Inequalities

Lord Richard Excerpts

Thursday 30th November 2017 Lords Chamber

[Lord Richard (Lab)]

My Lords, I start by congratulating my noble friend Lord Liddle on securing this debate and on the detailed, magisterial and persuasive way in which he opened it. I was slightly worried about whether what I was going to say would fit into the pattern of the debate. However, I am grateful to my noble friend Lord Parekh, because he has reassured me firmly that what I will say will, I hope, be of some relevance.

My noble friend Lord Liddle and other speakers have demonstrated clearly that there are economic, social and cultural inequalities between different parts of the United Kingdom. I do not propose to look at the economics of the situation, but I have some comments to make about the politics.

One thing that most concerns me is the haphazard, asymmetric and almost capricious way in which we are developing a pattern of devolving powers in this country. In some ways, this is really rather strange since, whenever the British set up a constitution for a former colony, or when, for example, it advised the then German Government on a proposed constitution for a federal Germany, the tendency was always in the direction of political symmetry, not asymmetry. However, the situation that we now have in the United Kingdom, in which different parts of the UK have different patterns of devolution, seems to be potentially dangerous and unstable, and what I have heard in today’s debate slightly reinforces my fears in that respect. The more we go down that particular road, the worse it will get. That is particularly so given the way in which powers are now being increasingly devolved not only to the nations that make up the UK but to the cities and regions. It is an untidy and almost quaintly eccentric way to behave. It reminds me a bit of the Chesterton poem “The Rolling English Road”, which he described as:

“A merry road, a mazy road, and such as we did tread

The night we went to Birmingham by way of Beachy Head”.

We now have a new British creation. It is individualistic, idiosyncratic and inefficient and, unless we are very careful, it will soon become traditional and, as such, deemed worthy of historical respect. I really do not think that this country can go on affording such a luxury for very much longer.

However, if there is a need for political symmetry, the other side of the coin is that there is clearly a need for greater financial equalisation, which brings us to our old friend the Barnett formula. I do not think that you can produce greater equality between the different parts of the United Kingdom unless and until you can produce greater equality of contributions from central government to those parts. In 2008, I had the honour of chairing a committee of this House which considered the Barnett formula. It concluded that the Barnett formula should no longer be used to determine annual increases in the block grant for the UK’s devolved Administrations. The formula accounts for around £50 billion of public spending each year. It has been neither reviewed nor revised during the last 40 years, and indeed it was totally disowned by its originator, Lord Barnett himself.

The main recommendation of that committee—I commend it to the House this afternoon—was:

“A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs should be introduced. Those devolved administrations which have greater needs should receive more funding, per head of population, than those with lesser needs. Such a system must above all be simple, clear and comprehensible. It must also be dynamic: able to be kept up to date in order to respond to changing needs across the United Kingdom”.


I can see no reason at all why precisely the same principle should not apply to the regions and cities of Britain as a whole as it could apply to the devolved Administrations. It seems to be common sense that needs should be the determining factor in deciding the size of central government allocations. Can this be achieved? I think that a major examination of the scope and extent of devolution is needed, whether that applies more to the nations of Britain or also to the cities and other regions. It really should not be beyond the wit of man to devise a system in which needs are assessed and moneys are distributed accordingly. Indeed, our committee in 2008 pointed the way forward.

It could be done if the Government are prepared to do it. My noble friend’s Motion calls for a fuller examination of this problem. Potentially, it raises issues of profound constitutional importance—I do not deny that—but we surely have to start this process with serious and detailed consideration of this issue and the numerous other issues that it raises.

I hope that the Government will at last have the courage and the determination to look at this problem in its entirety and not roll around it in a charmingly eccentric, almost Chestertonian way, attractive on the surface but inherently dangerous underneath. I hope that will happen but, given my past experience, I am not holding my breath.

Surrey County Council: Financial Issues

Lord Richard Excerpts

Wednesday 8th March 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I was absolutely clear. I am not reading from a prepared brief. The position is absolutely clear, and we have made a Written Ministerial Statement on it. I hope that the noble Lord is not seeking to make mischief—it would be unusual if he were not. There is no sweetheart deal with Surrey. There was never a prospect of a sweetheart deal with Surrey. Surrey is in the same position as every other local authority except that, as I indicated, regrettably it did not sign up to the financial deal. I do not accept the proposition the noble Lord seeks to put—that the position Surrey is putting forward is the correct position. I am sorry, but he wishes me to say something I do not want to say and am not going to say. The Government’s position is absolutely clear—there is no special deal. I make that absolutely clear.

[Lord Richard (Lab)]

I wonder whether the Minister can help me. Something caused Surrey to change its mind. What does he think it was?

[Lord Bourne of Aberystwyth]

My Lords, I have no idea. That is a question for Surrey to answer. However, we have had a freedom of information request, which I believe the noble Lord opposite knows about. We are very keen to respond to that and will do so. All the relevant documents, which I am sure will set out this matter very clearly, will be disclosed.

Draft Wales Bill

Lord Richard Excerpts

Thursday 29th October 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I greatly respect the noble Lord’s work in this area. Even designing a reserved powers model is a complex issue, because something has to be on the other side of the line. It is important that we get it right, but that is why discussions are ongoing at official and ministerial level.

[Lord Richard (Lab)]

My Lords, the noble Lord will know that some years ago I had the pleasure—indeed, the honour—of chairing a commission that looked at the governmental arrangements in Wales and made certain recommendations. Having looked at the Wales Bill, which it seems to me is of fiendish complexity, I do not recognise the Bill that is now coming before Parliament as fulfilling the recommendations made by the Richard commission as long ago as 2002.

Renewable Energy

Lord Richard Excerpts

Wednesday 24th June 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, a bear of small brain such as myself will have to get back to the noble Lord on that point, as I am uncertain.

[Lord Richard (Lab)]

My Lords—

[Lord Purvis of Tweed (LD)]

My Lords—

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[Lord Bourne of Aberystwyth]

My Lords, when the energy Bill comes before us—it will come to this House first—we will have an opportunity to look the questions that the noble Lord raises.

[Lord Richard]

My Lords, the Minister said in answer to the Question today that unabated coal would account for 1% of electricity by 2025. On the last occasion, last week, when this was raised, he said in one column of Hansard what he said today, while in another column of Hansard he said that it would account not for 1% of electricity supply but for 1% of emissions. Both cannot be right, and I would be grateful if he could tell us which is.

[Lord Bourne of Aberystwyth]

My Lords, following a conversation with the noble Lord yesterday, I went back and checked. That is why the version that I gave today was the correct version.

Wales Bill

Lord Richard Excerpts

Monday 24th November 2014 Lords Chamber

[Lord Roberts of Llandudno (LD)]

My Lords, in joining this debate, I congratulate the Minister on how she has handled us and steered us through the discussions. I would like to bring in two slightly different matters. First, in speaking of devolution to Wales, I understand that last week transport became the responsibility of the Welsh Assembly Government. How do we somehow get this movement between Wales and England as the line goes from Newport up to Chester? Who is going to be responsible as we go from England to Wales, Wales to England? That needs to be cleared up. Also, in her statement following last week’s debate, the Minister said that she had promises from the 22 electoral registration officers that each one of them had plans to increase the registration in their areas. It would help us tremendously if somehow or another she could make us aware of what each of these 22 various electoral registration officers intended doing.

Finally—I shall not be long—the anxiety in Wales and other places is that young people, as well as others, are becoming divorced from politics. They leave it to other people. Turnout is down. People do not feel that they have any influence over their lives through the ballot box. The eagerness to get people registered is not just so that they will vote and be on the electoral register but that they will be part of political life and involved in the lives of their communities. The Scottish referendum has been mentioned. There, young people did register and vote. They were an essential part of the debate in Scotland.

More strongly still, I remember 27 April 1994, when the South African franchise was opened and Nelson Mandela’s struggle had been won, how enthusiastic people were about the policies of the parties and how they queued for hours—some of them, for days—to register their vote. We need to do something that will enhance registration. Imagine that we have the European in or out referendum and that less than 50% of young people are registered to vote and that fewer than that actually cast a vote—the whole thing would be a shambles. The same applies to older people. We need the majority view on such an issue to be represented.

On the way here today, I was reading a book by David Tecwyn Evans recalling his memories of his life in Llandecwyn in Merionethshire at the end of the previous century and the beginning of last century. Here, he speaks of the elections of 1886, where the children of the school, although their parents were probably not entitled to vote, knew the name of every MP in Wales. They knew the issues—tithes, education, disestablishment—and they were interested. It is our job now not just to get people to register to vote but to enable them, through the education system and in other ways, to understand and to feel: it is not only a matter for the head but a matter for the heart. The facts are important, but being part of the argument is also important.

I thank the Minister for the work that she has done. I hope that she will be able to answer my two queries and that, somehow, we as representatives at various levels can enthuse people so that young people feel “rydym yn perthyn”, we belong.

[Lord Richard (Lab)]

My Lords, perhaps I may ask the Minister a severely practical question or two. What was the turnout among the 16 to 18 year-olds in the Scottish election? Was it indeed much below that of the 18 to 24 year-olds? My noble friend Lord Rowlands asked her how many 16 year-olds there are in Wales. How many 18 to 24 year-olds are there in Wales, so that we can make a comparison? I cannot sit down without saying a sentence about the speech that we have just listened to. Even in my headiest moments as a convinced Welshman, I have never quite seen England’s relationship with Wales as that of the Nationalist Party to the rest of South Africa.

Wales Bill

Lord Richard Excerpts

Tuesday 11th November 2014 Lords Chamber

[Lord Howarth of Newport]

The noble Lord always has a sense of historical drama. He imports that even to these very proceedings. We are grateful to him.

[Lord Richard (Lab)]

My Lords, I support the noble Lord, Lord Elystan-Morgan. As long ago as 2004, when the commission that I had the honour of chairing looked at this issue, we came to the conclusion that there was a need—not just a desirability but a need—for the number of Members of the Assembly to be increased. We based that conclusion on the fact that not enough Members were untouched by government—if I may use that phrase—to man the committees in a neutral and oppositional way. If that was true then—and I firmly believe that it was—it is even truer now, and will increasingly be in the future.

The first debate we had today was on whether the Assembly should move to a constitution based on reserved, rather than devolved, powers. Remarkably, the House agreed that we should move to a reserved powers model. Not only that, the Minister gave some pretty strong undertakings that she and the Secretary of State for Wales also took that view and were holding talks to achieve it. If the Assembly moves to that model then the need for an increase in the number of Members of the Assembly is increased. I hesitate to use lawyers’ phrases, but, a fortiori, the argument is underlined and indeed is strengthened.

Wales Bill

Lord Richard Excerpts

Tuesday 11th November 2014 Lords Chamber

[Lord Deben]

I quite agree with my noble friend, but that pressure is there. It has been there, and it has meant that we have had to do things. I have always believed that we should have worked this out rationally before we were pressurised into it, but pressurised we have been. It is not going to stop now. Let us make the answer rational. Let us not just say that we will add another bit here and another bit there and hope that the result is something sensible. I believe the moment has come to grasp this nettle, not to say that it is too difficult. Let us do it as well as we can. It will not be perfect, but I suggest to the noble Lord that it is more likely to be closer to perfect if it has been thought through rather than if it happens accidentally.

[Lord Richard (Lab)]

My Lords, I did not intend to speak in this debate until I heard the speech from the noble Lord, Lord Deben. I shall make two points. First, he is absolutely right that the constitution of the United Kingdom as a whole needs a good looking at. There is no question about that. It needs looking at rationally, sensibly and at a very high level. Therefore, I have for a long time been in favour of some kind of convention or royal commission which would do precisely that task. That is one issue.

The other issue is what you do about Wales now. You cannot mix the two up and pretend that the Welsh issue is not an issue that has to be dealt with before the royal commission begins to sit. The position with the Welsh Assembly at the moment is that it has—to use the noble Lord’s phrase—an irrational system whereby it is entitled to legislate. I would have thought that the noble Lord would agree that perhaps some rationality should be brought into the Welsh system. You would then at least have conformity between Wales and Scotland.

The relationship between the devolved Administrations and the centre is precisely the issue that then has to be looked at by a royal commission when it comes to consider the constitution as a whole. I do not think you can just pretend that the situation in Wales does not really exist and wait for the deliberations of a royal commission, which may take some time, as they usually do, and when it reports, the report usually takes a long time to be properly considered. I think there is a distinction there.

[Lord Elis-Thomas (PC)]

My Lords, I am a little reticent to enter the debate on the basis of rationality because I once had to resit an examination in logic, happily in the university of which I am now the chancellor, so some things work out. This has been an extremely illuminating debate for all of us, not least because we have had further highlights from the memoirs of the noble and learned Lord, Lord Morris of Aberavon, which I am sure many noble Lords have already read. I remember those days in the 1970s very vividly. I pay tribute to him for his consistency in this matter and for his consistency at that time. He has pointed out how he was so keen to ensure that there was not a flanker movement on the part of the Scots, as there always is in politics and occasionally is in sport. He ensured that the issue of Wales stood alongside the issue of Scotland at that time. We had a few cups of tea, and other things, at that time to discuss these matters, and we are where we are today because of the way that he stood firm.

If this is the day of the eulogy of the conferred powers model, I want to say some positive things about it. I was elected Presiding Officer in the Assembly, and I had to work with the three constitutions we have had so far: the executive period; the transitional period of the late lamented—perhaps not—requests for permission to legislate; and now the period post the 2011 referendum on the conferred model conferring full legislative powers with exceptions.

As I mentioned in Committee it is important to say that in constitutional theory, as far as I am concerned, conferred powers with reduced or no exception, bring us to the same place as reserved matters. It means that the subject set out in Schedule 7—the latest and most relevant model—and Clause 108 of the Government of Wales Act 2006 gives us those powers as defined. There is no ambiguity there.

Wales Bill

Lord Richard Excerpts

Wednesday 15th October 2014 Lords Chamber

[Lord Lexden (Con)]

My Lords, I am glad to follow the noble Lord, Lord Howarth of Newport, whom I have known personally and respected for many years. I strongly support Amendment 20 which provides the key to securing a marked and rapid increase in the number of young people registered to vote. Time and again, the need for effective action to tackle the acute problem of underrepresentation among the young has been highlighted, not least in the reports of the Hansard Society of which I have the privilege to be a trustee.

Across the House we support the marvellous organisation Bite the Ballot, which is bringing determination and dedication to the task of getting many more young people on to the register, as we have heard. Surely we must give the organisers of Bite the Ballot the tools they need for this vital job. Nothing, it tells us, is more important than the creation of a sustained and lasting partnership between electoral registration officers and schools based on the model developed in Northern Ireland. We have heard today from my noble friend Lord Roberts and others that this is the wish of the Welsh Assembly, too.

The case for such a partnership is surely overwhelming—it has been proved beyond all doubt in Northern Ireland. The Province has pointed the way. As a staunch unionist, I say: let Wales, and indeed the rest of the country, follow where Northern Ireland has led. It would be a tragedy if the United Kingdom as a whole failed to reap the benefits of what has been pioneered in Northern Ireland—a point that I hope my noble friend on the Front Bench would be particularly sympathetic towards, given her dual responsibilities in Wales and Northern Ireland, and I am quite convinced that St Edward the Confessor would be on our side.

[Lord Richard (Lab)]

My Lords, perhaps I may say a brief word. Following the noble Lord, Lord Tyler, I should perhaps declare an interest. First, I am Welsh; secondly, I am a lawyer; and, thirdly, I am not a Methodist minister but my grandfather was, so I suppose that that qualifies me to speak on this amendment. I do so for one basic reason, which is to assure the Government that there is very warm cross-party support in the House for these amendments. When the Minister replies, I hope that we shall not hear, as we have on many occasions on the Bill so far, that this is not the right time to do it. It seems to me to be absolutely the right time to do it. Indeed, if you are looking for a better time to do it, it will be difficult to find one. With elections looming for the Assembly in 2016, it seems to me absolutely right that we should go down this route now.

The desirability of the amendments is perfectly clear. What is proposed is not based upon anything fanciful; it is based upon practical experience of the way that it has worked in Northern Ireland. There is also some evidence in the United States that this type of approach is effective, and I cannot see for the life of me any reason why it should not be introduced in Wales in time for the next election. I hope that the Minister is not going to get up and say merely that it is not the right time to do it; I believe that the House thinks that it is.

[The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)]

My Lords, there must be, and clearly is, concern across the Chamber about the low engagement of young people in particular with our democracy and with civic life. However, I have to make the point to noble Lords that registration in itself does not mean that young people vote. Experience in Northern Ireland—and, as my noble friend Lord Lexden made clear, I am very familiar with that experience—has shown that voting does not necessarily follow from registration. Therefore, I think that we have to work very hard at what is a complex issue which goes beyond simply having to ensure, quite rightly, that more people vote.

[Lord Richard]

Before the noble Baroness leaves that point, it is perfectly true that if you register, you do not necessarily vote, but it is also true that if you do not register, you cannot vote. With great respect, we are talking here about the qualifications for voting.

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[Lord Richard]

My Lords, I support my noble friend on this. I am not a tax lawyer and I have given thanks for that ever since I was called to the Bar. I am bound to say that I read this new section with incredulity. It is designed to cover a Scottish parliamentarian as well as a Welsh parliamentarian—Mr Mac ap Jones, I suppose we can call him. That individual is covered here in such a way that it is a masterpiece of almost Proustian complexity. Even for one who is reasonably familiar with looking at legislation, I found it almost impossible to understand. I did what my noble friend did and went to the Explanatory Notes, but they are almost impossible to understand, too. Why on earth are we legislating in this way? Some 40 years ago, I was a member of a committee presided over by the late Lord Renton on the drafting of legislation. It was an interesting committee and we said that the practice of legislating by cross-reference meant that you had to have half a dozen books open at the same time to get even a glimmer of understanding of the subject. We said that that was bad and something should be done about it. Of course, successive Governments said, “Yes, we agree entirely that it should be changed”, but it never is. It just seems to get worse as time goes on—until we arrive at the nonsensical drafting that appears in this Bill.

Perhaps I may make a simple suggestion to the Minister. It is obviously designed to deal with a person who may be working in one jurisdiction and has residency in another. It is meant to make sure that the person does not pay two lots of tax in two different jurisdictions. Why can we not have a simple residence test? I would suggest tentatively that the Minister should look at proposed new Section 116E, which states at the end of page 9:

“For any year, a Welsh taxpayer is an individual”,

and thereafter it sets out an enormously complicated structure. Why can we not say that in any tax year, a Welsh taxpayer is an individual who is resident in Wales? We could have similar rules for Scotland, England and Northern Ireland. With any luck, Mr Mac ap Jones would be successively reinterred and we need not bother about him again. Really, the way this has been drafted is too much. I agree totally with my noble friend that perhaps it is time for this Committee to say, “We do not like this drafting. We don’t understand the purpose of it, and we think it could be simplified so that people can understand it. The Government should take it away and try again”.

[Lord Wigley]

I want to join briefly with colleagues who have raised these points. Over many years I have often heard the argument made that matters of substance are passed through Parliament by order—by secondary legislation and so on. Here we have the reverse position, where there are matters that should surely be set out in orders. Ministers should be empowered to introduce orders to deal with a variety of circumstances that certainly do not warrant taking up the face of the Bill. If that were the case, there would be flexibility within the orders to deal with other cases which possibly have not been thought of. Putting this in the Bill in this way is surely a nonsense.

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[Baroness Randerson]

He was an MP and an MSP in the same tax year. I am pretty certain I am right, but the principle is that he moved from Wales to Scotland, straight from one job to the other.

[Lord Richard]

Is it not absurd that we should be legislating in this way for one person? Is it not absolutely ludicrous? Has there been a flow of parliamentarians across the borders in this way, or is it just this one individual? The Minister, with great respect, should take these measures back and look at them again and, if she wants to, simplify them and bring them back.

[Baroness Randerson]

This has been through the whole scrutiny process in relation to Scotland. If noble Lords wish to blame someone, I suggest they blame the Scots. They sat in here and in the other place and thought up a lot of complexities that had to be answered in the case of both this Bill and the Scotland Act. Just for the sake of clarification—

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[Baroness Randerson]

That is a perfectly valid point, but we have it here in the Bill. I am also very conscious of the fact that noble Lords constantly complain that there is not enough in the Bill and that there should be more on its face and less in orders for the sake of transparency. On this occasion, you have total transparency. There is also, of course, the argument that we are talking about tax rules for individuals. In fact, if you have more on the face of the Bill, that could be said to be easier for individual taxpayers to follow.

May I finally make it absolutely clear to noble Lords that the noble Lord’s amendment would, in fact, mean taking away the simple test—which is the test, if you have only one home, of where your closest connection is—and replacing it with everyone counting days? Counting days is one way of dealing with it but not the simplest one. For most people, the simple thing is to ask, “Where is your home?” and, “Where do you spend most of your time?”. Taking away that option and leaving everyone counting days would possibly make life much more complex.

The noble Lord, Lord Richard, asked why not just say “resident in Wales”? I think noble Lords are well aware that the concept of where your residence is has caused a number of people a lot of trouble over the years. It is really important that we have clarity and absolute rules. There should be no doubt in people’s minds as to which rules they need apply.

[Lord Richard]

With the greatest respect to the noble Baroness, residence is a very well known concept in tax law. If you talk to taxpayers, particularly in areas such as the City of London, they know what their residence qualification is. They know that they have to establish a certain residence and that it is on the basis of where that residence is that they pay their tax. That is a much simpler concept than this.

[Baroness Randerson]

These rules flesh out what the term “residence” means in tax rules in relation to Wales. I hope noble Lords will accept that although the rules may not make pretty reading, they are workmanlike and, despite their complexity, they are clear, unambiguous and easy for people to follow.

Wales Bill

Lord Richard Excerpts

Wednesday 15th October 2014 Lords Chamber

[Lord Richard (Lab)]

My Lords, I start by declaring an interest. Some years ago, I had the privilege and honour of chairing the committee of your Lordships’ House that looked into the operation of the Barnett formula. It was an extraordinary committee. On it, among other people, we had a former Chancellor of the Exchequer, two former Secretaries of State for Scotland, assorted junior Ministers, and other Members of your Lordships’ House. The committee came to the unanimous conclusion, set out in a report, that the Barnett formula was out of date, inefficient, basically unfair and ought to be replaced. One of the most substantial parts of evidence we had was from my noble friend Lord Barnett himself. He said that he thought it was out of date and inefficient and was never intended to last this long—that it was introduced as a temporary measure in about 1977 or 1978 and not designed to be semi-permanent. It was meant to last a year or so and then expire. I put it to him whether it was fair to say that it ought to be replaced. He said, “Yes, perfectly fair.” He has persisted in that view.

Where are we on this issue? Here we have a formula, introduced nigh on 40 years ago, which still determines the basis of the block grants for Scotland, Wales and Northern Ireland. It is based on evidence garnered in the 1970s, and is not based on needs but rather on population. You hear the argument frequently that you cannot have a formula based on needs because it is too imprecise and difficult to do. I would commend that the people who veer in that direction of the argument read the evidence that we produced in that report about six years ago. There was a detailed examination of a needs-based formula and the evidence then seemed quite conclusive, as it does now. The Barnett formula is unjust and unfair. Wales is unfairly discriminated against as a result of the operation of the Barnett formula.

No Government in recent years have been prepared to take this issue on. In terms of the Labour Government which left office in 2010, the then Chief Secretary to the Treasury appeared before our committee and said that he thought the operation of the Barnett formula was broadly sort of fair. Indeed, the then Secretary of State for Wales even came in front of the committee and said he thought it was sort of fair. Of course, the Secretary of State for Scotland thought it was extremely fair. The Secretary of State for Northern Ireland also did not dissent from that general proposition. I was appalled, frankly, at the evidence that we got from the Chief Secretary to the Treasury and the Secretary of State for Wales. Nothing has changed. Things have not got better as far as the Barnett formula in Wales is concerned: on the contrary, they have got worse. Something has to be done about it. We really cannot go on with this.

Although I have held the view for some time that the formula’s time has come and that it should be quietly expunged from the public record, I was surprised and, indeed, somewhat appalled to see the three party leaders re-emphasise in the Scottish referendum campaign that it should continue to apply to Scotland. If it is said that it should continue to apply to Scotland, on what basis should it do so? Does that mean that it should continue to apply to Wales? If so, will Wales be asked to put up with what is, by almost everybody’s admission now, a basically unfair system of allocation of resources from central Government to Cardiff? Are we really going to be asked to put up with this because the party leaders went up to Scotland at the end of the referendum campaign and made what is, on the face of it, an extraordinary offer to the Scots? If the party leaders want to keep the Barnett formula for Scotland, so be it, but they should not be prepared to inflict it upon the Principality in perpetuity. It is basically unfair, unjust and out of date, and something should be done about it.

[Lord Howarth of Newport]

My Lords, it is enough to make one weep that, in the run-up to the Scottish referendum, political leaders felt themselves driven by expediency to pledge to retain the Barnett formula. As my noble friend Lord Richard explained to the Committee, it is one of the great injustices and malfunctions of government in this country over the past 40 years and a lamentable lack of statesmanship has prevented it being reformed. There was a great opportunity in 2010. The Conservatives had nothing to lose in Scotland. With universal recognition of the need for austerity, there was a political opportunity to deal with it then. That has been made infinitely harder now by the rash and unprincipled pledges that have recently been made.

The report of the committee of my noble friend Lord Richard is unanswerable. We debated it in your Lordships’ House and there was not a scintilla of a persuasive argument to defend the status quo. Indeed, I do not recollect anybody even trying to defend it. The pledges that have been made will come back to bite their authors because I cannot foresee how we can make progress towards new constitutional arrangements in this country following the referendum in Scotland and following the pledges that have been made in respect of devolution so long as there is such a fundamental inequity in public financing. I cannot see how there can be a fair and acceptable new set of arrangements while the Barnett formula is retained.

The noble Lord, Lord Wigley, spoke extremely well and constructively with his practical suggestions as to how we might try to develop a sort of fallback position. My noble friend Lord Richard suggested that if the Scots are to retain their advantage, it may none the less be possible to find ways at least to reduce the inequity for Wales. However, it seems to me that that path also bristles with political difficulties because, if public spending is a zero-sum game, if there is to be more for Wales, then it has to come from somewhere and if the Scots are allowed to retain their present advantages, then it will come from Northern Ireland or, more likely, from England. However, there is, rather belatedly, a growing recognition in the regions of England that the Barnett formula is a lousy deal for the English. I cannot see that there is a path towards remedying at least a part of the injustice from which the people of Wales suffer if it is to be done directly at the expense of the people of England. Hasty pledges have placed us all in immense difficulty but I look forward to hearing from the Minister or the noble Lord, Lord Bourne, who may be able to pluck a solution out of the hat, although I somehow doubt it.

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[Lord Thomas of Gresford (LD)]

The noble Baroness said that a future Labour Government would address the Barnett formula. Well, they addressed it in the last Labour Government; they appointed the noble Lord, Lord Richard, and his commission to produce a report and then ignored his findings.

[Lord Richard]

That is not right. I was appointed by this House, in accordance with the usual rules for the appointment of chairmen of committees.

[Lord Thomas of Gresford]

I withdraw the term “appointed” but I am sure that the idea was generated by the Labour Government of the day. It was not something that this House thought up of its own accord.

[Lord Richard]

I am sorry but it was an ad hoc committee, which was set up after the Liaison Committee decided that that was one of the subjects on which the House should have an ad hoc committee. That is how the committee came into existence and I was then asked to chair it.

[Lord Thomas of Gresford]

I had misunderstood the basis of that committee, so I withdraw what I said first of all—that the last Labour Government addressed the Barnett formula. They clearly did not and it was a committee of this House, chaired by the noble Lord, Lord Richard, which did address it. The Government then ignored its findings. That is what I am told. I am told that there was a second committee but I am not particularly aware of it.

Where the problem really arises is that the Barnett formula is used as an excuse for the failures of the Welsh Labour Government in the fields of education and other devolved areas. They say, “We don’t get enough money”. As soon as I read of the vows given to the Scottish people by the three leaders, it seemed to me that at that moment the concept of having a formula that could apply equally in Scotland and Wales was dead because one surely has to decouple whatever funding formula eventually applies in Scotland when it exercises its powers from whatever formula happens in Wales when it exercises different and more limited powers. Accordingly, we need something specific to Wales through looking at the needs of its people as opposed simply to dividing money on a population basis.

The whole point of the social contract is that taxes are paid—not to be divided equally per head of population but so that services according to need can be paid for by the government of the day. That is the principle that must be the basis of the way in which Wales is funded in the future.

[The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)]

My Lords, as ever, a debate on the Barnett formula is interesting but I am afraid that from my perspective it is rather too well worn territory.

I start by responding to the comments of the noble Lord, Lord Wigley, in relation to the £300 million to which he referred as the funding gap identified in the Holtham report. The gap has indeed come down in size and it would be very useful to determine the current shortfall. It is particularly important to point out that when the agreement was made between Jane Hutt and the Chief Secretary to the Treasury in an exchange of letters in October 2012, it acknowledged that convergence had ceased to take place, that there was, in fact, divergence and that Welsh funding was within the region of what the Holtham report regarded as fair funding. Therefore, at the moment, there is not a major issue of unfair funding. There may be issues at the edge, but it is not a big problem at the moment, as was acknowledged by the Welsh Government. Of course, that does not solve the problem, because convergence is predicted to start again around 2018. That issue has to be addressed if the gap is not going to widen again. I agree that there is a need to deal with this in the scope of the devolution discussions because it distorts the political debate in Wales. Funding is quite simply blamed for every policy failure. Even if we take the figure of £300 million, in a budget of £15 billion, £300 million is a significant amount of money, but it is not something that could possibly be blamed for every health failure, every education failure and every social problem within Wales. It is not so massive that it is fundamental to the problems that we all acknowledge are faced in Welsh society.

The noble Lord, Lord Anderson, is absolutely right in saying that it is the funding issue that the public are interested in. They do not worry too much in general about devolution, but they are interested in fair funding. The noble Lord, Lord Anderson, referred to the Severn tolls. I look forward to our debates on that in the next Government. Whoever wins the election, there will be debates on the Severn tolls because, of course, the end of that franchise is due in the mid-years of the next Government.

I strongly welcome the acknowledgment by the noble Lord, Lord Richard, that the Labour Party did not deal with the problems of Barnett. Indeed, the Labour Party refused for 13 years to agree publicly that there was any problem with the Barnett formula and it was in those years that convergence was taking place and the funding gap was really growing. It would certainly be the case that Wales would have fewer problems now if that had not been neglected. It is my view, and the Secretary of State certainly agrees, that it is time to look at the funding formula for Wales, and it is my view that one could do this even with the constraints of the agreement that Scotland will retain its current funding. One can look at Wales on a unilateral basis.

The noble Baroness, Lady Morgan, asked me to clarify the Prime Minister’s statement. He simply restated the oft-stated government position on funding in Wales, which is that because the problem of the deficit is our priority, no additional funding can be provided within this Government. That is in no way at odds with the Secretary of State saying that the long-term funding position of Wales needs to be looked at. There is an immediate situation and a long-term situation. The noble Baroness also asked for clarification on the impact of having income tax powers on the block grant and so on and referred to the index deduction method. The purpose of the index deduction method was to protect Wales from big swings in the economy as a whole and the sort of big swings that are due to UK government policy. However, I point out yet again that the Welsh Government have acknowledged that funding is fair at this point, within the region of fairness. Given that the Welsh Government acknowledged that we were in that sort of territory two years ago, it would be a good idea to go for a referendum on income tax powers as soon as possible to give the Welsh Government the maximum opportunities to use the taxation system to increase prosperity in Wales.

I shall very briefly look at the technical details of the amendments. Amendment 56 would require the Secretary of State to lay an independent report on options to replace the Barnett formula. Amendments 59 and 60 would seek to make the devolution of an element of income tax conditional on dealing with the funding formula. They specifically say that income tax can devolve only when the Welsh Government confirm that they are content with how funds are allocated. The progress that this Government have made on working towards fair funding, with the significant exchange of letters in 2012 between the Ministers in the two Governments, can be built on. I urge the noble Lord to withdraw his amendment.

[Lord Richard]

Can I be perfectly clear as to what the Minister has just said? As I understand it, she is saying that the fact that a vow has been given to Scotland that the Barnett formula should continue to apply there is no bar to the funding arrangements for Wales being reconsidered, and that it is the Government’s position that those funding arrangements for Wales will be reconsidered.

[Baroness Randerson]

I am saying that I do not believe that it is impossible to overcome the issue of the commitments made to Scotland and that you can honour those commitments and look separately and independently at the funding for Wales. Northern Ireland is also funded via the Barnett formula but from time to time gets additional funding for specific things. I cannot see why Wales cannot be treated, as Northern Ireland is, as a separate thing, as a matter of principle. Having said that, I am simply arguing the case—it is not government policy to do that. I am firmly saying that the Secretary of State for Wales has made it absolutely clear that it is his view that fair funding needs to be looked at in the context of the devolution settlement and the discussions that are going on about it. In that case, I am confident that those discussions will encompass the issue of funding, although I cannot predict the outcome.

[Lord Richard]

So that is government policy—what the Secretary of State said?

[Baroness Randerson]

Yes, that is policy, announced by the Secretary of State for Wales.

Wales Bill

Lord Richard Excerpts

Monday 13th October 2014 Lords Chamber

[Lord Wigley (PC)]

My Lords, I can readily identify with the comments of the noble Baroness, Lady Morgan of Ely. I agree that these matters should ideally be in the hands of the National Assembly to decide. None the less, we have guidelines that have been laid down from here. By virtue of speaking to Amendment 5, I want to draw attention to the fact that there are real dangers when a Westminster election overshadows an election to the National Assembly.

Amendment 5 provides that the poll for a National Assembly ordinary general election should not be held within 355 days of the date of a UK general election, although I accept entirely that it should be a matter for the Assembly finally to decide on these matters if we can give it the power to do so. The amendment mentions 355 days rather than 12 months to allow situations to arise whereby one vote could be held on 7 May one year, followed by a poll on 1 May the following year, or similar circumstances.

The truth, which may not be immediately apparent to colleagues from other parts of the United Kingdom, is that the UK media are heavily biased in favour of England-only issues. That is understandable because most of the media are based in south-east England and look through a prism from that perspective. In the leaders’ debates in the run-up to the previous general election, for example, party leaders answered questions relating to healthcare and education, without mentioning that those policies were applicable only in England and not in Wales or Scotland. These considerations spill over to arguments in relation to the settlement that will be made to Scotland as well.

Circumstances such as these are highly confusing for viewers, listeners or readers in Wales and can lead to voters making choices based on policies that would not in fact affect them. Wales has a number of daily newspapers such as the Western Mail and Daily Post, as well as very good local newspapers, but the majority of people still get their news and election coverage from London-based outlets. Were an election to the Welsh Assembly to occur in quick succession following a UK general election, or in inverse circumstances, it is certain that any debates surrounding Welsh policies would be totally drowned by UK election coverage. The Electoral Reform Society Wales has said that combining polls would always have a detrimental impact by causing confusion for voters, and that Welsh elections would be “subsumed” into media coverage of the UK general election.

To ensure that voters’ decisions are well informed, we believe that provisions similar to those contained in Amendment 5 would be necessary to mitigate such media distortion, although I repeat that I would prefer that initiatives along those lines should come from the Assembly itself.

[Lord Richard (Lab)]

My Lords, I agree with the thrust of the amendment but I am bound to say that I am not sure that I fully understand the wording of the first part of it. If one actually looks at the text, it would seem that the amendment proposes that the Welsh Assembly should revert to a system in which the First Minister of the Welsh Assembly, with the consent of the Assembly, would be able to determine to hold an election at any moment that he thinks fit. In other words, we would be back to the situation that we were in before we passed the Act a few years ago that set up the five-year Parliament gap.

If the intention of the amendment is that the Assembly should be able to fix in advance a particular term at the end of which an election should be held—in other words, that the Assembly should decide whether it should be a five-year, four-year or even perhaps a three-year term—that I understand and fully appreciate. If the intention is, however, to give the Welsh Assembly the additional powers that the Prime Minister had in the old House of Commons, to call an election at the time of his own choosing, I am bound to say that I am not sure I agree. I accept the thrust of the amendment, which is that decisions on the timing of an election should be a matter for the Assembly, but I am not sure whether the wording of proposed new subsection (1) in the proposed amendment goes anywhere near achieving that.

--- Later in debate ---

[Lord Richard]

My Lords, I strongly support this amendment. If one goes back 10 years to the report of the commission that I had the honour of chairing, we then identified this as one of the problems the Assembly had then and would face increasingly in the future. I will spend just two minutes on analysing where the Assembly is in this regard. We have 60 Members in the National Assembly in Wales; the Scottish Parliament has 129 and the Northern Ireland Assembly has 108.

At first sight, those numbers are a bit odd. I do not see why they should be quite as different as they are. If one then goes on to look at what the present 60 in the National Assembly of Wales do, only 42 of them are actually available to hold the Welsh Government to account and scrutinise legislation. Indeed, at one stage it was even worse than that. At the time of the Labour-Plaid Cymru coalition, there were 41 Members either from Labour or Plaid Cymru, leaving only 19 from a non-governing party to scrutinise the whole body of Assembly legislation. The noble Lord, Lord Bourne, who is sitting on the Front Bench opposite me will no doubt remember those days pretty well since he was one of the 19.

Can that many Members do that work? The short answer is no. They could not do it 10 years ago and they certainly cannot do it now. I recently came across a quote from Rosemary Butler, the Presiding Officer of the National Assembly. She put it like this:

“There are only 42 Members to scrutinise £15 billion of taxpayers’ money, and to scrutinise the government on the big issues of the day—the future of our health service, our education system and the economy. On top of that they have to make sound, thoroughly scrutinized laws for our nation. A quarter of those 42 members sit on three committees, half sit on two”.

She concludes with the comment:

“One would simply not find the same level of workload on Members in Westminster, Holyrood or Stormont”.

That is clearly true.

Over the years, we have given the Assembly greater powers. We have not increased the number of people available to deal with those powers and scrutinise the way they are used. In this Bill, we propose to give them more powers. We will no doubt, in the not too distant future, have proposals to give the Assembly further powers again. To keep the limit at 60 is frankly ludicrous. It hobbles the way in which the Assembly works and means that laws are not sufficiently scrutinised. It means, too, that the way money is spent is not sufficiently looked at. Quite honestly, it breeds inefficiency. The argument for increasing it from 60 to 80 is, frankly, irrefutable.

The only argument now is whether it should be 80 or go up to 100. I have an open mind on that. As a first step, going up to 80 would satisfy me for the moment. If you are to give the Assembly more powers, and if it is to become a Parliament in the sense that the Scottish Parliament is one, 80 may not be enough. Assuredly, if you are to do that, 60 will not be. I support this amendment.

[Lord Elis-Thomas (PC)]

My Lords, it is always a delight to follow a debate proposed by the noble Lord, Lord Rowe-Beddoe, and spoken to by the noble Lord, Lord Richard—to whom I owe a great debt of gratitude for having defined an ideal model in 2004 of what the National Assembly could have been.

My Amendment 9 has a whiff of relative autonomy about it, which will not surprise noble Lords. Although I deny being a separatist and I am not an upper-case Nationalist, I am certainly an avid, totally committed, complete devolutionist. My amendment—which my noble friend supports—proposes that the Assembly should decide its own size. No doubt many constitutional objections will be put forward to this notion. However, the amendment proposes that the decision should be subject to the very important principle of a majority of not less than two-thirds of voting Assembly Members on a vote of the whole Assembly. That is a feature we have already in our constitution—and use regularly. It applies to dissolution Motions and other Motions within our procedures.

My amendment has the support—and I had the assistance in drafting it—of the Electoral Reform Society Cymru. I will not detain the Committee by quoting from Size Matters—I know the Government have read it. However, it provides a comparative analysis of the size of national Assemblies—that is Parliaments; we will come to this at a later stage this evening, perhaps with the noble Lord, Lord Elystan-Morgan. The key issue is the ratio of Members to the size of the electorate in a given constituency, and the relationship between the two. It also looks at the legislative Assemblies of other comparable European regions or nations— whatever you wish to call them. Again, it looks at their size in relation to function. What is relevant in this analysis is the functional level. In other words, with the amount of devolutionary power that the National Assembly for Wales already has, we are reaching the norm of the European Union—and the Canadian provinces, another comparator. However, we are nowhere near the norm in terms of the number of Members.

Therefore, this amendment would give the National Assembly the ability to decide its own membership subject to the agreement of a two-thirds majority of Members. This is a proper devolutionary measure for the nature of the constitution itself. I know that that is a difficult concept for the Committee to understand. I am sorry to say that the United Kingdom is still an extremely centralist state. It is not a unitary state and never has been. It is a state of unions and those unions are different, for historical reasons. But the nation of Wales, despite the great time we had during the Tudor ascendancy, is not well placed in the pecking order of UK devolution. This amendment seeks to redress that. I know the Government will not be able to accept the amendment because it is too autonomous—but it is a constitutional principle that it is important to present in this discussion.

--- Later in debate ---

[Baroness Randerson]

The noble Lord is seeking to guarantee that gender balance. I am normally very supportive of any initiative that increases the number of female elected Members but, as the noble Baroness, Lady Gale, indicated, there would be an element of controversy. For example, if a female was elected as one of the Members and a male as the other Member, but the second male, shall we say, on the list had more votes than the winning female, or vice versa, there would be local controversy.

However, the main concern with this proposal is that it would reduce the element of proportionality. The offer of proportionality was intrinsic when Welsh people accepted the Assembly in the referendum. It was an integral part of what was offered.

The interlinked issues of the right number of Assembly Members, the optimum balance between constituency and regional Members and the system used to elect them need to be considered as part of the further step forward in devolution in Wales. If there are to be profound changes, there needs to be wider consultation. I know I will disappoint many Members when I say that I do not believe that the thinking behind these amendments is sufficiently mature for me to accept any of them. There needs to be further debate.

[Lord Richard]

Can the Minister go this far and say that the Government would accept in principle that the Assembly needs more Members?

[Baroness Randerson]

I can certainly undertake to relay the points of view put forward this evening within government discussions on the future of devolution in Wales. I understand that there are very clear and strong views. Although I cannot promise action on this issue in this Bill, I can guarantee that I will ensure that the views are widely known within government. I fully understand the issues that have been raised.