Hinkley Point: Chinese Investment

Lord Wigley Excerpts

Monday 2nd November 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord for his welcome of the project. It is true that 60% minimum is guaranteed on the supply chain in relation to Hinkley Point C, as I am sure he will be aware. It is very early stages for Bradwell yet; it has not really been discussed. I am sure that the aim will be to get at least that, but as yet pen has not been put to paper at all.

[Lord Wigley (PC)]

My Lords, as only four EPR reactors are currently being built—one in Finland, one in France and two in China—and none have shown that they work safely or efficiently, why was that technology chosen for Hinkley, ahead of the proven advanced boiling water reactor developed by Hitachi, which is currently being used successfully at three different locations?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right that the projects in France at Flamanville and in Finland to which he referred, and indeed in China—although the model is slightly different there—are ahead of what is happening at Hinkley Point C. This has been subject to detailed scrutiny, and we are satisfied that it is the best way forward. These are the first nuclear reactors that will have been built in this country for 25 years, and we are satisfied that this is the best way forward.

Fracking

Lord Wigley Excerpts

Tuesday 7th July 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness will be aware that there is a strong local element to the decision that has just been taken. The Government are of the view that a strong local element is important.

[Lord Wigley (PC)]

My Lords, does the Minister accept that, irrespective of the fact that he cannot go into detail about Lancashire, it is vital for the communities potentially affected by fracking, for local authority employees and councillors, and indeed for the companies that may be interested in fracking, to know exactly where responsibility lies on these matters? In that context, and given the statement made by his right honourable friend the Secretary of State for Wales in March about transferring powers to the National Assembly for Wales, can he now tell us from what date that will be effective?

[Lord Bourne of Aberystwyth]

The noble Lord will be aware that the Wales Bill will be subject to pre-legislative scrutiny this autumn. The Bill should become law at the end of next year or early in 2017.

Welsh Assembly Elections 2016

Lord Wigley Excerpts

Tuesday 23rd June 2015 Lords Chamber

[Lord Wigley (PC)]

My Lords, I am delighted to have the opportunity to follow the speech of the noble Baroness, Lady Randerson. It was the other way round last week—we seem to be a rotating show. I thank her for facilitating this debate and keeping a focus on matters that are important to all of us from Wales across party boundaries.

I will come back to some of noble Baroness’s comments but I welcome the noble Lord, Lord Bourne, to his position on the Government Front Bench. He is there at an interesting time. The noble Baroness, Lady Randerson, perhaps has been the keeper who has turned back to be poacher—and I am delighted to see her in that role—the noble Lord, Lord Bourne, is a poacher who has turned keeper. I remember well the way he campaigned in the National Assembly. It is good that he brings experience to the Front Bench and he knows the way in which a compromise was reached on the Silk commission with a lot of give and take by all parties.

If one has all parties buying into a process—as has been emphasised in the context of Smith in Scotland—then there is a reasonable expectation that the recommendations of such a commission should be enacted in full. All the parties in this Chamber and the other place were represented on the Silk commission. That was their opportunity, if they were unhappy with some of the compromises made, to draw a line. The ultimate report of the Silk commission was a unanimous one, as the noble Lord, Lord Bourne, well knows. Therefore, it is not unreasonable that, having made the compromises in reaching that report, there should be an expectation that all parties here fulfil those recommendations. To have come to a compromise in drawing up that report and then to have got to a position where it is second-guessed by the parties running into a general election frankly brings a degree of cynicism that undermines the integrity of the system. It is bound to lead to questions, if there are future such commissions, as to whether parties should be buying in as sincerely and genuinely as they did to the Silk report. I would be very grateful if the noble Lord, Lord Bourne, perhaps pondered a little on that as the Government consider how and when to bring forward the new powers. However, I am delighted that he is on the Front Bench and no doubt we will have many occasions to argue these matters.

I am also delighted to see the noble Lord, Lord Elystan-Morgan, back in his place after a bout of ill health. He looks fighting fit now. There is slightly less of him now than there was a few weeks ago but no doubt the quality makes up for the loss in quantity. We look forward to his contribution not only to this debate but whenever the interests of Wales arise.

Last Thursday, in introducing the debate on similar matters, I concentrated on the UK dimension—the need to ensure that there is some compatibility and an understanding of a balanced type of devolution taking place. Otherwise, as the noble Baroness, Lady Randerson, said a moment ago, people will start asking why things are happening in Scotland. Is it merely because of a knee-jerk reaction to the vote for the SNP? That will feed an agenda that could help my party but I am not sure if that is the incoherent way in which things should happen to get a better government for Wales. There needs to a balanced settlement but I will not repeat the arguments, except to say that I hope that that is an element in the thinking of the Wales Office as it addresses these issues.

As the noble Baroness, Lady Randerson, said in introducing this debate, the political parties and candidates in the coming election need to know exactly where they stand. In Wales, perhaps even more than in Scotland, we have had a shuffling type of devolution going on all down the 15 years since the Assembly was set up. There has been change upon change upon change. There now need to be adequate powers and finances and the job needs to be got on with, particularly when one thinks of the challenges in the health service and education facing the next Government in Wales. We need the powers to be cleared up, so they know what to do and get on with doing it.

Picking up the point made by the noble Baroness, Lady Randerson, on the police service, there needs to be a rounding off of the devolution process by bringing the police into the purview of the National Assembly. Many of the associated services, such as the local government parts—not only funding, but social services’ co-operation with the police, and the transport responsibilities that come under the National Assembly—interface with the police and should logically and coherently be devolved. Having the police devolved to the National Assembly would bring a balance with the powers of Northern Ireland and Scotland. I accept what was said: that what happens in Scotland does not always necessarily reflect the priority in Wales. Of course not— but I am sure that Members on the Liberal Benches tonight will be only too aware of their commitment to a federal approach. The principle of a federal approach was that there would be balanced devolution, not least so that the people in the centre at the federal level know exactly what powers they are dealing with at other levels. I hope that will be given further thought.

With the Cities and Local Government Devolution Bill currently going through Parliament, we have the odd situation whereby it is quite likely that powers relating to the police commissioners will be devolved to mayors in England—but what happens in Wales? We were told from the Government Front Bench last week that that Bill has nothing whatever to do with Wales, so Wales could be the only area with the existing commissioners. The National Assembly, which I am sure would like to do something about this, will not have the powers to do so. That really needs to be sorted and some clear thinking brought in.

On finances, whatever may be said about how Holtham might be reinterpreted in today’s circumstances, the reality is that the resources are not there to provide the services that Wales needs. Of course, the resources can be spent better. There is always a way of spending money better, but we really are cutting to the bone and next year we are going to see services eroded. There may well be places in England with equal problems that need more resources as well, but I am not willing to accept that because there has been a cutting back of public expenditure and a reversal in the Barnett squeeze effect, that justifies not trying to bridge the gap. Wales has been underfunded probably to the order of £6 billion or £7 billion since 1999 and it is time for that to be made up. Given the formula that Scotland gets, I cannot for the life of me understand why Wales has to get that much less. Is it a bonus paid to Scotland because it threatens to go independent at any point? Surely we do not have government policy based on that sort of thesis? I hope that we have a more logical approach to funding.

Reference was made last week to the referendum on tax powers. If we do not have a greater funding commitment to Wales, I wonder whether we are going to get any enthusiasm for that referendum. I am not convinced that a referendum is needed at all. We see all these other powers, including new taxation powers, going to Scotland, and yet we do not get them for Wales without a referendum. The time has come for Governments to make decisions and stand by them. If the commitment is that we need to get answerability through income tax powers, then let us get on with it rather than hiding behind a referendum. If we cannot get the capital that is needed for projects—we heard about the discussion concerning the M4 relief road at Newport only this morning—how on earth will we be able to meet our requirements without new sources of taxation?

I should like to make many other points but I know that time is squeezed. I will be grateful to hear the Minister’s response.

Welsh Government: Fracking

Lord Wigley Excerpts

Thursday 22nd January 2015 Lords Chamber

Asked by

[Lord Wigley]

To ask Her Majesty’s Government what discussions they have had with the Welsh Government regarding the devolution of powers over fracking for gas on land.

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

My Lords, in November 2014 my right honourable friend the Secretary of State for Wales announced a programme of work to seek a political consensus on the way forward for devolution and to provide a stable settlement for Wales. This work is underpinned by discussions with Welsh party leaders, including the First Minister of Wales, the right honourable Carwyn Jones AM.

[Lord Wigley (PC)]

My Lords, may I interpret that Answer as an indication that we can look forward to a Statement being made by the Secretary of State on St David’s Day to indeed confirm a transfer of responsibility for fracking to Wales? Since the Government have their own amendment to the Infrastructure Bill, Amendment 86, on Report in the House of Commons on Monday, removing Scotland from the provisions of that Bill concerning the right to use deep-level land for fracking, why is there not a similar amendment for Wales, if that is indeed the direction in which the Government are going? Will the Minister link up with the department today to see whether it is possible, even at this late stage, to table such an amendment?

[Baroness Randerson]

The noble Lord should take into account the process that is under way. The Secretary of State has set great store by the fact that he wants to achieve political consensus across the four parties in Wales. The Welsh Government are involved, of course, and they have made it clear what their views are on the need to offer powers to the Welsh Government if they have been offered to Scotland. However, what is right for Scotland is not necessarily always right for Wales, and discussions are still ongoing.

Government of Wales Act 2006 (Amendment) Order 2015

Lord Wigley Excerpts

Tuesday 13th January 2015 Grand Committee

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

My Lords, I beg to move that the draft order laid before the House on 5 November 2014 now be considered. I will provide noble Lords with a brief summary of what it seeks to achieve. The UK Government are making this order at the request of the Welsh Government. The National Assembly for Wales is currently considering legislation relating to sustainable development in the Well-being of Future Generations (Wales) Bill. The stated intentions of the Bill are to enhance the sustainable development duty on Welsh Ministers and to make sustainable development the central organising principle of the Welsh Government and of other public bodies in Wales exercising devolved functions.

However, Section 79 of the Government of Wales Act 2006 already imposes a duty on Welsh Ministers in relation to sustainable development. To avoid Welsh Ministers being subject to two separate duties, the Welsh Government wish to be able to amend Section 79. Currently, the Assembly does not have the legislative competence to do so. As a result, the UK Government have agreed to use the power under Section 109 of the Government of Wales Act that allows Her Majesty, by Order in Council, to amend Schedule 7 to that Act and thus confer the required competence upon the Assembly.

If passed, this order will enable the Assembly to amend Section 79 of GOWA, which in turn would allow the Welsh Ministers’ obligations to be aligned with the duties contained in the Bill. Section 79 was created in GOWA in 2006, when only executive competence existed in Welsh devolution. Following the referendum in Wales in 2011, the Assembly obtained full legislative competence for the subjects in Schedule 7 to the Government of Wales Act. This order therefore reflects the evolution of Welsh devolution since 2006. Section 109 requires the order to be approved not only by both Houses of Parliament but also by the National Assembly for Wales. The order was approved by the House of Commons on 15 December, and the debate in the Assembly is expected to take place on 20 January.

I believe that this order demonstrates the UK Government’s continued commitment to work constructively with the Welsh Government to achieve an effective devolution settlement for Wales. I hope that noble Lords will agree that this order is a sensible use of the power in Section 109 and that the practical result is something to be welcomed. I commend the order to the Committee.

[Lord Wigley (PC)]

My Lords, I rise to ask for clarification from the Minister. I do not think that many people would want to block the order, because it seems a patently sensible thing to do—but if the House did not pass this order, it would be a case of the unelected Peers blocking the wishes of both the elected House of Commons and the elected National Assembly for Wales. That strikes me as a rather unsatisfactory position to be in—albeit that the powers are being used in this instance with a recommendation and to move forward.

Secondly, the Minister said that the Assembly is “currently considering legislation”. I assume that those words were carefully used. Does that mean that the Assembly is currently considering legislation outside its powers? Are there issues that arise from that possibility? Is it outside its competence? If that is the case, are we asking for powers for retrospective action in order to put right something that has already been carried or debated, possibly outwith the Assembly’s powers? All these areas need clarification to avoid any instance arising, perhaps in circumstances more contentious than this. The objective of this order is probably acceptable to everyone, but one can imagine circumstances where that might not be the case and where there could be great difficulties.

[Lord Rowlands (Lab)]

I rise briefly to support this order. I followed the question asked by the noble Lord, Lord Wigley, with some interest. As I understand it—I hope the Minister will confirm this, and I think she did so in her opening speech—the order confers further legislative power on the Assembly to promote the Bill that is before it. If it is that, I fully support it. It is part and parcel of the staged process of the evolution of legislative competence contained in the 2006 Act. I know that there are many critics of that process, but it has served the Assembly and the Welsh Government well over the years, prior to the referendum and the Assembly’s full legislative competence. Will the Minister confirm that this is a process of conferring further legislative power on the Assembly to fulfil its wishes to introduce this Bill and carry it through?

If it is, we should hope it is the last such order, because there is unanimity across all parties that for legislation we should move from a conferred powers model to a reserved powers model. That was what the Minister assured us when she was taking the last Bill through the House. The process she described is now in full swing, and I hope that in the near future the proposed reserved powers arrangements will see the light of day. If, as I suspect, this will be the last such order, we should recognise that. I think I am in a minority, but I believe the process that was created to introduce legislative competence was sensible. It was part of a sensible staged process to transfer legislative power, but it is now redundant. I hope that this is the last order of this kind and that we will go over to a reserved powers model.

The title of the Bill that is the driving force behind this order is the most ambitious and courageous title I have ever seen. Over many years, I have heard Ministers making the case that their Bills will improve people’s well-being, but I have never seen the words “well-being” in the title of a Bill. The Well-being of Future Generations (Wales) Bill is an amazingly ambitious and courageous title. I sincerely hope that the performance that flows from the Bill will match it.

I realise that it is not within our competence to discuss the Bill, but considering that we are enabling it to go ahead and are supporting it, I hope it is within the bounds to ask the Minister to give us some idea about the costs that the Bill might incur. The Bill will place a duty on local authorities and a series of public bodies to promote and develop sustainability. At this stage, particularly in local government, there are horrendous problems of finance. I hope that the Bill will not create costs for local government that it cannot sustain.

The Bill that will eventually come forward is about the public sector. As I understand it, the private sector and the third sector will be covered by something called a sustainable development charter. I have not had sight of this charter. If the Minister is in a position to clarify what the charter might be, it would be helpful as a piece of background to an order which I and, I am sure, everybody else will support.

Wales Bill

Lord Wigley Excerpts

Monday 24th November 2014 Lords Chamber

[Lord Tyler (LD)]

My Lords, I am delighted to speak in support of Amendments 1 and 2, which I and my colleagues have signed. I want to pay tribute to my noble friend the Minister and her officials for the patience, persistence and professional care with which they have managed to perfect these proposals after so much discussion and improvement in meetings since I first raised the issue at an early stage of our consideration of the Bill. I am confident that we are now well on our way towards this timely reform. I cannot believe that anyone in the other place, or indeed anywhere else, will stand in its way. It would surely be a brave reactionary—even a foolhardy one—who would now claim that Welsh young people are less mature, well informed and well intentioned than their Scottish counterparts.

I have heard mutters that this is the thin end of the wedge. That is not so. The wedge was firmly implanted by the record number of 16 and 17 year-olds who not only registered to vote in their thousands, but then on 18 September ignored the blandishments of the separatists and voted to stay in the United Kingdom. We should recall that all UK parties endorsed the Edinburgh agreement which introduced this simple reform. I observed during the Report stage of this Bill:

“It would surely be constitutionally improper, in what has now been reinforced as a United Kingdom, to differentiate between the basic civic rights and duties of citizens here, simply on their area of residence. If, as I believe, the franchise is the foundation stone of our representative democracy, discrimination on that basis must surely be totally unacceptable”.—[Official Report, 11/11/14; col. 158.]

As my noble friend said, it will now be for the Welsh Assembly to complete the process. I am sure that this will prove uncontroversial since a substantial majority of Assembly Members have already declared their support. In the debate of 24 September, to which my noble friend referred, the Conservative spokesperson, Andrew Davies AM, said that:

“My group has a free vote on this particular issue, because there is no party line on whether there should be votes for 16 and 17-year-olds”.

Julie Morgan AM from the Labour Party said that it was encouraging and quite inspiring to see 16 and 17 year-olds involved in the Scottish referendum. The debate was led by my Liberal Democrat colleagues in the Assembly, who committed themselves there and subsequently, but perhaps even more significant was that the Minister, Jane Hutt AM, said that,

“we support the lowering of the voting age to 16”.

The outcome of that debate, held just two months ago and just after the Scottish vote, was 41 to 11 in favour of this reform. It is now surely unthinkable that any future referendum with equally long-term implications for the country and its citizens could be permitted to lapse back into the pre-2014 limited franchise. Whether that is on UK membership of the EU or any similar major decision, these young people have now earned the right to have their say.

This is a triumph for those who have worked so hard for so long to achieve this reform. The recent Youth Select Committee deserves special mention for its authoritative report, published just a few days ago, which carefully weighs the arguments. But the final and conclusive credit must go to the 110,000 young people in Scotland who showed by their actions that they were ready to take on this responsibility as fully adult citizens of the United Kingdom. I am delighted to support my noble friend.

[Lord Wigley (PC)]

My Lords, I am delighted to support the amendment as far as it goes. Of course we had amendments on Report that went a little further and would have dealt with voting for young people aged 16 and 17 in other referenda and in elections within Wales itself. I realise that as far as the Bill is concerned, the peg for this change is the fact that income tax is included in it. My colleague and noble friend Lord Elis-Thomas and I would like to have seen a more general approach by giving powers to the Assembly in the generality in order to address issues such as this. The fact that it does not go as far as we would have liked does not mean that we do not support it in going this far.

I was very conscious of the tone set by the Secretary of State, Stephen Crabb, as background to today’s debate. Only last Monday, addressing the Institute of Welsh Affairs, he said:

“We now have a unique opportunity to reshape the future of our Union. The appetite for change is there. People want a stronger voice over their own affairs. It is unmistakable in Scotland … And palpable in Wales. And it is a sentiment that cannot, and will not, be ignored. And I am determined that Wales should not play second fiddle in the current debate on devolution”.

That is very interesting, in the context of the amendments before us today, but it begs the question of how much further—and when—the rest of that commitment is going to be borne out.

We are very much aware that we expect to have the report of the Smith commission on Scotland tomorrow and, no doubt, this will have a relevance to these things. In relation to this amendment, however, can I take it that the Government would be minded to enable the Assembly to use similar powers in any further referendum which was only in a Welsh context? Does the fact that the provision goes only as far as income tax indicate—or not—that the Government do not foresee any further referendum in Wales in the context of further devolution and that that will be undertaken as quickly as possible, without being held up by the need for a referendum?

[Lord Crickhowell (Con)]

My Lords, I think I avoided being placed among the die-hards by the noble Lord, Lord Tyler, when I spoke on the subject on Report, because I said that I was still open-minded and prepared to be persuaded about the desirability of moving the voting age to 16. However, I did express anxiety about the idea that we should do this step by step, nation by nation, area by area. I would have preferred to see us having all-party discussions and taking a decision on the issue so that it applied to all votes, whether national ones or partial votes of this kind. I regret that we are moving in this ad hoc way because it is not the best way of undertaking constitutional reform. However, my noble friend has put forward these amendments and I am not going to oppose them. My successor as Member of Parliament for Pembrokeshire, or Pembroke South—my former constituency has been split in two and I always forget what it is called now—is Secretary of State. He has made firm commitments and I am delighted that he has taken such a strong position on these matters.

I will raise only two questions today. I am not going to challenge the decisions that have been taken, even if I would have preferred that we had got there by a somewhat different route. Many noble Lords will have received a note from the Electoral Commission which raises two issues. It points out that there are time constraints for introducing any change:

“In order to give Electoral Registration Officers (EROs) sufficient time to identify and encourage eligible 16- and 17-year olds to register to vote ahead of any future referendum in Wales, any primary legislation would need to be in place and amended regulations would need to be clear early in the calendar year before the referendum is expected to take place (e.g. by early 2015 if a referendum were planned to take place in 2016)”.

Later, it draws attention to the resource implications by stating:

“EROs would require additional resources to identify and encourage eligible 16- and 17-year olds in Wales to register to vote, including raising awareness of how to register to vote for this new group of eligible electors. The Commission may also seek further resources as part of our public awareness activity before any referendum”.

All I am asking is that, in the context of these amendments, we should be given the Government’s thinking about these issues and their reaction to the recommendations and report of the Electoral Commission. It seems to me that before we approve the way forward, we should know exactly what the position is going to be on the matter of resources and timing.

--- Later in debate ---

[Baroness Randerson]

My Lords, I shall respond briefly to the salient points that have been made in this, our last debate. The noble Lord, Lord Elystan-Morgan, referred to the words of the Prime Minister. Perhaps I may point out to him the solid steps that have been taken since 19 September. The Cabinet Committee has been established under the chairmanship of William Hague. The Secretary of State is of course a member of that committee and, indeed, I attend as well when Wales is being discussed. I would also point to the establishment of cross-party discussions here in Westminster. My right honourable friend the Secretary of State will also be in discussions with the leaders of the Assembly groups. We have made the announcement which has been referred to on numerous occasions in our debates of the date of 1 March, St David’s Day, by when we expect to have resolved the issues to a sufficient extent to be able to produce a reserved powers framework for future legislation in respect of Wales. That will deal with the proposals for additional powers in Silk 2, in so far as there is cross-party agreement relating to the size of the Assembly. Silk 2 was accepted by the Deputy Prime Minister in his role of leader of his party. The long-standing devolution credentials of the noble and learned Lord, Lord Morris, are well known and respected by this House. The recent Supreme Court judgment has made it imperative that the issue of the reserved powers model is dealt with.

[Lord Wigley]

The noble Baroness touched on Silk 2 and the fact that, in Wales, we had a remarkable cross-party agreement in the Silk commission to deliver it. A lot of parties compromised to reach that agreement. Can we be assured that there will not now be further compromise? The compromise has already taken place, the Government have a unanimous report and Wales expects it to be enacted.

[Baroness Randerson]

It does not, of course, lie in my hands whether there is compromise. It is an issue for the four parties within Wales. I strongly agree with the noble Baroness, Lady Morgan, who has made clear that the devolution debate has changed. It has gathered force and moved on since Silk 2 was published. I join the noble Lord, Lord Elis-Thomas, in being delighted at the end of the concept of WAG. I always regarded this as an unfortunate acronym of the Welsh Assembly Government. My noble friend Lord Thomas made the very important point that the Bill is just a step. I say to noble Lords who make me feel like a newcomer that I have only been campaigning for devolution in Wales since 1979.

Wales Bill

Lord Wigley Excerpts

Tuesday 11th November 2014 Lords Chamber

[Lord Morris of Aberavon (Lab)]

My Lords, it is with pleasure that I support the amendment tabled by the noble Lord, Lord Elystan-Morgan. There are three reasons why I do so. First, the Welsh Assembly has won its right to a new and better model of government, and its right to be granted, like Scotland, all the powers not reserved to Westminster.

Secondly, with experience, it is now indefensible, within a small kingdom, to have different forms of government —for Scotland, Northern Ireland and Wales. Hence my firm belief, which I have advocated for some time, in the need, particularly post the Scottish referendum, to appoint a constitutional convention, with greater authority than the Kilbrandon royal commission because it would have party leaders on it, to give it maximum authority. Royal commissions have fallen out of favour; Kilbrandon itself was inconclusive. The thrust was there for devolving government, but the options were many.

Thirdly, with the symmetry of equality of powers for the three Governments, we could then consider the part that England would play in a federal state. I explored the proposals of the MacKay commission in my National Library Archive lecture last November, and surmised then that there would be a great deal of agonising before any agreement was reached. I trust that my party will take a statesmanlike view and a broader perspective than short-term number-crunching, and will make the good governance of the whole of the United Kingdom paramount.

The arguments against my noble friend’s amendment, which I have learnt from the considerable time that I spend in Spain, my favourite European country, amount to “mañana”—or, to paraphrase St Augustine, “Oh Lord, make me good—but not yet”. However, I am confident that the ever efficient Whitehall machine has already done a great deal of the spadework. Indeed, it had done that as far back as the devolution Bill of 1976, of which I was the architect—and, I suspect, also did it as part of the work on the schedule of powers in the most recent Act, to which my noble friend referred. Those powers were not delineated lightly. So, from my experience of legislating, my noble friend’s proposal of six months seems a perfectly reasonable time within which to bring forward proposals.

At Second Reading, we heard some quite ill informed criticism of the present arrangements. As the architect of Harold Wilson’s Bill, I plead guilty, together with the other members of the Government I was proud to serve. I was warned then that this was a novel and untried proposal, and that reserved powers would be much simpler. Let me enumerate briefly the realpolitik facts—they can be proven historically—about why the decision was taken on granting powers as opposed to reserving powers.

First, we were spoilt for choice by the many proposals of the Kilbrandon commission, which deserve rereading. Secondly, the first draft of the Queen’s Speech in 1974 did not include any devolution proposals. I was warned in the first few days of the new Government to send an amendment to No. 10 to include devolution, and I did so—as it happened, from my sick bed. The reason for the omission was that the Cabinet Office drafters thought that a reforming Labour Government would have other, more general, priorities in the first year of government.

Thirdly, my great fear was that there would be a Bill for Scotland but not for Wales—mañana again. Wales might come at the tail end of a Parliament. My mission was to hang on to the coat tails of Scotland and, if necessary, compromise my ambitions to ensure that there would be contemporary Bills in the early years of the Labour Government.

Fourthly, the Labour Party was split, and many of my colleagues lacked appetite for any kind of devolution.

Fifthly, the Cabinet was split. The Prime Minister was the main protagonist and appointed his two deputies in turn, Ted Short and Michael Foot—such was the importance of the committee—to chair the Cabinet committee dealing with the day-to-day work of drafting the Bill. The difficulties, fears and doubts of all Whitehall departments were paraded in the twice-a-week meetings of that committee.

Eventually, one of the greatest and most intellectual civil servants, Sir Michael Quinlan, a distinguished future Permanent Secretary in the Ministry of Defence, was appointed to head the Whitehall machine. I tend to gauge the prospects of success of a particular policy by the quality of the civil servants appointed to run it. I knew with the appointment of Sir Michael—he was Mr Quinlan then—that we would get the proposals over the hurdle of the Cabinet legislative committee.

If anyone wants intellectual analysis of our political difficulties, I invite him to read or reread the admirable diaries of the period written by my noble friend Lord Donoughue, who had a ringside seat at many of the all-day meetings in Chequers and elsewhere. They are historical proof of the difficulties resulting from the different views of the Cabinet. The opposition changed from meeting to meeting: Roy Jenkins, Denis Healey, Elwyn Jones and so on—all big beasts. At one time, my noble friend says, they were quarrelling like monkeys at Chequers. It was only the steadfastness of the Prime Minister that got us through, and I am eternally grateful to him.

The intellectual defence of our proposals, which we now find inadequate, was that we proposed what we thought we might get away with in the party, in the House of Commons and in Wales. That was the realpolitik. In the event, we were proved wrong because of, as Mr Macmillan once said, “Events, dear boy, events”. Now is the opportunity to right the wrong. I, for one, marvel, now that everyone—well, almost everyone—is a devolutionist, how far we have moved in the 55 years of my parliamentary life.

[Lord Wigley (PC)]

My Lords, it is a delight to follow the noble and learned Lord, Lord Morris of Aberavon, and to learn some aspects of this question that I had not been aware of before. I am very glad that he has added his considerable expertise and weight to support the amendment. I am delighted to support the words of my noble friend Lord Elystan-Morgan and I am grateful to him for putting this amendment forward. I pay tribute to him for his consistent advocacy for the maximum self-determination for Wales within the framework that we are discussing.

I moved a very similar amendment to this in Committee, supported by my noble friend Lord Elis-Thomas. I do not intend to repeat the arguments that I put forward then, but I would like to highlight two points. First, the basis for having a reserved powers model is that it would be similar to that in Scotland and Northern Ireland, so it at least has arguments of symmetry in its favour as well as the practical arguments that have already been outlined. Secondly, the reserve powers model was unanimously recommended by the Silk commission, which included people from all four parties in Wales. There were some discussions before coming to that conclusion, and clearly it is something that should carry weight.

The principle of that amendment in Committee was supported by noble Lords on all Benches. It was supported by the noble Lord, Lord Crickhowell—I was delighted at that time to hear his words—and by the noble Baroness, Lady Morgan of Ely, the noble Lords, Lord Thomas of Gresford, Lord Rowlands, Lord Richard and Lord Anderson, as well as my noble friends Lord Elystan-Morgan and Lord Elis-Thomas.

In her response to that amendment, the noble Baroness, Lady Randerson, said:

“I am delighted that there is now a broad consensus that moving to a reserved powers model of devolution is desirable”.

She assured the Committee that the Wales Office was,

“working proactively on how we go forward to a new reserved powers model … we must … ensure that sufficient work is done on the reserved powers model so that there is cross-party agreement”.—[Official Report, 13/10/14; col. 26.]

She was then challenged by the noble and right reverend Lord, Lord Harries of Pentregarth, as to why the reserved powers model,

“cannot be accepted in principle in the Bill, with all the details to be worked out in due course”.

In reply, the noble Baroness said that she would,

“take it away and think about it”.—[Official Report, 13/10/14; col.28.]

She invited me to withdraw my amendment, saying that events were moving on very rapidly. It was on that basis that I withdrew the amendment that I had put forward.

Well, we are now at Report stage. I warmly invite the noble Baroness, Lady Randerson, now to indicate that the Wales Office has indeed worked proactively on this matter and can now accept the amendment and tell the House of the anticipated timescale to get the constitutional change put into effect.

[Lord Crickhowell (Con)]

My Lords, I very much enjoyed the history lesson that we received from the noble and learned Lord, Lord Morris. It was a revelation of what life was like in the Labour Cabinet at that time. I also have a great deal of sympathy for what he said about the need for a commission to look at the whole devolution package of constitutional change, and I have also expressed my views on that.

As the noble Lord, Lord Wigley, has reminded the House, I have already expressed sympathy for the reserved powers model. I have just one point to make, which arises from the phrase in the amendment,

“within six months of the passing of this Act”.

The noble and learned Lord, Lord Morris, has said that a great deal has no doubt already been done and it should be possible to get a measure together within about six months. We have heard that the Wales Office has probably been doing some work on it. However, this Bill is likely to pass into law quite quickly, and I am a little concerned, if more work needs to be done, that the implementation of this proposal might be required almost exactly at the time of the general election—or perhaps even worse, in the interesting period that may follow it, when attempts are being made to form a coalition Government.

It does not seem to me to be very wise that a new Government in those circumstances should be required, almost as their first act, to bring in this measure. My concern is that by using that phrase “within six months of the passing of this Act”, the noble Lord may have inadvertently created an unnecessary obstacle and difficulty. I would be happy with the general thrust of the amendment if we had a rather more relaxed timescale so that, if the matter has to go beyond the general election, it would enable it still to be dealt with expeditiously but not in the immediate aftermath of that general election.

Wales Bill

Lord Wigley Excerpts

Tuesday 11th November 2014 Lords Chamber

Moved by

[Lord Wigley]

2: Before Clause 1, insert the following new Clause—
“Powers of the Assembly to extend the franchise to younger people
(1) The Assembly may legislate to extend the franchise for Assembly elections to every person in Wales aged 16 and over on the date of the election.
(2) The Assembly may legislate to extend the franchise for elections to local authorities and for any Welsh referendum, whether held throughout Wales or locally within Wales, to every person in Wales aged 16 and over on the date of the election.
(3) No resolution to extend the franchise to people aged 16 and over, under this section, will be valid unless supported by at least two-thirds of the Assembly members participating in the voting on such a resolution.”

--- Later in debate ---

[Lord Wigley (PC)]

My Lords, Amendment 2, tabled in my name and that of my noble friend Lord Elis-Thomas, seeks to enable the National Assembly to extend the right to vote to 16 and 17 year-olds. A number of amendments have been grouped with this one and they point in the same direction. If the amendment is passed, the Assembly would be empowered to determine whether those aged 16 and over could participate in Assembly elections, Welsh local authority elections and any Welsh referendum that may be held. Subsection (3) of the proposed new clause ensures that no such change could occur unless,

“two-thirds of the Assembly members participating in the voting”,

support the provision. As might be expected, the amendment was drawn up partly in response to the decision of the Scottish Government to empower 16 and 17 year-olds to vote in the September referendum, and having noted the outstanding take-up of that right in Scotland. By polling day, 109,533 16 and 17 year-olds had registered to vote in the Scottish referendum. The impact of that referendum has understandably been felt keenly in our debates on the legislation before us. Whatever people’s politics may be, I hope that I would be correct in asserting that the decision to allow those aged 16 and over to vote in that referendum was commendable and opened up democracy for a new generation. The sheer level of engagement in the referendum was staggering, and if we in Wales and indeed across the United Kingdom can try to emulate such engagement in politics and public life, that will be a tremendous success.

In terms of principle, I believe that there should be no taxation without representation. Young people aged 16 and 17 can have left school, be working and thus paying tax. They should have the right to vote on their representation in Parliament and the Assemblies which determine any such taxation. In 2012, the National Assembly for Wales voted in favour of lowering the voting age to 16, but at present, of course, it does not have the necessary powers to implement that decision. Amendment 2 would give it the powers to do so.

Voting at16 is common practice in many European countries, including Austria, Germany and Norway, as well as in Latin America, in countries such as Argentina and Brazil. I would like to see Wales lead the way in this matter, especially as Assembly Members have already signalled their intention to introduce such measures. My party, Plaid Cymru, is committed to this, and I know that other parties in Wales are also committed.

The other amendments in this group have the same objective. I realise that if the amendment is carried, the Government might want to tidy it up in another place, although the advice that we were given was that the wording was both effective and clear. At the very least, I hope that the Government will realise that there is a widespread wish for this to happen and will not stand in the way of such progress. I beg to move.

[Lord Tyler (LD)]

My Lords, in speaking to the amendments in my name in this group—Amendments 3 and 19—I can be relatively brief, since I proposed similar improvements to the Bill in Committee, as those who participated then will recall. The principle of including 16 and 17 year-old fellow citizens in the franchise is now an accepted fact. All parties in this Parliament have endorsed this change. Contrary to the doom mongers’ forecasts, a very high proportion of this age group registered to vote in the Scottish independence referendum—nearly 110,000, which is a remarkable figure. Incidentally, I received the Answer to a Question today indicating that nearly 500,000 young voters in the age group 16 to 18 are currently registering under the new system, so this is a success story under IER.

On 18 September, a very large percentage of those—thousands of them—voted in the actual referendum. In the words of the Intergenerational Foundation newsletter,

“16 to 24 year-olds actually favoured staying in the union by a small margin (35% to 33%) ... the idea that the vision of an independent Scotland would appeal to an iconoclastic streak among the youngest members of the electorate appears to have been misplaced”.

That is putting it mildly. Curiously, it seems that middle-aged men, not women, were the most influenced by the fantastical claims of the separatists. Therefore, if we were to exclude the less mature, the less well informed and the less rational, we might wonder just which cohort we should be excluding from the franchise. It is not the most young; it is others.

There was another testimony from the noble Baroness, Lady Liddell of Coatdyke:

“Does the Minister agree that the quality of debate among 16 and 17 year-olds during the referendum debate was astonishing? I admit I was wrong; I was one of the people who thought that it was wrong for the franchise to reduce the voting age to 16. I was comprehensively proved wrong. I heard some of the best debates I have ever heard in a lifetime in politics from 16 and 17 year-olds”.—[Official Report, 16/10/14; col. 295.]

My noble friend Lord Cormack, whom I am pleased to see in his place, made a similar confession on 29 October:

“My eldest grand-daughter voted at the age of 16. I do not necessarily agree with the noble Baroness, Lady Liddell, on that, but I know that my grand-daughter and all her classmates took this matter exceptionally seriously”.—[Official Report, 29/10/14; col. 1261.]

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[Lord Cormack]

My Lords, I am not rising to resolve that particular problem. Though I am by nature and inclination a referenda man, do not let us go too far down that line. I frequently agree with the noble Lord, Lord Howarth, who is a friend of long standing, but I cannot go along with him on much of what he said, although I agree with him emphatically that—I hope—the Welsh people will not wish to vote on independence. At the moment, the polls indicate that only 4% of them are inclined to move that way. Somebody interjects to say it is 3%; the proportion is going down by the minute.

I come at this from a slightly different angle: I believe that among the things that should be common to the United Kingdom as a whole is the franchise. That is why I was critical of the Prime Minister and others, who conceded to Mr Salmond votes at 16 for the referendum in Scotland. I have mentioned my highly articulate and intelligent 16 year-old granddaughter in this Chamber before. Of course, because 16 year-olds were going to have the vote, I engaged with her, and through her with others, on the subject, because it was of such significance. That was far more important than any single vote I have cast in over 50 years of having the franchise; when I was able to vote for the first time it was at the age of 21.

We did concede to Mr Salmond that 16 year-olds should have the vote—and I entered into the spirit of it within family and so on—but I regretted that we had done so. We must consider carefully the wisdom of giving the vote to 16 year-olds. After all, there are so many other areas of life we could talk about in terms of what people can do at 16; some will work and pay taxes and some will not.

Only yesterday in this House the noble Earl, Lord Listowel, introduced an amendment that the Government accepted. He made an exceptionally moving speech, and the Minister gave an extraordinarily generous reply. The substance of that amendment was that 17 year-olds apprehended by the police should be treated in a similar way to 16 year-olds. He advanced an extremely convincing argument, which the Minister accepted.

A 16 year-old cannot drive a car, and is not legally allowed to take a drink. There are, and I think there should be, rites of passage. I believe that there is a danger in giving votes to those who are in full-time school education—I distinguish clearly between school education, and university and further education. We ought to treat this matter extremely carefully. My noble friend Lord Crickhowell made a generous speech in which he said that he was not necessarily against the idea, but that it should not be dealt with as yet another piecemeal reform. We heard quite a lot about those in our earlier debate on this Bill today.

There I entirely agree with my noble friend. This issue has not been dealt with on a UK-wide basis; it has just grown, like Topsy. If we are to move in this direction, with all the implications for the age of majority and everything else involved with it, we should do so only as a result of comprehensive debate and discussion within both Houses of this Parliament. It should also be part of the remit of the constitutional convention or royal commission. A royal commission is the option that I personally would favour, and the noble Lord, Lord Richard, who is not now in his place, also came down on that side. Any such move should be part of the remit of any such convention or commission. We would not be serving the people of Wales, or any other part of the United Kingdom, well if we continued with this piecemeal approach.

[Lord Wigley]

I am grateful to the noble Lord for giving way to me; he knows that I have very much respect for him. Does he not accept that, in its own way, this entire Bill is, in his terminology, piecemeal reform, in that it is reform for Wales and not across the United Kingdom? If we were to go down his road in all matters relating to devolution, we would not be able to do anything for Wales, Scotland or Northern Ireland unless it was also acceptable in the regions of England, or in England as a whole. Is that really what he is advocating?

[Lord Cormack]

The respect is mutual, may I say. My noble friend—I shall call him that—and I have known each other for a very long time. We have travelled together and talked together on a whole range of issues, and frequently found ourselves in agreement, not least about the fact that his wife is one of the most accomplished harpists in the whole of the United Kingdom.

--- Later in debate ---

[Lord Wigley]

My Lords, I am very grateful to the considerable number of noble Lords who have taken part in this important debate. A number of issues have come out that go well beyond the Bill we are discussing. I welcome the statement made by the Minister. It is a step in the right direction. One issue has come out loudest and mostly clearly. It started to raise its head in the earlier debate. It is the extent to which there is acceptance in this Chamber and at Westminster that we are now living in a pluralist democracy. By virtue of having devolved Governments and of having accepted devolution as a means of acting not only in Wales, Scotland and Northern Ireland but in London as well and possibly within England, we have accepted that things will be different in the different areas. There is no point whatever in having devolved structures if one does not accept the consequence that decisions will differ from area to area. The question that then arises is about which of the matters that we discuss here really do need to be decided on a UK level because of the basic nature of those decisions and which decisions can be devolved without making a considerable difference to what some Members of this Chamber would regard as the essential unity of the United Kingdom. That is something that has to be decided before one goes down the road of looking at commissions, conventions and all the rest.

I picked up one point that the noble Lord, Lord Forsyth, made. He referred to a convention slowing matters down. Perhaps he used those words inadvertently, but they were the words that he used. I can understand, possibly, from his point of view, that that is how people would want to see it, but if that is the general approach of establishing a commission or a convention, it would also raise a lot of questions, not least in Scotland, if there are ideas that all this is going to slow down the whole process that has been so focused on in recent weeks.

[Lord Forsyth of Drumlean]

I ought to be old enough not to have fallen into that trap. I was suggesting that, rather than rushing to solutions on a piecemeal basis and in a pre-election period, these issues need to be considered carefully. I have no desire to delay this matter. The sooner we stop talking about the constitution and concentrate on the issues that matter to our country, the happier I will be.

[Lord Wigley]

Many of us believe that getting the right devolution package is essential to all the countries of these islands in order to enable us to go on tackling the problems of day-to-day life in the economy, education, the health service and all the rest. That is basic. That is the purpose of it. I accept entirely that one does not make rushed decisions, particularly on constitutional matters, but neither should one be delaying them because delay is what causes frustration and sometimes brings the structures of government in these islands into question. We need to be able to take the proper decision on the right basis in a timely manner and in a way that carries people with us.

With regard to issues such as voting in referenda in Wales—I was very grateful to the noble Lord, Lord Cormack, for his kind remarks which I will pass on to my dear wife Elinor, who will be very grateful—I see nothing wrong in deciding these things in Wales. That applies to local elections or referenda that relate to matters purely within Wales. I understand that we could not decide in Wales alone to have votes at 16 for a UK election because that is the nature of the body. I was therefore very grateful to the Minister for the commitment to bring forward an amendment at Third Reading. I welcome the fact that that amendment will give the Assembly the right to take the decision with the two-thirds majority to which my noble friend Lord Elis-Thomas referred. That is the right approach. The decision should be there, but there should be safeguards. The two-third majority builds in that safeguard.

I regret that there is no willingness to look at this question in terms of elections. I hope that at some future stage, possibly in the context of a broader debate, that matter can be given further consideration. On the basis of the very significant step taken by the Government in this matter, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

--- Later in debate ---

[Lord German (LD)]

My Lords, I am pleased to move this amendment standing in my name and that of my noble friends Lord Thomas of Gresford, Lady Humphreys and Lord Roberts of Llandudno. I do not wish to repeat what I said in Committee but it would be worth outlining the two purposes of this amendment. First, it would reinstate the names of the candidates on the regional ballot paper; and secondly, it would reduce from 12, as it is now, to six the maximum number of names on the ballot paper.

The first of those objectives requires an order which, of course, can be tabled within six months or so of the next elections to the National Assembly for Wales. But, of course, the second of those matters requires primary legislation and was a block in the 2011 Assembly elections. I remind noble Lords that the names of candidates appeared on all the ballot papers for the regional ballot in Wales for the National Assembly for Wales, except at the very last elections in 2011 when they were removed.

I have three reasons for bringing the amendment forward in this format again. The first is to establish what progress has been made on the proposal. Originally it was that of the Electoral Commission—to reduce the number of names on the ballot paper from 12 to six and to examine timing issues. The second reason is to see whether it is possible, in this debate, to establish the views of the political parties towards the proposal that names of candidates should be on the ballot paper. The third is to try and establish accurately the reasons why candidates’ names were removed from the ballot paper and judge on that basis whether these reasons can be looked at afresh. Like many noble Lords, I would not want an acceptable solution ruled out because of the lack of primary legislative time.

On the first point on progress, I have read the consultation letter from the Electoral Commission, and much of what it says is that the barriers to putting the names on the ballot paper are to do with the interests of the administrators rather than the voters. It is to do with the fact that it takes some time to unfold them, lay them out flat and count them. Having stood in the regional ballot for the National Assembly for Wales, I do not think that I ever got away from a count before 7 am the following morning. That was in 2011 when I was present, as it was for the previous three elections. I do not think that it is markedly any different in time depending on the way in which the ballots are counted. That is not a reasonably rational solution. It is curious that in the letter which the Electoral Commission sent out to all the political parties and interested parties on this matter in its consultation recently, it did not mention the need for primary legislation to implement one of its proposals, which was its proposal back in 2009.

I have seen a letter to the Minister, which was copied to me by the Electoral Commission, which would lead us to believe that once the Secretary of State at that time had ruled out reducing the number of names on the ballot paper, that primary route was no longer a possibility. As my noble friends who put their names to this amendment will know, and as noble Lords here will know, we are reviewing the whole position of the way in which the National Assembly is treated. It seems to me that this is a real opportunity to examine the issue once more. I am sure that noble Lords would not want a recommendation from the Electoral Commission’s recent consultation which effectively said the same as it did in 2009—that the solution of only six names is not possible because, as at that time, the Secretary of State says that primary legislative parliamentary time cannot be found.

I turn now to the second point, which is the views of the political parties. The Electoral Commission’s evidence-gathering session has ended and all political parties in Wales have made their positions clear. I know the position of the Welsh Liberal Democrats. As noble Lords can see, the amendment follows closely my party’s policy, so I am happy to move it. I guess from the sympathetic words I received in Committee from the noble Lord, Lord Wigley, that Plaid Cymru supports putting the names back on the ballot paper. Perhaps my noble friend can tell us in her response whether her discussions with the Secretary of State indicate that the Conservative Party supports placing the names on the ballot paper. The position of the Labour Party still remains a mystery to me, but I am sure that I will be enlightened in the course of this discussion.

[Lord Wigley]

Before the noble Lord concludes his remarks—I support his general thrust—does he accept that if the noble Baroness, Lady Randerson, as Minister, moves ahead with the undertakings that she gave on the earlier group of amendments, her provisions may well allow the Assembly to decide this issue for itself, as opposed to us taking the prescriptive decision in the way in which it is laid down in the amendment?

[Lord German]

I understand, but I repeat what I said in Committee—that it is a matter of timing. We are talking about a decision for the 2016 elections, which require an order some time between six and nine months before those elections take place so that ballot papers and everything else can be put in place. But importantly, if the Electoral Commission were to think that it needed primary legislation, this may well be the only opportunity to have it in place before 2016, given that you need to have it in place well in advance of the elections. I remind noble Lords that the current legislation states that a political party can place a maximum of 12 names on the ballot paper. However, there are only four vacancies. I am not wedded to six persons but it seems fairly reasonable that, if you had a candidate who had held a seat on the regional ballot, you are not likely to get five deaths in a row which would mean that you had nobody left on your list to fill that vacancy. Certainly, that was the view of the Electoral Commission.

Finally, I tried to establish why the names were removed in the first place. There is something of an inconsistency in the letters from the Electoral Commission on this matter that I have received and seen. It said that there was no legislative time available and therefore its recommendation of having only six names maximum in order to have a shorter ballot paper—one that was easier to manage and easier for voters to see without the print being so small that you could not read the names—was rejected by the Secretary of State because there was no time in which to introduce primary legislation. The second letter I have seen does not say that in such stark terms. It simply says that the Secretary of State rejected this proposal. I wonder whether anybody can throw any light on that issue. If we are going to put the names of candidates back on the ballot paper, we should not have a restriction placed upon us by virtue of primary legislation.

In the first three elections to the National Assembly, when the names were on the ballot paper, postal voters could also see the names and see who they were electing. In those early elections there was the possibility of candidates being on both ballot papers at the same time—a position which will be re-established under the clause we are debating. That meant, of course, that people could see the read-across from both ballot papers and make their decision accordingly. In other words, if the same names were on both ballot papers, that provided more information to the voter. Taking the names off, of course, meant that the postal voters could not see the names of anyone and would not have a clue who they were electing, which is a fundamental process in our elections, as it is for the European elections in Wales, where we do see the names of candidates on the ballot paper.

In conclusion, I would like to ascertain what progress has been made, try to establish the political parties’ views on this and ask my noble friend what progress we can now make to bring back the names on the ballot paper, especially in relation to the other parts of Clause 2 which are so relevant to this amendment.

--- Later in debate ---

A figure of 120—we would not come to that for quite some time—would be very attractive for the simple reason that it would nearly double the membership. Doubling the constituencies might be a very simple exercise. However, there is one huge snag: even to mention an advance on the 60 current Members would be regarded almost as blasphemy in some parts of Wales. There would be very little popular support for it. That is where public leadership comes into play. Those who advocate it would not be popular. It would be extremely difficult for elected Members of Parliament to support it without risking their futures. It would be difficult, indeed, for Members of the Welsh Assembly to support it without running the same risk. However, it is essential that people who take part in public life should be prepared to run such risks and to adopt moral stances which are absolutely necessary. Such a stance is very necessary in this case to secure the future of the Welsh Assembly.

[Lord Wigley]

My Lords, I am delighted to have added my name to this amendment and very much support what the noble Lord, Lord Elystan-Morgan, said. At an earlier stage of the Bill, we had an opportunity to go into this issue in some detail. I will not repeat that or repeat the arguments that he has put forward. I will just underline that, ideally, I would like to see the control of the number of seats, as with other aspects of the Assembly, in the hands of the Assembly itself. However, an amendment on that will not be forthcoming now, which is why I am very glad to support this amendment.

Although noble Lords made persuasive cases at an earlier stage for the membership of the Assembly to be more than 80—to be 100 or even 120, as the noble Lord, Lord Elystan-Morgan, said—I accept that 80 is a logical number to go up to now. As my noble friend can confirm, the design of the building is such that it can expand to accommodate 80 Members without too great difficulty, so that at least avoids any additional cost in that regard.

As an elected Member of the Assembly in the first four years, I found the work pressure enormous. I accept that the nature of the work was a little different then. There were probably more committee meetings and they have been rationalised, possibly because of the pressure on Members’ time. I was on five committees and I was finding that very difficult indeed. Sometimes people say, “Ah, well, you should be there from nine o’clock on a Monday morning onwards”, but that does not overcome the problem of a shortage of Members to sit on all the committees.

An increase to a membership of 80 would also allow for the possibility of having a greater range of expertise in the Assembly cohort. I know from my time there of the benefits of having Members with first-hand medical experience; I think of Dr Dai Lloyd. All parties have people with various types of expertise. Clearly, the more Members you have, the better chance you have of getting a full balance of expertise.

I felt the pressure when there was no more than a secondary legislative role for the Assembly. To do justice to the increased workload of a full legislative role, and not having a second Chamber to go through the detail—I am not arguing for there to be one—much more attention needs to be given to scrutiny of legislation on a line-by-line basis. That requires people with the time, commitment and ability to do the job.

I very much hope that the Minister, if the proposed new clause is not accepted, can indicate that this question will be taken on board between now and St David’s Day.

[Lord Howarth of Newport]

My Lords, the noble Lord, Lord Elystan-Morgan, made his case in masterful fashion and has given a political explanation of why he confines his proposal for an increase in the size of the Assembly simply to 80, not a higher number.

As the noble Lord, Lord Cormack, said in the debate on an earlier amendment, in constitutional change form should follow function. A rigorous analysis is needed of the functions that the National Assembly for Wales already has to perform and the functions that are increasingly to be devolved to it. This legislation provides that the Assembly should take control to a significant degree of income tax and borrowing. The obligations that will fall upon the Members of the Assembly are not therefore solely in terms of additional legislative scrutiny but invigilation of public expenditure, authorising expenditure, and controlling and examining its quality. Whether the National Assembly for Wales would wish to replicate the sort of committee structure that we have in this Parliament, such as the Public Accounts Committee in the House of Commons, I do not know. That should rightly be a matter for the Assembly. However, what is beyond doubt is that the scale, range, complexity, difficulty and importance of the tasks that the Assembly has to undertake have been growing, are growing and will continue to grow.

Therefore, following the example already given by the Electoral Commission in Wales in certain respects, further analysis should be made of the membership required in order for the Assembly to manage to perform the tasks that the people of Wales, and indeed the United Kingdom, will expect it to carry out. For that reason, I very much welcome the spirit of the amendment. I would be happy if it were to be accepted but it would be seen only as a provisional step. It might be preferable that further work be carried out on this proposition, so that we can see exactly where, in practice, it should take the National Assembly for Wales.

The noble Lord, Lord Wigley, wisely and realistically observed that there is a constraint on physical space in the Assembly building. However, we should not be unnecessarily deterred by that factor. After all, when the House of Commons was reconstructed after the war, Winston Churchill, as Prime Minister, thought it appropriate deliberately to recreate a Chamber that would be a pretty tight squeeze for all its Members. That works rather well so we should not be worried.

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[Lord Wigley]

My Lords, I am very pleased to follow the noble Baroness, Lady Grey-Thompson, and to indicate that there is all-party support for the amendments. Noble Lords will be aware of the letter which has been circulated by Bite the Ballot, signed by all four party leaders in Wales and pressing the importance of the matter.

We have heard in several debates about the degree of consensus in Wales, and this is another example of it. Where there is such consensus, we should build on it. The fact that education is a fully devolved matter and that it will now be possible, as the Minister indicated earlier, for those aged 16 and 17 to take part in the referendum on income tax, when it comes, underlines the need for us to maximise registration.

I very much hope that the Government will be able to respond to the points made and look forward to hearing the Minister’s response.

[The Lord Bishop of Coventry]

My Lords, it is 94 years since the voice of the bishops in Wales has been heard in this House but, as my noble Lord Roberts implied, I thought it right to consult the Church in Wales, and the Archbishop of Wales in particular, about the amendments, which seem to me to have a great deal of merit, to see whether their voice might be heard today indirectly, as it were. As a result, I can say that the Archbishop of Wales has asked me to convey to your Lordships’ House that the bishops of the Church in Wales are very supportive of the amendments. Indeed, I understand that they also support the extension of the franchise, as was proposed and discussed earlier, but I chose to concentrate my consultations on these amendments.

As are Members of your Lordships’ House, the bishops in Wales are very conscious of and concerned about low levels of political engagement in Wales. The Church in Wales has been working hard on its own structures to increase participation in its governance, especially among young people, so it is very glad to give its backing to the amendments as practical steps in national government both to encourage a higher level of voter registration, especially among young people, and, as a necessary corollary, to further political education in the schools and colleges of Wales.

On a more personal level, I believe that the bishops of the Church in Wales are right to support the amendments. I hope that what is done in Wales will model ways forward—somewhat along the lines described by the noble Lord, Lord Howarth—as laboratories of best electoral processes for the whole of the UK, as was underlined by the noble Baroness, Lady Grey-Thompson. We need ways to improve levels of voter registration and to educate and, moreover, inspire young people in the responsibilities and opportunities of political engagement.

The amendments seem to me to be of great help in hooking young people into the political process, so that when they are entitled, they are primed and ready to go.

--- Later in debate ---

[Baroness Morgan of Ely]

My Lords, it is getting late, but I want to move this amendment, in which we seek to future-proof the legislation before us. It is clear that constitutional reform north of the border will move forward apace now that commitments have been made in the referendum—and, of course, these commitments must be respected. However, we need to understand that reforms of Scotland are likely to have an impact on Wales. In this amendment, we are asking the Government to undertake a commitment promising that if new taxes are introduced in Scotland we will need a review of the impacts on Wales and to probe whether there will be any benefits from introducing such measures in Wales.

I will give noble Lords the example of corporation tax, to which I am sure the noble Lord, Lord Wigley, will refer. If corporation tax were to be introduced in Scotland, there would undoubtedly be an impact on Wales. Let me be clear—the Labour Party does not want to see devolution of corporation tax to Scotland. It is hard enough to get large corporations to pay the tax that is owed already and the last thing that we want to see is a race to the bottom in terms of taxation across the UK with the consequent knock-on effect on the limited pot available for public expenditure. But the reality is that Labour is not currently in the driving seat in Scotland, and we are not sure what is going to come out of the Smith commission, so if corporation tax is introduced in Scotland and if it were to undercut corporation tax in Wales, or if we were to see a similar kind of thing being introduced on air passenger duty in Scotland, and being introduced and then reduced in Wales, it would be more difficult to attract inward investment into Wales.

We are asking for a degree of flexibility to be able to respond to whatever is introduced in Scotland. If we do not write that into the Bill, we could be waiting for a wholesale constitutional reform debate to be settled but, in the intervening period, Scotland may have started off that process of undercutting us on corporation tax, for example. Scotland may have whipped in and claimed advantage over other parts of the UK, and I do not think that we should allow that to happen.

We do not know where we are heading in terms of direction of travel on devolution. We do not know what the timetable is for constitutional reform, and we need this amendment as a belt and braces approach to protect Wales from the possible introduction of taxes that could be damaging. If the Minister is not going to accept this amendment, I would like to know how she proposes to protect Wales if the situation were to arise.

[Lord Wigley]

My Lords, I have listened to the noble Baroness, Lady Morgan of Ely, with interest. There are certainly arguments in support of symmetry in constitutional terms; they usually lead to various forms of federalism. If the Labour Party is indeed moving towards a federal approach, that is certainly an important development.

I wish to address Amendment 20 in my name, which would provide that, if corporation tax were devolved to Scotland it should certainly be devolved to Wales or be available. Noble Lords may recall that I tabled an amendment in Committee proposing that if corporation tax were devolved to either Scotland or Northern Ireland, it should also be devolved to Wales. I based that on the fact that all four parties in the Assembly had agreed that this was needed, and that the Silk commission said that corporation tax should be devolved to Wales if it was devolved to Northern Ireland. The response that I elicited from the Minister, Lord Newby, on that occasion, was entirely centred on the comparison with Northern Ireland, not with Scotland. He based his argument on two factors: first, that Northern Ireland has to compete with the lower corporation tax in the Irish Republic. Wales also has to compete with Ireland for footloose inward investment projects, tourism businesses that cross the sea, and in the agricultural food sector, for example, in cheese manufacture. We share a maritime border with Ireland so I refute his argument on that count.

Secondly, the Minister argued on the basis that the tax devolution to Northern Ireland is in order to help it to rebalance its economy, with the implication that Wales does not need to rebalance its economy. That is absolute poppycock. Wales has the lowest GVA per head of any nation or region in the UK, following the rundown of coal, steel and slate. We desperately need to rebalance our economy. I am seriously concerned that a Treasury Minister, for whom I have very great respect, should have been advised by Treasury officials that Wales does not need economic rebalancing.

The Government do not recognise Wales’s needs vis-à-vis Northern Ireland. Be that as it may, the Minister did not try to defend not devolving corporation tax to Wales if it was, indeed, devolved to Scotland. I understand that this has been raised in the context of the Smith commission that corporation tax should be devolved to Scotland. Certainly, in the pre-referendum pledge the impression was given that the devo-max model being touted would include fiscal autonomy, and that certainly includes corporation tax.

In tabling the amendment I am seeking an assurance that if Scotland gets control over corporation tax the question should be firmly on the agenda of similar provision for Wales. I hope that on this occasion I get a more conciliatory response from the Minister, not just for me but for all four parties of the National Assembly that seek such powers.

[Lord Rowe-Beddoe]

My Lords, I support Amendment 16, standing in the name of the noble Baroness, Lady Morgan of Ely. It is very clear what it says, and without trying to rehearse arguments previously made, I want to discuss the devolution of air passenger duty. I refer your Lordships to my register of interests with regard to Cardiff Wales Airport. The Silk 2 implementation stated that long-haul air passenger duty should be devolved. The arguments put forward in Committee have been considerably amplified—perhaps extended—recently by an unlikely ally in Mr Willie Walsh, the chief executive officer of International Airlines Group, which as noble Lords know, incorporates British Airways and Iberia.

In an article in the Times on 30 October—it was after our Committee meeting; it would be flattering to consider that Mr Walsh was actually watching our proceedings—he takes it much further and calls for a total abolition of this tax across the whole of the United Kingdom. It was a stunning headline but when analysing what he said, and doing a little more research, it is worth making a mark as to what was behind his statement. He said that this tax, permissions, or whatever it may be,

“should be consigned to the annals of history”.

The argument put forward is that the estimated £3.5 billion that the Treasury receives would be more than offset by a boost of some 0.5% to our GDP and the creation of some 60,000 jobs.

The interesting thing is that it is possible to avoid this tax, and people do. For example, a family of four flying economy to the United States pays £276. A Japanese visitor flying back home from London to Tokyo pays £81. This may well have a connection with the flattening level of Japanese visitors to this country, both business people and tourists, over the last 10 years. This tax is a disincentive. Holland got rid of it after 12 months and has never looked back, so there is something to be said for replacing this tax.

I may be proved wrong but I believe that Scotland could well be getting something out of this. We all know what happened in the Republic of Ireland but what we do not know and do not realise is the damage that is done to Northern Ireland because of the hundreds of thousands of people who start their long-distance flights south of the border as £276 is a lot of money for a family of four flying economy. I support the amendment. I am sorry to bring up air passenger duty again but at present it is, I am afraid, a rather hot subject.

Wales Bill

Lord Wigley Excerpts

Wednesday 15th October 2014 Lords Chamber

Moved by

[Lord Wigley]

52: Clause 20, page 23, line 19, at end insert—
“(5A) The Secretary of State shall make arrangements for an independent report to be compiled on the issuance of bonds by Welsh Ministers.
(5B) The Secretary of State shall lay a copy of the report specified in subsection (5A) before each House of Parliament within three months of this Act being passed.”

[Lord Wigley (PC)]

My Lords, I will also speak to Amendments 53 to 55. This group seeks to bolster the Assembly’s economic accountability and resources. We in Plaid Cymru believe that the Welsh Government should be able to issue bonds, just as the Scottish Government can. Amendment 52 would hence provide for a review into whether this could in fact take place. It is a very modest amendment giving the opportunity for this to be further investigated. I should point out that this was a recommendation of the Silk commission and is supported by the Welsh Government as well as by my own party.

Having this power would allow the Welsh Government to use innovative, less volatile ways of borrowing such as the Build for Wales scheme that we have championed. Such a project would create a new entity to invest in public infrastructure. At present, if the Welsh Government want to undertake large amounts of capital expenditure to invest in building schools, hospitals, roads and so on, they are unable to borrow and cannot raise enough by way of tax to provide the necessary resources. If they save the funds, the Treasury may claw the money back if it is not spent within a certain period—as was so disgracefully done in 2011 when savings prudently accumulated by the Welsh Government were ruthlessly purloined by Her Majesty’s Treasury. It is surely against common sense that the Welsh Government are unable to borrow funds long term to fund capital assets.

Amendments 53 to 55 would ensure that the threshold for the Assembly’s capital borrowing powers is raised from the £500 million in the Bill to £1,500 million—that is, £1.5 billion—which would make the Welsh Assembly more closely aligned to the £2.2 billion threshold afforded to the Scottish Parliament. We would feel very unhappy if the Scottish Parliament were able to borrow four times the sum that we can in Wales. We arrived at our figure by taking into consideration Wales’s population base as well as the fact that we have fewer PFI commitments than Scotland, hence giving us greater flexibility over repayments. I beg to move.

[Lord Howarth of Newport (Lab)]

My Lords, it is absurd that there should be a need for a review of such a matter. It is absurd that there should be limits on the ability of the Welsh Government to borrow. We all remember—I think we are all old enough—that in the 1960s and 1970s local authorities issued bonds, as did utilities. Much more recently, universities have issued bonds, notwithstanding that to a significant extent they are publicly funded. This is an elementary tool of financial management which, if the Assembly is to take serious responsibility for its own affairs, of course it ought to have.

My only complaint about Amendment 55, proposed by the noble Lord, Lord Wigley, is that he has been so modest. He wants to limit the amount that the Assembly is permitted to borrow to £1,500 million. There is a constraint on the amount of borrowing that rests in the ability of the Welsh Government to service the interest. That should be a sufficient discipline.

--- Later in debate ---

[Lord Wigley]

I am very grateful to the Minister. I certainly welcome his announcement that progress has been made with the bonds issue, and I hope that the National Assembly can move forward rapidly to take advantage of that opportunity.

With regard to borrowing, the capital budget of the National Assembly was reduced by just over 40% when the changes introduced by the Government were brought in. That put an immense squeeze on, among other things, the capital requirements of Governments, such as the Government in Wales, with responsibility for roads, schools, hospitals and all the rest. To get the economy moving, we have to get the capital injection, particularly into the economic infrastructure. I entirely accept that there has to be a cash stream to service this, and the Minister once again mentioned the income tax proposals. As he knows, I welcome those and want to see them used. Are the Welsh Government constrained to income tax? There are other sources of taxation revenue, and there may be other sources of revenue as well. For example, in the next four or five years, the M4 tolls will be reconsidered and renewed. Is it not possible for the Welsh Government to use sources other than income tax to service the capital borrowing that they need? Can the Minister give any indication on that?

[Lord Newby]

As the noble Lord knows, the Bill is permissive in terms of additional taxes being established in Wales. My working assumption would be that if such new taxes were devolved or established, there would be a commensurate rise in borrowing powers. However, many of the taxes that people sometimes talk about do not necessarily raise a huge amount of money. Therefore even if you got a commensurate increase in borrowing it would not necessarily be a transformative amount on its own. However, I think that the principle is very clear. The Bill is permissive in terms of additional tax powers for the Assembly and, as it were, borrowing follows income.

[Lord Wigley]

I am glad that the Minister has emphasised that there is a basket of possible sources of revenue which would justify the capital that is needed. No doubt the Welsh Government will need to use the capital responsibly as it is for capital investment projects and not just to subsidise revenue budgets that are running at a loss. As far as that is concerned we are making progress. Can I just pick him up on the comments that he made about Northern Ireland when he said that the situation there is different. Of course the situation is different from Wales. I understand the historic difference and all the rest but in economic terms the challenges in Wales are just as great as those in Northern Ireland—they are in terms of the income per head, the GDA. Is the Minister aware that the GDA per head in areas such as Kensington and Chelsea is 10 times the GDA per head in the Gwent valleys and Anglesey? That is the scale of the discrepancy. We need to regenerate the economy, otherwise we are always going to be going down this spiral. We need the tools to do the job and quite clearly this will be a responsibility of the Welsh Government. All I would press for is for him to be as sympathetic to the economic needs of Wales as he clearly is to the economic needs of Northern Ireland. I beg leave to withdraw the amendment.

Amendment 52 withdrawn.

--- Later in debate ---

Moved by

[Lord Wigley]

56: After Clause 23, insert the following new Clause—
“Review of Barnett Formula
(1) The Secretary of State shall make arrangements for an independent review of options for reforming the Barnett Formula in order to meet the objective of calculating the block grant funding for Wales on the basis of need.
(2) The Secretary of State shall lay a copy of the report of the review specified in subsection (1) before each House of Parliament within 3 months of the passing of this Act.”

[Lord Wigley]

This amendment stands in my name and that of my noble friend Lord Elis-Thomas. Noble Lords will be glad to know that this is the final amendment tabled in our names for today’s debate. It deals with perhaps one of the most central questions of all. We are coming to it last: the much-beleaguered Barnett formula which every party in Wales accepts must be replaced. Unfortunately, for what appear to be narrow political reasons the parties up here do not agree on that point. Those of us in Wales who know how much Wales misses out on funding due to this formula were horrified to hear the government parties giving pledges to the Scottish electorate that they would keep the discredited system in place in the event of a no vote. If it is to stay in place without amendment it will have very dire consequences for Wales.

As the Minister will know, in Wales an independent commission, the Holtham commission, has shown how we are disadvantaged by the implementation of the Barnett formula which, as noble Lords will be aware, calculates how much consequential funding the devolved nations get based on the spending levels in England. The Holtham commission argued in 2010 that we in Wales are underfunded by between £300 million and £400 million every year. We believed at that time that it was probably an underestimate. Since 1999 the aggregate shortfall in Wales arising from the Barnett underfunding of the necessary services amounts to more than £5 billion. That is why our NHS, education system and local government have been inadequately financed. Services vital to the people of Wales are being squeezed because successive Governments at Westminster have not got to grips with this problem.

The Holtham commission argued that the formula should be replaced with a mechanism based on needs as opposed to the per head of population as is currently the case. This would allow for the fact that Wales has more vulnerable and disadvantaged people, including older people—many people retire to Wales—disabled people and those on benefits. The level per head of population is higher than the UK average. Even the noble Lord, Lord Barnett, has openly argued that the formula to which he gave his name should be replaced. A committee of this House came to the same conclusion.

Our amendment calls for a review of the options for replacing this formula. In the Motion to which I referred in earlier debates in the Chamber today there has been agreement between the four party leaders. There is a Motion coming up for debate on Tuesday in the name of the four party leaders, including the First Minister, Carwyn Jones. It states in the context of Barnett that the National Assembly for Wales,

“calls for bilateral talks that are informed by the Holtham and Silk 1 Commissions’ findings, including an updated assessment of the current level and likely future direction of Welsh relative funding”,

and,

“calls for those talks, which should begin immediately and be completed by January 2015, to have a particular focus on fair funding, with the goal of securing rapid implementation of a funding floor which both addresses underfunding in a way that is consistent with Welsh needs and halts future convergence”.

There are three steps that can be taken to sort this out and I put to the Minister that they are within the Government’s easy competence and can be achieved. The first is to determine the extent of the shortfall at present. I accept that it has come down because of the economic patterns and it may now be at £150 million to £200 million rather than the £400 million back in 2010, but it is almost certainly still there. If the Government were also to commit to a one-off adjustment to sort that out and bring in a floor so that as the economy picks up again we do not get the Barnett squeeze hitting us in the way that it has, and if the Barnett formula is adjusted to a percentage basis rather than an absolute one so that we do not lose out every time the absolute figure in Wales gives a lower percentage of benefit than happens elsewhere, it would be possible to live with the Barnett formula although it still does not give us a needs-based formula.

Ideally, however, what Wales needs—and what all the parties in Wales have been calling for—is a needs-based formula. At some point we are going to get some daylight on this. We cannot go on from year to year with this underfunding. I press the Government very strongly indeed, even if they cannot accept these amendments, to please give us some ray of hope that we might find our way out of the hole in which we find ourselves in Wales. I beg to move.

--- Later in debate ---

[Baroness Randerson]

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

[Lord Wigley]

And of course, every word uttered from the Dispatch Box is government policy, as well. What I am trying to reconcile from the Minister’s response are the comments that things are more or less right now and that there is a need to look at fair funding. There is something a little bit contradictory about that. They are not absolutely right now, or at least we do not know that they are. That is the argument in favour of having more investigation.

The Holtham methodology may or may not have been right, though it has generally been accepted that it was. That indicates there has been a closure of the gap, though there probably is still a gap, of maybe £200 million rather than £300 million to £400 million. We do not know. Taking the comments that the Minister made a moment ago in response to the noble Lord, Lord Richard, if there is a gap of £200 million which could be put right, it would bring us on to roughly what a needs-based formula would generate.

The assumption is that Holtham was looking for a communality of standards in public services in Wales, as might be expected in England. Whether it be £300 million or £400 million as it was, or £200 million as it is now, if that could happen with a one-off adjustment and by bringing in a floor and making sure that the changes—convergence or divergence—were on percentage rather than absolute terms, so that we are not missing out, we would at least have a system that would be sort of needs-based. It is not the radical needs-based formula that a lot of us are looking for, where you have determinants that generate entitlement to certain funding, but at least it would meet the Holtham assessment of the needs as he saw them at that point in time.

Wales Bill

Lord Wigley Excerpts

Wednesday 15th October 2014 Lords Chamber

Moved by

[Lord Wigley]

21: Clause 6, page 6, line 15, at end insert “and associated tax credits”

[Lord Wigley (PC)]

My Lords, as well as Amendment 21, I will also speak to Amendments 22 and 23, all standing in the name of my noble friend Lord Elis-Thomas and myself. Amendments 21 and 22 are aimed at allowing the Welsh Government to introduce new tax credits as well as devolved taxes. That would mean that Wales was able to help target areas that require economic stimulation in one form or another.

Paragraph 4.6.8 of the Silk commission’s first report stated:

“In addition to the use of taxes to achieve policy outcomes in devolved areas, credits can also be applied so that activities are effectively subsidised. While existing tax credits such as the working tax credits (and in future the Universal Tax Credit) should remain UK wide, the Welsh Government should be able to introduce its own credits in relation to devolved taxes and through use of devolved grants and subsidies to promote investment and getting people into work”.

I hope that the Government will therefore either accept these amendments or bring forward their own amendments on Report to achieve that end—unless of course the Minister can persuade me that some other power exists or is in the pipeline that will achieve that.

I turn to Amendment 23. At present, any devolved tax to be implemented in Wales must be agreed by each House of Parliament as well as the National Assembly. We feel that it is wrong that a party in the Welsh Government implementing a manifesto pledge should be prevented from doing so by Governments in London. If the objective of this Government is to get the devolved Government to accept full responsibility for their actions then surely they should be given full and undivided authority in such matters. Manifestos and devolved taxes are matters for Wales, and the UK Government should not interfere in them. This amendment therefore removes the requirement for each House of Parliament to agree to the devolved tax so that it is in the hands of the National Assembly. It would mean that the people of Wales were absolutely clear as to where responsibility lies. I beg to move.

[Baroness Morgan of Ely (Lab)]

My Lords, the tax credits that currently exist are closely associated with welfare payments. The whole issue is integrated into the wider debate about welfare support which provides a basic living standard for people who are working and yet need state help. Introducing any amendment that would erode the provision of welfare in Wales would be a mistake—in particular, without that very comprehensive and structured debate about the implications in Wales. The Minister suggested that the noble Lord is talking about a new kind of tax credit. Could the noble Lord elaborate on what kind of thing he had in mind, beyond what currently exists?

[Lord Wigley]

If the noble Baroness refers to the Silk report, she will see the arguments made there. The whole point and ethos of the Silk report is to open out as much freedom as possible for the devolved authorities to develop ideas and even experiment with this area to reach the objectives that both she and I would wish they did. It is giving them more tools. I hope that those tools help them do the job.

[Lord Howarth of Newport]

My Lords, whatever the future structure of the United Kingdom, the union is surely to be based upon twin principles of solidarity and diversity. Tax credits are a principal structure of the welfare state. As my noble friend just now suggested, the welfare state is a fundamental underpinning of that solidarity. Given that in the last figures I saw only about 2% of the people of Wales do not wish to maintain the union, I very strongly suspect that noble Lords are a little bit ahead of themselves—not for the first time—and that the people of Wales would wish nothing to be done that would weaken the welfare state and undermine that principle of social solidarity that ought to underpin the union. I make this point particularly because great figures in Welsh political history were among the leading architects of the welfare state. Whether by accident or design, we should not do anything to undermine the welfare state and the solidarity that binds the people of Wales together with the rest of the United Kingdom through the welfare state and associated principles of fiscal redistribution.

[Lord Newby (LD)]

My Lords, Amendments 21 and 22 seek to include a reference to “associated tax credits” as part of the power to add further devolved taxes. I thought that the noble Lord was going to discuss tax credits associated with devolved taxes. In respect of landfill tax, at the moment, existing site operators can contribute a percentage of their tax liability to environmental benefits and get a 90% tax credit. As far as devolved taxes are concerned, that ability will still exist. For that type of tax credit, the power is there.

I think that the noble Lord, Lord Howarth of Newport, was talking about welfare benefit payments. Welfare benefits are not covered by the Bill. There has been no proposal to devolve power over welfare benefits to the Welsh Assembly. I thought that the noble Lord made strong arguments about why that might be opposed. The Bill makes no provision for devolving discretion over welfare benefits to Wales for good reason, and the Government are not minded to change their view on that.

Amendment 23 would remove the UK Parliament from the process of creating further devolved taxes. The Bill enables the Government to devolve further existing taxes as well as enabling the Welsh Government to create new devolved taxes. Clause 6 requires that if either of these powers is used the order would need to be approved by this House and the other place as well as by the Assembly.

[Lord Wigley]

Where powers to devise and implement new taxes in Wales are devolved to the National Assembly and those taxes have an appropriate dimension where tax credits could be introduced, would the powers allow that?

[Lord Newby]

Yes, they would, just as for existing taxes. The same principle would apply to any further taxes that were devolved to the Welsh Assembly.

Clause 6 requires that if either of the powers devolving further existing taxes or enabling the Welsh Government to create new ones is used, the order would need to be approved by this House and the other place as well as by the Assembly. The amendment would remove the UK Parliament from this process so that the order would need to be passed by the Assembly only. That would mean that the Assembly could pass an order under which existing tax powers would be transferred from the UK Parliament without this Parliament having any say. Clearly, that cannot be right. Surely it is important that the process of tax devolution continues to take place in the constructive and collaborative manner that has led to this Bill. As a mere Englishman now grappling with what we do about devolution within England, I have found the Silk process extremely impressive and one that could possibly be successfully emulated in England. The follow-up to the Silk process, under which there have been discussions with the UK Government and parliamentarians about how to take that forward, has been extremely constructive.

As for how we manage the existing devolution of tax proposals and take them forward, we have established the Joint Exchequer Committee, based on a similar body in Scotland, consisting of leading parliamentarians in Wales and the Treasury, specifically to look at how we implement the existing powers and at what further can be done. That would be one of the ways in which it would be sensible to contemplate adding additional tax powers. If Members of the Welsh Assembly have strong views about additional tax powers—and first they would have to express those views—they will then have a vehicle for discussing them. It seems to me that that is a very sensible way forward. Any change or devolution of powers over tax from the UK to Wales has, at the very least, implications for tax legislation in the rest of the UK, so it is only logical that the rest of the UK is involved in the discussions. It must be right that any future order-making process, whether initiated by the UK Government or the Welsh Government, should involve both the Assembly and Parliament. I hope that the noble Lord will withdraw his amendment on that basis.

[Lord Wigley]

My Lords, I listened with considerable interest to the responses I have had, and part of the clarification has been helpful. Certainly with regards to the tax credit associated with any new taxes, that may come along. However, may I just say to the Minister and to the House—without in any way wanting to cut across what has been largely a consensus approach to this legislation—that the whole point of giving new powers to the National Assembly for Wales or indeed to the Scottish Parliament is to trust them and enable them to go on with their business. We had for a period after the 2006 Act powers to legislate in Wales but in every instance we had to get orders passed through the House of Commons and the House of Lords. In its wisdom, Parliament has seen that this is probably not the right way to do it—if you have a dog you allow him to get on with it and do not try barking yourself. In this regard as well, if the people of Scotland had been told that any powers that they will get over taxation will be second-guessed at Westminster and orders will need to be put through before they can be implemented there might have been some second thoughts in Scotland as well on 18 September.

I believe that there is a strong opinion in Wales that, while all the details of devolution for Scotland and for Wales may not be at the same place in their development and some details may not even be appropriate, the principle is that the elected Assembly in Wales, the National Assembly, and the elected Parliament in Scotland should have the clear-cut responsibility for what has been devolved and that people should be able to see that. Once you bring in mechanisms to second-guess and to veto you are cutting right across that approach. I realise the Minister will not be in a position to give me any authoritative response with regard to the similarity or contrast between the powers for the National Assembly and those for the Scottish Parliament but it is undoubtedly an issue that will raise its head again, and I invite the Government to give further thought to it. On that basis, I beg leave to withdraw the amendment.

Amendment 21 withdrawn.

--- Later in debate ---

[Lord Wigley]

My Lords, I am very glad to have the opportunity to speak in this debate and to welcome the step taken by the Government in moving their ground with regard to lock-step. The noble Baroness, Lady Randerson, will well remember that I expressed some fairly strong feelings at an earlier stage with regard to lock-step. We felt that it was an inappropriate restriction and I am delighted that the Government have seen fit to move on it.

Amendment 37, standing in my name and that of my noble friend Lord Elis-Thomas, is included in this bank of amendments. We had a very useful debate on Monday in relation to constitutional principles on which there was a lot of consensus. Although the Government could not necessarily immediately accept the points that we made, they undertook to look at some of them. I hope that the same spirit will be adopted in their approach to other financial matters as has been shown with regard to the lock-step.

Amendment 37 seeks to ensure that the Assembly will be able to levy the three Welsh rates of income tax as it sees fit. The amendment is drafted to ensure that the Assembly will get full responsibility for raising and spending one of the three largest sources of government income alongside national insurance and VAT. If we give the Assembly the power to control these rates, it will enable Welsh Ministers to create additional jobs, which we hope will lead to an increase in the Welsh tax base. That would be an incentive for investment in the Welsh economy—which it certainly needs. As I say, we welcome the fact that the lock-step has been removed, which will give the Welsh Government greater freedom.

Amendment 38 stands in the name of the noble Baroness, Lady Morgan, who will no doubt speak on it in a moment. I will listen carefully to the arguments that she will put forward but I have some sympathy with what appears to be the intention of that amendment. However, I will listen carefully to what she has to say, and will listen to the Minister’s response to Amendment 37 to hear how the Government intend to build on their intention to give maximum flexibility to the Welsh Government.

[Baroness Morgan of Ely]

My Lords, the Labour Party understands the principle of the need for accountability and the need for the Welsh Assembly politicians to have responsibility not just for spending money but also for raising it. Devolving an element of income tax will undoubtedly increase the financial accountability of the Assembly. It will enable the Assembly to fund more of the spending for which it is responsible and will allow the Welsh Government to vary the levels of tax and spending in Wales and, crucially, it will allow Wales to borrow against tax.

We focus in these amendments on issues of income tax. However, it is worth pointing out that this is just one tax. In context, in 2013 income tax was 26% of the total tax take in the United Kingdom. It is significant, visible and understandable, but it is worth remembering that it is only one tax.

Devolving income tax powers to Wales has never been a priority for the Labour Party and the Welsh Government. However, it is important in terms of positioning the Assembly in the right place in the long term. We should remember that it was the Labour Party which devolved income tax powers to Scotland, but only after asking the Scottish people in a referendum whether they wanted that power. We would have to undertake a similar referendum if Wales were to follow suit. I will elaborate on this further when we discuss that group of amendments.

We will not always be in this situation. We are future-proofing here. I am confident that one day the Welsh economy will grow. There are clear signs that the Welsh Government’s efforts in this area are already bearing fruit. However, we must be aware that the whole principle behind the concept of the UK as a political entity is that we are supported by a social system that is available to all. We must be careful not to erode that basic philosophy and so provide fuel to the nationalist fire. There is a £16 billion annual gap between what Wales raises and what it spends. We must not lose focus on this issue. This is the economic foundation stone of the UK.

What drives us in the Labour Party is not some ideological zeal to create an independent utopia in Wales, but a practical, hard-headed approach to what is best, in particular for those who are struggling on low incomes, are desperate to make ends meet and are often dependent on the state to keep them afloat. We must remember that Wales has a weaker tax base than the UK as a whole. We must be careful when devolving tax powers that we do not lose out. HMRC estimated that in 2010 there were 89,000 higher rate taxpayers in Wales. They represented 7% of all taxpayers and were responsible for 33% of all the income tax revenues raised in Wales. There were only 4,000 additional rate taxpayers paying 45p in Wales. I could practically name them—they were mostly Tories, I will let you know. On the whole, we must understand that our tax base is very weak and we must be careful when we go down this route.

It is also worth noting that a very small proportion of revenues are raised by local taxation and the consequent tendency of Whitehall to wish to dictate how funds from the centre are used has seriously eroded local democracy and accountability. We must be very cautious and note that local revenue-raising should not go too far, since that tends to reinforce the regional disparities of income and wealth.

Tax differentiation can also lead to tax competition. In principle, this is not something that we encourage. We must be clear that we do not want to embark on a race to the bottom in relation to taxation. We are fearful that there is a hidden agenda on the part of the Conservative Party, which is for ever anxious to reduce the role of the state. The Conservative Party is committed to cutting taxes for the wealthiest people. Let us be clear: tax competition will lead to less money in the state pot, which means less money for our schools and hospitals.

The Conservative Leader of the Assembly, Andrew RT Davies, has said that he would like to make Wales into a “low tax economy”. He has pronounced proudly that he wants to cut just the top rate of tax. We must be aware that every time there is a tax cut, it is accompanied by a cut in services. It seems odd to consider this, at this moment in particular, in isolation from the discussions in the rest of the United Kingdom, and we need to consider what is happening in relation to the Smith commission in Scotland. That is why Labour would like to see this discussion occurring in the context of a broader constitutional convention involving the public and representatives of civil society. We must acknowledge that there is a disconnect between politicians and the public, and it is critical that we do not have a conversation about how money is collected and distributed from the distance of an ivory tower. However, the genie is out of the bottle and we need to respond.

Let us be clear that devolving income tax powers will not be a panacea for the economy of Wales. The chances are that income tax variations will not be significant. The previous Secretary of State suggested that he would like to see a 1p cut in income tax rates across the board. Research has suggested that that would cost £200 million. That would mean £200 million in terms of cuts to services—the equivalent of 7,700 nurses losing their jobs—in the hope that the economy would grow. That could happen but in the context of a Welsh Government budget of £15 billion it is hardly going to make a massive impact.

Of course, differential taxation of income would involve the need for a separate Welsh revenue collection mechanism that must be neither inefficient nor costly. The Government do not seem to be clear about the costs involved in establishing this mechanism. In Scotland, it is estimated that differential taxation would cost between £40 million and £42 million to set up. Can the Minister give some indication of how much it would cost to set up in Wales?

In anticipation of the Bill receiving Royal Assent, the Welsh Government have already set out in a White Paper how that mechanism would work. The Welsh Government and the National Assembly will have the ability to develop certain taxes shaped to the needs, circumstances and priorities of Wales. This is the first Welsh tax legislation in modern times. It is both historic and significant for Wales but we need to consider border issues, and I therefore turn to our Amendment 36.

We need to be aware of the complexity of border issues in relation to Wales, compared to Scotland. The Scotland-England border is not nearly as densely populated as the Wales-England border. Only 3.7% of the population of Scotland and 0.5% of the population of England live within 25 miles of the English-Scottish border. In Wales, the situation is totally different, with 48% of the population of Wales and 10% of the population of England living within 25 miles of the Wales-England border. There are more than 130,000 daily commuters. The fact is that introducing a variation in income tax could give rise to the possibility of higher taxpayers moving across the border in one direction or another. My understanding is that no Treasury impact assessment has been undertaken on this matter, although I understand that the previous Secretary of State said that a consultation has happened. Can the Minister confirm whether that is the case and will she commit to a Treasury impact assessment on that border issue?

I turn now to the lock-step issue. The Government have put down an amendment to remove the lock-step, thereby allowing the Welsh Government to vary increases or decreases to individual tax bands independently of one another. Again we would argue that this discussion ideally needs to be set in the context of a UK debate over the organisation of tax across the whole UK. To deal with this in isolation is inviting trouble, and that is why we need urgently to establish the constitutional convention. The public should have a greater say on where power should lie across the UK, including on the nature of tax devolution. Further devolution should not be piecemeal. The Minister referred to that in her comments on Monday. The notion of breaking lock-step is something that needs to be discussed in that broader context

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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.

[Lord Thomas of Gresford]

My Lords, I am most grateful to the noble Lord, Lord Rowlands, for drawing my attention to these new sections, in particular new Sections 116G and 116H. I spend around 140 days of the year here, about 60 days in my family home in Scotland and the rest of the time in Wales. On these formulae, I am not liable to pay income tax in Wales, certainly not in Scotland, and possibly not in England, if we have similar provisions. Thank you very much. Devolve away.

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Moved by

[Lord Wigley]

41: Clause 12, page 18, line 5, at end insert—
“(3A) The Secretary of State must lay a draft statutory instrument containing an Order under subsection (1) before each House of Parliament and the Assembly if—
(a) the First Minister or a Welsh Minister appointed under section 48 of GOWA 2006 moves a resolution in the Assembly that, in the Assembly’s opinion, a recommendation should be made to Her Majesty to make an Order under section 12(1), and(b) the Assembly passes a resolution on a vote in which the number of Assembly members voting in favour of it is not less than two-thirds of the total number of Assembly seats. (3B) The Secretary of State must lay the draft statutory instrument specified in subsection (3A) within the period of 30 days beginning immediately after the day on which the resolution under that subsection is passed.”

[Lord Wigley]

My Lords, this amendment stands in my name and that of my noble friend Lord Elis-Thomas. I will also speak to the associated group of amendments on the Marshalled List. In doing so, I suspect that there may be differences of opinion across the Chamber on some of the matters involved in these amendments.

Amendments 41 to 48 are drafted to ensure that only the National Assembly can begin the process of calling a referendum on the commencement of the income tax provisions in the Bill. Amendment 41 would ensure that a referendum might be called if a two-thirds supermajority of Assembly Members approved it—and that, this being the case, the Secretary of State would be required to make the order within 30 days of it being approved. This is evidently a change from the 180 days in the Bill, which we believe to be an unnecessary delay.

Amendments 42, 43 and 44 are consequential and ensure that although an order would still need to be laid before each House of Parliament, only the Assembly would need to approve the referendum order. We believe that the responsibility should be fairly and squarely on the shoulders of the Assembly in this matter, as in other matters which we debated earlier.

Amendment 45 similarly ensures that there is no unnecessary delay in the proceedings. As currently drafted, Clause 12(6) allows the Secretary of State to consult on the draft order until whatever time he or she considers appropriate. Amendment 45 would remove that provision.

We have laid an amendment arguing that Clause 13 should not stand part of the Bill for the reason that, were our other amendments in this group carried, the provisions in this clause would no longer be necessary. It should be for the Assembly to determine whether a referendum is needed. This decision should not be subject to the approval of the Secretary of State.

Amendments 47 and 48 allow for a supermajority of the National Assembly to decide whether there should be a referendum on transferring income tax powers or whether—I emphasise this—simply to commence the provisions. We believe that if a cross-party consensus were reached in the Assembly, which would be needed in order to achieve a supermajority of Members, that institution should not be compelled to put it out to a referendum. If all the parties agree on these matters, why on earth go to the expense of holding a referendum? Scotland is apparently going to be given far-reaching new taxation powers without such a referendum. Why should we in Wales have one forced on us?

On Monday, I argued that the Assembly should have the power to hold a binding referendum on matters which are already within its competence. A referendum on tax matters should be an available option if the Assembly deems it necessary. That would be for the Assembly to determine. The principle contained in this group of amendments is the same: if the Assembly should determine for itself whether to put a question to the electorate, it should have the power to commence that process itself. Similarly, if it agrees that a referendum on a technical issue such as this should not be necessary, it should be within its power to commence the provisions itself and, at election time, to be held accountable to the Welsh electorate on that basis. I beg to move.

[Lord Elis-Thomas]

My Lords, this amendment follows the amendments to Part 1 that were debated on Monday. The intention is to establish the constitutional principle that it is by requiring a threshold of a two-thirds majority of Members of the National Assembly present and voting that we can maintain the checks and balances brought about by the change in devolution. Since we debated these matters on Monday there has been rapid movement in the interparty discussions both here in Westminster between the political leaders and, equally importantly—I was about to say more importantly—in Cardiff. Those discussions have resulted in the Motion on the Assembly’s Order Paper which will be debated on Tuesday. It will clearly set out the view of the four party leaders in the Assembly in relation to negotiating with the United Kingdom Government and to the interparliamentary negotiations on some aspects of the procedure that will be required to take these matters further.

The principle of interparty agreement in Cardiff leading to a request to the UK Government, and to the UK Parliament where relevant, should generally be welcome in this place and throughout the United Kingdom levels of government in response to the new times that we are in as regards devolution.

Interparty agreement has been the route that we have taken for the development of devolution in Wales since the conversion of the Welsh Conservatives—I see my friend from the Assembly, the noble Lord, Lord Bourne, sitting on the Front Bench—to a position of embracing devolution. My intention has always been that, regardless of what happened in Scotland or Northern Ireland, that should be the route followed in Wales. Therefore, when there are contentious matters, it is the Assembly, on a supermajority, that should decide these things. It does not need to have it imposed on it by Parliament or, indeed, by political parties outwith the Assembly.

I therefore ask the Minister to consider this amendment in a spirit of agreeing to serious discussions. The Prime Minister has said—we do not need to quote this continually—that Wales should be at the heart of the debate on devolution. If the Assembly’s making a request to the UK Government and Parliament is not the people of Wales speaking through their elected representatives and asking to be part of the discussion on equal terms, what is? How are we to express that will? The expression of that will is essential to the spirit of the new union, as the First Minister of Wales called it today in this city. In that spirit, I ask the Government seriously to consider the direction of our amendment.

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[Baroness Randerson]

I thank noble Lords for their contributions to this debate. The Government have been consistently clear that the decision on whether to trigger a referendum on the devolution of income tax is a matter for the Assembly and the Welsh Government. I say that in response to the noble Lord, Lord Elystan-Morgan. Clause 13 empowers the Assembly to trigger a referendum to ask the electorate in Wales whether they want some of their income tax to be devolved. The Government agree with the Silk commission that the 2011 referendum on full lawmaking powers for the Assembly provides the best model for conducting such a referendum. Clause 13 replicates for the most part Section 104 of the Government of Wales Act. The clause provides for the Welsh Government to move a resolution in the Assembly to trigger a referendum. If the Assembly passes the resolution by a two-thirds majority, the First Minister must ensure that notice of the resolution is given in writing to the Secretary of State. The Secretary of State or the Lord President must lay a draft order before Parliament within 180 days. I refer the noble Lords, Lord Wigley and Lord Elis-Thomas, to Clause 13(3)(a) and (b) on page 18 of the Bill:

“the Secretary of State or the Lord President of the Council must lay a draft of a statutory instrument … the Secretary of State must give notice in writing to the First Minister of the refusal to lay a draft”.

The first thing I asked when I read the Bill was, “In what circumstances could the Secretary of State refuse?”. I was advised that the only sorts of grounds on which a Secretary of State could refuse would be where there was genuine doubt about the procedures of the Assembly that led to the two-thirds majority being obtained or whether it had been obtained.

[Lord Wigley]

Where in the Bill does it say that those are the only circumstances in which the Secretary of State can refuse to do so? Why must it take up to 180 days for such a decision to be taken?

[Baroness Randerson]

The Bill does not give those reasons. The legal advice I was given related to tried-and-tested constitutional principles. Dare I say it, the noble Lord is now asking for more to go into the Bill and in the previous debate he was asking for it to be reduced.

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[Baroness Randerson]

That is exactly the view of the Government. The Assembly, as I have just said, is in the driving seat in this process.

I resume my response to the initial speeches in this debate. I point out that by opposing the question that the clause should stand part of the Bill and through Amendments 41 to 45, 47 and 48, noble Lords are of course seeking to remove important parts of a tried-and-tested mechanism which was recommended by the Silk commission. Silk is the basis of consensus. The noble Lord, Lord Elis-Thomas, referred to the importance of agreement, and so on, and the characterisation of consensus as something that the Assembly has sought on many occasions. Silk is the basis of the consensus behind the Bill. I ask noble Lords to recognise that we sometimes need a bit of choreography in order to maintain unity. That means that there has to be agreement to work in unison, although it may not always be exactly what we would prefer at any one time.

Amendments 41 to 45 would remove the need for Parliament to approve the draft order that sets out how a referendum is to be conducted, and the right of the Secretary of State to consult before such an order is laid. I repeat that all this is based on the experience of the 2011 referendum for lawmaking powers. It is the mechanism that has been agreed.

Through Amendments 47 and 48, noble Lords are seeking to provide a mechanism by which the Assembly could resolve to commence income tax provisions in this Bill without a referendum. I realise that there are those who do not believe that a referendum is necessary, but I recognise entirely the arguments put forward by the noble Baroness, Lady Morgan, that the original referendum did not include a tax question. It is therefore important that people are engaged in this debate and given the opportunity to make their voice heard. It is a fundamental, far-reaching issue and therefore the people of Wales need to be consulted.

The noble Baroness, Lady Morgan, was concerned that I had deliberately misunderstood her, which I find a distressing accusation. I invite the noble Baroness to reread what she said earlier in the debate; she might then understand why it is possible to have misunderstood her.

I therefore ask the noble Lord, Lord Wigley, to withdraw the amendment, and not to oppose the question that Clause 13 stand part of the Bill.

[Lord Wigley]

My Lords, I am grateful to every noble Lord who has taken part in this debate and to the Minister for her response. There has been clarification on some points, such as the 180 days and so on, which is useful.

There is, however, a central point here: whether or not this House trusts the National Assembly for Wales, the elected parliament of Wales, to take decisions such as this. I have every faith in its Members that, if there is doubt as to whether they can carry the people of Wales with them in their decision within the Assembly, they know that they may need to revert to a referendum. Of course, they have as much intelligence to provide that as we do in this House.

[Lord Elis-Thomas]

More.

[Lord Wigley]

More, my noble friend says. In many ways, he is right: they are in Wales dealing with the circumstances of Wales. With all the good will in the world, what is done here is done for Wales and what is done in Cardiff is done by Wales. We want to ensure that they take that responsibility on their own shoulders. That is one of the driving forces towards getting a consensus of approach.

The noble Baroness mentioned choreography in getting agreement. There must have been a lot of choreography in getting all four party leaders to sign up to the Motion that is coming before the Assembly next Tuesday. It is a substantial step in the right direction. The way in which we are doing these things in Wales is different to the way in which they are being done in other parts of these islands. I think that, in many ways, we are doing them better and they will stand the test of time. We have to trust the people in a referendum, yes, but also the representatives to come to a sensible decision in regard to such matters.

I accept what the noble Lord, Lord Elystan-Morgan, said about the Barnett formula. We will be coming on to that in a later bank of amendments. Of course there has to be an acceptable basis before one moves into the income tax provisions, but we are going to have to go there. Otherwise we are not going to get the answerability that we need. Any hurdle that we put between the present position and getting those powers means that we are imposing a delay, a built-in roadblock, that stops the movement towards a more responsible and transparent national parliament for Wales. That is the background to the tabling of the amendment, and the Government should take it on board not just in the context of this debate but in the generality of the Bill. On that basis, I beg leave to withdraw the amendment.

Amendment 41 withdrawn.

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Moved by

[Lord Wigley]

49: After Clause 19, insert the following new Clause—
“Responsibility over fuel duty
Her Majesty may by Order in Council provide for the transfer of responsibility for varying fuel duty to the National Assembly for Wales.”

[Lord Wigley]

My Lords, I will also speak to Amendments 50 and 51, which each seek to transfer financial powers and hence strengthen the Assembly’s tax base.

Amendment 49 would transfer powers over fuel duty to the Welsh Government, so allowing that institution to address the concerns of the electorate relating to fuel costs, a problem which is particularly stark in rural areas, where people are forced to spend significantly more on fuel than in urban areas. The Office for National Statistics recognises that poorer families in rural areas spend more of their income on petrol than richer families. Plaid Cymru has long pushed for a genuine fuel duty stabiliser to cap prices at the pump when prices rise above expectations.

Amendment 50 provides the mechanism for a review of the tax receipts from Welsh natural resources. We believe that this should include the Crown Estate, which we believe should be the responsibility of the Assembly. Wales is an energy-rich nation, yet too many of its citizens live in fuel poverty. We believe that Wales should be properly recompensed for its natural resources.

Amendment 51 is aimed at transferring powers over corporation tax to Wales, in the event of this power being transferred to Scotland or Northern Ireland. I should point out that the draft Motion, standing in the name of all four party leaders in the National Assembly, supports the approach taken in Amendment 51 in relation to corporation tax, stating:

“The National Assembly for Wales … calls for the UK Government to ensure that the same powers are given to Wales regarding the devolution of corporation tax if they are provided to Northern Ireland and Scotland”.

Those are the words that are supported by all four party leaders in the National Assembly and that will be discussed on Tuesday.

We recognise that the Silk commission in its report did not support the transfer of corporation tax to Wales due to its volatility, but said that it should be considered if corporation tax were devolved to Northern Ireland, which was seen as most likely at that stage. We believe that it would be wholly unacceptable if these powers were granted to other countries and not to Wales. The amendment is drafted to ensure that, if these powers are given to those other countries, the same would happen for Wales to ensure that we are not left behind in this matter. I beg to move.

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[Baroness Morgan of Ely]

I understand that, but I also think that we should be aware of the dangers of a race to the bottom. That is my real concern. We have already seen that it is hard enough to get many of these corporations to pay their taxes at all, so for us to encourage corporation tax competition within the UK would be very problematic. The problem is that if you reduce the tax take, you start to have to cut services, and that becomes a problem. It means that our schools and hospitals have to be reduced.

On the issue of air passenger duty, it is worth noting that this is another issue where there has been cross-party agreement on devolution, on the basis that if this is provided to Scotland and Northern Ireland in the same way as corporation tax is, then we should be allowed to review it in Wales as well. The point is that if they are going to do it, of course we want to be part of that game. What we cannot have is them going off by themselves. That would be problematic. It is why Scottish independence was a problem for us.

[Lord Wigley]

I am grateful to the noble Baroness for giving way. She has warned about a race to the bottom as a reason to avoid this, but she then says that Scotland might do it, that that is the first step in a race to the bottom and that we should then do it. Is she not embarrassed by the fact that her party leader signed up to this in the Assembly and she has difficulty in selling it to her group here?

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[Lord Newby]

My Lords, I am sure that the Welsh Assembly, which I believe—including the Labour element of it—is in favour of devolution of air passenger duty to Wales, will continue to make the case. However, I am afraid that the Government are not at this point persuaded of it. The situation in Northern Ireland is completely different, in that it shares a land border with the Republic, which has a significantly lower rate of air passenger duty. That is its competitor.

The Silk commission recommended against devolution of fuel duty largely on the basis that member states must set a single rate for each fuel under the EU energy products directive. It also highlighted that fuel duty is a highly mobile tax base—no pun intended. As noble Lords have made clear, we could very easily see queues of motorists across the border if there was a significant disparity, which in itself makes it an unlikely candidate for devolution. So the Government accepted the Silk commission conclusion on that.

The noble Lord, Lord Thomas of Gresford, referred to the issue of whether the rural fuel scheme in Scotland might be extended to Wales. The Silk commission recommended that the Government assess whether the rural fuels scheme should be extended to remote and rural areas of Wales. It now operates in the Scottish islands and the Isles of Scilly. The Government have applied to the European Commission to extend the current scheme to areas on the UK mainland that meet strict criteria around pump price, population density and cost of fuel transportation. However, no areas in Wales were included, because they were not felt to meet the objective criteria. The Government believe that areas should experience similar characteristics to the islands in the current scheme to make the strongest possible case to the European Commission. The Government have yet to receive a response from the Commission to their existing proposal.

Amendment 51 would devolve corporation tax to the Welsh Assembly if it is devolved to either Scotland or Northern Ireland. The Government have been consistently clear that the devolved countries are different and that it is therefore right that decisions on devolution are treated on their own merits. In relation to corporation tax, the Government are committed to making a decision on devolving rate-setting powers to Northern Ireland by the time of the Autumn Statement. However, similar to the position on long-haul rates of air passenger duty, the potential devolution of corporation tax to Northern Ireland is being considered in the light of two unique features. First, Northern Ireland is competing against the Republic, which has a much lower headline rate of corporation tax. Secondly, the stated purpose of tax devolution in Northern Ireland is to help to rebalance the Northern Ireland economy. In Wales, as noble Lords will be aware, the principal aim of devolution is to increase the accountability of the Welsh Assembly and Welsh Government. Different objectives potentially require different decisions on devolution; it is therefore right that the UK Government retain the flexibility to take the right decisions for each part of the UK.

Finally, I turn to Amendment 50, which would require the publication of an independent report on options for the UK and Welsh Governments to share tax revenues from natural resources in Wales. The noble Lord in moving the amendment spoke about the resources available potentially to the Crown Estate and referred to energy. With regard to the Crown Estate, there are no provisions in the Bill to change its status, and I find it difficult to envisage circumstances in which that would happen. Therefore, I am not sure how relevant that is. On energy, I can only agree with the comments of the noble Baroness, Lady Morgan, about the fact that one does not tax wind power in the same way as one taxes a barrel of oil, and it is very difficult to envisage that we ever would do so. So I do not think that an independent report as proposed by the noble Lord would be of any real value.

In the light of my remarks, I hope that all noble Lords who have proposed amendments in this group will feel able not to press them.

[Lord Wigley]

I am grateful to noble Lords who have taken part in this short debate. On the amendment proposed by the noble Lord, Lord Rowe-Beddoe, on Cardiff Airport, of course we need intervention—that is the whole point of government. If we just leave it to free market forces, those areas that have difficulties with the economy will get worse and worse. I am amazed that the Government look at devolution and powers of the Assembly only in terms of answerability and do not see the central need to have intervention in the economy to build it up. In Wales, the GDP per head is 25% below the UK average, so something is going wrong. If London is not capable of sorting that out, and Westminster is not capable of sorting it out, we have to do the job ourselves. But we need the tools to do that job and to intervene, as the noble Lord, Lord Thomas of Gresford, said. Some tools may be more appropriate than others, but in the case of Cardiff Airport, when all the effort that is being made to rebuild it at the moment is in question, I find it staggering that they want just to turn it down on that basis.

On the other amendments and the reasons given against them, with regard to petrol charges we already have a massive differential. We do not see people queuing from north Wales to Chester to find cheaper fuel because there is a cost involved in travelling. The need to get fair play in rural areas should be recognised by the Government. Goodness only knows that life is difficult enough as it is without the very high petrol taxes that we have.

On the natural resources of Wales, we hear so much about fracking coming along, and we know it is a matter of considerable concern. That is a new source of energy, and it may be something that comes into the purview of government in those terms. We need those powers to be there.

On corporation tax, I again underline that there is unanimity within the Assembly to have those powers, if they are going to Scotland and Northern Ireland, and the Government in fairness should allow it for Wales, which is in competition for inward investment against the Irish Republic. The Irish Republic has this advantage, so why do we not? We need that in order to rebuild our economy. It is something that the First Minister of Wales has very reasonably asked for and I hope that the Opposition Front Bench will support the First Minister in those representations.

I was heartened by the comments made by the Minister that there are provisions for other taxes to be devolved by order. We shall have to look to the order-making system to try to ensure that we have the tools necessary to do the job.

[Lord Thomas of Gresford]

Does the noble Lord not agree that, if the Welsh Labour Government are not prepared to use the tools, there is no point in having these powers?

[Lord Wigley]

That is true of all the powers, and we have to look to the Assembly to take a responsible attitude. Obviously there are questions to consider—cross-border questions and all the rest—and the Assembly needs to make these powers work, so it is not going to do stupid things. It will take up the powers and use them in a way that moves our economy forward. I am quite happy to trust that people who give priority to the needs of Wales will do this, from whichever party they come. All I want them to have is the tools to do the job. I beg leave to withdraw the amendment.

Amendment 49 withdrawn.