Wales Bill

Lord Berkeley of Knighton Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Monday 7th November 2016 Lords Chamber

[Lord Howarth of Newport]

My Lords, the figure of £500 million, set as the limit for borrowing by the Welsh Government, is so small as to be well inside the margin of error in any computation of UK Government borrowing. Will the Minister say what £500 million is as a percentage of the UK Government’s present borrowing requirement? To set the figure so low is contemptuous of Wales. With the powers to vary income tax devolved, the Welsh Government will have the capacity to service a higher level of borrowing, even if interest rates rise. I agree with those who have said that it seems very odd to fix a figure in legislation. Will the Minister also explain why that fixed figure of £500 million is in the Bill? I think that the Government should be more generous towards the people of Wales and allow them the opportunity to invest as they need for the future of the economy of Wales.

[Lord Berkeley of Knighton (CB)]

My Lords, if EU investment in south Wales suffers, as some of us fear it might, we could find ourselves with some very dire unemployment problems. Therefore, we will need every penny possible to reinvest in that area.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lords who have participated in the debate on Amendment 24, and I thank the noble Baroness, Lady Morgan of Ely, for moving it.

The amendment seeks to quadruple the Welsh Government’s capital borrowing limit set in the Wales Act 2014 from £500 million to £2 billion. As the noble Baroness is of course aware, borrowing falls within the scope of the funding discussions between the United Kingdom Government and the Welsh Government that are proceeding alongside the Bill. As we know, the Bill cannot proceed without the legislative consent Motion, which is dependent on those discussions being successful.

I refer noble Lords to the communiqué published following the Joint Exchequer Committee meeting in September. The two Governments discussed the rationale for the existing capital borrowing arrangements and agreed to consider changing them. Therefore, I can give the noble Baroness the undertaking that she seeks, and I think it is consistent with what I said in the previous debate. It is unthinkable that the matter would not be raised. However, I think she will understand that I cannot give a specific figure. Indeed, the comments of the noble Baroness, Lady Randerson, perhaps indicate that we do not want to constrain the figure in case the discussions lead to it going higher than that. I have given noble Lords an undertaking, which I will repeat: ahead of Report I will give a summary of where we are on the fiscal discussions, which are going well—including, as I understand it, in this area.

As noble Lords have indicated, there are two key considerations in relation to the borrowing limit. The first is ensuring that borrowing is affordable for the Welsh Government. Of course, the transfer of the taxation powers that we have just been looking at will certainly help in that regard, as will the smaller taxes that have already been transferred. The second is ensuring that borrowing is appropriate within the funding arrangements for the United Kingdom as a whole. I am sure that those two points are being borne in mind during the discussions—which, as I said, seem to be going well.

In relation to Welsh Government affordability, as I have indicated, we need to ensure that the Welsh Government have sufficient independent revenues to manage their borrowing costs. As I said, the new taxation powers that are being carried forward by the Bill will help in that regard. In relation to the wider United Kingdom funding arrangements, it is important to recognise that, within any given fiscal position, additional Welsh Government borrowing will mean less spending in the rest of the UK, including in relation to some of the issues funded for Wales from United Kingdom taxation.

Those are the issues being looked at, and I can give two undertakings: first, we will not get the legislation without the LCM; and, secondly, I repeat the undertaking that I gave at Second Reading—I appreciate that not all noble Lords were here for that—to give a summary of where we are so that noble Lords will be aware of it ahead of Report.

I understand the points that are being made and I think all noble Lords who have spoken—the noble Lord, Lord Wigley, my noble friend Lord Crickhowell, and the noble Lords, Lord Howarth and Lord Berkeley—recognise the need for these powers in order that the Welsh Government can borrow. Of course, it is then for the Welsh Government to decide how they borrow and how they spend the money—that is within their devolved competence.

Given the undertakings I have given, I ask the noble Baroness to withdraw her amendment.

Wales Bill

Lord Berkeley of Knighton Excerpts

3rd reading (Hansard): House of Lords
Wednesday 18th January 2017 Lords Chamber

[Lord Crickhowell (Con)]

My Lords, I do not intend to speculate about what might be done in another place as we debate this issue at Third Reading here. Nor do I think that I will follow the noble Lord, Lord Wigley, in looking far into events that may or may not happen in the future. I very much welcome the amendments moved by my noble friend.

Before I pay some very well-deserved tributes, perhaps I might be allowed to voice just one regret about the way in which we legislate these days. If practical and possible, it would be much better if, instead of having a Bill that amends previous Bills so that we finish up with something almost unbelievably complex and difficult to interpret, we produced an entirely fresh Bill that everyone would be able to follow and understand without a degree of expertise that might be difficult to find even among those who guide the Welsh Assembly and this Parliament. I think that that would be a much better way of legislating.

I think that it was during Report that the noble Lord, Lord Kinnock, who is not here today, commented that he had once taken a different view about devolution, and I acknowledge that I had, too. When the final decision was taken by the narrowest of margins to go ahead, I said that I believed that when one crossed the Rubicon one should go on and make a success of it. I subsequently thought about that remark and realised that it was not very wise, because when Caesar crossed the Rubicon we had conflict, murder, civil war and the end of the empire. I am glad to say that that has not been the history of devolution in Wales or of the creation of the Welsh Government.

On this occasion it is right to pay considerable tribute to two Secretaries of State for Wales—the previous and the present ones—for their strong initiative in taking things further forward and producing a settlement that I believe will last for some considerable time. I believe that they and the Government deserve credit for the role that they have played in carrying devolution forward.

I pay a special and particular tribute to my noble friend Lord Bourne of Aberystwyth, whose performance on the Front Bench has been simply heroic and which he has combined with his responsibilities in other departments. I simply do not know how he manages to do it—and do it so well. However, I thank him. I believe that all those who have taken part in the debates on the Bill will at least share in that tribute. His role has been totally outstanding.

[Lord Berkeley of Knighton (CB)]

My Lords, having observed the passage of this Bill from the Welsh Marches, as it were, I, too, thank the noble Lord, Lord Bourne, for the way in which he has led his team through. I want to make one small plea—that he might be enticed to taste the menu put forward by the noble Lord, Lord Hain, regarding that tied vote. I know that it has come at a late stage in the day, but I feel that it has much to commend it.

[Lord Morgan (Lab)]

My Lords, I am, I think, the only historian of Wales present, and I think that this has been a historic event and process, for which the Minister and our Front Bench deserve great credit. I am perhaps among the last of the generation of Welsh children who was brought up to regard the House of Lords—to quote the Daily Mail—as the enemy of the people, hostile to the aspirations of the people of Wales on devolution, land, education, church matters and many other issues. It is historic because in this case, of course, the House of Lords has been enormously positive. Many of us were asked by political figures in Wales to be helpful and to try to resolve some of the needless quandaries in the Bill, which purported to extend devolution but in some respects seemed to restrict it, and clear things up. I think that we have succeeded to a considerable extent in so doing. Very important principles have been enunciated, which, again, are historic; particularly those that elevate the status, if not always the powers, of the Welsh Assembly, making them more comparable—although still not comparable—to those of Scotland.

I will not labour the point but, as has been said, we owe thanks to the Minister, who has been extraordinarily helpful and considerate. He has handled this matter in a model way and I conclude by suggesting a new role for him. I believe that one thing we need in all these measures—I recall that this point was made by the noble Lords, Lord Crickhowell and Lord Hunt, as well as by me—is some kind of statement of how they relate to the overarching vision of the union. Just as in the higher education Bill we put in some important points of general principle the other day, I feel that that would be valuable here. We have an unwritten constitution, and so perhaps the best way of achieving this kind of insertion would be to have a constitutional supremo to take it over. I can think of no Member of the Government more qualified to act in that, at the moment, untested role than the Minister. I thank him very much.