Wales Bill

Alun Cairns Excerpts

Monday 11th July 2016 Commons Chamber

[Susan Elan Jones]

One could talk about a lot of aspects in the Bill, as we know, because at one time or another most of us have done so. I will therefore concentrate on one particular amendment: amendment 123, which has been signed by my hon. Friend the shadow Secretary of State and others, which concerns the devolution of licensing of the provision of entertainment and late-night refreshments, and the sale and supply of alcohol.

My hon. Friend is a great scholar of Welsh history, so I am surprised that he did not mention that the first Wales-only legislation came with the Sunday Closing (Wales) Act 1881. That means that there is real sense of history behind this amendment. Most of us would agree that it makes perfect sense to devolve such provisions to the Assembly’s legislative competence so I, for one, strongly support the amendment. We must recognise that there needs to be a greater debate about this whole subject, because alcohol abuse has relevance to health services as well as local government services. We are not living in the days of the 1881 Act, following which areas voted on whether to be wet or dry. People from dry areas would often travel a little further along the lanes to get to a wet area. However, we are now dealing with problems of alcohol abuse and of pre-loading in many of our communities. Years ago, the mudiad dirwest—the Welsh temperance movement—would often decry other cultures and say, “Fancy the French—they give wine to their children!” In reality, alcohol and food have always gone together naturally in many continental cultures, but that is not the case with pre-loading. We need to think about that very seriously indeed.

We also need to consider our rural areas. I am sure that all of us take very seriously issues relating to drink or drug-driving. Those of us who represent rural and semi-rural areas will know from talking to our constituents and others that some people still take chances on country roads and drive when they are above the legal limit. I appreciate that the culture has changed for the better in many ways and that fewer people do that, but it is still a problem in many of our rural communities. Frankly, if someone in a car finds themselves on a narrow single lane faced by a drink-driver, their chances of survival are fairly low.

Devolving the relevant powers would affect how we consider health, social care and local government provision. Great problems are connected to alcohol and drug abuse. I do not wish to sound like a member of the Committee that considered the 1881 Act, because I think that many of us welcome wine, real ale and the conviviality provided by food and drink, but we do not welcome alcohol or drug abuse. We would, however, welcome sensible devolved provisions to make tackling those problems easier.

[The Secretary of State for Wales (Alun Cairns)]

It is a pleasure to welcome you to the Chair, Mr Hoyle, and to respond to Members’ comments about the amendments. I echo what was said about the Welsh football team. The Prime Minister has already congratulated them, and it is a pleasure for me to do so as Secretary of State for Wales.

The amendments go to the heart of the new devolution settlement for Wales that the Bill puts in place. Clause 3 and schedules 1 and 2 insert new section 108A and new schedules 7A and 7B into the Government of Wales Act 2006 to provide for a reserved powers model of Welsh devolution. The Bill devolves significant new powers and will enable the Welsh Government and Assembly Members to legislate on the things that really matter to Wales.

Clause 3 sets out the parameters of the legislative competence of the Assembly under the reserved powers model. An Act of the Assembly will be outside competence—it therefore will not be law—if it falls foul of any one of the five tests set out in paragraphs (a) to (e) of new section 108A(2). I will first say something about how it is intended that each of those tests will work before turning to the proposed amendments to the clause.

The five tests are separate and independent assessments, each of which must be satisfied for a provision to be within competence. The first test is that an Assembly Act provision cannot form part of a legal jurisdiction other than that of England and Wales. We debated many aspects of that during our first day in Committee.

Test 2 is that an Assembly Act provision cannot apply

“otherwise than in relation to Wales”.

There is an exception to that prohibition, however, because new section 108A(3) states that an Assembly Act provision can apply beyond Wales, but only when it is ancillary to a provision that is within competence and if there is no greater effect beyond Wales than is necessary to give effect to that provision. It is worth noting that we have used the word “ancillary” as shorthand for the Assembly’s existing enforcement and consequential-type powers under section 108(5) of the Government of Wales Act 2006.

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[Liz Saville Roberts]

I appreciate that the right hon. Gentleman has listed a number of tests, but does he agree that, for them to be justifications in a reserved power model, we should see how the reservations apply to each area?

[Alun Cairns]

I will cover those points, but I have sought to underline the importance of the tests because they are so fundamental to the reserved powers model. Of course, the reservations will be equally fundamental. The hon. Lady mentioned a significant number of them. As I make progress, I will cover many of the points she made and invite her to intervene then.

Amendments 118 and 119, tabled by the main Opposition party, and Plaid Cymru’s amendments 148 and 149 seek to broaden the Assembly’s competence significantly by enabling it to legislate in relation to reserved matters so long as the provision is ancillary to a provision on a devolved matter. These amendments would drive a coach and horses through the key principle underpinning the new model, which is a clear boundary between what is devolved and what is reserved. They would give the Assembly the power to make unfettered changes to reserved matters such as the justice system, which we debated in detail last week, provided only that some connection to a devolved provision was established. What is more, they are simply not needed. We want to ensure that the Assembly can enforce its legislation and make it effective. We provide for this in paragraphs 1 and 2 of new schedule 7B by enabling the Assembly to modify the law on reserved matters. This is suitable to ensure that the Assembly’s devolved provisions can be enforced without compromising the principle of reserved matters.

I turn now to the proposed new schedule 7A to the Government of Wales Act, which sets out the reserved matters, referred to in general in the legislation as the “reservations”. These matters must be seen through the prism of the purpose test. A reservation is a succinct description of the subject area covered. It includes reserved authorities carrying out functions relating to that subject and criminal offences relating to that subject.

The general reservations in part 1 of the new schedule reserve the fundamental tenets of the constitution: the Crown, the civil service, defence and the armed forces, the regulation of political parties, and foreign affairs. As a single legal jurisdiction operates in England and Wales, we also reserve matters such as courts and non-devolved tribunals, judges, and civil and criminal proceedings. However, we have made appropriate exceptions to these reservations to enable the Assembly to exercise devolved functions. For example, the Assembly can confer devolved functions on the courts or provide for appeals from devolved tribunals to reserved tribunals.

Amendment 6, tabled by Plaid Cymru, seeks to modify these core reservations by allowing the Assembly to consolidate the constitutional arrangements for Wales. It surely must be a fundamental principle that the UK’s constitutional arrangements, including Parliament’s authority to devolve its own powers, are reserved. We have a constitutional settlement for Wales, the Government of Wales Act 2006 as amended, and amendment 6 is simply not necessary.

Part 2 lists the specific reservations. We want there to be no doubt where the boundary of the Assembly’s legislative competence lies. The list is lengthy because it is quite specific in its reservations and provides exceptions to those reservations. Previously, in the draft, there were some broad headlines, but the current Bill is far more specific, which necessitates further detail on what is included.

[Jonathan Edwards]

During this afternoon’s debate, the Secretary of State has been challenged on many of the reservations listed in part 2. In the interests of transparency, and before we get to the remaining stages of the Bill, will he commit the Wales Office to publishing a document outlining why each reservation has been made?

[Alun Cairns]

The hon. Member is aware that I have an open style and am happy to maintain dialogue and work with all opposition parties, as well as with the Welsh Government, in seeking to come to an accommodation. However, hovercrafts, for example, have been highlighted a couple of times. That reservation relates to technical standards and is about a distinct class of transport, such as ships in relation to shipping and planes in relation to aviation. Therefore, although, on the face of it, one might ask what the purpose of a reservation is, very often there are technical issues well beyond that. I am happy to continue a dialogue in that respect, as we continue to do with the Welsh Government.

[Paul Flynn]

Will the right hon. Gentleman consider breaking the pattern we have had of passing Wales Bills and, then, five years later, coming back to try to undo the damage we have done with the previous Bill? Will he accept the spirit of unanimity on this side of the Committee when we point out the problem with many of these reservations? Take, for instance, the reservation on dangerous dogs, as was mentioned by the hon. Member for Ceredigion (Mr Williams). If there is any issue on which this Parliament has proved its legislative incompetence over the years it is the Dangerous Dog Act 1991. That is an example of how not to legislate. Wales could do better perhaps.

[Alun Cairns]

The hon. Member is well aware that 90% of the Welsh population live within 50 miles of the border between England and Wales. Clearly, some reservations are sensible so that people can walk their dogs across that boundary; otherwise, it could lead to significant complications. The hon. Member raised that specific practical example, and I am happy to maintain the dialogue on that.

Mr Hoyle, you would not believe it, but the vast majority of reservations are not contentious. They simply reflect those areas of policy that are best legislated on a Wales basis or at a UK level, and the further powers that are being devolved in the Bill. Constructive discussions on the reservations will continue between the UK Government and the Welsh Government, and, happily, with Opposition Members. I recognise that some reservations reflect the difference in policy between us. Others are subject to further detailed discussions, which I am happy to continue. In the context of the purpose test, the list of reservations before us today will ensure greater clarity and certainty in determining what is within the competence of the Assembly and what is not.

I turn now to the amendments to schedule 1.

[Hywel Williams]

The Secretary of State says with a flourish and extreme confidence that the list of reservations is sensible. If so, why is he so reticent about publishing his reasoning? He asserts, but he does not explain.

[Alun Cairns]

The hon. Gentleman will know that I am happy to continue open dialogues. As Secretary of State, that is the style I have sought to use, to build on that set by my predecessor. I hope that the hon. Gentleman will want to continue working in such an open and constructive way.

[Jonathan Edwards]

Will the Minister give way?

[Alun Cairns]

I would like to make further progress, if I may.

A whole host of amendments have been tabled in relation to policing and justice. The St David’s day process found no consensus to devolve the criminal justice system in Wales. The Government gave a clear manifesto commitment that policing and criminal justice will remain reserved. In our first day in Committee last week, I made clear the Government’s commitment to maintain the single legal jurisdiction of England and Wales. Crime, public order and policing are inextricably linked to the criminal justice system. There already exists an All Wales Criminal Justice Board, which consults fully with the Welsh Government and extends to prison provision. The Welsh Government are also in regular dialogue with the National Offender Management Service about its functions.

Amendment 116, tabled by Plaid Cymru, and amendment 87, tabled by Labour, seek to remove the reservations for late-night entertainment and alcohol licensing respectively. There was much debate within this group surrounding this. The Government consider both subjects to be closely connected to policing and maintaining public order. Given that policing and criminal justice remain reserved matters, late-night entertainment and alcohol licensing should also be reserved under the principle that has been established.

Amendment 155, tabled by Plaid Cymru, seeks to reserve “the Crown Prosecution Service” rather than “prosecutors” in the general reservation on the single legal jurisdiction. There is no intention to prevent the Assembly from continuing to specify devolved prosecutors for devolved offences in the legislation. The reservation of prosecutors would not prevent the Assembly from legislating to, for example, make local authorities in Wales the prosecuting authority for particular devolved offences, as was highlighted by the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). I agree, however, with the underlying policy intention of the amendment and will consider further, before Report, whether the reservation of prosecutors should be modified. I am happy to return to this at that stage.

Government amendments 53 to 58, tabled in my name, seek to put Wales in the same position as Scotland in respect of the reservations in C5, which reserves all prohibition and regulation of imports and exports in and out of the United Kingdom. It does, however, allow the Assembly to control movements of certain things, such as plants, animals, foods and fertilisers, for specified purposes. The amendments seek to put the Assembly in the same position as the Scottish Parliament by extending its competence to regulate movement of these things both within Wales and in and out of Wales.

Significant attention has been given to transport reservations, with a number of amendments being tabled by both Plaid Cymru and the Labour party. The transport reservations were subject to close scrutiny when the Bill was at a draft stage, and there is no basis on which to devolve railway services, coastguard services or aspects of road transport, as the hon. Member for Arfon (Hywel Williams) proposes. It is not what the Silk commission recommended, and my focus has been on delivering powers for a purpose.

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[Mr David Jones]

The Secretary of State mentioned the Silk commission’s recommendations, but he will recall that I asked for the rationale. I wonder whether he could explain it, please.

[Alun Cairns]

I am happy to explain that given that local authorities already have the power to vary speed limits, it is a logical, sensible extension to give further powers to the Welsh Government in this area.

Time does not permit me to address in detail all the remaining amendments to schedule 1. That is in part because hon. Members from Plaid Cymru seem to seek the devolution of just about everything, and they seem to want to reverse the principles on which the Bill is based. I am pursuing a pragmatic, practical approach as we amend and develop the Bill, so I reject the amendments to devolve Sunday trading, the generation, transmission, distribution and supply of electricity, coal, heat and cooling networks, energy conservation, working-age benefits, child benefit, guardians allowance, most employment and industrial relations, employment support programmes, abortion, health and safety, broadcasting, safety at sports grounds, equal opportunities, bank holidays and the Children’s Commissioner.

Amendment 124, which was tabled by the hon. Member for Newport West (Paul Flynn), seeks to carve out from the employment reservation terms and conditions of employment in relation to Wales public authorities. The Government believe strongly that the underlying legislative framework of rights and responsibilities in the workplace must be reserved for the labour market to work most effectively across Great Britain.

[Stephen Doughty]

Does the Secretary of State accept that, as a Minister told me during proceedings on the Trade Union Bill, the reserved powers granted under the legislation effectively allow any Minister in the UK Government to undermine a partnership or industrial relations decision made by a Welsh Minister in the running of the Welsh NHS or the education service, for example?

[Alun Cairns]

The hon. Gentleman will be familiar with the legislative background of the Government of Wales Act 2006, and the Bill seeks to expand on the 2006 Act in relation to employment rights. There was no intention in that Act to devolve those purposes, and we have continued the principle that was well established by the previous Labour Government.

I shall deal with amendments on three further areas. First, in relation to amendment 88, which was tabled by members of Plaid Cymru, and amendments 127 to 129 and new clause 10, the Government are considering the conclusions of the joint Governments’ programme board in relation to the Silk recommendations on water and sewerage. The joint committee reported only a couple of weeks ago, and it is only appropriate that the Government give proper, full consideration to that report. I hope that we can find a consensus among the Welsh Government and the opposition parties on a way forward, but there are a whole range of technical issues that need further consideration.

Secondly, in response to amendment 107, I assure the hon. Member for Arfon that the Assembly will have the competence to legislate in relation to party election broadcasts at Assembly and local government elections in Wales. Party political broadcasts are considered to be part of the conduct of elections, and there is no need to modify the broadcasting reservation to achieve that. Thirdly, on amendment 115, which relates to teachers’ pay, I am in principle in favour of devolving teachers’ pay and conditions, but there is a case for further discussions between the UK Government and the Welsh Government about how that can best be achieved.

Finally, new clause 1 and consequential amendment 2 are intended to devolve the management functions of the Crown Estate commissioners in relation to Wales to Welsh Ministers or to a person who is nominated by them. That broadly reflects the provisions in the Scotland Act 2016. The devolution of the Crown Estate in Scotland was recommended by cross-party consensus in the Smith agreement but, as hon. Members know, the St David’s day process found no similar consensus in respect of Wales.

Paragraph 1 of proposed new schedule 7B to the Government of Wales Act 2006 will prevent an Assembly Act from modifying the law on reserved matters. Paragraph 2 will provide flexibility for an Assembly Act provision to be able to modify the law on reserved matters, where doing so is ancillary to a provision that does not relate to a reserved matter and there is no greater effect on reserved matters than is necessary to give effect to the purpose of the provision. The restriction relating to the private law in paragraph 3 and the restriction concerning the criminal law in paragraph 4 are intended to provide a general level of protection for the unified legal system of England and Wales while enabling the Assembly to enforce its legislation.

The protected areas of private law include core subjects such as the law of contract and property. However, the Assembly is given the power to modify the private law where the purpose of doing so does not relate to a reserved matter. Importantly, the Assembly is not permitted to modify the private law for its own sake and cannot make wholesale changes to the private law, such as the wholesale rewriting of contract law. Any modification of the private law must be for a range of devolved purposes.

On the criminal law side, in paragraph 4 the serious offences protected from modification include treason, homicide offences, sexual offences and serious offences against the person. It is right that these serious offences remain consistent across the UK. In addition, the Assembly will not be able to alter the law that governs the existing framework of criminal law, such as sentencing and capacity to commit crimes.

I am conscious of the fact that a whole host of issues have been raised, so I will conclude. This has been a full and wide-ranging debate. I hope I have been able to assure the Committee that the reserved powers model will provide a clear, robust and lasting devolution settlement for Wales. I urge Opposition Members to withdraw amendment 118.

[Paul Flynn]

We will press amendment 123 to a Division, but I beg to ask leave to withdraw amendment 118.

Amendment, by leave, withdrawn.

Clause 3 accordingly ordered to stand part of the Bill.

Schedule 1

New Schedule 7A to the Government of Wales Act 2006

Amendment proposed: 83, page 47, line 32, leave out Section B5. —(Liz Saville Roberts.)

This amendment removes the reservation of crime, public order and policing from the list of reserved powers.

Question put, That the amendment be made.

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[Hywel Williams]

I want to speak to amendments 74 to 80, 81 and 82, 151 and 154, which I tabled along with my hon. Friends.

I welcome clauses 22, 23 and 24, which confer competence on Welsh Ministers in relation to onshore petroleum licensing, including hydraulic fracturing, or fracking, about which the Welsh people care a great deal. If the people of Wales do not want fracking, our Government should be able to ensure that it does not happen. Given that the Welsh Government and the National Assembly as a whole voted unanimously against fracking in Wales, I hope that the Secretary of State will work with his Cabinet colleagues to ensure that until the Bill is passed, the United Kingdom Government honour that unanimous opposition in Wales and no new licences are issued there. I hope that, at the end of the debate, either the Secretary of State or the Under-Secretary will give some indication that that will be the case.

I also welcome clause 26. Some time ago, I had a meeting with the traffic commissioner for Wales, who was based in Birmingham at the time. He was very unhappy about being traffic commissioner for Wales, and pointed out that not only did he work from Birmingham, but he lived in Derby, which is a considerable distance from Wales. Many years ago, the Welsh Affairs Committee called for the commissioner to be moved to Cardiff, and I am glad that the clause achieves a great deal more than that.

Amendments 74 and 75, and consequential amendments 76 to 80, would remove the 350 MW limit on the Welsh Government’s legislative competence in the field of energy. I would happily put a fiver on what is on the Under-Secretary of State’s notepad: my guess is that he intends to say that the limit was recommended by the Silk commission. I wish I had put that fiver down, because I see that the Under-Secretary is smiling.

Of course I accept that the Silk commission recommended the limit, but let us return for a moment to the purpose and the terms of the commission. It was set up by the coalition Government, with a Conservative Secretary of State for Wales. It consisted of one nominee from each of the four main parties at the time, including the Secretary of State’s and mine, along with various academic and other experts. It consulted widely and extensively with the political parties, civic society, academia and industry experts, as well as the public. Its two reports represented a consensus, reflecting not only the views of the political parties but, crucially, those of the public and of experts—that is, the views of civic society in general.

With that purpose in mind, the players in all four political parties had to compromise, and all four—including the Secretary of State’s party and mine—did so, in order to achieve a national consensus. That was a contrast with the St David’s day process, in which I played a minor part. At the time, the Secretary of State appeared to hand a veto to each party in respect of what it wished to reject. Labour used its veto to the full, which reflected the stance of the then shadow Secretary of State, as a self-confessed “proud Unionist”. It seemed to me that the veto extended to Whitehall Departments, in terms of which matters they wanted to reserve.

As was clear from my earlier intervention on the Secretary of State, I am still slightly unconvinced about this process—

[Alun Cairns]

rose—

[Hywel Williams]

I will gladly give way to him.

[Alun Cairns]

What example has there been of devolution to Wales in the past where the Secretary of State has really sought to bring about agreement throughout the House on a pragmatic, practical way forward, rather than bulldozing one particular model over another?

[Hywel Williams]

I was very glad to play a minor part in the St David’s day process, as was my colleague at the time, Elfyn Llwyd. I think there was a structural deficiency in that process, in that if individual parties wanted to veto a particular matter, they could do so—fine: that was what the process was about—but, to my mind at least, one party made rather a meal of that dispensation, and vetoed a great deal that could quite reasonably have been included. The criticism of the first draft of the Bill reflects that, but the current version is a great improvement, and I am happy to pay tribute to the Secretary of State and his predecessor for their achievement.

Some parties compromised on policing, and some on broadcasting. My party compromised on energy. We have always believed that Wales’s natural resources should be in the hands of the people of Wales, and that the people of Wales are best placed to make decisions about how best to put those resources to use. That is our historic stance. We have never believed in placing a limit on that principle, above which the people of Wales should no longer have a say. We never thought that that was a good idea, and never thought that it was necessary. However, we compromised, for the good of the Silk process and to ensure good order and progress. We agreed to the arbitrary limit of 350 MW in return for the support of others on policing and broadcasting.

The Secretary of State has chosen not to follow that consensual path, and to pick and choose from the Silk Commission’s recommendations which matters to accept and which to forgo. Indeed, he has chosen to ignore the majority of what Silk had to say. He cannot now reasonably defend that Westminster power grab and attack Plaid Cymru by claiming that he is only following the commission’s recommendations. We shall see what the Under-Secretary of State has to say about that one.

Clause 36 must be understood as it stands. Having voted to give Scotland complete control over its natural resources, with no limits, the Secretary of State is proposing to devolve energy in Wales only up to a limit of 350 MW, with anything above that threshold being reserved to Westminster. Why does he believe that Scottish natural resources should be in the hands of the people of Scotland, but Wales’s natural resources, above the limit, should be deemed to be the preserve of Westminster? Does he think that the people of Wales cannot be trusted with any energy projects above 350 MW? Do we suffer from some congenital infirmity in that respect? For that matter, why should it be 350 MW rather than 351, or 349? Perhaps the Under-Secretary of State will enlighten us. What factual evidence has he to justify that figure?

The hon. Member for Newport West (Paul Flynn) referred to the Swansea Bay tidal lagoon. It is proposed that the lagoon should be devolved to Wales, but that the proposed Cardiff and Colwyn Bay tidal lagoons, which are identical apart from scale, should be reserved to Westminster. What is the rhyme or reason for that? What practical reasons are there for such a distinction?

Let me give another practical example. In my constituency, there is a great capacity for hydro-electric power. The Dinorwig scheme, which has been mentioned, is a massive scheme that can power Manchester for five hours at the throw of a switch. It takes eight seconds for the turbines to start turning. It is an astonishing scheme, which I think is one of the great energy production secrets of Wales. I understand that the switch is thrown in Connah’s Quay and not in London, and that it controls not only Dinorwig but the Stwlan facility in Blaenau Ffestiniog, as well as Maentwrog. So here we have an astonishingly good scheme and the potential for several more, some of the same scale but also some smaller ones.

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[Jonathan Edwards]

The whole point of devolving APD to Wales is to allow Welsh Ministers to set their own priorities for the aviation industry in Wales. At the end of the day, it will be up to Welsh Ministers to consider the most appropriate APD policy for Wales to maximise revenues from their own public asset. Let us remember that Cardiff airport is owned by the people of Wales. Clearly, increasing footfall at the airport could generate substantial revenues elsewhere, primarily by boosting economic performance across the whole of the economy, especially in the Secretary of State’s own Vale of Glamorgan constituency.

I am not privy to the Cardiff airport’s strategic planning, but my understanding is that the element of APD that the airport is most interested in is long-haul taxation. As I mentioned, the airport has a superb runway that can accommodate transatlantic flights, which Bristol airport cannot. If Cardiff were to develop that angle of its business, that could surely be of use to Bristol airport, if transport links between both airports could be improved. There lies a challenge for the Welsh Government, because our international airport urgently needs public transport upgrades to get people from Cardiff—and indeed Swansea—to and from the airport. The current infrastructure is awful, compared with that of Belfast, Glasgow and Edinburgh.

Recent public opinion polls suggest that 78% of Welsh voters agree that APD should be devolved. That does not quite compare with the percentage who support the introduction of Welsh bank notes, but that incredibly high number is still a clear indication of public opinion. It takes a brave politician to ignore opinion poll figures of those proportions.

Furthermore, the National Assembly should have more responsibility for the money it spends. The Secretary of State for Wales himself has said that increasing its taxation responsibilities makes the Assembly “truly accountable” to the people of Wales, so why not include air passenger duty in the list of devolved taxes? Why continue to limit the financial responsibilities of the Welsh Government? Jane Hutt, the former Minister for Finance and Government Business in the Welsh Government, who I am not in the habit of quoting, has said:

“It is…disappointing that the UK Government has decided to continue its procrastination over the devolution of Air Passenger Duty. This discriminatory approach is unacceptable and unjustifiable”.

We have seen during the progress of the Bill that what the Labour Government say in Wales does not necessarily translate into voting behaviour where it counts down here in Westminster. Official Opposition Members might be relieved to hear that I do not intend to press the new clause to a Division, but I will return to the matter on Report. I hope that, in the meantime, the Secretary of State will listen to one of the most important strategic players in his constituency and his country, and I look forward to him bringing forward Government amendments to devolve APD before the Bill completes its progress through the House.

I now turn my attention to new clause 4, which would equalise the situation between Wales and Scotland when it comes to VAT revenues. The Scotland Act 2016 stated that revenues from the first 10 percentage points of the standard VAT rate would be devolved by the 2019-20 financial year. The current UK VAT rate is 20% and half of all the VAT raised in Scotland will be kept in Scotland. It is important to note that the Scottish Government will have no ability to change VAT rates.

Sales taxes in the United States are state taxes, not federal taxes, so different states have different levels of their version of VAT. We propose equalising the situation with Scotland because although EU rules prohibit different sales tax levels within the boundaries of a member state, adopting the Scottish model could pave the way, in a post-Brexit scenario, to devolving VAT in its entirety to Wales, to Scotland and to Northern Ireland. In a post-Brexit UK, it seems clear that significant political and fiscal power will have to be conceded by Westminster unless the post-Brexit vision is an even more lopsided state in which power and wealth are even more concentrated in London and the south-east.

The Scottish model has some incentivising benefits as it would help to galvanise the Welsh Government to boost the spending power of our citizens by basing a job creation strategy around well-paid jobs and seriously getting to grips with our low-wage economy. As page 4 of Cardiff University’s excellent “Government Expenditure and Revenue Wales 2016” report states:

“VAT was the largest source of revenue in Wales (raising £5.2 billion), followed by Income Tax (£4.6 billion) and National Insurance Contributions (£4.0 billion). The composition of revenues in Wales is markedly different from the UK as a whole. Large direct taxes…make up less of a share of total Welsh revenue, while a greater share is raised through indirect taxes”.

The report’s point is that indirect taxes such as VAT generate more revenue in Wales than direct taxes such as income tax. The report also indicates that Welsh tax revenues have grown by 12.3% since 2011, the main component of which was VAT revenues.

As long as we have a Tory UK Government, economic growth will continue to be based around consumer spending. If that is the case, it is all the more important that the people of Wales directly benefit from that growth and from their own spending power. Denying Wales the same powers as Scotland on VAT seems to be a deliberate attempt to undermine revenues for the Welsh Government.

New clause 4 is probing, so I will not be pressing it to a vote at this stage, but I look forward to hearing the UK Government’s justification for why they have not given Wales the same status as Scotland, especially considering the good performance of Wales—for whatever reason—in generating VAT revenues. I may return to this matter during the Bill’s later stages.

Similarly probing are new clauses 8 and 9, which would devolve corporation tax to mirror the situation in Northern Ireland. As a proud Welshman, I want my country to succeed. I desperately want our GDP to increase and to close the gap between the GDPs of Wales and the UK. If that is to happen, we unquestionably have to make Wales a more attractive place to do business. I want to make Wales the most attractive place in the UK to do business, and I hope that the Secretary of State for Wales would want the same for his country.

Most other countries are able to set their own rates of corporation tax. It is a lever with which a national Government can influence their country’s desirability to potential investors, but Wales is restricted from doing so. We are forced to compete with the other UK nations with our hands tied behind our backs. Northern Ireland has a huge competitive advantage over Wales, and we know about the rate in the Republic of Ireland, with which we share a sea border. We cannot build a High Speed 2 for Wales. We cannot electrify our railways and we cannot offer tax incentives. We are constantly forced to come to Westminster with a begging bowl. We are still waiting for even an inch of electrified railway. We are still not getting full Barnett consequentials from HS2, let alone getting our own high-speed rail, and we are once again being told that we cannot use corporation tax as a way of attracting business.

[Alun Cairns]

I am listening carefully to the hon. Gentleman’s proposal on devolving corporation tax. How would Wales cope with the significant volatility of corporation tax income?

[Jonathan Edwards]

I am grateful for that intervention because it provides a great insight into the Secretary of State’s thinking. If that is his argument on fiscal powers, he should align himself with the Labour party, which opposes Wales having income tax powers for exactly the same reason. This is about whether one believes that the Welsh Government can use such levers effectively to create jobs in our country. That intervention is indicative of the Secretary of State’s mindset.

Given that corporation tax is devolved in Northern Ireland, I hope that the Secretary of State will do his job, stand up for Wales and make it a devolved tax in Wales, as was recommended by the Silk commission’s report.

Governments Amendments to Wales Bill: Analysis of English Votes for English Laws

Alun Cairns Excerpts

Monday 11th July 2016 Written Statements

[The Secretary of State for Wales (Alun Cairns)]

I am pleased to announce the publication of analysis of English Votes for English Laws in relation to Government amendments to the Wales Bill at Commons Committee.

The English Votes for English Laws process applies to public Bills in the House of Commons. To support the process, the Government have agreed that they will provide information to assist the Speaker in considering whether to certify a Bill or any of its provisions for the purposes of English Votes for English Laws.

The memorandum provides an assessment of tabled Government amendments to the Wales Bill, for the purposes of English Votes for English Laws, ahead of the second day of Commons Committee. The Department’s assessment is the amendments do not change the territorial application of the Bill.

This analysis reflects the position should all the Government amendments be accepted.

The memorandum can be found on the Bill documents page of the Parliament website at: http://services.parliament. uk/bills/2016-17/wales.html and I have deposited a copy in the Library of the House.

[HCWS81]

Wales Bill

Alun Cairns Excerpts

Tuesday 5th July 2016 Commons Chamber

[Mr Mark Williams]

It is a privilege to serve under your chairmanship, Mrs Laing. I reiterate my support for the amendments on the permanence of the National Assembly. I think that they originate in the office of the Presiding Officer who co-represents the Ceredigion constituency, but regardless of our constituency interests, there is huge sympathy and empathy with the principle of permanence right across the Committee—perhaps there are one or two exceptions on the Government Benches.

Amendments 3 and 4 are probing amendments like those tabled by the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). I do not intend to divide the Committee on those amendments, but I wish to elicit from the Minister a little more detail that is currently not in the Bill. To avoid clashes between the two legislatures on devolved matters, this Parliament has hitherto adopted a self-denying ordinance, and would not normally legislate on devolved matters without the consent of the National Assembly.

I believe there is a consensus on the Opposition Benches, which is reflected by my amendment and amendments 24 and 25 tabled by Plaid Cymru, that the new provision does not provide a complete statement of the circumstances in which the Assembly’s consent is required in respect of parliamentary legislation. The Bill fails to mention the circumstances in which proposed legislation would modify the legislative competence of the Assembly itself. The amendments seek to clarify that. The requirement for consent in itself is not the issue. The Bill will at some point require the assent of the National Assembly for Wales, but in the interests of clarity and transparency the amendment sets out the circumstances when the Assembly’s consent should normally be required. I think it provides a tidier definition of devolved matters.

The meat of this grouping relates to a separate, although interestingly in this debate not a distinct, jurisdiction. I understand the principle behind Plaid Cymru’s amendments. We have heard about a separate jurisdiction and less about a distinct jurisdiction. The Government have gone as far in the Bill as to acknowledge and recognise a body of Welsh law. That is an important principle, but it is where we take that principle that concerns me. I am led in the direction of the Labour party’s amendment, which follows the stance established in the increasingly dated Silk report, which is something of a bible to Liberal Democrats. Silk, in that now slightly dusty report, talked about reviewing the case for devolving legislative responsibility for the court service—sentencing, legal aid, the Crown Prosecution Service and the judiciary—to the National Assembly. I think he would endorse the speech just made by the hon. Member for Torfaen (Nick Thomas-Symonds) and the case for a broader review of the legal system in Wales. Silk also talked about the need, in recommendation 34, for a “periodic report” by the UK Government, in consultation with the Welsh Government, to the UK Parliament and to the National Assembly on how access to justice is improving in Wales, and that there should be a regular dialogue between the Lord Chief Justice of England and Wales and Welsh Ministers on the administration of justice in Wales.

The groundwork has therefore already been done for the Labour party’s amendment. It requires the Secretary of State to keep under review the justice system as it applies in relation to Wales, with a view to reform. For some of us, the inevitable divergence of English and Welsh law being open to the possibility of reform is critically important. As a Liberal, there is still the question of timing. There is a very clear Plaid Cymru amendment. We have something that has been described as more pragmatic. Simplistically, we could say that it beefs up what Silk was talking about some time ago.

The Government have acknowledged that this is an issue by providing legal clarity on a Welsh body of law. They have also acknowledged it through the creation of a judicial working group. We talked on Second Reading about the principle of setting up the Government’s working group, which is welcome, but I do not believe it is sufficient to address the issues before us today. I am led to believe that the Welsh Assembly Government have not been invited to participate in its work.

[The Secretary of State for Wales (Alun Cairns)]

rose—

[Mr Williams]

I will stand corrected if that is actually the case. I am seeking clarification and it looks like I am about to get it.

[Alun Cairns]

I can absolutely confirm that an invitation was sent to the Welsh Government some weeks ago. We have not yet received a response.

[Mr Williams]

I am grateful to the Minister for that update. That should create some food for thought at the other end of the M4, because co-operation and collaboration between both Administrations on these issues is vital.

I still have concerns about timetabling. On Second Reading, the hon. Member for Dwyfor Meirionnydd spoke about timetabling and about the working group concluding its work by September. That suggests this House—or the other place, as the Bill proceeds—would not have much of an opportunity to deliberate on its work, which is a concern. Does the working group have the opportunity to engage with civil society in the way the Welsh Affairs Committee did when it received evidence on distinct and separate jurisdictions? That is important.

I support the idea of the commission, which follows a suggested precedent that we need to review these matters. As I said on Second Reading, of all the issues in the Wales Bill we have been talking about, legal jurisdiction is the one that will not go away. It needs to be addressed and I am not sure that that can be done in one amendment today. It needs to be addressed in a substantive review. If it is not addressed in a substantive review, I fear that if some of us are lucky enough to be in this House in years to come, we will be returning to another Wales Bill to deal with it.

--- Later in debate ---

New clause 6 has been prepared to address this omission. It is a logical consequence of the partial devolution of income tax, which will produce a new revenue stream for the Welsh Government. Increasing the borrowing cap in this way would strengthen the range of financial tools available to the Welsh Government, allowing them to invest in Wales with vital infrastructure. I urge the Government to accept the amendments.

[Alun Cairns]

It is a pleasure to serve under your chairmanship in this important debate, Mr Gray.

In opening, I say that it is a pleasure to welcome the hon. Member for Newport West (Paul Flynn) to his place. He is the Member of Parliament for my parents-in-law, and an active constituency Member. We all know how active he is, usually on the Back Bench, but it is a pleasure to see him on the Front Bench. I extend a welcome to the hon. Member for Swansea East (Carolyn Harris)—I have some roots in Swansea, having been brought up in that part of the world. I also pay tribute to the hon. Members for Llanelli (Nia Griffith) and for Clwyd South (Susan Elan Jones), for the work that they have put into consistent scrutiny of the Bill in its early stages. I am grateful for the co-operation and support they gave me as we sought to bring about broad agreement on where the Bill stands. There is not agreement on everything, but I am grateful to all Members who have contributed for the broad consensus that has come forward.

Clauses 8 to 21 and the amendments related to them deal with changes to Assembly processes, the devolution of income tax powers, and the functions of Welsh Ministers. Clause 8 would insert a new section into the Government of Wales Act that determines what types of protected subject matter would, if contained in an Assembly Bill, require that that Bill be passed by a super-majority, which is two thirds of all Assembly Members. The protected subject matters in clause 8 include the name of the Assembly, those entitled to a vote in the Assembly elections, the system used in Assembly elections, the specification or number of Assembly constituencies and regions, and the number of Members returned for each constituency or region. These are in line with the protected subject matters included in the Scotland Act 2016, with two exceptions. The Bill provides that any change to the name of the National Assembly for Wales be subject to a super-majority requirement. The Bill also provides for the specification of constituencies, regions or equivalent electoral areas as protected subject matter. The super-majority requirement will ensure that there is broad support across the Assembly for those fundamental changes.

In the first instance, it would be for the Presiding Officer to determine and make a statement on whether or not an Assembly Bill relates to any of those protected subject matters. It is this part of the clause that amendment 32, tabled by Plaid Cymru, seeks to change. The amendment would remove the requirement for the Presiding Officer’s statement to be made in both the English language and the Welsh language. It would also remove the requirement for the Assembly’s Standing Orders to determine the form of the statement and the manner in which it is to be made.

It goes without saying that the Government are fully committed to the Welsh language. The Wales Office has two Ministers who speak Welsh, of which I am one, and a third Minister who is learning Welsh. It is good to see that the political tension around the Welsh language seems to be a relic of history, which is, I am sure we would all agree, a positive move. But the intention behind proposed new sections 11A(5) and 111A(6) of the Government of Wales Act 2006, as inserted by clause 8, is to ensure that the Welsh language is treated equally with English when the new super-majority processes are incorporated into the workings of the Assembly.

[Glyn Davies]

Does the Secretary of State agree that it is outrageous for those organisations supporting the Welsh language to assume that because we are leaving the European Union the support for the Welsh language will in some way be greatly diminished? The UK Government and Welsh Government have been huge supporters of the Welsh language, and there is no earthly reason why that should not continue in future.

[Alun Cairns]

My hon. Friend makes an extremely important point. A broad consensus has developed on the Welsh language over the past few decades, which is very different from what we might have seen before.

[Susan Elan Jones]

Does that mean we will have a fully bilingual Welsh Grand Committee? I am just hoping.

[Alun Cairns]

The hon. Lady knows that the Welsh Grand Committee is fully bilingual when it sits in Wales, but when it sits in this place its proceedings are in English, the language of the House.

[Ian C. Lucas (Wrexham) (Lab)]

rose—

[Alun Cairns]

I am not going to give way, because there are many technical amendments I need to cover and I want to make some progress.

I say to the hon. Member for Arfon (Hywel Williams), who moved amendment 32, that he has made a persuasive argument that the Assembly processes would ensure that Welsh is treated equally anyway, without adding a prescriptive provision to the Government of Wales Act. I would like to give the matter more thought but undertake to return to it on Report. I therefore hope that he will consider withdrawing the amendment.

[Hywel Williams]

I am grateful to the Secretary of State for that response and will listen to the rest of his speech with interest. I will withdraw the amendment. There is a progression in the normalisation of a language such as Welsh, from a point where it has to be specified to one where it is assumed, which is where we are in the National Assembly. That is an important point to make.

[Alun Cairns]

The hon. Gentleman makes an extremely important point that demonstrates the maturity of the debate and the acceptance of the language.

Clause 8 also provides for the Counsel General or the Attorney General to be able to refer the question of whether a provision of an Assembly Bill relates to a protected matter to the Supreme Court for a decision. The Counsel General or the Attorney General may make such a reference to the Supreme Court at any time during a period of four weeks from either the Assembly rejecting the Assembly Bill or its being passed.

There is precedent for a requirement for a super-majority on matters of constitutional importance. Under the Government of Wales Act 2006, the Assembly vote that triggered the 2011 referendum on Assembly powers required two thirds of Assembly Members to vote in favour. The Government believe that the safeguards in the Bill are sensible and command broad support across Wales.

Supplementing clause 8, clause 9 amends requirements for the Assembly Standing Orders on Assembly Bill proceedings, to reflect the new processes required as a result of a reference to the Supreme Court. The clause provides for Assembly Bills to be reconsidered by the Assembly in the event that the Supreme Court rules against the Presiding Officer’s decision on whether the Bill relates to a protected subject matter. That is in line with procedures put in place for the Scottish Parliament in the Scotland Act 2016, which has been passed by both Houses.

Clause 10 relates to justice impact assessments, on which there was considerable debate. The UK Government and Welsh Government have a number of well-established processes for assessing the impact of legislation on matters ranging from regulation to equalities. Indeed, on Second Reading I discussed the fact that Assembly Bills are assessed against their likely impact on the Welsh language and on equalities. It is also important to recognise that, through the Treasury and a range of other Departments, Her Majesty’s Government issue guidance and requirements relating to expectations of how public spending will be conducted and how public interests will be guarded. That is the principle under which the justice impact assessment should be considered, rather than how it has been interpreted by many.

Within the UK Government, Departments bringing legislation forward to this House are required to assess its likely impact on the justice system. The importance of that assessment is self-evident: for legislation to be effective it must be enforceable. It is vital that that enforcement process is ready and resourced sufficiently to cope with new demands placed upon it.

--- Later in debate ---

[Mr David Jones]

Will my right hon. Friend explain what extraordinary event has happened in the past 14 months to move devolution on to such a large extent?

[Alun Cairns]

I am grateful to my right hon. Friend for his intervention. I was about to go on to say that two important principles have been acknowledged. First, the Assembly is more mature. That is reflected in the legislation we are passing to enable the Assembly to reach out and respond further to Welsh needs.

Secondly, when my right hon. Friend was Secretary of State for Wales, he established the principle of devolving significant tax-varying powers without a referendum. In the 2014 Act, the devolution of stamp duty land tax and the aggregates levy, in addition to powers over council tax and the subsequent full devolution of business rates to Wales, account for a broad income of £2.5 billion. The Welsh rate of income tax, which we propose to devolve is—at about £2 billion—significantly less than that. This important principle has been accepted positively by the Welsh public and by civic society. That stands firm and is a backstop to clause 16.

[Mr David Jones]

Does my right hon. Friend not accept that the significant difference is that very many more people pay income tax than pay stamp duty land tax or landfill tax? Is that not the point, that it affects nearly everybody in Wales?

[Alun Cairns]

I remind my right hon. Friend that a similar number of people who pay income tax also pay council tax, and that many will be business owners who pay business rates.

Much reference has been made to the Welsh Conservative manifesto and I remind right hon. and hon. Members what it said. Our manifesto for Wales stated that a funding floor would be introduced in the expectation that the Welsh Government would hold a referendum. We have fulfilled our end of the bargain, having introduced a funding floor of 115%, as has been mentioned. That is the floor—if I may gently correct the hon. Member for Ynys Môn (Albert Owen)—and the spending level is currently higher. If the Welsh Government are not going to introduce a referendum—I do not think that any of us want one after the events of recent weeks—we will need to take steps, so I hope that the House will agree clause 16 as it stands.

Clauses 17 and 20 deal with the functions of Welsh Ministers and devolve important new powers to them. Clause 17 will insert new subsection 58A into the Government of Wales Act 2006, conferring common law-type powers on Welsh Ministers—the kinds of powers exercised by a natural person, such as the power to enter into contracts, make payments or set up companies. It is difficult to believe that Welsh Ministers do not already hold these powers, and it demonstrates how current legislation is out of date with modern thinking and concerns.

Clause 19 deals with the transfer of ministerial functions. The Bill provides for a clear separation between devolved and reserved powers, an important component in which is being clear about which so-called pre-commencement Minister of the Crown functions in devolved powers are to be exercised in the future. We intend to transfer to Welsh Ministers as many of these functions as we can. We will do so in a transfer of functions order made under section 58 of the Government of Wales Act and will bring forward a draft order during later stages of the Bill. Several other transfer of functions orders have been made under section 58 since the Assembly was established.

I turn now to amendment 11, tabled by Labour, which would place a requirement in the Bill for a so-called fiscal framework. I should underline that the precedent in Scotland was not for the inclusion of such a provision in legislation; instead, the UK and Scottish Governments negotiated an agreement. I would hope that a mature relationship has developed between the Welsh and UK Governments, and between the First Minister and me, in respect of how we conduct our affairs. Clearly, there is no way I want to see Wales in a detrimental position—that is the starting point of our negotiations—and I am optimistic that we can come to an agreement over the appropriate adjustments to the Welsh block. Holtham has made some recommendations that are a good starting point for those discussions. Few people believed we would ever get to the position of introducing a funding floor. I hope, therefore, that that funding floor of 115% might give people confidence.

I would like us to reach a position where the Welsh Government can grant a legislative consent motion. Under the model we followed in Scotland, a legislative consent motion came only after the fiscal framework was agreed. I would hope that, once we have reached an agreement on a fiscal framework and a Barnett adjustment, a legislative consent motion could then be used as proof and evidence. For that reason, the amendment proposed is unnecessary—appropriate structures are in place to allow for that mature discussion to take place.

Amendment, by leave, withdrawn.

Clause 8 ordered to stand part of the Bill.

[Hywel Williams]

We have had a wide-ranging debate, including on issues not really to do with the lead amendment. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 ordered to stand part of the Bill.

Clause 9 ordered to stand part of the Bill.

Clause 10

Introduction of Bills: justice impact assessment

Question put, That the clause stand part of the Bill.

Wales Bill

Alun Cairns Excerpts

Tuesday 14th June 2016 Commons Chamber

[The Secretary of State for Wales (Alun Cairns)]

I beg to move, That the Bill be now read a Second time.

We are here today to debate the Wales Bill—legislation of fundamental importance to the future governance of Wales and its role within the United Kingdom. It will empower the National Assembly for Wales and the Welsh Government to deliver the things that really matter: the economy, the environment and essential public services. I want to thank stakeholders, including the Select Committee on Welsh Affairs and my hon. Friend the Member for Monmouth (David T. C. Davies), and the Assembly’s Constitutional and Legislative Affairs Committee, for their work on the draft Bill, and those, including the Welsh Government, for the way they have responded to the publication of the Bill. I am committed to continue working with all those stakeholders and others as the Bill progresses through Parliament.

I would first like to pay tribute to my right hon. Friends the Members for Chesham and Amersham (Mrs Gillan), for Clwyd West (Mr Jones) and for Preseli Pembrokeshire (Stephen Crabb) who each worked tirelessly to put Welsh devolution on a stable footing for the long term, and who have all played a major part in the development of this Bill. Following the resounding yes vote in the March 2011 referendum on full lawmaking powers for the National Assembly, my right hon. Friend the Member for Chesham and Amersham sought to simplify Welsh devolution by removing the widely disparaged legislative competence order, or LCO, system—a system and process I think we would all sooner forget. My right hon. Friend established a commission to review the financial and constitutional arrangements in Wales. The Silk commission, chaired by Sir Paul Silk—I pay tribute to him and to those who joined him on the commission for their work—included representatives from all four political parties represented in the Assembly. It published its first report in November 2012, which was on devolving financial powers to the Assembly.

My right hon. Friend the Member for Clwyd West then took forward the Wales Act 2014 to implement recommendations in that report, devolving tax-varying powers to the Assembly for the first time, and establishing an important principle.

The Silk commission published its second report, on the Assembly’s legislative powers, in March 2014, from which my right hon. Friend the Member for Preseli Pembrokeshire established the St David’s day process seeking political consensus on what could be taken forward. This culminated in the St David’s day agreement published in February 2015, which forms the blueprint for the Bill before us today.

I have also considered the Smith commission’s proposals, and in turn the Scotland Act 2016, to include the elements that work for Wales.

In preparing this Bill I have been guided by two underpinning principles: clarity and accountability.

[Kevin Brennan (Cardiff West) (Lab)]

On a point of clarity, will the Secretary of State make it absolutely clear to the House whether the Bill as it now stands would permit the Assembly to introduce compulsory voting in Welsh Assembly elections?

[Alun Cairns]

I am happy to give that clarification. Matters of elections, which I will come to in further detail, will be devolved, subject to a two-thirds majority. That includes the franchise for the Assembly elections and the constituencies and a whole range of other areas. [Interruption.] I will happily respond to those points when I get to that part in my speech a little later.

I was guided by the principle of clarity because the new reserved powers model of devolution draws a well-defined boundary between what is reserved and what is devolved, clarifying who is responsible for what. It is also a major step in extending powers. It will end the squabbles over powers between Cardiff Bay and Westminster, enabling the Welsh Government to get on with the job of improving the economy, securing jobs and improving devolved public services.

The second principle is accountability. The Bill paves the way to introduce Welsh rates of income tax. It will make the Welsh Government accountable to people in Wales for raising more of the money they spend. This, again, is a major step in the Assembly’s maturity.

[Hywel Williams (Arfon) (PC)]

Will the Secretary of State concede that a third possible point of principle would be proper subsidiarity, and if so, does he believe this Bill meets that requirement?

[Alun Cairns]

I am grateful to the hon. Gentleman for his question, and I hope we can cover some of those points later in the debate, but, Madam Deputy Speaker, much will depend on what you determine and interpret as subsidiarity.

[Mr David Hanson (Delyn) (Lab)]

The Secretary of State just mentioned Welsh income tax rates. What guarantees is he going to give the House with regard to the Welsh block grant to the National Assembly for Wales over the duration of this Parliament, which is all he can speak for? My worry is that he will cut the block grant and expect the people of Wales to make up the difference from higher income tax rates.

[Alun Cairns]

The right hon. Gentleman will recognise the funding floor introduced by my right hon. Friend the Chancellor of the Exchequer, which was a clear commitment and promise delivered by the Government. Of course, the Barnett adjustments need to be considered, and discussions between the Welsh Government and the Treasury and my officials are ongoing. We would like to see progress on those matters as the Bill is scrutinised throughout the parliamentary process. Both Administrations are determined to find a transparent way that will rightly serve the people of Wales and the Welsh and UK taxpayer.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

I wish to draw the Secretary of State’s attention to the comments of his colleague the Secretary of State for Scotland on the Scotland Act:

“This is a truly significant day for Scotland. If this Bill completes its parliamentary progress, it will add to the already extensive responsibilities of the Scottish Parliament a range of important new powers. It provides even greater opportunities for the Scottish Government to tailor and deliver Scottish solutions to Scottish issues.”—[Official Report, 23 March 2016; Vol. 607, c. 1683.]

Was the Secretary of State for Scotland right, and if so, why has the Secretary of State for Wales brought forward a Bill that pales into insignificance when compared with the Bill given to the people of Scotland?

[Alun Cairns]

I am somewhat disappointed by the tone the hon. Gentleman is taking. We have developed the Bill through consensus. We have responded to the comments that were made following the publication of the draft Bill, and before that we had the St David’s day agreement, in which his party was an active participant. We have sought to develop political consensus, but ultimately we do not have a uniform approach to devolution. What is right for Scotland is not necessarily right for Northern Ireland or for Wales. Clearly we have different circumstances and needs, and we should respond to those needs by developing appropriate Bills. I hope that the hon. Gentleman will actively participate and seek to improve the Bill through the parliamentary process; I am determined to achieve a Bill that all Members of the House will be at best satisfied with.

[Carolyn Harris (Swansea East) (Lab)]

In February, the Secretary of State’s predecessor said:

“A lot of the criticism of the draft Bill has been ill-informed or just plain wrong.”

Given that the Government have accepted most of the criticism and amended the Bill, does the Secretary of State agree that his predecessor was wrong?

[Alun Cairns]

It is right to say that part of the criticism was certainly ill informed and will have been wrong, but that does not necessarily mean that all the other elements of the scrutiny were wrong. One of the purposes of publishing a draft Bill was to encourage active scrutiny by the Welsh Affairs Committee, of which the hon. Lady is an active member. We are grateful for her input and that of the Committee.

We have made a commitment to put in place a clearer, stronger and fairer devolution settlement for Wales, and that is exactly what the Bill does. The St David’s day process established “Powers for a Purpose”—that is, powers that can make a real, practical difference to the lives of the people in Wales. Among the many powers devolved in the Bill are those that will enable the Assembly to decide the speed limits on Welsh roads; how taxis and buses in Wales should be regulated; whether fracking should take place and, if so, how it should be regulated; and how planning consent is given for all but the most strategic energy projects.

[Paul Flynn (Newport West) (Lab)]

The Bill contains welcome new powers for the Assembly on energy projects, but they are limited to projects that are smaller than 350 MW, and there are very few of those. Why can the powers not be extended to much larger projects?

[Alun Cairns]

I am grateful to the hon. Gentleman for his long-standing interest in these matters. I would point out that 350 MW is quite a significant capacity. I would also remind him that the basis for this proposal was a recommendation from the Silk commission.

[Mr David Jones (Clwyd West) (Con)]

Further to that point, though, does my right hon. Friend agree that in respect of wind generation, the Assembly’s powers will now be unlimited?

--- Later in debate ---

[Alun Cairns]

The powers in the Bill will be limited to a capacity of 350 MW, as I have stated.

There can be no doubt as to the extent to which the Assembly has matured over the 17 years since it was established. That maturity is reflected in the development of the institution into a confident law-making legislature. In recognition of this, the Bill enshrines the Assembly and the Welsh Government as permanent parts of the United Kingdom’s constitutional fabric for the first time. It also makes a commitment that Parliament will not normally legislate on devolved matters without the Assembly’s consent.

[Hywel Williams]

The Secretary of State referred a moment ago to some of the new powers, but of course some powers are not going to be devolved. Could he explain the principle behind choosing which powers to devolve and which to retain? For example, why is water to be retained here while sewerage goes down to Cardiff?

[Alun Cairns]

I will talk about the devolution of powers relating to water a bit later on. The hon. Gentleman will be aware that an intergovernmental working group has been established and that it is considering the implications of the in-principle decision that has been taken on devolved water. I will happily comment in further detail when I reach that part of my speech.

[Mr Jones]

My right hon. Friend mentioned what will effectively be the incorporation of the Sewel convention in statute, for the first time so far as Wales is concerned. Clause 2 of the Bill states:

“it is recognised that the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of the Assembly.”

If the United Kingdom Parliament were to legislate for such matters and there were to be a challenge from the Welsh Government as to whether that was “normal”, how would that matter be adjudicated?

[Alun Cairns]

The basis of this clause has been drawn from the Scotland Act. It would be a matter for the courts to judge in such a situation, but this underlines the principle that Parliament is sovereign in these matters, although we will absolutely respect the rights of the Assembly. That is why we have included a clause stating that we will not “normally” legislate on devolved areas.

The debate on the draft Bill, which was published for pre-legislative scrutiny last autumn, was dominated by justice issues. In particular, it focused on something that was labelled the necessity test, and the inclusion of the test led to calls for a separate jurisdiction. I have listened to those concerns, and this Bill has moved a long way from the draft version and is by general consensus more suitable. The necessity test was believed to set too high a bar, and calls were made for a lower threshold. I have gone further, however, and removed the test entirely when the Assembly modifies the civil and criminal law for devolved purposes. As a consequence, many of the arguments for a separate legal jurisdiction for Wales should have fallen away.

However, I recognise the validity of some of the points raised during pre-legislative scrutiny about the existence of Welsh law. The Bill formally recognises for the first time that a body of Welsh law made by the Assembly and Welsh Ministers forms part of the law of England and Wales within the England and Wales jurisdiction. The recognition of Welsh law needs distinct arrangements. As a result, I have been working with my right hon. Friend the Justice Secretary to establish an officials-led working group to look at how those administrative arrangements should be improved. The group includes representatives from the Judicial Office and the Welsh Government, and it will take forward its work in parallel with the progress of the Bill through this House and the other place.

The single jurisdiction can readily accommodate a growing body of Welsh law without the need for separation. There are many reasons why a separate jurisdiction would be to the detriment of Wales. As well as the unnecessary upheaval and cost of such a change, the economic and commercial interdependence of the legal profession on both sides of the border means that separation would undermine the success of one of Wales’s fastest growing sectors—the legal profession.

[Jonathan Edwards]

Will the working group be looking at the justice impact assessments mentioned in the Bill, and will it present its report before we have our final vote on the Bill on Third Reading?

[Alun Cairns]

The terms of reference for the working group have been published, and I would expect it to report in the autumn. The justice impact assessment is a matter for the Assembly and for scrutiny by Assembly Members. The principle of having a justice impact assessment is fundamental to proper scrutiny of any mature legislature. With your permission, Madam Deputy Speaker, we might be able to debate that when I get to that element—as I am about to do now.

Some Members, such as the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), have asked me about the requirement in the Bill for justice impact assessments to accompany Assembly Bills, and I would like to take this opportunity to clarify its purpose a little further. It is only natural for a mature legislature to consider the consequences of its own legislation. The impacts of Assembly Bills are assessed against a range of matters, including, quite rightly, the Welsh language and equalities, but no formal assessment is made of their potential impacts on the justice system, which is vital for its laws to be enforced properly. It is simply common sense that any such matters are considered and such an assessment is made, to help with the efficient delivery of justice services.

The Government committed in the St David’s day agreement to implementing—

[Jonathan Edwards]

This is the key point in relation to these new impacts. Who is going to be making the assessments? I take it that the Minister’s view is that that is a matter for the Welsh Government, but would those assessments at any point lead to a trigger whereby the Ministry of Justice could object to Welsh legislation?

[Alun Cairns]

It is a matter for Assembly Members, and the requirement is that the Standing Orders include a request for a justice impact assessment. No, there will be no veto arising out of the justice impact assessment. Let me give the hon. Gentleman a practical example.

The Renting Homes (Wales) Act 2016 has supporting documents in excess of 30 pages, with 15 lines talking about the justice implications or the consequence thereafter. The principle we are requesting is that full, proper consideration be given to the justice consequences that arise thereafter. That is mature scrutiny, and I pay tribute to the way in which the First Minister responded to the question on the Floor of the Assembly some weeks ago. Rather than a general accommodation with the Standing Orders, we are talking about a specific request for a justice impact assessment.



The Government committed in the St David’s day agreement to implement a clear devolution boundary for Wales. The reserved powers model at the heart of the Bill will make the Welsh devolution settlement clearer by drawing a well-defined boundary between what is reserved and what is devolved. Anything not specifically reserved is devolved to the Assembly and the Welsh Ministers—it does not get clearer than that! The Bill’s pre-legislative scrutiny prompted a wide-ranging discussion on what the future shape and structure of Welsh devolution should be. The list of reservations included in the draft Bill was criticised as being too long. We have listened, and the list in the Bill now contains fewer reservations and I have made the descriptions more accurate. More importantly, there is a clear rationale for reservations that are included. The list of reservations will never be as short as some would like, but clarity requires specificity. The list included in the Bill will be subject to further fine tuning, but I believe that, broadly, we have struck the right balance.

The Bill also clarifies the devolution boundary by defining which public authorities are Wales public authorities—devolved bodies—with all other public authorities being reserved authorities. To add further clarity, the Bill lists those bodies that are currently Wales public authorities, a list we have compiled in consultation with the Welsh Government and the Assembly Commission. Naturally, the consent of the UK Government will be needed if an Assembly Bill seeks to impose or modify the functions of a reserved body. That follows the well-established principle that the Assembly approves through legislative consent motions UK Government legislation that touches devolved areas.

The final key element of a clear settlement is the change we are making to the functions of Welsh Ministers. It is hard to believe that Welsh Ministers have not been able to exercise common-law powers up to now, unlike Ministers of the Crown and Scottish Ministers; the Bill puts the misjudgment of the Government of Wales Act 2006 right. Similarly, the Bill also removes the current restriction on the Assembly being able to modify Minister of the Crown functions in devolved areas. It lists those functions that Ministers of the Crown and Welsh Ministers exercise concurrently or jointly, and the small number of Minister of the Crown functions in devolved areas the Assembly could modify, with the consent of UK Ministers. All remaining Minister of the Crown functions in devolved areas will be transferred by order to the Welsh Ministers.

Taken together, these provisions deliver a settlement that will make it clear whom people in Wales should hold to account—the UK Government or the Welsh Government—for the decisions that affect their daily lives. I would like to inform the House that some minor clarifications have been made to the explanatory notes relating to some of these clauses, and revised copies of the notes are available for Members.

[Mark Tami (Alyn and Deeside) (Lab)]

The Minister is talking about extra powers and what is transferring across. What is he doing to help to get that information across to the people of Wales? Even under the current settlement, there is still a lot of misunderstanding as to who is responsible for what.

[Alun Cairns]

The hon. Gentleman raises an extremely important point. The intention of this Bill is to provide that clarity, from which there will be the opportunity for greater communication. All Members in this House and stakeholders have the responsibility to help to communicate this, but one key function of the Bill is to provide a clear line between what the UK Government are responsible for and what the Welsh Government are responsible for, so that anyone living or working in Wales clearly knows not only who to give credit to when policies are going right, but who to hold responsible where policies or the impacts of policies are not as effective as the policymakers might have thought at the outset.

[Nick Thomas-Symonds (Torfaen) (Lab)]

Does the Secretary of State agree that one of the other reasons why clarity is so important is so that we have far fewer examples of the Welsh Government and UK Government ending up arguing about things in the Supreme Court? Would clarity not assist in reducing that?

[Alun Cairns]

The hon. Gentleman is absolutely right about that, and this is the function of many of the clauses and much of the motivation behind them.

The Bill also strengthens Welsh devolution by devolving further powers to the Assembly and the Welsh Ministers. To complement the Assembly’s existing powers over economic development, the Bill devolves responsibility for ports in Wales. That will enable the Welsh Government to consider the development of ports in Wales as part of their wider strategies for economic development, transport and tourism. Major trust ports will remain reserved, given their national, UK-wide significance. That means Milford Haven, given its importance to the energy security of the whole of the UK, will remain reserved. We are also devolving consenting responsibility for all energy projects in Wales up to 350 MW, aside from onshore wind projects which are being devolved through the Energy Act 2016.

The Bill also streamlines the consenting regime for energy projects, providing a one-stop shop for developers by aligning associated consents with the consents for the main project. When the Welsh Government make a decision on a new energy project, they will also be responsible for consenting to the new substations, access roads and overhead power lines relating to that project.

[Albert Owen (Ynys Môn) (Lab)]

Will the grid connections be devolved as well? For the larger projects, many of the planning consents are local, but I am unsure as to the actual connection to the grid.

[Alun Cairns]

I am grateful to the hon. Gentleman for his question. The purpose of the Bill is to give that one-stop shop in terms of consents for energy projects and all the consequences that follow thereafter, from access roads to overhead power lines and the connections thereafter. Those will of course be conducted in discussions with National Grid plc.

[Glyn Davies (Montgomeryshire) (Con)]

What is the position where an overhead power line goes through England and Wales? I am talking not just about the connection point but about a significant part of the power line. Is the position on that clear in the Bill?

[Alun Cairns]

That relates to the discussions with the National Grid, which, quite obviously, has an interest in the matter. I will happily provide further detail to my hon. Friend if he has specific examples that he would like to pursue.

[Mr David Jones]

Further to the point raised by the hon. Member for Ynys Môn (Albert Owen), is it the case that the Assembly’s powers will be limited to 132 kV transmission lines, and not to the major grid connections to which my right hon. Friend is referring?

[Alun Cairns]

My right hon. Friend has expert knowledge. Obviously, he has some detailed understanding of this Bill and a range of other Acts that relate to such decision making. As this Bill progresses through the House, particularly through Committee, we will be able to examine, line by line, the consequences of each individual clause. I will happily write to him should he need further information.

[Several hon. Members rose—]

[Alun Cairns]

I wish to make a little more progress, then I will happily give way to a number of colleagues.

The Bill devolves a range of further transport powers, enabling the Assembly to legislate on all aspects of Welsh roads. It will be able to decide what the speed limits should be on Welsh roads; the regime for traffic signs and pedestrian crossings on those roads; the regulation of taxi services; and the registration of bus services in Wales.

There will be further powers on the environment. The Assembly can decide whether and how fracking takes place in Wales, and Welsh Ministers will have a say on whether licences are granted for new coal mining operations. It is difficult to believe that, with all of the Wales Acts that have passed since 1997, the Welsh Assembly does not have the power to sanction a new coal mine; it needs approval from the UK Government.

[Hywel Williams]

I have intervened on the Secretary of State twice, and this will be the last time. On transport matters, what will the implications be for the transport commissioner for Wales, who, as I understand it, is currently located in Birmingham?

[Alun Cairns]

Discussions are ongoing between the Department for Transport, the Wales Office and the Welsh Government about the functions and role of the transport commissioner, who serves the west midlands as well as Wales.

Welsh Ministers’ powers over marine licensing and marine conservation in the inshore area are being extended to the Welsh offshore zone.

The Bill devolves powers over sewerage and, as we committed to in the St David’s day agreement, we will consider the views of the joint Government review on aligning the devolution boundary for water with the national boundary when it reports its findings in due course. That was a point raised by the hon. Member for Carmarthen East and Dinefwr.

The Bill devolves a significant number of further powers, and I shall not go into detail on each this afternoon. The purpose of Second Reading is to consider the broad principles of the Bill before we move forward to the Committee stage. As I mentioned at the outset, the Bill devolves further powers that stem from the Smith commission. These include powers over equalities, the design of renewable incentives and the scrutiny of the Office of Gas and Electricity Markets. We are also giving the Assembly and Welsh Ministers a greater say in how the interests of Wales are represented within Ofcom. This is a strong package of further powers that moves Welsh devolution forward substantially and can be used to improve the lives of people in Wales if exercised thoughtfully by the Assembly and the Welsh Government.

I spoke about the Assembly coming of age, and the package of further powers for the Assembly truly gives form to that vision. Through this Bill, the Assembly will take control of its own affairs, including deciding arrangements for its own elections. It will be able to determine how its Members are elected, the number of Members, the constituencies and regions used in those elections and who is eligible to vote. As we promised in the St David’s day agreement, the Bill gives the Assembly full responsibility for deciding how it conducts its own affairs and regulates its own proceedings.

[Kevin Brennan]

The Secretary of State said that he would get to this point, but he has not answered my question, which is not about who will be able to vote, but whether the Bill will give powers to enable the Assembly to introduce compulsory voting if it chooses to do so. For clarity’s sake, it is very important that we know whether the answer to that question is yes or no.

[Alun Cairns]

I am happy to clarify that matter. The Bill gives provision for who votes rather than for compulsory voting.

The Assembly is a fully fledged legislature, trusted with passing laws that affect the lives of millions of people in Wales. It is right that the legislative framework in which it operates reflects that, and enables the Assembly to decide how it conducts its business.

The Bill also repeals the unnecessary and outdated right of the Secretary of State for Wales to participate in Assembly proceedings. Subject to the Bill’s progress, I hope that my attendance at the Assembly in a few weeks’ time will be the last by a Secretary of State for Wales. I am sure that Members of all parties, both here and in Cardiff Bay, will welcome that—probably for many different reasons. I am sure that it will go down well in all parts of the House. A key feature of a mature legislature is that it raises, through taxation, at least some of the money it spends. With power comes responsibility. The Assembly must become more accountable to those who elect it. It must take responsibility for raising more of the money that it spends. The devolution of stamp duty, land tax and landfill tax, and the full devolution of business rates in April last year, are the first steps towards that, and it is only right that a portion of income tax is devolved too.

In the autumn statement, my right hon. Friend the Chancellor announced that we will legislate to remove the need for a referendum to introduce Welsh rates of income tax, which means that the Welsh Government can take on more responsibility for how they raise money, and the Welsh Government want that to happen.

There are practical issues—the right hon. Member for Delyn (Mr Hanson) raised some of these—to agree with the Welsh Government, particularly how the Welsh block grant is adjusted to take account of tax devolution. Those discussions are already taking place, and I expect them to progress as the Bill passes through both Houses.

[Mr Hanson]

Will the Secretary of State clarify—I should possibly know the answer to this—on what the tax is based? Is it on residence in Wales or work in Wales?

[Alun Cairns]

It is residence in Wales. There will be further technical issues that we will want to clarify in discussions between the Treasury, the Welsh Government and the Wales Office. Those elements will be considered in further detail as the Bill progresses, and as the adjustments are agreed between all parties involved. The base is focused on residency rather than on where people work.

[Chris Davies (Brecon and Radnorshire) (Con)]

Personally, I am very disappointed that, in this clause, we have broken a manifesto commitment. Is the Minister, who stood on the same manifesto, equally disappointed about that?

[Alun Cairns]

I have two points to make in response. First, it was the Wales Act 2014 that devolved tax-varying powers to the Assembly. This Bill will go one step further by removing the requirement for a referendum. Secondly, devolution has moved forward since that time. We can either seek to have the hollow argument about rowing back, or we can make the Welsh Government more accountable and more responsible for the money that they raise. Under current legislation and current arrangements, the Welsh Government already have responsibility for raising £2.5 billion of their own income, through council tax, business rates and other taxes such as stamp duty, land tax, aggregate tax and landfill tax. According to the forecast of the Office for Budget Responsibility, the devolution of income tax will transfer something in the region of £2 billion to the Welsh Government, which is a smaller sum than the one for which they already have responsibility.

[Mr David Jones]

To develop the point made by my hon. Friend the Member for Brecon and Radnorshire (Chris Davies), is it not the case that just over 12 months ago the Conservative party fought on a manifesto that pledged that there would be a referendum before any tax-varying competence was devolved to the Assembly?

[Alun Cairns]

My right hon. Friend played a significant part in the development of legislation relating to Wales when he was Secretary of State. He will recognise how quickly the devolution make-up of the UK has developed and matured in that time. This is the next logical step in making the Assembly more mature and responsible, and ultimately more accountable to the people of Wales, because it will have to consider how money is raised as well as how it is spent.

[Paul Flynn]

I am greatly enjoying the right hon. Gentleman’s speech, but has his enthusiasm for referendums been diluted by recent experience, particularly the alternative vote referendum and the current referendum, which is a choice between whose lies people believe? Finally, was his faith in public opinion shaken by the large number of people who voted to name a boat Boaty McBoatface?

[Alun Cairns]

The hon. Gentleman makes an interesting point. It is fair to say that many of us might have referendum—or referendums—fatigue. The principle of devolving taxes was granted and supported in the Wales Act 2014, which transferred responsibilities in those areas without a referendum. The principle has been established, and we are taking it further through the devolution of income tax, removing the requirement for a referendum in the Bill.

I am conscious of time and the fact that many Members want to make a contribution, so I will conclude. The Bill delivers clarity to the Welsh devolution settlement and accountability to devolved government in Wales. It draws a clear line between what is devolved and what is reserved, so that people in Wales know whether to hold the UK Parliament or the Assembly accountable for the services on which they rely. It includes an historic transfer of powers to the Assembly and Welsh Government. It will strengthen Wales and it will strengthen the United Kingdom. It further enables the Welsh Government to deliver the things that matter to people living and working in Wales, and to be held to account for their decisions and policies. I commend the Bill to the House.

--- Later in debate ---

[Albert Owen]

I have not thought of the wording, but I agree with the hon. Gentleman that democracy is difficult. We have to make a positive case for things and do so honourably. I did not understand, and was not able to explain in great detail, the question on extending powers in 2011, but I argued, along with members of Plaid Cymru, that the Welsh Government deserved to have lawmaking powers. Tax-varying and lawmaking powers are simple questions. As my hon. Friend the Member for Newport West has said, it may be difficult to win an argument, but we have to stick to principles. I have been consistent on this matter since 1997, and I do not think we can just jump into it after all the different elections we have had. However, given the current referendum, I understand the climate of fear that people find themselves in at present. I want to be radical and forward looking, and I want the Welsh Government to be so, too.

When the Minister winds up, I want him to clarify the issue of election powers. On the issue of lowering the voting age from 18 to 16, am I right in thinking that the Welsh Government will have the power to do so and that it will apply to Welsh Assembly and local government elections only? If there were a Welsh-only referendum, such as one on tax-varying powers or another Wales-specific issue, would the Welsh Government have the power to lower the voting age from 18 to 16? I am an advocate of that and have argued the case for it in this House for some time. This is an opportunity for us to give those responsibilities to the Welsh Government.

My hon. Friends the Members for Cardiff West and for Wrexham have been campaigning hard on compulsory voting. This is a great opportunity for the Welsh Government to be radical. Let us give them the tools to do the job. If the Welsh Government decide that they want compulsory voting in Wales, that would be a good step forward.

[Alun Cairns]

rose—

[Albert Owen]

I give way to the Secretary of State. I realise that I have taken up more time than I wanted to.

[Alun Cairns]

The hon. Gentleman is making a considered speech. I have had further information since the earlier questions about compulsory voting. I am happy to clarify that compulsory voting is permitted under the Bill as drafted.

[Albert Owen]

That is excellent news, and it is on the record. It is a victory for the three of us on the Labour Back Benches that we will now have the opportunity for compulsory voting in Wales, which I think is a radical step. Hansard will make that known, but I hope the media in Wales are watching the progress of the Bill. After all, it is not dry as dust, but is about the real issues affecting people, including compulsory voting.

[Alun Cairns]

rose—

[Albert Owen]

I am sure the Secretary of State is going to reconsider his considered view.

[Alun Cairns]

I just want to underline the fact that it perhaps provides even more justification for the justice impact assessment that may well be brought forward in relation to the legislation.

[Albert Owen]

It is the Secretary of State’s job, with his extra responsibilities and wages, to decide on the details. As a Back Bencher, I am saying that I am very proud that the Welsh Government have the opportunity to have compulsory voting.

As I have said, I want devolution to work. I want the Bill to work, but I want it to be considerably improved. I think the name of the National Assembly for Wales is a matter for the Assembly itself, but I do not see anything wrong with the current name. I am not a revolutionary, but I remember from reading about the French revolution when I was studying history that the French people wanted a national assembly. They did not fight for a parliament, and I do not think there is much in that word. I am very proud, as I know the French people are, of having a National Assembly. The National Assembly is a good term: it is a good name and it has a good meaning. It is a sovereign body, and I think the name should be kept, but that is my personal view.

I want a strong Wales, a strong United Kingdom and, yes, I want the United Kingdom to remain within the European Union. I agree that the Bill will provide some extra tools for the Welsh Government to do their job. I think there has been progress, and I congratulate Carwyn Jones on being re-elected as First Minister of Wales. I hope that he will get a good Bill once it has gone through its parliamentary stages, so that he can continue to do his job and serve the people of Wales with a Labour programme that will have been enhanced by the Bill.

--- Later in debate ---

[Hywel Williams (Arfon) (PC)]

After the Scottish independence referendum in 2014, the Prime Minister promised the people of Wales that just as the rights of Scottish voters will be “respected, reserved and enhanced”, so, too, would the rights of the Welsh voters. He promised that Wales would be “at the heart” of the devolution debate. Since then, the Wales Office has published a draft Wales Bill and now we have the Wales Bill proper, billed as the UK Government’s response to the cross-party Silk commission. The draft Bill failed to deliver on the recommendations of the Silk commission—a commission established by the Tories themselves. Its recommendations were supported by all four of Wales’s biggest political parties, including the Secretary of State’s own Welsh Tories. Plaid Cymru, civil society groups, and people in all parts of Wales had hoped that the re-drafted Wales Bill would return to the consensus of the Silk commission and would offer the people of Wales the devolution settlement that is ours as of right, one that is sustainable, ambitious and fair. Today, we are very far away from that wholly reasonable goal.

I freely acknowledge that, compared with the draft published last autumn, some progress has been made in making the Bill fit for purpose, but we still have a long way to go before this Bill will become fit for enactment. I welcome the fact that the Secretary of State has acted on some of the criticisms of the previous draft, for example on the reservation of criminal law and the necessity tests. The recognition of the fact of Welsh law is very much to be welcomed, but it is just a recognition of the reality of the situation in Wales. There remain serious concerns regarding the complexity, uncertainty and indeed lack of coherence in some parts of the Bill.

Throughout Wales’s long devolution journey, Plaid Cymru has always tried to get the best possible deal for everyone and anyone who chooses to make their home in Wales. Those people who call Wales their home best understand the needs of our country. I believe it was Gwynfor Evans who once said that anyone can be Welsh, as long as they are prepared to take the consequences. One of those consequences is that those who live in Wales face up to deciding for Wales, but we recognise that not all parties share this view, which is why we signed up to the Silk commission. It was a cross-party commission, with nominees from each of the four biggest parties in Wales, along with academic experts, who talked, formally and informally, with people all over Wales. It was a truly representative commission and the two reports it produced represented a true consensus.

That consensus was not easy to achieve. We in Plaid Cymru gave way on some points, ones that were important to us but not to others, as did other parties on their issues. The Silk process involved all parties making compromises, including my own, so it was deeply disappointing and frustrating to see the Wales Office dump that true consensus in order to find a lowest common denominator and then call it an “agreement”. Far from being an agreement, the St David’s day White Paper and this eventual Wales Bill fall well short of the consensus that Silk worked so hard to achieve. The profound criticism of this Bill, after just one week, is in the same vein as that of the discredited draft Bill all those weeks ago. The criticism is really striking when we contrast it with the consensus and welcome that surrounded the Silk recommendations in Wales.

What happened to the consensus on the idea that Wales’s natural resources should be in the hands of those living in Wales? What happened to the consensus on the idea that it is the people of Wales who are best placed to determine our policing policies? What happened to the consensus on the idea that it is the people of Wales who best understand our country’s transport needs? Under this Bill, Wales can set its own speed limits, but drink-drive limits are just too complicated for little old us. One of the historical political controversies in Wales relates to water. Water is much too valuable a resource to be left to the Government of Wales, but, yes, we are allowed to have sewerage.

I have many concerns regarding the current list of reserved policy fields, and I shall return to them later. I wish to start by focusing on the foundations of the draft Bill. I should stress that Plaid Cymru warmly welcomes the move to a reserved powers model—that is, to move away from the current devolution model in which the settlement lists areas on which the Assembly can legislate to a model in which the settlement lists areas where they cannot.

There was an unusual and welcome consensus across all of Wales’s six biggest parties on the need to move to a reserved powers model. That consensus stems from the lack of clarity on where the responsibility lies, especially as compared with the Scottish dispensation; the challenges to Welsh legislation in the Supreme Court under the current dispensation; and the danger of further and increased challenges in the Supreme Court if we do not get this sorted out.

It was thought that moving to a reserved powers model would provide clarity both legally and for the public as to what is and what is not within the legislative competence of the Assembly. This is a problem for MPs as well, and it is no small matter. When considering legislation, I do not know how many times I have had to ask: “Is this Wales only? Is it England only? Is it England and Wales only? Is it Great Britain, or is it even Great Britain and Northern Ireland?” Whatever people’s opinion on devolution—whether pro or anti—we can all agree that such ambiguity is bad for democracy.

Moving to a reserved powers model should also be about changing the ruling attitudes towards devolution. It would be for the UK Government to justify whether something should be reserved, rather than justifying why something should be devolved. This is devolution based on subsidiarity—real subsidiarity, as I said to the Secretary of State earlier—rather than retention. It is enabling rather than hobbling, and trusting and respecting rather than suspecting and resenting. That is the case, however much some Whitehall Departments might snarl—and I think we know who they are.

I fear that these principles—the foundations of the arguments in favour of the reserved powers model—have been lost, and the result is a Bill that is unclear, somewhat unstable and possibly unsustainable. We have gone from a position as recently as last May where all six of Wales’s biggest parties agreed on a way forward, to a position now where the UK Government are alone in thinking that this Bill delivers a lasting settlement. The Wales Office has admitted that, rather than using the Scotland Act 1998 as a starting point—a devolution dispensation that has avoided the constant legal challenges and political tinkering that have bedevilled Welsh devolution—it has used the Government of Wales Act 2006, the failed devolution settlement that we are trying to replace. In fact, it is a model based on the administrative devolution in the 1960s, from the creation of the Welsh Office, as it was then known, onwards. It is a deeply outdated model and not fit for today, let alone tomorrow. The Bill claws back the powers for which the people of Wales voted overwhelmingly in 2011, and returns to a long list of reservations. The Western Mail, which, I concede, is not always 100% correct, lists 267 powers that

“Westminster doesn’t want Wales to have”,

ranging

“from axes to outer space”.

Almost every measure in the draft Bill was roundly criticised, but there was particular ire for the lengthy list of reserved powers. The Wales Office admitted that the list was too long, and promised to shorten it. It may well have taken out a few reservations, but the fact that the list has increased from 42 pages to 44 suggests that the ones that remain are even more long-winded than before.

[Alun Cairns]

rose—

[Hywel Williams]

There might be a reason for that, and I am sure that the Secretary of State will enlighten us.

[Alun Cairns]

On the list of reservations, simply measuring something according to the number of pages is not necessarily the most sensible thing to do. In the Scotland Act 1998, reservations are listed according to subject matter with a broad headline. A requirement in the Wales Bill is to make the list far more specific, so exceptions to the reservations are included, which naturally lengthens it. I hope that the hon. Gentleman accepts the spirit in which those reservations are defined: to prevent our ending up in court challenging each other.

--- Later in debate ---

[Hywel Williams]

I am not sure. I am in two minds about that. If we have full days of debate, that might indeed be the case. I have been here too long, so I remember days of Welsh debates which have been interrupted by statements, urgent questions and all kinds of shenanigans that have led to Welsh debates being curtailed. If we have protected time, we shall see. I think my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) will be looking into this point further in his remarks and I hope the right hon. Gentleman will be here to hear him.

I challenge the Secretary of State to respond today and offer justifications for why he believes the people of Wales do not deserve the same responsible government as the people of Scotland. As has been said, the Secretary of State voted for the Scotland Act. He voted to give the people of Scotland a Government with full control of Scottish natural resources, policing and criminal justice. He voted to make the Scottish Government responsible for raising a significant proportion of the money that they spend. He has also voted to devolve policing to Manchester, yet he refuses to do so for Wales. What practical reasons are there to insist that Welsh police forces follow the agenda of English forces? Those who were fortunate enough to be in the House last night would have heard my hon. Friend the Member for Dwyfor Meirionnydd (Liz Saville Roberts) making just those arguments. What reason is there for focusing largely on problems prevalent in urban England, such as knife crime, rather than on meeting the needs of Wales, and in my case, particularly of rural Wales? What practical reason is there for setting, for example, a 350 MW limit on the Welsh Government’s power over energy—a point that I made to the hon. Member for Newport West (Paul Flynn), who is no longer in his place—when there is no such limit on the Scottish Government? I raised the wholly practical question about that in my point to that hon. Gentleman. I will expand a little on it now, with the permission of the House.

A local hydroelectric scheme in Snowdonia was going to limit itself to 49 MW—that is the old limit. Those involved told me quite plainly that that was to avoid the entanglements of London bureaucracy. Now they are aiming for 350 MW, and they could produce more, but why should we skew reasonable economic development on the basis of a number that has, as far as I can see, been plucked out of the air? I would like to know why the figure is 350, and not 351 or 349.

[Alun Cairns]

The hon. Gentleman referred to the Silk commission. Does he not accept that 350 MW was a recommendation from Silk and that it was arrived at based on a proposition from members of all political parties?

[Hywel Williams]

We have moved on from the Silk commission, and we are now looking at this issue—[Interruption.] If the Secretary of State and the Under-Secretary can contain themselves, I will explain the position in a moment.

I would still like to hear the justification—not from the Silk commission, but from the Secretary of State—as to why the figure is not 351 or 349. What practical reasons are there for devolving the tidal lagoon in Swansea bay but not the lagoons proposed in the Cardiff area or in Colwyn bay, in the area of the right hon. Member for Clwyd West (Mr Jones)? What is the justification? I am interested, and we might even get an answer. However, there is no sensible argument for this limit—for me at least—and there is no limit in Scotland. Unless such decisions are based on reason and principle, the devolution settlement will never be long-lasting, and we will perpetually be debating the constitution.

It is not Plaid Cymru who is the constitutional obsessive here, despite frequent challenges that it is; it is successive Westminster Governments who have chosen Sir Humphrey’s fudge, mudge and fix over empowering the Welsh Government to settle down and get on with the job of bettering the lives of the people of Wales—and, boy, do they have a job on their hands!

The Bill is, among other things, an attempt to keep as much power as possible in Whitehall by devolving as little as possible to Cardiff. As far as I can see, it is not likely to build a stable, sustainable and fair devolution settlement for our country. However, the Wales Office has an opportunity to give us the devolution settlement we need: one that leads not to court cases and blame shifting, but to economic growth, a healthier NHS and a better educated workforce—one that will actually work and stand the test of time.

Plaid Cymru will be tabling amendments to the Bill to ensure that the people of Wales are treated with respect. We will demand a devolution settlement that facilitates progress, rather than puts up blocks. I still hope that the official Opposition will support those amendments. The opportunity to shape Wales’s constitution does not come around that often.

The Bill is crucial to all of us who care about the future of our country so I do not want to be forced to vote against it, and neither do my hon. Friends. There are many things in it that we welcome, including powers over fracking and the devolution of electoral arrangements, for example. For the party of Wales—a party whose very reason for existing is to empower the nation and the people of Wales to run their own affairs—it would be a painful decision to vote against those powers, and I sincerely hope the Secretary of State will not force us to do that. I therefore urge him to take our criticisms in the constructive spirit in which they are intended and to bring forward his own amendments to rescue the Bill.

I urge the Secretary of State to reflect on the significance of what he is building. He is reshaping the constitution of Wales, and he has an opportunity to create a significant shift in Wales’s future—to build a new Wales for a future history of Wales. This is an opportunity to construct the foundation on which his country’s economy will be built; his country’s NHS will be healed and his country’s schools will be transformed. He should not waste it.

The Bill falls well short of the Silk commission’s recommendations. However, the reality is that the commission, despite its good work, has now been superseded by the Scotland Act. Wales must not be forced to lag behind. The Secretary of State can be stubborn and push the Bill if he wishes to, but he will be in danger of pushing yet another failed Bill and of becoming a failed Secretary of State for Wales, and I would not wish that on him. He would be one in the line of a great many others who, as Secretary of State for Wales, have failed to serve Wales all that well. He should heed the arguments of my hon. Friend the Member for Dwyfor Meirionnydd, who last night made a compelling case on, for example, devolving policing. We heard not a peep from Welsh Tory Back Benchers or Welsh Labour Members on this matter, let alone ascertained their opinions in the Lobbies, with the honourable exception of the Secretary of State himself, who I think I spotted trooping through the No Lobby. He should also take the advice of my hon. Friend the Member for Carmarthen East and Dinefwr, who called for him to follow in the footsteps of the great Conservative reformers of the past—politicians who foresaw the future and legislated with foresight rather than submitting to the constraints of the present.

Disraeli wrote novels, now largely unread, as well as getting in a bit of prime ministering while he was at it. When asked if he had read “Daniel Deronda”—a very good novel—he replied:

“When I want to read a novel, I write one.”

The Secretary of State might likewise wish to see a good Wales Bill, so he should write one. I am sure he is capable of doing that, but this one is not quite it. He and his Under-Secretary now have a rare opportunity to prove that they are politicians of vision. My hon. Friends and I envy them. As to the Bill, I say with our national poet, Waldo Williams,

“Beth yw trefnu teyrnas? Crefft

Sydd eto’n cropian”,

or, “What is ordering a kingdom? A craft that’s barely crawling.” I say to them: do not waste this opportunity to build your nation into the country that it could be—the country that, by rights, it should be.

--- Later in debate ---

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr iawn, Madam Dirprwy Lefarydd. Am fod yn bowld, fe gymeraf y cyfle i ddweud rhyw frawddeg arall yn Gymraeg. If I was braver, I would probably carry on, but it did seem appropriate to get more than the usual introduction and salutation in Welsh in today on the Floor of the House.

As a relatively new MP, one of the 2015 generation, it seems to me that successive Secretaries of State for Wales are fond of bigging up Wales Bills as “generational milestones”. These landmarks of legislation are intended to stand as rocks of ages, directing the flow of governance with their permanence. I am a new MP, yet already I have seen Wales Bills come and Wales Bills go. Although I am impassioned with the will to empower Wales, I fear that the House must be concerned that this Bill, yet again, is a cypher for the ongoing tussle between Westminster Departments desperate to protect their little empires and the National Assembly for Wales—not the Welsh Government—seeking the tools to do its job.

For a second time, the laudable concept of reserved powers, which was so well explained by my neighbour the hon. Member for Montgomeryshire (Glyn Davies)—the hon. Member for Trefaldwyn—is in a reality little more than a series of glosses scribbled over the Government of Wales Act 2006: a cross-referencing exercise for lawyers and academics, shuffling backwards and forwards among documents. The people of Wales deserve clarity and permanence, whereas this remains an exercise in safeguarding the status quo and legislative sacred cows. The Government make much of lessons learnt from the draft Bill: the necessity tests have almost disappeared; ministerial consents no longer apply to so-called “Wales public bodies”, but they remain none the less; and the previous 267 reservations have been whittled down to 250. This is hardly evidence of a change of heart, although I particularly welcome the devolution of powers of heritage railways, having six in my constituency—very lovely they are, too, and I recommend a visit to any of them.

The Government have still got us jumping through hoops to maintain the fiction of a unified legal jurisdiction of England and Wales, when the very existence of the legislature at the Senedd, the growing body of Welsh legislation and the vast majority voice of civil and professional opinion together, in consensus, prove otherwise. Perhaps talk of distinct legal jurisdiction is the domain of political obsessives—we have heard this already this afternoon—but it is the very fabric of the infrastructure of government. It is boring, in the same way that the infrastructure of a country is boring, and roads and railways are boring—unless we have to travel to get somewhere and be there on time.

Wales is on a journey. Each new piece of constitutional legislation promises to deliver us at our destination, but the road ahead is not yet clear. We have had 17 years of learning to walk, but why are we still to be hobbled when we want to run? The present England and Wales single legal jurisdiction is past its sell-by date; it yokes together two diverging legal landscapes. Acknowledging this reality will remove the problem. Attempting to tie them together with legal shackles only underlines how much this is really about asserting London’s sovereignty over Wales—the last of the home colonies—and how little it is about mutual respect and support among equals.

What we have allegedly gained in the vaunted listening exercise between this Bill and the draft Bill runs the risk of being little more than a sleight of hand and a change of name. Out go necessity tests and in come justice impact assessments and a diktat to Assembly Standing Orders, which impose—as compulsory—something that Westminster treats as optional in its own affairs.

We are told that the protocol for dealing with disputes as a result of these assessments will be determined by the Justice in Wales working group—I am glad to learn of that working group, as it reflects the concern that some of us on the Welsh Affairs Committee had with the draft Wales Bill and that we raised in our report. None the less, it does concern me that there is no mention of these justice impact assessments in the working group’s remit. Indeed, there are concerns all round.

[Alun Cairns]

Does the hon. Lady accept that a justice impact assessment is a sensible thing for any mature legislature to have in relation to the scrutiny of legislation? If she does, what is her objection or question when I say that it is merely a statement of fact that helps with the scrutiny of a Bill, as we have not had justice impact assessments up until now?

[Liz Saville Roberts]

I note first of all that the impact assessments are compulsory in that they would be compulsory in their effect. However, for this Bill, they are not compulsory, but optional. We do not know for sure what results they could trigger. It interests me that they are not in the working group remit, but that they appear in the Bill. We should explore more fully what their impact is likely to be. Yes, at face value, they are to be welcomed, but we need to know more about them. We need to know the mechanism by which we will know more about them, and we need to be sure that that will feed into the process of this Bill.

Indeed, there are concerns all round about the pace of the Bill’s introduction, the need for scrutiny on its workability and how it synchronises with the timetable of the justice working group, which reports in the autumn. I anticipate that the Secretary of State will outline how these material issues co-ordinate, but I am disappointed that we are being asked to vote today on matters about which so many questions remain unanswered.

In passing, I also note further concerns about the working group. I seek a guarantee that the interests of Westminster departmental workings will be secondary to the best interests of Wales with regard to membership, remit and stakeholder evidence. To reiterate, I ask the Secretary of State to assure me that this Bill will not reach its Committee stage until the working group has reported. It would be unacceptable to move ahead in the present state of uncertainty.

I recall that, in discussions on the draft Bill, the sheer unworkability of the foundation principles meant that the reservations themselves did not receive proper attention. That must not happen again. We have had many speeches about the potential of Wales—I applaud the speech of the hon. Member for Newport West (Paul Flynn) who is no longer in his place—and how the Wales Bill should be looking to realise the fantastic future for Wales. We should be optimistic in our anticipations.

In fact, rather than giving the people of Wales more control over their own resources, some aspects of the Bill give the UK Government a greater hold. Clause 44 amends section 114 of the Government of Wales Act 2006—a section that gives the UK Government a veto on any Welsh legislation or measure that has an adverse impact on water quality or supply in England. Incidentally, that section is exclusive to the Welsh devolution settlement. It appears in neither the Scottish nor the Northern Ireland settlements. Rather than removing this section, bringing Wales into line with Scotland and Northern Ireland, clause 44 extends the veto to cover anything that has an adverse impact on sewerage systems in England, too—so we have water and now we have sewerage.

In last October’s debate on the flooding of Capel Celyn, I recall the Secretary of State referring to the joint Government review programme and how it was considering the Silk commission’s recommendation on water. I understand that this group is to report shortly. Perhaps the Secretary of State will be minded to amend the Bill to include a reciprocal power for the Welsh Government to veto UK Government measures that impact on Wales, or perhaps he will see sense and remove clause 44 from the Bill. That will, at long last, right the wrong of Capel Celyn and give Wales full powers over our own water.

--- Later in debate ---

[Jonathan Edwards]

I am grateful for that point, which is always used by the hon. Member for Monmouth (David T. C. Davies)—I am glad to see him in the Chamber, as we have debated this issue many times. However, the reality is that the Severn bridges are the two main supply links into the south Wales economy, so it is clearly in the interests of the Welsh Government to have control over them.

I always endeavour to be helpful in my politics, and when I look at the rate of constitutional change in the UK, it appears that the only way the British state can possibly survive is as a confederal arrangement between its constituent parts. The only reserved matters in that scenario should be those relating to currency, the Head of State, defence, welfare and foreign affairs, although the boat on welfare may have started sailing with the Scotland Act.

The necessity tests have been replaced by so-called justice impact assessments. In response to the Bill, my former academic master, Richard Wyn Jones, from the Welsh Governance Centre, said in the Western Mail:

“I’m afraid this unexpected addition to the Bill suggests the mindset that devised the necessity test is still alive and kicking in Whitehall.”

He went on to say:

“It clearly undermines the UK Government’s claim to respect the National Assembly as a mature democratic institution able to make its own laws without interference.”

He concluded by saying:

“Ultimately the Secretary of State would be able to override a piece of legislation passed by the democratically elected Assembly. It is a mindset which sees the Assembly as a second-class legislature. There is no similar provision at the Northern Ireland Assembly or the Scottish Parliament.”

[Alun Cairns]

Will the hon. Gentleman give way?

[Jonathan Edwards]

I will refer to the Secretary of State’s earlier points and let him intervene following that.

Professor Jones makes the further valid point that these impact assessments are not reciprocal, citing the example of the super-prison in Wrexham, where the UK Government took no account of the impact on devolved Welsh public services such as health, social services, education, lifelong learning and skills.

I welcome the Secretary of State’s comments during the debate and the guarantee that the justice impact assessments cannot trigger a UK veto—I accept him at his word. However, we will have to take our own legal advice to ensure that these assessments are not a Trojan horse to stymie the ability of the National Assembly to function fully as a legislative body.

[Alun Cairns]

Let me politely reassure the hon. Gentleman that the justice impact assessments are in absolutely no way considered to be a veto. He referred to the prison in Wrexham—HMP Berwyn. When two mature institutions come to agreements, and one is seeking to encroach on devolved areas or another to encroach on an area that is non-devolved within the UK, the UK Government need a legislative consent motion to take action in Wales. There is a mature arrangement. We need to come to a position where we understand each other, and these mature discussions should take place, rather than one having a right over the other. That is not the area that I want to get to.

[Jonathan Edwards]

I am extremely grateful for that intervention by the Secretary of State. His point about the Wrexham super-prison makes our argument for us. That facility has not been created to deal with the custodial needs and requirements of our country. That is partly why we will aim to remove the reservation on policing and prison services during the passage of the Bill.

My other major concern, as my party’s Treasury spokesperson, is the second-class settlement we are being offered in relation to fiscal powers. The Scotland Act 2016, which all Labour and Tory MPs based in Wales voted for, fully devolved air passenger duty and income tax—including, crucially, the tax bands and half of VAT receipts—to Scotland. The Scottish Government will now be responsible for raising over the half the money they use in all devolved expenditure. Yet, as the recent Cardiff University assessment, “Government Expenditure and Revenue Wales 2016”, notes, following the fiscal plans in this Bill, the Welsh Government will be responsible for raising only about 20% of the devolved expenditure for which they are responsible.

If the twin arguments for fiscal devolution are accountability and incentivisation, surely we need more ambition for Wales than what is currently on offer. After all, in essence, we are talking about keeping more tax revenues raised in Wales directly in Wales, as opposed to collecting them in London and sending them back. The Welsh Government should be responsible for raising the money that they spend. That is a very valuable principle in politics. We will seek to amend this Bill and the forthcoming Finance Bill to secure parity for Wales with Scotland, and challenge Labour and Conservative Members who supported these powers for Scotland on why they oppose them for Wales.

The other issue in relation to tax powers that must be addressed if the measure is to receive our support is the fiscal framework to accompany tax devolution. As we have seen with the debate surrounding the Barnett formula, words such as “fairness” and “non-detriment” are extremely opaque and open to interpretation. The Bill will put in place a Barnett floor to stop further funding convergence, but let us be clear that that is not the same as “fair”. A fair settlement would surely, at the very least, peg Welsh funding at the Scottish level, especially since that is what Labour and Tory Members of Parliament from Wales voted for for Scotland. I will let them explain to the people of Wales why they think that Wales deserves less support through public funding per head than Scotland.

Returning to the fiscal framework, I am glad that there seems to be genuine good will around a non-detriment principle, but that will need to be clearly outlined before we finally vote on the Bill. I would expect the Treasury, at the very least, to publish its recommendations in an official statement to the House during our proceedings on the Bill because Members of Parliament will otherwise be voting blind on the consequences of the tax proposals. I say this as a strong supporter of devolving job-creating levers to Wales, as I outlined earlier. However, neither I nor my colleagues will support the Bill if the UK Government intend to push a straightforward indexed deduction method. I note the significant concessions gained by the SNP Scottish Government on this issue, so I would hope that the Labour Government in Wales and the Wales Office here will be pushing hard for a suitable deduction method for Wales.

This vital issue is even more complicated than my favourite topic of Barnett consequentials, so we must get it right. We need a formula that will reflect the fact that the population of Wales, and hence our tax base, will grow more slowly than the UK average. We cannot be left in a position whereby a successful fiscal policy in Wales leaves us standing still in terms of Welsh revenues. Incentivisation can work only if the Welsh Exchequer is not at a loss before the process starts. Scotland has once again achieved a fair settlement, and so must Wales. It would be far easier to come up with a fair framework if we were debating full income tax powers similar to those awarded to Scotland—that is, full devolution of the bands and thresholds.

If the other main aim of fiscal devolution is to increase the political accountability of the Welsh Government, the sharing arrangement envisaged for income tax would continue to allow them to pass the buck. The shadow Secretary of State for Scotland, the hon. Member for Edinburgh South (Ian Murray), said that full devolution of income tax powers under the Scotland Act would stop the Scottish Government playing the politics of grievance. If Wales has a sharing arrangement, the politics of grievance will continue. In the interests of accountability, incentivisation and, critically, transparency, the UK Government need to revise their plans and fully devolve income tax powers to Wales.

This March, in an act of blatant electioneering, the previous Welsh Labour Government published an alternative Wales Bill that called for a separate legal system for Wales and the devolution of policing. I look forward to the Labour Opposition here tabling such amendments to the Bill. If they do, I will support them with vigour, but if they do not, Plaid Cymru will do so and the people of Wales will be able to judge for themselves whether the First Minister has any influence over his bosses here in Westminster.

In conclusion, I would like to highlight the policy areas devolved to Scotland that are not included in this Bill, which include legal jurisdiction, policing, prisons, probation, criminal justice, full income tax, VAT sharing arrangements, air passenger duty, welfare and employment, consumer advocacy and advice, gaming mechanisms, full energy powers and rail franchising of passenger services, to name but a few. As I have said before, it will be up to our political opponents to explain why they voted for those powers for Scotland, but are opposed to them for Wales.

That brings me to the forthcoming parliamentary boundary review, which has not been mentioned at all during the debate, but will reduce Welsh representation in this place to 29 Members. That means a loss of more than a quarter of Welsh seats in the House of Commons.

Oral Answers to Questions

Alun Cairns Excerpts

Wednesday 25th May 2016 Commons Chamber

[Stephen Kinnock (Aberavon) (Lab)]

2. What steps the Government are taking to support the steel industry in Wales.

[The Secretary of State for Wales (Alun Cairns)]

With your permission, Mr Speaker, may I pay tribute to my predecessor, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), who is now the Secretary of State for Work and Pensions, for the work he did when he was Secretary of State for Wales in all matters supporting Wales, but particularly in relation to the steel industry?

We are doing everything we can to support the sale of Tata Steel UK, including offering support to potential buyers worth hundreds of millions of pounds. Our discussions with buyers, the Welsh Government and the unions continue, and we stand ready to negotiate with the preferred bidder to ensure the future of steelmaking in Wales and across the UK.

[Stephen Kinnock]

As we know, a critical meeting is taking place in Mumbai later today, and the future of the industry is hanging in the balance. What measures have the Secretary of State and his colleagues in the Cabinet taken to ensure that a viable and sustainable pension scheme is developed as a result of the sale of the business? Can he assure the House that it will be sustainable for the 130,000 members of the scheme?

[Alun Cairns]

I have spoken to the Secretary of State for Business since his meetings with Tata in Mumbai. Pensions are rightly one of the issues under consideration, and the hon. Gentleman will be aware that my right hon. Friend highlighted them at the outset, when he said that pensions, plant and power were three of the issues that needed to be addressed. Pensions are an extremely complex issue and cross a number of Departments, but we are determined to find a way through in the interests of the members, the trustees and the company.

[Byron Davies (Gower) (Con)]

8. The sale of the steelworks is at a critical stage. It is crucial to the survival of the plant that both Governments act with purpose to support a successful buyer. Has my right hon. Friend agreed a way forward with the First Minister and the Welsh Government in Cardiff Bay to ensure that that is the case?

[Alun Cairns]

I pay tribute to my hon. Friend for the work he is doing in his constituency, where a number of steelworkers reside, and for the responsible way in which he has pressed issues that are fundamental to a successful steel sale. I met the First Minister earlier this week, and we absolutely agreed that this issue is our priority. We are determined to continue in close dialogue and to work closely together to secure the sale.

[Hywel Williams (Arfon) (PC)]

We on the Opposition Benches are solidly with the steelworkers who will be marching through Westminster today. The European Parliament has voted against giving China market economy status. Will the Secretary of State press his colleagues in the Cabinet to agree to higher tariffs on Chinese steel?

[Alun Cairns]

I look forward, like the hon. Gentleman, to meeting the unions that are marching through Westminster later today. Of course, we are determined to work with the unions and with Tata. However, market economy status for China is separate from the capacity of the European Commission to introduce tariffs. Where tariffs have been introduced, they absolutely work. There are 37 trade defence measures in place at the moment. On wire rod, for example, imports are down by 99%, and I could highlight a range of other speciality steels. So let us not confuse market economy status and the capacity to introduce trade defence measures.

[Hywel Williams]

Steel was a significant element in Wales’s £5 billion-worth of exports to the EU in 2015—that is in fact a third of the whole Welsh Government budget. Will the Secretary of State now make the positive case for the advantages to Wales’s businesses, jobs and profitability of remaining in the European single market and the European Union?

[Alun Cairns]

The hon. Gentleman is absolutely right: 69% of steel produced in the UK is exported to the European Union. Access to that single European market is fundamental to the steel industry, but it is also fundamental to attracting a buyer. That was the very point I was seeking to highlight to business leaders in Swansea last week.

[Tom Pursglove (Corby) (Con)]

The steel produced at Port Talbot is transported to Corby and used to produce steel tubes. What steps are Ministers taking to make the case that it is vital to keep that supply chain together as one?

[Alun Cairns]

I also pay tribute to my hon. Friend for the way in which he represents the interests of his constituents. He recognises the interdependency of all these plants—the site in Corby, the site in Port Talbot and other sites across the UK. We talk to suppliers regularly because we need to maintain confidence that they will be able to continue to buy steel. We are determined to find a buyer that is in the interests of workers and the economy.

[Paul Flynn (Newport West) (Lab)]

Is the right hon. Gentleman inspired by the minor miracle that has taken place in Newport, where Mr Sanjeev Gupta and his enterprising workforce have brought the dead Alphasteel company back to productive life? Is not this spirit of entrepreneurship, co-operation among the workforce, hope and confidence the way to stage a renaissance of the entire British steel industry?

[Alun Cairns]

The hon. Gentleman is right that the interest of Sanjeev Gupta in Liberty Steel demonstrates the dynamism in the industry and the great opportunity that is out there. Liberty Steel has reopened a plant that closed some time ago, and it sees that there is a future in British steelmaking. I hope that we will continue to use that momentum to secure steel for the whole of the Tata operations across the UK.

[Nick Thomas-Symonds (Torfaen) (Lab)]

Given the Secretary of State’s previous answer on the effectiveness of tariffs, why do the UK Government keep being at the head of a blocking minority for reform of the lesser duty rule? Is it not the case that they simply have not done enough to save the British steel industry?

[Alun Cairns]

The hon. Gentleman is confused about the impact of the lesser duty rule, which relates to the framework. There are currently 37 trade defence measures in place. Where the European Commission has acted within the lesser duty rule, it has had a significant effect, be it in rebar, wire rod, seamless pipes or cold-rolled flat products. I could highlight a whole range of speciality steels where the tariffs are working within the lesser duty rule, because otherwise there would be an impact on other manufacturers and other costs. We need to work within the rule because it currently operates effectively.

[Karl MᶜCartney (Lincoln) (Con)]

3. What assessment he has made of the financial accountability of the Government in Wales.

[The Secretary of State for Wales (Alun Cairns)]

In order to become truly accountable, the Welsh Government need to take responsibility for raising more of the money that they spend. That is why, as part of the Wales Bill, we will devolve income tax powers to the Welsh Assembly. I look forward to continuing to work alongside the Welsh Government to implement those powers.

[Karl MᶜCartney]

I hope my right hon. Friend agrees that while the Welsh Government are profligate in many ways, the reinstatement of the Aberystwyth to Carmarthen railway via Llanbedr Pont Steffan will be helpful to the entire Welsh economy. Such spending would be welcomed by all the citizens of Wales, who realise that investment in transport infrastructure is a precursor to economic prosperity.

[Alun Cairns]

My hon. Friend is absolutely right that there are several examples of the strange priorities shown by the Welsh Government. Investment in railways is a priority of the UK Government, as shown by the electrification of the line from Swansea through to Paddington. That in itself will provide greater opportunities for rail travel, such as the upgrade of the valleys lines, which, in turn, provides a knock-on, positive effect on more rural communities.

[Jo Stevens (Cardiff Central) (Lab)]

Air passenger duty has already been devolved to the Northern Ireland Assembly and is shortly to be devolved to the Scottish Parliament, but despite this, the Budget did not propose that it be devolved to the Welsh Assembly. Will the Secretary of State support the devolution of air passenger duty, and if not, why not?

[Alun Cairns]

Rates of taxation, including air passenger duties, are a matter for my right hon. Friend the Chancellor, who always keeps levels of taxes under review. The hon. Lady will be well aware that the Treasury is looking at this matter and will report in due course.

[Michael Fabricant (Lichfield) (Con)]

13. A few years ago in Boston, Massachusetts, a few revolutionaries said, “No taxation without representation”, so does my right hon. Friend agree that it is very important that the Welsh Assembly takes advantage of the Wales Bill and applies its own income tax?

[Alun Cairns]

I am grateful to my hon. Friend for the continued interest that he shows in Wales. I want the Welsh Assembly to be a mature legislator taking more responsibility for the money that it spends by raising money itself. On that basis, it will become truly accountable to the people of Wales, and will have to look differently at the sorts of spending priorities it has and the commitments it makes.

[Sir Henry Bellingham (North West Norfolk) (Con)]

4. What assessment he has made of the effect in Wales of the Government’s measures to support small businesses.

--- Later in debate ---

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

6. What the Government’s plans are for the future of S4C.

[The Secretary of State for Wales (Alun Cairns)]

I was delighted to visit S4C last week to see at first hand the exciting developments at the channel, including the launch of its HD service in time for the European championship. I am sure we all wish Chris Coleman and the boys well.

[Jonathan Edwards]

What assurances can the Secretary of State give us that the UK Government’s review of S4C will not be compromised, as it will be conducted after the BBC’s charter review? Can he confirm that all options will be on the table, including securing an independent financial stream for S4C funded from revenues raised for public service broadcasting, and from direct Government support?

[Alun Cairns]

The hon. Gentleman will recognise that a fundamental principle is operational and editorial independence. The BBC White Paper offers protection and support for S4C, but, of course, there is a review ongoing that will look at all these matters, such as governance and financing, in order to secure a long-term future for the channel. [Interruption.]

[Mr Speaker]

Order. Let us hear Mr Glyn Davies.

[Glyn Davies (Montgomeryshire) (Con)]

S4C is crucial to Wales, and particularly to the Welsh language. Does my right hon. Friend the Secretary of State agree that the Welsh language is too often seen as the secondary language in Wales? It is not a secondary language; it is at least equal first.

[Alun Cairns]

This Government have a strong record of supporting S4C, and previous Conservative Governments have a strong record of establishing S4C, introducing the Welsh Language Act 1993 and turning around the decline in the Welsh language that we saw previously. We should be rightly proud of the language of our culture and our heritage—a true Conservative policy.

[Richard Arkless (Dumfries and Galloway) (SNP)]

7. What assessment he has made of the potential effect on Wales of the UK leaving the EU.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

9. What assessment he has made of the potential effect on Wales of the UK leaving the EU.

[The Secretary of State for Wales (Alun Cairns)]

At the February European Council, the Government negotiated a new settlement, giving the United Kingdom a special status in a reformed European Union. As I said in my speech in Swansea last week, I believe that Wales and the UK will be stronger, safer and better off remaining in a reformed European Union.

[Richard Arkless]

Eighty per cent. of Welsh farmers depend on common agricultural policy payments from the European Union, and the vast majority export their goods to the European Union. Given that Wales receives £245 million more from the European Union than it puts in, what assurances can the Secretary of State give us that the loss to those farmers will be plugged by the UK Government in the event of Brexit?

[Alun Cairns]

The Welsh economy is showing some spectacular employment figures at the moment, with more people in work than ever before, the claimant count falling and an unemployment rate well below the UK average. This economic success is based on a stable economic policy, and all the independent forecasts from the OECD, the IMF, the Governor of the Bank of England and my right hon. Friend the Chancellor show that there would be a negative impact should we leave the single European market.

[Stuart C. McDonald]

EU programmes such as Erasmus bring enormous benefits to young people in Wales, broadening their experience and strengthening their employability. Does the Secretary of State agree that ensuring Welsh students can continue to benefit from such programmes is just one of the many good reasons to vote remain?

[Alun Cairns]

I would like to advise the House and the hon. Gentleman that the Erasmus programme was developed by a Port Talbot man some years ago. It has provided fantastic opportunities for students across Europe to share best practice and broaden the base of their knowledge. Of course, the European Investment Bank has also invested hugely in higher education and the new campus at Swansea University, worth more than £450 million, has benefited from such diversification.

[David T. C. Davies (Monmouth) (Con)]

The Secretary of State will surely have seen yesterday’s Cardiff University report showing that Britain pays nearly £10 billion a year net to be part of the European Union. Does he agree that, under the Barnett formula, that money could leave Wales £500 million better off if we vote leave on 23 June?

[Alun Cairns]

My hon. Friend is of course failing to recognise that independent forecasters—whether the IMF, the OECD or the Governor of the Bank of England—have talked about the negative impact Brexit would have on the Welsh economy. A £2 billion reduction in the scale of the economy, costing 24,000 jobs, is a step we cannot afford to take.

[Mr David Jones (Clwyd West) (Con)]

Is it the case that Wales Office special advisers recently had a meeting with representatives of the Britain Stronger in Europe campaign, and if so, what did they discuss?

[Alun Cairns]

We of course discuss a range of issues that affect the Welsh economy. A Brexit vote would of course affect the Welsh economy in a negative way, with a £2 billion cost to the Welsh economy, costing 24,000 jobs. As we speak, we are seeing some spectacular employment data, but they are based on strong economic foundations and access to 500 million customers across Europe.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

11. Given that Wales is already underfunded by the Barnett formula and the UK Government, what detailed guarantees can the Secretary of State give that the £245 million actually reaches Wales?

[Alun Cairns]

I do not necessarily recognise the basis of the question. The hon. Lady forgets the historic funding floor, which my right hon. Friend the Chancellor introduced at 115%. That demonstrates the strength of the commitment that this Government are showing to Wales.

[Mr David Nuttall (Bury North) (Con)]

Will the Secretary of State join me in welcoming the fact that Toyota has made it clear it will continue to manufacture in the United Kingdom, including at its engine plant in Wales, regardless of whether the British people vote to leave the EU on 23 June?

[Alun Cairns]

I certainly recognise the comments made by Toyota. It has specifically said that

“British membership of the EU is best for our operations and their long term competitiveness.”

Of course, it is not only Toyota; 150 component industries in the automotive sector depend on companies such as Toyota and Ford which all want us to remain part of the single European market.

[Mr Speaker]

We now come to questions to the Prime Minister.

Government’s Legislative Programme (Wales) 2016-17

Alun Cairns Excerpts

Thursday 19th May 2016 Written Statements

[The Secretary of State for Wales (Alun Cairns)]

The Government’s second legislative programme announced in the Queen’s Speech on 18 May contains a wide range of measures that will apply to Wales either in full or in part.

The following Bills and draft Bills will extend to in whole or in part:

Better Markets Bill (Department for Business, Innovation and Skills)

Bill of Rights (Ministry of Justice)

Children and Social Work Bill (Department for Education)

Counter-Extremism and Safeguarding Bill (Home Office)

Criminal Finances Bill (Home Office)

Cultural Property (Armed Conflicts) Bill (Department for Culture, Media and Sport)

Digital Economy Bill (Department for Culture, Media and Sport)

Education for All Bill (Department for Education)

Higher Education and Research Bill (Department for Business, Innovation and Skills)

Intellectual Property (Unjustified Threats) Bill (Law Commission Bill)

Lifetime Savings Bill (HM Treasury)

Modern Transport Bill (Department for Transport)

National Citizen Service Bill (Cabinet Office)*

Neighbourhood Planning and Infrastructure Bill (Department for Communities and Local Government)

NHS (Overseas Visitors Charging) Bill (Department of Health)*

Overseas Electors Bill (Cabinet Office)

Prison and Courts Reform Bill (Ministry of Justice)

Pensions Bill (Department for Work and Pensions)

Small Charitable Donations Bill (HMRC)

Wales Bill (Wales Office)

The following Bills will not extend to Wales:

Bus Services Bill (Department for Transport)

Local Growth and Jobs Bill (Department for Communities and Local Government)

*Discussions with the Welsh Government on these Bills will consider their application to Wales.

Discussions will continue with the Welsh Government on Bills that might include provisions that require the consent of the National Assembly for Wales or Welsh Ministers.

[HCWS6]

Oral Answers to Questions

Alun Cairns Excerpts

Wednesday 13th April 2016 Commons Chamber

[Julian Sturdy (York Outer) (Con)]

1. What assessment he has made of the effectiveness of steps taken to rebalance the economy in Wales.

[The Secretary of State for Wales (Alun Cairns)]

As the economy continues to grow, this one nation Government are ambitious for every part of the UK. In Wales, we are regenerating the south-east with a city deal for the Cardiff capital region. We intend to follow suit with a deal for Swansea in the west, and we have opened the door to a growth deal for north Wales.

[Julian Sturdy]

May I be the first to welcome the Secretary of State and the Minister to their new roles?

Following the announcement of the north Wales growth deal in the Budget, what plans are there for the deal to be genuinely cross-border and to plug into the northern powerhouse, which has the potential to deliver huge benefits throughout the north, not only for the distinct regions like north Wales but for God’s own county of Yorkshire?

[Alun Cairns]

As well as seeking to grow the economy across the United Kingdom, all the way to Yorkshire and beyond, we are seeking to move our dependency in Wales from the south-eastern part of the country. Less than two weeks ago, I was in north Wales talking to local authority leaders, businesses and business groups, all of whom were keen to support the north Wales growth deal. It was interesting to note that they called for the deal to take place on a cross-border basis, extending to Cheshire and the Wirral, to ensure that north Wales was plugged into the northern powerhouse.

[Mr David Hanson (Delyn) (Lab)]

Given the importance of north Wales, will the Secretary of State press very hard for the establishment of links to Manchester airport and rail links to enable people to benefit from HS2, and would I, as a north Wales MP, be able to vote on such measures?

[Alun Cairns]

As the right hon. Gentleman knows, the new cross-border taskforce is making a bid for control period 6 funding from the Department for Transport with the aim of improving links with north Wales. Franchise negotiations are taking place between the Welsh and United Kingdom Governments, and we are determined to ensure that Members are represented properly in those negotiations.

[Mr David Jones (Clwyd West) (Con)]

I, too, welcome my right hon. Friend to his position. As he said, the Budget contained excellent news for north Wales in the form of the growth deal announcement, which recognises the region’s close association with the north-west of England, but does he agree that maximising the benefit will require at least an element of political devolution to north Wales?

[Alun Cairns]

My right hon. Friend speaks with authority and knowledge of this issue. Devolution to north Wales from what is seen in many quarters as the remoteness of Cardiff Bay is essential. The community groups whom I met in north Wales, whether they were from the north-west, from the border or from the English side of the boundary, wanted the growth deal to work on a cross-border basis, and I am determined to explore that possibility in the interests of the region.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

One of the most effective ways of rebalancing the economy is to empower the Welsh Government by giving them the necessary job creation levers, which is why I welcome moves to increase fiscal empowerment for Wales. If fiscal devolution is to work, however, it must be facilitated by the provision of a genuinely no-detriment fiscal framework. The SNP Scottish Government have negotiated such a framework for their country. What is the Secretary of State’s preferred deduction method for Wales?

[Alun Cairns]

The hon. Gentleman will be aware of the plans in the draft Wales Bill for the granting of income tax-varying powers for the Welsh Government. We want Wales to be a low-tax economy. Of course, mechanisms will need to be introduced to protect Welsh interests. The hon. Gentleman will be pleased to hear that I met the Chief Secretary to the Treasury earlier this week to discuss early proposals for such mechanisms, and we are happy to engage in further such discussions.

[Mr Philip Hollobone (Kettering) (Con)]

Which sectors of the Welsh economy offer the most exciting prospects for growth to help to rebalance the economy, and what steps is my right hon. Friend taking to encourage them?

[Alun Cairns]

As my hon. Friend will know, the Budget focused on the city deal for Cardiff, which is the largest city deal in the United Kingdom, with £1.2 billion covering 10 local authority areas. However, we also have ambitions for the Swansea bay city deal and the north Wales growth deal. We need to remember that this involves UK taxpayers’ money in addition to the Barnett block, which is something that we never saw when Labour was in power.

[Albert Owen (Ynys Môn) (Lab)]

North Wales growth is interdependent on growth in the Republic of Ireland as well as in England. Will the Secretary of State—and I welcome both him and the Under-Secretary of State to their new positions—ensure that north Wales Labour Members are provided with some details of the so-called partnership, given that we are the partners from north Wales?

[Alun Cairns]

I am grateful to the hon. Gentleman for his kind words and support.

We are determined to work on that issue. There has been a bottom-up approach on the growth deal. We have met local authority leaders and businesses from north Wales, and we are determined to pursue that further. I am not sure that I can make the growth deal stretch as far as Northern Ireland and the Republic Ireland, but I would be interested to try to take it across the English border.

[Simon Hoare (North Dorset) (Con)]

2. What assessment he has made of the potential effect on people in Wales of the Government’s decision to reduce tolls on the Severn crossings.

[The Secretary of State for Wales (Alun Cairns)]

This Government’s commitment to halve the Severn crossings toll is a major boost for the economy and people of south Wales. It will make a positive difference to commuters and small business owners and demonstrates our continued determination to rebalance the economy.

[Simon Hoare]

I am grateful to my right hon. Friend for that reply. I also welcome him to his place. It seems only a moment or so ago that we were competing to be the parliamentary candidate for the then safe Labour seat of Gower, which was some years ago.

Does my right hon. Friend agree that the reduction in the tolls will also hugely benefit the Welsh tourism sector by encouraging people to come to Wales, and that it is time for the Welsh Government to pull their finger out and deliver the investment and improvements to the M4 corridor?

[Alun Cairns]

I am grateful to my hon. Friend for his kind words. It is fair to say that there are no infrastructure projects more important to the south Wales economy than the upgrade of the M4 around Newport. It is hard to believe that our noble Friend Lord Hague was Secretary of State for Wales when a commitment to that was first made, only for it to be cancelled twice by the Labour party when it was in government. Business has called for it; commuters have called for it; visitors have called for it. The Chancellor made money available specifically for this project almost three years ago. We just wish the Welsh Government would get on with it.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Select Committee on Welsh Affairs found that the operational and maintenance costs of the bridge represented a quarter of the toll, yet, as the bridge goes into public hands, the Government have reduced the toll by half and are therefore creating a 100% margin. When will they reduce the toll to the level of the operational and maintenance costs to give south Wales and the Welsh economy every chance of performing as well as anywhere else, rather than having this stranglehold on it?

[Alun Cairns]

I would have hoped that the hon. Gentleman, like business groups, be it the Federation of Small Businesses, the chambers of commerce or the Institute of Directors, would welcome the halving of the tolls. We saw no action in that regard from the Labour party when it was in government. However, we have gone further than just halving the Severn tolls. A small goods vehicle, for example, will move from the current rate of £13.20 to less than £4 when the tolls are halved, because we are also removing the second-class toll.

[David T. C. Davies (Monmouth) (Con)]

13. The announcement by this Conservative Government of the cut in tolls is hugely welcome. Does my right hon. Friend agree, however, that in the longer term the revenue generated from the tolls should not exceed the cost of maintaining the two Severn bridges?

[Alun Cairns]

I pay tribute to my hon. Friend for his diligent and persistent campaigning on the issue. I know that he was absolutely delighted when the Chancellor was able to respond to his and many other Conservative colleagues’ requests. Of course, a debt will remain on the tolls even when the bridges come back into public ownership in 2018 or thereabouts. That debt will still need to be serviced, as will the innovations on free-flowing traffic that we want to introduce.

[Nia Griffith (Llanelli) (Lab)]

I congratulate the Secretary of State and the Minister on their recent appointments. Labour Members look forward to working constructively with them, particularly on the new Wales Bill, whenever that may appear.

To clarify, in last month’s Budget the Chancellor made much of halving the tolls on the Severn crossings, but as we have since discovered that is not quite the bargain it appears to be. The 50% discount includes the 20% of VAT, which disappears anyway when the bridge reverts to public ownership, and of course businesses reclaim VAT. So instead of leaving businesses still paying thousands of pounds a year, why will not the Government do the right thing and scrap these tolls altogether?

[Alun Cairns]

We have an election coming and the call from the Labour party is now very different—it is very convenient. It has long called for the devolution of the tolls, but we were fearful that, as soon as the tolls were devolved, they would be used as a cash cow to support the income of the Welsh Government.

[Mark Pawsey (Rugby) (Con)]

3. What recent assessment he has made of employment trends in Wales.

--- Later in debate ---

[Tom Pursglove (Corby) (Con)]

4. What assessment he has made of risks to the future of the steel industry in Wales.

[The Secretary of State for Wales (Alun Cairns)]

The steel industry is currently dealing with unparalleled global economic conditions and the UK is deeply concerned by the social and economic impact that they are having in south Wales. While we cannot change the status of the global steel market, our objective remains to overcome the challenges and play a positive role in achieving a sustainable future for the steel industry in Wales and across the UK.

[Tom Pursglove]

I thank the Minister for that answer. Does he agree that in order to secure the future not only of the Port Talbot site but of Tata sites around the UK, no option should be ruled out?

[Alun Cairns]

I pay tribute to my hon. Friend for the way in which he has represented the interests of his constituents and of those who depend on steelmaking in his area. He recognises the way in which the plants are interlinked and he has been working closely with the Business Secretary and me to help to support a secure future. I can reassure him that no stone will be left unturned to secure a long-term future for the Corby plant as well as for every other plant across the UK.

[Hywel Williams (Arfon) (PC)]

I welcome the Secretary of State and his deputy to their new positions and assure you, Sir, that I will endeavour to give them ample opportunity to explain themselves after my questions. Why did the Secretary of State not travel to Mumbai for the Tata board meeting of 29 March?

[Alun Cairns]

The Government have been in close dialogue with Tata steel for many months. My right hon. Friend the Business Secretary was at Tata the month before the Mumbai meeting and had engaged with its directors well before that. I am sure that the hon. Gentleman will be grateful that as a result of the Government’s actions we managed to avert the immediate closure of the plant and propose a sale.

[Hywel Williams]

I will give the Secretary of State another go. Did he fail to attend the meeting because a more senior Cabinet colleague told him not to do so? Did he decide not to go off his own bat? Or was it more down to the fact that, as the Minister for Small Business, Industry and Enterprise said of her boss the Business Secretary to the Select Committee on Welsh Affairs yesterday,

“He would not have gone to Australia had he known that they were going to close the ruddy works”?

What stopped our Secretary of State? Was it the Cabinet’s pecking order, was it indolence, or was it just plain ignorance?

[Alun Cairns]

I am disappointed with the hon. Gentleman’s approach. Steelworkers want to see Government and Opposition, and the unions and the company, work together to secure a long-term future. The Government have been in a long-term dialogue, which is demonstrated by the ongoing sales process, as opposed to the plant facing the risk of immediate closure.

[Byron Davies (Gower) (Con)]

Will my right hon. Friend assure me that he and the Wales Office will work with all relevant Government Departments to ensure the long-term future of Port Talbot, particularly for the workers who live in my constituency?

[Alun Cairns]

I pay tribute to my hon. Friend. He met the Business Secretary last week, and he and I have had several conversations about support for his constituents who depend on the plant, demonstrating its regional impact. The Government are determined to do everything possible to secure a long-term, viable future for the plant.

[Nia Griffith (Llanelli) (Lab)]

As the Secretary of State well knows, at sites across Wales, such as Shotton, Llanwern, Orb, Trostre and Port Talbot, Tata steelworkers produce a whole range of specialist products. What assurances has he obtained from Tata that it will not siphon off the production of the most profitable lines to their plants aboard? What guarantees has he received that the intellectual property will remain with the Welsh operations in order to attract a suitable buyer and safeguard thousands of Welsh jobs?

[Alun Cairns]

The hon. Lady makes an important point about the sale of the operations in the United Kingdom, which demonstrates the positive engagement between the UK Government and Tata Steel that has resulted in its decision to sell off all its operations, rather than simply to dispose of what some might see as the more profitable assets.

[Stephen Kinnock (Aberavon) (Lab)]

5. What steps the Government are taking to support the steel industry in Wales.

[The Secretary of State for Wales (Alun Cairns)]

We have been in extensive discussions with Tata for months, and it is due to Government intervention that Tata has agreed to a sales process rather than an immediate closure of its operations in Wales. I spoke to the hon. Gentleman before he went to the Tata meeting in Mumbai and have spoken to him since. I am keen to stay in regular contact in order to update him as the position changes. [Interruption.]

[Mr Speaker]

Order. These are important matters affecting the livelihoods of tens of thousands of people in Wales and across the country. Let us have some respect for that fact without Ministers wittering away— Mr Evennett—in the background. Important matters are being discussed. Be quiet, sir!

[Stephen Kinnock]

The Secretary of State will know that retaining the order book and customer base is critical for the Welsh steel industry. I want a short answer to a short question. Will the Secretary of State confirm whether he has had conversations with customers such as Honda, Nissan and Jaguar Land Rover to secure the integrity of the customer base? Yes or no.

[Alun Cairns]

My father was a welder at the Port Talbot plant for more than 30 years before he was made redundant several years ago. I am from that community and understand how important the steelworks is to the income of the area. My family has been through the good times when records have been broken and the difficult times when my father, like many others, was made redundant. The Government regularly engage with many of the companies, both suppliers and customers, that work with Tata. We are determined to do everything to support them.

[Mark Tami (Alyn and Deeside) (Lab)]

Yesterday, the Business Secretary said we need to work together, cross-party, on this, and the Secretary of State for Wales has just said the same. I understand that he is to visit Shotton on Monday—when was he intending to tell me?

[Alun Cairns]

I would have hoped that the hon. Gentleman would be grateful for, or approving of, a visit from a UK Minister to Shotton. I have been responding to the calls from the local workers, but I was in Wrexham on the day that the news broke about Shotton, and I spoke to community leaders and business leaders about the impact. I said to the community, “As soon as more information becomes available, I will return.” That is why I am returning to Shotton next Monday, and I am pleased about it.

[Nic Dakin (Scunthorpe) (Lab)]

6. What assessment he has made of the economic effect on Wales of UK membership of the EU.

Commonwealth Games: Wales

Alun Cairns Excerpts

Wednesday 16th March 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Wales (Alun Cairns)]

I am grateful to my hon. Friend the Member for Cardiff North (Craig Williams) for not only the way in which he introduced the debate, but his recognition of the role that Cardiff can play in supporting the whole of Wales. I am also grateful to you, Mr Speaker, for enabling the debate to take place in the same week as Commonwealth Day, because it presents a great opportunity to discuss how a Welsh bid for the Commonwealth games could once more showcase Wales to the world and provide a welcome boost to our economy.

As my hon. Friend mentioned, what a day this has been. It is shaping up to be a fantastic week for Wales. I was delighted yesterday that we signed a £1.2 billion city region deal for Cardiff, a transformational opportunity, which the UK and Welsh Governments, along with local authorities, have worked together for some time to create. I pay tribute to my hon. Friend for spearheading the campaign from the outset. There is no stronger champion of the city deal and its benefits for Cardiff. The Budget has of course delivered some significant outcomes for Wales. The north Wales growth deal offers great prospects for north Wales, and the Swansea bay city deal offers excellent opportunities. The changes to the Severn tolls demonstrate that Wales is open not only to business, but to tourists. Dare I say that Wales is also open to major sporting events? It is good to see the hon. Member for Newport East (Jessica Morden), who has championed the need for changes to the Severn tolls for some time.

My hon. Friend the Member for Cardiff North will know that the Wales Office hosted a reception in January to celebrate Welsh sporting success, and I said then that I would like Wales to develop a bid for the 2026 Commonwealth games. That remains my ambition, so I am pleased to have the opportunity to discuss that further today and am grateful to see cross-party and even cross-nation support from across the United Kingdom.

Wales is well known for its sporting achievements. We achieved our best result in history at the 2014 Commonwealth games, finishing 13th in the overall medal table having secured 36 medals. We know that Wales can punch well above its weight. For example, we develop 6.5% of the UK’s Olympic and Paralympic athletes, despite having under 5% of the UK’s population. We are committed to showing our continued support for Welsh elite athletes, and it is a priority of this Government to provide the right conditions to produce the sports stars that will continue to shine at such events in the future.

Bringing the Commonwealth games to Wales would put us on the world stage once again, just like when we hosted the NATO conference in 2014, which was referred to by Opposition Members and my hon. Friend. We also hosted Olympic events as part of London 2012 and hosted the Ryder cup in 2010. At the 2012 Olympic games, the world saw what we have always known: the UK is an unbeatable venue for world-class sporting events. The world also saw what Wales has to offer when we hosted the very first event—Great Britain’s women took on New Zealand in the football competition in Cardiff.

We know that as well as reinforcing the Wales brand, sport can make huge economic contributions to Wales. Much has been said about how the Principality stadium is among the best stadiums, and it generates more than £130 million a year for the Welsh economy and sustains more than 2,500 jobs. In its first decade, the then Millennium stadium boosted the Welsh economy by more than £1 billion. The 2015 rugby world cup played a significant part in boosting the economy of south-east Wales. Cricket is another sport that we have managed to celebrate and derive significant economic success from, with the Ashes at Sophia Gardens giving a £19 million boost to the capital region economy in one year.

Wales is continuing to grow in this area, as it can look forward to hosting an exciting range of sporting events in the next few years, some of which were mentioned by my hon. Friend the Member for Cardiff North. These include: the world half-marathon championships; the UEFA champions league final; velothon Wales; and the international Snowdon race. But there is no reason why we should cap our ambitions at just those events. With Wales riding high on a sporting wave of success, there is surely no better time to identify how we can attract more global sporting occasions to our shores—occasions such as the Commonwealth games.

[Jonathan Edwards]

The Minister mentioned the national rugby stadium in his remarks. Although it is probably the best stadium in the world, UEFA was not going to allow us to hold a champions league final in that stadium because Cardiff airport is not designated as being up to a sufficient standard. One way of moving forward on that airport would be by devolving airport duty tax, especially in respect of long haul flights, to allow the airport to develop. Let the UK Government show some ambition and devolve that tax.

[Alun Cairns]

The hon. gentleman knows that the Treasury is actively looking at that area of policy, but this is a debate about the Commonwealth games and Cardiff airport will rightly play its role in hosting the visitors from the nations involved in the champions league final. As the airport lies in my constituency, I certainly hope to play a part in welcoming some of those superstars from around Europe and elsewhere when they visit Cardiff and Wales.

The opportunities to host such events in Wales should know no bounds. Not only can they pump millions of pounds into our economy and create thousands of jobs, but they can leave a lasting legacy and inspire youngsters from every corner of Wales to get hooked on sport. The 2014 Commonwealth games were the largest multi-sport event ever held in Scotland and a spectacular display of world-class sporting success. The enthusiasm of competitors and the public, the excellent organisation and of course the economic contribution came together to ensure lasting legacy from those 11 days of sport. From the Scottish Government and Glasgow City Council’s capital investment of about £425 million, topped up with ticket sales and revenue from commercial sources totalling £118 million, came a return of £740 million to boost the economy of Scotland and of Glasgow in particular. Hosting such a games can therefore be seen as an investment. That return included £390 million for Glasgow’s economy, and support for an average of 2,100 jobs each year between 2007 and 2014, including 1,200, on average, in Glasgow. The games attracted 690,000 unique visitors, whose net spending contributed £73 million to the economy over those 11 days alone.

Those figures demonstrate the investment and the opportunity; this is something Wales can hope to emulate. A bid team would, however, rightly need to look at the figures in more detail. Let us be clear about the challenges ahead of us. We have some of the best facilities. We have the Wales national velodrome in Newport and the national pool in Swansea. We have no shortage of mountains in Snowdonia for mountain biking. We have fantastic facilities in Bala for canoeing. Those facilities demonstrate that a bid from Cardiff could really be a bid from Wales, which we would welcome, but they are widely spread and we need to take that into account. Additional facilities are also needed. One pool is insufficient, so we would need a practice pool. One velodrome is insufficient and it will be 20 years old by the time of the games, so we need practice and warm-up facilities. That demonstrates the planning and construction challenges that exist. Over the next week or so, I am meeting one of the individuals who was responsible for planning the 2012 games in London to establish what Wales would practically need to achieve.

[Chris Davies]

rose—

[Alun Cairns]

I will give way in the very brief time that I have left.

[Chris Davies]

May I remind my hon. Friend that not far away from Cardiff is the Brecon Beacons National Park where we have mountains on which to compete and practise?

[Alun Cairns]

My hon. Friend is a true champion of his constituency, and he uses every opportunity to promote it, and rightly so.

For Wales to host major events, there are challenges to which we must respond positively. There needs to be a team approach, and the Wales Office stands ready and willing to co-ordinate and bring together all the issues ranging from transport problems right the way through to immigration and security issues.

As we look to the next decade, there are few opportunities to host major international sporting events here in the UK. We will not have the Olympics or the rugby world cup, and it does not appear that we will get the football World cup. I truly hope that, as a result of the initiative being pursued by my hon. Friend the Member for Cardiff North, all Members of Parliament here, and the UK Government, we will host the Commonwealth games in 2026.

Question put and agreed to.

Points of Order

Alun Cairns Excerpts

Tuesday 8th March 2016 Commons Chamber

[Wayne David (Caerphilly) (Lab)]

On a point of order, Mr Speaker. Last Thursday this House had an excellent debate on Welsh affairs, but unfortunately the Secretary of State for Wales was absent. The Under-Secretary of State for Wales, the hon. Member for Vale of Glamorgan (Alun Cairns), said:

“I can advise the House that the Secretary of State has parliamentary business elsewhere”.—[Official Report, 3 March 2016; Vol. 606, c. 1162.]

However, we learned from Twitter that the Secretary of State was at a lunch with Bexley Conservative Ladies, and I have the photograph to prove it. That is not parliamentary business, so I respectfully suggest that the Under-Secretary comes to the Dispatch Box to apologise for inadvertently misleading the House.

[The Parliamentary Under-Secretary of State for Wales (Alun Cairns)]

Further to that point of order, Mr Speaker, I am happy to clarify the position and, of course, apologise if I have inadvertently misled the House. I can confirm that the Secretary of State was on a mixture of Government and political activity that afternoon. I can also confirm that it was always expected that I, as Under-Secretary of State, would respond to the Backbench Business Committee debate on St David’s day.

[Mr Speaker]

I am grateful to the hon. Gentleman. I think that is helpful and we will consider that matter closed.

Welsh Affairs

Alun Cairns Excerpts

Thursday 3rd March 2016 Commons Chamber

[Carolyn Harris (Swansea East) (Lab)]

We have become very accustomed to waiting for things in Wales. We waited a very long time for rail electrification, we waited patiently to get the Welsh national football team into the Euros, and we waited a very long time for a Welsh premier league football club, but now Swansea City is there. Today, we waited a very long time for the Secretary of State to make an appearance in this very important debate. Either our performances are not up to scratch or he has had a better offer, because he has chosen to leave the Chamber.

[The Parliamentary Under-Secretary of State for Wales (Alun Cairns)]

I am happy to announce to the hon. Lady that the Secretary of State has an important telephone conversation with the Minister for Economy, Science and Transport in the Welsh Government.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Wales (Alun Cairns)]

I start by congratulating the hon. Member for Aberavon (Stephen Kinnock) and other Members on contributing to today’s important debate in Westminster’s calendar—one that underlines the role that Wales plays within the United Kingdom. I welcome all the contributions of right hon. and hon. Members, and I will do my best to cover as many points raised within the limited time remaining.

The debate has been extremely wide ranging and has covered issues across the spectrum of the constitution, the European Union, the economy, public services, the tidal lagoon, the railways, the northern powerhouse and many other issues. I shall canter through as many as I can, but I want to spend some time on the Wales Bill in order to respond to the questions from the shadow Secretary of State for Wales and others. I shall address some other points, too.

Let me start my opening remarks by saying that Wales is in a good place. I am optimistic about our future. As a Government, we have been determined to make a difference to all parts of the UK, and while the job is not complete and there is always obviously more work to be done, we have taken positive action that sets the scene for a bright outlook for Wales. We are determined to work constructively with the Welsh Government, and whatever rhetoric we hear from individuals within Cardiff Bay, we are determined to respond in the measured fashion that the people of Wales deserve.

We want to secure our economic recovery, which was our greatest challenge when we came to office in 2010. Members will remember that unemployment was rising and for too many young people there was little prospect of employment, with the UK and Wales in a precarious financial position. Few Members, however, have mentioned the funding floor, so I was grateful to my hon. Friend the Member for Aberconwy (Guto Bebb) for doing so. This has been called for by Members for well over a decade, and it is only a Conservative Administration who have delivered it—and within the first year of their Parliament.

[Glyn Davies]

Previously, throughout my time in this Parliament and, indeed, in the Welsh Assembly, the Barnett deficit dominated every discussion, and was often raised by Opposition Members. Now we are in balance. Fair funding for Wales is one of the Government’s biggest achievements, but it is not being properly recognised by everyone.

[Alun Cairns]

I am grateful to my hon. Friend for emphasising that point. The 115% rate of Barnett consequentials is extremely important—it entirely meets the criteria in the Holtham demands—but one would almost think that Labour and Plaid Cymru Members were disappointed that we had actually delivered on something that they had been calling for. They would far rather be shouting from the sidelines, calling for it in the hope that we would not deliver it. When we respond in a positive way and deliver for the people of Wales, there is complete silence.

[Jonathan Edwards]

Obviously the Barnett formula is a step forward, but does this not underline the danger of using opaque terms such as “fairness” and “non-detriment”? In my view, a fair funding settlement should be based on need rather than serving to prevent further injustice. As the hon. Member for Llanelli (Nia Griffith) pointed out, the key aspect of non-detriment is the fiscal framework. Has the Minister any idea of the preferred index for which the Welsh Labour Government are arguing with the Treasury? It is clear that different mechanisms will have vastly different outcomes.

[Alun Cairns]

The hon. Gentleman has made some important points. It is, of course, up to the Labour party to explain its position. All I know is that Labour called for this for decades, we responded within a year, and since then there has been complete silence on the Opposition Benches.

My hon. Friend the Member for Aberconwy was extremely upbeat about Wales’s economic prospects. It is true that, since 2010, the number of people in work has risen by 89,000, unemployment has fallen by 35%, the youth claimant count has fallen by 61%, and Wales has experienced faster growth per head than any other nation or region of the United Kingdom outside London. The hon. Member for Neath (Christina Rees) spoke of the importance of getting people into work. This is action, and this is where it is happening.

We have been getting behind Welsh businesses, and there are 22,000 more small and medium-sized enterprises in Wales than there were in 2010. The hon. Member for Aberavon mentioned the steel sector. I know that he spoke to the Secretary of State and the Minister for Small Business, Industry and Enterprise earlier today about the issues facing the steel industry and, in particular, the communities around Port Talbot, but I hope he will recognise that the Government have gone a long way towards meeting the five asks from the steel industry.

One of those asks was a cut in business rates, which were mentioned by some Opposition Members. That is a devolved matter, and something that the Welsh Government could do. The energy-intensive industry compensation package has been delivered, as has the provision of more time in which to comply with the EU’s industrial emissions directive. As for EU-level action on anti-dumping, the UK Government are leading the pressure that is being exerted in Brussels. I hope that the hon. Gentleman will recognise that, along with a range of other measures that we have taken.

[Stephen Kinnock]

The Minister was going OK until he got to the bit about dumping. I am sorry, but we cannot let that one go. There are two key facts. The British Government are the ringleader of a group of member states that is blocking the scrapping of the lesser duty rule, which would make a huge difference to the ability to impose tariffs on unfairly dumped Chinese steel. They are also the chief cheerleader for Beijing in Brussels when it comes to giving market economy status to China, which would also dramatically reduce the scope. It must be recognised that, in respect of those two points, it is a case of abject failure.

[Alun Cairns]

I am sorry to hear that response, which raised two issues. The first is the confusion over market economy status. Russia has market economy status, but that does not prevent the European Union from introducing tariffs or prevent it from taking action. The other measures that the hon. Gentleman mentioned would take three years to introduce. We want to take action before then. We want to continue to be proactive. We want to work with the hon. Gentleman, the Welsh Government and the communities in and around Port Talbot and Newport, because of the importance of the steel industry to them.

In 2014-15 there were 102 inward investment projects in Wales, 98% of which were supported by UK Trade & Investment. That demonstrates the role that the UK is determined to play in supporting the Welsh economy, and in working with the Welsh Government.

The hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) mentioned welfare reforms. Welfare reforms are very important to getting people back to work, but we cannot pick one element individually. We need to look at the wider package, such as the national living wage, which would increase the incomes of 150,000 people in Wales by 2020. That will make someone working full time on the national living wage £4,400 better off, on top of the tax cuts that they will receive as a result of the increase in the personal allowance.

The Cardiff city deal was mentioned by many hon. Members, most notably my hon. Friend the Member for Cardiff North (Craig Williams), who has spearheaded and championed that cause and been persistent at every turn. He has been relentless, first as a candidate and now as a Member of Parliament, in pressing Ministers on this issue. Let me make it clear that we want this deal to be signed as quickly as possible and we are determined to press those involved in order to develop a world-class deal. We want Wales to look outwards and we want it to involve the private sector. We want the city deal to be a world beater in what it delivers. Hon. Members should recognise the fact that the spending review has already announced our “in principle” commitment to support a new investment fund, and earlier this year the Chancellor committed £50 million to establish a UK compound semiconductor centre as a down-payment on the city deal.

My right hon. Friend the Member for Clwyd West (Mr Jones) talked about ensuring that north Wales was recognised and about the importance of the northern powerhouse, a subject that was also raised by the hon. Member for City of Chester (Christian Matheson). There was a focus on the importance of rail links, and I hope that bringing the HS2 investment forward by six years will provide great opportunities for mid-Wales, north Wales and Cheshire through the links to the northern powerhouse. The hon. Member for City of Chester talked about local government reorganisation and the need to look towards Wales. I would also say that local government in Wales needs to look across the border. I think that it does so, but the Welsh Government need to recognise the fact that it is an administrative border and that the way in which people lead their lives means that they cross that border in a much more open way.

I could also go on at length about the investments that the prison in north Wales and Hitachi’s involvement at Wylfa will bring. Much has been said about the tidal lagoon project in Swansea. The Tidal Lagoon Swansea Bay company has recognised the strength of the review and welcomed it. I wish that hon. Members would reflect on what they are saying in this context and support the company rather than seeking to undermine the project, which could involve a significant investment.

In the time remaining, I want to talk briefly about the Wales Bill. We said at the outset that it was a draft Bill and that we wanted to be pragmatic and to use pre-legislative scrutiny positively. Given some of the negative points that have been made, however, I want to say that we will take absolutely no lessons from the party that gave us the Government of Wales Act 2006 and the convoluted and complex legislative competence order system, which has led to a great deal of legislative confusion. We are determined to get this right, and this pause needs to be taken in the positive spirit in which it was intended.

There have been calls to adjust the necessity test, but we plan to go further and to remove it. We will look at the list of reservations, but it also gives clarity. I encourage members to look at the Scotland Bill, which also has quite a long list of reservations, but there have been no complaints because of the clarity that it provides. Many people are calling for a distinct legal jurisdiction, but that would effectively mean a separate legal jurisdiction. That would be dangerous for Wales, in relation not only to the legislative process but to investment. We are also determined to work constructively to clear up the mess that we inherited with the pre-commencement orders. We want to get this Bill right, and we are being pragmatic. If we ploughed ahead, we would be criticised. We are being criticised just for pausing. It seems that, according to Labour Members, whatever the Wales Office does, it cannot win.