Wales Bill

Lord Crickhowell Excerpts

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

[Lord Thomas of Gresford (LD)]

My Lords, I apologise for the absence of the noble Baroness, Lady Randerson, who is heavily engaged in the Moses Room on the High Speed Rail Bill. I therefore stand in her place.

My experience with Cardiff Airport is somewhat limited. I have flown into it only once, in an eight or twelve-seat plane from Harden, in north Wales. In those days there was no gap between the passengers and the pilot. As we came over the hills and the valleys and headed into Cardiff Airport, the co-pilot said to the pilot, “Do you think we will make it?” This did not fill his passengers with a great deal of confidence.

I support, as I always have, the concept of devolving air passenger duty in order to improve the use of Cardiff Airport and to provide a facility for the people of south and mid-Wales. I did a little research this morning on Bristol, because Bristol seems to be the problem, and discovered that it has only one flight that goes any distance: a weekly flight to Cancun, in Mexico, which is not one of the major long-haul trips. As the noble Baroness, Lady Finlay, pointed out a moment ago, the major airports in the south of England are overflowing. We are looking for solutions to the planes that are stacked and the passengers who fill the terminals in Heathrow and Gatwick. Here we have the possibility of a facility which will take long-haul traffic. If a proper incentive were given by a reduction in air passenger duty, then I am quite sure that the people of south Wales and indeed of the borders would flock to Cardiff Airport. It is common sense that this possibility should be allowed to develop. Bristol Airport, on the other hand, does not have any longer flights and does not have the capacity for such regular long-haul flights.

We have always supported air passenger duty devolution and I hope that the Minister, even at this stage, will give further thought to it. I do not think we have heard a positive rationale for not devolving it, save its impact on Bristol Airport. Its impact would be nil.

We very much welcome Amendment 22A. The increase in borrowing powers is one of the key points in the agreed fiscal framework. I congratulate the Government and the Welsh Government for coming to a sensible agreement on this before the Bill reaches its conclusion. It seems a reasonable basis for Wales to be ambitious in its capital projects. As for Amendment 73, it is ambitious—perhaps a little bit too ambitious, because, although you can pluck a figure from the air, debts do have to be repaid, and interest on them is a heavy burden and a drag on current expenditure. Therefore, a balance has to be struck. We believe that, for the moment, the Government and the Welsh Government have struck the right balance.

[Lord Crickhowell (Con)]

My Lords, I had not intended to intervene but I am prompted to do so by one or two things that have said. I particularly want to have a word about the much tighter amendment on Cardiff Airport, which shifts my position.

First, I congratulate the Government on the way they have dealt with the fiscal framework. Acknowledgment has been given from around the House to the real progress that was made in reaching what inevitably is a compromise deal but one which represents a very considerable step forward. Yes, things do change with time. When I was Secretary of State of State, long ago, it just happened that the Barnett formula was rather favourable to Wales, so I avoided criticising it. But of course it has changed—and we have heard how things change over time—and the Government, and the Welsh Government as well, deserve some credit for the deal that has been done.

I turn to this more restricted amendment about Cardiff Airport. I suppose that I should declare two matters. Long ago, at Second Reading, I supported the Government and declared an interest as a frequent flyer from Bristol. I did not declare another, even more remote interest—that long ago I was part of a consortium that bid for the management of Cardiff Airport. We did not bid enough, but I like to think that, if we had won, we would never have allowed that airport to be pushed downhill as rapidly as its subsequent managers did. That is the past history, which is very regrettable. I am sad that my noble friend—I always regard him as my noble friend, because he is a very good friend of mine—Lord Rowe-Beddoe, is not here, because he did great work in trying to rebuild the airport from the state in which it has been.

The new amendment would change things. Long haul is a very different matter, and the airport is not in my view a competitor with Bristol, as I feared that it would be in the past. So I hope that the Government will be sympathetic to this much narrower amendment. I withdraw the hostility that I previously expressed for the wider amendment and the wider campaign that was originally fought.

[Lord Rowlands (Lab)]

I shall speak to Amendment 74, proposed by the noble Lord, Lord Wigley, to continue to clarify the issue of the apprenticeship levy. I express my gratitude to the Minister for his letter on this issue in November, which was extremely informative and helpful. It spelt out how the Treasury was going to Barnettise the levy, which was very helpful, but I would like to press him a little more on the mechanics of this arrangement. I put this in the form of a question, because it has been hard to get anything factual. Under the Barnett formula before the levy, am I right in thinking that it was the budget of the department for business that was responsible for expenditure on apprenticeships? Are we now going to see an exchange—a replacement of BIS with Revenue and Customs—which is not an addition but just a transfer of responsibility for organising the Barnett formula in relation to apprenticeships? Am I right in thinking that that is the mechanics of this case?

Of course, the apprenticeship levy came out of the blue and without consultation—a point that we made very forcefully in an earlier debate—when the Assembly had already devised a very positive and constructive apprenticeship policy, envisaging no fewer than 100,000 places over the Assembly period and a budget of some £110 million. Now I understand that—and I am grateful if this is the case—as a result of the announcements and the fact that the Assembly knows that some of the apprenticeship levy money is going to be Barnettised, it has increased the present budget from £110 million to £125 million. That is a significant and important additional contribution to the Welsh economy. So on that side, I can welcome what has happened. But alongside that, we still do not know what the cost of the levy will be to the companies, public bodies and major utilities operating in Wales and how much of it they will be able to recover, one way or another. Yet again, I put the point in the form of a question because I have heard of some of these figures only at second hand. I hope the Minister, when he comes to reply, will be able to give us a much more authoritative account.

As I understand it, one assessment has been that the apprentice levy is going to cost the public sector in Wales some £30 million. In fact many organisations, public utilities, public bodies and companies, frankly, are treating the levy as an employment tax. They cannot see how they can retrieve the sorts of sums they are going to be levied with in any form of apprenticeship scheme that is going to be available. For example, what is the cost of this levy going to be to our 22 local authorities? Am I right in thinking that a county such as Pembrokeshire is going to pay some £750,000 a year as a result of the levy, and Powys about £600,000 a year? Multiply that by the 22 local authorities and you wonder how those authorities can possibly reclaim, through the levy, anything like the amounts of money they will pay. Can the Minister clarify and identify for us what the cost will be to a whole range of public bodies, utilities—I am going to refer to utilities in a minute—local authorities, the National Health Service and the Welsh Government themselves, which are all going to pay this levy? I fail to see how, somehow or other, we are going to be a beneficiary of this arrangement.

I raise one other major anomaly. We have very large national utilities that stretch across Scotland, Wales and England. According to one figure I have seen, some 75% of the employees of these major utilities—the energy companies, et cetera—are in the devolved Administrations. That means they can claim only 25% of the apprenticeship levy that they are going to pay through the English voucher system. Again, I would like to know how this is going to be sorted out. The situation is muddled and lacks the transparency the noble Lord, Lord Wigley, spoke about. We are flushing out greater transparency but it is still not sufficient, and I hope that we can use the opportunity of debating this amendment to seek much greater clarification.