Wales Bill

Nia Griffith Excerpts

Tuesday 5th July 2016 Commons Chamber

On reports to what will be the Welsh Parliament, we must look more broadly at justice in Wales, and not exclusively in relation to the jurisdiction. Wales already has a High Court district registry in Cardiff, which no doubt could be developed, and the Court of Appeal often sits in Wales. We need a real open justice system in Wales that is not just stuck in Cardiff, Swansea, Caernarfon or wherever, but is willing to go out and sit in different buildings and genuinely bring justice closer to the people. The pragmatic way forward on jurisdiction is by far the best because we would not bring all those disadvantages into play, but we can also build on the opportunity in amendment 7 to consider the whole justice system in Wales and ensure that we truly have access to justice for all.

[Nia Griffith (Llanelli) (Lab)]

I rise to support amendment 7, to reaffirm my support for the Bill, and to thank the Secretary of State for bringing it forward so quickly. We would all like it to be enacted as soon as possible. I also thank him for recognising the growing body of Welsh law, and for his initiative to set up a body to consider that. Amendment 7 would confirm that body in writing in the Bill, meaning that a report on the state of affairs is made on a regular basis. As my hon. Friend the Member for Torfaen (Nick Thomas-Symonds) so eloquently expressed, this is not a simple issue about which we can just have a yes or no discussion; it is a growing body of law and a number of complex issues arise. If that measure was included firmly in the Bill so that a report was made on a regular basis, we would have the opportunity to consider the direction things were going in and whether any changes were needed. The amendment states clearly that the report will consider

“whether the single legal jurisdiction of England and Wales should be divided into a jurisdiction for Wales and a jurisdiction for England.”

We want that practical, sensible solution included in the Bill so we can be certain that the review will continue to take place, and so that recommendations and reports come from that, which may or may not lead to a different view on things as that body of law grows. I reaffirm my support for the Bill, and I hope that amendment 7 will be included.

[Mr Mark Williams]

It is a privilege to serve under your chairmanship, Mrs Laing. I reiterate my support for the amendments on the permanence of the National Assembly. I think that they originate in the office of the Presiding Officer who co-represents the Ceredigion constituency, but regardless of our constituency interests, there is huge sympathy and empathy with the principle of permanence right across the Committee—perhaps there are one or two exceptions on the Government Benches.

Amendments 3 and 4 are probing amendments like those tabled by the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts). I do not intend to divide the Committee on those amendments, but I wish to elicit from the Minister a little more detail that is currently not in the Bill. To avoid clashes between the two legislatures on devolved matters, this Parliament has hitherto adopted a self-denying ordinance, and would not normally legislate on devolved matters without the consent of the National Assembly.

I believe there is a consensus on the Opposition Benches, which is reflected by my amendment and amendments 24 and 25 tabled by Plaid Cymru, that the new provision does not provide a complete statement of the circumstances in which the Assembly’s consent is required in respect of parliamentary legislation. The Bill fails to mention the circumstances in which proposed legislation would modify the legislative competence of the Assembly itself. The amendments seek to clarify that. The requirement for consent in itself is not the issue. The Bill will at some point require the assent of the National Assembly for Wales, but in the interests of clarity and transparency the amendment sets out the circumstances when the Assembly’s consent should normally be required. I think it provides a tidier definition of devolved matters.

The meat of this grouping relates to a separate, although interestingly in this debate not a distinct, jurisdiction. I understand the principle behind Plaid Cymru’s amendments. We have heard about a separate jurisdiction and less about a distinct jurisdiction. The Government have gone as far in the Bill as to acknowledge and recognise a body of Welsh law. That is an important principle, but it is where we take that principle that concerns me. I am led in the direction of the Labour party’s amendment, which follows the stance established in the increasingly dated Silk report, which is something of a bible to Liberal Democrats. Silk, in that now slightly dusty report, talked about reviewing the case for devolving legislative responsibility for the court service—sentencing, legal aid, the Crown Prosecution Service and the judiciary—to the National Assembly. I think he would endorse the speech just made by the hon. Member for Torfaen (Nick Thomas-Symonds) and the case for a broader review of the legal system in Wales. Silk also talked about the need, in recommendation 34, for a “periodic report” by the UK Government, in consultation with the Welsh Government, to the UK Parliament and to the National Assembly on how access to justice is improving in Wales, and that there should be a regular dialogue between the Lord Chief Justice of England and Wales and Welsh Ministers on the administration of justice in Wales.

The groundwork has therefore already been done for the Labour party’s amendment. It requires the Secretary of State to keep under review the justice system as it applies in relation to Wales, with a view to reform. For some of us, the inevitable divergence of English and Welsh law being open to the possibility of reform is critically important. As a Liberal, there is still the question of timing. There is a very clear Plaid Cymru amendment. We have something that has been described as more pragmatic. Simplistically, we could say that it beefs up what Silk was talking about some time ago.

The Government have acknowledged that this is an issue by providing legal clarity on a Welsh body of law. They have also acknowledged it through the creation of a judicial working group. We talked on Second Reading about the principle of setting up the Government’s working group, which is welcome, but I do not believe it is sufficient to address the issues before us today. I am led to believe that the Welsh Assembly Government have not been invited to participate in its work.

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[Jonathan Edwards]

The powers as envisaged do not involve the complete block grant. The block grant—the total money available to Wales—will not change on day one. The only issue of contention is the fiscal framework; I have been making that point. The devolution of the fiscal power itself is not an issue in terms of making Wales poorer on day one.

There is also a technical reason why we should be fully devolving income tax powers. It is far more difficult to create a fair fiscal framework to accompany the partial devolution of income tax as opposed to full devolution. The result of this would be to enable future Welsh Governments to continue to avoid responsibility for their mistakes. In the interests of transparency, accountability and—critically—incentivisation, I hope even at this late stage that the UK Government will accept my new clause 3.

A key element of ensuring that the devolution of income tax is devolved successfully is the empowerment of the National Assembly to set income tax thresholds. New clause 2 aims to achieve this objective and I will press it to a vote on the second day of Committee, with the Chair’s permission. If we have time, I would also like to press new clause 3. We will discuss these new clauses on Monday.

New clause 2 is of vital importance as we embark on the journey of devolving income tax powers. The setting of thresholds is a key component of being able to use those powers based on domestic considerations. The Welsh economy in comparison to other parts of the UK is, regrettably, currently a lower-wage economy, a concern raised by Labour colleagues. New clause 2 would enable the National Assembly ultimately to determine the number of income tax thresholds and the levels at which they are set, including, critically, the basic rate. That freedom would enable the Finance Minister of the Welsh Government, whoever he or she may be, to set innovative income tax structures aimed at maximising revenues for the Welsh Exchequer to invest in Welsh public services, but also to encourage wealth creation and encourage investment.

It has been a consistent policy of the current Chancellor to increase personal allowances—in other words to increase the rate at which people begin paying income tax. Brexit may lead to a radical reversal of this policy in the coming months and years by the next Chancellor as revenues reduce. However, the key point is that as long as the ability to set personal allowances is reserved to London and Wales has a low-wage economy, decisions by Chancellors here could have a significant impact on the revenue available to invest in Welsh public services.

It really is all or nothing when it comes to the devolution of income tax and, as someone who supports making the Welsh Government fiscally responsible, I very much hope that the UK Government decide to support the former. Diolch yn fawr iawn.

[Nia Griffith]

I shall speak to several amendments, in particular amendment 11, which provides that income tax powers may not be devolved to the Welsh Assembly until a fiscal framework has been approved by both Houses of Parliament and the Welsh Assembly.

We have always said that a fiscal framework must ensure that Wales is not disadvantaged by taking on the devolution of some income tax powers. In the wake of the EU referendum result, it is all the more urgent that the Government develop a coherent and redistributory regional funding strategy not just for Wales, but for the whole of the UK.

The EU uses specific criteria for designating the areas that should receive structural funds by comparing the income of an area with the EU average. Areas in Wales such as the valleys and west Wales have benefited because they have a GDP that is less than 75% of the EU average, as has Cornwall, and many other areas have benefited because their GDP is between 75% and 90% of the EU average, including south Yorkshire and Merseyside. It is, broadly speaking, a needs-based system. As Members across the House will remember, Holtham recommended that funding for Wales should be based on a needs-based formula. However, a sophisticated formula would take time to develop.

It is simply unacceptable for Wales to accept the devolution of income tax without an order in both Houses and the consent of the Welsh Assembly, because those measures would give elected Members the chance to discuss the funding and the fiscal framework so that we do not see a cut to our funding and then get told to make up the rest by increasing income tax.

[Stephen Doughty]

I wholeheartedly agree with the point about the potential trap for Wales. Does my hon. Friend share my concern and that of many of my constituents about the uncertainty that is being created for projects such as the south Wales metro, which was due to be funded by the EU? We are not clear where that £150 million of funding will come from. If we do not have clarity on Wales’s fiscal framework and on whether we will be better off or not, projects like that will be in doubt.

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[Nia Griffith]

I very much agree with my hon. Friend. It is even more serious than that because many jobs depend on EU funding. People might find that they no longer have the apprenticeship opportunities, training opportunities and many other things that are supported by the EU but that are not quite as obvious as the concrete structures.

It would be very difficult for the Welsh Government to make up a significant shortfall in the block grant. The block grant is some £15 billion per annum, whereas the total income tax raised in Wales amounts to some £4.9 billion. It would be very difficult to make up any percentage cut to that £15 billion, particularly if we wanted to protect the standard taxpayer. It is therefore vital that there is an opportunity for negotiation and for a vote and approval before any devolution of income tax.

People might think that I am very suspicious of the Conservative party and that I do not trust it an inch. [Hon. Members: “No!”] Well, I just think that we have to look at the facts. Look at what it has done with councils in England. It has told them that if they want to increase social care funding, they can raise it through council tax hikes. If anyone thinks that the UK Government run by the Conservative party are committed to fair funding or needs-based formulas and are free from partisan bias, I remind them that between 2012 and 2020 the average cut in spending power per household in Labour council areas in England is more than five times higher than the average cut in Tory local authority areas.

[Jenny Chapman (Darlington) (Lab)]

I regret to inform my hon. Friend that the situation is worse than she describes, because when special funding was identified for councils, 85% of it went to Conservative-held authorities.

[Nia Griffith]

My hon. Friend confirms my very worst fears. Instead of having needs-based funding, the average cut per household in a Tory area will be in the region £68 by the end of the Parliament, whereas in Labour council areas it will be more than £340. My fear is that the block grant will be cut and we will be told to make up the rest through income tax hikes in Wales. As Members are well aware, there has been no full assessment of the impact on Wales of different rates of tax on the different sides of a very porous border, so we really have no idea what will happen.