Wales Bill

Guto Bebb Excerpts

Ping Pong: House of Commons
Tuesday 24th January 2017 Commons Chamber

Transferred Ministerial functions

[The Parliamentary Under-Secretary of State for Wales (Guto Bebb)]

I beg to move, That this House agrees with Lords amendment 10.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss Lords amendments 28 to 32, 46 and 137.

[Guto Bebb]

The amendments deliver a comprehensive and lasting devolution settlement for Wales on water and sewerage. As right hon. and hon. Members know, water is of great symbolic importance as well as practical significance in Wales. Throughout the Bill’s passage, few issues have evoked more passion and debate. There is no question but that there cannot be a clear and lasting devolution settlement for Wales without resolving the issue of water devolution. The Government have therefore been determined to grasp the nettle and resolve the matter once and for all.

I was therefore delighted last autumn, when we were able to announce that we would replace the Secretary of State’s powers to intervene on water with a statutory agreement between the UK Government and the Welsh Government—in other words, a water protocol between the two Governments. Replacing the intervention powers with a formal protocol represents a clear break with the past, and is another landmark in the history of Welsh devolution.

The existing intervention powers were put in place in the Government of Wales Act 2006, when the Labour party was in government. Since then, they have taken on almost totemic status, despite having never been used. Their removal is another important change—alongside many others in the Bill—that marks the coming of age of devolved government in Wales. Amendments 30 to 32 give effect to this historic change.

Amendment 30 sets out the statutory requirements for the protocol that will be agreed between the two Governments, and we are absolutely clear that the protocol will have teeth. Both Governments will be subject to a duty to act in accordance with the new agreement, and once it is in place, both will need to agree any changes to it. The agreement will also need to include a process that both Governments sign up to for resolving any disagreements. The new arrangements will need to be negotiated, and that may take some time, but the Bill, as amended in the House of Lords, ensures that the Secretary of State’s water intervention powers can be repealed once an agreement is formally entered into.

Amendment 31 is also a crucial part of this package, as it imposes a duty on UK and Welsh Ministers to have regard to consumers on either side of the border when exercising functions relating to water resources, water supply or water quality.

The removal of these intervention powers ensured we were able to conclude our consideration of the wider devolution issues relating to water and sewerage, including the questions of whether powers over water and sewerage should be aligned with the England and Wales border and whether the sewerage intervention powers that were in clause 46 of the Bill when it left this House could be removed.

Amendment 30 removed the sewerage intervention powers from the Bill, and a great deal of work has gone into the question of whether the devolution boundary should be aligned with the geographical boundary of Wales.

[Nick Thomas-Symonds]

I welcome the giving up of the intervention power, but does the Minister remain concerned, as I do, that there will be no direct line of accountability between Ofwat and Welsh Ministers?

[Guto Bebb]

I dispute the view that there will be no direct line of accountability between Welsh Ministers and Ofwat. There will be an opportunity to consult and work through the Secretary of State. The protocol that is being put in place will also address that issue in more detail in due course. However, hon. Members should welcome the fact that we are moving in that direction on the mature basis of a protocol between the two Governments.

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

Will the Minister clarify the position on the Competition and Markets Authority? Its regulatory role is very relevant to water. Will it be accountable to the Welsh Government and the Assembly?

--- Later in debate ---

[Guto Bebb]

It is important to highlight that the Bill is not devolving competition power; it is being reserved. Therefore, the Welsh Government—and this place, obviously—will have the ability to ensure that the views of electors in Wales on this important issue are taken into account.

Of course, the Silk report recognised that water and sewerage devolution is complex and that further work was needed to consider the practical implications of implementing the commission’s recommendations. Immediately after the St David’s day agreement, the Government set up the joint Governments’ programme board with the Welsh Government to look at these issues and to report on the likely effects implementing the recommendations would have on the efficient delivery of water and sewerage services, on consumers and on the water undertakers themselves.

After considering the conclusions of that work, the Government brought forward amendment 28, which provides for new schedule 7A to the 2006 Act, which is inserted by schedule 1 to this Bill, to be amended to devolve water and sewerage policy as it relates to Wales. While, on paper, this simplifies the devolution arrangements, it will involve the unpicking of a considerable number of provisions in primary and secondary legislation to align respective ministerial powers and duties with the England and Wales border.

Amendment 29 provides an order-making power limited to making changes to previously transferred functions and to functions directly conferred by primary legislation relating to water and sewerage, so that we will be able to make the various associated changes through secondary legislation once the Bill has been enacted.

The amendments in this group provide a significant package of water devolution to Wales. They deliver a stable, mature and effective devolution settlement by aligning powers over water and sewerage with the national border and replacing the Secretary of State’s intervention powers relating to water with an intergovernmental protocol. These new arrangements are in the best interests of water consumers on both sides of the border. I urge the House to accept these Lords amendments.

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

The devolution of water and sewerage matters to the Welsh Government is welcome—and, if we are honest, somewhat overdue. The tragedy of Tryweryn will never be forgotten, but the amendments in this group should, I hope, be another step forward in ensuring that something like it will never happen again. More broadly, while some cross-border aspects of water regulation will remain, we are pleased that the Secretary of State has given up his ability to intervene on this issue. Like my hon. Friend the Member for Cardiff Central (Jo Stevens), I find myself in the somewhat strange place of thanking the Government for their movement on this issue, albeit after some prodding both here and in the other place.

However, also like my hon. Friend, I still believe that these amendments do not go far enough. While they correct some problems, there remain discrepancies. As my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) said, there is the issue of Ofwat’s accountability to the Welsh Government. When Ofwat is discharging its functions in Wales, surely it ought to be accountable in some way to the National Assembly for Wales and Welsh Ministers. As it stands, Welsh Ministers regulate water and sewerage operators in Wales, but with the Secretary of State being able to exercise his function of giving a general direction to Ofwat without any legally mandated consultation with Welsh Ministers. To be clear, we would argue that only Welsh Ministers should be able to provide directions in connection with matters relating to water and sewerage operators in Wales, or where licensed activities are carried out using the supply system of water or sewerage operators in Wales. Does that not seem a very reasonable and straightforward request? Surely it is not a step beyond imagining for the Minister that the regulator for a sector should be mandated to consult and speak to the politicians dealing with the implementation of that sector.

As my hon. Friend the Member for Wrexham (Ian C. Lucas) may well detail, it is not sufficient to believe that regulation from London will always work in the interests of communities in Wales. I will let him expand on that point and the ramifications of these amendments for the campaign he is fighting in his community. I pay tribute to him for his work in raising the issue, and assure the House that we support him on it.

Echoing my hon. Friend the Member for Cardiff Central, despite the gaps in these amendments and the problems we have with them, we will not vote against them. However, I would like the Minister to provide a substantive response to the points I have raised, to give us an assurance that the issue of Ofwat and the Welsh Government could be looked at, perhaps through some mechanism outside the Bill, and to keep the House informed of his progress on that.

--- Later in debate ---

[Liz Saville Roberts]

I rise to speak to the second group of amendments, led by amendment 10. My noble Friend Lord Wigley originally welcomed the Government’s announcement that they would devolve power over water, and in Committee he eloquently outlined how an historic wrong could be righted. He set out in great depth how the drowning of Welsh valleys has motivated his politics and the emotions of so many people in Wales, and how 50 years ago in Capel Celyn the compulsory eviction of families from their homes and land meant the destruction of whole communities. Llyn Celyn and Afon Tryweryn are in my constituency.

The high-handed way in which Westminster treated the people of Tryweryn still has repercussions in this place, as well as in communities across Wales. Amendment 30, in which the so-called water protocol is outlined, embodies the entrenched Tory resistance to addressing this injustice in any meaningful terms. What format the so-called protocol may take has never been fleshed out. In this Bill, we do not have a protocol or a draft protocol, and for that matter we do not have an outline of a draft protocol or a protocol by which to arrive at a protocol. However, despite that lack of clarity, the Government are willing to include clauses watering down this already thin provision.

Lords amendment 31 explicitly charges Welsh Ministers with the interest of English consumers when it comes to any changes to our water supply. It is important to note that the amendment specifically references English consumers. We are not concerned with communities or individuals even, but consumers matter and Wales’s natural resources are still not ours to dispose of to our best advantage. That is because the Government are prioritising the primacy of competition over the interests of Wales. The amendment refers us to the Water Industry Act 1991 to define consumers, but that Act was based on promoting competition. Does this mean that the protocol will be based on the Thatcherite dogma that the wellbeing of the consumer—in this case, the water consumer—is tied up with the tenets of free market competition?

[Guto Bebb]

rose—

[Liz Saville Roberts]

I thank the Minister for explaining this earlier, but perhaps he will explain it further.

[Guto Bebb]

The contents of the protocol and whether it includes a Thatcherite dogma are surely a matter for the Welsh Government to agree with Westminster, so there will be no Thatcherite dogma unless the Welsh Government agree to it.

[Liz Saville Roberts]

The Minister explained earlier that competition is a reserved matter. In this case, that prompts the question, what does such a dogma have to do with the reserved powers model for Wales, in relation to this most emotive of all subjects? My party and many people in Wales feel cheated. When the Minister played the card of water devolution, we were led to believe that this would be a real game changer, but I am afraid it is no more than smoke and mirrors.

We considered pushing Lords amendment 30 to a vote, but we will spare the Chamber such an exercise, given that we might only manage to tweak the wording of something we have already opposed. I want the record to reflect, however, that my hon. Friends and I will not be taken in by empty words dressed up as substance from the Government. This remains a cynical political sleight of hand—endeavouring to gain capital from an historical event of deep emotional significance in Wales.