Wales Bill

Lord Hain Excerpts

2nd reading (Hansard): House of Lords
Monday 10th October 2016 Lords Chamber

[Lord Hain (Lab)]

My Lords, I agree with a great deal of what the noble Lord, Lord Crickhowell, said, especially on transparency over the proposed fiscal framework. That is a critical issue.

Although I welcome parts of the Bill, and although, as the Minister said, the Government responded to very strong objections to the draft Bill, it still feels that the way in which the reserved powers have been drafted repatriates powers back to the United Kingdom, for there are around 190 exceptions to the reserved powers to be granted to Wales. For instance the Assembly’s Agricultural Sector (Wages) Act 2014 would not be permitted under this Bill. Yet the Assembly not only passed it but also overcame a challenge from the UK Government when the Supreme Court found in their favour, enabling it to be placed in statute. How can this be progress towards empowering the Assembly? It seems more like a Whitehall grab-back of powers, as indeed the Welsh Assembly’s Constitutional Affairs Committee argued last week and as, among others, my noble friend Lady Morgan of Ely and the noble Lord, Lord Elystan-Morgan, recently argued publicly.

However, I wish to focus upon my two main objections at this stage to the Bill—objections I raised with the Minister during the courteous briefing that I thank him for providing before the conference recess. First, there is the question that I and my noble friend Lady Morgan of Ely discussed in detail in this House during the passage of the Trade Union Bill: the undermining of the fundamental workings of the devolution settlement by dictating the manner in which industrial relations within devolved public services in Wales are configured. This Bill reinforces that and it is a matter of dispute with the Welsh Government because the Assembly will shortly have before them a Bill which exempts devolved public services from the Trade Union Act. Since that has been supported by Labour, Liberal and Plaid Cymru Assembly Members it will likely be carried by a large majority. I will return to this matter.

Meanwhile, my other major objection is that Clause 17 of this Bill removes sections of the Wales Act 2014—just two years ago—that retain the requirement which has existed since 1997 that a referendum will be required to implement the powers to vary income tax under that Act. That is constitutionally unacceptable, even outrageous. In September 1997, as a Welsh Office Minister I helped to lead the Government’s campaign to win the referendum to establish the Welsh Assembly. With due respect, I do not recognise the comments of the noble Baroness, Lady Randerson, that Labour has been a back-marker on devolution; we introduced the Welsh Assembly and empowered it in the 2006 Act.

There was only one question before voters in 1997: did they want an Assembly or not? There was no second question on whether they wanted income tax devolved, as was specifically and importantly the case in the referendum on a Scottish Parliament. Ministers at the time took the view that to have such a second question in Wales would be to lose the referendum. Given how narrowly it was won, with just 0.2%, how wise that turned out to be. Leading politicians of all parties, including Conservatives, have been crystal clear in the past: to devolve income tax powers to Wales would therefore need another referendum like Scotland had on income tax. Indeed, just last year the 2015 Conservative Party general election manifesto committed to a referendum before income tax powers were raised. If your Lordships’ House were to amend the Bill to reinstate the referendum requirement, we would be doing so in line with the Salisbury convention on a government election manifesto commitment.

The current Secretary of State for Wales, Alun Cairns, was a Government Whip and voted for the 2014 Act which put into statute the necessity for a referendum just two years ago. He argued for that, as did all his Conservative MP colleagues at the time. So why have he and the Government done a U-turn after such a short time, thereby breaking their own manifesto commitment of just last year? There has been no clear explanation by Ministers. Could it be that they are frightened that, if invited to vote, a majority in Wales—perhaps a large one—would turn down the powers? I suspect so; otherwise, why be afraid of trusting the voters?

Could it be that the Government wish to ram income tax devolution through without addressing the irrefutable evidence that the way the Barnett formula has operated has short-changed Wales—by at least £600 million annually—in contrast to Scotland? Without a new “Barnett floor”, which the First Minister has insisted upon, and without the fiscal framework he wants, it would be pure folly for Wales to have income tax devolved. I note the point made very powerfully by the noble Lord, Lord Crickhowell, that there should be full transparency on the fiscal framework before Parliament enacts this legislation, amended or otherwise.

Could it be that the Conservative Government have an ideological objective to shrink the Whitehall state, offloading as much responsibility as possible on to individual citizens to fend for themselves, outsourcing to private providers and sub-contracting tax and spending to devolved legislatures? Having strenuously opposed political devolution in the past, the Conservatives now see the virtues of economic devolution in neoliberal terms. In that respect at least, the outcomes, if not the ideologies, of nationalism and neoliberalism can converge, because under both the redistributive power of the United Kingdom state is either severed or stunted.

The incontrovertible advantage of modern Britain is its 20th-century innovation: the pooling and sharing of risks and resources across the whole United Kingdom to ensure common welfare and decent standards of life for all citizens, regardless of nationality or where they live. At the heart of that pooling and sharing of resources has been a set of path-breaking decisions throughout the 20th century: common welfare standards first introduced by Liberal Governments and subsequently consolidated by Labour Governments up until 2010, ensuring common economic and social standards; common UK-wide old-age pensions; common UK social insurance—sick pay, health insurance, unemployment insurance and labour exchanges; common UK child and family benefits; a common UK national minimum wage; and a UK system of equalising resources so that everybody, irrespective of where they live, has the same political, social and economic rights, not just equal civil and political rights.

Pooling and sharing the UK’s resources has also enabled redistribution from richer to poorer parts of the UK, whether constituent parts of a nation such as the coalfield communities of the south Wales valleys or regions of England such as the north-east. Although the Holtham commission, in its case for devolving limited tax-varying and borrowing powers to Wales, set out complex compensating arrangements which attempted to ensure that Wales did not fall behind richer parts of the UK, it could not guarantee that the Treasury would always deliver this. We wait to see whether the First Minister has been able to secure that in his negotiations with the Government on a fiscal framework.

With around 40% of UK GDP concentrated in London and the south-east of England, I have seen no answer—whether from Ministers or, indeed, in this respect at least, separatists—to what is at the heart of the case for maintaining the integrity of the UK: redistributing resources from better-off to less well-off parts; and guaranteeing equal opportunity and security for all UK citizens regardless of nationality, race, geography, gender, sexuality, age, disability or faith. That has meant, as former Prime Minister Gordon Brown showed in his book My Scotland, Our Britain, that while inside the European Union the average income of the typical citizen of the poorest country is just 20% of that of the richest country, and in the USA the income of the poorest state is 55% of that of the richest, the average income of the typical Scot is 96% of the average income of an English citizen; for Wales, the figure is 87%.

In a post-World War II settlement subsequently maintained by the Conservatives, at least until recent times, Labour created a set of universal rights: free healthcare across the UK in the 1940s; and in the 1990s a UK-wide minimum wage and a tax credits system which discouraged the regions and nations from undercutting each other in a race to the bottom. A cornerstone of our social rights is the common UK welfare system, which transfers resources between individuals, dependent on their circumstances, right across the union. Pooling and sharing of resources at UK nation-state level must be sufficiently strong so as to continue to guarantee free healthcare, the rights to a pension when elderly, help when unemployed, sick or disabled, a decent family income and universal education, as well as defence and security. There is an implicit UK government guarantee that nobody in the union—whether in Wales, Scotland or elsewhere in the UK—can be prevented from accessing those common social and economic rights, and the services that flow from them, by reason of a shortage of resources.

That is why it is right that all UK taxpayers—English, Welsh, Scottish and Northern Irish citizens together—contribute their taxes at a UK level to fund these common rights and services, thereby guaranteeing that the UK Government and, where appropriate, the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, have the capacity to deliver them. With England constituting 84% of UK population and 87% of UK GDP, it would be mad for Wales to cut itself off from that, just as it would be mad for the north-east of England, with its similar GDP per head and demographic, to cut its income off from the rest of England—especially the south-east, which, as I pointed out earlier, contributes something short of half the UK’s wealth. This is especially serious for Wales, which has a huge net fiscal deficit involving a massive annual subsidy from the UK Treasury, estimated by the Library at £14.7 billion in 2014-15. That total, by the way, is similar to the entire Welsh Government block grant. I believe that this Government are encouraging an offloading of the centre’s responsibility to all its citizens—English, Scots, Welsh and Northern Irish—and, by design or default, encouraging separatism. For if the UK does not offer common rights and resources to enable universal access for each citizen, why should they offer their loyalty to the UK in return?

In making this argument, I remind your Lordships that I have been a consistent devolutionist all my political life. As the author of the Government of Wales Act 2006, I was proud to deliver the full law-making powers that the Welsh Assembly has enjoyed for some five years now, to the great benefit of its citizens. Therefore my objection to Clause 17 repealing the Government’s very own clause of just two years ago, committing to a referendum, is on two grounds. The first is constitutional and democratic. Surely it is not acceptable to move the goalposts from a referendum vote in 1997 by denying Wales the chance to have a vote on income tax, like the Scots did. Why should Welsh voters be treated as second class compared with Scots voters? The second is that, in any case, we step at great peril down the road of income tax devolution, the destination of which could be impoverishment in less prosperous parts of the UK, Wales included. Just in passing, while I certainly do not wish to put any ideas into the Conservatives’ minds, what about VAT if we leave the European Union? Membership of the EU means that it cannot be devolved: what does Brexit mean?

Let me turn to the manner in which the Bill will enable one important part of devolved public services in Wales to be dictated from Whitehall, namely industrial relations. I ask the Government to reconsider the manner in which the Bill reserves all employment law to the UK level in respect of devolved Welsh public services alone—not the private sector but just devolved public services. In doing so, and this may address the concerns of the noble Lord, Lord Crickhowell, let me be clear that I am not asking for employment law as a whole—including strikes, unfair dismissal, health and safety, maternity and paternity rights and so on—to be devolved. I agree that the core issues of employment law should be a reserved matter, not least to prevent businesses or devolved governments competing to undermine basic conditions of work in a race to the bottom.

However, what right does a UK Secretary of State have to impose upon Wales such matters as trade union facility time, training arrangements, arrangements to deduct trade union subscriptions by payroll, the political levy and other industrial relations issues to do with what the Welsh Government, in exercising their statutory powers, deem the best way to deliver effective and efficient public services on the basis of social partnership, which they do? I shall be supporting an amendment to empower the Assembly and the Welsh Government to achieve that, and I ask the Minister to do the same. Otherwise there will be a direct clash with the Welsh Government and the Assembly which will surely undermine the Conservative Party’s new-found and welcome conversion to the cause of devolution. In short, this Bill is fundamentally flawed and could badly short-change Wales. I ask the Government urgently to think again on the matters that I and others have raised.

Energy Bill [HL]

Lord Hain Excerpts

Tuesday 12th April 2016 Lords Chamber

[Lord Foulkes of Cumnock]

It is indeed. Absolutely. As my noble friend Lord O’Neill said, it is unusual—exceptional—for me to do that.

[Lord Hain (Lab)]

Unprecedented.

[Lord Foulkes of Cumnock]

It is unprecedented, as my noble friend Lord Hain says. I also want to reassure the Minister that no constituencies of English Conservative MPs will be affected by this because I know some of them are genuinely worried about the effect on their constituencies. What I am suggesting in my amendments and what others are suggesting in theirs deals with proposals principally in Scotland and with very important community projects in Scotland. Two categories are dealt with in my amendments. The first category is those covered by Section 75 which are unable to go ahead not because they do not have planning permission —they have managed to get that—but because of some technicality. We are suggesting that that technicality is creating huge problems for them. The other category is in relation to grid connections. There is a particular problem in Scotland with the transmission and distribution grids not necessarily being as easily available as south of the border and having different arrangements. Some projects have fallen foul of these regulations.

If we put the schemes together, they amount to only just under 90 megawatts of generation. It is not a huge amount we are asking for. It is a relatively small amount. They all have the democratic consent of the local council, which is one of the matters raised in the Conservative election manifesto. I shall give the House a couple of examples. There is a scheme in Sorbie, a working dairy farm in Ardrossan in north Ayrshire, that has full planning consent and for which bank finance has been secured, a turbine contract has been agreed and design work has been started. Nearly £1 million has been spent on the scheme by the people concerned. The family-run working dairy farm is already suffering because of the low price of milk. If this project were to be cancelled because of the Government not accepting the amendments being put forward today, it would be in real difficulty. That is the kind of problem that is being faced.

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[Lord Hardie (CB)]

My Lords, on Report I drew attention to the unfair effect upon a development on Skye. The original provisions about the date upon which the guillotine would fall on new onshore wind farms discriminated against a development at Glen Ullinish in Skye which had planning permission, control of the land, the support of the local community and an agreement to link to the grid; the developers were paying money to the grid in fulfilment of that agreement. The only reason why the development could not go ahead was that the grid had to be upgraded, and that could not be achieved within the appropriate time.

I voted with the amendment that removed the clause from the Bill, but afterwards I wrote to the Minister to explain that that was the only option I had. I called on him and the Secretary of State to consider accommodating this unusual situation. I am grateful to the Minister, the Secretary of State and officials in the department for giving this matter consideration. Unlike the noble Lord, Lord Foulkes of Cumnock, I read the new Clause 32LL as a solution to the difficulty that there is a grid or radar delay condition. I seek confirmation from the Minister that I am reading it correctly, but I genuinely think it has enabled the development at Glen Ullinish to proceed. As I indicated in my letter, if that problem were resolved and a clause were brought back that accommodated this issue, I would support it, subject to the Minister’s confirmation that my understanding of Clause 32LL is correct.

[Lord Hain (Lab)]

My Lords, I tabled Amendment 7T and took the liberty of giving the Minister a copy of my draft speech in advance, in the hope of his co-operation and acceptance of the amendment. The Bill as it stands puts at risk a multimillion pound investment in Wales in and around my home area of Neath Port Talbot, which is already facing massive economic haemorrhage resulting from the threat to Tata Steel. The issue at stake relates to an already consented project, Gamesa’s Llynfi Afan renewable energy project, which has had its planning condition varied through a Section 73 consent to allow for a different road access route. The project is ready to start construction, and some of the major work is going to local businesses, with obvious positive implications for jobs, which in that area is welcome.

On 27 August 2013, the Llynfi Afan renewable energy project was granted consent by Neath Port Talbot County Borough Council. Previous consent had already been granted by two other local authorities, Bridgend County Borough Council on 18 July 2013 and Rhondda Cynon Taff on 13 October 2011. However, due to a change in the proposed site access route, the developer, Gamesa, successfully applied for variation of two conditions of the Neath Port Talbot permission by way of Section 73 consent. I stress that the variations dealt solely with the access route for turbine component deliveries to the site of the consented generating station itself, and its capacity will remain unaltered. As such, the impact on the DECC budget is neutral.

The variations were approved on 24 February 2016 by Neath Port Talbot County Borough Council. As I understand it, where an application under Section 73 is granted, the effect of the Planning Act 1990 is the issue of a new planning permission, with a new decision date, sitting alongside the original permission, which remains intact and unamended. The consent and conditions of the original consent are preserved, as is the implementation date by which the construction of the generating station should have been started. On Report in the House of Lords, the noble Lord, Lord Bourne, said:

“Where consent is granted for development on or before 18 June and is subsequently varied”,—[Official Report, 21/10/15; col. 668.]

in this way, it will continue to fall within the approved development condition.

While that is very welcome and positive for this project, regrettably, his statement by itself has proved insufficient to achieve adequate investor confidence. That is because the renewable obligation certificate is awarded after the wind farm has been built and has proven to be exporting electricity to the grid. Investors therefore need certainty before construction, otherwise there is a risk that the project could be built but not receive the required support. As a result, investors wish for certainty reflected in the legislation, and without the amendment the project will be put at risk. The amendment therefore aims to resolve the issue and ensure that the project can go ahead, matching government intent and delivering investment in the local community. My understanding is that without the amendment, such variation permissions as Section 73 would not qualify under the Government’s grace period condition.

The investors’ legal advisers have said that, as the Energy Bill currently stands, it fails to reflect the position that variation consents are fresh planning permissions as a matter of law, as used to be the case. They assert that without an amendment, such variation permissions would not qualify under the Government’s grace period condition. Amending the Bill would make it absolutely clear and avoid any additional funding being added other than what the Government have already allowed for.

In the particular case of Llynfi Afan Renewable Energy Park, tens of millions of pounds will be invested in the construction and operational phases. The communities have widely supported Gamesa’s Section 73 application, as they support the project and wish to see it happen. The local community stands to gain substantially in community benefits, and in terms of business rates and direct and indirect local employment opportunities. Gamesa is in the final stages of appointing a contractor who will be responsible for building the wind farm and, as such, will require employment and services from the locality. It has been Gamesa’s aim to work wherever possible with local companies, involving local jobs, and will continue to do so during the construction and operational phases.

I appeal to the Minister to agree to the amendment. If he finds some technical fault with it—although it is not obvious to me what that might be—will he agree to write a letter to the developers explaining why the Bill as it stands, without the amendment, meets their objectives and that they will be able to proceed, notwithstanding the fact that this amendment may not be accepted by the House?

[Lord Wallace of Tankerness (LD)]

My Lords, the Minister has moved Amendment 6 and spoken to Amendment 7, and I want to speak principally to my amendments to Amendment 7. My noble friend Lady Featherstone may say something about the wider issue of the early closure of the renewables obligation in respect of onshore wind generating stations. The Minister has repeated the Conservative Party manifesto commitment that there will be no new subsidies for onshore wind, but I well recall the comment from the noble Baroness, Lady Worthington, that it is difficult to think that a new subsidy is actually the early closure of a long-existing subsidy. The Minister repeats that again and again, but no one is seeking to overturn the early closure. However, the grounds he has stated— that it is a manifesto commitment—are somewhat doubtful.

I have yet to find many people in the industry who think this is a very wise move at all. It is not simply about what is being done with onshore wind; as we have already heard in this debate, a large amount of the investment made in developments over a long period will be cut off at a fairly arbitrary date. The Government’s capriciously cutting off developments in the way proposed affects the confidence of those who want to invest not only in onshore wind renewables but in the entire renewables industry and, indeed, in other infrastructure developments.

Turning to the amendments, I begin by thanking the Minister for his willingness to engage through exchanges of letters and in meetings. One reason why we on these Benches were very happy to support the move to take out the principal clause in the original Bill was not that we did not expect the Government to try to bring back the clause, but that we felt that it would give them an opportunity to reflect on and try to improve the grace periods. Although they were welcome as far as they went, they certainly fell far short of what many people in the industry—I would say almost universally—thought was required.

What has been disappointing, and perhaps not in keeping with the way this House operates when we ask the Government to think again, is that we have absolutely no sense that they are willing to compromise in any way whatever. They have said that there is no compromise, and that is why the amendments that I have tabled—particularly Amendment 7X—embody quite a number of the changes which the industry wants to see and on which we have had representations. I invite your Lordships to support that amendment. I hope that if that measure is brought back in—after all, the Bill has to go back to the Commons because the Government have brought forward amendments to their own amendments—there will be a further opportunity for the kind of engagement that is part and parcel of the way this House operates. Certainly, when I had the privilege of sitting on the Front Bench and dealing with amendments, I tried to find some means of compromise when there were Lords defeats.

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Tabled by

[Lord Hain]

7T: Line 145, after “2015,” insert “regardless of whether it was varied after that date by any planning permission, consent or development consent issued under section 73 of the Town and Country Planning Act 1990 (determination of applications to develop land without compliance with conditions previously attached), section 42 of the Town and Country Planning (Scotland) Act 1997 (determination of applications to develop land without compliance with conditions previously attached), section 36C of this Act (variation of consents under section 36) or under the Planning Act 2008,”

[Lord Hain]

My Lords, on the basis of the Minister’s kind offer to write to the developer, I will not move the amendment.

Amendment 7T, as an amendment to Commons Amendment 7, not moved.

Energy: Carbon Capture and Storage

Lord Hain Excerpts

Tuesday 2nd February 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness is wrong: it is not £1 million but £1 billion. This is the whole point. It is a massively expensive project. We have to look at value for money and at achieving the best ends for the best value. As I say, we recognise the importance of CCS. That is why we are carrying it forward in so many other ways.

[Lord Hain (Lab)]

My Lords, if the Minister is as positive about carbon capture and storage as he has indicated with his warm words, why is he slashing its budget so savagely?

[Lord Bourne of Aberystwyth]

My Lords, I have indicated that it is an issue of value for money. We do not believe that £1 billion spent on a competition is the right way forward. We are spending money elsewhere, such as on industrial carbon capture and storage; we are working with allies; and we have a powerful innovation budget. This is a key area, but we must get value for money.

Oral Answers to Questions

Lord Hain Excerpts

Wednesday 4th March 2015 Commons Chamber

[Alun Cairns]

VAT rates are a matter for the Treasury, but the hon. Gentleman will be able to make such points in the forthcoming Treasury debate. We need to ensure that Wales gets its fair share of VisitBritain, and the Countryside is Great campaign provides a great opportunity for his constituency and large parts of Wales to ensure that Wales is promoted internationally as well as within the United Kingdom.

[Mr Peter Hain (Neath) (Lab)]

4. What assessment he has made of the potential benefits to south Wales of the Severn barrage.

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

We have made it clear that we remain open to considering any well developed and privately funded proposals that come forward for harnessing the tidal range resource in the Severn estuary. The right hon. Gentleman’s tenacity on this and a great number of other subjects will of course be greatly missed when he leaves this place. I look forward to meeting him next week to talk further about the Severn barrage project.

[Mr Hain]

I am grateful to the Secretary of State. Is he aware that the company now taking forward the Severn barrage—exclusively for any form of renewable energy—requires no consumer subsidy through a contract for difference? That could be a game changer for the Government.

With your indulgence, Mr Speaker, may I thank my Welsh Labour colleagues for their comradeship, especially during my two years as a Welsh Minister and seven years as Secretary of State for Wales? We can be proud that we established a Welsh Assembly, and it has been a privilege to serve.

[Stephen Crabb]

I thank the former Secretary of State for his question. As I said, I look forward to talking to him in more detail about the project, and to understanding how the proposal might have changed since he and his associates last presented the ideas to various Committees. Let me add that I am proud to be part of a Government who believe in major infrastructure investment, and who are delivering strategic infrastructure investment in Wales the likes of which we have never seen before.

Oral Answers to Questions

Lord Hain Excerpts

Wednesday 21st January 2015 Commons Chamber

[Stephen Crabb]

I thank my right hon. Friend for that question, and he is absolutely right: the sentiment among businesses in north Wales, south Wales and west Wales is very confident and optimistic, and what they tell me every week as I criss-cross Wales talking to them is in stark contrast to the message we hear from the Opposition, who regularly now talk down the Welsh economy and the efforts of Welsh business.

[Mr Peter Hain (Neath) (Lab)]

On the economy, how does the right hon. Gentleman respond to today’s research by the university of Oxford and the London School of Hygiene and Tropical Medicine that only a fifth of claimants who have had their benefits sanctioned and then taken away have found work? Surely this will not rebalance the economy or make it stronger, let alone make it just, and it is diabolically punitive.

[Stephen Crabb]

I have not seen that report so I am not going to get drawn into commenting on the specifics, but I have seen the latest figures for the performance of the Work programme in Wales, which should give us encouragement that we have a set of measures in place that is helping to bring down long-term unemployment.

[Mr Hain]

indicated dissent.

[Stephen Crabb]

The right hon. Gentleman shakes his head, but I encourage him to look at the figures for long-term unemployment in Wales: they are coming down yet again this month, which is positive news. There is much more to be done, but the emerging picture is a very strong and positive one.

Oral Answers to Questions

Lord Hain Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Alun Cairns]

My hon. Friend makes an important point. Whereas council tax in England has broadly been frozen, council tax in Wales has gone up by 13% in spite of additional funding being given to freeze it. If there was such a cost of living crisis as the Opposition claim, they would be pressing their colleagues in local authorities and in the Welsh Government to ensure that they do not increase council tax as they have.

[Mr Peter Hain (Neath) (Lab)]

Does the Tories’ much trumpeted economic plan not mean depressed earnings in Wales, generating lower taxes, and Government borrowing overshooting Labour’s planned target by more than £20 billion—the very deficit target luridly denounced by the Tories, who said it would bankrupt the country? Why does the Minister not apologise for this abysmal failure in the Government’s austerity strategy?

[Alun Cairns]

As the right hon. Gentleman was part of the previous Government, he should apologise for leaving Wales the poorest part of the United Kingdom. He should further apologise for the fact that wages fell at the sharpest rate between 2008 and 2009. The Government’s long-term economic plan is working for Wales, and wages are rising quicker in Wales than across the rest of the United Kingdom.

Oral Answers to Questions

Lord Hain Excerpts

Wednesday 22nd October 2014 Commons Chamber

[Alun Cairns]

Again, I am surprised by the tactic used by the hon. Gentleman. If zero-hours contracts are so wrong, why do Labour-run local authorities make active use of them? Furthermore, why do more than 60 MPs make active use of zero-hours contracts?

[Mr Peter Hain (Neath) (Lab)]

In welcoming the new Minister to his post, may I suggest that, instead of trying to do an impression of a jumped-up rottweiler, he should try to understand and recognise the reality of the miserable state of employment for far too many workers in Wales, whether they are on zero-hours contracts, are among the 150,000 who are underemployed and want to work more hours but cannot, or are among the 50,000 people who are being shoved off disability benefits and into a world of work that is mean, difficult and hard?

[Alun Cairns]

The abuse of zero-hours contracts is an important issue and that is why this Government are taking action to ban them. The right hon. Gentleman mentioned people in part-time employment. Only 19% of part-time employees are looking for full-time work. We will take strong action against those employers that are abusing zero-hours contracts, but zero-hours contracts are important to many people, such as carers, to encourage and facilitate their path back to the workplace.

Wales Bill

Lord Hain Excerpts

Monday 31st March 2014 Commons Chamber

[Mr Peter Hain (Neath) (Lab)]

Will the Secretary of State explain how, with income tax devolution, Wales will continue to benefit—like, for example, north-east England, a comparable area, does—from the redistribution of income and wealth that comes through the Barnett formula, albeit imperfectly, from the 40% of GDP that exists in London and the south-east of England if income tax is devolved?

[Mr Jones]

That is an important point and it is a matter that would have to be debated in a referendum. My own view, as the right hon. Gentleman knows, is that Wales would benefit from a modest reduction in the rate of income tax, but I have to remind him that all we are talking about is a referendum that would empower the Welsh Government to decide on the rate of tax they want to charge the Welsh people. If they decided they did not wish to do that, there would be no compulsion on them to do so. However, it would provide Wales with an additional borrowing stream referable to the level of income tax devolved. It would also provide a powerful incentive to the Assembly Government to grow the Welsh economy, because clearly the more the economy grows, the more would be the revenue.

[Mr Hain]

I understand the Secretary of State’s point. However, I find it very interesting that he has not got an answer to my question—namely, how would Wales continue to benefit from the vast wealth that exists in a relatively limited area and is redistributed right across the UK? The fact that he does not have a clear answer makes me extremely sceptical about this entire proposal.

[Mr Jones]

Clearly, Wales would not be deprived of Barnett consequentials; the right hon. Gentleman knows that. We would have an additional tool for the Welsh Government to use, should they decide to do so, in growing the Welsh economy. I would have hoped he would be bold, because he has spoken in the past of the need to grow the private sector in Wales. I would have thought a small differential in the rate of tax would be a significant incentive to that private sector growth.

[Mr Hain]

The Secretary of State is being generous in giving way, but this is an important point. The Barnett consequentials will continue to come through from that portion of income tax which remains reserved to the Treasury, but the bit that is devolved under the scenario the right hon. Gentleman proposes would not, unless there was some kind of compensating mechanism which is not described. That is what makes me extremely sceptical about this.

[Mr Jones]

Some of what is passed to the Assembly would be subject to indexation every year. This would take into account both growth and contraction in the wider UK economy, so there is a mechanism built into the Bill that addresses the right hon. Gentleman’s point.

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[Mrs Gillan]

My hon. Friend is right. The trouble is that in Wales we never get a breathing space from elections. We have an election almost every year. When we looked at the timetable over the past four or five years, we were relieved of an election in only one year. There is much to be said for putting the elections on one day, but particularly the Assembly elections and the general election.

My right hon. Friend the Secretary of State will not be surprised to hear that I am sad about one particular omission from the Bill, although I will probably attract howls and squeals from both sides of the House. I am sorry that we did not take this opportunity to reduce the number of Westminster constituencies in Wales. When Scotland gained its additional primary legislative responsibilities, the Labour Government reduced the number of MPs in Scotland, and that should have happened in Wales. The job that is done at a cost of £66,396 in an English constituency is done by an MP, an Assembly Member and half a list Assembly Member in Wales, at a cost of some £147,000 in salaries alone. Democracy is expensive, but the boundary changes should have been made and the number of MPs from Wales reduced.

[Mr Hain]

Is the right hon. Lady saying that somehow Welsh MPs work less hard than they used to, or do not work as hard as she and others with English constituencies do?

[Mrs Gillan]

The former Secretary of State and I have engaged on this topic before. A constituency such as Arfon has only 41,138 electors and Chesham and Amersham has 70,000, so—in the interests of fairness and equality, the need for which is often spouted by the Opposition—we should look at equalising the number of constituents across constituencies. Democracy costs dearly—

[Mr Hain]

The right hon. Lady has not answered my question. All she has to say is yes or no. Do Welsh MPs work harder or less hard than she and her colleagues in English constituencies do?

[Mrs Gillan]

The right hon. Gentleman knows that many Welsh seats have fewer constituents than many English seats, and he also knows that many of the responsibilities are devolved—

[Mr Hain]

Yes or no?

[Mrs Gillan]

Well, the right hon. Gentleman can answer yes or no to my question. Does he think that the salary costs alone for every Welsh constituency— amounting to £147,00 compared with just over £66,000—are fair? Yes or no?

[Mr Hain]

The right hon. Lady has not answered my question. She has changed the question. She has traditionally been hostile to devolution, so she is now inventing all sorts of other issues. The simple fact is that we are not second-class MPs because we are from Wales: we are on the same level as she is, until her Government change that.

[Mrs Gillan]

I am not going to trade insults with the right hon. Gentleman. He has 57,823 constituents on the roll, as of 1 December 2010. I have never, ever said that a Welsh MP was a second-class MP, as well he knows. However, if he chooses to go down that line, I have to say that the boundary change and the reduction in the number of MPs should have been carried out and I am sorry it was blocked by vested interests.

Let me turn to the financial provisions in the Bill. I have long thought that the Welsh Assembly Government—soon to be known as the Welsh Government—should understand better and share the responsibilities of tax raising that go with the luxury of spending taxpayers’ money. I therefore welcome the steps in the Bill to bring that sense of responsibility and stronger financial accountability for Welsh Assembly Ministers, as well as the option for Welsh residents to make their views on tax powers known through a referendum.

--- Later in debate ---

[Mr Peter Hain (Neath) (Lab)]

I rarely agree with the hon. Member for Monmouth (David T. C. Davies), but I always get great entertainment from his sincere and intelligent extremism. He made a very thoughtful speech, for which he deserves credit, but may I correct him on one point about the national health service? I think he will find that more people cross the border from England to be treated in Welsh hospitals than go the other way.

[David T. C. Davies]

That is true, but these people do not do that by choice; they have no choice, and many of them are actively campaigning to be treated back in England and do not want to be treated in Wales.

[Mr Hain]

The facts seem to speak for themselves. We can have an argument about the degree to which people can express a preference, but the hon. Gentleman and his colleagues, led by the Secretary of State and the Prime Minister, persistently rant against the Welsh national health service as part of their war on Wales and completely distort the facts on the ground.

[Mr Harper]

rose—

[Mr Hain]

I will give way, although my speech is not about the Welsh NHS; I am merely responding to a point made by the hon. Member for Monmouth.

[Mr Harper]

I was not going to respond, but I cannot let what the right hon. Gentleman just said stand. Thousands of my constituents live in England and passionately want to be treated by the English NHS, according to the rules and the rights they have in law, but because their GPs based in England are registered with the NHS in Wales they are forced to be treated in Wales according to the NHS rules. They do not like that prospect and I am doing my best to change it, so please do not pretend that they have run away from the English NHS by choice, because they absolutely have not.

[Mr Hain]

In that case, I think the hon. Gentleman will find that the same applies for Welsh citizens on the Welsh side of the border. All I am saying is: let us have an intelligent debate about this, rather than rantings based on a misrepresentation of the facts on the ground.

Let me get down to my speech. In focusing on clause 2 of the Bill, I wish to record my pride at taking the Government of Wales Act 2006 through Parliament as the then Secretary of State, not least because it provided for the full law-making powers the Welsh Government are now using to protect the people of Wales from this Government’s disastrous policies, including on tuition fees and on the creeping privatisation of the national health service, which is not being applied by the Welsh Government. The fact that the Conservative party, the only party in this House to vote against the 2006 Act, now seems to have accepted that devolution is a sign of progress—I welcome that—but on the question of dual candidature it has sadly regressed. In section 7 of the 2006 Act, I amended one clause from the Government of Wales Act 1998 in order to prevent candidates from simultaneously standing both in a constituency and for a region, whether as a list candidate or as an individual—this Bill will disgracefully reverse that reform.

[Alun Cairns]

On that point—

[Mr Hain]

I am going to develop the point and then I will take an intervention. I want to remind colleagues of the reasons for the 2006 change. I did not act for politically partisan reasons, as was alleged by opponents of the change; I acted for democratic reasons. As one of the Ministers who also took the original 1998 Bill through the Commons permitting dual candidature, I never imagined for a moment then the abuses it would produce and the antipathy it would create among voters in Wales. Voters have never understood the widespread practice that has occurred since the Assembly was established in 1999, whereby candidates rejected by a particular constituency then secured back-door election as Assembly Members through the regional list and were even able to claim to represent the very constituency that had rejected them. Three of the four defeated candidates in Clwyd West in 2003 were subsequently elected to the Assembly through the regional list. Those very three people in Clwyd West—in the Secretary of State’s constituency—who were booted out by the electorate ended up as Assembly Members, competing against winning Assembly Member Alun Pugh.

[Alun Cairns]

The right hon. Gentleman talked about the Welsh electorate’s antipathy to the arrangements. Will he remind us what the Electoral Commission’s view was, following its long consultation on whether or not there was a need to change policy? What advice did it give him as the then Secretary of State for Wales?

[Mr Hain]

The Electoral Commission disagreed with me, and, not for the first time from my personal experience, it was wrong.

[Jonathan Edwards]

Does the right hon. Gentleman recognise that the Labour party has also had candidates that stand on the list and in constituencies? In 2003, on the North Wales regional list, Sandy Mewies Lesley Griffiths, Carl Sergeant and Karen Sinclair stood both in constituencies and in the region. In South Wales Central, Rhodri Morgan, Lorraine Barnett, Sue Essex, Jane Davidson, Jane Hutt and Leighton Andrews stood in both the region and the constituencies, and in Mid and West Wales, Christine Gwyther stood in both.

[Mr Hain]

Yes, indeed. That is my exact point. I am not making a politically partisan point; I am making a democratic point. The practice clouded political accountability and denied voters their right to reject a particular candidate at the ballot box. A change made by the Government of Wales Act 2006 requiring candidates to choose whether to stand for a constituency or on the regional list put the voters back in charge. It cannot be right for losers to become winners through the back door, despite having been rejected by voters. That is an abuse of democracy.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

Surely the rejection is of the party in question. The system is there to get a little bit of equality across the parties. It is not about the individuals.

[Mr Hain]

That intervention interests me. Is the hon. Gentleman saying that whoever stands for whichever party, even if they are deeply opposed by the particular constituents whom they seek to represent, cannot be challenged because they are standing on a party label?

[Chris Bryant]

Is not the point also that Wales is not the only place in the world that has a top-up system to enable diversity within the legislature, but it will be the only place in the world where that practice of standing both on the list and for the first-past-post seat is used?

[Mr Hain]

I bow to my hon. Friend’s superior experience and knowledge. I think that the system applies in Scotland.

[Chris Bryant]

It does in Scotland, but I mean outside the United Kingdom.

[Mr Hain]

It may well be the case that it exists outside the United Kingdom.

[Mr David Jones]

I am grateful to the right hon. Gentleman for giving way. The hon. Member for Rhondda (Chris Bryant) is entirely wrong. Is it not the case that Wales is the only country in the world where, under this electoral system, dual candidacy is presently banned?

[Mr Hain]

I am not sure about that, but what I can say is that we should look at the experience in Wales. If there is no such bar in other countries, then perhaps there was no such abuse there. There was widespread abuse in Wales, practised by 15 of the 20 list Assembly Members who used taxpayers’ money to open constituency offices in the very seats in which they were defeated. They then used those resources to try to win at the following election by cherry-picking local issues against the constituency AMs who had beaten them.

[Alun Cairns]

rose—

--- Later in debate ---

[Mr Hain]

I will not give way, because I want to make some progress. While all that was going on, someone in Wales said to me:

“If I want to defeat constituency candidates because I don’t like them and I succeed and they are defeated, why should they pop up on the list claiming to represent me?”

That is the point. There is an honourable, constitutional and necessary role to be played by list Assembly Members across the whole region that they represent. There is no justification for seeking to abuse the system by getting involved in local constituency matters to try to win back a seat at the following election using that position and that resource. That is the fundamental point.

[Guto Bebb (Aberconwy) (Con)]

Will the right hon. Gentleman give way?

[Mr Hain]

Not for a moment, no. The Government of Wales Act 2006 put the voters back in charge. If they did not want to elect somebody, they did not have to do so. The Act stopped the prevailing situation before then in which Assembly candidates could decide to place a “both ways” bet, by standing in both categories in order to win, even if they were kicked out by the electorate. To his shame, the Secretary of State is seeking to reintroduce that both ways bet.

There was an unholy coalition of Conservatives, nationalists and Liberal Democrats opposed to abolishing that abuse. Now they have reincarnated that unholy coalition in defiance of the popular will. Why are they so afraid of taking their choice to the people? Why are they so afraid of losing constituency elections that they need the lifebelt of standing on the lists as well?

[Guto Bebb]

rose—

[Mr Hain]

Perhaps the hon. Gentleman can answer that question.

[Guto Bebb]

It is the case that the Welsh system of electing Members to the Assembly is replicated in many parts of the world, but the only country that has a similar ban is Ukraine. The Bevan Foundation, a Labour party think-tank, is of the view that the ban should be withdrawn.

[Mr Hain]

I have no idea whether the abuse that we have seen in Wales, which I am now documenting for the House, applied in Ukraine as well. Lord Richard chaired the commission—[Interruption.] I will now present a lot of detailed evidence on that abuse for the sake of the hon. Members who are seeking to intervene and the whole of the House. Lord Richard chaired the commission that reported in 2004. He recommended the extra powers for the Assembly, which my 2006 Act delivered. He told the Welsh Affairs Committee:

“There is something wrong in a situation in which five people can stand in Clwyd, none of them can be elected, and then they all get into the Assembly. On the face of it, that does not make sense. I think a lot of people in Wales find that it does not.”

That is not me, a former Secretary of State who banned the abuse, speaking, but Lord Richard who carried through an eminent report.

The eminent Welsh Academic, Dr Denis Balsom—again, not a politically partisan figure—said in his evidence to the Richard commission:

“Candidates use the list as an insurance against failing to win a constituency contest. This dual candidacy can also confuse the electorate, who may wish to consciously reject a particular candidate only to find them elected via the list. It should remain a basic democratic right not to elect a particular candidate or to be able to vote a Member out.”

That is a right that the Government, supported by Conservatives and members of other parties in Wales, are seeking to deny the electorate. That is not democratically defensible.

[Mr Harper]

I am listening to the right hon. Gentleman’s argument, but I do not follow it at all. When we get a ballot paper in a first-past-the-post election, we have to choose a candidate—we have to vote for somebody. There is no option to say I do not like this person and to cast an anti-vote. I do not follow the idea that someone can vote against someone. They are choosing to vote for who they want to represent them in the Assembly or in Parliament. I do not follow the argument.

[Mr Hain]

I do not know what happens in the Forest of Dean, but in every other constituency if a candidate loses, they lose. If the electorate rejects them, if the voters vote against them, they lose. They do not find themselves parachuted back in to the Assembly, from which the voters have barred them, via another route.

[Mrs Gillan]

It was the right hon. Gentleman and I who sparred across the Dispatch Box on that very subject. I think he has a selective memory when it comes to the Richard commission. As I recall it, Lord Richard not only objected to the list system, but recommended that there should be 80 AMs and that Wales should move to that system and employ the single transferable vote, neither of which the right hon. Gentleman chose to take up. That is almost proof that the direction in which he took it was indeed partisan.

[Mr Hain]

Wait a minute, Madam Deputy Speaker. Far be it from me to question whether the right hon. Lady was in order with that point, but the questions about numbers of Assembly Members and a proportional representation system are not within this Bill. They have nothing to do with this Bill. What is in this Bill is restoring the ban on the abuse of dual candidature which was in the 2006 Act, and it is that point that I am addressing.

[Wayne David]

Does my right hon. Friend agree that there is a telling comment tucked away in the impact assessment produced by the Government? It says that the smaller parties want to change to a dual candidacy rule because they

“may have a smaller pool of high quality candidates”.

[Mr Hain]

I could not possibly comment, but since the Government say that, perhaps it is true on this occasion.

I have quoted a Labour figure, Lord Richard, in support of my case, so I shall now quote a Liberal Democrat. Lord Carlile, the former Welsh Liberal Democrat leader, said in June 2005 that

“many in Wales will welcome...the removal of the absurd dual candidacy opportunity.”

In the same debate in the Lords, the former Conservative Secretary of State for Wales, Lord Crickhowell, said:

“The present arrangements are really pretty indefensible“.—[Official Report, House of Lords, 15 June 2005; Vol. 672, c. 1216-1217.]

A Liberal Democrat, a former Labour Member and a Conservative former Secretary of State all agree with me. I think that that helps my case.

I recall, as Secretary of State for Wales, receiving on 9 January 2006 a press release from Helen Mary Jones, in which she described herself as a Llanelli-based Assembly Member, although she was on the list. In it, she complained about money being spent on a hospital in Carmarthen instead of one in Llanelli. However, as the list Assembly Member for Mid and West Wales, she represented both towns and should really have been supporting both hospitals. Had she been discharging her list Member’s duties properly, she would not have discriminated between the two towns or their hospitals.

[Owen Smith]

Why did she?

[Mr Hain]

Indeed, why did she? Why, of all the parts of the list area that she represented, did she target the one place where she had only been very narrowly defeated in 2003, invariably describing herself as the Llanelli-based Assembly Member? As it happens, I admire Helen Mary Jones for her ability and commitment, although not for her belief in an independent Wales. The 2006 Act stopped her describing herself as the Assembly Member for Llanelli, because there was one and it was not her. In the meantime, she campaigned hard and won the seat back in 2007.

The list Assembly Member for South West Wales, Bethan Jenkins, is often described as the Neath-based Assembly Member and is more active in the Neath constituency than anywhere else in the region. She has not yet had the courage to stand in the Neath constituency, but if the Bill goes through with clause 2 remaining within it, perhaps she will do so, safe in the knowledge that being defeated in Neath will not prevent her from being elected—[Interruption.] I will not respond to that intervention from the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards).

In a leaked memorandum written in August 2003, a Plaid Cymru list Assembly Member—now the party’s engaging young party leader—Leanne Wood, was embarrassingly blatant in encouraging abuse of the system using taxpayers’ money. Let me quote from that memorandum for the benefit of the House and my case. She urged Plaid Cymru Assembly list Members to concentrate tens of thousands of pounds of their local Assembly office budgets in their party’s target seats. She urged her party’s list Members to do casework only where it might benefit Plaid Cymru in those target seats and to attend civic or other events the constituency only if they thought there were votes in it.

I will now quote directly from that memorandum, entitled “What should be the role of a regional AM?” It perfectly illustrates the problem we faced before the 2006 Act banned dual candidature in Wales. Leanne Wood was hardly shy about her objectives:

“Each regional AM has an office budget and a staff budget of some considerable size. Consideration should be given to the location of their office—where would it be best for the region? Are there any target seats…within the region?”

She went on:

“We need to be thinking much more creatively as to how we better use staff budgets for furthering the aims of the party.”

She finished off with a refreshing burst of honesty:

“Regional AMs are in a unique position. They are paid to work full-time in politics and have considerable budgets at their disposal. They need not be constrained by constituency casework and events, and can be more choosy about their engagements, only attending events which further the party’s cause. This can be achieved by following one simple golden rule: On receipt of every invitation, ask ‘How can my attendance at this event further the aims of Plaid Cymru?’ If the answer is ‘very little’ or ‘not at all’, then a pro forma letter of decline should be in order.”

I could not have presented my case better than she revealingly did.

[Huw Irranca-Davies (Ogmore) (Lab)]

I am absolutely astonished at what I am hearing from my right hon. Friend. Would he, like me, welcome an intervention from the two Plaid Cymru Members present in the Chamber to distance themselves from that startling abuse of taxpayers’ money?

[Mr Hain]

That is not a matter for me, but I take my hon. Friend’s point with acclamation.

[Wayne David]

Is not my right hon. Friend’s case substantially weakened by the fact that nobody seriously believes that Leanne Wood can be party leader for much longer?

[Mr Hain]

I think I shall move on from that point, despite the great respect I have for my hon. Friend.

All the arguments and evidence I have cited demonstrate conclusively that the ban was not partisan but enhanced democratic standards among Welsh Assembly Members. Indeed, I reminded the House that six Labour Assembly Members, including three Ministers, could have been defeated in the 2007 Assembly elections by a swing of 3% against them—a very small swing. They would no longer enjoy the safety net of the regional list and two subsequently lost. The reform affected Labour candidates, just as it applied to candidates from other parties.

[Alun Cairns]

rose—

[Susan Elan Jones]

rose—

[Mr Hain]

I think I really ought to conclude my remarks.

Surely the principle behind the 2006 Act is right: namely, candidates must make their choices and then voters will make theirs. My right hon. Friend the Member for Torfaen (Paul Murphy), also a former Secretary of State for Wales, put it well in a debate on the then Bill in January 2006:

“The additional member system that we have as a result of the 1997 settlement is fundamentally flawed. People do not understand it. They do not understand how an individual can stand in two ways for the same body on the same day in the same election and be defeated, then get elected a matter of an hour or two later. Equally if not more confusing is the fact that, in my constituency and in those of my right hon. and hon. Friends in the south Wales valleys, thousands upon thousands of people vote Labour on their second vote, yet none of those votes is counted. I do not understand the logic of that. I can understand the technicalities, because I taught the subject many years ago when I was a teacher in a college of further education, but as an elector or as an elected representative, I think that it is terribly confusing and ought to be changed.”—[Official Report, 9 January 2006; Vol. 441, c. 63.]

My hon. Friend the Member for Aberavon (Dr Francis), as the then Chair of the Welsh Affairs Committee, said in the same debate:

“Electoral reform should not get caught up in internecine party politics...the present system is an unloved and confusing creature that causes more grief than it is worth.”—[Official Report, 9 January 2006; Vol. 441, c. 69-70.]

My hon. Friend the Member for Alyn and Deeside (Mark Tami) said:

“Following the last Assembly election, many people asked me how candidates who stood at the election and were defeated—and, in many cases, defeated by a country mile—could find themselves sitting in the Assembly, claiming not only to represent constituents but having equal status with the people who defeated them. How would we feel if a third of this Chamber”—

by which he meant this Chamber—

“were made up of candidates that had stood against us”

before appearing on the list

“they would not have come up with such a system even in North Korea”,

although I confess to having come up with it as a Wales Minister in the 1998 legislation. My hon. Friend continued:

“Once getting into the assembly via the back door, these characters spend much of their time cherry-picking issues and targeting seats that they or their party are looking at for future elections.”—[Official Report, 9 January 2006; Vol. 441, c. 96-97.]

Those are some of the reasons why I introduced the bar on dual candidature. It is astonishing that, for narrow partisan party reasons, the Secretary of State is assisting his own party members in Wales and those of other parties who complained about the ban. After the 2006 Act banned dual candidature, the well-known democratic abuses that had occurred before were not repeated. I find it astonishing that the Secretary of State is reinstating a regime that brought democracy in Wales into such popular disrepute. If he persists, I hope the House of Lords will delete clause 2.

I want to pick up on an earlier point relating to the interesting exchange I had with the Secretary of State. I will read the exchange in Hansard carefully. I was not at all convinced by his answer. Indeed, I remain very concerned, on the question of income tax devolution, that Wales will be cut adrift from richer parts of the United Kingdom and lose out. There have been a lot of warm words about indexation, but I do not find the answers we have been given, or the references in the associated financial documents, to be at all compelling or convincing. I respect the Holtham commission and I respect Gerald Holtham. I understand his points on indexation, but I do not trust a Conservative-led Treasury to honour the commitments in the Holtham commission.

I would be more reassured—this is a cross-party point, because we all want to see Wales doing the best it can—if a clear and absolute commitment was embedded in the proposed legislation for Wales to continue to benefit, regardless of income tax devolution, from the wealth of the United Kingdom. My politics come from a belief in fairness, and the redistribution from richer to poorer regions and from richer to poorer individuals. I do not see how tax accountability, which the Secretary of State exalts, can be a two-way bet. I do not see how having devolved income tax and giving, in the main, the Assembly greater accountability to local voters, will then be protected, according to the Secretary of State’s reassurance, by a kind of indexation that undermines that accountability. That makes me even more suspicious of it. I will be extremely sceptical of, if not opposed to, income tax devolution until I am absolutely sure that Wales will not lose out, for the reasons I have described.

--- Later in debate ---

[Mr Harper]

I will make a little progress before giving way again.

Let me divert a little to address the points on which the right hon. Member for Neath (Mr Hain) focused his speech, which relate to clause 2. I did not follow his argument at all. Although he was making a point about the amendment in the Bill, the thrust of his speech seemed to be a criticism of how the list system operates in Wales. He said that it was a system that we could find only in North Korea, but then he rather shot himself in the foot when he had to admit that he was the system’s author. I know that he is a supporter of proportional representation—

[Mr Hain]

I am not, actually.

[Mr Harper]

Oh, he is not a supporter now; I thought that he was. The system is the one he invented. Given that the Electoral Commission, which is independent of any party, and three of the four parties in the Assembly are perfectly happy with what is proposed in the Bill, I do not think that he can claim that this is being done for partisan reasons.

[Mr Hain]

I was one of the authors, under the Secretary of State at the time, Ron Davies, of the Bill that allowed candidates to stand in both the lists and the constituency, which the Secretary of State is now seeking to reinstate, but I had no idea of the abuse that would take place, for which I think I have provided more than ample evidence. That is the point.

[Mr Harper]

The right hon. Gentleman made two points, one of which I agree is an abuse, from the way he outlined it. Of course, parliamentary resources—I presume the same is true for the Assembly—are given to us by the taxpayer for parliamentary work, not party political campaigning. If that was the thrust of the Plaid Cymru document he quoted, that would have been quite wrong. He suggested that there is something wrong with candidates standing for a constituency and then being elected from a list, but that simply reflects the fact that in a list system, and certainly in the one that was put in place in Wales, it is the party label that gets a candidate elected, not their individual qualities. It seems to me that candidates getting elected by virtue of their place on a list might be a good reason for not having a list system, but it is not particularly offensive or undemocratic.

On voting for or against people, about which the right hon. Gentleman and I had an exchange, perhaps I am naive, but I happen to think that when people vote in a general election they are voting for somebody. I certainly conduct my election campaigns by trying to give people reasons to vote for me at a constituency level and reasons to vote for my right hon. Friend the Member for Witney (Mr Cameron) as Prime Minister, for example, rather than by thinking up lots of reasons why they should not vote for my opponents. I hope that is how my opponent in my constituency will conduct himself as well. That might not be what happens in Wales, but it is how I try to conduct things in my constituency.

[Mr Harper]

I suspect that my right hon. Friend, as ever, is spot on. The right hon. Member for Neath, in his lengthy speech, gave some anecdotes about one or two people who did not like the fact that a candidate who had stood in the constituency was then elected on the list, but I heard no evidence of a wider view.

[Mr Hain]

With all due respect, I represent a Welsh constituency, which is not the case for either the hon. Gentleman or the right hon. Member for Chesham and Amersham (Mrs Gillan), I was Secretary of State for Wales and I travelled the length and breadth of Wales, and that matter was raised with me all the time. He mentions the Electoral Commission, which often adopts a kind of academic approach to these matters. That contrasts with the findings of Denis Balsom and other sources of credible evidence from Wales.

[Mr Harper]

Based on what the right hon. Gentleman has just said, it sounds as if he has a number of anecdotes, but in my experience the Electoral Commission, with which I worked closely when I was the Minister with responsibility for political and constitutional reform, takes positions based on evidence. It carries out thorough research and is always scrupulous about not taking a position that could be portrayed as partisan, and it guards that reputation jealously. It does not agree with him, as he acknowledges—I have not always agreed with it—but I would put rather more weight on its views than on his.

--- Later in debate ---

[Mr Harper]

I am grateful for that point, which shows that the Government position is joined up across not just the Wales Office but the Treasury. The right hon. Member for Neath showed an astonishing lack of trust in the Treasury led by my right hon. Friend the Chancellor, whose excellent recent Budget cut taxes for those on modest incomes. The Labour party voted against those—against the fuel duty cut and the tax cuts for modest earners. I find that surprising.

[Mr Hain]

I do not trust the Treasury whoever is in power.

[Mr Harper]

I defer to the right hon. Gentleman, who has been a spending Minister in a number of Departments. For much of that period, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was Chancellor, so perhaps it is not surprising that he takes that jaundiced view. Having dealt with my right hon. Friend the Chancellor, I have a more positive outlook on Treasury Ministers, and I have yet to be proved wrong.

[Mr Hain]

The only Treasury Minister I trusted was Madam Deputy Speaker, when she was in that Department.

[Mr Harper]

Madam Deputy Speaker, I shall not draw you into the debate. I am sure that, for the sake of your reputation at the Treasury, you would, if allowed, cast off that foul calumny. If the right hon. Gentleman thought that highly of you when he was a spending Minister, you could not have been doing your job as a Treasury Minister properly. We all know that you absolutely were; otherwise you would not have found your way into that Chair. I will close this aspect of the debate just there, before I find myself cut off against my will.

I have some questions for my right hon. Friend the Secretary of State, although I do not necessarily want him or the Minister to respond today; perhaps we can touch on the issues when the Bill returns to the Floor of the House in Committee. If the income tax provisions were devolved, how would they work? I looked carefully in the Bill at the definition of an individual Welsh taxpayer; it is to do with their usual place of residence. How complex will operating the system be for businesses, particularly for small and medium-sized enterprises? In a constituency such as mine, businesses will have staff resident in both England and Wales. If income tax varying powers were to be used by the Welsh Government, I would want to make sure that the burden placed on employers of English and Welsh residents was not significant and that the system was as easy as possible to operate—preferably with as little burdensome administration as possible. I will return to that issue in Committee, to make sure that it has been properly thought through.

I also want to check on the issue of stamp duty land tax. The shadow Secretary of State touched on it in a slightly facetious way when he discussed properties that straddled the England-Wales border. I want to make a serious point about the quality of the mapping involved. May I make a plea for us not to use postcodes in determining which nation the land is in? It is not the Post Office’s fault, but a lot of organisations are sloppy and do not use postcodes properly. They assume that everybody with an NP postcode lives in Wales, including my constituents in the southern part of my constituency. A lot of my constituents, who live in England, get bilingual letters from all sorts of organisations that assume they live in Wales. I hope that my hon. Friend can assure me that we will use a proper mapping system when looking at stamp duty land tax so that we make the right decisions about whether property is in England or in Wales and do not have the sorts of cross-border issues that I have seen as a result of devolution so far.

I support the proposal to move to fixed-year terms offset against the terms for this place. On balance, it is better to have elections in Wales that focus on the issues important to the people of Wales—and ensure that those running the Welsh Assembly and those wanting to be elected to it are properly held accountable—than elections that take place on the same day as a UK general election, because then the arguments would blur. One can argue it both ways—the hon. Member for Rhondda, who is no longer in his place, did so, as did several others when we were passing the Fixed-term Parliaments Act 2011—but I am pleased with the measure.

I have already said that I am happy with the proposal to reverse the change made by the right hon. Member for Neath, and I will say no more about that. We have had a lot of debate about it already, and I do not want to provoke any more.

I notice that the borrowing powers are already available to be used for the M4 development. That is a helpful proposal. I have been having an ongoing debate with some Labour Members about the Severn bridge tolls that is driven by the desire for improvements on the M4 to improve the economic benefits from that corridor. I have proposed a third Severn crossing, although that is not welcomed by all Labour Members if it means an extension of toll revenues. Some of the borrowing powers could enable improvements to the M4 link, which is very important for the economies not only of south Wales but of constituencies such as mine. The proposal is very welcome.

Overall, I welcome the Bill. I am glad that it has been well thought through as a result of the proposals from the Silk commission and that it had pre-legislative scrutiny in this House. I will certainly support it, and I look forward to debating it further on the Floor of the House.

--- Later in debate ---

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

It is a pleasure to close this important debate and it is good, as ever, to follow the hon. Member for Llanelli (Nia Griffith), who on this occasion gave an uncharacteristically churlish speech. I want to call her out on her comments about the contribution by my hon. Friend the Member for Forest of Dean (Mr Harper), who is always the model of courtesy and graciousness in his contributions in this House. His remarks about Wales were based on evidence and truth and were carefully made, so I commend him. He is a former Cabinet Office Minister, so he is familiar with issues pertaining in particular to fixed-term Parliaments. This debate has been enriched by his participation. It has also been enriched by the speeches of not one, but two former Secretaries of State. It was good that the right hon. Member for Neath (Mr Hain) and my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), who is no longer in her place, both gave very thoughtful contributions on issues about which they have a lot of experience.

We also heard from the Chairman of the Welsh Affairs Committee, which did a fantastic job in scrutinising the draft Wales Bill. The speech by my hon. Friend the Member for Monmouth (David T. C. Davies) in fact attracted not just praise from Liberal Democrats, but a slightly backhanded compliment from the right hon. Member for Neath, who described him as having “sincere and intelligent extremism”. As I am sure the right hon. Gentleman knows better than most hon. Members in this House, extremism in the defence of liberty is no vice at all.

We have had a fascinating and wide-ranging debate during the past few hours on matters directly, and sometimes indirectly, related to the Wales Bill. There were excellent speeches from both sides of the House, and I thank all hon. Members for their speeches.

I will limit my remarks to the Bill, but I first want to say that, regardless of points of disagreement, there has been a broad measure of consensus on and support for the Bill by all parties in the House. Just as a Dulux colour sheet has different shades, there have been different shades of support—ranging from frosty and cold by my hon. Friend the Member for Monmouth to rather grudging and unenthusiastic by Opposition Members through to warm by my right hon. Friend the Member for Chesham and Amersham. There has been support for the Bill and, as we go into Committee, we should not forget that this wide-ranging Bill enjoys broad support from hon. Members and parties across the House.

The vast majority of hon. Members clearly support the Government’s move towards achieving a strong measure of fiscal devolution that will give the National Assembly for Wales control of devolved taxes for landfill and land transactions, and enable the Welsh Government to borrow for capital investment. I hope that such a positive position continues as the Bill progresses.

I should perhaps start with the lockstep, a term that few hon. Members had probably heard before the Silk commission did its work, but one with which we are certainly becoming increasingly familiar. I know that the Government’s proposals to allow the Assembly to vary income tax rates uniformly—in other words, in lockstep—subject to a referendum, concern some hon. Members on both sides of the House. Let me be clear that this Government believe that the structure of income tax is a key mechanism to redistribute wealth across the whole of the United Kingdom, including Wales and, as such, that wealth redistribution is properly determined at UK level. The lockstep is consistent with the principle that fiscal devolution should not unduly benefit one part of the UK at the expense of another, which would result in what at least one hon. Member has called a race to the bottom. I am pleased that that position is one that now seems to enjoy the support of Labour Front Benchers, although that was not clear when we last discussed it in the Welsh Grand Committee.

There would be a real risk of a so-called race to the bottom if the Welsh Government were able to set substantially lower rates for higher or additional rate taxpayers without needing to change the basic rate. Far from making the income tax powers unusable, as some hon. Members have suggested, the lockstep makes the powers very usable, as my right hon. Friend the Secretary of State explained at the start of the debate. Devolving income tax would give the Welsh Government a crucial lever to reduce taxes across the board in Wales to make it a lower-tax economy and put money back into the pockets of hard-working people across Wales.

If electors in Wales decide in a referendum in favour of income tax devolution, the Welsh Government would become responsible for almost half the income tax generated in Wales. In reducing the tax burden on working people in Wales, the Welsh Government would reap the benefits of a growing Welsh economy and gain access to a significantly larger revenue stream to finance further borrowing. With vision and foresight, the Welsh Government could grasp that virtuous circle with both hands.

Some Opposition Members, not least the right hon. Member for Neath, raised concerns about how the application of devolved income tax will work in practice. There was some discussion of that in the last sitting of the Welsh Grand Committee, when there was a lot of confusion about whether Welsh budgets would be detrimentally affected by the devolution of 10p of income tax. Following the Welsh Grand Committee, I circulated a letter to all members of the Committee explaining, with a practical example, how that would work. I would therefore hope there would be some clarity, but the right hon. Member for Neath said that there is a risk that Wales will be cast adrift. Let me explain to him that the system of income tax devolution we are proposing protects Welsh funding in two ways. First, the lockstep retains the redistributive structure of income tax across the UK, as I have just described. Secondly and crucially, the block grant adjustment mechanism, which we are calling indexed adjustment, means that Wales is protected from UK-wide shocks. For example, if the UK tax base were to decline, the block grant adjustment will be reduced accordingly. Reducing the block grant adjustment thereby increases the Welsh block grant. Therefore, the finances of the Welsh Government are protected through that mechanism.

[Mr Hain]

I am grateful for the Minister’s views. Is he saying that, if the Welsh Government raise less, Westminster will compensate more?

[Stephen Crabb]

That is not what I am saying. A key principle of the mechanism is creating the incentive for the Welsh Government to create the conditions for the economy in Wales to grow, so that they can reap the fruits and benefits of a growing Welsh economy. The protection kicks in when there are shocks and changes that affect the overall UK tax base. When changes would otherwise have a detrimental impact on Welsh Government revenues, Welsh Government revenues are protected because of the indexation. I shall circulate further information to right hon. and hon. Members.

Oral Answers to Questions

Lord Hain Excerpts

Wednesday 27th June 2012 Commons Chamber

[Mrs Gillan]

So far I have not been asked to give any evidence to the commission, but I understand that there will be a long discussion about the issue. I know that my hon. Friend is especially keen to give evidence and to provide information to the commission, and I am sure that she will have that opportunity.

[Mr Peter Hain (Neath) (Lab)]

On devolution, does the Secretary of State agree that any fundamental change to the voting system for the Assembly must at least have broad inter-party consensus and the agreement of the Welsh Government to avoid another referendum, because the system was endorsed by the 1997 referendum?

[Mrs Gillan]

I do not know whether the right hon. Gentleman was in the Chamber when I paid tribute to him, but I hope that he will read the Hansard report. We will miss him on the Front Bench.

The legislation governing any changes to the electoral voting system for the Assembly was put in place by a Labour Government. The power clearly remains here. Had the intention been different, I am sure that the right hon. Gentleman would have changed the situation himself through the Government of Wales Act 2006.

Oral Answers to Questions

Lord Hain Excerpts

Wednesday 25th April 2012 Commons Chamber

[Mr Jones]

Absolutely. The reduction in the Welsh health budget is a matter of shame for the Welsh Assembly Government. I repeat that the Welsh Government will have had almost an additional £500 million since the spending review in 2010.

[Mr Peter Hain (Neath) (Lab)]

Is it fair that Welsh churches, charities, caravanners, pensioners and almost everybody else will pay more taxes so that millionaires can each pay £40,000 less?

[Mr Jones]

That is a very strange rhetorical question. The right hon. Gentleman will know that the reduction in the top rate of tax will not take effect until the end of the public spending freeze and it is quite interesting that the Government of whom he was a member did not see fit to increase the rate of tax until a matter of weeks before their last Budget.

[Mr Hain]

I am amazed that the hon. Gentleman is not ashamed of that impact on some of the most vulnerable in our society. Can we in Wales, through him, apologise to the Secretary of State? We used to think that she was all on her own at sea in the Cabinet, but clearly they are now all at sea together. The Budget omnishambles, Abu Qatada, petrol pump panic—at least Wales has a Labour Government to give us some protection from this Tory-Lib Dem incompetence. At least Wales can reject this disastrous Budget by voting Labour in the council elections next Thursday.

[Mr Jones]

I am still waiting for the question, Mr Speaker.