Devolution: Wales and Scotland

Baroness Morgan of Ely Excerpts

Thursday 18th June 2015 Grand Committee

[Baroness Morgan of Ely (Lab)]

That is a pretty good challenge. We can always rely on the noble Lord to talk down Wales, but I think that there is a point: we need to do better in Wales. We have to remember that we have a long and difficult tradition of deindustrialisation that we need to compensate for. We start from a very low base, but there are some good news stories in Wales as well. We have to remember that inward investment has improved dramatically in recent years. Export levels have improved. Educational attainment is getting better. There are issues with the health service, but that is at least partly because of the massive cuts that we have had to endure from—if the noble Lord does not mind me saying—the coalition Government, of which his party was a part. He has paid the price for that, but it is important that we understand that there is work to be done. The Welsh Government are getting on with that work.

I now go back to the point that I wanted to make, which is to thank the noble Lord, Lord Wigley, for putting this issue on the agenda and to welcome the new Minister to his post. We know that the dust is beginning to settle after the Scottish referendum and the general election, but we have to be in no doubt whatever that the structure of governance in the UK is on the march. This hotchpotch, ad hoc, knee-jerk reaction to the making of a new constitution and to building political systems is no way to plan a country as complicated as ours. That is what is happening at the moment. We should be looking at the devolved organisation of this country as a whole, not responding to crisis after crisis, which, if we are not careful, will lead to the break-up of the union. It is only when we have a settled position that we will have settled people and a settled country.

The Scotland Bill was guaranteed by all parties in the run-up to the referendum. It guaranteed that, no matter the outcome of the referendum, all parties were agreed that a fundamental change had taken place in Scottish society. All parties were committed to bringing forward legislation that reflected that. A no vote was not a vote for no change. Unlike the noble Baroness, Lady Randerson, I argue that the Labour Party has always been a party of devolution. There have been shades within the party—that is true—but there has always been a strong contingent of people in the Labour Party who are pro-devolution. We have delivered on that time and time again in recent years. We recognise that devolution is a journey, but that the journey must not lead to disaster and the break-up of Britain.

The Scotland Bill will make the Scottish Parliament one of the strongest devolved Administrations in the world, being able to raise more than 40% of their own tax revenues, while being responsible for more than 60% of spending decisions. It shows the real steps that the Scottish Parliament is taking to be a fully responsible Parliament, so that the debate in Scotland can move on from “who holds power” to “how can Scotland best use that power”. I hope that this will see the Scottish Government take real steps to address the current crisis in schools and hospitals across Scotland.

However, these issues do not affect only Scotland. It is worth making clear that where Scotland leads, Wales will not and should not always follow. It is true that enthusiasm for the devolution project has increased significantly in Wales in recent years, but there is no groundswell of support for nationalism in Wales. There does not seem to be any significant demand in Wales for further powers beyond those recommended by Silk. The First Minister of Wales has talked about the need to follow a path in the UK set out by the Swiss socialist Andreas Gross: a path that enables, “unity while guaranteeing diversity”. That is probably something that we should all take into account.

More needs to be done to strengthen and to raise awareness of the ties that bind us. We need to turn the debate on its head and ask: what is the union for? What are the essential elements that we need to retain at the UK government level, without which the constant nagging attempt by Scottish Nationalists to demand more and more will inevitably lead to the break-up of Britain? That debate has to involve all parts of the UK: Scotland, Northern Ireland, Wales and England.

There are some obvious starting points such as defence and foreign affairs, but I would go much further than the noble Lord, Lord Wigley, and go beyond them. A lot of these are listed in annexe B of the St David’s Day agreement and whether we agree with them all is something that is worth discussing. We need to discuss how much money needs to be collected at the centre to pay for an NHS free at the point of delivery, and for free schooling for all across the whole of the UK. At what point does the NHS stop being a truly national health service? We should have a hard-headed discussion on these issues and we need to ask what else needs to be added to that list of powers held in the centre.

That exercise to develop the reserved powers model of governance is currently being undertaken by the Welsh Office, but again it is being done in isolation without thinking what else is going on. It is essential that the Governments at both the UK level and the Welsh level are involved in agreeing what should be included in that list of reserved powers. Can the Minister clarify exactly what level of discussion has so far taken place between the UK and Welsh Governments on the proposed list of reserved powers? What will be the criteria on which Whitehall departments will be able to argue that they can retain responsibilities?

I also ask the Minister for a categorical assurance that there will be no attempt to limit the National Assembly’s existing legislative competence. I want to give an example of my concerns here. There are aspects of equality legislation that are currently devolved under the conferred model of government, but others are not. In annexe B of the St David’s Day agreement, civil law and procedure is a subject that has been listed as a reserved matter—but the Human Transplantation Act is a piece of legislation which has amended civil law, so what is being suggested here? Is the suggestion that the Government intend to repeal this Welsh law and take it back to the centre? What is meant by that? Where are these lines going to be drawn? Can we have a categorical assurance that there will no attempt to claw back power from the Assembly on this or other areas already devolved under the conferred model?

The St David’s Day agreement lists several areas that should be reserved at the UK level but we should remember, as the document states, that it is only an illustrative list. So we have got to be very vigilant here. If the reserved powers model were to be based on the example given in annexe C of the agreement, there would be page after page of things that the Assembly could not do. Can the Minister clarify how many issues so far, and covering how many pages, have been suggested as areas that should be retained? Can the Minister also say whether the principle of subsidiarity will be respected when considering what should be retained at the UK level?

The Scottish First Minister has argued for full fiscal autonomy. Let me be clear—this is not a position which is supported by the Labour Party. As the Institute for Fiscal Studies has outlined, these plans would leave Scotland with a £7.6 billion black hole in its finances which could only possibly be filled by further spending cuts or tax rises over and above the current Conservative plans. Full fiscal autonomy holds no interest for the Welsh people. We are anxious to share the burden and responsibility across the whole of the UK. We all need to contribute and to restore benefits, ideally in a way that is based on need, in particular in terms of provision of services and benefits. We should be aware of an attempt by an ideologically driven Conservative Party, intent on reducing the size of the state, to devolve responsibility for raising taxes to a devolved level, and with it to devolve blame and wash their hands of the poorest parts of the union.

There is a danger, however, that we will get hung up on these constitutional discussions. It is the bread and butter issues that people are really concerned with. We need not just a rebalancing of powers but economic rebalancing across the UK, and that needs a proper industrial and regional strategy and improvements in productivity. It needs the UK Government to work constructively with the Welsh Government to generate investment and jobs. Devolution should not just lead in one direction; it must be shared outwards across the country and downwards into the hands of local communities.

Let me conclude by coming back to the constitutional issue. The failure of the coalition Government to respond to Carwyn Jones’s long and timely request to establish a constitution convention is one reason why we are in such a mess today. It makes sense for us all to collectively and democratically work out the right balance of powers and responsibilities throughout this United Kingdom—and let us not forget that the United Kingdom includes Northern Ireland, which has not had much attention in this debate. We need to see a pooling and sharing of resources and the social solidarity that makes this country what it is—a great place to be.

When the Prime Minister in the aftermath of the Scottish referendum linked what was a nationalist battle to the campaign for English votes for English laws he created the potential for serious divisions within our country—where every nation and region would concern itself only with its interest rather than the interests of collective society. We must once again refocus our constitutional agenda on our ability to co-operate as a family of nations, rather than add to the chorus of divisive grudge and grievance policies that we have today.