Wales Bill

Mark Williams Excerpts

Tuesday 6th May 2014 Commons Chamber

[Hywel Williams]

The hon. Gentleman raises a point that was made at an earlier time. He has outlined particular difficulties faced by his constituents, with which I have a great deal of sympathy. I might as well concede that this is a probing amendment and I would be interested to hear what he has to say later in the debate. We have a great deal of sympathy with hon. Members across the House who point to the border as a particular problem area; as has been said in the earlier debate, so many of our population live just over the border and vice versa, so I entirely concede that we need to take this issue seriously.

Paragraph 4.6.8 of the Silk commission’s first report states:

“In addition to the use of taxes to achieve policy outcomes in devolved areas, credits can also be applied so that activities are effectively subsidised. While existing tax credits such as the working tax credits (and in future the Universal Tax Credit) should remain UK wide, the Welsh Government should be able to introduce its own credits in relation to devolved taxes and through use of devolved grants and subsidies to promote investment and getting people into work.”

That is a laudable aim and I urge hon. Members on both sides of the House to support us in order to fulfil it.

Amendment 33 would enable the Welsh Government, by a resolution of the National Assembly for Wales, to introduce a new tax without the need for approval by a resolution of both Houses of Parliament. Obviously, Plaid Cymru’s starting position is that Wales should be an independent country and that it should be for the people of Wales, through our own democratic institutions, to decide how its taxes are structured. However, the amendment would simply tidy the process of bringing in the new tax credits should the Welsh Government, through the National Assembly, decide to do so. I need not remind Members who represent Welsh constituencies or who are interested in the smooth functioning of democracy of the disastrous bureaucratic and constitutional nightmare that was the legislative competence order system. I was involved in that as a member of the Welsh Affairs Committee. Before the successful 2011 referendum on full primary law-making powers, the Government of Wales Act 2006 provided for further devolution, on paper. The reality, I am afraid, was that it came to resemble a Kafkaesque constitutional quagmire when the powers were to be devolved. The Welsh Affairs Committee, reporting in 2010, stated that requests for extra powers from the Welsh Assembly Government, as it was named then, too often disappeared into the black hole of Whitehall.

[Mr Mark Williams (Ceredigion) (LD)]

We agree that we have, on the one hand, the extreme of the LCO system and, on the other, the reserved powers model, which we will come to later in this group. The hon. Gentleman would, I think, subscribe to the reserved powers model.

[Hywel Williams]

The hon. Gentleman surmises correctly. The model is clearer, more elegant and more easily understandable, and we will be able to debate it later.

Going back to the LCO process, the hon. Gentleman will recall, as he participated in those long debates on LCOs—

[Hywel Williams]

I certainly do not want to rehearse the discussions and arguments we had on LCOs. LCOs were a curate’s egg—occasionally they went through without touching the sides. I remember chairing the LCO on mental health, which lasted for two sessions. The LCO on the Welsh language took rather longer.

[Mr Mark Williams]

Will the hon. Gentleman remind the House—I think he did some specialised work on this—of the number of hoops we had to go through to achieve legislative competence orders and of the fact that that did nothing to enhance democracy, which, mercifully, this Bill is seeking to remedy?

[Hywel Williams]

I thank the hon. Gentleman for that point. The contrast between what I propose now and the LCO system is extreme. I think I counted 27 individual stages, but it might have been 28 or 26—the figure is lost in the mists of time. It was an extremely complicated business. To be fair, Members on both sides of the House made positive contributions. I pay tribute to the hon. Member for Aberavon (Dr Francis), who is not in his place, for his skilled chairmanship. We got a lot through, but it was against the odds.

There is a danger that matters get lost in process, are ignored by the government machinery and do not progress at good speed. If we repeated the LCO process, we would be repeating a mistake and would unnecessarily create a drag on the smooth functioning of democracy. Surely the Members of the Assembly, through scrutiny, have, in partnership with the Treasury, the ability to carry out the requisite research, impact assessments and consultation. I hope that that ability is there. The need for a lengthy process of resolution in each of the Houses of Parliament when there is so often a strain on time—perhaps not at the moment, but often there is a strain on time—is surely a bar to the swift adoption of the system once the requisite preparatory work has been carried out in Wales. Surely if a matter is devolved, it should be devolved, and devolved fully and without the Government in Westminster seeking to keep their oar stuck in. As with many of our amendments that were considered in Committee last week, we say that it should be for the people of Wales, through their democratically elected institutions and representatives, to decide on the matters that have been devolved without being harried back and forth. The Government have conceded that Wales should have the power to introduce new taxes, and we are arguing for tax credits as well, as did Silk. That should be done without strings being attached that could prove a restriction and impediment.

Finally, let me return to the LCO process, which operated in much the same way as the new tax process is designed to operate. The Assembly used to submit a request for more powers, which was then scrutinised by the Select Committee on Welsh Affairs before its final approval by MPs and peers. There is no proposal in this case of scrutiny by the Welsh Affairs Committee, and one does not have to be a constitutional expert and/or an accountant to see what a tremendous drag and immensely time-consuming process that might be. At the time, the critics of the LCO procedure maintained that it was cumbersome and opaque, and they were proved right. Sir Jon Shortridge, the former head of the civil service in Wales, said that Wales was often seen as “a complication too far” by London. The Welsh Affairs Committee also said that there was “an unacceptable lack of transparency” in the Whitehall clearance process.

All this talk of the Government of Wales Act 2006 and the 2011 referendum reminds me that Westminster always relinquishes its grip on power with a clenched fist. Where it can, it will inevitably introduce roadblocks or constitutional caveats that mean that the power on offer is never fully recognised at first despite the overwhelming majority of people in Wales being in favour of devolving more powers.

For the smooth functioning of democracy and to save Members’ time in this place in the future, I strongly urge hon. Members to support our amendment should it come to a vote and impress on the Government the need to learn from the mistakes of the past and streamline the process of introducing new taxes and tax credits in Wales.

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[Owen Smith]

That was the justification that the Secretary of State used at the time and he would no doubt use it again today. Our view and the view of many people in Wales is that what he did in respect of the Agricultural Wages Board was a party political attempt to tie the hands of the Welsh Assembly by arguing that it was employment legislation and not legislation that related to agriculture, which is devolved to Wales. Many of the learned counsel who offered their opinions on the matter backed the view of the National Assembly for Wales. We will wait to see what the ruling is. My point is simply that a shift from the conferred powers model to a reserved powers model would militate against such apparent confusion on the part of the Secretary of State and ensure that we had greater clarity about where the line lies between the powers of this House and the powers of the National Assembly.

[Mr Mark Williams]

I concur with much of what the hon. Gentleman has said about reserved powers. However, does he agree that the issue is less about party politics than about the clarity in the devolved settlement? That is why some parties are committed to having the reserved powers model in our manifestos. That is the conclusion that most people have reached after Silk II.

[Owen Smith]

Indeed; the hon. Gentleman’s party and my party are committed to having that in our manifestos. We see significant benefits in putting Wales in a symmetrical position to Scotland in respect of powers and in tying the hands of future Conservative Secretaries of State who might employ the same argument to tie the hands of the Welsh Assembly Government.

[Mr Williams]

Will the hon. Gentleman concede that Silk II found that the issue was about the clarity in the devolution settlement, rather than about party political motives and posturing?

[Owen Smith]

Absolutely; Silk said precisely that. I am saying today for the clarity of the Committee that we believe that the current Government employed the argument for party political purposes. They attempted to stop the Welsh Government doing what they wanted to do, which was to maintain the Agricultural Wages Board for Wales. That would have had significant benefits for some of the lowest paid workers in Wales. On that basis, I believe we can say firmly that Wales would be better off if we moved to a reserved powers model, with the greater clarity and additional safeguards that it would bring.

Finally, Madam Chair—[Interruption.] I beg your pardon, Sir Roger; I did not see you slip into the Chair, but it is a great pleasure to serve under your chairmanship once more. On the background to these clauses, we did not have much chance to discuss the so-called fair funding lock. The ability of the Welsh Labour Ministers in Cardiff Bay to determine whether they think the funding settlement for Wales is fair and adequate, in advance of their moving to adopt any of the powers of income tax—or any of the other taxes—is an important test. I hope that the Government will rise to that challenge at some point in the future.

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[Mr Mark Williams]

Would the hon. Gentleman add to that list the availability of maximum flexibility in the future? We had the Government of Wales Act 1998, the Government of Wales Act 2006 and we now have this Bill. This piecemeal, step-by-step approach to what some of us would like to see—home rule in a federal Britain—is going on and on, but a reserved powers model would give us greater opportunities for flexibility.

[Wayne David]

Home rule, of course, was championed by Keir Hardie, who was the first Labour Member of Parliament, representing Merthyr and Aberdare. Home rule is very important and we must look at mechanisms to enhance that principle and take it forward. A reserved powers model would provide flexibility, but it would also provide greater coherence, stability and clarity. On those principles, it is superior to what we have at the moment, but—as I have said—there is no such thing as perfect devolution. Whatever the nature of the devolution settlement, we will always need to discuss, debate and even argue about some issues. On balance, however, I think a reserved powers model would be the right choice.

Do the Government recognise that a cross-party consensus is emerging in Wales that a reserved powers model would be superior to what we have at the moment? I ask the Conservative Minister not to dig his heels in on this, but to recognise that there is a constitutional consensus and that it means something. It is one of the essential underpinnings of a progressive view on devolution. For goodness’ sake, do not give the impression that his opposition to a reserved powers model is all about trying to prevent what we would see as progressive measures to protect agriculture workers in Wales. He is genuinely concerned about constitutional stability and flexibility, as has been said, and about achieving something approaching a cross-party consensus on the way forward for devolution. That is why the amendment is very important indeed. In some ways, it takes us beyond the parameters of the Bill, but nevertheless, if the House were to support it, it would give an important indication of how we all see devolution moving forward. It is therefore very important that we support the second amendment, amendment 43 to clause 28.

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[David T. C. Davies]

I am grateful for the opportunity to speak to this amendment because I believe in the national health service. I know that I speak for all members of my political party in saying that we believe in having a truly national health service. The changes I am attempting to insert into the Bill would bring back the national health service that we once had but no longer have. At the moment, contrary to what people think, we have a regionalised health service with different systems in Wales, in Scotland, in England, and in Northern Ireland. It is a sad fact that in Wales, under the leadership of members of the Labour party, the Welsh national health service has been failing patients and letting people down. I care about that.

I also care about the patients who come to see in my surgery. They include Mariana Robinson, who has been speaking out in national newspapers over the past few weeks. I did not ask her to go the press; she came to see me to ask how she could tell the story of the scandalous treatment that she has been receiving. She was treated very well in a nearby hospital in England but then told that she could no longer have that treatment because funding was not available and she would have to be treated in Wales.

Only a few weeks ago, I spoke to a patient who had been suffering from cancer. She had been told that she was terminally ill and would not last more than a few months. She believes that she was, in effect, written off by the national health service in Wales. She found out about experimental treatment in England and accessed it. She is still alive. Her cancer appears to be in remission at the moment, and I wish her all the best. She obviously wants to continue to receive this experimental treatment in the same area, Newcastle, yet she too has been told that there will be no further funding for her.

There has always been a problem in getting cross-border funding, but it seems to have got a lot worse in the past 12 months, when a decision was taken somewhere along the line that meant that virtually anyone with an illness in Wales would have to be treated in Wales. I believe that this is part of the whole National Assembly mindset about doing everything in Wales because it feels that it can do it better.

[Mr Mark Williams]

Does my hon. Friend agree that we should not characterise this as an issue that affects only the borders of England and Wales? I can think of examples of constituents in Ceredigion who have been unable to access services in Gobowen and Frenchay hospitals for exactly the reasons he suggests.

[David T. C. Davies]

The hon. Gentleman is absolutely right. He will have to forgive me; I have been looking at this more from the perspective of a Member of Parliament in a border area where many patients find it much easier and quicker to access hospitals in Hereford—as they have for rheumatology, for example—or in Bristol, but it affects the whole of Wales because health care is becoming a more specialised matter. In an area of 3 million people, we will not have all the specialists we would like, and that means that there will always be those who need to travel in order to get access to the best on offer.

Wales Bill

Mark Williams Excerpts

Wednesday 30th April 2014 Commons Chamber

[Owen Smith]

No. We all want to get on with the serious business before the Committee, not nonsensical point-scoring.

These are probing amendments. They explore the extent to which the Government agree with us that, in principle, it should be with the consent of the National Assembly that changes are made to elections that affect it.

[Mr Mark Williams (Ceredigion) (LD)]

I, too, am glad that these are probing amendments. I very much agree with the principle that the hon. Gentleman is establishing that these responsibilities should be devolved to the National Assembly, but what safeguards does he envisage operating there to ensure that gerrymandering, of which he has, sadly, accused the Government, could not occur in the National Assembly?

[Owen Smith]

The clear principle to which we are responding with these amendments was outlined by the Welsh Government in their response to the Green Paper produced two years ago. For the information of the Committee, that stated that

“no change to the Assembly’s current electoral arrangements should be made without the Assembly’s consent. This is the fundamental constitutional principle in issue. It is a necessary consequence of a constitution based upon the principle of devolution.”

That is a clear expression from the Welsh Government on the centrality of their view in any changes to legislation which affect the elections to their Chamber—to the Assembly in Wales. That is something we wish to explore today with the Government.

Clearly, the Bill arises from the shift to a five-year fixed-term Parliament for this place. Three separate pieces of legislation needed to be amended as a consequence—the Scotland Act 1998, the Northern Ireland (Miscellaneous Provisions) Act 2014, and now the Government of Wales Act 1998. Labour is not opposed to fixed-term Parliaments, as the hon. Member for Forest of Dean (Mr Harper) will recall. In previous manifestos, including the last manifesto, Labour has consistently pledged to shift to fixed-term Parliaments, but we have consistently said that a five-year fixed term for any institution was too long.

--- Later in debate ---

[Mr Harper]

The hon. Gentleman says that there are 150, and I do not think that that is actually the number, but the point is that even with the number of appointments we have made, four years into this Parliament the number of Conservative peers has only just equalled the number of peers representing the Labour party, despite the fact that our commitment was to make the other place more accurately reflect the result of the general election. That reflects the enormous number of appointments made by his party when it was led by Tony Blair and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). That does not detract from my point, however. I wanted to reform the other place and to reduce the number of Members in both this place and the other place. I wanted to reduce the cost of politics and I am sorry that we were not able to do so, but I will not take any lectures from the hon. Gentleman, because he and his party did not support our legislation and they made sure that that reform could not happen—more’s the pity.

[Mr Mark Williams]

I want to return to the issue of the amount of space between electors that was mentioned earlier, not just in relation to our capacity—I have 600 family farms in Ceredigion, which covers a big rural area—but, critically, in relation to our constituents’ capacity to access us. That takes us back to the point about the hon. Gentleman’s amendment. Going down the route of having a list system with a list made up of anonymous people would, I think, be a retrograde step, as evidenced by what the hon. Member for Cardiff North (Jonathan Evans) said about anonymity, distance and how that will ultimately mean that we will fail our constituents.

[Mr Harper]

The hon. Gentleman makes some very good points, and I acknowledged them in response to my hon. Friend the Member for Cardiff North. I said that that was why I wanted the review to consider both the advantages and disadvantages. We need to consider them because the proposals I brought before the House to reduce and equalise the number of Members in this place clearly had an impact on the number of parliamentary Westminster seats in Wales, reducing the number from 40 to 30. We decided to decouple the number of constituency seats for this place from the number in the Welsh Assembly, but it seems to me that if we are going to consider the number of Members and if the trajectory of the number of Westminster Members is going down, we should at least consider how many constituency Members there should be in the Welsh Assembly. If that number moves downwards, as I think it probably ought to, consequences will clearly flow from that for the size of the regions and how we group them. We must also build in a process whereby we can change the number of seats as the population increases, decreases or moves to ensure that that equal representation continues.

Setting up the independent review enables all those issues to be considered properly. A report to the Secretary of State can then be produced and laid before both Houses of Parliament so that a proper decision can be taken. The Silk commission might well be able to consider all these issues in the further work it will undertake, and when I listen to the Minister’s response I might find that the amendment is effectively redundant. However, the issues are worthy of consideration.

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[Jonathan Edwards]

That relates to some of the points the hon. Member for Ogmore made earlier. My position has always been that any reduction in the number of Members of Parliament must be complemented with the transfer of significant further fields of power to the National Assembly, as happened in Scotland. Perhaps a more interesting context is the Williams commission, which has been set up by the Welsh Government to consider public service governance and delivery across Wales and, in particular, the number of local authorities. There seems to be a move towards reducing the number of councils and, therefore, councillors. Perhaps that might provide a better context for the debate on the number of AMs in Wales, rather than the number of MPs.

[Mr Mark Williams]

Given the timing of the Williams commission’s discussions on local government reform, does the hon. Gentleman not think that the amendment would be better placed in our manifestos—my party has already signed up to the reforms recommended in part II of the Silk commission—and debated at that time, rather than now?

[Jonathan Edwards]

The Minister made that point to me before the debate, but this legislation provides an opportunity now. Rather than making the case either for more Assembly Members or for fewer, the new clause essentially states that when the time comes to make that decision, it should be made by the National Assembly, not the House of Commons. It is a point of principle about where power lies in these matters. Given the shadow Secretary of State’s comments when he intervened on me earlier, I look forward to the Labour party’s support when we vote later—[Interruption.] Well, that is exactly the point.

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[Owen Smith]

That may well have been foreseeable. Labour has acknowledged that it was a mistake to draft the legislation in such a fashion that it became possible for would-be Members of the Assembly to nest like cuckoos in individual constituencies for a period, anticipating their entry to the Assembly via the back door. However, we did not imagine that the measure would be used so shamelessly as it was by parties in the Secretary of State’s Clwyd West constituency.

[Mr Mark Williams]

Has there been the same acknowledgement that such a measure was a mistake for elections to the Scottish Parliament or the Greater London authority, in which dual candidacy is still permitted?

[Owen Smith]

The hon. Gentleman makes a good point, and we should consider this matter right across the piece. The evidence of elections in Wales that is before our eyes, particularly in Clwyd West, but in other seats as well—Llanelli springs to mind, where wannabe Assembly Members perched for a significant period, only to contest the seats under first past the post—suggests that the measure will be abused. It has not of course been abused elsewhere, but it has been abused in Wales. That is why we as representatives of Wales, who were then in government but are now in opposition, are seeking to prevent this Government from amending the law for Wales so that we guarantee that such sorts of abuses do not take place in future.

[Mr Williams]

If the principle runs so deep and the risk of abuse is so great, surely the hon. Gentleman should talk to his colleagues in Scotland and London about reforming the systems there, rather than picking—quite frankly—on the National Assembly for Wales and the people of Wales.

[Owen Smith]

As all hon. Members do, I talk regularly to colleagues in other parts of Britain, but we are now addressing legislation that relates to Wales. The evidence relating to Wales that is before our eyes—from recent history in the Secretary of State’s own seat—suggests that there is a problem there and that the measure has been abused. As best we understand it, public opinion also supports my contention that the system should be retained and that the proposed ban should not be lifted.

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[Owen Smith]

It was indeed commissioned by my dear and hon. Friend the Member for Caerphilly (Wayne David), but the Bevan Foundation, as the Secretary of State will know, is a non-aligned charitable foundation. It would surely contest quite vigorously the implication—which I am sure he does not mean to make—that it is in any way aligned to the Labour party.

Of course, it is not just evidence from the Bevan Foundation that is important. International evidence suggests that this form of gerrymandering is not supported by the public. In New Zealand, for example, public opinion research conducted by the independent review committee, which is part of its Parliament and appointed to examine the electoral system, found that one key criticism was that it was possible for MPs to be defeated in an electoral contest but returned to the House through their position on the list—clear evidence that it is not just in Wales that people are concerned about that.

In fact, it is not just in New Zealand that there are concerns. In New Brunswick in Canada, an independent commission endorsed the ban on dual candidacy stating:

“The Commission heard that in some jurisdictions where candidates are able to run simultaneously on both ballots, voters are displeased with the case where a candidate is not successful in a single member constituency, but is elected anyway by virtue of being placed on the top of a party’s list.”

Evidence from two notable democracies—Canada and New Zealand—shows that it is not just those in the Labour party and in Wales who are worried about that process.

Of course, it is not just Labour Members who have been concerned about this issue: it used to be a concern of Members on both sides of the House. For example, Lord Crickhowell, a former Conservative Secretary of State for Wales, has said that the arrangements were “really pretty indefensible”. I would have thought that was a clear statement, but the current Secretary of State clearly does not agree.

Perhaps Liberal Democrat Members agree with the Chief Secretary to the Treasury who said when we last debated this in 2006:

“I should also point out that the Secretary of State for Wales has said that if the Commission had considered what he called the systematic abuses carried out by list members in Wales”—

which I have described here today—

“he would have reached the same conclusion that we have”—

“we” in that case being of course the Liberal Democrats—

“namely that a ban on dual candidacy is the only effective solution.”

We therefore have many examples from across the world, from Wales and from across the House of people’s concerns about the way in which the system has been abused.

[Mr Mark Williams]

The hon. Gentleman mentioned New Zealand and the international precedents that he asserts back his case. Is he aware that the final report of the commission that looked into the system in New Zealand concluded:

“It is proper and desirable…that political parties can protect good candidates contesting marginable or unwinnable electorates by positioning themselves high enough on their list to be elected”?

The New Zealand experience resulted in the ban being thrown out.

[Owen Smith]

I am aware of that: the point that I was making is that concern is felt about this issue across the world. It is not a narrow, partisan point: it has been widely discussed in other jurisdictions where this or similar systems have been applied. It has been suggested that this only applies in Wales, but that is not true. There are similar election arrangements in several Asian countries, including South Korea and Taiwan, where they have a similar ban on such behaviour.

[Mr Williams]

The key point is that the New Zealand experience validated the approach that the Government are taking in clause 2.

[Owen Smith]

I understood the point that the hon. Gentleman was making: I was merely pointing out the significant concerns in New Zealand that remain.

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[Mr Mark Williams]

I congratulate my hon. Friend and the Wales Office on their work on this matter. I endorse the principles behind the Silk commission and the legislation. Although my hon. Friend alluded to Silk, he has not yet mentioned the principles behind the lockstep and not giving the Welsh Government the capacity to vary rates between the bands. Some of us still have concerns about that.

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[Jonathan Edwards]

That is the crux of the argument, and the division between the Labour party and my party. My view is that we should empower the National Assembly and have a mature debate in Wales about what the level of taxation should be. I think the hon. Gentleman is aware of where my political conscience lies—I tabled an amendment to the Finance Bill to reinstate the top rate to 50p. Let us have the debate. Let us trust our Assembly Members to have the debate and let us see the National Assembly mature. The one thing that devolving responsibility for these powers will do is lead to the maturing of the Assembly. Hopefully, we will see the growth and development of our democracy in Wales.

When the Welsh Affairs Committee carried out the pre-legislative scrutiny of the Bill, we had independent witness after witness—I hasten to add that my hon. Friend the Member for Arfon (Hywel Williams) had taken over my role in the Committee for that period, as I was enjoying my paternity leave with my son Llywelyn—giving evidence, except of course the Secretary of State and Treasury Ministers, arguing that the lockstep should be removed. Those giving evidence included the leaders of all the parties in the Assembly, not least the leader of the Liberal Democrats and the Conservatives in Wales. Several distinguished economists, academics and experts, as well as the Chair of the Select Committee on Political and Constitutional Reform, also gave evidence. When the Welsh Affairs Committee visited Scotland following the initial Silk report, there was much excitement about its proposals. Academics, economists, civil servants, Ministers and Back Benchers in the Scottish Parliament were all in favour of Silk’s proposals for Wales, as opposed to what they have in the Scotland Act 2012.

I need not remind Labour Members present that the Labour First Minister, Carwyn Jones, said that the lockstep is a “Tory trap” and that it should be removed. He said the lockstep was “a long way short” of what was considered to be good for Wales, adding that

“binding the rates together is not right for Wales”.

That is a clear indication of the need to remove the lockstep on income tax varying powers.

We in Plaid Cymru are seeking, through amendment 21 and several other amendments, to maintain the integrity of the original cross-party Silk commission recommendations. We believe that the Welsh economy needs that sensible package of reforms in order to increase its ability to bring about economic growth and create jobs. We believe that it is a necessary tool, which will help us to begin to rebalance the economy of the British state by giving greater power to the nations and regions, and will help Wales to begin to lift itself from the bottom of the UK economic league table.

In its present form, the Bill requires Wales to hold a referendum on the lockstep model of income tax and win it in order to gain access to the higher limit applying to borrowing to fund investment. We believe that Wales needs access to that money in order to invest sensibly in infrastructure, secure a good return on its investment, and provide jobs that will have a beneficial effect on the state of the Welsh economy. We are all mindful of the huge cuts in its capital budget that the National Assembly has suffered under the coalition Government.

Given that the lockstep was not the compromise agreed by the parties during the Silk commission’s deliberations, it would surely make more sense to devolve the model without the need for a costly referendum. It is simply an income tax sharing model, with a 90-10 split between the United Kingdom and Welsh Governments. Giving the Welsh Government the ability to vary tax is a theoretical exercise that, as the Treasury well knows, cannot become reality with a lockstep—hence the strings that are attached in the Bill. The big prize of what we propose would be the increased borrowing capacity that I believe is required to help the Welsh economy to regenerate and renew itself.

It is clear that all the other parties are now putting narrow self-interest ahead of the Welsh economy by attaching conditions and caveats to Wales’s gaining of greater fiscal and financial powers. The Tories and Liberal Democrats have their condition of the lockstep, while Labour has its caveat in regard to reform of the Barnett formula, on which its members continue to contort and refuse to commit themselves despite citing it as a precondition for greater financial powers for Wales.

As for the debate in Wales, Andrew R. T. Davies and Kirsty Williams have announced some exciting tax policies that they wish to pursue in relation to the ability to vary taxes. Unfortunately, their colleagues down here in London are completely undermining what they have pledged to the people of Wales in various policy announcements. That is a big hit to their credibility, which may be why the Secretary of State introduced the lockstep: perhaps he wanted to undermine Andrew R. T. Davies.

There has already been much public debate in Welsh civil society about the issue of the lockstep and the power to vary income tax bands individually in Wales. There has been controversy as the lockstep row has engulfed the Conservatives. The Welsh Secretary has claimed that the mechanism would not prevent Welsh Ministers from using the powers—although they have not been used in Scotland since 1999—and has suggested that a 1p cut across all three bands would increase Wales’s competitiveness, a claim which, according to the Welsh Government, would cost £200 million a year. Meanwhile, the leader of the Conservatives in the Assembly rejected the lockstep in his submission to the Welsh Affairs Committee hearing on the powers, prompting a damaging fall-out with the Secretary of State. All the Tory Assembly Members were seconded down here to No. 10 Downing street to try to repair some of the damage.

We are often given the impression that it is the Treasury that does the overruling in all these matters. If Scotland does not have it, Wales surely cannot have it. However, the ability to vary income tax bands individually, as per Silk, would truly allow for the ability actually to vary income tax in Wales, and would be a significant step in the maturing of our democracy. As I said in our first debate this afternoon, it would provide a very positive narrative for the Westminster parties in relation to Scotland, demonstrating that they were serious about reforming the settlement of the UK and going beyond what Scotland has at present.

[Mr Mark Williams]

As the hon. Gentleman knows, I have a great deal of sympathy with him in regard to the lockstep, and, indeed, with one of his Select Committee colleagues who voted to remove it from the Bill. However, he is ending his speech—I think it is coming to an end: I think he has reached the last sheet—on an incredibly negative note. Does he accept that, in ensuring that our National Assembly has fiscal accountability, the Bill still represents a huge advance on the status quo? I sincerely hope that he will support it on Third Reading for that reason, whatever happens to his amendment this evening.

[Jonathan Edwards]

Of course the hon. Gentleman is right. We do support the Bill, but we want to use the opportunities provided by the Committee stage to strengthen and improve it. In my view, the lockstep is one provision that needs urgently to be removed. If the United Kingdom Government are determined to introduce it, let us devolve it in the Bill and then have a referendum on its removal. Why have a referendum on the lockstep mechanism?

The Secretary of State has spoken before of his belief that Wales needs the ability to vary income tax in order to be competitive—spoken as a true Conservative—but then does not offer a power that actually allows for any variation in income tax. That is the huge contradiction in the Bill as it stands. It is time for him and his Government to put their money where their mouth is and support our amendments—I am not holding out much hope—and for the Labour Members present to support what their party in Wales is saying by supporting us in the Lobby later.

Business Lending

Mark Williams Excerpts

Tuesday 8th April 2014 Westminster Hall

[Andrew George (St Ives) (LD)]

It is a great pleasure to have secured this important debate, Mrs Riordan. The issue has been pressing for many businesses in my constituency, and it has been raised on a number of occasions by me and by others in the House because of concern about the change of relationship between businesses and what used to be trusted advisers and supporters in banks. Now that relationship has changed—I hope not irrevocably, but many people fear that it is irrevocable—because of the way in which banks have treated small businesses in recent years.

Banks should be business-friendly, but the evidence is that they have behaved like parasites and engaged in sharp practice by mis-selling complex interest rate hedging products or hidden swaps that they will have known were massively to the detriment of the small businesses that they flogged them to. Instead of doing what small businesses do well and what the Government, those on the Government Benches and others who support the Government want businesses to do, which is to grow the economy and create jobs, thousands of small businesses have been held back and others put out of business altogether. But their being put out of business suits the banks in these circumstances, because every company that they lend to and that they can drive into administration has assets that they can sell and becomes a company that, conveniently, cannot seek redress from the bank, particularly in the current climate.

[Mr Mark Williams (Ceredigion) (LD)]

I congratulate my hon. Friend on securing the debate. In his analysis of this problem, is he of the view that the banks were clearly targeting specific businesses—asset-rich businesses? I ask that because my experience in my constituency is that the hotel sector, people owning property, property management companies and, above all else, the farming sector were really hard hit, particularly in the sales of unregulated tailored business loans.

[Andrew George]

My hon. Friend makes a very acute point. It does seem to me that in the many cases that I have taken up—no doubt he has done the same in his constituency—there were these rather dodgy business loans and, of course, the swap agreements embedded in them. That is the critical thing. There do appear to be very significant assets within the businesses themselves, and no doubt that will have guided the banks as to which businesses to offer the loans to.

I gave my hon. Friend the Minister at least some notice of the areas that I would be covering. In particular, I would like to ask her how the Financial Conduct Authority can justify the exclusion of at least one third of the companies that were being looked at and that were mis-sold these products because they are deemed by the FCA to be “sophisticated”. What was the basis for that—in my view, it was an arbitrary basis—and how can it be challenged?

What view do the Government take of the reasonable claim, in my view, by companies to which the mis-selling of these products has caused detriment that they could seek redress for “consequential loss”? It is suggested that some banks are seeking to reinterpret the law in this area, so that it is difficult for those companies to pursue consequential loss.

What happens to those businesses that were in effect forced into administration or liquidation by the mis-selling? At present, they appear to have no redress at all. Surely that cannot be right. I hope that the Government will encourage the FCA at least to have that matter looked at again.

Does the FCA review and redress process take into account or exclude the matter of “ongoing facilities” provided by the banks—the ongoing facilities that are made available through the banks?

Will the Government now authorise an inquiry into the sale of all hidden swaps—the tailored business loans, the embedded swaps and so on—sold to small and medium-sized enterprises by the banks since about 2001? That is when this pattern of activity was identified.

This is a separate but no doubt related point. What assistance is there for entrepreneurs who are trying to secure a mortgage, or even complete a rent check, for a home now that the self-certification system has been scrapped? Many small businesses and, in particular, new businesses that are starting up—we want to encourage people in those businesses—cannot secure a loan to advance their business.

I fully appreciate that the Government have made significant strides in recent years with the establishment of the business bank, the enterprise finance guarantee scheme, the enterprise capital fund, funding for lending, the growth accelerator and many other initiatives, which have been significant and helpful to the business sector. I certainly hope that those will prove to be a success in the months and years ahead. My primary focus today, however, is that we still have a legacy of a problem, which ought to be erased from the business lending environment. I hope that when the FCA completes its review process, it will ensure that the banks engaged in such shoddy practices are brought to book as quickly as possible, so that the companies that have suffered detriment may resolve their redress equally quickly.

Inevitably, I come at the problem from the perspective of my constituency, so I probably need to paint a picture of the west Cornwall and Isles of Scilly constituency of St Ives. Not only is it the most attractive constituency in the country, but it has a large number of very small businesses. There are no major companies—no car plants, refineries, major manufacturers or head offices of multinational companies, as there are in many other constituencies—and there are instead about 7,000 enterprises. That figure depends on how we define a small business, but certainly includes sole traders and medium-sized enterprises. They are multifaceted and many-talented businesses; they not only throw pots and manage satellites, but engage in basket weaving and international website design, and they include hoteliers, caterers, bakers, farmers, fishermen and fishmongers.

In order to be successful, as well as having to work extremely hard, the people in those businesses often have to have many other talents, such as in marketing, customer care, bookkeeping, or IT and other skills. Few of them, however, are financially sophisticated. Most of them used to assume that they could trust the bank of which they had loyally been a customer, in many cases for decades, before they were mis-sold those products. Surely banks are there to help. Do banks not have a shared interest in businesses succeeding? Surely banks would not engage in sharp practice or sell a small business something that they knew it would regret. I am afraid to say, however, that I and many other Members have seen that that is simply not the case.

The banking sector seriously let down small businesses and completely demolished any of the trust that used to be fundamental to the relationship between them and their banks. Would the banks do the same to Tesco, BP or Unilever? Of course they would not, and we know that they would not; they are simply taking advantage of small businesses. The banks know that small businesses do not have the sophistication, and that they can run rings around them, bullying them into the kind of agreements that put some of the businesses out of business and left many of them struggling to survive. I have taken up many cases, as other MPs have done, and my eyes have been opened to the shady dealing.

Colin Phillips of the Coasters tea shop in St Ives, for example, was recently put out of business by that bank practice. He saw his business sold from underneath him, without any consultation, after he was mis-sold a loan by Clydesdale bank more than five years ago. There are many other examples, which I could name, as well as some I cannot name. They have been devastated and damaged by the banks in that way. One company, Seasalt Ltd, was started in Penzance in my constituency in 1981 by Don Chadwick and is now run by his three sons, Leigh, David and Neil. It is a successful UK company. It is the first business ever to have its clothing certified by the Soil Association and it has won the Queen’s award for sustainable development, making it the first fashion company to do so. It has been very successful, it has won many awards and it is growing.

However, Seasalt could have grown a great deal more. It entered into a five-year interest rate swap agreement for £805,000 in April 2008 with HSBC. I am told by Leigh Chadwick that the company did not have a choice about the swap; it was a condition of the loan that it took the “interest rate protection.” The bank failed to make proper inquiries to ascertain the company’s level of knowledge and understanding of the risk inherent in the IRSA. The company was led to believe that interest rates were going to rise. Although the company had never previously taken a fixed-rate loan, the owners wrongly thought that HSBC, its trusted banking partner for 17 years, was acting in their mutual interest; otherwise, the owners thought, why would it be making a swap agreement a condition of a loan?

At the time, there was significant equity in the business—that relates to the point that my hon. Friend the Member for Ceredigion (Mr Williams) made—and the company also had access to additional external funding. The swap agreement was unnecessary and the bank’s motive for making it a condition of the loan was profit, not risk mitigation. The cost of breaking the swap was never explained or illustrated. The bank knew that there was a possibility that the loan could be repaid early, and yet it of course made it difficult for the company’s owners to do so. It confirmed in writing that there would not be any early prepayment or early termination costs, which was wrong. The bank failed to disclose that the IRSA created a contingent liability that would affect the company’s credit line. The IRSA had a detrimental effect on the company.

The company complained in 2012, but HSBC has done its utmost to fight its claim, despite the strength of the company’s case. While the company is preoccupied with trying to get proper and just redress, it is of course not focusing on growing its business and creating jobs. It is an appalling waste of money for UK business, given that the Financial Services Authority found that 90% of the swaps had been mis-sold.

[Mr Mark Williams]

My hon. Friend gets to the nub of the issue affecting businesses that are within the Government’s redress scheme. The Financial Conduct Authority’s redress scheme is very welcome and it has led to resolution of some cases. However, I have constituents who have been waiting for more than a year now to have resolution. As he says, that puts a huge amount of pressure on their businesses, let alone the tailored business loans—the embedded swap products—that are not being considered yet.

[Andrew George]

I am sure that the Minister heard my hon. Friend’s comment and will take it into account in her response.

The fact is that Seasalt is still waiting for its interest swap issue to be resolved, more than 21 months since it lodged a complaint about it. HSBC has done its best, first, to resist the redress process and then to slow it down, although the company’s owners have been told that the matter will be reviewed by the end of next month.

This issue has unquestionably cost thousands of jobs. In the case of Seasalt alone, it has estimated that the cost to it is 20 jobs, which it could have created if it were not for the impact that this swap has had on a company of its size; we are not talking about a very large company. Not unreasonably, Leigh Chadwick asked me:

“When will criminal proceedings be brought…?”

The Tomlinson inquiry suggested that in some cases this matter should be a criminal matter. As Leigh asks:

“When will criminal proceedings be brought against the bankers who have perpetrated this fraud?”

Equally reasonably, Leigh makes the point that this issue needs to be related to the issue of bankers’ bonuses. He fails to understand how a business—particularly one that is, after all, taxpayer-funded—can continue to pay huge bonuses when it is making losses. He says that he is sure that the bank would baulk at renewing Seasalt’s facilities if it made a loss but started paying its owners huge bonuses in the process.

I fear that the process of establishing a decent relationship between businesses and banks may have changed irrevocably. Seasalt has said that instead of banks being trusted advisers to SMEs, their relationship is like that with an untrustworthy supplier. The Government, the FCA and other regulating authorities should look at whether the regulations need to be significantly stepped up. What are the Government doing to stop banks side-stepping the EU bonus caps? What steps are the Government taking to increase the FCA’s power and to ensure that it acts in the best interests of SMEs and customers, and not the service providers?

I could describe many other cases, but the Minister needs time to respond. I mentioned the difficulty that many small businesses in my constituency, particularly new businesses, face because of removal of the self-certification scheme for those seeking a mortgage. It seems wrong that businesses that are employing people cannot get a mortgage when their employees can. I hope that the Minister will look at that.

The relationship has clearly broken down. The banks have behaved very irresponsibly with sharp practices like parasites on small businesses. I hope that the Government will take the bull by the horns and ensure that the FCA drives the review process and that we get satisfaction for our small businesses.

HMRC Inquiry Centre Closures

Mark Williams Excerpts

Tuesday 4th March 2014 Westminster Hall

[Ian Lavery]

I agree that the Government are going about it in entirely the wrong way. PCS, the union representing the HMRC workers, has agreed with HMRC that all members should have the opportunity for a formal one-to-one to help them consider their options. However, HMRC has withdrawn from that agreement in an attempt to pressure people into making decisions without information about applying for jobs and voluntary exits. That shows contempt for staff and puts huge pressure on people to leave by demoralising the work force.

[Mr Mark Williams (Ceredigion) (LD)]

I have four constituents who work at the Aberystwyth office and who will be affected in the way that the hon. Gentleman suggests. Before he moves on from customer service, does he agree that there are particular concerns about how the new service, in so far as it is a new service, will be delivered in rural areas? Access will be denied to many of our constituents by virtue of the fact that huge tracts, in my case of rural west Wales, will be covered by a diminished service, and arguably a more costly one.

[Ian Lavery]

I will certainly come to that later in my speech. The hon. Gentleman makes a valid point.

I am fairly positive that the Minister—perhaps he can indicate that this is the case—met PCS representatives this morning.

Tourism (VAT)

Mark Williams Excerpts

Tuesday 11th February 2014 Westminster Hall

[Mr Mark Williams (Ceredigion) (LD)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I, too, congratulate the hon. Member for South Down (Ms Ritchie) on securing this debate. She spoke as a Member for Northern Ireland, but she also took a UK perspective, and I will add a Welsh dimension to the debate. I suppose that the benefit of having a limit of three and a half minutes to speak is that we will not have huge opportunities to advertise the merits of our own constituencies, although both the hon. Members for Totnes (Dr Wollaston) and for Ynys Môn (Albert Owen) did a good job in advertising theirs. I look forward to going to Totnes to meet the members of the South Brent women’s institute in a week or so.

Ceredigion speaks for itself: there are huge opportunities for growth in our tourism sector. I reiterate the comments that have been made about flooding. Many Members will have seen on their TV screens the great Victorian promenade on our seafront in Aberystwyth being battered by the storms. That has caused significant damage, but the message from me, as from others, is that businesses in my area are open for business. I concur with what the hon. and learned Member for Torridge and West Devon (Mr Cox) said about the message that a reduction in VAT would send out to those businesses that have suffered recently.

In Wales, of course, the responsibility for tourism is shared—there is a partnership between our National Assembly Government and this place—but the taxation regime across the UK directly impedes the development of the tourism sector. Two years ago, the British Hospitality Association commissioned Oxford Economics to produce a report that specifically examined the impact of VAT on the tourist sector in Wales. The report was appropriately named, “Hospitality: driving local economies” and showed how hospitality underpins communities. It highlighted the importance of tourism and hospitality to jobs in Wales.

In Wales, more than 112,000 people are employed directly, and another 56,000 people are employed indirectly, in tourism and hospitality. In my constituency, 3,000 people are employed in the sector, which is about 8% of total employment in my constituency. If we take the big players out of our economy—our universities, our NHS and our local government—tourism is at the top of the list of employers.

As I say, 8% of people in Ceredigion are employed in the sector, and as we heard from the hon. Member for South Down, potentially another 80,000 jobs could be created in tourism. Therefore, 10,000 jobs could be created in Wales, which would mean 2,000 new jobs in my constituency. In turn, that would create opportunities for young people and keep people in our communities, rather than seeing them move away. The key phrase is giving the right support to the tourism sector, and I am very much of the opinion that the sector would be boosted if the 5% VAT rate was introduced.

My hon. Friend the Member for Wells (Tessa Munt) talked about the importance of caravans in her constituency, and they are important in my constituency, too. I will quote the Prime Minister, who has said:

“There are always good cases for cutting VAT on individual items. The leisure industry and the hotel industry make a very good argument”.

Of course, he is right on that and the Government were right to take the action that they took on the VAT rate for static caravans. I and many other Members who are here in Westminster Hall today presented petitions on that issue, making the point about the need to reduce VAT to stimulate our local economies, and of course that is what we are all calling on the Government to undertake to do today. We do so in the expectation that that move would be costly in the short term but that, further down the road, it would be cost-neutral, as well as being of huge benefit to the national economy and particularly to our local economies.

Fairness and Inequality

Mark Williams Excerpts

Tuesday 11th February 2014 Commons Chamber

[Jonathan Edwards]

I am grateful to my hon. Friend for that valuable contribution. I intend to develop some of those themes later in my speech.

What a pity that the Labour party is so completely removed from the vision of Keir Hardie today. Last Wednesday, during a meeting of the Welsh Grand Committee, the shadow Secretary of State for Wales, the hon. Member for Pontypridd (Owen Smith), made one of the most depressing speeches that I have heard since being elected to serve the people of Carmarthenshire. He returned the Labour party to the dark days of the 1970s, when it was clearly the most anti-devolution party in Wales. His speech was Kinnock-esque, and I certainly do not mean that as a compliment.

[Mr Mark Williams (Ceredigion) (LD)]

I share the hon. Gentleman’s concern. Was that not made all the worse by the fact that until then there had been a consensus among all four political parties in Wales about the inevitability of the movement towards devolution, which was torpedoed by those on the Labour party’s Front Bench last week?

[Jonathan Edwards]

The speech made by the hon. Member for Pontypridd was a truly staggering intervention in the Silk commission debate, not least because only a year or so earlier, the very same Member and his colleagues voted in favour of the very same proposals for Scotland, which were in the Bill that became the Scotland Act 2012. I find it staggering that they now believe that those measures, if applied to Wales, would completely deconstruct the United Kingdom.

I could travel much further on my historical journey, but I shall end it now by giving a mention to my political hero, D.J. Davies.

Interest Rate Swap Derivatives

Mark Williams Excerpts

Thursday 24th October 2013 Commons Chamber

[Mr Mark Williams (Ceredigion) (LD)]

It is a privilege to follow the hon. Member for Llanelli (Nia Griffith). Like many hon. Members, I pay tribute to my hon. Friend the Member for Aberconwy (Guto Bebb), who has shown immense leadership and tenacity on this case—not just in this debate, but more generally.

If any of us had thought that the constituency surgery meetings that we have held on this issue were unique, the turnout for the debate has illustrated the enormity of the problem. We should repeat, repeat and repeat again the point made by the hon. Member for North East Derbyshire (Natascha Engel): of the 30,000 cases, only 32 have been redressed.

I was going to talk about the inadequacies of the redress scheme, welcome though was its initiation and the progress that has been made, but time will limit what I can say about that. However, I will talk later about the fundamental omission of tailored business loans, which was alluded to by my hon. Friend the Member for Aberconwy.

My hon. Friend mentioned a constituent of mine, Mr Mansel Beechey of the Llew Du hostelry in Aberystwyth. I think that my hon. Friend has spent a bit more time in that particular pub than I have over the years. Mansel Beechey and many small business owners like him have been the backbone of the Ceredigion economy, but there have been times when I have thought that we were being targeted. The number of tourism and agricultural businesses that have come to me about these issues has been frightening. Bully-Banks helped us by putting an advert in the local newspaper about the scandal and many more cases came to light.

[Roger Williams (Brecon and Radnorshire) (LD)]

Does my hon. Friend share my concern that there are yet more small businesses out there who are ashamed to come forward and say that they have entered into such products because they think that it is their fault, rather than that of the banks?

[Mr Mark Williams]

We need to knock that on the head immediately, because there has been a concerted effort by the banks to target certain businesses. There is no need for people to be ashamed, and my hon. Friend is right that many more cases are coming to light.

Huw and Jackie Roberts of Minhafan Estates, a property development business in Aberystwyth, are in the midst of the review. They went through the “fact find” interview stage of the review six months ago and are still waiting to hear from the bank or the FCA.

I want to talk about the inadequacy and even dishonesty of the subject access requests. A sheep farmer who came to see me obtained his subject access request from Barclays, but it included presentation documents that he was alleged to have been shown at the time of sale, which he had never seen before. History can be rewritten. The fear is that, in some of these cases, history is being rewritten by the banks.

Why is the FCA advising customers that the scheme

“can deliver fair and reasonable redress without them needing to hire lawyers”?

Many of my constituents are on the brink and cannot afford to hire a lawyer, but why is the FCA saying that?

Like my hon. Friend the Member for Aberconwy, I want to talk about alternative products. What is wrong with this form of so-called redress is that the banks get to propose what would have happened if they had behaved better. Despite the banks admitting that they have breached regulatory requirements, they are being given a second chance through the promotion of alternative products, so they have a second bite of the proverbial cherry.

Yesterday, my hon. Friend the Member for Aberconwy said that the cost of the review was £200 million, and he then told us that it had gone up to £450 million. Despite it costing £450 million to set up the review, only £2 million has been paid out in redress.

[Nia Griffith]

Does the hon. Gentleman agree that, in certain agricultural communities, there is a huge capital intensive cost, which takes a long time to repay? That is a particular problem for some of our constituents.

[Mr Williams]

That is a particular problem. The hon. Lady does not need to be reminded how perilous the farming industry is these days; some businesses barely have the capacity to survive.

People who have been sold tailored business loans have no protection because of a mere technicality. They have no guarantee of fair treatment from the banks. Most of my constituents who have been affected by hedge mis-selling have been sold TBLs, although I hesitate to say that they were sold them, because some of them were not aware that they were being sold them. Most of my constituents who are affected are out in the cold, so I return to the question that I have asked Treasury Ministers and the FCA, although I have received inadequate responses. I question how the FCA decides to interpret its principle-based regulation. I am talking specifically about TBLs from the Clydesdale and Yorkshire banks.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

My hon. Friend is making a powerful case and I concur with what he says about tailored business loans. One of my constituents, who is here in the Gallery, has been affected on a large scale and is paying £33,000 per month as a consequence of swaps. He needs to be brought into the scheme. In addition, he has a tailored business loan, and I concur that those need to be brought into the framework urgently.

[Mr Williams]

I concur with my hon. Friend. Many of us have cases like the one that she raises that suggest that TBLs need to be brought into this review or another review of some kind.

The FSA famously stated in “Interest Rate Hedging Products—Pilot Findings” that

“poor disclosure of break costs”

was one of

“the most significant issues in assessing the compliance of a sale”.

How is it possible that poor disclosure of break costs can constitute a mis-sale when the customer is buying a stand-alone product, with all that that implies, and yet there is no mis-sale if the bank buys the interest rate swap allowance, conceals it from the customer and then holds the customer liable for its terms and conditions? That is unjust nonsense. If a feature is worthy of regulation when it is contained in one product, why is it not worthy of regulation when it is contained and concealed in another product?

[Martin Horwood (Cheltenham) (LD)]

My hon. Friend is right to highlight break costs, which have been a serious issue for some of my constituents. Is he aware of court evidence given by a former bank employee who said:

“When pitching to a customer the most the…Sales Team would try to say on the subject was that there could be break costs if the swap is broken early. Providing the customer didn’t ask, we never went into any detail as to the likely level of these costs.”

Does not that underline how much of this debate is not about complexity or understanding, but about straightforward mis-selling?

[Mr Williams]

That goes to the heart of the argument. The banks and the ironically named relationship managers were trusted by our constituents, and that trust has been breached.

I have asked the FCA for its legal advice that supports the view that it should not regulate fixed-rate commercial loans. The response stated that it is not normal for the FCA to disclose its legal advice because, by so doing, it could be said to have waived its legal privilege more generally, making it difficult to resist broader disclosure, and thereby setting a precedent that would make it harder for it to resist disclosure in other cases. I am sure that that is crystal clear to everyone in the House—so much for the commitment to transparency.

The interest rate swap scandal has cost many businesses dear. I recently drove down one of the approach roads to Aberystwyth, the largest town in my constituency, to see another boarded up shop. That shop was not boarded up three weeks ago; it is boarded up now because of the issues that we are discussing. Many people had no concept of the product that they were pressured to buy. That applies as much to embedded swaps as to stand-alone products. I implore the Minister to reflect and to put pressure on the FCA to consider tailored business loans as part of the review. They are an enormous problem.

Women in Wales

Mark Williams Excerpts

Tuesday 16th July 2013 Westminster Hall

[Jessica Morden]

My hon. Friend makes a valid point. Young families, in particular, will be hit by the cumulative impact of the loss of the child care element of tax credits, the child trust fund and maternity grants.

In Wales, most part-time jobs are undertaken by women; 27% of public sector employees work part time and 85% of those are women. Although it is true that many women want to work part time, many others have no choice.

[Mr Mark Williams (Ceredigion) (LD)]

I have some sympathy with many of the points that the hon. Lady has made on the welfare reform agenda. On child care, does she acknowledge that the Government have announced a constructive package that will help many young mothers? The figures suggest that 5,700 people in Newport would benefit. Child care is a particular problem, and the Government are taking action. In a spirit of fairness, I am sure that she would acknowledge that that should be recognised.

[Jessica Morden]

As far as I can see, the action on child care is too little, too late. Many families in my constituency are struggling with huge child care costs, which are bigger than those in many countries around the world. The Government’s proposals will take time to filter through and will have no immediate impact on those families. In addition, the little bit of help that has been provided for child care is totally offset by the huge cuts to tax credits.

According to the Bevan Foundation report “Women, Work and the Recession in Wales”, the number of people in Wales who work part time because they were unable to find a full-time job has increased by 79% to one in five of all part-timers. In addition, the burden of unpaid work still falls on women. Child care responsibilities or caring for older people mean that many women have little choice but to work part time. Contrast the difference between the Labour Government in Cardiff, who are doubling the number of Flying Start places despite losing £1.4 billion from their budget, with the coalition in Westminster, who have cut the child care tax credit by up to £1,500 a year for low paid women while giving millionaires a tax cut of £2,000 a week.

In Wales, women make up two thirds of public sector employees, so the steady and sustained attack on jobs in the public sector has affected women disproportionately. In addition, the pay freeze has worsened the pay gap between men and women; the full-time pay gap now stands at 14.9%. In many parts of Wales, particularly in places such as my constituency, the public and private sectors are completely intertwined. If money is taken from public sector workers, less money will be spent in the local economy, which in turn hits the private sector. By affecting so many women in such a way, the Government are directly affecting the Welsh economy.

The living wage is one that meets the requirements for a basic quality of life and reduces families’ reliance on Government programmes for additional income. In 2012, it was calculated that 24% of all working women earn below the living wage and 62% of those earning less than the living wage are women. How do we stand in Wales? Wales has the second-highest proportion of people earning below the living wage in the UK, the highest proportion of part-time workers earning below the living wage and, at 44.5%, the highest proportion of female part-time workers earning below the living wage.

In Wales, many women are on zero-hour contracts, which were the subject of a debate secured by my hon. Friend the Member for Sunderland Central (Julie Elliott) in this Chamber last week. Recent UK estimates suggest that 97,000 people in Wales have such contracts, of which at the very least half will be women. I know from bitter experience, however, that Government answers to parliamentary questions on the matter are difficult to come by.

Labour wants universal credit to work, but even the impact assessment by the Department for Work and Pensions states that

“second earners may choose to reduce or rebalance their hours or leave work.”

As a result of pay inequality and time taken out of the labour market to raise children, fewer women tend to be primary earners in their households, so the policy will simply not work for many women. In addition, many people are concerned that women will be sanctioned because they struggle to find the child care to enable them to take a job. That question was raised in the Welsh Affairs Committee inquiry into the Work programme.

Government cuts are not only affecting women disproportionately but cutting off access to advice and legal support. At the same time as all the changes are being made to benefits, swingeing cuts are being made to advice services. Organisations such as Citizens Advice, Shelter Cymru and Consumer Focus Wales provide such services, but the sector is expected to lose approximately £3.36 million from various sources over the next 18 months, which is the equivalent of 50 full-time jobs. In fairness, the Welsh Government have recognised the importance of such services and recently provided £1.8 million of extra money to allow the organisations to adapt to the increased demand for their services.

My local citizens advice bureau in Newport, which does excellent work, has had 745 more cases this year than last, but that tells us only part of the story. The citizens advice bureau can only deal with the numbers for which it has funding and advisory capacity. The staff know that more demand exists, but they cannot meet that demand without additional funding. That is happening at a time when people need more help than ever before. As we all see in our surgeries, demand increases every week.

The changes to legal aid demonstrate yet again that the Government are willing to make cuts irrespective of their impact. I am already seeing heartbreaking cases in my surgery following the cuts to some family and civil legal aid. One mother of three children came to see me because her ex-husband had refused to return one of the children after a stay. The father has a high income but the mother is in receipt of benefits, so she sought legal advice but was informed that she does not qualify for legal aid. Because both parents are considered good parents, a court case will be required to solve the issue, but she does not have the money to pay for it. Her husband can have a solicitor but she cannot. She told me that

“the poor no longer have recourse to justice, only the well off.”

Unfortunately, she appears to be right.

Many victims of trafficking and domestic abuse will no longer be eligible for legal aid. According to research by Rights of Women and Welsh Women’s Aid, half of all domestic violence victims will not qualify for legal aid to help them and their children safely to separate from abusive relationships.

Legal Aid (Rural Wales)

Mark Williams Excerpts

Wednesday 26th June 2013 Westminster Hall

[Mr Mark Williams (Ceredigion) (LD)]

It is a particular pleasure, Mrs Brooke, to serve under your chairmanship this afternoon. We have an extra minute or so, for which I am very grateful.

I sought this debate to highlight the increasing number of concerns about the proposals to reform legal aid, following publication of the consultation document, “Transforming Legal Aid” by the Ministry of Justice on 9 April. I hope to obtain some reassurance from the Minister that, at the very least, the impact of the reforms on our constituents will be fully considered before changes are made.

The consultation, which closed on 4 June, outlines a number of reforms to the provision of legal aid across the England and Wales that are causing a great deal of concern. I responded to the consultation, as many other colleagues did, and tomorrow’s Back-Bench debate provides another opportunity to speak on the issue—if hon. Members only have a small bite of the cherry today, there is the opportunity for a bigger bite in that debate.

I wanted to focus on the effect of the reforms particularly in rural areas—in constituencies such as mine and in rural Wales generally—because I believe that that has been lamentably overlooked in the consultation. I worry that, if enacted, the proposals will have a devastating impact on access to justice for my constituents and on solicitors’ practices, and we must be aware that the significance of the reforms is such that, if enacted, there will be no going back.

Before addressing the proposals, I want to raise concerns about the consultation itself. First, as mentioned by the Welsh Assembly Government in their submission to the consultation, there was no mention in the consultation document of the Welsh language in accordance with the Welsh Language Act 1993. The Welsh Language Commissioner, Meri Huws, states in her submission letter:

“There are several references in this consultation to assessing the impact of the proposed changes on various groups as well as assessing the impact in accordance with the MOJ’s duties under the 2010 Equality Act. With regard to the Welsh language, there is no mention of it in the consultation’s documentation.”

What discussions have there been so far between the Ministry of Justice, the Welsh Language Commissioner and the Wales Office? I am glad that a colleague from the Wales Office, the Under-Secretary of State for Wales, the hon. Member for Preseli Pembrokeshire (Stephen Crabb), is present today. It strikes many of us that the specific concerns of Wales have been low down the pecking order.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

I congratulate the hon. Gentleman on securing the debate, and I declare an interest, having practised legal aid work as a solicitor and barrister. I support everything that he is saying, but it is worse than he described. As the consultation document was sent out in English only, the Ministry of Justice thereby has broken its Welsh language policy. It is only a mere afterthought, as, I am sure, is getting rid of all these firms. The proposal is for four legal aid firms alone to deal with legal aid in the whole of north Wales, and I am sure that it is just as bad in mid-Wales.

[Mr Williams]

I am grateful to the right hon. Gentleman for that intervention, which illustrates the huge degree of concern. The Government embark on consultations, and we can have a debate about whether they are genuine; I hope very much that this one is, as much needs to be said and changes need to be made. However, I have to raise the treatment of the Welsh language in this case. I see, as an English speaker representing a majority Welsh-speaking constituency—50% of my constituents do so, and in large parts of my constituency, larger percentages speak Welsh as their first language—that what has happened is an insult to those people. All Departments across Whitehall need to be mindful of that when they produce any documentation.

[Glyn Davies (Montgomeryshire) (Con)]

The hon. Gentleman is making a hugely important point to many of us who represent rural parts where the Welsh language is strong. Does he agree that the consultation simply has not been acceptable, and the principal reason is the attitude towards the Welsh language, not only in the consultation, but in the fact that there will be four firms, making it impossible for them to deliver the service and pay proper account to the Welsh language?

[Mr Williams]

I agree with my hon. Friend completely on that point, and I am grateful for both interventions. They illustrate points that I will make a little later in my speech.

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

I intervene briefly, simply to say that in answer to a question of mine the Under-Secretary of State for Justice, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright), stated that

“any criminal legal aid contract holder would be required to meet the obligations of the Welsh Language Act.”—[Official Report, 11 June 2013; Vol. 564, c. 280W.]

That sounds all right on paper, but does the hon. Gentleman share my concern that it is something of an afterthought?

[Mr Williams]

As I shall say later, the delivery in practice will be a different story. There is concern that the consultation period of eight weeks is too short and does not allow people fully to analyse the proposals, particularly when reflecting on the Government’s ambitious timetable not only to get the proposals authorised, but to start tendering the contracts by the autumn. Consultation is particularly critical in this case, given that the proposals can be enacted without further primary legislation, which is why it is opportune that we discuss such matters now.

[Jessica Morden (Newport East) (Lab)]

I congratulate the hon. Gentleman on securing the debate. In April, the Government cut some civil and family legal aid, the consequences of which I am seeing in my office, with many parents fighting custody battles where one parent can get a solicitor and the other parent cannot. Therefore, justice is denied and courts are getting clogged up. In light of those changes, does it not make sense for the Government to slow down and have a look at what is happening already where they have cut legal aid, before rushing into further changes?

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[Mr Williams]

I concur with much of what the hon. Lady says. This is about process, and what her constituents will find more difficult when they are faced, I think, with nine solicitors’ practices in the whole of Gwent is physically accessing legal aid, if it is available to them.

On the proposals themselves, the model is inappropriate for rural areas. The geography of our country is such that defendants will be allocated a solicitor whom they will find it extremely difficult, physically, to meet sometimes. The proposals do not take into account the vast distances and travel challenges across my area of Ceredigion and the rest of rural Wales. If a defendant from Newtown was allocated a duty solicitor in Llanelli, a meeting would require the defendant or solicitor to make a round trip of more than five hours—not to mention, of course, the challenges with transport links that we face in rural areas.

The reduction in firms that are able to bid for contracts will lead to huge delays in solicitors attending courts, or possibly a police station, and that has serious implications for the defendant. I understand from a local solicitor that, just before Christmas, GEOAmey—one of the private companies—transported a constituent of mine from Manchester to Aberystwyth but was unable to take the constituent off the prison van. It had to take him back, as it had brought only two members of staff, and at least three are needed to escort a prisoner. That vast journey, at huge expense, was a wasted opportunity. A future with a criminal defence system providing that level of service is a worrying one.

[Nia Griffith (Llanelli) (Lab)]

Will the hon. Gentleman give way?

[Mr Williams]

I give way for the last time—[Interruption.] Sorry, nearly the last time.

[Nia Griffith]

Does the hon. Gentleman agree that affording that transport is virtually impossible for many clients and that, if they were allocated different people on different occasions, which can happen with repeat offences, they could end up with several different firms representing them at one court hearing? Again, that would be massively wasteful.

[Mr Williams]

The hon. Lady pre-empts another of my later remarks. The relationship between solicitors and those repeat offenders is critical, and we risk losing that.

It is asserted that there would be four providers across the whole of Dyfed Powys. There would be real access issues, and are the proposed consortia feasible? As we have heard from hon. Members, the proposals plan to have four providers across the whole of Dyfed Powys, four across the whole of north Wales—sorry, I correct myself—and four in Gwent and nine across the whole of south Wales. By contrast, 37 contracts are planned for Greater Manchester, which has a similar population to south Wales. Again, will the Ministry of Justice, and the Whip speaking for the Ministry today, outline how that was calculated? How was rurality factored in? Although my hon. Friends from south Wales and the M4 corridor will have strong feelings about the provision of access there, for those of us who work, live and function in mid-Wales and north Wales, the picture is disastrous. We lose out yet again, and we are put at a real disadvantage compared with other people across the country.

My next concern is that competitive tendering at 17.5% less will drive solicitors out of business. The competitive tendering proposed for contracts remains a major cause for concern. It will simply drive solicitors out of business. Those remaining will be firms that are willing to cut costs, possibly to unworkable levels. That would lead to tenders being awarded to less able and potentially less experienced firms, which may find themselves unable to deliver on the prices promised to secure the tender. I am clear in my mind where I would like to go if I needed legal advice. However, there is the spectacle of Eddie Stobart or Tesco providing the service. The Co-op has been mentioned recently, and I am a great supporter of the Co-op. It is an admirable place to go to buy food and it has a fine record of burying people—the Co-op funeral service is very good—but we should not be using such examples to justify changes to the legal system.

I am greatly concerned about the capacity of companies such as Capita, GEOAmey, Serco and G4S—and whether they are best placed to represent my constituents. My colleague in another place, Lord Thomas of Gresford alerted us in a Queen’s Speech contribution to Stobart Barristers—an offshoot of Eddie Stobart trucks. Lord Thomas noted that the Stobart Barristers legal director, Trevor Howarth, had confirmed that the firm would bid for the new criminal defence contracts and had said:

“We can deliver the service at a cost that’s palatable for the taxpayer… Our business model was developed with this in mind. We at Stobart are well known for taking out the waste and the waste here is the duplication of solicitors going to the courtroom. At the moment there are 1,600 legal aid firms; in future there will be 400. At Stobart, we wouldn’t use 10 trucks to deliver one product”.

As my noble Friend concluded, the problem with that is that criminal law is not a unit and justice is not a product that can be delivered like a load of bricks. That is the contrast in terms of what we are facing. There is a real fear that many of our high street solicitors will be lost; many will go out of business. The firms with the most cut-throat prices and cut-throat tactics will be the most successful, but I believe that liberty should be in the hands of the best, not the cheapest.

I come now to the loss of specialisms.

[Roger Williams (Brecon and Radnorshire) (LD)]

My hon. Friend is making many very good points, but surely one of them is that the people who supply these legal services will be given a financial incentive to get their clients to plead guilty. Surely, that is a characteristic of a totalitarian state, not the liberal democracy to which we aspire.

[Mr Williams]

My hon. Friend and I agree. He uses a very emotive word to describe what I think will be the reality on the ground.

Under the proposals, a call centre will allocate a lawyer from any background—an impersonal experience in itself—who might provide a minimal service to meet the requirements of the contract. People will not be able to select a firm by reputation, by personal recommendation or, sadly, by past experience. That discourages good practice and good performance among professionals, as those who gain a contract will get clients regardless of performance. Therefore, clients will be unable to choose a firm according to the nature—sometimes, the specialised nature—of their case. I have said this before and it is worth repeating: let us not understate the importance of the relationship between solicitors and clients and the trust that has been built up.

Solicitors in my constituency are concerned that the consultation document encourages solicitors not to provide a good service—not to provide the best service. The aim is to be “above acceptable levels”. That is a worrying prospect.

There will be a lack of choice. Owing to the call centre allocation of solicitors, clients will be left with no choice of representation. They may have a lawyer who does not know them or the area in which they live and who certainly does not know the background to their case. As the hon. Member for Llanelli (Nia Griffith) said, a different company could represent them at different stages. I think that that is bad.

The consultation document suggests that the same fee will be paid—this is the point made by my hon. Friend the Member for Brecon and Radnorshire (Roger Williams)—whether or not the matter is contested. Those firms that are awarded contracts will have a financial incentive to do minimal work to make their business sustainable, to the detriment of the client’s case. That could lead to a perverse incentive for legal advisers to recommend that clients plead guilty, as they would receive the same fee regardless of plea—a conclusion that certainly the solicitors whom I have spoken to are concerned about. They believe that suspicion may be created between client and lawyer.

I want to end where I started, with the effects on language. When we are talking about the consultation, there remain serious issues surrounding the provision of language services. I have anecdotal evidence that the large firm Capita is regularly unable to provide interpreting services to courts in a timely manner. In my constituency, as I said, Welsh is the first language of about half the population. In many parts of Ceredigion, it is overwhelmingly the language of everyday use, so the issue to which I refer is a worry and a barrier preventing many people from accessing the representation to which they are entitled.

I want to ask the Minister and particularly those behind the scenes in the Ministry of Justice about their awareness of Wales and of the Welsh language. As the Welsh Government pointed out in their submission to the consultation, the Ministry of Justice’s own Welsh language scheme—a point that the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) mentioned—declares the Ministry’s commitment to the principle of treating the English and Welsh languages on the basis of equality. The current system of more local provision means that someone is more likely to satisfy Welsh language needs. These proposals mean that it is much more likely that a provider will be based outside the relevant area and even outside Wales, allowing no provision for Welsh language services at all.

The proposals are socially divisive, as only the wealthy will be able to afford to choose their own lawyer. Only those who can afford to will be able to determine how they are represented. Everyone else, if they are eligible for legal aid, will be allocated a lawyer via a call centre.

Some of the public narrative on the issue has characterised it as one of fat cat lawyers acting in their own interests, although if we talk to solicitors on the ground, the story is somewhat different. In reality, it is far more worrying. It is about universal access to justice, the credibility of our court and justice system and the responsibility of Parliament to ensure the continued efficacy of our justice system.

Overall, what has been billed as a simple money-saving measure will have far deeper ramifications for society. The proposals take the fundamental principle of access to justice away from anyone who cannot afford it, but it is a right, not a commodity to be bought and sold.

The Minister knows that this is a consultation, and the deliberations will go on about the various submissions. I sincerely hope that it is a real consultation and that the Government will look at the submissions, particularly those from us in Wales and the concerns that we have raised; and I hope that the Minister and the Ministry of Justice will therefore reflect favourably on the needs of rural Wales.

--- Later in debate ---

[Nia Griffith]

rose—

[Mr Mark Williams]

rose—

[Mr Evennett]

I would like to make a little progress, because otherwise I will not answer my hon. Friend’s points.

Importantly, specialist services—vital for niche areas of law and for clients with particular needs—will be able to continue. We received approximately 16,000 responses to the consultation, many of which address the competition model in detail. We are carefully considering all responses before final decisions are taken. This afternoon’s debate will go forward as part of that consultation and will be fed back to the Lord Chancellor and Ministers in the Department. It will be examined in the pot with the other considerations.

[Mr Williams]

Will my hon. Friend give way?

[Mr Evennett]

I will not be able to answer the questions and points raised if I take lots of interventions, but I will take one in a minute.

Among the particular needs to be met in the provision of legal aid is of course the provision of services in Welsh for those who want them. The Government have no intention of changing the requirements placed on legal aid providers operating in Wales to offer a bilingual service—I can nail that concern for my hon. Friend. That that issue, alongside many other practical considerations, is not expressly addressed in the consultation document reflects the fact that it will be, as at present, given effect through the Legal Aid Agency contracts with providers. The document does not propose any change in current practice, but that issue has been raised by some respondents to the consultation and we will provide simple reassurance when we publish the Government response. As well as raising the provision of services in Welsh, a number of legal aid providers have set out their concerns about the operation of the proposed competition model in rural areas, including rural Wales. Some of those concerns have been echoed here this afternoon, and I propose to raise them, highlighting the points made, with the Lord Chancellor to inform his decision making when the consultation concludes.

The consultation sets out a model of competition to cover the whole of England and Wales and seeks to address the needs of both urban and rural areas. In the cases of two regions—the areas covered by West Mercia-Warwickshire and Avon and Somerset-Gloucestershire—it makes an exception to the rule that procurement areas will be based on current criminal justice areas, by combining each pair into a single area. That proposal, however, is based on the volume and type of work, rather than the areas’ rural geography. The consultation in fact sought views on whether the geographical arrangement of contracts it set out was the right one and sought alternatives. We are of course open to good suggestions and urge the profession to work with us to come up with the best solution. The appropriateness of the model to rural Wales was raised during the engagement events held by the Ministry of Justice during the consultation period. We will consider carefully the views raised, before finalising our proposals.

Concerns have been expressed about the Government’s decision to publish the transforming legal aid consultation in English before the Welsh translation was ready. I shall address that issue directly, because it is unfair to suggest that the Ministry of Justice has not taken its commitments under its Welsh language scheme seriously. The Department has committed to treating English and Welsh equally, as far as is reasonably practicable, and that is what we did. Translating a document of that length and complexity takes time, and it was published as soon as it was available. In translating the entirety of the document, we have gone further than the previous 2010 legal aid consultation. In deciding not to delay publication of the English version until the Welsh version was ready, we were conscious that the majority of the target audience in Wales comprises legal aid providers required to provide services in English, as well as Welsh. Moreover, when the previous legal aid consultation was published in 2010, only the executive summary was translated; the Department did not receive requests for a full translation in Welsh and we did not receive any responses in Welsh. We have so far identified about 10 responses to the current consultation in Welsh. That we have had responses in Welsh reflects, I hope, that legal professionals working in Wales have shown their own expertise in responding to our proposals.

Officials are in the process of studying all the consultation responses received and will consider carefully all views on how Wales’s particular rural geography should be accounted for before final decisions are taken.

[Mr Mark Williams]

I have two questions. The first relates to remarks the Minister made some time ago. The consultation ends on 8 June and we have a short time to get the system up and running. How optimistic is he that that can happen and in particular that the consortia he mentioned, of small solicitors, practices coming together, can be realised? Finally, he mentioned a consultation event in Cardiff, where I know some of my local solicitors were keen to ask Ministry of Justice officials about the extent of their detailed knowledge of rural, north and mid-Wales and the challenges of rural transport. How much detail has gone into the assessment of rural Wales, or for that matter rural England?

[Mr Evennett]

I will have to write to my hon. Friend, because I do not have that information to hand. All I will say is that we have engaged with many professionals and received lots of consultation responses in the Department. We are very aware of the difficulties and the particular issues he raises.

Time is ever so short, but I want to mention the Government’s compliance with the Equality Act 2010. We are mindful of the importance of considering the impact of our policies on different groups. In accordance with our obligations under the 2010 Act, we have considered the impact of the proposals, in order to give due regard to the need to eliminate unlawful conduct, advance equality of opportunity and foster good relations. Our initial assessment was published with the consultation paper, and we will update it in light of responses, before final decisions are taken on the equality issues.

I am aware that a half-hour debate is not long enough, but there is of course a debate tomorrow on the Floor of the House, where issues can be developed further. I thank my hon. Friend the Member for Ceredigion for securing this important debate and I thank right hon. and hon. Members for the contributions that they have made. I am confident that, after long discussions and a long thought-out process, which will include the consultation information, the Ministry of Justice will publish final proposals that command the confidence of those who provide and use legal aid-funded services in Wales. Final decisions have not yet been taken, and today’s debate will certainly be read and noted by the Lord Chancellor and his ministerial team. I have listened to the views raised. I again commend my hon. Friend for securing the debate. I will certainly pass on to my right hon. Friend the comprehensive views that have come up this afternoon. The Under-Secretary of State for Wales and I will discuss the issues raised. I am grateful for the opportunity to put forward the Government view.

Finance (No. 2) Bill

Mark Williams Excerpts

Thursday 18th April 2013 Commons Chamber

[Jonathan Edwards]

That is exactly the point. We have experienced twin processes in Wales. We have had the Silk commission, but there has also been a bilateral negotiation between the United Kingdom and Welsh Governments. The consequence of that negotiation was that the Welsh Government would be given borrowing powers if it had an independent fiscal stream. That is why my new clause is so vital for the Welsh economy.

In January, the Welsh Grand Committee debated the commission’s part II recommendations. Although there was a difference of views over the proposals for income tax-sharing arrangements, it was broadly accepted on all sides that the minor taxes recommendations should be implemented as soon as possible. I must confess that during that debate I became slightly confused. Unionist politicians were in favour of full devolution of some taxes, but opposed to a sharing arrangement between the UK and Welsh Governments in relation to income tax. My natural conclusion following the debate was that as there was a consensus at least in relation to the minor taxes, we ought to get on with devolving them swiftly rather than waiting for what could be years for a new Government of Wales Act.

The most prominent of the minor taxes is covered by the air passenger duty recommendation. It is difficult for us to table amendments relating to the other minor taxes at this stage because consideration in Committee is in the hands of the usual channels, from which my party is excluded, but we are at least able to consider the devolution of air passenger duty. I suggest that that should serve as a spur for the implementation of the other minor tax powers recommended by the commission.

[Mr Mark Williams (Ceredigion) (LD)]

Does the hon. Gentleman acknowledge that the Silk commission said that his package should be viewed as such—as a package? I share the hon. Gentleman’s impatience as we wait for the Government to respond to part I of the Silk recommendations, but we should nevertheless see them in that light.

[Jonathan Edwards]

I think that the question for the hon. Gentleman is this: if he favours the devolution of fiscal powers to Wales, should he not walk through the Lobby with us rather than waiting for another Government of Wales Bill? When will that Bill come before the House? When will the legislative gap arise? If he is promising me that the Bill will be in the Queen’s Speech, we may consider whether or not to press new clause 3 to a vote.

If the Committee supports the new clause, I shall expect the Treasury to include the other minor taxes and business rates as the Bill proceeds, and to implement fully this aspect of the Silk recommendations.