Wales Bill

Lord Anderson of Swansea Excerpts

Tuesday 22nd July 2014 Lords Chamber

[Lord Thomas of Gresford]

The noble Lord knows perfectly well that the Liberal Democrats are for the reform of the Barnett formula and always have been. I can give that assurance. I am just puzzled to hear what is said by the Scottish Labour Party, which obviously prefers the current arrangements.

[Lord Anderson of Swansea (Lab)]

What about the Scottish Liberal Party?

[Lord Thomas of Gresford]

The Scottish Liberal Party has been merged with the Scottish Liberal Democrats. I am not going to go any further into that.

The problem with devolution in Wales is that a Labour Government continuously in power—either on their own or as the lead party—escape accountability for their failures for a number of reasons. First and fundamentally, the essential link that all democratic Governments should have between raising resources through taxation and spending those resources on policies is missing. This Bill goes some way to dealing with that particular problem.

Labour’s demand for more money from the central government from a reform of the Barnett formula before they dare put these taxing powers to a referendum, is like Oliver Twist’s, “Please sir, can I have some more?”. It is Labour’s excuse for condemning Wales to fall behind in education and health, as it does, not merely judged by UK comparisons but also against international comparisons. Any very proper criticism of those failures is said to be “a war on Wales”—an empty piece of rhetoric first used by Carwyn Jones himself at the Welsh Labour Party conference in Llandudno in March.

Just as Labour seeks to delay the introduction of a Welsh income tax, so in the House of Commons debates on the Bill Labour sought to delay the introduction of the borrowing powers by waiting for a report on the legislative steps necessary to move to a model of reserved powers for the Welsh Assembly. I heard with interest the noble Baroness say that an amendment will be proposed to bring in reserved powers as the model in the Bill, and look forward to seeing how that is expressed.

The second matter that concerns me is that the recommendation of the Richard commission 10 years ago that the number of AMs should be increased to 80 to improve scrutiny within the Assembly was not pursued. The recommendations of the Silk 2 report, as the noble Lord will no doubt have noted, are that:

“A range of options should be considered in the short term for increasing the capacity within the existing National Assembly, including greater flexibility on the number and size of committees, increased numbers of research staff and better use of Assembly Members’ time. … The size of the National Assembly should be increased so that it can perform its scrutiny role better. The practical implications, and those for the electoral system, will need further consideration”.

The third matter that concerns me is that the press and media in Wales allow a dominant Labour Government to get away with it. Take the desire and the ability of the press in Westminster to tear Ministers limb from limb on a daily basis—for example the spat between Theresa May and Michael Gove over extremism in schools—and compare it with the deferential approach of the Welsh media over the very recent abject dismissal of Alun Davies, the former Welsh Government Natural Resources and Food Minister, for gross misconduct. One wonders whether the politicians and the Welsh media are too closely aligned and too ready to exchange roles.

I return to the Bill. I welcome the proposal to remove the current restrictions on individuals standing as a candidate for both a constituency seat and a regional seat. Studies by the Electoral Commission have shown that the current prohibition has a disproportionate impact on smaller parties, because they have a smaller pool of potential candidates from which to draw. The proposal to prohibit MPs from sitting as Assembly Members, and vice versa, is also welcome. It has an interesting history. Back in 1998, as the then Welsh spokesman for the Liberal Democrats I was lobbied from the very steps of the Throne by Mr Ron Davies Member of Parliament, the then Secretary of State for Wales, to give our party’s support to an amendment to the Government of Wales Bill which would permit him and others to have a dual mandate. At the time, it seemed reasonable to have some experienced politicians in the new body we were setting up, and so we agreed. However, I think that with the experience of the years that have passed it is time to end that practice.

I will raise another issue during the passage of the Bill. Much was made of the fact that two of the Lib Dem candidates in the last Assembly election were disqualified from being Members because they belonged to various public bodies, one of which was the Care Council for Wales. On the complaint of a Labour Party Member, they were interviewed by the police on an allegation that they had knowingly made a false statement in a document in which they gave their consent to being a regional party list candidate at those elections. That was translated into being disqualified from nomination.

The confusion arises because, under the Local Government Act 1972, a person is disqualified from being elected as a member of a local authority, whereas Sections 16 to 18 of the Government of Wales Act specifically say that:

“A person is disqualified from being an Assembly member”.

Of course, elections to local government are on the first past the post system; elections to the Welsh Assembly are done on both a constituency and regional basis. The regional election is in accordance with a party list. It is ludicrous to require a person on a list, who might not be first with a chance of election but second, third or fourth, to give up public service on a public body, very often unpaid, just to be a candidate. Although Liberal Democrat candidates were highlighted last time, I am aware that members of other parties stood as candidates, but were not elected, who might have been subjected to the same treatment. A successful candidate in an election ought to have a period in which to resign from any body that would disqualify him from being an Assembly Member—maybe eight days. I shall accordingly seek to amend Section 16 of the Government of Wales Act 2006 to make that position absolutely clear.

The aftermath of the Scottish referendum will, in all likelihood, see changes in Scotland. I was delighted to hear from the Minister that the situation in Wales will be revised; in particular, the lock-step will be looked at again. The structure of Welsh devolution is not yet satisfactorily settled. Once the Bill is passed as a further step, the focus in Wales will turn to the recommendations of Silk 2. The Liberal Democrats, who accept all its recommendations, will be here to return to the fray in the next Parliament. For the moment, I look forward to the fray in the Committee stage of the Bill.

--- Later in debate ---

[Lord Anderson of Swansea (Lab)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Rowe-Beddoe, who brings a reservoir of experience on the Welsh Development Agency and in public work in Wales generally. I agree with much of what he said about the scrutiny function, which, because of the increased responsibility of the Assembly, surely demands increased numbers. I also agree with him on Barnett—it was only to be temporary but it remains. I think he would probably not deny being a politician, but he must understand that, certainly in advance of the Scottish referendum and the 2015 general election, it would be foolish to expect any change in the Barnett formula before that time, at the very least.

I join the chorus of consensus in relation to the Bill, but I confess I cannot join the Minister in referring to it as an “exciting package”. As I left my native Swansea on Sunday or Monday, I cannot recall the bells ringing. It is unlikely to excite anyone, I would think. It is fairly limited. I speak at the end of the list. All has been said and I know that the noble Lord, Lord Roberts, would agree if I make three pastoral points. My first point is a simple, general point. It is claimed that the Bill represents another milestone along the road, in the words of my noble friend Lord Morgan, who taught me my politics at the University of Wales. The problem is: where is that road leading? No one knows and no one has revealed that destination—a point, I think, also made by my noble friend Lord Rowlands.

I concede, of course, that the Assembly, having made a shaky start and having only just won the referendum in 1997 by a whisker, is now a fully accepted part of the Welsh political landscape and is doing well. It has pioneered several initiatives that either have been adopted or will shortly be adopted at Westminster. However, there is a professional temptation to stop devolution at Cardiff; perhaps any move to city regions will provide a new opportunity for devolution within Wales and not just to Cardiff. Perhaps the report of the Williams commission, which reported in January, will provide such an opportunity. I note that the First Minister said a few days ago that there will be an expedited consultation period by September with the proposals brought forward in October. With the 10, 11 or 12 new larger local authorities in Wales, there will certainly be a much greater opportunity for devolution within the Principality, accepting the principle of bringing more power closer to our people.

In the 1970s, when I was a member of the so-called gang of six, my concern was always the problems posed by devolution in a unitary state—problems which could be solved in a federal system with clarity in the division of powers. The problems of constitutional principle remain today. Clearly, in this country, we do not do constitutions. Hence, I now agree that there should be reserved powers rather than conferred powers to the Assembly, and I note what other Members of your Lordships’ House have said about the absurdity of the Wales Office losing, on a series of references by the Attorney-General, on the question of the competence of the Assembly. I would ask noble Lords to read the judgment of 14 July, in relation to the power of the Assembly to regulate agricultural wages, before the very strong Supreme Court. I also note that it did not matter in principle whether the subject—in this case, agricultural wages—might also be capable of being classified as relating to a non-devolved area.

For the moment, we are likely to see a continuation of a series of small steps. I think that my noble and learned friend Lord Morris of Aberavon used the phrase “drip by drip” in his excellent contribution—a little bit of this, a little bit of that, with perhaps air passenger duty relating to Cardiff airport being in the next drip which is coming along. The Scottish referendum, even with a no vote, gives an opportunity for a rethink in Scotland, and that is bound to have repercussions for Wales. The Strathclyde report, published in June of this year, recommended that 40% of Scottish expenditure should come from devolved income tax. I think that that will have substantial repercussions. Perhaps there is never an ideal time for making rules of this nature, but to do so in advance of the Scottish referendum is manifestly not ideal.

I will not quote it now, but I commend to the House the Financial Times editorial of 16 June headed “Towards a federal future for the UK”, which argues that Wales and Northern Ireland should gain similar enhanced powers to those likely to be granted to Scotland. A new constitutional settlement, I say in passing, might also include a more consensual reform of your Lordships’ House. If we are really keen about removing the metropolitan flavour of this House and wish to involve people in the devolved Assemblies and local authorities more, we might have some form of indirect election.

My second point is that the package of financial proposals is complex and subject to further consultation. The new borrowing powers are most important and welcome. What prevents these borrowing powers coming into effect sooner? Why should not the formula, as many colleagues have argued, be the same as for Scotland, which would more than double the amount of borrowing available to the Assembly? I have noted the current controversy in the Assembly about the amount to be spent on the road network around Newport. I hope that the Assembly will avoid the temptation, which perhaps we always have in Wales, of spreading the amount non-strategically in penny packets and look strategically at the needs of Wales. It may well be Newport this time—it cannot be Swansea—and may be north Wales next time. However, let us at least look strategically at the major problems that face us. The principle of increased responsibility for expenditure is absolutely right, but I do not believe that the relatively small sums involved will take us sufficiently far along that road for the linkage between elections and responsibility for expenditure to be clearly perceived by the Welsh electorate as a means of generally holding those who spend the money to account.

We also have to be very wary in Wales of fiscal competition with richer areas. I note that the Mayor of London has now proposed devolving receipts from stamp duty in London to the Greater London Authority. That sort of devolution to London which they may pick up from us could have very adverse consequences for Wales. I shall not mention the Barnett formula, or Holtham and the general underfunding of the Principality, and that the people of Wales clearly would have as a priority poverty, youth unemployment, health and education rather than tinkering with relatively small revenue-raising measures. The margin of variation of income tax after a referendum would be small, and it must be asked whether there is much incentive to vary in any event. If we do not vary, what is the point of the power in any event? I remind your Lordships that only about 4,000 taxpayers in Wales pay the top rate. I assume that most are fairly close to the English border; surely some work should be done now on how they are likely to respond to an increase or decrease in the Welsh element of income tax.

Apart from stamp duty land tax and landfill tax in Wales, the Bill also enables other taxes to be designated as “devolved taxes” through secondary legislation. It would be helpful to know what other taxes the Government have in mind. Some could be dangerous—for example, a hotel occupancy tax could hit the tourist areas in Wales very hard—so we have to be extremely careful.

My third and final point is on the dual candidacy rules. Such electoral arrangements should surely, as my noble friend Lord Rowlands said, be a matter for the Assembly in any event, and it is wrong in principle for us to intervene, as the Electoral Reform Society Cymru has said. One of the noble Lords opposite said, as did the noble Lord, Lord Wigley, that it was nakedly partisan of the Labour Government to have brought this forward. Let me list some of those nakedly partisan people that have opposed the dual candidacy. For example, the noble Lord, Lord Crickhowell, the former Conservative Secretary of State for Wales, said:

“The present arrangements are really pretty indefensible”.—[Official Report, 15/6/05; col. 1216.]

Again, the current Chief Secretary to the Treasury, Danny Alexander, said:

“I should also point out that the Secretary of State for Wales has said that if the Commission had considered what he called the systematic abuses carried out by list members in Wales, he would have reached the same conclusion that we have, namely that a ban on dual candidacy is the only effective solution”.

So much for the nakedly partisan nature of what the Labour Party has done—I think that this is good moment to call a cloud of witnesses in support of my contention.

I will not rehearse all the arguments, such as the Alice in Wonderland situation in Clwyd West in 2003, when there were prizes for everyone—everyone was a winner, as a fairground stallholder would say. I also note the Llanelli situation in 2003, which I witnessed, where the Plaid Cymru candidate, who had lost and was weeping copiously, then went half an hour along the road to Carmarthen and exulted at having won a position on the list.

The defence of the proposed change—proposed by some—is that it enables candidates to stand in both constituencies and on the regional list because the pool of able people in Wales, particularly for the smaller parties, is limited, and we should do our best to ensure that the best people find their way to the Assembly. It is surely a nasty slur on the people of Wales to say that we cannot produce sufficiently able people. I used to travel a lot when I chaired the Foreign Affairs Committee, and I recall the quality of politicians in Luxembourg, for example—pace Mr Juncker —and even in little Gibraltar. I used to admire the quality of the politicians there. We in Wales will not do worse than that. Is Wales so different? To quote, or misquote, the Reverend Eli Jenkins, “Thank the Lord we are a political nation”. Although I can see that there are arguments on both sides, I will certainly vote against the proposed change.

Overall, then, two cheers for the Bill, but I am still confused as to where such drip-by-drip Bills lead us: a brave new future for the Principality, or a constitutional labyrinth for our people.

--- Later in debate ---

[Baroness Randerson]

No I am not, but the natural process of the way in which the formula works means that in times of spending restraint, where we have been for the last four years, the convergence process, which worked over many years and made the formula more, shall I say, sparing in relation to Wales, ceased to operate and we have had divergence which has brought Wales to a position of greater fairness now than in the past. That means, however, that if we go back to times of financial plenty, there would be an issue once again. That has been recognised in the exchange of correspondence between the Chief Secretary to the Treasury and the Finance Minister in Wales.

In response to the general point made by noble Lords from the Labour Party about dual candidacy, as I predicted, when we read Hansard tomorrow it will appear as the most important matter in the Bill to members of the Labour Party. It is significant to remember that the purpose of doing this is to widen the pool of good candidates. Time and again people have raised the issue of how important it is to have scrutiny of the highest nature in the Welsh Assembly. It is not only a case of ensuring that there are more Assembly Members—whether you agree with that or not—but of ensuring that the best candidates can stand and get elected.

Many noble Lords on the Benches opposite referred to the Clwyd West situation. I refer to the Nick Bourne situation, if my noble friend will forgive me, where, as the leader of a party in the 2011 Assembly elections, he failed to gain a seat because his party had done so well. That is an anomaly, and it is important to bear in mind that within this system you will get that kind of anomaly. I say to the noble Lord, Lord Rowlands, who raised the issue of people who lose still getting into the Assembly, that that applies only if you think that elections should be on a winner takes all strategy. However, if you believe that elections are a way of ensuring that different strands of opinion are represented in our legislatures and Parliaments, you look at ways of ensuring that significant minority opinions are represented as well as majority opinions.

[Lord Anderson of Swansea]

The very able leader of a party in Wales lost under that system. The solution is simple: his party should have ensured that he sat in a winnable seat.

[Baroness Randerson]

There are many other answers connected with the problems and anomalies associated with that system. However, I repeat, this system was established by the Labour Party in the first Government of Wales Act. It may not be perfect but it provides an element of proportionality, although not perfect proportionality by any means. Even now within the Assembly, 50% of its members are from the Labour Party even though it gained under 40% of the vote. It is not perfect but it brings some proportionality to the Assembly, which was an essential part of getting the original referendum accepted by the people of Wales.

I conclude by saying that it has been a great pleasure to listen to the debate. I am sure that I will be answering in considerable detail the questions that I know noble Lords will put to me when we return from the Recess. I invite your Lordships to support the Bill.