Wales Bill

John Bercow Excerpts

Monday 11th July 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Wales (Guto Bebb)]

I beg to move, That the clause stand part of the Bill.

[The Temporary Chair (Sir Alan Meale)]

With this it will be convenient to discuss the following:

Clauses 23 to 27 stand part.

Amendment 74, in clause 36, page 29, line 17, leave out from “wind” to end of line 18.

This amendment removes the 350 megawatts limit on the Welsh Government’s legislative competence in the field of energy.

Amendment 75, page 29, line 21, leave out from “zone” to end of line 22.

See amendment 74.

Amendment 76, page 30, line 2, leave out paragraph (c).

This amendment is consequential on amendments 74 and 75.

Amendment 77, page 30, line 16, leave out from “waters” to end of line 21.

This amendment is consequential on amendments 74 and 75.

Amendment 78, page 30, line 37, leave out from “waters” to end of line 39.

This amendment is consequential on amendments 74 and 75.

Amendment 79, page 30, line 40, leave out sub-paragraph (a)(ii).

This amendment is consequential on amendments 74 and 75.

Amendment 80, page 30, line 47, leave out from “waters” to end of line 48.

This amendment is consequential on amendments 74 and 75.

Clause stand part.

Clause 37 stand part.

Government amendments 47 to 49.

Clause 38 stand part.

Amendment 158, in clause 39, page 32, line 23, leave out “or (4A)” and insert “to (4D)”.

See amendment 160.

Amendment 159, page 32, line 27, at beginning insert

“subject to subsections (4B) to (4D),”.

See amendment 160.

Amendment 160, page 32, line 31, at end insert—

“(4B) Where Welsh Ministers are minded to grant planning consent for the construction or extension of a station generating electricity from wind which would have a capacity greater than 50 megawatts, they must not determine the application unless—

(a) they have sent to the Secretary of State—

(i) a copy of any representations made to them in respect of the application;

(ii) a copy of any report on the application prepared by an officer of the Welsh Government;

(iii) a statement of the decision they propose to make; and

(iv) where they propose to grant consent, a statement of any conditions they propose to impose and a draft of any planning obligation they propose to enter into and details of any proposed planning contribution; and

(b) either—

(i) a period of 14 days has elapsed beginning with the date notified in writing by the Secretary of State to Welsh Ministers as the date on which he received the documents referred to in paragraph (a); or

(ii) the Secretary of State has notified Welsh Ministers in writing that he is content for them to determine the application in accordance with the statement referred to in sub-paragraph (a)(iii) and, if applicable, the matters referred to in sub-paragraph (a)(iv).

(4C) Within the period of 14 days set out in paragraph (4B)(b)(i) the Secretary of State may direct Welsh Ministers empowered to determine the application for the construction or extension of a station generating electricity from wind which would have a capacity greater than 50 megawatts—

(a) to withhold consent for a further period up to six months;

(b) to provide further information about the application; and

(c) where he makes a direction under paragraph (4C)(a) within the period specified in the direction to direct them to—

(i) grant consent subject, if necessary, to the conditions set out at paragraph (4B)(a)(iv); or

(ii) refuse consent.

(4D) The Secretary of State may give a direction to Welsh Ministers that applications for consent for the construction or extension of stations generating electricity from wind which would have a capacity less than 51 megawatts must be determined by local planning authorities and must not be called in or determined by Welsh Ministers.”

Clause 39 would devolve powers for onshore wind development approval to the Welsh Assembly. This amendment empowers the Secretary of State to be notified and veto projects considered a Nationally Significant Infrastructure Project (NSIP). The Secretary of State would be given two weeks to inform Welsh Ministers that he wished to consider a project and he would have up to six months to direct refusal of the application. The amendment also empowers the Secretary of State to require Welsh Ministers to devolve approval for projects not considered a NSIP to local council level.

Clause stand part.

Clauses 40 to 43 stand part.

Amendment 81, in clause 44, page 34, leave out line 37 to line 5 on page 35 and insert—

“Omit sections 114 and 152 of the Government of Wales Act 2006.”

This amendment removes the power of the Secretary of State to veto any Welsh legislation or measures that might have a serious adverse impact on water supply or quality in England.

Amendment 125, in clause 44, page 34, line 38, leave out from “(1),” to end of line 40 and insert “omit paragraph (b).”

This amendment removes both the extension of the power in section 114 of the Government of Wales Act 2006 that would be introduced by clause 44(1) and the power in section 114 to block Assembly Bills in respect of water matters.

Amendment 126, page 34, line 41, leave out subsection (2) and insert—

‘( ) Omit section 152 of the Government of Wales Act 2006 (intervention in case of functions relating to water etc).”

This amendment removes both the extension of the power in section 152 of the Government of Wales Act 2006 that would be introduced by clause 44(2) and the power in section 152 of the Government of Wales Act 2006 to intervene in the exercise of devolved functions in respect of water matters.

Clause stand part.

Clause 45 stand part.

Amendment 130, in clause 46, page 35, line 33, leave out “consult” and insert “obtain the consent of”.

Clause 46 would require the Secretary of State to consult the Welsh Ministers before establishing or amending a renewable energy scheme as it relates to Wales. This amendment would require the Secretary of State to obtain the consent of the Welsh Ministers instead.

Amendment 132, leave out lines 1 to 3.

New section 148A(3) of the Government of Wales Act 2006 (as inserted by Clause 46) provides an exception to the consultation requirement for renewable energy schemes in respect of any levy in connection with such a scheme. This amendment is partly consequential upon amendment 130, but it would also mean that there would be a requirement for the Secretary of State to obtain the consent of the Welsh Ministers for any levy in connection with a renewable energy scheme as it relates to Wales.

Amendment 131, page 36, line 17, leave out subsection (2).

This amendment is consequential upon amendment 130.

Clause stand part.

Clauses 46 to 50 stand part.

Amendment 144, in clause 51, page 39, line 2, at end insert—

“( ) If a statutory instrument containing regulations under subsection (2) includes provision within devolved competence or provision modifying a devolution enactment, the Secretary of State must send a copy of the instrument or, if subsection (8A) applies, a draft of the instrument to the First Minister for Wales and the First Minister must lay it before the Assembly.”

This amendment and amendments 145, 146 and 147 are intended to apply appropriate Assembly procedures to regulations which make provision within the Assembly’s competence or which adjust the Welsh devolution settlement by modifying the Government of Wales Act 2006 or the Wales Act 2014 and provide for regulations containing provisions of this kind that amend primary legislation to be subject to an affirmative Assembly procedure, and for regulations containing provisions of the same kind which modify subordinate legislation to be subject to a negative Assembly procedure.

Amendment 147, page 39, line 2, at end insert—

“( ) In this section ‘devolution enactment’ means a provision contained in—

(a) the Government of Wales Act 2006 or an instrument made under or having effect by virtue of that Act;

(b) the Wales Act 2014 or an instrument made under or having effect by virtue of that Act.

( ) For the purposes of this section—

(a) ‘modifying’ includes amending, repealing and revoking;

(b) ‘within devolved competence’ is to be read in accordance with subsections (7) and (8) of section 17, but no account is to be taken of the requirement to consult the appropriate Minister in paragraph 11(2) of Schedule 7B.”

See the statement for amendment 144.

Amendment 150, page 39, line 4, leave out “primary legislation” and insert “an Act of Parliament”.

The amendment introduces separate provisions for the use of the power in clause 51 in relation to an Act of Parliament.

Amendment 82, page 39, line 6, after “Parliament” insert

“and the National Assembly for Wales.”

This amendment ensures that when exercising the power to amend, repeal, revoke or modify any Acts or Measures of the National Assembly for Wales, the Secretary must seek the permission of the National Assembly, as well as both Houses of Parliament.

Amendment 145, page 39, line 6, at end insert—

“(6A) A statutory instrument containing regulations under subsection (2) that includes—

(a) provision within devolved competence modifying any provision of primary legislation, or

(b) provision modifying any devolution enactment in primary legislation,

may not be made unless a draft of the instrument has been laid before and approved by a resolution of the Assembly.”

See the statement for amendment 144.

Amendment 151, page 39, line 6, at end insert—

“(6A) A statutory instrument containing regulations under subsection (2) that includes provision amending or repealing any provision of a Measure or Act of the National Assembly for Wales may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament and the Assembly.”

The amendment provides that where the Secretary of State uses the power in clause 51 to make regulations that amend or repeal an Assembly Act or Assembly Measure, then the regulations must be approved by the Assembly and each House of Parliament.

Amendment 152, page 39, line 7, at beginning insert “Subject to subsection (7A),”.

The amendment is linked to the provision that where the Secretary of State uses the power in clause 51 to make regulations that amend or revoke subordinate legislation made by the Welsh Ministers or the Assembly, the regulations would be subject to annulment by the Assembly and each House of Parliament.

Amendment 146, page 39, line 9, leave out

“, is subject to annulment in pursuance of a resolution of either House of Parliament”

and insert

“or the Assembly, is subject to annulment in pursuance of a resolution of—

(a) either House of Parliament, and

(b) if it includes provision that would be within devolved competence or provision modifying a devolution enactment, the Assembly.”

See the statement for amendment 144.

Amendment 153, page 39, line 10, at end insert—

“(7A) A statutory instrument containing regulations under subsection (2) that includes provision amending or revoking subordinate legislation made by—

(a) the Welsh Ministers, or

(b) the National Assembly for Wales as constituted by the Government of Wales Act 1998,

if made without a draft having been approved by a resolution of each House of Parliament and the Assembly, is subject to annulment in pursuance of a resolution of either House of Parliament or the Assembly.”

The amendment provides that where the Secretary of State uses the power in clause 51 to make regulations that amend or revoke subordinate legislation made by the Welsh Ministers or the Assembly, the regulations would be subject to annulment by the Assembly and each House of Parliament.

Amendment 154, page 39, line 11, leave out subsection (8).

The amendment removes the definition of “primary legislation”.

Clause stand part.

That schedule 5 be the Fifth schedule to the Bill.

Clause 52 stand part.

Government amendments 59 and 60.

That schedule 6 be the Sixth schedule to the Bill.

Government amendments 50 to 52.

Amendment 12, in clause 53, page 40, line 8, at end insert—

‘(4) Section 16(6) comes into force on the day appointed by the Treasury by order under section 14(2) of the Wales Act 2014 for the coming into force of sections 8 and 9 of that Act.”

The new limits proposed by New Clause 6 on borrowing by the Welsh Ministers are calculated by reference to the financial consequences of commencing the income tax provisions of the Wales Act 2014. This provision ensures that the new borrowing limits come into effect at the same time as commencement of the income tax provisions.

Clause stand part.

Clause 54 stand part.

New clause 4—Assignment of VAT—

“(1) The Government of Wales act 2006 is amended as follows.

(2) In section 117 (Welsh Consolidated Fund), after subsection (2) insert—

‘(2A) The Secretary of State shall in accordance with section 64A pay into the Fund out of money provided by Parliament any amounts payable under that section.’

(3) After that section insert—

‘117A Assignment of VAT

(1) Where there is an agreement between the Treasury and the Welsh Ministers for identifying an amount agreed to represent the standard rate VAT attributable to Wales for any period (“the agreed standard rate amount”), the amount described in subsection (3) is payable under this section in respect of that period.

(2) Where there is an agreement between the Treasury and the Welsh Ministers for identifying an amount agreed to represent the reduced rate VAT attributable to Wales for that period (“the agreed reduced rate amount”), the amount described in subsection (4) is payable under this section in respect of that period.

(3) The amount payable in accordance with subsection (1) is the amount obtained by multiplying the agreed standard rate amount by—

10

SR

where SR is the number of percentage points in the rate at which value added tax is charged under section 2(1) of the Value Added Tax Act 1994 for the period.

(4) The amount payable in accordance with subsection (2) is the amount obtained by multiplying the agreed reduced rate amount by—

2.5

RR

where RR is the number of percentage points in the rate at which value added tax is charged under section 29A(1) of the Value Added Tax Act 1994 for the period.

(5) The payment of those amounts under section 64(2A) is to be made in accordance with any agreement between the Treasury and the Welsh Ministers as to the time of the payment or otherwise.’

(4) The Commissioners for Revenue and Customs Act 2005 is amended as follows.

(5) In subsection (2) of section 18 (confidentiality: exceptions) omit ‘or’ after paragraph (j), and after paragraph (k) insert ‘, or

(l) which is made in connection with (or with anything done with a view to) the making or implementation of an agreement referred to in section 117A(1) or (2) of the Government of Wales Act 2006 (assignment of VAT).’

(6) After that subsection insert—

‘(2B) Information disclosed in reliance on subsection (2)(l) may not be further disclosed without the consent of the Commissioners (which may be general or specific).’

(7) In section 19 (wrongful disclosure) in subsections (1) and (8) after ‘18(1) or (2A)’ insert ‘or (2B).’”

This new clause would allow the payment into the Welsh Consolidated Fund of half the receipts of Value Added Tax raised in Wales, on the lines of section 16 of the Scotland Act 2016.

New clause 5—Tax on carriage of passengers by air—

“(1) In Part 4A of the Government of Wales Act 2006, after Chapter 4 insert—

Chapter 5

Tax on carriage of passengers by air

116O Tax on carriage of passengers by air

‘(1) A tax charged on the carriage of passengers by air from airports in Wales is a devolved tax.

(2) Tax may not be charged in accordance with that provision on the carriage of passengers boarding aircraft before the date appointed under subsection (6).

(3) Chapter 4 of Part 1 of The Finance Act 1994 (air passenger duty) is amended as follows.

(4) In section 28(4) (a chargeable passenger is a passenger whose journey begins at an airport in the United Kingdom), for “England, Wales or Northern Ireland” substitute “England or Northern Ireland”.

(5) In section 31(4B) (exception for passengers departing from airports in designated region of the United Kingdom) for “England, Wales or Northern Ireland” substitute “England or Northern Ireland”.

(6) Subsections (3) to (5) have effect in relation to flights beginning on or after such date as the Treasury appoint by regulations made by statutory instrument.’”

This new clause would make air passenger duty a devolved tax in Wales, on the lines of section 17 of the Scotland Act 2016.

New clause 6—Lending for capital expenditure—

“In section 122A(1) and (3) of the Government of Wales Act 2006 (lending for capital expenditure), for ‘£500 million’ substitute ‘£2 billion’.”

Section 122A of the Government of Wales Act 2006 (inserted by section 20(10) of the Wales Act 2014) makes provision for limits on borrowing by the Welsh Ministers for capital expenditure. This new clause changes the limit on the aggregate at any time outstanding from £500 million to £2 billion.

New clause 8—Corporation tax—

“(1) In Part 4A of the Government of Wales Act 2006, after Chapter 4 insert—

‘Chapter 4A

Corporation Tax

116P Corporation tax

A tax charged on trading profits in Wales is a devolved tax.’”

This new clause would make corporation tax a devolved tax.

New clause 9—Trading profits taxable at the Welsh rate—

“After part 8B of the Corporation Tax Act 2010 insert—

“Part 8C

357Y The Welsh rate

‘(1) The Welsh rate of corporation tax for a financial year is—

(a) if a resolution of the National Assembly for Wales—

(i) sets a rate under section 357YA for the year, and

(ii) is passed before the beginning of the year,

the rate set by the resolution;

(b) if the Welsh rate for the year is not determined under paragraph (a), but the Welsh rate for one or more earlier financial years was determined under that paragraph, the rate for the most recent of those earlier years;

(c) otherwise, the main rate.

(2) For the purposes of subsection (1)(a)(ii), a resolution passed before the beginning of a financial year is treated as not having been so passed if it is cancelled by a resolution under section 357YA that is itself passed before the beginning of the year.

357YA Power of National Assembly for Wales to set Welsh rate

(1) The National Assembly for Wales may by resolution set the Welsh rate for one or more financial years specified in the resolution.

(2) The Assembly may by resolution cancel a resolution under subsection (1).

(3) A resolution under this section may not be passed by the National Assembly for Wales except in pursuance of a recommendation which is made by Welsh Ministers and which is signified to the National Assembly for Wales.

(4) This section authorises the setting of a nil rate.

357YB Welsh rate supplementary provision

(1) The Secretary of State must lay draft regulations before the House of Commons and the National Assembly for Wales within twelve months of this Act coming into force.

(2) The Secretary of State must seek the consent of the Treasury before laying draft regulations under this section.

(3) The Secretary of State may make regulations under his section only if both the House of Commons and the National Assembly for Wales have approved those regulations in draft.

(4) Regulations under this section may make any necessary provision, including modifying or amending any enactment, that the Secretary of State or the Treasury considers necessary for the introduction of a Welsh rate of corporation tax.

(5) Regulations under this section may, for example, include—

(a) provision for the application of the Welsh rate of corporation tax to Welsh profits;

(b) provision about the operation of certain reliefs for trading losses that are given against profits;

(c) definitions of “Welsh company”, “qualifying trade”, “small or medium-sized enterprise” and “Welsh employer”;

(d) provision about whether a company has a Welsh regional establishment;

(e) rules for determining whether profits or losses of a trade are “Welsh profits” or “Welsh losses”;

(f) rules applying in the case of a Welsh company that is a small or medium-sized enterprise;

(g) rules applying in the case of a Welsh company that is not a small or medium-sized enterprise;

(h) the treatment of intangible fixed assets in relation to Welsh companies;

(i) provision about R&D expenditure credits and relief for expenditure relating to research and development;

(j) provision about relief for expenditure relating to the remediation of contaminated or derelict land;

(k) provision about film tax relief, television production, video games development and theatrical productions;

(l) provision about profits arising from exploitation of patents etc.;

(m) rules for determining whether profits or losses of a trade are “Welsh profits” or “Welsh losses” in the case of a company that is a partner in a Welsh firm;

(n) definitions of “excluded trade” and “excluded activity” (profits of which are not Welsh profits); and

(o) provision about the meaning of “back-office activities” (profits imputed to which may be Welsh profits).’”

This new clause mirrors the approach of the Corporation Tax (Northern Ireland) Act 2015 in defining a Welsh rate of corporation tax, but leaves the details to be set out in secondary legislation.

[Guto Bebb]

It is a pleasure to serve under your chairmanship this evening, Sir Alan.

Clause 22, alongside detailed technical provisions in part 2 of schedule 5, devolves onshore petroleum licensing in Wales to Welsh Ministers, fulfilling the St David’s Day commitment. Clause 23 is necessary to facilitate a smooth transfer of existing onshore licences. Clause 24 transfers to Welsh Ministers the regulation-making powers in the Infrastructure Act 2015 with respect to the right to use deep-level land below 300 metres for the purpose of exploiting onshore petroleum.

The St David’s day agreement stated that responsibility for speed limits in Wales should be devolved. It also committed the Government to consider the Smith agreement, to determine which recommendations for Scotland should also apply to Wales. As a result of this work, powers over traffic signs, including pedestrian crossings, will also be devolved. Clause 25 and section E1 of schedule 1 devolve these powers by reserving only powers relating to the exemption of vehicles from speed limits and certain traffic signs—for example, emergency vehicles attending incidents.

Together, the clause and the schedule have the effect of devolving to the Assembly and Welsh Ministers legislative and executive competence in respect of substantially all the provisions of the Road Traffic Regulation Act 1984 that concern speed limits and traffic signs. This means the Assembly will be able to legislate in respect of substantially all aspects of speed limits and traffic signs on all roads in Wales.

Clause 26 fulfils a St David’s day commitment and implements a Silk commission recommendation to devolve the registration of local bus services, including the relevant functions of the traffic commissioner. Devolution of bus registration is achieved by the matter not being listed as a reserved matter in schedule 7A. Clause 26 gives effect to the devolution of the relevant traffic commissioner functions to Welsh Ministers. Clause 27 also fulfils a St David’s day commitment and a Silk commission recommendation by devolving the regulation of taxi and private hire vehicle services in Wales to Welsh Ministers.

This complements the devolution of legislative competence to the Assembly for taxi and private hire vehicle licensing in new schedule 7A. Taxi and PHV services are currently licensed by local authorities under legislation that covers England and Wales outside London. Local licensing authorities set their own policies and standards. I therefore support these clauses standing part of the Bill.