18:08 - The House divided: - Ayes: 0 / Noes: 0 - Question accordingly negatived.
19:17 - The Committee divided: - Ayes: 6 / Noes: 265 - Question accordingly negatived.
21:06 - divided: - Ayes: 5 / Noes: 260 - Question accordingly negatived.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The hon. Gentleman said a moment ago that he did not believe that Wales should undercut England. In other words, he does not believe that Wales should have a lower level of income tax than England. Does he also believe that Wales should not have a higher level of income tax than England?
Owen Smith
No. That is why I said what I said and why we have tabled amendment 40. In the event of further cuts by a Tory Government to the taxes of the wealthiest people in Wales and England, we would afford the Welsh people the ability to set a more progressive rate and to reintroduce the 50p rate in Wales, just as we propose to do across the rest of the UK.
We are, of course, discussing a hypothetical point to an extent, because in the event of there being a Labour Government in Westminster—which is the only way Wales would enjoy these additional powers, unless the Secretary of State intends to amend the Bill—we would reintroduce the 50p rate right across the UK. The issue would then be a moot point in Wales.
Mr Gauke
This might be a hypothetical point, but it is interesting and revealing that, while the shadow Secretary of State is ruling out ever using income tax powers in Wales to reduce taxes, he is certainly not ruling out using them to increase taxes. As he is well aware, under the powers in the Bill, if he increased taxes at the additional rate, he would also increase the basic rate.
Owen Smith
Indeed. That should come as no surprise to anyone. The Exchequer Secretary, in his rather tortuous remarks, is attempting to put words into my mouth. I said in my speech in Llandudno—I say it again today—that in the event of a Labour Government in Westminster, we would afford the Welsh people the ability to put up the top rate of tax and reinstate the 50p rate in Wales. That is very simple.
Owen Smith
I will give way in a moment. We are not talking about increasing the basic rate or the top rate; we are talking about increasing the additional rate of tax. [Interruption.] No, it is called the additional rate.
Owen Smith
From a sedentary position, the Exchequer Secretary draws a distinction between the higher rate and the top rate. I fully accept that what I mean is the higher rate, by which I mean the 40% rate, as opposed to the additional rate of 45%.
Mr Gauke
It is a great pleasure to serve under your chairmanship, Sir Roger, and to respond to the debate.
Part 2 of the Bill introduces a provision to devolve taxes to the Welsh Assembly. Clause 6 introduces a new part 4 to the Government of Wales Act 2006 and confers the required competence on the Assembly to legislate on devolved taxes, including their collection and management. Clause 6 also allows for further taxes to be devolved to the Assembly via an Order in Council and makes it clear that officials working in any body set up by the Assembly to administer the devolved taxes can be designated as civil servants if the Assembly so chooses. This applies whether the body only collects and manages devolved taxes, or is additionally responsible for the existing devolved subject of local government finance, including council tax and business rates.
Clause 7 makes amendments to the commissioners for revenue and customs Acts to allow Her Majesty’s Revenue and Customs to administer devolved taxes on behalf of the Assembly. The clause also amends HMRC’s information powers to allow it to share information with the Welsh Government in relation to devolved taxes.
Clauses 14 to 16 and schedule 2 provide for a devolved tax to replace stamp duty land tax on land transactions in Wales, in line with the recommendation of the Silk commission. Clauses 17 and 18 provide for a devolved tax to replace the existing tax on disposals of waste to landfill sites in Wales, again as recommended by the Silk commission.
Let me address Government amendment 20. In devolving tax powers, our intention is that the Assembly should have a free hand in choosing how it wants its devolved taxes to be administered and by whom. We do, however, recognise that HMRC has many years—indeed, if one includes its predecessor organisations many centuries—of experience in administering taxes within the UK, so we want the Assembly to be able to use HMRC’s services for these purposes if it wishes to do so. The proposed legislation in clause 7 provides for this.
As set out in the Command Paper, though, we believe that this should be on the basis of mutual agreement. The Assembly should not be compelled to use HMRC to administer its devolved taxes, but neither should the commissioners for HMRC be compelled to take on this role. At present, the 2006 Act would allow an Act of the Assembly to modify an existing function of HMRC or confer a new function on HMRC without the consent of the UK Government.
Amendment 20, therefore, amends parts 2 and 3 of schedule 7 to the 2006 Act to make it clear that the Assembly can only confer functions on HMRC and, once conferred, modify those functions if they relate to a devolved tax and the Treasury consents to it. The amendment ensures that the Assembly has the option of using HMRC to administer its devolved taxes, but puts appropriate safeguards in place for the UK Government in recognition of the vital role HMRC plays in collecting tax throughout the UK. I therefore hope that hon. Members will support the amendment.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Will the Minister give us any idea of how long he expects the process of seeking the Treasury’s consent to take, and how long it will be before the Welsh Government can use whatever powers it decides to confer?
Mr Gauke
All I can say at this stage is that we would consider any such request in good faith. We want to work in a constructive manner, and I believe that the UK Government have a record of doing that when dealing with the Welsh Government. Our amendment certainly does not constitute an attempt to delay matters. The Assembly has the option of using HMRC, but it is not compelled to do so. We think it reasonable, if the Welsh Government wish to use HMRC, for its commissioners and the UK Government to make a proper assessment of the overall impact on the UK.
Jonathan Evans (Cardiff North) (Con)
I hear what my hon. Friend says about the use of HMRC, but I think that my constituents would be keen to know whether the tax office in Llanishen in Cardiff in my constituency is likely to be the location where its work is done.
Mr Gauke
I am sure that my hon. Friend is right. As I have said, our intention is to work constructively. It will be for the Assembly to choose whether to make use of HMRC’s expertise, which is obviously considerable, but should it wish to do so, I think it reasonable for the UK Government to reserve the right to ensure that no demands are placed on HMRC that could disrupt the important work that it does throughout the United Kingdom, including in Wales.
Amendment 40, tabled by the hon. Member for Pontypridd (Owen Smith), seeks to place a duty on the Chancellor of the Exchequer to review
“the benefits of symmetry in the devolution of taxes between Wales and Scotland”
whenever a tax is devolved to either. It requires the Government to assess whether a tax that is being devolved to Wales should also be devolved to Scotland, and vice versa. I understand the intention of the amendment, but it fails to take into account the fact that key principles of tax devolution already exist. The UK Government have adhered to those principles, and we would expect future Governments to do so. They state that any changes should be evidence-based, and should be considered in a UK context. An assessment of the UK context would include an assessment of whether symmetry with the other devolved Administrations was desirable.
The amendment seeks to impose an unnecessary statutory basis on a process that the Government would undertake as a matter of course when considering the case for devolving further taxes to either Scotland or Wales. It could, indeed, lengthen the process of devolving new taxes in the future by placing a superfluous statutory requirement on the Government. I do not believe that it is necessary, or would improve the procedure for adding new taxes that is set out in the Bill. It may well be that the hon. Gentleman simply wants to probe Ministers to establish whether this or a future Government would take the issue of symmetry into account, but I do not find the argument for a statutory basis persuasive.
Owen Smith
We are indeed keen to ensure that the Chancellor has a statutory obligation to consider the benefits of symmetry across the piece on a statutory footing, but let me take up the Minister’s reference to the need for an evidence base to support taxation policy. Does he agree that it would have been wise of the Treasury to undertake some form of detailed behavioural analysis of the impact of tax competition in respect of income tax, or indeed any analysis of the impact that stamp duty land tax or landfill tax might have on behaviour?
Mr Gauke
I shall deal with stamp duty land tax and landfill tax later in my speech. As for income tax, I am tempted to explain to the hon. Gentleman yet again about the lockstep attributes of our reforms. He has expressed concern about tax competition, but it seems to me from his earlier remarks that he does not believe in it, and that, if he had a chance to seek greater tax competitiveness for any part of the United Kingdom, including Wales, he would not do so. Indeed, he seems to be advocating a policy of “tax uncompetitiveness” for Wales. However, I must not detain the Committee too long on that subject.
Wayne David
I realise that the Minister wants to make progress, and I know that he has rejected the suggestion that there should be an analysis of what might happen as a consequence of the Bill, but it would be helpful to have a clear articulation of the Government’s position on tax competition. Does he want tax competition, yes or no?
Mr Gauke
What we want is greater devolution in terms of income tax. When we debated the subject last week, I explained in some detail why we thought that it was a good thing, primarily because it would increase the accountability of the Welsh Government to the Welsh people, which I would expect Members in all parts of the Committee to want.
Amendments 32 and 33 were tabled by members of Plaid Cymru. Clause 6 introduces an important new power to devolve further tax powers to the Assembly via an Order in Council. The power has a broad scope, and can apply to brand-new taxes and to existing UK-wide taxes. The clause sets out the process for making such an order, which would need to be approved by both the House of Commons and the other place, as well as by the Assembly. Amendment 33 would remove Parliament from the process, so that the order would need to be passed only by the Assembly.
We recognise that it is important to give the Assembly and the Welsh Government the economic levers that are needed to generate growth in the Welsh economy, including the ability to introduce new taxes. We also recognise that—although this would depend on the proposal under consideration—if we are to proceed in a timely manner, it would be advantageous to be able to devolve further taxes without requiring primary legislation. However, a balance needs to be struck. Tax devolution should not be at the expense of reducing the overall tax receipts or competitiveness of the United Kingdom as a whole.
That last point is particularly important. As we stated in the Command Paper that accompanied the Bill, we would assess any proposals for further tax devolution against a number of criteria. For example, we would consider whether any new tax would affect the UK’s wider economic policy, impose disproportionate burdens on businesses or individuals, or create new tax avoidance opportunities. In short, the criteria would ensure that any new tax would not be to the detriment of the UK as a whole.
It is important for the devolution of further tax powers to take place in the constructive and collaborative manner that led to the Bill. It is therefore right for the resulting legislative process similarly to involve both the Assembly and Parliament, so that the proposal can be considered from the perspectives of both Wales and the wider UK. It would not be right for either to be able to legislate to devolve further taxes without the agreement of the other.
Owen Smith
I am grateful to the Minister for giving way to me for the second time. He said a moment ago that the Treasury would be concerned if any reductions in taxes in Wales led to reduced receipts for the Exchequer. Does he not agree with the Secretary of State that a Conservative Government in Wales should cut taxes, or does he think that that would necessarily always lead to higher receipts?
Mr Gauke
That is a matter for the devolved Administration, but the design of the income tax powers is such that we believe that we are striking the right balance.
Amendment 32 seeks to extend the power to tax credits. I know there was a little debate earlier as to whether this was about extending powers over the social security system as such, which is not the intention behind amendment 32. That was made clear by the hon. Member for Arfon (Hywel Williams).
Paul Murphy
That is good to hear.
I come back to the issue of how this has been calculated. I was Finance Minister in Northern Ireland, where there is a stream of income from the rates. The household and the business rates go to the Northern Ireland Executive. But I do not believe that the way in which the borrowing powers were calculated for the Northern Ireland Executive were based on the fact that they had an income from rates. I certainly do not believe that the Scotland Act, which allowed Scottish Ministers to borrow 10% of the Scottish capital budget in order to fund additional capital projects, had anything at all to do with funding streams. I am not saying that funding streams are unimportant, but why should Scotland and Northern Ireland have separate calculations in order to determine what they can have, while Wales has to go by a different methodology? That is wrong. It is unfair. There should be fairness and equality in determining the capital budgets for Wales, Scotland and Northern Ireland.
The reason is probably that these things were done over a period of years in different ways. But it is not done with any consistency based on revenue streams. I wish that the Government could rethink that. Amendments have not been tabled because the Opposition support the issue of borrowing. The First Minister and other Ministers in Wales have been saying for at least two to three years now that to have borrowing and to increase their capital spending was the single most important thing they wanted. We welcome that, but we question the method by which the £500 million has been arrived at.
Mr Gauke
It is a pleasure to respond to the debate, and I thank all right hon. and hon. Members for their contributions. Clause 19 amends the Government of Wales Act 2006 to extend existing borrowing powers in relation to current spending and give Welsh Ministers new capital borrowing powers, and clause 20 repeals the existing borrowing powers that the Welsh Government inherited from the Welsh Development Agency.
Amendments 5 and 34 relate to the capital borrowing limit set in clause 19. Through the Bill, Welsh Ministers will be given new capital borrowing powers that will enable them to borrow up to £500 million. A non-legislative annual limit of £125 million has also been agreed with the Welsh Government. The Government have been consistently clear that borrowing powers must be commensurate with the level of independent revenue that is available to support the costs of borrowing, and a capital borrowing limit of £500 million is substantial relative to the tax powers that are initially being devolved. As hon. Members have already pointed out, if the same ratio between revenue and the borrowing limit had applied in Wales as in Scotland, the overall capital borrowing limit for Wales would have been closer to £100 million. The limit has been increased to £500 million to enable the Welsh Government to start improvements to the M4, should they choose to do so, in advance of a referendum on income tax devolution, and I hope that that flexibility will have the support of Members on both sides of the House. The Government recognise that the £500 million will not be appropriate for ever, but we believe that the arrangements we are implementing provide a more robust mechanism for reviewing and changing the limit than would be the case under the amendments. Specifically, the Command Paper published alongside the Wales Bill sets out the review process that we will undertake at each spending review, and the Bill makes provision for the limit to be changed through secondary legislation.
The UK and Welsh Governments have previously agreed a joint process to review convergence between Welsh and English funding at each spending review. That process will now be extended to ensure that the capital borrowing limit remains appropriate.
The Command Paper committed to consider not only the impact of inflation, but the economic and fiscal circumstances at the time of each spending review and the size of the independent revenue stream available to the Welsh Government. That means we will be considering a much broader range of factors than proposed by amendment 5. For example, if an element of income tax is devolved in Wales, applying the same ratio as in Scotland could suggest an increased limit for Welsh Ministers of around £1 billion.
Following the joint review process, the Bill contains the power for the UK Government to set out a new limit through secondary legislation. Although we have legislated that the limit cannot be reduced below £500 million, legislating that the limit can only be increased in future is not the right answer and could have unintended consequences. For example, consider the scenario in which the UK and Welsh Governments agree that the borrowing limit should be increased substantially. Under our proposals, the limit could be increased accordingly and, if necessary, reduced in future if fiscal conditions deteriorate.
The problem with amendment 34 is that it would act as a disincentive for future UK Governments to agree to increase the limit when fiscal conditions allow, because they would know that the limit could never subsequently be reduced. The UK Government would understandably be cautious about ever increasing it. We do not think that that is the best outcome for Wales, as it might result in unintended consequences.
The Bill provides a capital borrowing limit of £500 million, robust arrangements for jointly considering the limit with the Welsh Government and the appropriate flexibility for changing the limit in future. I hope that the whole Committee can agree with that approach and urge right hon. and hon. Members not to press amendments 5 and 34.
Amendments 35 to 37 cover the sources of borrowing available to Welsh Ministers to fund capital investment and the related powers and responsibilities that should be devolved. As a result of the Bill, Welsh Ministers will be able to borrow from the national loans fund or from banks to fund additional capital investment. The national loans fund is almost certainly the cheapest way for them to borrow, while borrowing from banks provides flexibility.
However, in the Command Paper published alongside the Bill, the Government explained that if a case for Welsh bonds was made, we are willing to consider it. That remains our position. But it is right that the UK Parliament retains the competence over the sources of borrowing available to the Welsh Government so that the UK Government can properly execute their macro-economic responsibilities. For example, it should be for the UK Parliament, rather than the Welsh Assembly, to decide whether it is appropriate for there to be another entrant into the sterling bonds market. As is consistent with that, although we are providing Welsh Ministers with these important new borrowing powers, it is right that the Treasury retains sufficient control over aggregate levels of public borrowing. I hope that this further explanation of our position will allow hon. Members not to press their amendments.
Let me explain the changes we are making in relation to current borrowing. Welsh Ministers can already borrow for in-year cash management purposes. That enables them to borrow up to £500 million from the national loans fund to manage the flow of funding in and out of the Welsh Consolidated Fund while maintaining a working balance. Clause 19 extends those powers by additionally allowing Welsh Ministers to borrow across years to deal with differences between the full-year forecast and out-turn receipts for devolved taxes. A non-legislative limit of £200 million a year has been agreed with the Welsh Government, within the continuing £500 million overall limit.
Paul Flynn
I will not give way. I will speak for only a very short time.
At the Conservative party conference in Wales, the Secretary of State for Wales, Assembly Members, the Secretary of State for Health and the Prime Minister lined up to talk about one subject: undermining the Welsh health service. It is, rightly, called the war on Wales. The damage that that does is enormous, and it is done to the whole reputation of Wales. That is not just happening in Wales; it is happening throughout the United Kingdom. This is how the Tories believe they are going to claw their way back to power, but I have news for them. There are now two Tory parties in Wales: the Joneses and the Farageists. The people will have a choice of which bit of bigotry they want to vote for next time. That will cut the reactionary vote in Wales in half and very few Welsh Tory MPs will be back here. When the Prime Minister says, from his lofty position, that there is a line between life and death at Offa’s Dyke, it will not be forgotten and it will never be forgiven.
Mr David Jones
It is a pleasure to serve under your chairmanship, Mr Crausby. It has been an interesting and lively debate. I will speak in the first instance to clauses 21 and 22.
Clause 21 confers on the Assembly the legislative competence to decide its own budgetary procedures. The effect of the clause is that the Assembly will be able to legislate to put in place budgetary procedures that take account of the Assembly’s and Welsh Ministers’ new powers under part 2 of the Bill. Clause 22 sets a requirement on the Secretary of State and Welsh Ministers to publish separate reports on the implementation and operation of the new tax and borrowing powers. Reports must first be published within a year of the Act passing and thereafter before each anniversary of the Act being passed. They must continue until a year after the new finance powers have been transferred fully to the Assembly and to the Welsh Ministers.
Mr Jones
That, of course, is entirely a matter for the Welsh Government, but, in practice, that is what they are calling it at the moment.
I thank my hon. Friends the Members for Monmouth (David T. C. Davies) and for Aberconwy (Guto Bebb) for their amendments 12, 13 and 14, and my hon. Friend the Member for Forest of Dean (Mr Harper) for his amendments 17 and 18 and new clause 3. They raise important issues about the provision of cross-border health services in Wales and England, issues which are, of course, vitally important to anyone who lives close to the border—or even not so close, as was pointed out by my hon. Friend the Member for Ceredigion (Mr Williams). Indeed, they are important to anyone who wants world-class health services to be delivered throughout the United Kingdom.
Health is one of the most important services—arguably, the most important service—to be delivered by any Government. We all know that people value the delivery of good health care more than almost every other public service. This is, after all, a service on which we are all likely to call at some stage in our lives. It is therefore essential for any Government to deliver health services which are effective and efficient, and which provide good value for money. In England, the Government will have increased spending on health by about £12.7 billion in cash terms over the lifetime of the current Parliament, delivering an NHS that continues to improve and the health care that people want and deserve. However, none of that would be possible without our front-line NHS teams: the doctors, nurses, and other health care professionals.
As we have heard from Members this evening, the sad fact is that the Labour Government in Cardiff are presiding over a health service in Wales which is declining. My hon. Friend the Member for Monmouth gave some illustrations of that decline. In Wales, Labour has cut the health budget by 8%, despite having been given an extra £1.6 billion in the block grant. The result has been a decline in health services in Wales which is evident for all to see, with unacceptably long waiting times.
Hywel Williams
Whether or not one agrees with the policies of the Labour Government in Cardiff, surely devolution means that it is a matter for them and not for the Secretary of State.
Mr Jones
Actually, it is for every elected representative to express concern when a service as important as health is affected. When the devolved Administration are not delivering an adequate standard of health care, it is entirely appropriate for every elected representative to draw attention to that.
Owen Smith
Does the Secretary of State agree with the Prime Minister that Offa’s Dyke is
“the line between life and death”?
Mr Jones
I agree entirely with my right hon. Friend the Prime Minister that in England there is a cancer drugs fund, and in Wales there is not. I can tell the hon. Gentleman—[Interruption.] The hon. Gentleman should listen to this. Constituents of mine have died because they have not had access to cancer drugs, because they live in Wales. If the hon. Gentleman considers that an acceptable state of affairs, shame on him.
There is a significant lack of resources in Wales compared with England. For example, Wales has no cancer drugs fund. As the hon. Gentleman will know, a recent study conducted by Bristol university showed that Welsh patients were seven times less likely to have access to cancer drugs than those in England. There is a litany of failure in relation to Welsh health services. Almost everybody who lives in Wales can give examples of such failures. Only today, the Western Mail reported that complaints to health boards in Wales had increased by more than 40% between 2009-10 and 2012-13.
However, the Labour party is simply not listening. The First Minister and his Cabinet are presiding over what looks increasingly like a shambles. Health care in Wales is moving backwards. That is, quite simply, unacceptable—
Mr Jones
No, I will not. The hon. Gentleman can listen.
Crucially, it is also both alarming and worrying for people in Wales who need to use those services.
The Welsh Labour Government in Cardiff are not only failing thousands of patients in Wales, but failing hard-working professionals who are every bit as competent and dedicated as those in any other part of the country. It is in that context that we are debating the amendments tabled by my hon. Friends the Member for Monmouth and for Aberconwy.
David T. C. Davies
I entirely support what my right hon. Friend has just said. I have just received a long e-mail. I shall forward it to my right hon. Friend, but one sentence says it all:
“I run a local veterinary hospital and I am ashamed to admit that the animals under my care are treated more promptly and effectively than the people in Monmouthshire.”
The lady who sent that e-mail made it quite clear that she was criticising not the doctors or nurses, but the system created by Labour Members.
Mr Jones
I am grateful to my hon. Friend for that intervention.
Amendments 12, 13 and 14 seek to shine a light on the organisation and funding of cross-border health services—services provided in England to patients living in Wales and vice versa. I shall not dwell on the intended legislative effects of these amendments, but rather on the intentions behind them. I know this is an issue of real importance to many Members who have spoken this evening, and I would like to reassure the Committee that I share the concerns about the operation of the current system.
My hon. Friend the Member for Forest of Dean has also spoken to his amendments 17 and 18, which would require both the Secretary of State and the Welsh Ministers to include in their annual reports on the implementation of the Bill’s financial provisions details on the costs and effectiveness of cross-border services. His proposed new clause 3, which reflects concerns he has expressed over many months to me and my right hon. Friend the Secretary of State for Health, would require the Welsh Ministers to consider the impact of their decisions on the provision of health services to people who live in England but who are registered with Welsh GPs.
Current funding arrangements are set out in the protocol for cross-border health care. I entirely agree that there is concern about the practicality and deliverability of these arrangements as they operate on the ground. Everyone should receive the best possible health care regardless of where they live or where their GP is registered. As we have heard, health services in Wales are falling short in many respects of the standards we expect. That is a matter for the Assembly, and in particular the Welsh Government, urgently to address.
The Welsh Government’s policy of referring patients registered with Welsh GPs for treatment in Wales only created more difficulties for English patients, such as the constituents of my hon. Friend, who are registered with Welsh GPs. I am pleased, however, that following discussions between the Wales Office and the Welsh Government some local health boards in Wales have reviewed this policy and have exempted English residents. I know this falls short of patient choice, but it is at least a step in the right direction.
Improving the cross-border protocol is the responsibility of both the Welsh and the United Kingdom Governments and I can assure the House that this Government are determined to tackle the protocol shortcomings and ensure better cross-border health services. It is only right that we ensure that the health care of people living close to the border does not suffer merely because of where they happen to live. It is in this mechanism that the greatest potential for real change lies, and that is why we are reviewing it to ensure it really does meet the needs of people on both sides of the border. Work is under way, led by the—
Owen Smith
On a point of order, Mr Crausby. Is it in order for the Secretary of State—who we have not heard from for, I think, fully 245 minutes—to dwell for almost the entirety of his speech today on continuing the war on Wales and the Welsh NHS, none of which is addressed in this Bill, which is meant to be about the financial circumstances post-the Silk commission as they relate to Wales, not the NHS in Wales?
The Temporary Chair
As long as—[Interruption.] Order. As long as the Minister is talking to the amendments, he can say what he likes.
Mr David Jones
Thank you, Mr Crausby. It is clear that the hon. Member for Pontypridd (Owen Smith) does not want to hear what we are doing to remedy the problems in the Welsh health service.
Work is under way, led by the Department of Health and the Wales Office, to find practical and durable solutions to the problems which patients living on both sides of the border face on a daily basis. In March, the Secretary of State for Health made a commitment to this House that, by the end of this year at the latest, we would find a solution to the problems faced by English patients who must currently use NHS services in Wales but who would prefer to receive their treatment in England. My right hon. Friend has also asked the chief executive of NHS England to investigate the possibility of the English NHS providing treatment to Welsh patients in areas where the Welsh NHS proves unable to provide the care they need.
Mr Llwyd
The right hon. Gentleman is describing the process for the Barnett floor, which has been well known for several months. He says that some urgent work is being undertaken by government on this issue. Therefore, it would not be an imposition to expect a review to be forthcoming within six months of this Act coming into force.
Mr Jones
Well, I can only reiterate the point which I thought the right hon. Gentleman had accepted: that our priority is to address the deficit we inherited from the Labour party at the last election. Nevertheless, the next review is expected to take place in advance of a spending review in 2015 and it is likely to be around the time when this new clause suggests the report should be published. These arrangements ensure that we have a shared understanding of funding levels in Wales, and a process is in place to consider options should further convergence be forecast to resume. It therefore provides a firm basis for proceeding with the new financial powers in the Wales Bill, and I hope that the Plaid Cymru Members will therefore not press new clause 1 to a vote. I also ask hon. Members to support clauses 21 and 22 standing part of the Bill and to support amendment 29.
David T. C. Davies
Given what I have heard today, I am perfectly happy for now to withdraw the amendment. I look forward to working with the Secretary of State for Wales and the relevant Welsh Assembly Minister in drawing further attention to this issue in Wales and to returning to it on Report. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 29, in clause 21, page 23, line 32, at end insert—
‘() in sub-paragraph (2), after paragraph (a) insert—
“(aa) section 119 in so far as it relates to estimated payments for a financial year into the Welsh Consolidated Fund or to the Welsh Ministers, the First Minister or the Counsel General;”;’.—(Mr David Jones.)
This amendment ensures that the Assembly is not prevented from modifying section 119 of GOWA 2006 (statement of estimated payments) provided such modification relates to the estimated payments described in the amendment and not to the Secretary of State’s duty in subsection (3) of that section.
Clause 21, as amended, ordered to stand part of the Bill.
Clause 22 ordered to stand part of the Bill.
New Clause 1
Review of options for Barnett formula reform
‘(1) The Secretary of State shall make arrangements for a review of options for reforming the Barnett formula in order to meet the objective of calculating the block grant funding for Wales on the basis of need.
(2) The Secretary of State shall lay a copy of the report of the review mentioned in subsection (1) before each House of Parliament within six months of this Act receiving Royal Assent.’.—(Mr Llwyd.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mr Llwyd
To be frank, it is probably an observation, but one can look at what would have been the Severn barrage; what is going on in Swansea at the moment; various other projects off Ynys Môn, such as wave power; and the way in which the Crown Estate is seeking vastly to increase its mooring fees, for example at Abersoch in my constituency, doubling, trebling and quadrupling the annual fee for mooring a boat, of which there are several hundred in that bay. Fees for mineral exploitation are also being increased and there are common land rights from which it is entitled to receive revenues, which are increasing. Taking all that in the round, and if there is to be further exploitation of natural resources offshore, and indeed onshore—whether that will happen, I know not, but it probably will—I can only conclude that there will be a substantial increase in revenue in the years to come. I cannot give the hon. Gentleman hard figures, but I surmise and I believe that the case is made that there will be a substantial increase in the future.
The new clauses are probing amendments, but I will be very interested to listen carefully to the Minister’s response.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
It is a pleasure to serve under your chairmanship for the final part of day two of the Bill Committee on the Floor of the House this evening, Mr Crausby, and I thank the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) for the way in which he presented the new clauses and the spirit in which he spoke to them. He is always constructive and informed on these matters.
In tabling the new clauses, the right hon. and hon. Members from Plaid Cymru seek to establish a mechanism by which the Crown Estate in Wales can be devolved. New clause 7 sets out a mechanism to devolve the Crown Estate in Wales to the Assembly; new clause 8 requires revenue from the Crown Estate in Wales to be paid into the Welsh Consolidated Fund; and new clause 9 specifies that one of the Crown Estate commissioners shall have “special responsibility for Wales” and
“shall be appointed on the recommendation of the Chancellor of the Exchequer”,
who must consult Welsh Ministers before making a recommendation.
As hon. Members will be aware, the Silk commission made several recommendations in its part II report relating to the Crown Estate in Wales. It recommended that a Welsh Crown Estate commissioner be appointed in consultation with the Welsh Government, that a Crown Estate office be established in Wales, that the existing memorandum between the Crown Estate and the Welsh Government should be published and regularly updated, and that more emphasis should be given by the Crown Estate to the Welsh supply chain.
The Silk commission did not recommend transferring ownership of the Crown Estate to the Welsh Government. Typically, Plaid Cymru seek to go further than the commission recommended, and in doing so are pre-empting proper consideration of the commission’s recommendations. My right hon. Friend the Secretary of State and I have repeatedly made it clear that the Government do not regard the Bill as an appropriate vehicle for implementing Silk II recommendations. It will come as no surprise to Opposition Members that we also do not regard it as a vehicle for going further than Silk recommended.
Silk recommendations that require primary legislation should be matters for political parties to consider in preparing their election manifestos. Those that do not are being actively considered by the Government. I therefore urge the right hon. Gentleman not to press new clause 7, 8 and 9.