Wales Bill

David Jones Excerpts

Tuesday 24th June 2014 Commons Chamber

[Owen Smith]

That is a misrepresentation of my position, but I have come to expect little else from the hon. Gentleman or, as he is also known, the shadow shadow Welsh Secretary—well, shadow shadow Foreign Secretary. [Interruption.] Maybe, but he seems to be auditioning these days for the Welsh Secretary’s job. Perhaps he will move on to the Foreign Secretary’s position at a later stage.

[The Secretary of State for Wales (Mr David Jones)]

Can the hon. Gentleman clarify whether the Labour party in the Assembly will be pushing for an early referendum on tax-varying powers?

[Owen Smith]

It was well worth waiting for the Secretary of State to intervene, but I think that the answer is no. Had he been paying attention, he would know that the First Minister has been very clear—[Interruption.] He says “Ah!”, but I think that there is no surprise in hearing that the First Minister has said that income tax-varying powers for Wales are not a priority, for all the reasons I have enumerated many times in this Chamber. If the Secretary of State was to debate some of these issues with me, rather than standing behind the Exchequer Secretary when it comes to all these detailed parts of his brief, perhaps we would have a clearer idea of his understanding of these issues.

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[Mr David Jones]

I think that everyone in the House is now even more confused as a consequence of what the hon. Gentleman has said. He said that he sees the value of borrowing powers associated with income tax, but given that Labour will never hold a referendum on income tax powers, how does he hope to access those borrowing powers?

[Owen Smith]

I suspect that that reveals why the Secretary of State cannot speak to his own Bill and instead relies on the Exchequer Secretary. The Secretary of State will know, of course, that irrespective of whether there is a referendum in future, the volume of income tax powers to be extended to Wales has a direct link to the amount of borrowing, because the Government have chosen to introduce a different rationale for affording Wales borrowing powers from that which they used for Scotland. The Scotland Act 1998 draws a connection between the amount of capital expenditure—the budget for capital—and the amount of borrowing. In this Bill, for some reason, the Government have chosen to pursue a different rationale, whereby the ratio of borrowing is to be equal to the ratio of income tax devolution. It is very important that the Government consider amendment 10, because it would increase the volume of income tax that could potentially be exercised by the Welsh Government, and should therefore, under the logic employed by the Government, increase the amount of borrowing above the £500 million that is currently envisaged.

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[Mr David Jones]

rose—

[Owen Smith]

I can see that the Secretary of State is champing at the bit. Why he did not simply do this in the first place is beyond me.

[Mr Jones]

The hon. Gentleman does not seem to understand that if there is never a referendum on income tax powers, the Welsh Government will not be able to access an income stream of either 10p or 15p. Does he not understand that point?

[Owen Smith]

Absolutely, so perhaps the Secretary of State could come back to the Dispatch Box to explain why that connection was never made in Scotland, and why, in Scotland, the powers relating to the amount of borrowing were a function of the capital expenditure budget. Can he explain why that difference occurred? Obviously, he cannot, so once again, we know that the Government have simply made it up as they went along.

My last point deals with our fair funding amendments. We remain convinced that the Government do not intend to provide fair funding for Wales, and that any extension of devolution of taxation to Wales ought to be subject to a clear understanding, and agreement by the Welsh Government that the fair funding issue has been dealt with. The Exchequer Secretary acknowledged earlier that the issue of convergence has been accepted by the Government in the floor that has been put beneath the Barnett formula. The Holtham commission said that there was a shortfall of about £300 million—perhaps it is now as little as £150 million—in Wales, but we are convinced that the Welsh Government ought to be the arbiter of whether that fair funding test has been met. That is why we would encourage the Government to adopt our proposal of a back-stop power for the Welsh Government to determine whether fair funding is afforded to Wales.

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[Mrs James]

I want to finish, because I promised to be brief and I want to keep my speech tight.

It is no wonder that the public see us politicians as a bit devious and above and beyond the basic rules, because we always apply rules that suit us. That is what the public see this as, purely and simply: politicians having a second bite of the cherry when they do not. I ask the Secretary of State to reconsider the amendment and to consider our proposals seriously.

[Mr David Jones]

With your permission, Madam Deputy Speaker, I will first address the Government amendments in this group. The Bill provides for a referendum to be triggered by the Assembly on whether a portion of income tax should be devolved. If the Assembly triggers that referendum, as I very much hope it will, it will be the third referendum on devolution to take place in the past two decades. It is vital that we as a Government learn lessons from the previous referendums, particularly the referendum on law-making powers that took place in 2011, to ensure that the framework for holding an income tax referendum is as robust as possible.

Hon. Members will recall a key issue in 2011 that led some to question the system that was then in place, namely that, because no credible organisation applied to the Electoral Commission to become the designated no campaign, no yes campaign could be designated either. Any future referendum on the devolution of a portion of income tax would pose a crucial question to the electorate in Wales that would affect generations to come, so it is highly important that the credibility of that poll should not be questioned in any way.

Amendment 6 therefore provides more flexibility in the designation process so that, should the Government of the time wish to, they could, by Order in Council, enable the Electoral Commission to designate an organisation under the Political Parties, Elections and Referendums Act 2000 for only one possible outcome of the referendum rather than only both. That will ensure that where a credible organisation seeks designation for one outcome, it can be designated even if no credible application for designation for the other outcome is made. We would of course want credible campaigns for both outcomes in a future referendum so that a full and vibrant debate about the issues could take place, but amendment 6 will help to ensure that there is no repeat of the situation that arose in 2011, when no organisation was designated for either outcome.

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[Mr Hain]

Is the Secretary of State aware of the evidence that Professor Roger Scully has brought forward? A number of Asian countries have a similar ban, including Taiwan and South Korea, in similar circumstances. Does the Secretary of State think that he should withdraw the statement that he has just made?

[Mr Jones]

I clearly referred to a particular type of system, which is the majoritarian type. That is where the votes in the constituencies count towards the list elections. In Asia and Ukraine, there is something similar, but not under that type of system. I am pleased that the right hon. Gentleman refers to Professor Scully. In his evidence to the Welsh Affairs Committee during pre-legislative scrutiny of the draft Bill, he clearly said:

“If parties that are defeated at constituency level can still win representation through the list, then it is difficult to see why that should not also apply to individuals.”

In other words, what is the difference for this purpose between a party and an individual? That is Professor Scully’s view. To pray him in aid goes against the advice that he gave during pre-legislative scrutiny of the draft Bill.

[Mr Hain]

Notwithstanding that advice, Professor Scully was simply correcting the Secretary of State on his basic proposition. The point is this, and no one has disputed it: neither the Secretary of State nor the Minister have challenged one bit of evidence that we have brought forward, and which I have repeatedly cited, about the serial abuses in Wales under the dual candidacy system, which the Secretary of State is about to reintroduce. He offers no protection or guarantee that that serial abuse will not happen; it went on prior to the ban in 2006. In fact, his Bill is a charter for reopening that abuse.

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[Mr Jones]

I have to take issue with the right hon. Gentleman. The reason for the abuse was that a particular individual, whom the right hon. Gentleman constantly quotes and cites in this context, behaved extremely badly, and people will continue to behave extremely badly. Let us go back to Professor Scully. He said in his evidence to the Committee:

“No substantial independent evidence was produced at the time of the GOWA (or, to my knowledge, has been produced subsequently) of significant public concern about dual candidacy. The claims made about dual candidacy ‘devaluing the integrity of the electoral system’, and ‘acting as a disincentive to vote’ therefore remain wholly unsupported by solid evidence.”

Those were the comments of the academic Professor Scully, whom the right hon. Gentleman prays in aid. That same professor demolishes the right hon. Gentleman’s argument.

The prohibition was introduced against the advice of leading academics such as Professor Scully, organisations such as the Electoral Reform Society and independent bodies such as the Electoral Commission. I was very surprised by the right hon. Gentleman’s criticism of the Electoral Commission. We are now legislating to correct this anomaly and I hope that the hon. Members for Pontypridd (Owen Smith) and for Llanelli (Nia Griffith) will not press their amendments, although I am not holding my breath.

Question put, That the amendment be made.

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[Mr David Jones]

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

We have had a number of productive debates on this Bill, and I would like to thank all right hon. and hon. Members for their contributions. It was in November 2012 that the Silk commission recommended a package of measures to devolve fiscal powers to the National Assembly and the Welsh Government. We have had a number of debates in this House since then on giving the Welsh Government increased borrowing powers; on the devolution of a portion of income tax, subject to a referendum; and on the devolution of taxation on land transactions and landfill. Our debates on the Bill have enabled us to fine-tune those proposals further, and I appreciate the broad support that the Bill has received from all parts of the House. I would again like to thank Paul Silk and his commissioners for their work on their two reports, and also my hon. Friend the Member for Monmouth (David T. C. Davies) and the other members of the Select Committee on Welsh Affairs for their excellent pre-legislative scrutiny of the Bill.

This Bill is a major milestone for Wales, and it demonstrates the Government’s commitment to strengthening Welsh devolution and Wales’s role in the United Kingdom.

[Mr Harper]

In the debate in Committee on 6 May, at column 109, the Secretary of State committed to updating the House, either on Report or on Third Reading, on the conversations he was going to have with the Secretary of State for Health about the health service. Is he able to do that today?

[Mr Jones]

Yes, and I am grateful to my hon. Friend for reminding me about that important point. I can tell the House that I have engaged with the Department of Health, and that NHS England is continuing its efforts to work constructively with the Welsh Government to find a solution to the problems faced by English patients, such as my hon. Friend’s constituents, who access NHS services in Wales. Work on resolving the issues raised by the cross-border protocol is continuing, and it is hoped that this work will conclude by the end of this year.

[Owen Smith]

Can the Secretary of State also inform the House on the relative performance of the NHS on either side of that border? What is the difference between, for example, the Wye Valley NHS Trust and the Aneurin Bevan health board on cancer waiting times? My understanding is that in Wales the targets are rather more stringent, and are being met.

[Mr Jones]

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

[Alun Cairns]

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

[Mr Jones]

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

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

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

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

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

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

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[Paul Murphy]

I think they will be right so to do. There is a lot of work to be done by their lordships, particularly the Welsh Members, in dealing with these issues, including borrowing.

[Mr David Jones]

I am reluctant to interrupt the right hon. Gentleman, but the intervention by the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) is completely misconceived. There is no question of the Westminster Government directing the Welsh Government as to how to exercise their borrowing powers.

[Paul Murphy]

In that case, we are all right, are we not, and we can see what happens next?

These detailed issues are very important for us. Whatever divides us in this Chamber—the nature of politics is that we do divide on issues—there is a general consensus among us all that this Bill is another step in the right direction, and a step that makes sure that we remain members of the United Kingdom. By strengthening devolution, we strengthen the United Kingdom. However, the situation is changing. We must all accept—even I, coming from south-east Wales and Monmouthshire, with all my early scepticism, accept it, and not reluctantly but with some enthusiasm—that the landscape of our constitution and the way in which we govern ourselves in the United Kingdom is changing. Inevitably, the referendum in 87 days’ time will change us all, but I hope that in so doing it will unite us in ensuring not only that the United Kingdom remains as it is but that we devolve, sensibly, more and more powers—including, indeed, taxation—to the people of Wales.