Wales Bill

Alun Cairns Excerpts

Tuesday 24th June 2014 Commons Chamber

[Owen Smith]

I entirely agree. I have been at pains throughout our deliberations to make it clear that, in this Bill, we are being accommodating with regard to borrowing that we understand, but there are real concerns—they are not frivolous—about the benefit for our constituents of Wales having powers that could be misused, particularly by the Conservative party, to cut taxes in Wales in order to engender tax competition across the UK. We think that would bring little benefit but many risks.

[Alun Cairns (Vale of Glamorgan) (Con)]

Is the hon. Gentleman telling us that he is absolutely against lower taxes in Wales, and is he therefore ruling out any Labour Administration using these powers to reduce taxes in Wales at all?

[Owen Smith]

The latter part of that question would of course be a matter for the First Minister, were those taxes to be devolved to Wales, but I think that I have been absolutely clear that we are not in favour of Wales undercutting the rest of Britain to afford benefits to itself. We do not think that would be beneficial to Wales in the long term. Let me be clear: were that to happen, we do not imagine that Wales would continue to enjoy the same degree of welcome support that we receive from the rest of the UK.

--- Later in debate ---

[Jonathan Edwards]

Well, that is the hon. Gentleman’s position. But if the Labour party’s position were to hold true in Wales, there would be a uniform business rate across the 22 Welsh local authorities. There seems to be a slight misunderstanding in Labour’s position.

[Alun Cairns]

Extending that logic beyond business rates, the same would apply to council tax rates. We have seen a 12% increase in council taxes in Wales since 2010, whereas there has been a broad freeze here in England.

[Jonathan Edwards]

The hon. Gentleman makes my point for me. He says that there are 22 local authorities in Wales, all with fiscal powers to change council tax rates and non-domestic rates. The Labour party does not seem to think that is a problem in Wales in terms of tax competition.

In my opening remarks in Committee, I also said that events in Scotland would supersede the second part of the Silk commission’s work and probably this Bill. Although it might appear that I have fortune-telling abilities, I reassure you, Mr Deputy Speaker, that I have yet to acquire such powers. Earlier this month, the Tory Strathclyde commission recommended that in the increasingly unlikely event of a no vote in Scotland in September, the Scottish Government should be given full income tax powers, and powers over VAT and the welfare system. The proposed new powers would make the Scottish Government responsible for gathering 40% of the money they spend. Crucially for this Secretary of State and this Bill, the Prime Minister has fully backed the commission’s proposals and promised to include them in the Conservative manifesto for next year’s general election. Contrary to the Minister’s remarks, the Prime Minister said that there was no reason why these powers should not be transferred to Scotland after the general election. Ruth Davidson, the leader of the Conservative party in Scotland, has said that this was going to be in its 2015 manifesto. Therefore, Treasury Ministers’ revelations might be revealing in terms of the debate in Scotland over the next few weeks.

The Secretary of State finds himself in an uncomfortable position, as this Bill represents the Tory offer for Wales. The people of our country can easily compare and contrast what is on offer for Wales with what is on offer for Scotland. Furthermore, the BBC is reporting that all three Westminster parties are pledging an agreement of joint travel, promising more powers for Scotland. Yet, this Bill does not even take us in Wales to where Scotland is now. Wales is not a second-class nation and there is no more powerful message in Welsh politics than equality with Scotland. This Bill is far from being a settlement that will last a generation; if the Tories want to survive in Wales next year, this Bill is unlikely to make it past the Lords in the autumn.

Only last week, none other than the Financial Times stated in its editorial that the UK should move to a federal model, noting that

“the status quo is not an option.”

It added that Wales should be included in proposals for full fiscal and policy autonomy. Today, we will endeavour to put forward amendments that will strengthen the Bill considerably. As the Westminster parties have decided to torpedo the Silk commission, we will also put forward amendments that go beyond its recommendations and reflect the rapid change of the constitutional debate within these isles. We will seek to divide the House on our later amendments in the next group, so that the people of Wales can contrast Plaid Cymru’s ambition for Wales with the apathy of the Westminster parties.

First, however, I will speak to our amendment 9, which is a straightforward, probing amendment. It would make the Welsh Government responsible for 100% of the income tax revenue gathered in Wales, rather than having the meagre 10%-90% split income tax-sharing arrangement on offer in this Bill. My Plaid Cymru colleagues and I have already tried to maintain the integrity of the original cross-party Silk commission recommendations. We tabled relevant amendments to the Bill in Committee, but they were either voted down or abstained on by Labour MPs who would not support what their colleagues in the National Assembly had been saying.

I mentioned the fact that the Tory Strathclyde commission has reported its conclusions. It recommended 100% devolution of income tax to Scotland. The report was fully endorsed at the highest levels of the Conservative party, with the Prime Minister himself giving it his full backing and saying that its recommendations would be included in the Conservative manifesto at the next UK general election. I need not point out to the Secretary of State, therefore, that what his party is offering to Scotland reveals what is on offer here to be completely behind the times.

--- Later in debate ---

[Mr Jones]

I could rehearse the remarks that were made on the last occasion we discussed this issue, but the point that my hon. Friend the Member for Forest of Dean (Mr Harper) was making was that his constituents access the health service in Wales. They wish to access the English health service, but at the moment they have difficulty doing so. I would have thought that the hon. Gentleman would want to facilitate my hon. Friend’s constituents’ access to the English health service, rather than continuing to snipe.

[Alun Cairns]

The shadow Welsh Secretary mentioned cancer waiting times, but does my right hon. Friend the Secretary of State agree that that is a very narrow element of this? The patient experience involves diagnosis, and the waiting times for diagnosis are much longer in Wales. If we take into account the total waiting times in Wales for cancer treatment, the picture is very different from what was suggested.

[Mr Jones]

My hon. Friend makes an important point. The shadow Welsh Secretary ought to understand that there is huge public dissatisfaction with the Welsh Government’s performance on health in Wales. I suggest that, rather than trying to engage in guerrilla warfare on individual points, he has a word with his Assembly colleagues and urges them to do more to deliver a decent health service for the people of Wales.

Despite Labour’s focus on dual candidacy, at its heart the Bill is about driving forward economic growth in Wales, and it illustrates the centrality of economic recovery to everything this Government do. The Bill provides the Welsh Government with additional levers and incentives to deliver economic growth. As well as providing opportunities for the Welsh Government, it increases scrutiny of them. Since devolution, the Assembly and the Welsh Government have been accountable only for how they spend taxpayers’ money; now, they will become more accountable for how they raise it. The challenge for the Assembly and the Welsh Government will be to use the tools we have given them effectively and efficiently. Part of that challenge will be deciding if and when to seek the agreement of the Welsh electorate, in a referendum, to devolving an element of income tax. I urge the shadow Secretary of State and his colleagues in Cardiff Bay to abandon their opposition to a referendum, and the Assembly to trigger a referendum sooner rather than later.

We are 87 days away from probably the most momentous decision in the 300-year history of our Union. The referendum in Scotland has significant implications for devolution in Wales. The majority of us in this House sincerely hope that the people of Scotland will vote to remain part of the Union. A no vote will allow those of us who believe in the Union to consider how best to strengthen it and to enable all parts of our United Kingdom to prosper.

In Wales, the recommendations made by the Silk commission in its second report provide opportunities to consider further devolution. As the commission acknowledged, the key legislative recommendations should be matters for the next Parliament, and it will be for political parties to set out their proposals at the 2015 general election. That will provide a mandate for the next Government to implement the changes they have committed to, and will enable Parliament to consider changes to the Welsh devolution settlement in the context of strengthening our Union.

As well as its financial reforms, the Bill makes some highly welcome improvements to the Assembly’s electoral arrangements, making them fairer and more equitable. Assembly terms will be changed from four to five years to make it less likely that Assembly and parliamentary elections occur on the same day. Members will no longer be able to sit simultaneously in both the Assembly and the House of Commons, enabling Assembly Members to concentrate on representing their constituents in the Assembly. The Bill overturns the clearly unfair ban on dual candidacy introduced by the Labour party, which is seen by constitutional experts and the public alike as partisan and anomalous.

This Bill marks a significant strengthening of the Welsh devolution settlement. It bolsters the democratic institutions in Wales, and ensures that the Assembly and the Welsh Government are more accountable to those who elected them. It provides the tools for the Assembly and the Welsh Government better to support stronger economic growth. I commend this Bill to the House, and I trust that the House will support its Third Reading.