Wales Bill

Lord Hain Excerpts

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

[Lord Bourne of Aberystwyth]

My Lords, I indicated on the latter point that I certainly intended that we would publish, in some form, the findings of the group on this matter. Yes, I will reflect on what has been said and say more on Third Reading, when we will be further forward in discussions, to provide extra reassurance. I come back to the point that obviously we want to move by consensus in talking with the Welsh Government and, more broadly, with the National Assembly for Wales. Again, I remind noble Lords that the LCM is a requirement before we can move to Third Reading, so the membership of the National Assembly has to be happy with what is proposed—otherwise, presumably, no LCM will be forthcoming.

[Lord Hain (Lab)]

My Lords, I apologise for not being here for the whole debate. The Minister mentioned the fiscal framework in the context of the LCM. I would be grateful if there were a prospect of that being published soon, as he kindly indicated to me, so that the House will have a chance to look at it before considering any amendments to be tabled for 10 January.

--- Later in debate ---

[Lord Crickhowell]

My Lords, I had not intended to intervene again on this issue. I have long experience of dealing with the port authority and sometimes the relationships were very good. One particular person was running the authority during my early years as the local MP with whom I had an absolutely first-class relationship. However, they were not always as good. What people ought to understand about the port authority is that it will not be the Welsh Government, or indeed the UK Government, actually operating and controlling things; that is very much for the port authority, which has extensive powers. I once had a profound disagreement with the authority over a campaign that I and others fought on the safety issue because we were deeply concerned about some of the actions being taken not by the Government but by the port authority for its own commercial or other reasons.

I wonder whether there is not some solution here. I understand entirely the crucial fact that the gas terminals are at the end of pipelines that carry gas into England and form an important part of our energy package. Surely it would be possible for some agreement to be reached by the Government with the Welsh Assembly that would take the authority for dealing with the strategic link and the gas facility out of the specific responsibility of the Welsh Government and make it a separate strategic effort, while somehow allowing the Welsh Government much more involvement for the reasons that have been outlined in the handling of such matters as safety within the port.

The fact is that the town of Milford, the oil facilities and the people who live around them on the south of the haven, as well as Neyland and Pembroke Dock, are all close to areas where, if an accident occurred, the impact would be enormous on the local population. So there is a real issue here, and I have a good deal of sympathy with the view that these matters should not necessarily be in the hands of a trust port whose powers were established a long time ago in very different circumstances. I wonder whether the powers and authority of this port should not be looked at again, perhaps jointly, by the Welsh Government and the UK Government, because there are practical issues here that go back to the original creation of this facility, when the circumstances were wholly different.

I understand the vital strategic issue, which needs to be covered and dealt with adequately, but I hope that the Government will give at least some further thought at some stage—whether they can do it during the passage of this Bill I am not sure—to the way in which these issues are managed and handled in the port of Milford Haven.

[Lord Hain]

My Lords, following that very interesting contribution from the noble Lord, Lord Crickhowell, perhaps I may ask the Minister to explain exactly how all the other issues to do with Milford Haven port are devolved to the Welsh Government. Economic development—which is crucial in the area—environmental questions, safety issues and matters relating to the sea are all devolved, yet, uniquely, Milford Haven port is excluded. If the sole reason for that is the energy question—one can understand the strategic importance of the LNG capacity there—surely the vehicle to address that might be a protocol. Since the Minister has wheeled out the protocol—I do not mean that pejoratively—in a way that is meant to satisfy the legitimate demands for control over water within Wales, why could that not be the vehicle for addressing the strategic energy question, while ensuring that the Welsh Government have full control over Milford Haven as they have over all other ports?

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in the debate on these amendments. Obviously, the Government have some amendments in this group as well, which I will move in due course.

Amendments 14 to 26 and Amendments 86 to 89 are opposition amendments. We debated amendments that were very similar to Amendments 14 to 26 and Amendments 86 to 89, tabled by the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Wigley, in Committee on 7 November. The amendments would remove the reservation of reserved trust ports from the Bill and so transfer functions to the Welsh Ministers and devolve legislative competence for these ports to the Assembly in the same way as the Bill does for other ports wholly within Wales.

During that debate, in light of our discussion and the points raised by noble Lords, I undertook to take another look at the reservation of reserved trust ports without prejudice—that is, not saying that I would come along with revised proposals. I am now convinced of the strategic case for excluding Milford Haven and will seek to explain why.

Trust ports have unique governance arrangements. They are run by independent statutory bodies whose role is to manage, maintain and improve a harbour. Trust ports operate on a commercial basis, generally without financial support from government. Harbour authorities for trust ports have no shareholders but are accountable to, and run for the benefit of, their stakeholders, who include port users, local communities and local economies as well as local government and national Governments. Any profits are reinvested by the harbour authority in the port for the benefit of those stakeholders. Indeed, it is the duty of a trust port board to hand on the harbour to succeeding generations in the same or better condition. There are five trust ports in Wales, at Caernarfon, Milford Haven, Neath, Newport and Saundersfoot.

In light of the unique governance arrangements that I have just outlined, the Government believe that trust ports that have a nationally significant role in Wales should continue to be accountable to UK Ministers, which is what the reservation of reserved trust ports in the Bill achieves. During our debate on 7 November, all noble Lords who participated were in agreement about the importance of the port of Milford Haven. The significant volume of liquid bulk cargo—that is, oil and oil products, and liquefied natural gas—passing through the port each year is a clear testament to that. The oil refinery and fuel storage facilities at Milford Haven, which are dependent on the port, play an important national role in securing supplies of road and aviation fuel in Wales and England.

Perhaps I may at this stage take issue with something that the noble Baroness, Lady Morgan, stated in relation to the Murco refinery. I am in a position to say something from direct experience because I was chair of the Haven Waterway Enterprise Zone when the Murco refinery was threatened with closure, which sadly came to pass. The two Governments, the Government in Wales and the Government at Westminster, worked closely and amicably in relation to this; there was no disagreement. As chair of the enterprise zone, I had frequent discussion with the Department of Energy and Climate Change, as it was at the time, and the Minister there. There were also discussions with the relevant Welsh Minister. It was all perfectly amicable. So on matters relating to Milford Haven, I would not want noble Lords to think that the two Governments are always at loggerheads on these issues; that was certainly not the case in relation to the Murco refinery and on other issues that came up while I was chairman there over a period of some two years.

It is because of the importance of the oil refinery and fuel storage facilities at Milford Haven, dependent on the port, that we take the view that it is of strategic significance. The turnover threshold in Clause 32, referred to by the noble Baroness, is used to determine which trust ports in Wales are reserved trust ports and is based on a turnover threshold in the Ports Act 1991. Although the context is different, it seemed to be a suitable test for determining which trust ports in Wales are nationally significant and so should be reserved.

I accept—I note the spirit of contributions made by the noble Lord, Lord Hain, and others—that Welsh Ministers will remain a very important stakeholder for Milford Haven given their devolved responsibilities for other matters, such as for economic development, surface transport and marine licensing. I say once again that it is wrong to anticipate that every time a serious issue arises the two Governments will not work together. I refer noble Lords by way of example to the situation in relation to foot and mouth. That would no doubt be the case if there was some national emergency involving both Wales and the rest of the United Kingdom. The two Governments would work successfully together again where there was a need for it.

[Lord Hain]

In that case, if the Minister is saying that the two Governments would work together anyway in the common interest of both Wales and the rest of the UK, why would that not apply also in the case of the strategic energy question?

[Lord Bourne of Aberystwyth]

My Lords, if I have understood the point correctly, this is in the context of our firm belief that the port is of strategic UK significance but that there are occasions when it is absolutely right that the Welsh Government need to be involved. They are a significant stakeholder in the port at the moment and—again, I can speak from experience of chairing the enterprise zone—are involved very much in issues there. It is not that the two Governments were at loggerheads; that is far from the case. It seems that we always anticipate that the two legislatures and the two sets of Ministers will always be at each others’ throats; that is far from the case. These two mature institutions very often—indeed, most often—work very successfully together. That is the point I am seeking to make.

[Lord Hain]

My Lords—

[Lord Bourne of Aberystwyth]

May I just develop this point? I remind noble Lords that the rule on Report is that they should speak only once—but I will give way since I am sure that it is a relevant contribution. I shall write to noble Lords on issues that have been discussed to explain how the relationship with the Welsh Government works, the matters they are involved in and, perhaps, how we can move that forward to ensure that we have harmonious relationships.

[Lord Hain]

I am grateful. Incidentally, that was an intervention, not another speech. If the Welsh Government and the UK Government will not be at loggerheads on things, why would the Welsh Government be at logger- heads with the UK Government on the supply of LNG, which is just as important to Wales, proportionately, as it is to the rest of the UK? I do not understand the logic of the Minister’s point.

[Lord Bourne of Aberystwyth]

My Lords, we could disagree on this issue until the cows come home but the basic point, which I think the noble Lord would accept, is that some matters are rightly retained as reserved matters for the United Kingdom Government while other matters are appropriate for the Welsh Government. It is our belief that the significance of this port in UK terms means that this should be a reserved port and not a devolved port. We disagree on that, but that is the basis on which we are moving forward, recognising that the Welsh Government have a role to play in relation to Milford Haven—a role that they fulfil at the moment. As I say, I will endeavour to ensure that I write to noble Lords to explain how that relationship is working at the moment.

In our debate on 7 November, some noble Lords questioned the matter of the devolution of strategic ports in relation to Aberdeen, which has been cited, quite appropriately, I acknowledge, in relation to Scotland. That was, of course, a devolution arrangement that was put in place in 1998. The Government’s thinking has developed since then and the Wales Bill includes the important concept of reserving to the United Kingdom Government trust ports that are nationally significant. I repeat to the noble Lord, Lord Hain, and others that that is the reason we seek to retain Milford Haven as a reserved port.

Government Amendments 27 to 35 are concerned with reciprocal requirements for the consent of the Secretary of State and the Welsh Ministers imposed by Sections 42C and 42D of the Harbours Act 1964. These requirements relate to harbour orders and schemes made under that Act which amend existing harbour orders and schemes made by the Secretary of State or the Welsh Ministers. The amendments are needed because the consent requirements are not consistent with the new devolution settlement for harbours in Wales set out in the Bill.

The amendments remove the reciprocal consent requirements. The transfer of harbour functions to the Welsh Ministers in the Bill will mean that the Welsh Ministers, not the Secretary of State, will exercise these harbour order and scheme-making functions for all harbours wholly in Wales, apart from reserved trust ports, which I shall refer to as “devolved harbours”. This would cover issues such as improvements to harbour facilities in relation to devolved harbours. The Secretary of State or his delegate could make such orders or schemes relating to devolved harbours only in very limited circumstances. In all such cases, the Secretary of State or his delegate will have a duty to consult the Welsh Ministers before making such a scheme or order, including under new provisions in the amendments.

Also, it would be unduly restrictive if Welsh Ministers were required to obtain consent from the Secretary of State when making, for example, a harbour revision order for a devolved harbour that alters the effect of a harbour revision order made for the harbour by the Secretary of State before the new devolution settlement. Other amendments in the group contain consequential amendments applying to Clause 36—provisions supplementary to Clauses 34 and 35—covering the Secretary of State’s new consultation obligation introduced by the amendments.

Lastly, Amendment 31 removes wording from Clause 36(1) which carries an exception from the duties to consult where consultation is not reasonably practicable. This amendment has been requested by Welsh Ministers.

Government Amendments 54 and 110 to 114 fulfil a commitment I gave in Committee to examine further the fisheries management functions being transferred to Welsh Ministers to regulate fishing vessels outside the Welsh zone. Amendment 54 introduces a new clause that transfers additional fisheries management functions to Welsh Ministers. The functions replicate, to a large extent, those already exercisable in the Welsh zone which were transferred under the Welsh Zone (Boundaries and Transfer of Functions) Order 2010. The effect of the amendments is that Welsh Ministers will have available to them the functions they require to manage Welsh vessels wherever they are. They also preserve the United Kingdom Government’s requirement to retain a symmetry between the concurrent functions available to the Secretary of State in relation to Scottish and Welsh fishing vessels operating outside their respective zones. Welsh Government officials worked with their colleagues in the Wales Office and in the Department for Environment, Food and Rural Affairs to recommend these amendments, which we are pleased to present.

Finally in this group, Amendment 55 requires the Secretary of State to consult Welsh Ministers while setting strategic priorities in relation 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. In practice, each of these functions is carried out by the Maritime and Coastguard Agency, an executive agency of the Department for Transport. While day-to-day operational and incident response decisions are, quite properly, the responsibility of the chief executive of the Maritime and Coastguard Agency, the Secretary of State is responsible for setting its strategic priorities. Areas covered include the 24-hour search and rescue helicopter service provided by the coastguard and the promotion of seafarer health and safety standards.

Noble Lords will be aware that statutory provision has been made for consultation between the Scottish Government and the Secretary of State in the Scotland Act 2016, and in Committee I agreed to reflect on the case for making similar provision for Wales, in line with the amendments brought forward in Committee by the noble Baroness, Lady Morgan, and the noble Lord, Lord Wigley, and by the Smith commission in respect of Scotland. I am pleased to say that we can make such provision, and this amendment is the result. I commend the government amendments in this group and urge noble Lords not to press their amendments.