Wales: Commission on Devolution in Wales

Earl Attlee Excerpts

Monday 18th November 2013 Lords Chamber

[Baroness Randerson]

The noble Baroness has given me a large number of questions to answer and I will do my best to cover all the major points. I take issue with her opening comment that the Government have accepted the majority of the Silk recommendations. Although technically that is the case, I feel that it is a pretty large majority to accept 30 out of 31 recommendations. “The overwhelming majority” is the way I would put it.

The noble Baroness makes the point that the Welsh economy is lagging behind the rest of the UK. It has lagged behind the rest of the UK for many decades. It is a matter of great sadness to me as someone who lives in Wales that it has fallen further and further behind the rest of the UK. This is not a recent thing since the coalition Government came to power: it is something that has existed for far too long, and the coalition Government, in making this series of announcements today, are determined to give the Welsh Government and the National Assembly for Wales the tools with which to do the job—the tools with which to repair the Welsh economy and ensure that it becomes fully efficient and effective again.

On the timing for the M4 financial package, our intention, as with everything else in this series of announcements, is to ensure that it can be put into practice as soon as possible. Early borrowing powers will be put into practice very rapidly. The Welsh Government are currently undertaking a consultation on a possible route for the M4 relief road and it is clearly going to be some time before any kind of actual building on the ground will take place. But I promise the noble Baroness that the tools will be in the hands of the Welsh Government in plenty of time to undertake that. It is the Government’s intention to ensure that that legislation is passed in this Parliament if at all possible. We intend to set about that with all speed.

In relation to the question on the level of borrowing that the Welsh Government will be able to undertake, clearly, as with prudence in one’s household budget, the level of borrowing that one can undertake must be related to the potential for revenue raising—your potential income. There will be one level of borrowing possible for the Welsh Government with the minor taxes, but there will be a much higher level of borrowing if the Welsh Government and the Assembly go forward with a referendum and the people of Wales vote yes on that. The timing of the referendum is firmly in the hands of the Welsh Assembly and Welsh Government, and that is appropriate.

The noble Baroness asked about the model for income tax devolution. The Government have taken the view that the Scottish model is appropriate. It has been welcomed in many quarters and therefore it is a good model to follow in this case, particularly as Wales has a very porous border and people move all the time across the border—very much more than they do between Scotland and England. There was concern that the model of income tax put forward in the Silk commission report could lead to an imbalance in terms of tax receipts.

Finally, the noble Baroness referred to the October 2012 joint statement. She asked what would be the trigger for reviewing funding for Wales. The trigger would be agreement that convergence was occurring again. At the moment, there is divergence. It is estimated and, I believe, agreed by both the Treasury and the Welsh Government that it is likely to be at least 2017 before convergence occurs again. The Liberal Democrats have always been in favour of a very high level of devolution and I strongly welcome, as does my right honourable friend the Secretary of State for Wales, the fact that I am able to make this Statement here today.

[Earl Attlee (Con)]

My Lords, may I remind the House of the benefit of short questions to my noble friend the Minister so that she can answer as many as possible? I can help.

--- Later in debate ---

[Lord Touhig (Lab)]

My Lords—

[Earl Attlee]

My Lords, we have not had a Lib Dem spokesman yet.

[Lord Thomas of Gresford]

My Lords, it is all very well saying that you are going to vote yes for a referendum. Would my noble friend the Minister be good enough to say who is going to frame the question which is to be put to the Welsh people? It has been noticeable that the First Minister, Mr Carwyn Jones, has not been overanxious to commit himself to timing for a referendum. Can we take it that the legislation will ensure that a referendum will be held and will not be deferred until some replacement for the Barnett formula has been found? In the 13 years of the previous Labour Government, they were unable to do that, despite all the pleas that were put to them at that time. Will my noble friend confirm that this referendum will go ahead with a proper question, within a reasonable time and with the Welsh Assembly having the power to determine precisely when?