Wales Bill

Baroness Randerson Excerpts

Committee: 1st sitting (Hansard - continued): House of Lords
Monday 31st October 2016 Lords Chamber

[Baroness Randerson (LD)]

My Lords, I shall speak to Amendments 13, 14 and 17. I must declare an interest as a governor of Cardiff Metropolitan University and an honorary fellow of Cardiff University.

As the Minister has outlined, these amendments reflect concern expressed by Universities Wales, which represents the Welsh higher education sector, about inclusion in the list. It gave evidence of that concern to the Assembly’s Constitutional and Legislative Affairs Committee, whose report has been circulated to noble Lords. The basis of the concern is that this may lead to inclusion as a public sector body by the ONS. Noble Lords may recall that a reclassification of this kind occurred for Network Rail. That reclassification was undertaken with the full agreement of the Treasury but its impact on Network Rail has been to have a huge effect on its ability to borrow.

Higher education institutions are clearly concerned about their ability to borrow. They are currently classified by the ONS as non-profit institutions serving households; they are therefore part of the private sector and, along with most other charities, enjoy that status. This reflects the extent of public sector control, as set out in EU accounting requirements. I must stress that universities regard themselves as independent organisations. They value their academic and institutional autonomy and are treated as public bodies for only a small number of very specific purposes—for example, for freedom of information purposes. It is true that higher education provision and fees are highly regulated but in Wales, less than 10% of university income comes from direct public funding. The ONS is already reviewing the classification of Welsh universities in the light of the Higher Education (Wales) Act 2015.

In England, the proposed higher education and research Bill will address complexities for those higher education institutions established as corporations, but that Bill will not affect Wales. So the potential reclassification by the ONS will badly affect higher education in Wales because all Welsh HEIs are charities. The Charity Commission is clear in its guidance, which says that a charity,

“must exist in order to carry out its charitable purposes, and not for the purposes of implementing the policies of a governmental authority”.

A breach of this rule could of course impact on governors as well, who could be held personally liable. It would obviously have a massive impact on Welsh higher education’s ability to raise funding for research and to assist poorer students, and on those institutions’ tax status.

Understandably, Welsh universities do not welcome their inclusion as public authorities, but neither should the Welsh Government nor the UK Government. If they are reclassified by the ONS, their debts and spending will go on the Government’s balance sheet. They will go first on the Welsh Government’s balance sheet and affect their ability to borrow because universities in Wales have a significant borrowing requirement of their own, which would of course detract from the ability of the Welsh Government to borrow in addition to that. In turn, it would go on the Treasury’s balance sheet.

I am surprised that the Welsh Government have indicated that they do not feel this is a problem and are not concerned about the inclusion of universities in this list. When I think of it, it is perhaps not entirely surprising because there has been a tendency over many years for the Welsh Government to seek greater control over the public sector, which the Minister will be aware of as an ex-Assembly Member. However it is important to remind noble Lords that the international reputation of our universities rests on their independence from government. Many were established as charitable foundations, and all continue to rely on charitable funding and on funds that rely on their charitable status. Universities in Wales are part of the devolved settlement, as the Minister said, and are hence subject to rules that are slightly different from those in the rest of the UK, but they are very definitely part of a UK-wide sector and of an international market, so they must not be undermined by incorrect classification in the Bill. This is a probing amendment, and I am glad to hear from the Minister that he will consider this matter further. I will be grateful for his further comments when he has time.

Finally, and briefly, the further education sector was also established autonomously in the 1990s. The FE sector has higher levels of direct government funding, but it values its independence, its ability to respond to the market and its flexibility. I will be grateful if the Minister looks at both sectors in detail before we discuss this issue again.

[Lord Murphy of Torfaen]

My Lords, I understand what the noble Baroness said about the charitable status of Welsh universities, and it is important that the Minister goes back and examines whether it is put at risk by this part of the Bill.

I cannot for the life of me understand Amendment 14, which excludes the Higher Education Funding Council for Wales from the Welsh public authorities list. It is not a university; it is a body that administers funding to the universities. It gets all its money from the Welsh Government, so I cannot quite understand the amendment, particularly because a recent review of non-compulsory post-16 education in Wales indicated that this body will be replaced by a new body dealing with funding for higher education and further education, which is a good thing. The amendment is an incongruous insertion when the argument is about universities and, to a certain extent, further education colleges somehow losing their charitable status, independence, right to borrow and so on. I would value the Minister’s comments on why the Higher Education Funding Council for Wales is part of this scene.

--- Later in debate ---

[Lord Norton of Louth (Con)]

My Lords, my noble friend Lord Crickhowell has raised practical objections to the amendment. I do not wish to raise practical objections but I have an objection of principle. Amendments like this immediately concern me in so far as they restrict the choice of electors. Any amendment that places a restriction on candidates is in effect a restriction on the choice of those who have to do the election. It may be that, as the noble Lord, Lord Hain, said, candidates may not know the problems of the local area or may not know the culture. That is for the electors to decide and not elect them as their representatives. It is not for us to say to the electors, “Sorry, you can’t elect them because we think they aren’t suitable to represent you”. That is fundamentally an issue for the electors. I am for widening choice for electors; if they want to elect whoever, that is entirely a matter for them. It is not for us to impose a statutory requirement.

I accept the point that the noble Lord, Lord Wigley, made about the problems that derive from the particular electoral system in respect of some candidates, but the problem there is the electoral system. My point is one of principle; therefore, one would need to look at the structure and the process of the electoral system to enable the electors to have a better choice, so that they are choosing those whom they wish to represent them. If one wishes the candidates to live within the area, that is a political issue. It is for them to promise electors, rather like Members here can say to their constituents, “If elected, I will live in the constituency”. However, this is fundamentally a relationship between electors and those they choose to represent them. I am therefore wary of any amendment that restricts choice; various amendments have come up in different contexts that do that, and in the Bill I am particularly wary of moving in this direction. I hope the Minister will resist it.

[Baroness Randerson]

My Lords, I have great sympathy with the amendment in the name of the noble Lord, Lord Wigley. Although I understand the principle of the amendment in the name of the noble Lord, Lord Hain, I fear that it takes rather too hard-line an approach to an important issue of principle. I disagree with the noble Lord, Lord Crickhowell. The principle here is not the individual convenience of candidates who stand for the Assembly or those who are elected to the Assembly, but the fundamental principle that you should not be a member of a legislature to which you are not subject yourself. You should not pass laws that you yourself do not have to obey and take heed of. That supersedes anything that can be said about the practical problems, which undoubtedly exist, for people who live on the border. I think the amendment of the noble Lord, Lord Wigley, deals with that issue in that you do not have to go through the upheaval of moving to Wales if you live a couple of hundred yards over the border. Indeed, if you live in the middle of Surrey, you do not have to go through that upheaval until you are elected.

Until this Assembly term, it has always been taken for granted that you would live in Wales. I recall that when the current Assembly Member for Cardiff Central was first selected as the Labour candidate, she lived in Islington, but she felt obliged to obtain a small flat in Cardiff when she became the Labour candidate—and rightly so. It is important that people feel obliged to live in Wales, that they feel part of the Welsh culture and that they understand Welsh media and Welsh issues. Without living in Wales, that cannot be so. Therefore, I support the amendment of the noble Lord, Lord Wigley.

[Lord Murphy of Torfaen]

My Lords, I agreed to put my name to the amendment of my noble friend Lord Hain because it is both timely and relevant as the Wales Bill passes through this House. It is not all about Neil Hamilton but it is a bit about him in the sense that he is, as far as I am aware, the very first Member of the National Assembly for Wales who has not lived in Wales. Not only has he not lived in Wales but he lives a long way from Wales, and it highlights why we, as a Parliament, should address this issue—it is different from the franchise that we have known in our country for generations. We are talking about a country; we are not talking about a constituency. I think it is important that you live in your constituency but that is another issue; sometimes it is not practicable or reasonable to do so. However, we are talking about a country that now has a legislative Assembly which passes primary and secondary legislation for that country and which runs the country in many different ways.

The noble Lord, Lord Crickhowell, asked, very relevantly, what happens if you live in a town or village bang on the border. Of course, the border between England and Wales is very different from, for example, the Northern Ireland and Ireland border and it is different from the Scottish/English border, which has lots of built-up areas on it. However, there is a big difference between being a few hundred yards away in Monmouth and being in Wiltshire, and that in a way—