Wales Bill

Simon Hart Excerpts

Tuesday 14th June 2016 Commons Chamber

[Nia Griffith]

Indeed. As a long-time supporter of votes at 16, which is now Labour policy, I share my hon. Friend’s disappointment that that could be the case.

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

Does the shadow Secretary of State accept that the new electoral legislation might enable a Welsh Parliament or Welsh Government to impose compulsory voting on our country? Would she support that or oppose it?

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[Jonathan Edwards]

Had the hon. Gentleman been here during last night’s debate, he would know that I support the devolution of policing because of what has happened to the police helicopter service in Dyfed-Powys. It has been lost because policing is a reserved power. The helicopter services were not lost in Scotland or Northern Ireland, but the service has been lost in Dyfed-Powys because policing is reserved, and we now have a pooled service that is letting my communities down and letting his communities down.

[Simon Hart]

Will my hon. Friend give way?

[Glyn Davies]

Are you intervening on me or on the hon. Gentleman? Go on!

[Simon Hart]

I thought it might be helpful, before my hon. Friend replied to the Plaid Cymru intervention, to take careful note of the fact that the Dyfed-Powys police helicopter has not been lost, and that it would be a gross misrepresentation of the truth to claim that it has been.

[Glyn Davies]

I thank my hon. Friend; that is exactly what I was going to say.

I also want to touch on the question of devolution in regard to energy. We all pay a price when we support a Bill that is as comprehensive as this one, because there are often parts of the Bill with which we are very uncomfortable, and I have to say that devolving power over wind farms up to 350 MW to the Welsh Government really sticks in my craw. For me, that is a high price to pay to support the Bill. Perhaps I did not make what I meant absolutely clear in an earlier intervention, but we know that the Welsh Labour Government—perhaps supported by some of the other parties—are hugely enthusiastic about covering mid-Wales with wind turbines, wind farms and pylons. There has been a huge battle to try to stop them, but the Welsh Government are very keen to do it.

On 1 March this year—St David’s day—the United Kingdom Government passed powers over onshore wind to local government across England and Wales. In England, local government now has the power to make decisions on wind farms of any size, and that power has also been devolved to Wales. On that same day, the Welsh Government took that power unto themselves. In Wales, everything over 25 MW is therefore now decided by the Welsh Government in Cardiff, but in England local authorities decide this. That is one reason why I find this part of the Bill to be extremely difficult to support.

I am looking forward to the Committee stage, where we will debate a series of aspects of the Bill, as we are not able to touch on everything today. The Bill is really worth while. We can perhaps change one or two parts of it, but it is a good Bill that will bring more stability, more security and more democracy, in the sense that through financial accountability people will be more engaged with the democratic process than has ever been the case in Wales before. That is why I very much hope that the Bill makes its way through the House.

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[Jonathan Edwards]

I am extremely grateful for that intervention by the Secretary of State. His point about the Wrexham super-prison makes our argument for us. That facility has not been created to deal with the custodial needs and requirements of our country. That is partly why we will aim to remove the reservation on policing and prison services during the passage of the Bill.

My other major concern, as my party’s Treasury spokesperson, is the second-class settlement we are being offered in relation to fiscal powers. The Scotland Act 2016, which all Labour and Tory MPs based in Wales voted for, fully devolved air passenger duty and income tax—including, crucially, the tax bands and half of VAT receipts—to Scotland. The Scottish Government will now be responsible for raising over the half the money they use in all devolved expenditure. Yet, as the recent Cardiff University assessment, “Government Expenditure and Revenue Wales 2016”, notes, following the fiscal plans in this Bill, the Welsh Government will be responsible for raising only about 20% of the devolved expenditure for which they are responsible.

If the twin arguments for fiscal devolution are accountability and incentivisation, surely we need more ambition for Wales than what is currently on offer. After all, in essence, we are talking about keeping more tax revenues raised in Wales directly in Wales, as opposed to collecting them in London and sending them back. The Welsh Government should be responsible for raising the money that they spend. That is a very valuable principle in politics. We will seek to amend this Bill and the forthcoming Finance Bill to secure parity for Wales with Scotland, and challenge Labour and Conservative Members who supported these powers for Scotland on why they oppose them for Wales.

The other issue in relation to tax powers that must be addressed if the measure is to receive our support is the fiscal framework to accompany tax devolution. As we have seen with the debate surrounding the Barnett formula, words such as “fairness” and “non-detriment” are extremely opaque and open to interpretation. The Bill will put in place a Barnett floor to stop further funding convergence, but let us be clear that that is not the same as “fair”. A fair settlement would surely, at the very least, peg Welsh funding at the Scottish level, especially since that is what Labour and Tory Members of Parliament from Wales voted for for Scotland. I will let them explain to the people of Wales why they think that Wales deserves less support through public funding per head than Scotland.

Returning to the fiscal framework, I am glad that there seems to be genuine good will around a non-detriment principle, but that will need to be clearly outlined before we finally vote on the Bill. I would expect the Treasury, at the very least, to publish its recommendations in an official statement to the House during our proceedings on the Bill because Members of Parliament will otherwise be voting blind on the consequences of the tax proposals. I say this as a strong supporter of devolving job-creating levers to Wales, as I outlined earlier. However, neither I nor my colleagues will support the Bill if the UK Government intend to push a straightforward indexed deduction method. I note the significant concessions gained by the SNP Scottish Government on this issue, so I would hope that the Labour Government in Wales and the Wales Office here will be pushing hard for a suitable deduction method for Wales.

This vital issue is even more complicated than my favourite topic of Barnett consequentials, so we must get it right. We need a formula that will reflect the fact that the population of Wales, and hence our tax base, will grow more slowly than the UK average. We cannot be left in a position whereby a successful fiscal policy in Wales leaves us standing still in terms of Welsh revenues. Incentivisation can work only if the Welsh Exchequer is not at a loss before the process starts. Scotland has once again achieved a fair settlement, and so must Wales. It would be far easier to come up with a fair framework if we were debating full income tax powers similar to those awarded to Scotland—that is, full devolution of the bands and thresholds.

If the other main aim of fiscal devolution is to increase the political accountability of the Welsh Government, the sharing arrangement envisaged for income tax would continue to allow them to pass the buck. The shadow Secretary of State for Scotland, the hon. Member for Edinburgh South (Ian Murray), said that full devolution of income tax powers under the Scotland Act would stop the Scottish Government playing the politics of grievance. If Wales has a sharing arrangement, the politics of grievance will continue. In the interests of accountability, incentivisation and, critically, transparency, the UK Government need to revise their plans and fully devolve income tax powers to Wales.

This March, in an act of blatant electioneering, the previous Welsh Labour Government published an alternative Wales Bill that called for a separate legal system for Wales and the devolution of policing. I look forward to the Labour Opposition here tabling such amendments to the Bill. If they do, I will support them with vigour, but if they do not, Plaid Cymru will do so and the people of Wales will be able to judge for themselves whether the First Minister has any influence over his bosses here in Westminster.

In conclusion, I would like to highlight the policy areas devolved to Scotland that are not included in this Bill, which include legal jurisdiction, policing, prisons, probation, criminal justice, full income tax, VAT sharing arrangements, air passenger duty, welfare and employment, consumer advocacy and advice, gaming mechanisms, full energy powers and rail franchising of passenger services, to name but a few. As I have said before, it will be up to our political opponents to explain why they voted for those powers for Scotland, but are opposed to them for Wales.

That brings me to the forthcoming parliamentary boundary review, which has not been mentioned at all during the debate, but will reduce Welsh representation in this place to 29 Members. That means a loss of more than a quarter of Welsh seats in the House of Commons.

[Simon Hart]

The hon. Gentleman has drawn up a long wish list of things that he wants to be properly devolved. What is the difference between that list and independence?

[Jonathan Edwards]

I am extremely surprised by that intervention, because the hon. Gentleman voted for those powers for Scotland. Is he now saying that he voted for Scottish independence? That is incredible.

[Simon Hart]

The hon. Gentleman and I are good friends. He is a fine cricketer, but he is also a naughty boy. Will he just answer the question?

[Jonathan Edwards]

I will take that intervention in the spirit in which it was intended. Those powers now reside in the Scottish Parliament, so is the hon. Gentleman saying that Scotland is independent? That is ridiculous. I am sure that the good people of Carmarthen West and South Pembrokeshire will be delighted to hear that he is in favour of full Scottish and Welsh independence.