Welsh Grand Committee


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Nick Ainger: Here we have the party that has only recently embraced devolution. The hon. Lady seems to be fighting yet again the battles that she fought and lost in the Government of Wales Bill proceedings. I assure her, and everybody else, that there is no great difficulty in this area. We debated the matters at great length throughout 2006 and she can read the memorandum that is going to the Welsh Affairs Committee. I am sure that her colleagues who serve on that Committee will be able to report back to her that a great deal of work has been completed. The matter is not particularly complex. It will take the devolution process forward in a measured and sensible way, and even the Conservative party’s new converts to the devolution agenda will welcome what we have to say.

Structural Funding

14. Adam Price (Carmarthen, East and Dinefwr) (PC): What recent discussions he has had on varying corporation tax rates in objective 1 areas in Wales. [108145]
The Parliamentary Under-Secretary of State for Wales (Nick Ainger): The answer is none. It is not the Government’s policy to vary corporation tax. That would be impractical and fiscally irresponsible and would put the United Kingdom in breach of European Union law.
Adam Price: Does the Minister believe that reducing corporation tax in Wales would be more or less successful than it is in Northern Ireland, where, last month, the Government-funded Economic Research Institute predicted that it would lead to the creation of 150,000 jobs and the doubling of the economic growth rate?
Nick Ainger: No, I do not believe that. First, the question relates to objective 1 areas, but the hon. Gentleman now seems to be applying it to the whole of Wales, and secondly, following the Azores ruling, it is not possible under EU law to do what he suggests. That is why it would be illegal. It would also be impractical in the context of the UK economy. That applies to Northern Ireland as well. We would have to employ an army of people to work out which companies were based in Wales or had their headquarters there rather than elsewhere in the United Kingdom.
The hon. Gentleman’s words sound like yet another soundbite from the nationalists who are not prepared to accept the success of the Welsh economy, which is growing faster than that of the rest of the United Kingdom. In the objective 1 areas, earnings are growing faster as well. Rather than looking for little gimmicks, he should be working on the same basis as the Government and accept that there is significant investment in objective 1 areas—£1.3 billion over the next six years. That will form the basis for improving the economy and raising the earnings of people who live and work in those areas. That is the way forward—not little gimmicks.

Government’s Legislative Programme

9.31 am
The Secretary of State for Wales (Mr. Peter Hain): I beg to move,
That the Committee has considered the Government’s Legislative Programme as outlined in the Queen's Speech as it relates to Wales and Public Expenditure in Wales.
The Queen’s Speech heralds a new era for devolution in Wales. The last Session was like no other in terms of the quantity of Welsh business that Parliament considered. A total of 37 days were devoted to considering no fewer than three Wales-only Bills. That figure does not include the time spent on Welsh provisions in a further 13 England and Wales Bills.
However, as a consequence of the Government of Wales Act 2006, the Assembly will soon have the power to make its own legislation. I am proud to have achieved that, along with my hon. Friend the Under-Secretary, and with the support of many hon. Members here today, except, of course, the Conservatives, who opposed the measure on both Second and Third Readings.
The constitutional argument has been settled, and attention can now turn to the delivery of policies that will make a real difference to the people of Wales. Instead of our having to introduce Wales-only Bills, as in the past, the Government of Wales Act has, crucially, established a mechanism to grant law-making powers directly to the Assembly, subject to parliamentary approval. In the last Session, the Education and Inspections Act 2006 and the NHS Redress Act 2006 granted framework powers to the Assembly.
In this Session, two further Bills contain framework powers—one to empower and reform local government and one to boost skills in further education and training. From next May, the new Order-in-Council process will come on stream to speed up fresh powers for the Assembly. We will be able to move on from debates about structures and institutions to discussions in which the people of Wales can really be engaged—developing innovative ways in which to tackle the key challenges we in Wales face today, such as bringing more people back into employment, tackling child poverty, improving public services, regenerating communities and tackling climate change.
Since 1999, the Assembly Government have been responsible for a great deal of innovation—the Children’s Commissioner, the Welsh baccalaureate, free prescriptions and free swimming for young and old. Under the new arrangements, they can do a great deal more. We must embrace the opportunity presented by the Assembly’s new law-making powers to address the new challenges of our changing world, and to improve further front-line delivery in our public services.
However, let me make it clear—there has been some speculation from the Opposition about this—that the new Order in Council process will not, and cannot be about Parliament rubber-stamping Welsh Assembly Government proposals. Parliament is, and remains the sovereign body in the UK; it does not rubber-stamp anything.
Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): In due course, will a concordat be reached between the National Assembly and Westminster so that we have firm guidance on how that procedure will be followed and how the Secretary of State’s discretion will be exercised? That would provide some clarity. Those matters were discussed at length during the passage of the Government of Wales Bill, but not much has been done since. I urge him to consider that.
Mr. Hain: I do not accept that not much has been done since then. Indeed, my hon. Friend the Under-Secretary and our officials, together with the First Minister and his officials, have been exploring precisely that matter. I expect a new constitutional convention to be established, with a clear presumption that the Assembly’s requests for new powers will be agreed so that Parliament asks it to reconsider requests only if there are clear reasons why the scope or the principle of the request is wrong. In other words, there will perhaps be an amendment to the devolution guidance notes, or some other form of clarification, subject to the stricture that I placed on the record earlier: Parliament—certainly this House—will not rubber-stamp anything.
Mrs. Cheryl Gillan (Chesham and Amersham) (Con): Will the Secretary of State confirm that he can refuse a request before the matter ever gets to a Committee in the House or the other place?
Mr. Hain: In the sense that the Secretary of State, whether myself or some other office holder, is not and cannot be under an instruction from the Welsh Assembly or the Welsh Assembly Government. As the Government of Wales Act makes clear, the Secretary of State has a sensible role to play. I see the process working out in a practical, sensible way. When the Welsh Assembly Government indicate that a proposal is wanted and a request for measure-making powers is made through an Order in Council, there will be discussion at official level, and between the Secretary of State and the First Minister, to get an agreement on the way forward. The precise drafting of the Order in Council will be agreed before it comes to Parliament and before it goes before the Welsh Affairs Committee.
Lembit Öpik (Montgomeryshire) (LD): While I accept that the current Secretary of State for Wales is broadly pro-devolution, does he not see that the legislation on the structures that we are discussing, which has been passed, could easily be abused by an anti-devolutionary party? The Conservatives voted against the devolution measure on Third Reading, which is a strong indication that they will make any efforts they can to thwart devolution in Wales. A Pandora’s box of opportunity for anti-devolutionary parties, such as the Conservatives, has been opened.
Mr. Hain: That danger exists, which is why I do not believe that the people of Wales will ever vote for a Conservative Government again. If there were to be an outbreak of Redwooditis in the Wales Office in future, I think that the people of Wales would quickly rebel against it and send all Conservative MPs packing from Wales, as we did in 1997. In the end, the people will be the ultimate arbiters.
Hywel Williams (Caernarfon) (PC): Surely it is not the decision of the people of Wales. As a committed Unionist, the Secretary of State will concede that votes in England and—dare I say it?— Scotland will have an effect on the colour of the Government that we have in Westminster, and it will not be the people of Wales who decide. It does not matter if all the Conservatives are packed off to where they came from—it is not the people of Wales who will decide.
Mr. Hain: I expect the hon. Gentleman, as a committed separatist, to say nothing else. However, the Government of Wales Act provides the people of Wales for the first time with the ability to trigger a referendum and get primary powers for the Assembly—full law-making powers—if we face Redwooditis running through Whitehall and attacking the interests of the people of Wales, as was done so destructively in those 18 miserable years between 1979 and 1997.
Mrs. Gillan rose—
Mr. Hain: Is this a prophet of Redwooditis rising to speak?
Mrs. Gillan: It is very cruel of the Secretary of State to say that. He reminds me of a previous Secretary of State when I hope that I may have the opportunity to be the next one, especially given that this Secretary of State has accrued such amazing powers—the powers of a viceroy—over Wales. I want a simple answer to a simple question. Is it true that, if Rhodri Morgan approaches the Secretary of State with a legislative request, the Secretary of State—and the Secretary of State alone—can turn it down without rhyme or reason, and it may never reach the scrutiny of a Committee in this House? Is the answer yes or no?
Mr. Hain: It is clearly no. Let me say this in the gentlest way possible to the hon. Lady: for her to talk of viceroys takes a lot of cheek when, between 1979 and 1997, we had a succession of Conservative viceroys running Wales as Secretaries of State. With the exception of only one, they did not even represent the people of Wales and were not elected by them. We know about viceroys—the people of Wales sent them packing with considerable speed in 1997.
It is important to stress that there will be full parliamentary scrutiny of any requests for Orders in Council from the Welsh Assembly Government. The Welsh Affairs Committee will conduct pre-legislative scrutiny of proposed Orders in Council. As my hon. Friend the Under-Secretary said earlier, he will give evidence to the Welsh Affairs Committee next week on that very issue. The Committee’s role will be important in ensuring pre-legislative scrutiny.
More than 20 Bills in the Queen’s Speech will directly affect Wales, ranging from pensions reform to combating serious and organised crime. The Queen’s Speech is about taking the long-term decisions necessary to give us security and opportunity in a rapidly changing world, such as tackling climate change, protecting the public against crime and the threat of terrorism, and providing security in old age.
Following the Stern review on the economics of climate change, we are legislating to provide a clear and credible long-term framework for reducing carbon dioxide emissions and strengthening the renewable transport fuel obligation, which is predicted to deliver carbon savings of 1 million tonnes per annum by 2010. The changes in duty on fuel and for air travel announced by the Chancellor are a small but important step in support of our policies. Wales is already at the forefront of providing renewable energy through onshore and offshore wind power and has the potential to be at the cutting edge of research and development for green technologies and become a model green nation.
There are new powers in the draft Road Transport Bill to tackle road congestion and pollution, giving both the Assembly and local authorities greater flexibility to implement measures to meet Welsh needs.
Lembit Öpik: As commented upon in questions, it is quite clear that there is a big opportunity in Wales to take renewable sources of energy very seriously. Is the Secretary of State willing to comment on the Severn barrage versus tidal lagoons? Various individuals actively involved in the question of tidal lagoons have attempted to make contact with him in the past, including Peter Ullman from Tidal Electric. Will he confirm that he is willing to have discussions and to hear representations from both the competing projects in making a decision as to which direction the Government should take us?
Mr. Hain: I welcome the hon. Gentleman’s question and remind the Committee that the Sustainable Development Commission is looking at the Severn barrage project and at the whole possibility of the lagoon alternative as well as part of the Energy Review that the Government announced a few months ago.
Without seeking to second-guess what the commission will say, since it is the expert, I think that the barrage has the potential to generate at least 5 per cent. of the entire UK electricity generation needs. That is a massive contribution and far bigger than anything else conceivable on the renewable energy front. It is an established fact that tidal lagoons would not make as big a contribution, and we need to bear that in mind in evaluating both alternatives. That is why I favour the barrage, subject to what the commission says. It would also provide the potential for a transport link from the south-west of England to Wales, allowing people to use Cardiff airport much more to come to south Wales, with all the benefits that that will bring.
 
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