Alun Cairns
Main Page: Alun Cairns (Conservative - Vale of Glamorgan)Department Debates - View all Alun Cairns's debates with the Wales Office
Commission on Devolution in Wales
Alun Cairns Excerpts(13 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mrs Gillan
We proposed to hold this debate before the first meeting of the commission to enable Paul Silk and the other commissioners to hear Members’ views. The right hon. Gentleman’s point is well made, and I know that when the commissioners read Hansard they will take it on board. I do not want to tie the commissioners’ hands; they must decide how they will work.
Alun Cairns (Vale of Glamorgan) (Con)
The right hon. Member for Delyn (Mr Hanson) makes a principled point, the logic of which should have been extended to the previous referendums on devolution. Why did that not happen?
Mrs Gillan
If I recall correctly, the Richard commission reported before the Government of Wales Act 2006 was enacted. Reaction to the commission—a pick-and-mix effect—was interesting. The 2006 Act contained some items that had not been telegraphed quite so clearly, and the House certainly did not have the opportunity to debate it as fully as I am trying to ensure that we debate things today and in future. My hon. Friend is quite right about that.
Mr Peter Hain (Neath) (Lab)
Let me begin, Mr Deputy Speaker, by welcoming the fact that we have a Welshman in the Chair for this debate—a Swansea boy who is, I am sure, delighted that Swansea City is in the premiership playing some very good football this season.
Just for the record, I cannot let the Secretary of State continue to repeat the fiction that when she arrived at the Wales Office in Gwydyr house in early May, the cupboard was bare and nothing had been done about the referendum. She knows that that is not the case. She will also know that a couple of days before she went up the stairs at Gwydyr house to occupy the office, I had sought confirmation that we could have delivered the referendum by the autumn, if we really had to; it would have been a tight squeeze, to repeat the phrase used. Let us hear no more nonsense from her about that, or about the housing legislative competence order. As my hon. Friend the Member for Caerphilly (Mr David) reminded her, the housing LCO was ready for Royal Assent, and she sabotaged it; the Conservative party refused to carry it through. She knows that that is true, so I am surprised that she is continuing to say these things.
Mr Hain
I am happy to take an intervention a little later.
I am intrigued by accountability; that is why I picked up the Secretary of State on that issue in The Western Mail. I am glad that she reads The Western Mail, and my comments in it, assiduously. It is not for the Secretary of State for Wales to decide in which way the Welsh Government or the Welsh Assembly should be accountable to the people of Wales. The Welsh Assembly is elected by the people of Wales; she is not elected by anybody in Wales. That is the true line of accountability that operates.
Alun Cairns
The right hon. Gentleman underlines the fact that the Welsh budget doubled in that period, but will he recognise that Holtham also reported that in a period of spending constraint and public spending reduction, the Barnett formula protects the Welsh budget?
Mr Hain
I accept the hon. Gentleman’s point to the extent that Holtham did recognise that when there is a period of spending restraint, or even cuts, underfunding and funding convergence do not happen to the same degree. However, I am not sure what the hon. Gentleman is arguing. Is he saying that spending cuts and restraint have a good impact on Wales?
Alun Cairns
I am not sure whether the right hon. Gentleman has a brass neck or simply selective hearing or a selective memory. Does he not recall that Wales, in the 1980s, was not the poorest part of the UK, and that, in spite of Labour Governments in Cardiff Bay and a Labour Government in Westminster, Wales is now the poorest part of the UK?
Mr Hain
I am astonished that a Member of Parliament for a Welsh seat is trying to defend the Government’s impact on Wales in the 1980s. As a result of Tory policies, there was mass unemployment and people were smuggled on to incapacity benefit to disguise the unemployment figures and left there—a whole generation of young people—never to work again. I am astonished that he is trying to defend that.
Alun Cairns
The right hon. Gentleman makes an extremely important point about consensus and it is a strong message that needs to go to the Silk commission, but is not the original root of all these inconsistencies that we now face the lack of consensus in 1997, when Labour let the genie out of the bottle and we started on the devolution road? I am mixing my metaphors, but I hope that I have made the point.
Paul Murphy
The hon. Gentleman knows that historically I was opposed to devolution—I changed my mind as the years went by—but we had to accept what the people of Wales decided. In 1997, they decided on devolution, albeit by a small majority—we must remember that the Conservative party did not get a majority of Members of Parliament, but we still have a Conservative-led Government—and in the referendum held earlier this year the overwhelming view of people in Wales was that there should be extra powers. It was the people who decided what they wanted in the end, and I agreed with them this time.
I repeat that we do not want to hear about consensus, given that that was abandoned by this Government when they introduced the Bill to reduce the number of our Members of Parliament. For the first time since 1832 we will have fewer than 40 Members of Parliament representing Wales in this House. I am not arguing about the nature of equal constituencies—that is for another debate—but I am saying that the reduction from 40 to 30 in the number of Welsh MPs reduces the influence of Wales within the United Kingdom. I will address that in a few moments’ time.
Part I of the commission’s remit is to deal with money: the financial responsibilities and the remit of the Welsh Assembly. We are told that this is all about accountability, but the hon. Member for Vale of Glamorgan (Alun Cairns) just referred to the devolution settlement of 1997. Such a settlement also took place in Scotland and later in Northern Ireland, where I played a part. In all those settlements that issue of financial accountability was raised, and it was argued by some, “If a parish or community council can raise revenue, why cannot a Government in Edinburgh, Belfast or Cardiff do so?”
When I chaired the talks in Northern Ireland on whether there should be income tax powers in Northern Ireland, the meeting lasted less than an hour. People in Scotland decided that they would have the possibility of tax-varying powers, but those have never been used. We in Wales rejected this from the beginning, and there was a reason for that: the resource base of Wales is much lower than that of Scotland—the resource base of Northern Ireland is even lower than that of Wales—and therefore the amount of money that could be raised by income tax in Wales or Northern Ireland, and, to a certain extent, in Scotland, is infinitesimally smaller than the amount that could be raised in England. This proposal was therefore abandoned.
The idea of how we finance our devolved Administrations, therefore, came down to the idea of the block grant. That system is not unique. The hon. Member for Monmouth (David T. C. Davies) referred to asymmetrical devolution, and that is what occurs in Spain, except that there they have devolution everywhere. They get their money through a system of distribution of block grants and, as my right hon. Friend the Member for Neath (Mr Hain) said, they are able to ensure that there is proper distribution of money so that poorer areas are helped by richer areas such as Catalonia.
Guto Bebb
It could be argued that the legislative competence order procedures and the Government of Wales Act 2006 were very successful in the context of what they were supposed to do, which was to keep the Labour party united. In terms of providing for good governance in Wales, however, they were an absolute disaster, and recognised as such by the people of Wales. The 2006 Act was also a belated party political attempt to create a situation that was favourable to Welsh Labour. It could be argued that my hon. Friend the Member for Montgomeryshire (Glyn Davies) lost his Assembly seat as a result of the changes to the way in which Welsh Assembly Members were elected, as implemented by the Act. Those changes were made for internal Labour party purposes, not as a result of any demand by the people of Wales. Not a single individual in my hon. Friend’s constituency argued that he should lose his seat because of changes that had been implemented to keep the Labour party happy.
Alun Cairns
Does my hon. Friend also recall that those changes to the electoral system were introduced against the advice of the Electoral Commission?
Hywel Williams
I thank the hon. Gentleman for that intervention. As I said, sometimes complexity is good and necessary. I do not want to appear too Panglossian about this, but it seems to me that we have a system that works fairly well. However, as we say in Welsh, nid da ble gellir gwell—it is not good if it can get better. Certainly that is our ambition.
The principle of the system for Wales inevitably still leads to a lack of clarity and some confusion for the public. I am glad to see that the commission will be looking at systems of devolution in other parts of the world. The hon. Member for Brecon and Radnorshire (Roger Williams) referred to the Scottish model as one under which everything is devolved other than that which is not, as compared with the situation in Wales, where nothing is devolved other than that which is. There is a great deal to commend that particular system.
I also encourage the commission to look beyond the boundaries of the UK. In an intervention on the former Secretary of State, the right hon. Member for Torfaen (Paul Murphy), I pointed out that the system in the Basque country, in terms of money, is slightly different to that in the rest of Spain, which generally operates on a block grant principle, whereas the Basques have historically, over many centuries, raised their own taxes and then sent a certain amount of money down to Madrid. That is easier for them given that the gross domestic product in the Basque country is currently 140% of the average across the country, so they are in the rather lucky position of having the money to do that. It is interesting that the Basque country has a steel industry and a history of heavy industry, but seems to have managed to go beyond that with the Mondragon co-operatives and various other methods that it has adopted. The area is similar to Wales in population and culture, with a smallish linguistic minority, but there we are—it seems to be succeeding where Wales is not.
I would say this, but I think that the will of the people of Wales was made clear in the referendum. I take the point made by the hon. Member for Aberconwy about the turnout, but unless we have compulsory voting there will be variations in turnout and I do not think that the lowish turnout for the Assembly elections indicates disenchantment with that body—rather, it is growing in popularity and interest. He made a good point about defending the institution. It may be a body that we are not always particularly keen on, but at least it is ours, and people must defend it. I hope that the commission’s timetable allows for legislative change before the next election, but I am grateful to the Secretary of State for setting out the options, which will repay close study.
I am conscious of the fact that time is passing and that other hon. Members wish to speak, but I will make a couple of further points. There is plenty that could be done, and I recommend that the commission look at two excellent private Member’s Bills, which happen to be mine: the Bilingual Juries (Wales) Bill, which I introduced in 2007 and which failed abjectly to proceed; and the Jobcentre Plus (Wales) Bill that I introduced earlier this year and which the hon. Gentleman opposed very successfully indeed, along with many of his friends across the border.
Those are two practical changes that could profitably be looked at by the commission, and I am sure that there are more. In my party at least, we have an appetite for change. We have done the work, and we have the imagination to think about what sort of changes might be introduced, so I commend both those measures.
If hon. Members want an example of why the devolution of certain measures is necessary, I refer them to the recent shenanigans of S4C and my early-day motion 2316. The scrutiny of the Public Bodies Bill by the majority of Members from Wales was entirely deficient as far as S4C was concerned. There were five Members from Wales on the Committee that considered the Bill. Two were unable to speak because of the role that they played, but the other three Members worked very hard indeed, and I pay tribute to the hon. Members for Clwyd South (Susan Elan Jones) and for Ceredigion (Mr Williams). We were able to debate the issue at length, and I was glad that we could do so. Subsequently, I secured a Westminster Hall debate on the subject, which was well attended.
When the Public Bodies Bill was on Report, however, we did not, for reasons that I will not go into—I shall not begin to point fingers—reach the amendment on S4C, so the majority of Members from Wales did not have an opportunity to express their opinion. That is one reason why the commission should look at an area that is difficult and complicated to devolve.
Alun Cairns
In view of the fact that the hon. Gentleman is commenting on S4C, will he congratulate the Secretaries of State for Wales and for Culture, Olympics, Media and Sport on the fantastic deal that S4C has secured with funding from the BBC?
Hywel Williams
The deal that was eventually reached has pleased no one and has pleased everyone to some extent because S4C has taken a hard hit on money. However, I pay tribute to the Secretary of State, and to Members from all parties, including Lords Wyn Roberts, Dafydd Wigley, Dafydd Elystan-Morgan and John Morris, who pressed the case, along with the BBC Trust member for Wales, Elan Closs Stephens, Cymdeithas yr Iaith Gymraeg, my hon. Friends and, perhaps, me. Everyone is included—success has many parents—so let us leave it at that. All I want to say is that broadcasting should be subject to fair scrutiny.
Alun Cairns (Vale of Glamorgan) (Con)
I am grateful for the opportunity to contribute to this extremely important debate for Wales, for the constitution, and for the stability of devolution, both in Wales and across the United Kingdom.
I congratulate the Secretary of State on securing the debate in Government time and on the way in which she introduced it. This is a genuine debate about the need for greater accountability and stability in the devolution settlement. It will set the scene for the Silk commission. Of course the commission is independent and I congratulate each and every one of its members. They need the freedom to investigate the issues, but this is an important debate about Wales, in Government time, in the Chamber.
In the past the Conservative party and the Conservative Secretary of State have been accused by Opposition parties of being devo-sceptics, but the reality is very different. Few predicted that it would be a Conservative Secretary of State who delivered a referendum on further powers for the Assembly. Even fewer would have predicted that a Conservative Secretary of State would move to advance the settlement to secure its stability over the longer term.
Stability is the key point. Over the past 13 years, Wales has experienced significant constitutional change in a piecemeal approach that has served the interests of the Labour party. There is no doubt about the mess created by the Government of Wales Act 1998. We started off with the National Assembly for Wales. Then we had a change in the voting system, which was opposed by the Electoral Commission. Then we had the Richard commission, which was generally ignored, and the legislative competence order model taken from that was unworkable. The Holtham commission’s report has not been debated even in the National Assembly for Wales. That was followed by a second referendum. All that was done to serve the partisan interests of the Labour party and to try and overcome the differences between the Labour Members in the Welsh Assembly and those on the Opposition Benches in this Chamber.
The churlish way in which the shadow Secretary of State responded to the opening comments from the Secretary of State for Wales demonstrated that the Opposition do not know how to react. There is obviously some enthusiasm from the Labour party in Wales for the Silk commission, but Labour Members here are worried about their personal futures, rather than thinking about the needs of Wales and the ability of the Silk commission to address them in order to deliver stability.
In view of the previous constitutional upheaval, the outcome of the Silk commission must be sustainable and must deliver stability, leading to a settlement that will not require further changes for a generation. Such confusing changes over recent years have led to a confused model of accountability. The public find it difficult to understand who is responsible for what because of the changes since the Government of Wales Act 1998, the referendums and other developments. The Welsh Government choose to perpetuate the confusion by blaming Westminster for anything that goes wrong in Wales, regardless of their own responsibility. They have learned from the early Blair years to become masters of spin.
Take the recent controversy over the establishment of wind farms. This is a subject that is extremely important to my hon. Friend the Member for Montgomeryshire (Glyn Davies), who is fighting hard for his constituents. The applications for wind farms in some of the most beautiful parts of Wales stem directly from the First Minister’s technical advice note 8 policy, which established strategic search areas identifying specific parts of the country that would be looked on favourably for wind farm applications.
As soon as the impracticality and unpopularity of the policy was exposed, we had a statement from the First Minister that he wanted to lead the charge to the Westminster Government to try and stop it happening. But the application was rooted in the TAN 8 policy developed in 2005, when Carwyn Jones was Minister for Environment, Planning and Countryside and had responsibility for driving that policy. The Welsh Government enjoy the resulting confusion, blaming Westminster when the responsibility lies on their desk.
That brings me to the respect—or should I say lack of respect?—agenda shown by many Labour politicians in Cardiff Bay. The agenda is a one-way street. Anyone listening to First Minister’s questions on a Tuesday in the Assembly will hear that everything that goes wrong is the coalition Government’s fault, yet it was Labour, here and in Cardiff Bay, that left Wales the poorest part of the United Kingdom and left an education system and standards that trail those in the rest of the UK, an inferior model for cancer care, longer waiting times for any medical interaction and every Welsh economic indicator—inactivity rates or unemployment rates—scoring much worse than those in any other part of the UK. That has not changed over the past 18 months, but anyone listening to First Minister’s questions will recognise the audacity shown by the First Minister, reflected today by the shadow Secretary of State, in blaming Westminster for anything that suits them. Labour is happy to perpetuate confusion and use a publicly funded publicity machine to criticise the Westminster Government.
The reason for the decline in health, education and the economy is that since 1999 the Welsh Assembly Government have chosen to make the argument about structures, strategies and powers rather than deal with the real issues. The Welsh Assembly Government have become unaccountable because they can blame Westminster for anything that goes wrong.
On the economy, we began with the national economic development strategy. A few years later “A Winning Wales” came out. Later, the Assembly came out with “Wales: A Vibrant Economy”. Running in parallel were the entrepreneurship action plan, the European aid programmes, which began with 600 partnership models, and a 90% target for GDP by 2010, which has not been met. The Assembly must be held responsible and accountable.
Alun Cairns
My hon. Friend underlines my point about the failure of the Cardiff Bay Government to seek to improve the quality of life: the economy, social care and education standards. In the 1997 referendum and the first Assembly elections in 1999 we were told that the devolution dividend would change all those things. Labour has failed, and it has not changed in the past 18 months. It blames Westminster for the underfunding that Holtham identified.
Owen Smith
The hon. Gentleman and his colleagues call for accuracy in the context in which we set our remarks about the public spending cuts in Wales, but should they not set themselves the same standards when discussing the profundity of the long-term, systemic economic problems facing Wales, which are reflected in our once again qualifying for objective 1 funding? I profoundly regret that, as I am sure he does, but the fact that we qualify shows how deep seated the problems are.
Alun Cairns
I am grateful for that point, but the hon. Gentleman misses the key issue: Labour’s failure over 13 years. Labour Members salivate in decrying the 1980s. Wales was not the poorest part of the United Kingdom at the time, but it was when they left office. [Interruption.] The hon. Gentleman says from a sedentary position, “It is not true”. Well, I will happily hear about the economic indicator that points out that Wales is not the poorest part of the United Kingdom.
Owen Smith
I did not say, “It is not true”, and the hon. Gentleman makes a semantic point, because we are talking about fractions. Many parts of the UK have not benefited in lots of respects; in fact, they all share the characteristics of being post-industrial parts of Britain with the same deep-seated economic problems as Wales. Those problems are not something to be solved quickly, but the Assembly has worked extremely hard and been extremely effective in all sorts of areas of public life in Wales.
Alun Cairns
I am stunned by the complacency of the hon. Gentleman, an Opposition Front-Bench Treasury spokesman who really should have a better handle on these issues. He talks about semantics and very small percentages, but when Labour left office after 13 years of government Wales was the poorest part of the United Kingdom, despite all the great announcements that we heard during the period, on the Barnett settlement, Barnett plus, European money, match funding, PES—public expenditure survey—cover and how lucky Wales was to have a Labour-run Westminster Government as well as a Labour-run Welsh Assembly Government. The data are quite clear that there has been blatant failure. They highlight the fact that Wales is the poorest part of the United Kingdom, and I am aghast at the hon. Gentleman’s complacency.
Guto Bebb
When the Welsh Affairs Committee visited Germany recently, the business people whom we met had no idea of any business organisation or Welsh Assembly Government Department with responsibility for inward investment, but every single one of them was aware of the Welsh Development Agency, an organisation that served Wales well in the 1980s but was abolished by the Welsh Government on the basis of a personal decision by the First Minister, who did not even have the courtesy at the time to inform the agency’s chairman of his intentions.
Alun Cairns
I am grateful again to my hon. Friend, who highlights an important point. The hon. Member for Pontypridd (Owen Smith) looked on favourably when the Welsh Development Agency was mentioned, and so many businesses in Wales would love to see it returned.
We heard from my hon. Friend the Member for Worcester (Mr Walker) earlier. When his father was Secretary of State for Wales, Wales attracted 20% of the UK’s inward investment with just 5% of the population. How great it is to have another Walker family member showing such an interest in Wales. That is the difference—from the time in the ’80s when those jobs were being created and the economy was being restructured, to the failure that we have seen over the past 13 years. I also seem to recall the right hon. Member for Neath (Mr Hain) questioning the judgment of the then First Minister, Rhodri Morgan, in seeking to abolish the WDA and bring it into the Welsh Assembly Government.
Those differences are similar to the differences today between Labour Members at Westminster and Labour Members in the Welsh Assembly, who are far more enthusiastic about the Silk commission. Indeed, it is quite obvious that Labour Members here are in an uncomfortable position on Silk. They do not know how to react, and the shadow Secretary of State for Wales, in today’s article in The Western Mail and in his response to today’s debate, has tried to position himself by thinking, “How can we get out of this with some sort of political advantage?”, rather than recognising that Assembly Members need to be more accountable for their policies.
I have listed the failed policies and, ultimately, the one on the economy, and we could go on to health, cancer care or any others that I have mentioned, because Opposition Members need to accept and recognise their part in that failure, rather than simply looking up the M4 and blaming everyone else when they quite honestly know that they are responsible.
Many Members have referred to the need for engagement, and I cannot underline that point enough. Advocates of devolution point to the outcome of the recent referendum, when 63% voted in favour, yet the turnout was only 35%, which demonstrates that a significant number in the population are not engaged. The key challenge for the Silk commission and the Welsh Government is to capture their imagination, hear their concerns and get them involved, because, troublingly, the views of anyone sceptical of devolution are almost dismissed, and I suspect that they largely make up the 65% of people who did not vote at the time.
Jonathan Edwards
The hon. Gentleman is using, as did the hon. Member for Aberconwy (Guto Bebb), the turnout for the referendum as a battering ram to try to hold back the whole process. The referendum was fought on an extremely technocratic question, and I was amazed that more than 30% of the people of Wales voted on a question that hardly anyone understood.
Alun Cairns
I am surprised at that intervention, and the low sights that the hon. Gentleman sets for himself. He was amazed by a 30% turnout. That almost sounds as though he was delighted with it. If that had been the case in the referendums in Scotland and Wales back in the late ’70s, they would have been dismissed.
There is a need for engagement on the issue. I do not for one second use the low turnout as a reason to batter devolution, but it underlines the fact that many people throughout Wales and in almost every local authority area—ironically, the highest turnout was in Monmouth, at 50%—are troubled about devolution or do not understand it. Their views are as important as those of the strongest advocates, who I suspect are within Plaid Cymru.
Alun Cairns
I could not agree more with my hon. Friend, who further underlines the point.
The key theme is accountability, which was covered extremely well in the excellent report of the Holtham commission, which set the backdrop to the Silk commission, highlighting key issues relating to accountability and some of the points that I tried to make earlier. The report states that the public sector, and I would say the Welsh Government specifically, is
“in some ways detached from the economic circumstances of the citizens it serves”—
that is the need for better accountability—and
“simply blaming Westminster for inadequate resources”
is not an option. That is effectively the position we are in.
The change of Government at Westminster has produced a chorus of an argument from the Welsh Government in Cardiff Bay, to the extent that the level of debate is stymied to mere rhetoric. The best description of the Welsh Government’s approach came from a former Labour Member of this House who said that the Welsh Government is in danger of becoming an
“institutional chip on the Welsh shoulder.”
That encapsulates the approach. The accountability argument must be underlined time and again.
It is too easy for the Welsh Government to play the blame game, and I hope that the Silk commission will consider accountability extremely seriously. The Holtham report offers useful pointers. It states that if it is decided that there is merit in devolving fiscal powers, the tax should be one that
“is paid by a high proportion of Welsh residents…raises substantial revenue”
and
“is ‘visible’ to most citizens”.
It is not surprising, therefore, that in seeking to avoid my accountability argument the Welsh Government and the First Minister call for air passenger duty, stamp duty, aggregates tax, landfill tax, and other obscure taxes. The more obscure they are, the less accountability there is, so they can continue the blame game. That is unacceptable, and I hope that the Silk commission will reject that.
Owen Smith
Again, I intervene on a point of accuracy. The hon. Gentleman quoted extensively from the Holtham report, which he purports to have read, so he will know that those are the very taxes that Gerry Holtham refers to as potentially being among the minor taxes that would be transferred to Wales.
Alun Cairns
The hon. Gentleman mistakes my recognition of the quality of the Holtham report for an indication that I agree with all its conclusions, and I simply do not agree with all the conclusions. I said earlier that it is a useful backdrop to the Silk commission. That should be recognised.
To pursue the argument about accountability and the approach taken by the Welsh Government, in a similar vein it needs to be noted that over the past 12 years the Labour party in Wales used council taxes to raise additional funds and then put the responsibility on to local authorities, most of which, as a result of 13 years of Labour Government, were not Labour. The Conservative party ran the same number of councils in Wales as the Labour party, and that is a far cry from how it was at the time of devolution. Most of the funding for local authorities comes from the Welsh Government, so I would suggest that over the past 10 years or so there has been a deliberate strategy of squeezing funding from local government in Wales, forcing local authorities to raise more money in council tax. That is demonstrated by the fact that over the past five years the average council tax increase in England was 2.6%, compared with 3.8% in Wales. That amounts to a plan to make local authorities responsible for the additional revenue that they are raising instead of becoming accountable for themselves. I could go on to talk about the re-banding mistakes that were made in some areas, which squeezed even more council tax out of some of the people who were least able to pay.
I will close by sounding a note of caution about the volatility of many taxes. Whatever the Silk commission develops and comes up with, I hope that it will recognise the volatility between the level of income tax raised three years ago in Wales compared with the level raised now. There is a significant difference, and that will be another important factor for Silk to consider.
Owen Smith
No, it has not been done, as the hon. Lady says. It is very good to see her today—I am very pleased that we have an English Member taking part in the debate, which is extremely important. However, I say to her that what came out of that report was a commitment in the Conservative manifesto and the coalition agreement, which has now been enacted, to begin a debate on the West Lothian question. We are concerned about the direction of travel and the trajectory that many Members now feel has been set.
In recent debates in Westminster Hall and elsewhere, many Members have referred rather aggressively to resentment felt by English constituents about the supposed unfair stipend or subsidy afforded to, and enjoyed by, citizens in Wales, Scotland and Northern Ireland. As Opposition Members have tried to point out today, that is not an unfair stipend, but a reflection of the accurate needs, born of the industrial heritage and present problems, of Wales, Scotland and Northern Ireland. Neither, as my right hon. Friend the Member for Torfaen mentioned, is it a reflection of the relative receipt of revenues in Wales versus parts of England where a needs-based formula already applies: for example, greater subsidy—if we want to use that word—and support is afforded to the north-east, the north-west and even the south-west than is afforded to Wales. It is legitimate, therefore, for us to voice our concerns about the Government’s attitude to the Union. That is not scaremongering; it is merely a question and a set of observations on our part.
The other reason we are worried, of course, is that, traditionally, Conservative and Labour Governments have not been partisan in how they have addressed the constitution, but for the first time, judging from how the Parliamentary Voting System and Constituencies Act 2011 was addressed in this place, a partisan attitude has been taken to the constitution. I hold that view absolutely fully. It is a view that I have heard expressed on many occasions by Conservative Members, not in the House, but outside. They view the Act as being underpinned by partisan motivations, and I fear that we might be seeing a similar set of motivations here. I sense that the Tory party has been seduced by the prospect of hegemony in England in the long term, even if it means a truncated, fragmented UK. I, for one, as a Welshman and proud British citizen, do not want that to come about.
Alun Cairns
Speaking as a Conservative Member, I do not accept that point. In my mind, the purpose of the Silk commission is to provide accountability and stability for the long term, but the motives about which the hon. Gentleman talks were behind devolution in 1997, when it suited the Labour party in Wales, rather than Wales as a nation.
Owen Smith
I wholly dispute that. Devolution in 1997 was born of need and demand in Wales. It had been developing for a long time. It perhaps had not come fully to fruition in 1979, but by 1997 there was a clear demand for it, and that demand has thickened over the past 13 years, right through to the referendum, when we saw it greatly increased.
Alun Cairns
I am grateful to the hon. Gentleman for giving way; he is being extremely generous. If demand was so strong, why was there only a 50% turnout and 7,000 majority? That is how strong his demand was.
Owen Smith
Several Government Members have talked about what, to put it bluntly, is ancient history now and pointed to the size of the mandate and turnout, but we all know that politics is a precarious, parlous business. The Tory party clearly thought that it had a sufficient mandate at the last election. It did not get a majority, but nevertheless it is the ruling party. We have to bury that argument and move on. Right now, there is clear support for devolution in Wales, as was shown in the recent referendum. That is not in dispute. It ill behoves Government Members, who purport to support devolution, to keep dredging up these ancient concerns and this ancient history, because, frankly, it gives us the suspicion that they still have not quite bought into it.
I have a second concern, which, actually, I share with some Government Members—even, perhaps, the hon. Member for Monmouth (David T. C. Davies)—about the constant, cyclical nature of the interaction between demands and desires, legitimate or otherwise, for additional, incremental powers in Wales, Scotland, Northern Ireland and even, perhaps, England. That is a problem. It leads to perpetual pressure for change and to very few instances in which we—legislators in this place and the devolved Administrations, which have their own particular locus—can put our foot on the ball and contemplate the broader picture, the country’s longer-term trajectory. That is hugely important. The Silk commission ought to consider that wider context.
In particular, however, this House needs to consider that wider context and be the place in our country where we contemplate the aggregate impact of the changes to the particular discrete functions and powers of different parts of the UK and where we think long term about what the benefits and disbenefits might be. That is not to take an anti-devolutionist perspective, however. I am thoroughly committed to devolution and the principle of subsidiarity—pushing down power and democratic accountability as low as we can—which is why I talk in my excellent and recommended article for Compass about reinvigorating local government democracy in England, which would be a jolly good thing. However, I am also British—indeed, proudly so—and I feel that my values and those of the Labour party transcend national boundaries and the identity politics that stem from an obsession with national boundaries. My concern is that the wider picture—the longer-term perspective—is too infrequently considered in this place or, in particular, the devolved Assembly. I do not want Wales to be as politically peripheral in Britain as it is de facto geographically peripheral. I worry that at some point that will be the net consequence—the aggregate impact—of these things.
Let me turn briefly to some of the specificities of what Silk will consider. I will take only one—corporation tax—but for me, they all highlight the risk that we might face. Anyone picking up the Financial Times this morning could have read an article about Peter Robinson, the First Minister of the Northern Ireland Assembly, who has advocated adopting a 10% corporation tax rate to compete with the 12.5% rate in the south. My view is that this would be hugely difficult and dangerous. Although it might be advantageous for Northern Ireland in the short term, we should also consider the risk that it would necessarily lead to arbitrage between the two areas and to different pricing arrangements. If we had variable taxation bands between different parts of the mainland, we would certainly see arbitrage across the borders and we would need internal transfer pricing policy and legislation in this place and the other jurisdictions. Given the difficulties with legislative vehicles to deal with transfer pricing between European countries—the disaster, even—what on earth would they be like within the UK?
Westminster needs to hold the ring. Westminster needs to consider the risks. Westminster needs to be the place where this debate is thought about, in conjunction with the discrete and—from the perspective of the local jurisdictions—eminently reasonably changes that may be wished for. This place also needs to be where the broader economic context is considered, because, bluntly, some of the peripheral changes to taxation that we are talking about and that Holtham talks about—indeed, perhaps even the larger changes too—will not lead to the growth, jobs, wealth and opportunity that would be created by measures that the Government could be implementing right now, such as those in Labour’s five-point plan.
Huw Irranca-Davies (Ogmore) (Lab)
I had intended to speak for about an hour, but I probably intervened for about an hour instead, all told, and I apologise to my colleagues for that. I shall therefore make my speech as short as possible.
The hon. Member for Epping Forest (Mrs Laing) opened her speech by saying that she was she was a proud Unionist. I would describe myself as a proud Unionist as well, but also as a proud devolutionist. I am a Unionist not on the basis of any ideology or fixed arbitrary principle, but in recognition that—as in the old trade union cry, “Unity is strength”—the constituent parts of the United Kingdom together add not only to social cohesion but to economic activity, and to our political clout on the world stage. That should be recognised in today’s debate.
The theme that I want to adopt in my brief speech, and to convey to members of the Silk commission if they hear today’s debate, is that we should not be talking about loosening ties. Instead, we should engage in a mature debate, recognising that there is a positive, welcome tension between our Government and the Governments in Scotland, Wales and Northern Ireland—although I must add, perhaps to the disappointment of my colleagues in the Plaid Cymru camp, that that is not necessarily a recipe for independence. I think that we carry much more clout if we work together. If devolution constituted a settlement, I think that on the basis of today’s debate we can all agree that it is still settling. If it is a process, I think what we have learnt from the debate is that we need to know where it is processing to.
Let me begin by paying tribute, as others have done, to the calibre and quality of the members of the commission—not least the political appointees, but in particular Paul Silk. He will be known to my right hon. Friend the Member for Torfaen (Paul Murphy) and other Members not just because of his extensive experience, but because he was a House of Commons Clerk for nearly 25 years during three different periods. He is also a former Clerk of the Welsh Grand Committee. He has lectured and written extensively on Parliament and the constitution; he co-authored the seminal book, “How Parliament Works”. I think we can all agree, therefore, that no one better appreciates the very sensitive balance of our constitutional settlement.
Professor Nick Bourne was a colleague of mine—not political, but academic—at Swansea Institute in my lecturing days. He was also shadow Minister for Finance and Public Service Delivery, in addition to his role as Leader of the Opposition. I am sure he will also make a good contribution to the Silk commission.
Sue Essex is very well known, and there is a huge amount of cross-party support for her on a number of issues. She is a former Minister for Finance, Local Government and Public Services. She is clearly of high calibre, therefore. Dr Eurfyl ap Gwilym is an economics expert and a long-standing adviser to Plaid Cymru. He has for many years advocated revisiting the Barnett formula. Rob Humphreys has been a strong advocate of devolution for many years, and was also a member of the all Wales convention. The Silk commission is in good hands with them and its other members.
My right hon. Friend the Member for Torfaen gave a warning about a possible Trojan horse. I welcome the fact that we are debating this subject today and that the Silk commission will undertake the work assigned to it, but I suggest to my right hon. Friend that the danger is not so much of a Trojan horse, but of a horse and trap, in that this could lead us into a trap.
The Secretary of State must understand that concern; these are not idle worries. Although there is significant merit in addressing the two matters that the Silk commission will examine—power and fiscal responsibilities—there is a worry that Wales will be done down. To her credit, the Secretary of State has made it clear today that she does not want that to happen, but there is a great deal of concern among Opposition Members that we might end up in that situation, particularly given the coalition’s approach to constitutional affairs since it was formed. The concern is that this process will not be about looking after the best interests of the people of Wales, or even the best interests of the institutions of Wales—that is, in fact, a decidedly secondary consideration—but that instead it will be a way to look as if we are giving with one hand, while in reality taking away with the other. That is a concern, and we must monitor what happens.
Although I welcome today’s debate, it must not be the only one on this topic. We must find opportunities to address it in the Welsh Grand Committee or a different forum, because we need to discuss the burning issues of the day facing Wales, such as the state of the economy and of society and, as I see in my constituency, the attacks on our communities.
My family has not consistently been on the same side in the devolution debate. My late uncle, the Member for Gower for many years, was a strong defender of the status quo back in 1979, along with many other notable people at that time. Times move on, however, and it is right for us to address this issue again as things progress, and we must also acknowledge that it involves not only the Wales question but the England question too. That also needs to be addressed. I should add that I welcome the involvement of England MPs in today’s debate, and that engagement must continue and deepen.
The England question becomes more important the more Scotland considers its powers in respect of fiscal autonomy and other areas, and the more Wales considers such matters too. If we do not address the England question, there will not only be political asymmetry in the old Celtic and Pictish nations; there will also be asymmetry here in England.
Through the years, numerous suggestions have been made as to how to address the England question, and many of them have been rejected out of hand. The idea of having an England-only Parliament has been proposed, as has the idea of restricting the ability of Welsh, Scottish and Northern Ireland MPs to “interfere”, as some would say, in England-only matters. As we have learned in today’s debate however, there appears to be a general consensus that it is pretty hard to identify England-only matters, and it is also hard to identify Wales-only matters. We need to speak loudly in defence of the ability of this place to continue putting its opinions forward strongly on all matters.
Alun Cairns
The hon. Gentleman is making an important point, which I think is recognised on both sides of the House. Does he think that that principle also needs to apply to his colleagues in the Welsh Assembly, and that they should recognise that the decisions that they take affect policy making here? There therefore needs to be dialogue between the Welsh Affairs Committee and Ministers in Wales, between Back Benchers and Ministers, and between Ministers here and Ministers in Wales.
Huw Irranca-Davies
Indeed. People who, like me, are very positive about devolution welcome such maturity and two-way engagement. We should look for ways to enhance that. That is to do with respect and, as I said earlier, that respect goes both ways.
Nia Griffith
The irony being that today we have discussed the importance of Parliament; many Government Members have referred to the importance of the commission being set up by Parliament.
Nia Griffith
No, I think that I have made my point. Opposition Members felt that they would have had more chance to influence things if the timing of the debate were different.
Up and down Wales, as far as the person in the street is concerned, the Silk commission is set up and can get on with its work. What those people are worrying about today is the empty order book in their company, the shops that are closing in their high street, the cuts in their council services, losing their job or their home, their children not being able to find work, and the daily struggle to make ends meet as prices for essentials such as food, vehicle fuel and energy bills spiral upwards. They understand something that the Government seem to have forgotten—that before the Government can raise any revenue or talk about any formula to distribute it, they need wealth creation. Indeed, what is the point of talking about taxation without wealth creation?
This week the Government have sent completely the wrong message to potential investors in Wales. Only days after the head of Tata Europe told MPs that he has been having serious doubts about future investment in Wales because of this Government’s lack of a long-term manufacturing strategy, the Government confirm his doubts by trying to sneak out in a written statement yet further cuts to the feed-in tariff scheme, with devastating effects on the industry. This is not about feed-in tariffs. This is not just about manufacturing industry. This is about raising the proper revenue and then being able to do something with it. It is about wealth creation, setting the right long-term strategies that will encourage manufacturing to come to Wales, attracting the investment that we need and providing the wealth so that we can talk about what we do with it. [Interruption.] I still have two minutes to go, I believe.
Why do we remain wary of the Government’s motives and suspect that they might be setting up the Silk commission to try to reduce funding to Wales? Because daily we see funding being sucked out of Wales, whether in higher VAT, the change from the retail prices index to the consumer prices index for the calculation of pensions and benefits, or the winter fuel allowance being cruelly cut for the over-80-year-olds from £400 to £300 this month, leaving many worrying about whether they can afford to put the heating on. It is this sucking money out of Wales that worries us considerably.
Although we welcome the Silk commission, wish it well with its work and look forward to debating its findings, in the meantime I again ask the Secretary of State to make it a priority to establish the so-called Barnett floor to protect funding for Wales, and I urge her Government to adopt fiscal policies that will stimulate the economy in Wales.
Mr Jones
My right hon. Friend the Secretary of State has already indicated the levels of fiscal accountability that are devolved in other parts of Europe. Ultimately, these will be matters for the Silk commission, which, as the hon. Member for Arfon (Hywel Williams) pointed out, will no doubt take into account what prevails in other parts of Europe in arriving at its conclusion, as it should.
In the brief time remaining, I will respond to the various points made. The shadow Secretary of State has explained to me the reasons for his absence, which we fully understand. He was less than enthusiastic about the commission, giving it a “cautious welcome”, which was as cautious as it gets and gave a whole new meaning to “welcome”. Resorting to the oldest rhetorical trick in the book, he set up the straw man of “devo-max”, under which Wales would be responsible for raising all its own revenue. He seemed to suggest that the commission’s recommendations might result in Wales having to raise all its own revenue, as a consequence of which public spending would be halved. I hope that it is unnecessary to point out, but I shall anyway, that the people of Wales should ignore these scare tactics.
Mr Jones
I shall not, as I have very little time left. I am sure my hon. Friend understands.
Fiscal devolution will work only where there is consensus on the powers to be devolved and in circumstances where the transfer of powers does not put unsustainable burdens on either the devolved Administration or the UK as a whole.
The shadow Secretary of State and other hon. Members mentioned Holtham and inquired why it was not being brought within the remit of the Silk commission. Separate bilateral discussions continue between the Government and the Welsh Government on all the Holtham commission’s proposals, including the idea of a funding floor and its wider proposals for reforms—an approach supported by the Welsh Government. The Government and the Welsh Government have started discussions, which will include work to gain a shared understanding of trends in Welsh spending, of previous studies on Welsh needs and of the operation of existing borrowing powers. Once consideration of spending trends and previous needs studies has been completed, and subject to Government and Welsh Government Ministers agreeing that a problem exists, the next step will be to look at options for reform. I put that on the record because of the concerns that right hon. and hon. Members expressed.
I believe that we must rely on the good sense of the commission, which will seek to find consensus—I make no apology for repeating the word because it is crucial to the commission’s work—on the extent to which the Welsh Assembly and Government should become more financially accountable.
I found the shadow Secretary of State’s negativity and tribalism most disappointing, and it was not typical of the debate. He appeared to have little or no faith in the capacity of the people of Wales to run to any extent their own financial affairs and, perhaps more importantly, to decide whether at an election a politician is making an unsustainable promise, which of course is crucial to what it falls to us to consider.
I found the contribution of my hon. Friend the Member for Monmouth (David T. C. Davies) disappointingly and uncharacteristically cynical. [Hon. Members: “Oh!”] I have to say, I found it quite hurtful. He said, almost in terms, that the conclusions of the commission were a fait accompli that would lead inevitably to more powers for the Assembly, but the commission has been asked to consider the boundaries of the devolution settlement and modifications that could work well for the benefit of Wales within the United Kingdom.
I am sorry that the right hon. Member for Delyn (Mr Hanson) is not here, but he made the important point that significant cross-border issues fall to be considered, and it is well within the commission’s remit to decide that in certain cases powers should be repatriated from the Assembly. That is what the Calman commission found in its consideration of the Scottish devolution settlement, and it is quite open to the Silk commission, which has a wide-ranging remit, to do so, too, so I hope that that offers some reassurance to my hon. Friend—who looks very reassured, I am bound to say.
The right hon. Member for Torfaen (Paul Murphy) praised the excellence of the commission members, and I feel it appropriate to echo that praise: we have a very well constituted commission. He raised the spectre of a Trojan horse, however, and doubted whether there was any real consensus on the commission, so I think it fair to point out once again that all the party leaders in the Assembly, including the Labour First Minister, co-operated in agreeing the commission’s terms of reference, and each party has a political appointee on it. I hope that gives the right hon. Gentleman some reassurance that it is not by any means an evil Tory Trojan horse; it is a genuine attempt to see whether it is possible to arrive at a settlement that will benefit the people of Wales in the long run.
The right hon. Gentleman also raised the issue of whether there will be a referendum on additional tax-raising powers, but that very much depends on what the Silk commission itself recommends. I for one find it hard to see how, for example, if there were recommendations on any significant changes to income tax, it would be possible to go forward without consulting the people of Wales as to whether that was what they wanted; after all, that is what happened in Scotland, and I have no doubt that it should happen in Wales.
The hon. Member for Brecon and Radnorshire (Roger Williams) took considerable credit on behalf of our Liberal coalition partners for the establishment of the commission, but I have to point out that it was a joint coalition commitment and one to which the Conservative party is very much wedded. He, too, praised the excellence of the commission members, and he paid tribute to Nick Bourne, the Conservative nominee. I can only echo the hon. Gentleman’s view that Professor Bourne will be an excellent member of the commission.
The hon. Member for Caerphilly (Mr David) did give a welcome, which I believe was genuine, to the commission, and I was very pleased to hear it, but he referred to the terms of reference and queried the reference to the United Kingdom’s wider fiscal objectives, pointing out that we live in a time of stringency that has resulted in spending reductions. Well, of course, it has, and I will not intrude into his private grief by pointing out the reason why we have to cut our public spending, but nevertheless it is quite right that whatever the commission decides should operate within the wider fiscal objectives of the United Kingdom as a whole.
There were excellent contributions also from my hon. Friend the Member for Aberconwy (Guto Bebb), the hon. Member for Arfon, my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), the hon. Member for Pontypridd (Owen Smith) and my hon. Friend the Member for Epping Forest (Mrs Laing), who came up with a memorable toothpaste tube metaphor, which I shall use regularly when talking about the effect of devolution on the United Kingdom. There was also a supportive contribution from the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards).
This has, as I say, been—