Wales Bill

Monday 11th July 2016 Commons Chamber

[2nd Allocated Day]

Further considered in Committee

[Mr Lindsay Hoyle in the Chair]

Clause 3

Legislative competence

17:15

[Paul Flynn (Newport West) (Lab)]

I beg to move amendment 118, page 2, line 28, after “7A)” insert

“and is not ancillary to another provision (whether in the Act or another enactment) that does not relate to a reserved matter”.

Clause 3 establishes the legislative competence of the National Assembly for Wales. This amendment makes clear that the Assembly has power to make provision touching upon reserved matters for the purpose of enforcing provisions in Assembly Acts that do not relate to reserved matters or otherwise making them effective.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 148, page 2, line 33, leave out “subsection (2)(b) does” and insert

“subsections (2)(b) and (2)(c) do”.

The amendment restores the Assembly’s competence by enabling it to legislate in an ancillary way in relation to reserved matters.

Amendment 149, page 2, line 34, leave out from “provision” to end of line 6 on page 3 and insert

“which is within the Assembly’s legislative competence (or would be if it were included in an Act of the Assembly).”

The amendment restores the Assembly’s competence by enabling it to legislate in an ancillary way in relation to reserved matters.

Clause 3 stand part.

Amendment 2, in schedule 1, page 41, line 24, at end insert

“(that is, the property, rights and interests under the management of the Crown Estate Commissioners)

‘(3A) Sub-paragraph (1) does not affect the reservation by paragraph 1 of the requirements of section 90B(5) to (8).”

This amendment is consequential on new Clause (The Crown Estate) which would transfer executive and legislative competence of the Crown Estate in Wales to the Welsh Government and the National Assembly for Wales.

Amendment 6, page 41, line 30 , at end insert—

“2A Paragraph 1 does not reserve the consolidation in English and Welsh of the principal legislation delineating the powers of the National Assembly for Wales and the Welsh Government, including (but not limited to) the Government of Wales Act 2006, the Wales Act 2011 and the Wales Act 2016.”

This amendment would allow the National Assembly for Wales to consolidate in both English and Welsh the statutes bills containing the current constitutional settlement affecting Wales.

Amendment 155, page 42, line 20, leave out “prosecutors” and insert “the Crown Prosecution Service”.

The amendment clarifies the reservation so that “the Crown Prosecution Service” is reserved, rather than “prosecutors” more generally, as this could prohibit Assembly legislation enabling devolved authorities to prosecute, such as local authorities.

Amendment 119, page 42, line 26, leave out sub-paragraphs (2) and (3).

This amendment seeks to allow ancillary provision by removing the exception in paragraph 6(2) and the related definition in paragraph 6(3), so that reliance can be placed on the general power to make ancillary provision made clear by the amendment to clause 3 proposed by amendment 118.

Amendment 83, page 47, line 32, leave out Section B5.

This amendment removes the reservation of crime, public order and policing from the list of reserved powers.

Amendment 122, page 48, line 9, leave out

“The subject matter of Parts 1 to 6”

and insert

“Anti-social behaviour injunctions under Part 1”.

This amendment is intended to narrow the reservation to the system of anti-social behaviour injunctions provided for by Part 1 of the 2014 Act.

Amendment 84, page 48, leave out line 11.

This amendment removes the reservation of dangerous dogs and dogs dangerously out of control from the list of reserved powers.

Amendment 85, page 48, line 15, leave out Section B8.

This amendment removes the reservation of prostitution from the list of reserved powers.

Amendment 86, page 48, line 24, leave out Section B11.

This amendment removes the reservation of the rehabilitation of offenders from the list of reserved powers.

Amendment 117, page 49, leave out lines 5 to 10.

This amendment will remove the reservation of knives from the list of reserved powers.

Amendment 123, page 49, leave out lines 24 to 29.

Paragraph 55 of the new Schedule 7A to be inserted into the Government of Wales Act 2006 by Schedule 1 would reserve the licensing of the provision of entertainment and late night refreshment from the Assembly’s legislative competence. Paragraph 56 would reserve the sale and supply of alcohol. This amendment removes both reservations.

Amendment 116, page 49, leave out lines 24 to 26.

This amendment will remove the reservation of the licensing of the provision of entertainment and late night refreshment from the list of reserved powers.

Amendment 87, page 49, line 27, leave out Section B17.

This amendment removes the reservation of alcohol from the list of reserved powers.

Government amendments 53 to 58.

Amendment 88, page 55, line 5, leave out Section C15.

This amendment removes the reservation of Water and sewerage from the list of reserved powers.

Amendment 89, page 55, line 28, leave out Section C17.

This amendment removes the reservation of Sunday trading from the list of reserved powers.

Amendment 90, page 55, line 32, leave out Section D1.

This amendment removes the reservation of generation, transmission, distribution and supply of electricity from the list of reserved powers.

Amendment 91, page 56, line 27, leave out Section D3.

This amendment removes the reservation of coal from the list of reserved powers.

Amendment 92, page 57, line 2, leave out Section D5.

This amendment removes the reservation of heat and cooling from the list of reserved powers.

Amendment 93, page 57, line 17, leave out Section D6.

This amendment removes the reservation of energy conservation from the list of reserved powers.

Amendment 94, page 57, line 24, leave out Section E1.

This amendment removes the reservation of road transport from the list of reserved powers.

Amendment 161, page 57, line 35, leave out from “roads” to the end of line 36 and insert—

“107A Speed limits

107B Road and traffic signs”

This amendment would make speed limits and road and traffic signs reserved matters.

Amendment 95, page 58, leave out line 36.

This amendment removes the reservation of railway services from the list of reserved powers.

Amendment 96, page 59, leave out line 21.

This amendment is consequential on amendment 61 to Clause 28 which would remove the exception to the devolution of executive functions in relation to Welsh harbours of “reserved trust ports”.

Amendment 140, page 59, line 21, leave out “Reserved trust ports and”.

Section E3 of the new Schedule 7A to be inserted into the Government of Wales Act 2006 by Schedule 1 would reserve certain marine and waterway transport matters from the Assembly’s legislative competence. Paragraph 119 in that Section would reserve trust ports. This amendment removes this reservation.

Amendment 97, page 59, leave out line 23.

This amendment removes the reservation of coastguard services and maritime search and rescue from the list of reserved powers.

Amendment 98, page 59, leave out line 24.

This amendment removes the reservation of hovercraft from the list of reserved powers.

Amendment 141, page 59, line 28, leave out “, reserved trust ports or”.

This amendment is consequential upon amendment 140.

Amendment 142, page 59, line 37, leave out

“that is not a reserved trust port”.

This amendment is consequential upon amendment 140.

Amendment 143, page 60, leave out lines 4 to 5.

This amendment is consequential upon amendment 140.

Amendment 100, page 61, line 21, at end insert—

“Benefits entitlement to which, or the purposes of which, are the same as or similar to those of any of the following benefits—

(a) universal credit under Part 1 of the Welfare Reform Act 2012,

(b) jobseeker’s allowance (whether contributions-based or income based) under the Jobseekers Act 1995,

(c) employment and support allowance (whether contributory or income-related) under Part 1 of the Welfare Reform Act 2007,

(d) income support under section 124 of the Social Security and Benefits Act 1992,

(e) housing benefit under section 130 of that Act,

(f) child tax credit and working tax credit under the Tax Credits Act 2002.

The benefits referred to in paragraphs (a) to (f) above are—

(a) in the case of income-based jobseeker’s allowance and income-related employment support allowance, those benefits as they existed on 28 April 2013 (the day before their abolition),

(b) in the case of the other benefits, those benefits as they existed on 28 May 2015.”

This amendment devolves all working age benefits to be replaced by Universal credit, and any benefit introduced to replace Universal credit.

Amendment 101, page 61, line 21, at end insert—

“Benefits entitlement to which, or the purposes of which, are the same as or similar to those of any of the following benefits—

(a) guardian’s allowance under section 77 of the Social Security Contributions and Benefits Act 1992,

(b) child benefit under Part 9 of that Act.”

This amendment devolves to the National Assembly for Wales, child benefit and Guardian’s allowance including conditionality and sanctions regimes.

Amendment 102, page 64, line 17, leave out Section H1.

This amendment would remove employment and industrial relations from the list of reserved powers.

Amendment 108, page 64, line 17, leave out Section H1 and insert—

“H1 National Minimum Wage

The subject-matter of the National Minimum Wage Act 1998.”

This amendment would devolve employment rights and duties and industrial relations, except for the national minimum wage, to the National Assembly for Wales.

Amendment 124, page 64, line 44, at end insert—

“Terms and conditions of employment and industrial relations in Wales public authorities and services contracted out or otherwise procured by such authorities.”

Section H1 of the new Schedule 7A to be inserted into the Government of Wales Act 2006 by Schedule 1 would reserve employment rights and duties and industrial relations from Assembly’s legislative competence. This amendment provides an exception to ensure that the Assembly retains its legislative competence over terms and conditions of service for employees in devolved public services and industrial relations in such services.

Amendment 99, page 65, line 7, leave out Section H3.

This amendment would devolve employment support programmes to the National Assembly for Wales.

Amendment 109, page 65, line 24, leave out Section J1.

This amendment removes the reservation of abortion from the list of reserved powers, to bring Wales into line with Scotland and Northern Ireland.

Amendment 103, page 66, line 31, leave out Section J6.

This amendment would remove Health and Safety from the list of reserved powers.

Amendment 105, page 67, line 14, leave out Section K1.

This amendment would remove broadcasting form the list of reserved powers

Amendment 107, page 67, line 17, at end insert—

“Exceptions

The regulation of:

(a) party political broadcasts in connection with elections that are within the legislative competence of the Assembly and

(b) referendum campaign broadcasts in connection with referendums held under Acts of the National Assembly for Wales.”

This amendment would devolve competence to the National Assembly for Wales in relation to party political broadcasts for Welsh and local elections.

Amendment 106, page 67, line 29, leave out Section K5.

This amendment would remove sports grounds from the list of reservations

Amendment 110, page 68, line 2, leave out Section L1.

This amendment removes justice from the list of reserved powers.

Amendment 111, page 69, line 25, leave out Section L11.

This amendment removes the reservation of prisons and offender management from the list of reserved powers.

Amendment 104, page 72, line 14, leave out Section N1.

This amendment would remove equal opportunities from the list of reserved powers

Amendment 112, page 73, line 24, leave out “bank holidays”.

This amendment, along with amendment 85, will devolve to the National Assembly for Wales, competence over bank holidays.

Amendment 113, page 73, line 27, at end insert “bank holidays”.

This amendment, along with amendment 112, will devolve to the National Assembly for Wales, competence over bank holidays.

Amendment 114, page 74, line 7, leave out Section N8.

This amendment will remove the reservation of the Children’s Commissioner from the list of reserved powers.

Amendment 115, page 74, line 11, leave out Section N9.

This amendment will remove the reservation of teacher’s pay and conditions from the list of reserved powers.

That schedule 1 be the First schedule to the Bill.

Amendment 120, in schedule 2, page 77, line 17, at end insert—

“1A Paragraph 1 does not apply to a modification that is ancillary to a provision made (whether by the Act in question or another enactment) which does not relate to reserved matters if it is a modification of the law on reserved matters in paragraph 6 or 7 of Schedule 7A.”

This amendment provides an exception for ancillary provision about certain justice matters that is not subject to a necessity test.

Amendment 121, page 77, line 18, leave out “a” and insert “any other”.

This amendment is consequential upon amendment 120.

Amendment 156, page 77, line 21, leave out from “matters” to end of line 26.

The amendment removes the necessity test in relation to the law on reserved matters.

Amendment 157, page 78, line 2, leave out paragraph 4 and insert—

“4 (1) A provision of an Act of the Assembly cannot make modifications of, or confer power by subordinate legislation to make modifications of, the criminal law. (See also paragraph 6 of Schedule 7A (single legal jurisdiction of England and Wales).)

(2) Sub-paragraph (1) does not apply to a modification that has a purpose (other than modification of the criminal law) which does not relate to a reserved matter.

(3) This paragraph applies to civil penalties as it applies to offences; and references in this paragraph to the criminal law are to be read accordingly).”

The amendment inserts a restriction so that the Assembly cannot modify criminal law unless it is for a purpose other than a reserved purpose. This would bring it into line with the private law restriction.

Amendment 34, page 79, line 29, leave out from “Assembly” to end of line 39.

The amendment removes the requirements relating to the composition and internal arrangements of the Assembly Committee with oversight of the Auditor General and/or their functions.

Amendment 35, page 80, line 41, at end insert—

“(i) subsection 120(1) as regards a modification that adds a person or body;”

The amendment will enable the Assembly to amend sections 120(1) of the 2006 Act which provide for ‘relevant persons’ which receive funding directly from the Welsh Consolidated Fund.”

Amendment 36, page 80, line 42, at end insert—

(iii) subsection 124(3) as regards a modification that adds a person or body;”

The amendment will enable the Assembly to amend sections 124(3) of the 2006 Act which provide for ‘relevant persons’ which receive funding directly from the Welsh Consolidated Fund.

Amendment 37, page 81, line 22, leave out from “taxes” to end of line 23.

The amendment removes the requirement for Secretary of State consent for the Assembly to amend the provisions of Part 5 of the 2006 Act which are not specifically referred to in paragraph 7(2)(d) and section 159, where the amendment is incidental to, or consequential on, a provision of an Act of the Assembly relating to budgetary procedures.

Amendment 128, page 82, line 30, leave out paragraph (c).

This amendment is consequential upon amendment 127.

Amendment 127, page 82, line 44, at end insert—

‘( ) Paragraph 8(1)(a) and (c) does not apply in relation to the Water Services Regulation Authority.”

This amendment would extend the existing exception for the Water Services Regulation Authority to include the matters that would otherwise be outside competence by virtue of paragraph 8(1)(c) of Schedule 7B.

Amendment 129, page 83, line 42, leave out paragraph (c).

This amendment removes the restriction in paragraph 11(1)(c) of the new Schedule 7B to the Government of Wales Act 2006 to be inserted by Schedule 2 to the Bill which would prevent the Assembly from legislating to remove or modify functions of a Minister of the Crown exercisable in relation to water and sewerage matters (including control of pollution) and matters relating to land drainage, flood risk management and coastal protection.

That schedule 2 be the Second schedule to the Bill.

New clause 7—Levies in respect of agriculture, taking wild game, aquaculture and fisheries, etc.—

“(1) In Schedule 7A to the Government of Wales Act 2006, section A1 is amended as follows.

(2) In the Exceptions, after the exception for devolved taxes insert—

““Levies in respect of agriculture, taking wild game, aquaculture and fisheries (including sea fisheries) or a related activity: their collection and management.”

(3) After the Exceptions insert—

“Interpretation

“agriculture” includes horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, and the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds.

“aquaculture” includes the breeding, rearing or cultivation of fish (of any kind), seafood or aquatic organisms.

“related activity” means the production, processing, manufacture, marketing or distribution of—

(a) anything (including any creature alive or dead) produced or taken in the course of agriculture, taking wild game or aquaculture, or caught (by any means) in a fishery,

(b) any product which is derived to any substantial extent from anything so produced or caught.””

This new clause would give the National Assembly for Wales general legislative competence in respect of agricultural, aquacultural and fisheries levies.

New clause 10—Water Services Regulation Authority—

“(1) In section 27 of the Water Industry Act 1991 (general duty of the authority to keep matters under review)—

(a) in subsection (3), after “may” insert “subject to subsection (3A),”;

(b) after subsection (3), insert—

“(3A) The Secretary of State must obtain the consent of the Welsh Ministers before giving general directions under subsection (3) connected with—

(a) matters in relation to which functions are exercised by water or sewage undertakers whose area is wholly or mainly in Wales,

(b) licensed activities carried out by water supply licensees that use the supply system of a water undertaker whose area is wholly or mainly in Wales, or

(c) licensed activities carried on by sewerage licensees that use the sewerage system of a sewerage undertaker whose area is wholly or mainly in Wales.”;

(c) in subsection (4), in both places where it appears, after “Secretary of State” insert “, the Welsh Ministers”.

(2) In section 192B of the Water Industry Act 1991 (annual and other reports)—

(a) in subsection (1), after “Secretary of State” insert “and the Welsh Ministers”;

(b) in subsection (2)(d), for “as the Assembly” substitute “or activities in Wales as the Welsh Ministers”;

(c) in subsection (4), for “Assembly” substitute “Welsh Ministers”;

(d) after subsection (5) insert—

“(5A) The Welsh Ministers shall—

(a) lay a copy of each annual report before the Assembly; and

(b) arrange for the report to be published in such manner as they consider appropriate;

(c) in subsection (7), omit “the Assembly,””.

(3) In Schedule 1A to the Water Industry Act 1991 (the Water Services Regulation Authority)—

(a) in paragraph 1—

(i) in sub-paragraph (1), after “Secretary of State” insert “and the Welsh Ministers acting jointly”;

(ii) in sub-paragraph (2), omit paragraph (a);

(b) in paragraph 2(2), after “Secretary of State” insert “and the Welsh Ministers acting jointly”;

(c) in paragraph 3—

(i) in sub-paragraph (2), paragraph (a), after “Secretary of State” insert “and the Welsh Ministers”;

(ii) in sub-paragraph (2), paragraph (b), after “Secretary of State” insert “and the Welsh Ministers acting jointly”;

(iii) omit sub-paragraph (3);

(d) in paragraph 4—

(i) in sub-paragraph (1) and (2), in each place where it appears, after “Secretary of State” insert “and the Welsh Ministers acting jointly”;

(ii) in sub-paragraph (3), for “determines” substitute “and the Welsh Ministers acting jointly determine” and at the end insert “and the Welsh Ministers acting jointly”;

(e) in paragraph 9(3)(b), for “Assembly” substitute “Welsh Ministers”.”

This new clause would amend the Water Industry Act 1991 to confer functions relating to the Water Services Regulation Authority (OFWAT) (which exercises functions in England and Wales) onto the Welsh Ministers and it would adjust the functions of the Secretary of State to better reflect the current devolution of water matters to Wales.

Amendment 61, in clause 28, page 23, line 32, leave out from “Wales” to the end of line 33.

This amendment removes the exception to the devolution of executive functions in relation to Welsh harbours of “reserved trust ports”.

Amendment 134, page 23, line 38, leave out subsection (4).

Clause 28(4) provides an exception to the general transfer of functions by clause 28 so that where a function relates to two or more harbours the function is transferred only to the extent that both or all of the harbours to which it relates are wholly in Wales and are not reserved trust ports. This amendment is partly consequential upon amendment 61, but it would also ensure that the Welsh Ministers retain functions where one harbour is in Wales and the other is not.

Amendment 62, page 23, line 40, leave out “and are not reserved trust ports”.

See amendment 61.

Amendment 63, page 24, leave out line 6.

See amendment 61.

Clause 28 stand part.

Amendment 64, in clause 29, page 24, line 13, leave out

“, other than a reserved trust port,”

See amendment 61.

Amendment 65, page 24, line 17, leave out

“, other than reserved trust ports”.

See amendment 61.

Amendment 66, page 24, line 21, leave out

“or a reserved trust port”.

See amendment 61.

Amendment 67, page 24, line 25, leave out

“other than a reserved trust port”.

See amendment 61.

Amendment 68, page 24, line 26, leave out subsection (5).

See amendment 61.

Amendment 69, page 24, line 31, leave out

“other than a reserved trust port”

See amendment 61.

Clauses 29 to 31 stand part.

Amendment 137, in clause 32, page 25, leave out lines 34 to 39 and insert—

(a) will be wholly or partly in England or in waters adjacent to England up to the seaward limits of the territorial sea, and.””

This amendment is consequential upon amendment 61.

Amendment 71, page 25, line 39, leave out “a reserved trust port”.

See amendment 61.

Amendment 138, page 25, line 41, leave out from beginning to end of line 3 on page 26 and insert—

(a) the harbour facilities are wholly or partly in England or in waters adjacent to England up to the seaward limits of the territorial sea, and.””

This amendment is consequential upon amendment 61.

Amendment 72, page 26, line 2, leave out from “and” to end of line 3.

See amendment 61.

Amendment 73, page 26, line 4, leave out subsection (4).

See amendment 61.

Clauses 32 to 35 stand part.

New clause 1—The Crown Estate—

“After section 89 of the Government of Wales Act 2006, insert—

“89B The Crown Estate

(1) The Treasury may make a scheme transferring on the transfer date all the existing Welsh functions of the Crown Estate Commissioners (“the Commissioners”) to the Welsh Ministers or a person nominated by the Welsh Ministers (“the transferee”).

(2) The existing Welsh functions are the Commissioners’ functions relating to the part of the Crown Estate that, immediately before the transfer date, consists of—

(a) property, rights or interests in land in Wales, excluding property, rights or interests mentioned in subsection (3), and

(b) rights in relation to the Welsh zone.

(3) Where immediately before the transfer date part of the Crown Estate consists of property, rights or interests held by a limited partnership registered under the Limited Partnerships Act 1907, subsection (2)(a) excludes—

(a) the property, rights or interests, and

(b) any property, rights or interests in, or in a member of, a partner in the limited partnership.

(4) Functions relating to rights within subsection (2)(b) are to be treated for the purposes of this Act as exercisable in or as regards Wales.

(5) The property, rights and interests to which the existing Welsh functions relate must continue to be managed on behalf of the Crown.

(6) That does not prevent the disposal of property, rights or interests for the purposes of that management.

(7) Subsection (5) also applies to property, rights or interests acquired in the course of that management (except revenues to which section 1(1) of the Civil List Act 1952 applies or are to be paid into the Welsh Consolidated Fund).

(8) The property, rights and interests to which subsection (5) applies must be maintained as an estate in land or as estates in land managed separately (with any proportion of cash or investments that seems to the person managing the estate to be required for the discharge of functions relating to its management).

(9) The scheme may specify any property, rights or interests that appear to the Treasury to fall within subsection (2)(a) or (b), without prejudice to the functions transferred by the scheme.

(10) The scheme must provide for the transfer to the transferee of designated rights and liabilities of the Commissioners in connection with the functions transferred.

(11) The scheme must include provision to secure that the employment of any person in Crown employment (within the meaning of section 191 of the Employment Rights Act 1996) is not adversely affected by the transfer.

(12) The scheme must include such provision as the Treasury consider necessary or expedient—

(a) in the interests of defence or national security,

(b) in connection with access to land for the purposes of telecommunications, or with other matters falling within Section C9 in Part 2 of Schedule 1,

(c) for securing that the management of property, rights or interests to which subsection (5) applies does not conflict with the exploitation of resources falling within Section D2 in Part 2 of Schedule 1, or with other reserved matters in connection with their exploitation, and

(d) for securing consistency, in the interests of consumers, in the management of property, rights or interests to which subsection (5) applies and of property, rights or interests to which the Commissioners’ functions other than the existing Welsh functions relate, so far as it affects the transmission or distribution of electricity or the provision or use of electricity interconnectors.

(13) Any transfer by the scheme is subject to any provision under subsection (12).

(14) The scheme may include—

(a) incidental, supplemental and transitional provision,

(b) consequential provision, including provision amending an enactment, instrument or other document,

(c) provision conferring or imposing a function on any person including any successor of the transferee,

(d) provision for the creation of new rights or liabilities in relation to the functions transferred.

(15) On the transfer date, the existing Welsh functions and the designated rights and liabilities are transferred and vest in accordance with the scheme.

(16) A certificate by the Treasury that anything specified in the certificate has vested in any person by virtue of the scheme is conclusive evidence for all purposes.

(17) The Treasury may make a scheme under this section only with the agreement of the Welsh Ministers.

(18) The power to make a scheme under this section is exercisable by statutory instrument, a draft of which has been laid before, and approved by resolution of, the National Assembly for Wales.

(19) The power to amend the scheme is exercisable so as to provide for an amendment to have effect from the transfer date.

(20) If an order amends a scheme and does not contain provision—

(a) made by virtue of subsection (12) or (19) of that section, or

(b) adding to, replacing or omitting any part of the text of an Act,

then, instead of subsection (18), the instrument containing the legislation shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(21) For the purposes of the exercise on and after the transfer date of functions transferred by the scheme under this section, the Crown Estate Act 1961 applies in relation to the transferee as it applied immediately before that date to the Crown Estate Commissioners, with the following modifications—

(a) a reference to the Crown Estate is to be read as a reference to the property, rights and interests to which subsection (5) applies,

(b) the appropriate procedure for subordinate legislation is that no Minister of the Crown is to make the legislation unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament,

(c) a reference to the Treasury is to be read as a reference to the Welsh Ministers,

(d) a reference to the Comptroller and Auditor General is to be read as a reference to the Auditor General for Wales,

(e) a reference to Parliament or either House of Parliament is to be read as a reference to the National Assembly for Wales,

(f) the following do not apply—

(None) in section 1, subsections (1), (4) and (7),

(None) in section 2, subsections (1) and (2) and, if the Welsh Ministers are the transferee, the words in subsection (3) from “in relation thereto” to the end,

(None) in section 4, the words “with the consent of Her Majesty signified under the Royal Sign Manual”,

(None) sections 5, 7 and 8 and Schedule 1.

(22) Subsection (7) is subject to any provision made by Order in Council under subsection (9) or by any other enactment, including an enactment comprised in, or in an instrument made under, an Act of the National Assembly for Wales.

(23) Her Majesty may by Order in Council make such provision as She considers appropriate for or in connection with the exercise by the transferee under the scheme (subject to subsections (5) to (8)) of functions transferred by the scheme, including provision taking effect on or before the transfer date.

(24) An Order in Council under subsection (23) may in particular—

(a) establish a body, including a body that may be nominated under that section as the transferee,

(b) amend, repeal, revoke or otherwise modify an enactment, an Act or Measure of the National Assembly for Wales, or an instrument made under an enactment or Act or Measure of the National Assembly for Wales.

(25) The power to make an Order in Council under subsection (24) is exercisable by Welsh statutory instrument subject to the affirmative procedure.

(26) That power is to be regarded as being exercisable within devolved competence before the transfer date for the purposes of making provision consequential on legislation of, or scrutinised by, the National Assembly for Wales.

(27) In this section—

“designated” means specified in or determined in accordance with the scheme,

“the transfer date” means a date specified by the scheme as the date on which the scheme is to have effect.””

This new clause mirrors the Scotland Act 2016 in transferring executive and legislative competence of the Crown Estate in Wales to the Welsh Government and the National Assembly for Wales.

[Paul Flynn]

Since we met in Committee last week, we have had the wonderful celebration of the Wales team’s great achievement in the European cup, which is a matter of enormous pride to us as a nation. I was delighted to see the celebrations on Saturday, which were the biggest thing to happen in Cardiff since VE-day and VJ-day, which I am sure we both remember, Mr Hoyle, if not since when Cardiff won the FA cup in 1926. These events will bring many benefits for the people of Wales. We feel pride not just in the skills of our team, but in the behaviour of our fans.

I saw a performance by the Secretary of State on television yesterday in which he was dancing with a ball on his head and foot. It seemed to be a wordless message; I did not quite get the point. Given these uncertain political times, he might have been auditioning for a future job as a circus performer, but perhaps there was a subliminal message that had he been substituted for Aaron Ramsey, the result of the Portugal game might have been different. None the less, we have had a moment of great happiness for our country. It is a joy to think that the beautiful national language in our anthem was probably heard by more people than at any time in its 3,000-year history. That intrigued many people, and Wales has been given a much sharper identity that will bring about practical benefits.

The Bill’s is proceeding in a consensual way. A great political tumult is going on about our ears, in various forms, but here is an oasis of calm and good sense, as all parties support a beneficial Bill that will give Wales further devolution. Progress on that is slow and endless, but the Bill is a step forward.

I will speak first to amendments 118 and 119. Amendment 118, together with consequential amendments to paragraph 6 of proposed new section 7A to the Government of Wales Act 2006 under schedule 1, and to paragraph 1 of proposed new schedule 7B under schedule 2, take us back to issues flowing from the Government’s insistence on retaining the single legal jurisdiction of England and Wales. In accepting that position, as we must following last Tuesday’s Division, we must now ensure that the Assembly has, within the single jurisdiction, powers that enable its legislation to be enforceable and effective, which is what amendment 118 would achieve.

In our view, the Bill as drafted would restrict the Assembly’s legislative competence inappropriately and reverse the competence given to the Assembly under the 2006 Act, section 108(5) of which allows the Assembly to make what might be termed “ancillary” provisions. At present, the Assembly has competence to legislate on matters relating to one or more of the listed subjects in part 1 of schedule 7 to the 2006 Act. That Act also provides that the Assembly has powers to make provision about non-devolved matters when that is done to make a devolved provision effective or to enforce a provision if it is otherwise consequential or incidental to the devolved provision. My understanding is that this is not the UK Government’s intention, meaning that our old friend unintentional consequences might well apply.

I am sure that the Government do not, in common with all parties in the House, intend to prevent the Assembly from making provision to enforce or to make effective devolved legislation. However, the Bill currently either prevents that, or is unclear about whether the Assembly will have the same ability as at present. Under the reserved power model, an Assembly Act will be outside competence if it relates to a reserved matter in proposed new schedule 7A. There is no express equivalent in the Bill to section 108(5) of the 2006 Act. Provisions relating to reserved matters will be outside competence and will not be law even if the intent of the provision in question is confined to making legislation effective or to enforce it. Other provisions are designed to address this issue, but Welsh Government officials have provided the Wales Office with several examples of when the Bill as drafted would have prevented uncontentious provisions in Assembly Acts from being included in that legislation.

These are not hypothetical problems. We have a strange history of the consequences of legislation. We have sometimes had legislation that was cumbersome and slow, while we have also seen judge-driven legislation involving Acts that were subject to adjudication by people outside Wales. Unless the Bill is amended as we propose, the Assembly’s ability to make its legislation enforceable and effective will be inappropriately constrained, and I do not believe that that is the Secretary of State’s intention. We shall not press the amendments to a Division, but I urge the Secretary of State to give very careful consideration to the issues that they raise, to instruct his officials to discuss them further with Welsh Government officials and to table amendments on Report that reflect an agreed position on this important issue.

Let me mention some of the general principles that should apply to our consideration of the schedule of reserved matters. In a reserved power model, it is for the UK Government to explain why the relevant subject matter must be reserved to the centre—to the UK Parliament and Government—for decision. Much of the schedule’s content is uncontroversial. It is common ground that matters such as foreign affairs, the armed forces and the UK’s security system should be determined at a UK level. On other matters, however, the situation is more contested. If reservations affect the Assembly’s existing competence, it is vital that the case for them is made explicitly and that the drafting of the relevant provision is precise and specific. That is essential to protect the Assembly’s ability to legislate coherently and within its competence.

Amendment 83 deals with policing, which is an interesting subject area in which change is desirable. The UK Government’s own Silk commission recommended devolution of policing on the basis that it is a public service that is a particular concern to people in their daily lives, and therefore similar to health, education and the fire service. That conclusion was reached in the light of extensive evidence, including from professional police bodies, chief constables and police and crime commissioners. I understand that the four present PCCs in Wales are in favour of such a change, and opinion polls show clear public support for it.

Silk noted that devolution would improve accountability by aligning police responsibility with police funding, much of which already comes from devolved sources. In short, he argued that devolution would allow crime and the causes of crime to be tackled holistically under the overall policy framework of the Welsh Government. As Silk noted, present arrangements are “complex”, “incoherent” and “lack transparency”.

Policing is the only major front-line public service that is not at present the responsibility of the devolved institutions in Wales. That anomalous position means that it is significantly more difficult to achieve advantages of collaboration with other blue light services, which is strongly advocated for England in current Government policy, as well as with other relevant public services. Deleting the reservation would address that anomaly, but responsibility for counter-terrorism activity should not be devolved—I would continue to argue that it should be reserved under paragraph 31 of new schedule 7A. The Assembly would be able to legislate in respect of bodies such as the National Crime Agency and the British Transport police only with the consent of UK Ministers, because they are “public authorities” within the meaning of paragraph 8 of new schedule 7B, which restricts the Assembly’s powers in respect of such bodies.

After reflecting on the Silk commission’s recommendations, what is envisaged is the devolution of responsibilities predominantly for local policing. The key point is that devolution would enable police services in Wales to work even more closely alongside other devolved public bodies, with greater opportunities to secure improved community safety and crime prevention.

In England—this is a fine example on which we can base our recommendations—the UK Government are pushing forward the devolution of policing and justice powers with the greatest enthusiasm. Only last week, it was reported that the Minister responsible for prisons—the Under-Secretary of State for Justice, the hon. Member for South West Bedfordshire (Andrew Selous)—declared himself as

“a firm fan of devolution”.

Having signed over new powers to the mayor of Greater Manchester, he hailed

“a new dawn for the justice system”

that is

“run by locals, for locals”

and is an effective justice system that meets the needs of local people. However, in a reserved power model of devolution for Wales, there is an overriding imperative to keep the control of these matters in Whitehall. Where is the consistency and fair treatment for Wales? If something is good enough for Manchester, surely it is good enough for Wales.

Amendment 122 deals with antisocial behaviour. Whatever the outcome on policing, it is imperative that we do not reduce the Assembly’s existing competence for dealing with antisocial behaviour in devolved contexts. That is why there needs to be an amendment to paragraph 41 of new schedule 7A, which relates to antisocial behaviour. As drafted, the Bill would reserve matters that are currently within the Assembly’s legislative competence, such as antisocial behavioural matters relating to housing or nuisance. That would represent a significant reduction of the Assembly’s existing competence, so the Welsh Government amendment would narrow the reservation to more closely reflect the current situation.

Amendment 123 is on the vexed subject of alcohol. As drafted, the Bill would reserve the sale and supply of alcohol, and the licensing of provision of entertainment and late-night refreshment. The amendment would delete the reservations and allow the Assembly to legislate on those matters.

Alcohol misuse is a major public health issue and a principal cause of preventable death and illness in Wales. It can lead to a great many health and social harm problems, in particular for a significant minority of addicts and people who drink to excess for other reasons. Given those impacts and the direct link with devolved responsibility for public health and the NHS, there is a pressing need to tackle alcohol misuse, so the Assembly and Welsh Government must have the full range of tools at their disposal. Policies that control the way in which alcohol is sold and supplied are widely acknowledged to be among the most effective mechanisms for tackling alcohol-related harms. Regulating the availability of alcohol is an important way to reduce the harmful use of alcohol, particularly by tackling easy access to alcohol by vulnerable and high-risk groups. Licensing controls are an essential tool which must form part of the Welsh Government’s strategy to tackle alcohol- related abuse. The reservations place unnecessary and inappropriate constraints on action to tackle alcohol availability in Wales. Those powers are devolved in Scotland and in Northern Ireland, where similar public health challenges were faced, and they should also be devolved in Wales.

17:30

The Bill, as drafted, would enable the Assembly to legislate on ports and harbours, and would also transfer additional Executive functions in respect of them from the Secretary of State to Welsh Ministers. That is welcome, and is in line with the Silk recommendations. However, the Bill also creates a specific category of “reserved trust ports”, on which the Assembly could not legislate and in respect of which Welsh Ministers cannot exercise any powers. The Bill defines reserved trust ports in such a way that only Milford Haven would be such a port.

Why is that reservation necessary? Silk did not recommend reserving any trust port, and neither did the St David’s day Command Paper. When giving evidence on the draft Bill to the Welsh Affairs Committee, the then Secretary of State said that the purpose of the clause was to reserve Milford Haven specifically as a strategic energy port owing to its status, but the United Kingdom Government, inconsistently, declined to cite energy security as a policy driver for an investment in Milford Haven to support the sale of the Murco refinery in 2014. Aberdeen trust port could equally be seen as a strategic energy port, given the importance of North sea oil to the UK, yet it was devolved to the Scottish Government. Why on earth should the same not happen to Milford Haven? Why should its control not be devolved to the Welsh Assembly?

The concept of a reserved trust port is unnecessary and inappropriate, and should be removed from the Bill. That would enable the Assembly to have legislative competence in respect of all trust ports in Wales, including Milford Haven. As recommended by Silk and the Welsh Ministers, powers should, by virtue of the amendments, extend to Milford Haven, as they will to other harbours in the country.

Amendment 124 covers employment and industrial relations in devolved public services. The devolved public service workforce, comprising those working in “Wales public authorities” as defined in the Bill, or engaged in public services that are contracted out or otherwise procured by such authorities, are intrinsically inseparable from the services and functions of those authorities, all of which work within the devolved sphere. The workforce are the main means by which authorities carry out their functions and provide services for the public. There is a well-recognised link between good employment practices and industrial relations within authorities, and the quality of the services that they provide for the public.

As the Bill is drafted, the Assembly would not be able to legislate on workforce matters in devolved services. The amendment proposes an exception, so that the general reservation preventing the Assembly from legislating on matters relating to employment and industrial relations would not undermine the Assembly’s ability to legislate in respect of devolved public services and the devolved public service workforce. The amendment would not undermine the shared framework and protections in respect of employment and industrial relations spanning the private and public sectors across the United Kingdom, but would give the Assembly a chance to augment them where appropriate, to support the effective delivery of devolved public services by Wales public authorities.

Amendment 195 deals with teachers’ pay and conditions. We agree that this reservation should be omitted. Education has been a devolved matter since the establishment of the Assembly, and retaining the reservation would be anomalous by comparison with the other devolution settlements, as confirmed by the Silk commission. Teachers’ pay and conditions are an integral part of the school system, and closely interrelated to the devolved education function. Maintaining this reservation and the associated Secretary of State’s functions, when the two education systems in England and Wales are diverging year on year, makes it more difficult for the Welsh Government to deliver Welsh priorities with the national pay systems and structures set up to support a different, English employment model. This is the whole principle of devolution on which we all agree.

The UK Government’s academisation programme, for example, does not require the same statutory compliance with the “School teachers’ pay and conditions” document that is required for all maintained schools in Wales. Additionally, the freedom in England for academies not to comply with the same professional registration standards does not operate in Welsh maintained schools. This means that the School Teachers Review Body report every year tends to reflect a different educational context. The relevance of the current process, driven by the fact that the Secretary of State’s remit to the review body does not reflect Welsh issues, is diminishing in relation to Wales. The Assembly should have legislative competence in this matter, and Executive responsibility should transfer to Welsh Ministers to allow for the development of an effective workforce strategy that reflects the needs of Welsh schools.

Water and sewerage are covered in amendments 128, 127 and 129, and we seek the deletion of the reservations 90 and 91. There are several different aspects to policy on water. The Secretary of State is well aware of how sensitive a matter this has been for generations; I think he agrees it has been a matter of great contention. I recall many years ago going to inspect public toilets in mid-Wales and seeing a notice on them saying, “Please flush twice; England needs our water.”

There has been a recognition that water is a great national resource of Wales that is available in great abundance. We have a great richness in water resources, but, sadly, there is the great history of Tryweryn and other matters that concerned us over many years, when Wales was plundered for its natural resources without compensation.

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

The hon. Gentleman mentions Tryweryn, and it is of course 50 years since Gwynfor Evans won that famous by-election in Carmarthen in 1966. The major stimulus of that great victory that changed Welsh, and, arguably, UK, politics was, of course, the drowning of Tryweryn. Does the hon. Gentleman think it would be a fitting memorial to that great victory by Gwynfor Evans that this Bill finally contains the devolution of water resources to Wales?

[Paul Flynn]

I think that would be entirely appropriate. The hon. Gentleman reminds us of matters that were subjects of great passion at the time. I believe they did—as many points in history have—concentrate the feelings of those in Wales about their national identity and what was seen to be an injustice against the people of Wales. I remember the events vividly.

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

On the subject of Tryweryn, will my hon. Friend be so kind as to put on record his admiration for Lord Thomas William Jones who was of course at the time the Member of Parliament for Meirionnydd and chaired the action committee? Originally, of course, he was a native of Ponciau as well,

[Paul Flynn]

I am very happy to record that. It is also worth mentioning that Tryweryn was opposed by every Welsh Member of this House. That opposition was not confined to any one group or party, although there were certain people who led it, as my hon. Friend has suggested. I look back with pride to the time when Labour MPs and peers took part in the early days of establishing a Welsh identity, particularly in the north Wales area. We had a large number of Welsh-speaking Labour MPs here, and they could only dream about a day like today when we are passing the legislation that their generation sadly failed to do, even though they and organisations such as Cymru Fydd were full of high hopes. We are now taking these steps forward, and the dreams of past generations are being fulfilled and honoured.

The scope of the Assembly’s legislative competence in this field is interesting. The Welsh Government are seeking full devolution of water and sewerage to be aligned with the geographical boundary with England, as set out in the Silk report and the UK Government’s St David’s day Command Paper. A joint Governments water and sewerage devolution programme board was set up following the publication of the St David’s day paper to consider the alignment of legislative competence with the national border. The programme focused on the impact on consumers and engaged with the regulator, consumer representatives, the water companies and both Governments. The work of the programme has now concluded, and I understand that the evidence confirms that these changes can be achieved with minimal impact on the consumers of water and sewerage services, so legislative competence for water should be aligned with the national border.

I shall take this opportunity to mention the related aspects of policy on water, including new clause 10 and the amendments to clause 44. Clause 44 would amend section 114 of the Government of Wales Act 2006 by adding to the grounds on which the Secretary of State can intervene to prevent the Presiding Officer from submitting an Assembly Bill for Royal Assent. Section 114 currently allows such intervention if, inter alia, the Secretary of State has reasonable grounds to believe that the Bill contains provisions which might have a seriously adverse impact on water resources, supply or quality in England. The Wales Bill would add to this by allowing intervention if a Bill might have a seriously adverse impact on sewerage services or systems in England.

In the view of the Welsh Government, with which I totally agree, the intervention power in respect of water should be replaced by a memorandum of understanding between the Welsh and UK Governments on how cross-border water issues should be managed. This was also the view of the Silk commission, which recommended that

“a formal intergovernmental protocol should be established in relation to cross-border issues”.

It also recommended that

“the Secretary of State’s existing legislative and executive powers of intervention in relation to water should be removed in favour of mechanisms under the inter-governmental protocol”.

It follows that the Welsh Government are opposed to the proposed extension by clause 44 of these intervention powers to sewerage, and would also wish to see sections 114 and 152 of the 2006 Act amended to remove these intervention powers in relation to water.

[Hywel Williams (Arfon) (PC)]

The hon. Gentleman has mentioned sections 114 and 152. I should like to draw to his attention our amendment 81, which I hope will be debated later and which I hope to press to a vote. It would remove those sections from the legislation. I do not want to pre-empt the debate now, but I want to give him fair warning that we will be taking that stance, which would achieve precisely the end that he has just described.

[Paul Flynn]

I am grateful to the hon. Gentleman for pointing that out. We agree with many of the amendments that he and his party have tabled, although we want to have further consultations on some of them. The speed at which the Bill is going through—although very agreeable—means that we have not yet consulted certain groups or individuals. We might not support the hon. Gentleman’s amendments in the Lobby, but we agree with a great many of them. However, we hope to divide the Committee on our amendment 123 later.

17:46

Finally, new clause 10 relates to Ofwat accountability. Ofwat should be fully accountable to the National Assembly for Wales in respect of the functions it exercises in relation to Wales, especially as legislative competence in respect of water and sewerage would be fully devolved. The new clause would make it a requirement for Ofwat to produce a report for Welsh Ministers and for that report to be laid before the National Assembly. New clause 10 is proposed to section 27 of the Water Industry Act 1991 to require the Secretary of State to seek the consent of Welsh Ministers before giving directions to Ofwat in respect of such matters.

I am grateful to the Committee for its patience in listening to my remarks on a large number of amendments. For the ones relating to Ofwat, we suggest that the changes are necessary so that Ofwat is fully accountable to the National Assembly and Welsh Ministers for these functions exercisable in relation to Wales. They represent another step forward for devolution and I will be grateful if the Government and the Committee give the proposals serious consideration.

[Mr David Jones (Clwyd West) (Con)]

I will speak briefly to amendment 161 in my name and those of my hon. Friends the Members for Brecon and Radnorshire (Chris Davies) and for Vale of Clwyd (Dr Davies). It would amend schedule 1 to the Bill by reserving the setting of speed limits in Wales and the design of road and traffic signs. The whole purpose of devolution should be to make life not more difficult but easier. We will be debating a great many practical amendments to the Bill this evening and this is one where the practical purpose of devolution would be better served by reserving such competences.

Dealing first with speed limits, I strongly suggest that it would be highly counterproductive for speed limits to differ between England and Wales because the road systems of England and Wales are closely integrated. Every day, many thousands of commuters travel backwards and forwards across the border. At certain times of year, such as holiday periods, there are considerable numbers of visitors from other parts of the United Kingdom and the continent of Europe. Such people are not confined to the principal arterial routes of the M4 and the A55, because several other important routes—going both east to west and north to south—cross the border. I am particularly thinking of the A483, the principal route between Manchester and Swansea that crosses and re-crosses the border at several points, and the A490, another well-known border route. To have different national speed limits at distances of possibly every two or three miles would be at the very least confusing and at the very worst positively dangerous.

The context of England and Wales is different from the context of England and Scotland because the integration of the road network between England and Wales is far closer. Given the practicalities, it makes no sense whatsoever to devolve the setting of speed limits to Cardiff.

[Hywel Williams]

I am following the right hon. Gentleman’s argument with considerable interest. Is he saying that motorists are unable to cope with speed limit changes that are signalled by appropriate signs? I know of a stretch of road in my constituency where the limit goes from 40 mph to 30 mph to 20 mph and then back to 30 mph and then 40 mph over a distance of about a mile.

[Mr Jones]

I think it is fair to say exactly that; the hon. Gentleman will remember the former chief constable of North Wales who generated substantial funds out of motorists’ inattention to speed limits. My point is not so much about local speed limits but about national speed limits. It is far more sensible if the national speed limit is set by the Department for Transport in London—if necessary, in consultation with the Welsh Assembly Government. Given that there is such a closely integrated main transport road network between the two nations, it makes no sense to have differential speed limits.

The second point I wish to make is about road signs and I do so principally on the same grounds; as we have such a closely integrated road network, there is the potential to cause considerable difficulty if the Welsh Government were to decide, for whatever reason, completely to redesign road signs. Again, that would be not only confusing, but positively dangerous. The competence for the design of road signs should remain with the DfT in London, although there should be consultation with the Welsh Government.

[Hywel Williams]

Is the right hon. Gentleman’s contention based on any research? I recall, and so will he, the extensive debate in Wales about having Welsh language road signs or bilingual signs. Research was done on various aspects of that, by the Road Research Laboratory, the AA and various people, and they predicted all kinds of doom should we have bilingual signs. Can he point us to any similar research on road signs or differential speed limits?

[Mr Jones]

I have no objection whatever to bilingual road signs—they should be positively encouraged. This is not so much about the language as about the design of the signage. Most of our road signs follow standard European norms, although they may not in the future. If we are to have consistency and avoid danger to motorists, we should have consistency in the design of road signage.

[Chris Davies (Brecon and Radnorshire) (Con)]

My constituency contains roads that traverse both England and Wales. What a pity it would be if our gorgeous countryside was to be littered with even more road signs, up and down those roads, up and down Wales, and up and down the Marches. What a great shame it would be for the visitors who come to Wales for that wonderful experience.

[Mr Jones]

I am sure we could have fewer signs, although we might have more. My concern is that they should not be so different as to cause accidents on the part of motorists wondering what the heck a sign meant as they passed it. On practicality, there is not a persuasive case being made here; I never really understood the case for the devolution of road signs.

[Kevin Brennan (Cardiff West) (Lab)]

Is the far more distracting and dangerous thing in country fields not all these Tory posters we get at election time? They cause far greater danger and distraction to motorists than any road signs.

[Mr Jones]

I have never received anything but praise for Conservative signage, and I received even more praise for the vote leave signs that were notable by their presence throughout Wales.

This is a probing amendment and I do not intend to press it to a vote, but I would be grateful to hear from Ministers the rationale for these two proposals. Let me say again that at the very least they are confusing and at the very worst they have the potential to be positively dangerous.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I must take this opportunity to congratulate the Welsh team on giving us the brightest, most joyful memories of the past few weeks—it is safe to say that.

I rise to speak to the amendments standing in my name and those of my Plaid Cymru colleagues. They seek to amend schedule 7A of the Government of Wales Act 2006 and, thus, relate to clause 3 of this Bill, which deals with the legislative competence of the National Assembly for Wales. The vast majority of our amendments in this group seek to omit certain reservations from that schedule. The amendments are intended in some cases to restore competence in areas that are already devolved. In others, they are intended to devolve competence to the Assembly in areas that are devolved to Scotland. If the Government are not prepared to give the Welsh Assembly parity with the Scottish Parliament in these areas, we would ask for specific reasons to be given in each instance. Both the Welsh Affairs Committee in this place and the National Assembly’s Constitutional and Legislative Affairs Committee have written reports on the draft Wales Bill, with both calling on the UK Government to provide individual justifications for each of the reservations now contained in schedule 7A. As such, it is a great disappointment to my colleagues and I that the Government have not seen fit to provide us with these justifications. I invite the Secretary of State to explain why the Government have not been forthcoming in this instance. If valid justifications cannot be provided, the Government should amend the schedule so as to omit those areas outlined in our amendments.

Plaid Cymru has not been alone in saying—over many years—that the National Assembly should move to a reserved powers model. Indeed, the independent, cross-party Silk commission made just such a recommendation. Legal experts and much of civil society in Wales, recognise that adopting a reserved powers model should, in theory, provide greater legal clarity and workability. The idea of moving towards a reserved powers model has also been taken in Wales to symbolise a shift in Westminster’s attitude towards the Assembly, because it was assumed to be synonymous with a maturing of relations between the two institutions. Rather than having to justify devolving an area of competence, Westminster would be compelled to justify reserving an area of law; again, that should have represented a significant attitudinal shift, and a recognition of greater parity. The sheer length of the list of reserved areas in schedule 1 has made a mockery of that notion.

It should therefore have come as no surprise to the Wales Office that the original draft Wales Bill was met with such dismay by the Welsh Assembly and by civil society in our nation. The dismayingly long list of reservations, and the way in which the Bill went so far in some cases as to curtail powers already devolved, would fundamentally undermine the Assembly’s competence. It would do the opposite of what was, presumably, intended. Although we are grateful that the previous Secretary of State announced a pause in introducing the legislation, we still believe that schedule 7A shows a paucity of ambition for Wales and her legislature, and that is why we have drafted the amendments in this grouping.

Amendments 83, 86, 110 and 111 should be considered together, as they seek to devolve aspects of the justice system to the Assembly: the legal profession and legal services are dealt with in amendment 110; crime, public order and policing are dealt with in amendment 83; the rehabilitation of offenders is dealt with in amendment 86; and prisons and offender management are dealt with in amendment 111. As has been pointed out in this House on many occasions, and as was championed by my predecessor, Elfyn Llwyd, Wales is the only legislature that has no separate or distinct legal jurisdiction of its own. The matter of a separate legal jurisdiction was debated last week, so I will not repeat my arguments. Although I accept that the Tories fundamentally disagree with the need for a separate jurisdiction, I remain somewhat confused by the position of the official Opposition, who said last week that they supported it but abstained because the Government do not support it. If the official Opposition can only vote in favour of measures that are supported by the Government, they are not well fitted to being the official Opposition. However, given that our amendment was defeated last week, we will use the Report stage of the Bill to bring forward proposals on a distinct, rather than separate, jurisdiction. I hope that the House will be more open to working with us when that time comes.

As is well known, the Silk commission recommended the devolution of policing and related areas of community safety and crime prevention, and my party is resolute in our standpoint that Wales, like the other nations of the United Kingdom, should have responsibility for its police forces.

We are presenting amendment 83 at a time when it is being proposed that policing is devolved to English city regions—Manchester and Liverpool, for example. If the policing of these cities can be held to account in a devolved landscape, why not the policing of Wales?

18:00

The First Minister of the devolved Assembly supports the devolution of policing. All four police and crime commissioners support the devolution of policing. I welcome what was said by the shadow Secretary of State for Wales earlier about the devolution of policing, and I argue strongly, therefore, that the time is right for that to move ahead, to enable the police of Wales to work directly to improve the lives and safety of the people of Wales, according to their unique needs and priorities. With that in mind, I intend to press amendment 83 to a Division.

We believe also that prisons and offender management should be devolved so that sentences, magistrates and probation can reflect the distinct priorities of a separate legal jurisdiction. Wales should have a prison system that meets the needs of our society so that decisions can be made that best support the needs of Welsh inmates and their families, and which allow for far better rehabilitation into our communities when inmates leave prison.

[Hywel Williams]

Does my hon. Friend not think it scandalous that there is no provision for women prisoners in Wales? There are very few women prisoners, but they are held in England in Styal and in Eastwood Park outside Gloucester. That causes problems for prisoners’ families, particularly from the west of Wales.

[Liz Saville Roberts]

Indeed. We are aware that in the north that there is no prison for women or for young offenders. There are many steps afoot, which are to be welcomed, to improve how women who enter the criminal justice system are treated in Wales, alongside imprisonment. HMP Styal is a long way from people’s homes and there must be a better way to deal with offenders’ families.

[Mr Mark Williams (Ceredigion) (LD)]

The hon. Lady mentioned the rehabilitation of young offenders. Devolution of these matters would support the critical interrelationship between health and education services in making rehabilitation successful. Recognition of that fact is a gross omission from the Bill.

[Liz Saville Roberts]

I can only agree.

[Jonathan Edwards]

As always, my hon. Friend is making a compelling case, full of strong arguments. Does she agree that it is slightly ironic that a referendum has just been won by those arguing for the UK to leave the European Union, partly on the basis of democracy and sovereignty, yet here we are, debating a Wales Bill which, compared with the settlement for Scotland and Northern Ireland, seems to deny sovereignty and democracy to Wales?

[Liz Saville Roberts]

With the Bill we are moving ahead in small steps—inching forward, painfully. I await the time when we will move ahead in a way that grants sovereignty to the people of Wales.

Many of the amendments that I have discussed so far were recommended by the Silk commission, as I mentioned previously. Other amendments in the group include amendment 85, which would remove prostitution from the list of reserved powers; amendment 117, which would remove the reservation of knives; and amendment 109, which would remove the reservation of abortion, to bring Wales into line with Scotland and Northern Ireland. Again, I challenge the Secretary of State to stand up and tell us why he voted for Scotland to have those powers, but is now telling us in Wales that we cannot have equivalent powers.

Amendment 155 is distinct in that it seeks to clarify a reservation contained in schedule 7A, and not to omit it entirely. The amendment would clarify as a reserved matter “the Crown Prosecution Service”, rather than the broader term “prosecutors”, as currently drafted. This amendment is crucial, as the existing wording of the schedule could prohibit Assembly legislation from enabling devolved authorities, such as local authorities and Natural Resources Wales, to prosecute. I hope that the Government will take note of this distinction and amend the schedule accordingly.

Amendment 156 would remove the necessity test in relation to the law on reserved matters. The test of necessity is objectionable on grounds of clarity and workability, as it is capable of a number of different interpretations. One possible interpretation is extremely restrictive and would represent a reduction in the Assembly’s current competence. The difference between a “reserved matter” and the “law on reserved matters” is explained in paragraphs 409 to 411 and 413 and 414 of the explanatory notes to the Bill.

The notes give the example of an Assembly Bill which related entirely to planning, which is not a reserved matter, but which modified a provision of a UK Act concerning telecommunications. That modification might be within the Assembly’s competence, as its purpose might relate entirely to planning, and so it would meet the test set out in new section 108A(6) of the Government of Wales Act 2006, inserted by clause 3. However, by modifying a provision of a UK Act of Parliament, which concerned a reserved matter, it would modify the “law on reserved matters”. The Assembly should be able to do so in a purely ancillary way, without also having to show that the modification made has

“no greater effect…than is necessary”.

An equivalent to the Bill provision is contained in the Scotland Act 1998. However, in the context of the Scottish devolution settlement, it is much less restrictive, as the Scottish Parliament has competence over considerably greater fields, including, of course, justice matters, and the Scottish system of civil and criminal law. Therefore, what might appear to be wider latitude for the Assembly would in practice still amount to narrower competence than that of the Scottish Parliament.

Amendment 157 would remove the criminal law restriction in paragraph 4 of schedule 7B and replace it with a restriction which provides that the Assembly cannot modify criminal law unless that is for a purpose other than a reserved purpose. It reflects the Assembly’s current competence—that is, the criminal law is a silent subject, and the Assembly can modify the criminal law if it relates to a devolved subject, or if the modification is ancillary. The Assembly, therefore, could not modify the criminal law if it was for a reserved purpose, thus protecting the criminal law around the 200 or so reservations in the Bill. The amendment would also make it clear that the Assembly could not modify the criminal law for its own sake: there must be a devolved purpose behind the modification of the criminal law. It would align the criminal law restriction with the private law restriction in paragraph 3 of schedule 7B. This would provide consistency and clarity.

I have already spoken of my party’s dismay that the Bill threatens in places to dilute, rather than augment, the legislative competence of the Assembly. In this vein, a number of the amendments in this group seek to clarify the Assembly’s powers in relation to its internal functions, as well as its overall competence to legislate. Amendments 148 and 149 seek to restore the Assembly’s competence closer to its current level. Currently, the Assembly is able to affect, in a minor way, matters that are listed as exceptions from competence in schedule 7 to the Government of Wales Act 2006. Most of these exceptions have been converted into reservations in the proposed new settlement—for example, consumer protection. However, under the new settlement, the Assembly would have no competence to legislate in a way that touches on reserved matters at all.

The Assembly can currently legislate in relation to “silent subjects”—that is, topics that are not listed either as subjects of competence, or as exceptions from competence, in schedule 7 to GOWA. The Assembly can do so only where it is also legislating on a subject that is specifically devolved by schedule 7. Many of these silent subjects—for example, employment rights and duties—have been converted into reservations in the Bill. The amendment would restore the Assembly’s competence to affect those topics in a purely ancillary way. However, that ancillary competence would still be narrower than the Assembly’s present competence to legislate on “silent subjects” when that legislation also relates to expressly devolved subjects.

In an attempt to allow the aforementioned institution to have control and oversight over its law making, amendment 6 would give the Assembly the power to consolidate, in both English and Welsh, the statutes containing the current constitutional settlement affecting Wales. No matter what our position on empowering the Assembly, I am sure we can all agree that it is important, whatever settlement we have, that that settlement is easily understood. It is disappointing that this Bill does not consolidate all existing legislation, but the amendment would allow the National Assembly to do that, in the interests of clarity. It would not allow the National Assembly to go beyond current legislation and broaden its competence.

Amendments 34 to 37 would amend paragraph 7 of schedule 2, which sets out the sections of the Government of Wales Act 2006 which the Assembly will have competence to modify. Paragraph 7(2)(d) specifically refers to those sections of part 5 of the 2006 Act which are amendable without restriction. As it stands, this does not include the ability to amend sections 120(1) or 124(3) of the Government of Wales Act 2006 which provide for “relevant persons”—otherwise known as “direct funded bodies”—which receive funding directly from the Welsh consolidated fund. That means, for example, the Welsh Government, the Assembly Commission, the Auditor General and the public services ombudsman for Wales.

Amendments 35 and 36 would allow the Assembly competence to add to, but not remove from, the list of “relevant persons”. It would allow it to enable a body that is independent of the Welsh Government also to be financially independent where that is deemed appropriate. Any use of such competence to add to the “relevant persons” would require an Act of the Assembly.

Paragraph 7 of schedule 2 provides that the remaining provisions of part 5 of the Government of Wales Act 2006 are amendable where the amendment is incidental to or consequential on a provision of an Act of the Assembly relating to budgetary procedures, and the Secretary of State consents to that amendment. I see no reason why the consent of the Secretary of State should be required to an amendment that will have no impact beyond the Assembly’s financial procedures, so amendment 37 removes that requirement.

On the remaining amendments in this group tabled in my name and the names of my hon. Friends, as I have already said, the majority of these amendments highlight areas of competence that are devolved to the Scottish Parliament, yet for some unstated reason are being reserved to Westminster in the case of Wales. No justification has been given for reserving those matters. Consequently, I shall list a number of amendments: 84, 87, 88, 90, 91, 92, 93, 94, 95, 97, 98, 106 and 103. I give the amendment numbers for a reason. It feels like the Secretary of State is allowing Whitehall to pick and choose the powers it wants to hold on to. We argue strongly that he must draw up a list of reservations based on principles. These reservations make no practical sense and the absence of principle is obvious. They range from the reservation of dangerous dogs to hovercraft, sports grounds and health and safety. We need a reason why those areas should be reserved.

In addition, there are amendments 105, 107, 104, 112, 113 and 89, which is on Sunday trading and safeguards the long-standing tradition in Wales of protecting shop workers’ terms and conditions, and amendments 114 and 115. Over and above that, Plaid Cymru has long argued that Department for Work and Pensions functions should be devolved to the Assembly. Thus amendment 100 would devolve all working age benefits that are to be replaced by universal credit and any benefit that is introduced to replace universal credit. Amendments 101, 102, 108 and 99 all relate to those areas of DWP functions that we have long argued should be devolved.

Amendments 96, 61 to 63 and 69 deal with the newly created Welsh harbours of “reserved trust ports”. Once again, this creation has no justification. A port will now be devolved unless it has a turnover of above a certain threshold. Again, that is the case not for Scotland or Northern Ireland, but only for Wales. It is yet another example of Westminster holding on to as much power as possible while appearing to be offering significant devolution. Once again, I challenge the Secretary of State to tell us why this is necessary in Wales, when he voted to devolve full control to Scotland.

Amendment 2 is consequential on new clause 1, which seeks to devolve Executive and legislative competence of the Crown estate in Wales to the Welsh Government and the National Assembly for Wales, as has been done in Scotland. New clause 7 would devolve general legislative competence in respect of agricultural, aquacultural and fisheries levies. Again, those are areas that Plaid Cymru has long argued should be devolved to the National Assembly.

Before I come to a close, I wish to note concerns expressed to me by the Welsh language commissioner regarding the Bill’s potential effect on the National Assembly’s powers to legislate in matters concerning the Welsh language. A possible effect of schedule 2 is that the National Assembly, should it wish to legislate for the Welsh language, would require the consent of the relevant UK Minister to confer, impose, modify or remove within that legislation the Welsh language functions of Ministers of the Crown, Government Departments and other reserved authorities. Under the current settlement, that ministerial consent is required only when legislating to impose Welsh language functions on Ministers of the Crown. The ministerial consent provisions of the Wales Bill in relation to the Welsh language would appear to be applicable to a wider range of persons than is currently the case, and would thus be more restrictive. I hope that that can be considered in the later stages of the Bill.

The amendments in this group should not be considered as mere separate, distinct “tweaks” to the Wales Bill. Rather, we present them as a collection of amendments, which, by their sheer number, make evident the many ways in which the current proposed legislation is deficient. No justification has been given by the Government as to why these many policy areas have been reserved, and no justification has been given as to why the Welsh Assembly should not be granted the same competence as the Scottish Parliament in these areas.

18:15

In the absence of these justifications, I respectfully urge the Government to amend their bill, and to present a bolder version of this legislation. This Government should not miss the opportunity to enable the Welsh Assembly to grow in competence and confidence. With responsibility comes capability. The Senedd should be given the power to legislate in these areas. I commend the amendments to the Committee.

[Dr James Davies (Vale of Clwyd) (Con)]

Although I have misgivings about a number of elements of this Bill, I wish to speak very briefly on amendment 161, which addresses the proposed transfer of powers over national speed limits from Westminster to Cardiff Bay. I have already spoken about this issue during the pre-legislative scrutiny of the Welsh Affairs Committee and also at the Welsh Grand Committee.

To be clear, the power to set specific speed limits, such as 20 mph zones outside schools, or 40 mph or 50 mph zones as preferred for reasons of safety, quite rightly already lies with local authorities and the Welsh Assembly Government. As it stands, the Wales Bill proposes transferring powers over national speed limits. Those include 30 mph speed limits in built-up areas and 60 mph limits in non-built-up areas, and of course a 70 mph limit on dual carriageways and motorways. In my mind, those are etched on the brains of all of us via the Highway Code, and, in the absence of any signage, they are usually clear, based on the type of road.

We all live on a small island, and more than 200 roads straddle the England and Wales border. In the case of many smaller roads, the border is not, at present, marked by any signage at all. In some cases, the border cuts across housing estate roads, or even runs lengthwise along roads and splits them in half. Roads across the UK are essentially subject to the same safety criteria as vehicles. Taking all that into account, it is clear to me that the prospect of additional different national speed limits in England and Wales simply would be neither desirable nor realistic.

[Hywel Williams]

The hon. Gentleman describes the complexity of the border in some areas, but does he have no confidence in the Welsh Assembly to administer different speed limits sensibly?

[Dr Davies]

It is perfectly possible that it can be done, but I just do not see the point. It would create extra confusion, and there would be a plethora of signs at the border where currently there is none. There would also have to be a huge information exercise, which would, in many cases, fail to get to the users of those roads.

Welsh devolution was meant to improve the lives of people, but it is very difficult to see how the devolution of a national speed limit, among other items in the Bill, would bring that about. It surely needs to be accepted that this is a matter most sensibly overseen at UK level. I respectfully urge the Government to reconsider.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure, Mr Hoyle, to serve under your chairmanship today.

I wish to speak specifically in support of amendment 124 in the name of my right hon. and hon. Friends. I know that a number of Members wished to add their name to the amendment. It does not look as though that has been done, so I wanted to make it clear that it has my full support.

The amendment relates to the experience that many of us had during the passage of the Trade Union Bill. We had extensive discussions around the relative competence of devolved Administrations and the UK Government over trade union and industrial relations and employment matters that related to devolved public services. I want to draw a very clear distinction here. I am not in favour of having some sort of potential beggar thy neighbour approach on employment and industrial relations across these islands. It is important that there are common standards and provisions that do not go into some sort of race to the bottom. I also believe in the Welsh Government and the Welsh Assembly having full power over the partnerships and industrial relations practices that they choose to pursue in areas where there is clear devolved competence such as in the public services, particularly in health and education, but also in other areas.

During the passage of the Bill, the Government regularly used the excuse that they were not interested in the positions of the Welsh Government, the Scottish Government or other Governments on issues such as check-off and facility time in the public services because those were exclusively reserved. However, the Welsh Government, the Scottish Government and others made it clear that they did not believe that this Parliament and the UK Government had full legislative competence in those areas, particularly in relation to the administration of public services.

That is crucial, because the Welsh Labour Government have pursued a different approach to industrial relations, which has led to an absence of some of the strikes and industrial disputes we have seen in other parts of the UK, and we had a clear example in the health service. The Welsh Government have taken a sensible partnership approach with the trade unions and a sensible approach to issues such as facility time and check-off. They have properly recognised the importance of those things, and particularly of partnership working, as opposed to the confrontational approach taken by the Government in Westminster at various points, and I would not want to see that undermined in any way.

Amendment 124 therefore makes it clear that the Assembly would retain its legislative competence over terms and conditions of service for employees in the devolved public services and over industrial relations in those services. That is entirely reasonable. This is not about a complete devolution of these issues—it is important that we retain common standards—but about taking a sensible approach and allowing the Assembly to handle relationships in, for example, the Welsh NHS, our schools and our further education institutions in the more positive and constructive way they have done.

The amendment would also enable the Welsh Government to take the action they clearly want to, without people resorting to the courts, as we have seen on other matters. The UK Government famously took the Welsh Government to court over the Agricultural Wages Board, which was a wholly foolish decision. The Welsh Government were trying to take a different approach—the right approach—but the UK Government wanted to waste tens of thousands of pounds of taxpayers’ money attempting to sue the Welsh Government. That is why, in areas such as this, we have to have a clear distinction in legislation, and why we should not attempt to hamstring devolved Administrations in areas where they have clear competence. In that way, we can avoid the resort to the courts and the expending of public money that would otherwise occur.

The amendment has the support of many of the trade unions in Wales, which have practised the different type of industrial relations I described, and I declare my interest as a proud member of the GMB, which is very supportive of the amendment. I hope the Government will accept that there is a clear distinction here and that there is a clear place for these responsibilities in relation to the public services where Wales has taken a different route. I therefore urge the Government to accept the amendment.

[Mr Mark Williams]

It is good to have this opportunity to say a few words about this mammoth group of amendments. I want to speak in support of a range of amendments to schedule 1 that remove certain reservations. I endorse amendment 83, on policing; amendment 112, on antisocial behaviour; amendment 84, on dangerous dogs; amendment 85, on prostitution; amendment 86, on the rehabilitation of offenders; amendment 117, on knives; amendment 123, on entertainment and late-night refreshment; amendment 116, on licensing; amendment 87, on the sale and supply of alcohol; the amendments on water and sewerage; amendment 89, on Sunday trading; amendment 90, on electricity; amendment 91, on coal; amendment 92, on heating and cooling; amendment 93, on energy conservation; amendment 94, on road transport; amendment 161, on speed limits; amendment 95, on rail services; amendment 141, on trust ports; amendment 97, on coastguards; amendment 98, on hovercraft; amendment 114, on the Children’s Commissioner; amendment 115, on teachers’ pay; amendment 113, on time; and amendment 112, on equal opportunities.

When I last read out the list of reservations in the Welsh Grand Committee, when we had the ill-fated draft Bill, it was somewhat longer, and I was saved from hyperventilation only by the right hon. Member for Clwyd West (Mr Jones), who helped me out. The Government should therefore be praised and congratulated to a small degree on reducing the length of the list of reservations, which is what the Select Committee said they should do.

I will not go too much into the specifics of the amendments, other than to say that I still question whether there was a write-around to various Departments. Who was calling the shots on the different subjects? Was it the former Secretary of State and his team? Was it our friends in the Assembly Government? Was it officials and Ministers in other Departments? Like my neighbours from Plaid Cymru, I would like to see the justification for the reservation list as it has been presented.

I was fully aware of the St David’s process. We looked through Silk systematically, and we looked at every one of Silk’s recommendations. If there was a consensus between the four parties, we would proceed; if there was not, we would not. However, in either eventuality, officials would go away and talk to Departments, so my hunch—my suspicion—is still that certain Departments were involved, not least the Department of Justice, given the discussions we had when we previously sat in Committee on a distinct or separate jurisdiction, and it is great to hear that, on Report, we will be discussing the need for a distinct jurisdiction in a way we did not then.

If these powers—these reservations—were controlled in Wales, would that mean the unravelling of our constitutional arrangement? Would it mean the end of the Union if we devolved the power over hovercraft, time or the Children’s Commissioner? Should there not be a principle—I suggest there should be—that if something is good enough to be devolved to Northern Ireland and Scotland, it should be devolved to Wales as well? Better still, perhaps we should have started from the principle that all powers are devolved and that it is the duty of the Wales Office and Westminster to argue the case for reserving them to Westminster. Whitehall would not have had a difficult time—from some of us at least, and I part company with my friends in Plaid Cymru on this —convincing us that defence should be reserved. However, I would love to hear the argument for why most of these other powers are still being reserved to this place.

Many of these items were referred to in Silk—for instance, ports and their development, harbour orders and the oversight of trust ports. There is no mention in Silk of reserved ports at Milford Haven. Silk also talked about speed limits and drink-driving limits. I respect those hon. Members who moved amendment 161, but they should have more faith in their Front Benchers, in the Department for Transport and, indeed, in our friends in the Cynulliad. I remember sitting, as the Liberal, in the St David’s day discussions at Gwydyr House, and the Conservatives, the Labour party and Plaid Cymru were all united on the Government’s suggestion. Members must have more faith in members of their own parties.

Silk talked about water and sewerage. He asserted that they should be devolved, but that the boundary for legislative competence should be aligned with the national boundary—a tall order indeed. He called for further consideration of the practical issues of alignment, with particular interest given to the interests of consumers, and for discussions with the regulator, consumer representatives, water companies and both Governments. When we discussed these matters, it was agreed that, to get consensus between the four parties, a joint Government water and sewerage devolution board would be established to consider aligning legislative competence with the national border. That work has now concluded, and I would be grateful to hear the Government’s interpretation of the conclusions. Is it not true that the conclusions that have been reached could be enacted with minimal impact on the consumers of water and sewerage services? Why, therefore, have this reservation?

I want to talk specifically about teachers’ pay and conditions. The issue is dear to my heart because I was a teacher before coming to this place. I taught in England and in the great county of Powys—indeed, I taught in the great constituency of Brecon and Radnorshire, at an excellent school called Ysgol Llangorse. I had a seamless move across the border from England into Wales, and I was able to benefit from remaining on the same teaching pay spine—it must be said that I had a bit of a promotion at Llangorse, for which I was very grateful—with the same conditions. I should also say, although not to infuriate friends on the Conservative Benches, that I remain a very proud member of NASUWT and pay my subs regularly.

18:30

For some, those arrangements might be a case for retaining the status quo. Silk acknowledged, as have the Welsh Government—this is now getting a little dated, but it was relevant then and is relevant now—that teachers’ pay and conditions are an integral aspect of the school system and should be closely related to the devolved education function. However, time has moved on with regard to the English and Welsh education systems. As the hon. Member for Newport West (Paul Flynn) said—I think we might have a brief from the same source, but this is a valid point, so I will repeat it—priorities in Wales are different. The national pay systems and structures were established to support a different employment model. There is now not even consistency within England as academisation means that schools are not required to comply in the same way with the schoolteachers’ pay and conditions document. We also operate different professional registration standards. There is still a General Teaching Council for Wales—I still send off my £35 a year to be a member—but the General Teaching Council for England no longer exists. The freedom not to comply with the professional registration standards when working in academies in England does not operate in Welsh maintained schools. That all means that when the School Teachers Review Body reports each year, it reports on different things, reflecting an educational context that is not relevant to Wales. We need to recognise that changing policy in England means that the role of the School Teachers Review Body is diminishing in Wales.

Welsh Ministers need the capacity to deal with these issues. It is, very occasionally, refreshing to have brief opportunities to talk about the delivery of policy. As a former teacher, I suppose I should rely on the great Kirsty Williams, my colleague in the Cynulliad, to deliver on these matters. However, there are practical problems. The difficulty of recruiting headteachers in rural Wales and of keeping staff in village schools represents a real challenge. If we permit the National Assembly to have powers on teachers’ pay and conditions, it can address some of these concerns—if, of course, sufficient resources go to Wales as well. Silk was clear that teachers’ pay and conditions must be devolved to the National Assembly, although the issue of pensions stays here. That is why it is so important to remove, through amendment 115, the reservation in section N9 in proposed new schedule 7A.

The issue of time will still be reserved to this place. Those who have read the Bill from cover to cover will have seen, tucked away in section N4, the reservation on time: the Assembly Government will have no capacity to change:

“Timescales, time zones…the calendar…the date of Easter”

and the subject matter of the Summer Time Act 1972, as if there was ever a call to change those things. Section N4 also refers to bank holidays. The Committee may or may not recall—probably not; attendance was not great on St David’s day this year—that I introduced a ten-minute rule Bill to devolve responsibility for bank holidays to the National Assembly. I have probably exchanged views with most Members on this subject, not least the Under-Secretary during a Westminster Hall debate some time ago. There are different views about this that will lead to a spirited debate, but the essential principle is that the designation of St David’s day as a bank holiday should be a matter not for us here, but for our colleagues in the Assembly. We now, unfortunately, have five parties in the National Assembly, but when there were four—the Liberal Democrats, the Conservatives, Labour, and Plaid Cymru—all endorsed the call for the Assembly to have that power.

[Mr David Jones]

As a matter of pure interest, which of the current bank holidays would the hon. Gentleman propose to dispense with in order to create one on St David’s day?

[Mr Williams]

I remember the right hon. Gentleman making that point in a previous Westminster Hall debate. I am not going to make that judgment because it is for the National Assembly. When the Under-Secretary responded to my debate, he talked about a review, but regrettably its results were parked in the proverbial long grass and are now in a cul-de-sac. This is a matter not for me, the right hon. Gentleman or the rest of us sitting on these green Benches, but for colleagues and friends in the Cynulliad.

[Mr Jones]

I recall that on the previous occasion this was considered, any change to the bank holidays proved deeply unpopular with the tourist industry in Wales.

[Mr Williams]

Without digging into the depths of the argument, I have made the position clear. Let the tourist industry make its representations to Ministers in our Cynulliad in Cardiff, not here. Let us not sit here, viceroy-like, dictating to the National Assembly. We should let the Assembly have that discussion with the tourist operatives, with the responsible Minister engaged with them, and then it can make the decision. It is a decision not for the right hon. Gentleman and me, but for our friends in the Assembly. That is what devolution means.

I want briefly to talk about policing. Silk said that:

“policing and related areas of community safety and crime prevention should be devolved”.

I must describe—I do not know whether Chatham House rules applied to our discussions in Gwydyr House, but they probably did—the genuine shock and anguish that was felt when we reported back on this matter to our National Assembly colleagues. Two of us from each party were sitting in an office somewhere in this House that I had never been to where big board meetings happen. There was shock and dismay that matters of youth justice were not, as recommended by the Silk commission, followed through in the St David’s day document. I understand how the Government have reached this position, and how the process was set in train when they talked to their colleagues in the Ministry of Justice, but that does not negate the case. Youth justice, of all issues, given its links between education, skills and health as part of rehabilitation, was not followed through in a devolutionary way.

I will now conclude my remarks, although such is the list of reservations that we could go on for hours. I hope that the Minister will respond to some of the concerns that many of us still have about the list, slightly shortened though it is.

[Susan Elan Jones]

One could talk about a lot of aspects in the Bill, as we know, because at one time or another most of us have done so. I will therefore concentrate on one particular amendment: amendment 123, which has been signed by my hon. Friend the shadow Secretary of State and others, which concerns the devolution of licensing of the provision of entertainment and late-night refreshments, and the sale and supply of alcohol.

My hon. Friend is a great scholar of Welsh history, so I am surprised that he did not mention that the first Wales-only legislation came with the Sunday Closing (Wales) Act 1881. That means that there is real sense of history behind this amendment. Most of us would agree that it makes perfect sense to devolve such provisions to the Assembly’s legislative competence so I, for one, strongly support the amendment. We must recognise that there needs to be a greater debate about this whole subject, because alcohol abuse has relevance to health services as well as local government services. We are not living in the days of the 1881 Act, following which areas voted on whether to be wet or dry. People from dry areas would often travel a little further along the lanes to get to a wet area. However, we are now dealing with problems of alcohol abuse and of pre-loading in many of our communities. Years ago, the mudiad dirwest—the Welsh temperance movement—would often decry other cultures and say, “Fancy the French—they give wine to their children!” In reality, alcohol and food have always gone together naturally in many continental cultures, but that is not the case with pre-loading. We need to think about that very seriously indeed.

We also need to consider our rural areas. I am sure that all of us take very seriously issues relating to drink or drug-driving. Those of us who represent rural and semi-rural areas will know from talking to our constituents and others that some people still take chances on country roads and drive when they are above the legal limit. I appreciate that the culture has changed for the better in many ways and that fewer people do that, but it is still a problem in many of our rural communities. Frankly, if someone in a car finds themselves on a narrow single lane faced by a drink-driver, their chances of survival are fairly low.

Devolving the relevant powers would affect how we consider health, social care and local government provision. Great problems are connected to alcohol and drug abuse. I do not wish to sound like a member of the Committee that considered the 1881 Act, because I think that many of us welcome wine, real ale and the conviviality provided by food and drink, but we do not welcome alcohol or drug abuse. We would, however, welcome sensible devolved provisions to make tackling those problems easier.

[The Secretary of State for Wales (Alun Cairns)]

It is a pleasure to welcome you to the Chair, Mr Hoyle, and to respond to Members’ comments about the amendments. I echo what was said about the Welsh football team. The Prime Minister has already congratulated them, and it is a pleasure for me to do so as Secretary of State for Wales.

The amendments go to the heart of the new devolution settlement for Wales that the Bill puts in place. Clause 3 and schedules 1 and 2 insert new section 108A and new schedules 7A and 7B into the Government of Wales Act 2006 to provide for a reserved powers model of Welsh devolution. The Bill devolves significant new powers and will enable the Welsh Government and Assembly Members to legislate on the things that really matter to Wales.

Clause 3 sets out the parameters of the legislative competence of the Assembly under the reserved powers model. An Act of the Assembly will be outside competence—it therefore will not be law—if it falls foul of any one of the five tests set out in paragraphs (a) to (e) of new section 108A(2). I will first say something about how it is intended that each of those tests will work before turning to the proposed amendments to the clause.

The five tests are separate and independent assessments, each of which must be satisfied for a provision to be within competence. The first test is that an Assembly Act provision cannot form part of a legal jurisdiction other than that of England and Wales. We debated many aspects of that during our first day in Committee.

Test 2 is that an Assembly Act provision cannot apply

“otherwise than in relation to Wales”.

There is an exception to that prohibition, however, because new section 108A(3) states that an Assembly Act provision can apply beyond Wales, but only when it is ancillary to a provision that is within competence and if there is no greater effect beyond Wales than is necessary to give effect to that provision. It is worth noting that we have used the word “ancillary” as shorthand for the Assembly’s existing enforcement and consequential-type powers under section 108(5) of the Government of Wales Act 2006.

18:45

In the context of the draft Wales Bill, there was much debate about the words “necessity test”. Let me be clear that “necessary” does not mean that there would only ever be one option that would satisfy that test. There could be a number of different options to achieve the same policy objective, all of which could satisfy the requirement not to have effects beyond Wales that are more than necessary.

Test 3 is that an Assembly Act provision must not relate to a reserved matter listed in proposed new schedule 7A, which we will come to later. The question of whether an Assembly Act provision relates to a reserved matter is to be interpreted by reference to the purpose of the provision, having regard to, among other things, the effect in all the circumstances set out in section 108A(6). The test is the same as that which currently applies in the context of the conferred powers model. It has become known as the “purpose test”.

Let me explain the technical issues that I have highlighted. Although the policy documents that give rise to an Assembly Bill may be relevant in determining its purpose, the essential question is what the Bill provision is seeking to achieve and what effect the provision has in legal, practical and policy terms. In other words, it will not be enough for the Welsh Government simply to assert the purpose of the provision. Why it is being enacted and what it actually does is what is really relevant in determining its purpose and, ultimately, whether an Assembly Act provision is within the Assembly’s legislative competence under test 3.

Test 4 is that an Assembly Act provision must not breach any of the restrictions in new schedule 7B, which I shall say more about in a moment. Finally, test 5 is the requirement that the Assembly Act provision must comply with the European convention on human rights and EU law. Those five tests represent clear, proportionate and reasonably parameters on the Assembly’s legislative competence, and it is important that I have put them on the record.

[Liz Saville Roberts]

I appreciate that the right hon. Gentleman has listed a number of tests, but does he agree that, for them to be justifications in a reserved power model, we should see how the reservations apply to each area?

[Alun Cairns]

I will cover those points, but I have sought to underline the importance of the tests because they are so fundamental to the reserved powers model. Of course, the reservations will be equally fundamental. The hon. Lady mentioned a significant number of them. As I make progress, I will cover many of the points she made and invite her to intervene then.

Amendments 118 and 119, tabled by the main Opposition party, and Plaid Cymru’s amendments 148 and 149 seek to broaden the Assembly’s competence significantly by enabling it to legislate in relation to reserved matters so long as the provision is ancillary to a provision on a devolved matter. These amendments would drive a coach and horses through the key principle underpinning the new model, which is a clear boundary between what is devolved and what is reserved. They would give the Assembly the power to make unfettered changes to reserved matters such as the justice system, which we debated in detail last week, provided only that some connection to a devolved provision was established. What is more, they are simply not needed. We want to ensure that the Assembly can enforce its legislation and make it effective. We provide for this in paragraphs 1 and 2 of new schedule 7B by enabling the Assembly to modify the law on reserved matters. This is suitable to ensure that the Assembly’s devolved provisions can be enforced without compromising the principle of reserved matters.

I turn now to the proposed new schedule 7A to the Government of Wales Act, which sets out the reserved matters, referred to in general in the legislation as the “reservations”. These matters must be seen through the prism of the purpose test. A reservation is a succinct description of the subject area covered. It includes reserved authorities carrying out functions relating to that subject and criminal offences relating to that subject.

The general reservations in part 1 of the new schedule reserve the fundamental tenets of the constitution: the Crown, the civil service, defence and the armed forces, the regulation of political parties, and foreign affairs. As a single legal jurisdiction operates in England and Wales, we also reserve matters such as courts and non-devolved tribunals, judges, and civil and criminal proceedings. However, we have made appropriate exceptions to these reservations to enable the Assembly to exercise devolved functions. For example, the Assembly can confer devolved functions on the courts or provide for appeals from devolved tribunals to reserved tribunals.

Amendment 6, tabled by Plaid Cymru, seeks to modify these core reservations by allowing the Assembly to consolidate the constitutional arrangements for Wales. It surely must be a fundamental principle that the UK’s constitutional arrangements, including Parliament’s authority to devolve its own powers, are reserved. We have a constitutional settlement for Wales, the Government of Wales Act 2006 as amended, and amendment 6 is simply not necessary.

Part 2 lists the specific reservations. We want there to be no doubt where the boundary of the Assembly’s legislative competence lies. The list is lengthy because it is quite specific in its reservations and provides exceptions to those reservations. Previously, in the draft, there were some broad headlines, but the current Bill is far more specific, which necessitates further detail on what is included.

[Jonathan Edwards]

During this afternoon’s debate, the Secretary of State has been challenged on many of the reservations listed in part 2. In the interests of transparency, and before we get to the remaining stages of the Bill, will he commit the Wales Office to publishing a document outlining why each reservation has been made?

[Alun Cairns]

The hon. Member is aware that I have an open style and am happy to maintain dialogue and work with all opposition parties, as well as with the Welsh Government, in seeking to come to an accommodation. However, hovercrafts, for example, have been highlighted a couple of times. That reservation relates to technical standards and is about a distinct class of transport, such as ships in relation to shipping and planes in relation to aviation. Therefore, although, on the face of it, one might ask what the purpose of a reservation is, very often there are technical issues well beyond that. I am happy to continue a dialogue in that respect, as we continue to do with the Welsh Government.

[Paul Flynn]

Will the right hon. Gentleman consider breaking the pattern we have had of passing Wales Bills and, then, five years later, coming back to try to undo the damage we have done with the previous Bill? Will he accept the spirit of unanimity on this side of the Committee when we point out the problem with many of these reservations? Take, for instance, the reservation on dangerous dogs, as was mentioned by the hon. Member for Ceredigion (Mr Williams). If there is any issue on which this Parliament has proved its legislative incompetence over the years it is the Dangerous Dog Act 1991. That is an example of how not to legislate. Wales could do better perhaps.

[Alun Cairns]

The hon. Member is well aware that 90% of the Welsh population live within 50 miles of the border between England and Wales. Clearly, some reservations are sensible so that people can walk their dogs across that boundary; otherwise, it could lead to significant complications. The hon. Member raised that specific practical example, and I am happy to maintain the dialogue on that.

Mr Hoyle, you would not believe it, but the vast majority of reservations are not contentious. They simply reflect those areas of policy that are best legislated on a Wales basis or at a UK level, and the further powers that are being devolved in the Bill. Constructive discussions on the reservations will continue between the UK Government and the Welsh Government, and, happily, with Opposition Members. I recognise that some reservations reflect the difference in policy between us. Others are subject to further detailed discussions, which I am happy to continue. In the context of the purpose test, the list of reservations before us today will ensure greater clarity and certainty in determining what is within the competence of the Assembly and what is not.

I turn now to the amendments to schedule 1.

[Hywel Williams]

The Secretary of State says with a flourish and extreme confidence that the list of reservations is sensible. If so, why is he so reticent about publishing his reasoning? He asserts, but he does not explain.

[Alun Cairns]

The hon. Gentleman will know that I am happy to continue open dialogues. As Secretary of State, that is the style I have sought to use, to build on that set by my predecessor. I hope that the hon. Gentleman will want to continue working in such an open and constructive way.

[Jonathan Edwards]

Will the Minister give way?

[Alun Cairns]

I would like to make further progress, if I may.

A whole host of amendments have been tabled in relation to policing and justice. The St David’s day process found no consensus to devolve the criminal justice system in Wales. The Government gave a clear manifesto commitment that policing and criminal justice will remain reserved. In our first day in Committee last week, I made clear the Government’s commitment to maintain the single legal jurisdiction of England and Wales. Crime, public order and policing are inextricably linked to the criminal justice system. There already exists an All Wales Criminal Justice Board, which consults fully with the Welsh Government and extends to prison provision. The Welsh Government are also in regular dialogue with the National Offender Management Service about its functions.

Amendment 116, tabled by Plaid Cymru, and amendment 87, tabled by Labour, seek to remove the reservations for late-night entertainment and alcohol licensing respectively. There was much debate within this group surrounding this. The Government consider both subjects to be closely connected to policing and maintaining public order. Given that policing and criminal justice remain reserved matters, late-night entertainment and alcohol licensing should also be reserved under the principle that has been established.

Amendment 155, tabled by Plaid Cymru, seeks to reserve “the Crown Prosecution Service” rather than “prosecutors” in the general reservation on the single legal jurisdiction. There is no intention to prevent the Assembly from continuing to specify devolved prosecutors for devolved offences in the legislation. The reservation of prosecutors would not prevent the Assembly from legislating to, for example, make local authorities in Wales the prosecuting authority for particular devolved offences, as was highlighted by the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). I agree, however, with the underlying policy intention of the amendment and will consider further, before Report, whether the reservation of prosecutors should be modified. I am happy to return to this at that stage.

Government amendments 53 to 58, tabled in my name, seek to put Wales in the same position as Scotland in respect of the reservations in C5, which reserves all prohibition and regulation of imports and exports in and out of the United Kingdom. It does, however, allow the Assembly to control movements of certain things, such as plants, animals, foods and fertilisers, for specified purposes. The amendments seek to put the Assembly in the same position as the Scottish Parliament by extending its competence to regulate movement of these things both within Wales and in and out of Wales.

Significant attention has been given to transport reservations, with a number of amendments being tabled by both Plaid Cymru and the Labour party. The transport reservations were subject to close scrutiny when the Bill was at a draft stage, and there is no basis on which to devolve railway services, coastguard services or aspects of road transport, as the hon. Member for Arfon (Hywel Williams) proposes. It is not what the Silk commission recommended, and my focus has been on delivering powers for a purpose.

18:45

The amendments are also designed to remove the reservation of reserved trust ports, on which there has been further debate. The Bill devolves responsibility for all ports in Wales other than the largest, nationally significant trust ports. It applies a threshold in order to define reserved trust ports in Wales. In consequence, Milford Haven is expected to be the sole reserved trust port in Wales. Milford Haven is one of the UK’s largest leading energy ports, with around 62% of the nation’s liquefied natural gas passing through it, and it plays a crucial national role in securing the nation’s energy supplies. It is right that it should be a reserved trust port. That is in the interests of the United Kingdom and in the interests of Wales.

Amendment 161, tabled by my right hon. Friend the Member for Clwyd West (Mr Jones), is designed to move in the other direction by reserving speed limits and road traffic signs. The devolution of speed limits was a Silk commission recommendation, and there is consensus under the St David’s day process to proceed with its implementation. Traffic signs are devolved in Scotland following the Smith agreement and, given the wider competence of the Assembly and Welsh Ministers in relation to highways and transport matters, it is sensible to devolve responsibility for them to Wales.

[Mr David Jones]

The Secretary of State mentioned the Silk commission’s recommendations, but he will recall that I asked for the rationale. I wonder whether he could explain it, please.

[Alun Cairns]

I am happy to explain that given that local authorities already have the power to vary speed limits, it is a logical, sensible extension to give further powers to the Welsh Government in this area.

Time does not permit me to address in detail all the remaining amendments to schedule 1. That is in part because hon. Members from Plaid Cymru seem to seek the devolution of just about everything, and they seem to want to reverse the principles on which the Bill is based. I am pursuing a pragmatic, practical approach as we amend and develop the Bill, so I reject the amendments to devolve Sunday trading, the generation, transmission, distribution and supply of electricity, coal, heat and cooling networks, energy conservation, working-age benefits, child benefit, guardians allowance, most employment and industrial relations, employment support programmes, abortion, health and safety, broadcasting, safety at sports grounds, equal opportunities, bank holidays and the Children’s Commissioner.

Amendment 124, which was tabled by the hon. Member for Newport West (Paul Flynn), seeks to carve out from the employment reservation terms and conditions of employment in relation to Wales public authorities. The Government believe strongly that the underlying legislative framework of rights and responsibilities in the workplace must be reserved for the labour market to work most effectively across Great Britain.

[Stephen Doughty]

Does the Secretary of State accept that, as a Minister told me during proceedings on the Trade Union Bill, the reserved powers granted under the legislation effectively allow any Minister in the UK Government to undermine a partnership or industrial relations decision made by a Welsh Minister in the running of the Welsh NHS or the education service, for example?

[Alun Cairns]

The hon. Gentleman will be familiar with the legislative background of the Government of Wales Act 2006, and the Bill seeks to expand on the 2006 Act in relation to employment rights. There was no intention in that Act to devolve those purposes, and we have continued the principle that was well established by the previous Labour Government.

I shall deal with amendments on three further areas. First, in relation to amendment 88, which was tabled by members of Plaid Cymru, and amendments 127 to 129 and new clause 10, the Government are considering the conclusions of the joint Governments’ programme board in relation to the Silk recommendations on water and sewerage. The joint committee reported only a couple of weeks ago, and it is only appropriate that the Government give proper, full consideration to that report. I hope that we can find a consensus among the Welsh Government and the opposition parties on a way forward, but there are a whole range of technical issues that need further consideration.

Secondly, in response to amendment 107, I assure the hon. Member for Arfon that the Assembly will have the competence to legislate in relation to party election broadcasts at Assembly and local government elections in Wales. Party political broadcasts are considered to be part of the conduct of elections, and there is no need to modify the broadcasting reservation to achieve that. Thirdly, on amendment 115, which relates to teachers’ pay, I am in principle in favour of devolving teachers’ pay and conditions, but there is a case for further discussions between the UK Government and the Welsh Government about how that can best be achieved.

Finally, new clause 1 and consequential amendment 2 are intended to devolve the management functions of the Crown Estate commissioners in relation to Wales to Welsh Ministers or to a person who is nominated by them. That broadly reflects the provisions in the Scotland Act 2016. The devolution of the Crown Estate in Scotland was recommended by cross-party consensus in the Smith agreement but, as hon. Members know, the St David’s day process found no similar consensus in respect of Wales.

Paragraph 1 of proposed new schedule 7B to the Government of Wales Act 2006 will prevent an Assembly Act from modifying the law on reserved matters. Paragraph 2 will provide flexibility for an Assembly Act provision to be able to modify the law on reserved matters, where doing so is ancillary to a provision that does not relate to a reserved matter and there is no greater effect on reserved matters than is necessary to give effect to the purpose of the provision. The restriction relating to the private law in paragraph 3 and the restriction concerning the criminal law in paragraph 4 are intended to provide a general level of protection for the unified legal system of England and Wales while enabling the Assembly to enforce its legislation.

The protected areas of private law include core subjects such as the law of contract and property. However, the Assembly is given the power to modify the private law where the purpose of doing so does not relate to a reserved matter. Importantly, the Assembly is not permitted to modify the private law for its own sake and cannot make wholesale changes to the private law, such as the wholesale rewriting of contract law. Any modification of the private law must be for a range of devolved purposes.

On the criminal law side, in paragraph 4 the serious offences protected from modification include treason, homicide offences, sexual offences and serious offences against the person. It is right that these serious offences remain consistent across the UK. In addition, the Assembly will not be able to alter the law that governs the existing framework of criminal law, such as sentencing and capacity to commit crimes.

I am conscious of the fact that a whole host of issues have been raised, so I will conclude. This has been a full and wide-ranging debate. I hope I have been able to assure the Committee that the reserved powers model will provide a clear, robust and lasting devolution settlement for Wales. I urge Opposition Members to withdraw amendment 118.

[Paul Flynn]

We will press amendment 123 to a Division, but I beg to ask leave to withdraw amendment 118.

Amendment, by leave, withdrawn.

Clause 3 accordingly ordered to stand part of the Bill.

Schedule 1

New Schedule 7A to the Government of Wales Act 2006

Amendment proposed: 83, page 47, line 32, leave out Section B5. —(Liz Saville Roberts.)

This amendment removes the reservation of crime, public order and policing from the list of reserved powers.

Question put, That the amendment be made.

19:08

Division 37

Ayes: 47

---

Scottish National Party: 37
Liberal Democrat: 3
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2

Noes: 270

---

Conservative: 268
Democratic Unionist Party: 1

Amendment proposed: 123, page 49, leave out lines 24 to 29.—(Paul Flynn.)

Paragraph 55 of the new Schedule 7A to be inserted into the Government of Wales Act 2006 by Schedule 1 would reserve the licensing of the provision of entertainment and late night refreshment from the Assembly’s legislative competence. Paragraph 56 would reserve the sale and supply of alcohol. This amendment removes both reservations.

Question put, That the amendment be made.

19:21

Division 38

Ayes: 210

---

Labour: 163
Scottish National Party: 38
Independent: 3
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Liberal Democrat: 2

Noes: 270

---

Conservative: 268
Democratic Unionist Party: 1

Amendments made: 53, page 51, line 15, leave out

“Imports, exports and movement of plants etc”

and insert “Import and export control”.

This is a drafting change consequential on amendment 54.

Amendment 54, page 51, line 17, leave out from “exports” to end of line 19.

This amendment removes the reservation of prohibition and regulation of the movement of food, plants, animals and other things within the United Kingdom.

Amendment 55, page 51, line 21, leave out “which relates to” and insert

“of movement into and out of Wales of”.

The effect of this amendment and amendments 56, 57 and 58 is to make the exceptions in Section C5 similar to those in the corresponding Section of Schedule 5 to the Scotland Act 1998.

Amendment 56, page 51, line 22, leave out “, and which is”.

See the explanatory statement for amendment 55.

Amendment 57, page 51, line 27, leave out “which relates to” and insert

“of movement into and out of Wales of”.

See the explanatory statement for amendment 55.

Amendment 58, page 51, line 29, leave out “, and which is”.

See the explanatory statement for amendment 55.—(Guto Bebb.)

Schedule 1, as amended, agreed to.

Schedule 2 agreed to.

Clause 22

Onshore petroleum licensing

[The Parliamentary Under-Secretary of State for Wales (Guto Bebb)]

I beg to move, That the clause stand part of the Bill.

[The Temporary Chair (Sir Alan Meale)]

With this it will be convenient to discuss the following:

Clauses 23 to 27 stand part.

Amendment 74, in clause 36, page 29, line 17, leave out from “wind” to end of line 18.

This amendment removes the 350 megawatts limit on the Welsh Government’s legislative competence in the field of energy.

Amendment 75, page 29, line 21, leave out from “zone” to end of line 22.

See amendment 74.

Amendment 76, page 30, line 2, leave out paragraph (c).

This amendment is consequential on amendments 74 and 75.

Amendment 77, page 30, line 16, leave out from “waters” to end of line 21.

This amendment is consequential on amendments 74 and 75.

Amendment 78, page 30, line 37, leave out from “waters” to end of line 39.

This amendment is consequential on amendments 74 and 75.

Amendment 79, page 30, line 40, leave out sub-paragraph (a)(ii).

This amendment is consequential on amendments 74 and 75.

Amendment 80, page 30, line 47, leave out from “waters” to end of line 48.

This amendment is consequential on amendments 74 and 75.

Clause stand part.

Clause 37 stand part.

Government amendments 47 to 49.

Clause 38 stand part.

Amendment 158, in clause 39, page 32, line 23, leave out “or (4A)” and insert “to (4D)”.

See amendment 160.

Amendment 159, page 32, line 27, at beginning insert

“subject to subsections (4B) to (4D),”.

See amendment 160.

Amendment 160, page 32, line 31, at end insert—

“(4B) Where Welsh Ministers are minded to grant planning consent for the construction or extension of a station generating electricity from wind which would have a capacity greater than 50 megawatts, they must not determine the application unless—

(a) they have sent to the Secretary of State—

(i) a copy of any representations made to them in respect of the application;

(ii) a copy of any report on the application prepared by an officer of the Welsh Government;

(iii) a statement of the decision they propose to make; and

(iv) where they propose to grant consent, a statement of any conditions they propose to impose and a draft of any planning obligation they propose to enter into and details of any proposed planning contribution; and

(b) either—

(i) a period of 14 days has elapsed beginning with the date notified in writing by the Secretary of State to Welsh Ministers as the date on which he received the documents referred to in paragraph (a); or

(ii) the Secretary of State has notified Welsh Ministers in writing that he is content for them to determine the application in accordance with the statement referred to in sub-paragraph (a)(iii) and, if applicable, the matters referred to in sub-paragraph (a)(iv).

(4C) Within the period of 14 days set out in paragraph (4B)(b)(i) the Secretary of State may direct Welsh Ministers empowered to determine the application for the construction or extension of a station generating electricity from wind which would have a capacity greater than 50 megawatts—

(a) to withhold consent for a further period up to six months;

(b) to provide further information about the application; and

(c) where he makes a direction under paragraph (4C)(a) within the period specified in the direction to direct them to—

(i) grant consent subject, if necessary, to the conditions set out at paragraph (4B)(a)(iv); or

(ii) refuse consent.

(4D) The Secretary of State may give a direction to Welsh Ministers that applications for consent for the construction or extension of stations generating electricity from wind which would have a capacity less than 51 megawatts must be determined by local planning authorities and must not be called in or determined by Welsh Ministers.”

Clause 39 would devolve powers for onshore wind development approval to the Welsh Assembly. This amendment empowers the Secretary of State to be notified and veto projects considered a Nationally Significant Infrastructure Project (NSIP). The Secretary of State would be given two weeks to inform Welsh Ministers that he wished to consider a project and he would have up to six months to direct refusal of the application. The amendment also empowers the Secretary of State to require Welsh Ministers to devolve approval for projects not considered a NSIP to local council level.

Clause stand part.

Clauses 40 to 43 stand part.

Amendment 81, in clause 44, page 34, leave out line 37 to line 5 on page 35 and insert—

“Omit sections 114 and 152 of the Government of Wales Act 2006.”

This amendment removes the power of the Secretary of State to veto any Welsh legislation or measures that might have a serious adverse impact on water supply or quality in England.

Amendment 125, in clause 44, page 34, line 38, leave out from “(1),” to end of line 40 and insert “omit paragraph (b).”

This amendment removes both the extension of the power in section 114 of the Government of Wales Act 2006 that would be introduced by clause 44(1) and the power in section 114 to block Assembly Bills in respect of water matters.

Amendment 126, page 34, line 41, leave out subsection (2) and insert—

‘( ) Omit section 152 of the Government of Wales Act 2006 (intervention in case of functions relating to water etc).”

This amendment removes both the extension of the power in section 152 of the Government of Wales Act 2006 that would be introduced by clause 44(2) and the power in section 152 of the Government of Wales Act 2006 to intervene in the exercise of devolved functions in respect of water matters.

Clause stand part.

Clause 45 stand part.

Amendment 130, in clause 46, page 35, line 33, leave out “consult” and insert “obtain the consent of”.

Clause 46 would require the Secretary of State to consult the Welsh Ministers before establishing or amending a renewable energy scheme as it relates to Wales. This amendment would require the Secretary of State to obtain the consent of the Welsh Ministers instead.

Amendment 132, leave out lines 1 to 3.

New section 148A(3) of the Government of Wales Act 2006 (as inserted by Clause 46) provides an exception to the consultation requirement for renewable energy schemes in respect of any levy in connection with such a scheme. This amendment is partly consequential upon amendment 130, but it would also mean that there would be a requirement for the Secretary of State to obtain the consent of the Welsh Ministers for any levy in connection with a renewable energy scheme as it relates to Wales.

Amendment 131, page 36, line 17, leave out subsection (2).

This amendment is consequential upon amendment 130.

Clause stand part.

Clauses 46 to 50 stand part.

Amendment 144, in clause 51, page 39, line 2, at end insert—

“( ) If a statutory instrument containing regulations under subsection (2) includes provision within devolved competence or provision modifying a devolution enactment, the Secretary of State must send a copy of the instrument or, if subsection (8A) applies, a draft of the instrument to the First Minister for Wales and the First Minister must lay it before the Assembly.”

This amendment and amendments 145, 146 and 147 are intended to apply appropriate Assembly procedures to regulations which make provision within the Assembly’s competence or which adjust the Welsh devolution settlement by modifying the Government of Wales Act 2006 or the Wales Act 2014 and provide for regulations containing provisions of this kind that amend primary legislation to be subject to an affirmative Assembly procedure, and for regulations containing provisions of the same kind which modify subordinate legislation to be subject to a negative Assembly procedure.

Amendment 147, page 39, line 2, at end insert—

“( ) In this section ‘devolution enactment’ means a provision contained in—

(a) the Government of Wales Act 2006 or an instrument made under or having effect by virtue of that Act;

(b) the Wales Act 2014 or an instrument made under or having effect by virtue of that Act.

( ) For the purposes of this section—

(a) ‘modifying’ includes amending, repealing and revoking;

(b) ‘within devolved competence’ is to be read in accordance with subsections (7) and (8) of section 17, but no account is to be taken of the requirement to consult the appropriate Minister in paragraph 11(2) of Schedule 7B.”

See the statement for amendment 144.

Amendment 150, page 39, line 4, leave out “primary legislation” and insert “an Act of Parliament”.

The amendment introduces separate provisions for the use of the power in clause 51 in relation to an Act of Parliament.

Amendment 82, page 39, line 6, after “Parliament” insert

“and the National Assembly for Wales.”

This amendment ensures that when exercising the power to amend, repeal, revoke or modify any Acts or Measures of the National Assembly for Wales, the Secretary must seek the permission of the National Assembly, as well as both Houses of Parliament.

Amendment 145, page 39, line 6, at end insert—

“(6A) A statutory instrument containing regulations under subsection (2) that includes—

(a) provision within devolved competence modifying any provision of primary legislation, or

(b) provision modifying any devolution enactment in primary legislation,

may not be made unless a draft of the instrument has been laid before and approved by a resolution of the Assembly.”

See the statement for amendment 144.

Amendment 151, page 39, line 6, at end insert—

“(6A) A statutory instrument containing regulations under subsection (2) that includes provision amending or repealing any provision of a Measure or Act of the National Assembly for Wales may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament and the Assembly.”

The amendment provides that where the Secretary of State uses the power in clause 51 to make regulations that amend or repeal an Assembly Act or Assembly Measure, then the regulations must be approved by the Assembly and each House of Parliament.

Amendment 152, page 39, line 7, at beginning insert “Subject to subsection (7A),”.

The amendment is linked to the provision that where the Secretary of State uses the power in clause 51 to make regulations that amend or revoke subordinate legislation made by the Welsh Ministers or the Assembly, the regulations would be subject to annulment by the Assembly and each House of Parliament.

Amendment 146, page 39, line 9, leave out

“, is subject to annulment in pursuance of a resolution of either House of Parliament”

and insert

“or the Assembly, is subject to annulment in pursuance of a resolution of—

(a) either House of Parliament, and

(b) if it includes provision that would be within devolved competence or provision modifying a devolution enactment, the Assembly.”

See the statement for amendment 144.

Amendment 153, page 39, line 10, at end insert—

“(7A) A statutory instrument containing regulations under subsection (2) that includes provision amending or revoking subordinate legislation made by—

(a) the Welsh Ministers, or

(b) the National Assembly for Wales as constituted by the Government of Wales Act 1998,

if made without a draft having been approved by a resolution of each House of Parliament and the Assembly, is subject to annulment in pursuance of a resolution of either House of Parliament or the Assembly.”

The amendment provides that where the Secretary of State uses the power in clause 51 to make regulations that amend or revoke subordinate legislation made by the Welsh Ministers or the Assembly, the regulations would be subject to annulment by the Assembly and each House of Parliament.

Amendment 154, page 39, line 11, leave out subsection (8).

The amendment removes the definition of “primary legislation”.

Clause stand part.

That schedule 5 be the Fifth schedule to the Bill.

Clause 52 stand part.

Government amendments 59 and 60.

That schedule 6 be the Sixth schedule to the Bill.

Government amendments 50 to 52.

Amendment 12, in clause 53, page 40, line 8, at end insert—

‘(4) Section 16(6) comes into force on the day appointed by the Treasury by order under section 14(2) of the Wales Act 2014 for the coming into force of sections 8 and 9 of that Act.”

The new limits proposed by New Clause 6 on borrowing by the Welsh Ministers are calculated by reference to the financial consequences of commencing the income tax provisions of the Wales Act 2014. This provision ensures that the new borrowing limits come into effect at the same time as commencement of the income tax provisions.

Clause stand part.

Clause 54 stand part.

New clause 4—Assignment of VAT—

“(1) The Government of Wales act 2006 is amended as follows.

(2) In section 117 (Welsh Consolidated Fund), after subsection (2) insert—

‘(2A) The Secretary of State shall in accordance with section 64A pay into the Fund out of money provided by Parliament any amounts payable under that section.’

(3) After that section insert—

‘117A Assignment of VAT

(1) Where there is an agreement between the Treasury and the Welsh Ministers for identifying an amount agreed to represent the standard rate VAT attributable to Wales for any period (“the agreed standard rate amount”), the amount described in subsection (3) is payable under this section in respect of that period.

(2) Where there is an agreement between the Treasury and the Welsh Ministers for identifying an amount agreed to represent the reduced rate VAT attributable to Wales for that period (“the agreed reduced rate amount”), the amount described in subsection (4) is payable under this section in respect of that period.

(3) The amount payable in accordance with subsection (1) is the amount obtained by multiplying the agreed standard rate amount by—

10

SR

where SR is the number of percentage points in the rate at which value added tax is charged under section 2(1) of the Value Added Tax Act 1994 for the period.

(4) The amount payable in accordance with subsection (2) is the amount obtained by multiplying the agreed reduced rate amount by—

2.5

RR

where RR is the number of percentage points in the rate at which value added tax is charged under section 29A(1) of the Value Added Tax Act 1994 for the period.

(5) The payment of those amounts under section 64(2A) is to be made in accordance with any agreement between the Treasury and the Welsh Ministers as to the time of the payment or otherwise.’

(4) The Commissioners for Revenue and Customs Act 2005 is amended as follows.

(5) In subsection (2) of section 18 (confidentiality: exceptions) omit ‘or’ after paragraph (j), and after paragraph (k) insert ‘, or

(l) which is made in connection with (or with anything done with a view to) the making or implementation of an agreement referred to in section 117A(1) or (2) of the Government of Wales Act 2006 (assignment of VAT).’

(6) After that subsection insert—

‘(2B) Information disclosed in reliance on subsection (2)(l) may not be further disclosed without the consent of the Commissioners (which may be general or specific).’

(7) In section 19 (wrongful disclosure) in subsections (1) and (8) after ‘18(1) or (2A)’ insert ‘or (2B).’”

This new clause would allow the payment into the Welsh Consolidated Fund of half the receipts of Value Added Tax raised in Wales, on the lines of section 16 of the Scotland Act 2016.

New clause 5—Tax on carriage of passengers by air—

“(1) In Part 4A of the Government of Wales Act 2006, after Chapter 4 insert—

Chapter 5

Tax on carriage of passengers by air

116O Tax on carriage of passengers by air

‘(1) A tax charged on the carriage of passengers by air from airports in Wales is a devolved tax.

(2) Tax may not be charged in accordance with that provision on the carriage of passengers boarding aircraft before the date appointed under subsection (6).

(3) Chapter 4 of Part 1 of The Finance Act 1994 (air passenger duty) is amended as follows.

(4) In section 28(4) (a chargeable passenger is a passenger whose journey begins at an airport in the United Kingdom), for “England, Wales or Northern Ireland” substitute “England or Northern Ireland”.

(5) In section 31(4B) (exception for passengers departing from airports in designated region of the United Kingdom) for “England, Wales or Northern Ireland” substitute “England or Northern Ireland”.

(6) Subsections (3) to (5) have effect in relation to flights beginning on or after such date as the Treasury appoint by regulations made by statutory instrument.’”

This new clause would make air passenger duty a devolved tax in Wales, on the lines of section 17 of the Scotland Act 2016.

New clause 6—Lending for capital expenditure—

“In section 122A(1) and (3) of the Government of Wales Act 2006 (lending for capital expenditure), for ‘£500 million’ substitute ‘£2 billion’.”

Section 122A of the Government of Wales Act 2006 (inserted by section 20(10) of the Wales Act 2014) makes provision for limits on borrowing by the Welsh Ministers for capital expenditure. This new clause changes the limit on the aggregate at any time outstanding from £500 million to £2 billion.

New clause 8—Corporation tax—

“(1) In Part 4A of the Government of Wales Act 2006, after Chapter 4 insert—

‘Chapter 4A

Corporation Tax

116P Corporation tax

A tax charged on trading profits in Wales is a devolved tax.’”

This new clause would make corporation tax a devolved tax.

New clause 9—Trading profits taxable at the Welsh rate—

“After part 8B of the Corporation Tax Act 2010 insert—

“Part 8C

357Y The Welsh rate

‘(1) The Welsh rate of corporation tax for a financial year is—

(a) if a resolution of the National Assembly for Wales—

(i) sets a rate under section 357YA for the year, and

(ii) is passed before the beginning of the year,

the rate set by the resolution;

(b) if the Welsh rate for the year is not determined under paragraph (a), but the Welsh rate for one or more earlier financial years was determined under that paragraph, the rate for the most recent of those earlier years;

(c) otherwise, the main rate.

(2) For the purposes of subsection (1)(a)(ii), a resolution passed before the beginning of a financial year is treated as not having been so passed if it is cancelled by a resolution under section 357YA that is itself passed before the beginning of the year.

357YA Power of National Assembly for Wales to set Welsh rate

(1) The National Assembly for Wales may by resolution set the Welsh rate for one or more financial years specified in the resolution.

(2) The Assembly may by resolution cancel a resolution under subsection (1).

(3) A resolution under this section may not be passed by the National Assembly for Wales except in pursuance of a recommendation which is made by Welsh Ministers and which is signified to the National Assembly for Wales.

(4) This section authorises the setting of a nil rate.

357YB Welsh rate supplementary provision

(1) The Secretary of State must lay draft regulations before the House of Commons and the National Assembly for Wales within twelve months of this Act coming into force.

(2) The Secretary of State must seek the consent of the Treasury before laying draft regulations under this section.

(3) The Secretary of State may make regulations under his section only if both the House of Commons and the National Assembly for Wales have approved those regulations in draft.

(4) Regulations under this section may make any necessary provision, including modifying or amending any enactment, that the Secretary of State or the Treasury considers necessary for the introduction of a Welsh rate of corporation tax.

(5) Regulations under this section may, for example, include—

(a) provision for the application of the Welsh rate of corporation tax to Welsh profits;

(b) provision about the operation of certain reliefs for trading losses that are given against profits;

(c) definitions of “Welsh company”, “qualifying trade”, “small or medium-sized enterprise” and “Welsh employer”;

(d) provision about whether a company has a Welsh regional establishment;

(e) rules for determining whether profits or losses of a trade are “Welsh profits” or “Welsh losses”;

(f) rules applying in the case of a Welsh company that is a small or medium-sized enterprise;

(g) rules applying in the case of a Welsh company that is not a small or medium-sized enterprise;

(h) the treatment of intangible fixed assets in relation to Welsh companies;

(i) provision about R&D expenditure credits and relief for expenditure relating to research and development;

(j) provision about relief for expenditure relating to the remediation of contaminated or derelict land;

(k) provision about film tax relief, television production, video games development and theatrical productions;

(l) provision about profits arising from exploitation of patents etc.;

(m) rules for determining whether profits or losses of a trade are “Welsh profits” or “Welsh losses” in the case of a company that is a partner in a Welsh firm;

(n) definitions of “excluded trade” and “excluded activity” (profits of which are not Welsh profits); and

(o) provision about the meaning of “back-office activities” (profits imputed to which may be Welsh profits).’”

This new clause mirrors the approach of the Corporation Tax (Northern Ireland) Act 2015 in defining a Welsh rate of corporation tax, but leaves the details to be set out in secondary legislation.

[Guto Bebb]

It is a pleasure to serve under your chairmanship this evening, Sir Alan.

Clause 22, alongside detailed technical provisions in part 2 of schedule 5, devolves onshore petroleum licensing in Wales to Welsh Ministers, fulfilling the St David’s Day commitment. Clause 23 is necessary to facilitate a smooth transfer of existing onshore licences. Clause 24 transfers to Welsh Ministers the regulation-making powers in the Infrastructure Act 2015 with respect to the right to use deep-level land below 300 metres for the purpose of exploiting onshore petroleum.

The St David’s day agreement stated that responsibility for speed limits in Wales should be devolved. It also committed the Government to consider the Smith agreement, to determine which recommendations for Scotland should also apply to Wales. As a result of this work, powers over traffic signs, including pedestrian crossings, will also be devolved. Clause 25 and section E1 of schedule 1 devolve these powers by reserving only powers relating to the exemption of vehicles from speed limits and certain traffic signs—for example, emergency vehicles attending incidents.

Together, the clause and the schedule have the effect of devolving to the Assembly and Welsh Ministers legislative and executive competence in respect of substantially all the provisions of the Road Traffic Regulation Act 1984 that concern speed limits and traffic signs. This means the Assembly will be able to legislate in respect of substantially all aspects of speed limits and traffic signs on all roads in Wales.

Clause 26 fulfils a St David’s day commitment and implements a Silk commission recommendation to devolve the registration of local bus services, including the relevant functions of the traffic commissioner. Devolution of bus registration is achieved by the matter not being listed as a reserved matter in schedule 7A. Clause 26 gives effect to the devolution of the relevant traffic commissioner functions to Welsh Ministers. Clause 27 also fulfils a St David’s day commitment and a Silk commission recommendation by devolving the regulation of taxi and private hire vehicle services in Wales to Welsh Ministers.

This complements the devolution of legislative competence to the Assembly for taxi and private hire vehicle licensing in new schedule 7A. Taxi and PHV services are currently licensed by local authorities under legislation that covers England and Wales outside London. Local licensing authorities set their own policies and standards. I therefore support these clauses standing part of the Bill.

[Paul Flynn]

These considerable and weighty clauses will bring significant benefits to the people of Wales. We are grateful for the improvements that have taken place as a result of the Government accepting the criticisms made of the draft Bill. Real progress is being made.

The main issues I wish to raise with this group of amendments involve energy, because there is a great opportunity for Wales to become a powerhouse for energy for the whole United Kingdom. For too long, we have neglected the vast energy of the tide that sweeps around the Welsh coast at different times of the day, providing pulses of energy that could be coupled with demand-responsive schemes such as pumped storage schemes in order to give completely demand-responsive electricity not only cleanly, but by providing renewable power in an entirely predictable way—the tide will always come in.

We have made huge strides in Wales on hydro schemes in Rheidol, Ffestiniog and Dinorwig. The possibility of using the topography of Wales to produce energy has been long neglected. When we look at the problems of the Port Talbot steelworks, we need to realise that washing along the shore of those steelworks is the highest rise and fall of tide in the world. They are in trouble because their energy is so expensive, yet a source of energy is available on their doorstep—free, British, eternal and absolutely predictable.

Amendments 130 to 132 deal with renewable energy schemes. These Welsh Government amendments would create a duty on the Secretary of State to consult Welsh Ministers before establishing or amending a renewable energy incentive scheme in Wales. As drafted, the clause excludes the requirement for the Secretary of State to consult in relation to the creation of a levy to fund an incentive scheme.

The obligation merely to consult is insufficient in respect of this important matter. The Energy Act 2013 provides that the Secretary of State must consult Welsh Ministers before making regulations in relation to contracts for difference. This is a fairly fresh concept, but it has been used widely by this Government and the previous one. Interested parties should also be consulted before a renewables obligation closure order is issued. When the UK Government announced the early closure of the renewables obligation scheme for onshore wind in 2015, there was no prior consultation with Welsh Ministers. We therefore think it essential that, as part of establishing an appropriate devolution settlement for energy, the requirement is put on a firmer and clearer footing. The amendment therefore provides that the Welsh Ministers’ agreement must be sought in relation to renewable energy incentive schemes in Wales either proposed or, in the case of existing schemes, proposed for amendment.

We further propose the omission of clause 46(3), which inappropriately limits the scope of the responsibility of the Secretary of State to engage constructively with Welsh Ministers. We see no reason, and none is offered in the explanatory notes accompanying the Bill, why that engagement should not extend to the consideration of matters relating to levies to fund renewable energy incentive schemes.

Amendments 144 and 147 relate to clause 51. Clause 51 provides the Secretary of State with order-making powers to make consequential provision following the enactment of the Wales Bill. This includes powers to amend, repeal, revoke or otherwise modify primary or secondary legislation as he considers appropriate. Affirmative procedure in both Houses is provided for where the amendment or repeal of primary legislation is envisaged in any such order. There is, however, no provision for Assembly approval of a draft order that would repeal or modify Assembly legislation. Furthermore, as the Bill is drafted, the Secretary of State could propose orders making modifications to the Acts of Parliament underpinning the Welsh devolution settlement without requiring the Assembly’s consent, although parliamentary consent would be needed. Even if such modifications were contained in a parliamentary Bill, the Assembly’s consent would be required. This is wrong in principle. If the Secretary of State wishes to take powers by order to make amendments, up to and including repeal, to Assembly legislation, that should be possible only with the consent of the Assembly itself. If orders are proposed that would make changes to the parliamentary legislation establishing the Welsh devolution settlement, they, too, should require Assembly consent before they can be made. The Welsh Government amendments would give effect to those important principles.

I welcome the agreement in this House across all parties. Plaid Cymru introduced a slightly tribal note by attacking Labour for not going to the same lengths that it has gone to in some of its amendments, but I think Labour has taken a pragmatic view. Where the Government made it clear they are not going to change their minds, we have tried to introduce amendments that are halfway between the Opposition and Government positions, and which might be acceptable to the Government. It should not be concluded from that that we have shown any lack of enthusiasm for the process of devolution.

Plaid Cymru’s amendment 74 relates to energy limits. The Welsh Government would have no powers over schemes above 350 MW. That is a very low level. It would include the tidal lagoon in the constituency of my hon. Friend the Member for Swansea East (Carolyn Harris), but it would not include the two tidal lagoons planned for either side—the Cardiff side and the Newport side—of the River Usk. The two schemes have enormous possibilities to produce huge amounts of electricity, particularly if they are linked with pumped storage schemes in the valleys. If the pulse of electricity comes in the early hours of the morning when it is not required, the energy can be used to pump the water up to the adjacent hills very close to the shore in Newport, and then drawn down to produce electricity throughout the day. This is a form of energy production that we have long, long neglected. We have ignored the power of the tide and we have used other, polluting forms of energy.

19:44

We are admirably suited in Wales, because of our geography, to hydroelectric schemes. Three splendid schemes already function quietly: Ffestiniog, Rheidol, which is quite small, and Dinorwig. Dinorwig is the great battery of the nation, which is hugely valued by the National Grid. It knows that in times of peak demand, in breaks between television programmes and so on, it can press a button here in London and send the water cascading down the mountain in Dinorwig. These are functions that should be under the control of the Welsh Assembly, where there is the enthusiasm to make Wales the great powerhouse of the United Kingdom with energy that is green, clean, eternal and British.

[Chris Davies]

I rise to speak to my amendments 158, 159 and 160. The Committee knows I have many concerns about the Bill and I have stated them very clearly over the past few weeks and months.

Today, I turn to the devolving of wind energy to the Welsh Assembly, which is of great concern to the people of Brecon and Radnorshire in mid-Wales, whom I represent. This is not a common-sense approach to energy. I was very concerned to hear the hon. Member for Newport West (Paul Flynn) state that Wales could be the energy centre of Great Britain. That makes the people I represent fear that the whole of mid-Wales will be covered with wind turbines. I am sure he is referring to other matters—I hope he is—but we have to remember the way that Cardiff Bay has looked at mid-Wales over the years. We are fearful that we will be littered, covered and blanketed with wind turbines.

We all have a great confidence in the Secretary of State, so I would like to see him have a veto over a UK-wide energy plan that is in the national interest. To have powers particular to the Welsh Assembly does not fit in with the strategic plan for power in Great Britain as a whole—that is the underlying concern. Cardiff Bay should not just be able to make those points and make arrangements for Wales; it needs to be done by Britain as a whole. A veto would give local people an appeal over proposals that may not be in the UK-wide interest. It would also allow local people to have a say in local decisions.

Before coming into this place, I was a councillor on Powys County Council. There was a possibility—more than a possibility—that planning permission was going to be granted so that the whole of mid-Wales would be covered in turbines. The council had to contribute £4 million to fight a legal case against the Government of the day. That money would have been better spent—as we know, Powys is under-utilised as far as money from the Assembly is concerned—on providing local services to local people, instead of having to fight a legal case against wind turbines. For many reasons, I would therefore like the Secretary of State to hold a veto. I repeat the fact that we have confidence in him. We had confidence in his predecessors and I have no doubts that we will have confidence in future Secretaries of State, so let the power stay there.

[Paul Flynn]

Wales suffered for centuries the dirt, the pollution and the danger of extracting coal from the ground, while the comfort and the money made from it was enjoyed throughout the United Kingdom. Nobody wants to go back to that. The sources of power I specifically mentioned were hydropower and tidal power. They are not only very good neighbours but they can enhance the landscape by providing lakes and other facilities. The hon. Gentleman should concentrate on the wider picture and see the possibilities, through the amendment, that the Welsh Government could develop.

[Chris Davies]

I agreed with most of what the hon. Gentleman said, but I do not think he listened to what I said. I am talking specifically about wind energy, to which my amendment relates, not about hydro-energy, off-coast energy or land energy.

I ask the Secretary of State to retain the possibility of a veto. I will not press the amendment to a vote—I am sure that you and many others will be delighted to hear that, Sir Alan—but I hope that the Secretary of State will look at the clause again.

[Hywel Williams]

I want to speak to amendments 74 to 80, 81 and 82, 151 and 154, which I tabled along with my hon. Friends.

I welcome clauses 22, 23 and 24, which confer competence on Welsh Ministers in relation to onshore petroleum licensing, including hydraulic fracturing, or fracking, about which the Welsh people care a great deal. If the people of Wales do not want fracking, our Government should be able to ensure that it does not happen. Given that the Welsh Government and the National Assembly as a whole voted unanimously against fracking in Wales, I hope that the Secretary of State will work with his Cabinet colleagues to ensure that until the Bill is passed, the United Kingdom Government honour that unanimous opposition in Wales and no new licences are issued there. I hope that, at the end of the debate, either the Secretary of State or the Under-Secretary will give some indication that that will be the case.

I also welcome clause 26. Some time ago, I had a meeting with the traffic commissioner for Wales, who was based in Birmingham at the time. He was very unhappy about being traffic commissioner for Wales, and pointed out that not only did he work from Birmingham, but he lived in Derby, which is a considerable distance from Wales. Many years ago, the Welsh Affairs Committee called for the commissioner to be moved to Cardiff, and I am glad that the clause achieves a great deal more than that.

Amendments 74 and 75, and consequential amendments 76 to 80, would remove the 350 MW limit on the Welsh Government’s legislative competence in the field of energy. I would happily put a fiver on what is on the Under-Secretary of State’s notepad: my guess is that he intends to say that the limit was recommended by the Silk commission. I wish I had put that fiver down, because I see that the Under-Secretary is smiling.

Of course I accept that the Silk commission recommended the limit, but let us return for a moment to the purpose and the terms of the commission. It was set up by the coalition Government, with a Conservative Secretary of State for Wales. It consisted of one nominee from each of the four main parties at the time, including the Secretary of State’s and mine, along with various academic and other experts. It consulted widely and extensively with the political parties, civic society, academia and industry experts, as well as the public. Its two reports represented a consensus, reflecting not only the views of the political parties but, crucially, those of the public and of experts—that is, the views of civic society in general.

With that purpose in mind, the players in all four political parties had to compromise, and all four—including the Secretary of State’s party and mine—did so, in order to achieve a national consensus. That was a contrast with the St David’s day process, in which I played a minor part. At the time, the Secretary of State appeared to hand a veto to each party in respect of what it wished to reject. Labour used its veto to the full, which reflected the stance of the then shadow Secretary of State, as a self-confessed “proud Unionist”. It seemed to me that the veto extended to Whitehall Departments, in terms of which matters they wanted to reserve.

As was clear from my earlier intervention on the Secretary of State, I am still slightly unconvinced about this process—

[Alun Cairns]

rose—

[Hywel Williams]

I will gladly give way to him.

[Alun Cairns]

What example has there been of devolution to Wales in the past where the Secretary of State has really sought to bring about agreement throughout the House on a pragmatic, practical way forward, rather than bulldozing one particular model over another?

[Hywel Williams]

I was very glad to play a minor part in the St David’s day process, as was my colleague at the time, Elfyn Llwyd. I think there was a structural deficiency in that process, in that if individual parties wanted to veto a particular matter, they could do so—fine: that was what the process was about—but, to my mind at least, one party made rather a meal of that dispensation, and vetoed a great deal that could quite reasonably have been included. The criticism of the first draft of the Bill reflects that, but the current version is a great improvement, and I am happy to pay tribute to the Secretary of State and his predecessor for their achievement.

Some parties compromised on policing, and some on broadcasting. My party compromised on energy. We have always believed that Wales’s natural resources should be in the hands of the people of Wales, and that the people of Wales are best placed to make decisions about how best to put those resources to use. That is our historic stance. We have never believed in placing a limit on that principle, above which the people of Wales should no longer have a say. We never thought that that was a good idea, and never thought that it was necessary. However, we compromised, for the good of the Silk process and to ensure good order and progress. We agreed to the arbitrary limit of 350 MW in return for the support of others on policing and broadcasting.

The Secretary of State has chosen not to follow that consensual path, and to pick and choose from the Silk Commission’s recommendations which matters to accept and which to forgo. Indeed, he has chosen to ignore the majority of what Silk had to say. He cannot now reasonably defend that Westminster power grab and attack Plaid Cymru by claiming that he is only following the commission’s recommendations. We shall see what the Under-Secretary of State has to say about that one.

Clause 36 must be understood as it stands. Having voted to give Scotland complete control over its natural resources, with no limits, the Secretary of State is proposing to devolve energy in Wales only up to a limit of 350 MW, with anything above that threshold being reserved to Westminster. Why does he believe that Scottish natural resources should be in the hands of the people of Scotland, but Wales’s natural resources, above the limit, should be deemed to be the preserve of Westminster? Does he think that the people of Wales cannot be trusted with any energy projects above 350 MW? Do we suffer from some congenital infirmity in that respect? For that matter, why should it be 350 MW rather than 351, or 349? Perhaps the Under-Secretary of State will enlighten us. What factual evidence has he to justify that figure?

The hon. Member for Newport West (Paul Flynn) referred to the Swansea Bay tidal lagoon. It is proposed that the lagoon should be devolved to Wales, but that the proposed Cardiff and Colwyn Bay tidal lagoons, which are identical apart from scale, should be reserved to Westminster. What is the rhyme or reason for that? What practical reasons are there for such a distinction?

Let me give another practical example. In my constituency, there is a great capacity for hydro-electric power. The Dinorwig scheme, which has been mentioned, is a massive scheme that can power Manchester for five hours at the throw of a switch. It takes eight seconds for the turbines to start turning. It is an astonishing scheme, which I think is one of the great energy production secrets of Wales. I understand that the switch is thrown in Connah’s Quay and not in London, and that it controls not only Dinorwig but the Stwlan facility in Blaenau Ffestiniog, as well as Maentwrog. So here we have an astonishingly good scheme and the potential for several more, some of the same scale but also some smaller ones.

20:00

A smaller scheme was proposed just outside Llanberis. The proposers came to see me and said that they were going to restrict it to 49 MW. When I asked them why they said that if it was 51 MW, it would get entangled in the processes down in Whitehall. When I met them recently they said that they are now proposing 350 MW. I asked why not 351 MW, and they said, “Because it would get entangled in the processes down in Whitehall.” That is a clear example.

I will give one further example that illustrates this point. When foot and mouth disease was active in Wales, I wrote to the Welsh Minister and the Minister in the Department for Environment, Food and Rural Affairs about the autumn movement of livestock scheme. I got a reply from Cardiff within two weeks, and one in May—it was about the autumn movement of livestock scheme—from London. That is the sort of problem these people thought they might be struggling with. I urge the Secretary of State to reconsider his position on this limit, and unless he comes up with a plausible answer, we will seek leave to divide the House on amendment 74.

Clause 38 is of course linked to clause 36, which we are seeking to amend, and we disagree with Government amendments 47 to 49 because they seek to add the 350 MW limit to clause 38. I welcome clause 39 which devolves power over onshore wind to Wales, but we are not supportive of amendments 158 to 160, which seek to give the UK Government a veto. I do not think we need to spend too much time explaining why that is an unacceptable proposal. Members who have put their names to those amendments are well known for their opposition, which I respect and understand, but I disagree fundamentally with them.

While we welcome clause 46 which requires the Secretary of State to consult Welsh Ministers before establishing or amending a renewable energy scheme as it relates to Wales, we fully support the amendment from the official Opposition which proposes that the Secretary of State should obtain the consent of Welsh Ministers rather than simply consult them. So we would support amendments 130 and 131 and 132. I do not know if it is the intention of the hon. Member for Newport West (Paul Flynn) to press those amendments, but our support would be there.

Clauses 48 and 49 are welcome, but we are concerned about Government amendment 60, which again tries to impose this arbitrary limit of 350 MW on the Assembly’s competence. We welcome clause 22, which devolves some aspects of road transport, including speed limits, and likewise we welcome clauses 26 and 27 which devolve some responsibility over bus services and taxi regulation respectively.

I shall now turn to clause 28 and amendment 81, which amends clause 44. Clause 44 refers to sections 114 and 152 of the Government of Wales Act 2006, which gives the Secretary of State for Wales a veto over any Acts or measures of the Assembly that might have a serious adverse impact on water quality or supply in England. This has been referred to in earlier debates. While the expectation was that this Bill would remove these sections from the Government of Wales Act, in fact it seems to extend the power of veto to cover sewerage services in England.

These sections embody the peculiar notion that Wales is somehow incapable of managing its own resources. Once again, it is exclusive to the Welsh settlement. Neither the Secretary of State for Scotland nor the Secretary of State for Northern Ireland have such powers, so why must the Secretary of State for Wales have a veto over Welsh water? It makes Wales a special case—a lesser case. It continues and entrenches the status of Wales in Westminster. It protects the legality of English exploitation of Welsh resources, and avoids recognition of what was referred to earlier as a shameful past. I need not go into the history of the drowning of Capel Celyn in 1965, in which the entire community in that part of rural Wales was flooded, but such events remain perfectly legal. Removing sections 114 and 152 from the Government of Wales Act, as amendment 81 would do, would at long last ensure that the actions of this Parliament in 1965 could never be repeated. I will seek to divide the Committee on amendment 81, as I believe it is of particular importance to the people of Wales. For the same reasons, if called, we will be supporting amendments 125 and 126 tabled by the official Opposition, which seek to achieve the same aim.

Needless to say, we will not be supporting clause 44 stand part. We welcome Clauses 45, 47 and 50. If called, we will support Opposition amendments 144 to 147.

Amendment 82 tabled by Plaid Cymru would ensure that when exercising the power to amend, repeal, revoke or modify any Acts or measures of the National Assembly for Wales, the Secretary of State must seek the permission of the National Assembly as well as both Houses of Parliament. Amendments 150 to 154, in the names of my hon. Friends and myself, are similar to amendment 82, but introduce separate provisions for the amendment, repeal or revocation of Acts of Parliament, Assembly primary legislation and Assembly subordinate legislation. They provide that where the Secretary of State uses the power in clause 51 to make regulations that amend or repeal an Assembly Act or Assembly measure, the regulations must be approved by the affirmative procedure in the Assembly as well as each House of Parliament. They make similar provision in respect of the Secretary of State using the power in clause 51 to make regulations that amend or revoke subordinate legislation made by Welsh Ministers or the Assembly. These regulations would be subject to the negative procedure, rather than the affirmative procedure. They also provide that the Assembly would have no role where the power in clause 51 was used to make regulations that amend or repeal an Act of Parliament or amend or revoke non-Assembly subordinate legislation.

We would be happy to support Government amendments 59, 50 and 51, but we do not see why the Secretary of State should make an exception in respect of when the clause 17 functions of Welsh Ministers should come into force. Why should everything else come into force two months after Royal Assent, but for clause 17 we will have to wait until the Secretary of State says so? Perhaps the Under-Secretary might explain.

We agree with Opposition amendment 12, which is linked with new clause 6, to extend the Welsh Government’s borrowing capacity. It is absolutely right that the Welsh Government should have fiscal levers at their disposal to facilitate economic growth in all corners of our country—and, I stress, all corners not just in the heartlands of south-east Wales.

Plaid Cymru has taken this Bill extremely seriously. We have tabled a great number of amendments. We shall press two amendments to a vote this evening and, with leave, new clause 2 if there is sufficient time. I look forward to hearing the Under-Secretary’s response.

[Mr David Jones]

I shall speak briefly in support of amendments 158 to 160 in the name of my hon. Friend the Member for Brecon and Radnorshire (Chris Davies). He has dealt very well with the thrust of the amendments and I do not wish to repeat what he has said. However, I would like to focus on proposed new subsection (4D) which provides:

“The Secretary of State may give a direction to Welsh Ministers that applications for consent for the construction or extension of stations generating electricity from wind which would have a capacity less than 51 megawatts must be determined by local planning authorities and must not be called in or determined by Welsh Ministers.”

As I mentioned on Second Reading, there have been unintended consequences of the Energy Act 2016, which is a development of UK Government policy that provides that all applications for onshore wind generating stations should no longer be governed by the Planning Act 2008, but should instead be determined by local planning authorities. This applies also in Wales, but as a consequence of Welsh legislation, the Welsh Government have designated all wind farm developments in Wales as so-called developments of national significance, which fall to be considered by the Welsh Government.

My hon. Friend the Member for Brecon and Radnorshire is right to insert this provision. We both come from parts of Wales where the development of wind farms has caused huge problems. They have been disproportionately scattered across rural Wales and there are large areas that almost literally have a turbine on every hillside. Local communities certainly want these applications to be determined at local level, and it is entirely right that the Welsh Government, having taken it upon themselves to adopt this power, should now have it taken away from them. The power should be returned to local authorities.

As I have suggested, this has been an example of the law of unintended consequences. I am absolutely sure that the Government did not expect that, as a consequence of the Energy Act 2016, all such applications would fall to be determined by the Welsh Government. That is what has happened, however, and local communities have been disfranchised. This proposal is therefore a sensible one, and I ask my right hon. Friend the Secretary of State to give consideration to it. If he cannot accept it this evening, will he take it away and come back with another proposal on Report to address the concerns that I have outlined?

[Jonathan Edwards]

I rise to speak to new clauses 4, 5, 8 and 9. I also refer Members to my speech on new clauses 2 and 3 and income tax during our first day in Committee last week.

New clause 5 would devolve air passenger duty to Wales. In 2012, the Silk commission recommended the devolution of a block of financial powers, including air passenger duty, to the National Assembly. That was a carefully crafted package of measures. Those minor taxes were clearly listed as pressing, and the commission recommended that they be devolved in the next possible legislative vehicle, which happened to be the 2013 Finance Bill. For whatever reason, however, APD was missing from that Bill and a Plaid Cymru amendment that would have included it was defeated.

On the publication of its recommendations, the commission had cross-party and governmental support. However, four years on, I am disappointed that the Government have turned their back on the commission and its recommendations. They are instead simply cherry-picking the amendments that will be the least disruptive to the current devolution arrangement for Wales. In that period, we have had a Northern Ireland Act and two Scotland Acts through which APD was devolved to those countries and, needless to say, Labour and Tory MPs based in Wales supported those Acts. Wales is, once again, getting the short end of the stick when it comes to devolved taxation.

I am disappointed that the hon. Member for Cardiff Central (Jo Stevens) is not in the Chamber. Although she is apparently oblivious to her party’s inability to support the devolution of APD twice in the previous Parliament, she has rightly stated:

“Air passenger duty has already been devolved to the Northern Ireland Assembly and…to the Scottish Parliament, but despite this, the Budget did not propose that it be devolved to the Welsh Assembly.”—[Official Report, 25 May 2016; Vol. 611, c. 521.]

She asked for it to be devolved, and that is an unimpeachable argument—I agree with every word she said.

20:19

Members of this House argued for devolving air passenger duty to Scotland to encourage investment and the expansion of airline networks and coverage. Furthermore, the reservation of APD was cited in a report by the Northern Ireland Affairs Committee as a “stumbling block” to economic growth. Why are those arguments not good enough for Wales? Why is parity with the other devolved Parliaments not even on the table? The Bill’s failure to include APD in the list of devolved taxes simply proves once again that Westminster views Wales as a second-class nation.

Devolving APD is the best way to develop Cardiff airport and to boost the Welsh economy. Cardiff airport is the fastest growing airport in the UK. It is the only airport in Wales or the west of England that is capable of accommodating transatlantic aircraft. It serves a catchment area of 6 million people and contributes £104 million to the Welsh economy. Devolving APD to Wales would greatly strengthen the airport’s competitiveness, as well as significantly improving its contribution to the Welsh economy. Given that the airport is now owned by the Welsh Government, it seems bizarre that the UK Government are intent on restricting the ability of a Welsh public asset to maximise its potential. Cardiff airport has projected that by devolving APD and then abolishing it, the airport would experience a 27% increase in jobs and a 28% increase in gross value added overall. I am not arguing for complete abolition, but Debra Barber, the managing director and chief operating officer at Cardiff airport, has said:

“APD is a punitive tax that only serves to hinder Cardiff Airport’s ability to continue on this journey of growth and we agree that it should be abolished at the earliest opportunity. We believe that neighbouring airports should work together and complement one another, growing and strengthening side by side for the greater good of a thriving aviation industry across the UK.”

[Mr David Jones]

Has the hon. Gentleman given any consideration to the impact that his proposals might have on north Wales’s local airports in Liverpool and Manchester?

[Jonathan Edwards]

The whole point of devolving APD to Wales is to allow Welsh Ministers to set their own priorities for the aviation industry in Wales. At the end of the day, it will be up to Welsh Ministers to consider the most appropriate APD policy for Wales to maximise revenues from their own public asset. Let us remember that Cardiff airport is owned by the people of Wales. Clearly, increasing footfall at the airport could generate substantial revenues elsewhere, primarily by boosting economic performance across the whole of the economy, especially in the Secretary of State’s own Vale of Glamorgan constituency.

I am not privy to the Cardiff airport’s strategic planning, but my understanding is that the element of APD that the airport is most interested in is long-haul taxation. As I mentioned, the airport has a superb runway that can accommodate transatlantic flights, which Bristol airport cannot. If Cardiff were to develop that angle of its business, that could surely be of use to Bristol airport, if transport links between both airports could be improved. There lies a challenge for the Welsh Government, because our international airport urgently needs public transport upgrades to get people from Cardiff—and indeed Swansea—to and from the airport. The current infrastructure is awful, compared with that of Belfast, Glasgow and Edinburgh.

Recent public opinion polls suggest that 78% of Welsh voters agree that APD should be devolved. That does not quite compare with the percentage who support the introduction of Welsh bank notes, but that incredibly high number is still a clear indication of public opinion. It takes a brave politician to ignore opinion poll figures of those proportions.

Furthermore, the National Assembly should have more responsibility for the money it spends. The Secretary of State for Wales himself has said that increasing its taxation responsibilities makes the Assembly “truly accountable” to the people of Wales, so why not include air passenger duty in the list of devolved taxes? Why continue to limit the financial responsibilities of the Welsh Government? Jane Hutt, the former Minister for Finance and Government Business in the Welsh Government, who I am not in the habit of quoting, has said:

“It is…disappointing that the UK Government has decided to continue its procrastination over the devolution of Air Passenger Duty. This discriminatory approach is unacceptable and unjustifiable”.

We have seen during the progress of the Bill that what the Labour Government say in Wales does not necessarily translate into voting behaviour where it counts down here in Westminster. Official Opposition Members might be relieved to hear that I do not intend to press the new clause to a Division, but I will return to the matter on Report. I hope that, in the meantime, the Secretary of State will listen to one of the most important strategic players in his constituency and his country, and I look forward to him bringing forward Government amendments to devolve APD before the Bill completes its progress through the House.

I now turn my attention to new clause 4, which would equalise the situation between Wales and Scotland when it comes to VAT revenues. The Scotland Act 2016 stated that revenues from the first 10 percentage points of the standard VAT rate would be devolved by the 2019-20 financial year. The current UK VAT rate is 20% and half of all the VAT raised in Scotland will be kept in Scotland. It is important to note that the Scottish Government will have no ability to change VAT rates.

Sales taxes in the United States are state taxes, not federal taxes, so different states have different levels of their version of VAT. We propose equalising the situation with Scotland because although EU rules prohibit different sales tax levels within the boundaries of a member state, adopting the Scottish model could pave the way, in a post-Brexit scenario, to devolving VAT in its entirety to Wales, to Scotland and to Northern Ireland. In a post-Brexit UK, it seems clear that significant political and fiscal power will have to be conceded by Westminster unless the post-Brexit vision is an even more lopsided state in which power and wealth are even more concentrated in London and the south-east.

The Scottish model has some incentivising benefits as it would help to galvanise the Welsh Government to boost the spending power of our citizens by basing a job creation strategy around well-paid jobs and seriously getting to grips with our low-wage economy. As page 4 of Cardiff University’s excellent “Government Expenditure and Revenue Wales 2016” report states:

“VAT was the largest source of revenue in Wales (raising £5.2 billion), followed by Income Tax (£4.6 billion) and National Insurance Contributions (£4.0 billion). The composition of revenues in Wales is markedly different from the UK as a whole. Large direct taxes…make up less of a share of total Welsh revenue, while a greater share is raised through indirect taxes”.

The report’s point is that indirect taxes such as VAT generate more revenue in Wales than direct taxes such as income tax. The report also indicates that Welsh tax revenues have grown by 12.3% since 2011, the main component of which was VAT revenues.

As long as we have a Tory UK Government, economic growth will continue to be based around consumer spending. If that is the case, it is all the more important that the people of Wales directly benefit from that growth and from their own spending power. Denying Wales the same powers as Scotland on VAT seems to be a deliberate attempt to undermine revenues for the Welsh Government.

New clause 4 is probing, so I will not be pressing it to a vote at this stage, but I look forward to hearing the UK Government’s justification for why they have not given Wales the same status as Scotland, especially considering the good performance of Wales—for whatever reason—in generating VAT revenues. I may return to this matter during the Bill’s later stages.

Similarly probing are new clauses 8 and 9, which would devolve corporation tax to mirror the situation in Northern Ireland. As a proud Welshman, I want my country to succeed. I desperately want our GDP to increase and to close the gap between the GDPs of Wales and the UK. If that is to happen, we unquestionably have to make Wales a more attractive place to do business. I want to make Wales the most attractive place in the UK to do business, and I hope that the Secretary of State for Wales would want the same for his country.

Most other countries are able to set their own rates of corporation tax. It is a lever with which a national Government can influence their country’s desirability to potential investors, but Wales is restricted from doing so. We are forced to compete with the other UK nations with our hands tied behind our backs. Northern Ireland has a huge competitive advantage over Wales, and we know about the rate in the Republic of Ireland, with which we share a sea border. We cannot build a High Speed 2 for Wales. We cannot electrify our railways and we cannot offer tax incentives. We are constantly forced to come to Westminster with a begging bowl. We are still waiting for even an inch of electrified railway. We are still not getting full Barnett consequentials from HS2, let alone getting our own high-speed rail, and we are once again being told that we cannot use corporation tax as a way of attracting business.

[Alun Cairns]

I am listening carefully to the hon. Gentleman’s proposal on devolving corporation tax. How would Wales cope with the significant volatility of corporation tax income?

[Jonathan Edwards]

I am grateful for that intervention because it provides a great insight into the Secretary of State’s thinking. If that is his argument on fiscal powers, he should align himself with the Labour party, which opposes Wales having income tax powers for exactly the same reason. This is about whether one believes that the Welsh Government can use such levers effectively to create jobs in our country. That intervention is indicative of the Secretary of State’s mindset.

Given that corporation tax is devolved in Northern Ireland, I hope that the Secretary of State will do his job, stand up for Wales and make it a devolved tax in Wales, as was recommended by the Silk commission’s report.

[Glyn Davies (Montgomeryshire) (Con)]

Thank you, Sir Alan, for calling me to speak in this hugely important debate. All Welsh Members recognise the Bill as an attempt to create a stable, long-lasting devolutionary settlement for Wales that provides financial accountability to the Welsh Government. I associate myself with many of the comments from both sides of the Committee, although I do not agree with everything that has been said.

I want to refer specifically to amendments 158 to 160, which have featured quite a lot in today’s debate. I have been inspired to speak in part by the contribution of the shadow Secretary of State for Wales, in which he was positive about energy. There is real potential for Wales to become an energy giant. I have been to Dinorwig about three times and have been inspired by the history of what Wales has achieved in energy production. We have even had—the shadow Secretary of State will not agree with me on this subject—nuclear energy generation in Wales on a considerable scale. It has formed part of a real decarbonisation effort, which I have supported and which we may well carry on at Wylfa B. We have the Swansea Bay tidal lagoon project and other such projects, and there is wonderful potential for Wales if they go ahead. At this stage, the issue is clearly one of whether they will become financially viable. There is no doubt that the tidal range is amazing, and I certainly hope that those schemes can be approved and that Wales can carry on its history of making a contribution to energy generation.

I am also inspired by those who tabled the amendments, including my hon. Friend the Member for Brecon and Radnorshire (Chris Davies) and my right hon. Friend the Member for Clwyd West (Mr Jones). The devolution of energy is a difficult issue for me, and I want to run through the reasons why. My concern is about onshore wind farms and the implications of onshore wind, particularly for my constituency. I am desperately keen to support the devolution process and keen that the Wales Bill be successful, particularly in relation to financial accountability. The Bill will enable the Assembly to become a Parliament and to grow up. However, the Welsh Government’s history when it comes to onshore wind causes huge problems, certainly in my constituency. They are landscape vandals—landscape philistines. That has been the general approach of the Welsh Government to onshore wind in my constituency. There are probably more wind turbines in Montgomeryshire than anywhere else in Wales.

Turning to the scale of what the Welsh Government want, they wanted another 500 turbines and a 40 km, 400 kV cable into Shropshire, which would have devastated my entire constituency. Powys County Council had to spend a huge amount of money simply to defend its constituency. The Ministers know what I am about to say, as they have heard me say it before. The only reason I can support this Bill is, ironically, that the Welsh Government have behaved in a centralising way when the UK Government devolved power to local authorities to decide on onshore wind farms. On the same day they devolved this to local authorities in Wales, the Welsh Government took that power back to themselves, like some old Soviet republic grabbing power to itself and away from the people. It was scandalous but the Welsh Government did that.

20:30

This Bill has within it the movement of power over onshore wind to the National Assembly, a change that has already happened through the Energy Act 2016. The part of this Bill that I am more interested in, and the detail I shall want to return to, is any powers we give the Welsh Government as a consultee to influence the subsidising process. That is where I disagreed fundamentally with the shadow Secretary of State, as he seemed to be suggesting that we give the Welsh Government power over that aspect of onshore wind as well. If that were part of this Bill, for me, representing my constituency and facing a Government in Cardiff who wanted to do it great damage, the Bill would be difficult to support.

[Guto Bebb]

We have had a decent debate about the issues relating to this group of amendments. Clause 36 is a carefully drafted clause, which, again, gives effect to the St David’s day commitment on energy consenting. The combined effect of subsections (1) to (6) is to disapply the Secretary of State’s power under the Planning Act 2008 to grant development consent for electricity generating stations in Wales and in the Welsh inshore and offshore zones, not exceeding a capacity of 350MW. This is a compromise, but one based on the views expressed by Silk and the St David’s day agreement, which was attempting to reach a consensus. Development consenting for all onshore wind-powered generating stations in Wales has already been devolved through the Energy Act 2016, and I shall say more about that in a moment in relation to some of the amendments put forward by Conservative Members.

Amendments 74 to 80 were tabled by the hon. Member for Arfon (Hywel Williams), and they again seek to reopen the issue of the political consensus we found under Silk and as part of the St David’s day process. It is important that we recognise that the Bill is attempting to move forward on the basis of consensus, whereas the amendments are trying to open up the whole issue once more. Clearly, we have to accept that the electricity transmission system in England and Wales is thoroughly integrated, and we must keep that in mind when we legislate on this issue. It is also important to highlight that the consensus on the 350MW figure is appropriate, given that we are dealing with a system that is interrelated and interdependent. It is moving significant changes and decision-making powers to Wales, but it is also recognising the importance of what might be seen as a strategic energy development. One of more than 350MW is considered to be strategic, whereas one of less than that can be done on a Welsh basis.

We have rightly talked a lot about hydroelectric generation in this debate. I am proud that my constituency has several sites that are open to development for hydro energy production. A 350MW rule would imply that all those developments could be decided upon in Wales, which is a major development. The biggest challenge we would have would be ensuring that the electricity infrastructure to take energy out of the Conwy valley was up to speed.

[Hywel Williams]

Perhaps this is a mischievous point, but may I ask the Minister this: if 350MW and over is “strategic”, was 50MW and over strategic in the past? If so, what has changed?

[Guto Bebb]

It should be stated that a former Secretary of State for Wales and former leader of this party had long argued that there was a need to look at a higher limit. It is fair to say that the process of devolution is an ongoing one, and it is highly unreasonable to criticise the fact that we are moving towards a situation where very large developments of hydro power in north Wales could be decided upon in Cardiff.

[Paul Flynn]

As the process is ongoing, do we not have a responsibility to catch up with information that was not available to the Silk commission? I do not think that the Newport barrage and Cardiff barrage were envisaged at that time. How does it make sense for the Welsh Government to have control over the Swansea lagoon, but not over the Newport and Cardiff lagoons?

[Guto Bebb]

I am very sympathetic to the concept of tidal lagoons, but, as the hon. Gentleman will be aware, a review is being undertaken at this time and I would not want to prejudge it. It is being undertaken by Charles Hendry, who is well respected across this House.

Clause 37 allows Welsh Ministers to make declarations extinguishing public rights of navigation, so as to ensure safety out to the seaward limits of the territorial sea in relation to generating stations up to 350MW. Clause 38 aligns, in a single authority, the ability to consent both to a generating station itself and the associated overhead line which would connect that station to the transmission system. It does so by removing consenting applicable requirements under either the Electricity Act 1989 or the Planning Act 2008 for certain associated overhead lines with a transmission capacity of up to 132kV necessary for connecting generating stations of up to 350MW capacity. This is an attempt to generate a one-stop shop for energy opportunities of that size in Wales. The Silk commission rightly identified that a one-stop shop should be developed, and the Bill tries to deliver that in a Welsh context.

Government amendments 47 to 49 correct an inadvertent constraint in the current drafting of clause 38 by removing the presumption that Welsh Ministers are the devolved consenting authority.

On clause 39, the Planning Act 2008 introduced the concept of “associated development”—development that the Secretary of State could consent to as part of the development consent orders which underpin and facilitate major development projects. The ability to grant associated development allows for more of the complete projects to be delivered within a single consent, to try to make the situation easier for developers. In Wales, the benefit of this approach has hitherto been restricted only to certain activities around the construction of underground gas storage facilities. Clause 39 amends relevant definitions in the Planning Act 2008 to extend the scope of associated development in Wales to include activities accompanying generating projects above 350 MW and larger overhead lines connections of 132 kV. Again, it fulfils a St David’s day commitment and implements a Silk commission recommendation.

I think it is fair to say that amendments 158 to 160, tabled by my hon. Friend the Member for Brecon and Radnorshire (Chris Davies), seek to re-open matters which have already been debated in the context of the Energy Act 2016. That Act delivered the Government’s manifesto commitment to give local people the final say on wind farm applications. It also ensured that in Wales it is for the Assembly and Welsh Ministers to decide how decisions are taken. I see no basis for rowing back from that position now, but I agree wholeheartedly with my hon. Friend that the Welsh Government should ensure that local people in Wales have the final say on these matters.

In our discussion of the Bill, we have talked about the importance of financial accountability, but this is also a case of political accountability. In my constituency, Aberconwy, we had the development of the Gwynt y Môr wind farm. I think I am right in saying that every single councillor in the Conwy local authority area voted against the development, but it was imposed by diktat by the then Energy Secretary. The important point is that the changes and the power given to local communities as a result of Acts passed by the coalition Government were a direct response to that political need for change. If the Assembly Government are guilty of taking powers into their own hands, there is political accountability there which needs to be challenged and needs to be part of the political discourse in Wales.

The Energy Act has ended subsidy for new onshore wind. If an onshore wind project does not already have planning permission, it is not going to be eligible for subsidy under the renewables obligation. In all the circumstances, therefore, the amendment should not be pressed to a vote.

Clauses 40 and 41 devolve further powers to Welsh Ministers in respect of equal opportunities. The powers follow as closely as possible the approach adopted in Scotland, but the two approaches are not identical. Clause 40 covers the operation of the public sector equalities duty. It removes the requirement in section 152 of the Equality Act 2010 that the Welsh Ministers consult a Minister of the Crown prior to making an order amending the list of Welsh public authorities that are subject to the duty, replacing it with a requirement to inform.

Clause 41 provides for the commencement and implementation of part 1 of the Equality Act 2010 in Wales. Part 1 imposes a duty on certain public bodies to have due regard to socio-economic considerations when making strategic decisions. Clause 41 allows the Welsh Ministers to bring part 1 into force in Wales on a date of their choosing. It also enables Welsh Ministers to amend the 2010 Act to add or remove relevant authorities that are to be subject to the duty, without first consulting a Minister of the Crown.

Clauses 42 and 43 extend Welsh Ministers’ existing responsibilities for marine licensing and marine conservation in the Welsh inshore region to the Welsh offshore region. The clauses fulfil St David’s day commitments and implement recommendations in the Silk commission’s second report.

Clause 44 enables the Secretary of State to intervene on legislation or Executive activities where she has reasonable grounds to believe that these might have a serious adverse impact on sewerage in England. As part of this Bill, legislative competence for sewerage will be devolved, subject to the matters set out in C15 of new schedule 7A. These powers of intervention are similar to those already held by the Secretary of State in relation to water. They may be used where an Act of the Assembly, or the exercise, or failure to exercise, a relevant function might have a serious adverse impact on sewerage services and systems in England.

Amendments 81,125 and 126, tabled by the hon. Member for Arfon, seek to take forward the recommendations of the Silk commission in relation to water and sewerage. The Silk report recognised that water and sewerage devolution is complex and that further work to consider the practical implications was needed. The Government set up the Joint Governments Programme Board with the Welsh Government to look at these issues and report on the likely effects that implementing the commission’s recommendations would have on the efficient delivery of water and sewerage services, consumers and the water undertakers themselves. As my right hon. Friend the Secretary of State explained earlier, that work has concluded and the Government are considering the evidence before deciding whether and how the recommendations will be taken forward. We will consider carefully the interests of customers and businesses on both sides of the border before reaching that decision. It should be stressed that this issue is under consideration.

[Liz Saville Roberts]

Will this material be available when we are next discussing the Bill? If I remember correctly, I first heard about that working group when we were discussing the 50 years since Capel Celyn. As we are now nine months down the road, it would be appropriate for it to be reported to the House before the Bill comes to the end of its journey.

[Guto Bebb]

I thank the hon. Lady for her question. Her recollection is correct. We have only just received the report, so consideration of it must now take place. It is now with the Wales Office, and, after it has been considered, we will, in the manner described by my right hon. Friend the Secretary of State, discuss the contents of the report with other parties who have an interest in the Wales Bill.

Clause 45 fulfils a St David’s day commitment and a Silk commission recommendation to devolve to Welsh Ministers the power to make building regulations for “excepted energy buildings” such as generating stations and gas storage facilities. Clause 46 formalises the current differing arrangements for consulting the Welsh Ministers on renewable energy incentive schemes.

Amendments 130 to 132, which were submitted by the Opposition, would require the Secretary of State to gain the consent of Welsh Ministers, rather than to consult them. Energy policy is a reserved matter as regards Great Britain. Maintaining consistency provides for workable schemes, certainty to the industry and fairness to consumers. It is right that responsibility for renewable energy incentive schemes should rest with UK Ministers. I hope that that comment has been welcomed by my hon. Friend the Member for Montgomeryshire (Glyn Davies).

Clause 47 implements for Wales the conclusions of the HM Treasury review of the Office for Budget Responsibility, published last year. The OBR has a statutory duty to carry out a number of core functions, including to produce fiscal and economic forecasts. This clause ensures that it will continue to receive information from Wales as necessary to fulfil that duty. It reflects the increased fiscal devolution to the Assembly, and the Welsh Government’s competence for economic development. These roles mean that the OBR is more likely to require and use information held in Wales to fulfil its remit.

Clause 48 increases the accountability of Ofgem to the Assembly. Clause 49 provides that where a coal operator wants to mine in Wales, it must seek the approval of Welsh Ministers as part of its application for a licence. Clause 50 increases the accountability of Ofcom to the Assembly and Welsh Ministers. It goes further by giving Welsh Ministers the power to appoint one member to the Ofcom board who is capable of representing the interests of Wales.

Clauses 51 and 52 and schedule 5 and 6 make consequential and transitional provision relating to the Bill. Clause 51 allows the Secretary of State to make consequential amendments by regulations in connection with this Bill, and through amendments 82, 144 to 147 and 150 to 154, the Opposition parties are seeking to give the Assembly a role in approving those regulations. Amendments 144 to 147 would require the Assembly also to approve those regulations where such consequential amendments are within the Assembly’s competence or where they alter the Assembly’s competence. Amendments 82 and 150 to 154 would achieve the same with regard to consequential amendments that amend Acts or measures of the Assembly or secondary legislation made by the Welsh Ministers.

Clause 51 is a fairly typical consequential provision that ensures that the Government are able to tidy up the statute book where required in connection with this Bill. Indeed, similar provisions are included in Assembly legislation as well. Giving the Assembly a role in approving the Secretary of State’s regulations made under this clause would be as unjustified as giving Parliament a role in approving Welsh Ministers’ regulations made under Assembly Acts. It would also make the process far more complicated and time consuming than it needs to be. In reality, we would discuss any proposed changes that impacted on the Assembly’s competence with the Welsh Government before regulations were laid.

20:45

Government amendments 50 to 52, 59 and 60 are the result of productive discussions between the Wales Office, the Welsh Government and the Assembly Commission. Paragraph 2(1) of schedule 6 provides that the new reserved powers model will apply only to Assembly Bills that have been introduced, but that have not passed stage 1 in the Assembly’s legislative process before the day on which the reserved powers model comes into force, or that are introduced after that day. Passing stage 1 means that the Assembly has approved the general principles of a Bill.

Paragraph 2(2) of schedule 6 currently provides that an Assembly Bill that has been introduced under the conferred powers model, but that has not passed stage 1 before the day on which the reserved powers model comes into force, would fall. Amendment 59 removes that provision so that a Bill could still proceed under the new reserved powers model, even if it has not passed stage 1.

Amendment 60 introduces tailored transitional provisions into schedule 6 for relevant energy infrastructure applications. Applications that have been formally accepted for examination under the Planning Act 2008 will continue to be determined by the Secretary of State under that Act. Those that have not been formally accepted will be considered by Welsh Ministers under the devolved planning regime.

Amendments 50 to 52 make some sensible and necessary changes to the commencement provisions in clause 53. Let me quickly touch on amendment 52, because the hon. Member for Arfon mentioned it. It ensures that Welsh Ministers’ common law-type powers under clause 17 come into effect at the same time as the new reserved powers model—a change agreed with the Welsh Government.

Clause 53 provides the framework for commencing the provisions of the Bill and for implementing the reserved powers model. Most importantly, subsection (3) provides for the new reserved powers model—at clause 3 and schedules 1 and 2—to come into force on the day appointed by the Secretary of State by regulation. That day is called the “principal appointed day”. The Secretary of State must consult Welsh Ministers and the Presiding Officer before making the regulations that establish the principal appointed day. That is to ensure their views are fully taken into account in determining when the reserved powers model comes into force.

Under subsection (4), the other provisions of the Bill come into force on whatever day the Secretary of State appoints by regulations. That may include the regulations made under subsection (3). Indeed, it is the Government’s intention to bring into force most of the Bill’s provisions devolving further powers to the Assembly and Welsh Ministers at the same time as the reserved powers model—in other words, on the principal appointed day.

Subsection (6) requires the principal appointed day, or a day appointed by regulations made under subsection (4), to be at least four months after the day on which the regulations are made. That is to ensure sufficient time for the Assembly and the Welsh Government to make the appropriate arrangements for the new model. Finally, clause 54 sets out the short title of the Bill as being the Wales Act 2016.

Amendment 12 and new clause 6, which were submitted by the Labour party, seek to quadruple the Welsh Government’s capital borrowing limit, which was set in the Wales Act 2014, from £500 million to £2 billion. There are two considerations in relation to the borrowing limit: ensuring that borrowing is affordable for the Welsh Government and that it is appropriate within the fiscal position of the UK as a whole.

In relation to Welsh Government affordability, it is important to ensure that the Welsh Government have sufficient independent revenues to manage their borrowing costs. We therefore need to consider the balance between devolved tax revenues and borrowing. Had the Wales Act 2014 simply followed the precedent set at the time by the Scotland Act 2012, the Welsh Government would have ended up with a borrowing limit of around £100 million. However, the Government agreed to increase it to £500 million to enable the Welsh Government to proceed with the upgrade to the M4 in Wales—something this Government fully support, although we are still waiting for action from the Government in Cardiff Bay.

The existing borrowing limit is therefore relatively large, compared with the position in the Scotland Act 2012, and I would argue that it goes further. Even taking into account the Welsh rates of income tax, this limit remains relatively large and, therefore, appropriate. The Government do not therefore believe it is right to increase the Welsh Government’s £500 million capital borrowing limit. Even if this position changes in the future, the Wales Act 2014 already provides for the UK Government to increase the Welsh Government’s capital borrowing limit by secondary legislation.

New clause 4, which was spoken to by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), seeks to assign a share of the VAT revenues generated in Wales to the Welsh Government in the same manner that a share of Scottish VAT revenues will be assigned to the Scottish Government following the Smith agreement. However, the Silk commission gave full consideration to the case for assigning a share of the VAT receipts generated in Wales, and while it recognised some of the arguments in favour, it ultimately recommended against VAT assignment in Wales. Unlike in Scotland, there is no consensus on this issue. I return to the fact that the Bill is moving through this House on the basis of consensus.

As we committed to do in the St David’s day agreement, the Government are considering the case and options for devolving air passenger duty to the Assembly, informed by a review of options to support English regional airports from the potential impacts of APD devolution. However, it is important to note that, as the hon. Gentleman knows to be true, the Silk commission did not recommend the devolving of APD in full, but the devolving of long haul only. It is important to bear in mind that when legislating on devolving a tax such as APD, we have to take into account the impact on other airports within the United Kingdom. We must also take into account whether, as my right hon. Friend the Member for Clwyd West highlighted, the benefits that might arise for an airport owned by the Welsh Government in south Wales would justify the complexity and difficulties of the devolution process, in the context of the economic development and the transport links of north Wales. I very much doubt that.

We are therefore not of the view that the case has been made for devolving APD at this point, but we will remain open to listening to the arguments in future. I fully understand the importance of the aviation sector for creating jobs and growth in Wales. I think it is fair to say, though, that the hon. Gentleman’s arguments seemed akin to an argument for state aid for a state-owned asset. In the light of the fact that we have just voted to leave the European Union, he seems very keen to adopt the concept of state aid provision. However, the fact that the Welsh Government have decided to buy the airport does not, in itself, make an argument for devolving APD.

New clauses 8 and 9 relate to the devolution of corporation tax. Together, they intend to replicate for Wales the Northern Ireland corporation tax regime, as set out in the Corporation Tax (Northern Ireland) Act 2015, which allows for devolution to the Northern Ireland Assembly of the power to set a Northern Ireland rate of corporation tax for certain trading income. Commencement of this legislation remains dependent on the Executive demonstrating that their finances are on a sustainable footing. Northern Ireland faces a number of unique challenges that Wales does not. In particular, it has a land border with the very low corporation tax environment in the Republic of Ireland. The Northern Ireland corporation tax model has been specifically designed for Northern Ireland’s economy and needs, and would not be appropriate for Wales. Again, we are saying no to the hon. Gentleman’s claims.

I propose that clauses 22 to 54 and schedules 5 and 6 stand part of the Bill, and that amendments 47 to 52, and 59 and 60 are agreed to. I urge Hon. Members not to press their amendments.

Question put and agreed to.

Clause 22 accordingly ordered to stand part of the Bill.

Clauses 23 to 35 ordered to stand part of the Bill.

Clause 36

Development of consent for generating stations with 350MW capacity or less

Amendment proposed: 74, page 29, line 17, leave out from “wind” to end of line 18.—(Hywel Williams.)

This amendment removes the 350 megawatts limit on the Welsh Government’s legislative competence in the field of energy.

Question put, That the amendment be made.

20:53

Division 39

Ayes: 195

---

Labour: 150
Scottish National Party: 35
Independent: 3
Plaid Cymru: 3
Liberal Democrat: 3
Social Democratic & Labour Party: 2

Noes: 275

---

Conservative: 274

Clause 36 ordered to stand part of the Bill.

Clause 37 ordered to stand part of the Bill.

Clause 38

Associated development of overhead lines

Amendments made: 47, page 32, leave out lines 9 to 12 and insert—

“(2A) Subsection (1) above shall not apply in relation to an electric line that—

(a) has a nominal voltage of 132 kilovolts or less, and

(b) is associated with the construction or extension of a devolved Welsh generating station consented to on or after the day on which section 36 of the Wales Act 2016 comes into force.

(2B) ‘Devolved Welsh generating station’ means a generating station that—

(a) is in Wales and—

(i) generates electricity from wind, or

(ii) has a maximum capacity of 350 megawatts or less; or

(b) is in Welsh waters and has a maximum capacity of 350 megawatts or less.

(2C) ‘Welsh waters’ has the meaning given in section 36 above.”

This amendment provides for consent for the development of electric lines associated with devolved generating stations to be given by Welsh authorities.

Amendment 48, page 32, line 17, leave out

“generating station consented to by the Welsh Ministers”

and insert

“devolved Welsh generating station consented to on or after the day on which section 36 of the Wales Act 2016 comes into force”.

This amendment provides for consent for the development of electric lines associated with devolved generating stations to be given by Welsh authorities.

Amendment 49, page 32, line 19, at end insert—

“(3C) ‘Devolved Welsh generating station’ means a generating station that—

(a) is in Wales and—

(i) generates electricity from wind, or

(ii) has a capacity of 350 megawatts or less; or

(b) is in waters adjacent to Wales up to the seaward limits of the territorial sea or in the Welsh zone and has a capacity of 350 megawatts or less.

(3D) ‘Welsh zone’ has the meaning given in section 158 of the Government of Wales Act 2006.” —(Alun Cairns.)

This amendment provides for consent for the development of electric lines associated with devolved generating stations to be given by Welsh authorities.

Clause 38, as amended, ordered to stand part of the Bill.

Clauses 39 to 43 ordered to stand part of the Bill.

Clause 44

Intervention in case of serious impact on sewerage services etc

Amendment proposed: 81, page 34, leave out line 37 to line 5 on page 35 and insert—

“Omit sections 114 and 152 of the Government of Wales Act 2006.”—(Hywel Williams.)

This amendment removes the power of the Secretary of State to veto any Welsh legislation or measures that might have a serious adverse impact on water supply or quality in England.

Question put, That the amendment be made.

21:06

Division 40

Ayes: 47

---

Scottish National Party: 36
Plaid Cymru: 3
Liberal Democrat: 3
Labour: 3
Social Democratic & Labour Party: 2
Independent: 2

Noes: 274

---

Conservative: 273

Clause 44 ordered to stand part of the Bill.

Clauses 45 to 51 ordered to stand part of the Bill.

Schedule 5 agreed to.

Clause 52 ordered to stand part of the Bill.

Schedule 6

Transitional provisions

Amendments made: 59, page 108, line 12, leave out sub-paragraph (2)

This amendment removes the sub-paragraph which says that an Assembly Bill introduced before the “principal appointed day” falls if it has not passed Stage 1 in the Assembly process by then.

Amendment 60, page 109, line 34, at end insert—

“Development consent for generating stations

7A (1) The amendments made by sections 36(2) to (6) and 38(4) do not apply in relation to an application acceptance of which is notified to the applicant under section 55 of the Planning Act 2008 before the day on which section 36 of this Act comes into force.

(2) Schedule 6 to the Planning Act 2008 has effect in relation to orders granting development consent for devolved Welsh generating stations as if—

(a) references to the Secretary of State were references to the Welsh Ministers;

(b) the following were omitted—

(i) paragraph 2(11);

(ii) paragraph 3(5A);

(iii) paragraph 4(9);

(iv) the references to the Lands Tribunal for Scotland in paragraphs 6(6)(a) and 7(3)(d).

(3) In this paragraph “devolved Welsh generating station” means a generating station that—

(a) is in Wales and—

(i) generates electricity from wind, or

(ii) has a capacity of 350 megawatts or less; or

(b) is in waters adjacent to Wales up to the seaward limits of the territorial sea or in the Welsh zone (within the meaning of the Government of Wales Act 2006), and has a capacity of 350 megawatts or less.”—(Alun Cairns.)

This amendment creates transitional provision so that applicants accepted by the Secretary of State before the reserved powers model is brought into force will continue to be decided by the Secretary of State under the Planning Act. It also allows the Welsh Ministers to vary consents granted before that time.

Schedule 6, as amended, agreed to.

Clause 53

Commencement

Amendments made: 50, page 39, line 41, at end insert—

“( ) sections13 and14;”.

The effect of this amendment is that clause 13 (composition of Assembly committees) and clause 14 (Assembly proceedings: participation by UK Ministers etc) will come into force two months after Royal Assent.

Amendment 51, page 39, line 42, at end insert

“, and sections 8 and 9 so far as relating to a provision of a Bill that would change the name of the Assembly or confer power to do so”.

Under this amendment the “super-majority” provisions of the Bill will come into force two months after Royal Assent—as does clause 15, which concerns changes to the name of the Assembly etc—but only so far as relating to an Assembly Bill providing for a change to the name of the Assembly.

Amendment 52, page 40, line 2, leave out paragraph (d). —(Alun Cairns.)

The effect of this amendment is that clause 17 (functions of Welsh Ministers) will come into force on whatever day the Secretary of State appoints by regulations under clause 53(4), rather than two months after Royal Assent.

Clause 53, as amended, ordered to stand part of the Bill.

Clause 54 ordered to stand part of the Bill.

New Clause 2

Welsh Thresholds for Income Tax

w ‘(1) Part 4A of the Government Wales Act 2006 is amended as follows.

(2) In section 116A(1)(a) (overview), after “of” insert “and thresholds for”.

(3) After section 116D insert—

“116DA Power to set Welsh thresholds for Welsh taxpayers

(1) The Assembly may by resolution (a “Welsh threshold resolution”) set one or more of the following—

(a) a Welsh threshold for the Welsh basic rate,

(b) a Welsh threshold for the Welsh higher rate,

(c) a Welsh threshold for the Welsh additional rate.

(2) A Welsh threshold resolution applies—

(a) for only one tax year, and

(b) for the whole of that year.

(3) A Welsh threshold resolution—

(a) must specify the tax year for which it applies,

(b) must be made before the start of that tax year, and

(c) must not be made more than 12 months before the start of that year.

(4) If a Welsh threshold resolution is cancelled before the start of the tax year for which it is to apply—

(a) the Income Tax Acts have effect for that year as if the resolution had never been made, and

(b) the resolution may be replaced by another Welsh threshold resolution.

(5) The standing orders must provide that only the First Minister or a Welsh Minister appointed under section 48 may move a motion for a Welsh threshold resolution.”’—(Jonathan Edwards.)

This new clause would allow the National Assembly for Wales to determine the income thresholds at which income tax is payable by Welsh taxpayers.

Brought up, and read the First time.

Question put, That the clause be read a Second time:—

21:18

Division 41

Ayes: 46

---

Scottish National Party: 35
Plaid Cymru: 3
Liberal Democrat: 3
Labour: 3
Social Democratic & Labour Party: 2
Independent: 2

Noes: 273

---

Conservative: 272

The Deputy Speaker resumed the Chair.

Bill, as amended, reported.

Bill to be considered tomorrow.