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House of Lords Hansard
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15 November 2016
Volume 776

Committee (3rd Day)

Relevant Document: 5th Report from the Delegated Powers Committee

Schedule 1: New Schedule 7A to the Government of Wales Act 2006

Amendment 52

Moved by

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52: Schedule 1, page 54, line 3, at end insert—

“ExceptionIn the case of a betting premises licence under the Gambling Act 2005, other than one in respect of a track, the number of gaming machines authorised for which the maximum charge for use is more than £10 (or whether such machines are authorised).”

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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.

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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?

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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?

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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.

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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.

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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.

Amendment 52 withdrawn.

Amendment 52A

Moved by

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52A: Schedule 1, page 55, line 11, at end insert—

“Interpretation“Business association” has the same meaning as in Section C1.”

Amendment 52A agreed.

Amendment 53

Moved by

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53: Schedule 1, page 56, line 16, at end insert—

“Section C5AC5A Sea fishing69A_ Regulation of sea fishing outside the Welsh zone (except in relation to Welsh fishing boats).Interpretation“Welsh fishing boat” means a fishing vessel which is registered in the register maintained under section 8 of the Merchant Shipping Act 1995 and whose entry in the register specifies a port in Wales as the port to which the vessel is to be treated as belonging.”

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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.

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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.

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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.

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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.

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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.

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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—

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

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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.

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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.

Amendment 53 withdrawn.

Amendment 53A

Moved by

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53A: Schedule 1, page 56, line 40, at end insert—

“Agricultural and horticultural produce, animals and animal products, seeds, animal feeding stuffs, fertilisers and pesticides (including anything treated as if it were a pesticide by virtue of an enactment).”

Amendment 53A agreed.

Amendment 53B not moved.

Amendment 53C

Moved by

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53C: Schedule 1, page 57, line 19, leave out “fish and fish products” and insert “animals and animal products”

Amendment 53C agreed.

Amendment 53D

Moved by

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53D: Schedule 1, page 59, line 7, leave out from “The” to end of line 8 and insert “Export Credits Guarantee Department.”

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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.

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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?

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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.

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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.

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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.

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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?

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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.

I express my thanks to the Minister for moving on the important issue of allowing the Welsh Government, if they so choose, to continue to give measures of tax relief to some of the poorest and most vulnerable members of society in Wales. Responsibility for council tax benefits was transferred to the Welsh Government in April 2013. Unfortunately, when the Tory-Lib Dem Government passed that responsibility over to the Welsh Government, they cut the amount they gave to Wales to fund the scheme by £22 million. Thankfully the Welsh Government, in the face of cuts in the welfare reform Bill, decided that the pain would be too much for the poorest in our society in Wales to bear and made up the difference from their own budget, which means that approximately 300,000 households in Wales continue to receive support in meeting their council tax liability and that, of these, around 220,000 will continue to pay no council tax at all. We are grateful that the Minister has conceded on this issue. We hope he will let his colleagues in government know that the need to increase support for some of the poorest members of society may be another area where they could learn lessons from the Welsh Government. I will have pleasure in not moving my Amendment 65 in favour of government Amendment 65A. I thank the Minister for that amendment.

I support Amendment 67C in relation to adoption. As the noble Baroness, Lady Randerson, suggested, the Bill would limit the National Assembly’s competence simply to addressing issues relating to adoption agencies and their functions. That would mean that there is a rollback on current competence, which would inhibit a future Welsh Government’s ability to bring forward legislation. For example, if the Welsh Government wanted to place the Wales Adoption Register on a statutory footing, they could not do so under the Bill. This amendment, relating to adoption, proposes an exception to the reservation which is wide enough to ensure that the National Assembly continues to retain its current level of competence in the field, specifically in respect of the changes to adoption delivered by the Social Services and Well-being (Wales) Act 2014. That pioneering legislation has led to the setting up of the National Adoption Service for Wales, a fantastic initiative which has reduced the average waiting time in Wales for adoption and offers more children the opportunity to become a part of a loving and supportive family. We would like those powers to continue.

I will also speak on the issue of sports grounds within this group of amendments. It is difficult to see how the safety of sports grounds must be controlled by London, or else the United Kingdom in some way will be imperilled. Why can we not abide by the principle that anything devolved to Scotland or Northern Ireland should also be devolved to Wales? Do the UK Government have the capacity or ability to monitor the safety of sports grounds from London? Do they have the contacts with the devolved fire service or the ambulance services? Again, this is an example of a rollback in Assembly power. I would also be interested to hear the Minister’s response in relation to careers and job search.

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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.

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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.

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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.

Amendment 53D agreed.

Amendment 54

Moved by

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54: Schedule 1, page 59, leave out lines 9 to 27

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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”.

That loosely translates—and please forgive the emotion which I still feel in these verses—as:

“What if tears blur my eyes?

What if anguish fills my heart?

Wondering where our future lies,

Loading our chattels in the cart;

To flee before the waters start.

Who are we to make a stand?

We few poor farmers, now depart,

So take our homes and drown our land”.

A generation later in the 1950s, the saga moved on to the Tryweryn valley in the former county of Meirionnydd. We all know the story: the Corporation of Liverpool needed a new supply of industrial water. It considered locations in the north-west of England but recoiled in the face of strong local opposition. It identified the Tryweryn valley and determined that it would acquire it, drowning the village of Capel Celyn and numerous farms and homesteads. There was virtually unanimous opposition in Wales. When it came to Liverpool needing an Act of Parliament to facilitate its vandalism, it got its Bill through in another place despite every Welsh MP but one across the political spectrum opposing it. Westminster democracy worked for Liverpool that evening, but it did not work for Wales.

That, along with the strong feelings about language rights and economic marginalisation, led to a large cross-section of my generation resolving that never again would this be allowed to happen. If we could not trust Westminster to safeguard our communities, we had no choice but to seek our own Parliament that would defend our villages, our countryside, our heritage, our land and our way of life. Tryweryn was the catalyst that politicised many young people in Wales in the 1960s; indeed, it had a direct effect on the mobilising of the SNP in Scotland as well. The arrogant way in which Westminster treated the Tryweryn episode still has repercussions along the corridors of Westminster, and there are most assuredly lessons that can and must be learned from this sad episode. Little wonder that another Welsh poet of international renown, RS Thomas, writing in English, said:

“There are places in Wales I don’t go;

Reservoirs, that are the subconscious

Of a people, troubled far down

With gravestones, chapels, villages, even”.

It is right that the Committee should be aware of this background to my amendments today. Their purpose is twofold. Amendments 54 and 105 would put into the hands of the National Assembly the full power to authorise or reject any proposal for the construction of new reservoirs in Wales. If they are agreed, as I hope they will be, there will be no doubt that another Tryweryn could not occur. The authority over such far-reaching matters should be in the hands of Welsh elected representatives in our own Parliament, on our own soil.

Amendment 103 would bring into the control of the National Assembly all aspects of water management within Wales, and would make the assembly’s authority over water resources to be coterminous with the borders of Wales. The Silk commission recommended aligning the boundary for legislative competence for water with the national boundary. This would effectively end the regulation of the industry in Wales on a “wholly or “mainly” basis.

Clearly those responsible for the various aspects of water management and control will need to work in close co-operation with colleagues in England where there are cross-border flows. There is no earthly reason why such co-operation should not be happily handled. Water flows over the borders between many countries, but never has that been regarded as a fundamental reason why the borders of a country should be compromised in homage to some hydrographic principle that has never appeared in any constitutional handbook.

Amendment 107A is closely linked to the other amendments and is essential to the process of devolving control over our natural resources. It would remove any veto that the Secretary of State has over any Acts or measures of the National Assembly that might have a serious adverse impact on water quality or supply in England. Without this amendment, the others would be ineffective because the Secretary of State could intervene at any point he might choose.

I am glad that there are Members in the National Assembly and at Westminster, of all parties and of none, who have supported the proposals before the House today. I do not bring this forward as a party-political initiative. I am aware that the Secretary of State announced yesterday that he will be amending the Bill at a later stage to address some of the issues that I have outlined today, and to remove the UK Government’s historic right to intervene on water-related issues. I very much welcome that announcement and look forward to reading the amendments he is proposing in more detail. If the Government’s amendments meet my objectives and those of my noble friends, I am sure that there will be an unmitigated welcome across Wales and in all parties. A historic wrong will be put right, and that is something in which we should all rejoice. I beg to move.

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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.

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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.

However, some consideration should be given to the fact that, in many a dry summer—and we do have such a phenomenon from time to time—there will be areas in Wales from which water is extracted which suffer drought and will see that invaluable asset running away from them without any compensation whatever. That has to be put right some day. Amendments 103 and 105 in my name make it impossible for another Tryweryn to take place. If it did, I have no doubt that it would be the finest recruiting sergeant Welsh independence ever had, but that is another matter altogether. This is a matter of justice and I am sure that the Minister bears very much in mind the feelings that still remain raw in Wales in relation to it. I am confident that what he does will be just, wise and proper.

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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.

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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.

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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.

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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.

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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.

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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?

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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.

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The temptation to intervene was too much.

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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—

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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?

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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.

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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.

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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.

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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.

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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.

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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.

Amendment 54 withdrawn.

Amendment 55 not moved.

Amendment 55A

Moved by

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55A: Schedule 1, page 60, line 4, at end insert —

“ExceptionConsent for—(a) the construction, extension or operation of devolved generating stations, and(b) the installation of devolved associated lines, or keeping such lines installed.Interpretation“Devolved generating station” means an electricity generating station that is or (when constructed or extended) is expected to be—(a) in Wales and—(i) generates or is to generate electricity from wind, or(ii) has or is to have a maximum capacity of 350 megawatts or less; or(b) in Welsh waters and has or is to have a maximum capacity of 350 megawatts or less.“Welsh waters” means so much of the internal waters and territorial sea of the United Kingdom as are adjacent to Wales, and the Welsh zone.“Devolved associated line” means an overhead electric line that—(a) is associated with a devolved generating station, and(b) has or is (when installed) to have a nominal voltage no greater than 132 kilovolts.”

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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.

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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.

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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”.

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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.

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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.

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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.

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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.

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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.

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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?

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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.

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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.

Amendment 55A withdrawn.

Amendment 56

Moved by

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56: Schedule 1, page 61, leave out lines 7 to 21

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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.

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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.

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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?

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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.

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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.

Amendment 56 withdrawn.

Amendment 57 not moved.

Amendment 57A

Moved by

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57A: Schedule 1, page 61, line 37, leave out “(including training, testing and certification)”

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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.

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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.

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Before the noble Lord sits down, is he now saying that he will not be moving his Amendments 58 and 97 on the devolution of the Wales and Borders franchise? I was going to speak about that briefly.

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As I understand it, the Government have moved on the Wales and Borders franchise. Perhaps the Minister can respond and there will be an opportunity for the noble Lord, Lord Hain, to intervene.

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I was going to say that I strongly support Amendments 58 and 97, in the absence of an assurance from the Minister to the contrary, because there is a strong case—following the St David’s Day agreement, the work of the Silk commission and, indeed, the logic of the case—that responsibility for this franchise should lie with the Welsh Government. To avoid taking up any more time, I hope the Minister will confirm that it will be devolved and the Government will bring forward an amendment to that effect at some point, presumably on Report.

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My Lords, as currently drafted, reservation 183(c) removes the ability of the National Assembly to introduce town and country planning legislation relating to the development of railways. This aspect of the Bill clearly rows back on the existing devolution settlement, as the National Assembly currently has the ability to legislate on town and country planning matters, which can include the construction of railways.

The Welsh Government are clear that the development and use of land for such infrastructure falls within the current devolved planning system. This is supported by the fact that, since devolution, subordinate legislation has been made by the Welsh Government under the Town and Country Planning Act 1990 to make provision for railway development, and that such development can be, and has been, given consent under the planning system.

More recently, the Welsh Government made regulations under the Town and Country Planning Act 1990, as amended by the Planning (Wales) Act 2015, to make provision for railway development to constitute development of national significance in Wales. At no point during the scrutiny of the Planning (Wales) Act was the issue of legislative competence raised in the context of railways by stakeholders, which included the UK Government. The inclusion of railways in the reservation would restrict the National Assembly’s ability to legislate further for railway development in the context of developments of national significance. There is a clear need to preserve the existing devolution settlement, which Amendment 70, in deleting reservation 183(c), achieves. I urge the Committee and especially the Minister to support this amendment.

Amendment 109 deals with railway franchising. At present, the majority of rail services in Wales are provided under the Wales and Borders franchise operated by Arriva Trains Wales. This was concluded following the joint parties’ agreement in 2006, which set out the division of responsibility for the management of the Wales and Borders franchise between the two Governments. From early 2017, the Welsh Government will become a franchising authority in their own right, with responsibility for awarding the next Welsh rail franchise, due to start in October 2018.

The current Railways Act does not allow the Welsh Government to permit public sector organisations to bid for rail franchises—a matter which was conceded for Scotland following Smith commission recommendations. We on this side of the House do not have ideological objections to the nationalisation of railways, unlike the UK Government. In fact we think that the German nationalisation model, which has been allowed to run franchises in the UK, has simply stuffed UK taxpayers’ money into the pockets of German taxpayers. The French nationalised railways run a much cheaper and more efficient system than any of our current players in the UK. We would like to see flexibility so that if the Welsh Government wished to bid for that franchise, they could do the same for Welsh people. The Welsh Government have stipulated time and again that they may be interested in applying for such a franchise or allowing a not-for-profit organisation to bid. Again, we would like the UK Government to explain on what grounds they justify this discriminatory action.

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I strongly support my noble friend’s case. Would she also say that the model of Welsh Water could be a very good one for the Wales and Borders franchise? That is not least because, being a not-for-dividend company, Welsh Water is able to raise capital at a far cheaper rate than on the open markets in the City, as other water companies are required to do. It is therefore a better model and that option should be available to the Welsh Government, should they choose to pursue the franchise in the future on that basis. I do not think that the existing Bill allows for that.

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The noble Lord is quite correct in his assessment. One of the problems is that the Welsh Government have indicated that they would be interested in looking at some kind of not-for-profit model, such as that of Dwr Cymru. But one of the real problems here—the real shame—is that the timing on this issue is very bad because while we hope that the Government will accede to our request on this matter, if they agree to do so it will come too late for the current procurement round. That round has already opened, so the earliest that we could see a Welsh public sector bid or a not-for-profit franchise bid on this matter would be 2028. I suppose that would be better late than never; at least we will be ready for the next time. I hope that the Minister will be able to give us some comfort on this issue.

I support the views of the noble Baroness, Lady Randerson, in relation to devolving the training, testing and certification of driver licensing to Wales.

Finally, I ask the Minister for clarification on a point regarding the regulation of bus services in Wales. Traffic management is already devolved, in addition to the regulation of transport facilities. These will continue to be devolved, thankfully, under the Bill by virtue of the fact that they are not reserved. Under the new settlement, there is new scope for the Assembly to legislate concerning local bus registration. Ministers currently have limited executive powers in respect of local authorities co-ordinating bus operations, as set out in the Local Transport Act 2008, including voluntary and statutory quality contracts.

I believe that there should be scope in the Bill to allow for the regulation of buses in Wales. I hope that the Minister can confirm that this is indeed the case. Can he confirm whether the associated benefits of regulation, include the possibility of capping and regulating fares and integrated ticketing, will also be possible? It is unclear to me whether reservations concerning competition and consumer protection could prevent these important issues being pursued. Some assurance on that would be helpful. Can he also confirm that the Bill in its current form does not prevent the Assembly legislating in relation to the registration of bus services and franchising, or indeed other areas covered by traffic management and regulation in addition to other transport facilities and services, such as parking, street works and the blue badge parking scheme?

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My Lords, I thank noble Lords who have participated in the debate on these issues relating to transport. I turn first to Amendment 57A, moved by the noble Baroness, Lady Randerson. Section E1 of new Schedule 7A lists the road transport powers that are reserved. Amendment 57A would give the Welsh Government responsibility over driver training, testing and certification. The words “including training, testing and certification” are intended to clarify further what is meant by driver licensing, which is an exception to the Assembly’s competence under the current devolution settlement. It is not intended to modify the Assembly’s current competence; I can confirm that and it will of course appear on the record. It is important for business and road safety for there to be a consistent approach across Great Britain. It would be impractical and costly for the transport industry to follow different rules on how drivers should learn to drive and have a different driving test from the rest of the country. I do not think the noble Baroness was suggesting that. Moreover, road safety is reinforced by all road users having to observe the same rules so that everyone is able to fully understand the consequences of not observing those rules.

Amendment 57B, as tabled by the noble Baroness, Lady Morgan, would except the registration and regulation of bus services from the road transport reservation. The Welsh Government already have the ability to determine a number of aspects of bus policy including concessionary fares, smart ticketing and the provision of subsidies. The devolution of the registration of local bus services—a St David’s Day commitment—is already provided for in the Bill and will complement the Assembly’s existing powers. Welsh Ministers will have the power to legislate in respect of bus franchising, quality contracts and quality partnerships. I will write to the noble Baroness more specifically on some of the exceptions and issues that she raised. I am sure she realises that one or two of those were fairly technical. I do not have the information to hand.

Amendment 97 will not be moved, as I understand it, but I will refer to it briefly— notwithstanding that I think the noble Lord, Lord Wigley, said that to confirm his understanding. Perhaps I could turn first to Amendment 58, which was spoken to by the noble Lord, and seeks to extend the legislative competence of the Assembly in relation to railway services to include the Wales and Borders rail franchise. It is not clear what the intended geographical scope of these powers would be, nor what particular functions potentially relevant to the procurement and operation of the franchise the Assembly would have competence over. This is somewhat like the issue relating to water; at issue is that the railway line is partly in England and partly in Wales. On railway services, the Assembly currently has legislative competence only in respect of financial assistance relating to railway services, subject to limited exceptions in relation to the carriage of goods, railway administration orders and compensation of passenger service operators for public service obligations, under EU Regulation 1370/2007.

Extending the Assembly’s legislative competence in relation to the provision of railway services was not recommended by the Silk commission and so was not considered in the St David’s Day process. The Bill therefore seeks to preserve the existing devolution settlement in relation to legislative competence for railway services. It may also be helpful if I confirm that an amendment to the Assembly’s legislative competence is not necessary to give effect to our agreement with the Welsh Government to take forward the devolution of executive franchising functions for Welsh services to Welsh Ministers.

Amendments 59 and 60, tabled by the noble Lord, Lord Wigley, seek to extend the Welsh Assembly’s legislative competence in relation to rail infrastructure in Wales and the specification and funding of Network Rail’s operations in Wales. As he will no doubt be aware, the Silk commission recommended the transfer of executive functions in relation to the specification and funding of Network Rail’s operations in Wales. This recommendation was considered as part of the St David’s Day process but there was no political consensus to take it forward. The Government do not intend to revisit this issue, given those discussions. I can however assure the Committee that the Department for Transport continues to liaise closely with the Welsh Government on the specification and funding of Network Rail’s operations in England and Wales for each five-year railway control period, to ensure that requirements in Wales for increased capacity on the network are reflected. The Government also welcome the significant investments made by the Welsh Government in the rail network in Wales to support the Welsh economy. These complement the significant investments in the strategic capacity of the England and Wales rail network that have been, and will continue to be, made by the UK Government that benefit Wales.

Amendment 70, which was tabled by the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Wigley, seeks to remove planning in relation to railways in Wales from the list of reservations. The underlying issue is the interpretation of the current devolution settlement set out in the Government of Wales Act 2006. The UK Government and the Welsh Government interpret the extent of current devolved competence in relation to this issue differently. This again emphasises the lack of clarity that exists under the current devolution settlement. It also points to the need to ensure that the Bill removes any uncertainty and provides clarity going forward. Establishing a clear boundary between what is devolved and what is reserved is, of course, a key objective of this Bill. However, Amendment 70, without further clarification, has the potential to introduce further uncertainty to the devolution boundary by creating a conflict with the “railway services” reservation in Section E2 of new Schedule 7A. As such, we need to be able fully to consider the issue and the most appropriate approach to adopt.

However, I am aware that the Assembly has already exercised competence in this area, as referred to by the noble Baroness, Lady Morgan, under the Planning (Wales) Act 2015. In the circumstances, I therefore propose to take this issue away for detailed consideration and to return to the House and set out the Government’s position on Report. With that assurance, I hope the noble Baroness will not press the amendment.

Amendment 109, in the name of the noble Baroness, Lady Morgan of Ely, seeks to press the UK Government to a decision on a matter they committed to consider in the St David’s Day Command Paper. That matter is whether to legislate for Wales in a manner similar to provision in the Scotland Act 2016 regarding the powers of Scottish Ministers, as committed to in the Smith commission agreement, to enable Welsh Ministers to invite United Kingdom public sector operators to bid for rail franchises for which they are the responsible franchising authority. I say in parenthesis that, as my right honourable friend the Secretary of State set out in other place, the Railways Act does not prevent not-for-profit bidding for franchises but prevents public sector bidders.

I recognise that the Welsh Government are keen to have such flexibility, in addition to that available under current legislation, to encourage bids from other sector organisations. The Government consider it would be premature to reach a decision on this matter in advance of final agreement with the Welsh Government on the terms for future devolution of executive franchising functions. At present, Welsh Ministers do not have any statutory powers to procure rail franchises. The effect of the proposed amendment would be to confer discretion to allow public sector bidders for franchises consisting of, or containing, Wales-only services on the Secretary of State. This would be inconsistent with the United Kingdom Government’s policy not to allow UK public sector operators to bid for rail franchises.

As the noble Lord, Lord Wigley, indicated, I am committing to the progress made between the United Kingdom Government and the Welsh Government in preparing for the transfer of franchising functions to Welsh Ministers. That is something we are seeking to do and are committed to do. As part of reaching final agreement, we will be able to reach a decision on the issue raised by this amendment regarding Welsh Ministers’ ability to invite bids from public sector operators in future procurements.

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Can the Minister give us a timetable for when those decisions will be made? Will it be before Report or is it an issue that will be resolved after the Bill has left this House?

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My Lords, to some extent I am in the hands of noble Lords as to when we complete Committee stage—a subtle hint if ever there were one. I hope and intend that we should be in a position to bring this forward on Report, but certainly during the passage of the Bill. I hope it will be before Report.

Amendments 83A, 83B, 119C, 119D, 119E and 119F amend Clause 27 and Schedule 5 so that all the Minister of the Crown powers in Sections 6, 6A and 6B of the Transport Act 1985 are transferred to Welsh Ministers by the Bill, which I am sure noble Lords will welcome.

As a result of the complexities involved in the traffic commissioner being a reserved body but exercising some devolved functions, the original clause transferred the regulation-making powers in Sections 6 and 7 of the Transport Act 1985 that related to the traffic commissioner. This was to provide clarity in the Bill, with the remaining powers to be transferred via a subsequent transfer of functions order. Following discussions with the Welsh Government, we have agreed to transfer all the regulation-making powers relating to the registration of local bus services in Section 6, 6A and 6B of the Transport Act 1985 in the Bill.

On the basis of that information and the assurances and responses I have given, I urge the noble Baroness to withdraw her amendment.

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My Lords, I fear that the longer I sit here and listen to the detailed debates, the less confidence I have that the Bill will provide the certainty that we on all sides believe should be provided.

On the specific issues, devolution is the name of the game in railways at the moment. I regret that that rule does not apparently apply to Wales in the fullest sense. I entirely accept that railway services in Wales do not run neatly within the country only. That is a specific challenge. I fear that there is a failure here to provide sufficient incentives to the Welsh Government to invest in the railway system in Wales because they are not being given sufficient control over it.

In relation to Amendment 57A, I agree with the Minister that it is necessary to have a consistent approach to road safety across the country, not least because the road along the border weaves in and out of the border so any other approach would not be workable. In the light of the Minister’s comments, I shall withdraw my amendment, but I ask him to consider clarification of the Assembly’s powers on training in road safety matters because I fear that, as written, the Bill could be taken by the Assembly and the Welsh Government to mean that they do not have to involve themselves in it any more, and that would not be an appropriate result. I beg leave to withdraw the amendment.

Amendment 57A withdrawn.

Amendments 57B to 65 not moved.

Amendment 65A

Moved by

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65A: Schedule 1, page 65, line 34, leave out “or liabilities for local taxes”

Amendment 65A agreed.

House resumed. Committee to begin again not before 8.28 pm.