Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Monday 12th September 2016 Commons Chamber

[Jonathan Edwards]

I am grateful for that clarification.

Plaid Cymru tried to include APD devolution in the Finance Bills of 2013 and 2014, I recall, but we did fall to some very England-centric comments by the Treasury officials at the time. These arguments have not yet satisfied us, or I imagine the 70% of the people of Wales who support the devolution of APD, as reported in recent opinion polls—as I said in Committee, that is an extremely impressive opinion poll rating.

On Second Reading of the Bill, the Minister said it was right and proper for Wales not to have the same rights regarding APD as the other devolved nations, and he has reiterated that this evening. Why would the Wales Office seek to deny Wales the same powers as Scotland and Northern Ireland? Why would it deny our only international airport in Wales the potential to use those fiscal levers to expand and develop, and why would it deny the ability of the Welsh economy to grow?

Clearly, increasing footfall at the airport would generate substantial revenues elsewhere in Wales, primarily by boosting economic performance across the whole of the economy, not least of course in the Secretary of State’s constituency, Vale of Glamorgan. Let us remember also that, as Members have said, Cardiff airport is owned by the people of Wales. The Welsh Government effectively nationalised the airport and this additional lever would further enable them to utilise a huge asset in the direct ownership of the people of Wales. It is highly regrettable that we have an airport in England, Bristol airport, effectively deciding UK policy, to the detriment of Wales.

While on the subject of Bristol airport, perhaps I should correct a statement I made in Committee, and I am happy to do so. I said Bristol airport could not accommodate long-haul flights and therefore there was no reason not to devolve long-haul APD. I received a strongly worded letter from Bristol airport—as we can imagine—a few days after the debate; it can accommodate long-haul flights. I am happy to correct the record, therefore, but what it cannot accommodate is the world’s largest aircraft, which Cardiff airport can, given the length of its runway. With the prospect of Wales being dragged out of the biggest and most successful trading bloc in the world, now, more than ever, it is important that we connect Wales to the world, and clearly devolving APD to Wales would enable the Welsh Government to do that more effectively.

New clause 7, in the names of my parliamentary colleagues and myself, seeks to equalise the situation between Wales and Scotland on VAT revenues. I will not be pressing it to a vote, due to the time left this evening. However, I remind the House that there is a consensus that devolution of public spending responsibilities should be accompanied by the assignment of significant own sources of revenue. That principle has now been accepted as this Bill progresses, and therefore the debate in Wales between the political parties is about what that fiscal package of tax powers should consistent of.

Wales’s funding framework has been highly unusual from an international perspective: there are not many Governments in the world with significant legislative and spending powers who do not also have a correspondingly important responsibility for raising tax revenues. If the UK Government are serious about securing a lasting devolution settlement for Wales, VAT should be seriously considered as part of the package of devolved fiscal powers.

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. A recent article published by the Wales Governance Centre confirms what I said in Committee, stating that Welsh VAT revenues have

“been far more buoyant than other major taxes, such that VAT has become the largest source of revenue in Wales.”

This is in contrast to the rest of the UK and Scotland, where income tax remains the largest source. The Government Expenditure and Revenue Wales report concluded that around £5.2 billion was raised in VAT revenue in Wales in 2014-15. A similar deal to that of Scotland would mean around £2.6 billion being assigned to the Welsh Government. This would mean that more than a third of total devolved expenditure would be financed by devolved and assigned taxes. By my calculation, that would represent an increase of about 13% compared with the amount to be raised under the current proposals.

I presume that as long as we have a Conservative Government in charge of the Treasury here, economic growth will continue to be driven by consumer spending. If that is the case, it is all the more important that the people of Wales benefit directly from that growth and from their own spending power. By devolving proportionately low revenue yielding taxes compared with the UK average, such as income tax, without devolving proportionately high revenue yielding taxes compared with the UK average, such as VAT, the UK Government are setting the tone in the Bill for an unfair and unstable fiscal position for Wales.

The devolution of VAT rates has been dismissed in the UK in the past on the ground that European Union rules prohibit the variation of VAT rates within a member state. Although we are calling only for parity with Scotland in this instance, the UK’s exit from the EU could open a debate on devolving rate-setting powers to Wales. If, as the International Trade Secretary and the Brexit Secretary seem to want, the UK does not remain part of the single market, that could open up a world of possibilities for fiscal policy. Setting VAT rates could give Welsh Ministers a powerful macroeconomic lever, and could perhaps be used in conjunction with other tax powers in considering the overall progressivity of the tax system in Wales.

[Hywel Williams]

I agree entirely with my hon. Friend. Does he agree that the record of Governments in London, both Labour and Conservative, is not encouraging? Under an agreement made in Helsinki in 2008, states are allowed to vary VAT down to 5% in labour-intensive industries. Were that to happen in respect of, say, tourism and construction in Wales, a huge amount of new business would be generated and the lost tax would be made up very quickly, but this Government and their predecessor did not take advantage of that dispensation. We do not need to wait for Brexit. We could make this change now, but the Government refuse to do so.

[Jonathan Edwards]

I am grateful to my parliamentary leader for that intervention. Plaid Cymru has a long-standing policy to make the case at Budgets and autumn statements in this House for the lowering of the VAT level for the tourism industry in Wales. The all-party parliamentary group on the tourism and hospitality industry in Wales, chaired by the hon. Member for Ceredigion (Mr Williams), has also called for that reduction, which would be of huge benefit to the industry.

The Under-Secretary of State for Wales, the hon. Member for Aberconwy (Guto Bebb), has said tonight that he will not support the new clause because the proposal was not part of the Silk commission’s recommendations. This is a classic case of the UK Government cherry-picking powers as it suits them and using the Silk commission as a justification for omission—in this case in relation to VAT—while dismissing its recommendations for the inclusion of measures on, for example, APD.

Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Tuesday 5th July 2016 Commons Chamber

[Hywel Williams]

I have considered that, and it is my opinion and that of the Presiding Officer that it would not put her in that difficult position. These amendments are hers, after consideration. The point about parity and similarity with Scotland is persuasive, to our minds.

[Jonathan Edwards]

Is it not the case that under the Bill as drafted, the Welsh Government could act unilaterally if they so decided, whereas if the spirit of the amendments were accepted, adapted by the Government and incorporated in the Bill, the power would reside with the Presiding Officer, but only with the support of the legislature, which means that there would have to be cross-party support before she acted?

[Hywel Williams]

I take my hon. Friend’s point entirely. The four Assembly elections held so far have not produced a majority Government, so the consent of the Assembly collectively would be required in that situation. I am not casting any aspersions on the motives of Governments in Cardiff, London or anywhere else, but the amendment would remove any suspicion of political advantage being sought.

By adding a strict seven-day timeframe, during which period the Assembly must meet and elect a Presiding Officer, the Bill once again puts Wales on an unequal footing with Scotland. The Scottish Parliament is allowed 14 days to carry out this function. Given the history of the outcomes of elections to our Assembly, as I said a moment ago, and the obvious consequence that time has been required for the parties to discuss all manner of arrangements, seven days for this particular exercise seems unreasonable. That is why amendment 29 extends this period to 14 days for the Welsh Assembly.

Amendment 30 amends the Government of Wales Act 2006 so as to confer powers over varying the date of an ordinary general election to the Presiding Officer, as opposed to transferring this power directly to Welsh Ministers under the Bill as currently drafted. Finally, amendment 31 amends the 2006 Act so as to ensure that powers over proposing the date of an extraordinary general election are given to the Presiding Officer. The amendment once again extends the timeframe during which the Assembly is required to meet following an election to 14 days, thus establishing parity with Scotland.

These amendments are meant to probe and promote discussion. We do not intend to press them to a vote.

Wales Bill

Debate between Hywel Williams and Jonathan Edwards

Tuesday 14th June 2016 Commons Chamber

[Hywel Williams]

I am grateful for that point, which we have discussed before, and I have said that the number of pages might not be the best indication of the number of reservations or their complexity.

There are new reservations in this Bill that were not in the draft Bill, for example, on matters as important as the Severn bridges—that nagging toothache for our economy in the south.

[Jonathan Edwards]

Going back to the intervention by the Secretary of State, does not the fact that the number of pages has increased indicate that this is not the bonfire of the reservations that we were promised?

[Hywel Williams]

No doubt that is something that we will debate. I relish the opportunity to discuss the reservations and hear the Secretary of State or his colleagues justify them. The explanatory notes include a description or explanation of the reservations but, as far as I can see, there is very little justification for them. I therefore look forward to hearing about that in subsequent debates.

The report by the Wales Governance Centre and University College London on the draft Bill described the list of reservations and said:

“Complexity is piled on complexity...the potential for legal challenge casts a long shadow.”

I see little evidence that the revised list is much clearer. It remains, alas, a lawyer’s playground. As I have said, the shift to a reserved powers model was supposed to be made in tandem with a shift in mentality—that is extremely important—to determine what needed to be reserved, rather than what should be devolved. It is clear that the Secretary of State has instead facilitated a Whitehall trawl of the powers—a pick and mix of what the Sir Humphreys fancy bagging for themselves—sometimes based on principles no deeper than the chance to shout “Mine!”

If the Secretary of State is serious about creating a lasting devolution settlement, he cannot simply flip the current settlement from the conferred powers model to the reserved powers model, then allow Whitehall to pick and choose which tasty bits of power they want to hang on to. The process must be built on principles. I agree with the principles that he identified—clarity and coherence—but I would add proper subsidiarity.

Some time ago I had an entertaining lunch with the Irish Minister responsible for a new Irish language Act. He was quite candid, loquacious and hilarious. He had been to Canada and Quebec and had thieved—his words—a little bit of their language law. He had been to Wales and has snaffled bits of ours. He had been here and there in the rest of Europe, and hey presto, here was their language bill. We do not need to roam two vast continents, stitching together a bit of this and a bit of that. A model is already there for the borrowing and—perhaps Plaid people will forgive me for saying this—it is a home-grown British model called the Scotland Act.

The Silk commission hoped that moving to a reserved powers model would be a chance to rewrite the settlement to remove some of the defects of haste and inconsistency that have so far marred legislative devolution in Wales. The list of reservations does not reflect that hope. The director of the Wales Governance Centre has described the Bill as being underpinned by a “patronising attitude” and as continuing to regard Wales as “enjoying a lower status” than the other devolved nations. In practical terms it will undoubtedly lead to more blame shifting between Cardiff and London. That is the last thing that people in Wales want and the last thing that the governance of the people of Wales requires.

Both the Welsh Affairs Committee, which has a Tory majority, and the National Assembly’s Constitutional and Legislative Affairs Committee, which was also chaired by a Tory, recommended that each reservation should be individually justified. That recommendation has been ignored and, as I said, I look forward to hearing the Secretary of State or his colleagues making up for that as we go into Committee.

The Wales Governance Centre has offered a list of considerations for identifying functions that should be devolved: is it necessary to retain function X for the functioning of the UK as a state? Does retention of Y make the governance of the UK less clear or comprehensible? Does retention of Z undermine the workability, stability or durability of the devolution settlement? These are the questions that the Secretary of State should be asking himself for each and every one of the reservations in the Bill and I hope we will have time to hear him go through those steps. Simply making hundreds of reservations for no given reason is not acceptable, particularly when the real rationale seems to be a deeply suspect power grab by Departments of Government that have failed Wales so spectacularly over the past few years.

Bank of England and Financial Services Bill [Lords]

Debate between Hywel Williams and Jonathan Edwards

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend agree that a worthwhile commercial advantage would be gained by issuing banknotes? That value would then accrue to Lloyds bank, and possibly to taxpayers in Wales and the rest of the UK, which would be a good move.

[Jonathan Edwards]

I am grateful to my parliamentary leader for his intervention. He is completely right, and that is why four banks in Northern Ireland and three in Scotland have continued the practice. There is a commercial interest for Lloyds, but also a public interest due to our part ownership of the bank.

Permission to issue Welsh banknotes would be a welcome boost to brand Wales, recognising our country as an equal and economic entity. Notes in Northern Ireland celebrate individuals such as J.B. Dunlop, Harry Ferguson and James Martin, as well as architectural splendour such as that of Belfast city hall. Notes in Scotland pay tribute to that country’s fantastic bridges and recognise the contribution of people such as Sir Walter Scott and Robbie Burns. Notes currently used in Wales recognise people such as Elizabeth Fry, Adam Smith and Matthew Boulton, and previous notes have portrayed Charles Dickens, Michael Faraday, Sir Isaac Newton, William Shakespeare, George Stephenson and the first Duke of Wellington. They are all great people, but none, to my knowledge, has anything to do with my country.

Is it not fair and sensible for us in Wales to use notes that recognise our historic landmarks, such as the incredible Castell Carreg Cennen in my constituency, Pont Menai in north Wales, Yr Wyddfa—Snowdon, the largest mountain in our country—and our historic greats such as Owain Glyndwr, who was nominated the seventh most important person of the last millennium by The Times, of all papers? There is also David Lloyd George, the originator of the welfare state, Aneurin Bevan, the architect of the NHS, and Gwynfor Evans, the first Plaid Member of Parliament and the father of modern Wales.

A case could also be made for what is arguably the most famous Welsh painting of all: “Salem”, painted by Sydney Curnow Vosper in 1908. His painting of Siân Owen aged 71 at Capel Salem, a Baptist chapel at Pentre Gwynfryn in the north of Wales, is a national icon, much as Constable’s “The Hay Wain” is in England. The Royal Mint already produces Welsh-specific coins, so my proposals raise no major issue of principle—indeed, the Minister referred to the Royal Mint earlier in the debate.

A national poll by ITV Cymru/Wales found that more than 80%—indeed, it was 82.6% when I looked at the website today—of the Welsh public supported these calls. If we are unsuccessful in the Division, I hope that the UK Government will support Plaid Cymru in putting right this historical anomaly and bring forward their own proposals.

[Hywel Williams]

I have a Welsh pound coin with me, and it reeks of nationalist propaganda because around the edge it states “Pleidiol wyf i’m gwlad”, which means “True am I to my country”. I certainly agree with that, but it is issued by the Royal Mint.

[Jonathan Edwards]

My hon. Friend makes my point entirely. There is no issue of principle at stake; this is about finding the mechanism for delivery.

This issue has received considerable media coverage in Wales. Considering that we are only two weeks from the Welsh general election, I suggest to Treasury Ministers that the election prospects of their candidates in Wales may be damaged if they choose to ignore the strong views of the people of Wales on this matter.