To ask Her Majesty’s Government what is their response to the warning by the Care Quality Commission in their State of Care report, published in October, that adult social care is approaching “tipping point”.

My Lords, we welcome the State of Care report. We know there are serious pressures on the care system. That is why we are giving local authorities access to up to £3.5 billion in new support for social care by 2019-20 so they can increase social care spending in real terms by the end of this Parliament.

I thank the Minister for his usual courteous reply, but I think he knows that the funding he has announced there for the better care fund is both too little and too late. Does he agree that there have never been so many challenges for the social care system? There is terrible pressure on the NHS and on caring families, and many people have no care at all at home, however great their needs. Does he further agree that there has never been so much consensus about what needs to be done? Across all professions and political divides, we hear that what is needed is more money, and more money now. I am well aware that asking for commitments in the Autumn Statement is above the Minister’s pay grade, but could he please assure the House that he and his colleagues are stressing the urgency of this matter to the Chancellor of the Exchequer and asking him to make more funding for social care an urgent priority?

My Lords, I think most people in the health and care system, whether it is Simon Stevens, the chief executive of the NHS, or the Secretary of State, realise how serious pressures are in social care. There is no question about that. The State of Care report from the CQC supports that view. That is why we are putting in more money towards the end of this Parliament. It is back-end loaded—I accept that—but on the other hand the £3.8 billion that went into the NHS this year is front-end loaded. I think everyone agrees that the only way out of the difficulties we are in is for health and social care to work much more closely together.

My Lords, it is good that extra money is coming into the NHS, even if it is loaded in the wrong direction at the moment. However, this Question is much more about care. The real problem at the moment is that social care is significantly starved of funding. What will the Government be doing to ensure that real cash goes into social care to help to alleviate the problems that the NHS is facing due to people remaining in hospital because there just are not the places for them to go nor the assessments for them in social care at the moment?

My Lords, the squeeze in social care started in 2010. Between 2010 and 2015, spending on social care declined in real terms by 12.8%. That was a significant reduction in spending when the noble Baroness’s party was in power in the coalition Government. Since then, it remains very tight in social care. As I said, we are putting more money into the NHS at the front end of this Parliament. We have introduced the 2% precept for local authorities to raise money for social care and we have put £1.5 billion into the better care fund, starting from 2017-18, which will provide more money for social care at the end of this Parliament.

My Lords, everybody agrees that there is enormous pressure on social care which, as has already been mentioned, is impacting adversely on the NHS. Is it not time for an independent commission with cross-party support to look at the whole area of health and social care, including something like the Japanese model, which funds social care so successfully?

My Lords, I know that the noble Lord is very keen on an independent commission, and he knows my views on that. I do not think we need an independent commission to tell us that social care and health care must be more joined up and integrated; we all know that. We can do that through a major reorganisation from the centre—but we know what big reorganisations do to the health service: they stymie it for years—or we can work locally in the STP and local authority areas to try to drive this at local level, which I think is the right way forward.

My Lords, an independent commission on care reported recently. It called for a national care service and for adequate investment in the social infrastructure of care now, not at the end of the Parliament, to give care equal status with the NHS and to prevent us going over the tipping point. The tipping point is here; we cannot wait until the end of the Parliament. Will the Minister and his colleagues take those recommendations seriously and urgently?

There is no question but that we all recognise the enormous pressures on social care. I cannot comment on what may or may not be in the autumn Statement, but I entirely recognise the pressures to which the noble Baroness draws our attention. As I said, the Government did not have resources available to put money into the NHS and social care at the same time at the beginning of this Parliament because we have to live in the real world, which is very financially constrained. As I said, an extra £1.5 billion is going into the better care fund and an extra £2 billion will be raised by the local authority precept by the end of this Parliament.

My Lords, given the well-established engagement of faith groups in the area of social care, such as the Good Neighbours support service in Hampshire, what progress have Her Majesty’s Government made in reducing barriers to engagement by faith and belief groups, as recommended by the Local Government Association in its 2012 report, Faith and Belief in Partnership?

I cannot answer specifically the question raised by the right reverend Prelate, but I would say that voluntary and support groups of the kind that he mentions have a hugely important role to play in delivering social care. I visited Crossroads in Gloucester with the noble Baroness, Lady Royall, last Thursday and was struck by the extraordinary work that voluntary groups do—and what carers do, of course. If we relied purely on statutory services, the whole health and social care system would collapse tomorrow.

My Lords, my noble friend will recall that in the coalition Government, Andrew Dilnot and his team produced a report on how to give longer-term sustainability to social care and enable people not to suffer catastrophic losses when they are long-term care recipients. Will the Government commit not only to introducing the Dilnot recommendations but, perhaps earlier, to funding it, and to do so by bringing the domiciliary care means test in line with the residential means care test, which would raise £1.3 billion a year?

My Lords, the Government are committed to introducing the proposals of the Dilnot commission by the end of this Parliament in 2020, and I understand that during 2017-18, we will bring back those proposals to refresh them, but with a view to phasing in implementation in 2020.

My Lords, the CQC report particularly highlights the crisis in residential care, showing that at a time of growing need the number of care homes in England has fallen by 8% in the past six years. Age UK’s report, published a couple of days earlier, warmed to the plight of self-funder residents in private care homes, who are having to pay higher fees because local authorities cannot afford to pay the actual care costs of the residents whom they support. Is not that the problem that the Dilnot proposals under the Care Act were designed to address, and does not it underline the fact that self-funders are ultimately paying the price for a care system under severe pressure and in desperate need of extra funding and investment?

My Lords, it is interesting with regard to the CQC’s State of Care report that there has been a decline in the number of residential care beds—that is absolutely true. However—and this is an extraordinary statistic—from 2010 to date, the number of domiciliary care agencies has increased from 5,700 to 8,500. The other interesting trend that came out of the CQC report was that, on balance, smaller care homes, nursing homes and domiciliary care agencies tend to perform better than the big ones. That is because they can deliver a degree of personalised care—a sort of home-from-home care—that the bigger concerns cannot. But I totally understand the point that the noble Baroness makes. This sector is under tremendous pressure; we recognise that.

To ask Her Majesty’s Government whether they intend to press the Financial Conduct Authority to publish the report, commissioned by the then Secretary of State for Business, Innovation and Skills at the end of 2013, concerning the treatment by the Royal Bank of Scotland of small businesses supposedly in financial distress.

My Lords, the Financial Conduct Authority is an independent body. On 8 November it published a summary of the main findings from the Skilled Persons Review into the Royal Bank of Scotland’s treatment of customers in financial difficulty. The FCA announced that it is carefully considering the report and other additional materials. It is currently assessing what further work may be needed and will publish a full account of its findings when practicable.

I thank the Minister for that Answer. At long last there has been a partial admission by RBS of its wrongdoing, for which the evidence is well documented and incontrovertible. The bank has been endeavouring to improve its financial situation by withdrawing its loans from small businesses that have consequently been driven into bankruptcy. Thereafter, the property department of the bank has been able to acquire the assets of the companies at fire sale prices and sell them on at a profit. The compensation that has been mooted by the bank falls far short of the damage that has been inflicted. Only a small minority of the companies that have survived this treatment can claim compensation. How can a Government who profess to be working in the interests of small businesses tolerate such an abuse on the part of a bank that is in public ownership?

The report to which the noble Viscount refers is indeed a worrying one for RBS. While the review did not find evidence to support the most serious allegations made against the bank, it is critical of some of its actions—for example, the failure to support SMEs in a manner consistent with good turnaround practice and, to pick up on a point made by the noble Viscount, the failure to handle conflicts of interest inherent in the West Register model and operation.

As for the compensation scheme, small businesses that came within the global restructuring group between 2008 and 2013 are eligible for compensation under the scheme. Complex fees will be repaid automatically and then, if people make complaints and are not happy with RBS’s response, they can appeal to the independent third party announced yesterday.

The FCA has a responsibility towards customers and businesses. It has been involved in the construction of the complaints system and has taken into account representations made on behalf of customers. However, it is continuing to consider whether further action is needed, and I know that it will take on board the points that the noble Viscount has just made.

My Lords, surely the Government could join with others in this House, including the noble Viscount, Lord Hanworth, in saying that those who were abused by this scheme should be fully compensated and that there should be a repayment not just of fees but for the damage done in businesses lost and far beyond that. That is a much bigger figure, which the FCA does not seem to have recognised in its report at this stage.

Would the Minister also back the whistleblowers? A number of RBS staff blew the whistle on the practices taking place. Virtually every one of them has found that their careers have ended; they have suffered extensively as individuals but, as far as I can tell from looking at the FCA report, not a word is said. We need whistleblowers and we need to treasure them.

I endorse what the noble Baroness has just said about whistleblowers who put their careers at risk in order to bring malpractice into the public domain. It is not just the fees that are going to be compensated; direct losses will also be eligible for compensation, as will consequential losses where these are directly attributable to the actions of RBS. Established legal principles will be used to determine whether a consequential loss is factually and legally attributable to it. So it is not just the fees; it is direct losses as a result.

My Lords, the Minister will recognise that the bank was bailed out by the taxpayer. Its malfeasances over the last few years—which have led to a very significant drop in its share price—mean that taxpayers are facing a very raw deal if they have to restore the bank fully at some stage in the future. The Minister must appreciate that, even in this latest examination of the issues which he has identified today, there are anxieties that market-sensitive information was leaked. Has the nation not had enough of really poor behaviour by this bank which necessitates more forthright action?

The review covers the period 2008 to 2013, so I am not sure whether the point about malfeasances by the bank is particularly for one of the parties in this House. It is the Government’s intention, in due course, to return RBS to the private sector. That is not immediately practicable at the moment —the issue of Williams & Glyn has not been resolved and there are outstanding legal issues in the United States—but we hope to return the bank to the private sector in due course.

I am not sure to what the noble Lord is referring in his point about leaks. In a letter to the Treasury Select Committee, Tom Scholar has firmly refuted any evidence of inappropriate behaviour by the Treasury. If the noble Lord is referring to action by RBS, that is a matter for RBS.

To ask Her Majesty’s Government whether they intend to publish a green paper on the cases for and against the United Kingdom remaining a member of the Single Market.

My Lords, the Government will seek the right deal to give UK businesses the maximum access to, and freedom to trade with and operate in, the single market. We have committed to keep Parliament and the public informed of our thinking and we will uphold that commitment. However, we will not risk compromising our ability to negotiate in the national interest, so as to protect the long-term prosperity of the UK.

My Lords, with respect, that answer is not more informative than the oft-repeated statement that “Brexit means Brexit”, which is about as revealing as a statement that breakfast means breakfast —except that the recently leaked memo to the Cabinet Office suggests, and indeed confirms, that the Government’s approach to Brexit so far is something of a dog’s breakfast. The Conservative manifesto said, emphatically:

“We say: yes to the Single Market”.

If Parliament is now to take a role, and I am sure that the Government could benefit in these negotiations from some of the expertise in this Chamber, is it not time for the Government to at least allow us to debate how they see the pros and cons of our relationships with the single market, which is perhaps the most important issue at stake? This is highly relevant to the assurances given to Nissan.

My Lords, we are absolutely determined to have as much debate as we can on these issues; the Government are committed to this. I have had extremely informative conversations with a number of noble Lords on all sides of the House. We have also listened to and read with interest the debates that have taken place. I say again that we are going to seek the maximum access to, and freedom to trade with and operate in, the single market. There is clearly a range of ways in which that might be achieved. Noble Lords will know of the relationships that Turkey, Switzerland and Norway all have with the single market. However, as the Government have said, we are looking at these options but intend to take a bespoke approach.

Does my noble friend recall the Japanese soldiers who were found in the 1950s still fighting the Second World War long after it had finished? Will he gently point out to the noble Lord, Lord Taverne, and the Liberal Democrat Benches that we have already had a government paper setting out the arguments for the UK remaining a member of the single market? It was published during the referendum campaign, and that view was overwhelmingly rejected by the British people.

My noble friend is absolutely right: 17.4 million people voted to leave and we are determined to deliver on that. We are now assessing the options open to us in a methodical and measured way, and we intend to continue to do so. I hope the Liberal Democrats will note that those 17.4 million people expect us to deliver on this. Clearly, they expect the unelected Chamber to contribute to that debate but, obviously, they would look pretty dimly on us if we were to block the measures that we need to take.

When the Minister has the answer to the Question on the Order Paper, will the Government first tell the press, our partners in the EU or the two Houses of Parliament?

My Lords, as we have said all along, we are absolutely determined to keep this House and the other place as informed as possible about our decisions. We stick by that.

My Lords, while many people might agree with the noble Lord, Lord Taverne, that there is ambiguity about the meaning of the word “Brexit”, assuming it is a word, there is no ambiguity whatever about the word that appeared on the ballot paper—namely, “leave”. As far as I can discover, leave means inexorably three things in relation to any organisation: first, that you no longer sit on the executive committee; secondly, that you no longer pay the subs; and, thirdly, that you are no longer obliged to abide by the rules. Will the Minister confirm that those three essential aspects of leave remain the central position of the Government’s negotiations?

The noble Lord makes a very good point. As he and the whole House will know, the Prime Minister has made it clear that we wish to take control of our laws, borders and money, while achieving the best possible access to the single market, and ensuring that we have the means to continue to co-operate and collaborate with our European partners on issues where it remains in our national interest to do so.

Is it not the truth that the Government were so ill prepared for Brexit that the reason they are not revealing their hand is that they do not know what their hand is? They seem to have three hands, with three different Ministers not in agreement and one of them even failing to meet the 27 fellow members of the European Union, whose support we will need in our negotiations. Therefore my question to the Minister is: rather than playing politics, could he—

Oh!

Listen to the punchline. Could he not treat us all as adults and say that this House and all parties should be involved in this for the sake of the national interest, and that we should have a discussion which incorporates what we want to say rather than saying, “It is all secret and we cannot tell you”? Will the Minister take that approach in the discussions?

My Lords, I certainly treat everyone in your Lordships’ House as adults and listen to, and respect, the views of those on all sides of the House, whatever their views might be. As I have said all along, the Government’s view on this is to continue to engage as far as possible with this House, the other place and, indeed, groups right across society, including businesses and NGOs, and listen to their views. We are doing so in a measured, calm and reasoned way. We will continue to do so and assess the options open to us.

My Lords—

My Lords—

My Lords—

My Lords—

My Lords, it is the turn of the Liberal Democrats.

My Lords, clearly, when the Conservative Party offered the emphatic pledge of saying yes to the single market in its manifesto last year, as cited by my noble friend, it had in mind the national interest. Equally clearly, now the Conservative Government are focusing purely on their internal party interest. When will they get back to prioritising the interests and needs of the United Kingdom people and businesses, which means avoiding a destructive hard Brexit?

I am very sorry to say that I totally refute what the noble Baroness says. We are putting the national interest absolutely first and are doing so in a calm and measured way. Quite frankly, if I had turned up at this Dispatch Box four or so weeks after the referendum result and had come out with answers to the very complex challenges that this Government face—among the most serious challenges that any Government have faced since 1945—I think she would have asked us, “Where is all the planning? How has it all been carried out?”.

Oh!

Let me make this point to the noble Baroness. We are doing this in a reasoned and controlled way. I repeat to her and her party that I hope they stand by the document I see in front of her—the Liberal Democrat plan for Europe—which says that,

“we should not keep rerunning the last referendum in order to get the result we wanted”.

I very much hope that that is the case and that they are not looking to overturn or block the result in this House.

My Lords, the Question refers to a Green Paper. Following that, it is normal to have a White Paper. Is this not just a naked delaying tactic? The British people want Her Majesty’s Government to get on with it.

My Lords, I am absolutely determined to make sure that we deliver on the view of the 17.4 million who in June voted to leave the European Union. As I said to the noble Baroness, Lady Ludford, we are doing so in a reasoned and thoughtful way. We will come up with a plan that delivers on the national interest and ensure that we deliver a smooth and orderly Brexit.

To ask Her Majesty’s Government what steps they are taking to ensure that the Lord Chancellor fulfils her duty to uphold the independence of the judiciary.

My Lords, the Lord Chancellor has fulfilled her duty and will continue to do so. Statements from the Lord Chancellor and wider government show that she considers the independence of the judiciary to be a foundation of the rule of law. She has emphasised that our judiciary is, rightly, respected the world over for its independence and impartiality.

Have the Government taken full account of the wide public disquiet that arose because the lurid and irresponsible attacks on some of our High Court judges were not answered immediately and emphatically? Have the Government taken note of a report issued by the Constitution Committee two years ago, which recommended:

“Given the importance of the Lord Chancellor’s duty to uphold the rule of law, the Lord Chancellor should have a high rank in Cabinet and sufficient authority … amongst his or her ministerial colleagues to carry out this duty effectively and impartially”?

My Lords, it is not the job of government or the Lord Chancellor to police the press headlines. Having considered the headlines and, more importantly, public reaction to them, the Lord Chancellor made a clear and timely statement that an independent judiciary was the cornerstone of the rule of law and that she would defend that independence to the hilt.

My Lords, I congratulate the noble and learned Lord on his forthright criticism of media and other attacks on the judiciary. Will he convey to the Prime Minister the disappointment of many across this House at the Lord Chancellor’s failure to be anywhere nearly as explicit in condemning those attacks, and will he offer her a short course on the proper discharge of her responsibilities in relation to this and other matters?

The Lord Chancellor is well aware of her rights and obligations in respect of this matter. Many people were shocked by some of the headlines that we saw last week. I have yet to speak to anyone who actually believed them.

My Lords, the Question of the noble Lord, Lord Lexden, refers to the duty to uphold the independence of the judiciary, but the Lord Chancellor also has a duty, under the Constitutional Reform Act, to have regard to the need to defend that independence. I am afraid that many believe that she singularly failed in both those duties following the decision of the High Court on 3 November. Will the noble and learned Lord convey to the Lord Chancellor how seriously this House takes both those duties and ensure that she is fully briefed on what is required of her should the Supreme Court come under an attack similar to that levelled at the judges of the High Court after the decision earlier this month?

The Lord Chancellor takes her duties towards the judiciary every bit as seriously as this House.

My Lords—

My Lords—

My Lords, it is the turn of the Conservative Benches.

My Lords, does my noble and learned friend recall that in the report referred to by my noble friend Lord Lexden the Constitution Committee recognised that every member of the Government has a duty to uphold the law but that the Lord Chancellor has a special position, in that he or she has a duty to ensure that the Government as a whole uphold respect for the law, and that included in that is the independence of the judiciary? Would my noble and learned friend be willing to revisit the committee’s recommendation that the oath of the Lord Chancellor, as enshrined in the 2005 Act, should be revisited and strengthened?

It is not considered necessary that the oath should be revisited. The oath of the Lord Chancellor is to respect the rule of law, defend the independence of the judiciary and discharge her duty to ensure the provision of resources for the efficient and effective support of the courts. That is the duty that she has addressed and discharged.

My Lords, we all value the freedom of press comment, but when judges are attacked in inflammatory terms and cannot answer back there is machinery in the Constitutional Reform Act for the judiciary to be defended without delay. Here, there was intolerable delay before the Minister spoke. Will the noble and learned Lord invite her to read Sections 3(1) and 3(6) of the Constitutional Reform Act, which spell out her duty in clear and unambiguous terms?

The Lord Chancellor is well aware of her obligations in terms of Section 3 of the Act and has addressed those obligations. It was not appropriate that she should give a knee-jerk reaction to sensationalist headlines. What she did was to consider a series of press reports and the public reaction to those, and then respond in a coherent and timely manner.

Does my noble and learned friend accept that his response in this House last week was exemplary?

Oh!

I see no distinction between my response and that of my right honourable friend.

My Lords, I think the whole House would want to echo the sentiments of the noble Lord, Lord Cormack. However, the issue here is timeliness. The noble and learned Lord has told the House that he believes that the Lord Chancellor’s response was timely. Would he like to reconsider that view?

I see no reason to reconsider that view. It is important to remember that neither the Lord Chancellor nor any other member of the Government is here to police a free press. It is necessary for the Lord Chancellor to have regard to not only what the press have reported but the public reaction to that, and then take a considered position on that matter. I reiterate a point I made earlier: I have met many people who were shocked by some of these headlines; I have met no one who believed them.

My Lords, with the leave of the House I will now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Justice. The Statement is as follows:

“I am grateful to the honourable Member for the chance to update the House on this important issue. Prison officers do a tough and difficult job and I have been clear that we need to make prisons safer and more secure. I have announced that an extra 2,500 officers will be recruited to strengthen the front line. We are already putting in place new measures to tackle the use of dangerous psychoactive drugs and improve security across the estate.

I met the Prison Officers’ Association on 2 November, and over the past two weeks my team has been holding talks with the POA on a range of measures to improve safety. These talks were due to continue this morning. Instead, the POA failed to respond to our proposals and called this unlawful action without giving any notice. The chief executive of NOMS, Michael Spurr, spoke to POA chairman Mike Rolfe this morning, reiterating our desire to continue talks today. The union’s position is unnecessary and unlawful and it will make the situation in our prisons more dangerous. We are taking the necessary legal steps to end this unlawful industrial action.

The Government are committed to giving prison officers and governors the support that they need to do their job and to keep them safe from harm. In addition to recruiting an extra 2,500 prison officers, we are rolling out body-worn cameras across the prison estate; we have launched a £3 million major crimes task force to crack down on gangs and organised crime; in September we rolled out new tests for dangerous psychoactive substances; and we have trained 300 dogs to detect these new drugs. We have set up a daily rapid response unit led by the Prime Minister to make sure that governors and staff have all the support that they need. Taken together, these measures will have a real and swift impact on the security and stability of prisons while we recruit additional front-line staff. I urge the Opposition Front Bench to join me in condemning this unlawful action and calling on the POA to withdraw this action and to get back to the negotiating table”.

My Lords, last week in his valiant if unavailing defence of the Government's prisons policy the Minister justified its failure, even in the light of recent events, to restore staffing levels to where they were four years ago by citing the fact that a number of prisons had closed. But it is not the ratio of prison officers to prisons that is the issue; it is the ratio of properly trained and supported staff to the number of prisoners which is relevant. Given that there is no sign of any policy calculated to reduce that number, how can the reduction in the number of officers—last week’s announcement that some 2,500 will be recruited over the next few years will still leave a shortage of 4,500—be expected to transform the situation?

Will the Secretary of State sit down now with the representatives of this dedicated workforce to discuss ways in which the present crisis can be urgently alleviated? Will she initiate a comprehensive review of the whole service as thorough as the Woolf review following the Strangeways riots as long ago as 1991? Is the issue of an injunction likely to lead to the kind of discussion that will resolve this matter?

My right honourable friend the Secretary of State for Justice has made it clear that she will sit down with the Prison Officers’ Association to discuss this matter as soon as it withdraws this unlawful action. She would be anxious to take forward such discussions.

The noble Lord referred to prison officer numbers. That is an issue, but it is an issue that is part of a wider problem. It is not just a question of prison officer numbers; it is a matter of training, retention, the prison estate itself having to be improved, attempts to bring down the number of prisoners using psychoactive substances, the question of safety and in particular of violence in prisons, and the need to develop suitable means of education and reform within our prisons. In other words, we have to accept that this is a complex algorithm that cannot be reduced to a simple binary issue about prison numbers.

Of course we do not support the prison officers’ unlawful industrial action, but that does not mean that we do not sympathise with them over what has got us here: too many people sent to prison, particularly for short sentences, overcrowding, too few staff, too much time for prisoners in their cells and inadequate education and purposeful activity. Consequently we have what we have spoken of many times in this House: a crisis of increasing violence and deaths among staff and prisoners. It is no wonder that prison officers often feel extremely unsafe. Frankly, 2,100 extra officers by 2018 is too little, too late. We need twice that number and we need them much more quickly. When talks with the Prison Officers’ Association resume, will the Government reconsider the number of new officers to be recruited, the timing of their recruitment and those other issues that, in answer to the noble Lord, Lord Beecham, the noble and learned Lord just mentioned —issues about training, about retention and about conditions for prison officers in relation to violence?

I am obliged to the noble Lord. I would point out that these issues have now been addressed by the White Paper announcement and will be taken forward in the context of that White Paper in order that they can be debated and, hopefully, resolved.

My Lords, while condemning the unlawful action taken by prison officers, perhaps I may remind my noble and learned friend that we appear to be twice as wicked as the French and the Germans when we work out how many people are put in prison. I cannot believe that. Do we not have to address the fundamental issue that Britain locks up lots of people that no one else does and that our record has therefore not improved? Until we face that, I do not see how we will deal with a whole range of other issues, and prison officers are only making it worse.

My Lords, I quite understand the concern that we might be perceived to be twice as wicked as the French. Nevertheless, I would point out that all of these statistics are relative across the world and, if we compare ourselves with other jurisdictions, we find that our prison population is much lower per head of population than it is in many other western societies. At the present time, it is not considered that the resolution of this issue lies in sentencing policy; it lies in reform of the prison estate and those who have to work so hard to maintain it.

My Lords, can the Minister tell me how any review will look at the need for registered nurses and medics to get more involved in our prisons in order to help prison officers cope with people with long-term mental health problems, many of whom should not be in prison anyway? I stand here in my 60s, having worked in Brixton prison in my 30s from the Maudsley hospital doing just what I said, and then doing the same work in both Dartmoor and Exeter prisons. However, these kinds of in-reach programmes are actually being reduced, due to shortages in the NHS and academia, rather than increased.

I am obliged to the noble Baroness. Of course mental health issues are a major problem within our prison estate. There is no question but that a very large proportion of those in our prisons suffer in one form or another from mental health issues, some of them induced by the use of illegal drugs, in particular psychoactive substances. That breeds difficulty, despair and indeed violence. We are attempting to address this at the present time, and again I would point to the issues raised in the context of the White Paper. We are determined to make progress in this matter.

My Lords, the Minister has twice recently referred, in answer to my questions, to the fact that the staffing levels the Government are bringing in will meet their benchmark as a refutation of the need for more officers. Would he care to write to me, and put a copy in the Library, if he can think of any other issues to be addressed beyond violence, escapes, suicides, self-harm, stabbings, attacks, riots, lockdowns—stopping the healthcare work just referred to by the noble Baroness going ahead—and preventing reoffending? How did the Government calculate their benchmark and which of these issues are now being tackled successfully in their prisons?

A benchmarking exercise was carried out some time ago to determine prison officer numbers in the context of the prison estate. The benchmarking exercise is being reconsidered going forward, but I am content to write to the noble Baroness outlining what the Government position is with respect to that and where we hope that it will be taken.

Can my noble and learned friend tell us how many prisons have writers in residence? Surely if prisoners were kept occupied, this would put less pressure on prison officers.

I cannot say how many prisons have writers in residence, but I would suggest that the problems within our prisons at the present time go rather deeper than occupational therapy in the form of writing. However, I will write to my noble friend with the details she requests.

My Lords, how bad do things have to get in the short term before we call on military support?

There is no question or suggestion of such a thing. In this context, I make clear there is a national response team organisation to deal with unrest in our prisons. For example, the recent incident at Bedford was resolved when the national response team moved into the prison.

My Lords, would the Minister consider a radical approach towards those offenders with mental health issues, with the possibility of probation with a requirement for residential care? That would remove a great many people from the prisons and allow them to be treated, with some ability to be rehabilitated.

The Government are of course always open to any suggestion that might improve the situation in our prisons. I take on board the observations of the noble and learned Baroness.

My Lords, to follow that question, the Minister has said there is an overwhelming number of mental health problems in our prisons. Is not the reality even worse, in that many of these people should never have been in prison at all? The experience of prison is counterproductive to their ability to build a future and to their well-being. What attention are we giving to providing alternative arrangements for mentally ill or mentally disturbed people? Would he not agree that it is a matter not just of numbers, although of course numbers matter, but of the purpose, dynamic and morale of the Prison Service? It makes nothing but economic and humane sense to have rehabilitation as the priority in safe custody. Can we please reassert the importance of this word “rehabilitation” and make it central to the purpose of the Prison Service?

I am obliged to the noble Lord. Clearly, our sentencing policy embraces more than just custodial sentences and has done for some considerable time. Clearly, the morale of those working in a difficult environment in our prisons is an issue. The noble Lord raised in particular rehabilitation. That lies at the very heart of our proposed reforms, not just with rehabilitation taking place in prisons, but with rehabilitation that will take prisoners through the gates of the prison and back into the community so that we avoid the present situation, in which more than half of those sentenced to a period of imprisonment return to prison in a relatively short period of time.

My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend the Secretary of State for Transport in another place. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a statement about HS2. One of my first steps as the new Secretary of State for Transport was to reiterate the Government’s backing for HS2. I did so from the conviction that HS2 is essential in delivering a modern, vibrant economy for the UK.

This is a Government who deliver the infrastructure projects that the economy needs. That is core to delivering a country that works for everyone, wherever in the country they live. Just last month we announced support for a new runway at Heathrow, showing that Britain is a dynamic country which is open to the world. Today, I am announcing the Government’s preferred route for HS2 lines from Crewe to Manchester and from the West Midlands to Leeds—known as phase 2B—helping to rebalance our economy beyond London and the south-east, ensuring economic prosperity and opportunities are shared throughout the country.

It means that, following on from the 2013 consultation and work we have done since, I am today confirming the majority of the route. There are also a number of cases, including the proposed route through South Yorkshire recommended by Sir David Higgins in a report earlier this year, where I am proposing substantial refinements. I am launching a consultation to seek the views of communities and other interested parties before reaching a decision on those sections next year.

The first phase of HS2, from London to the West Midlands, is just over 100 miles long, but phase 2 is significantly longer at 174 miles. The route I am confirming today represents a huge commitment to the Midlands and to the north. HS2 is not just about a faster connection between the south-east, the Midlands and the north; it represents a bold vision for connecting up the great cities of the north of England and the Midlands, both east and west.

Connectivity is central to HS2. Poor connectivity between the cities and regions of the Midlands and the north has restrained their economic growth. High-quality transport allows businesses to grow, work together and access a wide range of customers, suppliers and skilled labour markets. By improving connections between our great cities, HS2 will generate jobs, skills and economic growth and help us build an economy that works for all.

Today, only 4% of people who travel between Birmingham and Manchester do so by train. That is hardly surprising, when the journey takes around 90 minutes. But on HS2, it will take less than half that time—just 41 minutes. At a stroke, those two regional capitals will be much more closely linked and able to deliver increased economic prosperity. The flow of people, ideas and opportunity will follow those new connections.

Work is also progressing to see how HS2 could help deliver parts of a fast, frequent northern powerhouse rail network for Liverpool, Manchester, Sheffield, Leeds, Hull and Newcastle. Where necessary, we will include passive provision for those services in a phase 2B hybrid Bill, subject to agreement of funding and the supporting business case.

Just as important as connectivity is the uplift that HS2 will deliver to our transport system. HS2 will not be a separate, stand-alone railway but an integral part of our nation’s future rail network and overall transport infrastructure. It will add to the overall capacity of our congested railways.

Even if you never travel on HS2, you stand to feel its benefits. By providing new routes for intercity services, HS2 will free up space on our existing railways for new commuter, regional and freight services, while also taking lorries off our roads. It will provide new options for services to towns which currently do not have a direct connection to London.

Tomorrow’s HS2, east and west coast main lines could have 48 trains per hour to Birmingham, Manchester and Leeds—up from 29 today. Even if you never travel by rail at all, you stand to benefit from the thousands of local jobs and apprenticeships created by the better connections that HS2 will bring. The project will generate around 25,000 jobs during construction as well as 2,000 apprenticeships. It will also support growth in the wider economy, worth an additional 100,000 jobs.

I recently visited the site of the new National College for High Speed Rail in Birmingham. Together with its sister college in Doncaster, it will open its doors next year to provide Britain’s workforce with specialist training, skills and qualifications to build HS2 and future rail projects. It will deliver highly skilled, highly motivated people who have the opportunity of a great career in a vital industry.

Today’s announcement represents an important step forward in delivering HS2 and, with it, the transport infrastructure essential to the economy of 21st-century Britain. However, I am well aware that there are those with the firmly held view that HS2 should not go ahead—those who doubt whether the case has been made satisfactorily. Indeed, I know that many Members of this House have strong convictions on this issue.

I am under no illusions: this is no easy undertaking. But I believe it is the right thing to do. The easy thing to do would have been to keep patching up the existing railways; making do and mending with a railway that the Victorian pioneers would still recognise; hoping to fit ever-increasing passenger and freight growth in the same pint pot. That is not what the people of this country deserve, nor what our economy requires.

In addition to publishing today a Command Paper and accompanying maps setting out full detail of my preferred route for the HS2 phase 2B route, I have also written to those Members whose constituencies are affected. My ministerial colleague the Parliamentary Under-Secretary of State will also make himself available to Members who wish to meet him later today.

To ensure that our case is robust, and in line with the requirements of Her Majesty’s Treasury’s Green Book, we have of course considered alternatives to the phase 2B scheme. We have found no alternative that would deliver the same level of benefit for the country, stand the test of time and provide the same level of capacity, connectivity and service that phase 2B does. Indeed, over the last few months I have had the chance to visit most places along the HS2 route. I have seen and heard all the issues for myself and remain convinced that we are delivering the right solution to the country’s transport needs through this project.

I assure the House that I recognise that building major infrastructure will always be disruptive and disturbing for those living nearby and I am very mindful of the concerns of many of the constituents of many Members of this House. In proposing this route I have listened to the views expressed in the consultation of 2013 as well as those of HS2 Ltd’s engineering and environmental specialists. I am issuing safeguarding directions for the whole of the preferred phase 2B route today, which protects it from conflicting development. It also means that those people who are most affected by the plans will now be able to access statutory compensation straightaway.

In addition, I will be consulting on discretionary property schemes. These will go over and above what is required by law and give assistance to those who will be adversely affected by the railway. These schemes are the same as those currently in operation for people living along the phase 1 route and I aim to be able to confirm next year the schemes on which I am consulting today. Two of the schemes that will enter into operation from today are the express purchase scheme and the need to sell scheme. Express purchase allows owner-occupiers to apply to the Government to buy their home sooner than would be possible under statutory schemes. The Government will buy properties at their unblighted open-market value, as if HS2 were not going to be built. We will provide a “home loss” payment of 10% of the property’s open-market value up to £58,000 and pay reasonable moving costs. Need to sell is a purchase scheme for people who have a compelling reason to sell their property but cannot do so, other than at a significantly reduced price, because of HS2. There is no geographical boundary for this scheme. The Government will agree to buy a property for 100% of the open-market value if an application is successful.

As I say, I am mindful of the impacts HS2 has on communities. I assure every Member of this House that my department and HS2 Ltd will continue to work with affected communities and local authorities up and down the line of the route. I very clearly expect people to be treated in that process with fairness, compassion and respect. Today marks the end of a long period of uncertainty for communities, councils and businesses along the route of phase 2B. These have been complex and difficult decisions to take, but I make no apology for taking the time to get it right and making sure that the route we are proposing offers the best possible outcomes for passengers, communities, the environment and the economy.

I need also to report that phase 1 of the railway, from Birmingham to London, is progressing well. Construction work is due to start next year, subject to Royal Assent. Phase 1 will open in 2026. In a clear signal of how work is progressing, this morning I have also announced the companies that have been awarded the phase 1 enabling works contracts. These works include archaeology, site clearance and setting up construction compounds ahead of the start of the main engineering work. These contracts are worth up to £900 million and cover the whole of phase 1, from London to Birmingham, and the connection to the west coast main line at Handsacre. Work is due to begin in the spring.

Another aspect of the preparatory work on phase 1 is the considerable engagement with those on the line of the route, some of whom have taken up our express purchase compensation scheme. We are continuing this offer of support and will be writing to those people whose homes or businesses may be directly affected by construction. We have a general obligation to continue to seek further reductions to adverse impacts during the design, construction and operation of the scheme. I am personally watching this closely. In keeping with that obligation, HS2 Ltd has continued to look at possible mitigation measures around Euston station, where existing rail lines converge. This could significantly reduce impacts on rail passengers and the local community. Any decision on the adoption of these possible mitigations would be taken closer to the letting of the main contracts next year, and I will update the House at that time. This is part of a wider design process which will continue to add detail to our proposals for phase 1 well into next year and beyond. I would expect that similar mitigations might come forward elsewhere along the route as the detailed design stage starts in earnest after Royal Assent.

HS2 is an ambitious and exciting project and we must seize the opportunity it offers to transform our country for future generations. Local authorities and local enterprise partnerships are gearing up for HS2 and developing growth strategies, supported by United Kingdom government growth strategy funding, to maximise the benefits of HS2 in their areas. I am pleased to announce further funding today for Manchester, the Northern Gateway partnership, Leeds and the east Midlands, and the first tranche of funding for Sheffield, to support this important work.

This Government are planning for the future. We are taking the big decisions and investing in world-class transport infrastructure. We are ensuring that the UK can seize opportunities and compete on the global stage. We are also delivering more capacity on our overcrowded railway, which could see a 65% increase in the number of trains on this part of the network. The route decision I have published today takes us an important step closer to realising the full potential of HS2. It means better transport connections and capacity, and more jobs and training opportunities. Just as importantly, HS2 will link centres of innovation and opportunity in the cities and regions of the Midlands and the north and of our knowledge economy. I commend this Statement to the House”.

I thank the Minister for repeating the Statement made earlier today in the House of Commons. We support HS2 and thus welcome this further announcement of phase 2B on more but not yet all of the route. We welcome the intention that HS2 outside London will have connections to the existing network. We do not welcome the fact that the Government appear determined to see HS2 run in the private rather than the public sector, bearing in mind the amount of taxpayers’ money that will be invested, the success of the public sector in running the east coast main line twice following the withdrawal of two different private sector operators, and the continuing success of the public sector in running the London Underground, with its heavy traffic flows.

We will need to look at the details of the proposed route just announced and the extent to which legitimate concerns have or have not been addressed, as well as the compensation and mitigation proposals, but perhaps the Minister can say now how the compensation compares with that for those affected by a new runway at Heathrow. For how long will the further consultation mentioned in the Statement last, and by when do the Government expect to announce their decisions in the light of that consultation? The Government have not yet given a timescale on that. Likewise, when next year do the Government expect to announce the rest of the route of HS2? The National Audit Office stated earlier this year that HS2 had an “unrealistic timetable” and faced major cost pressures. What is now the timetable for the completion of HS2 and what is the latest accurate projected total cost figure, bearing in mind what has happened time-wise and cost-wise to what is presumably the much simpler Great Western electrification?

The Statement says that HS2 links up the cities of the north of England and the east and west Midlands. When do the Government intend to make firm announcements about improved rail links between the cities of the north? The Statement says in the context of a rail network for Liverpool, Manchester, Sheffield, Leeds, Hull and Newcastle that the Government will, where necessary,

“include passive provision for these services in the Phase 2b hybrid Bill, subject to agreement of funding and the supporting business case”.

In this context what exactly does passive provision mean—as opposed, presumably, to non-passive provision?

The Statement also says that:

“HS2 will free up space on our existing railways for new commuter, regional and freight services”,

and,

“will provide new options for services to towns which currently do not have a direct connection to London”.

What new commuter, regional and freight services do the Government have in mind, and what towns do the Government consider would have the option of a direct connection to London—or is that statement one simply of hope and expectation rather than fact?

The Statement refers to tomorrow’s HS2, east and west coast main lines being able to have,

“48 trains per hour to Birmingham, Manchester and Leeds”,

and that this would be up from 29 today. Perhaps the Minister could give me a breakdown of those two figures. On the face of it, they do not appear to include existing services from Marylebone to Birmingham; neither is it clear whether the existing services are only those to and from London or include those running between Birmingham, Manchester and Leeds.

The Statement also refers to phase 1, from Birmingham to London, and the award of some contracts. What percentage of those contracts, in number and value, are going to British firms? What percentage of any materials used will be imported from elsewhere and what percentage will come from within the United Kingdom? Reference has also been made to Euston station. To what extent has agreement been reached with the London Borough of Camden over the development of HS2 at Euston and its impact on the surrounding area?

Finally, I wish to raise two other points about phase 1 and need to declare an interest, as I have a home within a mile or so of the route of HS2 in the London Borough of Hillingdon. I make these two points in the context of what is stated on page 6 of the Statement:

“We have a general obligation to continue to seek further reductions to adverse impacts during the design, construction and operation of the scheme”.

Just prior to the London mayoral election the Government announced, following a meeting with the Secretary of State at which the Conservative candidate in that election was present, that they would ensure another look was taken at the case for extending the tunnelling of the route in the West Ruislip area. Can the Government tell us what the outcome of that further look is and the reason for any decision, now that the mayoral election is safely out of the way? Can the Government also say what has happened in respect of the relocation of the Hillingdon Outdoor Activities Centre, used by significant numbers of young people in particular? I have visited the site on two occasions in the company of two different Ministers—sympathetic noises were made, particularly on the second occasion. Has a suitable alternative site been found for the outdoor activities centre, since HS2 still appears to be going right across the existing site on a viaduct?

My Lords, I started today in Marseille and travelled here by TGV, which is fast, efficient, very comfortable and has low emissions. I mention this not because I think that your Lordships will be interested in my holiday photos but because France is decades ahead of us in the provision of a network of fast, efficient rail services. On these Benches, we are firm supporters of HS2 and we welcome this announcement and the details provided today, as far as they go. We also welcome the jobs whose potential creation has been outlined but we have concerns, which I wish to raise here.

First, HS1 was opened in 2007 and it will be at least 20 years between its opening and that of the first phase of HS2. I know that the Minister has given us an indication of the timescale for the second phase of HS2 but I wish to push him on whether there is any scope for faster completion, because the great cities of the midlands and the north need this connectivity very much faster than what is outlined. While the Government make the very valid point in their Statement that HS2 will take pressure off existing lines, it is worth pointing out at this stage that those lines are already groaning under the pressure of the number of passengers and the frequency of services that have to be provided. Therefore, when one extrapolates into the future, one finds it very difficult to believe that the system will not have cracked apart by the time HS2 phase 2 is opened. My main concern is that HS2 phase 2 will drain resources, which are so badly needed, from the rest of the network. Investment is urgently required now. Last week, the Government announced that four electrification projects were being put on permanent hold. There is a shadow over some aspects of the Great Western electrification. The east coast main line is desperately in need of investment. The ORR’s statistics show how badly that line is suffering. Previous promises of investment on that line have been put on hold. I urge the Government to give us more detail about their plans for investment in existing services to reassure us that HS2 is not just a highly polished priority project being operated at the expense of the rest of the rail network. Stimulating investment in the Midlands and the north depends on very much more than HS2. It has to link into an efficient, integrated public transport service.

Finally, the mitigation measures and the detail on them are very welcome, but I ask for a more open and straightforward approach from HS2 Ltd in future. Residents and local councils report that they have often found it less than easy to deal with. I shall not repeat many of the detailed questions put to the Minister by the noble Lord, Lord Rosser, but I emphasise that I am concerned to have more detailed information, particularly on what “provision” means and on the number of services that currently run and the future expansion of those services.

My Lords, I thank the noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, for their comments. I am slightly confused by the comments of the noble Lord, Lord Rosser. I take it that while he has raised certain questions they in no way suggest that Her Majesty’s Opposition are going lukewarm on the idea of HS2. Some of the questions are perfectly valid.

The noble Lord and the noble Baroness raised issues relating to the consultation. It starts today and will last for 16 weeks, so it will end around 9 March. The Secretary of State will take a decision on the remaining part of the route next year. The noble Lord asked about specific competition dates. As I said in the Statement, I believe phase 1 will be subject to Royal Assent. We are looking to complete by 2026 and for the second phase of the project to be completed by 2033.

The noble Baroness, Lady Randerson, said we must ensure that we deliver this important project as soon as possible. I assure her and the whole House that that is the Government’s intention. As the Secretary of State said in his Statement earlier today and repeated in his answers to questions, it is important that we take a considered view on the alternatives. We reflected on the 2013 consultation and on Sir David Higgins’s report on certain aspects of the project, and that has been reflected in the announcement made today.

The noble Lord, Lord Rosser, asked about the statutory compensation. I alluded to mitigation and 10% of the unblighted cost. We have also announced the details of two schemes today, and if the noble Lord has further questions once he has reviewed those schemes, I will of course be pleased to answer those in detail.

Both the noble Lord and the noble Baroness asked about investment in other areas aside from HS2. As I am sure noble Lords are aware, the Government are undertaking one of the biggest infrastructure investment programmes, and rail is no exception. Around £40 billion is being invested elsewhere. In terms of ensuring HS2’s connectivity to other routes, the word “passive” was used in the Statement, and both the noble Lord and the noble Baroness asked further questions on that. We are seeking to ensure that the HS2 route and the actual building of it are future-proofed so that, for example, any integration issues which arise within the context of northern powerhouse rail can be fully catered for in the construction of HS2.

The noble Lord, Lord Rosser, also asked about the additional work being done with Camden. We continue to work with all local authorities on the issues around Euston. Indeed, this applies across the whole network. The noble Lord will also be interested to know that, underlining the point about communication, 270,000 letters are going out today specifically to people impacted by the route. The noble Lord, Lord Rosser, also asked about the tunnelling at West Ruislip and the Hillingdon centre, which I know he has raised before. I will seek to get the latest updated situation on those two issues and write to the noble Lord accordingly.

My Lords, I am sorry to introduce a slightly discordant note, but is it not really a question of priorities? At a time when the National Health Service had a deficit, last year, of £1.8 billion, and we are asking it to save £22 billion by 2020-21, does it not seem a bit ridiculous to be spending £55 billion-plus on what is a non-essential project that is going to be hugely disruptive?

My noble friend draws a comparison with other areas, but in no way does our investment in HS2 take away from the importance of the National Health Service. I would counter his suggestion by not just looking at the project in terms of the cost. The whole project, once up and running, seeks to deliver over £103 billion of economic benefits to the country as a whole. I alluded to connectivity in my Statement, and the noble Lords who have already asked questions raised important issues about it. This is not just about connecting parts of London to the Midlands or elsewhere but about connecting the whole country. This is an important project. It is one of the biggest rail infrastructure projects, and the first major one outside London, since the Victorian age, and we now need to move forward and get HS2 built.

My Lords, I draw the House’s attention to my declaration of interest as a member of Sheffield City Council. In light of the fact that putting the Sheffield station in the city centre would save £768 million as compared to putting it at Meadowhall, as well as create 24% more daily passengers, £2.5 billion more GVA and 6,500 more jobs, why is more consultation needed? Why could the Government not make a decision today on where the station should go, to give certainty to both passengers and businesses in the area seeking that certainty?

As I said in the Statement, we have made certain changes on the actual route, which are based on the feedback we have been getting through different consultations and on the reports that we have had on the previous route in 2013. It is right that we take some time, because there are some major changes to certain elements of the Y route as it is. The consultation on that will not take an indefinite period of time: we are talking about up to March of next year. The noble Lord raises the important issue of the link into the city centre. I am sure he will acknowledge and respect the fact that the Government have listened and have sought to accommodate exactly the amendment that he sought previously.

My Lords, I welcome the Statement made this afternoon and the Minister’s commitment to phase 2B of HS2. The economic benefits are in fact more than he said. He concentrated on the main regional centres but the recent publication from HS2 showed that the benefits will be wider than that and journey times will be improved. In fact the economic benefits will improve health in the north because people in work tend to be healthier. I want to press him on future investments and ask him to ensure that as the HS2 line will hit the west coast main line at Wigan, we will get improvements and an upgrade to that line. We do not want a 21st-century journey up to Wigan followed by a 19th-century journey to Glasgow.

I think we all want to see a 21st-century experience across the whole network. I appreciate the noble Lord’s support for the project. In terms of journey times generally, we should compare the existing current routes. The noble Lord talked about Scotland. Once HS2 is up and running, we will be talking about journey times from London to Glasgow going from four hours and 31 minutes to three hours and 40 minutes, and to Edinburgh from four hours and 22 minutes to three hours and 40 minutes. I appreciate the noble Lord’s point about existing lines, but I assure him that the Secretary of State is determined to ensure that where the route connects with other parts of the existing network, as I have alluded to already, we are looking at making major investments in other parts of the rail network as well.

My Lords, I wholly welcome this long overdue investment in our national infrastructure, while also wishing that we were able to build our infrastructure as quickly as some other countries have demonstrated they can. Can the Minister explain the rationale for connecting HS2 to Leeds and Manchester but not to the city of my birth, Liverpool?

I suppose that is a question that I as a Liverpool fan should also raise; perhaps my accent does not quite give away the team that I support. The noble Lord talks about the importance of connectivity across regions. The Government are working—I referred earlier to northern powerhouse rail as well—on how to ensure that, with the new body that has been set up, we can look to improve connectivity not just between the cities that I have just mentioned but across various parts of the north-east and the north-west to link up the northern part of the country more effectively. I also assure the noble Lord that, as I mentioned previously, HS2 is being made safe and will accommodate any other changes or accommodations that we will need to make on additional line investment across different parts of the north-east and the north-west.

I warmly welcome the Minister’s Statement. Will he at least reflect that it is a question not just of how swiftly other countries manage to do these things in comparison with ourselves but of how we do them these days compared with how we managed to do them in the 1840s? Then we built thousands of miles of railway with picks and shovels but we have been told for some time that this link, which is ultimately maybe 300 miles of railway, cannot be completed until 2033. What did the Victorians have that we do not have today, and is there any possibility of this being speeded up?

What we probably have now is ensuring that there is proper consultation. I suggest to the noble Lord that planning laws have moved on since the Victorian age. The issue of airports was raised previously. I remember travelling to other parts of the world where they were building six runways, and it was suggested to me that we had had a challenge over the last 40 years in building a single runway. I am acutely aware, as are the Government, of the importance of pressing ahead with these infrastructure projects while ensuring that we effectively consult and adhere to the planning requirements presented by such large infrastructure projects.

My Lords, I support my noble friend on the question of Sheffield. On most parts of the continent, high-speed railways go on the conventional railway for the last bit of their journey, often a small bit. By so doing, they reinforce all the connections that that railway has with other railways, and with buses, where people actually want to go. We should take very seriously the point that Sheffield will be infinitely better off with a station in the city centre, even if it means that the journey will be a minute or two slower—after all, that is what we are talking about.

Secondly, having listened to the discussion, I bring to the Minister’s attention that the east coast main line is unreliable and it will become more so because of the increased pressure on it. At present the Government are in the process of purchasing a new fleet of trains. These are all electric trains, other than the bits that go to Scotland and places such as Hull. The main artery between Newcastle, Leeds and London is going to have trains that cannot be diverted on to diversionary routes when the inevitable infrastructure failures occur or when repairs have to be done. For the sake of the north of England, I ask him to go back and talk to his officials about the good sense of the decision they have made, and whether the decision can be revised to produce on the east coast main line more bi-mode trains.

I will certainly come back to the noble Lord on his point about the east coast main line, but on his earlier point about Sheffield, I reiterate that the Government are minded to accept David Higgins’s recommendation that HS2 should serve Sheffield city centre. We have also had several meetings about this with the noble Lord, Lord Kerslake, who I do not think is in his place, and we share the noble Lord’s opinion about the importance of providing that city link; the Government are certainly minded to do so.

My Lords, does the Minister recognise that in Leeds and West Yorkshire, today’s announcements will be very warmly welcomed? I look wryly at the comparison of spending on the NHS in a year with a project that will take 17 years before it is completed. Seventeen years is an awful long time, so while I welcome the strategic decision—many of the underlying details will be very beneficial in Leeds—can the Minister give the House two assurances? First, is funding of HS2 to Leeds robust and clearly thought through, and will it support the delivery of the strategy? Secondly, will the east-west connection, which we called HS3 at one time, not be held up until HS2 is completed, which is in 2033? Heaven forbid that there is no major improvement across the Pennines before 17 years is up.

First, on the noble Lord’s second point, let me assure him that discussions are already under way with Transport for the North and the appropriate councils on HS3. The importance of today’s decision is that it accommodates the fact that HS3 will be built. It is not an option, it is a question of ensuring that as HS2 is built, it makes appropriate accommodations. The cost remains at £55 billion for HS2 as a project as a whole, which the Government are keeping under close guard and watch to ensure delivery of the programme according not just to budget but to the timelines that have been established.

My Lords, it will be very welcome to reduce journey times from London to both Glasgow and Edinburgh as a result of HS2 linking with the present network. Can the Minister clarify government policy on the extension of HS2 to Scotland and the likely timescale for any such development?

I cannot give any further detail of plans—I am sure the noble and learned Lord is aware of that fact—but linking up Scotland in the most efficient way possible as part of a united United Kingdom is, I think, an important priority for us all.

My Lords, I declare an interest as a citizen of Newcastle and a member of its city council but, as I am approaching my 72nd birthday, I suspect it will be a posthumous interest in the HS2 programme. As we have heard, it will be 17 years before the network reaches Sheffield—we hope, the city centre. Is there any indication of how long it will take before the gap between Sheffield or Leeds and Newcastle will be met? It seems to me likely to be another 17 years. My children may be facing a posthumous interest in this matter at this rate.

I shall certainly endeavour to write to the noble Lord before his 72nd birthday, telling him what that timeline is—but in doing so may I also wish him a long and healthy life?

My Lords, I have listened to so many speeches and suggestions on this Bill. Mine is a tiny contribution to that debate. I make even my tiny contribution with some perplexity; I find it difficult to consider, or to hear being considered, proposals that will have considerable costing elements to them while we are being told that a fiscal framework is being debated somewhere else. That makes the nature of the contributions that we make a little recondite. Nevertheless, we carry on.

I have read a few Bills since I have been a Member of your Lordships’ House and this one seems so extraordinary—a bit of a dog’s breakfast—with all these reserved powers, enumerated one after the other, 10 after 10 and almost 100 after 100, which makes us wonder whether there is any coherence at all at the heart of this Bill. Others will debate significant and large issues before we exhaust the consideration of these reserved powers. Mine is a very small issue, as I say, yet it will test the good will of the Government and allow us to test whether the Government are prepared to consider these issues at all. If they cannot for the issue that I shall present in a moment, I cannot see how they will begin to deal with some of the bigger things under discussion.

We recognise that gambling is a prevalent aspect of contemporary culture and takes many forms. There is no suggestion in this humble amendment of ours that we should take powers to the devolved Government stretching across all the complex picture that represents the gambling industry in this land of ours. But when I look at the Gambling Act 2005 to identify the major thrust that it seeks to put out by way of policy, I see that there are three points—and they are quickly enumerated. First, it mentions,

“preventing gambling from being a source of crime or disorder”.

There is no problem there. Secondly, it talks about,

“ensuring that gambling is conducted in a fair and open way”.

Again, surely that is not problematical for any of us. But it is the third,

“protecting children … from being harmed or exploited by gambling”,

that concerns me here.

The amendment relates to gaming machines. Of all the gambling opportunities available to people, threatening them and tempting them, gaming machines are the most obviously accessible forms of gambling and might be the most obvious temptation for children. That is where children might be most vulnerable; when they go into a premises either licensed or licensed for a different activity, but having machines within it, there might be a danger that we should seek to mitigate as far as possible.

The amendment does not seek even to control gaming machines of all descriptions. Some noble Lords will remember, from the debate in 2005, that there are four categories of gaming machine, ranging in financial levels at which gambling can take place from A to D. Here, we are referring to those where the maximum charge for use is more than £10, which is perhaps more than most children have as pocket money. However, we are not only concerned about children; we just cite them as being likely to be in the presence of these alluring machines as much as adults are. Why should this aspect of gambling not be controlled by the devolved Government of Wales, since it is so easy to identify where they are, recognising that the application for licensing premises to include and use them is a fairly mechanistic affair? There is nothing complicated here. Nor would this complicate any issues that would imperil a coherent policy across the United Kingdom. Scotland has such powers already; why not Wales?

For this humble part of the gambling industry, some sort of oversight might be devolved to the Welsh Government. In 2012, the Gambling Commission gave a lot of statistics about gambling, including some that one can extract as applying to Wales. It seems that billions of pounds are spent on gambling in Wales every year. I say “it seems” because there is no real, empirical evidence that we can tie down convincingly in a debate such as this. The Welsh Government have felt that there were other priorities than conducting statistical research in this area. However, anecdotally—and in my experience of visiting a number of communities across Wales where I hear people talk—this is a real social problem. Consequently, it seems logical to invoke the principal of subsidiarity so that control of this aspect of gambling should be as near to where the gambling takes place as one can conceive of. It is not rocket science: this is a fairly easy conclusion to reach. The problem is whether Her Majesty’s Government will be prepared to single this aspect out from the welter of other gambling activities that take place in order to allow it to be controlled elsewhere than here at Westminster.

I hope that the gentle way in which I have moved this amendment will be heard. Gentle though it is, it may be a test of the Government’s readiness to take into consideration activities which are part of the prevailing culture in Wales, where ordinary people involved in ordinary activity are sometimes easily taken out of their depth and run into danger. I beg to move.

I support the amendment and, indeed, only wish that my noble friends had gone further and tabled an amendment that would have devolved legislative powers and policy-making on gambling in its entirety to Wales. Gambling is a social and moral issue and of its essence should be determined by the local community which is affected. Will the Minister say why it is the Government’s view that they must hug gaming machines to their bosom? Why are they not willing to allow the people of Wales their will, as expressed by their own Assembly in Cardiff, to go to perdition or to grace in the way of their own choosing?

My Lords, I would like to ask the Minister a couple of questions in relation to this amendment because it is a good example of an area which remains a reserved power but may be subject to different types of legislation in the future in either direction. The Government of the day might decide to loosen regulations around gaming to create a Las Vegas-type area somewhere in the UK, or they might find that the evidence on gaming, and the harm it causes society, is so great that they clamp down on it. What is the alert mechanism to update the Bill if any legislation or a statutory instrument is changed in relation to a reserved matter, this issue being an example of that? How will that happen? What will be the mechanism for updating the reserved powers? How will the Assembly be consulted if it feels strongly that it wants to go in a completely different direction, or will this be down just to the powers of persuasion of Ministers, particularly the Secretary of State for Wales?

My Lords, I thank my noble friend Lord Griffiths for introducing this very important amendment. As he outlined, fixed-odds betting terminals are devices normally found across the country in betting shops that allow players to bet on the outcome of various games and events with fixed odds. I must admit that I am not much of an expert in this field. In fact, the nearest I have come to some serious betting is the odd game of bingo and the 2p slot machines on Barry Island. While we have to recognise that betting probably goes back to the age of the ark, we should be aware that the scale—the ability to lose serious money very quickly—has changed exponentially in recent years.

I make it quite clear that we are under no circumstances here advocating the wholesale devolution of gambling regulation to Wales. With the advent of internet gambling, it is extremely difficult to regulate gambling even at the UK level, let alone at the Welsh level. However, a particular aspect of gambling is causing social havoc in families and leading to ill health. Fixed-odds betting terminals allow players to stake up to £100 every 20 seconds on touch-screen machines—a significantly higher stake than the £2 maximum bet on a fruit machine. Many, often vulnerable, people are attracted by the prospect of high payouts of up to £500. Evidence suggests that these machines are highly addictive, causing real and lasting damage to gamblers. They have become a huge problem in communities that are often struggling to cope with underinvestment and high unemployment, exacerbating problem gambling more than any other form of betting. There are more than 1,500 fixed-odds betting terminals in Wales today, and more than £1.6 billion is staked annually. That is £1.6 billion in Wales alone.

I am ashamed to say that I believe that deregulating this industry was one of the worst things that Labour did while in government. Betting is creating vast social problems and health problems in our communities, but it is not the UK Government who are having to wipe up the mess; it is the Welsh Government. This amendment would confer legislative competence over fixed-odds betting terminals on the Welsh Assembly—a matter which is already devolved to Scotland. Therefore, once again, I ask the Minister: if it is good enough for Scotland, why is it not good enough for Wales? Devolving the regulations would allow the Welsh Government to introduce appropriate restrictions on content and operation and would shape responsible gambling initiatives.

In 2014, the Assembly adopted a Back-Bench Motion drawing attention to the social problems arising from the growth of gambling in Wales. It is important to note that this was supported by all four political parties then represented in the Assembly. By ensuring that betting shops remain the safest place to gamble and that people enjoy their leisure experience without betting more than they can afford to lose, the Welsh Government could take action to alleviate the negative consequences of gambling addiction, such as insurmountable debt and poor health, which at present have a detrimental knock-on effect on the Welsh budget. I ask the Minister to consider very seriously this extremely grave problem in some of our most deprived communities.

My Lords, I thank the noble Lords who have participated in the debate on these amendments. In particular, I thank the noble Lord, Lord Griffiths of Burry Port, and the noble Baroness, Lady Morgan of Ely.

With these amendments, the noble Lord and the noble Baroness are seeking to devolve legislative and executive competence to the Assembly and Welsh Ministers to regulate the number of high-stakes gaming machines authorised by new betting premises licensed in Wales. Betting, gaming and lotteries is currently not devolved in Wales and is reserved under the new reserved powers model provided for by the Bill.

As has just been demonstrated, Westminster, too, is concerned about some of the addiction and social harm issues that the noble Baroness has referred to. Until recently, this matter was also wholly reserved in Scotland, but earlier this year the Scotland Act 2016 devolved certain powers in relation to high-stakes gaming machines in new licensed betting premises. Apart from that, however, the reservation ensures a coherent framework for gambling across Great Britain, as well as a single regulatory environment covered by the Gambling Commission.

The Silk commission made no recommendations on the devolution of betting, gaming and lotteries, so the subject was not considered by the all-party St David’s Day process. However, in the St David’s Day agreement the Government committed to consider whether non-fiscal Smith commission proposals should be implemented for Wales. One such proposal, which we implemented for Scotland in the Scotland Act, would devolve certain powers in relation to so-called fixed-odds betting terminals. I understand the strength of feeling expressed by noble Lords this afternoon about the proliferation of high-stakes gaming machines in Wales. I also thank the noble Baroness for her candour about the last Labour Government in relation to this issue. It was very candid and courageous to state that.

The noble Lord, Lord Howarth, asked why the Government did not bring this measure forward. The answer is simply that it was not put forward by the all-party Silk commission and therefore was not picked up by the all-party St David’s Day process.

The noble Baroness, Lady Finlay, asked about the alert mechanism in the Bill for updating reserved powers. As with all reservations, the list of reservations can be modified by primary legislation made by Parliament or by order under Section 109 of the Government of Wales Act, where the order is subject to affirmative resolution in both Houses of Parliament and the Assembly. With regard to any alteration of reservations, we would of course seek the agreement of the Assembly under the process put forward in the Bill and under the convention that is in place.

Due to the strength of feeling that I have picked up in the House, I should like to look at this matter again, to reflect on the points made by noble Lords and to bring it back on Report. On that basis, I ask the noble Lord to withdraw his amendment.

My Lords, such graciousness! How happy I am that the first amendment that I have tabled has met a response of that kind. Therefore, I am pleased to beg leave to withdraw the amendment in favour of the further discussion that we are now promised.

My Lords, this amendment, which concerns sea fishing, is a little bit complicated, so I hope that noble Lords will bear with me.

The Welsh Government already have executive competence for fisheries functions in the Welsh zone. In other words, it is now up to Welsh Ministers to determine what happens in relation to fishing anywhere within the 12-mile zone of Wales. This power is now extended to allow Welsh Government Ministers to have executive powers over Welsh fishing boats, whether they are in Welsh waters or UK waters. Take a Welsh fishing boat that is fishing off the Norfolk coast, which is within British fishery limits and would currently be subject to the licensing rules set out by UK Ministers. In future, when this power is transferred, it will be up to Welsh Ministers, by their rules, to license those Welsh fishing boats, whether they are in Welsh waters or in UK waters—obviously excluding Scottish waters.

That is all very nice and dandy for Welsh Government Ministers. However, there will be no oversight of Welsh Ministers because the Assembly—not the Government but the Assembly Members, like me—would not have any say on or sight of what is happening because the Assembly lacks the legislative competence to regulate fishing activities beyond the area of the Welsh zone. These are currently UK Minister powers, and so we come back to the issue of the alignment between legislative and executive functions.

This will become increasingly more important with Brexit on the horizon, because fishing is, of course, an area of devolved competence. The executive powers that are being transferred are the powers to require Welsh fishing boats to have a licence before they can fish outside the Welsh zone. For example, the licence could specify that you cannot fish for certain types of fish or that you must use approved fishing methods. At the moment, these fall under the EU common fisheries policy. Scotland currently has the legislative competence in relation to both the Scottish zone and Scottish fishing boats outside that area. The proposed amendment seeks simply to bring the Welsh Assembly’s legislative competence in line with the Scottish legislative competence and help align the Assembly’s legislative competence with Welsh Ministers’ executive fisheries functions. I hope that that is clear. I beg to move.

My Lords, I support this amendment from my noble friend Lady Morgan. It is in line with a more general issue that I raised earlier about the relationship between the executive competence of Welsh Ministers and the parallel competence, where it currently applies, of UK Ministers, and the competence of the Assembly itself and its ability to legislate and scrutinise. This is a fundamental issue and flaw in the Bill that we are now discussing. It is particularly reprehensible in the case of fishing.

I had the proud duty of trying to represent the northern part of Cardigan Bay. This will be well known to the Minister because he was based in the middle of Cardigan Bay for a very long time and, as far as I know, may still have a bolthole somewhere in the region—I will not pursue that in this debate. He also had a role further south-west in Milford Haven and so will know well the nature of the Welsh fishing industry and how it has been denuded over the years as a result of the reduction in the number of vessels and, more recently, the activity undertaken by the Welsh fisheries association with strong support from the Welsh Government in restoring and developing inshore fishing in order to ensure that we have product to promote Welsh fisheries as part of the Welsh food and drink initiative, which is currently the flagship policy of the Welsh Government. Therefore, I ask the Minister to take a further look at this.

It is essential, in my view, that we should be able to have direct oversight of our natural resources and not be in a situation where the oversight of the natural resources of Wales—in this case, the increasingly important marine resources—is located elsewhere.

As the longest serving Fisheries Minister—the longest serving in history, I think—and with my Welsh connections, I warn the Minister that it would be a good idea to do as is suggested by the amendment but also to be extremely careful. The fisheries issue is going to be one of the most difficult that we face, because the fishing industry has been misled into believing that if you remove yourself from the common fisheries policy you are somehow perfectly free to do what you like. In fact, almost every fishery that we have is a common fishery with one other European nation, if not more. We are therefore going to have to deal with these things on a common fisheries policy basis anyway. It is thus crucial that our structure internally provides no possibility of any misunderstanding. I rather like this amendment because it removes what would otherwise be a misunderstanding.

I hope that the Minister will understand and perhaps mention to his fellow Ministers that this is a long and hard row to hoe, if you can hoe rows in the sea. We will have to learn that we still have to live with each other even outside the European Union. Whatever you think about the policy, it is going to have to be common because there will be no other way of doing it. Therefore, getting it right internally will be crucial if we are to get it right externally, assuming that we continue with this disastrous policy.

My Lords, I plead total ignorance of the licensing regime. Are we satisfied that whoever is in charge of it, the fishing boats are actually going to be Welsh? I ask only because I seem to recall that long ago, when I was the Member of Parliament for Pembroke, Spanish fishing boats registered in the port of Milford Haven and somehow avoided the licensing regime. The licensing regime may now have dealt with that effectively but I should like confirmation that that is so.

I support the amendment for the reasons that have been placed before the House. I raise one question that is common to this and to all the other matters involving the reserved elements of the Bill. I ask the Minister not so much as a Minster of the Crown but also as a distinguished professor of law who understands these issues well. Harken back to the undertaking that was given solemnly, and I have no doubt sincerely, by the then Prime Minister on the day after the Scottish referendum result when he said that Wales was at the very heart of devolution. To my mind, those were not intended to be empty words of adulation but to be an undertaking solemnly given to the people of Wales. I take them in that spirit. My question applies to this and to all the matters reserved that we regard as being trivial and unworthy of reservation. It is this: how does being at the heart of devolution square first with the principle of home rule, secondly with the concept that every decision should be taken at as local a level as possible and thirdly with a healthy interpretation of the concept of devolution? Those are not three different matters at all. At some point they seem to coalesce.

Ships in olden days took their position at noon, but nowadays with sophisticated technology that is no longer necessary. I would like to know what the position is at noon, as it were, in relation to Welsh devolution. I put that to the Minister with very great respect knowing that he will react reasonably to it.

My Lords, I thank all noble Lords who have participated in the debate on Amendment 53, in particular the noble Baroness, Lady Morgan of Ely, who moved it. It seeks to reserve sea fishing outside the Welsh zone but makes an exception to that reservation for Welsh fishing boats. The notional effect of the amendment would be that the Assembly would have legislative competence for Welsh vessels outside the Welsh zone. However, in practical terms the amendment would have no effect because it seeks to reserve a power which the Assembly could not have. Under the Government of Wales Act 2006 and under this Bill, the Assembly’s legislative competence extends to the landmass of Wales and the sea adjacent to Wales out as far as the seaward boundary of the territorial sea; that is, 12 nautical miles, so as drafted it could have no effect. The Assembly has no legislative competence beyond that 12 miles—

The Minister will remember of course that before 2006 Wales did not even have a sea.

My Lords, I am going on to tackle the point made by the noble Lord. The Assembly has no legislative competence as things stand although Welsh Ministers can exercise executive functions in that part of the Welsh zone beyond 12 nautical miles in so far as these have been conferred by United Kingdom enactments.

I take the points that have been made in relation to fishing, but as drafted we would need to look at the amendment. It proposes something fairly fundamental to the extent that it would vary the geographic extent of the Assembly’s competence. I would want to go away and have a look at that to see how it could be refined, if that is possible. This is not something that was considered by Silk or by the St David’s Day agreement and, as drafted, the amendment goes well beyond the issue of fishing licences.

My noble friend Lord Deben referred to some of the ramifications in relation to fishing policy as it exists at the moment through Europe and as it will exist in the future outside of Europe, but that is obviously still something to be refined. I want to reflect on that as well.

My noble friend Lord Crickhowell asked about the licensing of fishing vessels and the position in his former constituency of Pembroke—Preseli Pembrokeshire as it now is. I can well remember as an elected representative in the Assembly for that area going at about four o’clock in the morning to the fish market at Milford Haven to speak to electors. All the electors there were Spanish electors, although they did have vehicles that were licensed in Wales as part of the United Kingdom. I think that that remains the position at the moment, but how it will pan out post-Brexit I do not know.

If I may I will take the amendment away and look at it, but based on the fact that there are far more ramifications to this than just fishing, and even in relation to fishing there are of course considerable ramifications—beyond 12 miles it is an economic zone for the state of the United Kingdom and we would exercise powers in relation to that for the whole country. On the points made by the noble Lord, Lord Elystan-Morgan, I thank him for his always gentle and complimentary approach which has me doing things I would probably not normally agree to; I recognise the dangers. I hope that we have looked at things in relation to this legislation on a pragmatic basis because that is the way to approach it. Any general rule is going to have to give way to exceptions because as we can see there are always difficulties in these things. Sometimes they look much more straightforward than they are. My door is always open and we have set up meetings with many noble Lords. I am happy to do that, but as I say our approach to the legislation is a good British pragmatic one. I will look without prejudice at what I think is a much more difficult area than perhaps it looks on the face of it. With that, I hope that the noble Baroness will feel able to withdraw her amendment.

I thank the Minister. His reply reminded me of the time when I was an MEP and I went to meet the head of the sea fishermen’s association of Wales, Mr Gonzalez. Times have changed; we will see what happens.

I am delighted that the Minister is happy to look at this again. We would be happy to redraft the amendment. I do not quite understand why, if Welsh Government Ministers have this competence, the Welsh Assembly cannot be allowed it. Perhaps I need to go away and think about it. We come back to the issue of aligning legislative and Executive competence. If the noble Lord could look at that, I will of course withdraw my amendment.

My Lords, in this group there are government amendments and non-government amendments. To try to ensure the proposers of the non-government amendments have an adequate opportunity to present their cases, I will try to extrapolate the two, although I appreciate that for Amendment 65 and government Amendment 65A it might be a little difficult as they are very much in the same territory. That apart, if I stray into non-government amendments, I would be grateful if noble Lords could gently tell me.

Government Amendment 53D modifies Section C14 of new Schedule 7A to set a more accurate devolution boundary relating to the Export Credits Guarantee Department, the ECGD. The department, acting as UK Export Finance, is the United Kingdom’s official export credit agency supporting United Kingdom exporters. Amendment 53D makes the ECGD a particular authority, thereby prohibiting the Assembly from legislating about it in any way. It replaces the existing wording, “subject-matter of” reservation, removing any uncertainty about how that reservation relates to the devolved matter of economic development, including providing advice and assistance to Welsh businesses. Its effect, therefore, is to allow the ECGD to continue to offer support, which we would all welcome.

On government Amendment 65A, the Government recognise that the Assembly has legislative competence over council tax reduction schemes. We accept that council tax reduction schemes are an integral part of the local government finance system, which is devolved. To that end, the Government have tabled Amendment 65A to remove the words,

“or liabilities for local taxes”,

from sub-paragraph (c) of the “social security schemes” definition under Section F1 of new Schedule 7A. This would remove any reference to local council tax and have the same effect as the amendment proposed by the noble Baroness, Lady Morgan.

We are content to devolve legislative competence to the Assembly as it is now an integral part of local government finance. I trust the amendment will satisfy the noble Baroness, but I look forward to hearing from her on that point.

It is a good thing that the Government have decided to devolve powers relating to council tax benefit, but are they also proposing to devolve the financial resources necessary to enable the National Assembly and, if the National Assembly chooses to do so, local authorities in Wales to exercise these powers usefully and constructively?

My Lords, the noble Lord will know that the financial arrangements are those of the Barnett block, which has existed for some time. That is currently subject to a floor and being considered in terms of fiscal arrangements. Obviously, it would not be an integral part of any devolved system to allow a devolved Government to bring forward laws and then say that the system should be funded by the centre; it has to be funded by the package that exists, whatever that may be.

Government Amendment 67B makes an addition to the list of matters which are treated as exceptions to the reservation for prisons and offender management. As drafted, Section L11 of new Schedule 7A treats the provision of healthcare, social care and education and training as exceptions to the general reservation. On consideration, the Government have come to the view that libraries should also be an exception to the reservation so that the Assembly has legislative competence over libraries in prisons in Wales. Welsh Ministers already have the power to make rules in relation to prison libraries, and libraries more generally are a devolved matter, so that clearly makes sense.

I am pleased to propose Amendment 67D, which seeks to address concerns expressed by the Welsh Government that the present wording in Section L12 of new Schedule 7A would have the effect of reserving some matters which are currently within the Assembly’s competence. That present competence is by virtue of the conferral of the protection and well-being of children, other than in relation to family law and proceedings, within the devolved subject of social welfare. The concern is that the wording of the reservation would arguably include, and so reserve, matters such as local authorities’ duty to investigate under Section 47 of the Children Act 1989 and applications for secure accommodation orders made by local authorities. This was not the Government’s intention. The amendment therefore modifies the reservation to resolve the concerns and provide a clearer devolution boundary. It does so by focusing on proceedings and orders made under Parts 4 and 5 of the Children Act 1989 rather than “the subject-matter of” that Act.

On Amendments 119B and 119K, the Wales Act 2014 imposed a requirement on the Welsh Government to share land transaction information with HMRC. This information is vital for HMRC’s compliance work, for policy work across government departments and for the Valuation Office Agency’s work. The Welsh Government have since established the Welsh Revenue Authority, which will administer the taxes devolved to Wales by the Wales Act 2014, including land transaction tax, and will be the body with which HMRC needs to share land transaction information. New legal gateways are therefore required to share information in both directions between HMRC and the WRA. The amendments do not represent any change in policy but enable the existing policy to be implemented, and are fully supported by the Welsh Government. On that basis, I commend the government amendments in this group.

My Lords, I shall speak to Amendments 66A, 67A and 67C in my name. Amendment 66A refers to job searches and careers. Paragraph 141 of the new schedule relates to “job search and support” and,

“arrangements for assisting persons to select, train for, obtain and retain employment, and to obtain suitable employees”.

Careers services are an exception to this reservation, which are devolved to the Welsh Assembly.

The Delegated Powers and Regulatory Reform Committee of this House queried what this means and how it would work in practice. It asked:

“Does this mean that the Assembly will have power to legislate as regards the provision of a service to assist persons in choosing a career, but that service could not include helping persons find a job in their chosen career?”.

This is clearly nonsensical. The Minister is undoubtedly well aware of this criticism in the committee’s report, so I look forward to his clarification, but I point out to everyone that there has been a long-standing issue of lack of connectivity and co-operation between the Welsh Government’s services and the UK Government’s services on job search and benefits, and a confused situation is not in the interests of people searching for careers or jobs.

Amendment 67A leaves out reservation 161 on the safety of sports grounds. It seems that the safety of sports grounds is currently within the Assembly’s competence, so this is the Government reducing the competence of the Assembly in the Bill. Why are the Government doing this? What is the key strategic reason that the Government feel ensures that they have to keep the safety of sports grounds in Wales within their control? After all, sports issues are devolved and have been since 1999. Through the Sports Council, through local authorities and through lottery funding, over which the Welsh Government have considerable influence via the Sports Council for Wales, the Assembly and the Welsh Government can fund sports facilities, right up to the level of the Principality Stadium. However, they are apparently not now considered capable of dealing with safety at those grounds. Once again, there is a lack of thinking through here—after all, who are you co-operating with in dealing with safety issues? Obviously, with the police, but also with the local authority on issues such as road closures and other facilities for crowds at sports grounds.

Finally, Amendment 67C relates to adoption. Reservation 175 relates to parenthood, parental responsibility, child arrangements and adoption. There is a lack of clarity about what this means generally, but I am specifically concerned about adoption. This is clearly a reduction in the Assembly’s current legislative competence. Other than intercountry adoption, adoption services are currently entirely devolved. This includes the recruitment of adopters, their training, matching and post-adoption support. As written, the only function that the Assembly would retain on adoption would be in relation to adoption agencies. Why have the Government decided to reduce the Assembly’s powers in this field? It is a field where it is essential that the various agencies work really closely together and that there is a seamless service for adopted children and those who are adopting. It is important that those services—social services, local authorities, education and the health service—are overwhelmingly part of the devolved picture. Adoption goes along with that very clearly.

My Lords, this group of amendments gives the Minister the opportunity, if he chooses to take it, to explain to the Committee what consistent principles have animated the choice of reservations that the Government have made in drawing up this legislation. We have a ragbag of reservations—as has been noted in previous debates, some 200 different reservations across an extraordinarily diverse range of policy areas—and in this group of amendments we have dealt with a miscellany of topics, including council tax benefit, careers services, sports grounds, libraries and adoption. It may be difficult to achieve consistency of principle in considering such a range of topics.

As I mentioned in an earlier debate, the Welsh Affairs Select Committee recommended that as the Government came to draw up this legislation providing for further devolution to Wales and introduced the reserved powers model, guidance should be issued to Whitehall departments as to the principles they should adopt in deciding what powers they wished to reserve to the centre—to the Government of the United Kingdom —and what questions they should ask themselves as they were judging these matters. I know that the Minister always seeks to achieve the best devolution settlement that he can for Wales. He cares about good government in Wales. He is a good representative and champion of the people of Wales and he wishes to achieve a devolution settlement that is coherent, commands wide acceptance and will endure. But it is difficult to achieve that if there is, apparently, no basis of principle for the reservation of powers.

It would be helpful if the Minister could tell us something about the process that has been adopted by the Government, partly in consultation with the Government of Wales—but I am thinking particularly of the process of consultation within Whitehall—as they came to decide that these 200 or so different powers should be reserved. Why have they chosen them? Is there any consistent principle lying behind that choice? If not, why not? Of course, the pressures of pragmatism are always very strong and one respects and understands that, but it may also be that there has been, as has also been said before in our debates, something of a dog in the manger attitude at work—that departments have not thought through with any thoroughness or care what is appropriate to devolve and what is appropriate to reserve but rather have said, “I think we’ll hang on to this”; essentially, “What we have we hold”. It would be a shame if we were driven to conclude that that was the basis on which the reservations have been chosen by the Government.

I hope the Minister can tell us about the process and encourage us to think that this has been done on a considered and principled basis and, for that reason, that these are decisions that should be respected and will stand the test of time for good, practical reasons.

My Lords, in supporting the persuasive case made by the noble Baroness, Lady Randerson, I want to press the Minister on the question of job searches, which are automatically part of the careers service—careers being devolved, as has been mentioned. Has the Bill been drafted with a view to DWP questions, which of course are reserved? Jobcentres, in managing benefits, are also concerned with getting people into work and therefore job searching and providing skills and so on. Are the Government looking at this matter from a DWP and therefore a reserved perspective, but not taking account of the fact that careers are devolved and job searches are by definition part of a supportive, active, flexible careers service?

Perhaps the Minister could clarify this when he responds. If the DWP dimension is the reason that this is not being devolved in the way that the noble Baroness, Lady Randerson, has argued should be the case, will he look at it again to see whether it is possible to reconfigure this part of the Bill?

My Lords, I will follow up on my noble friend Lord Howarth’s point on the principles that guided the determination of what should be reserved. To be fair to the Minister, we asked this question before but it was past 10.30 pm so I will give him another opportunity to state on what basis those principles were set—why have they been determined in this way? I underline the point made by many other noble Lords: we know the Minister to be a friend of Wales and that he is doing his very best for Wales. However, it would be interesting to understand why and on what grounds the other departments are making their case on the basis of reserving quite so many powers.

My Lords, I thank noble Lords for speaking to the non-government amendments in this group and the noble Baroness, Lady Morgan of Ely, for saying that she will not move her amendment. The three remaining non-government amendments were spoken to by the noble Baroness, Lady Randerson, and I turn first to Amendment 66A.

The reservation at Section H3 of new Schedule 7A covers the provision of advice and support to assist people to select, train for, obtain and retain employment or to assist employers to recruit suitable employees, including by providing assistance for disabled persons. The intention behind this reservation is to reserve legislative competence in relation to all work-related programmes for which the Secretary of State is responsible under the Disabled Persons (Employment) Act 1944 and Section 2 of the Employment and Training Act 1973 —for example, Access to Work and Work Choice. Under the Disabled Persons (Employment) Act 1944, the Secretary of State may make arrangements to facilitate severely disabled people to obtain employment or work on their own account and to train for such employment. Welsh Ministers exercise concurrent executive functions in relation to certain sections of the Employment and Training Act 1973, and these are included in the Bill in the list of concurrent functions in Schedule 4.

The Government accept and recognise that the provision of careers information, advice and guidance is devolved and falls to Careers Wales, whereas employment is a reserved matter. The noble Lord, Lord Hain, is right in relation to that. In practical and operational terms, the DWP works with Careers Wales, which often has a presence in the DWP’s jobcentres. I am very happy to look at improving co-operation between the two in the light of what the noble Baroness said so that services run in a smooth, dovetailed way and are not duplicated so there is no friction. I suspect there will inevitably be a degree of overlap, but this is perfectly understood on the ground.

On that basis, we cannot see any reason for the amendment tabled by the noble Baroness, but I will look at the issue of co-operation which she raised. There are two areas, one devolved, one reserved, coming together and inevitably there will be a degree of blurring. I am very keen that where this sort of thing happens we have protocols to ensure that there is co-operation, so I will look at that.

Will the Minister look again at this situation? My amendment was based on the judgment of the Delegated Powers Committee of this House, which looked at it from the outside, being unfamiliar in general with the operation of the devolution settlement in Wales. It found it confusing. It is therefore worth looking at it again and testing it out against the practicalities of what happens in relation to the careers service.

My Lords, I hope I indicated that I want to be aware of what is happening on the ground. The information I have is that it is working successfully and has been doing so for quite some time. However, I will have a look at it and write to the noble Baroness and other noble Lords who participated in debates on the Bill.

Amendment 67A relates to two areas, one of which is devolved—sport and recreation. The other is not—safety at sports grounds. That is a health and safety issue and is currently reserved. Health and safety is an explicit exception to competence in the current settlement, and it is on that basis that we resist this amendment.

Safety at sports grounds is of paramount importance to the Government, and it is often determined at a European level. It is through the work of the Sports Grounds Safety Authority that we have robust and effective procedures in place across England and Wales to ensure that spectators are as safe and secure as possible when watching sport. The current arrangements, which were brought in following the stadium tragedies at Ibrox, Bradford and Hillsborough, ensure a consistent approach to sports ground safety across England and Wales to ensure the continued safety of spectators. I recently visited Bradford City’s stadium, so I can speak of the work that was done there after that tragedy.

The multiagency approach overseen by the Sports Ground Safety Authority brings together all the emergency services—the police, ambulance and fire services—stadium management, local authorities and stewards. There have been no major incidents at sports stadia since the current arrangements were put in place some 27 years ago.

However, we face new threats to spectator safety in the form of terrorism, as seen in the tragic events a year ago at the Stade de France, and from new technology in the form of drones that can infiltrate stadia and expose spectators to danger. The Sports Grounds Safety Authority is providing support and guidance to sports grounds, clubs and other stakeholders and disseminating messages from the United Kingdom Football Policing Unit and National Counter Terrorism Security Office to help meet these new challenges. It is working to ensure that spectator safety remains a priority whatever the threat. It is on that basis that we are resisting this amendment.

Amendment 67C, in the name of the noble Baroness, Lady Randerson, relates to adoption. We cannot accept this amendment as drafted, as it would not only devolve the functions of adoption agencies—which are already within the competence of the Assembly and an exception to the family relationships and children reservation in Section L12 of new Schedule 7A—but have the effect of devolving the substantive law on adoption, which is not of course currently devolved. The reservation does no more than reflect the current competence of the Assembly, which does not include any of the substantive law on adoption. However, I am aware of concerns on the part of the Welsh Government, and the noble Baroness made a powerful case about the extent of this reservation. I would like to reflect on the issue further, although I can say that that will not include reconsideration of the reservation of adoption law as such, which is probably not something that the noble Baroness was seeking.

The noble Lord, Lord Howarth, asked about the basis for reservations. I have tried to cover this by saying that our approach has been pragmatic. It has obviously been influenced heavily by the Silk commission, of which I was part, and by the St David’s Day agreement. Both of those were consensual processes, and I applaud all political parties for taking part in them. We then had a draft Bill, which I think by common accord has been improved. We now seek to improve the legislation further as it goes through this House, and I think noble Lords will acknowledge that on some of the issues that have been of concern around the Chamber—teachers’ pay, fixed-odds betting terminals and so on—we have moved to accommodate some of the feelings expressed. On that basis, I ask the noble Baroness, Lady Randerson, not to press her amendment, as I think the noble Baroness, Lady Morgan, has agreed not to do.

My Lords, Amendment 54 stands in my name and that of the noble Baroness, Lady Morgan of Ely. I will also speak to Amendments 103, 105 and 107A, which also stand in my name and are grouped with my lead amendment. Some of them also stand in the name of my noble friend Lord Elystan-Morgan and the noble Baroness, Lady Randerson. I am grateful to these and other colleagues for their support in this matter.

The Committee today has an opportunity to put right a great historic wrong which has been the subject of much misgiving and dismay for a period of half a century and more. It concerns the drowning of valleys in Wales, usually with the compulsory eviction of farmers from their homes and land, sometimes with the destruction of whole villages and rural communities. I hope that in this matter I am knocking on an open door.

It would be stupid to assert that we should never construct reservoirs to supply water for domestic or industrial purposes, or to control the flow of water in our rivers. Some such projects have of course been built to supply water to our own conurbations in Wales, while some have been to provide water for English cities such as Birmingham. Some have been undertaken with the acquiescence of local people and with reservoirs so located that they do not cause massive disruption. Some projects have been handled with sensitivity and common sense, sometimes the reservoirs have helped to avoid flooding in Wales, as well as down river in England, and adequate compensation has been provided to those affected. But there have been other projects which have, to say the least, been handled in a cack-handed manner and, at worst, have ridden roughshod over local communities and their interests.

The best known of these, with the greatest ill repute, was the Tryweryn valley case, about which I shall say more in a moment—but it was not the first. The drowning of Llanwddyn and the valley in which the village was located to create Llyn Efyrnwy, the Vyrnwy reservoir, in the 1880s was probably the first to generate rancour. The poet Cynan, later Archdruid of Wales, wrote Balaad Dyffryn Ceiriog, which sums up the deep feelings. With noble Lords’ permission I shall quote just one verse in the original Welsh:

“Beth waeth fod dychryn dan fy ais?

Beth waeth fod deigryn ar fy ngrudd?

Wrth synfyfyrio ar y trais

A llwytho ‘nodrefn? Daeth y dydd

I ffoi o flaen y llid a fydd.

Pwy ydym ni, i gadw stwr?

Ffarmwr neu ddau, a gof a chrydd,

Cleddwch ein cartref dan y dwr”.

My Lords, during earlier discussion on the Bill, many criticisms were made of the lack of information available to us, and I am enormously grateful to my noble friend the Minister for the letters that he has sent us that deal with a great many of those issues, give us a lot of information and promise us more when it becomes available—preferably before Report.

I do not intend to speak about Amendment 105, although the noble Lord, Lord Wigley, spoke almost entirely about it—the one about reservoirs. I entirely understand the strength of feeling and his determination that what happened in the past should not happen again, and I am in no way critical of any proposal that he may put forward under that amendment.

However, Amendment 54 goes a good deal further. It talks about water. I speak with a good deal of experience because, for eight years, I was chairman of the National Rivers Authority and had to deal with some of the issues. We took great care about how we dealt with them. We had a Welsh region, but we were extremely careful to ensure that its work was carried out in the closest possible consultation and co-operation with the English regions that faced it across the frontier.

That was because, whatever the noble Lord may say, rivers do not exactly comply with national boundaries in a helpful way. The water that runs down them, the silt that it carries, the pollution that may be involved, and the fisheries and recreation are all affected, one way or another, by decisions taken on both sides of the water. Therefore, the closest co-operation and discussion is essential.

I refer first to the issue of drinking water and start with the river Severn, which, like the Wye, rises on Plynlimon. It does not originate in reservoirs; it is not, therefore, the subject of most of the points made by the noble Lord; but the water flows across the border and happens to provide a great deal of the drinking water for the midland region of England. Indeed, more than that, because the Severn-Trent River catchment area, an integrated system, carries the water on into eastern England and East Anglia, it is equally important for drinking water in those counties. Therefore, it is crucial that the closest possible co-operation happens on both sides of the border.

The other two main rivers with which we were—and I am—concerned are the Rivers Dee and Wye. The noble Lord, Lord Elis-Thomas, referred in an earlier debate as a keen fisherman to the importance of the Dee, which flows in and out of England, as does the Wye. But for quite considerable stretches they form the border. As I say, the management of that border is of crucial significance in terms of pollution control, flood defence, fisheries and recreation—and the way in which it is managed is of equal importance to those who live on either side of the border.

At an earlier stage in our discussions, we were told that a working party was discussing the exact way in which these matters are handled between the Welsh Assembly Government and the Government at Westminster. I am sure that that is the right way in which to proceed. I hope that by the time we get to Report we will know exactly what the outcome is and will be able to form a view as to whether they meet entirely my concerns and those of the noble Lord, Lord Wigley. But until we have those conclusions presented to us, the noble Lord’s initial Amendment 54 makes no sense at all.

When I was chairman of the National Rivers Authority, I depended enormously on the wisdom of a great Welshman and a great scientist, Professor Ron Edwards. He chaired our Welsh region. Ron Edwards, whose departure and death many of us deeply lament, would have regarded the proposal in its present form with the powerful criticism of which only he was able, and which I could not match. He would regard it as an absurdity, because he would want to have seen in place the kind of arrangements that I hope are now being discussed and which we will know about by the time we get to Report. For that reason, I am opposed to Amendment 54 but full of sympathy for Amendment 105.

I wholeheartedly support everything that has been said with such eloquence and conviction by my noble friend Lord Wigley. My feelings on what the Minister’s attitude might be are summed up in one sentence by a Welsh poet of many centuries ago, Dafydd Nanmor, “Gobeithiaw a ddaw ydd wyf”, “My hopes are for the future”. I am confident that the Minister, who I know has shown himself to be extremely sensitive to the rights and wrongs of situations such as these in Wales, will achieve a solution here that will be just and practicable.

In so far as the past is concerned, I remember very vividly the Tryweryn issue, although it is now more than half a century ago. There was a great deal of humbug involved and less than total honesty in the case put forward by Liverpool, which said, “The people of Tryweryn are deeply religious—they go to church on Sundays but they will not allow their neighbours in England to have a cup of cold water. Fie upon them”. Those are the exact words. But it was all bunkum; it was not drinking water but industrial water that Liverpool wanted, run down the River Dee and diverted from Queensferry to its own ends. It was sold to over 21 other authorities fringing Liverpool and they made millions upon millions out of it, because they chose to rape a Welsh valley. There is no other way of putting it. They stole the land of the living and desecrated the graves of the dead. I feel very strongly about this, even after half a century. I hope that I can forgive, but I doubt whether I can ever forget. However, that all now belongs to the past: Tryweryn must never happen again. I am confident that the Minister’s decision will be such that Tryweryn will not happen again. This does not mean to say that those privileges—call them what you will—that are entrenched in favour of English cities will be changed at all; they will remain as previously.

My Lords, in the 1970s, I was engaged in the case made by the Birmingham corporation to drown the Dulas valley, near Llanidloes. I was led by Sir Tasker Watkins VC and by Lord Hooson but unfortunately they could not stay more than a day or two so the full force of the inquiry fell on me for some three weeks. I was, of course, representing the objectors in the local community. I shall never forget the community hall in Llanidloes packed every day by the people from that valley. To the English eye, the valley seemed deserted. Such was our concern about that that we commissioned a report from the University of Aberystwyth. Some noble Lords may remember its great pre-war study of Llanfihangel-yng-Ngwynfa which indicated the strength of the Welsh community in a rural area. The study produced for the Dulas inquiry established the strong community links within that valley: the chapel, the school, the pub—two pubs actually—and how the people there came together far more than you would find in some housing estates in the sort of area that I came from. It was a strong and living community and we put that case to the inspector at the inquiry.

Birmingham corporation was represented by Michael Mann, later Lord Justice Mann, a man of great integrity. He presented the case for the corporation along the lines that Birmingham needs the water, but the ultimate result was that the inspector held against his case and for the community. One memory which I carried away from that was of the service of thanksgiving in the chapel afterwards. The community came together and I was there. The minister gave a prayer and a sermon in which he described the inquiry and the finest moment in it. I hoped he might mention my final speech, but he did not. It was when Michael Mann finished, on behalf of the Birmingham corporation. He had presented his case so fairly—and the result was not known at that stage—that the 400 people in the Llanidloes community centre applauded him. It was a spine-tingling moment.

As a result of the inquiry you can drive through the Dulas valley today, enjoy its scenery and meet its people; it is not the dank lake that I referred to in my closing speech. It is still there and still alive. Also, Lord Cledwyn, who as Cledwyn Hughes was Secretary of State for Wales, made a pronouncement in Parliament that no other Welsh valley would be drowned for the purposes of supplying water to England. That was his commitment. Your Lordships can imagine the sort of emotions that were felt at that time, and to which the noble Lord, Lord Elystan-Morgan, has just referred. It was a wonderful inquiry to be involved in. I support these amendments with all the emotion shown by my noble friend but I bear in mind the commitment given by the Labour Government of the day that no Welsh valley would ever be drowned again. These amendments are essential: it must be for the Welsh Assembly—the Welsh Parliament as I hope it will be—to have the responsibility of determining the water resources in Wales.

The noble Lord, Lord Crickhowell, talked about the River Dee. I am familiar with that river: in July I rowed some 14 miles up it in a quad. On one side was England and on the other was Wales. The only part of England that was ever on the other side of the Dee is the Grosvenor estate. The Grosvenors came in in 1066 and captured that little parcel of Wales. There are very important flooding issues affecting both sides. If the rain falls this winter, very shortly you will not be able to see where the boundary is because the whole of the area around Holt, Farndon and Almere Ferry always floods. There are problems, but the reservoirs have to be in the hands of the Welsh Assembly.

My Lords, as we turn the pages of history, I share the view of the noble Lord, Lord Wigley. Having been born and brought up in the Ceiriog valley, I went through the controversy which took place, to which he referred most eloquently. As a Liverpudlian as well, I can recall the great debates that took place. We have to learn from the lessons of history, but there is no doubt in my mind that water is by far the most complex aspect of Welsh devolution. In many ways, it is what my great friend and colleague, Wyn Roberts, used to call Welsh water: dagrau o Dduw— the tears of God. It falls in all the wrong places, and as many noble Lords have already conceded, the devolution boundary follows water catchment areas rather than the England/Wales border and that is the extent of the problem. However, as my noble friend Lord Crickhowell pointed out, we have to confront that problem and find a solution. I strongly support the concept of a reserved powers model. My noble friend Lord Morgan and I had the honour to sit on the Constitution Select Committee. Although we applauded the setting up of a reserved powers settlement determining which powers should be devolved and which should be reserved to the centre, we said that it was a “complicated and challenging process”. This debate has demonstrated how complicated and challenging it can be.

I pay tribute to my noble friend Lord Bourne of Aberystwyth, who has adopted the right approach to finding a solution by listening carefully to what has been said. I think the solution is there. We ought to take the opportunity to remind ourselves once again what the Silk commission determined because it outlined the way in which we can solve this problem. I am sure that my noble friend will know it off by heart but I think that it is the common-sense way forward.

I hope that my noble friend will say how far he can go on this issue. We have already had yesterday’s announcement, which I believe is a step in the right direction. I hope that we can find a solution by drawing the boundaries in the right place, or at least by making sure that the powers of intervention are limited. The noble Lord, Lord Thomas of Gresford, with his great eloquence, won the day for the communities which he represented. We must make sure that communities are never neglected in the same way ever again. Areas determined as being slums were ignobly swept away and their communities were forgotten about. The communities wanted to be relocated, if they were to be swept away, but they would have preferred to stay where they were and have their homes improved. Those communities in the valleys wanted to see the areas that they had lived in all their lives preserved. I do not know what my noble friend will say but if he follows his normal course, which I warmly applaud, I am sure that we will find a solution.

As a historian, I agree with a great deal of what has been said, including the speech of the noble Lord, Lord Hunt. However, the view of the Bill will be fundamentally prejudiced if a substantial move is not made towards accommodating the amendment of the noble Lord, Lord Wigley. The events at Tryweryn were a monumental injustice and a rural community in my own county of Meirionnydd was treated with contempt, about which I still feel great bitterness. It seems to me that it is, as it were, the Tonypandy of rural north Wales and is fundamental to how Welsh people feel their community has been dealt with. If something so fundamental and endemic to the concept of Wales is not substantially recognised by accepting this amendment in broad terms, the Bill will not receive the acclaim it otherwise deserves.

My Lords, we have heard some very passionate speeches and we are all very aware of how emotional the issue of water can become in Wales. The Minister is aware of how sensitive this issue is, especially following the travesty of the development at Tryweryn, which the noble Lord, Lord Wigley, mentioned. In fact, the Secretary of State, who is present —we welcome him to this Chamber—was clear in his public announcement yesterday that a second Tryweryn could never happen. The events at Tryweryn occurred in 1965, before I was born, but the fact that it has left an impression even on my generation says something about the powerful message that was sent at that time. I do not want to be churlish but I was fairly confident about this issue, having sought assurances from Welsh Government officials, who suggested that current planning laws already devolved to Wales could probably have stopped that scandal being repeated. I hope the Minister will confirm whether that is the case. As I say, I do not want to be churlish, so I cautiously welcome the announcement made yesterday by the Secretary of State for Wales in relation to water. However, I will reserve my judgment until we have seen the detail. On the face of it, the announcement should be a positive move but, as always, the devil is in the detail. Until we have had a chance to scrutinise that proposal, I intend to press ahead with our amendments.

The Bill amends Section 114 of the 2006 Act by limiting the grounds on which the Secretary of State can intervene to prevent the Presiding Officer submitting an Assembly Bill for Royal Assent. That section currently allows an intervention, so I look forward to the government amendment to remove it. The Minister should be aware that anything other than a complete deletion of this section will be looked on unfavourably.

Notwithstanding the points made by the noble Lord, Lord Crickhowell, I stand by Amendment 54, which would require the full devolution of water and sewerage to be aligned with the geographical boundary with England, as set out in the Silk report and the St David’s Day Command Paper. The work of the joint Governments’ water and sewerage devolution programme board, which was established following the St David’s Day paper to consider the alignment competence, found that changes can be achieved with minimal impact on consumers of water and sewerage services. I was delighted to see that in the letter to Peers that the Minister sent last week, he suggested that he was looking at this issue. Therefore, we hope that he will look favourably on this amendment.

The third amendment relates to the regulator. Ofwat, the regulator for water and sewerage providers in England and Wales, should be fully accountable to the National Assembly for Wales in respect of the functions it exercises in relation to Wales to better reflect the current devolution settlement on water matters. The amendment would make it a requirement for Ofwat to produce a report to Welsh Ministers and for that report to be laid before the National Assembly in respect of the functions it exercises in relation to Wales. The amendment would require the nomination of a board member as a joint appointment between the Secretary of State and Welsh Ministers to reflect a new arrangement which the Welsh Government consider necessary consequent to full legislative competence for water and sewerage.

Amendment 104 is proposed to amend Section 27 of the Water Industry Act to require the Secretary of State to seek the consent of Welsh Ministers before issuing general directions to Ofwat in respect of matters where functions are exercised by water and sewerage undertakers in Wales, or where licensed activities are carried out using the system of a water or sewerage undertaker wholly or mainly in Wales.

These changes are necessary so that Ofwat is fully accountable to the National Assembly for Wales and Welsh Ministers for those functions to be exercisable in relation to Wales. It is therefore important that we apply appropriate Assembly procedures to regulations which make provision within the Assembly’s competence. Scotland has great scope on environmental powers, including the regulation of water. It is only right that Wales is awarded equal authority in this respect.

My Lords, I thank the noble Lords who have participated in the debate on these amendments, which relate to water. I particularly welcome the contribution of the noble Lord, Lord Wigley, who moved his amendment with sensitivity and fairness on an issue which I know is very close to his heart. The Government are determined that never again should there be a Tryweryn. That is at the back of all our thinking on this issue.

I welcome the contributions from around the Committee. My noble friend Lord Hunt of Wirral spoke with passion of his time in north Wales, and the noble Lord, Lord Morgan, talked of his home county of Meirionnydd. I also welcome the contribution of the noble Lord, Lord Elystan-Morgan. I could not agree more with the sentiments that they expressed. I also thank my noble friend Lord Crickhowell—with his background and experience as chairman of the National Rivers Authority—for bringing his authority to this issue: aligning the border is not necessarily straightforward.

Water is of symbolic importance as well as practical significance to Wales. It evokes more passion and debate than probably any other issue relating to Welsh devolution. It is not just about Tryweryn; as the noble Lord, Lord Thomas of Gresford, reminded us, it is about the Dulas Valley as well, and there have been other issues. I thank noble Lords for contributing to the debate from the viewpoint of their own experiences. The strength of feeling has been amply demonstrated in their speeches.

In announcing the Government’s intention to devolve pay, my right honourable friend the Secretary of State for Wales signalled that the Government were exploring other aspects of the settlement to ensure that it is as clear and fair as possible. Yesterday, my right honourable friend Alun Cairns announced the Government’s intention to remove the Secretary of State’s powers to intervene on water and to replace them with a statutory protocol on water between the United Kingdom Government and the Welsh Government. Work will be done on that, and we hope to have the detail ready for Report.

That is a highly significant announcement. Water has been a challenging issue, as anyone familiar with recent Welsh history will know. The replacement of the intervention powers with a formal protocol marks a step change in the history of Welsh devolution—one that resolves past differences and provides clarity for the future. The move also removes any last impediment that there may be—at least in terms of this Bill; I hope the noble Baroness will be able to clarify this—to the Assembly giving its approval to the Wales Bill, subject of course to agreement on the fiscal arrangements.

The existing intervention powers were put in place in the Government of Wales Act 2006, when Peter Hain—now the noble Lord, Lord Hain—was Secretary of State. Since then, there has been a great deal of development in relation to devolution. This Bill marks a move to a new, durable and lasting devolution settlement, underpinned by a recognition of the maturity of the Assembly and the Welsh Government. In keeping with this, it is time to replace the Secretary of State’s powers to intervene on the Assembly and Welsh Ministers in relation to water with a statutory protocol between the United Kingdom Government and the Welsh Government which defines how the two Governments will work together on water-related issues—in particular, cross-border issues.

I confirm that the Government intend to bring forward amendments on Report to put in place the requirement for a formal agreement and to remove the intervention powers. In doing so, it will be important to respect the interests of water users in both Wales and England. As my noble friend Lord Crickhowell exemplified, this is not necessarily straightforward in every respect.

I am excited not just by the environmental and political aspects of this but by the constitutional implications. Can the Minister help us by indicating whether establishing a protocol in relation to powers between the Assembly and this Parliament, and indeed between the Welsh Government and the UK Government, is something that he would consider in other areas of policy in the Bill?

My Lords, as I have indicated, working together between the Government in Cardiff and the Government of the United Kingdom is of interest to all of us who believe in an effective United Kingdom and an effective Wales. So, yes, I am certainly in favour of that, as I have indicated. In so far as we can provide for that, the Government are open to looking at it. With the excitement of that intervention, I have lost my place.

The temptation to intervene was too much.

I fully understand.

It will be important to put in place a protocol with bite. Both Governments will be subject to a duty to act in accordance with the new agreement and, once it is in place, both will need to agree any changes to it. The agreement will also need to include a process for resolving any disagreements that both Governments will sign up to.

It is as yet too early to say how soon the new arrangements will be agreed, but the Government will repeal the Secretary of State’s water intervention powers once an agreement is signed and sealed. This historic commitment to remove the intervention powers paves the way to conclude the Government’s consideration of the wider devolution issues relating to water and sewerage, including the sewerage intervention powers currently in Clause 46 of the Bill and the question of whether powers over water and sewerage should be aligned with the England-Wales border.

The Silk report recognised that water and sewerage devolution was complex and that further work was needed to consider the practical implications of implementing the commission’s recommendations. Following the St David’s Day agreement, the Government set up the joint Governments’ programme board with the Welsh Government to look at these issues and report on the likely effects that implementing the recommendations would have on the efficient delivery of water and sewerage services, on consumers and on the water undertakers.

That work has concluded and the Government have been considering the evidence that has been collected. In doing so, it has been particularly important to consider carefully the interests of customers and businesses on both sides of the border before reaching a decision on the recommendations. It remains the Government’s intention to bring forward provisions to implement the recommendations, if such a thing is achievable, and I hope to be able to return to this on Report.

I will now turn to other water-related amendments that are not Silk recommendations. Amendment 104, tabled by the noble Baroness, Lady Morgan of Ely, seeks to amend the Water Industry Act 1991 as it relates to Ofwat. Part of this amendment would require the Secretary of State to seek the consent of Welsh Ministers before making directions to Ofwat, outlining her priorities for keeping the activities of water companies under review. This would occur where these directions apply to Welsh water companies and licensees carrying out activities in the areas of those companies. This requirement for consent would cover all of Ofwat’s functions, including those applicable to policy areas reserved to the Secretary of State, such as those relating to competition law, insolvency and mergers. This would give the Welsh Ministers considerable influence over policy areas that are not devolved.

The noble Baroness’s amendment would also place a requirement on Ofwat to make its annual report to the Assembly rather than just send it a copy, as is currently the case. At present there is nothing to prevent the Welsh Ministers laying before the Assembly the annual report that Ofwat sends them or publishing it in any manner they see fit.

The amendment requires appointments to Ofwat’s board to be made jointly by the Secretary of State and the Welsh Ministers. Other amendments seek to grant Welsh Ministers joint powers with the Secretary of State over board members’ terms and conditions. Currently, the Secretary of State makes all appointments following consultation with the Welsh Ministers and consults them on some other aspects. In practice, this means that the Secretary of State writes to the Welsh Ministers to seek their views on an applicant before confirming the appointment. However, the Welsh Government are also invited to sit on the appointment panel, which is chaired by Defra. This, along with the various requirements to consult Welsh Ministers, already provides the Welsh Government with considerable influence over the process and final appointment decisions.

Amendment 105 in the name of the noble Lord, Lord Wigley, concerns the abstraction of water from Welsh reservoirs. As I think I have indicated, I share the views expressed by noble Lords today: the events of some 50 years ago which resulted in the flooding of Tryweryn were some of the darkest and most regrettable days in modern Welsh history. Never again.

In answer to the question raised by the noble Baroness, Lady Morgan—I am delighted to note that she did not wish to be churlish; I welcome that very much—decisions about the construction of new reservoirs and environmental controls are already devolved to the Assembly. However, we are going further—and rightly so. The Assembly exercises legislative competence in relation to both issues: construction and environmental controls. The Welsh Ministers would need to issue a compulsory works order to allow the construction of a new reservoir to take place. It is within the competence of the Assembly to give itself a role in the issue of consent orders.

Natural Resources Wales is the environmental body which regulates abstraction in Wales. Again, the Welsh Minsters and the Assembly can legislate to change or add to its powers. Nevertheless, as announced yesterday by my right honourable friend the Secretary of State, the Government intend to remove the Secretary of State’s powers to intervene on water and replace them with a protocol. I think that that is in the spirit of where we need to be in relation to this totemic and practically significant area of water. On that basis—

I have listened very carefully to the response that the noble Lord, Lord Bourne, has given us. Quite clearly, there is an intention to make considerable movement in what I and many others would regard as the right direction on this matter—but we cannot come to a judgment on that until we see what comes forward on Report. However, can he confirm one thing? Notwithstanding that there are powers in planning, and the other powers that he has mentioned, will he consider between now and Report to have it written on the face of the Bill, so that there is no doubt whatever, that the construction of the reservoirs in Wales is a function of the National Assembly, in the same way that it is spelled out that the control of fracking is in the control of the National Assembly? Can he give us an assurance that he will be looking for words by which to achieve that between now and Report?

My Lords, I can certainly give the noble Lord the assurance that if it is not on the face of the Bill, a protocol that contains it will be referred to on the face of the Bill—that is important. It is perhaps something that we can return to. I am meeting the noble Lord and I appreciate the sensitivities in this area. I want to ensure, as I think we all do, that there can be no future Tryweryn. If it is helpful to put that on the face of the Bill, we will do so, and I am very happy to discuss that with the noble Lord ahead of Report.

I am pleased that there will be movement on the intervention powers of the Secretary of State. That is a very positive move. I am also very pleased the Minister has clarified the fact that we could have stopped what happened at Tryweryn with the current powers—that has come across clearly. But he did not say, in relation to Ofwat, whether he is minded to move on that issue. The impression I got was that he was not, but perhaps he will clarify that.

My Lords, I am happy to clarify that point. I believe that the existing powers in relation to the Welsh Government and Welsh Ministers are sufficient, but I am very happy to look at that issue and cover it in the protocol, which could extend to that if it is something that we should be doing. I will happily discuss that with the noble Baroness.

The Minister will recollect that we worked together in the National Assembly. I looked at this issue at the time and I can reassure him and the House that the way in which he described the current position in planning and environmental law is indeed the position. But of course that does not mean that we cannot strengthen it by making indications about the intervention powers of the Secretary of State. On that, I think we are all agreed.

I am very grateful to the noble Lord for reminding me of the years of co-operation we had in the National Assembly for Wales and for clarifying that issue in the way that he did. On that basis, I hope that the noble Lord will consider withdrawing his amendment.

My Lords, I am very grateful to everyone who has participated in this debate, including two former Secretaries of State for Wales—we had four in the Chamber and one adjacent to it at one point; a remarkable situation—and for the expertise that they have brought to our consideration. I also thank the noble Lords, Lord Elystan-Morgan and Lord Thomas of Gresford, for their passion and background, which added to our understanding, and the noble Lord, Lord Morgan, from Aberdovey, for his historical knowledge and appreciation of the importance of this issue to the people of Wales. I thank also the noble Baroness, Lady Morgan of Ely, for her contribution and her amendments, which I think should be considered along with the others between now and Report—perhaps we can discuss those. I am grateful for the intervention of my noble friend Lord Elis-Thomas, who represents in the National Assembly the area that includes the Tryweryn valley.

I think that we are making progress. We have not got there yet but there is much to be considered and built upon between now and Report. If the Minister can deliver what he seems to want to deliver, and if his colleagues in the Wales Office can do likewise, then quite possibly we can, once and for all, put this issue to bed by making it quite clear that control of these matters is in the hands of the elected National Assembly for Wales. There is a need for co-operation, but there is also a need to appreciate the importance of communities and the significance of this issue to our nation. On that basis, I beg leave to withdraw the amendment.

My Lords, this Bill proposes that the Assembly will gain competence over all renewable energy generating projects of up to 350 megawatts in Wales and in Welsh territorial waters. Amendment 55A suggests that the UK Government have gone too far in their intention to reserve their power to legislate over electricity, including the generation, transmission, distribution and supply of electricity. Although of course we recognise that it is important to have a single market in energy, ideally not just in the UK but across the EU as a whole, we contend that under the system proposed by the UK Government opportunities for the development of energy production in Wales will be stifled.

Here, I should probably declare an interest. It is not a current interest but an interest that I had in the past while I was working for an energy company in Wales. Part of my remit was to help develop a significant wind farm in mid-Wales. Let me tell you that the legislative process was chaos. The Welsh Government had more or less invited wind farm companies to develop wind farms in specific areas in Wales, but the decision as to whether permission could be given to develop a large wind farm was the responsibility not of the Welsh Government but of the UK Government.

On top of that, the wind farm needed to be connected to the grid. A 132 kV line—that is, a small electricity line on a pole—from the wind farm to the main national grid needed to be approved, not by the national Government but by the local authority. This could be called in by the National Assembly. These little electricity lines then needed to be connected to a large electricity substation—the places where you see the twirly bits in areas where the electricity goes in. That would convert the voltage from 132 kV to 400 kV, which is for the national grid. The responsibility to allow the building of the substation lay with local government, which again could be called in by the Welsh Government. Responsibility for the national grid and the decision as to whether to build the large power lines on pylons rested with the UK Government.

The whole system was chaos. It was no wonder that, in the end, the company threw up its arms in horror and walked away from the project, having already invested a not insignificant amount of money. Unless the associated consents for devolved electricity generation rest in Wales, the chaos is likely to continue.

I will touch briefly now on the limitation of the level at which Welsh Government approval in relation to electricity is set. The Bill proposes that the Assembly will gain competence over all renewable energy generating projects of up to 350 megawatts in Wales and in Welsh territorial waters. Our concern is that this figure is arbitrary. The Silk commission attempted to provide justification for this limit, but the situation in Wales has moved on considerably since those days. Since the Silk commission looked at the issue, we have seen ambitious projects such as the tidal lagoons progress and proposals for huge tidal lagoons introduced. I know that we are still waiting for the green light—and I will be extremely interested to hear what the strike price will be eventually on this project—but, whether you are a supporter or not, these plans are very far advanced.

In this amendment we suggest that the limit should be increased to 2,000 megawatts. I accept that that is just as arbitrary a figure. Therefore, will the Minister confirm why a level of 350 megawatts was suggested and why we cannot increase it? What is the rationale behind that? If we do not change it now, would there be any scope for us to change it in the future? What would the process for that be? I beg to move.

I am grateful to the noble Baroness, Lady Morgan, for moving this amendment. Her description of what happened with the history of substantial onshore wind projects in Wales was absolutely correct. For much of that period I had responsibility as chair of the environment committee of the National Assembly, which produced a substantial report on energy and planning. My difficulty is the difficulty to which she alluded; yet again we are placing a cap on the potential development of natural resources in Wales that does not make sense in terms of energy policy or indeed in terms of the potential for development of natural resources for the future.

There is a separation of generation capacity at different levels. There is the grid, as we have already heard, for the over 400 kilovolt—but there is also the separation of powers in relation to the internal grids provided by the electricity distribution companies. This affects potential smaller generation projects with individuals and small communities whether of hydro power, wind power, turbines, solar power or any other developing form of renewable energy. It means that the potential for development is being stifled because no one is taking a clear view of how these projects could be developed.

Unfortunately for the whole project, the Welsh Government intervention seeking to identify areas for development—mainly on land in public ownership—was not helpful. So for 10 years at least we lost potential capacity for energy generation and also capacity for having a proper grid connection throughout Wales. That is something that we shall have to revisit. I look enviously to Scotland, which has clear guidelines and clear demarcation in terms of the devolution of energy.

I have a particular interest in other forms of low-carbon energy, notably the potential development of small modular nuclear power that could replace the decommissioned nuclear power station at Trawsfynydd in my own part of the world. Currently nuclear power is with the UK Government in totality. But the actual capacity in terms of generation of a single modular power station is probably less than 350 megawatts. Obviously one would look for more than one unit at such a development where you have, as at Trawsfynydd, a full grid connection, land and water availability for coolant and of course a very skilled labour force that has worked in the energy industry. So the Minster needs to look again at the way in which these aspects of the Bill have been set out. In areas of natural resource, it is essential that we look to future capacity and not settle for arbitrary figures on present capacity.

I shall not ask whether the Minister is interested in introducing a protocol for energy policy, but if a protocol for natural resource in relation to water makes sense, it makes even more sense in relation to energy. I have not even mentioned the energy arriving increasingly now in Wales and as part of the Welsh grid from Ireland, where I am assured that the future development of renewable energy both onshore and offshore is likely to continue. That capacity can join the mainland European grid effectively only through Wales. All these aspects need to be considered. I hope that the Minister will be able to give the noble Baroness, Lady Morgan, me and others some optimism as to the potential for future development of this natural resource.

My Lords, I have spent much of the past five years involved with energy matters both here and abroad, albeit specifically interconnection and the generation of green energy. A nation's energy supply is so important a part of both industrial strategy and national security that in many countries the energy ministry is second in importance only to the Prime Minister’s office. It is surely right therefore that central government retains responsibility for determining the strategy that will ensure the security of supply for the whole nation through our common national grid.

The Silk commission recommended an increase in the threshold for devolved energy consenting for new projects from 50 to 350 megawatts—and this level I thought was agreed by all parties. Further, the Energy Act 2016 granted localised decision-making for all onshore wind projects. Surely the two together strike the necessary balance between devolving authority for many renewable energy schemes, for example the Swansea tidal lagoon, and allowing the Government to retain responsibility for larger schemes of more strategic significance to electricity infrastructure stretching beyond the confines of Wales.

Most of you will be aware that this is the first Bill that I have seen coming through this House. What a meaty one it is. I cannot hope to match the eloquence of the noble Lords, Lord Wigley and Lord Elystan-Morgan, but it did bring to mind the final two lines of the poem commissioned from the national poet for the opening of the fifth Assembly in Cardiff this year:

“Sooner may two men meet than two mountains”.

My Lords, once again it is a delight to follow the noble Baroness, Lady Bloomfield of Hinton Waldrist. I had the pleasure of speaking after her when she made her maiden speech a few weeks ago on an earlier stage of this Bill. On this occasion, I am afraid that we shall not see exactly eye to eye on the question of the limitation, since I shall speak briefly to Amendments 99 and 101, which seek to remove the 350 megawatt limit on the devolution of energy projects to Wales.

Having given Scotland complete control over its natural resources—with no limits, so for those looking for a United Kingdom policy, that has already been given away—the Government are proposing to devolve energy in Wales only up to a limit of 350 megawatts, with anything above that threshold being reserved to Westminster. This arbitrary constraint on the ability of Wales to control its own natural resources has stirred many emotions in Wales. It seems archaic and contrary to the spirit of devolution that Whitehall will still decide how and when Wales can harness many of its most precious natural resources.

I shall outline what this means in practical terms by reiterating an example highlighted by my colleagues in another place. Responsibility for the 320 megawatt Swansea Bay tidal lagoon would be devolved under the current Bill. However, the proposed Cardiff and Colwyn Bay tidal lagoons, which are identical apart from scale, will be reserved to Westminster. This does not stand up to any test in logic.

The Government have chosen to use the cover of the Silk commission’s recommendations—which, I recognise, also suggested a possible limit of 350 megawatts. However, if they are going to do so, does the Minister not agree that all of the Silk recommendations must be treated with the same respect? The Government most certainly are not doing this in other instances, so why pick out this one? As the Minister will undoubtedly recall, the 350 megawatt limit was agreed to in a cross-party Silk commission discussion on the understanding that other parties would support the devolution of policing and broadcasting. Does he recall that meeting? I have the references.

I conclude by noting that this is once again an example of how we are asked to accept second best in terms of devolution of energy. We are asking only for the same deal that is afforded to other nations. The 350 megawatt limit that the Bill imposes stops Wales effectively harnessing its world-class renewable resources —its wind, its coastline and sometimes even its sun. As my noble friend Lord Elis-Thomas emphasised, these are important ingredients for the future of the Welsh economy. Our resources belong to the people of Wales and now is the time for the law of the land to recognise that.

My Lords, we on these Benches have felt for a long time that the constraint on the Assembly’s current control over energy is ridiculously low and the suggestion that it should rise to 350 megawatts is better, but by no means good enough. The noble Lord, Lord Wigley, has outlined the foolish situation that we are likely to find ourselves in if the 350 megawatt limit is adhered to. We all know it was picked as a limit by the Silk commission because it would encompass the Swansea Bay tidal lagoon. But as the noble Lord pointed out, the problem is that the sister projects in Cardiff and Newport, if they are built, will be larger than 350 megawatts, so by what measure would the Swansea lagoon not be considered to be of strategic importance but one built in Cardiff would be?

It is absolutely essential that the Welsh Government and the Assembly are able to take a stronger position on energy development. They should also be able to take a distinctive and different position on it. We fully accept that nuclear developments would not be appropriate for devolution because of their massive scale, but we do not believe that artificial limits should be put on the ambition of the people of Wales, the Assembly and the Welsh Government to provide a larger share of the energy they consume, and to find new, different, innovative and environmentally sound ways of doing so. I think that this is one of the most important series of amendments which have been put forward to the Bill so far.

My Lords, Wales can play a pivotal role in the rewiring of the UK electricity system, which of course means that the rewiring of the UK electricity system can play a pivotal role in the renewal of employment, industry and infrastructure investment in Wales. Larger energy projects by their very nature must be assessed against a complex set of UK-wide system, strategic and security objectives.

Let us take the case of tidal lagoon infrastructure in Wales. Wales is blessed with a phenomenal natural tidal resource and the time has come to tap into it to bring more jobs, investment and industry for Wales. The Hendry review of tidal lagoons is imminent. We had hoped to see it this week and I hope that it will not be long before it sees the light of day. As my noble friend Lady Bloomfield has pointed out, the first project at Swansea Bay would have fallen below the Silk commission threshold, had one been in place at the time. But it was not and the project has already been awarded development consent, thereby paving the way for much larger projects in Wales that can be assessed only in the context of a UK-wide energy strategy.

It is my belief that the 350 megawatt limit, as recommended by the Silk commission, is the right one in devolution terms. It provides more certainty for the developers of energy projects in Wales about who is responsible for consenting to energy generation projects. Rather than wasting time debating arbitrary jurisdictional limits, efforts would surely be better placed in supporting a development that would be hugely beneficial to the Welsh economy. My hope and expectation are that the Hendry review will challenge officials and nay-sayers to engage with the real value-for-money arguments. It is dismissive and lazy to claim out of hand that the Swansea Bay tidal lagoon is just too expensive. The value-for-money case is compelling: this is a project that asks for less than 0.5% of all the money available each year to low-carbon projects in the UK and which in return will start a new British power and manufacturing industry. What other UK energy project promises to spend 84p in every pound in the UK while simultaneously stimulating the regeneration of coastal communities around Wales? This could include a hugely welcome stimulus to the beleaguered Welsh steel industry. It is of vital importance for Wales and we must accept and encourage the clear role that policymakers at both ends of the M4 need to play in nurturing this new industry through its infancy.

My Lords, I hesitate to get involved in an argument with the two noble friends on my left about what should be the upper limit, but I am bound to say that my instinct is that it seems to be on the low side, for the reasons set out by the noble Lord, Lord Elis-Thomas. However, I want to raise another issue, and that is the curious situation in which we find ourselves in the management of onshore wind-powered generating stations. The Energy Act 2016 contains provisions for the transfer of onshore wind out of the Planning Act 2008 development consent regime and to return responsibility for decision-making about these projects to local planning authorities in Wales. This would have meant that when the provisions of the 2016 Act come into force, decisions on larger onshore wind developments in Wales above 50 megawatts would have fallen to be determined by local planning authorities, whereas smaller onshore wind developments from 10 megawatts to 50 megawatts would have been determined by Welsh Ministers as developments of national significance. The Developments of National Significance (Specified Criteria and Prescribed Secondary Consents) (Wales) Regulations 2016 have now captured the onshore wind projects above 50 megawatts as developments of national significance. That means that onshore wind projects of 10 megawatts to 50 megawatts and those over 50 megawatts will be dealt with by that process. I find this rather extraordinary and very unsatisfactory.

In England, things have been taken the other way. The smaller schemes are essentially being given to local authorities and local planning authorities, and local communities are being given a real say in whether they should go ahead. I suppose it could be argued that the National Assembly for Wales and the Welsh Government are a local authority, but I do not see them in that way, having been rather influenced by events. I am not sure if the noble Baroness, Lady Morgan, was referring to a particular project in mid-Wales, but we did have a big wind farm project which would have decimated one of the most beautiful valleys in Wales and would have spread problems across the border into Shropshire. That was eventually dealt with by planning authorities and local people were able to make their views known, so the situation was substantially saved.

I feel that we should be in a situation in which, where smaller local schemes are concerned, people have the same kind of opportunity to comment on and criticise them as is the case in England. I suspect that my noble friend will say in reply that he shares my view and hopes that that is what the Welsh Government will decide, but that it is entirely a matter for the Welsh Government. I have to say that I am not happy about that. If that is the answer, I should say that I had toyed with the idea of putting down some kind of amendment at Report stage to give local people a say, but I suspect that it would be thrown out on exactly the grounds that I have cited, which is that the whole matter should be decided by the Welsh Government. But if this is to be their responsibility, I hope that the Welsh Government will take the view that the smaller schemes, which really cannot be described as developments of national significance in the same way as the big schemes, should be taken in such a way that local communities are able to form a view about them and can express that view locally.

My Lords, I thank noble Lords who have participated in the debate on devolution of energy to the National Assembly for Wales. I turn first to Amendment 55A, moved by the noble Baroness, Lady Morgan of Ely, which seeks to add an exception to the reservation in new Schedule 7A relating to the,

“Generation, transmission, distribution and supply of electricity”.

It is an amendment that needs to be considered in the context of Clauses 37 and 40, and of reservation M4 on “Development and Buildings”.

The Silk commission recommended that there should be further devolution to Wales—it is further devolution, as the noble Baroness, Lady Randerson, recognised—of responsibility for consenting electricity generation projects, and that there should be a more streamlined approach to consenting ancillary developments required to sit alongside those projects. Those were points well made in the debate. There was cross-party consensus to implement these recommendations taken forward under the St David’s Day agreement. Without looking at the Silk process, although I accept that it is important for the legislation, this is essentially based on the St David’s Day agreement.

We achieve the expanded role that Silk envisaged through the combined effects of Clauses 37 and 40, which clearly set out the parameters of the new devolution settlement in this area. The extent of that settlement is further reinforced by the terms of reservation M4, which provides that the very instances referenced at Clauses 37 and 40 are carved out of the range of planning matters that are reserved.

To provide further clarity on this point, the consenting of a generating station or an overhead line is a planning matter. While I accept that the proposed amendment is well intentioned, it would be not only superfluous but, as an addition to reservation D1, misplaced. Section D1 relates to the regulation and licensing of the process of generating electricity and to what subsequently happens to that electricity. This is the regime administered on a GB level by Ofgem, which includes Scotland. It does not concern itself with the planning for, or the construction of, the means of generating electricity.

Further, as drafted, the reservation would add confusion to the particular reservation and potentially the schedule in general. The Assembly’s legislative competence is limited to Wales—the counties forming Wales and the territorial waters adjacent to those counties. The amendment talks about planning in the “Welsh zone”, which includes seas beyond the territorial waters and outside the legislative competence of the Assembly, as we touched on earlier about the issue beyond the 12 miles of territorial sea. I hope the noble Baroness, Lady Morgan, will take those points on board.

As I said, the Bill already devolves matters relating to the planning for developments of up to 350 megawatts. This is not a point that has been covered, but the Energy Act 2016 has already devolved all onshore wind consents without limit to local authorities in Wales. At the same time, we devolved power to the Assembly to change that to the Welsh Government if it wanted to do so. In response to my noble friend Lord Crickhowell, I recognise his view that this should be a matter for local people, which I share, but at the same time, with this being a devolved issue, it would be for the Welsh Government to alter that if they wanted to do so. We have indicated our intention by giving the power to local authorities. The Welsh Assembly could alter that. There is no limit to the power relating to onshore wind. That might reassure noble Lords who were unaware of that.

The noble Lord, Lord Elis-Thomas, asked about a protocol. I will certainly go this far: it is important that Ministers talk together. Many of these projects are happening at a UK level. We should not consider that there is always malign intent on the part of the UK Government towards Wales. As we know from the Swansea lagoon project and others, important infrastructure projects are being moved forward by the UK Government, who are talking on a regular basis to officials and Ministers in Wales. Those points were covered by my noble friends Lady Bloomfield and Lady Finn. It is right that some of these important decisions are discussed between Wales and the United Kingdom.

I also say to the noble Lord, Lord Elis-Thomas, that I know, because I was a Minister in the Department of Energy and Climate Change, that BEIS is looking at small modular reactors. Trawsfynydd’s interest has obviously been noted, but I have to say to him that if it had been in Scotland it would not have got off the ground because of the nuclear element. Sometimes there are unintended consequences to these things. To come back to the issue we are looking at, the amendment as drafted would not achieve what it seeks to do, in any event.

Amendments 99, 100, 101 and 102 seek to reopen a key recommendation of the Silk commission and the St David’s Day commitment: that the devolution threshold for future consenting for electricity generation in Wales should be 350 megawatts and below. That threshold gives the Assembly and Welsh Government substantially more autonomy in determining the shape of Wales’s future energy structure than was previously the case.

I accept that any level is, in a sense, arbitrary. It has to be a matter of judgment where it is set as to what is appropriate for the UK Parliament and what is appropriate for Wales—hence the importance of the dialogue between the two Governments and the two Parliaments. It respects the fact that Wales and England are, and will remain, intrinsically linked through a common electricity transmission system that depends on inputs from a broad range of generating sources. The Government remain firmly of the view that, the larger the capacity of those sources, the greater their significance beyond the confines of Wales and to the United Kingdom as a whole. Those points have been made by noble Lords as the debate has progressed.

Consensus was reached during the St David’s Day process about the cut-off point. The noble Lord, Lord Wigley, said that if the Swansea lagoon is within this process for Wales—as I accept it is—it is simply an issue of scale. I agree that it is an issue of scale; that is where the cut-off comes in, because the cut-off has to be arbitrary. I cannot see that it can be any other way. It is a matter of judgment as to what is strategically significant for the United Kingdom and what is appropriate for Wales.

On that point, with regard to Swansea Bay being just below the threshold and Cardiff and Colwyn Bay being just above it, does it not make all sense for this limit to be adjusted at least enough to take those together, so the expertise in handling these matters is all in one place?

My Lords, I say two things to that. First, I am certainly not going to get into a Dutch auction as to what should come within on that basis. Of course I understand the point he makes, but my second point takes me back to one I have already made: we need a ready and willing dialogue between the Welsh Government and the National Assembly, as I think is happening, and between BEIS and Parliament. There is no reason to suppose that there is a malign intent regarding these projects. I know the noble Lord is not suggesting that.

Government Amendment 119G is a minor and technical change to Schedule 5. Under Clause 37, Welsh Ministers will have the ability to consent to electricity generating stations of up to 350 megawatts in waters adjacent to Wales. The vehicle for doing so will be Section 36 of the Electricity Act 1989, and Schedule 5 to the Bill gives Welsh Ministers the ability, by regulation, to amend the Section 36 application processes to suit their purposes. The Bill currently also extends that regulation-making power to Section 37 of the Electricity Act, which relates to the consenting of overhead power lines. However, as Section 37 consenting powers are not being devolved in the Bill, the power is ineffective and it makes sense to remove it.

Government Amendment 121 amends Clause 55. Further to the one-stop-shop philosophy for energy consenting advocated by the Silk commission, Clause 41 provides the Secretary of State with the ability to consent associated developments along with the principal consent for nationally significant infrastructure projects in the field of electricity generation and transmission. This will deliver significant streamlining improvements to a system which, at present, can require developers to assemble consents from a plethora of different authorities. It is wholly consistent with the Government’s policy of encouraging infrastructure development for these changes to be introduced as soon as it is practical. The amendment will achieve that by commencing the relevant provisions two months after the Bill’s Royal Assent.

On that basis, I urge the noble Baroness to withdraw the amendment, and for her and the noble Lord not to press the other amendments in the group. I intend to move the government amendments.

My Lords, I thank those who have participated in this debate. I recognise that my amendment on electricity generation, distribution and supply was imperfect; it was meant to generate a debate of this kind. I understand that there are no limits in terms of power over onshore wind and certainly do not want to imply any malign intent on the part of the UK Government, but the complexity of the current model means that it is extremely difficult for Wales to compete in a global investment energy market. If it is much easier to go through a planning process in Denmark than in Wales, why would you not go to Denmark? It is a shame that we have not come to any conclusion on this, but it is an issue that we need to look at. We may need to look at how we streamline the process. It may be another issue where we could put a protocol in place, because we like protocols as a way of moving things forward.

On the cap beneath which we should be allowed to determine energy consents in Wales, I am not sure how much further we have gone. Dialogue is good, as the Minister suggested, but I am not sure what kind of commitment that represents. I hope to retain our ability to come back to discuss both amendments on Report, but for now I beg leave to withdraw Amendment 55A.

My Lords, Amendment 56 relates to the proposal by the Government to reserve provision relating to heating and cooling energy systems at the UK level. I shall speak also to Amendment 57, on retaining energy conservation at a UK level.

The reservation in respect of heating and cooling is broad in its scope and risks impinging on existing legislative competence in the fields of planning, economy, environment and, crucially, energy efficiency, all of which are already devolved and under the control of the Welsh Government. Not devolving heating and cooling has the potential to prevent delivery of climate change targets across a number of devolved sectors. Heating networks are inherently local—there is no national heat network—so it seems clear that this is better delivered at a local or regional level. The case for retaining the power at a UK level has not been made.

Let me give you an example. Cardiff Council has helped to facilitate the development at Trident Park which converts residual waste into renewable energy. The project also has the potential of supporting a city-centre district heating scheme. Why do the UK Government need to be involved in what is essentially a local initiative? The Government of Wales Act is silent on heating and cooling, while the Scotland Act has no such reservation. I hope that the Minister can enlighten us on why this issue has been retained at a UK level.

The current Bill also reserves energy conservation at the UK level but accepts that energy efficiency other than by prohibition and regulation is devolved. The Explanatory Notes refer to the Energy Act 1976, which relates to energy security and the conservation of fuel stocks. That was drafted in a different era when we had little awareness of climate change, an era of miners’ strikes—it was just after the three-day week. At that time, energy conservation meant a very different thing.

Furthermore, the Bill refers to both “energy conservation” in a reservation and “energy efficiency” in an exception. Are these synonymous? If not, can the Minister explain the difference? The drafting of the reservation could lead to confusion and disputes between Administrations. Let us remember that the cheapest and most efficient way of tackling climate change and fuel poverty is not to use energy in the first place.

These reservations could place restrictions on the ability of the National Assembly to meet its climate change targets and deliver on its priorities across a number of devolved areas. It makes no sense to have a UK reservation for something that is inherently local in its delivery. I am of course willing to be enlightened by the Minister on the justification for retaining the power at the UK level.

My Lords, I support the noble Baroness in those comments; the amendment is in my name as well. I should declare an interest as someone who has solar panels on their roof and has therefore benefited from policy on renewable heat incentive schemes. That illustrates how locally we are talking now; we are at the other end of the scale from the previous debate, when we were wondering whether 350 megawatts was the right level for strategic national developments. We are now looking at schemes that are very local indeed.

I am particularly concerned that the reservation on heating and cooling has suddenly popped up. It was not in the draft Bill, so perhaps the Minister will explain why the Government have suddenly become concerned about such developments. My experience of combined heat and cooling networks as defined in the interpretation in Section D5 of the new schedule relates to the Llanedeyrn district heating system in Cardiff, which existed back in the 1960s. It was not terribly effective, being a pioneering system. People were either boiling hot or freezing cold because it was not sensitive to flexibility. It was therefore abandoned and the boiler house in which it was based was turned into a very useful community centre. That system was installed on what was then the council estate of Llanedeyrn at the initiative of the local council, which is where such a power should lie. It is very much a local thing.

On incentive schemes for renewable heat and for energy conservation, the policy has diverged within the UK between Scotland, Wales and England, and will continue to do so even more than now. Renewable heat incentive schemes and the encouragement of energy conservation are appropriate for local action and local schemes, because when they work best they engage the local community. It is difficult for large-scale, national schemes to appeal to and work effectively within local communities. In the USA, such incentives are provided at local council level. However, because in the UK we do not normally do these things at local council level, the Scottish Government have had a different policy. My reading of the outcome of that is that they have made significant progress, particularly in engaging communities to work effectively together on such schemes. I urge the Minister in his usual understanding manner to agree to look again at this aspect of the Bill.

My Lords, the Government’s contention that energy policy-making powers, even on such intrinsically local issues as heating and cooling and energy conservation, should be reserved to the Government of the United Kingdom, because they are essential to our country having a national energy strategy, would be the more impressive if our country had a national energy strategy, but the truth of the matter is, notwithstanding the no doubt valiant efforts of the noble Lord, Lord Bourne, when he was a Minister at the Department of Energy and Climate Change, we do not have a national energy policy.

Since 2010, energy policy has consisted of prolonged dithering in the face of major decisions that it was necessary to take, particularly on nuclear power, and on the creation of incentives for renewables, which were then removed as the Government did a complete volte-face in their attitude to green issues and green values. The consequence is that we now have unaffordable energy prices, a dangerous dependence on energy imports from politically unreliable parts of the world and energy insecurity. If the Government of the United Kingdom have proved themselves incapable of developing and maintaining an energy policy for England and Wales together, why will they not at least allow the Government of Wales to develop and maintain an energy policy for Wales?

My Lords, I thank noble Lords who participated in the debates on heat and cooling and on energy conservation. Amendment 56 seeks to remove the reservation that deals with the supply of heat and cooling. It is important to be clear that the reservation is concerned with policy on heat supply, which is analogous to the supply of every other type of energy. Heat is strategically significant and represents almost half of our energy use and around one-third of carbon emissions. I can tell the noble Lord, Lord Howarth, that the Government have a very definitive energy policy—not just when I was Minister, I hasten to add—very much signing up to the climate change targets internationally, along with many other countries, as he will know; a commitment to nuclear, which I do not think is shared, certainly, by his party leader; and a commitment to diverse sources of energy. Let us put that canard to rest: there is a very definitive energy policy.

The policy in relation to heat is significant. Heat represents, as I say, almost half our energy use and around one-third of carbon emissions. The reason that we are seeking to reserve this is because it is a relatively new technology; it is about supplying heat, through policies such as the renewable heat incentive, the heat networks investment project, the combined heat and power quality assurance scheme and innovation support, and through initiatives such as the smart systems and heat programme, all of which are part of the United Kingdom’s energy policy. I accept that rollout and delivery will always be at a local authority level, but it is question of how the framework is set. These policies already exist and benefit the people of both Wales and England. It seems clear that devolving this area would increase costs, due to a loss of economies of scale, and would add complexity and confusion for businesses and householders and add to bills. The noble Lord, Lord Howarth, touched on affordability, which is certainly a prime concern of the Government, along with security of supply and ensuring that energy is green.

Heat is not simply a local issue. There are strategic decisions to be taken over the coming years, including options that would require action at a national level, such as decarbonisation, possibly even decommissioning, of the existing gas grid. These emerging national-level heat issues mean that it would be far more effective to maintain consistency between England and Wales, and it is why grid and infrastructure issues relating to oil, gas and electricity are also reserved in Scotland as well as in Wales. I hope I have explained the Government’s reasons for this reservation and why I am not able to accept the amendment.

Amendment 57 seeks to remove the reservation that deals with energy-efficiency requirements. The reservation uses the term “energy conservation” to reflect the language in the existing devolution settlement. It is our contention that energy efficiency is a subset of energy conservation. I will write to the noble Baroness, Lady Morgan of Ely, with some of the technical detail on that, if it would be helpful. The settlement provides for the Assembly and Welsh Government to have powers on energy efficiency, except via the use of regulation or prohibition. It is not as if there is no power in relation to energy-efficiency; it is just in relation to regulation or prohibition. For example, it would allow schemes to advertise energy-efficiency measures—I think that is probably something the Welsh Government already do, although I stand to be corrected on this.

The reservation in this amendment, however, covers home and business energy-efficiency measures that are imposed by regulation, and so have been implemented by, or under, legislation or equivalents, such as licence conditions imposed on gas and electricity suppliers. Having separate energy-efficiency obligations for England and Wales would be likely to increase the complexity and costs for organisations involved in delivering the obligations, with an impact on consumer bills. That is something the Government cannot sanction and, on that basis, I urge the noble Baroness to withdraw her amendment.

I thank the Minister. I find it quite odd when, in one breath, there is a suggestion that we need to meet decarbonisation targets and yet there is an understanding that climate change targets also have to be met at local levels. I think the Welsh Government have targets on that. I do not think you can have it both ways. On grid and infrastructure, of course there is a recognition that there needs to be a UK grid and infrastructure, but I contend that that does not make sense in terms of local heat networks. I would be very interested to see a little more detail on what the Minister suggests in relation to energy conservation, but the fact that energy efficiency is already largely devolved is perhaps something that has not been recognised in the way we had hoped. With that, I beg leave to withdraw the amendment.

My Lords, Amendment 57A covers a small and detailed issue, in contrast to the big issues also addressed in this group concerning the railway system and rail funding in Wales. I will not pre-empt the speeches of other noble Lords on those amendments, other than to say that it is essential that Wales has clear accountability, funding and control in running the railway system if we are to have an effective one here in Wales.

Amendment 57A would omit training, testing and certification from reservation 104, covering driver licensing. Schedule 7 to the Government of Wales Act 2006 refers only to driver licensing. In other words, the Bill introduces a much tighter wording than that in the current devolution settlement for Wales, as set out in the 2006 Act. The wording in the Bill is narrower. The inclusion of the word “training”, in particular, concerns me, because it could discourage or prevent the Assembly from providing training in road safety. If the Government do not encourage the Assembly to do this, why should it provide the funding and the resources? It is essential that it is absolutely clear that the Assembly has control over issues such as road safety training. That is the kind of local issue that is best organised at a Wales level. Very often it is organised via the school system or the training system and therefore it sits appropriately with other devolved issues. I urge the Minister to look again at this reservation and the exceptions. I beg to move.

My Lords, my Amendments 59, 60 and 70 in this group seek to devolve responsibility for the funding and specification of the rail infrastructure in Wales. I shall not move Amendment 97 relating to the Wales and Borders rail franchise as the Government have, I believe, already accepted the changes in principle on that matter.

Only 1% of Network Rail funding has been spent on the Welsh rail network since 2011, according to the latest Welsh Government estimates. This is despite Wales being home to no less than 11% of the total England and Wales rail network. Deals struck between the Welsh and UK Governments for specific projects, such as the electrification of the Valleys lines, are of course very welcome, but they do not address the fundamental issue that the current arrangement for rail infrastructure planning and development does not work in Wales. There is a simple and widely supported solution to this problem: to devolve the funding and specification of the rail infrastructure to the National Assembly. I say “widely supported”: there is a plethora of people and organisations from across the professional and political spectrum who support the devolution of the rail infrastructure.

As is often the case with this Bill, the Silk commission is my first port of call on this issue, which is appropriate since the Minister was relying on Silk in an earlier group of amendments. The commission agreed that devolving the rail network in Wales is both “possible and desirable”. This sentiment was echoed by the previous Assembly’s cross-party Enterprise and Business Committee, which in one of its final reports before the 2016 election concluded that responsibility for Welsh rail infrastructure was best placed in the hands of AMs in Cardiff Bay. Only last month, the Economy and Infrastructure Cabinet Secretary, Ken Skates AM, told the Welsh Affairs Committee that he would like to see responsibility for the rail infrastructure and Network Rail devolved.

These statements of support from across the political spectrum are bolstered by comments from numerous figures in industry, including the passenger campaign group, Railfuture Wales, and a pre-eminent expert on Welsh transport, Professor Stuart Cole. Both have said that devolving rail services without rail infrastructure is just not logical. Even the UK Government’s own review of the structures of Network Rail, conducted by Nicola Shaw, concluded in March this year that a more devolved route structure is necessary for Network Rail to adapt to the challenges of developing a modern rail network. This must be matched in policy terms to allow the National Assembly for Wales to be accountable and to be able to facilitate the development of Welsh rail infrastructure fit for the needs of a modern Wales.

It is indeed anomalous that the Welsh Government will bear the responsibility for rail services but not the infrastructure. The obvious issues that this creates for infrastructure planning are matched by concerns over the apportioning of accountability that this unbalanced devolution settlement will trigger. Passengers—and, ultimately, voters—will lack clarity about where responsibility for meeting transport needs should lie. What they care about is a transport system that works. Devolution of rail infrastructure is a step towards delivering a rail network that works in a fair and accountable way.

The National Assembly for Wales is the last devolved national Parliament that has not been afforded the powers to manage its nation’s rail network. These powers have long been held in Scotland and Northern Ireland. It is inconsistent and ineffective for this aspect of transport policy not to be devolved. I therefore urge the Government to support these amendments and to heed the call of AMs and MPs across the party divisions, as well as those from industry who want to see this happen. I ask the Minister whether he would be prepared to look again, between now and Report, at whether it would be possible to get some sensible further devolution on this matter.