Wales Bill

Stephen Crabb Excerpts

Tuesday 24th June 2014 Commons Chamber

[Paul Murphy]

It certainly is not a wrecking tactic. I have made the position clear. I am just a Back Bencher, but Labour Front Benchers will also make it clear that the Labour party is committed to reserved powers for Wales. In the light of what is likely to happen in Scotland, that becomes much more important.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

I am grateful to the former Secretary of State for giving way. He is definitely not just a Back Bencher, but does he genuinely believe that moving to a reserved powers model is a panacea for all the difficulties and challenges of a devolution settlement between England and Wales—issues such as water, transport, and the populous border, which the shadow Secretary of State described earlier? Does he genuinely believe that moving to a different starting point is a panacea to overcome the challenges in the current devolution settlement?

[Paul Murphy]

I do not think for one second that the model is a panacea for all the issues and problems that we face, but I think that it will give tools to the National Assembly and the Welsh Government that they currently may not have and make it easier for them to resolve various issues. I do not suggest for one second that the model means that we will have to end the important cross-border co-operation that exists, or that there will be no need for the Governments to discuss matters. Of course that will have to happen, because of points Members made earlier; large swathes of the population live on the border in Wales, in contrast to Scotland. I agree with the Minister that this model is not the complete answer but it is an answer. It is also an answer in the light of what both parties are thinking with regard to Scotland. Whatever happens in Scotland—like me, the Minister will argue for a no vote—it will undoubtedly change the political and constitutional landscape of our country and so Wales must be in a position to take part in that. Otherwise, we will be seen as an adjunct to a very large England, with Northern Ireland, with its own special issues, on one side.

Therefore, I agree with the new clause. I am sure that my hon. Friend the Member for Llanelli will be able to make the points that I have not made and that have been discussed by Members.

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[Wayne David]

That is a fair point, and I will touch on it a little later. We have asymmetrical devolution in the United Kingdom; we have different forms of devolution in different parts of the UK. While there are good reasons for that, it does not help the general public’s understanding of what is devolved and what is not devolved. If we had greater consistency in the bedrock of devolution between Northern Ireland, Scotland and Wales, that would help that public understanding. Some may say that strictly speaking the Northern Ireland settlement is not quite akin to the Scottish settlement, but nevertheless in effect we have a reserved powers model in place and it would be advantageous if Wales were to follow their examples.

As Members, and in particular my hon. Friend the Member for Llanelli (Nia Griffith), have said, there has been an unfortunate conflict between central Government and the Welsh Government through the Supreme Court. There have been three referrals of legislation to the Supreme Court. We have heard about the then Local Government Byelaws (Wales) Bill, which the Government here in London questioned. They asked for the Supreme Court to make an adjudication, and the position of the Welsh Government was upheld, but we must consider the amount of time and effort that went into questioning such a relatively small measure and whether that meant there was better government.

I feel I must quote the Counsel General for Wales, Theodore Huckle QC, who has said that

“it took five Supreme Court Justices…several of the UK’s leading constitutional lawyers and a great many officials across three Governments to decide it was lawful to make minor changes to the way Welsh local councils deal with things like dog-fouling and loitering in public lavatories.”

That raises this question: what sense is there in that? How on earth can that be defended as good government? It cannot be.

[Stephen Crabb]

I genuinely wonder whether the hon. Gentleman is suffering from amnesia, as he was a part of a Government who created that exact system. If he does not think the Supreme Court is the relevant mechanism for resolving disputes between two Governments over legislative competence, then what is, under the reserved model he supports?

[Wayne David]

I just think it is very important to learn. I know that is anathema to the current Government, but if we recognise that devolution is a developing process, it is vital that we learn and make things better and, when things are clearly not as they should be, make improvements. That is a good way to approach government.

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[Wayne David]

I have no qualms at all about talking about England, because we are a United Kingdom, but if I deviated from my notes and spoke at length about England, you would take me to task pretty quickly Madam Deputy Speaker.

It is important to recognise that the Local Government Byelaws (Wales) Act was not a one-off. We have seen an attempt—perhaps most significantly, politically—to prevent the Welsh Government from carrying through their legislative plans for the agriculture sector. That is a far more emotive issue, particularly for workers who are directly affected by this Bill—or, as may happen, the lack of it. However, that reinforces the constitutional point that the current situation is unsatisfactory, facing as we do ongoing legal challenges on the basis of politics, rather than, as my right hon. Friend the Member for Torfaen (Paul Murphy) said, Members sitting down together where there is a genuine dispute between the two legislatures and working things out.

The conclusion I come to is that we need a system that transcends party politics: a constitutional arrangement that is seen to be fair to everybody, and that respects the integrity of the United Kingdom but also the development of devolution in Wales; a settlement based on a reserved powers model that is far more intelligible to people in Wales, and that will help them to understand far more easily the basis of our devolution arrangements in Wales and the United Kingdom as a whole.

[Stephen Crabb]

The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) said that the purpose of amendment 8 is to ensure that the Welsh Government can use their new borrowing powers to invest in projects that they, rather than Her Majesty’s Treasury, want to take forward. I should point out that the Bill already provides Welsh Ministers with complete flexibility to decide how to use their borrowing powers, in much the same way that they have complete flexibility regarding their resource and capital budgets. I wonder whether the hon. Gentleman was confusing the requirements for the early borrowing powers with the wider borrowing powers the Bill sets out. Regarding the former, he is right that there is a specific agreement between the Welsh Government in Cardiff and the UK Government—specifically the Treasury—to facilitate early movement on a strategic project of importance to the Welsh nation and economy: namely, the M4 upgrade. So, rather than it being a project imposed from above by the UK, it is very much demand-led from within Wales.

[Jonathan Edwards]

The Bill as I read it states that the Treasury has the final say on what the Welsh Government will be able to use those borrowing powers for, and the UK Government have made it crystal clear that their priority is the M4 relief road.

[Stephen Crabb]

There is a line in the Bill that refers to Welsh Ministers being able to borrow with the approval of the Treasury. That merely refers to the overall borrowing limit, which the Treasury will agree with the Welsh Government. It is not about the Treasury signing off on individual projects. We want to give the maximum possible freedom to Welsh Ministers to use their borrowing powers to decide on exactly the infrastructure projects they want to take forward. I am very happy to continue this discussion with the hon. Gentleman another time, but that is the situation.

On new clause 2, the Welsh Government already have the power to provide guarantees in relation to their devolved responsibilities. Section 70 of the Government of Wales Act 2006 states that

“Welsh Ministers may give financial assistance (whether by way of grant, loan or guarantee) to any person engaged in any activity which the Welsh Ministers consider will secure, or help to secure, the attainment of any objective which they aim to attain in the exercise of any of their functions.”

So there are no handcuffs or binds on Welsh Ministers. For example, they already have the powers to support the Circuit of Wales with a guarantee, should they choose to do so. Conversely, the UK Government would not be able to provide a guarantee under the terms of the Infrastructure (Financial Assistance) Act 2012 as the Circuit of Wales project does not meet the infrastructure criteria set out in the legislation.

Furthermore, it is the size of the UK Exchequer that enables the UK Government to guarantee substantial infrastructure projects, such the Wylfa Newydd nuclear plant that has been guaranteed with Hitachi. Wales, therefore, benefits from UK Government guarantees in relation to energy and other infrastructure, while the Welsh Government can decide how to provide financial support to help deliver their own devolved responsibilities.

--- Later in debate ---

[Jonathan Edwards]

I can base my position only on the list of prequalified projects, which was last updated by the Government on 16 June. I have a list here of a page and a bit, which has not a single Welsh project on it.

[Stephen Crabb]

All I can do is reiterate the information that I have received from the Treasury that there are indeed Welsh projects at the prequalification stage. We are currently talking about infrastructure guarantees to Welsh businesses and other companies that want to invest in Wales. I will happily write to the hon. Gentleman with further information to clarify the situation. On that note, I hope that Members agree that the existing arrangements and the Bill before us are therefore optimal and will withdraw amendment 8 and new clause 2.

I turn now to new clause 3, which would allow the transfer of responsibility for referendums to the National Assembly for Wales. I am afraid that with this new clause, we once again find Plaid Cymru trying to shoehorn far-reaching and fundamental changes to the wider devolution settlement for Wales into this specific Bill, which takes forward the recommendations of part 1 of the Silk commission.

Referendums, such as the one this Bill provides for, are intended to allow the electorate to decide on key constitutional issues. Competence for the conduct of referendums, except in very exceptional circumstances, such as those around the Scottish independence referendum, rests at a UK level. I have seen no evidence yet to suggest that there should be any change to the existing devolution settlement.

It is also worth noting that the Silk commission made no recommendations about that issue when it examined the devolution settlement in its second report. Furthermore, there have been no calls from the Welsh Government or the Assembly for this competence to be transferred.

This Bill is focused on delivering new fiscal powers to Wales that were recommended by the Silk commission in its first report, and new clause 3 forms no part of that. I therefore ask Opposition Members to withdraw this amendment as well.

Finally, I turn to new clause 4, which bares a striking resemblance to an amendment tabled by Opposition Members in Committee. The new clause seeks to postpone the commencement of part 2 of the Bill, apart from the referendum provisions and clauses 19 and 20 in relation to borrowing powers, until the Secretary of State has laid a report before both Houses of Parliament setting out the steps needed to move to a reserved powers model of devolution. That report would need to be laid within nine months of the Bill’s enactment, generously giving the Government three months longer than the Opposition permitted in their Committee stage amendment.

With these new clauses, Labour Members once again seek to connect directly the commencement of the parts of the Bill that will devolve tax-raising powers to the Assembly with one of the most far-reaching of the Silk commission’s part 2 recommendations. Other hon. Members have described that as a delaying tactic; some have even described it this afternoon as a wrecking tactic. It reveals yet again the Welsh Labour party’s opposition to the proposals in the first Silk commission report to devolve income tax powers to Wales. It is merely a smokescreen for Labour Members’ deep and widely held scepticism and suspicion—they have used those words this afternoon—and they fundamentally oppose fiscal devolution, which is the next important stage of devolution for Wales.

As this Government have made clear on a number of occasions, a move to a reserved powers model would be a fundamental change to the devolution settlement in Wales. We have also made it clear, as did the Silk commission, that this should be a matter for party manifestos at the next election. Therefore, there is nothing to be gained by requiring the Government to report to Parliament on the legislative steps needed to move to a reserved powers model.

Once again, the Labour party seems to be mired in confusion about its position in relation to the Silk commission’s recommendations in the part 1 and part 2 reports. As is typical of the Labour party, it wants borrowing powers, but it does not want the means to pay back the money borrowed. It does not want true accountability for the devolved Government in Wales; it just wants public spending on the never-never. Just such a reckless attitude by the Labour party got this country’s finances into such a mess in the last Parliament.

This coalition Government have no intention of returning to that sorry state of affairs. We are committed to devolving the tax and borrowing powers in the Bill as soon as possible, so that the Welsh Government can become accountable for raising the money that they spend and for repaying the money that they borrow. I therefore invite Opposition Members to consider the full implications of new clause 4 and not to press it.

[Jonathan Edwards]

We have had an interesting debate on this group of new clauses and amendment 8, three of which Plaid Cymru tabled: first, to allow the Welsh Government to issue a guarantee to enable them to boost economic development; secondly, to release the handcuffs on borrowing powers to enable them to choose their own priorities—the borrowing capacity in the Bill will be more or less completely consumed by the M4 project that the Treasury favours; and, thirdly, to hold binding referendums based on the Edinburgh agreement.

Labour tabled new clause 4. Obviously, as a party, we fully support the move to a reserved powers model for Wales. It is a pity that the Labour party decided to spoil the new clause with a second element, which is obviously a delaying tactic. The Welsh economy needs these powers now, rather than waiting for a report. It is obviously a wrecking new clause, typical of Labour’s attitude during progress on the Bill in all its various stages. Plaid Cymru is not a tribal party—we vote as we see fit—but we cannot support new clause 4 because of the wrecking element in its second part.

With your permission, Madam Deputy Speaker, I intend to press amendment 8 to a vote at the appropriate time, but I will not press new clause 3 and ask leave to withdraw new clause 2.

Clause, by leave, withdrawn.

New Clause 4

National Assembly for Wales: reserved powers

‘(1) The Secretary of State will lay a report before each House of Parliament on the further legislative steps needed to move to a model of reserved powers for the National Assembly for Wales and shall lay the report before each House of Parliament within nine months of this Act receiving Royal Assent.

(2) Part 2, except the referendum-related provisions and sections 19 and 20 shall not come into force until the report has been laid in accordance with subsection (1).”—(Nia Griffith.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.