Wales Bill

Lord Murphy of Torfaen Excerpts

2nd reading (Hansard - continued): House of Lords
Monday 10th October 2016 Lords Chamber

[Lord Murphy of Torfaen (Lab)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Finn, and to congratulate the noble Baroness, Lady Bloomfield, on her very fine maiden speech, which we all enjoyed. As an addition to the Welsh Members of the House of Lords, she is indeed most welcome. I also pay tribute to the Minister, the noble Lord, Lord Bourne, who I know is deeply committed to the business of Wales and its prosperity. He has enormous experience in the National Assembly for Wales and as a member of the Silk commission, which provided the basis for the Bill.

I welcome the Bill: it is better—a lot better—than the draft Bill that preceded it. As several noble Lords said, it is the fourth devolution Bill to come to Parliament in two decades. I have been involved in one way or another with all of them. It reminds me of a phrase by a previous Secretary of State for Wales, no longer in the House of Commons, who referred to devolution being a process, not an event. I was not sure at the time that I agreed with that idea, but when I look at my chequered relationship with devolution over the past 30 to 40 years, I understand it. My noble and learned friend Lord Morris gave a very interesting account of the birth of devolution in the Labour Government of the 1970s. I was a rather small but prickly thorn in both his flesh and that of the Labour Government as the treasurer of the Labour No Assembly campaign in the 1978-79 referendum, in which Wales of course overwhelmingly rejected devolution all those years ago.

I began to change my mind for a variety of reasons over the following 18 years and, by the time I became a Minister in Tony Blair’s Government and served on the same committee on devolution as my noble and learned friend Lord Morris, I had become a devo-sceptic—I had been a devo-hostile before. By the time I had finished my course as Secretary of State, I had become a devo-realist. Now I suppose I am a devo-enthusiast, to such an extent that I campaigned vigorously for the extension of the Assembly’s powers in the referendum in 2011.

Incidentally, I see nothing wrong in having this gradualist approach to dealing with devolution, whether it is here or in Northern Ireland or Scotland. There is no rule that you suddenly have to have a great Bill—like the great repeal Bill—which is all that has to be said or done about devolution. Of course, it does not work like that. We have asymmetric devolution in the United Kingdom, which means that it develops differently in different parts of our country. That applies to Wales as it does to Scotland and Northern Ireland.

Does the Bill do the trick? On reserved powers, it probably does—certainly in principle, but whether it does in practice needs to be seen. In Committee and on Report on the Bill, there is plenty of opportunity to examine that aspect of the Government’s commitment to the Silk commission’s report. I think that 200 reservations are too many, even after they have been trimmed down from the previous draft, but I quite understand how they got there.

My experience of Whitehall as Welsh Secretary on two separate occasions is that when Whitehall departments are faced, as they are here, with representations from the Welsh Office, Wales Office or Assembly about different powers and responsibilities, they react grudgingly and with great sulkiness, and I suspect that this has happened here. Government departments have been asked, “What do you want to keep? What do you want to give away?”. They rarely want to give anything away and there needs to be a central power with the Welsh Secretary, but with the help of the Prime Minister, to ensure that those grudging Whitehall departments are, frankly, told what to do. That is what lies at the basis of the inadequate nature of the devolved powers. There are some which have come to Wales which are welcome—for example, those dealing with oil and gas extraction and ports, except for Milford Haven. However, I am bewildered by the air passenger duty decision. If Northern Ireland and Scotland can have air passenger duty, why cannot Wales? If it is simply because of Bristol, that is not a good enough answer and we should have another look at that.

The entrenchment, as far as we can in our constitution, of the Assembly in law and the provision about electoral law for the Assembly and local government are welcome, but, like my noble friend Lord Hain, I have doubts about two issues. One, touched on by the previous speaker, is the question of employment law. I fully understand that, generally speaking, employment law should not be devolved; it should be a reserved matter for the United Kingdom Parliament and Government. But when it touches on policies and services run by the devolved Administrations, that is different. If the Assembly and local government in Wales are, for instance, to be able to deduct trade union subscriptions from wages, why on earth cannot they do that? The world would not fall in on the other side of Offa’s Dyke if that were to happen. It is not about strikes or general issues of employment legislation; it is about practicality and realising that the Assembly and the Welsh Government have a right to deal with those issues that are devolved.

It seems to me ironic that, because of the reserved powers situation, powers that the Welsh Government and Assembly currently have could go back to Whitehall. That cannot be right. I sincerely hope the Minister will have another look at those issues as well.

My noble friend Lord Hain and others also raised the question of the referendum on income tax powers. It depended, of course, not simply on a referendum but on the Assembly agreeing to income tax powers coming to the Assembly in Cardiff. I certainly would not go to the barricades about having a referendum but I remind noble Lords that in 1997, when the people of Wales voted on the whole issue of devolution, they were not asked, as in Scotland, whether they wanted tax-raising powers. I know that it is different if it is a separate referendum, and it is not likely to be very popular, but there is an issue of legitimacy there that needs to be addressed. Certainly the Assembly should give its approval before it decides to take up the issue of income tax powers.

Another vital issue, and something that we saw here in your Lordships’ House during the passage of the Scotland Bill some months ago, is that we cannot really deal with a Bill that, in this case, deals with a referendum on income tax without looking at the fiscal framework. I do not think that it is right for Members of this House to deal with the remainder of this Bill in Committee or on Report until some progress has been made with the fiscal and financial agreement between the Welsh Government and the United Kingdom Government. That is difficult at the moment, I know, because Barnett and the whole issue of the block grant needs to be addressed.

I am rather sceptical about devolving income tax powers, not because income tax on its own is a bad thing, or that the argument about accountability is bad—it is not. However, if all it does is plug the gap in a reduced block grant, that is not right. It should be over and above it. The reason for that is that with Brexit and the loss of European funding for Wales, and with the loss of Objective 1 funding—with which I had a great deal to do all those years ago, and which has benefited Wales enormously—the Assembly needs to be able to borrow money to deal with the great infrastructure projects. The way that it could do that is to have an income stream from income tax and also from other areas, including air passenger duty. I ask the Minister to look very carefully at the progress of these discussions and to keep the House informed on them. I hope that when we come to the Committee and Report stages we can deal with these matters with greater perspective.

I agreed with the noble Lord, Lord Crickhowell, when he talked about joint ministerial committees and interministerial conferences, and about the British-Irish Council, which acts as a means by which the different devolved institutions and the Republic can get together. I do not think that we have used those properly over the last number of years. In my view there would have been no need for the Supreme Court to do what it did if there had been proper discussions at ministerial level and it had been sorted out between Ministers of both the UK and Welsh Governments. The machinery is there, it has been set up for some years now, but it should not simply be a grandstanding or a great gesture. There should be working committees between the devolved institutions and the United Kingdom Government.

This is an opportunity. I think that this Bill should go through but that it needs serious amendment. I hope that, in Committee and on Report, noble Lords will have the opportunity to go into greater detail on some of the issues that I and other Members of the House have raised this evening.

Wales Bill

Lord Murphy of Torfaen Excerpts

Committee: 1st sitting (Hansard - continued): House of Lords
Monday 31st October 2016 Lords Chamber

[Baroness Morgan of Ely (Lab)]

My Lords, I shall speak to Amendments 7 and 8. These amendments are designed to clarify the circumstances in which the National Assembly’s legislative consent is required for parliamentary Bills. As drafted—as the noble Lord, Lord Wigley, has suggested—the Bill provides that Parliament will not “normally” legislate with regard to devolved matters without the Assembly’s consent. He has just pointed out the difficulties in the definition of “normally”, but neither is there any definition of “devolved matters”. Indeed, elsewhere, the Bill speaks of “reserved matters” or matters that are “not reserved”. It does not use the language of “devolved matters” at all.

This provision closely follows an equivalent in the Scotland Act 2016. Your Lordships might recall that the equivalent provision in the Bill leading to that Act was the subject of rather anxious debate. The concern was that the provision was incomplete in specifying when the Scottish Parliament’s consent was required for UK parliamentary legislation. The provision had been included, following a recommendation from the Smith commission that the Sewel convention be given statutory underpinning. Unfortunately, the Government, in implementing that recommendation, gave the narrowest possible interpretation of the convention in writing it into the Bill.

While it is true that, as originally formulated, the convention proposed that a devolved legislature’s consent was required only in respect of a provision within its devolved legislative competence, it soon came to be accepted that consent should also be required if a parliamentary Bill proposed a modification of that very competence. I will simplify this: if the UK Government wanted to bring in a law on an issue where the Assembly already had the power to legislate—so on agriculture or education—the understanding is that that would not be possible without the Assembly’s agreement. However, if the UK Government proposed to change the Assembly’s powers to legislate, it is not clear that that Assembly agreement would be necessary.

Demonstrating that this was not a matter of controversy, the Government have repeatedly said—and the Minister himself has said on this Bill—that a Bill that radically modified the National Assembly’s legislative competence could not be passed without the Assembly’s formal consent, even though that might not appear obvious from the language of devolved matters. This issue is highlighted in the report on this Bill by the Constitution Committee of this House:

“There were important differences between the Sewel Convention as referred to in the Bill and the Sewel Convention as understood in practice. The Bill framed the Convention in terms narrower than those in which it is usually understood, by failing to refer to that limb of the Convention that is concerned with UK legislation that adjusts the scope of devolved competence”.

It should not be a matter of dispute between the UK and Welsh Governments. The difficulty is that, although the two Governments agree on the circumstances in which the Assembly’s consent is required for parliamentary Bills, the Bill does not reflect that common understanding. The purpose of the amendment, therefore, is simply to define what is meant by “devolved matters”. In so doing, it sets out the agreed circumstances in which the Assembly’s legislative consent is required for parliamentary Bills. Those circumstances importantly include the situation of the present Bill, which modifies the Assembly’s legislative competence.

This is quite a useful clarification that could be achieved without raising any new issues of principle that might be of concern to the Government. I hope at least that the Minister will be able to reaffirm that when a parliamentary Bill comes forward with proposals for modifying a devolved legislative competence, such a Bill—as he has promised with this Bill—can proceed only with the relevant legislature’s formal consent.

[Lord Murphy of Torfaen (Lab)]

My Lords, I support both the noble Lord and my noble friend in their remarks. My noble friend Lady Morgan has outlined very well what “devolved matters” means in the Bill, and the noble Lord, Lord Wigley, quite rightly spoke about the sloppiness of the term “normally”. I think that it opens up huge possibilities for rift between Cardiff and Westminster unless there is a proper definition, if the Government want this, as to when the Assembly is not allowed to pass its comments upon legislation going through this Parliament which affects so-called devolved matters. Is it for the Secretary of State for Wales or a Cabinet committee to decide what is “normal”? No, this is an absolute recipe for conflict between the Assembly and Parliament, and between the two Governments. I hope that the Minister will take this back and either strike it completely from the legislation or, if they insist that there should be qualifications as to when the Assembly cannot utilise its powers, these should be defined very precisely indeed.

[Lord Crickhowell (Con)]

My Lords, I spoke at Second Reading and earlier today about the need for clarity in the Bill, and I must say that I share the concerns about the word “normally”. Those concerns were reinforced earlier today by the remarks of the noble and learned Lord, Lord Judge, who produced what seemed to me a pretty devastating analysis and related it to a subsequent clause—I think it was Clause 53. It seems to me that the Government would do very well to ponder what has been said today very carefully. I also have some sympathy with the noble Baroness on the Opposition Front Bench about the use of the word “devolved” when we are dealing with reserved powers. It seems to me that that, too, is likely to be a cause of some confusion. I am not sure that I followed all her arguments, but I am not speaking about those; I am simply seeking clarity. I hope that my noble friend will not dig his heels in tonight, but will take these comments away and give them much careful thought before coming back at a later stage.

--- Later in debate ---

[Baroness Randerson (LD)]

My Lords, I shall speak to Amendments 13, 14 and 17. I must declare an interest as a governor of Cardiff Metropolitan University and an honorary fellow of Cardiff University.

As the Minister has outlined, these amendments reflect concern expressed by Universities Wales, which represents the Welsh higher education sector, about inclusion in the list. It gave evidence of that concern to the Assembly’s Constitutional and Legislative Affairs Committee, whose report has been circulated to noble Lords. The basis of the concern is that this may lead to inclusion as a public sector body by the ONS. Noble Lords may recall that a reclassification of this kind occurred for Network Rail. That reclassification was undertaken with the full agreement of the Treasury but its impact on Network Rail has been to have a huge effect on its ability to borrow.

Higher education institutions are clearly concerned about their ability to borrow. They are currently classified by the ONS as non-profit institutions serving households; they are therefore part of the private sector and, along with most other charities, enjoy that status. This reflects the extent of public sector control, as set out in EU accounting requirements. I must stress that universities regard themselves as independent organisations. They value their academic and institutional autonomy and are treated as public bodies for only a small number of very specific purposes—for example, for freedom of information purposes. It is true that higher education provision and fees are highly regulated but in Wales, less than 10% of university income comes from direct public funding. The ONS is already reviewing the classification of Welsh universities in the light of the Higher Education (Wales) Act 2015.

In England, the proposed higher education and research Bill will address complexities for those higher education institutions established as corporations, but that Bill will not affect Wales. So the potential reclassification by the ONS will badly affect higher education in Wales because all Welsh HEIs are charities. The Charity Commission is clear in its guidance, which says that a charity,

“must exist in order to carry out its charitable purposes, and not for the purposes of implementing the policies of a governmental authority”.

A breach of this rule could of course impact on governors as well, who could be held personally liable. It would obviously have a massive impact on Welsh higher education’s ability to raise funding for research and to assist poorer students, and on those institutions’ tax status.

Understandably, Welsh universities do not welcome their inclusion as public authorities, but neither should the Welsh Government nor the UK Government. If they are reclassified by the ONS, their debts and spending will go on the Government’s balance sheet. They will go first on the Welsh Government’s balance sheet and affect their ability to borrow because universities in Wales have a significant borrowing requirement of their own, which would of course detract from the ability of the Welsh Government to borrow in addition to that. In turn, it would go on the Treasury’s balance sheet.

I am surprised that the Welsh Government have indicated that they do not feel this is a problem and are not concerned about the inclusion of universities in this list. When I think of it, it is perhaps not entirely surprising because there has been a tendency over many years for the Welsh Government to seek greater control over the public sector, which the Minister will be aware of as an ex-Assembly Member. However it is important to remind noble Lords that the international reputation of our universities rests on their independence from government. Many were established as charitable foundations, and all continue to rely on charitable funding and on funds that rely on their charitable status. Universities in Wales are part of the devolved settlement, as the Minister said, and are hence subject to rules that are slightly different from those in the rest of the UK, but they are very definitely part of a UK-wide sector and of an international market, so they must not be undermined by incorrect classification in the Bill. This is a probing amendment, and I am glad to hear from the Minister that he will consider this matter further. I will be grateful for his further comments when he has time.

Finally, and briefly, the further education sector was also established autonomously in the 1990s. The FE sector has higher levels of direct government funding, but it values its independence, its ability to respond to the market and its flexibility. I will be grateful if the Minister looks at both sectors in detail before we discuss this issue again.

[Lord Murphy of Torfaen]

My Lords, I understand what the noble Baroness said about the charitable status of Welsh universities, and it is important that the Minister goes back and examines whether it is put at risk by this part of the Bill.

I cannot for the life of me understand Amendment 14, which excludes the Higher Education Funding Council for Wales from the Welsh public authorities list. It is not a university; it is a body that administers funding to the universities. It gets all its money from the Welsh Government, so I cannot quite understand the amendment, particularly because a recent review of non-compulsory post-16 education in Wales indicated that this body will be replaced by a new body dealing with funding for higher education and further education, which is a good thing. The amendment is an incongruous insertion when the argument is about universities and, to a certain extent, further education colleges somehow losing their charitable status, independence, right to borrow and so on. I would value the Minister’s comments on why the Higher Education Funding Council for Wales is part of this scene.

[Baroness Morgan of Ely]

My Lords, Schedule 3 will provide some welcome clarity about competence in relation to Welsh public authorities. So long as Assembly Bills meet the competence tests in the Wales Bill, the Assembly will be able to legislate in relation to Welsh public authorities without needing to seek the consent of the UK Government.

Most of the UK Government’s amendments add to or clarify the list, and we support them. We are also very content with the removal of special health authorities. I understand that they will be treated differently and need not be in Schedule 3. I beg to differ with Liberal Democrat Peers who suggested removing from the list of institutions in Wales a reference to the further or higher education sectors, the Higher Education Funding Council for Wales and the regulated institutions under the Higher Education (Wales) Act, to which my noble friend referred.

We do not think it appropriate to support any amendments which might act in such a way as to restrict the legislative competence of the National Assembly in respect of these further and higher education bodies. Having said that, I am very grateful to the noble Baroness, Lady Randerson, for outlining the real concerns of the institutions, which need to be addressed. I thank the Minister for agreeing to clarify this issue and for looking at attempting to reflect that special position and ensure that they can continue with their current status.

However, I am afraid that removing these institutions could create uncertainty in the future over the need for ministerial consent where a provision of an Assembly Act confers functions on such a body or removes them from it. No such uncertainty exists in relation to the current legislative competence of the Assembly, and the uncertainty would not arise in the future if these bodies remained on the list.

--- Later in debate ---

[Baroness Randerson]

My Lords, I have great sympathy with the amendment in the name of the noble Lord, Lord Wigley. Although I understand the principle of the amendment in the name of the noble Lord, Lord Hain, I fear that it takes rather too hard-line an approach to an important issue of principle. I disagree with the noble Lord, Lord Crickhowell. The principle here is not the individual convenience of candidates who stand for the Assembly or those who are elected to the Assembly, but the fundamental principle that you should not be a member of a legislature to which you are not subject yourself. You should not pass laws that you yourself do not have to obey and take heed of. That supersedes anything that can be said about the practical problems, which undoubtedly exist, for people who live on the border. I think the amendment of the noble Lord, Lord Wigley, deals with that issue in that you do not have to go through the upheaval of moving to Wales if you live a couple of hundred yards over the border. Indeed, if you live in the middle of Surrey, you do not have to go through that upheaval until you are elected.

Until this Assembly term, it has always been taken for granted that you would live in Wales. I recall that when the current Assembly Member for Cardiff Central was first selected as the Labour candidate, she lived in Islington, but she felt obliged to obtain a small flat in Cardiff when she became the Labour candidate—and rightly so. It is important that people feel obliged to live in Wales, that they feel part of the Welsh culture and that they understand Welsh media and Welsh issues. Without living in Wales, that cannot be so. Therefore, I support the amendment of the noble Lord, Lord Wigley.

[Lord Murphy of Torfaen]

My Lords, I agreed to put my name to the amendment of my noble friend Lord Hain because it is both timely and relevant as the Wales Bill passes through this House. It is not all about Neil Hamilton but it is a bit about him in the sense that he is, as far as I am aware, the very first Member of the National Assembly for Wales who has not lived in Wales. Not only has he not lived in Wales but he lives a long way from Wales, and it highlights why we, as a Parliament, should address this issue—it is different from the franchise that we have known in our country for generations. We are talking about a country; we are not talking about a constituency. I think it is important that you live in your constituency but that is another issue; sometimes it is not practicable or reasonable to do so. However, we are talking about a country that now has a legislative Assembly which passes primary and secondary legislation for that country and which runs the country in many different ways.

The noble Lord, Lord Crickhowell, asked, very relevantly, what happens if you live in a town or village bang on the border. Of course, the border between England and Wales is very different from, for example, the Northern Ireland and Ireland border and it is different from the Scottish/English border, which has lots of built-up areas on it. However, there is a big difference between being a few hundred yards away in Monmouth and being in Wiltshire, and that in a way—

[Lord Crickhowell]

I say straight away that I entirely agree with that. I am not arguing for someone who lives in Wiltshire; I am merely pleading the case for those who have worked all their life in a Welsh town but, because of the geography, perhaps live a couple of hundred yards outside the town.

[Lord Murphy of Torfaen]

I think that can be addressed if, in dealing with this amendment, the Government look at what happens in local government. You can be a member of a local authority and live within, I think, three or four miles of the boundary of the local council, and I suppose that could happen with the Welsh situation. Thus, if you lived within a mile or two of the border but felt very much part of a town or village in Wales and you felt Welsh, the accident of the border could be overcome by applying local government laws to the Welsh Assembly.

I turn to the point made by the noble Lord, Lord Norton, about the ability of electors to elect an individual to represent them in the Welsh Assembly. There is an awful lot of merit in that. People should be given that choice but, again, there is a difference. The only example of someone living in England and not in Wales is the UKIP leader in Wales. He was elected as a top-up Member. He does not represent an individual first past the post constituency; he is part of a top-up regional list.

The difference is that on that regional list, one generally elects the party and not the individual. When people voted as they did in that region in Wales, they voted for Mr Hamilton not as Mr Hamilton but for UKIP. Therefore, they did not really have a choice of saying, “I don’t want this person because he doesn’t live in Wales”. They did not get a choice in that. In one form or another, I represented people in Wales for 43 years. People then had the option of saying, “I don’t want him on the local authority or in Parliament”, because, perhaps, the candidate did not live in the constituency, ward or whatever. They had that chance, but they do not have that chance with regard to the top-up seats.

[Lord Norton of Louth]

Surely, the argument, therefore, is that they should be given that chance—that one changes the system so that they have that degree of choice.

[Lord Murphy of Torfaen]

If I had my way I would change the whole system—probably not to what the noble Lord, Lord Wigley, wants, but to the alternative vote system, for example. The point I am making is that the people in that part of Wales did not get the opportunity to say, “I don’t want that person because they do not live in Wales”. They were voting for a party instead of an individual. I cannot see any reason why, when we set up a Parliament or an Assembly in one of our devolved parts of the United Kingdom, a person should represent it without living in it. All the arguments that have been addressed are valid and I hope that the Minister will look favourably on these amendments.

[Lord Thomas of Gresford]

My Lords, this debate takes me back to 1981, when I applied to be a candidate in a constituency not very far from my home. It was impressed on me that I should buy a cottage in this constituency, to which my reply was that I lived half an hour away and had a fast car. That was one factor that meant I was not chosen as the candidate. The other was that I was competing against my noble friend Lord Carlile of Berriew. That was much more important.

I support the amendment of the noble Lord, Lord Wigley. We had problems in my party in the Assembly election before last where two candidates could have been disqualified by being members of public bodies at the time they filed their nomination papers as candidates. One was in a paid office and one was not paid. But they could have been disqualified. One of them succeeded, as noble Lords will recall, in gaining entrance. The other did not.

My recollection is that in the last Wales Bill we adopted a similar provision to that of the noble Lord, Lord Wigley; namely, that they should have ceased to hold those public offices by the time they were sworn in as Members of the National Assembly for Wales. I think that is fair. A candidate does not know, particularly in my party, whether he is ever going to be elected. Accordingly, to ask him to move his house and family, even if it is only half an hour away and he has a fast car, is not a sufficient reason for disqualifying that person from being a candidate. Therefore, I support Amendment 22.

Wales Bill

Lord Murphy of Torfaen Excerpts

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

Debate on whether Clause 17 should stand part of the Bill.

[Lord Murphy of Torfaen (Lab)]

My Lords, I beg to move that Clause 17 does not stand part of the Bill and in so doing apologise for the absence of my noble friend Lord Hain, who is unable to be with us today. I am glad to say that my noble friend Lord Kinnock, who has also signed this Motion, is with us this afternoon.

It is just over 20 years ago now that the people of Wales voted in the referendum to establish a Welsh Assembly. It is just over 20 years ago that the people of Scotland voted to establish a Scottish Parliament. It was at that point, two decades ago, that the people of both countries were asked about the nature of the devolution that they wanted. In Wales, income tax was not an issue. In 1997, when the people of Wales voted, as they did, narrowly for an Assembly, it was not to have a system of income tax. On the other hand, the people of Scotland voted in favour not just of a Scottish Parliament but also of powers to vary income tax in that country, even though they have never done that.

The purpose of this probing amendment—and it is a big probe—is to find out why the Government have changed their mind since the previous Wales Bill. That Bill, just a couple of years ago, said that if income tax powers were to be introduced in Wales then the people of Wales would be asked their views. I suppose, in a way, we have had a lot of referenda of late, which have caused all sorts of difficulties and problems. Nevertheless, the principle of asking the people of Wales whether they want income tax powers for Wales is no different from what was asked in 1997 of the people of Scotland. Now, however, we have a proposal in this Bill to abolish that question. The people of Wales will not in fact be asked to decide whether they want income tax powers for their Assembly or whether they want the Assembly itself to agree to the principle of income tax raising powers for the Welsh Government and Assembly. I want to find out from the Minister why this change took place and, indeed, what mandate there is for this change to occur.

The second reason why this issue is important is that there is a good, sound economic and financial reason why the people of Wales should not be burdened by an extra income tax. I understand the issues of accountability, and that was the main principle that the Government and others have argued: that there should be this income tax provision. However, given the Minister’s vast experience in this area, I am sure he will understand that Wales is not a wealthy country by comparison with England. Probably thousands more wealthy people live in the county of Surrey than in the whole of Wales. Therefore, the resource base in Wales for income tax is very low indeed, but the burden upon the people would be high were an income tax to be raised in Wales alone.

My noble friend Lord Hain is keen to expostulate that, if income tax is levied at a United Kingdom level, it is properly and fairly distributed among the less wealthy parts of our country. Therefore, Wales benefits from that fair distribution because we are not as wealthy as the south-east of England. That is an important issue to consider when we look at whether income tax should be devolved. Also, if income tax were to be raised in Wales—whatever the levy, be it 2p or 3p in the pound—if all that did was plug a gap because the block grant had been reduced, that, too, would be pointless. If income tax is to be raised, it should be extra and above the block grant allocation—the Barnett formula, flawed as it is—as my noble friend Lord Rowlands indicated.

The third and final reason why the Government should say why this change has been introduced is that they are in the middle of negotiations with the Welsh Government on a fiscal framework for Wales. That is a vital discussion and an important negotiation. If income tax is to be partly devolved to Wales, the onus lies on the Government to ensure that the fiscal framework is so devised that that inequality between Wales and the rest of the United Kingdom is recognised and any block grant or Barnett formula ensures that Wales has a fair deal. For those reasons, I ask the Government to rethink this measure and I shall be interested to hear the Minister’s reply.

[Baroness Humphreys (LD)]

My Lords, before contributing to this Clause 17 stand part debate, I apologise to the Committee, and to the Minister in particular, for not having taken part in the debate at Second Reading.

I welcome the Government’s decision to remove the requirement for a referendum before devolving powers over income tax to the National Assembly for Wales. I am afraid that I have to take issue with the noble Lord on the Labour Benches, who still sees the need for a referendum.

Our democratic institution, the National Assembly, commenced 19 years ago and successive Bills have conferred increasing powers on it. The aim of this Bill should surely be to further build that democratic institution by providing it with the powers it needs to do its job. Along with those powers, there must also be a means of providing the Assembly’s electorate with the opportunity to hold the institution to account. For me, these two factors—power and accountability—are the basis of democracy. Providing the Assembly with powers over partial income tax devolution, which brings with it the opportunity for transparency and accountability without holding a referendum, should be a mark of the confidence of this House in the Welsh Government’s ability to carry out their functions. The Bill should be about indicating a clear way ahead for the Assembly to provide the people of Wales with the mature and confident democracy we want and deserve, not about placing further obstacles in the path of their progress.

I am tired of living in a country which has had to hold out the begging bowl to the Treasury to enable it to receive funding via its annual block grant. I am tired of hearing Welsh Ministers blame the UK Government for every shortfall in funding. But, most of all, I am tired of there being no means by which I, as a Welsh elector, am able to hold the Government of my country to account for the way they raise and spend their revenue.

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[Lord Murphy of Torfaen]

Obviously, I shall not oppose the clause standing part, but I shall make two points in response to the debate. First, I have never felt particularly deprived as a Welsh taxpayer and citizen by not having extra income tax for Wales. In the 30 years that I represented a Welsh constituency, not a single representation was made to me about this issue. In the five years when I was Secretary of State for Wales, not one Welsh Minister ever made representations to me about the need for income tax. However, the issue is not about the need for income tax—it is about the need for a referendum. That is what this resolution is about.

[Lord Thomas of Gresford]

The noble Lord seems to think that this is about additional income tax but we are talking about tax-varying powers. They could go up or down or they could stay the same, but they would give a separate stream to the income of the Welsh Assembly, which would assist in borrowing. What disappoints me in the Minister’s reply is not to hear some idea of the fiscal framework. I wonder whether the Welsh Government have ever put forward a variation on the Barnett formula. We all oppose the Barnett formula in one way or another, but I have never heard the Welsh Government suggest an alternative way in which to raise money, other than the Barnett formula. Can the Minister say something about the broader picture?

[Lord Murphy of Torfaen]

I had not quite finished my remarks—I thought the noble Lord was intervening on me. The issue is about the principle of a referendum. Right from 1997, the people of Wales agreed on a devolution settlement. In 1979, my noble friend Lord Kinnock and I disagreed with the idea of a Welsh Assembly. Twenty years later, we agreed with it—and, as the Minister himself said, in 2011 there was a referendum to change that settlement. I approved of it, I agreed with it and I supported it. That gave legitimacy to the change, because at the end of the day the people of Wales agreed.

I suspect there has been a change in the past 18 months because, after all, this is about a change in the current law. It is not about introducing something but about abolishing something: the right of the people of Wales to have a referendum on income tax. My guess is that it has nothing to do with the spread of devolution or the other issues to which the Minister referred; it is about their thinking that they would not win it. But the principle of the referendum would give it that legitimacy. Indeed, if the Government and others thought it would be hugely popular, what is wrong with a referendum on it? If we had one on the powers, we can have one on income tax. The Minister has not explained why the Government have changed their mind about the principle of a referendum in under two years. That is a pretty rapid change, and there must be other reasons lying behind the Government’s views. At the end of the day, if the people of Wales want income tax variation—and, by the way, it is not extra money. I reject that idea; I do not think for one second that any income tax powers will produce a penny more for the people of Wales, because the block grant will be reduced. That imposition has been put on a country that is poorer than England. Having said all that, I shall not push this to a vote this evening.

[Lord Thomas of Gresford]

In Committee, I think I am entitled to speak as many times as I wish. I apologise to the noble Lord, Lord Murphy, for interrupting him in full flow, but I still look to the Minister to give us some idea at this stage of how he sees it. What is the future fiscal framework? What does he have in mind? Will it be a deduction from the block grant, as the noble Lord, Lord Murphy, suggests, or will it not?

Wales Bill

Lord Murphy of Torfaen Excerpts

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

I believe that including an amendment to provide for an ongoing review mechanism can get the Government off being ensnared on a hook of their own making. Again, I believe that the working group should, of course, include representatives of the Welsh Government and the National Assembly. If the words of the two amendments are inadequate, let the Minister bring forward a government amendment or a new clause to that end on Report. I believe that a mechanism such as that proposed in Amendment 46 is necessary for the Bill to work when it is enacted.

[Lord Murphy of Torfaen (Lab)]

My Lords, I yield to no one in my admiration for my noble friend Lord Elystan-Morgan, but although I agree fundamentally with one of his amendments, I disagree fundamentally with the first. Dominion status is about the shedding of British governance. The 1931 statute of Westminster gave the dominions power over their own affairs, effectively making them semi-independent. I do not want to give up British governance in Wales; I am glad that we have it—and I am also glad that we have Welsh governance in Wales. I like the two, which is why I believe that we are in the right position in the United Kingdom whereby we have devolved Governments in those places that require them—Wales, Scotland and Northern Ireland. I hope that we can extend the same system of government to parts of England, too. I have always believed that, and I think we are heading towards it.

I cannot agree with the first of the amendments, but I fundamentally agree with the second—that a working party should be set up to look at the operation of Schedule 1 to the Bill. The noble Lord, Lord Elystan-Morgan, is absolutely right and put his finger on it when he asked why this particular list has come to fruition. It has come to fruition because individual government departments have made a wish-list of what they wanted to keep. It was not about looking at the bigger picture of what should happen in this new dispensation for Wales. So to have a body that looks at the operation of the new situation in Wales, with the reserved power Assembly, with this schedule, is absolutely right and I support it.

[Lord Thomas of Gresford]

It is really heart-warming to hear my noble friend Lord Elystan-Morgan—and I call him that—go back to the dominion status which was the lodestar of the early days of Plaid Cymru. Saunders Lewis did not want total independence; he wanted dominion status. I have no doubt that 1931 was very much on his mind at the time, having regard to the date of the statute of Westminster. I have always regarded that as totally unrealistic, requiring as it does that Wales should look after its own defence, foreign affairs, social security and so on. That is what dominion status means, and always has meant. So whereas I have always been a supporter of devolution, I rather go along with the Gordon Brown argument, which was so successful in the Scottish independence referendum, when he reminded his fellow countrymen that the United Kingdom is united because it shares risks and wealth. Those areas that are depressed at one time in history can be supported by those that are successful.

At the beginning of the 20th century, the highest wages were paid in the Rhondda valley, and as a result it attracted in the Irish and people from all over the United Kingdom. It was the Aberdeen of its day, if you like. Aberdeen has attracted people from all over and is currently suffering because of the fall in the price of oil and the possible diminution of oil resources in the North Sea. But it will be balanced by another part of the United Kingdom—and that is the important point. We are not really concerned with going back in history and talking about a British colony. I recall that Henry Tudor came from Wales and brought with him the Cecil family, who played a very big part not only in the proceedings in this House but in British history ever since. Although he had a Donald Trump attitude towards sex, he was nevertheless favourable towards Wales. His introduction into Wales of the assize judicial system and his formation of the counties of Wales was for their good, not in order to conquer them as his predecessors tried to do.

I do not go along with the idea of the English colony. As a Welshman, I do not feel, and never have felt, that I am in any way subject to the colonial oversway of the English. We have provided leadership in the United Kingdom over the years with our politicians—some great men who, as the noble Lord will no doubt recall, have held the highest offices in this country. For example, I will refer not to Lloyd George but to Aneurin Bevan. Many, many Welshmen have played their part in the governance of the United Kingdom as a whole. We have to stay with that and not go back to what I consider to be, with the greatest respect to my noble friend, the rather romantic aspirations of dominion status. I therefore support the basic proposition in the Bill that the Welsh Parliament—as I hope it will be—should have all the powers it needs but on a reserved powers model, not a conferred powers one. We should work towards that.

Although I have some sympathy for the second amendment which the noble Lord has put forward, it is our duty to try to deal with these issues here and now, as the Bill goes through, not simply kick them into the hands of a commission. That would, no doubt, be made up of great Welshmen but would sit in Cardiff or elsewhere and chunter over the provisions of the reserved powers set out in the Bill. In my Second Reading speech, I argued that we should not have 190 separate reservations. One effect of the Agricultural Wages Bill was that we became very interested in detail, whereas one could describe the powers which should be reserved to the Westminster Parliament in much broader terms, such as defence, foreign affairs and so on. I am very sorry: although I voted for the noble Lord in 1964 when he was a Plaid Cymru candidate, I cannot go along with his interesting and reminiscent arguments for dominion status.

Wales Bill

Lord Murphy of Torfaen Excerpts

Committee: 3rd sitting (Hansard - continued): House of Lords
Tuesday 15th November 2016 Lords Chamber

[Lord Elystan-Morgan (CB)]

My Lords, I very much regret that I must disagree respectfully with the submissions of the noble Baroness. Looking at it in a very narrow constitutional context, the issue is a massive irony. On the day the Supreme Court unanimously gave its judgment in the agricultural workers’ wages case, there was an epoch-making decision that changed the whole face of Welsh devolution. Until then, people had thought devolution was a fairly limited matter, limited to the specific expression of matters transferred, minus matters that were reserved. Nobody had conceived of what we might call the massive silent transfers, with which the decision of July 2014 was involved.

The irony we face is that that is the state of the law. It was the unanimous decision of the Supreme Court. There is no appeal from it. That is the state of the law at present. If the Bill passes in its present form there is a massive row-back, diminution of status and deduction of authority as far as Wales is concerned compared with the decision. I know I need not press the point with the Minister, who is an excellent lawyer and well understands this matter. If there is no change in this matter, there is a massive diminution of authority for Wales compared with that decision. That is the irony.

When the then Prime Minister, Mr Cameron, stood, as noble Lords will remember, in the grey dawn in Downing Street after the Scottish referendum—which was after the Supreme Court decision we are referring to—and said that Wales is at the very heart of devolution, what if he had said, at the same time, “Mind you, there’ll be far fewer rights for Wales when we’ve finished with the Bill than there are at present”? What would people have said? That is exactly the situation I put to the House. It is so plain and obvious that I do not think there can be any controversion regarding it at all. Although one may say it is politic to change the situation, it means doing so in such a way that would diminish the rights of Wales relating to devolution massively.

[Lord Murphy of Torfaen (Lab)]

My Lords, I support the points made by my noble friends Lord Hain and the noble Lord, Lord Elystan-Morgan. I, too, spoke during the passage of the then Trade Union Bill. I hope the Minister will reply to the debate with greater knowledge of the devolution settlement than his colleague did. Inevitably, his ministerial colleague looked at it from the point of view of employment throughout the whole of the United Kingdom. This is not about that, however: my noble friend made it absolutely clear that employment law is reserved. This is about public services in Wales and how industrial relations operate within them.

Since these public services are wholly and exclusively devolved, so should be the modest industrial relations consequences that flow from that. We are talking not about strikes, but about the possibility of public bodies allowing their workers to have their wages docked for trade union subscriptions and about allowing public workers to have full-time officials paid for in those organisations. These are not revolutionary or tremendously difficult issues; they are issues that affect public services. The constitutional point that the noble Lord, Lord Elystan-Morgan, made is crucial to this, because it strikes at the heart of the devolution settlement in Wales. That is why the Welsh Assembly is taking it so seriously that it has promised it will legislate to change the trade union law in so far as it affects public services in Wales. That could be avoided at a stroke were the Government to agree to my noble friend’s amendment. They probably will not, but they will cause a huge amount of trouble to build up in the months and years ahead.

In the agricultural workers’ case, the Supreme Court made it clear that the service was devolved to Wales and that the industrial relations aspect of it was therefore devolved as well. Nothing could be clearer than that, so why are we entering a war with the Welsh Government and the Welsh Assembly on this issue? It is a pointless war which will not be won. I hope the Minister will give some hope to us. If he does not, I am sure the issue will be raised again on Report. If the amendment is unsuccessful then, the Welsh Assembly will pass a law and the Supreme Court might become involved. Why are the Government doing this when there is no need for it? The public services are devolved. I urge the Minister to think carefully about his reply.

[Baroness Randerson (LD)]

My Lords, I have put my name to the amendment because we need to establish a clear principle here: if the Welsh Government and Welsh Assembly are funding a service, they should have an element of control over the terms and conditions of their employees who are running it. It should come as no surprise to anyone here that I hold that view, because I spoke on this matter during the passage of the Trade Union Bill.

The Welsh Assembly has long had considerable powers —for example, over doctors’ pay, terms and conditions. The doctors’ contract could in principle be completely different in Wales from that in England. It is not, for reasons of pragmatic certainty and manageability, but it could be. I see that the Government have signed an amendment tabled by my noble friend Lady Humphreys on teachers’ pay and conditions. That is very much along the same lines as the issues that we raise in this amendment.

The Assembly effectively gained such powers after the agricultural wages issue was referred to the Supreme Court. I was in the Wales Office at that time. I am sure I came to this House and told noble Lords that we firmly believed that the issue of agricultural wages was not devolved, but the Supreme Court found otherwise. The noble Lord, Lord Hain, was probably quite surprised by the Supreme Court’s judgment, too; I do not think he believed that he had devolved agricultural wages or any other issue of that nature in the 2006 Act. The Supreme Court’s interpretation of it is not in some way unmanageable or at odds with everything else; it can be viewed as completely consistent with other aspects of the Assembly’s work.

I ask the Minister to think about the issue of trust, of what it will look like in Wales, if the Government try to row back on what has now been accepted as part of the powers of the Assembly. I urge the Government to think again.

--- Later in debate ---

[Baroness Randerson]

My Lords, I have always felt that Welsh-language broadcasting should be part of the general broadcasting pool, not isolated from the rest of broadcasting. That way, I felt, there would be cross-fertilisation and Welsh-language broadcasting would not be seen as out of the usual in broadcasting.

On balance, though, it is clear that S4C has been under threat in recent years. Year after year, the Wales Office has to ride to the rescue of S4C by explaining to a Minister elsewhere in government why Welsh-language broadcasting is important and significant, and why it has a totemic importance in Wales well beyond the relatively small amounts of money that the Government are trying to cut from its annual amount. Indeed, if the control of S4C were devolved to the Welsh Assembly, I think S4C would still find itself under threat because it is responsible for spending a significant proportion of the total amount of money spent every year on the Welsh language. There are lots of other aspects of huge importance to the development of the Welsh language that would want part of that total amount of funding.

I do not think devolution is necessarily the answer but there needs to be a new settlement, a new concordat, or at the very least some kind of agreement between the UK Government and the Welsh Government to ensure that, year after year, the position of S4C is secure, not just in law and in theory but financially. The financial position of S4C should be secure so that there is not this constant fire sale going on. I therefore urge the Minister to look at a suitable solution to what I am sure he will acknowledge is a recurring problem.

[Lord Murphy of Torfaen]

My Lords, on more than one occasion, I probably rode to the rescue of S4C myself, and I very much agree with the noble Baroness, Lady Randerson, about the financial dangers unless we have guarantees. At the moment, the Welsh language is rightly devolved to the Welsh Assembly, so it would seem logical—would it not?—that Welsh-language broadcasting should be also. There are two issues that we should consider. First, Welsh-language radio broadcasting would presumably stay with the BBC. More significantly, were S4C to be devolved to the Welsh Assembly and the Welsh Government, there should be a proper financial settlement to go with it. At the moment, the United Kingdom Government provide the funds for S4C; were it to be devolved, that financial settlement absolutely must be devolved with it.

--- Later in debate ---

This issue is especially important because the Welsh Government have put taxpayers’ money into this and invested in developing Cardiff Airport, which has worked extremely well. It has produced good results under the leadership of the noble Lord, Lord Rowe-Beddoe, and Roger Lewis. It is very important that the airport in Cardiff is allowed to grow and to develop fully and is not forced to try to do so with one hand tied behind its back.

[Lord Murphy of Torfaen]

I agree very much with the noble Baroness, Lady Randerson. Over the past three days in Committee, the Minister has been very helpful. He knows his stuff. He probably knows devolution better than any other Minister in the current Government. I rather suspect that he might not agree with us on this but I hope he can. I think this debate is about Bristol, not air passenger duty. As the noble Baroness rightly said, if it is about devolution, there is no reason whatever that the treatment should not be the same for Wales as it is for Scotland and Northern Ireland.

It seems to me, too, that Cardiff is our Welsh national airport and should not be disadvantaged because of people who lobby for Bristol Airport. As good an airport as Bristol is, that is not the issue. This is about devolution, not about Bristol Airport.

[Lord Wigley]

My Lords, I will speak briefly in support of Amendment 96, so ably moved by the noble Lord, Lord Rowe-Beddoe. We are glad to hear his expertise in this particular debate.

The amendment provides for the devolution of air passenger duty to the National Assembly for Wales. As has been mentioned, long-haul air passenger duty is already devolved to Northern Ireland and Scotland. It was included as a key part of a carefully crafted package of devolved measures in the recommendations of the Silk commission—of which the Minister was a central part—and would be used to give competitive advantage to Wales.

Plaid Cymru MPs attempted several times to include APD devolution in the other place, but this was met by a deluge of England-centric counterarguments from the Secretary of State and his Ministers. They seemed more interested in the possible effects of devolving APD to Wales on airports in Liverpool and Manchester than the benefits to Wales. I exclude the noble Lord from this criticism, which is based on what was said on 11 July in another place, but I am dumbfounded as to how Wales Office Ministers, who are meant to be working in the interests of their constituents, can justify their position in prioritising English airports. In this instance, I gently say to government Ministers that their job is to stick up for Wales—goodness knows, there are enough other people in the Palace of Westminster to argue England’s corner.

A recent Western Mail poll found that 78% of Welsh people are in favour of devolving APD, showing that public opinion is clearly on that side. Increasing footfall at the airport would generate substantial revenues elsewhere in Wales, and enable Wales to better market itself for trade, tourism and inward investment purposes, which will become a top priority in the post-Brexit world which we, sadly, will soon inhabit. Let us also remember that Cardiff Airport is owned by the people of Wales. It should be a matter for Welsh Ministers to decide on an aviation strategy that best serves those people. Airports in England should not have the power to determine government policy and block a beneficial Welsh devolution settlement. I support the amendment.

Wales Bill

Lord Murphy of Torfaen Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 23rd November 2016 Lords Chamber

[Lord Howarth of Newport]

The noble Lord, Lord Elis-Thomas, is not only a master of procedure both in the Welsh Assembly and in this Parliament; he is also most ingenious politically.

[Lord Murphy of Torfaen (Lab)]

My Lords, I support my noble friend Lord Rowlands on his tidy amendment, which comes from a tidy friend. I have had the great pleasure of knowing my noble friend for 46 years; in fact, I was still in the sixth form when he first became a Welsh Member of Parliament. I know that the Minister has been hugely constructive during proceedings on the Bill. I hope that he will listen carefully to the points made by my noble friend, the noble and learned Lord, Lord Judge, and others with regard to Amendment 111.

I also support my noble friend Lord Elis-Thomas on his amendments, particularly on what he said about the role of the Secretary of State for Wales having changed dramatically. When he was a new Presiding Officer and I was a new Secretary of State, I had a desk and a seat in the National Assembly. I also had an office there. When I had finished some years later in 2009, I had lost both my seat and my office. That was a measure of the Assembly growing up and beginning to understand that we do not want Secretaries of State interfering any more in what it does.

[Lord Elis-Thomas]

I am sure that my noble friend will want to explain to the Committee that this happened with the full consent of the holder of the office of Secretary of State, and that our relationship was always one of positive development.

[Lord Murphy of Torfaen]

I am grateful to my noble friend. I want in particular to support my noble friend Lord Hain and his two amendments. For the whole of the Labour Government—from 1999 onwards, anyway—he and I held the position of Secretary of State for Wales between us. Two things emerged which were themes in that job—he has already touched on this. One was ensuring that there were good relations between the Assembly in Cardiff and the Government and Parliament in London. It seems to me that Amendment 120, which talks about the legislative consent Motion, is a vital link. I do not think that this Bill would be worth anything unless the Welsh Assembly agreed with it. It would be a pointless, meaningless Bill.

More particularly, on Amendment 120A, with regard to the fiscal framework, the Minister—and his boss—will know that relations between spending departments and the Treasury are never easy. Most of my time as a territorial Secretary of State was spent in negotiations with a less than benevolent Treasury, even when we thought that there was a lot of money about. It would try to stop and, occasionally, it would try to obstruct. I will not rehearse the arguments that we had some days ago on the devolution of income tax and a referendum but the danger with the devolution of income tax is that the Treasury will do its best to ensure that it keeps as much money as it can in negotiations between the Welsh Assembly—and the Secretary of State and Minister acting on the Assembly’s behalf—and the Treasury. There is an important issue here that, if the way in which the Assembly gets its money is to be dramatically changed—it is a dramatic change; I expressed earlier that I am quite dubious about the good effects of that—it will not necessarily be in terms of the democratic nature of income tax but the practical, realistic figures that result from its introduction. The people of Wales must not lose out upon the introduction of income tax powers for Wales and, ultimately, there should be a benefit to the people as a consequence of this new fiscal framework.

I know that we cannot hold up a crystal ball, but my noble friend made a very powerful case with regard to the resource base in Wales. We are not a rich nation and the amount of money that we can raise in income tax is low, as has been indicated even today in the figures that the Government have put out with the Autumn Statement. The amount that comes from every penny raised in Wales is effectively much less than can be raised in the rest of the United Kingdom, because of the need to ensure—as my noble friend rightly said—that we share and distribute our resources.

This amendment asks the Minister to tell us—on Report I assume, by which time there will hopefully have been an agreement on the fiscal framework—that the Bill should not proceed unless that fiscal framework is such that it is, at worst, neutral, and, at best, an improvement for the people of Wales in terms of what they get out of the settlement. There is no point in having a Bill that introduces the devolution of income tax if the Welsh people are going to be worse off because of the interrelationship between that and the block grant.

I have great pleasure in supporting all the amendments that have been proposed this evening.

[Lord Elystan-Morgan (CB)]

My Lords, I, too, support fervently and earnestly these amendments. I admire very much the eloquence and force with which those main arguments have been articulated, particularly, if I may say so, the magisterial rebuke that was delivered by my noble and learned friend Lord Judge.

It is not enough just to safeguard legislation in Cardiff. That of course, has to be done; it would be a nonsense to create a sister parliament—as it was described by Speaker Martin when the Cardiff Assembly was established—and, at the same time, to treat it as a meaningless plaything. But that is not the whole point. Most of the legislation they let into Wales is Westminster-based so that, in so far as protection is concerned, it would have to be protected not just in Cardiff but here as well, otherwise the main thrust of this issue would be missed.

I endorse everything that has been said by those who have held up this question of the template, as it were, of Clause 2. The Sewel protection, which was endorsed in Scottish legislation, has been perpetuated in this Bill. There is the danger that if nothing is done at all, the powers that we are discussing could make meaningless everything that is contained in Clause 2. I deliberately say “could make meaningless”, because there is the possibility that Clause 2 is meaningless already. In other words, if it were a case of Clause 2 being inserted in order to build a shield or carapace to protect the constitutional entity of Wales, it would be a very severe attack upon that protection. But, if in fact it were nothing more than merely declaratory of what was happening in any event, with the sovereign power of the Westminster Parliament deciding what was or was not necessary, it would of course be utterly meaningless. I do not think it necessary for us to dwell any further on that matter but it should be held up as a template for this piece of legislation.

My third point is that Henry VIII was no great benefactor as far as Wales was concerned. The whole purpose of the Acts of Union was not only to say that Wales should not exist but that it never had existed. It was said that,

“the dominion, principality, and country of Wales … is and ever hath been incorporated, annexed”,

and included within the greater realm of England. We never were there at all. Certainly, as far as Henry VIII clauses are concerned, they should be dealt with very carefully, because they erase the authority of Parliament —or they are, at any rate, in a position to threaten that, at their very worst.

I remember reading a book when I was a student by Sir Gordon Hewart, who was Attorney-General in, I think, the late 1930s. The book is called The New Despotism; it is an examination of the vast growth in powers delegated to Ministers by way of regulations. He saw this as a very great threat to parliamentary sovereignty. He was not talking about Henry VIII clauses but about the positive powers given to Ministers from day to day by way of regulations. If there was a new despotism then, now—three-quarters of a century and more later—that despotism has grown enormously. I would urge that thought be given to the exercise of delegated powers to Ministers. More and more are given every year and Parliament, even with the help of the massive effort of this House to scrutinise, finds it more and more difficult to sieve everything that goes through. And those powers are increasing. What Sir Gordon Hewart would have said of these negative powers I know not but, if there was a despotism three-quarters of a century ago, there is potential for very considerable despotism now.

I urge the House to accept the arguments put forward so magnificently by my noble and learned friend Lord Judge and indeed by those powerful bodies, the Delegated Powers Committee and the Constitution Committee of this House. They are dangerous powers to use. We should use them with very great circumspection in any event. However, in Wales there is a principle involved—namely, that you do not set up a parliament which you intend to be a genuine devolved Assembly, and then treat it as a meaningless plaything.

Wales Bill

Lord Murphy of Torfaen Excerpts

Report stage (Hansard - continued): House of Lords
Wednesday 14th December 2016 Lords Chamber

[Lord Murphy of Torfaen (Lab)]

My Lords, I support the amendments. The noble and learned Lord, Lord Judge, referred to Henry V as a Welshman; indeed, he was a Monmouthshire man like myself. Of course, Henry VIII was a Welshman too, and he was less benign to Wales than the other Henry, just as the situation described by noble Lords is not benign.

Over the past 20 years, the way in which legislation has been made in Wales has developed enormously. When it started in the late 1990s, the Welsh Assembly was effectively a big county council, and all it could legislate on initially was secondary legislation. Then my noble friend Lord Hain introduced the 2006 Wales Act, under which we had a sort of hybrid situation with legislative competence orders. Now, as the House knows, primary legislation can be, will be and is being made by the National Assembly for Wales. Those of us who live in Wales are subject to the laws of two parliaments and the diktats of two sets of Ministers.

Over the past two decades, the relationships between the two Governments and the two parliaments have themselves developed. At times, it has been very difficult, as my noble friend Lord Hain and I as Welsh Secretaries knew only too well. But now my noble friend Lord Rowlands has revealed—and the Minister himself revealed it in his letter to Members of this House—that a deeply unpleasant and unconstitutional situation is growing that allows Ministers in one Government to change the laws of another assembly or parliament. That is very wrong.

I rather suspect that the Minister will say that these amendments should not appear in the Bill for various reasons—not least of which is “It doesn’t happen in Scotland”, but that was a major oversight when the Scotland Bill was going through. In previous constitutional Bills, very often a Minister has indicated in the House what the consultation process can be. If the Minister cannot assure us that such provisions will appear in the Bill, perhaps he can reassure the House that there will be proper consultation between the two Governments and the two assemblies and parliaments, whenever the changes are made. That is not as good as putting changes in the Bill, but at least it would be something.

[Baroness Morgan of Ely]

My Lords, we have heard how Clause 60 allows for consequential provisions on Assembly Acts to be made by the UK Secretary of State. In other words, if there is a need for a tweak to be made to a new law introduced, or if there is a need to change a different government Bill as a result of the introduction of a new Bill, it could be done without going through the whole rigmarole of a full-on legislative parliamentary procedure.

We can all see the sense that now and again that is necessary. That is not an unusual state of affairs; it is not unusual for a Minister to be able to make consequential orders in relation to laws made and enacted in the United Kingdom. However, as we have heard, if a consequential law were to be introduced in Westminster, there would be that opportunity for both Houses to approve such changes before they could be enacted. If I may say so, I think that this House carries out that role very well; it is the House that really takes that seriously. As has been underlined, the major difference in relation to Wales is that the opportunity to approve consequential changes is not available to the Welsh Assembly on laws that affect it. That has been criticised vehemently by the Delegated Powers Committee.

My amendments would limit a requirement that statutory instruments would have to be approved by the Assembly so that it applied only if they related to provisions that would be within the Assembly’s competence or would amend the Government of Wales Act 2006. So it is a restricted responsibility. The Assembly would not be trying to grab power in any way—it is just making sure that the Assembly is able to do the work that it has responsibility for.

Wales Bill

Lord Murphy of Torfaen Excerpts

Report: 2nd sitting (Hansard): House of Lords
Tuesday 10th January 2017 Lords Chamber

In the meantime, however, because of the structural disequilibrium between Welsh tax growth and all-England tax growth, the very least that we should be seeking is fair comparisons between areas in England of similar industrial and economic structure and history to those in Wales, or, even more directly—and much more simply—we should make the comparison between Welsh rates of income tax growth and the English rate. Unless this basic equilibrium is addressed structurally and constitutionally, the disparities will continue to grow and, with them, the great disadvantages and some of the economic disincentives. So I ask the Minister, who I know is deeply committed to the basic well-being and future development of Wales, to give the most positive consideration to the proposal made by my noble friend.

[Lord Murphy of Torfaen (Lab)]

My Lords, as a co-signatory to my noble friend Lord Hain’s amendment, I support everything that my noble friend Lord Kinnock just said about the need to review the operation of devolving some income tax to Wales.

I congratulate the Minister and the Welsh Government on producing the fiscal framework. I defy anyone to understand it on their first or indeed second reading of it, but by the time you get to the third you get the general impression that it is an improvement in the finances for Wales over the last number of years. An improvement indeed: I have been living with the Barnett formula for three decades, and there is no question in my mind that the fiscal framework now before us is an improvement. However, there is no point in improving on the block grant if you then start losing out because of the income tax side of it, and that is the point that my noble friends have put. The important issue, as I am sure the Minister would agree, is that in the annual review of financing for Wales the impact assessment of this change will be very seriously examined. I am convinced that the comparisons between Wales and the whole of England mean that Wales could be disadvantaged unless we redress that in some way.

I support noble Lords who have dealt with the issue of Cardiff Airport. My noble friend Lord Kinnock, a former European Commissioner for Transport, put it distinctly: if we could give some advantage to Cardiff with regard to long-haul flights, that would not just be a benefit for Wales; it would benefit a whole swathe of England as well. I cannot for the life of me understand why the Bristol versus Cardiff argument applies in this case. Bristol has no runway capable of taking these long-haul flights. Cardiff has, and it is a very good runway. That could help the rest of the country as well as Wales, and I think the Minister must be persuaded that right across the House today people have said that this is a reasonable amendment that would not affect the Government’s position with regard to air passenger duty generally. I think the Government are wrong on that, by the way; if you devolve it to Northern Ireland and Scotland, you should devolve it to Wales too. Still, if Bristol is blocking this proposal, in the case of long hauls there is no block that the Government can actually agree to.

I hope the Minister will look favourably on all the different points that have been made today because they are made with the knowledge that over the last weeks and months the Government have accepted different points that have been put by Members of the House across the political spectrum. The Government have conceded on many issues, and I see no reason why they could not concede on this small but important point.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in the debate on the amendments in this group. Much of their contribution has been persuasive and helpful.

I thank those who have acknowledged the progress made in relation to the fiscal framework and the agreement. I stress that the agreement has been made between the UK Government, by the Treasury, and the Welsh Assembly Government, via the Finance Minister and the Welsh Ministers in the Welsh Government. To that extent, this is something that the Welsh Government have welcomed. The noble Lord, Lord Hain, in a very fair analysis, said I had welcomed this agreement for the long term, which indeed I have. More importantly, perhaps, it was welcomed for the long term by Mark Drakeford, who said he regards the agreement as ensuring there will be,

“fair funding for Wales for the long term by implementing the funding floor recommended by the Holtham Commission”.

Those are his words. He is yet to give a full analysis, to be fair, but that is the press statement that he put out and it is notable that that is the view of the Welsh Government. I also stress that the Welsh Assembly will of course be having a say on the legislation in general when it considers the LCM, so no doubt we will be giving a view on this important part of the legislation, as well as the rest of the legislation, when it delivers that view. That is something that we anticipate.

I turn to Amendment 143A in the names of the noble Lords, Lord Hain, Lord Kinnock and Lord Murphy, which all three noble Lords have spoken to very persuasively. As I have indicated, we have a requirement under existing legislation, which we will take forward in relation to this new legislation, of an annual report that happens in November/December each year. We will seek to ensure that the impact assessment—the information that the noble Lords are seeking—is incorporated in that report. As I have indicated, it is partly the Treasury, partly the Wales Office and partly the Welsh Government; all three contribute separately to that report. I will seek to ensure that that information is there because noble Lords have made a very fair point. The Government have already published two such reports, so there is a template. Of course, I appreciate that the significance of the new income tax powers makes the next report somewhat different in nature.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

I am sure I can and I will make endeavours to do so. Clearly, this is related to the way in which the levy operates. This is a matter being conducted from Westminster, so I will endeavour to get this information for noble Lords. What I cannot do is indicate how it will be spent. This is a matter for the Welsh Government and the National Assembly for Wales.

I turn now to Amendment 80 on air passenger duty. In doing so, I wish to say how sorry I am that the noble Lord, Lord Rowe-Beddoe, is not in his place because of indisposition. I am sure we all wish him a speedy recovery. I know that he has very strong views on this issue; I have discussed it with him on many occasions. The amendment was spoken to formidably by the noble Baroness, Lady Finlay, with other noble Lords speaking in support.

The Government have considered the case and options for devolving APD to the Assembly, as we committed to do in the 2015 St David’s Day agreement. From extensive debates in Committee, noble Lords will be aware that there is an issue about state aid, particularly in relation to but not limited to Bristol. The noble Lord, Lord Kinnock, correctly indicated a competitive element with Birmingham. There is a competitive element with airports in the United Kingdom which is obviously accentuated with those that are geographically proximate. While we remain members of the European Union there is clearly an issue with regard to state aid rules that cannot be lightly ignored. I assume that that will not be the position once we complete the Brexit discussions and implement it, but that is some way into the future. I put that important issue on one side.

[Lord Murphy of Torfaen]

Is it not the case, though, that the state aid argument would apply equally in Scotland and Northern Ireland?

[Lord Bourne of Aberystwyth]

The rules certainly apply equally throughout the EU but you have to establish that there is a competitive element. The distance from Edinburgh to Newcastle, which would be the next nearest airport where there is no devolution of APD, is considerably longer—and, I think, is a considerably tougher journey—than that between Cardiff and Bristol. I think noble Lords would accept that. I suspect that it is longer than the distance from Cardiff to Birmingham as well, so there is that difference. In Northern Ireland there is a different issue. The issue there concerns the presence of an airport in a different member state rather than within the same member state. Therefore, the rules are the same but obviously the geographical issue is somewhat different.