Wales Bill

Lord Wigley Excerpts

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

Moved by

[Lord Wigley]

54: Schedule 1, page 59, leave out lines 9 to 27

[Lord Wigley (PC)]

My Lords, Amendment 54 stands in my name and that of the noble Baroness, Lady Morgan of Ely. I will also speak to Amendments 103, 105 and 107A, which also stand in my name and are grouped with my lead amendment. Some of them also stand in the name of my noble friend Lord Elystan-Morgan and the noble Baroness, Lady Randerson. I am grateful to these and other colleagues for their support in this matter.

The Committee today has an opportunity to put right a great historic wrong which has been the subject of much misgiving and dismay for a period of half a century and more. It concerns the drowning of valleys in Wales, usually with the compulsory eviction of farmers from their homes and land, sometimes with the destruction of whole villages and rural communities. I hope that in this matter I am knocking on an open door.

It would be stupid to assert that we should never construct reservoirs to supply water for domestic or industrial purposes, or to control the flow of water in our rivers. Some such projects have of course been built to supply water to our own conurbations in Wales, while some have been to provide water for English cities such as Birmingham. Some have been undertaken with the acquiescence of local people and with reservoirs so located that they do not cause massive disruption. Some projects have been handled with sensitivity and common sense, sometimes the reservoirs have helped to avoid flooding in Wales, as well as down river in England, and adequate compensation has been provided to those affected. But there have been other projects which have, to say the least, been handled in a cack-handed manner and, at worst, have ridden roughshod over local communities and their interests.

The best known of these, with the greatest ill repute, was the Tryweryn valley case, about which I shall say more in a moment—but it was not the first. The drowning of Llanwddyn and the valley in which the village was located to create Llyn Efyrnwy, the Vyrnwy reservoir, in the 1880s was probably the first to generate rancour. The poet Cynan, later Archdruid of Wales, wrote Balaad Dyffryn Ceiriog, which sums up the deep feelings. With noble Lords’ permission I shall quote just one verse in the original Welsh:

“Beth waeth fod dychryn dan fy ais?

Beth waeth fod deigryn ar fy ngrudd?

Wrth synfyfyrio ar y trais

A llwytho ‘nodrefn? Daeth y dydd

I ffoi o flaen y llid a fydd.

Pwy ydym ni, i gadw stwr?

Ffarmwr neu ddau, a gof a chrydd,

Cleddwch ein cartref dan y dwr”.

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[Lord Bourne of Aberystwyth]

I fully understand.

It will be important to put in place a protocol with bite. Both Governments will be subject to a duty to act in accordance with the new agreement and, once it is in place, both will need to agree any changes to it. The agreement will also need to include a process for resolving any disagreements that both Governments will sign up to.

It is as yet too early to say how soon the new arrangements will be agreed, but the Government will repeal the Secretary of State’s water intervention powers once an agreement is signed and sealed. This historic commitment to remove the intervention powers paves the way to conclude the Government’s consideration of the wider devolution issues relating to water and sewerage, including the sewerage intervention powers currently in Clause 46 of the Bill and the question of whether powers over water and sewerage should be aligned with the England-Wales border.

The Silk report recognised that water and sewerage devolution was complex and that further work was needed to consider the practical implications of implementing the commission’s recommendations. Following the St David’s Day agreement, the Government set up the joint Governments’ programme board with the Welsh Government to look at these issues and report on the likely effects that implementing the recommendations would have on the efficient delivery of water and sewerage services, on consumers and on the water undertakers.

That work has concluded and the Government have been considering the evidence that has been collected. In doing so, it has been particularly important to consider carefully the interests of customers and businesses on both sides of the border before reaching a decision on the recommendations. It remains the Government’s intention to bring forward provisions to implement the recommendations, if such a thing is achievable, and I hope to be able to return to this on Report.

I will now turn to other water-related amendments that are not Silk recommendations. Amendment 104, tabled by the noble Baroness, Lady Morgan of Ely, seeks to amend the Water Industry Act 1991 as it relates to Ofwat. Part of this amendment would require the Secretary of State to seek the consent of Welsh Ministers before making directions to Ofwat, outlining her priorities for keeping the activities of water companies under review. This would occur where these directions apply to Welsh water companies and licensees carrying out activities in the areas of those companies. This requirement for consent would cover all of Ofwat’s functions, including those applicable to policy areas reserved to the Secretary of State, such as those relating to competition law, insolvency and mergers. This would give the Welsh Ministers considerable influence over policy areas that are not devolved.

The noble Baroness’s amendment would also place a requirement on Ofwat to make its annual report to the Assembly rather than just send it a copy, as is currently the case. At present there is nothing to prevent the Welsh Ministers laying before the Assembly the annual report that Ofwat sends them or publishing it in any manner they see fit.

The amendment requires appointments to Ofwat’s board to be made jointly by the Secretary of State and the Welsh Ministers. Other amendments seek to grant Welsh Ministers joint powers with the Secretary of State over board members’ terms and conditions. Currently, the Secretary of State makes all appointments following consultation with the Welsh Ministers and consults them on some other aspects. In practice, this means that the Secretary of State writes to the Welsh Ministers to seek their views on an applicant before confirming the appointment. However, the Welsh Government are also invited to sit on the appointment panel, which is chaired by Defra. This, along with the various requirements to consult Welsh Ministers, already provides the Welsh Government with considerable influence over the process and final appointment decisions.

Amendment 105 in the name of the noble Lord, Lord Wigley, concerns the abstraction of water from Welsh reservoirs. As I think I have indicated, I share the views expressed by noble Lords today: the events of some 50 years ago which resulted in the flooding of Tryweryn were some of the darkest and most regrettable days in modern Welsh history. Never again.

In answer to the question raised by the noble Baroness, Lady Morgan—I am delighted to note that she did not wish to be churlish; I welcome that very much—decisions about the construction of new reservoirs and environmental controls are already devolved to the Assembly. However, we are going further—and rightly so. The Assembly exercises legislative competence in relation to both issues: construction and environmental controls. The Welsh Ministers would need to issue a compulsory works order to allow the construction of a new reservoir to take place. It is within the competence of the Assembly to give itself a role in the issue of consent orders.

Natural Resources Wales is the environmental body which regulates abstraction in Wales. Again, the Welsh Minsters and the Assembly can legislate to change or add to its powers. Nevertheless, as announced yesterday by my right honourable friend the Secretary of State, the Government intend to remove the Secretary of State’s powers to intervene on water and replace them with a protocol. I think that that is in the spirit of where we need to be in relation to this totemic and practically significant area of water. On that basis—

[Lord Wigley]

I have listened very carefully to the response that the noble Lord, Lord Bourne, has given us. Quite clearly, there is an intention to make considerable movement in what I and many others would regard as the right direction on this matter—but we cannot come to a judgment on that until we see what comes forward on Report. However, can he confirm one thing? Notwithstanding that there are powers in planning, and the other powers that he has mentioned, will he consider between now and Report to have it written on the face of the Bill, so that there is no doubt whatever, that the construction of the reservoirs in Wales is a function of the National Assembly, in the same way that it is spelled out that the control of fracking is in the control of the National Assembly? Can he give us an assurance that he will be looking for words by which to achieve that between now and Report?

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[Lord Bourne of Aberystwyth]

I am very grateful to the noble Lord for reminding me of the years of co-operation we had in the National Assembly for Wales and for clarifying that issue in the way that he did. On that basis, I hope that the noble Lord will consider withdrawing his amendment.

[Lord Wigley]

My Lords, I am very grateful to everyone who has participated in this debate, including two former Secretaries of State for Wales—we had four in the Chamber and one adjacent to it at one point; a remarkable situation—and for the expertise that they have brought to our consideration. I also thank the noble Lords, Lord Elystan-Morgan and Lord Thomas of Gresford, for their passion and background, which added to our understanding, and the noble Lord, Lord Morgan, from Aberdovey, for his historical knowledge and appreciation of the importance of this issue to the people of Wales. I thank also the noble Baroness, Lady Morgan of Ely, for her contribution and her amendments, which I think should be considered along with the others between now and Report—perhaps we can discuss those. I am grateful for the intervention of my noble friend Lord Elis-Thomas, who represents in the National Assembly the area that includes the Tryweryn valley.

I think that we are making progress. We have not got there yet but there is much to be considered and built upon between now and Report. If the Minister can deliver what he seems to want to deliver, and if his colleagues in the Wales Office can do likewise, then quite possibly we can, once and for all, put this issue to bed by making it quite clear that control of these matters is in the hands of the elected National Assembly for Wales. There is a need for co-operation, but there is also a need to appreciate the importance of communities and the significance of this issue to our nation. On that basis, I beg leave to withdraw the amendment.

Amendment 54 withdrawn.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I have spent much of the past five years involved with energy matters both here and abroad, albeit specifically interconnection and the generation of green energy. A nation's energy supply is so important a part of both industrial strategy and national security that in many countries the energy ministry is second in importance only to the Prime Minister’s office. It is surely right therefore that central government retains responsibility for determining the strategy that will ensure the security of supply for the whole nation through our common national grid.

The Silk commission recommended an increase in the threshold for devolved energy consenting for new projects from 50 to 350 megawatts—and this level I thought was agreed by all parties. Further, the Energy Act 2016 granted localised decision-making for all onshore wind projects. Surely the two together strike the necessary balance between devolving authority for many renewable energy schemes, for example the Swansea tidal lagoon, and allowing the Government to retain responsibility for larger schemes of more strategic significance to electricity infrastructure stretching beyond the confines of Wales.

Most of you will be aware that this is the first Bill that I have seen coming through this House. What a meaty one it is. I cannot hope to match the eloquence of the noble Lords, Lord Wigley and Lord Elystan-Morgan, but it did bring to mind the final two lines of the poem commissioned from the national poet for the opening of the fifth Assembly in Cardiff this year:

“Sooner may two men meet than two mountains”.

[Lord Wigley]

My Lords, once again it is a delight to follow the noble Baroness, Lady Bloomfield of Hinton Waldrist. I had the pleasure of speaking after her when she made her maiden speech a few weeks ago on an earlier stage of this Bill. On this occasion, I am afraid that we shall not see exactly eye to eye on the question of the limitation, since I shall speak briefly to Amendments 99 and 101, which seek to remove the 350 megawatt limit on the devolution of energy projects to Wales.

Having given Scotland complete control over its natural resources—with no limits, so for those looking for a United Kingdom policy, that has already been given away—the Government are proposing to devolve energy in Wales only up to a limit of 350 megawatts, with anything above that threshold being reserved to Westminster. This arbitrary constraint on the ability of Wales to control its own natural resources has stirred many emotions in Wales. It seems archaic and contrary to the spirit of devolution that Whitehall will still decide how and when Wales can harness many of its most precious natural resources.

I shall outline what this means in practical terms by reiterating an example highlighted by my colleagues in another place. Responsibility for the 320 megawatt Swansea Bay tidal lagoon would be devolved under the current Bill. However, the proposed Cardiff and Colwyn Bay tidal lagoons, which are identical apart from scale, will be reserved to Westminster. This does not stand up to any test in logic.

The Government have chosen to use the cover of the Silk commission’s recommendations—which, I recognise, also suggested a possible limit of 350 megawatts. However, if they are going to do so, does the Minister not agree that all of the Silk recommendations must be treated with the same respect? The Government most certainly are not doing this in other instances, so why pick out this one? As the Minister will undoubtedly recall, the 350 megawatt limit was agreed to in a cross-party Silk commission discussion on the understanding that other parties would support the devolution of policing and broadcasting. Does he recall that meeting? I have the references.

I conclude by noting that this is once again an example of how we are asked to accept second best in terms of devolution of energy. We are asking only for the same deal that is afforded to other nations. The 350 megawatt limit that the Bill imposes stops Wales effectively harnessing its world-class renewable resources —its wind, its coastline and sometimes even its sun. As my noble friend Lord Elis-Thomas emphasised, these are important ingredients for the future of the Welsh economy. Our resources belong to the people of Wales and now is the time for the law of the land to recognise that.

[Baroness Randerson]

My Lords, we on these Benches have felt for a long time that the constraint on the Assembly’s current control over energy is ridiculously low and the suggestion that it should rise to 350 megawatts is better, but by no means good enough. The noble Lord, Lord Wigley, has outlined the foolish situation that we are likely to find ourselves in if the 350 megawatt limit is adhered to. We all know it was picked as a limit by the Silk commission because it would encompass the Swansea Bay tidal lagoon. But as the noble Lord pointed out, the problem is that the sister projects in Cardiff and Newport, if they are built, will be larger than 350 megawatts, so by what measure would the Swansea lagoon not be considered to be of strategic importance but one built in Cardiff would be?

It is absolutely essential that the Welsh Government and the Assembly are able to take a stronger position on energy development. They should also be able to take a distinctive and different position on it. We fully accept that nuclear developments would not be appropriate for devolution because of their massive scale, but we do not believe that artificial limits should be put on the ambition of the people of Wales, the Assembly and the Welsh Government to provide a larger share of the energy they consume, and to find new, different, innovative and environmentally sound ways of doing so. I think that this is one of the most important series of amendments which have been put forward to the Bill so far.

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[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords who have participated in the debate on devolution of energy to the National Assembly for Wales. I turn first to Amendment 55A, moved by the noble Baroness, Lady Morgan of Ely, which seeks to add an exception to the reservation in new Schedule 7A relating to the,

“Generation, transmission, distribution and supply of electricity”.

It is an amendment that needs to be considered in the context of Clauses 37 and 40, and of reservation M4 on “Development and Buildings”.

The Silk commission recommended that there should be further devolution to Wales—it is further devolution, as the noble Baroness, Lady Randerson, recognised—of responsibility for consenting electricity generation projects, and that there should be a more streamlined approach to consenting ancillary developments required to sit alongside those projects. Those were points well made in the debate. There was cross-party consensus to implement these recommendations taken forward under the St David’s Day agreement. Without looking at the Silk process, although I accept that it is important for the legislation, this is essentially based on the St David’s Day agreement.

We achieve the expanded role that Silk envisaged through the combined effects of Clauses 37 and 40, which clearly set out the parameters of the new devolution settlement in this area. The extent of that settlement is further reinforced by the terms of reservation M4, which provides that the very instances referenced at Clauses 37 and 40 are carved out of the range of planning matters that are reserved.

To provide further clarity on this point, the consenting of a generating station or an overhead line is a planning matter. While I accept that the proposed amendment is well intentioned, it would be not only superfluous but, as an addition to reservation D1, misplaced. Section D1 relates to the regulation and licensing of the process of generating electricity and to what subsequently happens to that electricity. This is the regime administered on a GB level by Ofgem, which includes Scotland. It does not concern itself with the planning for, or the construction of, the means of generating electricity.

Further, as drafted, the reservation would add confusion to the particular reservation and potentially the schedule in general. The Assembly’s legislative competence is limited to Wales—the counties forming Wales and the territorial waters adjacent to those counties. The amendment talks about planning in the “Welsh zone”, which includes seas beyond the territorial waters and outside the legislative competence of the Assembly, as we touched on earlier about the issue beyond the 12 miles of territorial sea. I hope the noble Baroness, Lady Morgan, will take those points on board.

As I said, the Bill already devolves matters relating to the planning for developments of up to 350 megawatts. This is not a point that has been covered, but the Energy Act 2016 has already devolved all onshore wind consents without limit to local authorities in Wales. At the same time, we devolved power to the Assembly to change that to the Welsh Government if it wanted to do so. In response to my noble friend Lord Crickhowell, I recognise his view that this should be a matter for local people, which I share, but at the same time, with this being a devolved issue, it would be for the Welsh Government to alter that if they wanted to do so. We have indicated our intention by giving the power to local authorities. The Welsh Assembly could alter that. There is no limit to the power relating to onshore wind. That might reassure noble Lords who were unaware of that.

The noble Lord, Lord Elis-Thomas, asked about a protocol. I will certainly go this far: it is important that Ministers talk together. Many of these projects are happening at a UK level. We should not consider that there is always malign intent on the part of the UK Government towards Wales. As we know from the Swansea lagoon project and others, important infrastructure projects are being moved forward by the UK Government, who are talking on a regular basis to officials and Ministers in Wales. Those points were covered by my noble friends Lady Bloomfield and Lady Finn. It is right that some of these important decisions are discussed between Wales and the United Kingdom.

I also say to the noble Lord, Lord Elis-Thomas, that I know, because I was a Minister in the Department of Energy and Climate Change, that BEIS is looking at small modular reactors. Trawsfynydd’s interest has obviously been noted, but I have to say to him that if it had been in Scotland it would not have got off the ground because of the nuclear element. Sometimes there are unintended consequences to these things. To come back to the issue we are looking at, the amendment as drafted would not achieve what it seeks to do, in any event.

Amendments 99, 100, 101 and 102 seek to reopen a key recommendation of the Silk commission and the St David’s Day commitment: that the devolution threshold for future consenting for electricity generation in Wales should be 350 megawatts and below. That threshold gives the Assembly and Welsh Government substantially more autonomy in determining the shape of Wales’s future energy structure than was previously the case.

I accept that any level is, in a sense, arbitrary. It has to be a matter of judgment where it is set as to what is appropriate for the UK Parliament and what is appropriate for Wales—hence the importance of the dialogue between the two Governments and the two Parliaments. It respects the fact that Wales and England are, and will remain, intrinsically linked through a common electricity transmission system that depends on inputs from a broad range of generating sources. The Government remain firmly of the view that, the larger the capacity of those sources, the greater their significance beyond the confines of Wales and to the United Kingdom as a whole. Those points have been made by noble Lords as the debate has progressed.

Consensus was reached during the St David’s Day process about the cut-off point. The noble Lord, Lord Wigley, said that if the Swansea lagoon is within this process for Wales—as I accept it is—it is simply an issue of scale. I agree that it is an issue of scale; that is where the cut-off comes in, because the cut-off has to be arbitrary. I cannot see that it can be any other way. It is a matter of judgment as to what is strategically significant for the United Kingdom and what is appropriate for Wales.

[Lord Wigley]

On that point, with regard to Swansea Bay being just below the threshold and Cardiff and Colwyn Bay being just above it, does it not make all sense for this limit to be adjusted at least enough to take those together, so the expertise in handling these matters is all in one place?

[Lord Bourne of Aberystwyth]

My Lords, I say two things to that. First, I am certainly not going to get into a Dutch auction as to what should come within on that basis. Of course I understand the point he makes, but my second point takes me back to one I have already made: we need a ready and willing dialogue between the Welsh Government and the National Assembly, as I think is happening, and between BEIS and Parliament. There is no reason to suppose that there is a malign intent regarding these projects. I know the noble Lord is not suggesting that.

Government Amendment 119G is a minor and technical change to Schedule 5. Under Clause 37, Welsh Ministers will have the ability to consent to electricity generating stations of up to 350 megawatts in waters adjacent to Wales. The vehicle for doing so will be Section 36 of the Electricity Act 1989, and Schedule 5 to the Bill gives Welsh Ministers the ability, by regulation, to amend the Section 36 application processes to suit their purposes. The Bill currently also extends that regulation-making power to Section 37 of the Electricity Act, which relates to the consenting of overhead power lines. However, as Section 37 consenting powers are not being devolved in the Bill, the power is ineffective and it makes sense to remove it.

Government Amendment 121 amends Clause 55. Further to the one-stop-shop philosophy for energy consenting advocated by the Silk commission, Clause 41 provides the Secretary of State with the ability to consent associated developments along with the principal consent for nationally significant infrastructure projects in the field of electricity generation and transmission. This will deliver significant streamlining improvements to a system which, at present, can require developers to assemble consents from a plethora of different authorities. It is wholly consistent with the Government’s policy of encouraging infrastructure development for these changes to be introduced as soon as it is practical. The amendment will achieve that by commencing the relevant provisions two months after the Bill’s Royal Assent.

On that basis, I urge the noble Baroness to withdraw the amendment, and for her and the noble Lord not to press the other amendments in the group. I intend to move the government amendments.

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[Lord Wigley]

My Lords, my Amendments 59, 60 and 70 in this group seek to devolve responsibility for the funding and specification of the rail infrastructure in Wales. I shall not move Amendment 97 relating to the Wales and Borders rail franchise as the Government have, I believe, already accepted the changes in principle on that matter.

Only 1% of Network Rail funding has been spent on the Welsh rail network since 2011, according to the latest Welsh Government estimates. This is despite Wales being home to no less than 11% of the total England and Wales rail network. Deals struck between the Welsh and UK Governments for specific projects, such as the electrification of the Valleys lines, are of course very welcome, but they do not address the fundamental issue that the current arrangement for rail infrastructure planning and development does not work in Wales. There is a simple and widely supported solution to this problem: to devolve the funding and specification of the rail infrastructure to the National Assembly. I say “widely supported”: there is a plethora of people and organisations from across the professional and political spectrum who support the devolution of the rail infrastructure.

As is often the case with this Bill, the Silk commission is my first port of call on this issue, which is appropriate since the Minister was relying on Silk in an earlier group of amendments. The commission agreed that devolving the rail network in Wales is both “possible and desirable”. This sentiment was echoed by the previous Assembly’s cross-party Enterprise and Business Committee, which in one of its final reports before the 2016 election concluded that responsibility for Welsh rail infrastructure was best placed in the hands of AMs in Cardiff Bay. Only last month, the Economy and Infrastructure Cabinet Secretary, Ken Skates AM, told the Welsh Affairs Committee that he would like to see responsibility for the rail infrastructure and Network Rail devolved.

These statements of support from across the political spectrum are bolstered by comments from numerous figures in industry, including the passenger campaign group, Railfuture Wales, and a pre-eminent expert on Welsh transport, Professor Stuart Cole. Both have said that devolving rail services without rail infrastructure is just not logical. Even the UK Government’s own review of the structures of Network Rail, conducted by Nicola Shaw, concluded in March this year that a more devolved route structure is necessary for Network Rail to adapt to the challenges of developing a modern rail network. This must be matched in policy terms to allow the National Assembly for Wales to be accountable and to be able to facilitate the development of Welsh rail infrastructure fit for the needs of a modern Wales.

It is indeed anomalous that the Welsh Government will bear the responsibility for rail services but not the infrastructure. The obvious issues that this creates for infrastructure planning are matched by concerns over the apportioning of accountability that this unbalanced devolution settlement will trigger. Passengers—and, ultimately, voters—will lack clarity about where responsibility for meeting transport needs should lie. What they care about is a transport system that works. Devolution of rail infrastructure is a step towards delivering a rail network that works in a fair and accountable way.

The National Assembly for Wales is the last devolved national Parliament that has not been afforded the powers to manage its nation’s rail network. These powers have long been held in Scotland and Northern Ireland. It is inconsistent and ineffective for this aspect of transport policy not to be devolved. I therefore urge the Government to support these amendments and to heed the call of AMs and MPs across the party divisions, as well as those from industry who want to see this happen. I ask the Minister whether he would be prepared to look again, between now and Report, at whether it would be possible to get some sensible further devolution on this matter.

[Lord Hain]

Before the noble Lord sits down, is he now saying that he will not be moving his Amendments 58 and 97 on the devolution of the Wales and Borders franchise? I was going to speak about that briefly.

[Lord Wigley]

As I understand it, the Government have moved on the Wales and Borders franchise. Perhaps the Minister can respond and there will be an opportunity for the noble Lord, Lord Hain, to intervene.

[Lord Hain]

I was going to say that I strongly support Amendments 58 and 97, in the absence of an assurance from the Minister to the contrary, because there is a strong case—following the St David’s Day agreement, the work of the Silk commission and, indeed, the logic of the case—that responsibility for this franchise should lie with the Welsh Government. To avoid taking up any more time, I hope the Minister will confirm that it will be devolved and the Government will bring forward an amendment to that effect at some point, presumably on Report.