(7 years, 7 months ago)
Commons ChamberMy hon. Friend regularly shows a great interest in Wales and he obviously knows a lot about the Welsh economy. He mentions the high-tech sectors. We have seen the expansion of General Dynamics, which my right hon. Friend the Secretary of State for Defence and I visited a couple of weeks ago. On that same day, we both handed over the Red Dragon super-hangar to Aston Martin. These are real jobs that are being created by real investors creating new opportunities.
The hon. Gentleman will recognise that exports from Wales have grown significantly, by 6.2%, over the past year. That is something that we welcome. He will also recognise the data that I highlighted earlier about record levels of employment and record low levels of unemployment. On that basis, he will recognise that we want the freest possible open trading arrangements in support of Welsh farmers, because we maintain an active relationship with them—
(7 years, 8 months ago)
Commons ChamberI will happily meet the hon. Gentleman, although I do not necessarily recognise his message about our approach to Brexit—we want a deal that works for every part of the United Kingdom.
I am sure that the hon. Gentleman would welcome the fact that unemployment across Wales is lower than the UK average, which is remarkable considering the industrial heritage of constituencies in Wales such as the hon. Gentleman’s. I will happily work with him on the issues he raises in connection with the Department for Work and Pensions.
In his evidence to the Brexit Select Committee yesterday, Cabinet Secretary Mark Drakeford also said that the Welsh Government were, disgracefully, not made aware of the UK Government’s 12-point Brexit plan or their White Paper. What is the Secretary of State doing to ensure that the Plaid Cymru-Welsh Government Brexit White Paper is fed into the article 50 letter and accompanying documents?
The Welsh Government’s White Paper on exiting the European Union was considered by the Joint Ministerial Committee at the end of February, and we have a significant amount of common ground. The Welsh Government talk about “unfettered access”, while my right hon. Friend the Prime Minister has talked about “frictionless” access and trade. We can work on the basis of a lot of common ground, and I am optimistic that we will continue to work in a positive environment with the Welsh Government and the other devolved Administrations to secure a Brexit deal that works for every part of the United Kingdom.
(8 years, 1 month ago)
Commons ChamberI pay tribute to my hon. Friend for the work he has done on this important issue. I think he drew attention to it at one of the first meetings immediately after the general election, and that started the discussions that have led to the Growth Track 360 proposal. There are growth elements and transport infrastructure elements, and it is important that we ensure that those come together for the benefit of the whole region. I am happy to work with him and with the Department for Transport as we approach the control period 6 considerations that will take place in due course.
I, too, associate my party and myself with the Secretary of State’s comments on the Aberfan disaster.
The Treasury aims to pool local government pension schemes in Wales and England to create wealth funds to invest in infrastructure, with each fund containing accumulated assets of £25 billion. Combined Welsh assets amount to £13 billion, meaning that if the Treasury has its way, Welsh funds will be swallowed up by a cross-border pool. Will the Secretary of State demand a specific Welsh wealth fund so that the contributions of Welsh local government workers are used to invest in infrastructure projects in Wales?
The hon. Gentleman raises a fairly technical area of policy. Appropriate economies of scale are involved in this. I am happy to discuss the details with him. The Welsh Government have made their views clear. However, it is not only about “Welsh money for Wales”—which, on the face of it, would sound good—but about having the economies of scale such that we can access funding elsewhere as well. Therefore, it is not necessarily the right thing, but I am certainly not closed to the idea.
(8 years, 2 months ago)
Commons ChamberI am grateful to the hon. Gentleman for the way in which he has made his intervention, but I would still underline the stability of the existing system and the certainty it provides. The title of the St David’s Day agreement was “Powers for a purpose” and I am still seeking to understand what additional purpose would be provided to anyone living or working Wales should there be a separate jurisdiction.
The Secretary of State pointed to the administration of the courts in Wales and HMCTS, which has of course recently decimated court service provision across many parts of Wales, including the magistrates court in Carmarthen. When he talks about the benefits of a single jurisdiction, is that what he has in mind?
The consequence, of course, would be to spend more money on public sector administration such as that. That would preclude the new innovations the Ministry of Justice is seeking to introduce, and new innovations clearly provide new opportunities. There is the opportunity for new services to be brought closer to communities, should we look at how we can enhance and make the system more efficient.
Diolch yn fawr iawn, Mr Deputy Speaker. Amendment 67 and new clause 10, which are in my name and those of my parliamentary colleagues, would put the devolution of the Wales and Borders franchise clearly in the Bill, fulfilling the UK Government’s promise to do so. Before I get into my speech, may I say that I will gladly not say a word if the Secretary of State or the Minister intervenes to say that they will proceed with that promise and if they outline the legislative vehicle whereby these powers will be devolved to Wales?
We are negotiating with the Welsh Government over the use of a transfer of functions order under the 2006 Act.
The Secretary of State is telling us that he will introduce a statutory instrument once the negotiations are complete. In that regard, I will not be pressing the matter to a vote. I am glad that it is now on the record that he will keep that promise, which was made to the people of Wales in successive statements in the House by the former Prime Minister. Many people in Wales are slightly confused about why the promise has not been included in the Bill, but that is positive news, so I will cut my speech in half.
I would, however, like to raise an associated point about the way in which the franchise may be altered—or, to put it another way, butchered—by siphoning off the more lucrative routes. The Secretary of State is fully aware that those lucrative routes are very valuable to the franchise. The Welsh Government have to put in a huge subsidy, as I understand it, and £700 million was paid between 2011-12 and 2014-15. If those routes are taken away from the franchise, the public subsidy paid by the people of Wales for that franchise will increase significantly.
(8 years, 4 months ago)
Commons ChamberI 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.
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?
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.
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.
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.
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.
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?
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.
(8 years, 5 months ago)
Commons ChamberThe right hon. Gentleman will recognise the funding floor introduced by my right hon. Friend the Chancellor of the Exchequer, which was a clear commitment and promise delivered by the Government. Of course, the Barnett adjustments need to be considered, and discussions between the Welsh Government and the Treasury and my officials are ongoing. We would like to see progress on those matters as the Bill is scrutinised throughout the parliamentary process. Both Administrations are determined to find a transparent way that will rightly serve the people of Wales and the Welsh and UK taxpayer.
I wish to draw the Secretary of State’s attention to the comments of his colleague the Secretary of State for Scotland on the Scotland Act:
“This is a truly significant day for Scotland. If this Bill completes its parliamentary progress, it will add to the already extensive responsibilities of the Scottish Parliament a range of important new powers. It provides even greater opportunities for the Scottish Government to tailor and deliver Scottish solutions to Scottish issues.”—[Official Report, 23 March 2016; Vol. 607, c. 1683.]
Was the Secretary of State for Scotland right, and if so, why has the Secretary of State for Wales brought forward a Bill that pales into insignificance when compared with the Bill given to the people of Scotland?
I am somewhat disappointed by the tone the hon. Gentleman is taking. We have developed the Bill through consensus. We have responded to the comments that were made following the publication of the draft Bill, and before that we had the St David’s day agreement, in which his party was an active participant. We have sought to develop political consensus, but ultimately we do not have a uniform approach to devolution. What is right for Scotland is not necessarily right for Northern Ireland or for Wales. Clearly we have different circumstances and needs, and we should respond to those needs by developing appropriate Bills. I hope that the hon. Gentleman will actively participate and seek to improve the Bill through the parliamentary process; I am determined to achieve a Bill that all Members of the House will be at best satisfied with.
The basis of this clause has been drawn from the Scotland Act. It would be a matter for the courts to judge in such a situation, but this underlines the principle that Parliament is sovereign in these matters, although we will absolutely respect the rights of the Assembly. That is why we have included a clause stating that we will not “normally” legislate on devolved areas.
The debate on the draft Bill, which was published for pre-legislative scrutiny last autumn, was dominated by justice issues. In particular, it focused on something that was labelled the necessity test, and the inclusion of the test led to calls for a separate jurisdiction. I have listened to those concerns, and this Bill has moved a long way from the draft version and is by general consensus more suitable. The necessity test was believed to set too high a bar, and calls were made for a lower threshold. I have gone further, however, and removed the test entirely when the Assembly modifies the civil and criminal law for devolved purposes. As a consequence, many of the arguments for a separate legal jurisdiction for Wales should have fallen away.
However, I recognise the validity of some of the points raised during pre-legislative scrutiny about the existence of Welsh law. The Bill formally recognises for the first time that a body of Welsh law made by the Assembly and Welsh Ministers forms part of the law of England and Wales within the England and Wales jurisdiction. The recognition of Welsh law needs distinct arrangements. As a result, I have been working with my right hon. Friend the Justice Secretary to establish an officials-led working group to look at how those administrative arrangements should be improved. The group includes representatives from the Judicial Office and the Welsh Government, and it will take forward its work in parallel with the progress of the Bill through this House and the other place.
The single jurisdiction can readily accommodate a growing body of Welsh law without the need for separation. There are many reasons why a separate jurisdiction would be to the detriment of Wales. As well as the unnecessary upheaval and cost of such a change, the economic and commercial interdependence of the legal profession on both sides of the border means that separation would undermine the success of one of Wales’s fastest growing sectors—the legal profession.
Will the working group be looking at the justice impact assessments mentioned in the Bill, and will it present its report before we have our final vote on the Bill on Third Reading?
The terms of reference for the working group have been published, and I would expect it to report in the autumn. The justice impact assessment is a matter for the Assembly and for scrutiny by Assembly Members. The principle of having a justice impact assessment is fundamental to proper scrutiny of any mature legislature. With your permission, Madam Deputy Speaker, we might be able to debate that when I get to that element—as I am about to do now.
Some Members, such as the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), have asked me about the requirement in the Bill for justice impact assessments to accompany Assembly Bills, and I would like to take this opportunity to clarify its purpose a little further. It is only natural for a mature legislature to consider the consequences of its own legislation. The impacts of Assembly Bills are assessed against a range of matters, including, quite rightly, the Welsh language and equalities, but no formal assessment is made of their potential impacts on the justice system, which is vital for its laws to be enforced properly. It is simply common sense that any such matters are considered and such an assessment is made, to help with the efficient delivery of justice services.
The Government committed in the St David’s day agreement to implementing—
This is the key point in relation to these new impacts. Who is going to be making the assessments? I take it that the Minister’s view is that that is a matter for the Welsh Government, but would those assessments at any point lead to a trigger whereby the Ministry of Justice could object to Welsh legislation?
It is a matter for Assembly Members, and the requirement is that the Standing Orders include a request for a justice impact assessment. No, there will be no veto arising out of the justice impact assessment. Let me give the hon. Gentleman a practical example.
The Renting Homes (Wales) Act 2016 has supporting documents in excess of 30 pages, with 15 lines talking about the justice implications or the consequence thereafter. The principle we are requesting is that full, proper consideration be given to the justice consequences that arise thereafter. That is mature scrutiny, and I pay tribute to the way in which the First Minister responded to the question on the Floor of the Assembly some weeks ago. Rather than a general accommodation with the Standing Orders, we are talking about a specific request for a justice impact assessment.
The Government committed in the St David’s day agreement to implement a clear devolution boundary for Wales. The reserved powers model at the heart of the Bill will make the Welsh devolution settlement clearer by drawing a well-defined boundary between what is reserved and what is devolved. Anything not specifically reserved is devolved to the Assembly and the Welsh Ministers—it does not get clearer than that! The Bill’s pre-legislative scrutiny prompted a wide-ranging discussion on what the future shape and structure of Welsh devolution should be. The list of reservations included in the draft Bill was criticised as being too long. We have listened, and the list in the Bill now contains fewer reservations and I have made the descriptions more accurate. More importantly, there is a clear rationale for reservations that are included. The list of reservations will never be as short as some would like, but clarity requires specificity. The list included in the Bill will be subject to further fine tuning, but I believe that, broadly, we have struck the right balance.
The Bill also clarifies the devolution boundary by defining which public authorities are Wales public authorities—devolved bodies—with all other public authorities being reserved authorities. To add further clarity, the Bill lists those bodies that are currently Wales public authorities, a list we have compiled in consultation with the Welsh Government and the Assembly Commission. Naturally, the consent of the UK Government will be needed if an Assembly Bill seeks to impose or modify the functions of a reserved body. That follows the well-established principle that the Assembly approves through legislative consent motions UK Government legislation that touches devolved areas.
The final key element of a clear settlement is the change we are making to the functions of Welsh Ministers. It is hard to believe that Welsh Ministers have not been able to exercise common-law powers up to now, unlike Ministers of the Crown and Scottish Ministers; the Bill puts the misjudgment of the Government of Wales Act 2006 right. Similarly, the Bill also removes the current restriction on the Assembly being able to modify Minister of the Crown functions in devolved areas. It lists those functions that Ministers of the Crown and Welsh Ministers exercise concurrently or jointly, and the small number of Minister of the Crown functions in devolved areas the Assembly could modify, with the consent of UK Ministers. All remaining Minister of the Crown functions in devolved areas will be transferred by order to the Welsh Ministers.
Taken together, these provisions deliver a settlement that will make it clear whom people in Wales should hold to account—the UK Government or the Welsh Government—for the decisions that affect their daily lives. I would like to inform the House that some minor clarifications have been made to the explanatory notes relating to some of these clauses, and revised copies of the notes are available for Members.
I am grateful for that point, which is always used by the hon. Member for Monmouth (David T. C. Davies)—I am glad to see him in the Chamber, as we have debated this issue many times. However, the reality is that the Severn bridges are the two main supply links into the south Wales economy, so it is clearly in the interests of the Welsh Government to have control over them.
I always endeavour to be helpful in my politics, and when I look at the rate of constitutional change in the UK, it appears that the only way the British state can possibly survive is as a confederal arrangement between its constituent parts. The only reserved matters in that scenario should be those relating to currency, the Head of State, defence, welfare and foreign affairs, although the boat on welfare may have started sailing with the Scotland Act.
The necessity tests have been replaced by so-called justice impact assessments. In response to the Bill, my former academic master, Richard Wyn Jones, from the Welsh Governance Centre, said in the Western Mail:
“I’m afraid this unexpected addition to the Bill suggests the mindset that devised the necessity test is still alive and kicking in Whitehall.”
He went on to say:
“It clearly undermines the UK Government’s claim to respect the National Assembly as a mature democratic institution able to make its own laws without interference.”
He concluded by saying:
“Ultimately the Secretary of State would be able to override a piece of legislation passed by the democratically elected Assembly. It is a mindset which sees the Assembly as a second-class legislature. There is no similar provision at the Northern Ireland Assembly or the Scottish Parliament.”
I will refer to the Secretary of State’s earlier points and let him intervene following that.
Professor Jones makes the further valid point that these impact assessments are not reciprocal, citing the example of the super-prison in Wrexham, where the UK Government took no account of the impact on devolved Welsh public services such as health, social services, education, lifelong learning and skills.
I welcome the Secretary of State’s comments during the debate and the guarantee that the justice impact assessments cannot trigger a UK veto—I accept him at his word. However, we will have to take our own legal advice to ensure that these assessments are not a Trojan horse to stymie the ability of the National Assembly to function fully as a legislative body.
Let me politely reassure the hon. Gentleman that the justice impact assessments are in absolutely no way considered to be a veto. He referred to the prison in Wrexham—HMP Berwyn. When two mature institutions come to agreements, and one is seeking to encroach on devolved areas or another to encroach on an area that is non-devolved within the UK, the UK Government need a legislative consent motion to take action in Wales. There is a mature arrangement. We need to come to a position where we understand each other, and these mature discussions should take place, rather than one having a right over the other. That is not the area that I want to get to.
I am extremely grateful for that intervention by the Secretary of State. His point about the Wrexham super-prison makes our argument for us. That facility has not been created to deal with the custodial needs and requirements of our country. That is partly why we will aim to remove the reservation on policing and prison services during the passage of the Bill.
My other major concern, as my party’s Treasury spokesperson, is the second-class settlement we are being offered in relation to fiscal powers. The Scotland Act 2016, which all Labour and Tory MPs based in Wales voted for, fully devolved air passenger duty and income tax—including, crucially, the tax bands and half of VAT receipts—to Scotland. The Scottish Government will now be responsible for raising over the half the money they use in all devolved expenditure. Yet, as the recent Cardiff University assessment, “Government Expenditure and Revenue Wales 2016”, notes, following the fiscal plans in this Bill, the Welsh Government will be responsible for raising only about 20% of the devolved expenditure for which they are responsible.
If the twin arguments for fiscal devolution are accountability and incentivisation, surely we need more ambition for Wales than what is currently on offer. After all, in essence, we are talking about keeping more tax revenues raised in Wales directly in Wales, as opposed to collecting them in London and sending them back. The Welsh Government should be responsible for raising the money that they spend. That is a very valuable principle in politics. We will seek to amend this Bill and the forthcoming Finance Bill to secure parity for Wales with Scotland, and challenge Labour and Conservative Members who supported these powers for Scotland on why they oppose them for Wales.
The other issue in relation to tax powers that must be addressed if the measure is to receive our support is the fiscal framework to accompany tax devolution. As we have seen with the debate surrounding the Barnett formula, words such as “fairness” and “non-detriment” are extremely opaque and open to interpretation. The Bill will put in place a Barnett floor to stop further funding convergence, but let us be clear that that is not the same as “fair”. A fair settlement would surely, at the very least, peg Welsh funding at the Scottish level, especially since that is what Labour and Tory Members of Parliament from Wales voted for for Scotland. I will let them explain to the people of Wales why they think that Wales deserves less support through public funding per head than Scotland.
Returning to the fiscal framework, I am glad that there seems to be genuine good will around a non-detriment principle, but that will need to be clearly outlined before we finally vote on the Bill. I would expect the Treasury, at the very least, to publish its recommendations in an official statement to the House during our proceedings on the Bill because Members of Parliament will otherwise be voting blind on the consequences of the tax proposals. I say this as a strong supporter of devolving job-creating levers to Wales, as I outlined earlier. However, neither I nor my colleagues will support the Bill if the UK Government intend to push a straightforward indexed deduction method. I note the significant concessions gained by the SNP Scottish Government on this issue, so I would hope that the Labour Government in Wales and the Wales Office here will be pushing hard for a suitable deduction method for Wales.
This vital issue is even more complicated than my favourite topic of Barnett consequentials, so we must get it right. We need a formula that will reflect the fact that the population of Wales, and hence our tax base, will grow more slowly than the UK average. We cannot be left in a position whereby a successful fiscal policy in Wales leaves us standing still in terms of Welsh revenues. Incentivisation can work only if the Welsh Exchequer is not at a loss before the process starts. Scotland has once again achieved a fair settlement, and so must Wales. It would be far easier to come up with a fair framework if we were debating full income tax powers similar to those awarded to Scotland—that is, full devolution of the bands and thresholds.
If the other main aim of fiscal devolution is to increase the political accountability of the Welsh Government, the sharing arrangement envisaged for income tax would continue to allow them to pass the buck. The shadow Secretary of State for Scotland, the hon. Member for Edinburgh South (Ian Murray), said that full devolution of income tax powers under the Scotland Act would stop the Scottish Government playing the politics of grievance. If Wales has a sharing arrangement, the politics of grievance will continue. In the interests of accountability, incentivisation and, critically, transparency, the UK Government need to revise their plans and fully devolve income tax powers to Wales.
This March, in an act of blatant electioneering, the previous Welsh Labour Government published an alternative Wales Bill that called for a separate legal system for Wales and the devolution of policing. I look forward to the Labour Opposition here tabling such amendments to the Bill. If they do, I will support them with vigour, but if they do not, Plaid Cymru will do so and the people of Wales will be able to judge for themselves whether the First Minister has any influence over his bosses here in Westminster.
In conclusion, I would like to highlight the policy areas devolved to Scotland that are not included in this Bill, which include legal jurisdiction, policing, prisons, probation, criminal justice, full income tax, VAT sharing arrangements, air passenger duty, welfare and employment, consumer advocacy and advice, gaming mechanisms, full energy powers and rail franchising of passenger services, to name but a few. As I have said before, it will be up to our political opponents to explain why they voted for those powers for Scotland, but are opposed to them for Wales.
That brings me to the forthcoming parliamentary boundary review, which has not been mentioned at all during the debate, but will reduce Welsh representation in this place to 29 Members. That means a loss of more than a quarter of Welsh seats in the House of Commons.
(8 years, 6 months ago)
Commons Chamber6. What the Government’s plans are for the future of S4C.
I was delighted to visit S4C last week to see at first hand the exciting developments at the channel, including the launch of its HD service in time for the European championship. I am sure we all wish Chris Coleman and the boys well.
What assurances can the Secretary of State give us that the UK Government’s review of S4C will not be compromised, as it will be conducted after the BBC’s charter review? Can he confirm that all options will be on the table, including securing an independent financial stream for S4C funded from revenues raised for public service broadcasting, and from direct Government support?
The hon. Gentleman will recognise that a fundamental principle is operational and editorial independence. The BBC White Paper offers protection and support for S4C, but, of course, there is a review ongoing that will look at all these matters, such as governance and financing, in order to secure a long-term future for the channel. [Interruption.]
(8 years, 7 months ago)
Commons ChamberMy right hon. Friend speaks with authority and knowledge of this issue. Devolution to north Wales from what is seen in many quarters as the remoteness of Cardiff Bay is essential. The community groups whom I met in north Wales, whether they were from the north-west, from the border or from the English side of the boundary, wanted the growth deal to work on a cross-border basis, and I am determined to explore that possibility in the interests of the region.
One of the most effective ways of rebalancing the economy is to empower the Welsh Government by giving them the necessary job creation levers, which is why I welcome moves to increase fiscal empowerment for Wales. If fiscal devolution is to work, however, it must be facilitated by the provision of a genuinely no-detriment fiscal framework. The SNP Scottish Government have negotiated such a framework for their country. What is the Secretary of State’s preferred deduction method for Wales?
The hon. Gentleman will be aware of the plans in the draft Wales Bill for the granting of income tax-varying powers for the Welsh Government. We want Wales to be a low-tax economy. Of course, mechanisms will need to be introduced to protect Welsh interests. The hon. Gentleman will be pleased to hear that I met the Chief Secretary to the Treasury earlier this week to discuss early proposals for such mechanisms, and we are happy to engage in further such discussions.
(8 years, 8 months ago)
Commons ChamberI am grateful to my hon. Friend the Member for Cardiff North (Craig Williams) for not only the way in which he introduced the debate, but his recognition of the role that Cardiff can play in supporting the whole of Wales. I am also grateful to you, Mr Speaker, for enabling the debate to take place in the same week as Commonwealth Day, because it presents a great opportunity to discuss how a Welsh bid for the Commonwealth games could once more showcase Wales to the world and provide a welcome boost to our economy.
As my hon. Friend mentioned, what a day this has been. It is shaping up to be a fantastic week for Wales. I was delighted yesterday that we signed a £1.2 billion city region deal for Cardiff, a transformational opportunity, which the UK and Welsh Governments, along with local authorities, have worked together for some time to create. I pay tribute to my hon. Friend for spearheading the campaign from the outset. There is no stronger champion of the city deal and its benefits for Cardiff. The Budget has of course delivered some significant outcomes for Wales. The north Wales growth deal offers great prospects for north Wales, and the Swansea bay city deal offers excellent opportunities. The changes to the Severn tolls demonstrate that Wales is open not only to business, but to tourists. Dare I say that Wales is also open to major sporting events? It is good to see the hon. Member for Newport East (Jessica Morden), who has championed the need for changes to the Severn tolls for some time.
My hon. Friend the Member for Cardiff North will know that the Wales Office hosted a reception in January to celebrate Welsh sporting success, and I said then that I would like Wales to develop a bid for the 2026 Commonwealth games. That remains my ambition, so I am pleased to have the opportunity to discuss that further today and am grateful to see cross-party and even cross-nation support from across the United Kingdom.
Wales is well known for its sporting achievements. We achieved our best result in history at the 2014 Commonwealth games, finishing 13th in the overall medal table having secured 36 medals. We know that Wales can punch well above its weight. For example, we develop 6.5% of the UK’s Olympic and Paralympic athletes, despite having under 5% of the UK’s population. We are committed to showing our continued support for Welsh elite athletes, and it is a priority of this Government to provide the right conditions to produce the sports stars that will continue to shine at such events in the future.
Bringing the Commonwealth games to Wales would put us on the world stage once again, just like when we hosted the NATO conference in 2014, which was referred to by Opposition Members and my hon. Friend. We also hosted Olympic events as part of London 2012 and hosted the Ryder cup in 2010. At the 2012 Olympic games, the world saw what we have always known: the UK is an unbeatable venue for world-class sporting events. The world also saw what Wales has to offer when we hosted the very first event—Great Britain’s women took on New Zealand in the football competition in Cardiff.
We know that as well as reinforcing the Wales brand, sport can make huge economic contributions to Wales. Much has been said about how the Principality stadium is among the best stadiums, and it generates more than £130 million a year for the Welsh economy and sustains more than 2,500 jobs. In its first decade, the then Millennium stadium boosted the Welsh economy by more than £1 billion. The 2015 rugby world cup played a significant part in boosting the economy of south-east Wales. Cricket is another sport that we have managed to celebrate and derive significant economic success from, with the Ashes at Sophia Gardens giving a £19 million boost to the capital region economy in one year.
Wales is continuing to grow in this area, as it can look forward to hosting an exciting range of sporting events in the next few years, some of which were mentioned by my hon. Friend the Member for Cardiff North. These include: the world half-marathon championships; the UEFA champions league final; velothon Wales; and the international Snowdon race. But there is no reason why we should cap our ambitions at just those events. With Wales riding high on a sporting wave of success, there is surely no better time to identify how we can attract more global sporting occasions to our shores—occasions such as the Commonwealth games.
The Minister mentioned the national rugby stadium in his remarks. Although it is probably the best stadium in the world, UEFA was not going to allow us to hold a champions league final in that stadium because Cardiff airport is not designated as being up to a sufficient standard. One way of moving forward on that airport would be by devolving airport duty tax, especially in respect of long haul flights, to allow the airport to develop. Let the UK Government show some ambition and devolve that tax.
The hon. gentleman knows that the Treasury is actively looking at that area of policy, but this is a debate about the Commonwealth games and Cardiff airport will rightly play its role in hosting the visitors from the nations involved in the champions league final. As the airport lies in my constituency, I certainly hope to play a part in welcoming some of those superstars from around Europe and elsewhere when they visit Cardiff and Wales.
The opportunities to host such events in Wales should know no bounds. Not only can they pump millions of pounds into our economy and create thousands of jobs, but they can leave a lasting legacy and inspire youngsters from every corner of Wales to get hooked on sport. The 2014 Commonwealth games were the largest multi-sport event ever held in Scotland and a spectacular display of world-class sporting success. The enthusiasm of competitors and the public, the excellent organisation and of course the economic contribution came together to ensure lasting legacy from those 11 days of sport. From the Scottish Government and Glasgow City Council’s capital investment of about £425 million, topped up with ticket sales and revenue from commercial sources totalling £118 million, came a return of £740 million to boost the economy of Scotland and of Glasgow in particular. Hosting such a games can therefore be seen as an investment. That return included £390 million for Glasgow’s economy, and support for an average of 2,100 jobs each year between 2007 and 2014, including 1,200, on average, in Glasgow. The games attracted 690,000 unique visitors, whose net spending contributed £73 million to the economy over those 11 days alone.
Those figures demonstrate the investment and the opportunity; this is something Wales can hope to emulate. A bid team would, however, rightly need to look at the figures in more detail. Let us be clear about the challenges ahead of us. We have some of the best facilities. We have the Wales national velodrome in Newport and the national pool in Swansea. We have no shortage of mountains in Snowdonia for mountain biking. We have fantastic facilities in Bala for canoeing. Those facilities demonstrate that a bid from Cardiff could really be a bid from Wales, which we would welcome, but they are widely spread and we need to take that into account. Additional facilities are also needed. One pool is insufficient, so we would need a practice pool. One velodrome is insufficient and it will be 20 years old by the time of the games, so we need practice and warm-up facilities. That demonstrates the planning and construction challenges that exist. Over the next week or so, I am meeting one of the individuals who was responsible for planning the 2012 games in London to establish what Wales would practically need to achieve.
(8 years, 8 months ago)
Commons ChamberI am grateful to my hon. Friend for emphasising that point. The 115% rate of Barnett consequentials is extremely important—it entirely meets the criteria in the Holtham demands—but one would almost think that Labour and Plaid Cymru Members were disappointed that we had actually delivered on something that they had been calling for. They would far rather be shouting from the sidelines, calling for it in the hope that we would not deliver it. When we respond in a positive way and deliver for the people of Wales, there is complete silence.
Obviously the Barnett formula is a step forward, but does this not underline the danger of using opaque terms such as “fairness” and “non-detriment”? In my view, a fair funding settlement should be based on need rather than serving to prevent further injustice. As the hon. Member for Llanelli (Nia Griffith) pointed out, the key aspect of non-detriment is the fiscal framework. Has the Minister any idea of the preferred index for which the Welsh Labour Government are arguing with the Treasury? It is clear that different mechanisms will have vastly different outcomes.
The hon. Gentleman has made some important points. It is, of course, up to the Labour party to explain its position. All I know is that Labour called for this for decades, we responded within a year, and since then there has been complete silence on the Opposition Benches.
My hon. Friend the Member for Aberconwy was extremely upbeat about Wales’s economic prospects. It is true that, since 2010, the number of people in work has risen by 89,000, unemployment has fallen by 35%, the youth claimant count has fallen by 61%, and Wales has experienced faster growth per head than any other nation or region of the United Kingdom outside London. The hon. Member for Neath (Christina Rees) spoke of the importance of getting people into work. This is action, and this is where it is happening.
We have been getting behind Welsh businesses, and there are 22,000 more small and medium-sized enterprises in Wales than there were in 2010. The hon. Member for Aberavon mentioned the steel sector. I know that he spoke to the Secretary of State and the Minister for Small Business, Industry and Enterprise earlier today about the issues facing the steel industry and, in particular, the communities around Port Talbot, but I hope he will recognise that the Government have gone a long way towards meeting the five asks from the steel industry.
One of those asks was a cut in business rates, which were mentioned by some Opposition Members. That is a devolved matter, and something that the Welsh Government could do. The energy-intensive industry compensation package has been delivered, as has the provision of more time in which to comply with the EU’s industrial emissions directive. As for EU-level action on anti-dumping, the UK Government are leading the pressure that is being exerted in Brussels. I hope that the hon. Gentleman will recognise that, along with a range of other measures that we have taken.
(8 years, 11 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure, Mr Hollobone, to serve under your chairmanship once again. I thank the hon. Member for Neath (Christina Rees) for securing this debate on the Government’s spending review and autumn statement. It is an opportunity to try to answer many of the questions that have been put, and to clarify the great opportunities that the autumn statement brings for our nation.
The Chancellor set out in the spending review and the autumn statement how the Government will deliver economic security, national security and opportunity for Welsh families. In Wales, the Government’s economic plan will build on the improvements made during the last Parliament. Since 2010, only London has grown more per head than Wales; unemployment in Wales has fallen by 26% since 2010; and in the last year alone, employment in Wales grew by more than 43,000. This investment continues to be made in this Parliament. Hopefully Labour Members will agree that the increase in capital funding for the Welsh Government—an increase of more than £900 million, or 16% in real terms, over five years—will support investment projects that matter to Wales and the Welsh economy.
It is interesting that the hon. Member for Neath focused on revenue expenditure, and at the close of her speech she talked about the lack of infrastructure investment. A 16% increase in capital spending certainly allows any infrastructure deficiency to be fixed by the Welsh Government. I suggest that all Members focus their attention on delivery, including the delivery by the Welsh Government of many projects, such as the M4 relief road, the electrification of valleys lines and other capital projects around Wales. When the hon. Lady’s predecessor, Peter Hain, was the Member for Neath, he cancelled the M4 relief road back in 1997. It is hard to believe that despite there being a Labour Administration in Cardiff Bay since 1999, we are still debating the same project, which is vital for the prosperity of Wales, given the commercial opportunities that it would create.
I am very grateful to the Minister for giving way, and his reply will be very useful to me as somebody who represents the communities in the west of our country. When the borrowing powers were awarded to the Welsh Government, was there a caveat that enhanced borrowing powers would only become available if the money was invested in the M4 relief road, or has that decision been made by the Labour Members in the Welsh Government independently?
I will happily write to the hon. Gentleman with further details. I can confirm now that the Welsh Government’s power to borrow up to £500 million for capital spending was initially due to start wholesale in 2018. The UK Government recognise that those powers are integral to the delivery of the M4 relief road, so early access to the borrowing powers was facilitated. The hon. Gentleman will know that that happened some years ago, but we are yet to see those borrowing powers being exercised to deliver that vital road project.
The hon. Gentleman will also know that during the recent rugby world cup, many demands and calls were made for that relief road. That is why, as I have pointed out, it was sad that that project was cancelled in 1997, following the previous Government’s decision to deliver that road.
(9 years, 5 months ago)
Commons ChamberThe hon. Gentleman makes a constructive point. There is a need to develop a project board in north Wales that brings in the Welsh Government, potential European funding and Department for Transport support to develop the best possible, strongest case.
6. What plans he has for the future of air police services in the Dyfed Powys area; and if he will make a statement.
The National Police Air Service plays an important role in keeping the people of England and Wales safe. Operational capability decisions regarding the provision of police air support remain the responsibility of the strategic board.
Maps produced by NPAS show that about half of the Dyfed Powys police force area will fall within 30 minutes’ flying time from a helicopter base, despite NPAS wanting to reach 90% of the population of Wales and England within 20 minutes. Is the Minister content with this extension of response times and with the fact that parts of Dyfed Powys will still not be reachable even within the extended 30-minute timescale?
The hon. Gentleman has a strong record in scrutinising such changes—the Westminster Hall debate just last week was testimony to that—but I also pay tribute to the police and crime commissioner, who is seeking to improve cover and save money at the same time. Any money saved, of course, will create an opportunity to support more officers on the beat.
Anyone looking at the proposed NPAS division will come to the conclusion that the residents of Dyfed Powys will receive a second-class service compared with the dedicated police helicopter service currently enjoyed. Considering that the commissioner is powerless to act, will the Minister join me in calling on the Home Office to hold an urgent review of the situation in Wales, and Dyfed Powys in particular, as it is doing in the north-east of England?
I encourage the hon. Gentleman to meet the police and crime commissioner, who has said he is more than happy to meet him to discuss such issues. There is an opportunity, however, not only to save money but to improve cover. At the moment, the station he talks about operates limited hours, whereas the NPAS proposals would operate 24-hour cover and also provide access to more helicopters and added resilience.