Wales Bill
Lord Bourne of Aberystwyth Excerpts(9 years, 6 months ago)
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Baroness Gale
My Lords, I speak to this amendment in support of what my noble friend Lord Anderson said. When the Welsh Assembly was set up as an elected institution, it was the Labour Party that introduced PR for the regional list—along with the traditional first past the post system—which was in direct opposition to its own political interests. It is only a few years ago that we had a referendum for the people of this country to decide what system of voting they wanted. Overwhelmingly, they decided that first past the post was the best system.
Removing the ban on dual candidacy would mean that candidates who have been rejected by the electorate under first past the post could get into the Assembly via the back door. We believe that that is subverting the will of the electorate. The majority of people responding to the Government consultation on this issue disagreed with the Government’s position. We share the wider concerns of the public that removing the ban would be anti-democratic. As my noble friend Lord Anderson clearly illustrated, it would allow losing candidates to be elected by the back door. It is not what the voters want.
As I said on Second Reading, it is not surprising that two significant surveys carried out on dual candidacy have both found a clear majority in favour of a ban. One was the Government’s own consultation and the other the Bevan Foundation study. According to the Government’s own consultation, there was a small majority in favour of the ban. It does seem strange that the Government are completely ignoring their consultation—I assume because it did not give them the answer that they wanted.
The Explanatory Notes on the Wales Bill say that this change will be made to the benefit of the smaller parties in Wales. They say that studies by the Electoral Commission and others,
“have demonstrated that the prohibition has a disproportionate impact on smaller parties who have a smaller pool of potential candidates to draw upon”.
If that is the case, we are changing the law in order to help smaller parties because they cannot find enough candidates. I have seen no evidence of that. At every election, every party in Wales fields a full slate of candidates, so to me there seems to be no problem. If that is the reason for changing this, it does not hold up very well because no party has had any candidate vacancies.
There should be strong democratic reasons for a change back to dual candidacy, but I do not think that the Government have produced any. I can give a commitment that if Labour is in power after the general election, and if this is carried through, we will reintroduce the ban on dual candidacy.
Lord Bourne of Aberystwyth (Con)
My Lords, Amendment 7 tabled in the name of the noble Lord, Lord Anderson, would remove Clause 2 from the Bill. The clause overturns the ban on dual candidacy by the previous Labour Government, thus reversing their own position as set out in the Government of Wales Act 1998. Dual candidacy refers to the situation at an election where a candidate stands in both a single member constituency and on a party list at the same time. Perhaps I may say first that the amendment seems to be supported only by the Labour Party. Indeed, the noble Lord, Lord Howarth, referred to the fact that the three other parties are very much against this change, which should suggest to noble Lords that this is something of a partisan manoeuvre on the part of the Labour Party; it would seem that everyone else is out of line except for that party.
Let us look at some of the arguments which have been put forward. The noble Lord, Lord Anderson, knows that I respect him immensely, but I cannot understand the argument that when people go into a polling station and cast their vote, they are voting against candidates. They are voting for a candidate. There is no evidence to suggest that when people voted in Clwyd West they were voting against Brynle Williams, Eleanor Burnham and Janet Ryder; they were voting for Alun Pugh. Unless noble Lords on the other side are suggesting that some candidates have more validity than others or some Members have more validity than others, it is hard to see their objection to people being elected on the proportional list who have been candidates for constituencies. I cannot follow the argument that people are voting against candidates; they are voting for candidates when they vote.
Lord Anderson of Swansea
There may or may not be validity in what the noble Lord is saying. Some people may vote positively for a candidate while others, knowing certain candidates, will vote against. It is not a question of either/or.
Lord Bourne of Aberystwyth
This comes back to the amendment put forward by my noble friend Lord German where the candidates’ names are on the list. I should like to see the evidence that people are voting against candidates; none has been brought forward that I have seen.
When the last Labour Government introduced the ban on dual candidacy in the Government of Wales Act 2006, Ministers claimed to have done so as a result of the general public’s “considerable dissatisfaction” with dual candidacy. I have heard it suggested again today that an overwhelming majority of people are against it. Let us look at the two surveys referred to by the noble Baroness, Lady Gale. I turn first to the Government’s Green Paper. It was suggested by the shadow Secretary of State in another place that an overwhelming majority of respondents to the consultation were opposed, but in fact the summary of responses published by the Wales Office in 2012 notes only a small majority—in fact, it was a majority of one.
Let us look at those who actually submitted to the consultation. The majority in favour of removing the ban were Labour AMs with responses written in remarkably similar language. I would ask noble Lords to look a little more closely at the evidence before they assert, as was done in another place, that an overwhelming majority of respondents thought that it was right to have the ban. Frankly, that is not the case. It is true that the 2006 paper produced by the Bevan Foundation found that a small majority did consider it to be unfair, but the foundation went on to say that any change should be “based on sound evidence”.
Perhaps I may take noble Lords with me to look at some of the evidence. Independent bodies such as the Electoral Commission have disputed the change. They have suggested in evidence to the Welsh Affairs Committee that the view is clear that prohibiting dual candidacy in Wales is not something that they are in favour of and is not supported by evidence as necessary. It seems to me that no evidence has been brought forward since then that suggests that such a change is necessary.
An acknowledged expert on this issue is Professor Roger Scully—who has already been mentioned—from Cardiff University’s Wales Governance Centre. I do not know his politics, but I know that he does not vote for the Conservative Party. He said:
“No substantial independent evidence was produced at the time of the GOWA”—
the Government of Wales Act 2006—
“(or, to my knowledge, has been produced subsequently) of significant public concern about dual candidacy. The claims made about dual candidacy ‘devaluing the integrity of the electoral system’, and ‘acting as a disincentive to vote’ therefore remain wholly unsupported by solid evidence”.
It is a fact, and one recognised by the Arbuthnott commission established by the last Labour Government, that dual candidacy is a feature of mixed-member proportional electoral systems the world over; yet of all the countries that use this system, it is only Wales that has such a ban.
That brings me to the point made by the noble Lord, Lord Anderson. Taiwan, which I believe he mentioned, Thailand and Ukraine all have a different system where they have two completely separate lists that do not interact; so it does not apply in the same way. In New Zealand, whose system he also recommended, the Electoral Commission has urged against introducing such a ban, so there is very little evidence elsewhere out there that this ban is desirable.
I come to a point that has not been touched on—rather significantly—that, apparently, at the same time as we were saying that this ban was so necessary for Wales when it was introduced for Wales at Westminster, for some strange reason it was not introduced in relation to the Greater London Assembly or to Scotland. At the time, of course, both bodies had regional members who represented the Labour Party, whereas in Wales there were no regional members for the Labour Party. Cynics might suggest that there is something to read into that, but we have not heard any mention of why the ban is only something that is right for Wales, but not right for Scotland or Greater London.
Baroness Gale
If one looks at the votes that are cast for the regional lists and the constituencies, Labour tops the poll in each of them. Because of the way the proportions are divided out, Labour does so well in the constituency section that it cannot—under the d’Hondt system—get many seats in the list system. This time around, we had two seats, even though we topped the poll in the regions. In the whole of Wales, Labour got 36.9%, the Conservatives 22%, Plaid Cymru nearly 18% and the Liberal Democrats 8%. As far as Wales is concerned, therefore, Labour tops the poll in the regional lists and in the constituencies, so we are grateful to the people of Wales for showing their support for us. I cannot see the validity of what the Minister is saying.
Lord Bourne of Aberystwyth
I thought that the noble Baroness was going to address the point about Scotland and the Greater London Assembly, but she did not. In relation to what she has just said, she has just expressed the essence of a proportional system. Nobody needs to explain to me that, the better a party does on first past the post, the more likely it is to lose seats on the list. I certainly know that to be the case, but that was the essence of the system that the Labour Government introduced, and I applaud them for it—it is a proportional and fair system. However, the question the noble Baroness did not address is why it is right to have the ban in Wales, but not right to have it in Scotland and London. I leave Members to ponder that one.
I return to the point that this, as I see it, is a partisan measure—I am afraid I have to say that because that is what I believe—and I cannot see other than that, particularly in light of the fact that in Scotland and Greater London it seems to be all right by the Labour Party to continue the system. Therefore, although I have the greatest respect for the noble Lord, Lord Anderson, I cannot agree with him on this point, and I invite him to withdraw his amendment.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord, Lord Norton, for his amendment, which allows us to discuss a clause in the Bill that we have not touched on in our previous discussions. I should also say that this is an additional matter that was not covered in the Silk report. The noble Lord comes to this debate on Report with an enviable and well deserved reputation on constitutional issues. I listened very carefully to what he said.
The noble Lord touched on the 2009 report from the Committee on Standards in Public Life, which did indeed recommend that the practice of Members of the House of Commons holding a dual mandate with a devolved legislature should be brought to an end by 2015 at the latest. As my noble friend has set out, that has so far prompted action additionally in relation to Northern Ireland.
The committee questioned whether it was possible for someone sitting in two legislatures simultaneously to do justice to both roles. The Government share the committee’s concern, and listening to noble Lords across the Chamber, it seems that this is a widely shared concern. I very much agree with the comments of the noble Baroness, Lady Morgan, that this is not just about serving the needs of constituents, although, of course, that is important; it is also about the ground rules and the practicalities of what is going on in the institutions concerned.
No Assembly Member is currently an MP but, historically, a number have been so. Indeed, we have two distinguished ones here today who could probably speak to the difficulty—near impossibility, I think—of doing both roles, certainly on a sustained basis. In the Government’s 2012 Green Paper, Future Electoral Arrangements for the National Assembly for Wales, the Government consulted on whether the practice of having multiple mandates should be brought to an end. A large majority of respondents—this time a reliable sample, I think, and a very large majority of respondents—agreed that it should, including opposition parties in the Assembly and the Electoral Reform Society.
Although the Welsh Government did not consider legislation to be necessary, at the Bill’s Second Reading in the Commons the shadow Secretary of State agreed with the proposal, as my noble friend Lord Norton affirmed. Following consultation, in March 2013 the Government announced that we would introduce legislation to prohibit multiple mandates between the House of Commons and the National Assembly at the earliest opportunity. This clause provides that membership of the House of Commons automatically disqualifies someone from sitting in the Assembly, subject to specific exceptions.
If a sitting Member of Parliament is subsequently elected as an Assembly Member, they are given eight days’ grace in which to vacate their seat in the House of Commons, by requesting appointment to a disqualifying office such as the Crown Steward and Bailiff of the Chiltern Hundreds. The eight-day period also applies if parliamentary and Assembly elections are held in close proximity and a candidate is elected to both legislatures. This is to allow them to decide which post to take up. Similar provisions apply in Northern Ireland.
No grace period is given to an Assembly Member who is elected as an MP except where a scheduled Assembly election is expected to take place within a year, the maximum possible period actually being 372 days between parliamentary and Assembly elections. In this instance, an individual will be able to retain both seats for that limited period of time to avoid a costly Assembly by-election when a scheduled Assembly general election is relatively imminent. The draft Wales Bill allowed for a six-month grace period, but following pre-legislative scrutiny of the draft Bill, the Welsh Affairs Committee recommended that the period be extended to one year, and the Government have accepted this recommendation. This clause does not apply to the House of Lords, where there are no constituency interests to represent.
This clause will ensure that an Assembly Member will be able to concentrate on representing the constituents and can contribute significantly to the institution. There was cross-party agreement on these proposals in the House of Commons, and I would therefore ask my noble friend Lord Norton to withdraw his amendment.
Lord Norton of Louth
My Lords, it is precisely because there was cross-party agreement that there is a valuable case for raising the issue. I am grateful to those who have spoken. The noble Lord, Lord Howarth, invites me to digress somewhat on to the proposal for a senate of the regions and nations—the words “back of an envelope” come to mind. In terms of the principle that would apply, it would be that which I have enunciated. He talked about caution, but I think that caution should apply to the very proposal for such a senate, rather than the method by which its members should be chosen.
On the points that have been raised, the principal argument deployed from both Front Benches against the amendment is, in essence, that being an MP is a full-time job. There are two problems with that. It was not accepted by the Committee on Standards in Public Life in its report, where the challenge was a conflict with the primary role, not an argument about its being a full-time job. It is also belied by the fact that the House of Commons is not unable to function because MPs are doing other jobs. It is quite possible for an MP to fulfil the functions of a Member of Parliament while being a Minister of the Crown, for example. I really do not see the argument that—
Lord Bourne of Aberystwyth
Perhaps I could remind the House that, after the Minister has spoken, it is only the mover of the amendment who can speak.
Lord Norton of Louth
In that case, I will not be able to anticipate what my noble friend Lord Crickhowell may have been about to raise with me. My point is that the objection to what I am bringing forward is one of practice. I am challenging whether, in effect, one can really do that. Essentially, when your Lordships think about it, those who are making that case are saying: “We know best”. That is not an argument for restricting the freedom of electors. The task may be difficult. It may be close to impossible, which is the point being put forward, in which case it is open to those people not to stand and put themselves up to fulfil those dual roles and it would be open to the electors to make the decision not to elect them. As the Committee on Standards in Public Life made absolutely clear, there is at least transparency in this respect. You know what you are getting into, at least on whom you are electing, because of the positions that they hold, so I think that that principle holds.
The other argument put by the Committee on Standards in Public Life is that of a conflict of interest. However, I do not regard that as being persuasive either, because Members of Parliament have at times a conflict of interest between what their party wants and what they see as the interests of their constituencies. I suppose that the logic of that would be to ban MPs from being elected on a party label, which I think is not what the parties particularly want.
In response to the arguments put forward, there is a practical argument, but I do not think that it is sufficient to overcome what is a fundamental issue of principle. We are restricting the right of electors and it is important to get that on the record. That may not suffice today to prevent such rights from being restricted but I hope that it may help to give thought and prevent such incursions in the future. In the mean time, I beg leave to withdraw the amendment.
Wales Bill
Lord Bourne of Aberystwyth Excerpts(9 years, 9 months ago)
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Lord Bourne of Aberystwyth (Con)
My Lords, it is a great privilege to follow the noble and learned Lord, who has unparalleled experience in these matters. I found myself in agreement with much of what he said. I also join the noble Baroness, Lady Morgan, in saying that it was a great pleasure to see the Secretary of State here for the beginning of the debate. It signals a close working relationship with us and indeed with the Welsh Government in Cardiff, perhaps underlined by the fact that he attended the First Minister’s reception yesterday. I think that is a sign of things to come. I do not think that the jury is out: I think it is going to be a good, close working relationship.
The Bill is in three parts. I do not propose to deal with one part for very long, except to say that it deals with the housing revenue account debt. I do not think anybody else has dealt with that either. It is largely non-controversial. I will first say a few words about Part 1, which deals with matters that were not at all within the purview of the Silk commission—namely, electoral arrangements. First, moving to a five-year fixed term now that the UK Parliament is on a fixed term makes a lot of sense. The party leaders and indeed the parties in the National Assembly welcomed it and we should as well. The ending of the dual mandate with the House of Commons also makes sense. There are some transitional measures there for people who move from one body to another so that they are not automatically disqualified from the other body. Once again, these are sensible.
What seems to be controversial, at least with the Labour Party, is the return to the process that the Labour Party introduced, which it now says people find confusing, of allowing people to stand both on a regional list and for first past the post constituencies. I would like to see the evidence that the people of Wales are confused by that. I do not have such a low opinion of the intelligence of the people of my country as to believe that. There is no evidence to suggest that anybody is confused by that. It is perhaps even more insulting that the Labour Party did not seem to think that the people of Scotland were confused by that because, at the same time as the Labour Government were changing it for Wales, they kept it for Scotland, where of course they had regional Members. When they changed it in Wales, they did not have any regional Members. If it were not the noble Baroness putting this forward, it would smack of hypocrisy, but I know her well enough to know that the opposition that she is putting forward is probably tongue-in-cheek. It makes sense to permit this and allow people to vote as they wish to vote.
Turning to the part of the Bill relating to Silk Part I, the taxation and borrowing powers are largely but not exclusively an adoption of Part I of the Silk report. I welcome what the noble Lord, Lord Wigley, said about the consensual nature of that. I particularly commend him for the lead that he has always taken in Plaid Cymru, and that Eurfyl ap Gwilym took as the representative of Plaid Cymru, in ensuring that we developed a consensus. It was not perhaps as difficult as he has suggested. I well remember that in Scotland Eurfyl ap Gwilym was mistaken for the Conservative representative because he was far to the right of me on many economic policies when we met the trade unions. It is sometimes surprising how these things develop. It is also important to note that the Labour Party was represented on Part I by a much respected and very able former Finance Minister, Sue Essex, who worked extremely hard, as did Rob Humphreys for the Liberal Democrats. The consensus building on Part I and indeed Part II was not that difficult. If we are able to capture that same capacity to move forward together within this House and the House of Commons, that will be all to the good.
Looking at the various taxes that are dealt with in the Bill and were dealt with by Silk Part I, the proposals on landfill taxes have been accepted, as have those on stamp duty land tax. The difficulties on aggregates tax were largely to do with the European position, and when we recommended devolution of that we put in the caveat, “Subject to this being solved in relation to European constraints”. We recommended that air passenger duty should be devolved for non-stop or direct long-haul flights. I regret that that has not been the case. I anticipate that the noble Lord, Lord Rowe-Beddoe, will deal with that when he speaks. I am disappointed in that regard.
The other difference is on income tax—not with the proposals on the bands so much as the lock-step. The amount on the bands is the same but we recommended the scrapping of the lock-step, which I thought was a good thing. Of course, there is lock-step in Scotland and we have to see that at the moment everything is looked at through the prism of Scotland, as noble Lords have said. It may look very different after the Scottish referendum, as my noble friend the Minister suggested. I do not agree but I can understand the Government’s position on that.
In relation to borrowing, I suppose we would all want more borrowing for Wales but we should note that this is a significant step. It goes further than what the Labour Party achieved in its period in government. For all the complaining about lack of progress on the Barnett reform—I wish the noble and learned Lord had grabbed that envelope and torn it up when it was being scribbled on in front of him; it might have saved us all a lot of trouble—and the gnashing of teeth on the other side, no progress was made on reform of the Barnett formula while Labour was in government. To be fair, I think the present Finance Minister in the National Assembly, Jane Hutt, has acknowledged that; in discussions with my right honourable friend Danny Alexander they have made progress on reform of the Barnett formula, although clearly there is still some distance to go on that.
I note what the noble Baroness, Lady Morgan, said about not leading the campaign for income tax powers in Wales. I must say, since she seems to regard those powers as pretty much akin to killing blue-eyed babies, we should be grateful that she is not going to be leading that campaign because, on the basis of her speech today, I do not think she would convince many people. But this gives power to the people of Wales, for us to do things differently based on having some independent tax-raising powers—new taxes, as the noble Lord, Lord Wigley, mentioned. These are things that we should be seizing.
Yes, there are some deficiencies in the Bill but it is a massive stride forward and we should acknowledge that and try to move forward in the spirit of consensus, as we have done so far on these issues, in marked contrast to Scotland. No doubt the position will look different after the Scottish referendum, but that does not mean that we should not grab this opportunity and move forward because otherwise we will get left even further behind. On that basis, the Bill deserves our support and then close scrutiny in Committee.
Lord Morgan (Lab)
My Lords, perhaps I should declare an interest as a member of the King’s College group which has produced a plan for a written constitution, currently being considered by the House of Commons constitutional committee. I cannot, I am afraid, declare an interest in the House of Lords Constitution Committee because I have been kept off it.
I therefore speak from the Back Benches with the independence that that conveys, and do so by giving the Bill my very strong general support. As has been pointed out by other speakers, it is a remarkable change for the Conservative Party, which opposed devolution and primary legislative powers, and the former Secretary of State, who spoke against the Assembly having taxing powers. So when the Prime Minister in Cardiff recently declared that this is a Government who believe in Welsh devolution, that was a very remarkable conversion worthy of events on the road to Damascus a long time ago.
This Bill has many excellent features from the small—like the name of the Assembly Government—to implementing the bulk of the first report of the Silk commission on taxation. One concludes that we have a coalition Government of repentant sinners—who, we are told in the good book, have a better than even chance of entering the kingdom of heaven.
I want to say something briefly about the Assembly and its character and a little about the policy it should pursue. I pray in aid not a Welshman but a Scotsman, Gordon Brown, whose contribution to the Scottish independence debate has been outstanding, and who has many important things to say in his latest book on the constitution more generally.
It is clearly important that the powers of the Assembly should be revised. It was a big conceptual mistake that the Welsh Assembly did not have reserved powers from the very beginning. It had the drip-drip of conferred powers. No intelligent reason was given why this should not be done as it was in Scotland. I do not think, with respect, that any intelligent reason has been given this afternoon. It seems to me that it is bound to happen as part of the wider constitutional changes which the noble Lord, Lord Wigley, has said will follow the Scottish referendum whatever the outcome is. As the Silk report has said, it would make matters clearer and make for greater coherence and consistency. It would also bring out the meaning of what devolution actually is. It is really rather humiliating to have powers determined for you by another assembly. I think that this would strengthen the Assembly, and would make the Welsh Assembly as Gordon Brown would wish to see the Scottish Parliament—namely an entrenched, permanent part of an updated constitution, and an updated written constitution, I hope. I hope to see that and, as people have said, for that to be treated as a matter of urgency.
On the size of the Assembly, I agree with the noble Baroness, Lady Humphreys, that 60 Members is nowhere near enough. The Richard commission argued strongly for it. This is a very small number of Assembly Members who are not in the Government to carry out the processes of scrutiny. I remember raising this with the previous Secretary of State but one and inquiring why the Welsh Assembly did not have more powers. She observed that the public mood did not favour having more paid officials. I recall asking her why in that case the Government had suggested creating 300 more paid politicians in the upper House, but there was not a response to that.
I think that the length of the Assembly should be determined by the Assembly; it should not be told by another body for how long it should conduct its operations. As a responsible and dignified body, it should decide for itself.
On the policy changes, much has been said about the borrowing powers. That is the central feature of the Bill and will enable the Welsh Government, or should enable them, to take on far greater powers to improve the economy and infrastructure in Wales. The borrowing amount of £500 million is, as was said, far too timid—I think that “chicken feed” was the expression that I heard on my left, which seems rather accurate. It is based on a measurement which is different from that of Scotland. There is nothing divinely created about it and I am sure that it will be looked at. It is profoundly necessary after the public sector cuts that Wales has endured in the past four years that it should have the ability to expand through its borrowing powers. There is a stronger case now for greater borrowing powers because the Welsh Assembly is to have much greater powers and to be able to do more things. Silk has virtually argued that the same measurement should be used for Wales as for Scotland and I do not see why that should not be the case.
I welcome the thrust of the Bill on taxation. As we said in the debate on the Scotland Bill, there should be no representation without taxation. We now have powers for stamp and landfill duties, which will give the Welsh Government more of an independent income. On income tax, I would hope that the Labour Party, of which I am a member, would be less apprehensive. It was noted in the New Statesman a week or two back by Professor Adam Tomkins that the Labour Party had lost out in the debate on Scotland by being too timid and, having set up devolution, not spelling out what it was for. I hope that the Labour Party, which is, as it has always been, the dominant party in Wales—or has been since the First World War at least—would be less apprehensive about that. One can see the apprehension about tax competition and about the Treasury using income tax variations for its own purposes, but this is a matter on which the parties should be quite clear—for that matter, I support what the Labour Party has said about perhaps increasing to 15 pence the amount of income tax that could be devolved to Wales.
I do not think that we need a referendum. We have had quite enough referendums in Wales. The noble Baroness, Lady Morgan, showed proper apprehension at leading or even taking part in any such debate—it would be one of the lower turnouts on record. Politicians of both sides have been passing the buck on this one. There was no referendum in relation to the Calman proposals for Scotland. Why should there be for Wales? It is a humiliating cop-out—to use the vocabulary—which is unfair.
Lord Bourne of Aberystwyth
There was of course a referendum in Scotland which the Labour Party provided for when devolved taxation was introduced.
Lord Morgan
Yes, I accept that. At any rate, in this case, I think that the argument against a referendum in the Silk commission report is profoundly the case and I strongly support it.
What I think is quite wrong, however, is to have income tax devolved at all while the Barnett formula continues. The formula was shredded by the Holtham report; it was shredded by the House of Lords committee. I do not know whether a stop-gap can be well past its sell-by date but—if those metaphors are in any sense reconcilable—that is the main point that has come forward. We have had a conspiracy of silence on all sides about the Barnett formula. The Labour Party had one or two debates on it in this House which were not at all sensible. The Conservatives have had their own discussion which quite falsely linked the Barnett formula with the accumulation of national debt, which it has nothing to do with. The Liberal Democrats have not been particularly vocal on it. Plaid Cymru has attached the Barnett formula to an extreme version of Welsh nationalism not particularly favoured since the days of Owain Glyndwr. UKIP has attached it to English nationalism, which seems to be equally unfortunate. In a way, the “none of the above” candidate would have a strong vote from me in that debate.
Proper government in Wales has been a long and hesitant process. It began in perhaps unlikely fashion with the demon drink in 1881, when the Sunday Closing (Wales) Act began the principle of Welsh legislation. This Bill is a welcome milestone, but it needs a wider vision linking the arguments in Wales both with the important and highly relevant debates on independence in Scotland and with the forthcoming debate on a referendum for Europe, which may not come for two or three years but will most certainly affect the attitude of Welsh people towards devolution and towards participating in a United Kingdom where England is perhaps strongly Eurosceptic. Hence, Gordon Brown has urged that a new constitutional settlement be adopted to bring together all these different themes and to make, as I have suggested, the Scottish Parliament and the Welsh Assembly permanent and irreversible.
This Bill shows how Wales has been a casualty of the process of stop-start change that we have had on constitutional reform for many years. The constitution has been correctly described by Professor Anthony King of the University of Essex as a “mess”. Wales is one area that has suffered from this mess. I would hope therefore that the mess could be cleared up by having a constitutional convention to provide a holistic look at all these aspects: the union in this country; the union with Europe; and the relationship between the different nations within the United Kingdom. I hope that we will have a vision supplied—perhaps even by the Constitution Committee here, of which I shall not be a member—and that the people of Wales will benefit. Nevertheless, that this Bill is a very helpful and hopeful start is incontestable.
Wales: Economy
Lord Bourne of Aberystwyth Excerpts(10 years, 1 month ago)
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Lord Bourne of Aberystwyth (Con)
First, I congratulate the noble Baroness, Lady Morgan of Ely, on securing this important debate. I agreed with some of what she said, although I must say that she often exemplifies a creationist approach to politics, as if nothing had ever happened before the Conservative victory and the alliance with the Liberal Democrats in 2010. There were, of course, deep historic problems with the Welsh economy well before 2010. We can understand the challenge only if we consider the historic position of Wales. Wales has had problems of poverty, particularly in west Wales and the valleys well before 2010. Nor is it just about employment, important though that is.
Let me say something about GVA, because that has been an historic problem in west Wales and the valleys, in particular. It has been falling for some time. It was falling well before 1997 and continued to fall until the present. That remains a massive problem with the loss of heavy industry. We have seen the growth of the service sector, which is significant, with employers such as Admiral Insurance, which is in the FTSE 100—our only FTSE 100 company. That is concentrated in south-east Wales. There is Moneysupermarket in north-east Wales, and there are iconic brands, such as Airbus. Much is going on in Wales that is very good.
It is true that the position on employment in Wales is healthy. Unemployment is falling fast and we have a good story to tell. Of course, the noble Baroness did not say that that is also true of England, Scotland and Northern Ireland: it is falling there too, despite the predictions of the Labour leader that we would have 1 million extra unemployed through the recession. We are no longer in a recession; it is not that Wales is coming out of the recession more quickly than elsewhere; we are all out of recession. That is an important point to make. It is the position in the whole of the United Kingdom that unemployment is falling and continues to fall. Nor are the economic levers just with Wales; they are also with Westminster. One thing that was stressed in Silk II—I declare an interest as a member of the Silk commission—was the importance of partnership between Westminster and Wales. I think that we would all subscribe to that, because there are things that have to be done together.
I think that it is fair to say that this coalition Government have pushed things forward where they were not pushed forward by the previous Government. For example, rail electrification, announced first to Cardiff and then to Swansea, had not been tackled by previous Governments—and certainly not by the previous Labour Government under either Prime Minister Blair or Prime Minister Brown at a time when we had more resources. That project is very good news. I know from first hand that the Prime Minister took a great personal interest in it, not least because he travelled to Swansea and recognised the difficulties of that journey and how important it was for Wales to improve on it.
Let us look at the recent Budget. There are many things that successive Budgets have done to help Wales. Successive Budgets from the coalition Government have seen 155,000 people in Wales taken out of tax altogether. In the most recent Budget, which I think has been widely welcomed, the cost of energy has come down, which is good news for Wales.
The noble Baroness mentioned, and I agree with her, the problems at Murco—I declare my interest as chair of the Haven enterprise zone, which includes Murco as our second most significant employer after Valero, also mentioned by the noble Baroness. That situation exemplifies the need for a partnership between Westminster and Wales to save those vital jobs. They are vital for Pembrokeshire, but the whole of that plant is vital for the United Kingdom, as the noble Baroness rightly said. We have lost Coryton. Given the problems of energy security, which have been exemplified and thrown into high relief by the situation in Ukraine, we need concerted action from both Governments to save those jobs. I have contacted the Department of Energy and Climate Change, which would perhaps be more central to this matter even than the Wales Office, to see what it is doing. I look forward to what the Minister has to say in that regard.
So, much that has been happening in Wales is good. There are historic problems and there is some good news that has been brought forward by this Government. I also welcome the news on Wylfa B and look forward to hearing what the noble Lord, Lord Wigley, has to say on that, because I think that he would take a personal interest in it, being from north Wales. I think that all parties, notwithstanding perhaps some difficulties on their policy stance on nuclear energy, have got behind that project and said how important it is. That, too, is something for which the Government deserve credit.
It has not been a question of waging war on Wales; I do not recognise that. That is certainly not the way in which the Prime Minister and the Chancellor have approached Welsh issues. From the referendum held in 2011, which I think was successful from all our points of view, to the commitment to look at Barnett when circumstances make that easier to tackle and a general approach to devolution and other issues in Wales, this Government have a lot to be proud of. Yes, there are historic issues that need addressing, but that is best done in a spirit of partnership. We would do well to recommend that approach to others in another place and at the other end of the M4—a phrase I hate, but it seems to exemplify the correct wording in this regard.
Lord Wigley (PC)
My Lords, I thank the noble Baroness, Lady Morgan of Ely, for facilitating this debate. I share many of her concerns, particularly those regarding European Union uncertainty. However, I admit that I do not recognise other aspects of the Wales that she describes.
The economy of Wales is still, sadly, the poor relation of the UK. Back in the 1960s Wales had a GDP standing at 92% of the UK average. The GVA per head, today’s measure, has Wales down at 72.3% of the UK—the lowest of any nation or region in the UK. London has a GVA of more than £37,000 per year, Wales under £16,000 per year. This decline is a devastating indictment of the failure of public policy over that period.
Before any noble Lord rushes in to castigate our National Assembly and the Welsh Government, I will point out that much of this decline occurred before 1999 and most of the economic tools are in the hands of the UK Government. Under successive Governments this decline has sadly continued. Incidentally, many of us in Wales are indeed getting sick to the back teeth of some Tory politicians, and the right-wing London media in particular, constantly talking Wales down. The truth is that the polarisation between the haves and have-nots among the UK nations and regions has worsened over recent years. The most recent years for 2012 show the GVA of south-east England increasing by 2.5% and that of Wales, as has been mentioned, by only 1.6%. So the gap is still widening.
The main factor in the GDP or GVA disparity a generation ago was the low activity rates in Wales. Wales was then some 6% behind the UK average. This has changed over recent years and that is to be welcomed. Wales now has an employment rate of 71%, closing in on the UK’s level of 72.3%, yet, sadly, the youth unemployment figures, if one looks at the past three years, not just the past year, have risen five-fold in Wales. That is not acceptable.
In Wales, the inactivity rate has decreased to 23.7%—again, something to be welcomed—lower than the north-east, the north-west and the East Midlands of England and of Northern Ireland, yet still our GVA figures are low. The explanation is the poor quality of so many of the new jobs in Wales. Too many are at the rock bottom of wage levels and many are part-time, zero-hour contracts. This is as much a problem in rural Wales as it is in the old industrial valleys. The two worst blackspots in terms of average wages being below living wage levels of £7.65 an hour are Dwyfor Meirion in north-west Wales, with 39.9% of its workers below a living wage level, and the Rhondda at 39.7% below a living wage level.
Lord Bourne of Aberystwyth
My Lords, against that background we have perhaps all been overcritical of politicians here, so does the noble Lord welcome the fact that the Secretary of State is hosting a job summit in west Wales, talking to local government and local employers to see what the Wales Office can do to help?
Lord Wigley
I welcome initiatives taken by anyone to improve the situation in Wales. To that extent, it is not a party political question; it is a crisis facing all the people of Wales, particularly those on low incomes.
In total, 23% of Welsh workers are below the living wage level. Surely all working people in Wales should receive a living wage. We need to generate jobs paying top-level salaries and wages, not just at the bottom, and public policy must be geared to achieve that. To my mind, one of the worst decisions in recent years was that of Rhodri Morgan to abolish the Welsh Development Agency. I very much regret that that was supported by all parties in the National Assembly, including my own, and including by the noble Lord, Lord Bourne. Even if the WDA cannot be re-established, the Government of Wales should look seriously at the proposal put forward last month by Plaid Cymru, and endorsed by the Federation of Small Businesses, to establish a private sector-led body to identify investment opportunities for EU funds. There is a real danger of EU strategic funds being squandered by successive Governments on projects that do not produce self-regenerative economic growth.
There is a pressing need for much higher capital investment projects, and in that context I include Wylfa—very much so—the M4 link road and the electrification in the south of Wales but also through to Holyhead. Given the Assembly’s limited borrowing powers at present, it is to be welcomed that there is a development in the legislation coming before Parliament but it will be years before it is fully developed if we have to wait for yet another referendum for it to be approved. It is ridiculous that the limited tax-varying powers in the Government of Wales Bill should need a referendum. Why can the Government not take such decisions without running for a plebiscite cover on the most trivial change? If the Government justify themselves on the basis that the Silk recommendations called for that, why ignore the Silk proposal to break free of the lockstep constraint on those tax changes? We also need a public sector development bank in Wales, as they have in Germany, to support small businesses that are neglected by the high street banks.
To secure economic recovery, Wales needs a business-friendly Government with a commitment to the specific needs of Wales, who are not driven either by a statist bureaucratic dead hand or by the perennial prerequisite of protecting the City of London at every turn. The domination of the UK economy by London has gone on for too long. For the sake of Wales, and indeed many regions of England, we need new thinking on that matter, and we need it urgently.
Wales: Silk Report
Lord Bourne of Aberystwyth Excerpts(10 years, 3 months ago)
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Lord Bourne of Aberystwyth
To ask Her Majesty’s Government what assessment they have made of the opportunities for Wales resulting from the recommendations of Part One of the Silk Report.
The Deputy Chairman of Committees (Lord Geddes) (Con)
The Grand Committee is again adjourned for 10 minutes.
Lord Bourne of Aberystwyth (Con)
My Lords, in opening this debate, I declare my interest as a member of the Silk commission, an unremunerated commissioner, as all the commissioners are. The work on Part 2 is soon to end. It is hard to conceive of life without the Silk commission; like taxes and motorway cones, it seems that it has always been there.
I am sure that your Lordships will agree that it is fitting that I say a few words about the late, much-loved and much-lamented Lord Roberts of Conwy. This is the first Welsh debate in your Lordships’ House since his very sad death. For more than 30 years, Wyn gave massive public service to our country—to the United Kingdom and to Wales. He fought hard and successfully for Welsh interests, and he is missed here as he is, of course, massively, in Wales. That is a considerable epitaph. On a personal note, I shall miss his wise advice, encouragement and assistance as well as his impish humour and happy demeanour. His life was a fulfilled one. Our thoughts are very much with Enid and his family.
As we debate the opportunities afforded to Wales by Part 1 of the Silk report and the Government’s response to it in the draft Wales Bill, which encompasses key aspects of the Government’s response as well as other matters, it is being debated in another place. I am pleased at that because I believe that it is important that the current momentum is not lost. It was rightly said in Shakespeare’s “Julius Caesar”:
“There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves,
Or lose our ventures”.
I believe that that sums up the position that we are in at the moment.
I mentioned at the outside that the Silk commission, which has been on the Silk road, so to speak, for more than two years, under the able chairmanship of Paul Silk, is considering Part 2. I do not propose to say anything about that because it would be premature, but it is now 14 months since we presented the report on Part 1. Each of the four main political parties in Wales—that is, the Welsh Conservatives, Welsh Labour, the Welsh Liberal Democrats and Plaid Cymru—has had representatives on the commission throughout its work and it also has independent members. Agreement on the Part 1 report was unanimous, and I am sure that in all honesty there was no real difficulty in achieving that unanimity. It is important that we keep that very much in mind as we go forward.
I turn to our recommendations. Consistent with the recommendations of Part 1, the Government have come down in favour of devolving landfill tax and stamp duty land tax to Wales. Admittedly, they are not massive taxes in terms of revenue, but it was very much consistent with what we recommended. Those taxes, particular the latter, could be used to make it more attractive to business to be formed in Wales. The Wales-England border, unlike the Scotland-England border, is very porous, and the opportunity to attract business and jobs into Wales should be a priority. Stamp duty land tax could be used to attract business as well as business men and women into Wales, which would provide a much-needed boost for the Welsh economy, which has been slipping in relative terms against England. It is key to raising economic standards in Wales as well as Welsh public services because the revenue that is generated could help with those services as well. I do not believe that there is a serious politician in Wales across all the parties who does not believe that expanding the private sector should be a priority; most would probably agree that it should be the number one priority because it generates the wealth that is needed to improve public services.
We also recommended the transfer of power over the aggregates levy and some limited power over long-haul flights in relation to air passenger duty. In that case, the Government have not taken heed of our recommendations, although we recognised in our report that there were issues of competition law and state aid and that the position in Europe might cause difficulty. Are these matters now under constant review so that if the position in Europe demonstrates that they could be devolved to Wales without any legal difficulty, they would accordingly be devolved?
In addition, the Government have recognised the case for devolution of 25% of the income tax system so that, even if there is no change in the rate from Westminster, the tax rate would have to be set in Wales, consistent with the tax rate from Westminster. Once again, that tax system could and should be used to encourage business and create wealth and jobs in Wales, and funding flowing from that would once again help our public services.
The commission recommended that income tax rates should be capable of variation independently, just as Gerry Holtham recommended in a report to the Welsh Government. We thought that that was the right way forward and would mean that it would be possible to create better economic conditions in Wales because of the possibility of varying the rates independently. That has not happened, and so far I have had no satisfactory explanation of why it has been rejected. There is, of course, a lock-step in Scotland and it may be that the other side of the Scottish referendum—where I hope for a no vote, which I am sure most, but perhaps not quite all, of us fervently hope for and passionately want—that will be revised. Perhaps the Minister will respond on this.
In their response to Silk Part 1, the Government acknowledged borrowing powers for Wales. That is extremely important but, apart from the limited power that has already been conceded in advance of any progress on income tax and other taxation powers, some power has now been given for the much-needed M4 relief road to improve the M4. I am sure that most people here recognise that as a priority. I tuned into Radio Wales this morning to find, as one does nearly every morning, that there was a hold-up in the Brynglas tunnel, which is a priority. However, there are other things that need doing, and they can be done only with the extended borrowing powers consequent upon having income tax as well as the other smaller taxes so that money can be invested in improvements in infrastructure, whether rail or road, in north, mid and south Wales and in things such as dualling the A40, which is certainly much needed.
Some of that borrowing can be consequent on the smaller taxes—landfill tax, stamp duty land tax and air passenger duty, if that does come, and so on—but the great bulk will be dependent on income tax being devolved. We recognise that in the report. It is what we called for, so it is no different from the plea we made to the Government and is consistent with what happens in Scotland. Borrowing is dependent on taxation powers, but it would be a much-needed boost to the Welsh economy and Welsh infrastructure.
I shall take up one issue that we saw as important for Wales: the Barnett formula. We recognised that change in the Barnett formula should go hand-in-hand with progress on taxation and borrowing and that there should be no hold-up on taxation and borrowing. It would be a big mistake for Wales if we parked this until there was a done deal on Barnett. There has clearly been some progress on Barnett. This problem has been with us for a long while and, in all honestly, we have made more progress in the past three years than we did in the previous 20 years on getting the Barnett formula looked at. Is the Minister in a position to tell us where we are on that and what progress is being made on the Barnett formula?
Under this Government and this Prime Minister and with Danny Alexander, Cheryl Gillan and David Jones we have delivered important opportunities for Wales that complete, or go some way to completing, the jigsaw for what is in reality a Parliament. However, a Parliament without taxpayers looks rather a strange sort of Parliament, and I do not think there is anywhere else in the world where that is the case. This is a necessary move, and I hope that we can all move forward together on it. We did not get everything we wanted in Silk Part 1, but we largely did, and now we must move forward.
Wales: Cost of Living
Lord Bourne of Aberystwyth Excerpts(10 years, 5 months ago)
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Lord Bourne of Aberystwyth (Con)
My Lords, I congratulate the noble Baroness, Lady Morgan, on securing this debate. It is good to see the spotlight on Wales. The noble Baroness and I go back quite a way. I anticipated that there would be some valid points and some party political ones and there were some of both although they did not often coincide, sadly. I thought, first, I would look at some of the points on welfare, secondly, look at the cost of living issues and then, thirdly, try to put it in the context of Wales in general, particularly looking at some of the devolved elements that apply.
The welfare changes have to be seen against the background of the deficit. The noble Baroness did allude to that. The deficit did not suddenly happen. A gaping deficit confronted the country in 2010 as Gordon Brown left office and the coalition Government under David Cameron took over. I think it was common ground among the parties that this deficit needed to be dealt with. Against that background, it was anticipated, and indeed acknowledged, that welfare reform was a key part of that. There have often been warm words from the Official Opposition about the need to tackle welfare reform, but nothing specific, and when any particular reform is put forward they always shoot it down. We need more than warm words. We need some concrete evidence of what they would do.
In the reform process the most vulnerable need protection. We have sought to do that with pensioners. For example, pensioners are now getting a protected pension with a rise in line with the consumer prices index, or average earnings, of 2.5%. That did not happen under the previous Government and there was, on one occasion at least, a derisory increase which was howled down even by people on the Labour side. We need to recognise that pensioners are being protected, as they are on the spare room subsidy. The noble Baroness referred to that welfare reform.
On some of the cost of living issues, first, what has happened on energy bills did not suddenly happen. The noble Baroness is well aware of that, having worked as a director for an energy company for much of the period in which these increases were happening. I am sure that her abilities and talents were being used to try to keep those increases down. But this is not something that suddenly happened and we are seeking to address that, too.
One thing that the noble Baroness did not refer to was the fact that employment has remained strong. Indeed, it has gone up at a time when it was anticipated, certainly by the right honourable Leader of the Opposition, that unemployment would go up. That has not happened. It has gone down in Wales in the past year by 22,000. Some policies have been pursued effectively in Wales by the Welsh Government; for example, on enterprise zones, a policy of the coalition Government, but with a Welsh spin. I declare an interest as a chair of the Haven Waterway enterprise zone in Pembrokeshire. We have seen local unemployment fall in Pembrokeshire and Carmarthenshire over the past several months, which is all to the good. Again, there is agreement among the parties, and this is certainly the case in Wales, that there had to be a move from public sector growth to private sector growth. That has long been anticipated.
Perhaps I may say something in a wider context about the devolved settlement after 14 and a half years of devolution. I strongly support devolution, of course, but that does not mean that I support all the policies that have been pursued in Wales. We have seen Welsh GDP fall back not just against English GDP, although that has been the case over the past 14 years, but as against many parts of eastern Europe. We are now behind them, too. Sadly, that is something to be placed at the foot of the devolved Government. The noble Baroness also referred to increases in council tax, but one reason for those is that the freeze which has happened in England has not happened in Wales. That is because the Welsh Government choose not to use the Barnett money to reduce council tax in Wales. That is their privilege but it has been the main reason that council tax has gone up by so much in Wales. That needs to be recognised.
Lastly, perhaps I may ask the noble Baroness to use her undoubted talents to persuade the Labour Party to embrace the Silk commission on Part 1. Again, I declare an interest as a commissioner on the Silk commission. The power of taxation and the power to borrow money, which largely do not exist in Wales at the moment, would be all to the good. Such powers would strengthen Wales’s hand and the Welsh economy. I hope that we can develop consensus among the four parties so that we are able to bring such powers forward and enhance Wales’s position in terms of economic performance.