Wales Bill

Lord Morgan Excerpts

Tuesday 22nd July 2014 Lords Chamber

[Lord Morgan (Lab)]

My Lords, perhaps I should declare an interest as a member of the King’s College group which has produced a plan for a written constitution, currently being considered by the House of Commons constitutional committee. I cannot, I am afraid, declare an interest in the House of Lords Constitution Committee because I have been kept off it.

I therefore speak from the Back Benches with the independence that that conveys, and do so by giving the Bill my very strong general support. As has been pointed out by other speakers, it is a remarkable change for the Conservative Party, which opposed devolution and primary legislative powers, and the former Secretary of State, who spoke against the Assembly having taxing powers. So when the Prime Minister in Cardiff recently declared that this is a Government who believe in Welsh devolution, that was a very remarkable conversion worthy of events on the road to Damascus a long time ago.

This Bill has many excellent features from the small—like the name of the Assembly Government—to implementing the bulk of the first report of the Silk commission on taxation. One concludes that we have a coalition Government of repentant sinners—who, we are told in the good book, have a better than even chance of entering the kingdom of heaven.

I want to say something briefly about the Assembly and its character and a little about the policy it should pursue. I pray in aid not a Welshman but a Scotsman, Gordon Brown, whose contribution to the Scottish independence debate has been outstanding, and who has many important things to say in his latest book on the constitution more generally.

It is clearly important that the powers of the Assembly should be revised. It was a big conceptual mistake that the Welsh Assembly did not have reserved powers from the very beginning. It had the drip-drip of conferred powers. No intelligent reason was given why this should not be done as it was in Scotland. I do not think, with respect, that any intelligent reason has been given this afternoon. It seems to me that it is bound to happen as part of the wider constitutional changes which the noble Lord, Lord Wigley, has said will follow the Scottish referendum whatever the outcome is. As the Silk report has said, it would make matters clearer and make for greater coherence and consistency. It would also bring out the meaning of what devolution actually is. It is really rather humiliating to have powers determined for you by another assembly. I think that this would strengthen the Assembly, and would make the Welsh Assembly as Gordon Brown would wish to see the Scottish Parliament—namely an entrenched, permanent part of an updated constitution, and an updated written constitution, I hope. I hope to see that and, as people have said, for that to be treated as a matter of urgency.

On the size of the Assembly, I agree with the noble Baroness, Lady Humphreys, that 60 Members is nowhere near enough. The Richard commission argued strongly for it. This is a very small number of Assembly Members who are not in the Government to carry out the processes of scrutiny. I remember raising this with the previous Secretary of State but one and inquiring why the Welsh Assembly did not have more powers. She observed that the public mood did not favour having more paid officials. I recall asking her why in that case the Government had suggested creating 300 more paid politicians in the upper House, but there was not a response to that.

I think that the length of the Assembly should be determined by the Assembly; it should not be told by another body for how long it should conduct its operations. As a responsible and dignified body, it should decide for itself.

On the policy changes, much has been said about the borrowing powers. That is the central feature of the Bill and will enable the Welsh Government, or should enable them, to take on far greater powers to improve the economy and infrastructure in Wales. The borrowing amount of £500 million is, as was said, far too timid—I think that “chicken feed” was the expression that I heard on my left, which seems rather accurate. It is based on a measurement which is different from that of Scotland. There is nothing divinely created about it and I am sure that it will be looked at. It is profoundly necessary after the public sector cuts that Wales has endured in the past four years that it should have the ability to expand through its borrowing powers. There is a stronger case now for greater borrowing powers because the Welsh Assembly is to have much greater powers and to be able to do more things. Silk has virtually argued that the same measurement should be used for Wales as for Scotland and I do not see why that should not be the case.

I welcome the thrust of the Bill on taxation. As we said in the debate on the Scotland Bill, there should be no representation without taxation. We now have powers for stamp and landfill duties, which will give the Welsh Government more of an independent income. On income tax, I would hope that the Labour Party, of which I am a member, would be less apprehensive. It was noted in the New Statesman a week or two back by Professor Adam Tomkins that the Labour Party had lost out in the debate on Scotland by being too timid and, having set up devolution, not spelling out what it was for. I hope that the Labour Party, which is, as it has always been, the dominant party in Wales—or has been since the First World War at least—would be less apprehensive about that. One can see the apprehension about tax competition and about the Treasury using income tax variations for its own purposes, but this is a matter on which the parties should be quite clear—for that matter, I support what the Labour Party has said about perhaps increasing to 15 pence the amount of income tax that could be devolved to Wales.

I do not think that we need a referendum. We have had quite enough referendums in Wales. The noble Baroness, Lady Morgan, showed proper apprehension at leading or even taking part in any such debate—it would be one of the lower turnouts on record. Politicians of both sides have been passing the buck on this one. There was no referendum in relation to the Calman proposals for Scotland. Why should there be for Wales? It is a humiliating cop-out—to use the vocabulary—which is unfair.

[Lord Bourne of Aberystwyth]

There was of course a referendum in Scotland which the Labour Party provided for when devolved taxation was introduced.

[Lord Morgan]

Yes, I accept that. At any rate, in this case, I think that the argument against a referendum in the Silk commission report is profoundly the case and I strongly support it.

What I think is quite wrong, however, is to have income tax devolved at all while the Barnett formula continues. The formula was shredded by the Holtham report; it was shredded by the House of Lords committee. I do not know whether a stop-gap can be well past its sell-by date but—if those metaphors are in any sense reconcilable—that is the main point that has come forward. We have had a conspiracy of silence on all sides about the Barnett formula. The Labour Party had one or two debates on it in this House which were not at all sensible. The Conservatives have had their own discussion which quite falsely linked the Barnett formula with the accumulation of national debt, which it has nothing to do with. The Liberal Democrats have not been particularly vocal on it. Plaid Cymru has attached the Barnett formula to an extreme version of Welsh nationalism not particularly favoured since the days of Owain Glyndwr. UKIP has attached it to English nationalism, which seems to be equally unfortunate. In a way, the “none of the above” candidate would have a strong vote from me in that debate.

Proper government in Wales has been a long and hesitant process. It began in perhaps unlikely fashion with the demon drink in 1881, when the Sunday Closing (Wales) Act began the principle of Welsh legislation. This Bill is a welcome milestone, but it needs a wider vision linking the arguments in Wales both with the important and highly relevant debates on independence in Scotland and with the forthcoming debate on a referendum for Europe, which may not come for two or three years but will most certainly affect the attitude of Welsh people towards devolution and towards participating in a United Kingdom where England is perhaps strongly Eurosceptic. Hence, Gordon Brown has urged that a new constitutional settlement be adopted to bring together all these different themes and to make, as I have suggested, the Scottish Parliament and the Welsh Assembly permanent and irreversible.

This Bill shows how Wales has been a casualty of the process of stop-start change that we have had on constitutional reform for many years. The constitution has been correctly described by Professor Anthony King of the University of Essex as a “mess”. Wales is one area that has suffered from this mess. I would hope therefore that the mess could be cleared up by having a constitutional convention to provide a holistic look at all these aspects: the union in this country; the union with Europe; and the relationship between the different nations within the United Kingdom. I hope that we will have a vision supplied—perhaps even by the Constitution Committee here, of which I shall not be a member—and that the people of Wales will benefit. Nevertheless, that this Bill is a very helpful and hopeful start is incontestable.