Devolution: Wales and Scotland

Lord Wigley Excerpts

Thursday 18th June 2015 Grand Committee

Asked by

[Lord Wigley]

To ask Her Majesty’s Government how the powers promised to Wales and Scotland will operate within new, balanced United Kingdom governmental structures.

[Lord Wigley (PC)]

My Lords, I am very grateful for being afforded this Question for Short Debate and to the Minister and other colleagues for being here to consider what will surely be a dominating issue in this Parliament: namely, how the powers already promised to Wales and Scotland, together with the further powers being broached, will operate in a balanced governmental structure. That includes powers needed for England to take its own decisions on English matters. We are standing at an important crossroads but with a Government appearing unable to respond to the urgency of the moment or give any meaningful coherent lead. There is an urgent need to decide on the direction of travel, otherwise events—the piecemeal unfolding of legislation in the two Chambers at Westminster; the EU referendum; the outcome of the elections next May to the devolved legislatures; and the fleshing out of the cities Bill—will lead to a situation in which Westminster seems like a boat with no tiller or engine, and whose captain has no charts to see the way forward.

I shall make clear from where I come on these matters. I want to see my native Wales—my nation—have the greatest possible degree of independence but that does not mean absolute independence, as UKIP defines the term. We live as part of a community of nations, in European and British terms. Plaid Cymru does not want Wales to cut itself off from such relationships; rather, it wants Wales to be a full partner in its own right within such structures. We believe that Wales, like Scotland or Northern Ireland—or indeed England—has the right to independence, something which was accepted in the recent Scottish referendum. It was immensely to the UK’s credit that this was recognised. The principle has already been accepted long ago for Northern Ireland, as it underpinned the peace process, and more than one Prime Minister has accepted that Wales, too, has that basic right.

We are de facto living in a confederal union, in which the constituent parts have the right to go their own ways. There is therefore a question as to whether the citizens of each nation wish to exercise that right. My party, Plaid Cymru, fought the recent election on a manifesto calling for home rule for our constitutional objectives in this Parliament. Home rule is not a new term: 130 years ago, the Irish parliamentary party won 85 out of 103 Irish seats on a home rule manifesto. Had that been delivered, we probably would not have witnessed the Easter Rising of 1916, but despite Gladstone’s efforts it was denied and the UK, as then constituted, broke up in acrimony.

Are we any wiser today? Are the parties at Westminster going to respond to the Scottish situation in a positive, inclusive manner or are we going to see intransigence, with all that that implies? Let us remember how we got here. Gordon Brown, apparently speaking on behalf of all three of the then UK party leaders a week before the referendum, launched his famous vow. He referred to it as home rule—a devo-max type settlement which the Scots could secure if they voted no to independence. Scotland voted no and some who would have voted yes to devo-max, had that been on the ballot paper, were undoubtedly influenced to vote no because of that pledge. So what happened?

On 19 September, we had the Prime Minister unwisely trying to jump the gun at 7 am, linking in the same breath the Smith commission and English votes for English laws. Yes, we had the Smith commission, and while many of its proposals were, and are, worthwhile steps forward they certainly did not add up to home rule. The three UK parties fought the general election on implementing Smith. The SNP, accepting that the referendum had ruled out independence in the immediate future, advocated home rule as a practical next step, deliverable in this Parliament. The outcome of the election in Scotland was unmistakable. The three UK parties, placing their trust in the Smith proposals, got three MPs between them; the SNP, advocating home rule, got 56 seats. There is no mistaking an elephant when it sits on your doorstep. It is high time that the three UK parties accepted that it is home rule that the Scots endorsed on 7 May.

The noble Lord, Lord Forsyth, summed it up last week when he said that,

“the Smith commission proposals are clearly not going to meet the aspirations of the Scottish people”.—[Official Report, 8/6/15; col. 626.]

I also draw the Minister’s attention to the words of the Conservative MP, Bernard Jenkin. Speaking at Second Reading of the Scotland Bill, he said:

“I am bound to ask … whether this Bill is really ‘it’ for the future of Scotland. Is this the full and final settlement that will stabilise the Union of the United Kingdom? I hae ma doots”,

if I interpret the accent correctly. He added:

“We need … to start building up a consensus on what a full and final settlement for the whole United Kingdom might look like … we need a new, 21st-century Act of Union”,

which,

“would aim to provide a balanced and equal settlement of powers across the four parts of the United Kingdom … and a mechanism such as a new council for the Union for distributing UK tax resources on the basis of need and unanimous agreement”.—[Official Report, Commons, 8/6/15; cols. 941-43.]

In the same debate, the SNP leader Angus Robertson MP stated:

“There is no doubt whatever that this Bill does not match the pledges of the campaign or the spirit and letter of the Smith deal”.—[Official Report, Commons, 8/6/15; col. 946.]

Labour’s shadow Scottish Secretary, Ian Murray MP, stated:

“This might be a Scotland Bill, but it has implications for other parts of the UK”.—[Official Report, Commons, 8/6/15; col. 938.]

However, he did not commit to home rule all round, which I hoped would be forthcoming.

What do we mean by home rule? Putting it crudely, it means Westminster retaining sovereignty over defence, foreign affairs, the monarch and the pound with the Scottish Parliament having sovereignty over everything else in Scotland, and likewise in Wales, Northern Ireland and England. Of course, it is not that simple. It implies a quasifederal or confederal constitution. It implies some federal taxes and some non-federal taxes, which is a model towards which we are already moving. It implies, one way or another, an English Chamber dealing with non-federal matters.

Here I come to the heart of the matter as far as we in Wales are concerned. The key question for us is whether Scotland is to have a Scotland-only solution, a separatist constitutional settlement separate from the rest of the UK, or whether we are to have a balanced UK-wide settlement in which new constitutional provision is made not just for Scotland but for Wales, Northern Ireland and, indeed, England. In other words, are we going to get a coherent, thought-out structure of government which has a reasonable chance of standing the test of time or are we going to have a knee-jerk, ad hoc settlement responding to the most recent kicking suffered by the Government, which certainly will not endure?

In my final remarks, I shall put forward some positive ideas by drawing attention to a keynote speech made on 20 May by Plaid Cymru leader Leanne Wood AM, a name, face and voice familiar to many colleagues from the election television debates. She proposed that,

“all responsibilities except for those over defence, foreign affairs, the Crown and the currency, should be transferable to any one or all devolved governments, provided a majority vote in favour of such a transfer in the respective national legislatures”.

She added:

“This flexible approach allows for each nation to build a constitutional framework that is in the specific interest of the nation, but guarantees … the consent of the people at all times”.

She also called for a strong council of Ministers at UK level to replace the present joint ministerial committee, a principle which the Smith commission has also endorsed. Those three elements—a council of Ministers, a clear devolution process and a mandate from the national legislatures—would, in her words,

“serve all the nations and peoples in these islands far better than the current web of complexities”.

She described this model as,

“a proposal for a Confederal UK”,

and I strongly endorse this approach. I appeal to the Minister to give an assurance that such a new constitutional model has not been ruled out. Much work would need to be done on the detail, perhaps by a convention, provided that it had a strict 12-month working time limit to deliver its recommendations, which could then be legislated upon within two years and brought into effect prior to the 2020 election. As such, this proposal has the seeds of a way forward which respects the aspirations of all four nations within a framework of co-operation.

The United Kingdom as currently constituted is drinking in its last chance saloon. A new constructive partnership between the nations of these islands is still possible if leadership and vision are forthcoming, but it will not happen unless there is a new realisation in this Chamber and the other place of the urgency of the situation. Will the Minister please ponder on these matters and keep the House informed as ideas progress, giving us every opportunity to debate the unfolding Scottish settlement in the context of a new deal for all the nations of these islands and, in particular, for Wales?

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)]

My Lords, I am grateful to the noble Lord, Lord Wigley, for bringing this Question to the House. I know that he brings considerable knowledge and experience to this important subject. The debate on how powers promised to Wales and Scotland will operate within new, balanced United Kingdom governmental structures has covered a wide range of issues. Although the Question mentions Wales and Scotland, I cannot help but notice that the speakers list has a distinctly Welsh flavour. I hope that, as a Scotland Office Minister, I can do justice to the Welsh aspects of the Question. I congratulate all noble Lords who have spoken so well and demonstrated their considerable expertise in the issues before us. I am grateful for the opportunity to close the debate and will endeavour to respond to as many of the substantive points raised as possible. If there is a specific point to which I am unable to respond, I will happily write to noble Lords.

Since 1998, the devolution of powers and responsibilities to the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly has fundamentally changed the constitutional make-up of the UK. Today’s debate is timely as the Government have made a commitment to implement the St David’s Day agreement for Wales and have introduced the Scotland Bill to implement the Smith commission agreement for Scotland.

The Government have announced a programme founded on the idea of one nation—bringing fairness to all parts of our United Kingdom—where the people and institutions across this country are treated with respect. Governing with respect means recognising that the different nations of our United Kingdom have their own Governments, as well as the United Kingdom Government. Both are important and with our plans, the Parliaments and Governments of these nations will become more powerful, with wider responsibilities. No constitutional settlement could be complete if it did not also offer fairness for England.

The Government’s plans for constitutional reform set out in this Parliament build on the record of the last Government, who delivered one of the most extensive programmes of devolution of any government, including the largest devolution of fiscal powers to Scotland in over 300 years, a referendum to give the Welsh Assembly for the first time primary law-making powers, and legislation to give the Welsh Assembly for the first time tax and borrowing powers. I pay tribute to the noble Baroness, Lady Randerson, who played such a distinguished part in helping to deliver that programme.

The Government’s constitutional proposals for this Parliament also build on a substantial body of detailed work undertaken by constitutional experts in a range of forums. The Smith agreement was informed by the significant analysis undertaken by the Calman commission and the individual commissions established by Scotland’s political parties, such as the Strathclyde commission. The St David’s Day agreement takes forward the work of the Silk commission. Similarly, the English proposals are an evolution of the work of the McKay commission, among others.

The Government are taking forward these proposals because it is the right thing to do. There is consistency in our approach. We believe in devolving decision-making closer to the people who are affected by those decisions, and in increasing the responsibility of the devolved Administrations to the people who elect them. One of the weaknesses of the original devolution settlements was that, while the devolved Administrations had significant powers to spend money, they had little or no responsibility for raising it. The Government are rectifying that imbalance.

The Scotland Bill will increase the financial accountability of the Scottish Parliament. To respond to one of the points raised earlier, it meets both the spirit and the letter of the Smith agreement. For similar reasons, we look forward to the Welsh Government holding a referendum on devolving income tax powers. The noble Lord, Lord Wigley, spoke of the need for Wales to have the greatest degree of independence. However, the Government believe that it is important to strike a balance between giving the Scottish Parliament and the Welsh Assembly more control over domestic affairs, and preserving the strengths of being part of the larger UK family. The noble Lord also questioned whether the proposals for Scotland go far enough or are ambitious enough. I think that, as was rightly pointed out by the noble Baroness, Lady Morgan, after these powers are delivered the Scottish Parliament will be one of the most powerful devolved parliaments in the world.

In taking forward this programme, the Government recognise that there is no one-size-fits-all solution. The noble Baroness, Lady Randerson, mentioned federalism. I can think of no examples of a successful federal state in which one of the constituent parts represents 85% the whole. The individual devolution settlements reflect the distinct histories, circumstances and geographies of the different parts of the United Kingdom. The appetite for devolution in Wales is different from that in Scotland. What the First Minister of Wales said in a recent speech was echoed here today by the noble Baroness, Lady Morgan. He said:

“I have said in the past that whatever proposals for further devolution to Scotland should be offered also to Wales. But I do not subscribe to the notion that whatever Scotland has, Wales must have too, without properly considering the implications. The devolution of welfare programmes to Wales, for example, is not something that we consider to be in the best interests of Wales”.

The noble Lord, Lord Wigley, suggests that it should be for the legislatures of the UK nations to decide which areas of responsibility they wish to have transferred from Westminster. Let me emphasise that devolution across the UK has been taken forward to suit the particular needs of each nation, and on the basis of cross-party consensus. Both the Smith agreement and the St David’s Day agreement reflect those aspects on which there is cross-party consensus in both Scotland and Wales. This is the foundation on which our legislative proposals are and will be based.

Let me say a little more about Wales. I can confirm to the noble Baroness, Lady Randerson, that the scope of the new Wales Bill will be as envisaged in the St David’s Day agreement. The Wales Bill will provide a robust package that will make the Welsh devolution settlement clear, sustainable and stable for the future. The noble Baroness, Lady Morgan, asked about the reserved powers model. The Government intend to discuss an early draft of the reserved powers model we are preparing with the Welsh Government in the coming months, and we want to engage the Welsh Government and hear the views of Welsh Ministers before publishing a draft Wales Bill for pre-legislative scrutiny in the autumn. I do not want to pre-empt the outcome of those discussions.

The St David’s Day agreement also said that we will consider other non-fiscal elements of the Smith agreement to decide whether they should be implemented in Wales. That is being done right now, although, as I previously noted, what is right for Scotland is not necessarily right for Wales.

The issue of intergovernmental working was raised by the noble Lord, Lord Wigley, who spoke of his desire to see the joint ministerial committee replaced by a UK council of Ministers. While I recognise that existing joint ministerial committee structures can be improved, it is a forum that has long supported the changing devolution settlements and it would not be appropriate to replace it altogether. A process is in place across the four Administrations to review the memorandum of understanding that establishes the joint ministerial committee. Any changes will need to be agreed between the four Administrations and will consider the interests of the whole of the UK.

The noble Baronesses, Lady Randerson and Lady Morgan, raised the issue of a constitutional convention to deliberate on the broad shape and nature of the United Kingdom. I respectfully suggest that this should not be our priority. Our priority is to deliver on the constitutional commitments we have made. All our constitutional proposals draw on the values and traditions of our United Kingdom. The British constitution is characterised by pragmatism and an ability to evolve and adapt to changing circumstances. Our unique constitutional arrangements enable agility and responsiveness to the needs and wishes of our citizens. Those wishes are surely clear: a desire to be part of a strong and successful union, but one that recognises and values the unique nature of and arrangements in each of our nations.

On the issue of funding, which has already been mentioned, the Government have made it clear that Barnett formula will continue to be used as the basis for calculating the block grant. By moving to greater self-funding, and thus greater accountability, we are delivering mature and enduring settlements that provide strong incentives for economic growth, which will help to address the concerns raised by the noble Lord, Lord Thomas. The Barnett formula will therefore become less important as the Scottish Government become responsible for raising more of their own funding following the devolution of further tax powers.

[Lord Wigley]

I grant that those changes may happen in Scotland. However, does the Minister accept that unless there is a radical change to the funding in Wales, putting in a floor does not make up for the 15 years of underfunding and the position we are in? What specific proposals will the Government bring forward to put this right, for the sake of whoever is governing in Cardiff?

[Lord Dunlop]

It is important that any settlement is fair to Wales. The Government are very conscious of the need to address the issue of fair funding for Wales. I note—I think it has already been mentioned—that according to the Holtham criteria Wales is not currently underfunded, and it is also important that the Welsh Government become responsible for raising more of the money they spend. That is why we will introduce a floor in the level of funding provided to the Welsh Government, and the details will be agreed at the next spending review, in the expectation that the Welsh Government will call a referendum on income tax powers in this Parliament.

The noble Baroness, Lady Randerson, raised the issue of Holtham. It is worth saying that the Secretary of State for Wales has held discussions with Professor Holtham and others with regard to a floor, and the Government consider that the work of the Holtham commission still has resonance today. There are no plans to recommission Professor Holtham to undertake any further analysis.

Before we conclude our deliberations for the day, I thank your Lordships once again for the insight and knowledge demonstrated during today’s debate. We have ranged over a wide area of subject matter, and as I said at the outset, the Government will govern with respect and honour our promises to improve governance for all parts of our United Kingdom. We have begun to bring forward legislation to secure a strong, fair and enduring constitutional settlement. Bringing together the four nations of our United Kingdom is an important task and a chief priority of this Government, and I know that your Lordships will play a full part in that task.