19:08 - The Committee divided: - Ayes: 47 / Noes: 270 - Question accordingly negatived.
19:21 - divided: - Ayes: 210 / Noes: 270 - Question accordingly negatived.
20:53 - The Committee divided: - Ayes: 195 / Noes: 275 - Question accordingly negatived.
21:06 - The Committee divided: - Ayes: 47 / Noes: 274 - Question accordingly negatived.
21:18 - divided: - Ayes: 46 / Noes: 273 - Question accordingly negatived.
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.
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.
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.
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.
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.
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
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.
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.
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.