Commission on Devolution in Wales

Owen Smith Excerpts

Thursday 3rd November 2011 Commons Chamber

[Mrs Gillan]

That shows the advantage of this approach to constitutional change: all hon. Members, no matter where they come from, how they speak and from what direction they approach constitutional matters, will have an opportunity to express their views. I am grateful to my hon. Friend, and I am sure that he will speak later in the debate and let the House know what he feels the Silk commission should consider.

Before I took that series of interventions, I was saying that neither the Assembly nor the Welsh Government are accountable to the people of Wales for the money that they spend on the policies that they implement. The Welsh Government simply receive the Welsh block grant voted by Parliament, and spend it.

That cannot be right. With power comes responsibility, and it is surely better for the devolved institution to be accountable to the people of Wales not just for decisions on public spending in Wales, but by being responsible for raising some of the money needed to pay for those decisions. Even local authorities, despite receiving block grants, have responsibility for raising local council tax, and consequently they recognise the difficulty of raising tax moneys before they spend money. There is no reason why one institution—

[Owen Smith (Pontypridd) (Lab)]

Will the right hon. Lady give way?

[Mrs Gillan]

I have been very generous, and would now like to make some progress.

There is no reason why one institution should be immune from raising taxes, and instead simply spend money and continue to ask for more—but the Labour party seems to think that that should continue. Only last Friday the right hon. Member for Neath said in The Western Mail that seeking more accountability for the Assembly and the Welsh Government was a “curiously disturbing motive”, so I certainly look forward to hearing his further observations in a minute, because I should like him also to explain the contradiction between his position and that of the Labour First Minister, who welcomes the commission and its objectives.

The first part of the Silk commission’s remit is to look at financial accountability. It will consider the case for devolving fiscal powers and recommend a package of powers that could improve the Assembly’s financial accountability. Those powers would need to be consistent with the United Kingdom’s wider fiscal objectives.

The commission will consider the tax and borrowing powers that could be devolved to the Assembly and the Welsh Government. Those include powers in relation to landfill tax, air passenger duty and stamp duty, but they are not limited to those taxes. The commission’s remit, however, is to recommend the devolution only of taxation powers that are likely to have wide support, and it will need to consult broadly to secure that support not only in Wales but in other parts of the United Kingdom.

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[David T. C. Davies]

There have been several motives for devolution. Nationalists saw it as a stepping stone towards independence—I imagine that they would be fairly honest about that—while others, some of whom are now on the Opposition Benches, were afraid of nationalism, and saw devolution as a way of preventing the nationalist genie from getting out of the bottle. I think that they were mistaken. I fear that some may have taken the narrow political view that Wales would always be dominated by Labour whereas Britain would not necessarily be, and that therefore it would not be a bad idea to carve out little corners of the United Kingdom where Labour could always have an inbuilt majority and a left-wing Government could rule. I dread to think that that is the case, but, being a bit cynical, I suspect that there may be some grounds for believing that it is.

[Owen Smith]

The hon. Gentleman is, as usual, being generous in giving way. Does he agree that a further crucial aspect of the rationale for devolution in Wales and Scotland was demand, and that that may have been a greater consideration than nationhood? Does he also recognise that, because of a feeling that—for reasons related to distance and divergence in economic performance—people are getting worse deals from the Government in some parts of England than in others, such as the south-east, there may well be a growing demand in some areas for a fresh look at the possibility of English regional devolution?

[David T. C. Davies]

The answer to the hon. Gentleman’s first question is that despite the enormous amount of money spent on the referendum in 1999, only one in four people went out and voted yes, so the demand could not have been that great. As for his second question about the issues that are bubbling away in the various regions of England, I do not profess to know the answer, and I certainly will not be trying to pose that question. As I said to the right hon. Member for Neath (Mr Hain), the English will have to work out for themselves whether they wish to base a future settlement on England itself or on regions thereof. It is not for us to tell them what to do.

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[Guto Bebb]

It is interesting to note that the Labour Government in Cardiff Bay were planning for 3% cuts per year for four years, yet, as we saw from the settlement granted by the coalition Government, the actual cut is in the region of 2% per year. That would be manageable in any small or medium-sized business in Wales, so I see no reason why it should not be manageable for the Welsh Assembly Government.

Some Members will have noticed that when the right hon. Member for Neath (Mr Hain) was commenting on the boundary changes, indicating, once again, that Wales was being extremely harshly treated, he refused more than once to allow me to intervene. The reason I wanted to intervene was that I was of the opinion that the hon. Member for Pontypridd (Owen Smith) had been promoted to the Opposition Front Bench as a result of his superb understanding of financial matters, because it transpires that he has written in a pamphlet that there is a need to reduce the number of Welsh MPs. However, the shadow Secretary of State for Wales argues otherwise, so now we understand why there has been a change on the Opposition Front Bench. The reason is simply because of disagreements between the two spokespersons.

[Owen Smith]

I would merely ask the hon. Gentleman to clarify this reference, which he appears to have plucked out of thin air.

[Guto Bebb]

The reference is to a pamphlet to which the hon. Gentleman contributed that was quoted at length by Professor Wyn Jones in a recent article in Barn. If he has misquoted the hon. Gentleman, the hon. Gentleman can take it up with the professor, but that article has been printed in a taxpayer-supported publication in Wales, and I shall stick by my comments.

We need to ask ourselves a simple question: why are we here today? We are here because the Wales Office has delivered on the promise in the coalition agreement to establish a Calman-like commission to consider how the Welsh Assembly is accountable to the people of Wales. I accept entirely that the Assembly is accountable to the people of Wales because they elect its Members, as several hon. Members have said. However, every Member in the Chamber will also recognise that local authorities are accountable to the electorate because local councillors are elected; yet they are accountable through the council tax increases they impose as well. Therefore, it is certainly arguable that there is a need for some financial and fiscal accountability in how the Welsh Assembly operates. We should welcome the fact that the coalition Government have recognised the need to consider the issue. It is a strength of the coalition that we are willing to look at difficult questions and consider them at length.

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[Guto Bebb]

I thank the Secretary of State, and I am delighted to hear that those discussions have already started. I take the view that the sooner they are concluded, the better.

[Owen Smith]

I do not intend to refer to the quotation in the pamphlet now—I shall do so later, if I may, and perhaps seek to get it withdrawn. I am intrigued to hear the hon. Gentleman say that he thinks the discussions should conclude as quickly as possible. Do I take it that he will urge his right hon. Friend the Secretary of State to do just that—to conclude the negotiations as soon as possible and then to implement them? As my hon. Friend the Member for Ogmore (Huw Irranca-Davies) has said, we do not need to wait for Silk; we could have this now.

[Guto Bebb]

I am slightly surprised by that intervention, because I thought it was self-explanatory. The sooner the discussions between the Government in Cardiff and the Treasury are concluded, the better. [Interruption.] My understanding is that this is a matter for the Welsh Government and the Treasury. I am sure that the pressure is being brought to bear by my Front-Bench colleagues.

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[Guto Bebb]

I am grateful for that intervention, but the Labour party has no hope of having me as a member.

[Owen Smith]

This is not a point of order, but just a request for clarification. Is there a reason why the hon. Gentleman did not approach me in the Tea Room before mentioning me and misquoting me in the Chamber?

[Guto Bebb]

The hon. Gentleman was not in the Tea Room when I was there. I hope that he accepts my apology.

On part I, it is important that we consider the issue of fiscal responsibility. Some of the areas that the First Minister has said are appropriate for change are not acceptable, because they are not significant changes. For example, I do not think that the average person who votes in an Assembly election will be motivated to vote one way or the other because of a slight change in the aggregates tax. We need to look at proper fiscal changes.

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[Owen Smith]

The hon. Gentleman and his colleagues call for accuracy in the context in which we set our remarks about the public spending cuts in Wales, but should they not set themselves the same standards when discussing the profundity of the long-term, systemic economic problems facing Wales, which are reflected in our once again qualifying for objective 1 funding? I profoundly regret that, as I am sure he does, but the fact that we qualify shows how deep seated the problems are.

[Alun Cairns]

I am grateful for that point, but the hon. Gentleman misses the key issue: Labour’s failure over 13 years. Labour Members salivate in decrying the 1980s. Wales was not the poorest part of the United Kingdom at the time, but it was when they left office. [Interruption.] The hon. Gentleman says from a sedentary position, “It is not true”. Well, I will happily hear about the economic indicator that points out that Wales is not the poorest part of the United Kingdom.

[Owen Smith]

I did not say, “It is not true”, and the hon. Gentleman makes a semantic point, because we are talking about fractions. Many parts of the UK have not benefited in lots of respects; in fact, they all share the characteristics of being post-industrial parts of Britain with the same deep-seated economic problems as Wales. Those problems are not something to be solved quickly, but the Assembly has worked extremely hard and been extremely effective in all sorts of areas of public life in Wales.

[Alun Cairns]

I am stunned by the complacency of the hon. Gentleman, an Opposition Front-Bench Treasury spokesman who really should have a better handle on these issues. He talks about semantics and very small percentages, but when Labour left office after 13 years of government Wales was the poorest part of the United Kingdom, despite all the great announcements that we heard during the period, on the Barnett settlement, Barnett plus, European money, match funding, PES—public expenditure survey—cover and how lucky Wales was to have a Labour-run Westminster Government as well as a Labour-run Welsh Assembly Government. The data are quite clear that there has been blatant failure. They highlight the fact that Wales is the poorest part of the United Kingdom, and I am aghast at the hon. Gentleman’s complacency.

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[Alun Cairns]

I could not agree more with my hon. Friend, who further underlines the point.

The key theme is accountability, which was covered extremely well in the excellent report of the Holtham commission, which set the backdrop to the Silk commission, highlighting key issues relating to accountability and some of the points that I tried to make earlier. The report states that the public sector, and I would say the Welsh Government specifically, is

“in some ways detached from the economic circumstances of the citizens it serves”—

that is the need for better accountability—and

“simply blaming Westminster for inadequate resources”

is not an option. That is effectively the position we are in.

The change of Government at Westminster has produced a chorus of an argument from the Welsh Government in Cardiff Bay, to the extent that the level of debate is stymied to mere rhetoric. The best description of the Welsh Government’s approach came from a former Labour Member of this House who said that the Welsh Government is in danger of becoming an

“institutional chip on the Welsh shoulder.”

That encapsulates the approach. The accountability argument must be underlined time and again.

It is too easy for the Welsh Government to play the blame game, and I hope that the Silk commission will consider accountability extremely seriously. The Holtham report offers useful pointers. It states that if it is decided that there is merit in devolving fiscal powers, the tax should be one that

“is paid by a high proportion of Welsh residents…raises substantial revenue”

and

“is ‘visible’ to most citizens”.

It is not surprising, therefore, that in seeking to avoid my accountability argument the Welsh Government and the First Minister call for air passenger duty, stamp duty, aggregates tax, landfill tax, and other obscure taxes. The more obscure they are, the less accountability there is, so they can continue the blame game. That is unacceptable, and I hope that the Silk commission will reject that.

[Owen Smith]

Again, I intervene on a point of accuracy. The hon. Gentleman quoted extensively from the Holtham report, which he purports to have read, so he will know that those are the very taxes that Gerry Holtham refers to as potentially being among the minor taxes that would be transferred to Wales.

[Alun Cairns]

The hon. Gentleman mistakes my recognition of the quality of the Holtham report for an indication that I agree with all its conclusions, and I simply do not agree with all the conclusions. I said earlier that it is a useful backdrop to the Silk commission. That should be recognised.

To pursue the argument about accountability and the approach taken by the Welsh Government, in a similar vein it needs to be noted that over the past 12 years the Labour party in Wales used council taxes to raise additional funds and then put the responsibility on to local authorities, most of which, as a result of 13 years of Labour Government, were not Labour. The Conservative party ran the same number of councils in Wales as the Labour party, and that is a far cry from how it was at the time of devolution. Most of the funding for local authorities comes from the Welsh Government, so I would suggest that over the past 10 years or so there has been a deliberate strategy of squeezing funding from local government in Wales, forcing local authorities to raise more money in council tax. That is demonstrated by the fact that over the past five years the average council tax increase in England was 2.6%, compared with 3.8% in Wales. That amounts to a plan to make local authorities responsible for the additional revenue that they are raising instead of becoming accountable for themselves. I could go on to talk about the re-banding mistakes that were made in some areas, which squeezed even more council tax out of some of the people who were least able to pay.

I will close by sounding a note of caution about the volatility of many taxes. Whatever the Silk commission develops and comes up with, I hope that it will recognise the volatility between the level of income tax raised three years ago in Wales compared with the level raised now. There is a significant difference, and that will be another important factor for Silk to consider.

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[Owen Smith (Pontypridd) (Lab)]

It is always a pleasure to follow the perfectly formed hon. Member for Vale of Glamorgan (Alun Cairns). I had hoped to follow the hon. Member for Aberconwy (Guto Bebb), as that would have given me an immediate opportunity to respond to his curious remarks—

[Guto Bebb]

Will the hon. Gentleman give way?

[Owen Smith]

In a moment.

I could have responded to the hon. Gentleman’s curious remarks about some mysterious article that I have ostensibly written.

[Guto Bebb]

rose—

[Owen Smith]

I will give way in a moment.

The hon. Gentleman said that somewhere in an article I had advocated a reduction in the number of Welsh MPs. If I had been mistranslated, that would have been a different matter, but I have certainly never advocated that. However, the article in question is relevant, and I will talk about it in a moment. Over to the hon. Gentleman.

[Guto Bebb]

I am grateful to the hon. Gentleman for allowing the facts to be stated clearly on the record. The article is called “Towards a New Union” and it was published by Compass. In talking about how to ensure that the West Lothian question is dealt with without moving to federalism, it states:

“Such a reformation of English local government, allied to the reduced number of Welsh and Scottish MPs at Westminster, would go a long way to answering the English Question.”

I think that the article was translated correctly and that my statement was also correct.

[Owen Smith]

I suggest that in future the hon. Gentleman needs to do more than take selected excerpts from things. He should read all 5,000 words of the article, in which he would clearly see that I am talking about the fact that we are going to have the number of Welsh MPs reduced—not that it is desirable, not that it is justified, but that it is a matter of fact as a result of the shameless gerrymandering of the electoral map in Wales that we have seen as a result of the Parliamentary Voting System and Constituencies Bill. I suggest that the hon. Gentleman needs to read it all—or if he would like to withdraw his remarks, which are wholly inaccurate, he can do so now.

[Guto Bebb]

I believe that the hon. Gentleman doth protest too much.

[Owen Smith]

I do not, at all. I am quoting accurately from my article. I suggest that the hon. Gentleman read it and that in future he does his homework a little better lest he be in danger of misleading the House about my opinions, if nothing else. [Interruption.] He can withdraw his remarks whenever he wants.

I thank the Secretary of State for scheduling today’s debate. Labour Members and, I am sure, Members right across the House are extremely grateful that after 18 months we have a debate about a Welsh matter on the Floor of the House. We did not have a substantive one, of course, about the Welsh aspects of the Parliamentary Voting System and Constituencies Bill, we have not had one about growth, and we have not had one about the disproportionate effect of cuts in Wales, but we are having one today, for which I am very grateful.

I asked the Library staff to look into when we last had such a long interregnum between substantive Welsh debates on the Floor of the House, but once they got back to the 1940s I told them to stop bothering.

[Mrs Gillan]

The hon. Gentleman will no doubt make absolutely every effort to ensure that the Backbench Business Committee, which is now responsible for scheduling our St David’s day debate, allows us to have it. It did not do so last year, despite my letters to it and despite other Members appearing before it to ask for that debate. If we have that debate, we can cover all the matters that he mentions.

[Owen Smith]

With the greatest respect, I find it extraordinary that the Secretary of State should now view it as the job of the Backbench Business Committee to decide whether we have a debate on Wales. I am surprised that she should go to that Committee to request a debate, rather than go to her colleagues around the Cabinet table such as the Chief Whip and ask for a debate in Government time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We are having a debate on devolution in Wales, so I am not quite sure whether a future debate is relevant. We ought to stick to the agenda.

[Owen Smith]

Indeed, and thank you, Mr Deputy Speaker.

Today’s debate and the Silk commission are extremely important, and I welcome them for two reasons. First, they enable the discussion of issues of genuine magnitude. Part I of the commission’s role on fiscal powers, and part II on the boundaries between the competences of Westminster and Wales, both cover enormously important issues that will have an impact on people in Wales in particular and across the rest of the UK. Secondly, the debate is important because it provides an opportunity to discuss the wider issue of the Union, to which my article referred, and the wider context in which the Silk commission is set. A lot of Members, particularly my right hon. Friend the Member for Torfaen (Paul Murphy) in his excellent contribution, have taken that opportunity. I wish to talk about that wider context.

Government Members, including the Secretary of State, have looked askance today at Opposition Members who have said that they are suspicious of the motivation that may lie behind some of the remarks that have been made, and perhaps even behind the Government’s whole direction of travel with regard to the Union. We are seeing diminishing support from the Conservative party for the concept of the Union.

Those concerns are not plucked out of thin air, and they are not illegitimate. They are born of our reading and listening to comments made by Conservative Members, and of hearing comments such as those of the former Prime Minister, Sir John Major, who said that Scottish ambition was “fraying English tolerance”. They come from reading the conclusions of the report commissioned by the Prime Minister, when he was in opposition, from the current Justice Secretary. It recommended that the only way to deal with the West Lothian question was to create an English Parliament with English votes on English issues, denying Welsh, Scottish and Northern Irish Members a vote.

[Mrs Gillan]

indicated dissent.

[Owen Smith]

The Secretary of State shakes her head, but that was the conclusion drawn by a commission led by the Justice Secretary.

[Mrs Laing]

It hasn’t been done.

[Owen Smith]

No, it has not been done, as the hon. Lady says. It is very good to see her today—I am very pleased that we have an English Member taking part in the debate, which is extremely important. However, I say to her that what came out of that report was a commitment in the Conservative manifesto and the coalition agreement, which has now been enacted, to begin a debate on the West Lothian question. We are concerned about the direction of travel and the trajectory that many Members now feel has been set.

In recent debates in Westminster Hall and elsewhere, many Members have referred rather aggressively to resentment felt by English constituents about the supposed unfair stipend or subsidy afforded to, and enjoyed by, citizens in Wales, Scotland and Northern Ireland. As Opposition Members have tried to point out today, that is not an unfair stipend, but a reflection of the accurate needs, born of the industrial heritage and present problems, of Wales, Scotland and Northern Ireland. Neither, as my right hon. Friend the Member for Torfaen mentioned, is it a reflection of the relative receipt of revenues in Wales versus parts of England where a needs-based formula already applies: for example, greater subsidy—if we want to use that word—and support is afforded to the north-east, the north-west and even the south-west than is afforded to Wales. It is legitimate, therefore, for us to voice our concerns about the Government’s attitude to the Union. That is not scaremongering; it is merely a question and a set of observations on our part.

The other reason we are worried, of course, is that, traditionally, Conservative and Labour Governments have not been partisan in how they have addressed the constitution, but for the first time, judging from how the Parliamentary Voting System and Constituencies Act 2011 was addressed in this place, a partisan attitude has been taken to the constitution. I hold that view absolutely fully. It is a view that I have heard expressed on many occasions by Conservative Members, not in the House, but outside. They view the Act as being underpinned by partisan motivations, and I fear that we might be seeing a similar set of motivations here. I sense that the Tory party has been seduced by the prospect of hegemony in England in the long term, even if it means a truncated, fragmented UK. I, for one, as a Welshman and proud British citizen, do not want that to come about.

[Alun Cairns]

Speaking as a Conservative Member, I do not accept that point. In my mind, the purpose of the Silk commission is to provide accountability and stability for the long term, but the motives about which the hon. Gentleman talks were behind devolution in 1997, when it suited the Labour party in Wales, rather than Wales as a nation.

[Owen Smith]

I wholly dispute that. Devolution in 1997 was born of need and demand in Wales. It had been developing for a long time. It perhaps had not come fully to fruition in 1979, but by 1997 there was a clear demand for it, and that demand has thickened over the past 13 years, right through to the referendum, when we saw it greatly increased.

[Alun Cairns]

I am grateful to the hon. Gentleman for giving way; he is being extremely generous. If demand was so strong, why was there only a 50% turnout and 7,000 majority? That is how strong his demand was.

[Owen Smith]

Several Government Members have talked about what, to put it bluntly, is ancient history now and pointed to the size of the mandate and turnout, but we all know that politics is a precarious, parlous business. The Tory party clearly thought that it had a sufficient mandate at the last election. It did not get a majority, but nevertheless it is the ruling party. We have to bury that argument and move on. Right now, there is clear support for devolution in Wales, as was shown in the recent referendum. That is not in dispute. It ill behoves Government Members, who purport to support devolution, to keep dredging up these ancient concerns and this ancient history, because, frankly, it gives us the suspicion that they still have not quite bought into it.

I have a second concern, which, actually, I share with some Government Members—even, perhaps, the hon. Member for Monmouth (David T. C. Davies)—about the constant, cyclical nature of the interaction between demands and desires, legitimate or otherwise, for additional, incremental powers in Wales, Scotland, Northern Ireland and even, perhaps, England. That is a problem. It leads to perpetual pressure for change and to very few instances in which we—legislators in this place and the devolved Administrations, which have their own particular locus—can put our foot on the ball and contemplate the broader picture, the country’s longer-term trajectory. That is hugely important. The Silk commission ought to consider that wider context.

In particular, however, this House needs to consider that wider context and be the place in our country where we contemplate the aggregate impact of the changes to the particular discrete functions and powers of different parts of the UK and where we think long term about what the benefits and disbenefits might be. That is not to take an anti-devolutionist perspective, however. I am thoroughly committed to devolution and the principle of subsidiarity—pushing down power and democratic accountability as low as we can—which is why I talk in my excellent and recommended article for Compass about reinvigorating local government democracy in England, which would be a jolly good thing. However, I am also British—indeed, proudly so—and I feel that my values and those of the Labour party transcend national boundaries and the identity politics that stem from an obsession with national boundaries. My concern is that the wider picture—the longer-term perspective—is too infrequently considered in this place or, in particular, the devolved Assembly. I do not want Wales to be as politically peripheral in Britain as it is de facto geographically peripheral. I worry that at some point that will be the net consequence—the aggregate impact—of these things.

Let me turn briefly to some of the specificities of what Silk will consider. I will take only one—corporation tax—but for me, they all highlight the risk that we might face. Anyone picking up the Financial Times this morning could have read an article about Peter Robinson, the First Minister of the Northern Ireland Assembly, who has advocated adopting a 10% corporation tax rate to compete with the 12.5% rate in the south. My view is that this would be hugely difficult and dangerous. Although it might be advantageous for Northern Ireland in the short term, we should also consider the risk that it would necessarily lead to arbitrage between the two areas and to different pricing arrangements. If we had variable taxation bands between different parts of the mainland, we would certainly see arbitrage across the borders and we would need internal transfer pricing policy and legislation in this place and the other jurisdictions. Given the difficulties with legislative vehicles to deal with transfer pricing between European countries—the disaster, even—what on earth would they be like within the UK?

Westminster needs to hold the ring. Westminster needs to consider the risks. Westminster needs to be the place where this debate is thought about, in conjunction with the discrete and—from the perspective of the local jurisdictions—eminently reasonably changes that may be wished for. This place also needs to be where the broader economic context is considered, because, bluntly, some of the peripheral changes to taxation that we are talking about and that Holtham talks about—indeed, perhaps even the larger changes too—will not lead to the growth, jobs, wealth and opportunity that would be created by measures that the Government could be implementing right now, such as those in Labour’s five-point plan.

[Nick Smith]

I congratulate my hon. Friend on his support for subsidiarity and decisions being made at the right level. The success of the Welsh Assembly, particularly in the last few months, has been based on its good ideas, such as the Welsh job fund and introducing local police support officers, all because people in Wales are fed up with the horrible attacks that we have seen from the Government.

[Owen Smith]

My hon. Friend is absolutely right. The Welsh Assembly has understood that in order to stimulate our economy we need a stimulus. We cannot sit on our hands and assume, as the Government do, that laissez-faire economics will drive economic progress in our country.

[Mrs Laing]

rose—

[Owen Smith]

I will not give way; I am going to finish in a moment.

We need a stimulus, which is why the five-point plan that Labour has produced is absolutely what we should consider implementing. It is also why we should be celebrating what Carwyn Jones and the Welsh Assembly Government have done along the same, as it were, Keynesian lines.

I will conclude with the broader economic picture. It is for this place to bring the global and European context to bear in this debate. However, it is ironic that at a time when Members in all parts of the House are advocating greater collaboration and greater cohesion and integration of states’ fiscal powers on the continent—it is particularly ironic that Conservative Members should be doing that at all—we in the UK are contemplating disaggregating those fiscal powers. That is a profound irony—one perhaps born out of the peculiarity of how our constitutional thinking has developed. It is for us—and, in particular, the Secretary of State for Wales and her Northern Ireland and Scotland colleagues—to ensure that those thoughts are brought to bear round the Cabinet table and to subjugate any party political interest beneath the national interest, for all our citizens right across the UK.

[Several hon. Members]

rose—

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[Mrs Eleanor Laing (Epping Forest) (Con)]

I thank the hon. Member for Pontypridd (Owen Smith) for his kind words in welcoming me to the debate as the only Back Bencher not representing a Welsh constituency. I am here quite deliberately because I agree with the hon. Gentleman, as well as the right hon. Member for Torfaen (Paul Murphy) and, of course, all my hon. Friends on this side of the House, that it is this Parliament, the Parliament of the United Kingdom, that ought to debate matters concerning the Union. I am very much a Unionist, and I will never be anything else. If we start to draw lines and say that people who are elected to seats in Essex should not speak on Welsh matters, or that those who represent Cornwall should not speak on Scottish matters, we are negating the very concept of the Union, which most of us wish to defend.

I am sorry to see that the shadow Secretary of State, the right hon. Member for Neath (Mr Hain), is no longer here, because I have saved up all my political arguments to put to him across the Floor. He made some appalling remarks in his speech, but it is his right to do so. I can tell the House that, just as he has Scottish roots, my maiden name is Pritchard, and you cannot get much more Welsh than that. I do not think that my father ever set foot in Wales in his life, however, and I do not think that his father, or his father before him, did either. I must have some Welsh blood somewhere, but that is not the point.

The point is that we are the Parliament of the United Kingdom, and the devolution settlement that we have put together for certain parts of the United Kingdom affects all of the United Kingdom. It is like a tube of toothpaste; you cannot press one part of it without making an impression on the other parts. Anything to do with devolution, and anything that affects our constitution in any way, affects the whole of our country. There ought to be more Members from other parts of the United Kingdom here today, so that they might understand that we, as a whole, have responsibility for what happens in any part of the United Kingdom.

I also agree with the hon. Member for Pontypridd—this is getting disturbing—that the distribution of taxpayers’ money to Wales, Scotland and other parts of the United Kingdom is fair because it is based on deciding which part needs the most input from taxpayers’ investment in our country as a whole.

[Owen Smith]

On a point of fact, the distribution to Wales is not based on need—that is why we have long argued for a needs-based formula—but it is reflective of need.

[Mrs Laing]

I appreciate what the hon. Gentleman is saying. I do not believe that we should have a needs-based formula. I would always argue that the Barnett formula distributes taxpayers’ money in a reasonable manner, even though it obviously needs to be reformed and brought up to date. Just as Newcastle does not require the same sort of taxpayer subsidy as Surrey, and just as the centre of Birmingham does not require the same amount as the leafy lanes of Kent, so it is important that we get the balance right in Scotland and Wales.

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[Mrs Laing]

Of course, Mr Deputy Speaker. I was merely illustrating the balance of fairness, and saying that if we are to distribute funds fairly, we should distribute democracy fairly, too. Many Opposition Members have made that point this afternoon, and it was time for it to be corrected. I am glad you allowed me to do so, Mr Deputy Speaker. I appreciate that we have had a long debate and that Opposition Members still wish to speak, so I shall be brief.

The constitutional development of our country is ongoing and continuous. Like other Members, I was not in favour of devolution to begin with, but I have come to realise the benefits from having devolved government, so I warmly welcome the Secretary of State’s setting up the Silk commission. This is a genuine commission. The Secretary of State has made it clear that she has no “pre-conclusions” about what the Silk commission should do or where it should go. Just as the Calman commission did an excellent job for Scotland, resulting in the Scotland Bill, I am sure that the Silk commission will do the same for Wales.

It is important for the commission to look seriously, as I am sure it will, at the issue of accountability as its first duty. Democratic accountability obviously comes through accountability for spending money and therefore for raising money. At present, the settlement in Wales gives the power to spend without the responsibility to raise taxpayers’ money. I argue that accountability is possible only if there is a link between the casting of the vote, the paying of the taxes and the outcome of the election.

[Owen Smith]

Is not the logic of that argument that all spending should be devolved to Wales in order for it to be fully accountable, or is it enough for just a tiny fraction of spending to be devolved? Does that take the trick?

[Mrs Laing]

No, that is not the logic at all. If the hon. Gentleman argues in that way, he is arguing against himself. He agrees with me and with many of his hon. Friends that it is this Parliament that represents the whole of the United Kingdom, so this Parliament must have the responsibility not only for raising most taxes but for spending them. He has argued, as have others, that devolved Assemblies and Parliaments must bear responsibility as well as wielding power. As I say, if that is his argument, he is arguing against himself.