Wales: Commission on Devolution in Wales

Lord Crickhowell Excerpts

Monday 18th November 2013 Lords Chamber

[Lord Crickhowell (Con)]

My Lords, I welcome the general thrust of this important Statement, based as it is on the Silk commission’s recommendations. To understand the import of the Statement it is necessary to read the accompanying paper that has been placed in the Public Bill Office. Paragraph 2.6 emphasises the enormous importance of,

“an integrated economic and fiscal union”,

and of the need to make sure that:

“Any changes to the funding of the Assembly and the Welsh Government must be consistent with maintaining the integrity of the system”.

There is nothing in the decisions announced by the Government that threatens that integrity. I refer to paragraph 2.12 of the document: the Government were particularly wise, in taking their decisions about income tax, to recognise that any distortion,

“of the redistributive structure (or progressivity) of the income tax system … could potentially be detrimental to the UK as a whole”.

The paragraph goes on:

“While the impacts are uncertain … this would be unprecedented in the United Kingdom”.

The Government are wise for the reasons that my noble friend has given. Perhaps I should declare an interest. I now live only 500 hundred yards or so from the border. The truth is that a great many people live close to the border and therefore the issues that she addressed are important. It is also very important that the issue of taxation should go to the Welsh people for a decision in a referendum. I welcome that.

I have a final question. There is emphasis again in the paper that has been laid before both Houses about the need to strengthen the institutional arrangements. The Welsh Government are going to have a major task in managing these new responsibilities. Has any estimate been made of the cost that will fall on the Welsh Government, and therefore on the Welsh people, of the institutional changes that will be needed?

[Baroness Randerson]

I thank my noble friend for his support on this issue and for underlining the importance of this Statement. I am proud of the record of the coalition Government: we have already, through our facilitating the referendum on increased full legislative powers for the Welsh Assembly, enabled one step forward on devolution to be taken. Today’s announcement heralds a second giant step forward for devolution. While expressing full confidence in the model of devolution throughout the United Kingdom, however, the Government have been concerned that we should not in any way undermine the union. It is important to bear that in mind.

My noble friend referred to the need to strengthen institutional arrangements. I cannot give him an estimate of the cost, because that strengthening is largely a matter for the Welsh Government. It is essential that they go ahead with this rapidly. I am aware that they are already in the process of strengthening their financial arrangements for establishing a Treasury function within the Welsh Government.