Tuesday 10th January 2017
(7 years, 10 months ago)
Lords ChamberWales Act 2017 View all Wales Act 2017 Debates Read Hansard Text Amendment Paper: HL Bill 77-II Second marshalled list for Report (PDF, 176KB) - (6 Jan 2017)
18:21 - Division on Amendment 81 - Ayes: 90 / Noes: 223 - Amendment 81 disagreed.
Amendment 90 disagreed. - Ayes: 0 / Noes: 0 -
“Lending for capital expenditure
In section 122A of the Government of Wales Act 2006 (lending for capital expenditure), in subsections (1) and (3), for “£500 million” substitute “£1,000 million”.”
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, first, I apologise humbly and unreservedly to the whole House for not being here when the business was called.
In moving government Amendments 72A and 143B, I remind the House that I wrote to noble Lords before Christmas to set out the details of the United Kingdom Government’s and Welsh Government’s agreement of a historic new fiscal framework which sets out how the Welsh Government will be funded alongside further tax devolution. This agreement ensures that the Welsh Government have a fair level of relative funding in the long term which is fair to both Wales and the rest of the United Kingdom. This is the view of the United Kingdom Government and it is also the view of the Welsh Government, whose Finance Secretary, Mark Drakeford, has said that he regards this agreement as ensuring,
“fair funding for Wales for the long term by implementing the funding floor recommended by the Holtham Commission”.
This agreement also sets out that the Welsh Government’s overall capital borrowing limit will be increased to £1 billion, thereby doubling the existing limit as set out in the Wales Act 2014. This increase is in line with the commitment made by the Government during the passage of the Wales Act 2014 that we would increase the capital borrowing if the Welsh Government took on income tax powers.
The fiscal framework agreement sets out that Welsh rates of income tax will be devolved in 2019, and so government Amendments 72A and 143B seek to put this agreed increase into statute and provide for its commencement two months after Royal Assent, alongside the provisions in Clause 17 that provide for the removal of an income tax referendum. Alongside the statutory increase to the overall capital borrowing limit, the Welsh Government’s fiscal framework also sets out that the non-statutory annual capital borrowing limit will be increased to £150 million a year from 2019-20, which is equivalent to 15% of the overall cap. This limit aligns with that agreed in Scotland as part of the Scottish Government’s fiscal framework. As is also the case in Scotland, there remain no restrictions on how the Welsh Government can use their borrowing powers to deliver their devolved responsibilities.
The noble Baroness, Lady Morgan, and the noble Lord, Lord Wigley, have, through their Amendments 73 and 144, which were tabled before the two Governments had made this historic announcement, sought to increase the Welsh Government’s capital borrowing limit to £2 billion. I look forward to hearing the arguments that the noble Baroness and the noble Lord have in support of their amendments shortly.
Amendment 143A in the names of the noble Lords, Lord Hain, Lord Kinnock and Lord Murphy, seeks to make the majority of this Bill conditional on the Secretary of State providing an assessment of the impact of the Welsh Government’s fiscal framework and the effect this will have on differential tax receipts in Wales. Ahead of hearing what the noble Lords have to say, I would point out that as part of the Wales Act 2014 there is already a requirement on the Government to provide an annual report to both Houses on the implementation and operation of the finance elements of that Act. The Government have published two such reports already, the most recent just before Christmas, and the fiscal framework agreement restates this commitment to these reporting arrangements. The next report is expected to be published in December of this year, which I expect to be before the reserved-powers model is brought into force.
In the light of the amendments that have been put forward, I have ensured that as far as the Wales Office is concerned we will seek to provide the information that is being sought here. I remind noble Lords that there is a requirement that Government Ministers in Wales also report on this separately. That would be part of that annual report. We have sought to provide an agreement that is fair for Wales and for the rest of the United Kingdom, as I indicated, so I hope that noble Lords are reassured by what I am saying. I will of course await the contributions that are to be made.
I turn briefly to Amendment 74 in the name of the noble Lord, Lord Wigley. In advance of his comments, let me indicate that the Government’s thinking is that it is important to have a standard approach throughout England, Wales, Scotland and Northern Ireland—across the whole of the United Kingdom. As things stand, because contributions from the private sector in Wales are limited to larger employers, they are smaller than those from the rest of the country, so Wales is a net beneficiary of the way this is organised.
I turn briefly to the amendment of the noble Lords, Lord Rowe-Beddoe and Lord Wigley, and the noble Baronesses, Lady Randerson and Lady Finlay, on air passenger duty, which we also considered in Committee. The Government’s view remains that there can be no separate powers as things stand in relation to the devolved arrangements for Cardiff Airport. Obviously, I wait to hear what the noble Lords will say on that issue. In due course I will also formally move government Amendments 72A and 143B. I await contributions from the noble Lords on the other issues. I beg to move.
Baroness Morgan of Ely (Lab)
My Lords, I wish the Minister a happy new year. It is extremely good news that the Welsh Government were able to come to an agreement with the UK Government on the impact of partial income tax devolution to Wales and the other taxes due to be devolved as a result of the Wales Act 2014. We were all aware that there was no chance that this Bill could be passed if there were no agreement.
As financing of the Assembly is central to this Bill, it is worth pausing on the matter for a while, as it is crucial to the deliverability and provision of services in Wales. I turn first to the effective change in the method of financing Wales as a result of partial income tax devolution. It has long been argued that due to its relative degree of poverty, Wales has been short-changed over a relatively long period, in particular when compared to Scotland, on the basis of the Barnett formula. In this new deal Wales will have access to around £2.5 billion in new tax revenues from the people of Wales. The Treasury will of course be anxious to cut the Welsh block grant to an equivalent amount.
If income tax receipts were to stay constant in both Wales and the UK over the long term, this would not be a problem. However, the fact is that in future years this block grant adjustment will go up or down depending on what happens to revenues in the rest of the UK. Unless Welsh taxes are to grow as quickly as England’s, we could be in trouble in future years. I am afraid that the chances of this happening are quite remote, not because Wales is incapable of raising its game but because it starts off with much lower incomes and does not have the tools to change the situation if the UK Government implement certain policy decisions which may make sense in England but do not make sense in Wales. Fiscal responsibility on the whole remains at the UK level.
To take as an example the UK Government’s policy of increasing the level at which taxpayers start to pay income tax—the personal allowance—this is great news for people on low incomes. But, because proportionately more Welsh taxpayers than English taxpayers are taken out of paying tax altogether, less tax will be collected in Wales to pay for our schools and hospitals, and Wales will have no control whatever over this decision. To be fair to the Treasury, and to its credit, it has recognised this and has agreed to make separate block grant adjustments for each of the three bands of income—so that was a good win for Wales.
I will heap even more praise on the Treasury—which I assure noble Lords does not occur often. It has been agreed that the Barnett floor will be made permanent, which means that Wales should not lose out under this deal either now or in the future. In the past, the system has worked because, ironically, the more public funding is spent in England, the worse off Wales becomes in terms of expenditure relative to England. This led Gerry Holtham to claim in his report that Wales was being short-changed to the tune of around £300 million a year.
However, the fact is that in recent years we have had an extended period of austerity. Wales has also had relatively slower population growth, which means that for every £100 per head spent in England, the Welsh Government now receive approximately £120 per head—higher than Holtham’s suggestion that Wales needs around £115 per head to respond to the needs of the Welsh people. Of course, we are not dancing in the streets in Wales, because this really reflects a reduction in the role of the state—a principle to which we are opposed, not just in Wales but across the UK. We will start believing Theresa May’s rhetoric on the shared society when she stops shrinking the state and starts expanding it. That is worth noting. We are also aware that this situation is likely to change at some point in the future, and we need to focus on this issue.
In accepting that the Barnett floor will be made permanent, Wales will always be assured of 115% funding for its devolved public services. This is extremely welcome news, and I hope that it will go some way towards alleviating the concerns that my noble friend Lord Hain and others expressed in Committee. The slight concern I had in relation to the impact of population change, over which of course the Welsh Government have little say, has been addressed by the Barnett bonus that has been agreed to, which is a 105% multiplier to any Barnett consequentials from 2018.
On the amendments which relate to borrowing powers—my Amendment 73 and government Amendment 73A—we made it clear at Second Reading and in Committee that one of the key requirements, if there should be a partial income tax devolution to Wales, was that there should also be an increase in the amount the Welsh Government are allowed to borrow. We, along with the Welsh Government, are intensely aware of the restrictions that austerity, along with the potential serious loss of European funding, will put on our ability to invest in infrastructure in particular. We are aware that, despite having the lowest unemployment rates in the whole of the UK for the first time ever, low productivity rates are a real curse on the Welsh economy, and that infrastructure investment would go a long way towards improving the situation and increasing the GVA of Wales.
In our amendment we request that the amount allowed to be borrowed should be £2 billion. This is based on the Holtham recommendations, which take into account the fact that Wales has borrowed very little under the PFI initiative compared with other parts of the UK. The amount offered by the Treasury is £1 billion. This is £500 million more than the current amount but £1 billion less than we had hoped.
I have spoken to the Finance Minister in the Assembly and he suggested that, in the current circumstances, as we have to use revenue from the Welsh budget to support any capital borrowing, the amount we can borrow is limited because we would have to divert money from the regular running costs of the NHS, education et cetera to support that borrowing. This underlines how flawed and self-defeating the policy of austerity being pursued by this Government is.
Lord Murphy of Torfaen (Lab)
My Lords, as a co-signatory to my noble friend Lord Hain’s amendment, I support everything that my noble friend Lord Kinnock just said about the need to review the operation of devolving some income tax to Wales.
I congratulate the Minister and the Welsh Government on producing the fiscal framework. I defy anyone to understand it on their first or indeed second reading of it, but by the time you get to the third you get the general impression that it is an improvement in the finances for Wales over the last number of years. An improvement indeed: I have been living with the Barnett formula for three decades, and there is no question in my mind that the fiscal framework now before us is an improvement. However, there is no point in improving on the block grant if you then start losing out because of the income tax side of it, and that is the point that my noble friends have put. The important issue, as I am sure the Minister would agree, is that in the annual review of financing for Wales the impact assessment of this change will be very seriously examined. I am convinced that the comparisons between Wales and the whole of England mean that Wales could be disadvantaged unless we redress that in some way.
I support noble Lords who have dealt with the issue of Cardiff Airport. My noble friend Lord Kinnock, a former European Commissioner for Transport, put it distinctly: if we could give some advantage to Cardiff with regard to long-haul flights, that would not just be a benefit for Wales; it would benefit a whole swathe of England as well. I cannot for the life of me understand why the Bristol versus Cardiff argument applies in this case. Bristol has no runway capable of taking these long-haul flights. Cardiff has, and it is a very good runway. That could help the rest of the country as well as Wales, and I think the Minister must be persuaded that right across the House today people have said that this is a reasonable amendment that would not affect the Government’s position with regard to air passenger duty generally. I think the Government are wrong on that, by the way; if you devolve it to Northern Ireland and Scotland, you should devolve it to Wales too. Still, if Bristol is blocking this proposal, in the case of long hauls there is no block that the Government can actually agree to.
I hope the Minister will look favourably on all the different points that have been made today because they are made with the knowledge that over the last weeks and months the Government have accepted different points that have been put by Members of the House across the political spectrum. The Government have conceded on many issues, and I see no reason why they could not concede on this small but important point.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on the amendments in this group. Much of their contribution has been persuasive and helpful.
I thank those who have acknowledged the progress made in relation to the fiscal framework and the agreement. I stress that the agreement has been made between the UK Government, by the Treasury, and the Welsh Assembly Government, via the Finance Minister and the Welsh Ministers in the Welsh Government. To that extent, this is something that the Welsh Government have welcomed. The noble Lord, Lord Hain, in a very fair analysis, said I had welcomed this agreement for the long term, which indeed I have. More importantly, perhaps, it was welcomed for the long term by Mark Drakeford, who said he regards the agreement as ensuring there will be,
“fair funding for Wales for the long term by implementing the funding floor recommended by the Holtham Commission”.
Those are his words. He is yet to give a full analysis, to be fair, but that is the press statement that he put out and it is notable that that is the view of the Welsh Government. I also stress that the Welsh Assembly will of course be having a say on the legislation in general when it considers the LCM, so no doubt we will be giving a view on this important part of the legislation, as well as the rest of the legislation, when it delivers that view. That is something that we anticipate.
I turn to Amendment 143A in the names of the noble Lords, Lord Hain, Lord Kinnock and Lord Murphy, which all three noble Lords have spoken to very persuasively. As I have indicated, we have a requirement under existing legislation, which we will take forward in relation to this new legislation, of an annual report that happens in November/December each year. We will seek to ensure that the impact assessment—the information that the noble Lords are seeking—is incorporated in that report. As I have indicated, it is partly the Treasury, partly the Wales Office and partly the Welsh Government; all three contribute separately to that report. I will seek to ensure that that information is there because noble Lords have made a very fair point. The Government have already published two such reports, so there is a template. Of course, I appreciate that the significance of the new income tax powers makes the next report somewhat different in nature.
Lord Rowlands
I apologise for interrupting the Minister but can he publish exactly which public bodies, which local authorities and which companies are going to pay this levy and what amounts they will pay?
Lord Bourne of Aberystwyth
I am sure I can and I will make endeavours to do so. Clearly, this is related to the way in which the levy operates. This is a matter being conducted from Westminster, so I will endeavour to get this information for noble Lords. What I cannot do is indicate how it will be spent. This is a matter for the Welsh Government and the National Assembly for Wales.
I turn now to Amendment 80 on air passenger duty. In doing so, I wish to say how sorry I am that the noble Lord, Lord Rowe-Beddoe, is not in his place because of indisposition. I am sure we all wish him a speedy recovery. I know that he has very strong views on this issue; I have discussed it with him on many occasions. The amendment was spoken to formidably by the noble Baroness, Lady Finlay, with other noble Lords speaking in support.
The Government have considered the case and options for devolving APD to the Assembly, as we committed to do in the 2015 St David’s Day agreement. From extensive debates in Committee, noble Lords will be aware that there is an issue about state aid, particularly in relation to but not limited to Bristol. The noble Lord, Lord Kinnock, correctly indicated a competitive element with Birmingham. There is a competitive element with airports in the United Kingdom which is obviously accentuated with those that are geographically proximate. While we remain members of the European Union there is clearly an issue with regard to state aid rules that cannot be lightly ignored. I assume that that will not be the position once we complete the Brexit discussions and implement it, but that is some way into the future. I put that important issue on one side.
Lord Murphy of Torfaen
Is it not the case, though, that the state aid argument would apply equally in Scotland and Northern Ireland?
Lord Bourne of Aberystwyth
The rules certainly apply equally throughout the EU but you have to establish that there is a competitive element. The distance from Edinburgh to Newcastle, which would be the next nearest airport where there is no devolution of APD, is considerably longer—and, I think, is a considerably tougher journey—than that between Cardiff and Bristol. I think noble Lords would accept that. I suspect that it is longer than the distance from Cardiff to Birmingham as well, so there is that difference. In Northern Ireland there is a different issue. The issue there concerns the presence of an airport in a different member state rather than within the same member state. Therefore, the rules are the same but obviously the geographical issue is somewhat different.
Lord Kinnock
I say to the Minister as a matter of record that I would gladly continue with the situation of the UK being subject to the state aid rules of the European Union, and retain membership, than have any other kind of relationship. That being said, however, the point made by my noble friend is absolutely valid; namely that within the United Kingdom a disparity of treatment is allowed under state aid rules because the authorities concerned have been able successfully to argue—rightly, in my view—that the market is not distorted by having arrangements in Scotland and Northern Ireland which differ from those in the remainder of the United Kingdom. Given the argument to which I referred in passing about the area to be served particularly by Cardiff if it were able to dispense with the passenger levy, I believe that under the current state aid rules it could certainly be argued that there is no distortion of the market because the form of competition that exists between international airports is not such as to be distorted by the operation of a different levy system in Cardiff.
Lord Bourne of Aberystwyth
My Lords, I hear what the noble Lord says. I think he would accept that it is a case of defining where there is a competitive market. The point I was making is that I think it would be much more difficult to suggest that there is a single market between Edinburgh and Newcastle in relation to air travel than there is between Bristol and Cardiff. I think that, factually, that must be the case. If you live in a suburb of Edinburgh, I do not think you would lightly consider going to Newcastle to catch a flight whereas, if you live in a suburb of Bristol, you might consider going to Cardiff and vice versa.
However, as I say, that is not the only argument that I am deploying. The point about giving a special tax status to Cardiff is the issue here. The Government cannot subscribe to that. However, we acknowledge that we will revisit air passenger duty at some stage. It may be appropriate to do so and decide how we approach it across the whole country as Brexit approaches, and in the light of decisions made on Heathrow and Gatwick. However, in relation to the specific issue, I am afraid that I cannot give any comfort to noble Lords who want me to move further than I have indicated.
Baroness Finlay of Llandaff
It sounds as if the Minister, in winding up on the airport aspect, is dismissing the arguments we have made that the type of flight going into Cardiff would be quite different from the type of flight going into Bristol. They are not competitive but compatible. Given that, and the arguments we have made, will the Minister undertake to meet a few of us before Third Reading? Listening to the arguments, I do not quite understand why the Government are saying anything other than that they do not want to do it and that that is it—that is what I am hearing—rather than that there is true competition between the two.
Lord Bourne of Aberystwyth
My Lords, if I may say so, that is a somewhat unfair caricature of what I am saying. I am saying that we want to look at this in the round. We do not want to look at it just in terms of Wales, because there is a broad issue about what we do with air travel throughout England and Wales, and that is part of a much broader consideration. So I am not dismissing it out of hand and saying that this is something that the Government do not want to look at. We want to look at it in the round and not, in this legislation, in isolation, which we cannot undertake to do.
I believe that that has dealt with the mass of the issues here. I thank my noble friend Lord Crickhowell for his contribution, and particularly for what he said about the fiscal framework and the hard work that has been put in by officials from the Welsh and UK Governments, and indeed the work of the Welsh Treasury as well as of the Treasury here. It is a signal achievement that has been welcomed in the United Kingdom and in Wales—and, noting that we have Governments of different complexions, that is no small achievement in itself. So while it may not be perfect, it is a way forward. Of course, it is subject to review. Some noble Lords perhaps hinted at what happens now. The noble Lord, Lord Hain, indicated that there would be a review once there is convergence to 115%, which is the case, but thereafter there would be one no more than once in every Parliament; we anticipate that that would be looked at within every Parliament. That is important as well, and is something that has not happened previously.
With that, I ask noble Lords and noble Baronesses not to press their amendments.
Lord Kinnock
No, it is the definition of the fact that when confronted with reality, I try to make it work. Consequently, while I retain some reservations about the whole way in which devolution is taking place in the United Kingdom, I am utterly in favour of decentralisation of administration and decision-making, which any democrat must be, but would quarrel with the sectional and selective form of devolution that is taking place. I would argue on another occasion that, had we undertaken in 1979, let alone in the 1990s, the form of devolution that I and some of my colleagues, including my noble friend from Pontypool, were then advocating, there would have been devolution throughout the whole of the United Kingdom. Perhaps we would not be confronted with the constitutional mismatches and disequilibria that confront us now, especially when we are faced with the prospect of the disaster of Brexit. I will return to that on a different occasion.
I say to the noble Lord, Lord Balfe, that the accretion of competencies that has taken place is in the nature of devolution. Indeed, the Minister could take justifiable credit for producing a Bill that assists in the clarification and strengthening of the whole devolution process. I hope that the noble Lord, Lord Balfe, will welcome the redemption of the Conservative Party, which, back in 1979, took a view that was almost as enlightened as mine on the issue. The most important point—and it is fundamental to this amendment and this Bill—is that the argument in favour of Amendment 90 is that those powers currently exist and they manifestly work. I am therefore employing, in a sense, a conservative argument in saying, “If it works, don’t fix it”.
What happens in Wales—and has happened for several years past—is that the powers advocated for retention in this current set of arrangements for devolution should remain: not that there should be mission creep, but restoration of the status quo. I say to the noble Lord, Lord Balfe, that surely, in his changed political prism, he would recognise and wrap his arms around the principle of the maintenance of the status quo that works. It is on that basis that I hope the Minister will give further consideration to these arguments and retain a set of arrangements that work, that are warmly endorsed by everybody involved in Wales, and that do not constitute the difficulty of definition suggested by the noble Baroness, Lady Finn, in discriminating between public and private employers. The terms on which this measure, if accepted, would be retained, properly describe where the responsibilities and obligations would lie and be exercised. It works now; do not fix it.
Lord Bourne of Aberystwyth
My Lords, I thank all noble Lords who participated in the discussion on these amendments. I will begin with Amendments 75 to 77 and 79, which seek to broaden the circumstances in which the Assembly could legislate in relation to reserved matters. I will first deal with an issue that was raised by the noble Lord, Lord Wigley, concerning the phrase,
“ancillary to a provision of any Act”.
I took him to mean that this was not provided for in the Bill. It is in fact expressly provided for in Clause 3, in subsections (3)(a) and (b) of new Section 108A. It says,
“subsection (2)(b) does not apply to a provision that —
(a) is ancillary to a provision of any Act of the Assembly or Assembly Measure or to a devolved provision of an Act of Parliament, and
(b) has no greater effect otherwise than in relation to Wales, or in relation to functions exercisable otherwise than in relation to Wales, than is necessary to give effect to the purpose of that provision”.
So there is express provision in relation to “ancillary to” and how that would operate, and I hope he finds that of some comfort.
Lord Wigley
I am grateful to the Minister. He will see that my amendment in fact applies to subsection (2)(c) of new Section 108A, in Clause 3, and therefore extends the provision.
Lord Bourne of Aberystwyth
I appreciate that, but I think the noble Lord made a broader point about “ancillary to” not being provided for. I shall move on, if I may, to deal with some of the issues that noble Lords raised about this part of the Bill.
The amendments tabled are similar to those debated in Committee where, as has been acknowledged, I provided noble Lords with a detailed explanation of how the purpose test in the new model is intended to operate. As I made clear then, for a challenge of ultra vires under the reserved powers model to succeed, a case would need to be made that an Assembly Act provision was outside competence because its purpose related to a reserved matter. I think it is common ground among noble Lords that that much is appropriate. If such a case could not be made, the provision would satisfy the requirements of new Section 108A(2)(c) and would be within competence, provided that it satisfied the other requirements of new Section 108A.
In response to the noble Baroness, Lady Morgan, I want to clarify the important issue of how the Assembly can legislate in a way that is ancillary to a non-reserved provision but affects the law on reserved matters. As I set out in Committee, the purpose test is crucial to determine whether a provision in legislation is within the Assembly’s competence. Only once a provision’s purpose has been determined as not relating to a reserved matter would an assessment need to be made of whether it modifies the law on reserved matters and, if so, whether it is ancillary to a matter that is not reserved. If a provision is ancillary, it will also, as I have indicated, be subject to an additional test of having no greater effect on reserved matters than is necessary to give effect to the provision’s purpose in order to be within the competence of the Assembly.
In Committee I gave the House some examples of how the purpose test might be applied, and in particular how a provision that could engage reservations would be within competence if it had a devolved purpose and was ancillary to that purpose either by being appropriate for the enforcement of such provision or otherwise to give effect to it, or was consequential or incidental. Those examples were hypothetical but included: a requirement for tenants to insure their residence; the creation of competitive tendering requirements for local authorities; an extension to the jurisdiction of the Agricultural Lands Tribunal for Wales; and information sharing between Welsh schools and Estyn. In each case we argued that, as the purpose of the provision was devolved and the provision could be characterised as ancillary, it was within devolved competence if it had no greater effect than necessary on the reserved matter. Potentially any provision in Assembly Bills about enforcement would engage the reservation for the courts and their jurisdiction, or that for civil or criminal proceedings, but provided that it is required to enforce or give effect to a devolved purpose, such provision will be within competence even though it impacts on the law on reserved matters, subject always to the test that it has no greater effect than necessary on the reserved matter.
Comparisons have been made with the settlement in Scotland and how this “greater effect than necessary” test applies to it but, when considering that, it is important to note that the restriction on legislating about the law on reserved matters in paragraphs 1 and 2 of new Schedule 7B gives the Assembly wider scope to modify the law on reserved matters than the Scottish Parliament is afforded under paragraphs 2 and 3 of Schedule 4 to the Scotland Act 1998. That is because issues such as private law and criminal justice are reserved in Wales, but we recognise that the Assembly needs to be able to enforce its laws by amending the law in relation to these and other reserved matters.
We have used the same definition of “ancillary” throughout the Bill. If a provision falls within that definition then the Assembly can legislate about England by virtue of the exception to the competence test in Section 108A and can modify the law on reserved matters if it complies with the restriction in Schedule 7B. The Government do not accept the argument that the test of “no greater effect on reserved matters than is necessary to give effect to the purpose of the provision” is of less consequence in Scotland. It is true that Schedule 7A in the Wales Bill contains more reserved matters than Schedule 5 to the Scotland Act 1998, but in Scotland this test nevertheless provides an important but proportionate limitation on competence. The large number of orders made under Section 104 of the Scotland Act 1998 is in part a result of the UK Government and the Scottish Government recognising how far modification to the law on reserved matters can go in Acts of the Scottish Parliament, and that modifications to the law on reserved matters that fall outside the definition can and should be made only by the UK Government and this Parliament.
Concerns have been raised that defendants will always be able to challenge the validity of Assembly Act provision as a basis for an enforcement action on the basis that this has a greater effect than necessary. We believe that, provided that the response is proportionate, this will not be the case. The frequency of such challenges and their merits will of course depend on how the Assembly chooses to legislate in future, and indeed the view of the courts if these matters were subject to challenge. Nevertheless, we consider that the legislative competence constraints set out in the Bill give the Assembly sufficient latitude to create and enforce devolved policies within the shared legal system of England and Wales.
I turn to government Amendment 78B, which is technical and is proposed in the light of issues raised in particular by the First Legislative Counsel for Wales. Sub-paragraphs (2) and (3) of paragraph 6 of the new Schedule 7A to the Government of Wales Act 2006, as inserted by Schedule 1 to the Wales Bill, sought to clarify that the Assembly is able to provide for devolved decisions or orders to be appealable to a court or to require a court order or be made by a court on application. These were included in order to provide helpful clarifications about the Assembly’s powers in respect of the courts, following the removal of the so-called necessity test and the subsequent application of the purpose test. Having examined these provisions in more detail, the First Legislative Counsel has argued that the reservation for courts, including their jurisdiction, might have the effect of restricting the ability of the Assembly to legislate for the procedural effectiveness of a new sort of order, or decision, related to a devolved matter.
The First Legislative Counsel’s analysis identifies paragraph 6(2) and, with it, paragraph 6(3) as unnecessary. Although the provision was intended to address a specific problem, I am persuaded by that very helpful analysis provided that it does not in fact require bespoke provision to address it. I accept the argument that the purpose test would encompass the sort of legislative provision that would otherwise be captured under paragraphs 6(2) and (3) and that, accordingly, they would arguably cast doubt on the breadth of the purpose test. I am satisfied by the First Legislative Counsel’s argument, and government Amendment 78B therefore proposes their removal. In light of that amendment, I think Amendment 79, proposed by the noble Baroness, Lady Morgan, becomes unnecessary, but of course that is a matter for the noble Baroness.
Amendment 78 is an opposition amendment seeking to place a new duty on the Secretary of State for Wales to establish a working group to review Schedule 1 in relation to reservations. I am most grateful for the comments and guidance on that from the noble Lord, Lord Elis-Thomas, who has very broad experience of this as Llywydd and as a Member of this House. We have had bodies a-go-go looking at the area of devolution. I served with the noble Baroness, Lady Morgan, some 20 years ago on the National Assembly advisory group, and since then there have been other bodies: the noble Lord, Lord Rowlands, sat on the Richard commission; there has been the Emyr Jones Pary review; the Holtham commission; the Silk report and the St David’s Day agreement. I agree with the noble Lord, Lord Elis-Thomas, that at the very least we have reached the end of this chapter and now is the time for us to concentrate on the things that I am sure the people of Wales, and indeed its Assembly Members, want to concentrate on—the delivery of public services and a sound economy. Some powerful arguments were put forward by the noble and learned Lord, Lord Morris of Aberavon, and the noble Lord, Lord Elystan-Morgan. I thank the noble Lord for his kind comments and hope that I would be half as charitable if someone else should appear late as he was to me. I am most grateful for his comments.
I turn to government amendments to Schedule 1, which establishes a clear boundary between the devolved matters that are the responsibility of the National Assembly for Wales and the Welsh Government and those that are the responsibility of this place and the UK Government. I can confirm, however, that I intend to bring forward amendments at Third Reading to change the status of the Open University. The noble Baroness, Lady Randerson, is not in her place at the moment, but I thank her in particular for her assistance on this issue. I acknowledge and recognise the important role that the Open University plays in Wales and therefore propose that it is dealt with in relation to devolved areas in the same way as universities and higher education institutions in Wales.
I turn to amendments to reservation M4 on developments and buildings. I will deal first with an issue raised by the noble Baroness, Lady Morgan, in Amendment 91 on the legislative competence relating to railways. I thank the noble Baroness for her comments. We propose that planning in relation to railways that start, end and remain in Wales should be devolved. I should also like to bring forward Amendment 91B giving the Assembly legislative competence in relation to the community infrastructure levy. The noble Baroness also kindly acknowledged this. Turning to Amendment 92A—I understand that the noble Lord, Lord Wigley, did not speak to Amendment 92, so I will not spend too much time on it—we are proposing that such compensation should be devolved, except in relation to the calculation of the compensation, which I think the noble Lord appreciates.
The noble Lord also indicated that he would not speak to his amendments on water and sewerage, so I will not deal with that area.
Regarding changes to the reservation in Part 1 on Crown property, I will just formally move those amendments, as I do not think they were the subject of debate.
On the issue of anti-social behaviour orders and the provisions of Part 5—which the noble Lord, Lord Thomas of Gresford, indicated he felt should be devolved—I was persuaded by the noble Baroness, Lady Morgan of Ely, in relation to this and to the Dangerous Dogs Act and so on, and by the more general comment from the noble Lord, Lord Kinnock, that, where something is working, one should not to seek to overturn it unnecessarily. I think this area is working very well. We are proposing to devolve ASBOs in relation to housing. This has been acknowledged. Elsewhere—and I regret that some noble Lords will be disappointed—we shall not be going further.
The noble Baroness indicated that there has been movement on heating and cooling, so I will formally move those amendments.
The opposition amendment from the noble Baroness, Lady Finlay, seeks to remove the reservation for the sale and supply of alcohol regulated under the Licensing Act 2003. Section B17 of new Schedule 7A to the Government of Wales Act 2006 in the Bill preserves the current devolution settlement in respect of all matters in the 2003 Act covering the sale and supply of alcohol, the provision of regulated entertainment and of late night refreshment. The 2003 Act provides a framework for licensing based on the promotion of four licensing objectives: the prevention of crime and disorder; public safety; the prevention of public nuisance; and the protection of children from harm. As such, alcohol licensing is inextricably linked to policing and the criminal justice system. While they are reserved, alcohol licensing should also continue to be reserved.
The police have a crucial role in the licensing system, including in decisions to grant or refuse applications for licences, to review licences and to close problem premises. The police and criminal justice system bear a significant proportion of the costs associated with alcohol consumption—£11 billion of the £21 billion overall annual cost to society. That said, the noble Baroness is widely, and quite rightly, recognised for her campaigning on the effects of alcohol misuse. Of course, these affect people in England too—in parts of England in a very similar way to parts of Wales. I should like to place on record my enormous respect for the work she does and express the hope that she will continue to campaign on this issue. However, we feel that this is something that should be reserved to the Westminster Government.
“2A(1) Paragraph 1 does not reserve property belonging—(a) to Her Majesty in right of the Crown,(b) to Her Majesty in right of the Duchy of Lancaster, or(c) to the Duchy of Cornwall.(2) Paragraph 1 does not reserve property belonging to any person acting on behalf of the Crown or held in trust for Her Majesty for the purposes of any person acting on behalf of the Crown.(3) Sub-paragraphs (1) and (2) do not affect the reservation by paragraph 1 of—(a) the hereditary revenues of the Crown,(b) the royal arms and standard, or(c) the compulsory acquisition of property—(i) belonging to Her Majesty in right of Crown;(ii) belonging to Her Majesty in right of the Duchy of Lancaster;(iii) belonging to the Duchy of Cornwall;(iv) held or used by a Minister of the Crown or government department.2B_(1) Paragraph 1 does not reserve property held by Her Majesty in Her private capacity.(2) Sub-paragraph (1) does not affect the reservation by paragraph 1 of the subject-matter of the Crown Private Estates Acts 1800 to 1873.”
“ExceptionIn the case of a betting premises licence under the Gambling Act 2005, other than one in respect of a track, the number of gaming machines authorised for which the maximum charge for use is more than £10 (or whether such machines are authorised).”
“The reference to maritime search and rescue does not reserve participation by Welsh fire and rescue authorities in maritime search and rescue responses.”
“The deferral of payment due to a local authority from an individual in respect of costs of, or financial assistance for, meeting that or another individual’s needs for care or support.”
“185_ Compensation in respect of—(a) the interference with rights in land by exercise of a statutory power;(b) depreciation in the value of land as a result of works or land provided or used in the exercise of a statutory power.”
“but only in relation to specified Crown land and specified undertaker land.”