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House of Lords Hansard
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15 October 2014
Volume 756

Committee (2nd Day) (Continued)

Clause 20: Borrowing by the Welsh Ministers

Amendment 52

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52: Clause 20, page 23, line 19, at end insert—

“(5A) The Secretary of State shall make arrangements for an independent report to be compiled on the issuance of bonds by Welsh Ministers.

(5B) The Secretary of State shall lay a copy of the report specified in subsection (5A) before each House of Parliament within three months of this Act being passed.”

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My Lords, I will also speak to Amendments 53 to 55. This group seeks to bolster the Assembly’s economic accountability and resources. We in Plaid Cymru believe that the Welsh Government should be able to issue bonds, just as the Scottish Government can. Amendment 52 would hence provide for a review into whether this could in fact take place. It is a very modest amendment giving the opportunity for this to be further investigated. I should point out that this was a recommendation of the Silk commission and is supported by the Welsh Government as well as by my own party.

Having this power would allow the Welsh Government to use innovative, less volatile ways of borrowing such as the Build for Wales scheme that we have championed. Such a project would create a new entity to invest in public infrastructure. At present, if the Welsh Government want to undertake large amounts of capital expenditure to invest in building schools, hospitals, roads and so on, they are unable to borrow and cannot raise enough by way of tax to provide the necessary resources. If they save the funds, the Treasury may claw the money back if it is not spent within a certain period—as was so disgracefully done in 2011 when savings prudently accumulated by the Welsh Government were ruthlessly purloined by Her Majesty’s Treasury. It is surely against common sense that the Welsh Government are unable to borrow funds long term to fund capital assets.

Amendments 53 to 55 would ensure that the threshold for the Assembly’s capital borrowing powers is raised from the £500 million in the Bill to £1,500 million—that is, £1.5 billion—which would make the Welsh Assembly more closely aligned to the £2.2 billion threshold afforded to the Scottish Parliament. We would feel very unhappy if the Scottish Parliament were able to borrow four times the sum that we can in Wales. We arrived at our figure by taking into consideration Wales’s population base as well as the fact that we have fewer PFI commitments than Scotland, hence giving us greater flexibility over repayments. I beg to move.

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My Lords, it is absurd that there should be a need for a review of such a matter. It is absurd that there should be limits on the ability of the Welsh Government to borrow. We all remember—I think we are all old enough—that in the 1960s and 1970s local authorities issued bonds, as did utilities. Much more recently, universities have issued bonds, notwithstanding that to a significant extent they are publicly funded. This is an elementary tool of financial management which, if the Assembly is to take serious responsibility for its own affairs, of course it ought to have.

My only complaint about Amendment 55, proposed by the noble Lord, Lord Wigley, is that he has been so modest. He wants to limit the amount that the Assembly is permitted to borrow to £1,500 million. There is a constraint on the amount of borrowing that rests in the ability of the Welsh Government to service the interest. That should be a sufficient discipline.

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I will speak to Amendments 53 to 55, which are about increasing the amount that the Welsh Government should be allowed to borrow. One of the key reasons why the Assembly is so enthused about this Bill is that, for the first time, the Welsh Government will be able to access those borrowing powers. This is particularly important at the present time as £1.7 billion has been cut from the Welsh budget and the capital budget has been slashed by 33%. If the Welsh economy is to grow, it needs to invest in essential infrastructure. That ability to invest has been choked off by government cuts. It seems unfair that the Government connected the amount that the Welsh Government are able to borrow to the taxation revenue stream of the Welsh Government. Revenue streams in relation to stamp duty and landfill—two taxes that are, it is proposed, to be devolved initially—have proved to be extremely volatile in the past.

How was it determined how much the Welsh Government are allowed to borrow? It strikes me that the approach to Wales is very different from the approach adopted for the borrowing powers in Scotland, where a connection was not drawn to the funding stream but to the capital budget. The Scotland Act allows the Government to borrow 10% of the Scottish capital budget in any year to fund additional capital projects. That would be around £230 million in 2014, up to £2.2 billion in total. Scotland seems able to borrow proportionately considerably more, despite the fact that it has considerable PFI commitments—unlike the Welsh Government. This is not the case for Northern Ireland, where no revenue stream exists apart from the block grant. Yet, it is allowed to borrow.

This Bill allows the Welsh Government to borrow up to £125 million per year, up to a limit of £500 million. However, if the same rationale were used in Wales as in Scotland, so that borrowing was based on capital budget not tax revenue stream, Wales would be allowed to borrow up to £1.3 billion—or £130 million per year—reflecting that £1.3 billion capital budget in Wales. Ideally, we would like the Government to allow flexibility so that the Welsh Government can increase their borrowing powers at a time when the economy looks like it is much more on its feet. Could the Minister outline whether there is any mechanism through which that would be possible?

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My Lords, in this group of amendments on borrowing powers, I begin with Amendment 52, which would require the Secretary of State to lay an independent report on Welsh bonds before both Houses. As the Government have previously made clear, the subject of bond issuance by Welsh Ministers is something that the UK Government are willing to consider. Moreover, initial discussions have now taken place between the two Governments on the form that those considerations should take and we are keen to progress this work quickly and bring it to a conclusion.

The Government have previously committed to consider Scottish bonds and have agreed to make this source of borrowing available to the Scottish Government. Our record therefore demonstrates that we are able to consider such matters without legislation, and I therefore ask the noble Lord to withdraw his amendment on that basis.

I turn to the proposed amendments to the borrowing limits. The Government have consistently been clear that capital borrowing must be commensurate with the level of independent revenue available to support the costs of borrowing. This is an important principle that ensures borrowing remains affordable in much the same way as mortgage lending must reflect the capacity to service borrowing. It is also worth repeating that the £500 million capital borrowing limit is already substantial relative to the level of independent revenues that will be available to Welsh Ministers when stamp duty and landfill tax are devolved. In particular, the limit is far higher than it would have been had we simply applied the tax and borrowing ratios implemented by the Scotland Act. Such an approach would have given the Welsh Government capital borrowing of only £100 million rather than £500 million. Although the noble Baroness talks about the relationship between capital expenditure and borrowing powers as the consideration that she wants to underlie the amount that the Welsh Government can borrow, it has to be related to the Welsh Government’s management of their taxes; otherwise, by the same logic—perhaps she supports this—large cities and the English regions could also have large borrowing powers if they were simply related to the fact that they are already spending money on capital. The link between borrowing powers and the Assembly is secured by the fact that the Assembly has its own sources of revenue.

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Will the Minister explain how Northern Ireland is allowed to borrow when it does not have this income stream?

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My Lords, as we have discussed in respect of virtually every tax we have talked about today, the considerations in Northern Ireland, and the situation in Northern Ireland, are very different from those in all other parts of the United Kingdom. The noble Baroness is aware of the history of Northern Ireland and why we do things differently there. Noble Lords have made good points about read-across from Scotland to Wales, but it is a lot less easy to do the same with Northern Ireland. Very different considerations apply, and the nature of the economic challenges facing Northern Ireland is rather different.

I fully understand the desire to see as much investment as possible in Wales, but we must ensure that it is manageable for the Welsh Government. Not only must the Welsh Government repay borrowing, they must fund the associated interest payments. That is why we need to ensure appropriate independent funding streams are in place. I remind noble Lords that for every 1% that the Welsh Government have to pay in interest on their £500 million borrowing—if they reach that level—they will have to take £5 million from their overall budget. The maths is clear. It is a very significant amount that the Welsh Government will have to provide from their overall budget in any event.

We should be encouraging the Welsh Government to hold a referendum on income tax powers. If an element of income tax is devolved to Wales, that increased funding stream could allow Welsh Ministers to borrow around £1 billion. Our message to all parties in Wales is that it is time to get cracking, once we get this Bill through, and get that referendum held and the income tax powers devolved.

Finally, in order to manage forecast error, the Government have provided the Welsh Government with exactly the same £500 million of current borrowing as in the Scotland Act, despite the more limited tax powers initially being devolved to Wales. The Welsh Government’s current and capital borrowing limits are therefore relatively generous compared with Scotland, and I ask the noble Lord not to move his amendments.

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I am very grateful to the Minister. I certainly welcome his announcement that progress has been made with the bonds issue, and I hope that the National Assembly can move forward rapidly to take advantage of that opportunity.

With regard to borrowing, the capital budget of the National Assembly was reduced by just over 40% when the changes introduced by the Government were brought in. That put an immense squeeze on, among other things, the capital requirements of Governments, such as the Government in Wales, with responsibility for roads, schools, hospitals and all the rest. To get the economy moving, we have to get the capital injection, particularly into the economic infrastructure. I entirely accept that there has to be a cash stream to service this, and the Minister once again mentioned the income tax proposals. As he knows, I welcome those and want to see them used. Are the Welsh Government constrained to income tax? There are other sources of taxation revenue, and there may be other sources of revenue as well. For example, in the next four or five years, the M4 tolls will be reconsidered and renewed. Is it not possible for the Welsh Government to use sources other than income tax to service the capital borrowing that they need? Can the Minister give any indication on that?

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As the noble Lord knows, the Bill is permissive in terms of additional taxes being established in Wales. My working assumption would be that if such new taxes were devolved or established, there would be a commensurate rise in borrowing powers. However, many of the taxes that people sometimes talk about do not necessarily raise a huge amount of money. Therefore even if you got a commensurate increase in borrowing it would not necessarily be a transformative amount on its own. However, I think that the principle is very clear. The Bill is permissive in terms of additional tax powers for the Assembly and, as it were, borrowing follows income.

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I am glad that the Minister has emphasised that there is a basket of possible sources of revenue which would justify the capital that is needed. No doubt the Welsh Government will need to use the capital responsibly as it is for capital investment projects and not just to subsidise revenue budgets that are running at a loss. As far as that is concerned we are making progress. Can I just pick him up on the comments that he made about Northern Ireland when he said that the situation there is different. Of course the situation is different from Wales. I understand the historic difference and all the rest but in economic terms the challenges in Wales are just as great as those in Northern Ireland—they are in terms of the income per head, the GDA. Is the Minister aware that the GDA per head in areas such as Kensington and Chelsea is 10 times the GDA per head in the Gwent valleys and Anglesey? That is the scale of the discrepancy. We need to regenerate the economy, otherwise we are always going to be going down this spiral. We need the tools to do the job and quite clearly this will be a responsibility of the Welsh Government. All I would press for is for him to be as sympathetic to the economic needs of Wales as he clearly is to the economic needs of Northern Ireland. I beg leave to withdraw the amendment.

Amendment 52 withdrawn.

Amendments 53 to 55 not moved.

Clause 20 agreed.

Clauses 21 to 23 agreed.

Amendment 56

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56: After Clause 23, insert the following new Clause—

“Review of Barnett Formula

(1) The Secretary of State shall make arrangements for an independent review of options for reforming the Barnett Formula in order to meet the objective of calculating the block grant funding for Wales on the basis of need.

(2) The Secretary of State shall lay a copy of the report of the review specified in subsection (1) before each House of Parliament within 3 months of the passing of this Act.”

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This amendment stands in my name and that of my noble friend Lord Elis-Thomas. Noble Lords will be glad to know that this is the final amendment tabled in our names for today’s debate. It deals with perhaps one of the most central questions of all. We are coming to it last: the much-beleaguered Barnett formula which every party in Wales accepts must be replaced. Unfortunately, for what appear to be narrow political reasons the parties up here do not agree on that point. Those of us in Wales who know how much Wales misses out on funding due to this formula were horrified to hear the government parties giving pledges to the Scottish electorate that they would keep the discredited system in place in the event of a no vote. If it is to stay in place without amendment it will have very dire consequences for Wales.

As the Minister will know, in Wales an independent commission, the Holtham commission, has shown how we are disadvantaged by the implementation of the Barnett formula which, as noble Lords will be aware, calculates how much consequential funding the devolved nations get based on the spending levels in England. The Holtham commission argued in 2010 that we in Wales are underfunded by between £300 million and £400 million every year. We believed at that time that it was probably an underestimate. Since 1999 the aggregate shortfall in Wales arising from the Barnett underfunding of the necessary services amounts to more than £5 billion. That is why our NHS, education system and local government have been inadequately financed. Services vital to the people of Wales are being squeezed because successive Governments at Westminster have not got to grips with this problem.

The Holtham commission argued that the formula should be replaced with a mechanism based on needs as opposed to the per head of population as is currently the case. This would allow for the fact that Wales has more vulnerable and disadvantaged people, including older people—many people retire to Wales—disabled people and those on benefits. The level per head of population is higher than the UK average. Even the noble Lord, Lord Barnett, has openly argued that the formula to which he gave his name should be replaced. A committee of this House came to the same conclusion.

Our amendment calls for a review of the options for replacing this formula. In the Motion to which I referred in earlier debates in the Chamber today there has been agreement between the four party leaders. There is a Motion coming up for debate on Tuesday in the name of the four party leaders, including the First Minister, Carwyn Jones. It states in the context of Barnett that the National Assembly for Wales,

“calls for bilateral talks that are informed by the Holtham and Silk 1 Commissions’ findings, including an updated assessment of the current level and likely future direction of Welsh relative funding”,

and,

“calls for those talks, which should begin immediately and be completed by January 2015, to have a particular focus on fair funding, with the goal of securing rapid implementation of a funding floor which both addresses underfunding in a way that is consistent with Welsh needs and halts future convergence”.

There are three steps that can be taken to sort this out and I put to the Minister that they are within the Government’s easy competence and can be achieved. The first is to determine the extent of the shortfall at present. I accept that it has come down because of the economic patterns and it may now be at £150 million to £200 million rather than the £400 million back in 2010, but it is almost certainly still there. If the Government were also to commit to a one-off adjustment to sort that out and bring in a floor so that as the economy picks up again we do not get the Barnett squeeze hitting us in the way that it has, and if the Barnett formula is adjusted to a percentage basis rather than an absolute one so that we do not lose out every time the absolute figure in Wales gives a lower percentage of benefit than happens elsewhere, it would be possible to live with the Barnett formula although it still does not give us a needs-based formula.

Ideally, however, what Wales needs—and what all the parties in Wales have been calling for—is a needs-based formula. At some point we are going to get some daylight on this. We cannot go on from year to year with this underfunding. I press the Government very strongly indeed, even if they cannot accept these amendments, to please give us some ray of hope that we might find our way out of the hole in which we find ourselves in Wales. I beg to move.

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My Lords, my Amendment 59 has the same target as that of the amendment of the noble Lord, Lord Wigley, but approaches it in a different way. I ask that the tax reforms shall not come into force until a Welsh Government Minister has laid a report before the National Assembly containing a statement that the Welsh Government, with regard to the statement of funding policy, are content with the fairness of the allocation of funding arrangements from the UK Government to Wales. So this is effectively about fair funding, also known as the Barnett formula. I follow the noble Lord, Lord Wigley, in saying that in the current, somewhat depressed, economy, the gap has been narrowed. If there is positive economic development, that gap will be widened again.

The noble Lord, Lord Newby, asked us to be positive and not to be “moaning minnies”. I therefore turn to the front page of yesterday’s Western Mail, which quotes Shadow Welsh Secretary Owen Smith as saying after the discussions yesterday afternoon:

“I impressed on the Secretary of State the need for his Government to deliver fair funding for Wales”—

and here it is—

“and am pleased that he seemed prepared to address this issue”.

Well, if he is prepared to address it satisfactorily, I could sit down, I suppose. However, it is clearly a major issue in Wales.

Many years ago I sat at the feet of the noble Lord, Lord Morgan, who went on to become the vice-chancellor of Aberystwyth. He had come “al hoot” from Oxford and taught us poor undergraduates in Swansea new words such as “marginal”. He taught me about the great American labour leader Samuel Gompers, who was once asked, “What does American labour want?”. Some people expected him to suggest revolution or radical change. Samuel Gompers answered: “More”. If the grand public in north, south or mid-Wales were asked what they wanted, they would not enthuse about the proposed changes to landfill tax or income tax, or modified powers. They would say, “We want more”—because we are currently underfunded; the extent is uncertain, but we are certainly underfunded.

That was the position taken by the First Minister. I recall that immediately after the Scottish referendum he said something to the effect that Scotland has put the United Kingdom “through the grinder”—I think those were his words—and that the funding issue should now reappear: we should effectively shout more loudly. Scotland has been rewarded for it. Are we in Wales to continue to be taken for granted? We have played Mr Nice Guy and been ignored. Objectively, we have lost out financially.

Time is such that I will not detain the Committee, but I was impressed by an article by Alice Thomson in the Times of 24 September which—unusually, coming from a non-Welsh person—stated:

“While Scotland is being showered with largesse, Wales—failing and underfunded—has been pointedly ignored”.

She went on to give examples from Holtham:

“Last year under the Barnett formula, Scotland received £10,152 per head, while Wales, despite being much poorer, got £9,709. If Wales received the same levels of public spending per capita as Scotland, its public services would be boosted by £1.4 billion”.

Well, there may be argument about the exact amounts, but I cite what she says: Wales has been the orphan within the United Kingdom. She says:

“Wales is now barely acknowledged by politicians in Westminster … When I asked one English minister what the future held for Wales, he said: ‘Sheep and singing’”.

I hope that is not the attitude of other Ministers in this Government. I would ask noble Lords to read that article, which is very important.

It may well be that the shortfall could be remedied in other ways. I think it was the noble Lord, Lord Wigley, who mentioned a review of Severn Bridge funding. What is clear is that the Severn Bridge, with its substantial and increasing toll, is a major tax on Wales. There would be a big boost to the economy of Wales if that toll were to be removed. I would commend that to the Government. There may be other ways of making up that shortfall, but fair funding there should be.

I will end again on a positive note. I am encouraged by the way in which Owen Smith emerged from that conclave and said that he thought the Secretary of State was listening. Not just listening I hope, but ready to act.

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My Lords, I start by declaring an interest. Some years ago, I had the privilege and honour of chairing the committee of your Lordships’ House that looked into the operation of the Barnett formula. It was an extraordinary committee. On it, among other people, we had a former Chancellor of the Exchequer, two former Secretaries of State for Scotland, assorted junior Ministers, and other Members of your Lordships’ House. The committee came to the unanimous conclusion, set out in a report, that the Barnett formula was out of date, inefficient, basically unfair and ought to be replaced. One of the most substantial parts of evidence we had was from my noble friend Lord Barnett himself. He said that he thought it was out of date and inefficient and was never intended to last this long—that it was introduced as a temporary measure in about 1977 or 1978 and not designed to be semi-permanent. It was meant to last a year or so and then expire. I put it to him whether it was fair to say that it ought to be replaced. He said, “Yes, perfectly fair.” He has persisted in that view.

Where are we on this issue? Here we have a formula, introduced nigh on 40 years ago, which still determines the basis of the block grants for Scotland, Wales and Northern Ireland. It is based on evidence garnered in the 1970s, and is not based on needs but rather on population. You hear the argument frequently that you cannot have a formula based on needs because it is too imprecise and difficult to do. I would commend that the people who veer in that direction of the argument read the evidence that we produced in that report about six years ago. There was a detailed examination of a needs-based formula and the evidence then seemed quite conclusive, as it does now. The Barnett formula is unjust and unfair. Wales is unfairly discriminated against as a result of the operation of the Barnett formula.

No Government in recent years have been prepared to take this issue on. In terms of the Labour Government which left office in 2010, the then Chief Secretary to the Treasury appeared before our committee and said that he thought the operation of the Barnett formula was broadly sort of fair. Indeed, the then Secretary of State for Wales even came in front of the committee and said he thought it was sort of fair. Of course, the Secretary of State for Scotland thought it was extremely fair. The Secretary of State for Northern Ireland also did not dissent from that general proposition. I was appalled, frankly, at the evidence that we got from the Chief Secretary to the Treasury and the Secretary of State for Wales. Nothing has changed. Things have not got better as far as the Barnett formula in Wales is concerned: on the contrary, they have got worse. Something has to be done about it. We really cannot go on with this.

Although I have held the view for some time that the formula’s time has come and that it should be quietly expunged from the public record, I was surprised and, indeed, somewhat appalled to see the three party leaders re-emphasise in the Scottish referendum campaign that it should continue to apply to Scotland. If it is said that it should continue to apply to Scotland, on what basis should it do so? Does that mean that it should continue to apply to Wales? If so, will Wales be asked to put up with what is, by almost everybody’s admission now, a basically unfair system of allocation of resources from central Government to Cardiff? Are we really going to be asked to put up with this because the party leaders went up to Scotland at the end of the referendum campaign and made what is, on the face of it, an extraordinary offer to the Scots? If the party leaders want to keep the Barnett formula for Scotland, so be it, but they should not be prepared to inflict it upon the Principality in perpetuity. It is basically unfair, unjust and out of date, and something should be done about it.

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My Lords, it is enough to make one weep that, in the run-up to the Scottish referendum, political leaders felt themselves driven by expediency to pledge to retain the Barnett formula. As my noble friend Lord Richard explained to the Committee, it is one of the great injustices and malfunctions of government in this country over the past 40 years and a lamentable lack of statesmanship has prevented it being reformed. There was a great opportunity in 2010. The Conservatives had nothing to lose in Scotland. With universal recognition of the need for austerity, there was a political opportunity to deal with it then. That has been made infinitely harder now by the rash and unprincipled pledges that have recently been made.

The report of the committee of my noble friend Lord Richard is unanswerable. We debated it in your Lordships’ House and there was not a scintilla of a persuasive argument to defend the status quo. Indeed, I do not recollect anybody even trying to defend it. The pledges that have been made will come back to bite their authors because I cannot foresee how we can make progress towards new constitutional arrangements in this country following the referendum in Scotland and following the pledges that have been made in respect of devolution so long as there is such a fundamental inequity in public financing. I cannot see how there can be a fair and acceptable new set of arrangements while the Barnett formula is retained.

The noble Lord, Lord Wigley, spoke extremely well and constructively with his practical suggestions as to how we might try to develop a sort of fallback position. My noble friend Lord Richard suggested that if the Scots are to retain their advantage, it may none the less be possible to find ways at least to reduce the inequity for Wales. However, it seems to me that that path also bristles with political difficulties because, if public spending is a zero-sum game, if there is to be more for Wales, then it has to come from somewhere and if the Scots are allowed to retain their present advantages, then it will come from Northern Ireland or, more likely, from England. However, there is, rather belatedly, a growing recognition in the regions of England that the Barnett formula is a lousy deal for the English. I cannot see that there is a path towards remedying at least a part of the injustice from which the people of Wales suffer if it is to be done directly at the expense of the people of England. Hasty pledges have placed us all in immense difficulty but I look forward to hearing from the Minister or the noble Lord, Lord Bourne, who may be able to pluck a solution out of the hat, although I somehow doubt it.

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Today, the First Minister called again for a new funding system that meets the public service requirements in Wales. He likened the Barnett formula to,

“fixing a hole in the roof with Blu Tack and cardboard”.

It is no secret that Wales does not do well out of the Barnett formula. However, we know, following the Scottish referendum, that that formula is not in danger of dying any time soon. Indeed, the Prime Minister made his sentiments on the issue quite clear last week, when he reiterated that he had no intention of reopening the debate on providing a fair funding mechanism for Wales. That seems very different from the position of the Secretary of State for Wales, who said yesterday that he is prepared to address the issue. It would be nice to hear which one of those statements is correct.

At present, the block grant provides 113% of the English level of spending on devolved services, while the Holtham report found that Wales’s relative needs were between 114% and 117%. The noble Lord, Lord Newby, has asked me to be more positive, so I will give it a good go. The good news is that an arrangement was put in place in October 2012 that established a process to review the relative funding of Wales to England in advance of every spending review. If it looked like convergence were happening—for example, if the level of funding between England and Wales looked like it was becoming more equal, despite Wales’s needs being greater, due to things such as ageing population and rurality—then the Government would discuss options to address the issue in a fair and affordable manner. That is the good news.

The problem is that there is no guarantee. It is purely up to the good will and subjective decision-making of the respective Ministers in Cardiff Bay and Westminster. The Labour Party has acknowledged that there is a specific funding problem in Wales and that we will address the issue when we are in office.

I am sorry, but I am afraid that I must return to my negatives. One of the problems with the income tax recommendations is that this issue is compounded by the problem of the devolution of income tax in Wales. It is clear from David Cameron’s insistence that Wales should just pick up that offer of income tax powers that he has not understood the link between underfunding in Wales and the method through which the block grant will be reduced in future, should Wales pick up the option of introducing the Welsh income tax. While it is worth re-emphasising that we agree with the principle of income tax devolution, it is also worth underlining the risks that Wales would be undertaking if we were to devolve income tax powers without changing the Barnett formula.

The idea is that, if the Government suggest that in the first year of operation 10 points of personal income tax receipts are yielded to Wales, then the equivalent amount will be deducted from the Welsh block grant. That cut is then adjusted proportionately in subsequent years. The Government have suggested that the indexed deduction method, as recommended by Gerry Holtham, is used as a method to determine what that proportional cut would be. The problem is that if the block grant fails to produce a fair level of funding relative to need at the outset, as every subsequent change will be based on that initial level of funding, any cut in grant in future, however it will be adjusted, will probably make matters worse as convergence happens.

On the one hand, we are saying that we need fiscal accountability in Wales. On the other hand, we need to ensure that before we set out on this path we start from a fair position. It is critical that a fair funding mechanism is established from the outset, otherwise that unfairness will be locked into the system for the long term.

I know that the Minister is intensely aware of this issue. She has her fingers all over it and has been discussing it for years. However, I ask her to reiterate what the Secretary of State said this week: that he is prepared to look at this issue.

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The noble Baroness said that a future Labour Government would address the Barnett formula. Well, they addressed it in the last Labour Government; they appointed the noble Lord, Lord Richard, and his commission to produce a report and then ignored his findings.

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That is not right. I was appointed by this House, in accordance with the usual rules for the appointment of chairmen of committees.

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I withdraw the term “appointed” but I am sure that the idea was generated by the Labour Government of the day. It was not something that this House thought up of its own accord.

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I am sorry but it was an ad hoc committee, which was set up after the Liaison Committee decided that that was one of the subjects on which the House should have an ad hoc committee. That is how the committee came into existence and I was then asked to chair it.

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I had misunderstood the basis of that committee, so I withdraw what I said first of all—that the last Labour Government addressed the Barnett formula. They clearly did not and it was a committee of this House, chaired by the noble Lord, Lord Richard, which did address it. The Government then ignored its findings. That is what I am told. I am told that there was a second committee but I am not particularly aware of it.

Where the problem really arises is that the Barnett formula is used as an excuse for the failures of the Welsh Labour Government in the fields of education and other devolved areas. They say, “We don’t get enough money”. As soon as I read of the vows given to the Scottish people by the three leaders, it seemed to me that at that moment the concept of having a formula that could apply equally in Scotland and Wales was dead because one surely has to decouple whatever funding formula eventually applies in Scotland when it exercises its powers from whatever formula happens in Wales when it exercises different and more limited powers. Accordingly, we need something specific to Wales through looking at the needs of its people as opposed simply to dividing money on a population basis.

The whole point of the social contract is that taxes are paid—not to be divided equally per head of population but so that services according to need can be paid for by the government of the day. That is the principle that must be the basis of the way in which Wales is funded in the future.

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My Lords, as ever, a debate on the Barnett formula is interesting but I am afraid that from my perspective it is rather too well worn territory.

I start by responding to the comments of the noble Lord, Lord Wigley, in relation to the £300 million to which he referred as the funding gap identified in the Holtham report. The gap has indeed come down in size and it would be very useful to determine the current shortfall. It is particularly important to point out that when the agreement was made between Jane Hutt and the Chief Secretary to the Treasury in an exchange of letters in October 2012, it acknowledged that convergence had ceased to take place, that there was, in fact, divergence and that Welsh funding was within the region of what the Holtham report regarded as fair funding. Therefore, at the moment, there is not a major issue of unfair funding. There may be issues at the edge, but it is not a big problem at the moment, as was acknowledged by the Welsh Government. Of course, that does not solve the problem, because convergence is predicted to start again around 2018. That issue has to be addressed if the gap is not going to widen again. I agree that there is a need to deal with this in the scope of the devolution discussions because it distorts the political debate in Wales. Funding is quite simply blamed for every policy failure. Even if we take the figure of £300 million, in a budget of £15 billion, £300 million is a significant amount of money, but it is not something that could possibly be blamed for every health failure, every education failure and every social problem within Wales. It is not so massive that it is fundamental to the problems that we all acknowledge are faced in Welsh society.

The noble Lord, Lord Anderson, is absolutely right in saying that it is the funding issue that the public are interested in. They do not worry too much in general about devolution, but they are interested in fair funding. The noble Lord, Lord Anderson, referred to the Severn tolls. I look forward to our debates on that in the next Government. Whoever wins the election, there will be debates on the Severn tolls because, of course, the end of that franchise is due in the mid-years of the next Government.

I strongly welcome the acknowledgment by the noble Lord, Lord Richard, that the Labour Party did not deal with the problems of Barnett. Indeed, the Labour Party refused for 13 years to agree publicly that there was any problem with the Barnett formula and it was in those years that convergence was taking place and the funding gap was really growing. It would certainly be the case that Wales would have fewer problems now if that had not been neglected. It is my view, and the Secretary of State certainly agrees, that it is time to look at the funding formula for Wales, and it is my view that one could do this even with the constraints of the agreement that Scotland will retain its current funding. One can look at Wales on a unilateral basis.

The noble Baroness, Lady Morgan, asked me to clarify the Prime Minister’s statement. He simply restated the oft-stated government position on funding in Wales, which is that because the problem of the deficit is our priority, no additional funding can be provided within this Government. That is in no way at odds with the Secretary of State saying that the long-term funding position of Wales needs to be looked at. There is an immediate situation and a long-term situation. The noble Baroness also asked for clarification on the impact of having income tax powers on the block grant and so on and referred to the index deduction method. The purpose of the index deduction method was to protect Wales from big swings in the economy as a whole and the sort of big swings that are due to UK government policy. However, I point out yet again that the Welsh Government have acknowledged that funding is fair at this point, within the region of fairness. Given that the Welsh Government acknowledged that we were in that sort of territory two years ago, it would be a good idea to go for a referendum on income tax powers as soon as possible to give the Welsh Government the maximum opportunities to use the taxation system to increase prosperity in Wales.

I shall very briefly look at the technical details of the amendments. Amendment 56 would require the Secretary of State to lay an independent report on options to replace the Barnett formula. Amendments 59 and 60 would seek to make the devolution of an element of income tax conditional on dealing with the funding formula. They specifically say that income tax can devolve only when the Welsh Government confirm that they are content with how funds are allocated. The progress that this Government have made on working towards fair funding, with the significant exchange of letters in 2012 between the Ministers in the two Governments, can be built on. I urge the noble Lord to withdraw his amendment.

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Can I be perfectly clear as to what the Minister has just said? As I understand it, she is saying that the fact that a vow has been given to Scotland that the Barnett formula should continue to apply there is no bar to the funding arrangements for Wales being reconsidered, and that it is the Government’s position that those funding arrangements for Wales will be reconsidered.

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I am saying that I do not believe that it is impossible to overcome the issue of the commitments made to Scotland and that you can honour those commitments and look separately and independently at the funding for Wales. Northern Ireland is also funded via the Barnett formula but from time to time gets additional funding for specific things. I cannot see why Wales cannot be treated, as Northern Ireland is, as a separate thing, as a matter of principle. Having said that, I am simply arguing the case—it is not government policy to do that. I am firmly saying that the Secretary of State for Wales has made it absolutely clear that it is his view that fair funding needs to be looked at in the context of the devolution settlement and the discussions that are going on about it. In that case, I am confident that those discussions will encompass the issue of funding, although I cannot predict the outcome.

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So that is government policy—what the Secretary of State said?

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Yes, that is policy, announced by the Secretary of State for Wales.

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And of course, every word uttered from the Dispatch Box is government policy, as well. What I am trying to reconcile from the Minister’s response are the comments that things are more or less right now and that there is a need to look at fair funding. There is something a little bit contradictory about that. They are not absolutely right now, or at least we do not know that they are. That is the argument in favour of having more investigation.

The Holtham methodology may or may not have been right, though it has generally been accepted that it was. That indicates there has been a closure of the gap, though there probably is still a gap, of maybe £200 million rather than £300 million to £400 million. We do not know. Taking the comments that the Minister made a moment ago in response to the noble Lord, Lord Richard, if there is a gap of £200 million which could be put right, it would bring us on to roughly what a needs-based formula would generate.

The assumption is that Holtham was looking for a communality of standards in public services in Wales, as might be expected in England. Whether it be £300 million or £400 million as it was, or £200 million as it is now, if that could happen with a one-off adjustment and by bringing in a floor and making sure that the changes—convergence or divergence—were on percentage rather than absolute terms, so that we are not missing out, we would at least have a system that would be sort of needs-based. It is not the radical needs-based formula that a lot of us are looking for, where you have determinants that generate entitlement to certain funding, but at least it would meet the Holtham assessment of the needs as he saw them at that point in time.

If it were possible for the Secretary of State, between now and Report, to come forward with some statement—not necessarily to this House, but to find a platform where this could be spelled out—at least we could then come to some consensus on whether that would do the job and, if it does, move on. The last thing I like doing is coming to this or any other Chamber, perpetually moaning and groaning that we in Wales are being short-changed. I do not want that argument. I want to have the resources to do the job and get on with it. So we need to put this one to bed. I am grateful to the Minister for her response. I hope she will take back the message, which came through fairly loud and clear both in this debate and in the debate earlier. I beg leave to withdraw the amendment.

Amendment 56 withdrawn.

Clauses 24 to 28 agreed.

Clause 29: Commencement

Amendment 57

Moved by

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57: Clause 29, page 31, line 18, leave out from end to “is” in line 25 and insert—

“(1A) Subject to the other provision made by this section, Parts 1, 2 and 3 come into force on such day as the National Assembly for Wales shall determine.

(1B) Parts 1, 2 and 3 may not come into force until the recommendations of a constitutional convention examining the distribution of power between Wales and the rest of the United Kingdom have been considered and voted upon by each House of Parliament.

( ) Subsection (1A)”

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My Lords, the last two amendments—and I hope I will not detain your Lordships too long—are in my name. They refer to the constitutional convention and the relevance of the Williams report: a report which is not mainly about the structure of local government but which contains important clauses on that. My contention would be that, just as we have looked at the relationship between the component parts of the United Kingdom, we should look also at the relationship between the Welsh Government and local government in Wales.

On the constitutional convention, there seems to be an increasing consensus that we need to look at the British constitution in the round. I fear that the response of the Minister would be: if you are so keen on your constitutional convention, why not put it in the manifesto for the next election when it can be debated? But that was Monday’s argument—since when, as we say, an amendment has been moved.

As an assiduous reader of the Western Mail I notice that, on the front page of yesterday’s paper, the Secretary of State, no less, is quoted as saying:

“Up to now, we’ve been saying, ‘Well, these are just matters for the individual parties and their manifestos at the next election’, but actually I think we can do better than that”.

Clearly, the noble Baroness appeared not to be on message on Monday; perhaps she will be a bit more on message today when she comes to respond.

So there is an increasing consensus. I hear the argument from time to time that to suggest a constitutional convention is no more than a device for delay and for kicking the matter into the long grass. The answer is that promises were made to Scotland—and some might argue that never has so much response been made by parties in the United Kingdom to one maverick opinion poll. When the Sunday Times YouGov poll suggested that there was a majority for independence, there was a certain panic among all parties, resulting in a response that may now be regretted at leisure.

The promises made to Scotland are clear and should be honoured, but they can be implemented on their own grounds. However, there are implications for the rest of the United Kingdom and, in my judgment, for the constitution—and I think that the Liberal Democrats have broadly been the leaders in this field. Clearly, the quasi-federal constitution needs to be viewed with all the difficulties that may arise. We need to have concern across the board, including in relation to your Lordships’ House. If there is to be a new regionalism, it should be reflected in the way that this House is elected, directly or indirectly—possibly, as in France, using the notables from local authorities. I think that the electorate of the French Senate is roughly 80,000. These are the people who are in the localities, the regional assemblies and the local authorities, and they come together having been elected indirectly to work together in the Senate. Your Lordships’ House should not be excluded from this consideration.

I think it was Alastair Campbell who said, “We don’t do religion”. That may or may not be the case but in the United Kingdom we don’t do constitutions—except for other people. We are pretty keen on delivering constitutions to colonial powers from high to low but we are not so good at doing it for ourselves. I have spoken to many groups from the Commonwealth Parliamentary Association and have been tempted to use the phrase “the Mother of Parliaments”, but clearly things are creaking in our own constitutional structures at the moment. Perhaps the 45% vote for independence in Scotland is a means of alerting us to the fact that the status quo cannot continue.

I recall Lord Weatherill, who was both a distinguished Speaker of the other place and the Convenor of the Cross-Bench Peers in this House, telling me a little story. He worked in the family firm of tailors and on his first day there was an old Jewish tailor to monitor him. One of the senior people came to the old Jewish tailor and said they wanted a suit made. He said, “Do you want it quick or do you want it good?”. There is an element of that in terms of constitutions. After all, we have agonised over changes for so long, going from precedent to precedent with a little tweak here and a little tweak there.

Now there must surely be a case for a group to make an initial analysis by looking at foreign examples and then for the elected representatives, so far as they are able, to take a considered view. It may be a federal system. Even within a federal system or a quasi-federal system one can have a range of very different powers. We know that in the different autonomía of Spain, for example, it is federalism à la carte. An autonomía such as Valencia has relatively limited powers, whereas Galicia and Catalonia have far more extensive powers—all within the same system. There is no reason why, according to demand, there should not be asymmetric devolution.

The key question is: are we happy to continue with constitutional tinkering or do we feel that we have reached the point where we need to look at the whole constitution from this place and the other place. I recall that one of the major cogent arguments used when we were discussing the future of this House was that there was no attempt to place it in the context of the relationship between this House and the House of Commons. We need to look at the devolved assemblies, and we also need to look at local authorities.

If we are not happy to continue tinkering, it is clearly right that we should now recognise that after the Scottish referendum we are in a new context, and that the status quo has proved insufficient. I recall that when the three party leaders made a vow, they came together quite properly. If they accept the case for a constitutional convention that is good although perhaps not quick, what is now stopping them? Is there not a reason for them to now make a similar vow on a consensual basis that this country deserves a constitutional convention?

I turn now to my second point, on which I shall be quite brief, which is the question of the Williams report. I submit that it would be wrong to ignore the position within Wales: that is, the relationship between the Assembly and the local authority. I recall that during the initial debates on devolution in the 1970s the Welsh Office, as it was then called, totally ignored local government. It was only at a fairly late stage of the debate that it was recognised and brought within the discussion that there were substantial implications for local government.

There is clearly a temptation for Cardiff Bay to hold on to what it has. However, I am encouraged by the response of the leader and, indeed, all the parties in the Assembly. Although the Williams commission hoped that there would be action by Easter of this year, we know that on 1 July the overview on broad public service recommendations was addressed, and on 8 July the local government reorganisation was addressed with a general White Paper. Now we are promised that on 28 November there will be a voluntary merger of local authorities. On 28 February there will be a White Paper setting out the process for merging councils that do not want to merge. There is already a timetable in process.

I will not labour the point that there is no ideal local government structure in Wales. I recall that many years ago when I was the Member for Monmouth there were certainly at least a dozen local authorities: rural district councils, urban district councils and town councils. That was done away with in the Walker reforms, with counties and districts. Clearly, it was right that the counties had responsibility for education and social services, but the divisions were not easily made.

We have now had further elements of reform. City regions are being considered. However, perhaps the failures over food safety are very good examples of the fact that, for certain areas of expertise, local authorities need to be able to employ experts in the field. I end on the plea that we do not forget local government. There appears to be a consensus within the Assembly on implementing the recommendations of the Williams commission, and the timetable is such that these could well be implemented before the provisions of the Wales Bill become law. I beg to move.

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My Lords, it is such a delight to hear from the noble Lord, Lord Anderson, who had a somewhat feckless youth when he was passionately anti-devolution. Clearly, somewhere between Monmouth and Swansea he was struck with the true light of liberal principle. As I understand his speech, he now supports not merely Liberal Democrat policy but also what was, in his feckless youth, Liberal policy.

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My position then was as it is now. Devolution within a unitary system is flawed in many respects, including the fact that there is no end position, whereas a federal or quasi-federal system with a constitutional court to adjudicate on the differences between the component parts is logical. We were embarking in the 1970s on a strange new journey and perhaps it was Mrs Thatcher, with her own form of centralisation, who was the major recruiting sergeant for me on that.

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The noble Lord, Lord Anderson, has disappointed me slightly with this recantation of what he said earlier, but never mind. I am entirely with him that we need a constitutional convention and that we should be looking for the abolition of the House of Lords and some form of federal, directly elected or proportionately elected Chamber that could consider the situation as a whole, perhaps with a Supreme Court charged with the sort of duties that attach to the Supreme Court in the United States. That is not, however, any reason for holding up the provisions of this Bill, which are urgent. The Bill needs to go through because Wales cannot wait for a future nirvana when we have got it all together, it is all very logical and all the problems are at an end. We cannot keep the Bill waiting for that moment.

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If my noble friend Lord Anderson’s Amendment 57 is passed it will be a very long time before the provisions of this Bill are brought into force. I am against that delay because I want the Welsh Government and the people of Wales represented by them to have the new borrowing powers that are built into the Bill. However, if there is to be a constitutional convention, I am in favour of it taking its time. In the field of constitutional reform, more haste means less speed, as we saw rather painfully in the attempt at reform of your Lordships’ House in this Parliament.

I also think that the constitutional commission, if there is to be one, should be very much at arm’s length from the political parties and the Westminster and Whitehall establishment. It will be important that the public should not suppose that this is any kind of stitch-up or a device for the existing establishment to protect its own interests. The public would want to see that members of the commission were deeply versed in constitutional theory and constitutional law, and that while they may have close affiliations and loyalties to the different nations and regions of this country, they were prepared to take, as far as they could, an objective view of the long-term interests of the United Kingdom.

It would also be essential that they should receive submissions from the public. Those submissions would be numerous and would take a very long time to consider. I am sure that if a committee of wise people formed on these principles were to set to work, they would perform a valuable task in clarifying the issues, educating us all and pointing the way forward. They would probably succeed in coming up with a blueprint for a new federal model of the United Kingdom. However, it is one thing to come up with a blueprint; it is quite another to implement it, and then politics would re-enter. I anticipate that the processes of constitutional change would then be, as has always been the case in this country, incremental, and they would be the better for that.

I cannot support my noble friend’s amendment, but as we reflect on what we might be seeking in a constitutional commission we should disentangle it from our continuing day-to-day requirements of legislation and politics. We should get on with enacting this Bill. We should get on with implementing it and think generously, spaciously and patiently about how to develop a future framework for the government of the United Kingdom.

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My Lords, we have to understand what the Scotland referendum was really about. It was a cry from the people of Scotland who feel cut out of the political process. Of course, that has had an impact not just in Scotland because of the commitments that were made in the last days of the referendum, but it is having and will have an impact across the whole of the United Kingdom. It makes sense for us to place the discussion within a broader context.

We are not in favour of stopping this Bill in its tracks. A lot is in the Bill and there is a lot more to come with Silk 2. It is important that the Welsh devolution process does not stop because of a huge transformation in Scotland. However, it is worth saying that we have to think in a broader way about the constitutional arrangements of our country. What happens in Scotland is having an impact in Wales. Those commitments on Barnett are already having an impact in Wales and there is a problem if they continue to do so. We need to get the balance right and we need to have a broader discussion.

For two years the First Minister of Wales has been calling for a constitutional convention to be established where a discussion about the power relationship between Wales and the rest of the United Kingdom would be undertaken. Who would be on such a constitutional convention? Obviously there would have to be representatives from the devolved Administrations and local government representatives from England. But, crucially, we would also want to see representatives of civil society and the general public. The disconnection between politicians and the public absolutely has to be halted. We would need to work to a clear timetable. The last thing we want is a discussion that goes on for years and years without end. We would also need to think clearly about what the convention would do. We would have to define the core elements of a new constitution that would enshrine a programme of fundamental reform for the UK. The new settlement, while recognising the different circumstances of the four nations, must be based on common principles that reflect the multinational and multi-union character of our United Kingdom.

The referendum in Scotland was a wake-up call for all members of the political class. We must acknowledge the depth of disillusionment in this country and the distance that people feel from the political process. Through establishing a convention, we would have a one-off opportunity fundamentally to reform the system of governance of this country. A constitutional convention is needed and it is well overdue. We recognise, however, that the Wales Bill is not the ideal mechanism for introducing the idea of a constitutional convention, but it seems rather odd for us to be ploughing on with constitutional changes as if nothing has happened. As Carwyn Jones, the First Minister of Wales, has said, the current constitutional settlement is dead. We recognise the need and the demand for more devolution in Wales, but we need to set the whole within the broader UK framework. To proceed in isolation from the wider discussion would be to miss the opportunity to elaborate on a new vision and a constitution for this country, a constitution that would involve, include and invigorate the population so that people would feel as if they had ownership of their own country.

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My Lords, the noble Lord, Lord Anderson, has pointed out the flaws in the devolution settlement for Wales. I say to him that I have campaigned for devolution for virtually the whole of my adult life. I have faced downright nasty opposition at worst and a lack of enthusiasm and total incomprehension at best. Long ago, I came to the conclusion that the overwhelming majority of people simply were not interested. It is a really exciting time for me because devolution is suddenly fashionable and a lot more people understand what it is about. Noble Lords will not be surprised, therefore, that I am keen to seize the moment; I am keen to get this Bill through as a basis on which we can take the next step. The Bill is a very important step forward in devolution in its own right.

Yes, there is a great deal to be said for a constitutional convention. The noble Baroness, Lady Morgan, said that the First Minister has been calling for one for two years. My party has been calling for one for 40 years. On that basis, I would argue that one should not place too much faith in the immediate production of an outcome of the concept. I agree with the noble Lord, Lord Howarth, when he says that this is something that we need to think about widely and in the long term. The message from my noble friend Lord Thomas and the noble Lord, Lord Howarth, is that, despite the great advantages of a constitutional convention, we have to get on with it now.

To the noble Lord, Lord Anderson, I say that if I accepted his amendments, it would ensure that Parts 1 to 3 of the Wales Act could be commenced only by the Assembly on a day of its choosing, but the Assembly could not decide to commence the provisions until the recommendations of a constitutional convention had been voted on by both Houses of Parliament or until the Welsh Government had implemented the Williams report. I would say that would mean a minimum of five years. My noble friend Lord Bourne, being a member of the Williams commission, assures me that that should be implemented a lot sooner, but we all know that local government reform in Wales does not prove easy. Therefore, I am not betting my political reputation on the timescale for either of those events.

The last few months have been momentous for our United Kingdom. It is now time for us to come together and move forward, but we also accept that it is not “business as usual”. The referendum in Scotland has led to a demand for reform across the UK. We now have a chance—a great opportunity—to change the way we are governed, and change it for the better. The Government have made it clear that we want a debate on how to make the United Kingdom work for all its nations. We have introduced a new devolution committee, chaired by the Leader of the Commons, to consider how we can best do this. The Wales Office is fully represented on that committee and my right honourable friend the Secretary of State for Wales is also having meetings across the parties to pursue this agenda.

We have as a Government already committed to devolving further powers to Scotland as a result of the referendum, and we will deliver on that commitment. England, Wales and Northern Ireland are now on the agenda. This is the time to put our foot on the pedal of devolution. I regret that the noble Lord’s amendments would apply the handbrake. Wales needs the powers this Bill provides now, not in several years’ time, which would be the case if the noble Lord’s amendments were accepted.

The noble Lord’s amendments would also enable the Assembly to decide the commencement of the provisions in the Bill, subject to his other conditions being met. I regret to say that they are very imprecise conditions and it would be difficult to know when they are satisfied. We will of course—this is a commitment—work with the Welsh Government and the Assembly on the commencement and implementation of the provisions in a Wales Act.

The Bill is about creating truly accountable devolved government for Wales. It is about providing the Welsh Government with the levers to grow the economy in Wales and ensuring clarity for Welsh voters when they go to vote in 2016. All these things would be prevented if commencement of the Bill was delayed in any way, including through the amendments put forward by the noble Lord. I therefore respectfully ask him to withdraw his amendment.

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My Lords, the Minister vastly overstates her case by claiming that this Bill would lead to a truly accountable Welsh Government. If we look at this objectively, it is pretty small beer. It is a Wales (Miscellaneous Provisions) Bill. It was framed in a very different context from that which we have now, after the Scottish referendum. I assure her that the purpose of these two amendments—

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Is the noble Lord saying that a Bill that provides fiscal accountability for the very first time for the Welsh Assembly and Welsh Government is not a big step forward? Is he saying that the provision of borrowing powers for the first time for them is not also a big step forward? Does he not accept that the devolution settlement has been sadly lacking up to now because there has not been that proper accountability and that this is a vital development?

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I hear what the Minister says about accountability but given the relatively small changes and the small amount of money involved in these taxes which are to be transferred, I doubt that one can properly say that there is real accountability. There is considerable scepticism in the Assembly in relation to the tax powers, which may be stillborn in any event. Yes, I accept that borrowing powers are a major innovation in the Bill but these borrowing powers, albeit in diluted form, are available to local authorities in Wales in any event so why not to the National Assembly?

On the general point she made, my purpose in having this formula of,

“may not come into force until”,

was clearly only to provoke a debate. It was not intended as a freeze or delaying device. I accept that after the result of the Scottish referendum we cannot return to business as usual. Finally, I also accept the point made by my noble friend Lord Howarth that there are great problems in the concept of a constitutional convention. Even if we have the so-called constitutional experts, no doubt there will be minority opinions—as there have been on similar issues. It may be extremely difficult to find—as we saw in respect of reform of your Lordships’ House—any reasonable consensus following that.

Having provoked the debate that I set out to provoke by using the formula that, I say again, was not intended to freeze in any way the progress of the Wales (Miscellaneous Provisions) Bill, I will withdraw the amendment.

Amendment 57 withdrawn.

Amendments 58 to 60 not moved.

Clause 29 agreed.

Clause 30 agreed.

In the Title

Amendment 61 not moved.

Amendment 62

Moved by

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62: In the Title, line 3, leave out “a rate” and insert “rates”

Amendment 62 agreed.

Amendment 63 not moved.

Title, as amended, agreed.

House resumed.

Bill reported with amendments.

House adjourned at 10.06 pm.