Wales Bill

Glyn Davies Excerpts

Wednesday 30th April 2014 Commons Chamber

[Jonathan Edwards]

Well, apart from the Swans staying up this year—another great achievement, which I know the hon. Member for Pontypridd (Owen Smith) shares with me.

Most striking about the referendum result was that it was matched across every county in Wales—apart from Monmouthshire, which only just voted no. When the history of Wales is written, that result will be recorded very strongly when compared with the referendums of ’79 and ’97. It was an earthquake moment, and I remember the shell-shocked faces of many Unionists down in Westminster the week after that historic occasion.

The nature of the game has therefore changed, and subsequent opinion polling clearly indicates that the people of Wales want greater control over their lives. I think they are far ahead of the political class at the moment, and I even include Plaid Cymru in that context. Today we are discussing in historical terms a further milestone on the path towards Welsh self-government, with, for the first time, a national legislature being empowered to have an element of fiscal powers. Needless to say, the Bill does not go anywhere near as far as my party would want in terms of powers for Wales, but as an historian in a previous life I can safely say that when the history of Wales is written, this period will be seen as one of rapid political development for our nation.

As we celebrate the 20th anniversary of the great indie band from Manchester, Oasis, and its first studio album in ’94, I am reminded of one of its best songs, “Little by Little”. I hope sincerely that when we conclude our Committee deliberations we will not be “looking back in anger”—a reference to another of its great songs. Today is therefore another landmark in the political development of our country.

The context of the Bill is interesting in itself, and I get the impression that the Secretary of State would rather walk through fire than deal with the Bill today. I am sure he sees it as a hospital pass from his predecessor. The Bill results, of course, from the UK Government-sponsored Silk commission, in particular part I, and I pay tribute to Sir Paul and his fellow commissioners for their work on both stages of the report. As I said, as a party our evidence to both parts of the commission called for far greater progress than was finally agreed, but we were prepared to compromise to seek agreement and make progress. It is therefore disappointing that we find ourselves presenting amendments in Committee, and endeavouring to preserve the integrity of the Silk commission.

Unfortunately, the Wales Bill has torpedoed the recommendations of the Silk commission, particularly in relation to the lockstep on the income tax powers, which we will discuss later. Even more regrettably, it seems that Labour’s amendments to the Bill, rather than strengthening it as we seek to do, aim to place further roadblocks and move us even further from what the Silk commission proposed.

[Glyn Davies (Montgomeryshire) (Con)]

The hon. Gentleman is running through the parts of the Bill that he disagrees with, and it is entirely possible that people on both sides of the Committee may disagree because it is a wide-ranging Bill. Does he accept, however, that the Bill makes dramatic progress in that it provides the foundation stones for financial accountability to be vested in the National Assembly for Wales? That is a key step forward that makes the Bill hugely important for the interests of Wales.

[Jonathan Edwards]

As I said, I think the Bill will be viewed as an important milestone in the constitutional development of our country, but it will not surprise the hon. Gentleman to hear that my ambition for Wales is greater than what is set out in the Bill.

--- Later in debate ---

[Jonathan Edwards]

Of course the hon. Gentleman is right. We do support the Bill, but we want to use the opportunities provided by the Committee stage to strengthen and improve it. In my view, the lockstep is one provision that needs urgently to be removed. If the United Kingdom Government are determined to introduce it, let us devolve it in the Bill and then have a referendum on its removal. Why have a referendum on the lockstep mechanism?

The Secretary of State has spoken before of his belief that Wales needs the ability to vary income tax in order to be competitive—spoken as a true Conservative—but then does not offer a power that actually allows for any variation in income tax. That is the huge contradiction in the Bill as it stands. It is time for him and his Government to put their money where their mouth is and support our amendments—I am not holding out much hope—and for the Labour Members present to support what their party in Wales is saying by supporting us in the Lobby later.

[Glyn Davies]

This is a very important debate. The Bill is incredibly wide ranging and has lots of aspects to it, but the one issue that dominates it, as much the most important aspect, is the devolution of meaningful tax-raising powers to the National Assembly for Wales, and that involves a significant part of income tax. In doing that, the Bill will deliver financial accountability to the Welsh Government, which has been lacking since the National Assembly for Wales was established.

Let me give some context by saying something about my own background. In 1997, I was opposed to the establishment of the National Assembly for Wales, because I thought we were considering setting up a body that was not meaningful. I recall being at the count in Llandrindod Wells when the result for Carmarthenshire came through, and there were great celebrations because a yes vote had been snatched from defeat at the last minute. I recall driving home and thinking to myself that that was a key moment, and from then on I have taken the view that the National Assembly for Wales should have law-making powers and meaningful tax-raising powers. If we did not have those two powers, we were creating something that was simply not worth while. That is why this Bill is particularly important and we are dealing here with the key part.

It does not make any sense to have a Welsh Government who claim credit and say how good they are whenever they do something the people of Wales approve of but whenever something is done that the people of Wales do not approve of say, “We cannot do that because we do not have enough money from Westminster.” They transfer the blame, and they do not become a meaningful body until they are responsible for raising their own taxation. All of us know that from other things we might have done in our lives. When I was chair of Berriew community council, a very small village council, the biggest debate we had in the year was about whether we should levy 1p on the rates, just as a precept. It was much the biggest debate because it involved balancing what we wanted to spend with the demands on the ratepayers and it made us think clearly about the decisions we were taking. The same thing applied when I was the finance chairman of Montgomeryshire district council. We had an all-day debate every year about 1p on the rates, because again it was about balancing what the council wanted to spend against what we wanted to raise. That is what has always been lacking in the National Assembly.

I was a Member of the Assembly for eight years, at one stage being the finance spokesman, and I would never use the term “budget” as to my mind it was always an annual spending plan. It was not a genuine budget because it was not informing the people that it wanted money from them and that a balance was being struck between spending and demanding money from the ratepayers. So I am strongly in favour of the income tax proposal, because it is hugely important and it is why I really welcome the Bill. There are other parts of the Bill where my support is at varying levels, but the income tax proposal will be crucial.

My right hon. Friend the Secretary of State will know that I have always had some doubts about the need for a referendum. If we believe passionately that a body must have tax-raising powers to be a viable parliamentary body, we should commit ourselves in our manifestos to going forward with this proposal and then delivering it afterwards. I have come to accept that for two reasons, one of which is that there is a general expectation because of the referendum in Scotland that there will be a referendum on income tax-raising powers in Wales.

The second reason is that I want to stay as true as I can to the Silk commission report, which recommended a referendum, and all parties signed up to that. In pursuing this issue, I think I have to accept that there will be a referendum.

There has been a lot of discussion about the lockstep and the lack of freedom for the Welsh Government to vary individual rates. There will be different views on that, but I perfectly accept the rationale of the argument of the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). I must say though that it diverts us from the huge step forward that the Bill represents.