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The Committee consisted of the following Members:

Chairman: Frank Cook
Clelland, Mr. David (Tyne Bridge) (Lab)
Cryer, Mrs. Ann (Keighley) (Lab)
David, Mr. Wayne (Parliamentary Under-Secretary of State for Wales)
Dunne, Mr. Philip (Ludlow) (Con)
Field, Mr. Mark (Cities of London and Westminster) (Con)
Flynn, Paul (Newport, West) (Lab)
Jones, Mr. David (Clwyd, West) (Con)
Kilfoyle, Mr. Peter (Liverpool, Walton) (Lab)
Morden, Jessica (Newport, East) (Lab)
Moss, Mr. Malcolm (North-East Cambridgeshire) (Con)
Owen, Albert (Ynys Môn) (Lab)
Tami, Mark (Alyn and Deeside) (Lab)
Timpson, Mr. Edward (Crewe and Nantwich) (Con)
Williams, Mrs. Betty (Conwy) (Lab)
Williams, Hywel (Caernarfon) (PC)
Williams, Mark (Ceredigion) (LD)
Glen McKee, Committee Clerk
† attended the Committee

Fifth Delegated Legislation Committee

Tuesday 3 November 2009

[Frank Cook in the Chair]

Draft Welsh Ministers (Transfer of Functions) (No. 2) Order 2009
4.30 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): I beg to move,
That the Committee has considered the draft Welsh Ministers (Transfer of Functions) (No.2) Order 2009.
The Chairman: With this it will be convenient to consider the draft Government of Wales Act 2006 (Consequential Modifications, Transitional Provisions and Savings) Order 2009.
Mr. David: It is a pleasure to serve under your chairmanship, Mr. Cook.
The draft Welsh Ministers (Transfer of Functions) (No.2) Order 2009 will transfer a range of functions relating to building standards from UK Government Ministers to Welsh Ministers. In particular, it will transfer the functions of the Secretary of State under the Building Act 1984 and associated legislation. The most important of those functions is the power to make building regulations. The building regulations set functional performance requirements for building work, and address a range of health, safety and sustainability issues.
The 1984 Act confers functions on the Secretary of State in relation to the administration of the regulations, and imposes a duty to establish and maintain a building regulations advisory committee—BRAC for short—to advise on changes to the regulations. The order will transfer all the Secretary of State’s remaining functions under the 1984 Act and related regulations. That is subject to a number of exceptions. In particular, functions are not transferred in relation to major energy infrastructure, such as power stations. Those buildings are currently exempt from the building regulations, but the exemption will come to an end if and when section 5 of the Sustainable and Secure Buildings Act 2004 is brought into force. When that happens, the power to set construction standards for major energy buildings will remain with the UK Government. That reflects the UK Government’s responsibility for national energy policy.
As I said, the 1984 Act requires the Secretary of State to appoint a BRAC and to consult the committee before making building regulations. It is appropriate that Welsh Ministers should receive advice on building regulations from a committee with specific knowledge and expertise relating to Wales. The draft order therefore provides for the current BRAC to be replaced with separate committees for England and Wales. The recruitment and remuneration of the Welsh committee will be in the hands of the Welsh Assembly Government.
The period before the draft order comes into force in 2011 will ensure that Wales benefits from the changes to those requirements that the UK Government propose for 2010, and will give the Welsh Assembly Government the opportunity to develop further their proposals and engage with the industry in Wales. Clearly, the need for early action on the climate change agenda is well understood. Nevertheless the Welsh Assembly Government will need to consider the wider aspects of sustainability, including the impact on the Welsh economy, house builders and purchasers, particularly against the backdrop of the current recession. In considering proposed changes to the regulations, the Welsh Assembly Government will need to carry out regulatory impact assessments in accordance with their regulatory impact assessment code. They will also have to consult the new Welsh advisory committee in accordance with the 1984 Act.
Welsh Ministers have given an assurance that they intend to continue with the current building control enforcement system and to develop changes only in respect of energy efficiency standards in the first two years following the making of this draft order. Welsh Ministers have further confirmed support for the United Kingdom Government’s proposals for reform of the building control system, the implementation of which may fall to the Welsh Assembly Government post transfer. There will be no budgetary transfer from the UK Government to the Welsh Consolidated Fund when the Executive functions concerned are transferred. The full costs of devolution in this case will be borne by the Welsh Assembly Government. No impact assessment of the order has been carried out, as no burdens on industry or consumers will arise out of the transfer itself. At transfer, the current regulations and standards for England and Wales will apply to Wales. The proposed transfer of building regulations functions would complement existing devolved functions and enable Welsh Ministers to exercise more coherent policy control over the development process. Delivering sustainability in the built environment increasingly relies on a co-ordinated approach through the stages of planning, design and construction.
Let us consider the draft Government of Wales Act 2006 (Consequential Modifications, Transitional Provisions and Savings) Order 2009. The legal separation of the National Assembly for Wales and the Welsh Assembly Government under the Government of Wales Act 2006 has required a large number of consequential modifications to other enactments. Some have already been made by the 2006 Act itself and a previous order. The draft order makes further modifications to three Acts. It does not give new powers to the Welsh Assembly Government, but ensures that the changes introduced by the 2006 Act are reflected in other enactments.
Part 2 of the draft order deals with modifications to British nationality legislation. The British Nationality Act 1981 provides for a child who is born overseas to a British citizen who is serving overseas in Crown service to be a British citizen. Provided that either parent is serving overseas under the Government of the UK and was recruited for that service in the UK, their child will at birth be a British citizen.
The 2006 Act established the Welsh Assembly Government as a separate entity of the Crown. Article 3 of the order now includes service under the Welsh Assembly Government as Crown service for the purposes of the 1981 Act. That means that service with the Welsh Assembly Government overseas will be treated in the same way as service with the UK Government. An interim solution to this issue had been provided by order made under the 1981 Act in 2008. This order revokes that interim order and includes transitional and saving provisions. I understand that the Welsh Assembly Government have approximately 25 UK-recruited staff working overseas. These are mostly engaged in promoting Welsh economic and industrial interests and representing the Welsh Assembly Government in the European Union. I understand that 11 children have been born overseas to Welsh Assembly Government staff since May 2007 and are affected by the transitional and saving provisions.
Part 3 of the order amends two other Acts. Section 41 of the Constitutional Reform Act 2005 is amended so that decisions of the Supreme Court relating to Acts and Measures of the National Assembly for Wales will have the same status as decisions relating to Acts of the Scottish Parliament and Northern Ireland Assembly. Part 3 also modifies a number of provisions in the Companies Act 2006. The restrictions on companies and businesses adopting names suggesting a connection with Government, are extended to cover the Welsh Assembly Government. There are also amendments to update references to the Government of Wales Act 1998, which should now apply to the Government of Wales Act 2006, and amendments to insert references to the First Minister for Wales where appropriate. I commend the draft orders to the Committee.
4.40 pm
Mr. David Jones (Clwyd, West) (Con): May I, too, say what a pleasure it is to serve under your chairmanship, Mr. Cook?
On the order that deals with consequential modifications, I have no observations to make, other than that it is clearly sensible and desirable. However, I have concerns about the transfer of functions order. The building industry is one of the most important industries in Wales and a significant driver of the Welsh economy. Even though it is currently in the depths of a recession, in June this year—the most recent date for which figures are available—around 45,000 were employed in construction in Wales. Although that figure is significantly smaller than the 100,000 employed in the sector two years previously, construction is clearly a huge generator of employment in Wales. It cannot be denied, however, that construction in Wales is in a delicate state, so it is essential that care should be taken not to do anything that might have an adverse impact upon the industry.
Therefore, we are deeply concerned about the proposed transfer of functions order. The explanatory memorandum makes it clear that the transfer is intended to enable Welsh Ministers to pursue Welsh Assembly Government objectives on sustainable housing. Those objectives are clarified in a briefing note prepared by the Wales Office in 2008, which states:
“The previous administration had set the aspiration that all new buildings in Wales might be zero-carbon by 2011, well in advance of the CLG target...That aspiration has been retained by the current administration while recognising that the pace at which it will be possible to move will ultimately be determined by the preparedness of the sector in Wales.”
That is by any standards a highly ambitious proposal. It is therefore surprising that the Welsh Assembly Government, as the Minster has just said, have carried out no public consultation on the impact of the proposal on business in Wales. That is a matter of significant concern. The briefing note also states:
“Early meetings with CLG officials identified industry concerns at the prospect of different standards for Wales post-transfer...The same concerns were raised in a meeting between Huw Irranca-Davies and Jane Davidson on 12th November 2007...The main concerns raised with us by the NHBC and the HBF have been the implications for the general building control systems and administrative structures.”
Given that both the Wales Office and the Welsh Assembly Government were aware of industry concerns, can the Minster explain why it was not thought appropriate at that stage to take further soundings from the industry?
In the brief time available, I have carried out a consultation with industry representatives in Wales on their views on the proposed transfer of functions. CBI Wales has expressed great concern at the absence of formal consultation with the private sector. It observes:
“The Welsh Assembly Government cannot expect the confidence and trust of the private sector if it continues to ignore the spirit of its statutory duty to consult with the private sector (within the 2006 Government of Wales Act)...Furthermore, the lack of a regulatory impact assessment accompanying this Order is deeply regrettable...In 2006 the National Audit Office recommended RIAs be developed at the onset of the policy making process...When considering such a substantial change to the Welsh construction environment we expected the devolution process to be more rigorous and inclusive.”
The CBI is extremely concerned about the impact of Wales-only building regulations:
“The CBI is opposed to the devolution of building regulations in Wales as we believe it is not in the best interests of the Welsh economy or the effective development of new buildings...While we accept some aspects of business policy benefit from devolution, this is not one of them...Differing building regulations to the UK will add complexity, confusion and cost to the construction sector at a time of severe challenge...The administration of these regulations will cost the Welsh Assembly an additional £10 million at a time when frontline services are under growing pressure...We question whether this is the most effective use of Welsh government resources at this current time.”
The national Government have a target for zero-carbon new homes by 2016. That is challenging, but the Welsh Assembly Government’s target is to achieve the same objective by 2011. The Home Builders Federation has expressed extreme concern about the impact on the construction sector of pursuing such an ambitious agenda. The federation represents builders throughout Wales, ranging from multinationals, such as Barratt and Redrow, to smaller local businesses. It has written to me saying:
“We are extremely concerned at the”
Welsh Assembly Government’s
Similar concerns were expressed in a letter from Mr. Graham Anwyl of Anwyl Construction Company of Rhyl, one of the largest builders in north Wales. Mr. Anwyl said:
“Our belief is that meeting the UK target in itself was challenging enough and we understand that the WAG target of zero carbon was announced without any consultation with the development industry...Because of this, we are profoundly concerned at the potential effect it may have on the housebuilding industry in Wales.”
That lack of consultation, which is a theme running through all the representations that I have received, was also identified by Mr. Glyn Watkin Jones of the Watkin Jones Group, the oldest and largest privately owned construction company in Wales. He said that Welsh house builders are already moving out of north Wales to the north of England where not only can they build affordable units, but the catchment area for sales is larger. He considers it imperative for the Welsh housing market that no more changes to building regulations are made until the economy has improved.
Albert Owen (Ynys Môn) (Lab): When the hon. Gentleman consulted, did he contact the Union of Construction, Allied Trades and Technicians, which is the biggest construction union? What sort of questions did he ask the companies when requesting their opinions?
 
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Prepared 4 November 2009