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Welsh Assembly Elections 2016

Volume 762: debated on Tuesday 23 June 2015

Question for Short Debate

Asked by

To ask Her Majesty’s Government what steps they plan to take to ensure that the 2016 Welsh Assembly elections provide an opportunity to reflect recent and planned changes to the Welsh devolution settlement.

My Lords, I start by saying how pleased I am that the noble Lord, Lord Bourne, is the Minister replying to the debate today. I was delighted when I heard of his appointment to the Wales Office. I believe that we worked well together during the previous Government and I know that his understanding of Welsh devolution is unparalleled. Indeed, as he is a former member of the Silk commission I look upon him as the fount of all wisdom on such issues.

My purpose in tabling this debate today is twofold. First, I wish to press the new Government on progress and preparations for the new Wales Bill. I welcomed the inclusion of the Bill in the gracious Speech and I am mindful of the Chancellor of the Exchequer’s promise, made when he was campaigning in Wales, that a new Bill would be brought forward within 100 days. So I hope that the Minister will take this opportunity to update us on progress. My second reason for wanting this debate is unashamedly to press the Government to think more widely and to be bolder than I fear is currently their thinking.

There are very good reasons why we need this Bill as soon as possible. Assembly elections will be held in May next year and it is important that electors know the extent of the Assembly and Welsh Government powers when they go to vote. More than that, the political parties need to know about that when they write their manifestos. I would argue that we need to move on from a Welsh politics which is defined by an endless refrain demanding more powers; we need instead a political campaign which debates what should be done with those powers.

The St David’s Day agreement gave us some clues as to what is likely to be in the Bill. For example, it said that the Assembly should have control over its size, the system and timing of elections, and ways of working. Now this will be a pretty fundamental change if and when it happens. The forthcoming Assembly elections should be an opportunity to debate, for example, how many Assembly Members are needed and how they are to be elected, rather than focusing on whether those powers will actually be devolved. The St David’s Day agreement also confirmed the intention to move to a reserved powers model of devolution. This is very welcome and I realise that it is a complex issue, but since the Supreme Court judgment on agricultural wages it is also an urgent issue, so I would like to ask the Minister to update us on progress there, too.

In response to the debate tabled by the noble Lord, Lord Wigley, last week the Minister, the noble Lord, Lord Dunlop, said:

“The Government intend to discuss an early draft of the reserved powers model we are preparing with the Welsh Government in the coming months”—

so far, so good. He goes on to say,

“before publishing a draft Wales Bill for pre-legislative scrutiny in the autumn”.—[Official Report, 18/6/15; col. GC 67.]

Do I understand from this that we are no longer looking at a Wales Bill itself this Session, and instead only at a draft Bill?

The St David’s Day agreement also committed the Government to the introduction of a Barnett floor. The Prime Minister has said that this is in the “expectation” that the Welsh Government will call a referendum on income tax powers. Is it still the Government’s view that these two should be explicitly linked?

Like the Minister, I am keen for the Assembly to have greater fiscal responsibility, but I doubt the enthusiasm of the Labour Party for this. I fear that the Labour Welsh Government will not be keen to call a referendum. The need for a referendum was enshrined in the Wales Act 2014, and based on a Silk recommendation. It has been controversial from the start, not least in the Minister’s own party. We all know that the Silk reports have been overtaken by events in a number of respects. The Minister knows above all of us that there were elements of compromise in the Silk reports. What seemed bold in 2012 does not necessarily seem bold now. So I will be interested to hear whether the Government still feel that a referendum is needed.

Returning now to the commitment made by the coalition Government to introduce a Barnett floor, do the Government intend to entrench and define this in the Bill? If not, how will it be incorporated into the funding structure in a way that gives us confidence that it cannot be dismantled simply at the behest of new occupants in the Treasury? We need detail on this and we need certainty. The noble Lord, Lord Dunlop, said last week that there was no need to update Holtham as Wales is not currently underfunded. I accept that Wales is not currently underfunded. Government funding is at a rate of £116 in Wales for every £100 in England, which is clearly within the region that Holtham identified as fair. However, there was a past history of underfunding under the Labour Government. Labour failed to admit to this, or to address the issue, of course, until it was no longer in power in 2010.

These two factors mean that the presumption of underfunding is still out there, even among politicians. The First Minister, for example, continues to refer to unfair funding. I believe that the Government need to provide absolute clarity on funding, even if Holtham’s calculations still have validity today. The issue of funding has had a corrosive effect on Welsh politics. The perception of unfairness in funding for Wales strikes a much stronger political chord with electors than the issue of more Assembly powers, for example. If the Government are sensible, they will address this issue head on by entrenching it in the Bill.

I want to encourage the Government to broaden the scope of the Bill. I was pleased to hear from the noble Lord, Lord Dunlop, that the Government are considering other non-fiscal elements of the Smith agreement. There are, of course, other powers already and long since devolved to Scotland and recommended in Silk, but not included in the St David’s Day agreement, such as, for example, policing. The Government appear to have set their face resolutely against devolution of policing, despite there being very good arguments for devolving it. In this financial year, the Welsh Government are providing just short of 40% of total police funding. They therefore have a big financial stake in it.

This Government have proudly boasted of their decentralising credentials that local decisions are best made locally. We agree with them, and I would suggest to the noble Lord that policing is just the sort of service which varies most according to the problems in each locality. The police work closely with many partner organisations that are devolved—for example, health services and local government services such as education and social services. Therefore, it is highly logical that it should be devolved. Policing is already devolved not just in Scotland but in Northern Ireland. If it can work successfully in a sensitive situation such as Northern Ireland, which has the added complication of a land border with a separate state, then I am sure it can be made to work in Wales.

There are other powers that the Liberal Democrats would like to see devolved—for example, an investigation into a separate legal jurisdiction and the devolution of youth justice. These seem such modest steps beside the giant leap that Scotland is taking. Although we welcome additional energy powers, we believe that more can be done.

The establishment of the Silk commission in 2010 seemed a great leap forward. It was a great step forward, as was the referendum on full lawmaking powers for the Assembly. The Silk recommendations on fiscal responsibility were another really big step, enshrined in the Wales Act 2014. However, there is a long way to go before we can have any hope that the political debate in Wales will settle down to a discussion of what we do with those powers instead of what powers they should be.

May I remind the Minister that, despite the coalition Government’s excellent and progressive record on devolution, time and again their plans were overtaken by enthusiasm for reclaiming power, both in Scotland and in Wales? The St David’s Day agreement has already been overtaken by the success of the SNP in the general election. The baton has already passed over the Government’s head. What suits Scotland does not necessarily suit Wales. The history and geography of the two nations is very different and it means that their paths will diverge. There has been no rise of nationalism in Wales as there has been in Scotland, with only 3% support for independence. However, I would say to the Minister that Scottish devolution has not developed in a vacuum. People in Wales look north and they will draw lessons from what happens there.

My Lords, I am delighted to have the opportunity to follow the speech of the noble Baroness, Lady Randerson. It was the other way round last week—we seem to be a rotating show. I thank her for facilitating this debate and keeping a focus on matters that are important to all of us from Wales across party boundaries.

I will come back to some of noble Baroness’s comments but I welcome the noble Lord, Lord Bourne, to his position on the Government Front Bench. He is there at an interesting time. The noble Baroness, Lady Randerson, perhaps has been the keeper who has turned back to be poacher—and I am delighted to see her in that role—the noble Lord, Lord Bourne, is a poacher who has turned keeper. I remember well the way he campaigned in the National Assembly. It is good that he brings experience to the Front Bench and he knows the way in which a compromise was reached on the Silk commission with a lot of give and take by all parties.

If one has all parties buying into a process—as has been emphasised in the context of Smith in Scotland—then there is a reasonable expectation that the recommendations of such a commission should be enacted in full. All the parties in this Chamber and the other place were represented on the Silk commission. That was their opportunity, if they were unhappy with some of the compromises made, to draw a line. The ultimate report of the Silk commission was a unanimous one, as the noble Lord, Lord Bourne, well knows. Therefore, it is not unreasonable that, having made the compromises in reaching that report, there should be an expectation that all parties here fulfil those recommendations. To have come to a compromise in drawing up that report and then to have got to a position where it is second-guessed by the parties running into a general election frankly brings a degree of cynicism that undermines the integrity of the system. It is bound to lead to questions, if there are future such commissions, as to whether parties should be buying in as sincerely and genuinely as they did to the Silk report. I would be very grateful if the noble Lord, Lord Bourne, perhaps pondered a little on that as the Government consider how and when to bring forward the new powers. However, I am delighted that he is on the Front Bench and no doubt we will have many occasions to argue these matters.

I am also delighted to see the noble Lord, Lord Elystan-Morgan, back in his place after a bout of ill health. He looks fighting fit now. There is slightly less of him now than there was a few weeks ago but no doubt the quality makes up for the loss in quantity. We look forward to his contribution not only to this debate but whenever the interests of Wales arise.

Last Thursday, in introducing the debate on similar matters, I concentrated on the UK dimension—the need to ensure that there is some compatibility and an understanding of a balanced type of devolution taking place. Otherwise, as the noble Baroness, Lady Randerson, said a moment ago, people will start asking why things are happening in Scotland. Is it merely because of a knee-jerk reaction to the vote for the SNP? That will feed an agenda that could help my party but I am not sure if that is the incoherent way in which things should happen to get a better government for Wales. There needs to a balanced settlement but I will not repeat the arguments, except to say that I hope that that is an element in the thinking of the Wales Office as it addresses these issues.

As the noble Baroness, Lady Randerson, said in introducing this debate, the political parties and candidates in the coming election need to know exactly where they stand. In Wales, perhaps even more than in Scotland, we have had a shuffling type of devolution going on all down the 15 years since the Assembly was set up. There has been change upon change upon change. There now need to be adequate powers and finances and the job needs to be got on with, particularly when one thinks of the challenges in the health service and education facing the next Government in Wales. We need the powers to be cleared up, so they know what to do and get on with doing it.

Picking up the point made by the noble Baroness, Lady Randerson, on the police service, there needs to be a rounding off of the devolution process by bringing the police into the purview of the National Assembly. Many of the associated services, such as the local government parts—not only funding, but social services’ co-operation with the police, and the transport responsibilities that come under the National Assembly—interface with the police and should logically and coherently be devolved. Having the police devolved to the National Assembly would bring a balance with the powers of Northern Ireland and Scotland. I accept what was said: that what happens in Scotland does not always necessarily reflect the priority in Wales. Of course not— but I am sure that Members on the Liberal Benches tonight will be only too aware of their commitment to a federal approach. The principle of a federal approach was that there would be balanced devolution, not least so that the people in the centre at the federal level know exactly what powers they are dealing with at other levels. I hope that will be given further thought.

With the Cities and Local Government Devolution Bill currently going through Parliament, we have the odd situation whereby it is quite likely that powers relating to the police commissioners will be devolved to mayors in England—but what happens in Wales? We were told from the Government Front Bench last week that that Bill has nothing whatever to do with Wales, so Wales could be the only area with the existing commissioners. The National Assembly, which I am sure would like to do something about this, will not have the powers to do so. That really needs to be sorted and some clear thinking brought in.

On finances, whatever may be said about how Holtham might be reinterpreted in today’s circumstances, the reality is that the resources are not there to provide the services that Wales needs. Of course, the resources can be spent better. There is always a way of spending money better, but we really are cutting to the bone and next year we are going to see services eroded. There may well be places in England with equal problems that need more resources as well, but I am not willing to accept that because there has been a cutting back of public expenditure and a reversal in the Barnett squeeze effect, that justifies not trying to bridge the gap. Wales has been underfunded probably to the order of £6 billion or £7 billion since 1999 and it is time for that to be made up. Given the formula that Scotland gets, I cannot for the life of me understand why Wales has to get that much less. Is it a bonus paid to Scotland because it threatens to go independent at any point? Surely we do not have government policy based on that sort of thesis? I hope that we have a more logical approach to funding.

Reference was made last week to the referendum on tax powers. If we do not have a greater funding commitment to Wales, I wonder whether we are going to get any enthusiasm for that referendum. I am not convinced that a referendum is needed at all. We see all these other powers, including new taxation powers, going to Scotland, and yet we do not get them for Wales without a referendum. The time has come for Governments to make decisions and stand by them. If the commitment is that we need to get answerability through income tax powers, then let us get on with it rather than hiding behind a referendum. If we cannot get the capital that is needed for projects—we heard about the discussion concerning the M4 relief road at Newport only this morning—how on earth will we be able to meet our requirements without new sources of taxation?

I should like to make many other points but I know that time is squeezed. I will be grateful to hear the Minister’s response.

My Lords, it is a pleasure to take part in this debate, although I feel a little bit of an intruder because three of the six speakers were all leading Members of the Assembly in Cardiff. It is a delight to see our noble friend Lord Elystan-Morgan back in his place.

I would like to consider dangers to democracy and the democratic decisions of the Assembly and of Parliament itself. We celebrate the Magna Carta, yet the ordinary man and woman at that time had no voice at all in determining the laws that they were called to obey. It was only very slowly that people obtained a voice in their own destinies. Democracy has struggled to be born.

In Wales we saw the great advances of the middle and latter part of the 19th century. Those who had no vote objected to paying tithes. Why should non-conformist farmers and smallholders finance what was often an oppressive established church? So we saw the protests and evictions of the tithe wars. We saw the massive expansion of education from primary level to the establishment of the University of Wales, and the struggle for the disestablishment of the Church of England to shake off the shackles of the established church in Wales.

At the same time, throughout Great Britain there arose the demand for the right to vote. At last, people were gaining influence over the laws and decisions that shaped their lives. It was a slow progress from the Great Reform Act of 1832 to the universal franchise that we enjoy today, but it can never be static. Democracy can never be static; otherwise, it stagnates. Democracy, to be valid, must evolve, as we see in the campaign to enable 16 year-olds to be enrolled on the voting register.

Looking at the past, in the general elections of the 19th century, the Whigs challenged the Tories—two parties—and then the Liberals challenged the Conservatives. They were straight fights, with first past the post. In a time of just two parties, there was in each constituency a clear winner, although the nationwide picture was not quite so fair. For instance, in 1885 in Wales, the Liberals polled 58% and won 29 constituencies, whereas the Conservatives polled 39% and won just four constituencies. It was unfair, yes, but in every constituency the candidate with most votes won. Even in 1997, 30 of Wales’s 40 MPs were elected with more than 50% of the vote in their constituencies. Overall, Labour won 55% of the vote and had 34 MPs, whereas the Conservatives won 20% yet had no MPs at all.

The same distortion continues throughout the UK. At the last election, a Tory majority Government were elected with 37% support from those who voted but only the votes of 24% of the total electorate. There are other examples of which we are all aware—for instance, the result in Scotland, with the SNP winning 56 of the 59 seats on half the votes cast. I agree with nothing that UKIP proposes, but it gained only one seat after polling millions of votes. I suggest that something is seriously wrong.

The Chancellor of the Exchequer said last week at the Mansion House that people had voted for £12 billion-worth of cuts, when 63% who voted voted against them. Only 37% supported the Conservative candidates. Legislation will be rushed through backed by only a minority. We are in a very serious situation indeed. Can it be justified? Is it democratic for 37% to overrule 63%? Is it fair that 37% of the electorate hold the whip-hand over 63%? Does the fact that 37% dictates to 63% represent the opinion of the people? Is our electoral system fit for purpose? If such results were obtained in the Division Lobbies of the House of Lords, we would have a riot on our hands.

The constitutional convention proposed by the noble Lord, Lord Purvis, includes Wales. When the Assembly was elected, it saw the shortcomings of relying solely on a first-past-the-post system. There are 40 constituency Members and an additional 20 Members to make good the lack of representation of the parties which are not forming a Government there. Twenty additional Members ensure that each of the five regions have fairer representation. Why did the Tory and Labour Parties support this top-up scheme in Wales? It was unfair, yet they are unwilling to look at the situation that we are in now where the unfairness is absolutely obvious.

At the last Assembly elections, the additional vote system gave the Labour Party half the seats for 37% of the votes. Other parties were more fairly treated because of the top-up system. The Conservatives won 23% of the seats for 22% of the votes—you cannot complain about that—Plaid won 18% of the seats for 18% of the votes, and my poor Lib Dems won 8% of the seats for 8% of the votes. But at least there is a fairness there, which is not to be seen in the Westminster elections. Only Labour is overrepresented. I am not starting a campaign yet to look again at the electoral system in Wales which distorts the results in this way. In spite of some attempts to try to change this to 40 constituencies each with two Members—that would destroy proportionality, although an Assembly of 80 Members would of course enable our AMs to be far more effective—any suggestion that you would have 40 constituencies electing two Members each on a first-past-the-post system would be totally out of proportion.

In addition, should we delay boundary changes in Wales at council and parliamentary level until we have an electoral system that is more representative than the one we have at present? We must not abandon the better representation of the Cynulliad or Assembly system for the much less fair system we have in Westminster elections. There is a far clearer mandate in Wales than there is here in Westminster. Is there a single Member of this House who would say that the present system is fair—that the 37% figure should provide a Government with a majority of 12? So our electoral system clearly needs total reform. I do not think anybody here would say that that is not the case. We are not sure what the reform will be but we certainly need a convention to discuss these matters. The opinions of a majority—this time 63% of those who voted—are ignored. We cannot accept that sort of system. There is no genuine mandate. It is not a matter of party advantage but of the very value of each person in Wales and in the United Kingdom.

My Lords, I express my gratitude to all the noble Lords who referred so kindly to me. It is a great delight to be back here once again. The House is very much in the debt of the noble Baroness, Lady Randerson, as far as this Question is concerned. My few remarks will be confined to the issue of reserved powers, a matter about which one will hear a great deal over the next few months and years.

Over the years, particularly during the period from when devolution developed in Wales, from 1964, and the formation of the Welsh Office, there has been the belief that devolution really fitted into one of two mutually exclusive categories: either a reserved powers system, whereby there was a presumption that all other powers had been devolved, saving in so far as they were specifically reserved and excluded, or, on the other hand, a conferred or incremental system, whereby matters were devolved bit by bit, almost like confetti, and the devolution was valid only if they were specifically referred to—if there was an absence of reference to them, there was no devolution.

That was regarded as being the system up to July of last year, when, as the noble Baroness, Lady Randerson, has mentioned, there was the decision by the Supreme Court in relation to the Agricultural Sector (Wales) Act 2014 of the Welsh Assembly. The effect of that was that the Supreme Court, the highest court in the land, had to face this issue head on. The case for the Cardiff Assembly was that there had been, under Section 108 of, and Schedule 7 to, the Government of Wales Act 2006, a transfer of,

“Agriculture. Horticulture. Forestry. Fisheries and fishing”,

and that therefore one should not interpret “agriculture” in a narrow way at all; it should be something much more than the mere pursuit of husbandry. It should include agricultural wages as well. That was the Welsh case. The case put forward by the Attorney-General on behalf of Westminster was, “What you say is true, but it is very limited. Agriculture is one thing; agricultural wages are another. Agricultural wages belong to the realm of employment and employment has not been devolved; ergo, it is outside your powers”. The Supreme Court was faced with the choice of either a narrow interpretation of “agriculture” or a wider, more liberal understanding of the whole situation. To its eternal credit, the Supreme Court took the latter course.

The consequence is utterly historic as far as Welsh devolution is concerned. It means that even though there is no specific reference in the 20 categories of devolution that we have under the 2006 Act, if there is a general intention to transfer authority to Wales, matters that are consistent with and closely attached to that—which might be referred to as the silent matters—will also be transferred. What does that mean? In Wales it means that we are in a situation not very different from that French gentleman of fiction who in middle age realised that he had been talking prose all his life. We have had powers that we never appreciated were within our grasp.

The situation causes possibilities and problems. I have some sympathy with the Secretary of State for Wales. In a speech in March at Aberystwyth, a place well known to the Minister and me, he said this:

“the UK Government’s defeat over Agricultural Wages last July, blew wide open the true nature of the Welsh devolution settlement … vague, silent on many key subject areas, unstable, not built to last—a payday for lawyers”.

Maybe it was a pay day for lawyers, but it was probably a legislative precipice at the same time.

Where do we go from here? We go in one direction only: that devolution, whatever is defined by the Government, should never be less than what exists at the present moment. It would be ironic if we ended up with a reform of the system that greatly reduced the totality of the powers, legislated under the Executive, that have been transferred to Wales already. I appreciate that the Government face problems. What is their attitude towards these? They have set them out in the White Paper published in February this year. They say that we will certainly have a system of reserved powers, which they had flirted with for a long time. They are accepting Silk 2, to which the Minister has made a distinguished contribution.

However, I find the way in which they go about it extremely upsetting. This is what they say: they set out in Annex B to the White Paper a list of subjects that they regard as proper to reserve and accept. How many are there? I make the number to be 103. However, it does not end there, as they have this sentence in relation to Annex B.

“The list is not exhaustive, and reservations would also be needed in other areas”.

It reminded one of that line in Macbeth, speaking of Banquo’s issue—of the shades of many more.

I appreciate that these decisions are not of necessity in any way the Minister’s. He is a man of great wisdom, legal expertise and statesmanship. However, I ask respectfully of him: when is a reserved powers model not a reserved powers model? I suggest that the answer is that when the matters that have been reserved are so massive and all encroaching they make the concept of a general devolution a nonsense. My advice to the Government is, therefore, in the words of Corporal Jones, “Don’t panic”. Some people flirt with the idea that devolution should prove itself. One or two remarks made by the current Secretary of State might suggest that. I do not accept that for a moment. That would be to turn the issue of devolution on its head. The entire lifeblood of devolution is that it is for the other side to prove the case against it, if it possibly can. Devolution is the birthright of this nation.

My Lords, I, too, welcome the Minister to his post. I do not think that anybody in Wales—certainly not in the Conservative Party—understands the journey of devolution better than he does. There were those heady days when we both worked together on the advisory group, setting up the standing orders of the Welsh Assembly. It has been very interesting to watch the development of the Minister to where he sits today. I should perhaps introduce my remarks to this debate by declaring an interest, because today I have announced my intentions to the Labour Party: I shall be seeking selection and election as an Assembly Member in next year’s election. I know that I can rely on many Members of this House to give me some great tips on what to expect in that chamber, if I am lucky enough to be selected and then elected. Your Lordships can rest assured now that any changes to the Assembly’s powers and responsibilities will be watched by me like a hawk—as if I was not doing that before.

This debate follows a similar debate that we held in the Lords last week, where I acknowledged that there was an increasingly positive attitude towards devolution in Wales but that we were far from having the kind of appetite for devolution demonstrated by the Smith commission. So on devolution, for Wales do not read Scotland. Wales has to establish its own path to devolution and the gradualist approach to it is one with which the Labour Party wholeheartedly agrees. This is not a never- ending process; there are limits to how far we are prepared to go in the devolution of power, as a party absolutely committed to the future of the union.

Many aspects of the first Wales Bill, which reflected to a large extent the views of the Silk commission, on which the Minister served, will be implemented in time for the Welsh Assembly elections next year. While there are experts in universities and political institutions—and, dare I say it, this House—who are fascinated by issues of constitutional settlement, it is worth remembering that the vast majority of the public who will cast their votes in next year’s elections will be determining their choice on the basis of who best stands up for Welsh public services and who can best deliver jobs and growth. It is of course the Labour Party. I do not know whether I am allowed to say that in the Lords, but there we have it. The constitutional debates remind me of some sailors I see when I visit the lovely harbours around Wales. There are always people fixing or painting their boats, or repairing their sails. At some point, it would be nice to see them actually sail somewhere; well, the Welsh Government are going somewhere. They have, through intervening and not letting the markets determine everything, created 17,000 job opportunities through the Jobs Growth Wales fund and 500 police support officers to mitigate against police cuts. They have funded free breakfasts for schools, making sure that children from the poorest homes are able to concentrate in their classes. But as this House excels in constitutional debates, I shall return to that theme now.

Following the passing of the Act, for the first time the Welsh Government will have the power to raise their own taxes. The consultation on the collection and management of stamp duty and landfill tax is well under way. In addition, an immense amount of work has already been undertaken to establish a Welsh revenue authority. Funding is of course an issue that still needs to be addressed. I do not buy into this idea that we are at the right place on funding at the moment. However, today I want to focus my comments on other aspects of devolution and to look at Silk 2, which made 61 recommendations. Many of these have been taken up by the St David’s Day agreement that was the precursor to the Wales Bill. Perhaps the Minister could let us know what we can expect on the timing, as he has suggested. Is it a full Bill or a draft Bill and what is the timetable, so that I might know whether I will be here or not?

One of the key issues that was recommended, and which thankfully has been taken up by the St David’s Day agreement, was the proposal to move towards the reserve power of government. The pros and cons of this system have been well rehearsed in this Chamber but I return to the theme that I alluded to in the debate last week since we now have the right Minister in place, who might understand the issues better. It is about whether in the process of drawing up the reserved powers list, the Minister can give a categorical assurance that there will be no grab for power by Whitehall of powers that have already been devolved.

I gave the example last week of the fact that in Annex B of the St David’s Day agreement, civil law and procedure is a subject listed as a reserved matter but the Human Transplantation (Wales) Act is legislation which has amended civil law. Will civil law be reserved or devolved? If it is reserved, as suggested in Annex B, will there be an attempt to pull back powers such as those in the Human Transplantation (Wales) Act? It would be good to hear what the thinking is here. I will give another example. Aspects of equality legislation have already been devolved but others have not. Will we therefore see all aspects of equality law being devolved or will they all be reserved? I have to warn that any attempt to haul back powers to the centre will be fiercely resisted.

A further concern is the implication of the Supreme Court’s decision against the introduction of an asbestos Bill for Wales and how that reflects judicial attitudes towards devolution. I am aware that I could get into some hot water, with my learned friend on the Cross Benches, the noble Lord, Lord Elystan-Morgan, being such an expert. I am so pleased to see him back in his place. However, it is worth considering the implications of the judgment for the devolved settlement in Wales and the constitution of the UK as a whole. The asbestos Bill was an attempt by the Welsh Government to recover medical costs from past employers, and their insurers, whose staff or members had contracted asbestosis in order to compensate the NHS in Wales for treatment. This was knocked down by the Supreme Court, by a judgment of three to two. The court decided that the Bill was outside the subject matter competence of the Government of Wales Act.

On the issue of competence, the question was whether the Bill related to organisation and funding of the National Health Service, which is one of the subjects in Schedule 7G. The noble and learned Lord, Lord Mance, and the majority of the Supreme Court interpreted the meaning of the subject under consideration by reference to the other subjects under the same heading. If the same approach were adopted in respect of other headings, it could result in a substantial clawing back of the Assembly’s competence. It is worth contrasting this view with the minority view expressed by the noble and learned Lord, Lord Thomas. In his view, the Bill had two objectives. The first was to,

“withdraw the requirement that the Welsh NHS continue the delivery of the benefit to employers and their insurers of not having to meet the cost of medical treatment and care of an employee where the employers are responsible for causing asbestos diseases as tortfeasors”.

I am sure my learned friend could tell us what that means, but I looked it up and it means:

“A civil wrong that unfairly causes someone else to suffer loss or harm resulting in legal liability for the person who commits the tortious act”.

Secondly, it created a mechanism to collect the costs.

The noble and learned Lord, Lord Thomas, argued that these were clearly within the subject matter competence. The more worrying aspect for the Assembly of the judgment of the noble and learned Lord, Lord Mance, is that it appears to suggest that it is legitimate for the court to investigate the extent to which Assembly legislation is in the public interest, and also to investigate the sufficiency of the consideration given to legislation by the Assembly before it is passed. This approach does not hold true for England. The noble and learned Lord, Lord Thomas, powerfully suggested that each democratically elected body must be entitled to form its own judgment about public interest and social justice under the structure of devolution, and there is no logical justification for treating the views of one such body differently from others.

The asbestos case had implications of a commercial nature—who knows whether this might have had a bearing on the judgment? Will the Minister respond to that judgment and tell the House whether it will be a consideration when formulating the Wales Bill that we can expect in this place?

My Lords, I stand here as a poacher turned gamekeeper, as has been said. This has been an excellent debate and I will try to do justice to the contributions that have been made forcefully and with great grace. First, I thank the noble Baroness, Lady Randerson, for securing this evening’s debate, and pay testament to the considerable work she has done in the Wales Office. Her great and continuing commitment to public life in Wales is appreciated much more widely than in her own party. It is a tonic to see the noble Lord, Lord Elystan-Morgan, back in his place. Like many others, I have missed his smiling presence and wisdom. I am sure he will be giving us both of those for many years yet.

I will say a little bit about the Wales Bill. Without wishing to pre-empt the will either of Parliament or the National Assembly for Wales, next year’s Assembly elections may well be the last in their current form. The Government will publish a draft Wales Bill in the autumn for pre-legislative scrutiny and will introduce a Bill in the Commons—the correct place for Bills of a constitutional nature that are as far-reaching as this one—early next year, to implement the legislative commitments made in the St David’s Day agreement to make the Welsh devolution settlement clearer, stronger and fairer. This work was begun before I entered the Wales Office and was pushed forward by the Secretary of State and the noble Baroness so effectively.

The Bill will provide for a clearer settlement, founded on a reserved powers model, to clarify the division of powers between Parliament and the Assembly. I will try to answer the points made in different subject areas if I can. The first of these is reserved powers, a point made forcibly by the noble Baroness, Lady Randerson. We are moving to a reserved powers model. I accept the point made by the noble Lord, Lord Elystan-Morgan, that it is important to get this right and not panic. We will not. There will be no attempt at a power grab but, as has been demonstrated during the debate, it is not a straightforward issue and we want to get it right. The debate has been interesting in that, much as we all want to move on to look at health, education, the economy and transport, they barely surfaced this evening. They were touched on cursorily here and there but we are still, perhaps understandably, looking at the constitutional settlement. It is important that we get that right and we will.

We need a stronger settlement with important new powers devolved to the Assembly—as they will be—over energy, transport and elections. I will come back to elections separately. Understandably, some mention was made of policing. It is quite true that this was a recommendation for devolution from the Silk commission which was not taken up in the St David’s Day agreement. However, let us not become too pessimistic about this. We have come a long way in devolution, under the previous Government and this one. There have been previous commissions which have not seen the light of day, although they should have. The noble Lord, Lord Richard, who I see in his place, will perhaps understand my point. The Silk commission has been substantially taken forward in a way that we can see in the forthcoming Wales Bill.

I understand the points made by the noble Lord, Lord Wigley, and some of his frustration, but he himself went on to suggest that we drop the referendum on tax-raising powers, something that was in the Silk commission. Let us remember that we are driving this forward considerably in the Wales Bill and there will be a chance for scrutiny and discussion of that as it proceeds through both Houses. Legal jurisdiction was not something that was recommended to be subject to devolution under Silk. It is right that we should look at Scotland but, as all noble Lords have said, we should not be hidebound by what happens there. Scotland is very different from Wales, not least on the funding basis, to which I will come back in a while.

I will say at this juncture that I would happily run the noble Baroness’s campaign to get into the Welsh Assembly—we go back a long way. This will probably not do her too much good, but I hope they have the sense to pick her, and I am sure that they will. I had better say no more in case it does the noble Baroness more damage than is sensible.

A central issue raised by noble Lords was tax and funding. This is important and we want to get it right. The Finance Minister in the Assembly, Jane Hutt, and the First Minister, Carwyn Jones, are very much aware of the Government’s view that the funding floor needs to go hand in hand with some commitment to a referendum. A referendum has been accepted as central to Silk, for reasons we can understand. I agree that there has been historic underfunding of Wales, certainly under the Labour Party, which has continued for some time. We need to get that right. The noble Baroness talked about putting this on a statutory basis in order for it to be lasting. The Barnett formula, goodness knows, has lasted well for many years without being on a statutory basis, so I am not convinced that is the case, but we have certainly not closed our minds to that. If we have some agreement going forward, it may be something that could be looked at, but I am not sure that it is absolutely necessary.

In terms of elections, the noble Lord, Lord Roberts of Llandudno, spoke very passionately about the democratic processes and pressures that exist. Although I can understand the frustration that is felt by the Liberal Democrats and other parties about the electoral system, I gently remind him that we did of course have a referendum in the previous Parliament on electoral reform and that the fairly clear result was to retain the present system, certainly against the choice that was offered. I reassure the noble Lord that all these powers over the electoral system, the elections and the number of Members will be devolved to the National Assembly, as is appropriate. I think that will be subject to a supermajority again, as has been the case in Scotland, but they will no longer be a concern for us. Instead, they will be a concern, quite rightly, for the National Assembly for Wales.

I hope I have addressed the significant points raised in the debate. As I say, it was a very good debate and will certainly inform our thinking on the Wales Bill and the way forward. We anticipate the publication of a draft Bill which will be subject to pre-legislative scrutiny. This is an important piece of legislation and we want to see it on the statute book next year. Then I hope that we can move in a way that we all want so that we can consider the issues that truly matter to people in Wales. As we well know from the recent general election—and as we will see, I am sure, in the Assembly election in the same way—nobody on the doorsteps talks about reserved powers or the Barnett formula. They certainly talk about funding for Wales, but the issues that they really talk about and that really matter to them, as they matter to us, are education, health, the economy, transport, agriculture, tourism and so on.

Lastly, I come back to the final theme that emerged, which is Scotland. We certainly have to be aware of what is happening in Scotland—we do not exist in isolation—but at the same time, we have to recognise that Wales is very different from Scotland, not just in the way it votes, which clearly was the case and which is a relevant consideration, but in many other respects. For example, our legal history is very different and we have a much more porous border. Very few people live near the Scottish-English border, while a heck of a lot of people live near the English-Welsh border, on both sides of it. That makes a difference to many of the things that we want to do. We must ensure that what we do is for the good of the people of Wales within the United Kingdom. That is what this Government are determined to do.

I thank your Lordships once again for an excellent debate. We will take away all these comments and study them very closely to inform progress on the Bill.