Wales Bill

Liz Saville Roberts Excerpts

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

Building on the existing funding floor, the Welsh Government will continue to have a fair level of funding for the long term, taking into account Welsh tax capacity and treating population change consistently. For the first time, we have agreed to add a need-based factor of 115% into the Barnett formula, as Holtham recommended. We are embedding the funding floor that we announced in December 2015 into the mechanisms that decide how Wales is funded. The significance of this measure should not be understated: the Labour party called for it from Cardiff Bay for many years while it was in power in this place, but it has taken a Conservative Government to introduce that needs-based factor and deliver on Wales’s needs. I hope that the shadow Secretary of State, the hon. Member for Cardiff Central (Jo Stevens), will recognise the significance of bringing the needs-based factor into the Barnett formula.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Does not the Secretary of State share my concern that the needs-based factor will be based on sums ascertained in 2009-10, which will be effectively 10 years old when it comes into effect? There should be a review before it starts.

[Alun Cairns]

I am grateful to the hon. Lady for her intervention, and for the scrutiny and interest she has rightly given the Bill, but I hope she recognises the significance of the fiscal framework. The needs-based factor to which she refers is 115%, and the current level is well above that. It will fall to 115% over time, recognising the fair settlement that Wales gets because of its needs. It is significant that that needs-based factor is being introduced into the Wales settlement for the first time. It is something for which the hon. Lady and her party have been calling for some time, but it took a Conservative Government to deliver it.

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[Stephen Crabb]

To be absolutely honest, I do not think that this represents the end of the book on Welsh devolution, but we need a prolonged period in which the Welsh Government learn to deploy their powers and use their competencies in a way that benefits the people of Wales. We were talking about the M4 upgrade earlier; an early deal that I did when I was Secretary of State for Wales involved making new money available to the Welsh Government to crack on with it. The project had been talked about for years. I remember taking a question on it during Welsh questions and William Hague leant across to me and said that people were talking about it 20 years ago when he was Secretary of State for Wales. We are still waiting for any substantial action despite the money being available. That is the challenge that risks corroding public support for devolution in Wales—the sense that the Welsh Government, despite their additional powers, seem unable to crack on and take big, bold decisions to improve the lives of people in Wales.

Returning to my previous point, the Bill meets the core objectives that we set out. The reserved powers model and additional powers for the Assembly and for the Welsh Government create a stronger devolution framework. Amendment 9 will create a clearer and fairer settlement as a result of the fiscal framework and the funding floor for the Welsh Government’s new borrowing powers. I remember being told two and a half years ago that the four things that we wanted to achieve had no chance of success. I was told that the Treasury would not agree to them, that the Welsh Government would not agree to take tax-raising powers—income tax powers—and that my own Back Benchers would not agree. However, all the parties worked together to sketch things out while respecting each other’s’ differences. Plaid Cymru has long-standing aspirations and ambitions for Welsh devolution that, frankly, no Wales Bill has met, but the tone was constructive and that has laid a good foundation and has provided smooth passage for a reasonably good Bill. It is not the end of the story, but I hope that it is the end of an interesting chapter for Welsh devolution.

[Liz Saville Roberts]

I am sure that the House will join me in wishing the best to my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards), who is expecting the imminent arrival of the latest member of his family. [Hon. Members: “Hear, hear.”] I sympathise with all MPs who have to balance family life and parliamentary duty.

I, of course, welcome to an extent the fact that a fiscal framework is on the verge of being in place, giving the Welsh Government a degree of financial accountability that is intrinsic for any functioning democratic Parliament. Judgment is still very much out, however, on whether it can really deliver the economic accountability and levers for growth that are required in this tumultuous time. I therefore want to start with a few brief comments about the framework’s ambition, or lack thereof. I then want to ask the Minister a specific question about how the framework will operate before finally discussing the capital expenditure limit outlined in amendment 9.

Despite finally having this fiscal framework in place, we still lag behind every other devolved Administration in terms of powers and responsibilities. Earlier today—like most days—we were embroiled in the Brexit conundrum and all its unravelling economic implications, but the Government’s insistence on a patchwork approach to devolution means that Wales will not have the real levers for growth that it needs at this most difficult of economic times. If the Conservative party wants to talk about the real opportunities that a single market and customs union exit brings for Wales, it should be looking at the fiscal levers for growth, including VAT, the most important tax for Wales, and how it could be devolved. I hope the Minister will indicate that he plans to review the framework in the light of recent developments to ensure that Wales has such fiscal levers.

I briefly want to touch on a technical point that my party colleague, Adam Price AM, has already raised with the Welsh Government’s Cabinet Finance Secretary. The much trumpeted relative need provision of the fiscal framework—the 115% rule, which is referred to as the Holtham floor—was based on a set of criteria that determined Wales’s relative need in 2009-10. There seem to be no plans to conduct a review of that relative need when the floor is set to be implemented approximately three years from now, meaning that those relative needs will be based on figures that are 10 years out of date. This was discussed briefly in earlier interventions, but the 115% rule surely cannot be set in stone for all time, so I ask the Minister to propose a review to investigate that.

[Alun Cairns]

I am happy to clarify that the fiscal framework agreement, which is supported by the Welsh Government, includes opportunities for periodic reviews.

[Liz Saville Roberts]

I welcome those comments about periodic reviews as opposed to using 10-year-old statistics. I also have some concerns about the framework’s dispute resolution mechanism, but there may not be the time to discuss them here. We may be able to resolve that problem in future discussions.

I want to finish by emphasising the fact that both Governments lack ambition. In the Lords, Plaid Cymru called for a £2 billion capital expenditure limit, which was supported by Labour. However, under pressure from the devo-sceptic Tory party, we can see in amendment 9 that we are left with a capital expenditure limit of exactly half that. Although I am pleased that a fiscal framework is finally in place, I cannot avoid the observation that Wales is once again being short-changed through a lack of vision and ambition.

[Glyn Davies (Montgomeryshire) (Con)]

Thank you, Madam Deputy Speaker, for calling me to speak in a debate that is hugely important to me. As someone who served as a Member of the National Assembly for Wales for eight years before my six years here, almost all of my political life has been dogged—if I can use that word—by Wales Bills of one sort or another. I do not know whether I will still be a Member of this Parliament when the next round comes but, as my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) said, I am sure that there will be one.

It is a great honour to debate a particularly important Wales Bill, which makes devolution much more stable than it has been since it was first established in 1999. I could speak about a host of matters and on some of them there would be disagreement across the Floor of the House, but two principles are hugely important to me. The first relates to the fiscal issues, which I will come to, but I believe also that moving to a reserved powers model is of fundamental importance. There will be disagreements about what should be reserved to the Westminster Parliament, but, generally speaking, moving to a reserved powers mode will be a big step forward. People—including me—have been calling for it since 1999, and we should not forget that in the discussions about finance.

This debate is about financial issues, one of which relates to borrowing powers. I greatly support the measure, which gives the Welsh Government new and important borrowing powers. Other Members have suggested that the ceiling is not high enough, but I have heard Mark Drakeford, the responsible Minister in Cardiff, say that the Welsh Government will probably not borrow the £1 billion allowed in the first instance. I believe that the borrowing power will make a significant difference to the way the Welsh Government can operate.

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The Government have let down local people in Wrexham and Chester, where Dee Valley Water supplies water, and the regulators have let the people down. The proposals in the Bill are very welcome indeed, but I wish that they had been introduced a year ago. If they had been, the people of the community that I represent would have been listened to by a Government who had influence and authority and who would have exerted influence to prevent the predatory takeover of our local business, which is serving our community well and being let down badly by the proposal.

[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.

[Susan Elan Jones]

As much as two words can ever encapsulate a feeling or a sense, the two words “Cofiwch Dryweryn”—“Remember Tryweryn”—probably do so. I hope that we will not look back at this year and think of another four words, “Cofiwch Dwr Dyffryn Dyfrdwy” —“Remember Dee Valley Water”—as encapsulating the spirit of our age.

My hon. Friend the Member for Wrexham (Ian C. Lucas) spoke very powerfully about a difficulty in our part of north-east Wales that threatens the livelihoods of many people working for the local water company. In a sense, it is a David and Goliath battle, but there is real fear that David may not win on this occasion. David is in the courts tomorrow, so we cannot speak about many of the intricacies of the situation. We can say, however, that one of the UK’s smallest water companies—indeed, it may be the smallest, but I need to check that—which has the fourth lowest bills of any water company in the United Kingdom, is in court against its Goliath on issues involving the votes of shareholders.

In north-east Wales, we have seen what used to be called the unacceptable face of capitalism, with a nasty, large predator coming in and trying to take over a local company quite against the will of the local workforce and the local consumers. That, I fear, is a cause of great regret. I will not repeat what my hon. Friend said about the issues concerning us—the role of the Competition and Markets Authority, and its lack of linkage in terms of devolution to the Welsh Assembly, and that of Ofwat—but he made some very serious and important points about the future of water in our area. I know that great symbolism attaches to Tryweryn, and rightly so. The chair of the action committee of Tryweryn, T. W. Jones, was also a resident of my constituency. T. W., as he was known, fought valiantly for that campaign.

I urge this House and Ministers, as we approach the welcome devolution of water, to think carefully about what is happening with Dee Valley Water and to look carefully at aspects of company law. Surely this cannot be right, given the views of local people, shareholders and the employees of the company. If local ownership matters to us, surely a predatory takeover is in nobody’s interests, other than the large predator itself. I urge the Minister to give thought to the points that my hon. Friend and I have made. I welcome the proposals that devolve water to the Welsh Government. I agree that it is totemic and symbolic, but most of all, I want something that works, especially for people in north-east Wales.