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Wales Bill

Volume 776: debated on Monday 7 November 2016

Committee (2nd Day) (Continued)

Clause 18: Functions of Welsh Ministers

Amendment 25

Moved by

25: Clause 18, page 17, line 33, at end insert—

“(e) those functions of a Minister of the Crown specified in paragraph 11(1)(b) to (e) of Schedule 7B.”

My Lords, we come to the end of our scrutiny of Part 1 and to the group of clauses subtitled, “Executive competence etc”. The Minister will not be surprised to know that I am particularly interested in the “etc”, because the issue of the competence of the Assembly and how it is defined in law is one that he and I have followed throughout our political careers in Welsh devolution—or should we now say “Welsh reserved matters”? The Assembly has developed away from a body that did not have an Executive: the notion of an elected body—that is, the legislature—and a Government—an Executive—were confused in the original Government of Wales Act 1998, which was really a rewritten version of the Wales Act 1978. But that was the form of constitution with which we had to work. It is not just a matter of what politicians work with but the understanding of the constitution outwith the political class and the ability of the electorate to engage with the constitution that I have always been deeply concerned about.

I am not sure where we are going in the detail of this Bill. In the attempts to define the functions of Ministers and the transfer of ministerial functions, which we are dealing with in these clauses, we have not moved much further in clarity of understanding of what devolved matters are about and how Ministers derive their functions. I pray in aid the Explanatory Notes, which in introducing us to the delights of Clause 18 tell us about new Section 58A, inserted into the Government of Wales Act 2006, which seems to be taken as the urtext of our constitution—I may come back to that later this evening with the question of consolidation. The Explanatory Notes emphasise that that new section inserted into the Act,

“confers common law type powers on Welsh Ministers; these powers are described as executive ministerial functions and they will be exercisable both in relation to devolved functions and ancillary to  executive functions conferred on”,

Ministers in reserved areas. It goes on to say:

“Subsection (5) defines what is meant by an executive function; this does not include any prerogative functions”.

Clearly, the earlier Statement in this House, repeated from the Commons, and the judgment of the High Court has been much about the definition of “prerogative” and its limits and potential in defining what Ministers can do. If we are being told that Welsh Ministers have no functions by virtue of any legislation or the prerogative, how do they derive their functions? There is no explanation known to me or my advisers for the exclusion to which I have just referred.

During the debate in the other place, the Government said that they intended to transfer,

“as many of these functions as we can”.—[Official Report, Commons, 5/7/16; col. 835.]

That is, they will transfer to Welsh Ministers pre-commencement functions and devolved powers. What is the present ministerial position on that, and on the draft transfer of functions order which was promised to be brought forward in later stages of the Bill? In particular, I would like a clearer explanation of why the approach adopted in the Scotland Act 1998 has not been adopted in how we define the functions of Welsh Ministers. I beg to move.

I have one very naive question, in which I shall simply display my ignorance—but I am puzzled by the explanation given in the Explanatory Notes that Clause 18(1) inserts a new section into the Government of Wales Act which,

“confers common law type powers on Welsh Ministers”.

That is the passage that the noble Lord just quoted. I thought that the judges and the courts created common law; I did not think that the Ministers created it. I would be most grateful if someone, presumably the Minister, could educate me on that point.

We have quite a strange group of amendments here but, rather than uncouple them, I would like to suggest a degree of support for the points raised by the noble Lord, Lord Elis-Thomas, and the question from my noble friend. We believe that our amendments, notably Amendment 29 in the next group, will achieve the same result of a better alignment between the Assembly’s legislative competence and Welsh Ministers’ executive powers. I shall save my comments on the general principle of aligning legislative and executive powers until the next grouping.

I shall address the specific issue of fishing, addressed by one of the government amendments in this group. At present, Welsh Ministers have powers to exercise fisheries functions in relation to Wales and the Welsh zone. The Welsh zone includes a zone of 12 nautical miles next to the Welsh coast and the territorial sea, which, because Ireland is to the west of most of Wales, reaches beyond that point significantly only in the south-west of Wales, on the Pembrokeshire coast. Unfortunately, the extent of Welsh Ministers’ powers do not reflect the arrangements in England and Scotland, with those Administrations having executive powers in relation to their relevant areas. My understanding is that the Welsh Government have pursued a solution to this for several years, so it is encouraging that the amendment has been brought forward.

The amendment goes some way to addressing requirements, but it requires further work to work properly. For example, as currently drafted, the amendment would permit functions under Section 5 of the Sea Fish (Conservation) Act but not Section 5A, which permits functions to be exercised for “marine environmental purposes”. A number of other aspects need to be considered. It would be better if the amendment mirrored the scope of the Welsh Zone (Boundaries and Transfer of Functions) Order 2010, which covers the sort of functions required. It would help to achieve a degree of consistency around who controls fisheries management measures. While we support the Government’s amendment on fisheries as far as it goes, we hope that further work can be done on this matter before Report to ensure that the provisions are fit for purpose.

My Lords, I thank noble Lords who have participated in the debate on these amendments, and the noble Lord, Lord Elis-Thomas, for bringing them forward. I am well acquainted with his burning passion in relation to these matters, which I know we have discussed many times before.

I turn to the amendments, through which the noble Lord and the noble Baroness seek to extend the common law-type powers of Welsh Ministers. I shall break off and explain what I think that means to the noble Lord, Lord Howarth. The issue here is that, yes, common law grows up over a period of time, mostly, though not exclusively, from the contribution of judges—some of it would be by convention in other ways, I think. Here we are seeking to confer these types of powers on Welsh Ministers. We cannot do that by the effluxion of time, because time has not allowed that, so we are taking what is already the position in relation to the common law powers that exist for UK Ministers and saying that we believe that those types of powers should exist for Welsh Ministers. We are transposing them because we cannot build in the period of time element.

It is our view that these amendments would undermine the protection given to a very limited number of Minister of the Crown functions, which the Assembly may modify only with the consent of United Kingdom Ministers. Clause 18 is a key part of delivering the clear settlement that we are putting in place through this Bill. Ministers of the Crown and Scottish Ministers already exercise these common law-type powers. This clause would put Welsh Ministers broadly on the same footing as Ministers of the Crown and Scottish Ministers by ensuring that in future they too will be able to exercise such common law powers.

The noble Lord, Lord Elis-Thomas, asked a very fair question in relation to the royal prerogative. I am very willing to meet with him to discuss this further but, so far as we have been able to ascertain, the royal prerogative has not been conferred on Welsh Ministers. They derive their powers from transfer of function orders or under the legislation. The noble Lord probably knows more about the royal prerogative than I do; I am very happy to meet with him on this issue.

My very short and technical question is whether it is humanly possible, in any event, for prerogative powers to apply to a Parliament of the nature of the devolved Welsh Administration. As I tried to say in a contribution earlier this afternoon, the royal prerogative derives from what started off as a monarchical diktat, curbed by Coke in 1610, very largely whittled away during the Civil War, and largely defined during the First World War—the noble Lord will remember the case of the Attorney-General v De Keyser’s Royal Hotel Limited. By now, there is hardly a remnant left, but I submit that that remnant can remain only with the mother Parliament.

The noble Lord jogs my memory on the Attorney-General v De Keyser’s Royal Hotel Limited which was a compulsory purchase situation. I believe that he is right and he speaks with great authority. I am always stunned by the noble Lord’s recall of these matters, without any note. I am confident that he is right on this issue, but nevertheless I am very happy to meet with the noble Lord, Lord Elis-Thomas, to look at it further.

I was also asked about the transfer of powers, which we are doing by transfer of function order rather than in the Bill. I have notified noble Lords of the functions that we have identified that will be transferred to Ministers. We are consulting with the Welsh Government in case they find any more that we have missed. I do not think that is the case, but if it is we will, of course, amend the transfer of functions orders.

The noble Baroness referred to and welcomed Amendments 31 to 35, which add a number of additional fisheries management functions to the licensing functions already being transferred to Welsh Minsters. These are management functions under the Sea Fish (Conservation) Act 1967. The noble Baroness has said that she is happy with this but it could go further. I will go away and take a look at it, reflect on what she has said and come back to it on Report. On that basis, I urge the noble Lord, Lord Elis-Thomas, to withdraw his amendment.

My Lords, I will take up the Minister’s offer of a meeting, not that I want to add to his diary which is obviously very busy during the passage of the Bill. I know that he understands my concern about the general failure of the Bill to move us forward and provide a stronger basis for both the functions of Ministers and the operation of the National Assembly itself. I will not pursue that, because I am leading on the next amendment. I beg leave to withdraw the amendment.

Amendment 25 withdrawn.

Amendments 26 and 27 not moved.

Amendment 28

Moved by

28: Clause 18, page 18, line 4, at end insert—

“(6A) In this section and section 58AA, “within devolved competence” and “outside devolved competence” are to be read in accordance with subsections (7) and (8); but for the purposes of section 58AA no account is to be taken of the requirement to consult the appropriate Minister in paragraph 11(2) of Schedule 7B.”

We come to a further elaboration of the relationship between ministerial functions and those of the Assembly. This is a basic constitutional issue which we have failed to address throughout the years of the pursuit of the holy grail which United Kingdom Governments of both parties and one coalition keep calling a “settlement” of Welsh devolution. I think I have said in this House—I have certainly said it in the Assembly—that there is no such thing as a settlement of democracy or politics: it always evolves. If we are looking for something akin to what is available in Scotland and Northern Ireland, which is what I would look for in the context of the United Kingdom, then this Bill does not deliver it, particularly in the area of the relationship between the definitions of ministerial functions and the competence of the Assembly. In her evidence in July, the chief legal adviser to the National Assembly, Elizabeth Jones, referred the constitutional committee—to which, I am happy to announce, I have recently been re-elected following my change of description—to the position, put forward by the former Presiding Officer, that,

“the situation in Wales should be equivalent with Scotland; that is that all ministerial functions, functions of Ministers of the Crown, exercisable within devolved areas … should lie with Welsh Ministers. From a constitutional law point of view, that would be a very logical situation and would also increase the clarity of the settlement very considerably”.

I must pursue this. Perhaps I could discuss it with the Minister at the same meeting he gave me the option of having earlier when we discussed the royal prerogative. It seems to me that the aligning of executive functions of Welsh Ministers with the legislative competence of the National Assembly would address some of the complexity that will arise in relation to the Minister of the Crown consent in the current regime. If there was such an alignment, then UK government consent would not be needed before the National Assembly could affect UK Ministers’ functions in devolved areas because those functions would already have been transferred to Welsh Ministers. These are the issues that I am trying to pursue in this series of amendments. The Minister will, no doubt, be aware of and have read the report of the Constitutional and Legislative Affairs Committee of the National Assembly, whose work in this area is equivalent only to the work of the Constitution Committee of this House. We have been so exercised by the attempt to make sense of the devolution structure with which we have to work that I do hope it will be possible for the Minister to consider whether a move towards the alignment of legislative and executive competence would not clarify the devolution structure much more effectively. I beg to move.

My Lords, I thank the noble Lord for setting out some of the issues relating to the transfer of Minister of the Crown functions and the need for an alignment of legislative and executive powers. Many of the amendments in this group make provisions for the executive competence of Welsh Ministers to be aligned with the legislative competence of the National Assembly; that is to say that Welsh Ministers would gain all the relevant executive functions in devolved areas. Given the Government’s intention of producing a Bill that is to provide clarity and coherence to the Welsh devolution settlement, it is difficult to understand why such a simple provision as the alignment of executive and legislative competence has not been included.

The Government have made it clear that they believe that the reserved powers model of devolution is superior to the conferred powers model—that is common ground between us. Why then does the Bill provide for a reserved legislative competence but continue to operate on the basis of a conferred powers model in respect of executive powers for Welsh Ministers?

The continued heavy reliance on transfer of functions orders, with their itemised listing of the statutory powers available to Welsh Ministers, is a relic from the past. I note that the Minister has said today that he will look again to see whether there are any more that he has left out. But it is the principle involved here that we are concerned with. We need now to fully accept the logic of the reserved powers model and align legislative and executive competence in the way set out in the simple and straightforward formula proposed in Amendment 29.

It has become clear that the Government have used the Scotland Act as a guide in developing this Bill. Again, it is therefore difficult to understand why a fundamental principle of the Scottish devolution settlement is not being replicated in this Wales Bill. The Bill provides for the extension of the competence of the National Assembly in a number of areas. Surely as the legislative powers of the Assembly expand, it is essential to align executive powers with them. We recognise that transfer of functions orders will still be needed where there is a proposal to transfer ministerial functions in areas that are reserved—emergency powers are a case in point. However, in the general principle, it is just not clear why the Government have taken this point.

My noble friend referred to the constitutional committee of the Assembly. I now want to refer to the House of Lords Select Committee on the Constitution, which said that:

“If the Government’s intention is to align, as far as possible, the executive and legislative competence of the Welsh Assembly and Government, we question why it is doing so via secondary legislation rather than in primary legislation—as was the case in Scotland”.

The general principle should be that executive powers in devolved areas should be exercised by Welsh Ministers. Why do the Government have such difficulty with this simple proposition? I hope that the Minister will be able to enlighten us.

My Lords, I want to add just a word or two from the Scottish perspective to what has just been said. I was involved in the consideration of the Scotland Bill that became the Scotland Act 1998, some considerable number of years ago. One of the groups of sections, which is now to be found in Sections 52 to 56 of the Scotland Act 1998, dealt with ministerial functions. The critical section, which is closely aligned with what is proposed in this amendment, is Section 53, which says in subsection (1) that:

“The functions mentioned in subsection (2) shall, so far as they are exercisable within devolved competence”—

those critical words—

“be exercisable by the Scottish Ministers instead of by a Minister of the Crown”.

That was part of the whole structure of the Scotland Act, which, as the noble Baroness, Lady Morgan, has noted, was designed on a reserved powers basis but is very much relevant to what has been designed for Wales today, dealing as it does with the idea that anything to do with devolved competence so far as Ministers are concerned should be within the functions of Scottish Ministers in place of Ministers of the Crown.

The functions listed in subsection (2) were three. The first is,

“those of Her Majesty’s prerogative and other executive functions which are exercisable on behalf of Her Majesty”.

I do not think it is being suggested that that should be done in this case. The second is,

“other functions conferred on a Minister of the Crown by a prerogative instrument”.

The third and important one for the present purpose is,

“functions conferred on a Minister of the Crown by any pre-commencement enactment”.

Those are the words we see echoed in subsection (1) of proposed new Section 58B. We then have a definition in the Scotland Act of what a pre-commencement enactment means, which is exactly as set out in the amendment.

So far as Scotland is concerned, the effect of Section 53 was to achieve complete clarity and make it very simple for those who were designing statutory instruments to give effect to the transfer of functions to find a solid base for what they were proposing to do. Again, I was quite closely involved in observing the way in which the functions were transferred. It seemed to me that the matter went very smoothly, given the clarity set out in the Scotland Act.

Although I certainly am not as fully aware of the position in Wales as those who have already spoken are, I think, with great respect, that there is great force in the idea that an amendment of this kind should be made. It is part of the development that the noble Lord, Lord Thomas of Gresford, mentioned earlier of progressing the Welsh Assembly and its Ministers into the modern structure that suits the evolving nature of what is now taking place in Wales.

My Lords, the call for the alignment of legislative and executive powers is not just a call for tidying-up: it is a call for clarity of accountability. Unless we have that alignment, in the same devolved matter, Welsh government Ministers will be accountable to the Welsh Assembly on some aspects and Ministers of the Crown will be responsible to this legislature on others. That makes for confusion and a political mess. Is not it far better to get some coherence and clarity of accountability, as my noble friend and other noble Lords are calling for?

My Lords, on 5 July, in the House of Commons, the Government promised to produce draft transfer of functions orders. Have those been produced so far—and if not, why not? Is the noble Baroness, Lady Morgan, right when she says that they will be conferred functions rather than reserved functions?

I thank all noble Lords who have participated in the debate on this part of the Bill and specifically the noble Lord, Lord Elis-Thomas, and the noble Baroness, Lady Morgan of Ely, who are seeking to broaden the definition of the Assembly’s legislative competence to include functions where consultation with a Minister of the Crown is required before modification, by virtue of paragraph 11(2) of new Schedule 7B.

Specifically in relation to the functions set out in that sub-paragraph, I should say first that they are very few. We should be clear that the great bulk of ministerial functions will be transferred by transfer of functions orders—that is the intention—but there are four here that need prior consent. I am willing to go away and look at these, but I have to say that some relate to circumstances that perhaps noble Lords have not taken account of. For example, the very porous nature of the border means that for water—noble Lords will know that we are still looking at this—the present position is that the National Assembly for Wales has some competence in relation to customers who are in England, and vice versa. Therefore, it is not quite as straightforward as it might be in Scotland, with respect to the noble and learned Lord, Lord Hope. That said, I will have another look at the functions as they are set out and be in a position to better inform noble Lords as to the precise thinking behind these.

However, in relation to, I think, Amendment 36, in the name of the noble Lord, Lord Elis-Thomas, or Amendment 37, in the names of the noble Lord, Lord Elis-Thomas, and the noble Baroness, Lady Morgan of Ely, the reason for the measure is specifically the evolving picture on water. We are still looking at that. That is why the measure is in the Bill. Having looked at it, I think it is probably wider than we need, because, if it is needed just for water and sewerage, I do not see why we cannot say so. Therefore, I will certainly take that back to see whether we cannot amend it. If the noble Baroness and noble Lord look at that provision, they may see that we need it because of the situation to which I have just referred of some English customers being subject to Welsh law and Welsh customers being subject to English law. We need to tidy that up.

The noble Lord, Lord Thomas of Gresford, asked about the transfer of functions orders. He will be aware that I wrote to noble Lords setting out those we intend to transfer. Because of the evolving nature of reserved matters—for example, on teachers’ pay—work on that is still going on. I assure him that work continues on that, perhaps not quite as we speak but pretty much as we speak. On the basis of these remarks, I would be grateful if the noble Lord would withdraw his amendment.

I take up the noble Lord on one point. If I heard him correctly, he said that the amendment was concerned with legislative functions. Strictly speaking, it deals with executive functions, certainly from the perspective of the Scotland Act. Looking at it against that background, I see this as dealing very definitely with the functions of Ministers, which is the executive branch, rather than the powers of the Assembly.

The noble Lord has not clarified to me why he would object to the principle of this alignment between executive and legislative competence. He has told us that he has looked at all these different things, has brought most of them forward, that there is a long list and that he does not think there are many more. But why would he object to the principle of this alignment?

My Lords, with respect, for the reason I have given—namely, that it is fine as a principle but, because it on occasion throws up circumstances that cannot be foreseen, it is wise that we go through it with a fine-toothed comb. If we had not done so, it would create difficulties with the alignment we are seeking on water, for example.

Would it not be possible to do it the other way round and make an exception to the principle? Would that not be easier?

Once we know what the exceptions are, of course, that is the case, but we need to go through them to make sure that there are none of those exceptions.

My Lords, I am grateful to the Minister yet again for his generosity in responding to the arguments. We await his further consideration and, no doubt, will have further discussions with him. As the former Member of Parliament and now the Assembly Member for a particular length of the River Dee, I certainly would not want to deprive customers anywhere on either side of the Marches of Wales of their water supply. It is a bit rich, when we revert to this exceptional issue, to suggest to the noble and learned Lord, Lord Hope, that because the rivers in Scotland apparently flow into the sea rather than into England, the situation in Scotland is somehow different. We need weightier arguments on that issue than we have had.

However, I am grateful to all noble Lords who have participated in the debate. The noble Lord, Lord Howarth, emphasised the need for clarity and accountability. That is exactly the clarity that all of us who have tried to build and rebuild the devolution settlement in Wales seek. I was particularly grateful, as always, to the noble Lord, Lord Thomas of Gresford, for his incisive questioning, and, of course, to the noble Baroness, Lady Morgan of Ely, whom I affectionately earlier called the red baroness. I hope that did not cause her offence. Perhaps I called her that in the Assembly; I keep confusing the Assembly and this Parliament. I will withdraw the amendment but I give way to the noble Lord.

I propose to speak later on the water issue but the noble Lord observed that the rivers in Scotland flow straight into the sea. As a former chairman of the National Rivers Authority, I can assure him that the Solway does not flow straight into the sea; it flows from Scotland through England. We had considerable difficulties when we tried to charge the Scots for the work we did on fisheries on one side of the border, so there is not even that exception to justify the treatment. I hope we can move to simplicity and clarity in the Bill, something I have urged all along. I am grateful to noble Lords who have spoken for their clarity and brevity on this constitutional issue, in contrast to the extraordinary verbosity with which a so-called constitutional issue was addressed earlier this evening.

I do not think it is for me to comment on that. I am grateful to the noble Lord, who was a very distinguished Secretary of State and took many initiatives from which we benefited in Wales. He was certainly an extremely distinguished chair of the National Rivers Authority. I can never forget that. I recognise that there are exceptions in Scotland and in Wales. Perhaps one day we will legislate in this House in a way that removes this notion of a border between England and Wales. As a late medieval scholar, I always thought that everywhere within a 40-kilometre band of the so-called political border was the Marches. I beg leave to withdraw the amendment.

Amendment 28 withdrawn.

Clause 18 agreed.

Clause 19 agreed.

Clause 20: Transfer of Ministerial functions

Amendment 29 not moved.

Clause 20 agreed.

Schedule 4: New Schedule 3A to the Government of Wales Act 2006

Amendments 30 to 35

Moved by

30: Schedule 4, page 94, line 6, at end insert “or the Marine Management Organisation”

31: Schedule 4, page 94, line 11, leave out “(c)” and insert “Functions of a Minister of the Crown under”

32: Schedule 4, page 94, line 12, at end insert “, so far as relating to sections 4 and 4A”

33: Schedule 4, page 99, line 11, leave out from “functions” to “so” in line 12 and insert “listed in sub-paragraph (2),”

34: Schedule 4, page 99, line 14, leave out from “exercisable” to end of line 15 and insert “concurrently with the Welsh Ministers.”

35: Schedule 4, page 99, leave out lines 16 to 18 and insert—

“(2) The functions are—(a) functions of a Minister of the Crown under section 1 (size limits, etc for fish) and section 3 (regulation of nets and other fishing gear) of the Sea Fish (Conservation) Act 1967;(b) functions of a Minister of the Crown or the Marine Management Organisation under section 4 (licensing of fishing boats) and section 4A (restrictions on time spent at sea—appeals) of that Act;(c) functions of a Minister of the Crown under section 5 (power to restrict fishing for sea fish) and section 6 (prohibition on landing of sea fish caught in certain areas) of that Act;(d) functions of a Minister of the Crown under section 15(3) of that Act (conferral of enforcement powers on British sea-fishery officers), so far as relating to the sections listed in paragraphs (a) to (c);(e) functions of a Minister of the Crown under section 5 of the Sea Fisheries Act 1968 (regulation of conduct of fishing operations), so far as they relate to the identification and marking of fishing boats, and section 7 of that Act (sea fishery officers);(f) functions of a Minister of the Crown under section 2 (access to British fisheries) and section 7(1) (power to incur expenditure) of the Fishery Limits Act 1976;(g) functions of a Minister of the Crown under sections 15(1) and 16 (financial assistance) of the Fisheries Act 1981.”

Amendments 30 to 35 agreed.

Amendment 35A

Moved by

35A: Schedule 4, page 99, line 46, at end insert—

“Functions exercisable concurrently or jointly with Welsh Ministers4A_ Functions of the Secretary of State under section 272 of the Transport Act 2000 (financial assistance for inland waterway and sea freight) so far as they relate to—(a) the carriage of goods by an inland waterway that is partly in Wales, or(b) the carriage of goods by sea where the carriage concerned is wholly or partly by sea adjacent to Wales (within the meaning of that section),are exercisable concurrently or jointly with the Welsh Ministers.”

I can move it, if noble Lords would like that. Is that acceptable? The issue addressed by this group of amendments is that of the trust ports.

The Bill as drafted enables the Assembly to legislate on ports and harbours and transfers additional executive functions in respect of them from the Secretary of State to Welsh Ministers. This is in line with the Silk recommendations and the St David’s Day announcement. However, the Bill also creates a specific category of reserved trust ports which reach a certain turnover threshold on which the Assembly cannot legislate and over which Welsh Ministers cannot exercise any powers. Therefore, the Welsh Assembly is able to legislate on almost all ports, but a significant one is missing. This reservation was absent from both the St David’s Day Command Paper and the Silk report. Currently, the only Welsh port to reach the threshold stated in the Bill is Milford Haven in Pembrokeshire. The UK Government’s justification for this peculiar reservation is the strategic significance of Milford Haven as a key energy port. They point to the fact that 62% of all liquid natural gas that comes through UK ports is handled by Milford Haven and that the oil refinery and fuel storage facilities at the haven, which are dependent on the port, play an important role in securing supplies of road and aviation fuel.

That is especially odd considering that the UK Government declined to cite energy security as a policy driver for investment in Milford Haven to support the sale of the Murco refinery in 2014. It is worth noting that the trust port of Aberdeen, which could be seen to have a strategic significance equal to that of Milford Haven due to the importance of North Sea oil to the UK, is under the control of the Scottish Government. There is an element of double standards at work here. In Scotland, all ports and harbours are devolved, including Aberdeen.

Reserving the port also brings into play the danger that the UK Government could in future privatise the port authority against the wishes of the people and the National Assembly. Some have already noted their concern about the potential for asset-stripping and fragmentation, were that to occur. Removing any reservation regarding Milford Haven would safeguard from privatisation what some have called “The People’s Port”. It would also bring the Welsh Government’s devolved powers with respect to ports and harbours in line with those of Scotland, with the Silk report and with the St David’s Day announcement. I am therefore proposing amendments that would remove the concept of a “reserved trust port” from the Bill, which would enable the National Assembly to have competence in respect of all trust ports in Wales.

I should like to touch briefly on another amendment in this group, concerning coastguards. There is no rhyme or reason to discuss it here but it is included in this group. I think it is asking the Secretary of State very little to consult Welsh Ministers on the strategic priorities of the coastguard in Wales. This is done in Scotland and perhaps the Minister could comment on that.

My Lords, I support the noble Baroness’s comments. I really cannot see any shadow of logic behind the exception being given to Milford Haven. It makes no economic sense to give the Assembly the power over all the other ports but to make this the one exception. Of course, the exception hurts all the more because, by some strange coincidence, it just happens to be the largest port in Wales.

I strongly believe that Welsh devolution should not be a slavish mirror of Scottish devolution. I accept that there is a long and well-populated border between Wales and England, and it is not always the case that what is good for Scotland is good for Wales. However, I can see absolutely no reason why Milford Haven, which is about as far from the border as you could possibly get, should not be subject to the same kinds of rules to which Aberdeen is subject. It is clearly inconsistent for the Scottish Government but not the Welsh Government to be given this power, and I fear that, yet again, it is a case of Wales being treated as second class.

I also fear that we are going to come across dozens of examples—if not today then certainly in next week’s debates—of the Government simply mirroring the existing messy settlement in the long list of reservations. That will not provide the stable settlement I had hoped the Bill would achieve, and which I believe many of the Bill’s architects had originally hoped for. Therefore, I very much hope that the Government will use the opportunity between Committee and Report to think again about this issue.

My Lords, for 17 years I was the Member of Parliament for Pembroke and I had very detailed and involved discussions—and sometimes arguments—with the trust board at Milford Haven. Undoubtedly it is a strategic port. Gas imports are important, and the port’s position at the end of the oil pipeline that conveys the gas to the rest of Britain is clearly of great significance. However, from time to time I had profound disagreements with the port authorities, not least on safety matters, and I frequently urged the UK Government to interfere and take action, which on a number of occasions they were reluctant to do. The Welsh Government might be more likely to give attention to those concerns than the UK Government.

I remain completely open-minded on this issue. As I said, I understand the strategic significance but, on the face of it and on the basis of my experience, I am not entirely convinced that the job could not be done by the Government of Wales. Therefore, I will listen with considerable interest to the case made by my noble friend. I am quite prepared to be persuaded, but I think that a legitimate case is being advanced here and we need to know the exact reasons for the Government’s decision.

My Lords, I shall be brief. It strikes me that it is for the Government to make the case for Milford Haven being an exception. The natural position would be for it to be within the competence of the Welsh Government and Assembly, and a case for it needs to be made—a case that I have not yet heard.

I support the points about Milford Haven made by the noble Baroness, Lady Morgan of Ely. As she said, it handles 62% of all the liquid natural gas, but it has had other strategic existences in the past and it may well do so in the future. At one point it had a strategic position in regard to fishing due to its deep-water facility. At the time, there was the possibility of Celtic oil off the Pembrokeshire coast. In that context, Milford Haven would have been important to the economic development of the area. Therefore, taking out what should be a focus for possible future growth in Pembrokeshire seems perverse, and a strong case needs to be made for allowing that to happen.

On coastguards, many other services in Wales come under the National Assembly—one thinks of the ambulance service, for example. One would have thought that the coastguard facility would naturally have the same sorts of conflicts. Again, I would be interested to hear the Government’s case.

My Lords, Milford Haven is at the other end of Wales from me and I have never been there. However, I am very familiar with Aberdeen Harbour, having on a number of occasions rowed upstream from there as far as the main road bridge, and I have fished in the river very frequently.

There are differences and I can assist the Minister to this extent: I do not believe that oil or gas is discharged in Aberdeen Harbour, as it is in Milford Haven. However, that makes my point. It seems to me that the Welsh Government would control the standards and risks of pollution at Milford Haven in a much more hands-on way than could ever be the case in Westminster. The Minister should explain why such a distinction is made between Milford Haven and the other ports in Wales.

I support this amendment, the first of a series dealing with individual areas where the British Government do not want certain things devolved to the Welsh Government. I understand why that should be the case in some areas but the onus is squarely on the United Kingdom Government to explain why it should not be the case in others. I am not convinced that Milford Haven should be any different from any other Welsh port. If the issue is about the devolution of ports, the ports should be devolved, both Milford Haven and the rest of them. There may well be a reason but, given the general situation in regard to all these functions, as we go through them today and next week, I repeat, the onus must squarely be on the Government to explain why, under this new system of reserved powers, the Welsh Government cannot have responsibility for them.

My Lords, I apologise for being blindsided on the government amendments in this group but perhaps I may turn to them first before answering the points raised by noble Lords.

Through the government amendments we will give the Welsh Ministers new powers and more flexibility to make grants or payments to encourage freight modal shift from road to water. The Welsh Ministers are already able under Section 272 of the Transport Act 2000 to make grants or other payments for carriage of freight on inland waterways where this is wholly within Wales, but neither the Secretary of State nor the Welsh Ministers are able to award a grant for a cross-border inland waterway service. This relates to the porous nature of the water, canals and so on to which I referred earlier. Two separate grants would be needed—one for the section of waterway in England and the other for the section of waterway in Wales. The amendment will enable a single grant to be made by either or both the Secretary of State or the Welsh Ministers for a cross-border service on inland waterways. I hope noble Lords will acknowledge that that is very sensible. This already happens for rail in the mode shift revenue support scheme, which is a scheme for rail and inland waterways.

The amendment would also give the Welsh Ministers new powers to award grants or other payments under Section 272 of the Transport Act 2000 for freight services by sea to, from or within Wales. At present only the Secretary of State is able to do so. Although the waterborne freight grant scheme is a Great Britain-wide scheme, the Welsh Ministers do not currently have the same powers as the Scottish Government to award grants under it. The amendment will put that right.

Joint and concurrent powers will offer the flexibility to make awards for cross-border freight services by inland waterway and sea. They also allow for the possibility that there could be circumstances in which the Secretary of State might wish to provide support for services to or from a reserved trust port in Wales and another port in Wales.

Government Amendments 83C, 83D and 107B transfer further powers to the Welsh Ministers to allow them to make loans to harbour authorities under the Harbours (Loans) Act 1972 and the Harbours Act 1964. They enable the Welsh Ministers to make the loans out of the Welsh Consolidated Fund and they apply requirements for the loan accounts to be certified by the Auditor-General for Wales and laid before the Welsh Assembly. The effect of the amendments is to ensure that in relation to harbours wholly in Wales, other than reserved trust ports, the Welsh Ministers can fully exercise the loan-making functions currently conferred on the Secretary of State, subject to equivalent controls.

The Bill already provides for the Welsh Ministers to make loans under Section 11 of the Harbours Act 1964 to harbour authorities for works to harbours wholly in Wales, other than reserved trust ports. The first amendment will also allow Welsh Ministers to make loans to these harbour authorities to pay off capital debts, temporary loans and overdrafts as provided for by the Harbours (Loans) Act 1972.

The second amendment inserts new provisions into Section 43 of the Harbours Act 1964 which supplement the transfer of loan-making powers under the Harbours Act 1964 and the Harbours (Loans) Act 1972. These comprise giving the Welsh Ministers the power to set the repayment terms of any loans made; enabling the issue to the Welsh Ministers of sums to make the loans from the Welsh Consolidated Fund; requiring that all loan repayments must be paid into the Welsh Consolidated Fund; and requiring the Welsh Ministers to prepare annual accounts in respect of loans issued to and repaid by harbour authorities and the Auditor-General for Wales to certify and report on the accounts of the Welsh Assembly.

The noble Baroness, Lady Morgan of Ely, has tabled a number of amendments which would remove reservations for reserved trust ports from the Bill and indicated her intention to oppose that Clause 32 stand part of the Bill, which would remove the definition of a reserved trust port. Amendments 61 to 64 seek to remove reservations for and other references to reserved trust ports from Schedule 1, which reserves legislative competence for these ports. Amendments 84 and 86 to 95 seek to remove reservations for and other references to reserved trust ports from Clauses 29, 30 and 33, dealing with the transfer of the executive functions to Welsh Ministers. Clause 32 does not contain any reservations but defines the term “reserved trust port”, and its removal from the Bill would be consequential upon the amendments The Government believe that the reservations for reserved trust ports are an essential element of the Bill and therefore cannot support the amendments of the noble Baroness.

However, in the light of the comments made—particularly by my noble friend Lord Crickhowell, who obviously is well acquainted with the trust port—but without any promises, I will have another look at this issue. The point of the noble Baroness, Lady Randerson, that we should not be slavishly mirroring Scotland, is well made. We have to look at the issues specifically on the basis of the nature of Wales. It is right that this would be the only port caught within the definition by some margin—all the other ports are much smaller. Some noble Lords have said that this is just replicating the current position but that is not true because other trust ports would be transferred under the proposals in the Bill.

It is right that this is significant in relation to LNG—I have got 63% but we will not argue about 1%—and gas. It was also at one stage suggested by the current First Minister as a base for the nuclear fleet. The Government are not considering that but it gives an indication of the important strategic role played by Milford Haven. It is a deep water port of unique significance. As I say, I will have another look at the issue but without making a promise on the conclusion.

Perhaps I may clarify something. I entirely accept and understand the strategic argument but perhaps I should explain why I slightly question the aspect of safety. To give an example, the old Esso jetty, which is a mile long, stretches right across the entrance to the port into the area where all gas tankers entering the port have to pass. It is one of the most exposed parts of the port because it is close to the mouth of Milford Haven. If an accident was to happen, for example, by a gas tanker being blown on to the end of the Esso jetty—and collisions have occurred in the past with fishing vessels hitting the jetty—and an explosion occurred, it would devastate the towns and the oil refinery on the south bank and the town of Milford Haven on the north bank. It is therefore a matter of considerable interest to the Government of Wales on grounds of safety and its possible effect on inhabitants. It is an issue that needs to be considered because there is probably a case for the Government of Wales to at least be involved in some way in considering the possible consequences on the population around the haven if an accident were to occur.

I thank my noble friend for that intervention. He is absolutely right about the need for partnership working between the Government in Wales and the Government at Westminster—as happened in the past, I think he would acknowledge, in relation to disasters that happened in the port. As I said, I have also been involved with the port of Milford Haven through the enterprise zone. It is my understanding that there is co-operation with the Welsh Government at the moment, but there is certainly consultation on certain matters on the part of the port with the Government. It is, of course, important that they are fully engaged. As I have said, I will go and look at it, but without making any promises.

Amendment 98 would require the Secretary of State to consult with Welsh Ministers while setting the strategic priorities relating to the Secretary of State’s delivery, in Wales, of functions under two pieces of primary legislation: the Coastguard Act 1925 and the Merchant Shipping Act 1995. These functions are all reserved matters, exercisable by the Secretary of State for Transport, and are in practice delivered in the United Kingdom by the Maritime and Coastguard Agency, an executive agency of the Department for Transport.

The strategic priorities involved would cover decisions over subject areas such as the 24-hour search and rescue helicopter service provided by the coastguard, and the promotion of seafarer health and safety standards. “Strategic priorities” does not cover operational activities and incident response decisions, which remain the responsibility of the chief executive of the Maritime and Coastguard Agency. Such consultation would normally be effected through administrative arrangements. However, I recognise that the noble Baroness’s amendment mirrors the action taken by the Government through the Scotland Act 2016. Despite having said we will not slavishly mirror things, I will look at that and reflect on the issues raised by the noble Baroness in the amendment. In the light of that, I ask that she does not press her amendments in this group.

I thank the Minister for that and welcome the amendments he put forward relating to the modal grants, the cross-border initiatives and the loans for harbour authorities. I note he said there was an exception and that trust ports would not be allowed to access those grants. I assume they would be allowed to access other UK grants. Perhaps he could clarify that.

My Lords, I think that related just to reserved trust ports, so it would only be those that are reserved in relation to the Milford Haven issue.

I thank the Minister. I noted he said that Milford Haven was essential to the Bill. He then said that he would take another look. I ask him to think about the issues that people have underlined today. The integration of the economy, the environment and safety have all been touched on. The noble Lord was on the enterprise zone for that area. He will therefore be aware of how crucial that interactivity—the interaction between local communities and the local authority—is. All those things need to be co-ordinated. Would it not be a lot easier to co-ordinate that if that power were given to the Welsh Assembly? I appreciate that he will also look at the issue relating to the coastguard and I would be prepared to withdraw the amendment.

My Lords, on the point the noble Baroness raised on the enterprise zone, it exhibited that the current arrangements work very well, but I will have a look at it. In the meantime, I propose that the amendment be agreed to.

Amendment 35A agreed.

Schedule 4, as amended, agreed.

Clause 21: Transferred Ministerial functions

Amendments 36 and 37 not moved.

Clauses 21 and 22 agreed.

House resumed. Committee to begin again not before 8.29 pm.