Wales Bill

Lord Rowe-Beddoe Excerpts

Tuesday 11th November 2014 Lords Chamber

I do not know whether the Minister can go this far. I suspect that her sympathies may be at least broadly in line with the amendment in the name of the noble Lord, Lord Elystan-Morgan, but I would not expect her to say that she was prepared to accept it. On the other hand, if the Government are to have a great look at what is to happen by 1 March, particularly on whether or not we should move to reserved powers, could she go so far as to say that, in the course of that review, one of the matters to which the Government will give urgent consideration is the size of the Assembly and whether it should increase from 60 to 80? I am not going to enter into a bidding war as to the precise number of Assembly Members there should be. In 2004 our figure was 80; I think that 80 is probably my figure now. Having a somewhat incremental view of these matters, I would be reasonably satisfied if we got 80 in this bite.

[Lord Rowe-Beddoe (CB)]

My Lords, I support the amendment most warmly. I do not wish to rehearse the Committee stage of the Bill, but I moved a very similar amendment at that time, supported by the noble Lords, Lord Elystan-Morgan and Lord Richard. I now have a mnemonic for the situation, PRAT. It works something like this: increased powers—which is what I focused on in Committee—brings increased accountability; increased accountability produces a necessity for greater transparency. I think those are totally linked. It is therefore important that we put a marker in the Bill. I agree with the noble Lord, Lord Elystan-Morgan, that this may well be determined in future by the National Assembly for Wales. In the mean time, a marker should be put down to recognise that we all feel—I think there is consensus in the House at this moment—that there are not enough Assembly Members to do the work that will be put on them by the powers they will be given by the Bill. I strongly support the amendment.

[Lord Norton of Louth]

My Lords, I, too, have sympathy with the amendment. I was recently in Cardiff Bay, speaking at a conference organised by the Welsh Government centre looking at the challenges facing the National Assembly. I focused on the challenges that derive from the fact that it is devolved, relatively new and small. Size does matter; it is especially important in a parliamentary system. As we have already heard, it affects the committees that are operating, not least because, with the small number of Members, there are problems setting up a comprehensive series of investigative committees where Members are not stretched by having to serve on several. That limits the capacity of the legislature to effectively scrutinise the Executive.

The other point about size is that the proportion of the Assembly that forms the Executive tends to be somewhat greater than with larger assemblies. The National Assembly is nowhere near the position in Gibraltar, where there are actually no Back-Benchers at all. However, the proportion of Ministers in the National Assembly is greater than it is in the House of Commons. In order for it to fulfil its functions effectively, you need members who can do that and to ensure that the Executive are not too prominent as a proportion of the Chamber itself. For these reasons, I have considerable sympathy with this amendment.

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[Lord Wigley]

My Lords, I have listened to the noble Baroness, Lady Morgan of Ely, with interest. There are certainly arguments in support of symmetry in constitutional terms; they usually lead to various forms of federalism. If the Labour Party is indeed moving towards a federal approach, that is certainly an important development.

I wish to address Amendment 20 in my name, which would provide that, if corporation tax were devolved to Scotland it should certainly be devolved to Wales or be available. Noble Lords may recall that I tabled an amendment in Committee proposing that if corporation tax were devolved to either Scotland or Northern Ireland, it should also be devolved to Wales. I based that on the fact that all four parties in the Assembly had agreed that this was needed, and that the Silk commission said that corporation tax should be devolved to Wales if it was devolved to Northern Ireland. The response that I elicited from the Minister, Lord Newby, on that occasion, was entirely centred on the comparison with Northern Ireland, not with Scotland. He based his argument on two factors: first, that Northern Ireland has to compete with the lower corporation tax in the Irish Republic. Wales also has to compete with Ireland for footloose inward investment projects, tourism businesses that cross the sea, and in the agricultural food sector, for example, in cheese manufacture. We share a maritime border with Ireland so I refute his argument on that count.

Secondly, the Minister argued on the basis that the tax devolution to Northern Ireland is in order to help it to rebalance its economy, with the implication that Wales does not need to rebalance its economy. That is absolute poppycock. Wales has the lowest GVA per head of any nation or region in the UK, following the rundown of coal, steel and slate. We desperately need to rebalance our economy. I am seriously concerned that a Treasury Minister, for whom I have very great respect, should have been advised by Treasury officials that Wales does not need economic rebalancing.

The Government do not recognise Wales’s needs vis-à-vis Northern Ireland. Be that as it may, the Minister did not try to defend not devolving corporation tax to Wales if it was, indeed, devolved to Scotland. I understand that this has been raised in the context of the Smith commission that corporation tax should be devolved to Scotland. Certainly, in the pre-referendum pledge the impression was given that the devo-max model being touted would include fiscal autonomy, and that certainly includes corporation tax.

In tabling the amendment I am seeking an assurance that if Scotland gets control over corporation tax the question should be firmly on the agenda of similar provision for Wales. I hope that on this occasion I get a more conciliatory response from the Minister, not just for me but for all four parties of the National Assembly that seek such powers.

[Lord Rowe-Beddoe]

My Lords, I support Amendment 16, standing in the name of the noble Baroness, Lady Morgan of Ely. It is very clear what it says, and without trying to rehearse arguments previously made, I want to discuss the devolution of air passenger duty. I refer your Lordships to my register of interests with regard to Cardiff Wales Airport. The Silk 2 implementation stated that long-haul air passenger duty should be devolved. The arguments put forward in Committee have been considerably amplified—perhaps extended—recently by an unlikely ally in Mr Willie Walsh, the chief executive officer of International Airlines Group, which as noble Lords know, incorporates British Airways and Iberia.

In an article in the Times on 30 October—it was after our Committee meeting; it would be flattering to consider that Mr Walsh was actually watching our proceedings—he takes it much further and calls for a total abolition of this tax across the whole of the United Kingdom. It was a stunning headline but when analysing what he said, and doing a little more research, it is worth making a mark as to what was behind his statement. He said that this tax, permissions, or whatever it may be,

“should be consigned to the annals of history”.

The argument put forward is that the estimated £3.5 billion that the Treasury receives would be more than offset by a boost of some 0.5% to our GDP and the creation of some 60,000 jobs.

The interesting thing is that it is possible to avoid this tax, and people do. For example, a family of four flying economy to the United States pays £276. A Japanese visitor flying back home from London to Tokyo pays £81. This may well have a connection with the flattening level of Japanese visitors to this country, both business people and tourists, over the last 10 years. This tax is a disincentive. Holland got rid of it after 12 months and has never looked back, so there is something to be said for replacing this tax.

I may be proved wrong but I believe that Scotland could well be getting something out of this. We all know what happened in the Republic of Ireland but what we do not know and do not realise is the damage that is done to Northern Ireland because of the hundreds of thousands of people who start their long-distance flights south of the border as £276 is a lot of money for a family of four flying economy. I support the amendment. I am sorry to bring up air passenger duty again but at present it is, I am afraid, a rather hot subject.

[Lord Howarth of Newport]

My Lords, these amendments utter an important warning. It is one thing to devolve minor taxes, such as development land tax and landfill tax, it is another to devolve more significant taxes such as air passenger duty, of which the noble Lord, Lord Rowe-Beddoe, has just spoken. But when it comes to the major taxes such as income tax and corporation tax, very deep thought needs to be given to the viability of such devolution if the United Kingdom is still to hang together. It worries me very much that we can toy with such propositions without them having been thought through. My noble friend is absolutely right to insist that, in the event of further proposals for tax devolution being made, deep thought needs to be given to them, led by the Treasury, and there needs to be a responsible debate across the United Kingdom because we risk unravelling if we continue to play these games.