it might not be timely to make concrete decisions when we do not know the verdict of the Scottish people on becoming independent. We do not know whether that decision will gather pace for the devolutionary process in Wales.

[David T. C. Davies]

I just wondered whether the hon. Gentleman could clarify whether the Bill is a dog’s breakfast or a pig’s ear. I have never heard of a pig’s breakfast before.

[Geraint Davies]

It is a new constitutional phenomenon that I have just introduced. I am sure the hon. Gentleman will delight in it, being a person who indulges in that sort of thing.

If I may reference Scotland for a moment, rational and emotional powers are at play. There are people who thought that Scottish independence was going to go down the tube because of currency, the EU and inward investment, but now, of course, the wind is blowing in a different direction. The people of Scotland feel that they are being told that they cannot live without us and there are the emotions of divorce, so there is a mixture of rational economic argument and emotion. The feeling in Wales is that, rather than facing years and years of Tory austerity, we want to decide our own thing. The reality is that if Scotland leaves the UK we will end up with more Conservative Governments, because of the residual demography, and that will change the appetite for devolution.

Plaid Cymru would obviously like Wales to go down the road of independence and it sees this as a stepping stone. It talks about fair deals and fair funding for Wales even in the knowledge—this is an important point on what is behind the Tory agenda, too—that the difference between taxes raised versus expenditure in Wales is about £15 billion. The Conservative plot is to reduce the number of Welsh MPs, give borrowing and tax raising powers to Wales and forget about giving Wales its fair share of both revenue and capital. In the case of Scotland, the difference, coincidently, is also about £15 billion, but it currently makes up that difference in oil.

We therefore have a situation where it is convenient for everybody to go along this path, but the people of Wales want fair funding now. What that means in relation to the Barnett formula, as has been mentioned, is an extra £300 million a year. Wales should have the same needs-based formula as the English regions. It is not difficult to work that out, so that should just move forward.

With regard to capital, like other parts of Britain outside London and the south-east, Wales gets a small fraction of the investment per head that London gets—London gets about £5,000 per head and Wales gets about £500 per head. That is a problem for everyone outside London. If we migrated some of that investment outside London, we could put pressure on the system to make it more balanced. Britain is quite unusual in that respect. In Germany, for example, Berlin does not dominate Munich or Dusseldorf, so there is no necessity for that balancing.

If the response in Wales is, “Well, we are not getting enough money to do our own thing, so we will have to borrow it,” who will pay for that borrowing? That is the real fear, because there is no money on the table for that. Then there is the false analysis that the borrowing needs to be hypothecated against an income stream from income tax or other taxes, and that the amount of borrowing should be determined by the size of those streams. Frankly, that is just false. It is not the case that in order to justify more borrowing we need more income tax devolution. It is the case that the amount of money Wales will get in future, as the Secretary of State argues, will be broadly the same; it will not be distorted by this method.

My right hon. Friend the Member for Neath (Mr Hain) and I fear that we will end up with less money over time because the tax take per penny of income tax is 70% of what it is in England. If we assume for a moment that the global amount of money remains the same, then where does the extra money for paying back the borrowing come from? Well, it comes from nowhere. The reality is that the money would be paid back by top-slicing revenue, which means top-slicing the amount of money for services. That is what will happen if Wales does not get its fair share of UK funding.

We have already seen the signs and symptoms of the stealthy stranglehold that the Tories want to put on Wales, with the recent U-turns on the valleys lines. All of a sudden we hear, “Here you are. You can borrow some money.” A moment ago there was going to be electrification from Paddington to Cardiff and then through to Swansea, including the valleys, but all of a sudden we are told, “Well, the small print states that the Welsh Assembly has to do that, and it can do that by borrowing.” In fact, the commitment to go through to Swansea is not even fulfilled. The Government said that they would electrify the line from Paddington to Cardiff and then from Bridgend to Swansea, but they will not do the bit in the middle. If the Welsh Assembly Government say that they will not do that because they have another priority, which they might have, as is their right, we will have a bit in the middle that is not electrified, and that is not electrification through to Swansea, so the Government have broken their word.

[Albert Owen]

I am a little confused by my hon. Friend’s terminology, because he talks about small print. I do not see any small print. The Prime Minister made a statement to the BBC in which he said that he would pay for electrification to Swansea and the valleys. That was in his statement, not in any small print.

[Geraint Davies]

Perhaps I have been misinterpreted. There was no small print. There was a big announcement, as my hon. Friend has just said, by the Prime Minister, the Secretary of State and others. The small print I was referring to was the weasel words in the long-winded document that was exchanged between Ministers, which presumably changed the headline proposition. It had been, “We will provide this,” and then the Minister argued, “When we went through it all I found here on page 23 that it says that actually it is interpreted in this way, so according to our lawyers the Welsh Government will have to do that.” That is not what we heard on the radio.

[Mr David Jones]

The hon. Gentleman will know that there was a letter, signed by Carl Sargeant, the relevant Welsh Minister, confirming that there was an agreement. Is that small print?

[Geraint Davies]

The Prime Minister said that the UK Government would pay for the electrification of the railway lines, which are essentially UK infrastructure. I think that it is disgraceful, frankly, that while £52 billion is to be spent on HS2, the Secretary of State will not even fight for that extra bit of money for Wales. We desperately need it. He should resign.

[Owen Smith]

I just want to clarify for the House that the Prime Minister said:

“It’s this government”—

I presume he means Her Majesty’s Government—

“that’s putting the money into the electrification of the railway line all the way up to Swansea and, of course, the valley lines.”

[Geraint Davies]

Which valleys was he talking about?

The Secretary of State, in concluding his lamentable speech, said that this bit of legislation would make Wales more competitive, fairer and more accountable and that it would deliver economic growth. If I believed that, I would support the Bill wholeheartedly, rather than in a lukewarm fashion. What is really involved is a “Wonga economics” trick—“You can borrow all this money. Don’t worry, it’ll be all right. You can spend it on the railways and roads. Spend some more and we’ll give you some more and if you tax more you can have more,” and all that. Globally, however, there will not be any more; the money has to be paid back. There will be less overall revenue for core services such as health and education.

Members will be glad to hear that I will not speak for much longer, as people want to wind up the debate, but I want to say that the whole essence of devolving income tax is about competition and confusion. Labour Front Benchers have said that we do not want a competition, and I think it intrinsically wrong to generate more and more different sorts of tax competition across the United Kingdom. It is not healthy and it generates confusion for inward investors. It is not something that we want.

I mentioned the smaller taxes such as stamp duty, which are seen as peripheral and unimportant. However, Boris Johnson has jumped on his hind legs and started squawking that he now wants stamp duty on the back of what we are having in Wales. He wants £1.3 billion. The issue is undermining the national accounts of the United Kingdom. It is no longer about small fry and throwing crumbs to Wales; it is distorting the stability of public economics in Britain, and we need to think about that carefully.

One problem has been that the Silk commission was made up of people who know about the Welsh Assembly and have been inside the system; they were talking to each other and to small groups of people in cold church halls. Questions that were not asked or answered include, “What will happen in a few years’ time if London or Yorkshire wants this? What will it look like?” Some people mentioned cross-border health and education; we can add cross-border tax differences to that. Will such things be a help or hindrance to the people of Wales? There is by no means a clear answer.

The Tories are not generating a regionally balanced economic growth perspective; the majority of economic growth is funded by mortgages and consumer debt in London and we are again seeing the emergence of a twin-track economy. Where will the devolution of different taxes at different rates to different parts of the UK end up, when greedy London wants more than its fair share, gobbling up the core of the resources for Britain as a whole?

Wales is increasingly being pushed into being decoupled from the speed boat of London, which will zoom away. We need to have our fair share of economic stimulus and investment and to a large extent what I have been discussing is a decoy from the real matter at hand, which is to get the right money for Wales now before we talk about the intricacies of tax devolution.

20:58

[Nia Griffith (Llanelli) (Lab)]

We have had a good discussion on the Wales Bill, and a wide range of views have been expressed. We will broadly support the Bill, although we will table amendments in Committee. I put on the record straight off that we disagree with the clause on dual candidacy.

We heard from the right hon. Member for Chesham and Amersham (Mrs Gillan), a former Secretary of State for Wales. She welcomed the Bill and the cross-party participation on the Silk commission. However, she was the only person who regretted that the Bill did not include a clause to reduce the number of MPs in Wales and she felt strongly that there should be no reform of the Barnett formula until the deficit had been brought down—quite what she meant by that, we are not absolutely sure.

The hon. Member for Monmouth (David T. C. Davies), in characteristic form, told us that he saw the Bill as part of a relentless devolution of powers to Wales and likened it to sleepwalking to independence. However, he expressed his support for a federal system. He told us that he would vote and campaign for no in any referendum, although he did rather like the idea of borrowing powers, especially if they led to a relief road for the M4.

We then heard from the hon. Member for Forest of Dean (Mr Harper), who, when he had finished smearing Labour in Wales, got down to the point—

[Mr Harper]

I am sorry, but the only comment I made about the NHS in Wales was about mortality statistics, and I was quoting exactly the right hon. Member for Cynon Valley (Ann Clwyd). If quoting her is smearing, I plead guilty, but I do not think I was doing that; I was raising legitimate concerns on behalf of my constituents.

[Nia Griffith]

Indeed. Perhaps I will move on then. The hon. Gentleman also said that he wanted road bridges to be built with money raised from the Severn road bridge; again, we wonder quite where he is going with that one.

Returning to the Bill, the hon. Gentleman raised valid points about the devolution of stamp duty and land being divided, and referred to confusion between people with certain postcodes whereby, for example, somebody with a Newport postcode ends up, in effect, being put in Wales when in fact they are in England. He also mentioned the complexities of payroll for small businesses in the event of devolution of income tax. I think he is really saying that there needs to be a very thorough impact assessment on all these issues, and we would certainly call for that.

The hon. Member for Brecon and Radnorshire (Roger Williams) emphasised the benefits of holding elections on separate days to avoid confusion, although not all Members agreed. He reiterated his support for the reserved powers model of devolution whereby the assumption should be that the National Assembly for Wales has powers in the devolved areas of responsibility unless otherwise specified.

The hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) said that it is difficult to find anybody in his patch who is interested in more devolution, so perhaps he spends more time in South Pembrokeshire than in west Carmarthenshire. He agreed with the hon. Member for Monmouth about devolution creep. He also noted his disagreement with the academics who are calling for more Assembly Members.

The hon. Member for Aberconwy (Guto Bebb) found himself agreeing with my hon. Friend the Member for Rhondda (Chris Bryant)—that must be a first—on the idea that if anyone changes the term of a Government, it is always to increase it rather than decrease it, and he was sceptical about the need for an increase to five years.

The hon. Member for Arfon (Hywel Williams), speaking on behalf of Plaid Cymru, expressed severe disappointment that the Bill did not fully reflect the Silk commission recommendations. He described the thorough scrutiny of the draft Bill by the Welsh Affairs Committee and explained the potential difficulties in enthusing the electorate about a referendum on tax. He mentioned the Barnett formula and the need for funding reform and told us that Plaid Cymru would table an amendment to allow for devolution of income tax without a referendum.

The hon. Member for Ceredigion (Mr Williams) reminded us that he is a strong supporter of localism and firmly believes that decisions made should be linked with any money raised. He wants to see a positive impact in terms of working together for a referendum. He compared the very thorough scrutiny of the draft Bill with the complete lack of scrutiny of the transparency of lobbying Bill before it came to this House.

My hon. Friend the Member for Swansea East (Mrs James) talked about borrowing and expressed concern about the unfairness to Wales in contrast with Scotland, where it is calculated as 10% of capital budget rather than being contingent on the devolution of taxes.

My right hon. Friend the Member for Neath (Mr Hain) spoke very eloquently about banning dual candidacy, quoting Lord Richard’s evidence to the Welsh Affairs Committee. He reminded the House of the very considerable, bare-faced abuse of the list system and quoted the leaked memorandum from Leanne Wood, the leader of Plaid Cymru, in which she gives explicit instructions to her party’s list Assembly Members to direct their time and resources—paid for by the taxpayer, Mr Deputy Speaker—to Plaid Cymru’s target seats. He also emphasised the need for shared risk on taxation and making sure that Wales does not in any way miss out if income tax powers are devolved.

My hon. Friend the Member for Caerphilly (Wayne David) expressed disappointment that the Bill falls short of fully reflecting what was in the Silk commission report. He also gave contemporary examples of how the list system is being abused, with list Members neglecting much of their area in order to focus almost exclusively on one part of it, with a view to standing for that constituency—exactly following the advice of the Plaid Cymru leader, Leanne Wood, to ignore constituents’ problems and focus solely on what will bring electoral advantage.

My hon. Friend the Member for Islwyn (Chris Evans) reminded us that people have a lot of concerns, and do not have only constitutional issues on their minds. Again, he was concerned about the large number of people living within easy commuting distance of the border and the effects that any change in tax rates could have on either side of the border. He called for a thorough impact assessment.

My hon. Friend the Member for Ynys Môn (Albert Owen), who is a fervent devolutionist but is not for devolution as a route to independence, said it was vital to work with people and to have a referendum on all important decisions.

My hon. Friend the Member for Swansea West (Geraint Davies) referred to the current dispute about railway funding, saying that it was a good example of his worries that weasel words might mean giving with one hand but taking away with the other. He also said that we should look carefully at what exactly the intentions behind the Bill are.

I turn now to some of the more mundane issues dealt with by the Bill. We very much welcome the devolution of the land taxes—stamp duty and landfill tax. They will provide an independent income stream against which the Welsh Government can borrow. We hope that the devolution of those taxes can take place as soon as possible and that the process will not be subject to any unnecessary delays. We understand the logic of the time scale but we urge that it should not be allowed to slip.

We welcome the borrowing powers that the Bill will legislate for, not least because this Tory-led Government have cut the Welsh budget by 10% over the course of this Parliament and have reduced the Welsh Government’s capital budget by nearly a third. Borrowing powers will enable the Welsh Government to invest in vital infrastructure projects to help boost economic development.

[Jonathan Edwards]

The Labour party continually attack the UK Government—and rightly so—for their huge cuts to capital expenditure in Wales, but the Government are following the exact budget lines set by the previous Chancellor of the Exchequer before the 2010 election. The Labour party set a path to cut capital budgets in Wales by 40%. That is what the UK Government have delivered.

[Nia Griffith]

The hon. Gentleman knows full well that the Opposition have very different priorities from the Government in the way that we deal with budgets and decide what our priorities are. Quite frankly, I think that he needs to do a bit more homework before he begins to make these suggestions.

I turn now to income tax. The Opposition do not accept that there is no accountability without the devolution of income tax. The National Assembly for Wales and the Welsh Government are accountable through elections, and Welsh Ministers are subject to the usual scrutiny procedures. Let us look at councils: more of a council’s budget comes through the block grant than from council tax, but nobody says that councils cannot borrow and that council borrowing has to be contingent on further devolution of some income tax powers.

None the less, we accept that the Welsh Government are slightly anomalous in not having the power to raise revenue. The devolution of a number of minor taxes will rectify that anomaly. It should be noted that in their evidence to the Silk commission the Welsh Labour Government did not actually seek the power to vary income tax. However, since the publication of the Silk commission report we have said that we support the recommendation to give Wales the power partially to vary income tax, contingent on a triple lock. That consists of fair funding, agreed by the Welsh and UK Governments; the power being subject to a referendum; and the power being in the long-term interests of Wales—that is to say that it should tested during a period of assignment.

We would like the Secretary of State to give further details on the period of assignment and to provide reassurances about the ability of HMRC to monitor a Welsh rate of income tax. We believe that further examination is needed of the impact of tax competition arising from different rates of income tax on either side of the border. We want to ensure that that looks at the behavioural aspects of what might happen if income tax rates vary on either side of the border.

Turning to the constitutional issues, we believe that the question of five-year terms is a matter for the Assembly. It may not be practical to table an amendment to that effect, but we want to put on record our belief that it should be something for the Assembly to decide.

On double-jobbing, we are very clear that we do not think that an individual should be an MP and an AM at the same time. It is not practical or fair to the electorate and we certainly support the ban in the Bill.

A number of my hon. Friends have referred to dual candidacy and I want to focus on one aspect of it, namely that the impact assessment notes that more people find it confusing and dislike it than those who favour it, and that smaller parties need the system because they are struggling to find candidates. It is pathetic that some of the smaller parties are finding it difficult to find candidates of the right quality. They should be asking themselves why it is that they cannot find anyone. Is the Liberal Democrats’ problem that no young person wants to knock on doors and explain why the Liberal Democrats propped up the Tories to put up student fees to £9,000 in England while in Wales the Labour Welsh Government pegged fees at £3,500? I cannot see any young person wanting to stand for the Lib Dems. Will young people want to stand for Plaid Cymru when they are worried that they might be told, “If you haven’t got two parents who were born in Wales, you can’t represent Wales”?

[Hywel Williams]

Disgraceful!

[Nia Griffith]

Well, that is the sort of thing we have heard Plaid Cymru say about whether the captain of the Welsh rugby team should be captain or not. [Interruption.] Plaid Cymru Members can shout and protest all they like, but that is what they said only three weeks ago.

[Jonathan Edwards]

A smear!

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I think the hon. Members for Arfon (Hywel Williams) and for Carmarthen East and Dinefwr (Jonathan Edwards) need to calm down a little. In fairness, everybody has been able to put their point of view. I am sorry they do not accept what the shadow Minister is saying, but they cannot shout from the Benches in that way.

[Nia Griffith]

I am not sure how the Conservative party will find people to stand for it when many of its Members are simply rubbishing Wales in order to further their electoral interests in England. It may be very difficult for the Conservatives to find people, but if they can they should not try to overturn the ban on the dual candidacy. That is the whole point, is it not?

[Hywel Williams]

Will the hon. Lady give way?

[Nia Griffith]

I think I have been asked to keep going by Mr Deputy Speaker.

[Mr Deputy Speaker]

Don’t bring me into this! I certainly did not say that. It is up to the shadow Minister whether she wishes to give way, not the advice from the Chair.

[Nia Griffith]

In that case, Plaid Cymru Members have had one intervention already and I think that is enough, especially as they have had a long time today to raise different issues.

We in Llanelli felt let down by the abuse of the dual candidacy system. It was like having a massive cuckoo sitting in a nest in which it did not belong, neglecting all the other constituencies and focusing solely on one, whereas the proper role of a list Assembly Member is to look at broader issues, as Joyce Watson is doing with human trafficking and Rebecca Evans with disability.

We are strongly opposed to clause 2, which would reverse the ban on dual candidacy. Apart from that, we are generally in favour of the Bill and welcome it. I will table amendments in Committee and we will oppose dual candidacy, but all in all we are in favour of the Bill.

21:13

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

It is a pleasure to close this important debate and it is good, as ever, to follow the hon. Member for Llanelli (Nia Griffith), who on this occasion gave an uncharacteristically churlish speech. I want to call her out on her comments about the contribution by my hon. Friend the Member for Forest of Dean (Mr Harper), who is always the model of courtesy and graciousness in his contributions in this House. His remarks about Wales were based on evidence and truth and were carefully made, so I commend him. He is a former Cabinet Office Minister, so he is familiar with issues pertaining in particular to fixed-term Parliaments. This debate has been enriched by his participation. It has also been enriched by the speeches of not one, but two former Secretaries of State. It was good that the right hon. Member for Neath (Mr Hain) and my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), who is no longer in her place, both gave very thoughtful contributions on issues about which they have a lot of experience.

We also heard from the Chairman of the Welsh Affairs Committee, which did a fantastic job in scrutinising the draft Wales Bill. The speech by my hon. Friend the Member for Monmouth (David T. C. Davies) in fact attracted not just praise from Liberal Democrats, but a slightly backhanded compliment from the right hon. Member for Neath, who described him as having “sincere and intelligent extremism”. As I am sure the right hon. Gentleman knows better than most hon. Members in this House, extremism in the defence of liberty is no vice at all.

We have had a fascinating and wide-ranging debate during the past few hours on matters directly, and sometimes indirectly, related to the Wales Bill. There were excellent speeches from both sides of the House, and I thank all hon. Members for their speeches.

I will limit my remarks to the Bill, but I first want to say that, regardless of points of disagreement, there has been a broad measure of consensus on and support for the Bill by all parties in the House. Just as a Dulux colour sheet has different shades, there have been different shades of support—ranging from frosty and cold by my hon. Friend the Member for Monmouth to rather grudging and unenthusiastic by Opposition Members through to warm by my right hon. Friend the Member for Chesham and Amersham. There has been support for the Bill and, as we go into Committee, we should not forget that this wide-ranging Bill enjoys broad support from hon. Members and parties across the House.

The vast majority of hon. Members clearly support the Government’s move towards achieving a strong measure of fiscal devolution that will give the National Assembly for Wales control of devolved taxes for landfill and land transactions, and enable the Welsh Government to borrow for capital investment. I hope that such a positive position continues as the Bill progresses.

I should perhaps start with the lockstep, a term that few hon. Members had probably heard before the Silk commission did its work, but one with which we are certainly becoming increasingly familiar. I know that the Government’s proposals to allow the Assembly to vary income tax rates uniformly—in other words, in lockstep—subject to a referendum, concern some hon. Members on both sides of the House. Let me be clear that this Government believe that the structure of income tax is a key mechanism to redistribute wealth across the whole of the United Kingdom, including Wales and, as such, that wealth redistribution is properly determined at UK level. The lockstep is consistent with the principle that fiscal devolution should not unduly benefit one part of the UK at the expense of another, which would result in what at least one hon. Member has called a race to the bottom. I am pleased that that position is one that now seems to enjoy the support of Labour Front Benchers, although that was not clear when we last discussed it in the Welsh Grand Committee.

There would be a real risk of a so-called race to the bottom if the Welsh Government were able to set substantially lower rates for higher or additional rate taxpayers without needing to change the basic rate. Far from making the income tax powers unusable, as some hon. Members have suggested, the lockstep makes the powers very usable, as my right hon. Friend the Secretary of State explained at the start of the debate. Devolving income tax would give the Welsh Government a crucial lever to reduce taxes across the board in Wales to make it a lower-tax economy and put money back into the pockets of hard-working people across Wales.

If electors in Wales decide in a referendum in favour of income tax devolution, the Welsh Government would become responsible for almost half the income tax generated in Wales. In reducing the tax burden on working people in Wales, the Welsh Government would reap the benefits of a growing Welsh economy and gain access to a significantly larger revenue stream to finance further borrowing. With vision and foresight, the Welsh Government could grasp that virtuous circle with both hands.

Some Opposition Members, not least the right hon. Member for Neath, raised concerns about how the application of devolved income tax will work in practice. There was some discussion of that in the last sitting of the Welsh Grand Committee, when there was a lot of confusion about whether Welsh budgets would be detrimentally affected by the devolution of 10p of income tax. Following the Welsh Grand Committee, I circulated a letter to all members of the Committee explaining, with a practical example, how that would work. I would therefore hope there would be some clarity, but the right hon. Member for Neath said that there is a risk that Wales will be cast adrift. Let me explain to him that the system of income tax devolution we are proposing protects Welsh funding in two ways. First, the lockstep retains the redistributive structure of income tax across the UK, as I have just described. Secondly and crucially, the block grant adjustment mechanism, which we are calling indexed adjustment, means that Wales is protected from UK-wide shocks. For example, if the UK tax base were to decline, the block grant adjustment will be reduced accordingly. Reducing the block grant adjustment thereby increases the Welsh block grant. Therefore, the finances of the Welsh Government are protected through that mechanism.

[Mr Hain]

I am grateful for the Minister’s views. Is he saying that, if the Welsh Government raise less, Westminster will compensate more?

[Stephen Crabb]

That is not what I am saying. A key principle of the mechanism is creating the incentive for the Welsh Government to create the conditions for the economy in Wales to grow, so that they can reap the fruits and benefits of a growing Welsh economy. The protection kicks in when there are shocks and changes that affect the overall UK tax base. When changes would otherwise have a detrimental impact on Welsh Government revenues, Welsh Government revenues are protected because of the indexation. I shall circulate further information to right hon. and hon. Members.

[Geraint Davies]

Is the Minister saying that there are only upsides? Is he saying that, if the Welsh Government do well and grow the Welsh economy, they get a greater share of overall UK revenue, and if things go the wrong way from their point of view or the UK point of view, they still get that share or more and it never goes down? I cannot believe that.

[Stephen Crabb]

There is a lot of upside in the proposals, which I hope Opposition Members have the intelligence and foresight to recognise. In fact, the Silk commission calculated that Wales would have been better off under the system we are proposing had it been in place in the past decade. That answers the question asked by the right hon. Member for Neath—he asked whether Wales will be better off. The Silk commission estimated that, had the system been in place in the past 10 years, the people of Wales would have been better off. I hope that that also provides assurance to the hon. Member for Swansea West (Geraint Davies), who sees the Bill as a nasty plot and conspiracy.

Some Opposition Members have sought to link the devolution of income tax to so-called fair funding. That is another diversion they are throwing up, and another barrier they are erecting, so that they do not have to contemplate greater and truer accountability for the Government in Cardiff Bay, which they would prefer not to contemplate. The joint statement from the UK and Welsh Governments in October 2012 established a clear process to review relative levels of funding for Wales and England in advance of each spending review. The announcement recognised that levels of funding for Wales relative to England were not currently converging, but that, if convergence in funding is forecast to resume during the period, both Governments are committed to discussing a sustainable and fair solution. The fair funding mechanism agreed with the Welsh Government in 2012 worked very well in practice ahead of the last spending review. I hope that that, too, reassures hon. Members.

Current funding levels are well within the parameters recommended as fair by the Holtham commission. Safeguards are in place to address convergence if and when it resumes. Therefore, the funding regime for Wales should not be seen as a barrier to income tax devolution. That is one more smokescreen the Opposition are throwing up to disguise their basic opposition to, and dislike of, fiscal devolution.

A number of hon. Members mentioned borrowing powers for capital investment. There is clearly a broad consensus on all sides in favour of giving the Welsh Government the ability to borrow to invest in Wales’s infrastructure. Some Opposition Members want the Welsh Government to be able to borrow more than the £500 million permitted under the Bill—some suggested they should be able to borrow a virtually unlimited amount. The UK Government have set the limit considerably higher than we would have if we had used the tax and borrowing ratios we used in the Scotland Act 2012. Had we done that, the borrowing limit would be closer to £100 million, based on the taxes devolved in the Bill. We have set a higher capital borrowing limit of £500 million initially, but with flexibility for that limit to be increased if the Welsh Government gain access to further independent streams of funding, such as an element of income tax. If Opposition Members want to see the Welsh Government have a greater borrowing capacity, they should join us in campaigning for a yes vote in an income tax referendum.

What we are not prepared to accept is reckless borrowing without the means of paying that money back. Borrowing must be commensurate with the independent revenue streams. The Government have not worked hard over the last four years to build a reputation for financial prudence and competence, and tackling Britain’s deficit effectively, only to throw away that hard-earned reputation by allowing the Welsh Government to borrow beyond their means.

The hon. Member for Swansea East (Mrs James) said that she would welcome sight of the “workings-out”—I think that was the phrase she used—to help her to understand how we arrived at the £500 million borrowing limit. I suggest that she looks at pages 26 and 27 of the Command Paper that was published alongside the Bill, which is clear on the rationale and the basis for deciding on the £500 million figure. It is higher than would have applied if we had stuck closely to the Scottish ratios, and that is because we want the Welsh Government to crack on with the job of improving the M4. That was agreed with Welsh Ministers, and it gives them the tools to make progress quickly and to tackle that major infrastructure problem.

The hon. Lady also asked why Northern Ireland’s position was different. Northern Ireland is not a good benchmark for hon. Members to use in comparing borrowing regimes. The Northern Ireland Executive exercise many of the powers and responsibilities that are exercised by local authorities in other parts of the UK. In particular, they collect the equivalent of council tax and business rates and have borrowing powers similar to those held by local authorities.

Opposition Members did not talk much about borrowing, which will have a huge, transformational impact in allowing the Welsh Government to invest in new infrastructure in Wales, and nor did they talk much about the impact of lowering taxes in Wales, creating a low-tax economy and creating new jobs. They saved most of their energy and time for discussing the ending of the ban on dual candidacy. In fact, the right hon. Member for Neath used large chunks of a speech he made in 2006, if my memory serves me right. It has been like “Groundhog Day” as Opposition Members—although I am sure they were reflecting the concerns they have heard in their constituencies—manned the barricades to oppose a sensible measure—

[Albert Owen]

Is the Minister criticising Opposition Members for referring to a measure in the Bill? Surely it is the purpose of a Second Reading debate to talk about the measures in the Bill.

[Stephen Crabb]

I am criticising Opposition Members on two counts. One is the amount of time that they took talking about a relatively minor issue, when they could have used their time to better effect by talking about the real, everyday concerns of the people of Wales who will be affected by the measures in the Bill. I also criticise Opposition Members on this issue because they are wrong. They are in the minority. All other parties support the measure. Wales is the only country with such a ban on dual candidacy.

[Wayne David]

Will the Minister give way?

[Stephen Crabb]

I have been very generous with my time, and I am not giving way again.

The Bill provides the Welsh Government with the means to take active steps to improve the lives of hard-working people in Wales. It will allow the Welsh Government to tailor devolved taxes to best fit the specific needs of Wales; it will make them accountable for some of the money they raise, not just the money they spend; and it will give them the tools to grow the Welsh economy. It also provides them with the means to make much needed investment in critical infrastructure in Wales and, if they choose, to call a referendum to devolve a portion of income tax. It is a Bill I am pleased to commend to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Wales Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Wales Bill:

Committal

The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee

(2) Proceedings in Committee of the whole House shall be completed in two days.

(3) The proceedings shall be taken on the days shown in the first column of the following Table and in the order so shown.

(4) The Proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

[Jonathan Edwards]

On a point of order, Mr Speaker. I appreciate that you were not here at the time, but the hon. Member for Llanelli (Nia Griffith) made an unjustified and improper comment about me and refused to take an intervention during her winding-up speech. Is it in order for the hon. Lady to make such a comment? What advice could you give me about securing a withdrawal and what advice would you give the hon. Lady?

[Mr Speaker]

Whatever my capacities, it is very difficult for me to reach a conclusion about a matter to which I was not privy. As the hon. Gentleman sagely observed at the start of his attempted point of order, I was not myself present in the Chamber, so I am not party to the facts. If I were a cynical soul, I would imagine that he was seeking to continue the debate.

[Jonathan Edwards]

indicated dissent.

[Mr Speaker]

The hon. Gentleman assures me, with an air of wide-eyed innocence, that he has no such motivation. I simply counsel him, off the top of my head, that this is not a matter for the Chair—not, at any rate, as things stand—but that he, as a diligent and indefatigable Member, with great versatility, will be aware of the devices that are available to him to pursue this matter to a satisfactory conclusion, but almost certainly not now.

Business without Debate

Monday 31st March 2014 Commons Chamber

Wales Bill (Carry-Over)

Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),

That if, at the conclusion of this Session of Parliament, proceedings on the Wales Bill have not been completed, they shall be resumed in the next Session.—(Claire Perry.)

Question agreed to.

Delegated Legislation

[Mr Speaker]

With the leave of the House, we shall take motions 7 to 11 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Representation of the People

That the draft European Parliamentary Elections (Amendment) Regulations 2014, which were laid before this House on 24 February, be approved.

That the draft Representation of the People (Combination of Polls) (England and Wales) (Amendment) Regulations 2014, which were laid before this House on 24 February, be approved.

Social Security

That the draft Statutory Sick Pay Percentage Threshold (Revocations, Transitional and Saving Provisions) (Great Britain and Northern Ireland) Order 2014, which was laid before this House on 15 January, be approved.

Tax Credits

That the draft Tax Credits, Child Benefit and Guardian’s Allowance Reviews and Appeals Order 2014, which was laid before this House on 12 February, be approved.

That the draft Tax Credits (Late Appeals) Order 2014, which was laid before this House on 12 February, be approved.—(Claire Perry.)

Question agreed to.

Delegated Legislation

[Mr Speaker]

With the leave of the House, I propose to take motions 13 and 14 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Local Government

That the draft Local Authorities (Conduct of Referendums) (England) (Amendment) Regulations 2014, which were laid before this House on 5 March, be approved.

That the draft Local Authorities (Conduct of Referendums) (Council Tax Increases) (England) (Amendment No. 2) Regulations 2014, which were laid before this House on 24 February, be approved.—(Claire Perry.)

Question agreed to.

Delegated Legislation (Financial Assistance to Industry)

Motion made, and Question put forthwith (Standing Order No. 9(6)),

That the Motion in the name of Secretary Vince Cable relating to Financial Assistance to Industry shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice has been given that the instrument be approved.—(Claire Perry.)

Question agreed to.

Planning Inspectors and the National Planning Policy Framework

Monday 31st March 2014 Commons Chamber

21:33

[Jacob Rees-Mogg (North East Somerset) (Con)]

I am very pleased to bring to the House a petition brought to me by the mayor of Midsomer Norton, among others, that has been signed by so many people, so numerous as the stars in the heaven and as the sand which is upon the seashore.

The petition states:

The Petition of residents of North East Somerset,

Declares that the Petitioners believe that while the principles of the National Planning Policy Framework (NPPF) are worthy, its implementation has led to negative consequences that were not anticipated; further that the Petitioners believe that when the Planning Committee of a local authority, which has a draft Core Strategy, refuses a planning application on strategic grounds, the application is often allowed on appeal by the Planning Inspector on the basis of non-strategic, site-by-site considerations; and further that the Petitioners believe that as a result, unsustainable development in the Somer Valley is being approved on sites often remote from employment and transport infrastructure, in accordance with the priorities and interests of developers rather than the carefully researched and democratically agreed plans of the Local Authority.

The Petitioners therefore request that the House of Commons urges the Government to take the necessary steps to allow Planning Inspectors at appeal hearings to take into account and give great material weight to the cumulative effect of proposed developments; further that the House requests that the Government allows Planning Inspectors to interpret the sustainability principle in the NPPF on an area rather than merely on a site specific basis and further that the House requests the Government to take the necessary steps to allow Planning Inspectors at appeal hearings to give weight to the strategic proposals of a draft Core Strategy while it is going through the lengthy approval process.

And the Petitioners remain, etc.

[P001340]

Planning (Walsall South)

Monday 31st March 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Claire Perry.)

21:35

[Valerie Vaz (Walsall South) (Lab)]

I do not know what to say other than “How do I follow that?” However, the theme of my speech is very similar to that of the petition presented by the hon. Member for North East Somerset (Jacob Rees-Mogg).

Thank you, Mr Speaker, for granting me an Adjournment debate on what is becoming a very controversial issue in Walsall South. What I am about to describe are not only threats to the green belt, but threats to those of us who oppose a planning application in support of it. I refer in particular to an application for 59 large detached houses in Great Barr park.

I am sad to say that one of the developers has already made a complaint about me to the Labour party. I think that is because he believes that I am supporting the residents too much, although I am not quite sure what his grounds are. Moreover, a leaflet has been delivered which makes defamatory statements about me, about my hon. Friend the Member for West Bromwich East (Mr Watson)—who is in the Chamber—and about a residents’ group, the Beacon Action Group, and its chairman Mr Bob Winkle. A personal attack on me has been made by Mr Peter Allen, a consultant for the applicants, who does not live in Walsall South, on the letters page of the Great Barr Observer and the Walsall Advertiser. Both Mr Allen and the applicants appear to want to interfere in my work as a Member of Parliament, but more of that later.

The planning committee of Walsall metropolitan borough council has made two other decisions allowing building on the green belt. It decided that the historic Three Crowns pub should be converted into a single dwelling, and that three additional houses should be constructed, despite the advice of planning officers that that would reduce the openness of the green belt. That was decided in September 2011, but nothing has been built, and the site still lies derelict save for a car wash for which there was no permission. The footprint of the Three Crowns school could have been used as a community building, but there are now to be eight detached houses on the site. According to some of my correspondence with constituents, the planning committee was not given the full history of the site before it made its decision—a decision that the planning casework unit upheld.

However, the development that is causing the biggest controversy and the most personal attacks on people who oppose it is the one on which I want to focus: the development of Great Barr park and hall. My main concern, which I hope the Minister will address, is the use of enabling development to bypass planning law and the national planning policy framework on the green belt. As the Campaign to Protect Rural England suggested in a report published last week, the green belt is not safe. While I welcome the Minister’s written statement of 6 March 2014, local people who are directly affected, and the current framework, are being ignored in the whole process.

Since 2012, when the current owners bought the land, residents of Great Barr park have been unaware of behind-the-scenes discussions with English Heritage and the council, and with the self-styled historical consultant Peter Allen. The site was the subject of an inquiry in 2001, and at a public meeting Mr Allen said:

“Forget any romantic notion of bringing Great Barr Hall back to the way it was in Lady Scott’s time. There is no roof; the stucco and underlying brickwork are badly decayed… all doors and fireplaces have been stolen; floorboards, ceilings and staircases have disappeared”.

Great Barr hall, he said, was

“a derelict shell—that is the…reality.”

That is what he said in 2001, and that is exactly the situation now, with English Heritage saying that there is absolutely nothing of historic value in the building. So why are the developers being able to use this building as enabling development to bypass the planning framework on the green belt? The application fails all the tests set out in paragraphs 80, 88 and 89 of the NPPF, and the developer’s own statement says it will have an impact on the openness of the green belt.

If allowed, this development will extend Walsall, Birmingham and Sandwell into the countryside and the gap between them will be eroded. It will not safeguard the countryside from encroachment, nor does it assist with urban regeneration by encouraging the recycling of derelict and other urban land—all set out in the NPPF.

Then there is the use of agricultural land near Chapel lane. An inspector said at the inquiry that the Ministry of Agriculture, Fisheries and Food—now the Department for Environment, Food and Rural Affairs—

“considers the farmland within the site to be high quality and would object to development.”

What safeguards are there to ensure that the local planning authority is not there to support the developers, particularly when it is clear, and there is a prima facie case, that the development does not meet the NPPF guidance? The planning authority should have refused it if it was applying the NPPF. Instead, it is engaged in an exercise, and a letter on the council website stated

“we would very much like to continue to work with you towards delivering an acceptable proposal.”

Peter Allen’s website states:

“After prolonged and close scrutiny it is now endorsed by, amongst others, Walsall MBC, English Heritage…and the Environment Agency”—

and that was before the residents were even aware of the application. There is now a disclaimer on the website, however.

My constituents were provided with the notice of planning application on 23 December 2013 and given 21 days to respond. How cynical is that! Incensed by this and bewildered, some constituents contacted me. Some who would have been affected did not even receive the notice. The vicar of St Margaret’s church, Rev. Rutter, who knows about the Scott family whose history is based around the church and who built the hall, has not even been consulted on or informed of the notice of planning application. He could have told English Heritage that a reference to a chapel was never located in the hall and has always been in the church.

The Beacon Action Group, which has been around for the last 31 years, set up a public meeting to discuss the plans. On 1 February, two MPs—my hon. Friend the Member for West Bromwich East and I—heard the views of the residents. All those who spoke to me were opposed. We were not there to give our view, but to hear the views of the residents. The plans were up and people could see them for themselves, and they were horrified.

The hall was to become a wedding and conference centre, but there is one already and it is called St Margaret’s church—and conferences have taken place at the nearby Holiday Inn. Agricultural land would be swallowed up by houses: 59 in total across the site, and they would not be affordable homes. Residents who have had access to the park for over 20 years would be restricted to twice a year, and even now some are being escorted out of the park.

There is an ancient woodland called Gilbert’s wood which has a bluebell wood, which Rev. Rutter, who is a botanist, says has taken 200 years to establish, with native English bluebells. An access road will go right through it, but it seems that in the planning statement it was all systems go except for the local residents. English Heritage could have either saved the building or provided a grant, but did neither. It has known about the hall since 2001. Successive owners have promised to repair the hall but this has never happened, and even in the current application the intention is not to do anything to repair the hall until 10 years on.

Why did English Heritage refuse to meet residents who know more about the history, like Rev. Rutter and the Beacon Action Group? I had to deal with the extraordinary situation of an English Heritage officer refusing to meet me unless Walsall council was present—refusing to meet an MP on the site, refusing to listen to residents, and propping up a building which by its own admission has no historic value at all, and allowing its name to be used to endorse the application.

As for the council, it either knows the guidance or it does not. It has outlined no special circumstances, so why is it leading the applicants on? It seems to want to silence the residents, too. The residents have put up posters, some along a grass verge. The council sent a truck along to remove the posters, even though the grass verge was not on Walsall land but on Sandwell land. It is trying to silence the residents. The applicants’ schedule of works states that the hall will not be restored for another 10 years. Moreover, this is not about housing. The council said in 2011, in response to the draft NPPF, that

“there is plenty of capacity for house building not just for the next 5 years but until 2026”.

The green belt is not secure. According to the Minister’s own figures in a written answer to me, of the 419 applications for development that have been referred to the casework unit, 10 have been called in and all the others were allowed. Of the 10, seven are under consideration, one was withdrawn and two were approved. With those odds, my constituents and those of other Members do not stand a chance of protecting the green belt. They do not stand a chance in the face of bullying, threats and intimidation by those who have financial means and who do not want to apply the guidance.

Will the Minister tell me why local authorities are engaging with developers when the guidance is clear? Why are they engaging with developers and not listening to residents’ concerns? Why did the council not consult all stakeholders, including the Merrions Wood trust and the residents of Merrions close, of Birmingham road, for which there are traffic implications, and of Skip lane and other roads? The council is rushing out notices each time it is told that people have not been consulted. Who is it working for? Why is it allowing supporters of the development to say that the authority making the decision has endorsed the proposal as though the decision has already been made?

I ask the Minister to issue further guidance immediately to all local authorities about the green belt, to make them aware of his written statement and to confirm that brownfield sites should be used first in all circumstances. The green belt is under further threat from the general permitted development order coming into force on 6 April, which will allow agricultural buildings to be turned into residential use. Sadly, the statistics and the evidence do not hold up. Will the Minister please reassure me that the green belt is safe?

Back in Walsall South, walking down Chapel lane towards St Margaret’s church, there is a beautiful silence. We know we are in the countryside there, and the church provides a setting for contemplation and serenity. That will all be lost as a result of a few people making life intolerable for the many, and for the generations to come.

21:47

[Mr Tom Watson (West Bromwich East) (Lab)]

I thank my hon. Friend the Member for Walsall South (Valerie Vaz) and the Minister for allowing me to make this brief contribution to the debate.

Mr Speaker, this discussion takes me back to a contribution that you made as a Back Bencher some years ago. There was a debate on how low-flying military helicopters were affecting horse riders, and you sagely warned the Minister that you were not going to go away. My hon. Friend’s contribution tonight has made it very clear to those developers that she is not going to go away either, and I will be standing right behind her. I am deeply impressed with the commitment she has shown to her constituents and mine in raising this important matter, which I hope the Minister will take seriously.

Hundreds of residents in West Bromwich East and Walsall South are opposing this application through the Beacon Action Group, led by the doughty campaigner Bob Winkle. The proposed development is contrary to all Government guidelines on the use of the green belt, including the national planning policy framework, and to local plans in the metropolitan boroughs of Sandwell and Walsall. Walsall council has already identified its housing needs for about the next decade and does not require the use of this prime green belt land. Sandwell council says that if the application as it stands is passed, it could set a dangerous precedent for development on green belt land, not just locally but nationally.

What is particularly concerning about this application is the manner in which the developers have failed to consult the community adequately. Indeed, in my view, they have misled them. They told local residents that English Heritage was in favour of the proposals, but that is not the case. They told Great Barr residents that local historian Peter Allen was in favour of the proposals to modify the dilapidated Great Barr hall, yet they did so without telling them that he had been enlisted as a consultant on the project. They also told local residents that it would lead to the restoration of Great Barr hall, but only in 10 years’ time, and in my view they have not adequately explained how they will pay for it. I just say to the Minister that this application has been a textbook example of how developers can alienate a community and propose to destroy the green belt in the name of profit. Local people believe the proposed application should never see the light of day.

21:50

[The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)]

It is a pleasure to reply to the debate secured by the hon. Member for Walsall South (Valerie Vaz), and I congratulate her on securing a debate on an issue of such great concern to her and her constituents. I am sure she was delighted when the hon. Member for West Bromwich East (Mr Watson) said that he was standing right behind her—I am not sure everyone is so delighted when he says such a thing, but I know that in this case it is well intentioned, and certainly for her protection and nothing else. The hon. Lady will understand that I cannot talk about any particular application, but I hope I can reassure her about the protection for the green belt in national policy, the further clarification of the protections we have issued in national planning guidance and routes open to her and the hon. Gentleman should they feel that this or any other application merits further inspection and decision making by Ministers.

First, let me deal with the policy on the green belt. The protections for the green belt in the national planning policy framework are simply as strong or stronger than any protection in any policy that preceded it. Nothing about the policy in the framework has in any way diluted the protection of the green belt relative to the previous position. The NPPF makes it clear that changes to green belt boundaries should be made only in exceptional circumstances, and through a local plan process involving a great deal of consultation with local people and robust examination by a planning inspector. As that policy position is so strong, the latest data show that between 2012 and 2013 just 0.02% of the total green belt changed status—became developed having been previously undeveloped. That is a tiny proportion of the 13% of land in England that has designation as green belt. So I can reassure the hon. Lady that the protections for the green belt remain very strong. I also have to say, as she raised this, that some of the claims made in the recent report by the Campaign to Protect Rural England were simply false and based on a spurious reading of very partial evidence.

The hon. Lady is also right to point out that there is a second test in national policy: when is inappropriate development in the green belt nevertheless acceptable? The policy makes it clear that inappropriate development can be permitted only in very special circumstances, and she referred to her belief that in this case those circumstances have not been demonstrated. We have made it clear in a written ministerial statement, which we then reiterated in the planning guidance to which she referred, that it is very unlikely that unmet housing need, of itself, will be sufficient to provide the very special circumstances to justify inappropriate development in the green belt. That is why in recent times we have called in for ministerial decision a number of planning applications proposing such development in the green belt, because we were keen to ensure that this very important area of national policy was being abided by and adhered to in decisions about green belt development.

That leads me on to the route that is open to the hon. Lady and the hon. Gentleman. When an application comes before a local authority, we as a Government prefer that decisions on it are taken locally, by the local authority. However, there are some applications that raise particular issues that have a greater relevance than simply their local impact. It is possible, in rare cases, to ask for an application to be called in for ministerial decision. The way that that works is that the planning authority will go through its process of determining the application, but before it can issue the decision—before the decision itself has statutory force—the Department and the Secretary of State will have an opportunity to look at the particular application and consider whether to call it in for ministerial decision. If the Secretary of State concludes that it is an appropriate application to call in for ministerial decision, there will then be an inquiry by a planning inspector, who will make a recommendation on that planning application to the Secretary of State. The Secretary of State or one of the other Ministers in the Department will then make the decision on that planning application.

I cannot prejudge whether the hon. Lady will want to avail herself of that course of action—of writing to the Secretary of State to request any application to be called in—nor can I prejudge what the decision might be likely to be in any particular case if she were to do so. All I can say is that many other Members, on both sides of the House, have taken this route on very particular applications that raise issues that are of more than local significance and that are right at the heart of national policy. While it is rare, there have been several cases relating to inappropriate development in the green belt where the Secretary of State has concluded that it is appropriate to call it in for ministerial decision rather than to allow the local authority to determine it.

I hope that that gives the hon. Lady a perspective and an avenue that she might usefully be able to explore.

Question put and agreed to.

21:57

House adjourned.