Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Report: 2nd sitting (Hansard continued): House of Lords
Tuesday 10th January 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, we are not comparing like with like. There is a significant amount of legislation here that is actually devolving new powers to the National Assembly. As I have indicated, the noble Lord’s analysis of what the legislation is seeking to do is correct; I am not seeking to deny that.

Amendment 109, moved by the noble Baroness, Lady Morgan, again seeks a blanket transfer of pre-commencement Minister of the Crown functions and prerogative functions exercisable in devolved areas to the Welsh Ministers, an issue we debated in Committee. I hope noble Lords have read my letter of 12 December to the noble Baroness which explained the Government’s approach on this issue. This has not changed.

I will give an outline of what happens next, which I think may provide some reassurance to the noble Baroness. In preparing the Bill we have undertaken substantial work with departments across Government to identify the remaining functions exercised by Ministers of the Crown in devolved areas. Noble Lords will appreciate that most such functions have already been transferred by transfer of functions orders made since 1999. In the light of the existing transfer of functions orders and the outcome of this work, we have concluded that the blanket transfer proposed would not deliver the clarity that we are looking to deliver through the Bill. New Schedule 3A to the Government of Wales Act 2006, inserted by Clause 20 of the Bill, sets out the Minister of the Crown functions in devolved areas that will in future be exercised concurrently or jointly with the Welsh Ministers.

A handful of pre-commencement functions will continue to be exercised by a Minister of the Crown solely. These are set out in paragraph 11 of new Schedule 7B. I agreed in Committee to take a further look at these functions, and as a result we have, through Amendments 107B and 107C, narrowed the range of functions in the Marine and Coastal Access Act that require consent for modification. As a corollary to this, in Amendment 114A, we have added some functions under this Act and regulations made under it to the list of functions jointly exercisable by Ministers of the Crown and Welsh Ministers, reflecting the interconnectedness of decision-making in the Welsh zone.

The remaining Minister of the Crown functions in devolved areas will be transferred to Welsh Ministers by order, and we intend to make that order once this Bill has been enacted. I shared a draft list of the functions that will be included in this order with noble Lords before Second Reading, and we are continuing to discuss this list with the Welsh Government so that we can include any further functions that we identify. Any such order will be subject to the affirmative procedure in both Houses of Parliament, so noble Lords will be able to debate the content in more detail at that stage.

Once we have made this order it will be absolutely clear which functions have been transferred to Welsh Ministers, something that a blanket provision would not achieve. In addition, a blanket provision would not provide the benefits of concurrent exercise of some powers—for example, enabling Ministers in both Governments to give grants. I will write to the noble Baroness about the issue she raised concerning Scotland, about which I am uncertain, and copy that to other noble Lords who have participated in the debate.

The amendment also includes prerogative functions in so far as they are exercisable in devolved areas. On examining the range of those functions, we concluded that none applied to devolved matters, and therefore have not acted on that.

The noble Baroness talked about the 35 more functions identified by the Welsh Government. As I said, we are looking at additional functions as identified by the Welsh Government and discussing those with them. We will consider them in light of the order that will need to be made. As I said, this will be subject to debate.

In conclusion, regarding the Welsh language, I am very happy for the Wales Office to engage with Meri Huws and perhaps provide her with more certainty about how this would be carried forward. I can assure the noble Lord, who knows my approach to the Welsh language, that there is no malign intent here at all. The language is central to everything that happens in Wales, and thank goodness it is no longer the party-political football it once was. The Wales Office, as you can imagine, is at the moment very much wedded to that view.

I will endeavour to update the noble Baroness on the Scotland issue, but I will also write to her and to noble Lords more generally about how the discussion with the Welsh Government is going regarding those functions. With that, I ask the noble Lord to withdraw the amendment.

[Baroness Morgan of Ely]

Before the noble Lord sits down, may I be clear? There is going to be this transfer after the Bill, but what if we find some more things down the back of the sofa later on? Is there a facility for us to transfer later on the things that we may not have found in this initial sweep-up? It is a big place, the Civil Service.

[Lord Bourne of Aberystwyth]

My Lords, I am trying to speculate what the noble Baroness might be finding behind the sofa at that stage. I hope that the process would have delivered most of the important issues, but in so far as something is discovered later on, I am sure we will be able to engage with the noble Baroness—or whoever else discovers it behind the sofa—and come to some measure of agreement. It is difficult to anticipate what that issue would be, but if it clearly should be the subject of an order, then I do not see any problem.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Report: 2nd sitting (Hansard): House of Lords
Tuesday 10th January 2017 Lords Chamber

[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.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Report stage (Hansard - continued): House of Lords
Wednesday 14th December 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I am very grateful for the build-up from the Benches opposite. I thank noble Lords who have participated in the debate on the railways. Perhaps I may say first, although I do not think the noble Baroness, Lady Morgan of Ely, referred to it, that although Amendment 91 is in this group, I would like to return to it on the second day of Report, in the new year. I see that the noble Baroness is content with that.

I turn to Amendment 59 moved by the noble Baroness, Lady Morgan of Ely. She is seeking to press the Government to a decision on a matter that we committed to consider in the St David’s Day Command Paper, as my noble friend Lord Hunt of Wirral has just indicated. That matter is whether to legislate for Wales in a similar manner to the provision in the Scotland Act 2016 regarding the powers of Scottish Ministers as committed to in the Smith commission agreement to enable Welsh Ministers to invite UK public sector operators to bid for rail franchises for which they are the responsible franchising authority. Let me deal first with the point about not-for-profit and not-for-dividend organisations. They are currently able to bid and there is no proposal to alter that, so the likes of Dwr Cymru, as I indicated in Committee, would be able to bid in relation to this.

I know the Welsh Government are keen to have this power, but I have to tell noble Lords that we have no proposal in this area, particularly given that it will be 2028 before it could kick in. I think that by common agreement the current border franchise contract will be agreed in 2018. We do not propose to permit public sector bidders in the interim because we do not see any urgency about this. On that basis, I cannot give the reassurance that is sought.

[Baroness Morgan of Ely]

I am very disappointed with the Minister’s response. I do not understand why we cannot have the same rights as Scotland for the public sector to be able to bid for the franchise. We are not asking to be given it; we are asking for the right to submit a proposal, which, as the noble Lord suggested, is allowed in the Smith commission agreement. It is a double standard to allow German, Dutch and French state-owned companies to bid for the franchise but not Welsh state-owned companies. The noble Lord will understand that when talking about railways you need a long-term approach. That is why we do not think it is premature to be pushing this. I am afraid I am not convinced by the arguments put forward by the Minister and I would like to test the opinion of the House.

--- Later in debate ---

[Baroness Morgan of Ely]

Before the Minister sits down, I thank him for the suggestion that there will effectively be some kind of early warning system. But he suggested that it would allow the Assembly to act appropriately. What does he mean by that? What would the Assembly acting appropriately mean?

[Lord Bourne of Aberystwyth]

My Lords, I am too old a hand at devolution to suggest what would be appropriate for the Assembly; that would be a matter for the Assembly in the particular circumstances of the case. I do not think that I can second-guess what it would want to do; it would depend very much on the circumstances and the view of the Assembly on a particular matter, not to me as Minister at the Wales Office here.

[Baroness Morgan of Ely]

What tools are available for the Assembly to use in order to act appropriately? What tools does it have?

[Lord Bourne of Aberystwyth]

Again, the noble Baroness is a Member of the National Assembly; I am not. I would expect her to have a better idea of that than I do.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Report: 1st sitting: House of Lords
Wednesday 14th December 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, in relation to the fiscal framework, things continue to move in a very satisfactory direction in the discussions between the UK Treasury and Government and the Welsh Government. I certainly anticipate and hope that we will be in a position to say much more about the fiscal framework before we rise next week. That is not an undertaking, but it looks promising. If it is not the case, I will write to noble Lords and indicate the timetable.

[Baroness Morgan of Ely]

My Lords, it was heartening to hear that the committee can go forward only through consensus—that was a welcome commitment. I am assuming that that means that the terms of reference would be agreed by consensus as well. Can the Minister confirm that that will be the case? He also did not address the issue of the membership of the group and whether that would be agreed by both the UK and Welsh Governments. That would be welcome. It is also worth underlining that this is a matter of critical importance for the Welsh Assembly in its broadest form—not just for the Welsh Government. I know that the Government are keen to see the Bill passed, and there is a need for a legislative consent Motion. I wonder whether we can keep open that opportunity to keep talking until Third Reading, just to give the flexibility that the Government may need to ensure that they can get the legislative consent Motion.

[Lord Bourne of Aberystwyth]

First, as I have said, these things are best done by consensus but it is a two- way street—both sides have to come to it in a consensual way. So I hope that that is the case when these matters are discussed subsequently.

I have gone as far as I can in relation to the discussions that are being conducted by the Secretary of State and the First Minister. They will discuss these things, and I do not want in any way to give an indication from here as to how those discussions will proceed—but I have undertaken to say more on this when we come back at Third Reading. If there is additional information in the mean time that I can convey in written form to noble Lords who have participated in the debates, I shall certainly do that. I ask the noble Lords and noble Baronesses not to press their amendments.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I will address the remarks on this group of amendments and I thank noble Lords who have participated in the discussion. First, I will deal with a point raised by the noble Lord, Lord Howarth, in relation to the grouping of amendments by pointing out that it is entirely possible through the usual channels to decouple amendments. That has happened in at least one other group, so I do not think the accusation was entirely fair. It is open to other parties to challenge that.

Initially, I will address government Amendment 38 to Clause 37, as well as Amendments 36 and 37, tabled by the noble Lord, Lord Wigley. The government amendment is a technical one to address concerns raised by the Welsh Government. Consistent with the principle of establishing a lasting settlement, it simply acknowledges that future Acts of the Assembly may prove relevant factors in the exercise of consenting powers under the Electricity Act 1989. This addition simply amends that Act accordingly to allow for that possibility.

The noble Lord’s amendments seek once more to reopen the basis on which the Government endorsed a key recommendation of the Silk commission. I note what the noble Lord said about the commission, but he will know that the legislation is essentially based on the St David’s Day agreement, which took forward a lot of the Silk commission recommendations but not all of them. What is in the Bill is essentially based on the St David’s Day consensus rather than on the Silk recommendations, although in this context they are the same.

As I said in Committee and have subsequently reiterated in writing to your Lordships, the Bill has been carefully drafted to give effect to that political consensus around the devolution of new powers which will give Wales a substantially greater degree of autonomy in determining the shape of its future energy structure. To use a word that has been used recently, it would be paradoxical if the Government ignored that consensus and came up with a figure that was not part of it. Key to that consensus was recognition that Wales and England are, and will remain, intrinsically linked through a common electricity transmission system which depends on the inputs from a broad range of generating sources.

The Government continue to be firmly of the view that the larger the capacity of those sources, the greater their significance beyond Wales and to the United Kingdom as a whole. Consensus was reached around 350 megawatts being the appropriate watershed, and I do not believe that the landscape has changed to such a degree since then as to necessitate exploring an alternative approach. The noble Lord, Lord Wigley, I think, and possibly others asked whether we already have the powers if we were to subsequently seek to increase that. Yes, we have the powers, without fresh primary legislation, under, I think, the Electricity Act. It might be under a planning Act, but I can assure the noble Lord that those powers exist in relation to upping the figure. That is not to say that factors might not emerge in the future which would give us pause for thought on this front. I do not believe, however, that now is the time to alter the 350 megawatts figure, but as I have indicated, the power is there if it should be needed.

Government Amendments 117, 118 and 119 relate to generating stations and provide Welsh Ministers with greater flexibility for the future around the exercise of their new electricity generation consenting functions in Welsh waters and in relation to the amendment of existing onshore consents up to 350 megawatts under the Electricity Act 1989. They simply and sensibly provide Welsh Ministers with the ability to delegate the exercise of their new functions to a person they appoint for the purpose. This is a flexibility which the Welsh Government have asked for, and I am happy to provide it.

Government Amendments 56 and 83, and opposition Amendments 57 and 58, relate to fixed-odds betting terminals. I confess that I am not acquainted with these either, although I understand that the noble Baroness, Lady Morgan of Ely, has been experiencing them in the last week or so to see how they work, in addition to Nessa’s Slots in Barry Island. In Committee last month, I committed to reflect further on the arguments in favour of devolving powers over fixed-odds betting terminals. Having done so carefully, I am pleased to bring forward Amendment 56, which will transfer the power on fixed-odds betting terminals in exactly the same way as has been done for Scotland. I am very grateful for the intervention from my noble friend Lord James, indicating that the amount relates to a bank rather than a stake. I hope that gives some reassurance to the noble Baroness opposite and ties in with her experience on this issue.

The noble Baroness, quite fairly, raised the issue of whether, if the amount were to change in England, it would translate across to Wales. I can confirm it would. As she rightly says, this is a serious problem which has been exercising the all-party group and others. If it were to be altered in England, that would have the effect of transferring that same amount to Wales. I thank the noble Lord, Lord Griffiths, as well for his contribution. I know he feels strongly about these issues and has spoken on them forcefully and persuasively in the past.

The amendments would devolve legislative and executive competence to the Assembly and Welsh Ministers to regulate the number of high-stakes gaming machines authorised by new betting premises licences in Wales. It is right that they are new betting premises, as the noble Baroness confirmed. Once again, I think the Government have been given rather a raw deal here; having come up with something that has been welcomed, we have then been accused of not going as far as noble Lords thought we had gone. I thought I was absolutely clear that we have gone as far on this as we did with Scotland. I note the comments and this is a serious issue, but I hope I have given some reassurance that if there is some movement in England, that would affect the position in Wales as well.

The Silk commission made no recommendations on the devolution of betting, gaming and lotteries, but we agreed as part of the St David’s Day process to consider non-fiscal recommendations by the Smith commission and it was in that context that we decided it would be appropriate to take this forward in relation to Wales. We reflected on it and mirrored the provisions in the Scotland Act 2016. The noble Baroness, Lady Morgan, has proposed going much further than the position in Scotland in the Scotland Act but I am afraid we cannot agree to that. I take issue with her on one point on which she spoke passionately in relation not just to gaming machines but to the SNP. The Scotland Act is not an SNP Act—it is an Act of Westminster to which we all contributed. I think we can all reflect on that.

Amendment 60, tabled by the noble Lord, Lord Wigley, seeks to devolve the management functions of the Crown Estate commissioners in relation to Wales to Welsh Ministers or a person nominated by them. This broadly reflects a provision in the Scotland Act 2016 that devolves management functions of the Crown Estate commissioners in relation to Scotland to the Scottish Ministers or a person nominated by those Ministers. The devolution of the Crown Estate in Scotland was recommended by cross-party consensus in the Smith commission report. It was not part of the Silk recommendations and I am not aware that such a consensus exists in respect of Wales.

The Crown Estate works closely with devolved services in Wales; for example, it has agreed memorandums of understanding with the Welsh Government and Natural Resources Wales. I believe the Crown Estate commissioners are doing an excellent job. Last year the Crown Estate recorded a record profit of £304 million, which was returned to the Exchequer. This is not revenue retained by the Crown. The revenue from the Crown Estate is used to fund public services across the UK, including in Wales. This means that Wales is already directly benefiting from the management of Crown assets by the Crown Estate. I urge the noble Lord, Lord Wigley, to withdraw his amendment.

[Baroness Morgan of Ely]

Before the Minister sits down, I should like to be clear on this point. The suggestion is that there will be no possibility for the Welsh Government to look at fixed-odds betting terminals that currently exist, despite there being this incredible social problem in Wales. If the UK Government will not allow the Welsh Government to deal with this, do they have any intention of bringing forward something that would address this issue, which is devastating communities not just in Wales but across the UK?

[Lord Bourne of Aberystwyth]

My Lords, I acknowledge that this is a serious issue. I am grateful to the noble Baroness for exaggerating my powers in relation to the Government as a whole regarding what legislation is forthcoming. I will have to write to her on that, but I acknowledge that it is a problem and I have given her an indication that if we deal with it in Westminster, of course any consequent changes would apply in Wales as well.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Committee: 3rd sitting (Hansard - continued): House of Lords
Tuesday 15th November 2016 Lords Chamber

[Baroness Morgan of Ely (Lab)]

My Lords, I support the amendment moved by my noble friend Lord Hain. The Welsh public sector workforce is the linchpin in ensuring that Welsh public sector authorities carry out their functions and provide services to the public. There is a well-recognised link between good employment practices and industrial relations within authorities and contractors and the quality of the services they provide to the public.

Since devolution, the Welsh Government have led with a distinct vision for public services, rooted in the principles of social partnership. These principles have guided the development of public service delivery in Wales, which is now distinct from that of England. As many noble Lords have noted, this amendment would not undermine the shared framework and protections in respect of employment and industrial relations, but would allow the Assembly to augment these where appropriate to support the effective delivery of devolved public services by Welsh public authorities. I ask the Minister how he thinks people based in London can have the first inkling of what is happening in our schools and hospitals, which are devolved.

For devolution to be meaningful, the Welsh Government must be able to continue to pursue social partnership, defining the relationship between public service employers and employees with integrity, transparency and trust. In proposing this reservation, the UK Government are seeking to divorce the terms of employment and industrial relations in public services from the delivery of those services. The reservation will fundamentally weaken the existing powers of the Government of Wales Act and will prevent Welsh Ministers exercising their legitimate functions prescribed by the Bill on public services. We know this because a leaked letter from the government legal opinion suggested that we currently have the rights over these powers.

I echo the point made by my noble friend Lord Murphy: let us avoid a future reference to the Supreme Court. This was supposed to be the final full stop in the whole legislative framework for the devolution settlement for Wales. If this goes through, I assure your Lordships that this will be not the full stop but the beginning of another battle.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank noble Lords who participated in the debate on this part of the Bill concerning employment law. I thank the noble Lord, Lord Hain, for his very kind words in opening the debate.

To put this in perspective, I think it is common ground between the noble Lord, Lord Hain, and I that employment and industrial relations law is a reserved area. I am not sure that that view is shared by the noble Baroness. She seemed to be suggesting that somehow our reservation meant the end of civilisation as we knew it. It is fundamental to the country that we live in. The UK Government believe that the underlying legislative framework concerning rights and responsibilities in the workplace must be reserved. I believe as much as anyone does in good employment practice. I worked in the public sector in Wales before I went into the Assembly. I was a member of a trade union. I do not think I can still be a member of that trade union or I would be. It is imperative that we have good employment law and good industrial relations. I would not contest this. This is a very important area, but we want a simple, unified system in Great Britain. As the noble Lord acknowledged, this is not something that is devolved to Scotland. It was not considered by the Smith commission or the Silk commission and it was not part of the St David’s Day process.

The system we have allows workers to be clear on their rights, whether they are in the public sector or the private sector, in England or in Wales. This is a fundamental principle and I cannot accept that the law underpinning the terms and conditions of public sector workers should be different from the law that underpins the rights of other workers. Whether that leads to better rights, more rights or worse rights, it seems fundamentally wrong. It is important to have common minimum standards which apply to all workers throughout Great Britain to minimise uncertainty and cost for both workers and employers. This is a matter of employment law; it is not about public service delivery.

Furthermore, it seems clear to me that if public sector employers in Wales, which would include the Welsh Government and public sector authorities, want to grant more favourable wages or more holidays then they are able to do so. They can do that presently and there is no question of it being taken back. Also, the judgment on the agricultural wages Act in the Supreme Court is an exception to the reservation. There is no question of that being clawed back as that specific piece of law remains.

If we had a diversified system of rights, workers might be reluctant to pursue the best progression opportunities in their organisation because they could get better rights in the private sector or the public sector—one or the other. They may find it more difficult to undertake collective bargaining and make their voice heard in isolation from colleagues in similar roles in Wales or the rest of Britain. I certainly believe in having strong industrial rights and strong employment rights—and obligations, too—but this has to be unified. As I said, both the Silk and Smith commissions came down in favour of a single employment regime, such as this, and there is nothing to prevent the Welsh Government or devolved public authorities agreeing specific arrangements with their staff, provided that they meet the requirements of employment and industrial relations legislation which apply across Great Britain.

The noble Lord, Lord Murphy, suggested that this amendment did not concern strikes. I am sure that I heard the noble Lord, Lord Hain, say that it related to altering the threshold, so it is about strikes and, as drafted, would certainly include the possibility of doing that. The Government could not sign up to that, nor to different rights on check-off or facility time. The rights should by all means be generous, but they should be unified across the country. I do not see that insisting on this is somehow apocalyptic in the way that some noble Lords suggested. The reservation of employment law ensures that there is a minimum floor of rights to offer workers key protections. At the same time, it recognises that each workplace is unique by allowing employers to provide additional pay or holidays in the public or private sector, if they want to do so.

Amendment 74 was put forward by the noble Baroness, Lady Humphreys, for the Liberal Democrats, and I have added my name to it for the Government. I am not sure whether that makes it an additional government amendment, but we are in agreement with removing the reservation relating to teachers’ pay. This has been a key priority for the Welsh Government and we are very happy to support this amendment. We have been listening on teachers’ pay and are content to support the noble Baroness’s amendment.

In relation to employment law, because we see specific difficulties regarding different rights in the public sector, some of which relate to the calling of strikes but do not affect pay and holidays—which the public sector can negotiate quite separately, as it does now—I urge the noble Lord, Lord Hain, to withdraw his amendment.

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[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness for moving this amendment in relation to the civil registration of births, deaths and places of worship. I have listened carefully to her argument. Civil registration functions, including the registration and administration of births, deaths, marriages, civil partnerships, adoptions and associated functions, and the registration of places of worship, are overseen by the Registrar-General for England and Wales, and the Government do not have plans to devolve any of these functions. Perhaps I may try to explain some of the difficulties that would arise in relation to devolution and answer some of the issues raised by the noble Baroness.

First, the noble Baroness raised the issue of the Welsh language, which is obviously very valid in relation to registration. However, it is already possible to register events in both English and Welsh where the events take place in Wales. The registration Acts, as extended by the Welsh Language (Wales) Measure 2011, the Welsh Language Act 1993 and the Welsh Language Act 1967 enable any person who can speak and understand Welsh to make a bilingual registration. Welsh local authorities, by virtue of their obligations under their Welsh language schemes, should provide registration staff who can speak, write and understand Welsh to accommodate citizens who desire this service.

The current position is that the Places of Worship Registration Act 1855 extends to England and Wales. Amendments 68 and 69 seek to separate civil registration functions by specifically devolving responsibility for the registration of places of worship to the Assembly. There are clear efficiencies in administering the responsibilities across England and Wales, and the inevitable cost of separating after over 150 years would appear to be disproportionate to any wider benefit.

The Registrar-General is an independent statutory officeholder—appointed under Section 1 of the Registration Service Act 1953—who exercises functions through the General Register Office, set up under Section 2 of that Act. As the arrangements are well established, there are significant links to, and dependencies on, the provision of civil registration in a unified system across England and Wales, including the use of a single computer system for all registrations. It works well in its current form and it does not make sense to separate out one element of it. I have not heard of any particular groundswell of support for a change in the law in relation to marriage in Wales. It is, in any case, not a devolved matter, and it is a very complex issue, as one can imagine, with the diverse faiths that we have in this country.

However, I can reassure the noble Baroness on one specific point. Looking at faith and integration in the devolved Administrations, I have already been in contact with the devolved Ministers in Scotland, Northern Ireland and Wales. I have arranged meetings so that we can discuss issues such as this, and I have had a positive response from Minister Carl Sargeant in Wales and from the other Ministers. We will be looking at issues such as this in the devolved forum, although I have to say that the issue of marriage law is not specifically a matter for the Department for Communities and Local Government; it is a matter for the Ministry of Justice.

However, it is a very wide-ranging issue because of the nature of the conduct of marriages. Some faiths’ marriages are recognised automatically if they take place in particular religious buildings—specifically, those of the Church of England, the Church in Wales and the Society of Friends, and synagogues—but that would not be true of other faiths as things stand. At some stage, this whole area probably will be looked at. However, as I say, this is not my specific ministerial responsibility, so I say that without being certain whether it is proposed at the moment. I do not think it is, but no doubt at some stage it will be looked at.

I am happy to discuss this further with the noble Baroness but, as I say, the Government have no plans to devolve this function. Therefore, I ask the noble Baroness to withdraw the amendment.

[Baroness Morgan of Ely]

My Lords, I will be very brief. I am not quite convinced by the argument that the separation would not lead to efficiency and cost savings—we could say that about almost all devolved areas of policy. The whole point here is that you need to respond to local needs. I am very happy to hear that the Minister has initiated the devolved forum to look at this, and I look forward to hearing more about that. It would perhaps be an idea for us to discuss this further. It is just another one of those things for which I can think of no good reason to retain it nationally. I have not been convinced that there is a good reason and so we will just have to agree to differ on that point. I beg leave to withdraw my amendment.

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[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness, Lady Morgan, for proposing these amendments.

Amendment 71 would devolve to the Assembly competence to legislate for how infrastructure funding should be collected in relation to development. This is currently accomplished through the community infrastructure levy, which applies across England and Wales, and the mechanisms we use to raise funding for infrastructure to support development are undoubtedly important. I appreciate the points made by the noble Baroness and I am aware of the issues raised on the matter in the other place. In addition, the Welsh Government have argued persuasively in discussions with the UK Government that the community infrastructure levy should be devolved. I can therefore confirm that, as the Secretary of State announced on 31 October, we are content to devolve competence over the levy to the Assembly and I expect to table a government amendment on Report to achieve this. I hope that that is reassuring to noble Lords.

The noble Baroness, Lady Morgan, made some interesting points, when speaking to Amendment 72, about why she believes that the compulsory purchase law in its entirety should come within the legislative competence of the National Assembly and not be reserved to the United Kingdom Parliament. The debate has highlighted the lack of clarity that exists in the current devolution settlement. As compulsory purchase is a so-called “silent subject”, the United Kingdom Government and the Welsh Government have formed different views on the extent of the Assembly’s legislative competence in this area.

This reservation has been the subject of detailed and productive discussions between the United Kingdom Government and the Welsh Government. The United Kingdom Government consider that legislating on the general rules and framework of the compulsory purchase system, such as the compensation regime in the Land Compensation Acts, falls outside the Assembly’s current legislative competence. However, we accept there are arguments that the Assembly could confer or modify powers in legislation for bodies to acquire land by compulsion for devolved subjects. These would include powers for local authorities to acquire land for housing, planning or education purposes, among others.

I assure the noble Baroness that discussions between the two Governments on this reservation are at an advanced stage and appear to be going well. Discussions are fruitful. I would therefore like to reflect further on her points as the Government conclude their consideration of the extent of this reservation.

Amendment 73, also tabled by the noble Baroness, Lady Morgan, seeks to remove the reservation concerning building standards and building regulations. The noble Lord, Lord Howarth, also spoke with effect on this. Before responding to the amendment, I note that, through earlier transfer of functions orders and Clause 47 of the Bill, Welsh Ministers will have powers to make building regulations in respect of almost all buildings in Wales. There will now be parity in England and Wales as to buildings for which building regulations may be made by the Secretary of State and Welsh Ministers respectively. As drafted, the noble Baroness’s amendment goes considerably wider than this to devolve competence to the Assembly over building standards. I am aware that this devolution is being sought by the Welsh Government. There are some genuinely difficult issues here in terms of organisations currently exempted from the application of building standards in England and Wales. I am none the less happy to reflect on this further, with a view to returning to it on Report.

I hope I have been able to provide reassurance to the noble Baroness and I ask her not to press her amendments.

[Baroness Morgan of Ely]

My Lords, things are getting much better. We have had three positive replies. I thank the Minister for his constructive approach on those issues. We look forward to working with him much more closely on them in the next few weeks, and to new amendments coming, we hope, on Report. I beg leave to withdraw the amendment.

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[Baroness Morgan of Ely]

My Lords, I agree with the case eloquently put by the noble Lord, Lord Rowe-Beddoe, and others. A reduction in air passenger duty would help air passengers, support growth and jobs and cut costs for businesses. I urge the Minister to support this amendment.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in this debate on air passenger duty, specifically the noble Lord, Lord Rowe-Beddoe, who has served with distinction in so many areas of public life in Wales, not least in relation to Cardiff Airport. His very good work is being carried on by Roger Lewis.

As we committed to in the 2015 St David’s Day agreement, the Government have considered the case and options for devolving APD to the Assembly, informed by consideration of the impact this would have on regional airports in England, as they happen to be; as things stand, Wales has only the one international airport, in Cardiff.

It is clear from the debate that noble Lords are aware that Cardiff and Bristol airports are about an hour apart, and the population density of the border area there means that more than 4 million people live in the overlapping catchment areas of the two airports. I must take issue with the noble Baroness, Lady Randerson, with whom I am normally in agreement as she is normally very fair: the distance from Cardiff and Glasgow airports to the English border is not the relevant one. There is no international airport in Berwick-upon-Tweed. It is a long while before you get to an international airport, which is Newcastle.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Committee: 3rd sitting (Hansard): House of Lords
Tuesday 15th November 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I am going on to tackle the point made by the noble Lord. The Assembly has no legislative competence as things stand although Welsh Ministers can exercise executive functions in that part of the Welsh zone beyond 12 nautical miles in so far as these have been conferred by United Kingdom enactments.

I take the points that have been made in relation to fishing, but as drafted we would need to look at the amendment. It proposes something fairly fundamental to the extent that it would vary the geographic extent of the Assembly’s competence. I would want to go away and have a look at that to see how it could be refined, if that is possible. This is not something that was considered by Silk or by the St David’s Day agreement and, as drafted, the amendment goes well beyond the issue of fishing licences.

My noble friend Lord Deben referred to some of the ramifications in relation to fishing policy as it exists at the moment through Europe and as it will exist in the future outside of Europe, but that is obviously still something to be refined. I want to reflect on that as well.

My noble friend Lord Crickhowell asked about the licensing of fishing vessels and the position in his former constituency of Pembroke—Preseli Pembrokeshire as it now is. I can well remember as an elected representative in the Assembly for that area going at about four o’clock in the morning to the fish market at Milford Haven to speak to electors. All the electors there were Spanish electors, although they did have vehicles that were licensed in Wales as part of the United Kingdom. I think that that remains the position at the moment, but how it will pan out post-Brexit I do not know.

If I may I will take the amendment away and look at it, but based on the fact that there are far more ramifications to this than just fishing, and even in relation to fishing there are of course considerable ramifications—beyond 12 miles it is an economic zone for the state of the United Kingdom and we would exercise powers in relation to that for the whole country. On the points made by the noble Lord, Lord Elystan-Morgan, I thank him for his always gentle and complimentary approach which has me doing things I would probably not normally agree to; I recognise the dangers. I hope that we have looked at things in relation to this legislation on a pragmatic basis because that is the way to approach it. Any general rule is going to have to give way to exceptions because as we can see there are always difficulties in these things. Sometimes they look much more straightforward than they are. My door is always open and we have set up meetings with many noble Lords. I am happy to do that, but as I say our approach to the legislation is a good British pragmatic one. I will look without prejudice at what I think is a much more difficult area than perhaps it looks on the face of it. With that, I hope that the noble Baroness will feel able to withdraw her amendment.

[Baroness Morgan of Ely]

I thank the Minister. His reply reminded me of the time when I was an MEP and I went to meet the head of the sea fishermen’s association of Wales, Mr Gonzalez. Times have changed; we will see what happens.

I am delighted that the Minister is happy to look at this again. We would be happy to redraft the amendment. I do not quite understand why, if Welsh Government Ministers have this competence, the Welsh Assembly cannot be allowed it. Perhaps I need to go away and think about it. We come back to the issue of aligning legislative and Executive competence. If the noble Lord could look at that, I will of course withdraw my amendment.

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[Baroness Morgan of Ely]

My Lords, we have heard some very passionate speeches and we are all very aware of how emotional the issue of water can become in Wales. The Minister is aware of how sensitive this issue is, especially following the travesty of the development at Tryweryn, which the noble Lord, Lord Wigley, mentioned. In fact, the Secretary of State, who is present —we welcome him to this Chamber—was clear in his public announcement yesterday that a second Tryweryn could never happen. The events at Tryweryn occurred in 1965, before I was born, but the fact that it has left an impression even on my generation says something about the powerful message that was sent at that time. I do not want to be churlish but I was fairly confident about this issue, having sought assurances from Welsh Government officials, who suggested that current planning laws already devolved to Wales could probably have stopped that scandal being repeated. I hope the Minister will confirm whether that is the case. As I say, I do not want to be churlish, so I cautiously welcome the announcement made yesterday by the Secretary of State for Wales in relation to water. However, I will reserve my judgment until we have seen the detail. On the face of it, the announcement should be a positive move but, as always, the devil is in the detail. Until we have had a chance to scrutinise that proposal, I intend to press ahead with our amendments.

The Bill amends Section 114 of the 2006 Act by limiting the grounds on which the Secretary of State can intervene to prevent the Presiding Officer submitting an Assembly Bill for Royal Assent. That section currently allows an intervention, so I look forward to the government amendment to remove it. The Minister should be aware that anything other than a complete deletion of this section will be looked on unfavourably.

Notwithstanding the points made by the noble Lord, Lord Crickhowell, I stand by Amendment 54, which would require the full devolution of water and sewerage to be aligned with the geographical boundary with England, as set out in the Silk report and the St David’s Day Command Paper. The work of the joint Governments’ water and sewerage devolution programme board, which was established following the St David’s Day paper to consider the alignment competence, found that changes can be achieved with minimal impact on consumers of water and sewerage services. I was delighted to see that in the letter to Peers that the Minister sent last week, he suggested that he was looking at this issue. Therefore, we hope that he will look favourably on this amendment.

The third amendment relates to the regulator. Ofwat, the regulator for water and sewerage providers in England and Wales, should be fully accountable to the National Assembly for Wales in respect of the functions it exercises in relation to Wales to better reflect the current devolution settlement on water matters. The amendment would make it a requirement for Ofwat to produce a report to Welsh Ministers and for that report to be laid before the National Assembly in respect of the functions it exercises in relation to Wales. The amendment would require the nomination of a board member as a joint appointment between the Secretary of State and Welsh Ministers to reflect a new arrangement which the Welsh Government consider necessary consequent to full legislative competence for water and sewerage.

Amendment 104 is proposed to amend Section 27 of the Water Industry Act to require the Secretary of State to seek the consent of Welsh Ministers before issuing general directions to Ofwat in respect of matters where functions are exercised by water and sewerage undertakers in Wales, or where licensed activities are carried out using the system of a water or sewerage undertaker wholly or mainly in Wales.

These changes are necessary so that Ofwat is fully accountable to the National Assembly for Wales and Welsh Ministers for those functions to be exercisable in relation to Wales. It is therefore important that we apply appropriate Assembly procedures to regulations which make provision within the Assembly’s competence. Scotland has great scope on environmental powers, including the regulation of water. It is only right that Wales is awarded equal authority in this respect.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lords who have participated in the debate on these amendments, which relate to water. I particularly welcome the contribution of the noble Lord, Lord Wigley, who moved his amendment with sensitivity and fairness on an issue which I know is very close to his heart. The Government are determined that never again should there be a Tryweryn. That is at the back of all our thinking on this issue.

I welcome the contributions from around the Committee. My noble friend Lord Hunt of Wirral spoke with passion of his time in north Wales, and the noble Lord, Lord Morgan, talked of his home county of Meirionnydd. I also welcome the contribution of the noble Lord, Lord Elystan-Morgan. I could not agree more with the sentiments that they expressed. I also thank my noble friend Lord Crickhowell—with his background and experience as chairman of the National Rivers Authority—for bringing his authority to this issue: aligning the border is not necessarily straightforward.

Water is of symbolic importance as well as practical significance to Wales. It evokes more passion and debate than probably any other issue relating to Welsh devolution. It is not just about Tryweryn; as the noble Lord, Lord Thomas of Gresford, reminded us, it is about the Dulas Valley as well, and there have been other issues. I thank noble Lords for contributing to the debate from the viewpoint of their own experiences. The strength of feeling has been amply demonstrated in their speeches.

In announcing the Government’s intention to devolve pay, my right honourable friend the Secretary of State for Wales signalled that the Government were exploring other aspects of the settlement to ensure that it is as clear and fair as possible. Yesterday, my right honourable friend Alun Cairns announced the Government’s intention to remove the Secretary of State’s powers to intervene on water and to replace them with a statutory protocol on water between the United Kingdom Government and the Welsh Government. Work will be done on that, and we hope to have the detail ready for Report.

That is a highly significant announcement. Water has been a challenging issue, as anyone familiar with recent Welsh history will know. The replacement of the intervention powers with a formal protocol marks a step change in the history of Welsh devolution—one that resolves past differences and provides clarity for the future. The move also removes any last impediment that there may be—at least in terms of this Bill; I hope the noble Baroness will be able to clarify this—to the Assembly giving its approval to the Wales Bill, subject of course to agreement on the fiscal arrangements.

The existing intervention powers were put in place in the Government of Wales Act 2006, when Peter Hain—now the noble Lord, Lord Hain—was Secretary of State. Since then, there has been a great deal of development in relation to devolution. This Bill marks a move to a new, durable and lasting devolution settlement, underpinned by a recognition of the maturity of the Assembly and the Welsh Government. In keeping with this, it is time to replace the Secretary of State’s powers to intervene on the Assembly and Welsh Ministers in relation to water with a statutory protocol between the United Kingdom Government and the Welsh Government which defines how the two Governments will work together on water-related issues—in particular, cross-border issues.

I confirm that the Government intend to bring forward amendments on Report to put in place the requirement for a formal agreement and to remove the intervention powers. In doing so, it will be important to respect the interests of water users in both Wales and England. As my noble friend Lord Crickhowell exemplified, this is not necessarily straightforward in every respect.

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[Baroness Morgan of Ely]

I am pleased that there will be movement on the intervention powers of the Secretary of State. That is a very positive move. I am also very pleased the Minister has clarified the fact that we could have stopped what happened at Tryweryn with the current powers—that has come across clearly. But he did not say, in relation to Ofwat, whether he is minded to move on that issue. The impression I got was that he was not, but perhaps he will clarify that.

[Lord Bourne of Aberystwyth]

My Lords, I am happy to clarify that point. I believe that the existing powers in relation to the Welsh Government and Welsh Ministers are sufficient, but I am very happy to look at that issue and cover it in the protocol, which could extend to that if it is something that we should be doing. I will happily discuss that with the noble Baroness.

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[Lord Bourne of Aberystwyth]

My Lords, I say two things to that. First, I am certainly not going to get into a Dutch auction as to what should come within on that basis. Of course I understand the point he makes, but my second point takes me back to one I have already made: we need a ready and willing dialogue between the Welsh Government and the National Assembly, as I think is happening, and between BEIS and Parliament. There is no reason to suppose that there is a malign intent regarding these projects. I know the noble Lord is not suggesting that.

Government Amendment 119G is a minor and technical change to Schedule 5. Under Clause 37, Welsh Ministers will have the ability to consent to electricity generating stations of up to 350 megawatts in waters adjacent to Wales. The vehicle for doing so will be Section 36 of the Electricity Act 1989, and Schedule 5 to the Bill gives Welsh Ministers the ability, by regulation, to amend the Section 36 application processes to suit their purposes. The Bill currently also extends that regulation-making power to Section 37 of the Electricity Act, which relates to the consenting of overhead power lines. However, as Section 37 consenting powers are not being devolved in the Bill, the power is ineffective and it makes sense to remove it.

Government Amendment 121 amends Clause 55. Further to the one-stop-shop philosophy for energy consenting advocated by the Silk commission, Clause 41 provides the Secretary of State with the ability to consent associated developments along with the principal consent for nationally significant infrastructure projects in the field of electricity generation and transmission. This will deliver significant streamlining improvements to a system which, at present, can require developers to assemble consents from a plethora of different authorities. It is wholly consistent with the Government’s policy of encouraging infrastructure development for these changes to be introduced as soon as it is practical. The amendment will achieve that by commencing the relevant provisions two months after the Bill’s Royal Assent.

On that basis, I urge the noble Baroness to withdraw the amendment, and for her and the noble Lord not to press the other amendments in the group. I intend to move the government amendments.

[Baroness Morgan of Ely]

My Lords, I thank those who have participated in this debate. I recognise that my amendment on electricity generation, distribution and supply was imperfect; it was meant to generate a debate of this kind. I understand that there are no limits in terms of power over onshore wind and certainly do not want to imply any malign intent on the part of the UK Government, but the complexity of the current model means that it is extremely difficult for Wales to compete in a global investment energy market. If it is much easier to go through a planning process in Denmark than in Wales, why would you not go to Denmark? It is a shame that we have not come to any conclusion on this, but it is an issue that we need to look at. We may need to look at how we streamline the process. It may be another issue where we could put a protocol in place, because we like protocols as a way of moving things forward.

On the cap beneath which we should be allowed to determine energy consents in Wales, I am not sure how much further we have gone. Dialogue is good, as the Minister suggested, but I am not sure what kind of commitment that represents. I hope to retain our ability to come back to discuss both amendments on Report, but for now I beg leave to withdraw Amendment 55A.

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[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who participated in the debates on heat and cooling and on energy conservation. Amendment 56 seeks to remove the reservation that deals with the supply of heat and cooling. It is important to be clear that the reservation is concerned with policy on heat supply, which is analogous to the supply of every other type of energy. Heat is strategically significant and represents almost half of our energy use and around one-third of carbon emissions. I can tell the noble Lord, Lord Howarth, that the Government have a very definitive energy policy—not just when I was Minister, I hasten to add—very much signing up to the climate change targets internationally, along with many other countries, as he will know; a commitment to nuclear, which I do not think is shared, certainly, by his party leader; and a commitment to diverse sources of energy. Let us put that canard to rest: there is a very definitive energy policy.

The policy in relation to heat is significant. Heat represents, as I say, almost half our energy use and around one-third of carbon emissions. The reason that we are seeking to reserve this is because it is a relatively new technology; it is about supplying heat, through policies such as the renewable heat incentive, the heat networks investment project, the combined heat and power quality assurance scheme and innovation support, and through initiatives such as the smart systems and heat programme, all of which are part of the United Kingdom’s energy policy. I accept that rollout and delivery will always be at a local authority level, but it is question of how the framework is set. These policies already exist and benefit the people of both Wales and England. It seems clear that devolving this area would increase costs, due to a loss of economies of scale, and would add complexity and confusion for businesses and householders and add to bills. The noble Lord, Lord Howarth, touched on affordability, which is certainly a prime concern of the Government, along with security of supply and ensuring that energy is green.

Heat is not simply a local issue. There are strategic decisions to be taken over the coming years, including options that would require action at a national level, such as decarbonisation, possibly even decommissioning, of the existing gas grid. These emerging national-level heat issues mean that it would be far more effective to maintain consistency between England and Wales, and it is why grid and infrastructure issues relating to oil, gas and electricity are also reserved in Scotland as well as in Wales. I hope I have explained the Government’s reasons for this reservation and why I am not able to accept the amendment.

Amendment 57 seeks to remove the reservation that deals with energy-efficiency requirements. The reservation uses the term “energy conservation” to reflect the language in the existing devolution settlement. It is our contention that energy efficiency is a subset of energy conservation. I will write to the noble Baroness, Lady Morgan of Ely, with some of the technical detail on that, if it would be helpful. The settlement provides for the Assembly and Welsh Government to have powers on energy efficiency, except via the use of regulation or prohibition. It is not as if there is no power in relation to energy-efficiency; it is just in relation to regulation or prohibition. For example, it would allow schemes to advertise energy-efficiency measures—I think that is probably something the Welsh Government already do, although I stand to be corrected on this.

The reservation in this amendment, however, covers home and business energy-efficiency measures that are imposed by regulation, and so have been implemented by, or under, legislation or equivalents, such as licence conditions imposed on gas and electricity suppliers. Having separate energy-efficiency obligations for England and Wales would be likely to increase the complexity and costs for organisations involved in delivering the obligations, with an impact on consumer bills. That is something the Government cannot sanction and, on that basis, I urge the noble Baroness to withdraw her amendment.

[Baroness Morgan of Ely]

I thank the Minister. I find it quite odd when, in one breath, there is a suggestion that we need to meet decarbonisation targets and yet there is an understanding that climate change targets also have to be met at local levels. I think the Welsh Government have targets on that. I do not think you can have it both ways. On grid and infrastructure, of course there is a recognition that there needs to be a UK grid and infrastructure, but I contend that that does not make sense in terms of local heat networks. I would be very interested to see a little more detail on what the Minister suggests in relation to energy conservation, but the fact that energy efficiency is already largely devolved is perhaps something that has not been recognised in the way we had hoped. With that, I beg leave to withdraw the amendment.

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[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in the debate on these issues relating to transport. I turn first to Amendment 57A, moved by the noble Baroness, Lady Randerson. Section E1 of new Schedule 7A lists the road transport powers that are reserved. Amendment 57A would give the Welsh Government responsibility over driver training, testing and certification. The words “including training, testing and certification” are intended to clarify further what is meant by driver licensing, which is an exception to the Assembly’s competence under the current devolution settlement. It is not intended to modify the Assembly’s current competence; I can confirm that and it will of course appear on the record. It is important for business and road safety for there to be a consistent approach across Great Britain. It would be impractical and costly for the transport industry to follow different rules on how drivers should learn to drive and have a different driving test from the rest of the country. I do not think the noble Baroness was suggesting that. Moreover, road safety is reinforced by all road users having to observe the same rules so that everyone is able to fully understand the consequences of not observing those rules.

Amendment 57B, as tabled by the noble Baroness, Lady Morgan, would except the registration and regulation of bus services from the road transport reservation. The Welsh Government already have the ability to determine a number of aspects of bus policy including concessionary fares, smart ticketing and the provision of subsidies. The devolution of the registration of local bus services—a St David’s Day commitment—is already provided for in the Bill and will complement the Assembly’s existing powers. Welsh Ministers will have the power to legislate in respect of bus franchising, quality contracts and quality partnerships. I will write to the noble Baroness more specifically on some of the exceptions and issues that she raised. I am sure she realises that one or two of those were fairly technical. I do not have the information to hand.

Amendment 97 will not be moved, as I understand it, but I will refer to it briefly— notwithstanding that I think the noble Lord, Lord Wigley, said that to confirm his understanding. Perhaps I could turn first to Amendment 58, which was spoken to by the noble Lord, and seeks to extend the legislative competence of the Assembly in relation to railway services to include the Wales and Borders rail franchise. It is not clear what the intended geographical scope of these powers would be, nor what particular functions potentially relevant to the procurement and operation of the franchise the Assembly would have competence over. This is somewhat like the issue relating to water; at issue is that the railway line is partly in England and partly in Wales. On railway services, the Assembly currently has legislative competence only in respect of financial assistance relating to railway services, subject to limited exceptions in relation to the carriage of goods, railway administration orders and compensation of passenger service operators for public service obligations, under EU Regulation 1370/2007.

Extending the Assembly’s legislative competence in relation to the provision of railway services was not recommended by the Silk commission and so was not considered in the St David’s Day process. The Bill therefore seeks to preserve the existing devolution settlement in relation to legislative competence for railway services. It may also be helpful if I confirm that an amendment to the Assembly’s legislative competence is not necessary to give effect to our agreement with the Welsh Government to take forward the devolution of executive franchising functions for Welsh services to Welsh Ministers.

Amendments 59 and 60, tabled by the noble Lord, Lord Wigley, seek to extend the Welsh Assembly’s legislative competence in relation to rail infrastructure in Wales and the specification and funding of Network Rail’s operations in Wales. As he will no doubt be aware, the Silk commission recommended the transfer of executive functions in relation to the specification and funding of Network Rail’s operations in Wales. This recommendation was considered as part of the St David’s Day process but there was no political consensus to take it forward. The Government do not intend to revisit this issue, given those discussions. I can however assure the Committee that the Department for Transport continues to liaise closely with the Welsh Government on the specification and funding of Network Rail’s operations in England and Wales for each five-year railway control period, to ensure that requirements in Wales for increased capacity on the network are reflected. The Government also welcome the significant investments made by the Welsh Government in the rail network in Wales to support the Welsh economy. These complement the significant investments in the strategic capacity of the England and Wales rail network that have been, and will continue to be, made by the UK Government that benefit Wales.

Amendment 70, which was tabled by the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Wigley, seeks to remove planning in relation to railways in Wales from the list of reservations. The underlying issue is the interpretation of the current devolution settlement set out in the Government of Wales Act 2006. The UK Government and the Welsh Government interpret the extent of current devolved competence in relation to this issue differently. This again emphasises the lack of clarity that exists under the current devolution settlement. It also points to the need to ensure that the Bill removes any uncertainty and provides clarity going forward. Establishing a clear boundary between what is devolved and what is reserved is, of course, a key objective of this Bill. However, Amendment 70, without further clarification, has the potential to introduce further uncertainty to the devolution boundary by creating a conflict with the “railway services” reservation in Section E2 of new Schedule 7A. As such, we need to be able fully to consider the issue and the most appropriate approach to adopt.

However, I am aware that the Assembly has already exercised competence in this area, as referred to by the noble Baroness, Lady Morgan, under the Planning (Wales) Act 2015. In the circumstances, I therefore propose to take this issue away for detailed consideration and to return to the House and set out the Government’s position on Report. With that assurance, I hope the noble Baroness will not press the amendment.

Amendment 109, in the name of the noble Baroness, Lady Morgan of Ely, seeks to press the UK Government to a decision on a matter they committed to consider in the St David’s Day Command Paper. That matter is whether to legislate for Wales in a manner similar to provision in the Scotland Act 2016 regarding the powers of Scottish Ministers, as committed to in the Smith commission agreement, to enable Welsh Ministers to invite United Kingdom public sector operators to bid for rail franchises for which they are the responsible franchising authority. I say in parenthesis that, as my right honourable friend the Secretary of State set out in other place, the Railways Act does not prevent not-for-profit bidding for franchises but prevents public sector bidders.

I recognise that the Welsh Government are keen to have such flexibility, in addition to that available under current legislation, to encourage bids from other sector organisations. The Government consider it would be premature to reach a decision on this matter in advance of final agreement with the Welsh Government on the terms for future devolution of executive franchising functions. At present, Welsh Ministers do not have any statutory powers to procure rail franchises. The effect of the proposed amendment would be to confer discretion to allow public sector bidders for franchises consisting of, or containing, Wales-only services on the Secretary of State. This would be inconsistent with the United Kingdom Government’s policy not to allow UK public sector operators to bid for rail franchises.

As the noble Lord, Lord Wigley, indicated, I am committing to the progress made between the United Kingdom Government and the Welsh Government in preparing for the transfer of franchising functions to Welsh Ministers. That is something we are seeking to do and are committed to do. As part of reaching final agreement, we will be able to reach a decision on the issue raised by this amendment regarding Welsh Ministers’ ability to invite bids from public sector operators in future procurements.

[Baroness Morgan of Ely]

Can the Minister give us a timetable for when those decisions will be made? Will it be before Report or is it an issue that will be resolved after the Bill has left this House?

[Lord Bourne of Aberystwyth]

My Lords, to some extent I am in the hands of noble Lords as to when we complete Committee stage—a subtle hint if ever there were one. I hope and intend that we should be in a position to bring this forward on Report, but certainly during the passage of the Bill. I hope it will be before Report.

Amendments 83A, 83B, 119C, 119D, 119E and 119F amend Clause 27 and Schedule 5 so that all the Minister of the Crown powers in Sections 6, 6A and 6B of the Transport Act 1985 are transferred to Welsh Ministers by the Bill, which I am sure noble Lords will welcome.

As a result of the complexities involved in the traffic commissioner being a reserved body but exercising some devolved functions, the original clause transferred the regulation-making powers in Sections 6 and 7 of the Transport Act 1985 that related to the traffic commissioner. This was to provide clarity in the Bill, with the remaining powers to be transferred via a subsequent transfer of functions order. Following discussions with the Welsh Government, we have agreed to transfer all the regulation-making powers relating to the registration of local bus services in Section 6, 6A and 6B of the Transport Act 1985 in the Bill.

On the basis of that information and the assurances and responses I have given, I urge the noble Baroness to withdraw her amendment.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Committee: 2nd sitting (Hansard - continued): House of Lords
Monday 7th November 2016 Lords Chamber

[Baroness Morgan of Ely]

I think the noble Lord has decoupled that amendment. We will deal with heating and cooling at a different time.

[Lord Bourne of Aberystwyth]

I apologise. I am grateful for the intervention. In that case, I have dealt with our amendments. I am grateful to the noble Baroness for her timely intervention. I beg to move.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Monday 7th November 2016 Lords Chamber

[Baroness Morgan of Ely (Lab)]

We have quite a strange group of amendments here but, rather than uncouple them, I would like to suggest a degree of support for the points raised by the noble Lord, Lord Elis-Thomas, and the question from my noble friend. We believe that our amendments, notably Amendment 29 in the next group, will achieve the same result of a better alignment between the Assembly’s legislative competence and Welsh Ministers’ executive powers. I shall save my comments on the general principle of aligning legislative and executive powers until the next grouping.

I shall address the specific issue of fishing, addressed by one of the government amendments in this group. At present, Welsh Ministers have powers to exercise fisheries functions in relation to Wales and the Welsh zone. The Welsh zone includes a zone of 12 nautical miles next to the Welsh coast and the territorial sea, which, because Ireland is to the west of most of Wales, reaches beyond that point significantly only in the south-west of Wales, on the Pembrokeshire coast. Unfortunately, the extent of Welsh Ministers’ powers do not reflect the arrangements in England and Scotland, with those Administrations having executive powers in relation to their relevant areas. My understanding is that the Welsh Government have pursued a solution to this for several years, so it is encouraging that the amendment has been brought forward.

The amendment goes some way to addressing requirements, but it requires further work to work properly. For example, as currently drafted, the amendment would permit functions under Section 5 of the Sea Fish (Conservation) Act but not Section 5A, which permits functions to be exercised for “marine environmental purposes”. A number of other aspects need to be considered. It would be better if the amendment mirrored the scope of the Welsh Zone (Boundaries and Transfer of Functions) Order 2010, which covers the sort of functions required. It would help to achieve a degree of consistency around who controls fisheries management measures. While we support the Government’s amendment on fisheries as far as it goes, we hope that further work can be done on this matter before Report to ensure that the provisions are fit for purpose.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank noble Lords who have participated in the debate on these amendments, and the noble Lord, Lord Elis-Thomas, for bringing them forward. I am well acquainted with his burning passion in relation to these matters, which I know we have discussed many times before.

I turn to the amendments, through which the noble Lord and the noble Baroness seek to extend the common law-type powers of Welsh Ministers. I shall break off and explain what I think that means to the noble Lord, Lord Howarth. The issue here is that, yes, common law grows up over a period of time, mostly, though not exclusively, from the contribution of judges—some of it would be by convention in other ways, I think. Here we are seeking to confer these types of powers on Welsh Ministers. We cannot do that by the effluxion of time, because time has not allowed that, so we are taking what is already the position in relation to the common law powers that exist for UK Ministers and saying that we believe that those types of powers should exist for Welsh Ministers. We are transposing them because we cannot build in the period of time element.

It is our view that these amendments would undermine the protection given to a very limited number of Minister of the Crown functions, which the Assembly may modify only with the consent of United Kingdom Ministers. Clause 18 is a key part of delivering the clear settlement that we are putting in place through this Bill. Ministers of the Crown and Scottish Ministers already exercise these common law-type powers. This clause would put Welsh Ministers broadly on the same footing as Ministers of the Crown and Scottish Ministers by ensuring that in future they too will be able to exercise such common law powers.

The noble Lord, Lord Elis-Thomas, asked a very fair question in relation to the royal prerogative. I am very willing to meet with him to discuss this further but, so far as we have been able to ascertain, the royal prerogative has not been conferred on Welsh Ministers. They derive their powers from transfer of function orders or under the legislation. The noble Lord probably knows more about the royal prerogative than I do; I am very happy to meet with him on this issue.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, the noble and learned Lord is absolutely right. I correct myself.

[Baroness Morgan of Ely]

The noble Lord has not clarified to me why he would object to the principle of this alignment between executive and legislative competence. He has told us that he has looked at all these different things, has brought most of them forward, that there is a long list and that he does not think there are many more. But why would he object to the principle of this alignment?

[Lord Bourne of Aberystwyth]

My Lords, with respect, for the reason I have given—namely, that it is fine as a principle but, because it on occasion throws up circumstances that cannot be foreseen, it is wise that we go through it with a fine-toothed comb. If we had not done so, it would create difficulties with the alignment we are seeking on water, for example.

[Baroness Morgan of Ely]

Would it not be possible to do it the other way round and make an exception to the principle? Would that not be easier?

[Lord Bourne of Aberystwyth]

Once we know what the exceptions are, of course, that is the case, but we need to go through them to make sure that there are none of those exceptions.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

I thank my noble friend for that intervention. He is absolutely right about the need for partnership working between the Government in Wales and the Government at Westminster—as happened in the past, I think he would acknowledge, in relation to disasters that happened in the port. As I said, I have also been involved with the port of Milford Haven through the enterprise zone. It is my understanding that there is co-operation with the Welsh Government at the moment, but there is certainly consultation on certain matters on the part of the port with the Government. It is, of course, important that they are fully engaged. As I have said, I will go and look at it, but without making any promises.

Amendment 98 would require the Secretary of State to consult with Welsh Ministers while setting the strategic priorities relating to the Secretary of State’s delivery, in Wales, of functions under two pieces of primary legislation: the Coastguard Act 1925 and the Merchant Shipping Act 1995. These functions are all reserved matters, exercisable by the Secretary of State for Transport, and are in practice delivered in the United Kingdom by the Maritime and Coastguard Agency, an executive agency of the Department for Transport.

The strategic priorities involved would cover decisions over subject areas such as the 24-hour search and rescue helicopter service provided by the coastguard, and the promotion of seafarer health and safety standards. “Strategic priorities” does not cover operational activities and incident response decisions, which remain the responsibility of the chief executive of the Maritime and Coastguard Agency. Such consultation would normally be effected through administrative arrangements. However, I recognise that the noble Baroness’s amendment mirrors the action taken by the Government through the Scotland Act 2016. Despite having said we will not slavishly mirror things, I will look at that and reflect on the issues raised by the noble Baroness in the amendment. In the light of that, I ask that she does not press her amendments in this group.

[Baroness Morgan of Ely]

I thank the Minister for that and welcome the amendments he put forward relating to the modal grants, the cross-border initiatives and the loans for harbour authorities. I note he said there was an exception and that trust ports would not be allowed to access those grants. I assume they would be allowed to access other UK grants. Perhaps he could clarify that.

[Lord Bourne of Aberystwyth]

My Lords, I think that related just to reserved trust ports, so it would only be those that are reserved in relation to the Milford Haven issue.

[Baroness Morgan of Ely]

I thank the Minister. I noted he said that Milford Haven was essential to the Bill. He then said that he would take another look. I ask him to think about the issues that people have underlined today. The integration of the economy, the environment and safety have all been touched on. The noble Lord was on the enterprise zone for that area. He will therefore be aware of how crucial that interactivity—the interaction between local communities and the local authority—is. All those things need to be co-ordinated. Would it not be a lot easier to co-ordinate that if that power were given to the Welsh Assembly? I appreciate that he will also look at the issue relating to the coastguard and I would be prepared to withdraw the amendment.

[Lord Bourne of Aberystwyth]

My Lords, on the point the noble Baroness raised on the enterprise zone, it exhibited that the current arrangements work very well, but I will have a look at it. In the meantime, I propose that the amendment be agreed to.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Committee: 2nd sitting (Hansard): House of Lords
Monday 7th November 2016 Lords Chamber

[Baroness Morgan of Ely (Lab)]

My Lords, I was 12 in 1979 when we had the first referendum on whether we wanted devolution to come to Wales, and I have had a little taster this afternoon of what it must have been like during that campaign. But we have had a different result from that in 1979; the Assembly has been established for 19 years and it is maturing and developing.

I thank my noble friends Lord Murphy and Lord Hain for tabling this amendment because this issue is worthy of debate. I am afraid the people of Wales were told when we established the Assembly that we would put the issue of income tax-varying powers to them in a referendum. We have heard today what a risky business referendums are; I concur—I also have the scars from the recent referendum—and, let me tell you, I am no longer a fan of referendums.

It is worth repeating the question asked by my noble friend Lord Murphy: what has changed since the last Bill that the noble Baroness, Lady Randerson, brought through the House, and what is the difference between that Bill and this one? What has made the Government change their mind on this issue? It is worth drawing attention to the fact that Wales is not a rich country. My understanding is that only about 6,000 people in Wales pay the highest rate of income tax, those who earn over £150,000, while only one in 16 pay the 40p higher rate of income tax. We are not talking about people that it is easy to tax, so it is worth remembering and understanding that this is not going to be a power that is easily exercisable.

However, I beg to differ with my colleagues on this issue, because times have changed. As the noble Baroness, Lady Randerson, said, the Assembly has moved a long way during those 19 years. On top of that, we have the issue of austerity. The IFS said recently that, by 2020, there will have been an 11% cut since 2010 in funding coming to Wales. That is hitting some of the poorest members of our society. Austerity is hitting not only our revenue budgets but our capital budgets. It is all very well to talk about borrowing money from the European Investment Bank, but we do not even know whether we will be able to access that kind of funding in future.

Why do I support the amendment? I support the amendment because, at this difficult time, borrowing against this income stream will be essential if we want to invest in our infrastructure in Wales. There is demand for better infrastructure. People want improvements in Wales. That demand is there. However, it is important to understand—we will come to this in the next amendment—

[Lord Bourne of Aberystwyth]

I am grateful to the noble Baroness for giving way. I do not think that she is speaking in favour of the amendment; she might want to clarify that.

[Baroness Morgan of Ely]

I am not speaking in favour of the amendment because of the next amendment. We need an increase in the borrowing powers because of the funding stream and the devolution of taxation. That is critical to investment in Wales.

We know that the Welsh Government and the UK Government have an understanding and that there will be an agreement on the fiscal framework before we enter the next phase of the Bill. It is important that, in that fiscal framework, we have an offset to the block grant in return for that tax revenue. We need to see how that offset will interact with the Barnett formula, and we need the funding floor to be made permanent. It is critical that we should not accept a situation where Wales will be materially worse off as a consequence of devolving taxation. That would not be good for the people of Wales?

We expect the Minister to negotiate that with the Finance Minister in the Assembly, but can he can assure us that that fiscal framework will be resolved before we have an understanding? We will come in the next amendment to the amount that may be borrowed, but can he assure us that we will be able to have an increase in borrowing powers as a result of the fiscal autonomy that will be coming to Wales?

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in this debate. For the sake of clarity—I correct myself as well—this is a clause stand part debate rather than a debate on an amendment to Clause 17.

I thank the noble Lords, Lord Murphy and Lord Kinnock, for moving and speaking to the Motion that the clause do not stand part. I disagree with their intent. As the noble Lord, Lord Murphy, said, we have been here for nearly 20 years since the first successful referendum in 1997. Circumstances massively changed in that time, as the noble Baroness, Lady Morgan of Ely, said.

Let me try to deal with some of the points. Circumstances have changed since the Silk commission’s first report. The noble Lord, Lord Wigley, has been consistent on this topic, as has the noble Lord, Lord Kinnock. I confess that I have not. I am more like the brother-in-law of the noble Lord, Lord Thomas of Gresford: I have changed my mind on some of these issues. I should set that out first. In the Silk commission, all four parties recognised the need for income tax powers for the National Assembly for Wales. If it was to become a full legislature in the proper sense, it was accepted that it needed income tax powers. Some noble Lords have used the phrase as if it meant all income tax powers; of course, it does not; some income tax powers remain with the United Kingdom. We should make it clear that this is not transferring all income tax powers; it is transferring some. It is a significant change, I agree, but the suggestion made by the noble Lord, Lord Kinnock, for example, that it is a fundamental, apocalyptic change to the way things happen but that it will not be exercised is somewhat inconsistent. It cannot be both apocalyptic and not be used.

I very much hope that it will be used. We cannot necessarily draw conclusions from what has been happening in Scotland. I hope that the National Assembly for Wales will be more imaginative. I was there for 12 years, and there was evidence of a lot of free thinking on many issues, not least in this area, so I do not accept that the power will not be used. We must realise that it is a limited power; it is not transferring all income tax powers to Wales.

I agree with the points made by the noble Baroness, Lady Humphreys, and the noble Lords, Lord Wigley, Lord Crickhowell and Lord Morgan, about circumstances having changed, that perhaps we make use of referendums too freely, and that they are not always appropriate. I feel that if we were to insist on a referendum, it is arguable that we would be holding Wales back. In some quarters—I certainly exempt the noble Lord, Lord Kinnock, from this—it is being put forward as a means of trying to defeat the proposal or slow things down. We would not be doing Wales a great service if we did that. This is a power for a purpose, as was identified by the Silk commission. It is bringing in accountability. It is making what I hope becomes the Welsh Parliament, in name as well as reality, a real Parliament with this element of tax-raising power on income tax.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lords who have participated in the debate on Amendment 24, and I thank the noble Baroness, Lady Morgan of Ely, for moving it.

The amendment seeks to quadruple the Welsh Government’s capital borrowing limit set in the Wales Act 2014 from £500 million to £2 billion. As the noble Baroness is of course aware, borrowing falls within the scope of the funding discussions between the United Kingdom Government and the Welsh Government that are proceeding alongside the Bill. As we know, the Bill cannot proceed without the legislative consent Motion, which is dependent on those discussions being successful.

I refer noble Lords to the communiqué published following the Joint Exchequer Committee meeting in September. The two Governments discussed the rationale for the existing capital borrowing arrangements and agreed to consider changing them. Therefore, I can give the noble Baroness the undertaking that she seeks, and I think it is consistent with what I said in the previous debate. It is unthinkable that the matter would not be raised. However, I think she will understand that I cannot give a specific figure. Indeed, the comments of the noble Baroness, Lady Randerson, perhaps indicate that we do not want to constrain the figure in case the discussions lead to it going higher than that. I have given noble Lords an undertaking, which I will repeat: ahead of Report I will give a summary of where we are on the fiscal discussions, which are going well—including, as I understand it, in this area.

As noble Lords have indicated, there are two key considerations in relation to the borrowing limit. The first is ensuring that borrowing is affordable for the Welsh Government. Of course, the transfer of the taxation powers that we have just been looking at will certainly help in that regard, as will the smaller taxes that have already been transferred. The second is ensuring that borrowing is appropriate within the funding arrangements for the United Kingdom as a whole. I am sure that those two points are being borne in mind during the discussions—which, as I said, seem to be going well.

In relation to Welsh Government affordability, as I have indicated, we need to ensure that the Welsh Government have sufficient independent revenues to manage their borrowing costs. As I said, the new taxation powers that are being carried forward by the Bill will help in that regard. In relation to the wider United Kingdom funding arrangements, it is important to recognise that, within any given fiscal position, additional Welsh Government borrowing will mean less spending in the rest of the UK, including in relation to some of the issues funded for Wales from United Kingdom taxation.

Those are the issues being looked at, and I can give two undertakings: first, we will not get the legislation without the LCM; and, secondly, I repeat the undertaking that I gave at Second Reading—I appreciate that not all noble Lords were here for that—to give a summary of where we are so that noble Lords will be aware of it ahead of Report.

I understand the points that are being made and I think all noble Lords who have spoken—the noble Lord, Lord Wigley, my noble friend Lord Crickhowell, and the noble Lords, Lord Howarth and Lord Berkeley—recognise the need for these powers in order that the Welsh Government can borrow. Of course, it is then for the Welsh Government to decide how they borrow and how they spend the money—that is within their devolved competence.

Given the undertakings I have given, I ask the noble Baroness to withdraw her amendment.

[Baroness Morgan of Ely]

I thank the noble Lord for those undertakings. I was particularly pleased to hear that the amount could even go above £2 billion. We will certainly underline and take note of that. I beg leave to withdraw the amendment.

Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Committee: 1st sitting (Hansard - continued): House of Lords
Monday 31st October 2016 Lords Chamber

[Baroness Morgan of Ely]

My Lords, Schedule 3 will provide some welcome clarity about competence in relation to Welsh public authorities. So long as Assembly Bills meet the competence tests in the Wales Bill, the Assembly will be able to legislate in relation to Welsh public authorities without needing to seek the consent of the UK Government.

Most of the UK Government’s amendments add to or clarify the list, and we support them. We are also very content with the removal of special health authorities. I understand that they will be treated differently and need not be in Schedule 3. I beg to differ with Liberal Democrat Peers who suggested removing from the list of institutions in Wales a reference to the further or higher education sectors, the Higher Education Funding Council for Wales and the regulated institutions under the Higher Education (Wales) Act, to which my noble friend referred.

We do not think it appropriate to support any amendments which might act in such a way as to restrict the legislative competence of the National Assembly in respect of these further and higher education bodies. Having said that, I am very grateful to the noble Baroness, Lady Randerson, for outlining the real concerns of the institutions, which need to be addressed. I thank the Minister for agreeing to clarify this issue and for looking at attempting to reflect that special position and ensure that they can continue with their current status.

However, I am afraid that removing these institutions could create uncertainty in the future over the need for ministerial consent where a provision of an Assembly Act confers functions on such a body or removes them from it. No such uncertainty exists in relation to the current legislative competence of the Assembly, and the uncertainty would not arise in the future if these bodies remained on the list.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords for participating in the debate on this group of amendments. In response to the noble Baroness, Lady Randerson, and the noble Lord, Lord Thomas of Gresford, I will just perhaps restate some of the points I made earlier. Very much on the basis that we will still cover these institutions, if there is a way of looking at the nomenclature, such that we can seek to ensure that they have the continued strength and independence that they enjoy at the moment, we will do that, as that is very much in the best interests of Wales. We have first-class educational institutions at university and further education level, and we want to maintain that but at the same time ensure that they are brought within this part of the legislation.

I take the point that the noble Lord, Lord Murphy, made about the Higher Education Funding Council for Wales and agree it does not seem to be in the same category as the universities. I think the noble Baroness, Lady Randerson, agrees with that. That is different in nature, but if there is a way of protecting the universities and the further education bodies and their charitable status, at the same time as covering them within the Welsh public authorities, universities and so on, I am keen to do that, and will ensure that we look at the Bill in that regard. I thank noble Lords who brought forward these amendments but urge them not to press them at this stage.

Draft Wales Bill: Silk Commission

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Monday 30th November 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is perhaps aware that the draft Wales Bill gives power over this issue, and over elections to the Welsh Assembly in general, to the Welsh Government. That being the case, this is a matter for Cardiff and for Wales to determine.

[Baroness Morgan of Ely (Lab)]

My Lords, tomorrow Wales will become the first UK country to adopt the soft opt-out approach to organ donation. This was approved by the National Assembly for Wales, after a long and comprehensive debate and widespread public consultation. Will the Minister clarify whether the Assembly could have introduced such a Bill under the new measures proposed in the draft Wales Bill; or would it have been forced to go cap in hand to a Minister in Westminster to ask permission because, as the First Minister has claimed, the Government are trying to roll back the devolution settlement for Wales?

[Lord Bourne of Aberystwyth]

My Lords, the First Minister has recently acknowledged that significant progress is being made on the draft Bill. In terms of the consenting provisions, if there is an aspect of legislation from this House to apply in Wales, it needs a legislative consent Motion and vice versa. It is not one-way traffic. Because we are a United Kingdom, it is important to preserve the consenting process. Discussions are going on on the precise scope of that process.

Draft Wales Bill

Debate between Lord Bourne of Aberystwyth and Baroness Morgan of Ely

Thursday 29th October 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

The noble Lord is quite right about the role of that committee of the National Assembly for Wales. It does very good work and of course it will be listened to. As I understand it, the Secretary of State will be giving evidence to the committee to discuss the Bill. I emphasise that the Bill is in draft form at the moment.

[Baroness Morgan of Ely (Lab)]

My Lords, the Welsh Government suggest that only five of the 19 Welsh Government Bills that are now Acts could have proceeded to Royal Assent had the new draft Bill’s provision been in place, either because they would now be outside the limits of the Assembly’s power, or because new UK ministerial consent obligations would have had to be satisfied first. Does the Minister accept that, as the draft Bill stands, the newly proposed reserved powers model of governance has been written in such a restrictive way that it will curtail the Assembly’s current power and lead to an even greater potential for legal conflict between Westminster and Wales?

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness will not be surprised to hear, as we had a brief discussion on this issue, that I do not accept that. I do not think that that is the case. The First Minister and the Secretary of State are looking at this very closely. It is the case that if a piece of legislation in Wales has an effect in England—for example, adoption agencies set up in England—then it will need the consent of this House. Similarly, if we wanted to do something in Wales in a devolved area, we would need the consent of Wales. That is not unreasonable. Discussions are ongoing; this is in only draft form.