Question for Short Debate
My Lords, I am very grateful for being afforded this Question for Short Debate and to the Minister and other colleagues for being here to consider what will surely be a dominating issue in this Parliament: namely, how the powers already promised to Wales and Scotland, together with the further powers being broached, will operate in a balanced governmental structure. That includes powers needed for England to take its own decisions on English matters. We are standing at an important crossroads but with a Government appearing unable to respond to the urgency of the moment or give any meaningful coherent lead. There is an urgent need to decide on the direction of travel, otherwise events—the piecemeal unfolding of legislation in the two Chambers at Westminster; the EU referendum; the outcome of the elections next May to the devolved legislatures; and the fleshing out of the cities Bill—will lead to a situation in which Westminster seems like a boat with no tiller or engine, and whose captain has no charts to see the way forward.
I shall make clear from where I come on these matters. I want to see my native Wales—my nation—have the greatest possible degree of independence but that does not mean absolute independence, as UKIP defines the term. We live as part of a community of nations, in European and British terms. Plaid Cymru does not want Wales to cut itself off from such relationships; rather, it wants Wales to be a full partner in its own right within such structures. We believe that Wales, like Scotland or Northern Ireland—or indeed England—has the right to independence, something which was accepted in the recent Scottish referendum. It was immensely to the UK’s credit that this was recognised. The principle has already been accepted long ago for Northern Ireland, as it underpinned the peace process, and more than one Prime Minister has accepted that Wales, too, has that basic right.
We are de facto living in a confederal union, in which the constituent parts have the right to go their own ways. There is therefore a question as to whether the citizens of each nation wish to exercise that right. My party, Plaid Cymru, fought the recent election on a manifesto calling for home rule for our constitutional objectives in this Parliament. Home rule is not a new term: 130 years ago, the Irish parliamentary party won 85 out of 103 Irish seats on a home rule manifesto. Had that been delivered, we probably would not have witnessed the Easter Rising of 1916, but despite Gladstone’s efforts it was denied and the UK, as then constituted, broke up in acrimony.
Are we any wiser today? Are the parties at Westminster going to respond to the Scottish situation in a positive, inclusive manner or are we going to see intransigence, with all that that implies? Let us remember how we got here. Gordon Brown, apparently speaking on behalf of all three of the then UK party leaders a week before the referendum, launched his famous vow. He referred to it as home rule—a devo-max type settlement which the Scots could secure if they voted no to independence. Scotland voted no and some who would have voted yes to devo-max, had that been on the ballot paper, were undoubtedly influenced to vote no because of that pledge. So what happened?
On 19 September, we had the Prime Minister unwisely trying to jump the gun at 7 am, linking in the same breath the Smith commission and English votes for English laws. Yes, we had the Smith commission, and while many of its proposals were, and are, worthwhile steps forward they certainly did not add up to home rule. The three UK parties fought the general election on implementing Smith. The SNP, accepting that the referendum had ruled out independence in the immediate future, advocated home rule as a practical next step, deliverable in this Parliament. The outcome of the election in Scotland was unmistakable. The three UK parties, placing their trust in the Smith proposals, got three MPs between them; the SNP, advocating home rule, got 56 seats. There is no mistaking an elephant when it sits on your doorstep. It is high time that the three UK parties accepted that it is home rule that the Scots endorsed on 7 May.
The noble Lord, Lord Forsyth, summed it up last week when he said that,
“the Smith commission proposals are clearly not going to meet the aspirations of the Scottish people”.—[Official Report, 8/6/15; col. 626.]
I also draw the Minister’s attention to the words of the Conservative MP, Bernard Jenkin. Speaking at Second Reading of the Scotland Bill, he said:
“I am bound to ask … whether this Bill is really ‘it’ for the future of Scotland. Is this the full and final settlement that will stabilise the Union of the United Kingdom? I hae ma doots”,
if I interpret the accent correctly. He added:
“We need … to start building up a consensus on what a full and final settlement for the whole United Kingdom might look like … we need a new, 21st-century Act of Union”,
“would aim to provide a balanced and equal settlement of powers across the four parts of the United Kingdom … and a mechanism such as a new council for the Union for distributing UK tax resources on the basis of need and unanimous agreement”.—[Official Report, Commons, 8/6/15; cols. 941-43.]
In the same debate, the SNP leader Angus Robertson MP stated:
“There is no doubt whatever that this Bill does not match the pledges of the campaign or the spirit and letter of the Smith deal”.—[Official Report, Commons, 8/6/15; col. 946.]
Labour’s shadow Scottish Secretary, Ian Murray MP, stated:
“This might be a Scotland Bill, but it has implications for other parts of the UK”.—[Official Report, Commons, 8/6/15; col. 938.]
However, he did not commit to home rule all round, which I hoped would be forthcoming.
What do we mean by home rule? Putting it crudely, it means Westminster retaining sovereignty over defence, foreign affairs, the monarch and the pound with the Scottish Parliament having sovereignty over everything else in Scotland, and likewise in Wales, Northern Ireland and England. Of course, it is not that simple. It implies a quasifederal or confederal constitution. It implies some federal taxes and some non-federal taxes, which is a model towards which we are already moving. It implies, one way or another, an English Chamber dealing with non-federal matters.
Here I come to the heart of the matter as far as we in Wales are concerned. The key question for us is whether Scotland is to have a Scotland-only solution, a separatist constitutional settlement separate from the rest of the UK, or whether we are to have a balanced UK-wide settlement in which new constitutional provision is made not just for Scotland but for Wales, Northern Ireland and, indeed, England. In other words, are we going to get a coherent, thought-out structure of government which has a reasonable chance of standing the test of time or are we going to have a knee-jerk, ad hoc settlement responding to the most recent kicking suffered by the Government, which certainly will not endure?
In my final remarks, I shall put forward some positive ideas by drawing attention to a keynote speech made on 20 May by Plaid Cymru leader Leanne Wood AM, a name, face and voice familiar to many colleagues from the election television debates. She proposed that,
“all responsibilities except for those over defence, foreign affairs, the Crown and the currency, should be transferable to any one or all devolved governments, provided a majority vote in favour of such a transfer in the respective national legislatures”.
“This flexible approach allows for each nation to build a constitutional framework that is in the specific interest of the nation, but guarantees … the consent of the people at all times”.
She also called for a strong council of Ministers at UK level to replace the present joint ministerial committee, a principle which the Smith commission has also endorsed. Those three elements—a council of Ministers, a clear devolution process and a mandate from the national legislatures—would, in her words,
“serve all the nations and peoples in these islands far better than the current web of complexities”.
She described this model as,
“a proposal for a Confederal UK”,
and I strongly endorse this approach. I appeal to the Minister to give an assurance that such a new constitutional model has not been ruled out. Much work would need to be done on the detail, perhaps by a convention, provided that it had a strict 12-month working time limit to deliver its recommendations, which could then be legislated upon within two years and brought into effect prior to the 2020 election. As such, this proposal has the seeds of a way forward which respects the aspirations of all four nations within a framework of co-operation.
The United Kingdom as currently constituted is drinking in its last chance saloon. A new constructive partnership between the nations of these islands is still possible if leadership and vision are forthcoming, but it will not happen unless there is a new realisation in this Chamber and the other place of the urgency of the situation. Will the Minister please ponder on these matters and keep the House informed as ideas progress, giving us every opportunity to debate the unfolding Scottish settlement in the context of a new deal for all the nations of these islands and, in particular, for Wales?
My Lords, I thank the noble Lord for providing us with the opportunity to debate this important topic. I find myself in agreement with a number of the points that he made, although our political philosophies are very different.
Those of us who are campaigners for constitutional reform have experienced a lifetime of frustration at the glacial pace of change and the fact that it seems to come only grudgingly, with the offer of only the minimum of what is acceptable, and that all too often it is a response to a crisis rather than a logical, well-thought-out programme of reform. This principle has applied to our devolution efforts as well as to cross-constitutional reform in general.
The Labour Party—not the most devolutionary of parties—was brought back to devolution in 1997 by the determination not to be shut out of government again throughout the whole of the UK for another 18 years. Even if the Tories won at Westminster—so the thinking went—the Labour Party was at least assured of Labour Governments in Scotland and Wales. That did not quite work to plan, but the rise of the SNP is one of a series of political changes that was not then foreseen. However, the model of devolution designed for Wales was at that time underpowered and unworkable. It was quite literally the minimum—a minnow—and was designed to leave as much power as possible with Westminster and Whitehall. Of course, as soon as AMs got their feet under the table in Cardiff Bay, they realised this and started asking for more and, grudgingly, more was given. Some noble Lords may remember legislative competence orders, where MPs sort of double-checked the homework of Assembly Members and decided whether it was good enough to go forward as legislation.
We are in a very different world now. The pace of change has quickened considerably. Thanks to the coalition Government, who enabled the referendum in 2011, the Assembly now has primary legislative powers. It has more and wider powers. In fact, the pace of change has become so brisk that Wales Bills have been effectively queueing up on the runway. The Silk 1 report was not finally embedded in legislation before the Silk 2 recommendations were drafted into a new Bill, which, crucially, will deal with the uncertainties of the conferred powers model as well as giving the Assembly more powers, some of which were not even within the remit of the Silk commission to consider when it was established. I was delighted to see that the Wales Bill was mentioned in the gracious Speech. Will the Minister confirm that the scope of the Bill remains much as was envisaged in the St David’s Day agreement, in which I know he was very much involved?
The coalition Government were admirably responsive to pressure for more devolution in both Wales and Scotland, but—this is where I differ from the noble Lord, Lord Wigley—sometimes responsiveness is not enough and rapid responses can be contradictory and inconsistent. There were many differences between the devolution settlements of Wales, Scotland and Northern Ireland, and many of these exist for good reasons of history and geography, although there needs to be consistency. However, other differences were included by chance or for reasons of political pragmatism, neither of which is a good basis for constitutional development.
My party has long argued that we need a constitutional convention to take a comprehensive look at the constitution throughout the UK. That does not mean that in the mean time all change must stop and that we should be frozen in time until the constitutional convention reports. However, it does mean that the constitutional convention should look thoroughly at the situation from all angles. The title of the noble Lord’s debate suggests that there needs to be balance in this area, not slavish duplication. One devolved body should not simply be the clone of others. I and my party believe that the sensible answer lies in federalism, which would allow for balanced differences between the constitutional settlements in each country. The noble Lord quoted from a speech made in May by the leader of Plaid Cymru. I will forbear to quote from a speech made by Lloyd George on much the same lines.
Any convention must reflect well beyond the narrow interests of the political classes. It must be a people’s convention, not a politician’s convention. It was suggested in the news today that the Welsh First Minister would be an ideal chair of that convention. That suggestion illustrates that the Labour Party has failed to grasp even the shadow of the dangerous and unstable constitutional position that we are in as a United Kingdom. Any leader of a convention must command confidence across Britain and across political parties.
Our dangerous position is made worse by the highly divisive EU referendum now appearing over the horizon and by the distortions of our electoral system, which have magnified the political differences between the four nations to the point where the political balance is dramatically different from one nation to another. The noble Lord cited the SNP’s success in the election. It is important to remember that the SNP got 95% of the seats on just over 50% of the vote. That is one of the problems with our electoral system.
I now want to return to the title of the noble Lord’s debate and the issue of balance. A crucial factor in that balance is the funding formula—the Barnett formula. Of course, it is not a proper formula; it simply takes what Ministers decide to spend in England and applies it to the other three nations in percentage terms, based on historical spending decisions made way back in the 1970s. I recognise the pledge made to Scotland in the referendum campaign, which means that whatever its limitations the Barnett formula will stay for some time. However, the situation in relation to Wales is quite simply unsustainable. In the early years of devolution—Labour’s high spending years—the formula led to a massive gap developing between funding for Wales and funding for Scotland. The Holtham commission calculated that Wales was underfunded by £300 million a year. Wales was, and remains, the poorest part of the UK. Indeed, figures out today show that 15 years of devolution have not made even a dent on poverty levels in Wales.
One of the foibles of the Barnett formula has been that, as the coalition Government cut back on public spending, the relative underfunding in Wales became much smaller. Indeed, it seems likely that Wales is not actually underfunded relative to the rest of the UK at this time. However, when and if public spending rises again, the problem will return and we need to prepare for it now. I am pleased that the Government have agreed to introduce a funding floor, but we need more than that and we need it very soon. I am disappointed that the Government do not agree to an update to Holtham’s calculations. I refer here to an Answer given by the Secretary of State for Wales yesterday in Welsh Questions, in which he said in relation to the Holtham calculations:
“The work has been done and we need to crack on with introducing the fair funding floor”.—[Official Report, Commons, 17/6/15; col. 303.]
I should like some clarity on what the Secretary of State was referring to. Has Holtham updated his work? If not, how can the funding floor be embedded at a fair level without further calculations? Does the Minister accept that the perceived funding unfairness, which may or may not exist, simply magnifies a sense of grievance? Does he agree that the issue should be prioritised? He will be aware of Plaid Cymru’s call for Wales to be funded at the same level as Scotland. We all know why Scotland’s funding will remain; we are also aware that it is extremely generous. Maybe the Minister would like to comment on the realities of this situation. Is this fantasy economics? If so, I suggest to him that the Government need to get a grip on the funding issue before the sense of grievance in Wales escalates further.
Finally, I recommend to noble Lords an excellent book written about a decade ago by a Conservative Assembly Member, David Melding, now the Deputy Presiding Officer of the Assembly. It posed the question: will Britain survive beyond 2020? It seemed an astonishing question then. Now, it is not astonishing at all. Funding powers, voting patterns and political power—all these are pulling our union apart. England has at last found its voice in this debate and the fear is that it will simply be the loudest. I am sorry to use another metaphor—the noble Lord talked about the last chance saloon, whereas mine concerns a ship. The ship is being steered by a motley crew and if the Government are sensible they will take the helm before it hits the rocks. The Government should establish a convention that will bring order, restore confidence and, I hope, encourage further change.
My Lords, when my noble friend Lady Randerson referred to the glacial pace of reform, I was taken back to an evening at Rhyl Town Hall in 1964, when I addressed for the first time, in my first election, the voters of the West Flintshire constituency. I called for a parliament for Wales, with proportional representation. I also called for the abolition of the hereditary principle in the House of Lords, if the noble Earls will forgive me. I was very young then.
I was starting off on a long road towards devolution. I cherished a belief then that, given significant power over the decisions that affect their lives, the people of Wales would make innovative, better-informed and targeted decisions. The question was what structure of devolution would provide that result. I led for my party on the 1998 Bill and on the subsequent Wales Bill. It is quite apparent, however, that the structure is not working. A motley crew is indeed in charge, as my noble friend said.
Today—my noble friend referred to the report out today—the Welsh Assembly’s Communities, Equality and Local Government Committee’s inquiry into tackling poverty in Wales has been scathing about the Welsh Labour Government’s ineffective efforts to get to grips with the issue. The committee says that it is,
“deeply concerned by the Welsh Government’s lack of progress in reducing poverty, particularly given its long-term commitment and investment in the issue”.
Poverty rates in Wales have barely changed since the beginning of this century. The number of people who rely on food banks has doubled within a year; 23% of the Welsh population live in poverty, compared to 17% of the United Kingdom population as a whole. The position has remained static despite the fact that the Welsh Government have a Minister specifically responsible for targeting poverty. It happens to be the Assembly Member for my home town of Wrexham. Today she helplessly held up her hands and said that,
“we have to be very honest about what we can achieve. I think that we have to recognise that there are a lot of factors that are outside our control. I do believe that our policies and programmes are making a difference”.
It is very interesting that the excuse is that,
“there are a lot of factors that are outside our control”.
That brings the framework of devolution into question.
It is quite apparent, however, that the policies and programmes are not making a difference. On unemployment, Wales stagnates, with 99,000 people out of work. While the United Kingdom rate of joblessness steadily declines, the Welsh figures remain completely static. There was a year-on-year decline of 0.01% last year, compared to Scotland’s 0.5% and England’s 1.4%, according to the Office for National Statistics.
In the Welsh Government’s annual report, it is claimed that 48 of their 49 commitments relating to education either have been delivered or are on target. That is too much guff. The claim to achievement contrasts sharply with the PISA international rankings and the Estyn annual report, which both point to serious concerns about schools. The Welsh school inspectorate says that standards in our primary schools are slipping; PISA results show that Wales is behind every other part of the United Kingdom; compared with the top-performing countries in the world, we have very few high achievers; and children in every corner of Wales are not being helped to achieve their full potential. The only bright side is the introduction of the pupil deprivation grant—pupil premium—which was achieved by Welsh Liberal Democrats in return for agreeing to allow the Labour Government’s overall Budget through, which is helping to close the attainment gap.
The Wales Audit Office reported earlier this month on the four regional education consortia which are responsible for school improvement. It said:
“The governance of regional consortia is developing but we found progress was hindered by limited capacity, incomplete management structures, inadequate scrutiny of overall consortia arrangements, weaknesses in financial and performance management and insufficient openness and transparency”.
Estyn said that all regional consortia had struggled to fill senior posts, which,
“adversely affected their capacity to direct and manage work and highlights the lack of a national strategic approach to develop senior leaders.”
In my part of the world, many bright pupils, including my own grandson, are voting with their feet and going over the border for their sixth-form studies after they have completed their GCSE examinations.
The record on health is dire. The hospital which serves Wrexham, where I live, is part of the Betsi Cadwaladr group, which last week was put into special measures. I understand that the police are investigating. It has been given Welsh Government cash of £20.6 million to help pay its bills. The chief executive has been suspended. This week, Cardiff and Vale University Health Board is reported to have overspent by £21.4 million and Hywel Dda University Health Board by £7.5 million. On 5 June, the Royal College of Physicians, representing 1,100 doctors in Wales, said that there could be an “unprecedented” funding gap of £2.5 billion within the NHS in Wales by 2025-26. It has launched an action plan calling for more investment, a patient-centred and clinically led approach to change, a national medical workforce and training plan, and leadership on improving public health.
I am still an optimist and do not believe that the principle of devolution has failed, but for the last 15 years we have been landed with a Labour Government of one sort or another—sometimes in coalition but now on their own. In my view, they are by now an exhausted animal, totally devoid of energy and ideas, and utterly incapable of tackling the problems which they are facing.
I applaud the noble Lord, Lord Wigley, for securing this debate and I am very happy to discuss with him comparisons with Scotland, the extent of powers and funding, the Barnett formula, the d’Hondt system of proportional representation, the ideal number of AMs and scrutiny committees. Indeed, federal constitutions are my bread and butter. As chairman of the Lloyd George Society, I was very disappointed that my noble friend did not read out a quotation from that great man, who demanded home rule all round in the 1910s. I would prefer to join the noble Lord, Lord Wigley, in a movement to sweep the Labour incumbents out of power. We missed our chance with the rainbow coalition. Two of the three are here—the noble Lord, Lord Bourne, is not at the Dispatch Box, unhappily—but we have to get rid of them. Labour lost in Scotland and it is time it lost in Wales.
That is a pretty good challenge. We can always rely on the noble Lord to talk down Wales, but I think that there is a point: we need to do better in Wales. We have to remember that we have a long and difficult tradition of deindustrialisation that we need to compensate for. We start from a very low base, but there are some good news stories in Wales as well. We have to remember that inward investment has improved dramatically in recent years. Export levels have improved. Educational attainment is getting better. There are issues with the health service, but that is at least partly because of the massive cuts that we have had to endure from—if the noble Lord does not mind me saying—the coalition Government, of which his party was a part. He has paid the price for that, but it is important that we understand that there is work to be done. The Welsh Government are getting on with that work.
I now go back to the point that I wanted to make, which is to thank the noble Lord, Lord Wigley, for putting this issue on the agenda and to welcome the new Minister to his post. We know that the dust is beginning to settle after the Scottish referendum and the general election, but we have to be in no doubt whatever that the structure of governance in the UK is on the march. This hotchpotch, ad hoc, knee-jerk reaction to the making of a new constitution and to building political systems is no way to plan a country as complicated as ours. That is what is happening at the moment. We should be looking at the devolved organisation of this country as a whole, not responding to crisis after crisis, which, if we are not careful, will lead to the break-up of the union. It is only when we have a settled position that we will have settled people and a settled country.
The Scotland Bill was guaranteed by all parties in the run-up to the referendum. It guaranteed that, no matter the outcome of the referendum, all parties were agreed that a fundamental change had taken place in Scottish society. All parties were committed to bringing forward legislation that reflected that. A no vote was not a vote for no change. Unlike the noble Baroness, Lady Randerson, I argue that the Labour Party has always been a party of devolution. There have been shades within the party—that is true—but there has always been a strong contingent of people in the Labour Party who are pro-devolution. We have delivered on that time and time again in recent years. We recognise that devolution is a journey, but that the journey must not lead to disaster and the break-up of Britain.
The Scotland Bill will make the Scottish Parliament one of the strongest devolved Administrations in the world, being able to raise more than 40% of their own tax revenues, while being responsible for more than 60% of spending decisions. It shows the real steps that the Scottish Parliament is taking to be a fully responsible Parliament, so that the debate in Scotland can move on from “who holds power” to “how can Scotland best use that power”. I hope that this will see the Scottish Government take real steps to address the current crisis in schools and hospitals across Scotland.
However, these issues do not affect only Scotland. It is worth making clear that where Scotland leads, Wales will not and should not always follow. It is true that enthusiasm for the devolution project has increased significantly in Wales in recent years, but there is no groundswell of support for nationalism in Wales. There does not seem to be any significant demand in Wales for further powers beyond those recommended by Silk. The First Minister of Wales has talked about the need to follow a path in the UK set out by the Swiss socialist Andreas Gross: a path that enables, “unity while guaranteeing diversity”. That is probably something that we should all take into account.
More needs to be done to strengthen and to raise awareness of the ties that bind us. We need to turn the debate on its head and ask: what is the union for? What are the essential elements that we need to retain at the UK government level, without which the constant nagging attempt by Scottish Nationalists to demand more and more will inevitably lead to the break-up of Britain? That debate has to involve all parts of the UK: Scotland, Northern Ireland, Wales and England.
There are some obvious starting points such as defence and foreign affairs, but I would go much further than the noble Lord, Lord Wigley, and go beyond them. A lot of these are listed in annexe B of the St David’s Day agreement and whether we agree with them all is something that is worth discussing. We need to discuss how much money needs to be collected at the centre to pay for an NHS free at the point of delivery, and for free schooling for all across the whole of the UK. At what point does the NHS stop being a truly national health service? We should have a hard-headed discussion on these issues and we need to ask what else needs to be added to that list of powers held in the centre.
That exercise to develop the reserved powers model of governance is currently being undertaken by the Welsh Office, but again it is being done in isolation without thinking what else is going on. It is essential that the Governments at both the UK level and the Welsh level are involved in agreeing what should be included in that list of reserved powers. Can the Minister clarify exactly what level of discussion has so far taken place between the UK and Welsh Governments on the proposed list of reserved powers? What will be the criteria on which Whitehall departments will be able to argue that they can retain responsibilities?
I also ask the Minister for a categorical assurance that there will be no attempt to limit the National Assembly’s existing legislative competence. I want to give an example of my concerns here. There are aspects of equality legislation that are currently devolved under the conferred model of government, but others are not. In annexe B of the St David’s Day agreement, civil law and procedure is a subject that has been listed as a reserved matter—but the Human Transplantation Act is a piece of legislation which has amended civil law, so what is being suggested here? Is the suggestion that the Government intend to repeal this Welsh law and take it back to the centre? What is meant by that? Where are these lines going to be drawn? Can we have a categorical assurance that there will no attempt to claw back power from the Assembly on this or other areas already devolved under the conferred model?
The St David’s Day agreement lists several areas that should be reserved at the UK level but we should remember, as the document states, that it is only an illustrative list. So we have got to be very vigilant here. If the reserved powers model were to be based on the example given in annexe C of the agreement, there would be page after page of things that the Assembly could not do. Can the Minister clarify how many issues so far, and covering how many pages, have been suggested as areas that should be retained? Can the Minister also say whether the principle of subsidiarity will be respected when considering what should be retained at the UK level?
The Scottish First Minister has argued for full fiscal autonomy. Let me be clear—this is not a position which is supported by the Labour Party. As the Institute for Fiscal Studies has outlined, these plans would leave Scotland with a £7.6 billion black hole in its finances which could only possibly be filled by further spending cuts or tax rises over and above the current Conservative plans. Full fiscal autonomy holds no interest for the Welsh people. We are anxious to share the burden and responsibility across the whole of the UK. We all need to contribute and to restore benefits, ideally in a way that is based on need, in particular in terms of provision of services and benefits. We should be aware of an attempt by an ideologically driven Conservative Party, intent on reducing the size of the state, to devolve responsibility for raising taxes to a devolved level, and with it to devolve blame and wash their hands of the poorest parts of the union.
There is a danger, however, that we will get hung up on these constitutional discussions. It is the bread and butter issues that people are really concerned with. We need not just a rebalancing of powers but economic rebalancing across the UK, and that needs a proper industrial and regional strategy and improvements in productivity. It needs the UK Government to work constructively with the Welsh Government to generate investment and jobs. Devolution should not just lead in one direction; it must be shared outwards across the country and downwards into the hands of local communities.
Let me conclude by coming back to the constitutional issue. The failure of the coalition Government to respond to Carwyn Jones’s long and timely request to establish a constitution convention is one reason why we are in such a mess today. It makes sense for us all to collectively and democratically work out the right balance of powers and responsibilities throughout this United Kingdom—and let us not forget that the United Kingdom includes Northern Ireland, which has not had much attention in this debate. We need to see a pooling and sharing of resources and the social solidarity that makes this country what it is—a great place to be.
When the Prime Minister in the aftermath of the Scottish referendum linked what was a nationalist battle to the campaign for English votes for English laws he created the potential for serious divisions within our country—where every nation and region would concern itself only with its interest rather than the interests of collective society. We must once again refocus our constitutional agenda on our ability to co-operate as a family of nations, rather than add to the chorus of divisive grudge and grievance policies that we have today.
My Lords, I am grateful to the noble Lord, Lord Wigley, for bringing this Question to the House. I know that he brings considerable knowledge and experience to this important subject. The debate on how powers promised to Wales and Scotland will operate within new, balanced United Kingdom governmental structures has covered a wide range of issues. Although the Question mentions Wales and Scotland, I cannot help but notice that the speakers list has a distinctly Welsh flavour. I hope that, as a Scotland Office Minister, I can do justice to the Welsh aspects of the Question. I congratulate all noble Lords who have spoken so well and demonstrated their considerable expertise in the issues before us. I am grateful for the opportunity to close the debate and will endeavour to respond to as many of the substantive points raised as possible. If there is a specific point to which I am unable to respond, I will happily write to noble Lords.
Since 1998, the devolution of powers and responsibilities to the National Assembly for Wales, the Scottish Parliament and the Northern Ireland Assembly has fundamentally changed the constitutional make-up of the UK. Today’s debate is timely as the Government have made a commitment to implement the St David’s Day agreement for Wales and have introduced the Scotland Bill to implement the Smith commission agreement for Scotland.
The Government have announced a programme founded on the idea of one nation—bringing fairness to all parts of our United Kingdom—where the people and institutions across this country are treated with respect. Governing with respect means recognising that the different nations of our United Kingdom have their own Governments, as well as the United Kingdom Government. Both are important and with our plans, the Parliaments and Governments of these nations will become more powerful, with wider responsibilities. No constitutional settlement could be complete if it did not also offer fairness for England.
The Government’s plans for constitutional reform set out in this Parliament build on the record of the last Government, who delivered one of the most extensive programmes of devolution of any government, including the largest devolution of fiscal powers to Scotland in over 300 years, a referendum to give the Welsh Assembly for the first time primary law-making powers, and legislation to give the Welsh Assembly for the first time tax and borrowing powers. I pay tribute to the noble Baroness, Lady Randerson, who played such a distinguished part in helping to deliver that programme.
The Government’s constitutional proposals for this Parliament also build on a substantial body of detailed work undertaken by constitutional experts in a range of forums. The Smith agreement was informed by the significant analysis undertaken by the Calman commission and the individual commissions established by Scotland’s political parties, such as the Strathclyde commission. The St David’s Day agreement takes forward the work of the Silk commission. Similarly, the English proposals are an evolution of the work of the McKay commission, among others.
The Government are taking forward these proposals because it is the right thing to do. There is consistency in our approach. We believe in devolving decision-making closer to the people who are affected by those decisions, and in increasing the responsibility of the devolved Administrations to the people who elect them. One of the weaknesses of the original devolution settlements was that, while the devolved Administrations had significant powers to spend money, they had little or no responsibility for raising it. The Government are rectifying that imbalance.
The Scotland Bill will increase the financial accountability of the Scottish Parliament. To respond to one of the points raised earlier, it meets both the spirit and the letter of the Smith agreement. For similar reasons, we look forward to the Welsh Government holding a referendum on devolving income tax powers. The noble Lord, Lord Wigley, spoke of the need for Wales to have the greatest degree of independence. However, the Government believe that it is important to strike a balance between giving the Scottish Parliament and the Welsh Assembly more control over domestic affairs, and preserving the strengths of being part of the larger UK family. The noble Lord also questioned whether the proposals for Scotland go far enough or are ambitious enough. I think that, as was rightly pointed out by the noble Baroness, Lady Morgan, after these powers are delivered the Scottish Parliament will be one of the most powerful devolved parliaments in the world.
In taking forward this programme, the Government recognise that there is no one-size-fits-all solution. The noble Baroness, Lady Randerson, mentioned federalism. I can think of no examples of a successful federal state in which one of the constituent parts represents 85% the whole. The individual devolution settlements reflect the distinct histories, circumstances and geographies of the different parts of the United Kingdom. The appetite for devolution in Wales is different from that in Scotland. What the First Minister of Wales said in a recent speech was echoed here today by the noble Baroness, Lady Morgan. He said:
“I have said in the past that whatever proposals for further devolution to Scotland should be offered also to Wales. But I do not subscribe to the notion that whatever Scotland has, Wales must have too, without properly considering the implications. The devolution of welfare programmes to Wales, for example, is not something that we consider to be in the best interests of Wales”.
The noble Lord, Lord Wigley, suggests that it should be for the legislatures of the UK nations to decide which areas of responsibility they wish to have transferred from Westminster. Let me emphasise that devolution across the UK has been taken forward to suit the particular needs of each nation, and on the basis of cross-party consensus. Both the Smith agreement and the St David’s Day agreement reflect those aspects on which there is cross-party consensus in both Scotland and Wales. This is the foundation on which our legislative proposals are and will be based.
Let me say a little more about Wales. I can confirm to the noble Baroness, Lady Randerson, that the scope of the new Wales Bill will be as envisaged in the St David’s Day agreement. The Wales Bill will provide a robust package that will make the Welsh devolution settlement clear, sustainable and stable for the future. The noble Baroness, Lady Morgan, asked about the reserved powers model. The Government intend to discuss an early draft of the reserved powers model we are preparing with the Welsh Government in the coming months, and we want to engage the Welsh Government and hear the views of Welsh Ministers before publishing a draft Wales Bill for pre-legislative scrutiny in the autumn. I do not want to pre-empt the outcome of those discussions.
The St David’s Day agreement also said that we will consider other non-fiscal elements of the Smith agreement to decide whether they should be implemented in Wales. That is being done right now, although, as I previously noted, what is right for Scotland is not necessarily right for Wales.
The issue of intergovernmental working was raised by the noble Lord, Lord Wigley, who spoke of his desire to see the joint ministerial committee replaced by a UK council of Ministers. While I recognise that existing joint ministerial committee structures can be improved, it is a forum that has long supported the changing devolution settlements and it would not be appropriate to replace it altogether. A process is in place across the four Administrations to review the memorandum of understanding that establishes the joint ministerial committee. Any changes will need to be agreed between the four Administrations and will consider the interests of the whole of the UK.
The noble Baronesses, Lady Randerson and Lady Morgan, raised the issue of a constitutional convention to deliberate on the broad shape and nature of the United Kingdom. I respectfully suggest that this should not be our priority. Our priority is to deliver on the constitutional commitments we have made. All our constitutional proposals draw on the values and traditions of our United Kingdom. The British constitution is characterised by pragmatism and an ability to evolve and adapt to changing circumstances. Our unique constitutional arrangements enable agility and responsiveness to the needs and wishes of our citizens. Those wishes are surely clear: a desire to be part of a strong and successful union, but one that recognises and values the unique nature of and arrangements in each of our nations.
On the issue of funding, which has already been mentioned, the Government have made it clear that Barnett formula will continue to be used as the basis for calculating the block grant. By moving to greater self-funding, and thus greater accountability, we are delivering mature and enduring settlements that provide strong incentives for economic growth, which will help to address the concerns raised by the noble Lord, Lord Thomas. The Barnett formula will therefore become less important as the Scottish Government become responsible for raising more of their own funding following the devolution of further tax powers.
I grant that those changes may happen in Scotland. However, does the Minister accept that unless there is a radical change to the funding in Wales, putting in a floor does not make up for the 15 years of underfunding and the position we are in? What specific proposals will the Government bring forward to put this right, for the sake of whoever is governing in Cardiff?
It is important that any settlement is fair to Wales. The Government are very conscious of the need to address the issue of fair funding for Wales. I note—I think it has already been mentioned—that according to the Holtham criteria Wales is not currently underfunded, and it is also important that the Welsh Government become responsible for raising more of the money they spend. That is why we will introduce a floor in the level of funding provided to the Welsh Government, and the details will be agreed at the next spending review, in the expectation that the Welsh Government will call a referendum on income tax powers in this Parliament.
The noble Baroness, Lady Randerson, raised the issue of Holtham. It is worth saying that the Secretary of State for Wales has held discussions with Professor Holtham and others with regard to a floor, and the Government consider that the work of the Holtham commission still has resonance today. There are no plans to recommission Professor Holtham to undertake any further analysis.
Before we conclude our deliberations for the day, I thank your Lordships once again for the insight and knowledge demonstrated during today’s debate. We have ranged over a wide area of subject matter, and as I said at the outset, the Government will govern with respect and honour our promises to improve governance for all parts of our United Kingdom. We have begun to bring forward legislation to secure a strong, fair and enduring constitutional settlement. Bringing together the four nations of our United Kingdom is an important task and a chief priority of this Government, and I know that your Lordships will play a full part in that task.
Committee adjourned at 5.56 pm.