Members of Parliament today debated the Second Reading of the draft Wales Bill. Click to watch and/or read the contribution of Jonathan Edwards MP.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
At the start of my contribution, I would like to raise an issue relating to the programme motion, which will be taken after these proceedings. There will be no debate on the programme motion, but when the Under-Secretary makes his winding-up speech, will he clarify the time allocated for the Bill’s Committee stage? In our view, two days will not be enough—the Scotland Bill had four days’ deliberation—but if the Under-Secretary is able to give guarantees that that time will be protected, we will be willing to concede on that. Will he also give an outline of the likely timetable for the Bill as it proceeds through its various stages?
We have heard some fantastic contributions to the debate from Members on both sides of the House. I particularly enjoyed the speech of the hon. Member for Islwyn (Chris Evans), in which he made a passionate case for the full devolution of corporation tax. I fear that my comments will be tame in comparison. I made similar comments in the Western Mail on Saturday while I was out in Bordeaux, only to be accused by the shadow Secretary of State for Wales of nationalist dogma. The hon. Member for Islwyn, who is not in the Chamber, might be in trouble with the hon. Member for Llanelli (Nia Griffith) after this debate.
After less than two decades of devolution in Wales, we have had to change the settlement four times—this Bill will be the fifth time. Every one of those changes was meant to settle the constitutional question for a generation, yet here we are, debating another Bill that, it is claimed, will settle the constitution for our lifetime. I fear that we yet again have another tinkering Bill which will be past its sell-by date before the ink dries. During the course of the previous Bill, Plaid Cymru, the party of Wales, endeavoured to strengthen it, as we will do during the course of this Bill. I am glad to see that some of our amendments, which were ruthlessly voted down last time, are reflected in provisions in this Bill, specifically the parts that allow the National Assembly to determine its own electoral system and give the National Assembly the right to change its name if it chooses. Surely since the last Assembly election, when one party had 50% of the seats on 30% of the vote, every true democrat must realise that we have to do something about the electoral system for the National Assembly.
On the question of the name, as far as I am concerned, now that the National Assembly can pass laws, it is a Parliament in its own right. However, I accept the arguments of some of my colleagues back home in the motherland that law-making bodies in Europe are known as assemblies, such as the Assemblée nationale in France.
I particularly welcome the Chancellor’s decision in the autumn statement to remove the need for a further referendum before the proposed income tax-setting arrangement is implemented. Referendums should be held only on a fundamental point of principle, as with next week’s vote on the UK’s membership of the European Union. Conversely, the 2011 Welsh referendum on a very opaque matter indicates the problems associated with holding a public vote on technical issues.
The principle of fiscal devolution from Westminster to Wales has already been conceded in the 2014 Act, with the devolution of minor taxes, stamp duty land tax, the aggregates levy and landfill tax. Devolution of power is the settled will of the people of Wales, as is highlighted by a long list of opinion polls. Political parties just need to get on with it now and to react to the growing demand for more powers for Wales, as opposed to hiding behind referendums. The only future referendum that should be held on the constitutional question in Wales is the referendum on Welsh independence, when the time comes.
The Bill is a step forward from the draft Bill, which was published last year by the then Secretary of State for Wales, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb). That Bill included roll-back powers, which would have been completely unacceptable to Plaid Cymru, because they undermined the settlement overwhelmingly endorsed in the 2011 referendum.
Three new reservations have been added, including the Severn crossings. We will be pushing an amendment to repatriate the bridges during the Bill’s later stages and look forward to the support of Labour and Conservative Members. It is allegedly Labour Government policy in Wales that the bridges should come under the control of the Welsh Government. It is also the policy of the Conservatives in the National Assembly. In 2013, their transport spokesman said:
“Devolution of the crossings—and future use of the tolls—has the real potential to help hard-pressed motorists, provide significant investment in Welsh infrastructure and encourage economic growth”.
The hon. Member for Gower (Byron Davies), who uttered those words while in the Assembly, was singing from my hymn sheet, and I am disappointed that he is not in the Chamber.
The Parliamentary Under-Secretary of State for Wales (Guto Bebb)
Which of the three ends of the Severn bridges that are in England does the hon. Gentleman feel are subject to a right to be repatriated to Wales? After all, there is a geographical reality that should be recognised.
I am grateful for that point, which is always used by the hon. Member for Monmouth (David T. C. Davies)—I am glad to see him in the Chamber, as we have debated this issue many times. However, the reality is that the Severn bridges are the two main supply links into the south Wales economy, so it is clearly in the interests of the Welsh Government to have control over them.
I always endeavour to be helpful in my politics, and when I look at the rate of constitutional change in the UK, it appears that the only way the British state can possibly survive is as a confederal arrangement between its constituent parts. The only reserved matters in that scenario should be those relating to currency, the Head of State, defence, welfare and foreign affairs, although the boat on welfare may have started sailing with the Scotland Act.
The necessity tests have been replaced by so-called justice impact assessments. In response to the Bill, my former academic master, Richard Wyn Jones, from the Welsh Governance Centre, said in the Western Mail:
“I’m afraid this unexpected addition to the Bill suggests the mindset that devised the necessity test is still alive and kicking in Whitehall.”
He went on to say:
“It clearly undermines the UK Government’s claim to respect the National Assembly as a mature democratic institution able to make its own laws without interference.”
He concluded by saying:
“Ultimately the Secretary of State would be able to override a piece of legislation passed by the democratically elected Assembly. It is a mindset which sees the Assembly as a second-class legislature. There is no similar provision at the Northern Ireland Assembly or the Scottish Parliament.”
Will the hon. Gentleman give way?
I will refer to the Secretary of State’s earlier points and let him intervene following that.
Professor Jones makes the further valid point that these impact assessments are not reciprocal, citing the example of the super-prison in Wrexham, where the UK Government took no account of the impact on devolved Welsh public services such as health, social services, education, lifelong learning and skills.
I welcome the Secretary of State’s comments during the debate and the guarantee that the justice impact assessments cannot trigger a UK veto—I accept him at his word. However, we will have to take our own legal advice to ensure that these assessments are not a Trojan horse to stymie the ability of the National Assembly to function fully as a legislative body.
Let me politely reassure the hon. Gentleman that the justice impact assessments are in absolutely no way considered to be a veto. He referred to the prison in Wrexham—HMP Berwyn. When two mature institutions come to agreements, and one is seeking to encroach on devolved areas or another to encroach on an area that is non-devolved within the UK, the UK Government needs a legislative consent motion to take action in Wales. There is a mature arrangement. We need to come to a position where we understand each other, and these mature discussions should take place, rather than one having a right over the other. That is not the area that I want to get to.
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.
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?
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.
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?
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.
Earlier the hon. Gentleman referred to something similar to what I believe in, which is a confederal system in the UK. Is he now advocating that and not independence? Is that his party’s line?
As I said when I made those remarks, I always try to be helpful in my politics. My party’s position is independence for my country—
I have made that clear in my contribution. However, if I was a Unionist such as the hon. Gentleman, I would make exactly the same argument as him, and I commend him for it.
Before I was rudely interrupted by my constituency neighbour, the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), I was talking about the boundary review. Wales is about to lose more than a quarter of our political representation. To put that in context, Wales will experience the largest proportional cut in representation here while simultaneously being denied powers and responsibility for our devolved Government. If the boundary changes go through without our significantly equalising the Welsh settlement with that of Scotland and Northern Ireland, there will be a further democratic deficit. With that in mind, I will vote against the boundary changes unless we have the same powers as Scotland.
The constitution of the UK is rapidly changing. This is a time for bold and visionary acts in the finest traditions of this House. I am afraid that the Bill does not reflect the realities we face, nor does it respond to the practical problems that arise from tinkering with the settlement. We will endeavour to strengthen it during its passage so that our country is not treated like a second-class nation.