Huw Irranca-Davies
Main Page: Huw Irranca-Davies (Labour - Ogmore)Department Debates - View all Huw Irranca-Davies's debates with the Wales Office
Commission on Devolution in Wales
Huw Irranca-Davies Excerpts(13 years, 1 month ago)
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Mrs Gillan
The hon. Gentleman, who was serving in the Wales Office at the time, arranged the timetabling so that the LCO would fall in that period; he could have delivered it much earlier.
Thirdly, we promised that following the referendum we would establish a process for Wales, in the vein of the Calman commission, and I am pleased to inform the House that we have delivered on that.
Huw Irranca-Davies (Ogmore) (Lab)
Before the right hon. Lady takes credit for every achievement, may I ask her to acknowledge that although the Government put the legislative framework in place, the referendum was delivered by the people of Wales, who voted for it? I am sure she will want to acknowledge that.
Mrs Gillan
The hon. Gentleman is dancing on the head of a pin. This Government gave the people of Wales the opportunity to vote in the referendum, as indeed they did, and I was pleased by the outcome. It was only as a result of a great deal of work and application by the Wales Office and others in government that we were able to deliver that on time and to the schedule anticipated.
I am pleased that today, before the first meeting of the Silk commission, we have given all Members an opportunity to register their views by allowing a full-day debate. It is fair to say that Westminster politicians rarely get the time to stand back and thoughtfully consider the future shape of our country’s constitution. We react to events, perhaps to political and tribal allegiances and timetables and, as John Major said in his Ditchley Foundation annual lecture, the Union cannot be maintained by constant antagonism—for example, between Wales and London.
Like our former Prime Minister, I opposed devolution because, as a Unionist, I believed it could be the slippery slope to separation. I am now less fearful of separation and more hopeful—
Mrs Gillan
The hon. Gentleman suggests that not all Members are less fearful. That is fair and, in the spirit of the debate, I want to hear from Members who do not share the views that he and I hold. My fears about separatism, which have diminished, might be reflected in some Members’ contributions. I am more hopeful that there will be a mature debate and reasoned solutions, delivering a degree of self-determination without threatening the strength of the Union. With the advent of the commission, we are getting time to contribute and reflect.
Huw Irranca-Davies
I thank the right hon. Lady for giving way again; she is generous. I wish to ask about her position as Secretary of State on a point of principle underlying the Silk commission’s consideration of such fiscal powers. Does she agree that it would be wrong of any review to make recommendations that were to the financial disadvantage of the people of Wales, recognising, good Unionist that she is, that the nature of the Union depends on ensuring that economically disadvantaged areas receive greater subsidy from other parts of the UK? On that point of principle, does she concur that today we should all agree that any review of fiscal union does not disbenefit the status quo in Wales, and should if anything improve its lot?
Mrs Gillan
The hon. Gentleman makes a valid and good point, but once again I do not want to prejudge or tie the hands of the Silk commission, although I cannot imagine a situation in which an agreed solution, as I have anticipated and laid out in the terms of reference, would disadvantage Wales. That is far from my motivation, as he will see as I progress with my speech.
The commission already has contributions to its evidence base from work such as the Holtham commission’s reports, which were prepared to a Welsh Assembly Government remit, but crucially, unlike Holtham, the Silk commission can take things a step further. The terms of reference require the commission to consider implementation and to make recommendations on how best to resolve the legal and practical implementation issues that arise from devolving a package of fiscal powers and having consistency within the United Kingdom.
The commission will aim to report on part 1 of its remit in the autumn of next year, and the Government will consider its recommendations very carefully. Members may wish to contribute directly to the commission as well as in today’s debate, but I very much hope that we will be able to hold a debate, again on the Floor of the House, at some stage following the delivery of part 1 of the commission’s findings, because the intention is to take the matter forward as consensually as possible.
The commission will then turn its attention to the second part of its remit—to look at the current constitutional arrangements in Wales. Specifically, it will consider the powers of the Assembly and the boundary between what is devolved and non-devolved, and make recommendations to modify the boundary, if they are likely to enable the Welsh devolution settlement to work better. Again, the commission will need to consult broadly on its proposals and make only those recommendations for change that are likely to have wide support.
Currently, the Assembly has powers in all 20 devolved areas, and it will be for the commission to decide whether there is a requirement to tidy up the devolution boundary, but any further changes to the settlement will need to be right for Wales and right for the United Kingdom as a whole. I anticipate the commission reporting on part II of its remit in 2013.
With the exception perhaps of the right hon. Member for Neath, there is broad agreement on the basis for moving forward and considering issues of both fiscal devolution and accountability. The Government have moved forward collaboratively with all four political parties in the Assembly, in establishing the terms of reference and the members of the commission, and I thank in particular all four party leaders in Cardiff Bay for the positive and co-operative spirit in which they are engaged with me and my office to agree the way forward.
Mrs Gillan
I am about to come to the composition of the commission, and I will pick up the hon. Gentleman’s point then.
Huw Irranca-Davies
On a point of detail about the possible extension of powers that the Silk commission is considering, will that include energy consents? The matter has been debated a lot recently, as the Secretary of State knows, and it has some support, and opposition, on both sides of the House. Ministers have made it clear that they do not think that it should be part of the commission’s deliberations. Will she clarify the situation?
Mrs Gillan
I am grateful to the hon. Gentleman for raising that matter, particularly as before the debate I was looking at the party manifestos for the Assembly elections. He will know that I regularly receive requests for powers over all sorts of areas, and I expect those areas to be looked at. It is fair to say that I expect the commission—this is subject to the way in which it wishes to conduct its business—to consider requests for energy consents for projects of more than 50 MW, and to consider trust ports, rail and separate Welsh legal jurisdiction, all of which have been raised up the agenda by one or other party, or the Welsh Government. It is right that it should have the opportunity to consider energy consents, but I have an extremely long list of things that other parties want fully devolved, which will not stop until the point of separatism is reached. He and I agree that that is not the way to go. The commission may find itself having to consider several other areas, but I am not going to restrict its operation by anything we say in the House. Indeed, I am looking forward to seeing the outcome.
Mr Hain
If I am allowed to finish my response to the hon. Member for Epping Forest (Mrs Laing).
My other point is that such constitutional matters, particularly parliamentary boundaries, have traditionally always been dealt with on a consensual basis. This is the first time that a politically partisan rigging of the parliamentary boundaries has been introduced in this House and forced through.
Huw Irranca-Davies
This is very pertinent in learning the lessons in terms of how the Silk commission operates. We cannot have a debate when none of the voices are heard. The Secretary of State has said that she wants these voices to figure as part of the work of the commission, but that did not happen in the boundaries review. None of the Welsh concerns was heard and none was acted on; it was a travesty of democracy.
Mr Hain
If the right hon. Gentleman looks at the whole Holtham commission report, he will notice that spending was converging with the English average and coming towards the point that it reached last year, when it started seriously to disadvantage Wales. That was the point I was making.
Huw Irranca-Davies
To the best of my knowledge, the Holtham report did not mention the fact that in successive years of the Labour Administration, it was vital that we recognised Wales’s particular needs through the Barnett-plus funding settlements, which increased funding for Wales from some £7 billion to something in excess of £14 billion—way above Barnett. That reflects how the Labour Government ensured that Wales had the proper funds to do the work we needed to do.
Mr Hain
I know that the hon. Gentleman has a reactionary view on the climate change agenda—perhaps that is reflected in his question—but the briefing that we had from the European chief of Tata Steel was clear. He said that it was overwhelmingly the lack of Government support and investment in the economy—and the demand for steel that comes from that—that was hitting his industry so badly, along with energy prices, thereby risking future investment. Incidentally, the hon. Gentleman’s question also gives me the opportunity to remind him that although he celebrated the county of Monmouthshire’s no vote, the fact is that 49.36% voted yes, while 50.64% voted no. That does not seem to be a massive rejection of devolution in Monmouth.
Huw Irranca-Davies
Will my right hon. Friend confirm from the discussions with Tata Steel and others that they are not opposed to environmental taxes per se? They are opposed to the Government’s inept handling of taxes such as the CRC, or carbon reduction commitment, and the carbon floor price, which are rightly perceived not as stealth taxes—there is nothing stealthy about them—but as a deliberate blow to our energy-intensive users. What they are saying to the Government is: “When you’re dealing with taxation issues”—as the Silk commission is—“you should do it with industry, not tell industry what’s happened to it after the event.”
Mr Hain
My hon. Friend, who has expertise in this matter from his previous shadow ministerial job, makes a valid point. Indeed, Tata Steel also talked to us about the carbon price element that is threatening the future of its industry in areas such as Llanwern and Port Talbot.
Mr Hain
Absolutely. I have had many discussions with businesses in Wales that have been severely damaged—some have even been threatened with extinction and bankruptcy—as a result of public spending cuts, because they depend for their activities, whether they be providing services, procurement or whatever, on the public purse.
By all means consider the Silk commission agenda, but unless the Government change course, things will get worse and worse for Wales. It is the most vicious of circles: fewer working means fewer people paying taxes, which means less money to pay off the deficit. As Wales gets poorer, how can it be expected to raise its own money through taxes, as the Secretary of State would like, if the revenue coming in is being cut? There are serious questions for the Silk commission to consider, because the Government’s cuts are choking off growth, and tax revenue in Wales is diminishing substantially. I do not want the Welsh budget to be cut because of what might be deemed to be the gap in the revenue going to the Treasury arising from devolving taxes—which might happen as a result of the Silk commission—only to find that those taxes do not make up that gap.
Huw Irranca-Davies
My right hon. Friend is generous in giving way again. May I urge him to advocate from the Dispatch Box a tax change that we can introduce right now, namely a national insurance tax holiday for small businesses? That would encourage far more people to take on more employees, including women, who are significantly disadvantaged at the moment. We do not have to wait for the Silk commission; the Government should adopt our five-point plan right now.
Mr Hain
I completely agree, and I have been urging that on the Secretary of State in this debate. Cutting VAT to 5% for businesses involved in home maintenance and repairs could revitalise a building industry that is on its back in Wales. That should be the priority for the Secretary of State.
Families across Wales are struggling with rocketing food prices and electricity, oil and gas bills, and are worried about their jobs and their children’s futures. Far from our economy being a safe haven, our recovery was choked off last autumn, well before the eurozone crisis. Our economy has stagnated for over a year now. However, there is a better way. We need a plan for jobs and growth to get the Welsh economy moving again and help get the deficit down in a steadier and more balanced way. That is what the Secretary of State should be focusing on for Wales, not simply the Silk commission’s tax and powers agenda.
David T. C. Davies
The answer to the hon. Gentleman’s first question is that despite the enormous amount of money spent on the referendum in 1999, only one in four people went out and voted yes, so the demand could not have been that great. As for his second question about the issues that are bubbling away in the various regions of England, I do not profess to know the answer, and I certainly will not be trying to pose that question. As I said to the right hon. Member for Neath (Mr Hain), the English will have to work out for themselves whether they wish to base a future settlement on England itself or on regions thereof. It is not for us to tell them what to do.
Huw Irranca-Davies
It would be wrong for English MPs alone to discuss, and decide on, such matters. As a UK parliamentarian, I agree that English devolution is the great unanswered question. However, Welsh MPs—along with Scottish and Northern Ireland MPs—will want to have a say in that because it will have a considerable impact on the UK as a whole. I ask the hon. Gentleman to consider this point in his peroration, because we would not want non-England MPs to be shut out from the debate on English devolution. Nor would I want England MPs to be shut out from our debate here today, and it is great that some England MPs are present.
David T. C. Davies
That is a sensible point, but my peroration has become more of a conversation now, and I wish to return to it. I shall think about what the hon. Gentleman has said, however, and I suspect that all of us will want to contribute in various and different ways if and when the England question arises.
The Silk commission is addressing fiscal powers. The leader of Plaid Cymru—I think he is still the leader—said that that could have an historic effect on Wales, by which I assume he means that it will lead to all sorts of extra powers being acquired and Wales heading much further along the road that he wishes to travel down. I am very concerned about the prospect of giving fiscal powers to Wales, however. It is hard to see how we could maintain the integration of the various parts of the United Kingdom if we were all doing different things fiscally. The Silk commission has apparently ruled out borrowing, but I have been told by those in a position to know that it has ruled out only some kinds of borrowing, and anything can be examined. There are certainly ongoing discussions about different kinds of borrowing.
Roger Williams
I thank my hon. Friend for his intervention, which brings me to a point I had intended to make later. The present coalition agreement sets out the programme for the first half of this Parliament. Work now needs to be set in hand to take forward the coalition for the second half, which will obviously include proposals for Wales. When Wales said yes to having a Welsh Assembly in 1997, the devolution package was missing one critical element. The Welsh Government have the luxury of spending money handed out by others, but unlike those in Scotland and Northern Ireland they have no power to borrow or raise money; as has been suggested, they have fewer powers than local authorities. I believe that the lack of accountability has led to some irresponsibility in the Welsh Government’s spending of money. Indeed, when the Chief Secretary to the Treasury visited Wales in April he said that the commission
“will aim to develop the financial autonomy of the Welsh Government to give Wales more opportunity to create the right environment for encouraging growth”
and jobs. I thank him for his support. As a Scottish MP, he brought knowledge of the Calman commission to the proposals, whose usefulness should not be underestimated. Welsh Liberal Democrats will engage fully and constructively in this process. We will urge the commission to bring more accountability and responsibility to the Welsh Government and to give Wales further power to drive forward economic development, creating jobs and prosperity in Wales.
Huw Irranca-Davies
I thank the hon. Gentleman for giving way in the midst already of several very good contributions, but will he clarify what he understands by “financial accountability”? We all understand it in broad terms, but will it be financial accountability with some additional tax-raising or tax-varying powers, or accountability from within a deficit that has been lopped off the block grant? Robbing Peter to pay Paul and then asking the Welsh Government to be accountable for money that the UK Government have taken away from them, and for which the Welsh Government are then able to raise taxes, does not seem like real accountability. I want to protect what is already in Wales, and if there is accountability let it be for additionality, not for something that has been taken away from Wales.
Roger Williams
I recognise the hon. Gentleman’s first point, but not his second. We would all like to see local authorities raising more of their spending power locally so that they become more accountable, and I believe that the situation would be the same for the Welsh Assembly Government, although I do not see any reduction in the spending proposed for them. I may come on to that later, however.
I thank also the Deputy Prime Minister for his work in broadening the commission’s terms of reference and composition. There were people who wanted a much smaller commission, of perhaps only three people and without political appointees, but I am glad that the consensus was for a much larger and broader one. The political appointees are a huge boost to the commission, and they bring vital political experience to its work.
I commend the choice of Paul Silk to chair the body. Paul has worked in this House, where he had a fine reputation, and in the Welsh Assembly, so he is perfectly placed to understand the workings of both. I cannot think of an individual who is better informed to carry out this important task, and I wish him well. I and my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) went to the same school at the same time as Paul, so I can vouch for his high academic attainment.
Dyfrig John brings to the table 35 years of experience in financial services, and his financial know-how will be invaluable to the commission. He and I were members of the Development Board for Rural Wales, along with the hon. Member for Montgomeryshire (Glyn Davies), who was chairman at the time, and Dyfrig was instrumental in maintaining a banking presence in Llandrindod Wells, which on its own would be enough to recommend him for the job.
Professor Noel Lloyd is a distinguished academic from Aberystwyth university, and before he became its highly regarded vice-chancellor he was a practising mathematician, so his ability to do sums means that Wales will not fall into the same trap as Ireland, which underestimated its reserves by €3 billion, or Germany, which did so by €50 billion.
Rob Humphreys, the Liberal Democrat representative, has long been a champion of devolution. He was heavily involved in Swansea’s yes campaign in 1997; he served on the all Wales convention; and he was the Liberal Democrat representative on the yes campaign steering group in 2011. Rob’s leadership of the Open university gives him a knowledge and understanding of young people and adults, and he will bring real expertise to the commission.
I also pay tribute to Nick Bourne, who served the people of mid-Wales very well during his time as an Assembly Member. His commitment to Wales, all things Welsh and, particularly, the Welsh assembly made him an example to all political leaders in Wales—and I look forward to his memoirs.
It is also great to have the ministerial experience of Sue Essex. She became the Minister for Finance, Local Government and Public Services following the 2003 election, so she has first-hand experience of the financial arrangements between Cardiff and Westminster.
Last, but certainly not least, there is Dr ap Gwilym, whose performance against Paxman showed his commitment to, knowledge of and passion for devolution. It is a dedicated and highly talented team with a range of expertise.
It was almost inevitable that we would talk about the Barnett formula, because it is an essential part of delivering a prosperous Wales. I am disappointed that it is not included in the Silk commission’s remit, but I understand that the Welsh Assembly’s Labour First Minister was not keen that it should be included.
I understand that bilateral discussions are taking place between London and Cardiff, and they will include not only the Secretary of State, but the Treasury.
Guto Bebb
I fully accept that. Indeed, I was recently at a CBI event in Flintshire at which exactly the same points were made, albeit not specifically in relation to the Silk commission, about how devolution has to work for Wales, while also recognising that small and large businesses—especially in parts of north Wales such as my constituency, where one can reach the English border in 45 minutes or less—must be treated equally to those across the United Kingdom. The commission that is being established will look into those issues. I would encourage businesses in my constituency and across Wales to engage fully, as I did to the CBI audience in Flintshire recently.
Huw Irranca-Davies
Does the hon. Gentleman agree that even though the commission’s terms of reference do not include the West Lothian question and the Barnett formula, it would be hard for the commission entirely to ignore them? It must proceed with some cognisance of the additional work being done across Government, because otherwise its conclusions may be aborted before they have even been published.
Guto Bebb
I thank the hon. Gentleman for what was again a thoughtful comment. It is recognised that there is a debate to be had on the Barnett formula between the Government in Cardiff and the Government in London. Where the Welsh Assembly wants to speak up on behalf of the people of Wales about the implementation of Holtham, that is the proper way to proceed. I welcome the fact that the coalition Government have announced movement on the West Lothian question. It has received a lot of attention in this debate, but when there was a Back-Bench motion on the West Lothian question, my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) and I were the only two Welsh Members present. However, it is important to take the issue into consideration, because ultimately—I think it was the hon. Member for Alyn and Deeside (Mark Tami) who also said this—it is important that, for example, Members from north Wales should have a voice on health issues in England. As someone who is dependent on health services provided in Liverpool and other parts of England, I sympathise with that view. Another argument, however, asks why we should have a voice on the health service in England if we do not allow any English Member to have a voice on the health service in Wales.
Guto Bebb
I thank the hon. Gentleman for that contribution. I do not doubt that his comment is accurate.
Another reason for welcoming the announcement is that it creates a cross-party and non-party commission, which is something very fresh and new in the Welsh context. As I have said, however, it will not work unless the people of Wales take an interest in the issue. I would therefore stress that we, as Members, need to go out and persuade our own electorate to take an interest in the commission and its work.
A second reason why we need to welcome the commission is the fact that although there have been numerous commissions and inquiries into the powers of the Welsh Assembly Government and how it should work, the Silk commission is different because it has been created by the Westminster Government. The Holtham commission produced a superb piece of work. I have read the documentation, and the arguments in the research are persuasive, showing that Wales has for several years suffered a degree of unfairness in the funding provided by central Government. The degree of unfairness was not as great as was claimed by Plaid Cymru Members, but the main point—that the Barnett formula was unfair—was, I think, proven by the report.
The Silk commission is different and more advantageous. Because it is a commission established by the coalition Government in Westminster, the ability to act on its findings is stronger. We are still waiting for the Holtham recommendations to be implemented, but our ability to act on the findings of the Silk commission is clear, which is another reason why we should welcome its establishment.
Huw Irranca-Davies
I thank the hon. Gentleman for being so generous in giving way. Having praised the Holtham report, as I do, does he agree that in respect of the Silk commission, one thing that we do not need to wait for is putting a funding floor in place to protect the interests of Wales as we go forward? As the Secretary of State said, we could be expecting to receive the Silk commission report just before the next election, perhaps just after it or even a bit longer after it. If we got on with the Holtham recommendations and put the funding floor in place, we would at least be doing our job for our constituents right now.
Guto Bebb
I thank the hon. Gentleman for that intervention. Given that an intergovernmental approach has been applauded by the First Minister, it is imperative for him to get down to the Treasury as soon as possible to discuss the issue. We are often told that there is a respect agenda between Westminster and Cardiff. It is not therefore for us to say to the First Minister that he must act now, but I would certainly recommend that the discussions should start—and the sooner they start, the better.
Guto Bebb
I am slightly surprised by that intervention, because I thought it was self-explanatory. The sooner the discussions between the Government in Cardiff and the Treasury are concluded, the better. [Interruption.] My understanding is that this is a matter for the Welsh Government and the Treasury. I am sure that the pressure is being brought to bear by my Front-Bench colleagues.
Huw Irranca-Davies
I am genuinely trying to be helpful. I think the hon. Gentleman is saying that he would support the principle of the Holtham commission— that there should be a funding floor at this time. I understand what he says about the respect agenda. As a strong pro-devolutionist myself, I say that the respect cuts both ways. If parliamentarians like the hon. Gentleman and my hon. Friends were to express our clear opinion today, it would help our Welsh Assembly Government colleagues and the First Minister to come to a rapid conclusion, while also assisting the hon. Gentleman’s Front-Bench colleagues.
Guto Bebb
I thank the hon. Gentleman for his intervention. For clarity, let me say that I am previously on record as stating that the Holtham report was persuasive, and the sooner the recommendations were implemented the better—recognising, of course, the financial constraints faced by the Westminster Government. I hope that fully clarifies the matter.
Before I turn to the detail, let me say that when we talk about the process of devolution in the Welsh context, there is often a misunderstanding about exactly what the people of Wales are saying. Many Members will claim that the result of the referendum in March was a clear indication of the will of the people of Wales. Like many of my colleagues, I was surprised by the extent of the support for change, but it must be said that that change happened on the basis of a comparatively low turnout. I am not one to argue that those who do not turn out have an equal voice: democracy means that people must take part in order to ensure that their voices are heard. However, I think it should concern all of us who want to ensure that we have an Assembly that works for the benefit of the people of Wales that only 35% or 36% of the Welsh population turned out to vote in that referendum.
There is currently a disengagement with the political process in Wales, which, unfortunately, is more pronounced in relation to elections to the Welsh Assembly than it is in relation to Westminster elections. For example, I was elected to the Aberconwy constituency on a turnout of 70%, one of the highest turnouts in any Welsh constituency for a Westminster election. The turnout for the Assembly election was about 40%. Those who argue that the voice of the people of Wales was heard clearly back in March are actually arguing that a turnout of 35% and a yes vote of 60% constitute a clear democratic mandate. They do not. A great deal of work remains to be done to persuade the people of Wales that the Assembly is working on their behalf, and I think that the commission will have an opportunity to engage with them.
Other myths are being peddled by those who do not support the Assembly. There are plenty of them in Wales, and they tend to hear what they want to hear. They say that when they mention the Assembly, people complain that it is not delivering on health. I think that that is true, and it is a complaint that we hear on the doorstep. They say that people also complain that educational standards in Wales are extremely poor in comparison with those in England and many other parts of the European Union. I think that that is true as well, and again we hear about it on the doorstep. However, I believe that the enemies of the Welsh Assembly often misunderstand complaints about its performance. They consider those complaints to be an indication that people are fed up with the Assembly and do not want it, but I do not agree.
I think that the people who complain are not dissimilar to a mother who criticises a badly behaved son or daughter. The mother will be more than happy to complain about the behaviour of that son or daughter, because after all she has a right to do so, but when she hears someone else complain about it, she immediately goes on the defensive. I think that the same applies to the attitudes of people in Wales towards the Assembly. Yes they criticise, yes they complain, but ultimately there is a feeling—which I think those who are unhappy about the Assembly must take on board—that it is “our” Assembly. Perfect? No, it is not. Could do better? Undoubtedly. But there is, I believe, an acceptance that it is the Welsh Assembly, and I think that those who are unhappy about the way in which it is developing should engage in the process that we are discussing to ensure that we have a better performing Assembly to serve the people of Wales.
The first part of the Silk commission’s work will relate to fiscal responsibility—an issue that I believe we should consider seriously. Yes, the Assembly has a responsibility to answer to the people of Wales, and yes, its members are elected by the people of Wales, but ultimately we need a degree of accountability for fiscal decisions. Time and again during the 18 months for which I have been a Member of Parliament, we have heard members of Opposition parties criticise the cuts being made at Westminster, and we have heard Assembly Members criticise them as well. It is easy for them to make such criticisms: there is no need for them even to think about the deficit, because it is not the Assembly’s responsibility. The cuts being made in Wales—which are much lower than expected, and lower than cuts in many other parts of the United Kingdom—are being made in a context, and the problem with the current set-up in the Welsh Assembly is that that context is missing from its debates. That is why I think we should think about fiscal responsibility.
Welfare reform provides a useful analogy. The changes proposed in the Welfare Reform Bill, which has completed its passage through the House of Commons and is currently in the other place, are built on the concept of giving people who receive state benefits a degree of accountability and responsibility. There is a difficult argument to be had. I have been talking to housing associations in my constituency about the importance of ensuring that housing benefit is paid directly to claimants, to enable them to have the same respect and dignity as any other member of society in terms of paying rent and taking responsibility for their financial position. The same responsibility should apply to Governments. After all, the smallest community council in my constituency will raise local taxation, and I see no reason why the Welsh Assembly should not have the same degree of responsibility and accountability.
Having said that, it is important to point out that there are difficulties. The right hon. Member for Delyn (Mr Hanson) is no longer present, but he made an important point about people commuting across the border to work in jobs in north Wales. One of the jewels of the Wales economy is the Airbus factory in Broughton, which is committed to apprenticeships and training, and giving young people from north-east Wales genuine employment opportunities. We should be proud of that, and we should also be proud of the support Broughton has received from the Welsh Assembly, but we cannot deny the fact that many of the workers at Broughton travel in from England—or that many of the workers at the Ellesmere Port factories producing Vauxhall cars travel in from north-east Wales.
Hywel Williams
There have been persistent complaints from members of the legal profession in Wales and others, including academic lawyers, who have looked at the changes to the body of law in Wales and found that it is difficult to keep track. There are people who are doing a heroic job of trying to keep track of the implications and I only wish that they were better resourced. Unsurprisingly, my opinion is that there should be a devolution of jurisdiction to Wales, which would make things rather clearer, but I shall say something about that later.
Huw Irranca-Davies
Does the hon. Gentleman agree that the Silk commission, whatever its outcome, will not get rid of complexity entirely? Indeed, some complexity is a necessary—if not evil—part of the devolution process. The level of maturity of this stage of devolution means that there is often administrative negotiation, including over aspects that the Welsh Assembly Government want to pass back or to be retained here because it makes more sense to do them on a UK-wide basis. For example, some aspects of marine matters have been devolved, but the Assembly has later returned to say, “Actually, we’d like that little bit to be done on a UK-wide basis, because that is where the resources lie.”
Hywel Williams
I thank the hon. Gentleman for that intervention. As I said, sometimes complexity is good and necessary. I do not want to appear too Panglossian about this, but it seems to me that we have a system that works fairly well. However, as we say in Welsh, nid da ble gellir gwell—it is not good if it can get better. Certainly that is our ambition.
The principle of the system for Wales inevitably still leads to a lack of clarity and some confusion for the public. I am glad to see that the commission will be looking at systems of devolution in other parts of the world. The hon. Member for Brecon and Radnorshire (Roger Williams) referred to the Scottish model as one under which everything is devolved other than that which is not, as compared with the situation in Wales, where nothing is devolved other than that which is. There is a great deal to commend that particular system.
I also encourage the commission to look beyond the boundaries of the UK. In an intervention on the former Secretary of State, the right hon. Member for Torfaen (Paul Murphy), I pointed out that the system in the Basque country, in terms of money, is slightly different to that in the rest of Spain, which generally operates on a block grant principle, whereas the Basques have historically, over many centuries, raised their own taxes and then sent a certain amount of money down to Madrid. That is easier for them given that the gross domestic product in the Basque country is currently 140% of the average across the country, so they are in the rather lucky position of having the money to do that. It is interesting that the Basque country has a steel industry and a history of heavy industry, but seems to have managed to go beyond that with the Mondragon co-operatives and various other methods that it has adopted. The area is similar to Wales in population and culture, with a smallish linguistic minority, but there we are—it seems to be succeeding where Wales is not.
I would say this, but I think that the will of the people of Wales was made clear in the referendum. I take the point made by the hon. Member for Aberconwy about the turnout, but unless we have compulsory voting there will be variations in turnout and I do not think that the lowish turnout for the Assembly elections indicates disenchantment with that body—rather, it is growing in popularity and interest. He made a good point about defending the institution. It may be a body that we are not always particularly keen on, but at least it is ours, and people must defend it. I hope that the commission’s timetable allows for legislative change before the next election, but I am grateful to the Secretary of State for setting out the options, which will repay close study.
I am conscious of the fact that time is passing and that other hon. Members wish to speak, but I will make a couple of further points. There is plenty that could be done, and I recommend that the commission look at two excellent private Member’s Bills, which happen to be mine: the Bilingual Juries (Wales) Bill, which I introduced in 2007 and which failed abjectly to proceed; and the Jobcentre Plus (Wales) Bill that I introduced earlier this year and which the hon. Gentleman opposed very successfully indeed, along with many of his friends across the border.
Those are two practical changes that could profitably be looked at by the commission, and I am sure that there are more. In my party at least, we have an appetite for change. We have done the work, and we have the imagination to think about what sort of changes might be introduced, so I commend both those measures.
If hon. Members want an example of why the devolution of certain measures is necessary, I refer them to the recent shenanigans of S4C and my early-day motion 2316. The scrutiny of the Public Bodies Bill by the majority of Members from Wales was entirely deficient as far as S4C was concerned. There were five Members from Wales on the Committee that considered the Bill. Two were unable to speak because of the role that they played, but the other three Members worked very hard indeed, and I pay tribute to the hon. Members for Clwyd South (Susan Elan Jones) and for Ceredigion (Mr Williams). We were able to debate the issue at length, and I was glad that we could do so. Subsequently, I secured a Westminster Hall debate on the subject, which was well attended.
When the Public Bodies Bill was on Report, however, we did not, for reasons that I will not go into—I shall not begin to point fingers—reach the amendment on S4C, so the majority of Members from Wales did not have an opportunity to express their opinion. That is one reason why the commission should look at an area that is difficult and complicated to devolve.
Huw Irranca-Davies (Ogmore) (Lab)
I had intended to speak for about an hour, but I probably intervened for about an hour instead, all told, and I apologise to my colleagues for that. I shall therefore make my speech as short as possible.
The hon. Member for Epping Forest (Mrs Laing) opened her speech by saying that she was she was a proud Unionist. I would describe myself as a proud Unionist as well, but also as a proud devolutionist. I am a Unionist not on the basis of any ideology or fixed arbitrary principle, but in recognition that—as in the old trade union cry, “Unity is strength”—the constituent parts of the United Kingdom together add not only to social cohesion but to economic activity, and to our political clout on the world stage. That should be recognised in today’s debate.
The theme that I want to adopt in my brief speech, and to convey to members of the Silk commission if they hear today’s debate, is that we should not be talking about loosening ties. Instead, we should engage in a mature debate, recognising that there is a positive, welcome tension between our Government and the Governments in Scotland, Wales and Northern Ireland—although I must add, perhaps to the disappointment of my colleagues in the Plaid Cymru camp, that that is not necessarily a recipe for independence. I think that we carry much more clout if we work together. If devolution constituted a settlement, I think that on the basis of today’s debate we can all agree that it is still settling. If it is a process, I think what we have learnt from the debate is that we need to know where it is processing to.
Let me begin by paying tribute, as others have done, to the calibre and quality of the members of the commission—not least the political appointees, but in particular Paul Silk. He will be known to my right hon. Friend the Member for Torfaen (Paul Murphy) and other Members not just because of his extensive experience, but because he was a House of Commons Clerk for nearly 25 years during three different periods. He is also a former Clerk of the Welsh Grand Committee. He has lectured and written extensively on Parliament and the constitution; he co-authored the seminal book, “How Parliament Works”. I think we can all agree, therefore, that no one better appreciates the very sensitive balance of our constitutional settlement.
Professor Nick Bourne was a colleague of mine—not political, but academic—at Swansea Institute in my lecturing days. He was also shadow Minister for Finance and Public Service Delivery, in addition to his role as Leader of the Opposition. I am sure he will also make a good contribution to the Silk commission.
Sue Essex is very well known, and there is a huge amount of cross-party support for her on a number of issues. She is a former Minister for Finance, Local Government and Public Services. She is clearly of high calibre, therefore. Dr Eurfyl ap Gwilym is an economics expert and a long-standing adviser to Plaid Cymru. He has for many years advocated revisiting the Barnett formula. Rob Humphreys has been a strong advocate of devolution for many years, and was also a member of the all Wales convention. The Silk commission is in good hands with them and its other members.
My right hon. Friend the Member for Torfaen gave a warning about a possible Trojan horse. I welcome the fact that we are debating this subject today and that the Silk commission will undertake the work assigned to it, but I suggest to my right hon. Friend that the danger is not so much of a Trojan horse, but of a horse and trap, in that this could lead us into a trap.
The Secretary of State must understand that concern; these are not idle worries. Although there is significant merit in addressing the two matters that the Silk commission will examine—power and fiscal responsibilities—there is a worry that Wales will be done down. To her credit, the Secretary of State has made it clear today that she does not want that to happen, but there is a great deal of concern among Opposition Members that we might end up in that situation, particularly given the coalition’s approach to constitutional affairs since it was formed. The concern is that this process will not be about looking after the best interests of the people of Wales, or even the best interests of the institutions of Wales—that is, in fact, a decidedly secondary consideration—but that instead it will be a way to look as if we are giving with one hand, while in reality taking away with the other. That is a concern, and we must monitor what happens.
Although I welcome today’s debate, it must not be the only one on this topic. We must find opportunities to address it in the Welsh Grand Committee or a different forum, because we need to discuss the burning issues of the day facing Wales, such as the state of the economy and of society and, as I see in my constituency, the attacks on our communities.
My family has not consistently been on the same side in the devolution debate. My late uncle, the Member for Gower for many years, was a strong defender of the status quo back in 1979, along with many other notable people at that time. Times move on, however, and it is right for us to address this issue again as things progress, and we must also acknowledge that it involves not only the Wales question but the England question too. That also needs to be addressed. I should add that I welcome the involvement of England MPs in today’s debate, and that engagement must continue and deepen.
The England question becomes more important the more Scotland considers its powers in respect of fiscal autonomy and other areas, and the more Wales considers such matters too. If we do not address the England question, there will not only be political asymmetry in the old Celtic and Pictish nations; there will also be asymmetry here in England.
Through the years, numerous suggestions have been made as to how to address the England question, and many of them have been rejected out of hand. The idea of having an England-only Parliament has been proposed, as has the idea of restricting the ability of Welsh, Scottish and Northern Ireland MPs to “interfere”, as some would say, in England-only matters. As we have learned in today’s debate however, there appears to be a general consensus that it is pretty hard to identify England-only matters, and it is also hard to identify Wales-only matters. We need to speak loudly in defence of the ability of this place to continue putting its opinions forward strongly on all matters.
Alun Cairns
The hon. Gentleman is making an important point, which I think is recognised on both sides of the House. Does he think that that principle also needs to apply to his colleagues in the Welsh Assembly, and that they should recognise that the decisions that they take affect policy making here? There therefore needs to be dialogue between the Welsh Affairs Committee and Ministers in Wales, between Back Benchers and Ministers, and between Ministers here and Ministers in Wales.
Huw Irranca-Davies
Indeed. People who, like me, are very positive about devolution welcome such maturity and two-way engagement. We should look for ways to enhance that. That is to do with respect and, as I said earlier, that respect goes both ways.
Huw Irranca-Davies
I am sorry, but I will not give way because I need to leave enough time for another person to speak.
I will try to fit in another couple of key points in one minute. We are looking at the reverse of the Boston tea party—the “No representation without taxation” principle. Perhaps that could be called the Bangor tea party, or the Barry tea party. It has been asked what proportion of the fiscal arrangements is needed for financial accountability. Is it a tiny element and just tinkering around the edges, or is it more substantial? I ask the Secretary of State to expand on the timetable. She said something about it in her opening remarks, but it seems to be in the medium grass, if not the long grass. Perhaps she can say something a little more concrete about when the commission will report and when we might see something in Parliament.
A critical factor that has been mentioned several times is the Holtham commission. It has been praised repeatedly by Conservative Members. In that case I say to them, and to the Secretary of State, let us get on with implementing it, regardless of waiting for the Silk commission. We would do a great service to the people of Wales by implementing it right now. The point has been made that Wales is not over-subsidised compared with other parts of the UK. That has long been a myth, but we are not, we are not, we are not. All we are calling for is fair treatment. Implementing the Holtham report would help us to copper-bottom that.
To add an element of caution, what we do not of course want at the end of this commission is what we might refer to as “Silk cuts”. We want an enhancement for Wales, not a diminution of our financial power or democratic clout.
Finally, the Assembly is only just over 10 years old. It is still, by the standards of democratic institutions, something of a stripling. Let us take these decisions wisely, cautiously and with careful consideration. Just as devolution had many fathers, some of whom were in this House, we need to be engaged as this process goes forward.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Before I call the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), I suggest that he can speak until 28 minutes to 6, because of everything that has gone on.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones)
This has been an important debate and, as it turns out, one that is particularly well timed because the Silk commission will hold its first meeting tomorrow. I am sure right hon. and hon. Members in all parts of the House will wish it well, and that the members of the commission will be grateful for the opportunity to take into account the numerous points that have been made by Members on both sides of the House this afternoon, not only on the commission’s work but on the matters that it should take into consideration when arriving at its conclusions. I am pleased that so many hon. Members were able to contribute to the debate today and make a variety of important points that I am sure the commission will find extremely valuable.
As the Secretary of State pointed out, this is a Government who have delivered for Wales. Despite the doubters and the nay-sayers, we delivered the referendum on primary legislative powers for the Assembly in March and now we are taking that further by delivering on our coalition commitment to establish a commission to consider, first, the question of the financial accountability of the Welsh Government and of the Welsh Assembly, and secondly, the powers of the Assembly, and to recommend modifications to the present constitutional settlement that may enable Welsh devolution to work more effectively within the context of the United Kingdom.
It is timely that the commission should start this work now. The Welsh Government spend some £15 billion of public money each year. They and the Assembly now have considerable powers, which extend to primary law making in the devolved areas. It is widely accepted not only in the Chamber but outside that that level of power should be matched by accountability to the people of Wales for the money that those institutions spend on their behalf. The issue of financial accountability is a hugely important part of the Silk Commission’s remit. Seeking to build consensus around the extent and form of accountability is a challenging aspect of that remit.
The second part of the commission’s task, which will commence towards the end of next year, is also important. By then, Wales will have experienced more than 13 years of devolution. People will have had considerable time to assess whether the suite of powers vested in the Assembly and in the Welsh Government are working as well as they could be in the interests of Wales and, importantly, in the interests of the United Kingdom as a whole. It will be an appropriate time to assess whether modifications to the devolution settlement should at least be considered, so the work of the commission is extremely important. As my hon. Friend the Member for Vale of Glamorgan (Alun Cairns) pointed out, we will need to listen carefully to the views of people across Wales and the United Kingdom and seek to establish a consensus on the way forward. I am sure that Members’ interesting and varied points will be extremely valuable to the commission as it starts its important work.
Huw Irranca-Davies
I am trying to get my head around the idea of the level of financial devolution that will give accountability to the Welsh electorate. In local authorities it is typically up to 20%. Do Ministers envisage such a figure, or 2% or 3%?
Mr Jones
My right hon. Friend the Secretary of State has already indicated the levels of fiscal accountability that are devolved in other parts of Europe. Ultimately, these will be matters for the Silk commission, which, as the hon. Member for Arfon (Hywel Williams) pointed out, will no doubt take into account what prevails in other parts of Europe in arriving at its conclusion, as it should.
In the brief time remaining, I will respond to the various points made. The shadow Secretary of State has explained to me the reasons for his absence, which we fully understand. He was less than enthusiastic about the commission, giving it a “cautious welcome”, which was as cautious as it gets and gave a whole new meaning to “welcome”. Resorting to the oldest rhetorical trick in the book, he set up the straw man of “devo-max”, under which Wales would be responsible for raising all its own revenue. He seemed to suggest that the commission’s recommendations might result in Wales having to raise all its own revenue, as a consequence of which public spending would be halved. I hope that it is unnecessary to point out, but I shall anyway, that the people of Wales should ignore these scare tactics.