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House of Lords Hansard
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14 December 2016
Volume 777

Report (1st Day)

Clause 1: Permanence of the National Assembly for Wales and Welsh Government

Amendment 1

Moved by

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1: Clause 1, page 2, line 5, leave out “There is” and insert “The law that applies in Wales includes”

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My Lords, before we begin our Report stage scrutiny of the Bill, I would like to say a few words on the wider context and timing of the Bill’s remaining stages. This House has undertaken very effective scrutiny of the Bill. On our part, the Government have listened to points that have been made and concerns raised, and have brought forward amendments where we believe this will improve the Bill’s provisions and put in place a more robust and lasting new devolution settlement. The amendments that the Government are bringing forward for debate today, and for consideration by this House on the second day of Report in the new year, are testament to this.

There is a need for the Assembly to consider an LCM on the Bill before our Third Reading, which we will certainly do. Should the Bill then be subsequently different from the one agreed to by the Assembly, a new LCM would be needed. A different Bill post 17 January would need a new LCM. I feel duty-bound to mention this difficulty and this pressure, although the attitude of noble Lords is of course entirely a matter for your Lordships’ House.

On the amendments in this first group, Clause 1 gives important statutory recognition to the existence of a body of law created by the Assembly and Welsh Ministers which forms part of the law of England and Wales. In Committee, I committed to reflect further on the spirit of an amendment tabled by the noble Lord, Lord Elis-Thomas, that sought to clarify that the body of Welsh law made by the Assembly and the Welsh Ministers forms part of the law that applies in Wales. Having done so, I am pleased to bring forward government Amendment 1, which clarifies that the body of Welsh law made by the Assembly and Welsh Ministers forms part of a wider body of law that applies in Wales. In considering the wording of this government amendment, I am extremely grateful to the noble Lord, Lord Elis-Thomas, for his wise counsel, drawing on his expertise and experience as a former Presiding Officer of the National Assembly.

On Amendment 2, a non-government amendment, noble Lords will recall that we debated a similar amendment from the noble Lord, Lord Wigley, on the first day in Committee, and this issue was also considered in some detail in the other place. It is clear that is there a strong appetite to keep under review the operation of the justice system in Wales as a result of continuing divergence in the laws that apply in England and in Wales, and to ensure that the distinctiveness of Wales is properly reflected under the settlement provided by this Bill.

The Government have been clear throughout the passage of the Bill that we consider the most effective and efficient way to administer justice in England and Wales is through a single jurisdiction. The distinctiveness of Wales can be, and indeed already is, reflected within the single jurisdiction, for example through the National Offender Management Service in Wales and Her Majesty’s Courts & Tribunals Service in Wales. This enables, for example, the National Offender Management Service in Wales to work closely and directly with the Welsh Government and with health and education providers to ensure appropriate provision of services for offenders. It allows the courts to be administered directly in Wales by staff in Wales, while ensuring that a consistent approach is taken on justice policy.

There is undoubtedly a distinctive legal identity in Wales. It has two legislatures and a small but growing body of law made by the Assembly and Welsh Ministers which lawyers and judges will have to specialise in and apply appropriately in relation to devolved matters. Even with increased divergence, the vast majority of laws will, however, continue to apply across England and Wales. A separate jurisdiction would therefore create significant upheaval and huge cost for no good reason.

In Committee, I agreed to take away the points made about establishing a commission to review the functioning of the justice system in relation to Wales, recognising the points made by the noble Baroness, Lady Morgan, that it is an evolving picture and the points made by the noble Baroness and the noble Lord, Lord Elis-Thomas, about the sources of Welsh law. But for the reasons that I have just outlined, such a review should be within the framework provided under the Bill; that is to say that it should review the functioning of the justice system in Wales within the single legal jurisdiction. I was also clear that a statutory commission would not be the appropriate solution. This would be unnecessarily costly and complex, and would be constrained in how it approached its task.

The principle of reviewing the functioning and operation of the justice system in Wales is sensible. That is why we established the Justice in Wales Working Group to consider the administrative and practical implications for the justice system of diverging law. The group will report to Ministers and the Lord Chief Justice within the next week. I wrote to noble Lords yesterday with an early overview of its recommendations, and consideration is being given as to how best to inform Parliament and stakeholders of its findings.

The group has met a range of people involved in the justice system in Wales, including the judiciary, academics, legal practitioners, professional bodies and those directly responsible for the delivery of justice, including NOMS in Wales, HMCTS Wales, Youth Justice Board Cymru and the Crown Prosecution Service. Those discussions have yielded an invaluable source of information on the current processes as well as providing sensible, pragmatic solutions for managing the justice system as the law continues to diverge in Wales. But the work will not finish there. There will be a continuing need to ensure that justice operational arms and devolved authorities work closely together to deliver effective justice in Wales, building on existing examples of good practice and co-operation.

I understand that one of the group’s main recommendations is likely to be the establishment of a committee to undertake periodic reviews of the operation of the justice system as the law continues to diverge. My right honourable friend the Secretary of State has written to the First Minister proposing that such a non-statutory group be established to keep the operation of the justice system in Wales under review on a permanent basis as the administrative arrangements continue to evolve to reflect Wales’s distinctiveness within the single jurisdiction.

The committee will have a focused remit, and will be chaired by a senior official from the Cabinet Office. It will include a representative from the Ministry of Justice and from the Welsh Government. The committee would report periodically to the Lord Chancellor, with both the First Minister and the Secretary of State for Wales receiving copies. Further consideration will be given to the membership and terms of reference of the committee, and to issues such as how regularly it will report and when it should be established. I understand that my right honourable friend the Secretary of State and the First Minister are meeting tomorrow to discuss this issue, among others. However, the committee will not consider issues relating to the jurisdiction or the devolution boundary that this Bill puts in place. I trust that noble Lords will agree that this committee provides a solid basis through which to ensure that the justice system in Wales keeps pace with the dual influence of Assembly and parliamentary lawmaking within the single jurisdiction.

I turn now to Amendment 3. Clause 2 places the existing convention on legislative consent on a statutory footing—

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I am most grateful to the noble Lord and I hear what he says about jurisdiction. If that is to be the case, can he confirm that although the committee will not deal with jurisdiction, it may make recommendations about the administration of parts of the joint jurisdiction so that, for example, a Wales division of the High Court, for instance, might be established which is separate in devolution terms from the Queen’s Bench Division of the High Court, so that the High Court could be fully administered within Wales?

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My Lords, I am sure that the noble Lord will understand that I do not want to be drawn into the specifics but, having said that, I understand that that would be within scope. As I say, my right honourable friend the Secretary of State and the First Minister are meeting tomorrow to discuss the terms of reference more fully, but as I say I understand that that would be in scope.

Again, I turn to Amendment 3, dealing with the convention on legislative consent which we are seeking to place on a statutory footing as the Government committed to do in the St David’s Day agreement. This is also in line with Section 2 of the Scotland Act 2016. The convention states that Parliament will not normally legislate on matters devolved to the National Assembly for Wales without the consent of the Assembly. Through Amendment 3, the noble Lord, Lord Wigley, is seeking to broaden the convention by removing the word “normally” from it, and I understand that he will come to address the points on this later.

The use of the word “normally” reflects the convention as it is set out in devolution guidance and its removal from the clause would fundamentally change the nature of what is understood by the convention. That is not what was recommended by the Silk commission or what was set out in the St David’s Day agreement and it is therefore not what we are doing in this Bill.

It is a fundamental principle of our constitution that Parliament is sovereign. As such, it can legislate for matters devolved to the National Assembly for Wales as it can for those devolved to the Scottish Parliament. The convention does not seek to fetter this ability. What it does is make clear that Parliament would not normally do so without the consent of the relevant devolved legislature. The inclusion of “not normally” is essential as it acknowledges parliamentary sovereignty. It also signals that it is not intended to be justiciable, because the courts would recognise that it is for Parliament to determine what is and is not normal in this context.

There may be occasions when it makes sense to legislate on a UK-wide basis. Since the convention was established, a legislative consent Motion has always been sought before Parliament passes legislation applying to Wales which, in the Government’s view, relates to the conferred matters within the Assembly’s legislative competence. I can confirm that this is part of the normal working arrangements between the UK and Welsh Governments that work well, and I expect that to continue.

I turn now to government Amendment 9. Clause 5 inserts new Section 13A into the Government of Wales Act which gives the Secretary of State the power to make regulations to combine the polls at certain Assembly elections with certain UK parliamentary elections and European parliamentary elections. The exercise of this power is subject to the agreement of Welsh Ministers. We consider that it is appropriate for the Secretary of State to be required to consult the Electoral Commission on any regulations made under Section 13A of the Government of Wales Act. This is consistent with the requirement to consult under Section 13 of that Act. Government Amendment 9 achieves this by adding Section 13A of the Government of Wales Act to Section 7(2)(f) of the Political Parties, Elections and Referendums Act 2000.

Government Amendments 10 and 105 relate to the current limit placed on the number of Welsh Ministers. Section 51 of the Government of Wales Act provides that no more than 12 persons are to hold relevant Welsh ministerial office at any time. A relevant Welsh ministerial office is defined in this section as the office of Welsh Minister appointed under Section 48 of the Government of Wales Act or the office of Deputy Welsh Minister. Noble Lords will be aware that the Bill provides significant powers to the Assembly to be able to increase its size if it so wishes. In this context, it is only right that the Assembly should also have the power to increase the size of the Executive. Amendment 105 devolves power to the Assembly to be able to modify or repeal this limit.

Amendment 10 provides that any Assembly legislation which sought to modify this limit would be subject to a supermajority; that is, it would need to be supported by at least two-thirds of Assembly Members. Given the current size of the Assembly in relation to the Welsh Government, we believe that this provides a sensible safeguard to ensure that any modification or repeal of the limit would have broad support among Assembly Members. We have worked closely with the Welsh Government and the Assembly Commission in preparing these amendments.

Government Amendment 11 is a further minor change to the provisions in Clause 13 that has resulted from discussions with the Welsh Government and the Assembly Commission. Clause 13 requires the Assembly to design and put in place accounting and audit arrangements for various devolved bodies to which payments are made from the Welsh Consolidated Fund. Taking on these responsibilities is a natural next step in the progress of devolution to the Assembly. The Scottish Parliament, under the Scotland Act, has similar arrangements. It is with that in mind that this amendment has been brought forward.

The Assembly Commission in particular has argued that the Assembly needs the same powers as the Scottish Parliament to legislate to make devolved Welsh authorities accountable for funds they receive that are derived from the Welsh Consolidated Fund. The Government have looked at this issue pragmatically and agree that this should be within the Assembly’s competence. Accordingly, having moved government Amendment 1, I shall move Amendments 9, 10, 11 and 105 in due course. I look forward to hearing from noble Lords and Baronesses on their amendments. I beg to move.

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My Lords, perhaps I may respond positively to the amendment introduced in response to the discussion that we had during our first day in Committee on the notion of so-called Welsh law. I commend the Government on their simplicity as well as their inclusiveness by invoking the terms of the law that applies in Wales and pointing to the various bodies of law that apply in Wales, which include the growing body of Welsh law produced by the National Assembly and Welsh Ministers, the law of England and Wales as enacted in this Parliament, the context of European law and the law that is made by precedents and the decisions of the courts. All that is very welcome and I am grateful to the Minister for his response.

It coincides with an equally important statement made in the National Assembly yesterday by Mick Antoniw, the Counsel General, who indicated that to pursue the greater public understanding of the law in Wales, and Welsh law as defined, he intends to instigate a project of consolidation and codification as a pilot. I warmly welcome that statement as well. Therefore, there is a willingness on the part of the legal profession in Wales and its senior government officer in the form of the Counsel General to ensure that the Law Commission’s recommendations for the creation of a dedicated legislative code office and the greater consolidation and codification in an intelligible form of Welsh law are pursued. I particularly welcome as well the decision to publish on the Cyfraith Cymru/Law Wales website further discussion and evaluation of the advantages of consolidation and codification.

That brings me to the other issue I want briefly to touch on: the ongoing response of the UK Government and the Minister to how we progress the analysis and measurement of the effectiveness of the combined jurisdictions and the administration of justice in Wales. I have seen the letter from the Secretary of State to the Welsh First Minister and I had the benefit of a short discussion before I left Cardiff this morning with the First Minister about this, but it is not for me to stand up in this House and purport to represent the position of the Welsh Government. That would be severely out of order.

What the Minister has announced in response to the discussions we have had here and elsewhere has indicated a willingness to understand that there is a balance between the sovereignty of Parliament as understood historically and the increasing democratic accountability and lawmaking potential of the National Assembly. I am looking for a way in which we can move beyond a rather sterile debate where red lines are drawn between various approaches. I am not sure that the committee or commission that the Minister is outlining goes quite far enough on the kind of road I envisage.

I also point the Minister and this House towards the remarkable case presented to the Supreme Court by the Welsh Government which emphasises that, whatever the history of the United Kingdom has been historically, in terms of the relationship between the nations, the only way to operate is by treating the United Kingdom as an association of nations that is now not so hierarchical but more equal. Therefore, in looking for ways we can work within frameworks, is it not time to try to ensure greater equality of representation on commissions, committees or working groups that study these issues? I am not sure that the chairing of a committee by a senior person from the Cabinet Office meets the case. This requires equal representation from practitioners and stakeholders in Wales and in the United Kingdom, and an independent chair.

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My Lords, I want to add one word to what the noble Lord, Lord Elis-Thomas, has just said. I very much welcome what he has told us about the intentions of the Assembly, through its Counsel General, to consolidate the laws of Wales as they emerge. I raised this point earlier in the passage of the Bill. I was a consumer once, as a practitioner. Consumers generally, whether lawyers in Cardiff, Swansea, Caernarfon, London or elsewhere, want easy access to the law of Wales as it emerges from Cardiff; otherwise, they could be sued for being negligent in the advice they give. I welcome it very much and I am grateful to the noble Lord for telling us of those intentions.

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My Lords, I have tabled Amendment 2 relating to the establishment of a justice in Wales commission. I am very pleased to hear that there has been a degree of movement by the Government on this matter. We emphasised in Committee that we were largely dissatisfied, as I think are the Welsh Government, with attempts by the UK Government to address the fact that over time there will be this increasing disparity between English and Welsh laws, albeit they will both still be dealt with under the single England and Wales jurisdiction.

We have heard about this working group and I am glad that we have had a letter to inform us of the Government’s suggestions. We have not had as much time as we would have liked to deliberate on those, but I am pleased that the Government have recognised the need for some kind of ongoing committee or representation to make sure that they are constantly taking the temperature of the changes that will be happening. We made it clear that we were unhappy with this working group; we did not think it had been thought through in agreement with the Welsh Government but had been imposed on the Welsh Government, who certainly did not feel that they necessarily needed to respect any outcomes of it. That is why we are pleased to see the move to a more equitable system in which the Welsh Government will be respected.

Whether the committee outlined by the Minister goes far enough is questionable. We wanted a commission rather than a committee, but I am not going to nit-pick on that point; it is more important to look at the purpose of this group. I am glad that the Minister recognises that there will be, and is already, a distinct legal identity to Welsh laws but a number of points need to be addressed in relation to this committee. The noble Lord, Lord Elis-Thomas, just made the point that it needs to be seen to be more independent—equidistant from the UK and Welsh Governments. We have moved from the Ministry of Justice having the chairmanship to the idea that it might be somebody from the Cabinet Office but, given that it could be chaired by a representative from the UK Government, we wonder whether it would be better to have a more independent representative chairing the committee.

However, what is more important to me is the need to be clear that the people on the committee should be senior individuals, with the independence and expertise required to carry weight with both Governments. In that sense, it is crucial that both Governments are involved in making sure that they can agree on its membership. Can the Minister give us a commitment today that that will be respected—that there will be a joint agreement on who those experts will be? I should like it to be absolutely clear that this will be an ongoing group, because the body of Welsh law is likely to grow over time. It should not be a task-and-finish group; it needs to be ongoing. I am anxious to hear the terms of reference for this group. Can the Minister give us some indication of them? Would they also be agreed with the Government of Wales? If we are not to get an independent chair, those terms of reference need to be agreed by both Governments.

I hope the Minister will listen to those few requests on this issue. I am very pleased to see that he has come a long way towards us on it. A few tiny paces further would be very welcome but there have been a number of changes, as he suggested in his opening statement. On the new definition of Welsh law and in other areas, the Government have once again kindly listened to the changes that need to be made to the Bill. I thank the Minister for that.

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My Lords, I had intended to speak in support of the noble Baroness, Lady Morgan of Ely, on her Amendment 2, but I am not sure whether she will now pursue Amendment 2 or seek to find a common way forward with the Minister. I will therefore truncate some of my comments on Amendment 2, but I also have Amendment 3 standing in my name in this group.

None the less, will the Minister confirm the permanent nature of the committee he has in mind? The noble Baroness raised that point herself. The difference between a statutory provision and an ad hoc provision is that the latter can easily run like water into the sand and disappear over time. A statutory commission not only would have the permanence that statute gives it but is also likely to have its terms of reference fairly clearly defined in an open way that people can respond to. A far greater degree of attention would also be given to drawing up the body’s terms of reference when it is set up. There is therefore a strong case for it to be a statutory body. But if it is not to be, I would certainly be interested in knowing what safeguards the Minister proposes to ensure that this is not something that is granted now but then disappears. As we know, and as I think the Minister accepts, there will be an evolving context for Welsh law and there will occasionally need to be adjustments to respond to it.

The Minister referred to Amendment 3—which, incongruously, has also been linked to this group of amendments. The noble and learned Lord, Lord Judge, the former Lord Chief Justice of England and Wales, made an eloquent and expert case, as did others, in favour of a similar amendment in Committee. Although the Government chose to ignore such expert opinions at that stage, I once again make the case that, if we are going to have a fair, equitable and lasting devolution settlement for Wales, these amendments should be supported to introduce a new reference that supports our case.

Effectively, this amendment seeks to ensure that the democratically accountable National Assembly for Wales has unquestionable authority in the areas in which it has legislative competence, whether it is primary or secondary legislation. Under the Bill, we are faced with the dangerously vague and unquestionably weak commitment that the UK Government,

“will not normally legislate with regard to devolved matters”.

As the noble and learned Lord, Lord Judge, graphically put it,

“The word ‘normally’ … is a weasel word. It does not mean anything very much in legislative terms”.—[Official Report, 31/10/16; col. 465.]

I certainly accept his guidance on such matters. Who decides what is normal? In reality, this is nothing less than ensuring that Westminster can still keep a political grip on the National Assembly and thereby on Wales. Scotland may also be afflicted with the same burden. But the Minister now has a chance to be bold—to stand up for Wales and, once and for all, to put into statute that the National Assembly for Wales has the unquestionable authority, matching its democratic mandate, to legislate on matters that are its responsibility. It has been revealed by the recent Supreme Court case regarding Brexit—the so-called acknowledgement of the Sewel convention—that the word “normally” in the Scotland Act is not worth the paper, or the vellum for that matter, on which it is written.

The Government’s Advocate-General, the noble and learned Lord, Lord Keen, only last week explained to the court that the reference to the Sewel convention in the Scotland Act was simply a political accord and should not be considered a legal obstacle to Westminster riding roughshod over Holyrood. Unfortunately, under the current circumstances, Wales will yet again be patronised by such a political accord. This is hardly a big ask. Despite the complexities of our haphazard, patchwork quilt of a constitution, this issue is quite simple: making the Assembly the authority that it should be when it comes to devolved matters.

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My Lords, I agree with the noble Lord, Lord Wigley, and my noble friend Lady Morgan of Ely. I firmly believe that a statutory commission is highly preferable to a non-statutory one. I learned that lesson many years ago when I was sorting out the problems of the various bodies that operated in mid-Wales. I introduced an Act in order to ensure that there was a statutory commission. I learned that at the feet of a very great Welshman, Huw T Edwards, who believed that a statute has permanence unless and until it is abolished. It has to make reports. This amendment deals with that issue. A report to Parliament is a great signal to anybody in that field that it has to consider and reflect on the observations of those who come before it. In due course, that report may be debated in London. That is a vital safeguard. I support very strongly the need for a statutory commission.

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My Lords, at Second Reading, I spoke in support of the maintenance of the single legal jurisdiction in England and Wales. I argued that the body of Assembly legislation can be accommodated for now within that single jurisdiction and that a separate jurisdiction would impose significant upheaval and unnecessary costs on the people of Wales, and that remains my view.

There has been a lot of change in administrative terms. There is already an administrative court to deal with judicial review and similar applications involving the interpretation of the legislation of the Assembly. However, this is a far way off from a wide separate jurisdiction. I agree with the noble Lord, Lord Thomas of Gresford, who argued that there was no need for procedural change and that the principles of statutory interpretation will remain the same. I would just continue to urge that more cases be heard in Wales.

However, although this is the position for now, I appreciate that the body of Welsh law will grow, with diverging Welsh laws over the years. My noble friend the Minister has listened to concerns that it is sensible to keep under review the functioning and operation of the justice system in Wales. I welcome his announcement that there should be a non-statutory committee— I have to disagree with the noble and learned Lord, Lord Morris—within the justice system that will undertake periodic reviews as the law continues to diverge. I believe that this is a proportionate and considered response that allows for a sensible evolution of the system.

A non-statutory review with a clear remit is the right way forward. The proposed statutory commission would have a broad remit and be unnecessarily expensive and complex to administer. Therefore the proposal from my noble friend the Minister is a sensible way through the issue. It recognises that the vast majority of laws will continue to apply across England and Wales and that there is no great appetite at the moment for a separate jurisdiction, with all the attendant cost and disruption. At the same time, it addresses the concerns of the noble Baroness, Lady Morgan, and of other noble Lords that it is important to keep the situation under review as the body of Welsh law grows and the system evolves.

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My Lords, I will speak to Amendment 2, in the name of the noble Baroness, Lady Morgan of Ely, to which I have added my name. Although the amendment does not perfectly achieve the objectives of those of us on these Benches, I welcome the opportunity it brings to debate this important issue and to allow me to place our objectives on record.

The amendment itself reflects the views of the Silk commission, which recommended that, along with the devolution of youth justice, prisons and policing to the Welsh Assembly, a review of the legislative devolution of other aspects of the justice system should be carried out over a period of 10 years. Sadly, this Bill has not gone far enough to meet any of these expectations, although we have of course seen some movement on the matter of justice today.

Let me make this point and make the opinion on these Benches clear. We have followed and taken part in the debate over whether there is a need for a separate or distinct legal jurisdiction for many years and feel strongly that, sooner or later, the current system will require substantial reform to cope with the growing distinctions between the bodies of law produced by the two Governments. However, we have been cautious over whether now is the time for Wales to have a fully separate system from England. At this stage in the devolution process, we call for a distinct legal jurisdiction for Wales, but while the English and Welsh jurisdictions are still similar, we would support sharing the judicial framework, so as not to wastefully duplicate resources. The consequential massive savings on costs, at a time when Wales would be finding its feet as a legal jurisdiction, would be valuable.

Alan Trench, who drafted a report on behalf of the Wales Governance Centre and the Constitution Unit called Delivering a Reserved Powers Model of Devolution for Wales, said:

“Establishing a Welsh jurisdiction would be a major political decision, and have cost implications if the courts were to be devolved as well”.

We share this view. Our concern is how this can or will be achieved. We cannot allow this Bill to pass to its final stages without setting up a mechanism for further discussions on this vital issue. We owe it to the Welsh Assembly and the people of Wales to begin to sketch out a road map for the future of justice in Wales—a future which will highlight the relevance of the body of Welsh law which exists now and the additional Welsh laws which the Assembly will undoubtedly pass in the future.

I welcome the contents of the Minister’s letter, which I received today, concerning the emerging findings of the Justice in Wales working group. I was particularly pleased to note its anticipated focus on a periodic review of the operation of the justice system under the framework of the Bill, and its likely recommendations on the need to be more effective in considering the distinctiveness of how justice is delivered in Wales.

I am grateful to the Minister for providing further details of the way in which these recommendations will be put into operation. I look forward to reading the details of this debate in Hansard and giving further thought to how the committee that he proposes will operate. I hope he will be able to provide us with further details about the operation of that committee.

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My Lords, I think this is an occasion on which we should not speak for more than a minute and a half, and that is my intention. I support the Government’s amendment, and I thank the Minister for his consideration, but I make it clear that I regard it as an interim statement—something that will not stand the test of time. As Welsh law develops, the case for a Welsh jurisdiction will become overwhelming. There is an old Welsh song that asks, “Who will be here in a hundred years’ time?”—“Pwy fydd yma mewn can mlynedd?”—and perhaps that is the view that one should take.

At the moment we have a Bill that gives the Assembly reserved powers. The legislative competence of the Assembly is growing, yet we have two different legislatures passing laws for the same small territory. That is a situation unique in the UK and in Europe, and it seems bound to result in confusion and perhaps, in due course, conflict.

The idea of a distinct Welsh jurisdiction is supported by the legal professions in Wales. University law departments see Wales as lacking a legal identity, which actually it had for 300 years after Henry VIII’s Act of Union, so we have to catch up with Henry VIII. The idea is supported strongly by the Lord Chief Justice, Lord Thomas of Cwmgiedd; his wording is careful but he has said that it is perfectly possible to have a single justice system with two separate jurisdictions within it. Similar views were expressed by the great Lord Bingham in his work The Rule of Law.

So this is a well-meant interim settlement, a stopgap, that will not last. There is a void in the devolution settlement and eventually we will need a permanent principal settlement, both for the sake of devolution in Wales and, frankly, for the sake of the union of the UK.

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My Lords, I shall raise two short points. One is to commend the Government’s Amendment 1 and the skilled drafting that is revealed by it. However, there is no doubt that the wording that it seeks to replace was too tightly drawn. It looked only at the legislative part of the body of law that makes up, if one likes to put it this way, the body of England and Wales and, looking into the future, following the point by the noble Lord, Lord Morgan, it was designed to follow the law of Wales itself as it built up its own common law. What was missing was an acknowledgement that there is a body of law outside legislation that applies in both jurisdictions as part of the great heritage of the common law that England and Wales has exported around the world. It would be very sad if the common-law element was not accepted. So the word “include”, as the noble Lord, Lord Elis-Thomas, pointed out, carries with it a great deal. That is not expressed at length, thank goodness, because, as he put it, the simplicity and exclusivity of the language chosen does it all for us. It is very nice to see simple language being used so effectively in legislation, so this is an excellent amendment and I warmly support it.

As for Amendment 3, I recall long arguments during discussion on the Scotland Bill—which the noble Lord, Lord Wigley, may have listened to but I am not sure took part in—when we tried to persuade the Minister, the noble and learned Lord, Lord Keen, to drop the word “normally”, but he refused. The passage that the noble Lord, Lord Wigley, quoted from what was said in the Supreme Court last week was just a repetition of the points the noble and learned Lord made in response to those who were seeking to effect that change in the wording.

I add a note of caution. Some of the justices last week picked up the point that once you put a convention into legislative form—which I think the Minister was saying was the purpose behind Clause 2—it is difficult to escape from the fact that judges will construe the wording of the legislation, because as soon as someone challenges a word in the legislative formula, someone has to work out what it means. We may find ourselves driven to the position where the judges will have to construe the word “normally”, however slippery it is.

We will know more about this when the Supreme Court delivers its judgment, because I suspect something will be said about it. I respectfully warn the Minister that if he adheres to the wording as it is, he will take with it the judgment of the Supreme Court, yet to be known, which will tell us what it really means. It may be a little more open to judicial interpretation than he suggested.

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My Lords, I thank noble Lords who have participated in debate on this group of amendments. It was a debate of considerable weight. First, I thank the noble Lord, Lord Elis-Thomas, for his kind words and agree with him about the need for institutions in general to work together, but particularly in the context he mentioned of the legislatures in Wales and here, and his comments about the work of the Counsel General for Wales, Mick Antoniw—his work is much welcomed.

I turn to points made by the noble Baroness, Lady Morgan of Ely, about the committee—it is the Government’s view that it should be non-statutory—that will look at the judicial arrangements within the jurisdiction of England and Wales. Points were also made by the noble Lords, Lord Elis-Thomas, Lord Wigley and Lord Morgan, the noble and learned Lords, Lord Morris and Lord Hope, and my noble friend Lady Finn.

First, let me reassure noble Lords that, as I think I indicated, it is intended that this should be a permanent body. We await the recommendations of the working group as to how often it should report. It has been suggested that it could be annually; others have suggested every three or five years. Let us look to see what the committee says. The Government have an open mind on this; we will await the recommendation. The important point is that it will be permanent. I accept the point made by noble Lords that this is an evolving picture; indeed, this is an interim arrangement, as the noble Lord, Lord Morgan, said. In a sense, it is interim between different reports. When the reports come, they will come with advice. It is an advisory committee, but Governments, unless there is good reason, listen to advice—and this will be advice from people with expertise in this area.

I return to the point that there is good will between the UK Government and the Welsh Government as to how this should operate. My right honourable friend the Secretary of State is meeting the First Minister to discuss this. I hesitate to say that it is a reserved area or that we feel that there is some veto on it by the Welsh Government, but we can progress only by consensus. I think it is accepted that it needs willing participation by both parties—and that is there, so let us see what evolves.

I should perhaps remind noble Lords that the LCM has not yet been passed, so if the Welsh Government are not happy with it, it will be open to them to turn it down. The LCM is not just about the fiscal framework—although that is clearly an important part—but about the Bill in general.

Welsh law is different in many respects now from English law—I recognise and accept that, and have said so myself before—but the noble and learned Lord, Lord Hope, referred to the common law of England and Wales. It is a point worth making that this is not exclusively the property of England; the common-law system belongs to both countries and will no doubt remain a bedrock of the legal system. That is what practitioners in Wales want—and what the law schools there want, so far as I can tell from my conversations. However, they recognise that this is an evolving picture, as do the Government. We need the expertise of practitioners and academics as well as the views of the Welsh and UK Governments in moving this forward. We have sought to craft something balanced. There is a general desire to do something in this area and, although opinions may differ to a degree, we are in the same territory, so I hope that this is acceptable.

I turn to the points made by the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Hope, in relation to “normally”. I accept that putting something into legislation is very different from having it as a convention. Obviously, we await the judgment of the Supreme Court for all sorts of reasons, as noble Lords know. I indicated—perhaps I should have reiterated it earlier—that we are looking at guidance notes, which will be the focus of attention after the Bill has passed. In the light of the Bill, we will obviously need to look at them anyway. I give an undertaking that we will flesh out “normally” in the context of guidance notes, which is probably a better way of proceeding than legislation.

I hope that I have covered the main points in relation to the non-government amendments and thank noble Lords for participating in this debate. I thank my noble friend Lady Finn for welcoming some of the changes that we have made, and the noble Baroness, Lady Humphreys, for her points about permanence; I certainly give reassurance on that.

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May I pursue the point that the Minister just made about the non-statutory proposal for this commission between the legislatures and the Governments of the United Kingdom and Wales? Would he like to reflect further on the nature of that proposal? When we come to Third Reading, he might be able to tell us a little more. Does he intend to publish a report from the working group in time for us to be able to discuss it further at that stage?

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My Lords, I indicated on the latter point that I certainly intended that we would publish, in some form, the findings of the group on this matter. Yes, I will reflect on what has been said and say more on Third Reading, when we will be further forward in discussions, to provide extra reassurance. I come back to the point that obviously we want to move by consensus in talking with the Welsh Government and, more broadly, with the National Assembly for Wales. Again, I remind noble Lords that the LCM is a requirement before we can move to Third Reading, so the membership of the National Assembly has to be happy with what is proposed—otherwise, presumably, no LCM will be forthcoming.

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My Lords, I apologise for not being here for the whole debate. The Minister mentioned the fiscal framework in the context of the LCM. I would be grateful if there were a prospect of that being published soon, as he kindly indicated to me, so that the House will have a chance to look at it before considering any amendments to be tabled for 10 January.

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My Lords, in relation to the fiscal framework, things continue to move in a very satisfactory direction in the discussions between the UK Treasury and Government and the Welsh Government. I certainly anticipate and hope that we will be in a position to say much more about the fiscal framework before we rise next week. That is not an undertaking, but it looks promising. If it is not the case, I will write to noble Lords and indicate the timetable.

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My Lords, it was heartening to hear that the committee can go forward only through consensus—that was a welcome commitment. I am assuming that that means that the terms of reference would be agreed by consensus as well. Can the Minister confirm that that will be the case? He also did not address the issue of the membership of the group and whether that would be agreed by both the UK and Welsh Governments. That would be welcome. It is also worth underlining that this is a matter of critical importance for the Welsh Assembly in its broadest form—not just for the Welsh Government. I know that the Government are keen to see the Bill passed, and there is a need for a legislative consent Motion. I wonder whether we can keep open that opportunity to keep talking until Third Reading, just to give the flexibility that the Government may need to ensure that they can get the legislative consent Motion.

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First, as I have said, these things are best done by consensus but it is a two- way street—both sides have to come to it in a consensual way. So I hope that that is the case when these matters are discussed subsequently.

I have gone as far as I can in relation to the discussions that are being conducted by the Secretary of State and the First Minister. They will discuss these things, and I do not want in any way to give an indication from here as to how those discussions will proceed—but I have undertaken to say more on this when we come back at Third Reading. If there is additional information in the mean time that I can convey in written form to noble Lords who have participated in the debates, I shall certainly do that. I ask the noble Lords and noble Baronesses not to press their amendments.

Amendment 1 agreed.

Amendment 2 not moved.

Clause 2: Convention about Parliament legislating on devolved matters

Amendment 3 not moved.

Clause 4: Wales public authorities

Amendment 4

Moved by

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4: Clause 4, page 3, line 24, leave out “Wales public” and insert “Devolved Welsh”

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My Lords, the amendments in this group relate to universities and public bodies. Their purpose is to address concerns expressed by universities in Wales that their classification as Wales public authorities in the Bill could have wider consequences in terms of categorising them as public authorities. The ministerial consent restrictions do not apply to legislation relating to “Wales public authorities”. This expression is defined in Clause 4 of, and Schedule 3 to, the Bill. The Wales public authorities expressly include the governing body of an institution within the higher education sector within the meaning of Section 91(3) of the Further and Higher Education Act 1992 and a regulated institution within the meaning of the Higher Education (Wales) Act 2015, other than the Open University.

I am very grateful to the noble Baroness, Lady Randerson, and the noble Lord, Lord Thomas of Gresford, for raising this issue in Committee. During our debate on their amendments, the noble Baroness and the noble Lord expressed concerns which had been raised by universities based in Wales. They sought to reverse the universities’ classification as Wales public authorities because of concerns that this might suggest that they should be classified more widely as public authorities. This was not the intention of the Government, and the relevant provisions did not purport to have any wider effect—but I had considerable sympathy with the points made, as did my right honourable friend the Secretary of State, and I agreed to reflect on the wording before Report. Having done so, I am pleased to bring forward these government amendments— I appreciate that there are many of them—to rename “Wales public authorities” as “devolved Welsh authorities”. The amendments also move universities out of the list of public authorities in Schedule 3, because Clause 4 makes it clear that the listed authorities are public authorities.

Instead, separate provision is being made for governing bodies of an institution within the higher education sector in Wales, so that they are classified as devolved Welsh authorities and the Assembly can continue to legislate in relation to them without requiring ministerial consent. At this point I should also make clear that this will not apply to the Open University, because its activities are not principally or wholly carried out in Wales. It will be a “reserved authority” and the United Kingdom Minister’s consent will be required for the Assembly to legislate in relation to the Open University.

Although we have responded to the particular concerns of universities, I should clarify that it is not our intention that the definition of devolved Welsh authorities and the list of authorities should have wider meaning. They apply only for the purposes of the Bill. Another effect of the amendments is that universities will be taken to be in Wales even if they carry out some activities outside Wales, so long as their activities are carried out principally in Wales. This is to ensure consistency with the approach taken in the Higher Education and Research Bill.

These amendments again demonstrate that the Government have listened to concerns expressed by noble Lords in Committee and, where we believe that there is good reason to modify the Bill’s provisions, we are bringing forward amendments to address the concerns. I commend the government amendments in this group and beg to move.

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My Lords, I must express our gratitude to the Government for clarifying this position. I also echo the noble and learned Lord, Lord Hope, in saying that there was some rather neat draftsmanship involved. The officials are to be congratulated on the way that this has clarified the situation.

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My Lords, I was once vice-chancellor of the University of Wales and I think that this is a distinct improvement. It will strengthen the status of Welsh university institutions and I am grateful for it.

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My Lords, I start by declaring an interest as a governor of Cardiff Metropolitan University. I echo other noble Lords by referring to Amendments 5 and 7; I am really pleased to see that the Government have clarified that they had no intention of changing the status of Welsh universities. It is a status that is rightly prized and valued, not least because it gives them charitable status, which is extremely important from the funding perspective.

Government Amendment 8 deals with the Open University, which the Minister referred to in his remarks. Does he believe that this clarification is adequate and fully addresses the concern of the Open University that it should be seen as operating equally in all four constituent countries? Obviously it would not be seen appropriately as a Welsh institution, but it does not want to be seen as an English institution. It wants to be seen as bestriding all the countries of the United Kingdom. It would therefore be helpful if the Minister could clarify that he believes those concerns are fully addressed.

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My Lords, as for expressing thanks and congratulations, may I, as the first president of Cardiff University, add to those thanks and congratulations from these Benches?

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My Lords, I thank noble Lords who have participated in the debate on the second group of amendments and I particularly thank the noble Lord, Lord Thomas of Gresford, for reminding me that I had not thanked the noble and learned Lord, Lord Hope, for his very kind comments about the drafting. Obviously they will have been picked up by the people who were responsible for that drafting, as will be the case for the drafting of these amendments.

I also thank the noble Lord, Lord Morgan, who has very distinguished service in the education sector in Wales, and the noble Baroness, Lady Randerson, for their comments. I thank my noble friend Lord Crickhowell for his kind comments, too.

On the specific point raised by the noble Baroness, Lady Randerson, in relation to Amendment 8 in this group about the status of the Open University, I have looked at this quickly, since it has been raised. I take the point that she made. I would like to take it away and have a look at it. It is open to us to do something in this regard on the second day of Report, as I think it is within the scope of the list of reserved and devolved bodies, and, indeed, mixed-function bodies, which this may well be. Therefore, I will, if I may, take that away without prejudice and have a look at it to see whether we should bring something back on the second day of Report. With that undertaking, I commend the government amendments in this group.

Amendment 4 agreed.

Amendment 5

Moved by

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5: Clause 4, page 3, leave out lines 25 to 28 and insert—

“(1) In this Act “devolved Welsh authority” means—(a) a public authority that meets the conditions in subsection (2),(b) a public authority that is specified, or is of a description specified, in Schedule 9A (whether or not it meets those conditions), or(c) the governing body of an institution within the higher education sector (within the meaning of section 91(5) of the Further and Higher Education Act 1992) whose activities are carried on, or principally carried on, in Wales.”

Amendment 5 agreed.

Schedule 3: New Schedule 9A to the Government of Wales Act 2006

Amendments 6 to 8

Moved by

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6: Schedule 3, page 96, line 16, leave out “WALES PUBLIC” and insert “DEVOLVED WELSH”

7: Schedule 3, page 97, leave out lines 27 and 28

8: Schedule 3, page 98, line 30, leave out “the Open University” and insert “an institution within the higher education sector (within the meaning of section 91(5) of the Further and Higher Education Act 1992)”

Amendments 6 to 8 agreed.

Clause 5: Power to make provision about elections

Amendment 9

Moved by

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9: Clause 5, page 6, line 21, at end insert—

“(3) In section 7 of the Political Parties, Elections and Referendums Act 2000 (Commission to be consulted on changes to electoral law), in subsection (2)(f), after “64(3)” insert “or regulations under section 13A(1)”.”

Amendment 9 agreed.

Clause 9: Super-majority requirement for certain legislation

Amendment 10

Moved by

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10: Clause 9, page 12, line 17, at end insert “, and

( ) the number of persons who may hold the office of Welsh Minister appointed under section 48 or the office of Deputy Welsh Minister.”

Amendment 10 agreed.

Clause 13: Financial control, accounts and audit

Amendments 11 and 12

Moved by

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11: Clause 13, page 15, line 40, at end insert—

“(3A) Welsh legislation may make further provision for the purpose of ensuring that devolved Welsh authorities that receive sums derived from the Fund are accountable.That provision may, in particular, include provision for a devolved Welsh authority to which subsection (1)(a) does not apply to be accountable for its expenditure and receipts in respect of functions for which it receives sums derived from the Fund.”

12: Clause 13, page 16, line 11, leave out “Wales public” and insert “devolved Welsh”

Amendments 11 and 12 agreed.

Clause 21: Transferred Ministerial functions

Amendment 13

Moved by

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13: Clause 21, leave out Clause 21

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My Lords, these new clauses and amendments in my name mainly take forward the recommendations of the Silk commission in relation to water and sewerage.

The Silk report recognised that water and sewerage devolution is a complex issue and that further work to consider the practical implications was needed. Following the St David’s Day agreement, the Government set up the joint Governments’ programme board with the Welsh Government to look at practical issues around Silk’s recommendations and the effect they would have on the efficient delivery of water and sewerage services across England and Wales. It is widely acknowledged that the devolution arrangements around water and sewerage are incredibly complex, and they are not necessarily made any simpler by devolving legislative competence and executive functions along the border. This was recognised, not least by my noble friend Lord Crickhowell, in Committee.

The Silk recommendation on the devolution of sewerage was, of course, included in this Bill when it was introduced in another place. However, these provisions would devolve sewerage policy on a “wholly or mainly” basis, and Clause 46 includes a power for the Secretary of State for the Environment, Food and Rural Affairs to intervene where an Act of the Assembly or any action or inaction of the Welsh Ministers or a public body could have a serious adverse impact on sewerage services in England. This was to mirror the equivalent existing devolution arrangements for water.

Amendment 39 will amend Schedule 7A to the Government of Wales Act 2006, which is inserted by Schedule 1 to this Bill, to devolve both water and sewerage policy as it relates to Wales. While on paper this simplifies the devolution arrangements, it will involve the unpicking of a considerable number of provisions in both primary and secondary legislation to align respective ministerial powers and duties with the England-Wales border. Clause 21 currently provides the necessary powers to deliver this aspect of Silk’s recommendations through secondary legislation by changing the extent of previously transferred provisions. Given this is quite a broad power, Amendment 40 will replace Clause 21 with an order-making power limited to making changes to previously transferred functions relating to water and sewerage. These amendments address a recommendation by the Delegated Powers and Regulatory Reform Committee in its report on the Wales Bill, and I am very grateful to the committee for its scrutiny of the Bill.

Amendment 41, tabled by my noble friend Lord Crickhowell, seeks to extend this list of “water-related” functions to include those relating to “fisheries” and “recreation”. These matters are not devolved on a wholly or mainly basis and there are no plans to change any ministerial functions on these matters using this power.

Amendment 39 also places a requirement on Ofwat to make its annual reports to the Welsh Ministers rather than just sending them a copy, as is currently the case. The Welsh Ministers will be required to lay the annual report before the Assembly and publish it. This reflects the current duty on the Secretary of State to lay Ofwat’s report before Parliament and is similar to one part of Amendment 43, tabled by the noble Baroness, Lady Morgan of Ely. The noble Baroness’s Amendment 43 also seeks to amend other provisions in the Water Industry Act 1991 as it applies to Ofwat. I appreciate that the noble Baroness will address this later. Part of the amendment would require the Secretary of State for the Environment to seek the consent of the Welsh Ministers before making directions to Ofwat outlining her priorities for keeping the activities of water companies under review. This consent would include directions relevant to reserved matters, such as those relating to competition law, insolvency, mergers and so on. This would therefore give the Welsh Ministers considerable influence over policy areas for which they do not have legislative competence or executive functions.

The amendment requires appointments to Ofwat’s boards to be made jointly by the Secretary of State and the Welsh Ministers and seeks to grant Welsh Ministers joint powers over board members’ terms and conditions with the Secretary of State. There is already a duty on the Secretary of State to consult the Welsh Ministers before making any Ofwat appointment. However, joint appointments would be unprecedented and could prove problematic where the Ministers could not agree.

Amendment 42, tabled by the noble Lord, Lord Wigley, would devolve legislative competence for all water policy, including the licensing of water supply and sewerage licensees. The Government believe that legislative competence for licensing should remain with the United Kingdom Parliament. There would be no obvious benefits for licensees or customers should the Assembly seek to introduce its own separate licensing regime for Wales.

I said in Committee that I would bring forward amendments to replace the controversial Secretary of State intervention powers relating to water. Amendments 45 and 53, tabled in my name, will repeal the water intervention powers and replace them with a power for the Secretary of State for the Environment and Welsh Ministers, to agree and lay before Parliament and the Assembly a water protocol. This will enable both parties to challenge any action or inaction by Ministers or relevant public bodies that could have a serious adverse impact on water on either side of the border. We have gone further than Silk recommends by giving the water protocol statutory backing and making it reciprocal so that the interests of water consumers in Wales, as well as those in England, are protected. However, Amendments 46 to 48, tabled by my noble friend Lord Crickhowell, seek to extend the scope of the water protocol to cover all water-related functions, not just those relating to water resources, water supply and water quality. I know that my noble friend has unrivalled expertise in this area but the amendments go much further than Silk recommends on the replacement of the existing intervention powers with a water protocol. As I have already mentioned, my noble friend appreciates the challenges around changing the devolution arrangements as they relate to Wales. I fear that the amendments are unnecessary and would no doubt be seen by the Welsh Government and the Assembly as a retrograde step.

Amendment 50 introduces new duties on the Secretary of State which, in practice, will fall on the Secretary of State for Environment, Food and Rural Affairs and on the Welsh Ministers, to have regard to the interests of water consumers across from their respective borders when carrying out their water functions. The amendment mirrors the definition of consumer interests in Section 2 of the Water Industry Act 1991. This defines the interests of consumers as being the interests of those that receive water and sewerage services from the networks of water companies. It is not affected by, and does not affect, the consumer objective set out in the 1991 Act. The new duties will require both Governments to consider the likely impacts of their policies on customers outside of their respective jurisdictions. This additional check will help ensure that, like the intervention powers, the disputes process contained within the protocol may never need to be used by either Government.

Amendment 44, tabled by the noble Lord, Lord Wigley, on the extraction of water from reservoirs, is the same as one tabled in Committee. I acknowledge the massive role that he has had in looking at this area. The Assembly already has legislative competence for environmental controls over abstractions in Wales. It therefore has the ability to introduce such a provision for Welsh reservoirs, should it require one.

The amendments in my name provide a significant package of water devolution to Wales. They deliver a stable, mature and effective devolution settlement by aligning powers over water and sewerage with the national border and replacing the Secretary of State’s intervention powers relating to water with an inter- governmental protocol. Again, this illustrates the capabilities of mature institutions developing these things together. These new arrangements are in the best interests of water consumers on both sides of the border.

I look forward to hearing noble Lords speak to their amendments. I beg to move.

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My Lords, I refer in passing to Amendment 42, in the name of the noble Lord, Lord Wigley. I spoke about it at a previous stage and explained why I did not think it was workable, and I do not propose to add to my remarks on it today. I am a good deal more sympathetic to his Amendment 44, which my noble friend said was not necessary because it could be dealt with by the Welsh Assembly Government. However, it still seems a perfectly reasonable amendment.

I will concentrate my remarks on government Amendments 40, 45 and 50 and my amendments to them. I was delighted to see the amendments in the basic form they are in. I thought that we would probably only hear at this stage about the outcome of discussions between the Assembly and the Government on the arrangements for water in a kind of informal concordat form. I am delighted that the Minister has decided to introduce them all in statute, as that seems a considerable step forward. I will explain why I think that having made that great step forward, it is rather sad that he is not making them as comprehensive and effective as they could be. I will speak from my considerable experience—not always easy in this field—as the chairman of the National Rivers Authority, when I had to deal with exactly these issues on both sides of the border.

Amendment 40, which introduces the modification of water-related functions, as my noble friend explained, refers to “previously conferred or transferred” water-related functions. However, it happens to contain an extremely useful definition, I think taken from the 2006 Act, of what water-related functions mean. Because I want to use this definition later, I inserted something in it—which it is probably not appropriate to do at this stage—because we are dealing with matters previously conferred or transferred. I think that is what the definition confines itself to, although new subsection 2B refers to,

“provisions contained in or made under this Act or any other enactment”.

I therefore raise the question of whether those words in fact apply to the matters I will refer to on the later clauses. My reason for inserting the important matters of fisheries and recreation into the definition here is not so much where it refers back to previously conferred or transferred functions but because I want at this stage to produce a definition of water-related functions, which would be extremely useful in the later clauses. I therefore leave my point with a question about the wording and a comment about why I have inserted fisheries and recreation into the definition.

When we come to the later amendments, this becomes really important. It is equally important in both the later government Amendments 45 and 50, which deal with different aspects of the management of the water environment. When we come to the water protocol, which goes into statutory form, we refer only to water resources, water supply and water quality in England, but equally, we apply the same in Wales. The great thing about the protocol and all the government amendments is that they are of benefit equally to both parties, working both ways. Therefore I do not quite understand my noble friend’s point that if we alter the Silk commission recommendation, which in my view is incomplete, we will somehow upset the Welsh Government. The reality is that the Welsh Government ought to be equally pleased.

On both this and the later amendment, which deals with the way in which we manage these affairs, it makes no sense at all to pick just one or other of the water matters. In managing the water environment and what is going on in the rivers, we are dealing with the whole package, so usefully defined by the definition I extracted from the earlier clause. I seek only to bring together and complete what seems to be an admirable, initial partial proposal from the Government to provide effective management for both England and Wales of the water environment, comprehensively, covering all the things they ought to be looking at, not just water supply and water resources but flood defence and other matters such as the purity of water supply.

I will enlarge for a moment on fisheries and recreation. Fisheries are extremely important here. The main rivers we are talking about, the Severn and the Dee, are both important fishery rivers, as important for Wales as they are for England. Recreation is important in both; recreation and fisheries are related, because canoeists can have an impact on the fishermen, and in the past there have been disagreements and quarrels between canoeists and fishermen. I am happy to say that they are usually resolved, but it may be useful for those managing the affairs to have them involved in the total package of water functions so that they can play a part for the benefit of both Wales and England.

The Government have set about doing an excellent thing in statutory form in giving partial effect to the proper management of water as it ought to be managed, on a catchment management basis, covering all aspects of water management. In a sense, they have baked a cake—I do not know whether it will be a very nice cake—but it is missing a central ingredient. My proposals are trying to be helpful and positive. They ought to be welcomed equally on both sides of the border, and I hope that the Minister will not simply reject them because Silk did not cover them adequately. That is rather a bad reason to reject them. If they can be improved on, it is our job, proceeding with statute, to do so here and now.

I therefore hope that the Minister will at least not reject what I suggest at this stage. I hope that with his usual good sense and courtesy he will say, “I will go away and consider very carefully what my noble friend has said and see if we cannot come back with something”. He may not fully accept my amendments because Governments always say that amendments drafted from the Back Benches are likely to be imperfect in some way.

I thought that I would have to criticise my noble friend’s partial set of proposals on the grounds that officials in his department have simply not given adequate thought to providing the most comprehensive and complete answer, but I find that that is not so. They were studiously obeying Silk. I know that my noble friend played a crucial role in the Silk commission and therefore the St David’s Day agreement, but I suggest that if he is to do a complete, good and effective job, he should listen to my proposals and, I hope, accept them. If he cannot do so now, perhaps he can bring them back in a new or improved form at a later stage of the Bill.

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My Lords, I am delighted to follow the noble Lord, Lord Crickhowell, whose interest and involvement in matters relating to water, and particularly water in Wales, has been known to us all for many years.

I wish to speak to Amendments 42, 44 and 49, which stand in my name and deal with water issues. I shall also speak to the other amendments in the group that impinge on these matters.

I say at the very start that, although the noble Lord, Lord Bourne, has rightly been praised for the way in which he has handled aspects of the Bill in Committee and, now, on Report, I am bitterly disappointed that we have not been able to get on to the face of the Bill substantive clauses that deal adequately with the three main issues in contention: an unambiguous statement that the National Assembly has total legislative control over all aspects of the creation of reservoirs in Wales, raised in Amendment 44; for the Assembly to have legislative control over all matters relating to water in all of Wales, with powers coterminous with Wales’s border, addressed in Amendment 42; and the unqualified removal of the powers of the Secretary of State to intervene, which I provide for in Amendment 49.

A few weeks ago, we were treated to a fanfare of triumph by the Secretary of State—whom I see standing at the back of our Chamber—who asserted that these matters had been sorted and the vexed issue finally put to bed. I welcome that statement, accepting it at its face value. Even today, I am willing to believe that not only were Alun Cairns, Guto Bebb and the noble Lord, Lord Bourne, sincere in that declaration but they genuinely aspired for these changes to happen, knowing how sensitive in Wales are matters relating to water. It would indeed have been a feather in their cap had they been able to deliver what they claimed to have achieved.

Today, at this last opportunity to get these three principles firmly embedded in the Wales Bill, we come to the reality of the situation—that they have, so far, failed to deliver on all these details. There is nothing whatever in the Bill or in any of the Government’s many amendments on Report that states unequivocally that the National Assembly has full legislative power over all aspects of authorising, building and controlling reservoirs in Wales in all their many guises. Yes, we were told in Committee that this would be contained in a protocol and, yes, Amendment 45 provides for a new clause entitled “Water protocol”, but we did not have the opportunity in Committee to see a copy of such an intended protocol and we still do not have one on Report. I assume of course that the detailed protocol will go way beyond the bare framework in this Bill to which the noble Lord, Lord Crickhowell, referred. We do not even have a draft protocol—not even an outline draft protocol—yet we are asked to confirm in legislation a provision about which we have next to no substantive knowledge whatever. We are being asked to rubber-stamp a pig in a poke.

In so doing, we are not even certain that the poke is there. Proposed new subsection (1) in Amendment 45 states:

“The Welsh Ministers and the Secretary of State may make an agreement (the ‘water protocol’) for the purpose of”—

which it goes on to define in outline but not in detail. It does not state that they “shall” produce a water protocol; it just states that they “may”—or, indeed, they may not. What a weak basis on which to build policies which the Wales Office Ministers paraded as being our salvation. There is no guarantee that there is in fact, in the murky room marked “Wales Office Water Policy”, any poke whatever. It may exist at some time; equally, it may never come into being.

Even if we have this undefined poke of a protocol, what sort of a pig do we find inside? The clause goes on to stipulate that the provisions that will be facilitated by law are to safeguard the well-being of English consumers. It gratuitously adds that the protocol may also safeguard the well-being of Wales—something that would not be needed in any protocol whatever if full control over water in Wales were in the hands of the National Assembly. It gives the impression of being a charter for the meddling by English Ministers and English authorities in matters relating to water in Wales. That is what we have suffered in Wales down the years and it is something that the National Assembly was expected to bring to an end, although now it may not be able to do so. We do not know for certain for the very reason that we do not have a protocol or a draft protocol before us to examine the implications.

One of the few things that we do know, by courtesy of government Amendment 50, which is also in this group, is that,

“‘the interests of consumers’ has the same meaning as in section 2 of the Water Industry Act 1991”.

Noble Lords will remember that that Act was predicated on the Thatcherite belief that the needs of consumers are best met by competition and the market. Well, well. So we are to have a protocol based on Thatcherite dogma that the well-being of the consumer—in this case, the water consumer—is based on free-market competition. What does that mean for the future of the water industry in Wales? We currently benefit greatly from having Dwr Cymru operating as a not-for-distributed-profit entity. If the interests of consumers, whether in Wales or England, or in those bits of Wales still run by private sector profit-seeking companies from England, are to be driven by such a vision, God help Welsh water consumers. Not only do we not have a protocol but we do not have any outline of one—no draft protocol; not even an explanation of a protocol that might have cast light on such matters.

Do Ministers really think that the people of Wales will be so gullible as to buy a pig of dubious quality in a non-existent poke, with all the details shrouded in secrecy and defined in terms that could be a back-door means of generating private profit from what Welsh water consumers pay for their water? Come on. We really deserve better than that, and if we are not to get it at this stage in the House of Lords—it looks pretty unlikely that we will—then when Welsh MPs come to deal with the Bill, they must stand up and be counted. Alternatively, the National Assembly must use every device at its disposal to insist that the Bill cannot go ahead on such a flimsy basis.

I very strongly suggest that the Minister should accept my amendments, deficient in drafting though they no doubt are, and use his Christmas holiday to bring forward his own amendments, either when the House further considers the Bill on Report in January or at Third Reading, or, if the Government need more time, then as amendments to the amended Bill when it goes forward in another place.

One thing is certain: we do not have the information needed to come to a meaningful decision on the water provisions of this Bill. We need to build in a mechanism that can provide us with a further opportunity to return to it when, it is hoped, we have a draft protocol before us and are in a position to make a meaningful decision on the matter.

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My Lords, I very strongly agree with what the noble Lord, Lord Wigley, has just said. To leave these matters uncertain and vague, and potentially as, yet again, a source of future bitter conflict, is quite contrary to what the Minister is doing in the Bill.

Two points occur to me. First, it seems that giving the Assembly authority over water is fully consonant with what we are doing in the rest of the Bill—that is, strengthening the regulatory powers of the Assembly over the natural resources of Wales. Secondly, and perhaps more fundamentally, we are—perhaps unintentionally —bypassing this enormous emotive issue in Wales. I would like it to be felt and seen by the citizens of Wales, who are not always clear on the point, that devolution is making a difference. I would like it to be felt that devolution means that there will be no more Tryweryns in Wales and no more treating with contempt the small rural communities for the benefit of others. I expect the Minister to listen with sympathy and I hope very much that the amendments of the noble Lord, Lord Wigley, will be supported.

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My Lords, to follow on from what the noble Lord, Lord Morgan, has just said, I have looked at the government amendments with some care and notice that Amendment 45, which sets out the proposed water protocol, refers to a,

“serious adverse impact on water resources in England, water supply in England or the quality of water in England”,

and, conversely, water resources in Wales. What is not contained there is the impact on the social and environmental character of Wales from any proposal that may be brought forward for the extraction of water from Wales. When the Minister referred to Amendment 44 in the name of the noble Lord, Lord Wigley—that the extraction of water from Welsh reservoirs shall require the legislative consent of the National Assembly for Wales—he said that we need not worry about that because there is already environmental law that will protect the people of Wales from the building of reservoirs that would have such an environmental or social impact. I would like the Minister to state quite clearly that there will be no reservoirs built in Wales without the consent of the Welsh Assembly. I think that that must be said. Whether it is due to the existing position or the proposals he has brought forward in these amendments, I do not care. I just want it to be absolutely clear what the position is.

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My Lords, I take exactly the same view and support completely everything that has been said by the noble Lord, Lord Wigley. I have, as the House well knows, spoken with bitterness and rancour on many previous occasions about what happened 50 years ago in Tryweryn in Wales. I make no apology for that. However, I jumped with joy when I had the impression—as I think every other Member of the House had the impression—that this matter had been settled once and for all on the previous occasion. I would have preferred it to have been included in an Act of Parliament as a matter of primary legislation, but I was perfectly prepared to accept the word of the Minister, a most honourable and splendid Minister whom we greatly admire, that this matter would be settled on the basis of a protocol. Now, it seems that that is left drifting in mid-air.

The noble Lord, Lord Wigley, speaks of a pig in a poke. I have no doubt that he is perfectly correct in that. There is no certitude at all now in relation to this matter. I feel that I acted rather foolishly when, some weeks ago, I, like many others, joined the choir of those on radio and television who revelled in the fact that this matter had been solved and a long-standing injustice had been righted. Although clearly there should be some further undertaking with regard to a protocol, I hope that the Minister will say tonight, in strict terms, that there will be no further Tryweryn—never, never, never.

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My Lords, I defer to my noble friend Lord Crickhowell’s specialist knowledge on fisheries and will restrict my comments to the general. I will also happily endeavour to follow the suggestion of the noble Lord, Lord Morgan, to limit contributions to under two minutes.

I spoke in Committee in support of reserving powers on consents for energy, on the basis that energy policy is so important as to be part of a national strategy determined by Westminster. On this occasion, however, I am delighted to support the devolution of matters relating to water and sewerage to the Welsh Government. As I hope will be mentioned today, and as was so passionately and eloquently referred to in the last debate on the Bill by the noble Lords, Lord Wigley and Lord Elystan-Morgan, this decision should put right a long-standing injustice following the flooding of the Tryweryn valley in 1965.

I welcome the positive steps that the Government have taken to put in place a comprehensive devolution settlement for water and sewerage in Wales. The amendments on this subject brought forward today reflect a clear devolution boundary on these matters. This, in turn, reflects the clearer boundary between devolved and reserved powers which underpins the new model of devolution set out in the Bill. Importantly, it includes a new statutory agreement, the water protocol, between the UK Government and the Welsh Government, setting out how they will work together in future on water and sewerage matters and how any disputes will be resolved. This replacement of intervention powers with a statutory intergovernmental agreement reflects the maturing of the relationship between the two Governments, one that is based on working together and resolving issues by discussion, rather than relying on powers of intervention. I particularly welcome the move to make this agreement reciprocal, with the same duties on the Welsh Ministers and the Secretary of State to have regard to the interests of consumers in both England and Wales respectively in exercising functions relating to water resources, water supply or water quality.

We must all hope that, as predicted by the noble Lord, Lord Wigley, on the last occasion, these decisions will be welcomed by every party in Wales and will put to rest any lingering rancour and bitterness that the tragic drowning of the Tryweryn valley created.

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My Lords, I was reflecting on how passionate and moving some of the speeches about water were in Committee, and then I remembered that we are also dealing in these provisions with sewerage, and we do not really get quite as excited about that.

I will speak to my Amendment 43, which would introduce a new clause to amend Section 27 of the Water Industry Act 1991. I acknowledge that there has been a degree of movement on the issue of Ofwat and its accountability to the Welsh Assembly. My amendment would require the Secretary of State to consult Welsh Ministers before giving general directions to Ofwat, the water regulator. Obviously, these directions would be in connection with matters relating to water and sewerage operators in Wales or where licensed activities are carried out using the supply system of water or sewerage operators in Wales. At an earlier stage of the passage of the Bill, I explained why these changes are necessary and I listened very carefully to the Minister’s reply. I have therefore changed the amendment I proposed at that point so that his concerns relating to any non-devolved areas of Ofwat functions, which he alluded to again in his opening statement today, would be taken out so that there can be no question of the Assembly interfering in areas beyond its competence in relation to giving guidance on what Ofwat should do in Wales.

It should be emphasised that we are not interested in trying to step beyond the Welsh Assembly competence here. However, we believe that Ofwat should be accountable to the National Assembly for Wales and Welsh Ministers for the function that it exercises in Wales. Without this new clause, Welsh Ministers will find themselves in the bizarre situation of regulating water and sewerage operators in Wales but with the Secretary of State being able to exercise his function of giving a general direction to Ofwat without any consultation whatever with the Welsh Ministers. We do not think that that issue has been addressed yet.

I support the point made by the noble Lord, Lord Wigley, on the need for an unequivocal statement on the face of the Bill that Wales is now responsible for matters relating to water. We have not got that and it would be good to have it. Sometimes, when it is such a politically sensitive issue, it makes sense to write it into the Bill to make sure that people understand the politics of what is going on; it is not all about law. That is probably true also in relation to reservoirs. I have heard what people have said before, and yes, the Welsh Assembly has the ability through the laws that it has even now to stop reservoirs and a future Tryweryn happening. But let us do it because it is the right thing to do, and because it is politically sensitive and something that people in Wales would really appreciate.

I will deal now with the Government’s amendments that relate to water. Noble Lords will recall, as we have just heard, the much-heralded announcement and fanfare in the media that everything was going to change in relation to water and that we were all thrilled. Yes, the idea that an intergovernmental protocol should be established on cross-border issues including water is a good thing. But it was also made clear that the Secretary of State’s existing legislative and executive powers of intervention in relation to water should be removed in favour of mechanisms under the intergovernmental protocol. The Secretary of State cannot now use those interventionist powers with regard to water. That is a good thing because we can deal with it through this protocol.

However, I return to the point made by the noble Lord, Lord Wigley. What is in this protocol? We have no idea. If no agreement can be reached on the protocol, it is possible that those intervention powers may never be removed. What will happen if there is a dispute between the two Governments in terms of what should happen in that protocol? Specifically, to whom would any disagreement be referred and how do the UK Government envisage this section would work in practice? We have no clarity on this protocol. We are clearly concerned about it.

I am also concerned about this new clause from the Government concerning the reciprocal cross-border duties in relation to water. This was not part of the Silk commission and we are concerned. We heard alarm bells ringing because of a reference to the Water Industry Act 1991, which again the noble Lord, Lord Wigley, emphasised, was based on promoting competition as the only way to secure the interests of consumers. I understand that the Minister made a reference to that at the beginning of his statement but can I be absolutely clear that this issue of promoting competition will not be enforced on Wales in this cross-border understanding? Please correct me if I have not understood—this is not about imposing competition on Wales where we do not want it in relation to water.

Scotland and England do not have cross-border operators and as such the issue in respect of consumers is not as obvious. But the Solway Tweed river basin district covers both Scotland and England and decisions either side of the border would impact on the other. I am not aware that such a requirement exists in the Scotland Act, so why do the Government propose to insert it into this Bill at such a late stage in the scrutiny process?

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My Lords, I thank noble Lords for what has certainly been an impassioned debate on an area that I agree deserves passion. I will try to deal with the various issues that have been raised. I turn first to the package of provisions raised by my noble friend Lord Crickhowell in relation to his proposals for fisheries and recreation to be brought within the definition of water-related functions in Section 58 of the Government of Wales Act as amended. I obviously listen very carefully to everything that my noble friend says on any subject, but particularly in this area, where I know he has great expertise. I will look carefully again at this area and write to him. But I return to the basic point as I see it, which is that fisheries and recreation are already devolved matters, so there is no issue in relation to intervention in those areas. To use his analogy, the ingredients of the cake have already been passed to the Welsh Government. But I will take another look at it and write to the noble Lord.

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The only thing that worries me about that is that they may have been passed to the Welsh Government when the fish are in Wales, but fish pass up and down the border, in and out of England and Wales, and affect both England and Wales—so there is an issue about cross-border arrangements.

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My Lords, as I said, I will look at the issue, but my understanding is that if the fishing is taking place in England it will be a matter for England and if in Wales it will be a matter for Wales—but I will take a more detailed look at that and write to my noble friend and other noble Lords who have participated in the debate.

I turn now to the serious issue about the protocol and Tryweryn. I have said on more than one occasion—I feel that I have said this so often—that Tryweryn is not affected by this legislation. Tryweryn could not happen now. The power in relation to reservoirs in every respect is already with the National Assembly for Wales. I could not have been clearer on that. I understand the importance of the issue as part of our folklore, but it is unaffected by this legislation. One would not expect this legislation to claim to be doing things that it is not doing. That is the basic point—although I understand the passion in relation to this area. I give that reassurance to the noble Lords, Lord Wigley, Lord Thomas, Lord Elystan-Morgan and Lord Morgan. Tryweryn cannot happen—or if it does, it is a matter for the National Assembly for Wales.

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I am grateful to the Minister, who is repeating—quite understandably—the points he made in Committee. However, I pray in aid the comments made by the noble Baroness, Lady Morgan of Ely, with regard to the benefits of having something written in the Bill. Other declaratory points are included in the Bill—for example, the permanence of the Assembly. That is a declaration and there is no reason at all why there should be not that clear declaration. But it goes further than that. It goes to the question of the total control of reservoirs in Wales—every aspect of them should be under the control of the Assembly. Is the Minister saying that they are?

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My Lords, I am saying that. The noble Lord is not often unfair, but I think that he is being unfair on this occasion. The issue in relation to the permanence of the Assembly is an aspiration and a declaration that was sought by his party and agreed by others. This is a very different issue. It is a statement of what this particular Act will do. This Bill as it is at present does not do anything in relation to the situation he is referring to—so it would be most extraordinary to claim that it did.

Turning to the broader issue of the protocol, once again I am conscious that the protocol is clearly important, but the Government have not claimed anything that is untrue or indeed misleading. We have said that the existing intervention powers will be substituted by a protocol. That remains the case. I understand noble Lords wanting information on what the protocol will cover, and perhaps some timetable for how it will be agreed, but noble Lords cannot have thought that I would be able to produce an agreed protocol at this stage of proceedings when we have only just agreed across government that this will be the way forward. I certainly undertake to write to noble Lords with a timetable for how the protocol will proceed and what it will cover, but I hope that they will accept that there has been no misleading in relation to the protocol. What we claimed is what we are delivering.

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I am sorry to intervene again—I do not want to be a nuisance—but the Bill says that the protocol “may” be introduced. Why does it not say “shall”?

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That is a drafting point. The noble Lord makes a fair point, but I can give the reassurance that there is certainly no intention on the part of the Government that this should not happen. It is something that is proceeding. I can confirm that it is the Government’s intention. We want this to happen and I believe that it will happen. I am not taking a pessimistic view of this. The noble Lord makes a fair point about the drafting, which I had not picked up—but sometimes these things are referred to as “may” and sometimes as “must”. From our point of view, we regard this as imperative.

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From what the Minister says, it seems pretty obvious that the protocol will not be in existence before the Bill receives royal assent. So one will be left with some sketch on the part of the Minister. That is not the ideal way of doing things, but I am sure that we would be prepared to accept the word of the Minister on what the basic content of the protocol will be.

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I thank the noble Lord, Lord Elystan-Morgan, for that intervention. I cannot be certain, but I anticipate that the protocol will not be decided before Third Reading on our current timetable; that is most unlikely. But as I said, I will write to noble Lords giving an indication of what it will contain and some timescale ahead of Third Reading. I hope that that will be before the second day of Report. Once again I say that I do not think that there has been any misleading on this at all. We said that there would be a protocol to replace the intervention powers. That is the intention. We have good will and we want to get this agreed. We will do it with due expedition, as quickly as we can, but it may take longer than the middle of January, which is what we are looking at. With that, I ask noble Lords not to press their amendments.

Amendment 13 agreed.

Clause 29: Transfer of executive functions in relation to Welsh harbours

Amendment 14

Moved by

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14: Clause 29, page 26, line 23, leave out “, other than harbours that are reserved trust ports”

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My Lords, I shall speak briefly to Amendment 14 and the other amendments in the group which have been tabled by the noble Baroness, Lady Morgan of Ely, seeking to devolve the trust ports to the National Assembly for Wales. I have added my name to Amendments 14 to 22.

The noble Baroness’s amendments were debated at the previous stage of the Bill, and I would like to remind the House of a point on which we were all agreed: the fact that Milford Haven is of strategic significance. It is unique in that it has a deep-water facility and handles 62% of all our liquefied natural gas, and as such it is of economic importance to Pembrokeshire. It was included in the Silk report and the St David’s Day agreement. To my mind, the reasoning behind this reservation is totally unclear. On the previous occasion, the Minister implied that the Government were unwilling to compromise on this matter, stating that reserving Milford Haven was an essential part of the Bill. He went on to assure noble Lords that he would take another look at the arguments set out and report back on his conclusions. I look forward to hearing them.

I want to reiterate that I am in full agreement that Milford Haven should be devolved. There is, however, one deeply troubling comment that I wish to raise again, and that is that Milford Haven trust port was at one stage being suggested by the current First Minister of Wales as a base for the UK nuclear fleet. He went on to say that the Government are not considering that option, but using the hosting of Trident as a way to emphasise the strategic significance of the port immediately rang alarm bells. Devolved or reserved, Trident is not welcome in Wales, and I urge both the Government and the Opposition to put on the record today that they do not intend to acquire powers in order to justify locating it there. However, I am very much in agreement with the main points made by the noble Baroness, Lady Morgan, in Committee. I beg to move.

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My Lords, I shall speak to Amendments 14 to 22 in my name and that of the noble Lord, Lord Wigley, and to Amendments 23 to 26 in my name, on the devolution of ports to Wales. The difference between my amendments and the Government’s position is that I believe that all ports in Wales should be devolved. The Bill as currently drafted does not conform with the recommendation of the Silk commission on the devolution of ports to Wales, as the noble Lord, Lord Wigley, has just emphasised.

To be fair, the Bill allows the Assembly to legislate on ports and harbours, which is a welcome move, but there remains this category of reserved trust ports on which the Assembly cannot legislate and over which Welsh Ministers cannot exercise any powers. That category seems to be arbitrarily defined by a certain turnover in relation to ports. In fact, only one port in Wales falls within the category, and that is Milford Haven in Pembrokeshire. It strikes me as very odd that the UK Government are seeking to control this one particular port.

So far, the justification given is that Milford Haven is a strategic energy port because it handles 63% of all the liquefied natural gas that comes through UK ports. As I mentioned in Committee, this justification is particularly odd as the UK Government made no attempt to cite energy security as a policy driver for investment in Milford Haven to support the sale of the Murco refinery in 2014. Equally strange is the fact that the UK Government did not seek to control the trust port of Aberdeen, which has significant strategic energy value due to the importance of North Sea oil to the United Kingdom. There are definite double standards in this. In Scotland, all ports and harbours are devolved, while Wales is once again being treated as a second-class country.

I would also argue that devolving powers over the trust port at Milford Haven is incredibly important for the economic development of the area, and it should be within the power of the Assembly to help promote growth in Pembrokeshire. It is the Assembly which has responsibility for economic development.

Some powerful points were made in Committee by noble Lords, including one by the noble Lord, Lord Crickhowell, on the issue of safety at the port. Indeed, the very fact that so much fuel comes through the port makes safeguarding an essential issue. The emergency services, both ambulance and fire, are already devolved. I want noble Lords to recall the “Sea Empress” oil tanker, which in 1996 ran aground just outside the port of Milford Haven. Protecting our environment is equally as important as the safety issues, as is the policing of the legislation for both safety and the environment at the port. In order to have a truly holistic response to accidents, whether on safety or environmental grounds, it should be acknowledged that one umbrella of responsibility makes more sense.

Noble Lords can imagine that, if an accident such as that involving the “Sea Empress” happened today, there would be a great deal of passing the buck between the UK Government and their accountable body, the port authority, and the Welsh Government, who are responsible for environment and safety. This was not an issue in 1996 because the Assembly did not exist. I am always concerned that, when there is not an absolutely clear line of responsibility, where does the buck stop? In a case like that of the “Sea Empress”, noble Lords can imagine how the bodies would pass the responsibility for it between each other for years.

The interrelated issues of the economy, the environment and safety, together with the interaction of local communities and the local authority, all need to be co-ordinated. Surely it would be easier and more effective to co-ordinate them at the Wales level. I hope that the Minister will reconsider this point and allow the port at Milford Haven to come under the control of the Welsh Assembly, as recommended by the Silk commission.

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My Lords, it really rankles that, yet again, something which is taken for granted in Scotland is viewed as not appropriate for the Welsh Assembly and the Welsh Government. There is no logic to this decision. There might be an excuse, but that is different from logic. There is every reason to take a comprehensive approach to managing the ports in Wales on very good strategic and economic grounds, along with developing a strategy in relation to them as a whole. Moreover, as the noble Lord, Lord Crickhowell, mentioned in Committee, there is the importance of the safety aspects of this issue. So I would say to the Minister, who I realise understands only too well the importance of ports to the Welsh economy and who understands extremely well the economy of that part of Wales, that even at this late stage of our consideration of the Bill he should give this matter further thought and come back at Third Reading.

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My Lords, I had not intended to intervene again on this issue. I have long experience of dealing with the port authority and sometimes the relationships were very good. One particular person was running the authority during my early years as the local MP with whom I had an absolutely first-class relationship. However, they were not always as good. What people ought to understand about the port authority is that it will not be the Welsh Government, or indeed the UK Government, actually operating and controlling things; that is very much for the port authority, which has extensive powers. I once had a profound disagreement with the authority over a campaign that I and others fought on the safety issue because we were deeply concerned about some of the actions being taken not by the Government but by the port authority for its own commercial or other reasons.

I wonder whether there is not some solution here. I understand entirely the crucial fact that the gas terminals are at the end of pipelines that carry gas into England and form an important part of our energy package. Surely it would be possible for some agreement to be reached by the Government with the Welsh Assembly that would take the authority for dealing with the strategic link and the gas facility out of the specific responsibility of the Welsh Government and make it a separate strategic effort, while somehow allowing the Welsh Government much more involvement for the reasons that have been outlined in the handling of such matters as safety within the port.

The fact is that the town of Milford, the oil facilities and the people who live around them on the south of the haven, as well as Neyland and Pembroke Dock, are all close to areas where, if an accident occurred, the impact would be enormous on the local population. So there is a real issue here, and I have a good deal of sympathy with the view that these matters should not necessarily be in the hands of a trust port whose powers were established a long time ago in very different circumstances. I wonder whether the powers and authority of this port should not be looked at again, perhaps jointly, by the Welsh Government and the UK Government, because there are practical issues here that go back to the original creation of this facility, when the circumstances were wholly different.

I understand the vital strategic issue, which needs to be covered and dealt with adequately, but I hope that the Government will give at least some further thought at some stage—whether they can do it during the passage of this Bill I am not sure—to the way in which these issues are managed and handled in the port of Milford Haven.

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My Lords, following that very interesting contribution from the noble Lord, Lord Crickhowell, perhaps I may ask the Minister to explain exactly how all the other issues to do with Milford Haven port are devolved to the Welsh Government. Economic development—which is crucial in the area—environmental questions, safety issues and matters relating to the sea are all devolved, yet, uniquely, Milford Haven port is excluded. If the sole reason for that is the energy question—one can understand the strategic importance of the LNG capacity there—surely the vehicle to address that might be a protocol. Since the Minister has wheeled out the protocol—I do not mean that pejoratively—in a way that is meant to satisfy the legitimate demands for control over water within Wales, why could that not be the vehicle for addressing the strategic energy question, while ensuring that the Welsh Government have full control over Milford Haven as they have over all other ports?

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My Lords, I thank noble Lords who have participated in the debate on these amendments. Obviously, the Government have some amendments in this group as well, which I will move in due course.

Amendments 14 to 26 and Amendments 86 to 89 are opposition amendments. We debated amendments that were very similar to Amendments 14 to 26 and Amendments 86 to 89, tabled by the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Wigley, in Committee on 7 November. The amendments would remove the reservation of reserved trust ports from the Bill and so transfer functions to the Welsh Ministers and devolve legislative competence for these ports to the Assembly in the same way as the Bill does for other ports wholly within Wales.

During that debate, in light of our discussion and the points raised by noble Lords, I undertook to take another look at the reservation of reserved trust ports without prejudice—that is, not saying that I would come along with revised proposals. I am now convinced of the strategic case for excluding Milford Haven and will seek to explain why.

Trust ports have unique governance arrangements. They are run by independent statutory bodies whose role is to manage, maintain and improve a harbour. Trust ports operate on a commercial basis, generally without financial support from government. Harbour authorities for trust ports have no shareholders but are accountable to, and run for the benefit of, their stakeholders, who include port users, local communities and local economies as well as local government and national Governments. Any profits are reinvested by the harbour authority in the port for the benefit of those stakeholders. Indeed, it is the duty of a trust port board to hand on the harbour to succeeding generations in the same or better condition. There are five trust ports in Wales, at Caernarfon, Milford Haven, Neath, Newport and Saundersfoot.

In light of the unique governance arrangements that I have just outlined, the Government believe that trust ports that have a nationally significant role in Wales should continue to be accountable to UK Ministers, which is what the reservation of reserved trust ports in the Bill achieves. During our debate on 7 November, all noble Lords who participated were in agreement about the importance of the port of Milford Haven. The significant volume of liquid bulk cargo—that is, oil and oil products, and liquefied natural gas—passing through the port each year is a clear testament to that. The oil refinery and fuel storage facilities at Milford Haven, which are dependent on the port, play an important national role in securing supplies of road and aviation fuel in Wales and England.

Perhaps I may at this stage take issue with something that the noble Baroness, Lady Morgan, stated in relation to the Murco refinery. I am in a position to say something from direct experience because I was chair of the Haven Waterway Enterprise Zone when the Murco refinery was threatened with closure, which sadly came to pass. The two Governments, the Government in Wales and the Government at Westminster, worked closely and amicably in relation to this; there was no disagreement. As chair of the enterprise zone, I had frequent discussion with the Department of Energy and Climate Change, as it was at the time, and the Minister there. There were also discussions with the relevant Welsh Minister. It was all perfectly amicable. So on matters relating to Milford Haven, I would not want noble Lords to think that the two Governments are always at loggerheads on these issues; that was certainly not the case in relation to the Murco refinery and on other issues that came up while I was chairman there over a period of some two years.

It is because of the importance of the oil refinery and fuel storage facilities at Milford Haven, dependent on the port, that we take the view that it is of strategic significance. The turnover threshold in Clause 32, referred to by the noble Baroness, is used to determine which trust ports in Wales are reserved trust ports and is based on a turnover threshold in the Ports Act 1991. Although the context is different, it seemed to be a suitable test for determining which trust ports in Wales are nationally significant and so should be reserved.

I accept—I note the spirit of contributions made by the noble Lord, Lord Hain, and others—that Welsh Ministers will remain a very important stakeholder for Milford Haven given their devolved responsibilities for other matters, such as for economic development, surface transport and marine licensing. I say once again that it is wrong to anticipate that every time a serious issue arises the two Governments will not work together. I refer noble Lords by way of example to the situation in relation to foot and mouth. That would no doubt be the case if there was some national emergency involving both Wales and the rest of the United Kingdom. The two Governments would work successfully together again where there was a need for it.

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In that case, if the Minister is saying that the two Governments would work together anyway in the common interest of both Wales and the rest of the UK, why would that not apply also in the case of the strategic energy question?

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My Lords, if I have understood the point correctly, this is in the context of our firm belief that the port is of strategic UK significance but that there are occasions when it is absolutely right that the Welsh Government need to be involved. They are a significant stakeholder in the port at the moment and—again, I can speak from experience of chairing the enterprise zone—are involved very much in issues there. It is not that the two Governments were at loggerheads; that is far from the case. It seems that we always anticipate that the two legislatures and the two sets of Ministers will always be at each others’ throats; that is far from the case. These two mature institutions very often—indeed, most often—work very successfully together. That is the point I am seeking to make.

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My Lords—

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May I just develop this point? I remind noble Lords that the rule on Report is that they should speak only once—but I will give way since I am sure that it is a relevant contribution. I shall write to noble Lords on issues that have been discussed to explain how the relationship with the Welsh Government works, the matters they are involved in and, perhaps, how we can move that forward to ensure that we have harmonious relationships.

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I am grateful. Incidentally, that was an intervention, not another speech. If the Welsh Government and the UK Government will not be at loggerheads on things, why would the Welsh Government be at logger- heads with the UK Government on the supply of LNG, which is just as important to Wales, proportionately, as it is to the rest of the UK? I do not understand the logic of the Minister’s point.

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My Lords, we could disagree on this issue until the cows come home but the basic point, which I think the noble Lord would accept, is that some matters are rightly retained as reserved matters for the United Kingdom Government while other matters are appropriate for the Welsh Government. It is our belief that the significance of this port in UK terms means that this should be a reserved port and not a devolved port. We disagree on that, but that is the basis on which we are moving forward, recognising that the Welsh Government have a role to play in relation to Milford Haven—a role that they fulfil at the moment. As I say, I will endeavour to ensure that I write to noble Lords to explain how that relationship is working at the moment.

In our debate on 7 November, some noble Lords questioned the matter of the devolution of strategic ports in relation to Aberdeen, which has been cited, quite appropriately, I acknowledge, in relation to Scotland. That was, of course, a devolution arrangement that was put in place in 1998. The Government’s thinking has developed since then and the Wales Bill includes the important concept of reserving to the United Kingdom Government trust ports that are nationally significant. I repeat to the noble Lord, Lord Hain, and others that that is the reason we seek to retain Milford Haven as a reserved port.

Government Amendments 27 to 35 are concerned with reciprocal requirements for the consent of the Secretary of State and the Welsh Ministers imposed by Sections 42C and 42D of the Harbours Act 1964. These requirements relate to harbour orders and schemes made under that Act which amend existing harbour orders and schemes made by the Secretary of State or the Welsh Ministers. The amendments are needed because the consent requirements are not consistent with the new devolution settlement for harbours in Wales set out in the Bill.

The amendments remove the reciprocal consent requirements. The transfer of harbour functions to the Welsh Ministers in the Bill will mean that the Welsh Ministers, not the Secretary of State, will exercise these harbour order and scheme-making functions for all harbours wholly in Wales, apart from reserved trust ports, which I shall refer to as “devolved harbours”. This would cover issues such as improvements to harbour facilities in relation to devolved harbours. The Secretary of State or his delegate could make such orders or schemes relating to devolved harbours only in very limited circumstances. In all such cases, the Secretary of State or his delegate will have a duty to consult the Welsh Ministers before making such a scheme or order, including under new provisions in the amendments.

Also, it would be unduly restrictive if Welsh Ministers were required to obtain consent from the Secretary of State when making, for example, a harbour revision order for a devolved harbour that alters the effect of a harbour revision order made for the harbour by the Secretary of State before the new devolution settlement. Other amendments in the group contain consequential amendments applying to Clause 36—provisions supplementary to Clauses 34 and 35—covering the Secretary of State’s new consultation obligation introduced by the amendments.

Lastly, Amendment 31 removes wording from Clause 36(1) which carries an exception from the duties to consult where consultation is not reasonably practicable. This amendment has been requested by Welsh Ministers.

Government Amendments 54 and 110 to 114 fulfil a commitment I gave in Committee to examine further the fisheries management functions being transferred to Welsh Ministers to regulate fishing vessels outside the Welsh zone. Amendment 54 introduces a new clause that transfers additional fisheries management functions to Welsh Ministers. The functions replicate, to a large extent, those already exercisable in the Welsh zone which were transferred under the Welsh Zone (Boundaries and Transfer of Functions) Order 2010. The effect of the amendments is that Welsh Ministers will have available to them the functions they require to manage Welsh vessels wherever they are. They also preserve the United Kingdom Government’s requirement to retain a symmetry between the concurrent functions available to the Secretary of State in relation to Scottish and Welsh fishing vessels operating outside their respective zones. Welsh Government officials worked with their colleagues in the Wales Office and in the Department for Environment, Food and Rural Affairs to recommend these amendments, which we are pleased to present.

Finally in this group, Amendment 55 requires the Secretary of State to consult Welsh Ministers while setting strategic priorities in relation 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. In practice, each of these functions is carried out by the Maritime and Coastguard Agency, an executive agency of the Department for Transport. While day-to-day operational and incident response decisions are, quite properly, the responsibility of the chief executive of the Maritime and Coastguard Agency, the Secretary of State is responsible for setting its strategic priorities. Areas covered include the 24-hour search and rescue helicopter service provided by the coastguard and the promotion of seafarer health and safety standards.

Noble Lords will be aware that statutory provision has been made for consultation between the Scottish Government and the Secretary of State in the Scotland Act 2016, and in Committee I agreed to reflect on the case for making similar provision for Wales, in line with the amendments brought forward in Committee by the noble Baroness, Lady Morgan, and the noble Lord, Lord Wigley, and by the Smith commission in respect of Scotland. I am pleased to say that we can make such provision, and this amendment is the result. I commend the government amendments in this group and urge noble Lords not to press their amendments.

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I thank those who have taken part in this debate, including the noble Baronesses, Lady Morgan and Lady Randerson, the noble Lords, Lord Crickhowell and Lord Hain, and, of course, the Minister. On Milford Haven, I think that there is a feeling across the House that there is a greater role for the National Assembly and the Welsh Government in this matter, particularly when one considers that they have responsibility for the safety and civil emergency aspects. There are questions of coherence in manpower planning, in transportation and road planning and in the economic infrastructure of the whole area. None the less, we note the points that the Minister made and it appears that we will have to agree to differ on this. I thank the Minister for government Amendments 54 and 55 on fisheries, which are a response to amendments we tabled in Committee and which will be welcome in Wales. On that basis, I beg leave to withdraw the amendment.

Amendment 14 withdrawn.

Amendments 15 and 16 not moved.

Clause 30: Transfer of executive functions: amendments of the Harbours Act 1964

Amendments 17 to 22 not moved.

Clause 32: Reserved trust ports

Amendment 23 not moved.

Clause 33: Development consent

Amendments 24 to 26 not moved.

Clause 35: Cross-border exercise of pilotage functions

Amendment 27

Moved by

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27: Clause 35, page 30, line 46, at end insert—

“( ) Where the Secretary of State or the Welsh Ministers have made an order under section 42A of the Harbours Act 1964 delegating the function of making a harbour revision order, the duty in subsection (1) or (2), so far as it relates to the function mentioned in subsection (4)(c), applies to the delegate as it applies to the Secretary of State or the Welsh Ministers.”

Amendment 27 agreed.

Amendments 28 and 29

Moved by

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28: After Clause 35, insert the following new Clause—

“Exercise of functions in relation to two or more harbours

(1) Where—(a) a Minister of the Crown proposes to exercise a relevant function in relation to two or more harbours, and(b) at least one of those harbours is a harbour that is wholly in Wales and is not a reserved trust port, the Minister of the Crown must first consult the Welsh Ministers (except where section 36(1) applies).(2) Where a Minister of the Crown has made an order under section 42A of the Harbours Act 1964, the duty in subsection (1) applies to the delegate as it applies to a Minister of the Crown.(3) In this section—“relevant function” has the same meaning as in section 34;“reserved trust port” has the meaning given in section 32;“Wales” has the same meaning as in section 34.”

29: After Clause 35, insert the following new Clause—

“Consequential amendments to consent requirements in Harbours Act 1964

(1) In section 42C of the Harbours Act 1964 (consent of Welsh Ministers for certain orders and schemes), after subsection (2) insert—“(2A) The references in subsections (1)(c) and (2) to a statutory provision of local application do not include a harbour revision order, a harbour empowerment order or a harbour reorganisation scheme.”(2) In section 42D of that Act (consent of Secretary of State for certain orders and schemes), after subsection (2) insert—“(2A) The references in subsections (1)(c) and (2) to a statutory provision of local application do not include a harbour revision order, a harbour empowerment order or a harbour reorganisation scheme.””

Amendments 28 and 29 agreed.

Clause 36: Sections 34 and 35: supplementary

Amendments 30 to 35

Moved by

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30: Clause 36, page 31, line 28, leave out “or section 35(1) or (3)” and insert “, section 35(1) or (3) or section (Exercise of functions in relation to two or more harbours)(1)”

31: Clause 36, page 31, line 30, leave out from “function” to end of line 31

32: Clause 36, page 31, line 32, leave out “or section 35(1)” and insert “, section 35(1) or section (Exercise of functions in relation to two or more harbours)(1)”

33: Clause 36, page 31, line 40, leave out “or section 35(1) or (3)” and insert “, section 35(1) or (3) or section (Exercise of functions in relation to two or more harbours)(1)”

34: Clause 36, page 31, line 44, after “35” insert “, (Exercise of functions in relation to two or more harbours)”

35: Clause 36, page 32, line 10, leave out “or 35” and insert “, 35 or (Exercise of functions in relation to two or more harbours)”

Amendments 30 to 35 agreed.

Clause 37: Development consent for generating stations with 350MW capacity or less

Amendment 36

Moved by

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36: Clause 37, page 32, line 32, leave out “350” and insert “2000”

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My Lords, here we go again. I rise to move Amendment 36 and to speak to Amendment 37, which is coupled with it. I shall speak to Amendment 60 a little later.

I welcome the Minister’s acknowledgement in the previous stage of the Bill that the limit placed on energy projects is in fact arbitrary. However, he failed to outline in any way why such a low arbitrary limit is necessary. I am sure that I will catch his eye, or his ear, in a moment so that he will be able to respond to that point in due course. The Minister rightly made the point that if you have to put a limit somewhere it will always, in some respects, be arbitrary. An obvious solution is to remove the limit altogether, as is the case in Scotland. Does he not think it bizarre that the Government are happy to use words such as “arbitrary” to justify their imposition of a regime which means that Welsh people will not decide how and when Welsh resources are developed? I do not want to replay the battles already fought. However, I am keen to respond to some points that he made during our last discussion on this matter.

First, as he knows well, and as I have already made clear, the Silk commission serves as no cover to justify the failure to enhance the Bill, since the Government have blatantly ignored unanimous Silk recommendations on other matters. The Minister cannot have it both ways. Although I accept that the 350 megawatt limit was agreed in the cross-party commission, that was in the context of an understanding that other parties would support the devolution of a range of policies in other areas and part of a carefully constructed compromise, as he will well recall, several aspects of which are now being sidelined. The Government have ignored the recommendations of the commission on policing, youth justice and rail infrastructure, among other areas. Just to cherry pick from the commission’s recommendations makes a mockery of the process.

Secondly, I am pleased that the Minister has agreed that I was right to highlight the absurd situation of the tidal lagoons, which means that the already approved 320 megawatt Swansea Bay lagoon would be within the threshold, while almost all the other proposed lagoons would not be within the competence of the Assembly. That makes it impossible for the Assembly to develop a coherent expertise, recognised by all people in such matters. Since we already have projects on the stocks in this area and close to each other in size, it really begs the question: seeing that it is arbitrary, why should it not be so at a slightly higher level?

I do not agree with the Minister that the 350 megawatt limit is the only way to do things, as he said, even when it comes to tidal lagoons. He justified the arbitrary 350 megawatt limit by intimating that some strategically important energy projects were not safe in the hands of Wales—at least, that was the implication. Of course, it is the policy of my party that the people of Wales should decide on how all its resources are utilised, regardless of technology or size. However, I emphasise that the Minister need not be concerned about strategically important energy projects being scuppered by Wales. Nuclear energy is already listed in the reservations. A limit well in excess of 2,000 megawatts would still fail to capture much of what is considered as strategically significant by way of energy generation. Fundamentally, a more sensible and pragmatic approach to these energy limits would create a clear, lasting devolution settlement. Even more importantly, in practical and pragmatic terms it would be easier for the developers and for the expertise within the Assembly.

The amendments in my name, unlike the previous ones tabled by Plaid Cymru MPs, recommend a 2,000 megawatt cut-off offer. This would still not encapsulate many of the projects which I had hoped the Government would recognise should be decided on by the Welsh people. But I hope that it offers a more amenable arbitrary limit—yes, arbitrary, as the Minister put it—which would increase Welsh people’s ability to decide how Welsh resources are utilised and give the Assembly a coherent role. The 2,000 megawatt figure, although undoubtedly arbitrary, has been inspired by the Labour amendment in Committee; I readily acknowledge that it proposed the same figure. I therefore hope that I can count on their support for this amendment. Can the Minister outline how any arbitrary limit, be it 350 megawatts or 2,000, can be increased without the need for primary legislation in a pragmatic and sensible fashion, or adjusted in any way that circumstances require, to ensure that we get to a point where Wales’s natural resources are decided on by Welsh people to the maximum possible extent?

Amendment 60, which stands in this group, is on a totally different matter but that is how the group has been put together so I will speak to it now. It deals with the devolution of the Crown Estate to Wales, as is the case in the Scotland Act 2016. The Crown Estate is not currently accountable to the people of Wales. All profits from its holdings are passed to the UK Government. These profits are likely to grow substantially, mainly on account of the demand for renewable energy, and Plaid Cymru firmly believes that the ownership of and control over the Crown Estate in Wales should be transferred to the Welsh Government, as indeed is the case with those in Scotland and the Scottish Government.

I have tabled this amendment in the wake of the recent announcement about spending £369 million on refurbishing Buckingham Palace, funded by an increase in the sovereign grant. Profits from the independent property business of the Crown Estate go to the Treasury, which in turn gives 15% of the sum to the monarch in the form of a sovereign grant for official duties, which this year will total £43 million. The trustees say that the grant should be raised to 25% of these profits to pay for the repairs. I cannot see on what basis of logic or equity we in Wales should forgo the energy revenue potential to pay for such expensive projects, but be that as it may. At present, the Crown Estate receives the financial rights of the Crown in Wales from fishing, mining, oil and gas exploration, tidal and wave power, wind farms and gold and silver, as well as all energy and resources within the territorial waters and borders designated to Wales. It is as if we still live in an imperial time, with an imposition on our natural resources to subsidise in some way the monarchy.

It is true that the devolution of the Crown Estate to Scotland was recommended by cross-party consensus in the Smith agreement, whereas the St David’s Day process found no similar consensus in respect of Wales. I question the Government’s logic, however, when they use omissions in the Silk commission to justify not devolving a policy area and then ignore recommendations to devolve policy areas at their own discretion.

During the year ended March 2016, the Crown Estate in Wales generated £10.5 million in revenue and its capital value is almost £100 million. In Wales, this includes: the Gwynt y Môr offshore wind farm; the marina in Deganwy and Conwy; the Morfa developments in Swansea; 3,238 acres of farmland; 66,470 acres of common land; and 245,000 acres with amenity rights, and much more. It is high time that the power over Welsh land and coast rested in Welsh hands in our National Assembly, with the income used for the benefit of the people of Wales.

Wales was once the leader in carbon-based energy and it is clear that we have the potential to be world leaders again in renewables. Wales is well placed to thrive from the increasing global demand for renewable energy. A recent report by RenewableUK Cymru estimates that the current pipeline of onshore wind projects will generate £2.3 billion of GVA and more than 2,000 full- time equivalent jobs per year. Our 1,200 kilometres of coastline, our deep sea ports and our university expertise in both north and south make Welsh waters particularly valuable to the marine energy industry, which is estimated to be worth up to £3.7 billion to the UK economy by 2020. At the moment, Wales is unable to profit from this huge potential. The country’s ability to do so is constrained by the rules set here at Westminster. Increasing the arbitrary limit on the Welsh Government’s energy competence, which I discussed in my earlier amendment, is one key to the people of Wales seeing greater benefit from this potential. Devolving the Crown Estate is another way of freeing some of those constraints.

In his evidence to the Silk commission, Dr Richard Cowell of Cardiff University suggested that,

“bringing ownership of the Crown Estate in Wales to the Welsh Government might enable a better quality of debate about the kind of off-shore renewable energy development pathway that is appropriate for Wales, and open up discussion on how the royalties from resource exploitation should be best invested”.

I hope the House will agree that devolving the Crown Estate would be a step towards fully harnessing the potential offered by Wales’s natural resources, and will offer a gateway to a prosperous renewables-focused future, encouraging us to do more to help ourselves by utilising our own resources for the benefit of our people. I beg to move.

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My Lords, I shall speak to Amendments 57 and 58, which seek to amend government Amendment 56. These amendments have been bizarrely grouped with the amendments to which the noble Lord, Lord Wigley, has just spoken. These amendments are about fixed-odds betting terminals. We were really pleased when the Minister suggested in Committee that he would be minded to devolve the regulation of fixed-odds betting terminals in Wales, and we are grateful that an amendment has been tabled by the Government on this issue. However, a detailed reading of the amendment reveals that it does not go nearly far enough in addressing the issue of concern to us.

The government amendment will enable the Welsh Government to address fixed-odds betting terminals in Wales under the Gambling Act 2005. It states that Welsh Ministers may legislate for the number of machines in the betting establishment for which the maximum stake exceeds £10. In other words, the only machines that would come under this provision are those where you have to spend at least £10 every time you play. At least, that is my understanding of the Government’s amendment; perhaps the Minister will correct me if I am wrong on that point.

Under the current Gambling Act, up to four machines are authorised per betting premises. Our amendment would enable the Welsh Government to make laws that would affect machines where anything over £2 could be gambled. I am not saying that we need to regulate the 2p slot machines in Nessa’s Slots in Barry Island where, like thousands of others, I frittered away my coppers in years gone by, but we need to lower the amount that can be gambled at a time. This is something which has exercised many experts in the field. We are aware that a review of betting machines is being undertaken by the UK Government, and this issue has been taken up by the All-Party Parliamentary Group on Fixed Odds Betting Terminals. There seems to be all-party support to reduce the maximum bet to £2. Will the Minister give us an assurance that the amount could be reduced if the matter is devolved? It would be good if the Minister could indicate that to us. If the amount could be amended here, that would be the ideal situation, but if not, will he give us an indication about how it could be done in future?

However, that is not my biggest concern with this amendment. My real concern with the Government’s amendment is that it would apply only to new betting premises. In other words, all the betting shops that exist in Wales today would be entirely unaffected and the Welsh Government would have no powers whatever over fixed-odds betting terminals currently in Wales. I know what the Government will say. They are going to say that that is what the Scotland Bill said. That is not good enough. Just because the SNP was not keeping an eye on its Bill does not mean that we will wave this Bill through when it is fundamentally flawed. It is important that we take note and the Scots should take note as well. They were not keeping an eye on their Bill. They flagged through the Henry VIII clauses as well. A message should be given to the SNP that it should step up and keep an eye on things.

Gambling is causing massive social, economic and health problems in Wales, and we want the tools to deal with them. Research conducted by the Gambling Commission identified 1.1% of the Welsh population as problem gamblers. Figures show that nearly one-fifth of problem gamblers in the UK have reported debts of between £20,000 and £100,000, while counselling sessions increased by 29% between 2013 and 2015. This is happening now, it is an epidemic and we need to do something to stop it. These machines are phenomenally popular. It is estimated that on average £3,000 a day is wagered on the 1,500 terminals in Wales. You can lose up to £100 every second on these machines. The gambling prevalence survey, a major study of British gambling, found that these machines are most popular among young, male, low-income gamblers, particularly the unemployed, as well as among students and those from ethnic minorities. Where have bookmakers decided to concentrate their efforts? They are putting them in high streets in poorer areas. To date, the UK Government have not done nearly enough to curtail the proliferation of fixed-odds betting terminals, so if the UK Government are reluctant to act, they should give the Assembly the freedom to act to reduce the maximum stake to £2 and make sure that the Assembly can act retrospectively, not just in the future. The problem exists now, and the Assembly is expected to wipe up the mess.

I guess I should be grateful that the Government have brought something forward, but I am afraid that, in its current form, I am disappointed with the amendment. I hope the Government will take on board our amendments on this important issue.

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I believe that the noble Baroness, Lady Morgan, has been led astray by a very faulty piece of wording here on which I have written to the Minister. I think it is not a question of a minimum bet of £10. I believe you can nominate any value you want down to 20p on any machine. It is not a minimum bet; it is a minimum bank that you have to open to have the right to play on the machine. That is £10. Then you can have any value of stake you want within it down to 20p, even perhaps 10p in some instances. The confusion comes from the difference between a minimum stake and a minimum bank that you can buy into on any machine. If we could get that clear once and for all, this problem would largely go away.

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My Lords, I start by making clear that I do not share the views of the noble Lord, Lord Wigley, on the value for money of the repairs to Buckingham Palace, which I see as a major tourist attraction and therefore well worth the investment.

I agree, however, with his views on the limits to the Assembly’s powers on energy and support his amendments to increase them. For many years, it has been Liberal Democrat policy to give the Assembly power over energy, with the exception of nuclear energy. It is essential that we keep pressing this issue because it is so illogical to have this 350 megawatt limit plucked— I understand why—out of the air.

Will the Minister supply us with further information on fixed-odds betting terminals? We have had some very interesting suggestions. The noble Baroness, Lady Morgan, said that she is unclear about issues associated with gambling. It is certainly not something on which I can speak with any authority, but I am sure we need to make sure that the powers given to the Welsh Assembly are sufficient to be meaningful. The only reason for giving it powers over this would be to allow it to exert those powers in a way to change behaviour and deal with a very serious problem. I would be very grateful for any further information that the Minister can give us about the intention of this amendment and about, for example, the percentage of terminals that would be affected and the percentage of gamblers whose activities would be affected by this amendment.

I am very grateful that the Government have made a concession on this. It is something that has been pressed by many noble Lords, and not just in the context of this Bill. However, it is important that it should be a meaningful concession.

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My Lords, I will intervene for a short moment, with real apologies for not having been here at earlier stages in these discussions—I fear that I have duties that do not make it possible to be here all that often. I take the definition of the £10 bank very seriously to heart, but that is not the issue for me. I congratulate the Government and the Minister on recognising that there is a problem and bringing forward a government amendment that reflects that. The curious paradox for me is that having recognised there is a problem, on the basis of fixed-odds betting machines as they currently exist, the one area that devolved responsibility does not address is the very part of the problem that creates the discussion in the first place. To have an amendment that provides powers for the Welsh Assembly to look after what happens in the future, when the problem that has generated the debate cannot yield a similar level of control, seems to me a curious paradox. So while thanking the noble and genial Lord the Minister, who has handled things so magnificently in these debates, I just urge him to think about something that is paradoxical but could be tidied up. If retrospective responsibility could be introduced, that would make it a much better amendment from the Government.

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My Lords, my noble friend Lord Griffiths of Burry Port is rather charitable, indeed flattering, to the Government in referring to their creation of a paradox. I would say that this is simply confused and bad policy-making and endorse what my noble friend Lady Morgan of Ely said at the outset. First, it is not a good way to treat the House for the Government to insist on mixing up, in one group, amendments on this variety of topics—energy, the Crown Estate and gambling. This is not a basis for rational scrutiny of legislation and it should not have happened.

I want to dwell on the gambling issue for only a moment, as much more important is the confusion in the handling of it. To make this distinction between different sizes of bank or stake—I am grateful to the noble Lord, Lord James, for his elucidation of the issue—and to attempt to make a distinction between responsibility for supervision of machines that are already in Wales and for machines that may in future be in Wales is to fragment responsibility. If the Government are going to devolve responsibility for a very important social issue, they should devolve it properly and produce a coherent solution. Fragmenting responsibility can only make for confused and ineffective policy-making. This issue matters far too much to Welsh society, and in particular to the prospects for significant numbers of young people in Wales, and we need a coherent and proper policy for it.

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My Lords, I will address the remarks on this group of amendments and I thank noble Lords who have participated in the discussion. First, I will deal with a point raised by the noble Lord, Lord Howarth, in relation to the grouping of amendments by pointing out that it is entirely possible through the usual channels to decouple amendments. That has happened in at least one other group, so I do not think the accusation was entirely fair. It is open to other parties to challenge that.

Initially, I will address government Amendment 38 to Clause 37, as well as Amendments 36 and 37, tabled by the noble Lord, Lord Wigley. The government amendment is a technical one to address concerns raised by the Welsh Government. Consistent with the principle of establishing a lasting settlement, it simply acknowledges that future Acts of the Assembly may prove relevant factors in the exercise of consenting powers under the Electricity Act 1989. This addition simply amends that Act accordingly to allow for that possibility.

The noble Lord’s amendments seek once more to reopen the basis on which the Government endorsed a key recommendation of the Silk commission. I note what the noble Lord said about the commission, but he will know that the legislation is essentially based on the St David’s Day agreement, which took forward a lot of the Silk commission recommendations but not all of them. What is in the Bill is essentially based on the St David’s Day consensus rather than on the Silk recommendations, although in this context they are the same.

As I said in Committee and have subsequently reiterated in writing to your Lordships, the Bill has been carefully drafted to give effect to that political consensus around the devolution of new powers which will give Wales a substantially greater degree of autonomy in determining the shape of its future energy structure. To use a word that has been used recently, it would be paradoxical if the Government ignored that consensus and came up with a figure that was not part of it. Key to that consensus was recognition that Wales and England are, and will remain, intrinsically linked through a common electricity transmission system which depends on the inputs from a broad range of generating sources.

The Government continue to be firmly of the view that the larger the capacity of those sources, the greater their significance beyond Wales and to the United Kingdom as a whole. Consensus was reached around 350 megawatts being the appropriate watershed, and I do not believe that the landscape has changed to such a degree since then as to necessitate exploring an alternative approach. The noble Lord, Lord Wigley, I think, and possibly others asked whether we already have the powers if we were to subsequently seek to increase that. Yes, we have the powers, without fresh primary legislation, under, I think, the Electricity Act. It might be under a planning Act, but I can assure the noble Lord that those powers exist in relation to upping the figure. That is not to say that factors might not emerge in the future which would give us pause for thought on this front. I do not believe, however, that now is the time to alter the 350 megawatts figure, but as I have indicated, the power is there if it should be needed.

Government Amendments 117, 118 and 119 relate to generating stations and provide Welsh Ministers with greater flexibility for the future around the exercise of their new electricity generation consenting functions in Welsh waters and in relation to the amendment of existing onshore consents up to 350 megawatts under the Electricity Act 1989. They simply and sensibly provide Welsh Ministers with the ability to delegate the exercise of their new functions to a person they appoint for the purpose. This is a flexibility which the Welsh Government have asked for, and I am happy to provide it.

Government Amendments 56 and 83, and opposition Amendments 57 and 58, relate to fixed-odds betting terminals. I confess that I am not acquainted with these either, although I understand that the noble Baroness, Lady Morgan of Ely, has been experiencing them in the last week or so to see how they work, in addition to Nessa’s Slots in Barry Island. In Committee last month, I committed to reflect further on the arguments in favour of devolving powers over fixed-odds betting terminals. Having done so carefully, I am pleased to bring forward Amendment 56, which will transfer the power on fixed-odds betting terminals in exactly the same way as has been done for Scotland. I am very grateful for the intervention from my noble friend Lord James, indicating that the amount relates to a bank rather than a stake. I hope that gives some reassurance to the noble Baroness opposite and ties in with her experience on this issue.

The noble Baroness, quite fairly, raised the issue of whether, if the amount were to change in England, it would translate across to Wales. I can confirm it would. As she rightly says, this is a serious problem which has been exercising the all-party group and others. If it were to be altered in England, that would have the effect of transferring that same amount to Wales. I thank the noble Lord, Lord Griffiths, as well for his contribution. I know he feels strongly about these issues and has spoken on them forcefully and persuasively in the past.

The amendments would 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 licences in Wales. It is right that they are new betting premises, as the noble Baroness confirmed. Once again, I think the Government have been given rather a raw deal here; having come up with something that has been welcomed, we have then been accused of not going as far as noble Lords thought we had gone. I thought I was absolutely clear that we have gone as far on this as we did with Scotland. I note the comments and this is a serious issue, but I hope I have given some reassurance that if there is some movement in England, that would affect the position in Wales as well.

The Silk commission made no recommendations on the devolution of betting, gaming and lotteries, but we agreed as part of the St David’s Day process to consider non-fiscal recommendations by the Smith commission and it was in that context that we decided it would be appropriate to take this forward in relation to Wales. We reflected on it and mirrored the provisions in the Scotland Act 2016. The noble Baroness, Lady Morgan, has proposed going much further than the position in Scotland in the Scotland Act but I am afraid we cannot agree to that. I take issue with her on one point on which she spoke passionately in relation not just to gaming machines but to the SNP. The Scotland Act is not an SNP Act—it is an Act of Westminster to which we all contributed. I think we can all reflect on that.

Amendment 60, tabled by the noble Lord, Lord Wigley, seeks to devolve the management functions of the Crown Estate commissioners in relation to Wales to Welsh Ministers or a person nominated by them. This broadly reflects a provision in the Scotland Act 2016 that devolves management functions of the Crown Estate commissioners in relation to Scotland to the Scottish Ministers or a person nominated by those Ministers. The devolution of the Crown Estate in Scotland was recommended by cross-party consensus in the Smith commission report. It was not part of the Silk recommendations and I am not aware that such a consensus exists in respect of Wales.

The Crown Estate works closely with devolved services in Wales; for example, it has agreed memorandums of understanding with the Welsh Government and Natural Resources Wales. I believe the Crown Estate commissioners are doing an excellent job. Last year the Crown Estate recorded a record profit of £304 million, which was returned to the Exchequer. This is not revenue retained by the Crown. The revenue from the Crown Estate is used to fund public services across the UK, including in Wales. This means that Wales is already directly benefiting from the management of Crown assets by the Crown Estate. I urge the noble Lord, Lord Wigley, to withdraw his amendment.

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Before the Minister sits down, I should like to be clear on this point. The suggestion is that there will be no possibility for the Welsh Government to look at fixed-odds betting terminals that currently exist, despite there being this incredible social problem in Wales. If the UK Government will not allow the Welsh Government to deal with this, do they have any intention of bringing forward something that would address this issue, which is devastating communities not just in Wales but across the UK?

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My Lords, I acknowledge that this is a serious issue. I am grateful to the noble Baroness for exaggerating my powers in relation to the Government as a whole regarding what legislation is forthcoming. I will have to write to her on that, but I acknowledge that it is a problem and I have given her an indication that if we deal with it in Westminster, of course any consequent changes would apply in Wales as well.

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My Lords, I am grateful to everyone who has taken part in this debate. I have noted the replies given to the various subjects that have arisen. I still feel very strongly that some of the powers that Scotland has regarding the Crown Estate are powers that we should have as well, but clearly we are not going to make much progress on that today. I also suspect that we will come back to the diverse matters that we have discussed, including the gambling questions and possible legislation. On the basis of the debate, though, I beg leave to withdraw the amendment.

Amendment 36 withdrawn.

Amendment 37 not moved.

Amendment 38

Moved by

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38: Clause 37, page 34, line 11, at end insert—

“( ) in the definition of “statutory provision”, after “Scottish Parliament” insert “and an Act of the Assembly”;”

Amendment 38 agreed.

Amendment 39

Moved by

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39: After Clause 45, insert the following new Clause—

“Water and sewerage

(1) In Schedule 7A to the Government of Wales Act 2006 (substituted by this Act), in section C15 (water and sewerage)—(a) omit paragraph 90;(b) in paragraph 91 omit “and regulation”;(c) omit the two exceptions (and the heading “Exceptions”);(d) omit the definitions of “supply system of a water undertaker” and “sewerage system of a sewerage undertaker”.(2) In section 192B of the Water Industry Act 1991 (annual and other reports)—(a) in subsection (1), after “the Secretary of State” insert “and the Welsh Ministers”;(b) after subsection (5) insert—“(5A) The Welsh Ministers shall—(a) lay a copy of each annual report before the Assembly; and(b) arrange for the report to be published in such manner as they consider appropriate.”;(c) in subsection (7) omit “the Assembly,”.”

Amendment 39 agreed.

Amendment 40

Moved by

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40: After Clause 45, insert the following new Clause—

“Modification of water-related functions

In section 58 of the Government of Wales Act 2006, after subsection (2) insert—“(2A) Her Majesty may by Order in Council—(a) make provision modifying (by reference to geographical extent or otherwise) a previously conferred or transferred water-related function;(b) provide for such a function to be exercisable—(i) concurrently or jointly with a Minister of the Crown or the Welsh Ministers, or(ii) only with the agreement of, or after consultation with, a Minister of the Crown or the Welsh Ministers.(2B) In subsection (2A)—“previously conferred or transferred function” means a function exercisable by— (a) the Welsh Ministers, the First Minister or the Counsel General,(b) a Minister of the Crown, or(c) any authority or other body,by virtue of provision contained in or made under this Act or any other enactment;“water-related function” means a function exercisable in relation to water supply, water quality, water resources management, control of pollution of water resources, sewerage, rivers and other watercourses, land drainage, flood risk management or coastal protection.””

Amendment 41 (to Amendment 40) not moved.

Amendment 40 agreed.

Amendments 42 to 44 not moved.

Clause 46: Marine conservation zones

Amendment 45

Moved by

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45: Clause 46, leave out Clause 46 and insert the following new Clause—

“Water protocol

(1) The Welsh Ministers and the Secretary of State may make an agreement (the “water protocol”) for the purpose of ensuring that—(a) actions or inaction of the Welsh Ministers, or public bodies exercising functions in Wales, do not have a serious adverse impact on water resources in England, water supply in England or the quality of water in England, and(b) actions or inaction of the Secretary of State, or public bodies exercising functions in England, do not have a serious adverse impact on water resources in Wales, water supply in Wales or the quality of water in Wales.(2) The water protocol must—(a) provide for a procedure for resolving matters of disagreement between the Welsh Ministers and the Secretary of State;(b) make provision about whether, or to what extent, functions relating to such matters may be exercised pending the outcome of the procedure.(3) The water protocol may be revised by agreement of the Welsh Ministers and the Secretary of State.(4) The water protocol, and any revised protocol, must be laid before both Houses of Parliament and the National Assembly for Wales.(5) The Welsh Ministers and the Secretary of State must exercise their functions in accordance with the provisions of the water protocol, unless it is revoked by agreement of the Welsh Ministers and the Secretary of State.”

Amendments 46 to 48 (to Amendment 45) not moved.

Amendment 45 agreed.

Amendment 49 not moved.

Amendment 50

Moved by

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50: After Clause 46, insert the following new Clause—

“Reciprocal cross-border duties in relation to water

(1) In exercising functions relating to water resources, water supply or water quality—(a) the Welsh Ministers must have regard to the interests of consumers in England;(b) the Secretary of State must have regard to the interests of consumers in Wales.(2) In subsection (1) “the interests of consumers” has the same meaning as in section 2 of the Water Industry Act 1991.”

Amendment 51 and 52 (to Amendment 50) not moved.

Amendment 50 agreed.

Amendments 53 and 54

Moved by

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53: After Clause 46, insert the following new Clause—

“Repeal of intervention powers relating to water

(1) In the Government of Wales Act 2006—(a) in section 114 (power to intervene in certain cases) omit paragraph (b) of subsection (1);(b) omit section 152 (intervention in case of functions relating to water).(2) Regulations under section 62 bringing this section into force may not be made until an agreement under section (Water protocol) has been laid before both Houses of Parliament and the National Assembly for Wales.”

54: Before Clause 47, insert the following new Clause—

“Transfer of functions in relation to fishing vessels

(1) The functions to which this section applies, so far as exercisable in relation to Welsh fishing boats beyond the seaward limits of the Welsh zone, are transferred to the Welsh Ministers.(2) This section applies to —(a) functions of a Minister of the Crown or the Marine Management Organisation under the Sea Fish (Conservation) Act 1967,(b) functions of a Minister of the Crown under the Sea Fisheries Act 1968,(c) functions of a Minister of the Crown under Parts 2 to 4 of the Fisheries Act 1981, and(d) functions of a Minister of the Crown or the Marine Management Organisation under the Sea Fisheries (Wildlife Conservation) Act 1992.(3) But this section does not apply to—(a) functions conferred on the Board of Trade by section 8 of the Sea Fish (Conservation) Act 1967;(b) functions listed in paragraph 2(2) of Schedule 3A to the Government of Wales Act 2006 (inserted by this Act) (functions concurrently exercisable with the Welsh Ministers).(4) In this section—“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; “Welsh zone” has the meaning given in section 158 of the Government of Wales Act 2006.”

Amendments 53 and 54 agreed.

Amendment 55

Moved by

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55: After Clause 49, insert the following new Clause—

“Maritime and Coastguard Agency

(1) In section 1 of the Coastguard Act 1925 (transfer of the coastguard to the Board of Trade), after subsection (4) insert—“(5) The Secretary of State must consult the Welsh Ministers about the strategic priorities of the Secretary of State in exercising functions under subsection (1) in relation to activities of Her Majesty’s Coastguard in Wales.(6) In subsection (5) “Wales” has the same meaning as in the Government of Wales Act 2006.”(2) In section 292 of the Merchant Shipping Act 1995 (general functions of the Secretary of State), after subsection (4) insert— “(5) The Secretary of State must consult the Welsh Ministers about the strategic priorities of the Secretary of State in exercising functions under subsection (1) in relation to the safety standards of ships in Wales and protecting the health and safety of persons on them.(6) In subsection (5) “Wales” has the same meaning as in the Government of Wales Act 2006.””

Amendment 55 agreed.

Amendment 56

Moved by

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56: After Clause 49, insert the following new Clause—

“Gaming machines on licensed betting premises

(1) In section 172 of the Gambling Act 2005 (gaming machines), in subsection (12) (definition of “appropriate Minister”), after paragraph (a) insert—“(aa) the Welsh Ministers, so far as, in the case of a betting premises licence in respect of premises in Wales and not in respect of a track, the order varies—(i) the number of gaming machines authorised for which the maximum charge for use is more than £10, or(ii) whether such machines are authorised;”.(2) In section 355 of that Act (regulations, orders and rules)—(a) in subsection (1), after “the Secretary of State” insert “, the Welsh Ministers”;(b) in subsection (3), after “the Secretary of State” insert “or the Welsh Ministers”;(c) after subsection (8) insert—“(8A) An order of the Welsh Ministers under section 172 shall not be made unless a draft has been laid before and approved by resolution of the National Assembly for Wales.”(3) The amendments made by this section do not apply in relation to a betting premises licence issued before this section comes into force.”

Amendment 57 and 58 (to Amendment 56) not moved.

Amendment 56 agreed.

Consideration on Report adjourned until not before 8.47 pm.