Wales Bill

Debate between Baroness Randerson and Lord Rowe-Beddoe

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

[Lord Rowe-Beddoe (CB)]

Amendment 96 stands in my name and those of the noble Baronesses, Lady Morgan of Ely and Lady Randerson, and the noble Lord, Lord Wigley. I refer noble Lords to my register of interests, specifically as past chair of Cardiff Wales Airport. Your Lordships will be pleased to know that I do not intend to repeat what I have said in the past on this vexed issue. The Minister is well versed on the subject as a result of his previous membership of the Silk commission, before his ennoblement, on which he sat with distinction—and which recommended that this particular tax be devolved.

As a brief background, the tax was introduced in 1994 at a rate of £5 per passenger for travel within the United Kingdom and the European Union and £10 per passenger for travel elsewhere. Over the past 22 years, there have been several increases and changes in the structure. Since April this year, band A is levied at £13 per passenger at the reduced rate and £26 per passenger at the standard rate. For journeys of more than 2,000 miles—band B—the reduced rate is £73 and the standard rate is currently £146. These are significant amounts, I am sure your Lordships will agree.

Despite some small changes in structure, these taxes continue to be the highest in the world and represent a growing barrier to tourism, trade and investment in our country. Internationally, the tax is currently either being frozen or, in many cases, abolished. It is worth noting that, for domestic flights within the United Kingdom, air passenger duty is twice the amount of that paid for travel to and within Europe. This has a significant impact on domestic air services and, of course, regional connectivity—something which we hear a lot about on the development on new runways in the south-east. One must never forget the congestion on the roads or the slowness of our rail building. Air connectivity in the regions is very important and becoming increasingly so.

However, this tax—it is my favourite subject, really—is another example of the asymmetrical devolution of powers that has been thrust upon Wales continuously. In January 2013, the Government devolved APD to the Northern Ireland Executive on all direct long-haul flights there, which set the tax at £0. That still pertains. In January 2015, as part of the Scotland Bill, air passenger duty was devolved and the Scottish Government have since announced that they will reduce the level of APD by 50% between 2018 and 2021 and abolish the tax completely when public finances allow. In February 2015, in line with the St David’s Day agreement, the Government announced that they were considering the case—or recommendation, call it what you will—and the options for devolving this tax to Wales. Is the deliberate omission of this provision from the Bill therefore the result of the Government’s consideration?

It is clearly recognised that the devolution of APD could provide a much-needed boost to the Welsh economy through the growth of inbound tourism, additional trade links and a much-needed increase in destinations from Cardiff Airport, particularly for long haul. Abolishing this tax in Wales on long haul alone could bring an increase of 27% in jobs within aviation-related employment at Cardiff and indirect support employment in the greater area. This would give rise to a 28% increase in the GVA impact for the Welsh economy, which would clearly include the anticipated 41% increase in inbound tourism. I am sorry that it is so late an hour to give the Committee these numbers and percentages, but the abolition of this tax could be significant for the economy of our country.

In the other place, the honourable Member for Carmarthen East and Dinefwr posed this question on Report, which I repeat:

“Why would the Wales Office seek to deny Wales the same powers as Scotland and Northern Ireland?”.

Again, he asked a little later,

“why would it deny the ability of the Welsh economy to grow?”.—[Official Report, Commons, 12/9/16; col. 701.]

Wales needs parity with Scotland and Northern Ireland. It is in the interests of the development of our economy and therefore clearly in the interests of the people of our country. I beg to move.

[Baroness Randerson]

My Lords, I was very pleased to put my name to this amendment. This is a tale of two airports—the rivalry between Bristol and Cardiff airports—but someone listening to this debate who is not familiar with the geography that lies behind the arguments within it could be forgiven for thinking that these two airports are near neighbours. The argument is always put forward that, if you devolve responsibility for APD to the Welsh Assembly, it will cut the level of the duty and that will put Bristol Airport at a disadvantage. However, these airports are 102 kilometres apart, and they are not easy kilometres. They include driving along the M4, with its congestion, over the Severn bridge with its tolls and over very poor road links around Bristol to the airport, so it frequently takes in excess of two hours to go between the two airports. If you try going by public transport, you have an extremely complex journey involving trains and buses.

Wales Bill

Debate between Baroness Randerson and Lord Rowe-Beddoe

Monday 13th October 2014 Lords Chamber

[Baroness Randerson]

The noble Lord is possibly being a little on the cautious side in his estimate of how fast a future Government could produce a further devolution settlement. I cannot give any guarantees about anything that a future Government might do, but if this debate is taken forward and undertaken rigorously within Wales within the next few months, and if parties put something in their manifesto on the increase in the size of the Assembly that they believe is required, we can have a debate on the future shape of devolution during the general election that would enable a future Government to take this forward with considerable speed. I regret that there are a number of “ifs” in that answer, but there is no need for the noble Lord to despair of the outcome.

This debate must continue. It must include civil society and seek to engage the general public if the Assembly is to change as a result of the further devolution of powers so that there can be more Assembly Members. I hope the noble Lord will withdraw his amendment.

[Lord Rowe-Beddoe]

I thank the Minister for her reply and her summing up of a very interesting debate. I am still most concerned that devolved power as contained in this Bill will become law and more money will be devolved, more capital will go down, more tax-raising powers will come along and there will still not be a resolution for scrutiny. I listened very carefully to what the Minister said in her concluding remarks. I hope the Government understand that it is inextricably linked. I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

House resumed. Committee to begin again not before 8.25 pm.

Wales Bill

Debate between Baroness Randerson and Lord Rowe-Beddoe

Tuesday 22nd July 2014 Lords Chamber

[Baroness Randerson]

I think that the noble Lord raises a fundamental point about devolution. The control of building and road infrastructure in Wales is devolved. With it comes the Barnett consequential of the funding for infrastructure throughout the UK, which is reflected in the proportion of the Department for Transport’s budget that is devolved to the Welsh Government.

To complete the point I was making, we have agreed an annual limit of £125 million relating to borrowing in Wales. That limit was proposed by the Welsh Government. A lot of noble Lords referred to the Barnett formula. I remind them that the Holtham report recommended that Welsh funding should be between 15% and 17% above English funding. Funding in Wales is 15% above the funding for England at this time, so it is within the areas deemed as fair by the Holtham commission. That is not to say that it has been fair in the past; it is at the current point because there has been divergence in recent times rather than convergence. I remind noble Lords that in 2012 the Welsh Finance Minister Jane Hutt agreed with the Chief Secretary to the Treasury in an exchange of letters a system to review the situation in relation to Barnett if convergence was about to begin again. That system worked satisfactorily at the spending review last year and it provides a basis for fairness in the future. I am absolutely sure that noble Lords will return to this in the future and that we will be talking about it in some detail.

[Lord Rowe-Beddoe]

Is the Minister saying that the Barnett formula has been revised in the last 12 months?

[Baroness Randerson]

No I am not, but the natural process of the way in which the formula works means that in times of spending restraint, where we have been for the last four years, the convergence process, which worked over many years and made the formula more, shall I say, sparing in relation to Wales, ceased to operate and we have had divergence which has brought Wales to a position of greater fairness now than in the past. That means, however, that if we go back to times of financial plenty, there would be an issue once again. That has been recognised in the exchange of correspondence between the Chief Secretary to the Treasury and the Finance Minister in Wales.

In response to the general point made by noble Lords from the Labour Party about dual candidacy, as I predicted, when we read Hansard tomorrow it will appear as the most important matter in the Bill to members of the Labour Party. It is significant to remember that the purpose of doing this is to widen the pool of good candidates. Time and again people have raised the issue of how important it is to have scrutiny of the highest nature in the Welsh Assembly. It is not only a case of ensuring that there are more Assembly Members—whether you agree with that or not—but of ensuring that the best candidates can stand and get elected.

Many noble Lords on the Benches opposite referred to the Clwyd West situation. I refer to the Nick Bourne situation, if my noble friend will forgive me, where, as the leader of a party in the 2011 Assembly elections, he failed to gain a seat because his party had done so well. That is an anomaly, and it is important to bear in mind that within this system you will get that kind of anomaly. I say to the noble Lord, Lord Rowlands, who raised the issue of people who lose still getting into the Assembly, that that applies only if you think that elections should be on a winner takes all strategy. However, if you believe that elections are a way of ensuring that different strands of opinion are represented in our legislatures and Parliaments, you look at ways of ensuring that significant minority opinions are represented as well as majority opinions.