Wales Bill

Jonathan Evans Excerpts

Wednesday 10th December 2014 Commons Chamber

[Jonathan Evans (Cardiff North) (Con)]

Let me be the first to congratulate my right hon. Friend on his recognition overnight as the Welsh politician of the year.

Does this debate not highlight one of the difficulties with devolution? People only really want half of it—they want the powers, but do not want the responsibilities. There is a statistic showing that a minority of people in Wales recognise that health policy is decided in Cardiff. Does that not illustrate the importance of giving responsibility as well as devolving the powers themselves?

[Stephen Crabb]

My hon. Friend is exactly right and characteristically articulates his point better than anybody else in the House could. Devolution got stuck. The settlement meant that the Welsh Government were essentially a spending Department with no real responsibility for raising money—in fact, local authorities or parish councils probably had more ability to raise revenue than the Welsh Government. The Bill is all about letting Welsh devolution take the next step forward, which is about fiscal devolution, giving responsibility and enhancing accountability to create a more meaningful relationship between the Welsh Government and the people who elect Assembly Members and Welsh Ministers.

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[Jonathan Evans]

The hon. Gentleman should be a bit cautious in his dismissal of the Conservative party, given this week’s opinion polls. His argument is the complete antithesis of the position adopted by the Labour party in Scotland—late in the day, it must be said—which is to agree to the devolution of all tax raising powers to Scotland. Against that background, how is his argument in any way consistent with the position adopted north of the border?

[Owen Smith]

To paraphrase the infamous, notorious entry in the Encyclopaedia Britannica, it is not a question of “For Wales, see England”, “For Scotland, see Wales”, or “For Wales, see Scotland”. We have different countries with different demographics, histories and relative tax takes, and on behalf of the Welsh people, we should sensibly take a position that reflects their best interest, rather than talking an ideological perspective across the board. On the prospects of the Tory party in Wales, I would be a little more hopeful that it might do well were it not for those such as the hon. Gentleman not fighting their seats at the next election. We can read into that what we will.

[Jonathan Evans]

It is the same as the right hon. Member for Neath (Mr Hain)

[Owen Smith]

Indeed, but I do not suggest for a minute that there is any prospect of my right hon. Friend being replaced by a Tory. Not now, not tomorrow, not ever. [Interruption.] It will be a cold day in hell before Neath turns Tory, and ditto Pontypridd.

Let me return to my point about whether Wales will be better off with these tax powers. As the hon. Member for East Antrim (Sammy Wilson) said, we can look to last week’s autumn statement to demonstrate that Welsh tax receipts are now £2 billion less than what was planned by the Chancellor in 2010. That is our proportion of the £66 billion shortfall in tax receipts that is a result of our underperforming economy under this Conservative Government. Had these measures applied in 2010, they would have devolved to Wales about £1 billion of that shortfall. That decline makes a mockery of the notion that such powers make the Welsh Government more accountable, because a poor performance across the board by the UK economy would not have been down to the actions of the Welsh Government. That performance would have been wholly down to a Tory Government in Westminster, and there is little that a smaller economy and country such as Wales could have done to mitigate that effect.

The other thing that those numbers illustrate—again, the hon. Member for East Antrim effectively made this point—concerns the volatility of tax receipts across the UK. That volatility has led to a £66 billion shortfall, and traditionally there are greater fluctuations in peripheral and regional parts of the UK economy than at the centre, and especially in London and the south-east. It is difficult to imagine how a country such as Wales with a small economy could manage the risk associated with that greater volatility. That shows some of the benefit of our being part of a wider Union, and it makes clear the dangers and risks associated with disaggregating that Union.

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[Glyn Davies (Montgomeryshire) (Con)]

I am grateful for the opportunity to speak on the occasion of the Bill’s return from the House of Lords in much improved form, if I may say so. In general, I welcome the Bill although I am concerned about some elements. Perhaps it is a Welsh trait that we can never completely agree on things, and I want to touch on one issue where I am not in agreement.

What I welcome in particular is the new reality of the Conservative and Liberal Democrat coalition shaping the process and future of devolution and driving forward, leaving—if I may say so to the shadow Secretary of State—Labour languishing in its wake. He may describe that as a U-turn, but that is the reality today. I want to make just one important point, which is very much a personal view. I disagree with one specific aspect of the Bill, but I would like to emphasise my overall support: it is a very good and welcome Bill.

I would like to put my point in context by painting some background to my personal journey in the devolution debate. I was not in favour of the form of devolution on offer in the referendum on 18 September 1997. It seemed to me to be creating a permanently unstable constitutional settlement. A settlement is the last thing it was. I attended the count in Llandrindod Wells leisure centre, watching the TV coverage as the decision of the voters of Wales came through and they decided in favour of establishing a national assembly for Wales. I drove home knowing that there was no going back. The people had spoken, albeit by a tiny margin of 0.6%. We were now facing an entirely new question: how would devolution work in practice? I concluded immediately that the new Welsh Assembly would eventually become a law-making, tax-raising Parliament based in Wales. That has influenced my thinking on the issue ever since. I did not want to be dragged, kicking and screaming, and trying to refight the 1997 devolution referendum. I preferred to get ahead of the curve and identify where we were going to get to, and move towards that in a positive and smooth way. That was not a change of mind, but a recognition of a new reality.

[Jonathan Evans]

My hon. Friend, through his service in the Assembly, has been one of the individuals who has encapsulated the position adopted by the Conservative party. Although the party battled against establishing the Assembly in the first place, and although the margin was only 4,000 in a million, nobody could claim other than that my hon. Friend and the party in Wales have not been dragged back to the previous debate, but have moved forward and sought to make a success of the devolution settlement.

[Glyn Davies]

Nowhere has that been more obvious than in the contribution from those on the Front Bench when we started today’s debate.

The Government of Wales Act 2006, introduced by the Labour party, moved things forward quite a lot, as did the 2011 referendum in relation to tax-raising powers. The Wales Bill takes us further down the road to what I consider to be the inevitable conclusion, but not far enough for me on tax levying responsibility. I will be blunt about my view: it is a mistake that the Bill requires a referendum before devolving responsibility for levying part of income tax collection to the Welsh Government. That is properly an issue for a general election. The Welsh Government are not financially accountable to the people of Wales until they are responsible for levying a degree of income tax. It is also my personal view that financial accountability through responsibility for income tax is so fundamental to a proper, grown-up National Assembly for Wales and Welsh Government that we should not devolve extra responsibility until this principle is accepted—no financial accountability, no new powers.

The First Minister, and perhaps Labour Members here on the Opposition Benches, do not want financial accountability. How convenient it is to bask in the credit of every spend that the people of Wales approve of and blame the UK Government for every difficult decision needed to bring order to the United Kingdom’s finances. We see the First Minister in Wales scrabbling around for any reason he can come up with to avoid committing to a referendum. First, it was lockstep, which is removed by the Bill. Then it was the Barnett deficit, until it became clear that it is a rather smaller Barnett deficit than we thought. I hear now that air passenger duty might be another reason, and if that is resolved, there will be another one. The reality is that Welsh Labour in Cardiff is desperate to avoid financial accountability. It does not want to be properly financially accountable to the Welsh people.