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as since the start of “this so-called recession”. It seems that he has continued to advise the Prime Minister at the heart of the Downing street machine. Can we have a statement from the Leader of the House on this Government’s understanding of the definition of the word “resignation”? Will he please clarify the position of Lord Young—was his resignation a sham or has he somehow been unresigned?

Sir George Young: I look forward to welcoming the UK Youth Parliament to this Chamber tomorrow and to making a short preliminary address along with you, Mr Speaker, and the hon. Member for Wallasey (Ms Eagle). I hope that many of those young people will return in due course as Members when the Chamber is sitting, rather than on a non-sitting Friday.

We are to debate youth unemployment on Wednesday on an Opposition day. I remind the hon. Lady that youth unemployment went up by 40% under the previous Government, at a time when the economy was doing better than it is currently. The Opposition therefore have little to lecture us about on that.

The Localism Bill does not actually include the national planning policy framework. I hope that the hon. Lady will welcome what is happening on Monday, when we will spend a whole day on localism. There are a number of Government amendments that I hope will be welcomed on both sides of the House because we have listened to the debate on the Bill and made some changes.

On forecasts, the hon. Lady ought to know that the Government do not make economic forecasts. That is done by the Office for Budget Responsibility. Its next report will come out on 29 November when the Chancellor makes his autumn statement. Some of the issues that the hon. Lady raised in relation to the IMF have just been dealt with by my hon. Friend the Financial Secretary.

I am sorry that the hon. Lady did not find time to welcome the news from earlier this week about the revival of Stanley dock in north Liverpool, as a result of the regional growth fund, which will help to reduce unemployment in and around her constituency.

Finally, on executive pay, it is worth reminding the House that the average chief executive of a FTSE 100 company earned 47 times the amount earned by the average employee in 1998 and 115 times that amount in 2009, so the gap actually widened under the last Labour Government. I agree with the hon. Lady that there is an unsustainable disconnect between how our largest listed companies perform and the rewards that are on offer. Concern on that comes not just from Government, but from investors, business groups and others. We are considering ways to reform remuneration committees and to empower shareholders, for example by making shareholder votes on pay binding and ensuring that there is shareholder representation on nomination boards. We are consulting on a number of issues, but at the end of the day, it is up to shareholders rather than the Government to determine executive pay.

Philip Davies (Shipley) (Con): May we have a debate on transport funding? A recent survey showed that Bradford was seen as one of the most congested cities in the country. My constituency is probably the most congested part of the Bradford district. I am not asking for extra funding for transport, given the terrible financial legacy that this Government were left by their predecessor.

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What I am asking for is that Yorkshire gets a fairer slice of the transport cake and that Bradford gets an even fairer slice than that.

Sir George Young: I understand my hon. Friend’s anxiety that a larger share of the transport budget should be allocated to his constituency to deal with congestion. There will be an opportunity at Transport questions on 10 November for him to press the case for more funding for his constituency with my right hon. Friend the Secretary of State for Transport, whom I will forewarn that my hon. Friend is on the way.

Mr Barry Sheerman (Huddersfield) (Lab/Co-op): Does the Leader of the House share my concern, in this important and welcome Parliament week, that increasingly there are organisations and individuals in this country who do not believe in equal rights for women? Many of us put our heads in the sand and ignore this issue. It is something that worries me and my constituents, and this House should start to address it.

Sir George Young: I hope that the hon. Gentleman will welcome a number of initiatives that we have taken recently. For example, we are extending child care for women who work for fewer than 16 hours a week. Yesterday’s statement by the Chief Secretary to the Treasury on the reform of pensions had much in it for women, who tend to have part-time and less well-paid jobs. They will gain from the reforms that we outlined. The hon. Gentleman makes his comments in a week when my right hon. Friend the Prime Minister announced proposals to change the rule of primogeniture for the monarchy. If one looks across the board, we have taken a number of steps to promote the cause of women.

Amber Rudd (Hastings and Rye) (Con): The Government have allocated a welcome £20 million to support advice agencies following changes to the Legal Aid, Sentencing and Punishment of Offenders Bill. May I press my right hon. Friend for more information on that £20 million so that advice agencies such as mine in Hastings can find out more about when and how it will be allocated?

Sir George Young: My hon. Friend is right to say that, in the summer, the Lord Chancellor announced £20 million for those providing advice. Announcements will be made shortly about the allocation of that fund, and I know the anxiety felt by the citizens advice bureaux that are waiting for it. I will remind my right hon. and learned Friend that there is a very strong bid from Hastings.

Valerie Vaz (Walsall South) (Lab): In a written answer to the hon. Member for Kettering (Mr Hollobone), the Cabinet Office said that the public duty costs allowance for former Prime Ministers amounted to £1.7 million in the past five years. May we have a statement on the actual work that these former Prime Ministers have done and whether they have had to provide receipts?

Sir George Young: The hon. Lady is tempting me out of my comfort zone. I am not sure that the Government have responsibility for these particular payments. Those concerned are, by definition, no longer Members of Parliament—at least many of them are no longer Members.

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I will make some inquiries with the relevant authorities to see whether any further light can be shed on her question.

Mr James Arbuthnot (North East Hampshire) (Con): May I thank my right hon. Friend for providing a day to debate armed forces personnel shortly before Remembrance day? However, does he agree that the arrangements between the House and the Backbench Business Committee in relation to defence matters are not working? Although I would sometimes like to blame that Committee, on this occasion I really cannot do so. Will he enter into negotiations with the Chair of that Committee, who is doing as good a job as she possibly can in the circumstances?

Sir George Young: I certainly endorse the last remark. Now is not the time to go into the theology of the Wright Committee and the division of responsibilities between the Government and the Backbench Business Committee. My right hon. Friend will know that the four days for defence debates that were traditionally provided by the Government were transferred to the Backbench Business Committee. I understand why it has not been able to find time for them and, in recognition of that pressure, as he has said, we have now found a day for a debate on armed forces personnel. The Government will continue to do what they can to make sure that we do have adequate time for defence debates, and in the review of the Backbench Business Committee, I will see, in conjunction with the hon. Member for North East Derbyshire (Natascha Engel), whether we can move towards a different regime that meets the aspirations of my right hon. Friend and the responsibilities of the Backbench Business Committee.

Mr John Spellar (Warley) (Lab): Yesterday, in the Chamber, the Prime Minister roundly and rightly denounced metal theft. But he then went on to say:

“We are working with the Association of Chief Police Officers to put in place an action plan to deal with this, which will involve looking again at the whole regulation of scrap metal dealers.”—[Official Report, 2 November 2011; Vol. 534, c. 918.]

That is totally unsatisfactory. Everyone knows the answer—it is to license the dealers and to prevent them from dealing in cash. So can the Leader of the House arrange for a debate when that can be explored or, better still, could he use the two spare days he has created in the week after next to put it through and stop what the Prime Minister rightly called “this appalling crime”?

Sir George Young: I am grateful to the right hon. Gentleman. It is an appalling crime and the current legislation is basically unenforceable. Dealers are meant to register with their local authority but there are no penalties if they do not do so. The Government are consulting on a range of measures, including the ones he has mentioned—the banning of cash payments, with everything being done by cheque, and having a much tougher regime. We are consulting to see whether we can have a better regime that reduces the damage done by all these thefts.

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Bob Russell (Colchester) (LD): Mr Speaker, I am sure that you and the whole House will rejoice at the announcement that today a contract will be signed to build an airport on the island of St Helena, and I would like to extend the House’s thanks to all involved. This will bring to an end five centuries of isolation for British people who are proud to live on this overseas territory. With that in mind, will the Leader of the House find time for a debate so that we can discuss how the overseas territories are an important part of this country?

Sir George Young: I am grateful to my hon. Friend for that. It is indeed the case that, after protracted negotiations, the Department for International Development has now agreed to fund the airport in St Helena. I would welcome such a debate, and he might like to put in for a debate on the Adjournment so that we can discuss this issue at more length.

Mr Ben Bradshaw (Exeter) (Lab): Exeter city council and the energy company E.ON have spent considerable time and money preparing to install 500 solar panels on council homes in my constituency, thus reducing tenants’ bills by £120 on average and helping to reduce carbon emissions. That excellent scheme is now threatened with cancellation because of the Government’s decision to more than halve the feed-in tariff. May we have an urgent debate in Government time about this incredible incompetence?

Sir George Young: As the right hon. Gentleman will know, the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) made a statement on this matter on Monday, explaining why the scheme had to be changed. If we did not do this, all the money would have been mopped up by those few people who are currently eligible; the lower the tariff, the more people that can benefit. We had that exchange on Monday. We are now consulting on how we take the scheme forward and I will take the right hon. Gentleman’s comments on board.

Andrew Stephenson (Pendle) (Con): On Monday, we heard that the Government will provide £9 million to reopen the Todmorden curve, cutting journey times between Burnley and Manchester. We also heard about an additional £7.5 million in business support for local manufacturing small and medium-sized enterprises being made available through Regenerate Pennine Lancashire. Both those projects were funded by the Government’s regional growth fund which, it is estimated, will create or safeguard more than 55,000 jobs in the north-west of England. May we have a debate on the huge beneficial impact of the fund on the north-west of England?

Sir George Young: I am sorry that some hon. Members have taken a rather dismissive view of the regional growth fund, and I am grateful to my hon. Friend for identifying a number of projects that will go ahead. We announced £950 million of funding in round 2, supporting 119 businesses and creating or protecting 201,000 jobs. There may be an opportunity on Wednesday for him to come in on that debate, amplify the benefit to many constituencies from the regional growth fund and perhaps encourage those who have been less than generous about it to change their mind.

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Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): This week, Merseyside police announced that it is having to cut 250 officers over the course of the next two years because of the Government’s slashing of its budget. Deputy Chief Constable Bernard Lawson has admitted that there will be an impact on the service that the force is able to provide for my constituents and all the people of Merseyside. May we have an urgent debate on the impact that the Government’s spending cuts are having on front-line policing?

Sir George Young: The hon. Lady will remember that, before the last election, the then Home Secretary made it clear that if he and his party were re-elected, they would not be able to guarantee that there would be no reductions in the number of front-line officers. It is the view of the Government that it is possible for police authorities to cope with the budgets they have been allocated and protect the effectiveness and visibility of front-line policing.

Pauline Latham (Mid Derbyshire) (Con): In response to a question from a Labour Member, the Leader of the House mentioned the Commonwealth discussions that the Prime Minister has had about the royal succession. May I urge the Leader of the House to tell us when we might expect a debate on the royal succession Bill and what that Bill might include?

Sir George Young: When we have a Bill there will, of course, be a debate. I am grateful to my hon. Friend for raising the issue. In his statement, the Prime Minister said that we are intending to legislate

“to end the system of male preference primogeniture and the provision that anyone who marries a Roman Catholic would be ineligible to succeed to the Crown.”—[Official Report, 31 October 2011; Vol. 534, c. 31WS.]

Any legislation that we bring before the House has to work for 16 countries, and to that end a group of senior officials from across those countries is working urgently to agree the necessary legislation. When that has been done, it will be brought before the House.

Keith Vaz (Leicester East) (Lab): Further to that answer, may I say that the Prime Minister needs to be praised for making his announcement in Perth, which was of course supported by the Leader of the Opposition and the Deputy Prime Minister? Further to what the hon. Member for Mid Derbyshire (Pauline Latham) has said, I have a Bill before the House, which is to have its Second Reading on 25 November, that deals with this very point. I am happy to give that Bill to the Leader of the House so that, instead of drafting new legislation, he can use it and introduce the measures as soon as possible, because when it happens here first, it will then happen in the other 16 countries.

Sir George Young: That is an enormously generous offer from the right hon. Gentleman, but he will have heard what I said a moment ago about a working group that is preparing the necessary legislation. He may well have anticipated the output of this hard-working team of people and perfectly drafted his piece of legislation to anticipate what they will recommend, but I am afraid that the Government do not have that total confidence and it might be best to await the output of the working group before we look again at his Bill.

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Paul Uppal (Wolverhampton South West) (Con): Given the excellent news that Jaguar Land Rover is opening a new engine plant—a £355 million investment, which will create up to 750 new skilled jobs—just outside my constituency, will the Leader of the House find time for a debate on the skills gap, as this can provide a platform and a legacy for learners in Wolverhampton?

Sir George Young: I am grateful to my hon. Friend for balancing the news. There is good news in parts of the country and he has just reminded the House of that particular piece of good news. I understand that Jaguar Land Rover is working with the National Apprenticeship Service, the Skills Funding Agency and the black country local enterprise partnership on the whole issue of skills for the new plant. I hope it will be possible to train those who are currently unemployed to give them the skills that they need to work in this new investment—this new engine plant. We are supporting this particular project through the grant for business investment scheme, which is providing up to £10 million.

Steve McCabe (Birmingham, Selly Oak) (Lab): Given the fuss last week about the FairFuel petition, does the Leader of the House accept that No. 10 and the Government may have misled the public into thinking that e-petitions that achieved 100,000 signatures would automatically be debated here? Does he agree that they may also have misled Back Benchers into thinking that the Backbench Business Committee would be there to represent our interests? I know that he would not mislead anyone, but is not the solution to reserve some additional days exclusively for e-petition debates so that the Backbench Business Committee can do the job it was set up to do?

Sir George Young: I am grateful to the hon. Gentleman. If he looks at the coalition agreement, he will see that we made it absolutely clear that once an e-petition got 100,000 signatures it would be “eligible for debate”—I think that is the wording—so there is no question of my or anyone else’s misleading anyone about that. His suggestion that there should be extra time specifically for e-petitions is a helpful one. He will know that the Procedure Committee is reviewing the parliamentary calendar and that we are committed to reviewing the work of the Backbench Business Committee. It may be that those two reviews work together in tandem and that we are able to find extra space within the calendar to debate e-petitions. I know that this is an issue on which the Chair of the Backbench Business Committee has strong views.

Tessa Munt (Wells) (LD): The Government’s cancer strategy for England recognises that access to radiotherapy is critical to improving outcomes. Radiotherapy takes only 5% of the estimated total NHS spend on cancer care but 50% of patients can benefit from it. May I ask the Leader of the House whether he has seen and supports Cancer Research UK’s “A voice for radiotherapy” petition, which has been signed by more than 36,000 people and will be handed in to Downing street this afternoon? As 2011 is the year of radiotherapy, may we have an urgent debate this year on better and fairer access to radiotherapy in England?

Sir George Young: I am grateful to my hon. Friend for raising the profile of Cancer Research UK’s petition. I agree that it would be helpful to have a debate and to see what more we can do to reduce any delays in the use

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of radiotherapy or, indeed, chemotherapy once people have had their operation. There will be an opportunity at Health questions to raise this issue quite soon but, in the meantime, she might like to put in for a Westminster Hall debate so that we can do justice to the important issue she has just touched on.

Andrew Miller (Ellesmere Port and Neston) (Lab): The last time the Minister for Universities and Science, whom I hold in very high regard, appeared before the Select Committee on Science and Technology, he made a statement that affected the science budget stemming from the break-up of the regional development agencies and the redistribution of moneys. That has subsequently been the subject of a series of exchanges about what he actually said versus what he meant to say. Coincidentally, over the summer a very good paper has been published by the Campaign for Science and Engineering in the UK showing that the Government’s science budget is affected by smoke and mirrors. May we have an urgent debate in Government time about the truth around the science budget?

Sir George Young: On 8 December, which is some time away, there will be an opportunity to raise the issue. In the meantime, I should like to raise with my right hon. Friend the Minister for Universities and Science the issue that the hon. Gentleman has just touched on to see whether there is any gap between what my right hon. Friend said and what he meant to say—I am sure there was not—and to deal with the allegation that there are smoke and mirrors in the science budget.

Andrew Miller: I was not blaming him.

Sir George Young: It sounded as though the hon. Gentleman was blaming him. None the less, I shall raise the matter with my right hon. Friend and ask him to write to the hon. Gentleman.

Guto Bebb (Aberconwy) (Con): May we have a debate on the impact of the VAT threshold on micro-businesses and their growth potential? In my constituency, many small businesses involved in the tourism sector are in the process of closing for the winter period. They are closing not because they are scared of work or because there is no opportunity for them to create a market and carry on working, but because the current VAT threshold creates a cliff edge that penalises them for being successful.

Sir George Young: I am grateful to my hon. Friend and of course we will take on board what he says. The current VAT threshold, at £73,000, is one of the highest in the EU. It is the case that some traders would like it to be raised so that they are outwith it, but others would like it to be reduced to avoid unfair competition from those who are exempt. I believe that we have got the balance about right, but in the light of his comments I am sure that Treasury Ministers will want to keep this under review.

Jessica Morden (Newport East) (Lab): We have just passed the fifth anniversary of the collapse of Farepak, but my constituent Deb Harvey, who was a Farepak

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agent, and her customers have not received any compensation and are still waiting for justice to be done in relation to the people who caused the collapse of the company. Does the Leader of the House feel that we should find time to revisit this issue, not least to ensure that it never happens again?

Sir George Young: I am grateful to the hon. Lady for raising this issue. I think we have had debates on Farepak in the past—possibly in the last Parliament. I will raise this with appropriate Ministers to see where we have got to in the process of getting funds for those who lost money. I would welcome a debate on this matter and she might like to apply to you, Mr Speaker, for a debate on the Adjournment.

Christopher Pincher (Tamworth) (Con): May we have a debate on student visas? I am conscious that the Government have already barred 470 colleges from accepting new students as part of their immigration crackdown, but a debate would enable us to explore the extent of the abuse that has been going on and to understand what the Government are doing to stop it.

Sir George Young: I understand that there is an e-petition on the slightly broader issue of immigration and if that got through the 100,000 threshold, there would indeed be a debate in which it would be relevant for my hon. Friend to raise this issue. [ Interruption. ] There might be a debate—indeed. In addition to the 470 colleges that my hon. Friend has touched on, 302 have had their licence revoked and a further 172 have been allowed to continue to teach current students but may not sponsor any new ones from the EU. I hope that he is assured that Ministers at the Home Office have this matter under serious consideration.

Grahame M. Morris (Easington) (Lab): The Leader of the House has previously told us that he is not keen on having any debate that involves the expenditure of additional resources. However, I wonder whether we might prevail upon him to persuade the Health Secretary to have a debate on NHS procurement, not least because we desperately need a credible plan for jobs and growth, and NHS procurement could provide a way of securing such a commitment.

Sir George Young: I am grateful to the hon. Gentleman. I think I am right in saying that the Select Committee on Health, or possibly the Public Accounts Committee, has recently produced a report on NHS procurement—I think it was the PAC—in which case the Government will want to respond to that in due course. If there are lessons to be learned in order to procure more efficiently, get better value for money and, indeed, create jobs by so doing, of course the Government would like to pursue that.

Kris Hopkins (Keighley) (Con): Ilkley business forum in my constituency has established a new scheme to protect local independent traders and to save the town centre. May we have a statement making clear the Government’s support for small traders and outlining what they are doing to protect such traders from national chains and internet shopping?

Sir George Young: I am interested to hear what my hon. Friend’s local authority has done. I believe that our planning proposals will give more weight to local authorities to take the sort of initiative that he has just

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touched on to protect independent stores and local traders. As for protecting them from unfair, predatory trading from some of the giant chains, the draft Groceries Code Adjudicator Bill may give some protection. Of course, the Government have in the pipeline the broader agenda of deregulation, which I hope will help all the small shopkeepers in his constituency.

Graham Jones (Hyndburn) (Lab): We heard today that house building fell to an all-time record low of 121,000 and that the Select Committee on Communities and Local Government has produced a report that condemns the Government’s regeneration policy. Areas such as Woodnook in my constituency are really suffering. Last week, Shelter revealed that in 55% of local authorities people are being priced out. When will the Housing Minister come to the Floor of the House and debate the debacle that is the Government’s housing policy? Let us get to the bottom of this because it is a disgrace.

Sir George Young: There was an exchange on housing on Monday when we had Communities and Local Government questions. We have taken a number of initiatives to promote housing. There is the new homes bonus to encourage local authorities, there is our streamlining of the planning system to remove unnecessary delays and, crucially, as we heard in the previous statement, there are low interest rates, which are crucial to enable first-time buyers to get on to the housing ladder. I hope that a combination of those measures will lead to a revival in house building, and it is worth reminding the hon. Gentleman that we had the lowest output in peacetime since the 1920s under the previous Government.

Mr Bernard Jenkin (Harwich and North Essex) (Con): I thank my right hon. Friend for his sympathetic tone about the lack of defence debates that we have had so far in this Parliament. We are still waiting for debates on procurement and defence policy, for example, and we are also still waiting for the annual debate on the civil service. Is not the right answer that we should move swiftly towards having a fully fledged business Committee so that we can end the division of responsibility that has led to these problems?

Sir George Young: The proposal in the coalition agreement envisages, certainly in the short term, two Committees: a BackBench Business Committee dealing with Back-Bench time, and a House business Committee dealing with Government time. In the longer term, we may move to a single, integrated Committee, but the initial proposal was that there should be two, side by side. Whether that would resolve the dilemma on which my hon. Friend touched, I am not sure because there would still be tension between, on the one hand, providing more time for Back-Bench business and, on the other, providing adequate time to scrutinise Government legislation. [ Interruption. ]We are sitting longer in the first two years of this Parliament than in the first two years of the previous Parliament. In the remaining days of this Session, I will see whether there is headroom to provide for more debates on defence, which is what prompted my hon. Friend’s initial question.

Pat Glass (North West Durham) (Lab): This week, the Government announced a review of feed-in tariffs, which will put at risk jobs across the country, not least

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at Romag in my constituency which, among other things, is responsible for the security screen in the Commons. At the same time, the Government have provided a regional growth fund so that companies can import solar panels from China for assembly in the UK, so that the onward sale is British. May we have an urgent statement on that piece of economic insanity?

Sir George Young: We have had a statement on this enlightened policy, if I may phrase it slightly differently. I am sure that the hon. Lady was in the House when the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) replied to that question. The return on solar panel investment will be roughly what it was when the Labour Government began the scheme. We have recalibrated it to take account of the falling costs of solar panel installation. We are consulting on what replaces the regime after 12 December, and her thoughts will be welcome.

Bob Stewart (Beckenham) (Con): May I reinforce what my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), the Chair of the Select Committee on Defence, and my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) have said? I am quite shocked, as a new Member, that while we are fighting what looks increasingly like a guerrilla war in Afghanistan and are taking casualties, the House has not spent time generally looking at what we are doing in defence.

Sir George Young: I detect the serious mobilisation of the armed forces on the Benches behind me, pressing for a further defence debate. As my hon. Friend knows, we have provided one day and, as I said in response to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), between now and the end of the Session, now that most of the major Bills have gone through the House, there may be headroom to provide some of the debates that were provided in Government time in the previous Parliament but which, for whatever reason, have not been forthcoming so far in this one.

Fiona Mactaggart (Slough) (Lab): The right hon. Gentleman will be aware that I apologised to the Economic Secretary to the Treasury for my patronising tone in my question to her on Monday, but will he ask her to come back and apologise to the House for misleading it when she claimed that unemployment under the previous Government reached 30%?

Mr Speaker: Let us hear the response from the Leader of the House, but I must say, while I note what the hon. Lady has said, that we need to be very careful about accusing Members of misleading the House. She may wish to insert the word, “inadvertently”.

Fiona Mactaggart: I am sure that it was inadvertent. Perhaps the Economic Secretary would come to the House and explain how she arrived at that figure.

Sir George Young: In fairness to the hon. Lady, I welcomed what she said at the outset of her remarks about apologising for any offence that she may have caused my hon. Friend the Economic Secretary. I will draw my hon. Friend’s attention to this exchange, and

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ask her to write to the hon. Lady clarifying the use of the figures and, I am sure, justifying any figure that she used in the Chamber.

Richard Graham (Gloucester) (Con): Given the recent publication of the Justice and Security Green Paper, which includes proposals on the reform of the Intelligence and Security Committee, and covers the protection of sensitive material, which is especially relevant to my constituents in Gloucester who work at GCHQ, will the Leader of the House consider providing time in the near future for the annual debate on the ISC?

Sir George Young: I am grateful to my hon. Friend, and I recognise his constituency interest. We have both seen the ISC annual report, as well as the consultation exercise announced by my right hon. and learned Friend the Lord Chancellor a few days ago and the recently published Justice and Security Green Paper. I shall reply in similar terms to the reply that I have given on an earlier occasion. I hope that it will be possible to find time to debate this important matter during the remainder of the Session, but whether in Government or in Backbench Business Committee time is something that needs to be resolved.

Ian Lavery (Wansbeck) (Lab): In Ashington in my constituency, 20.7% of 16 to 18-year-olds are classified as NEETs—not in education, employment or training. Will the Leader of the House make time to discuss the bleak future faced by hundreds of thousands of young people as a result of the Government’s policies?

Sir George Young: I announced in the business statement that there would be a debate in Opposition time on youth unemployment on Wednesday, so the hon. Gentleman will have an opportunity to raise those issues. There will also be an opportunity for Ministers to explain the initiatives that they have taken, including the Work programme, investment in apprenticeships, and universal credit, which were all introduced to try to help the people in his constituency who hope to get into work.

Mr Mark Williams (Ceredigion) (LD): May we have a debate on the appalling human rights situation in Iran, made worse by the spectre of 3,250 Iranian citizens who are in Camp Ashraf and who will be forcibly removed in 57 days, probably back to Iran, potentially with catastrophic consequences?

Sir George Young: I understand the concern expressed by my hon. Friend. I will contact the Foreign Secretary and ask him to write to him outlining what representations the British ambassador and the Foreign Office have made on this issue.

Nic Dakin (Scunthorpe) (Lab): A report by the Fawcett Society shows that women are affected worst by Government cuts. Notwithstanding the earlier comments by the Leader of the House, may we have a clear statement from the Government about what they are going to do to ease that pressure on women’s lives?

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Sir George Young: Women have an interest in the Government’s economic policies, which lay the foundations for sustainable growth, enabling the country to remain competitive. They have an interest in the success of the action that we have taken to get the deficit down and rebuild confidence in the country. Women have much to gain from the success of that policy.

Mr Peter Bone (Wellingborough) (Con): At the start of Parliament week, and with a leading Parliamentarian at the Dispatch Box, one thing that the Government could do very quickly is move towards the establishment of a business of the House Committee, so that Parliament timetables everything? The commitment, I accept, is not to go beyond 5 May 2013, but could we have it earlier, and may we have a statement from the Chief Whip welcoming that measure?

Sir George Young: I know that my hon. Friend has a good working relationship with my right hon. Friend the Patronage Secretary, particularly in the light of the private Member’s Bill that my hon. Friend introduced to abolish the Whips Office.

The Wright Committee recommended the measure but, at the end of the previous Parliament, the outgoing Government failed to accept that recommendation. We remain committed to doing it in the third year of this Parliament. Whether it makes sense to bring it forward before the review of the Backbench Business Committee is complete, I am not certain. However, we are committed to further reform of the way in which the House manages itself, and we are committed to the establishment of a House Committee to work alongside the Backbench Business Committee so that there is a slightly broader basis on which Government business is decided.

Barry Gardiner (Brent North) (Lab): Will the Leader of the House take a careful look at the timing of consultations? Many Members have long believed that consultations are not necessarily the most effective way of changing Government policy, but the consultation on the feed-in tariff is the first occasion on which that which is being consulted on has been announced to come into effect 12 days before the end of the consultation. Considering that point would help the Government, if only to avoid judicial review.

Sir George Young: That seems to be a repetition of a question that the hon. Gentleman put on Monday to the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle. We had to have a cut-off point to stop the erosion of funds under the current scheme. We are now consulting on what should replace that scheme, which is a sensible way forward.

Mr David Nuttall (Bury North) (Con): May we please have a statement on the Commonwealth Heads of Government meeting? Apart from the agreement in principle that was reached to amend the rules relating to royal succession, many other matters were discussed. The Prime Minister routinely makes oral statements to the House after European Council meetings, and it would help reflect the great importance of the Commonwealth if it became routine for oral statements to be made following Commonwealth Heads of Government meetings in the future.

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Sir George Young: I am grateful to my hon. Friend for his recognition that the present Prime Minister regularly makes statements to the House. He has made 23 so far this Session—a higher average strike rate than his predecessors. With statements after Commonwealth Heads of Government meetings, we have followed the procedure adopted after earlier such meetings. There was a written statement to the House in 2005, in 2007 and in 2009, and we have simply carried that procedure forward.

Diana Johnson (Kingston upon Hull North) (Lab): I have been contacted by Mr Les Bennett, a small businessman in Hull. Seven weeks ago he took to market a new software application that would assist the solar panels industry. His business is now in ruins because of Monday’s announcement about the feed-in tariff. May we please have a debate on the Government’s commitment to small businesses and the renewables industry?

Sir George Young: Obviously, I am sorry to hear about the hon. Lady’s constituent. I am not quite sure why a software application should not continue to be relevant even though the tariffs have changed. I hope Mr Bennett can recalibrate whatever product he has, in order to cope with the new regime.

Joseph Johnson (Orpington) (Con): Heathrow and Gatwick are operating at 99% capacity, leaving little scope for the UK economy to take advantage of the growth opportunities in the BRIC economies—those of Brazil, Russia, India and China. After the debate on the airstrip on the island of St Helena, in which the Leader of the House expressed such interest, might we perhaps find time for a further debate on UK aviation strategy and proposals for a new hub airport for London, so that such important opportunities do not go begging for a moment longer than necessary?

Sir George Young: There will be an opportunity at the next Transport questions for my hon. Friend to raise that issue. He raises a serious point about the future of aviation policy. I would welcome such a debate in Westminster Hall, either according to the guidance of Mr Speaker or in Backbench Business Committee time, so that the Government can set out their current aviation policy and those who are in favour of alternative provision can make their case.

Jonathan Ashworth (Leicester South) (Lab): Could the Leader of the House find time for a debate on the future of local and regional newspapers, many of which have been under some strain recently? Is the right hon. Gentleman as delighted as I am that following my representations, the Leicester Mercury is now available in the Library?

Sir George Young: I congratulate the hon. Gentleman—but I hope that he is not going to start a bidding war in which all hon. Members seek to catch Mr Deputy Speaker’s eye and raise the fortunes of their local newspaper. We have just had Department for Culture, Media and Sport questions. I am not sure whether the hon. Gentleman was in his place, but I am sure that the Leicester Mercury will adequately record this exchange.

Mark Pawsey (Rugby) (Con): There is concern in my constituency over the intention to close Birch ward, at the hospital of St Cross in Rugby, later this month.

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That action arises because of the need to reduce the deficit within the hospital trust, which includes a large private finance initiative hospital based at Coventry. May we have a debate to consider the consequences of PFI funding, which was so favoured by Labour in the delivery of health care?

Sir George Young: I am sorry to hear of the problems that confront my hon. Friend’s local hospital as a result of the private finance initiative scheme. We have done a review of PFI schemes that has produced annual savings of about 5% on NHS PFI schemes. I will draw the case of my hon. Friend’s hospital to the attention of the Treasury to see whether that scheme is one of those under review. Twenty-two NHS trusts have identified their PFI payments as an issue in terms of being financially sustainable, and plans have now been agreed for most of those at local health economy level, to ensure that that does not undermine their sustainability.

Bob Blackman (Harrow East) (Con): Will my right hon. Friend join me in wishing Hindus everywhere a belated happy Diwali last week? As well as welcoming that important festival, will my right hon. Friend join me in welcoming the decision of the Department for Education to grant initial approval to St Chaitanya’s school, a new Hindu free school for the borough of Harrow that will provide 1,470 young people with a faith-based education as part of this Government’s excellent free schools programme?

Sir George Young: I join my hon. Friend in welcoming that initiative. I am glad the Government are taking it forward. It is the second scheme in this country sponsored by I-Foundation. It will be a free school, but like all schools that have a broad, balanced curriculum, it will build its ethos on the faith values of integrity, respect, courage, empathy, self-restraint and humility. I wish the school and its promoters every good fortune in the future.

Henry Smith (Crawley) (Con): Recently a constituent came to me concerned that in the space of five days she had received seven separate letters, almost identical, from the Child Support Agency, each envelope containing an identical large booklet. Can we find time for a debate on the efficiency of the Child Support Agency?

Sir George Young: I think we all know from our advice bureaux that the current child maintenance system is not working properly. We have in mind a major child-centred reform promoting, where possible, agreement between the parents on the financial regime. I very much hope that once this new maintenance system is up and running, my hon. Friend will have fewer problems such as the one he has just described.

Glyn Davies (Montgomeryshire) (Con): One of our great concerns is the low number of organ donations in the United Kingdom compared with other European countries, which has led to discussion about possibly introducing presumed consent, which I personally oppose. May we programme a debate in the Chamber to consider how we might increase that number, taking as an example what has happened in other European countries?

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Sir George Young: I am grateful to my hon. Friend, and I have here my own donor card—which I hope will not be activated in the very near future. We have taken a number of initiatives. For example, when people renew their driving licence they are encouraged to take out a donor card. The issue of presumed consent raises a whole lot of ethical questions, and I am sure they should be debated, but at present the Government’s energy is devoted to encouraging the take-up of donor cards.

royal assent

Mr Deputy Speaker (Mr Nigel Evans): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Coinage (Measurement) Act 2011

Armed Forces Act 2011

Pensions Act 2011

Bill Presented

Household Safety (Carbon Monoxide Detectors) Bill

Presentation and First Reading (Standing Order No. 57)

Mr Barry Sheerman, supported by Jason McCartney, Meg Munn, Julian Sturdy, Steve Baker, Andrew Percy, Laura Sandys, Dr Hywel Francis, Karl McCartney, Andrew Stephenson, Chris White and Heidi Alexander, presented a Bill to introduce a requirement that a functioning carbon monoxide detector must be installed in residential properties; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 25 November, and to be printed (Bill 245).

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Commission on Devolution in Wales

1.7 pm

The Secretary of State for Wales (Mrs Cheryl Gillan): I beg to move,

That this House has considered the matter of the Commission on Devolution in Wales.

Before I commence the debate, may I—with the permission of the Speaker, which I sought earlier—say to the right hon. Member for Neath (Mr Hain), who speaks for the Opposition on Wales, that I was shocked to hear of the incident at the Aberpergwm mine at 3 am, but I was also exceedingly glad to know that all three men have been brought out of that mine successfully? It reminds all of us, particularly after the sad events at the Gleision mine, that men are putting their lives on the line each and every day to recover coal. Because both those incidents involved the right hon. Gentleman’s constituency, I thought we should acknowledge that.

Mr Peter Hain (Neath) (Lab): I am very grateful, and thank the right hon. Lady for that, as will the families and the individuals involved. I thank her too for her support for the miners appeal fund and for her support over the tragedy at Gleision. Today’s incident, although obviously serious, particularly for those concerned—they have suffered injuries, but fortunately they are okay—is in a very different category from Gleision, which was a major disaster and tragedy. Aberpergwm pit is run extremely efficiently by a company with high levels of investment, recruiting miners and apprentices, and in all respects an admirable company. The incident is rather an exception, but it is the third one in my constituency in the past couple of months.

Mrs Gillan: The right hon. Gentleman knows that my door is always open. We have already spoken to other Departments from my office and we will continue to deal with these matters on a cross-party and non-political basis, as is the proper and right way to deal with them.

I am pleased that we have been able to give the House an opportunity to debate in Government time the work of the Silk Commission, the commission that I announced on 11 October would examine devolution for Wales.

The coalition agreement contained three specific items on Wales. First, we promised to take forward the housing legislative competence order that had been held up by the previous Government, and I am pleased to say that we delivered on that. Secondly, we promised a referendum on granting primary legislative powers in devolved areas to the Welsh Assembly Government, and we delivered on that, although on taking office I found that preparations were—how shall I put it?—behind the curve.

Mr Wayne David (Caerphilly) (Lab): Before the right hon. Lady moves on from the subject of the coalition agreement, may I point out that her party, in opposition, blocked the housing LCO during the wash-up period before the general election?

Mrs Gillan: The hon. Gentleman, who was serving in the Wales Office at the time, arranged the timetabling so that the LCO would fall in that period; he could have delivered it much earlier.

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Thirdly, we promised that following the referendum we would establish a process for Wales, in the vein of the Calman commission, and I am pleased to inform the House that we have delivered on that.

Huw Irranca-Davies (Ogmore) (Lab): Before the right hon. Lady takes credit for every achievement, may I ask her to acknowledge that although the Government put the legislative framework in place, the referendum was delivered by the people of Wales, who voted for it? I am sure she will want to acknowledge that.

Mrs Gillan: The hon. Gentleman is dancing on the head of a pin. This Government gave the people of Wales the opportunity to vote in the referendum, as indeed they did, and I was pleased by the outcome. It was only as a result of a great deal of work and application by the Wales Office and others in government that we were able to deliver that on time and to the schedule anticipated.

I am pleased that today, before the first meeting of the Silk commission, we have given all Members an opportunity to register their views by allowing a full-day debate. It is fair to say that Westminster politicians rarely get the time to stand back and thoughtfully consider the future shape of our country’s constitution. We react to events, perhaps to political and tribal allegiances and timetables and, as John Major said in his Ditchley Foundation annual lecture, the Union cannot be maintained by constant antagonism—for example, between Wales and London.

Like our former Prime Minister, I opposed devolution because, as a Unionist, I believed it could be the slippery slope to separation. I am now less fearful of separation and more hopeful—

Huw Irranca-Davies: Not all of you are. What about the others?

Mrs Gillan: The hon. Gentleman suggests that not all Members are less fearful. That is fair and, in the spirit of the debate, I want to hear from Members who do not share the views that he and I hold. My fears about separatism, which have diminished, might be reflected in some Members’ contributions. I am more hopeful that there will be a mature debate and reasoned solutions, delivering a degree of self-determination without threatening the strength of the Union. With the advent of the commission, we are getting time to contribute and reflect.

Geraint Davies (Swansea West) (Lab/Co-op): Is not the real Conservative agenda to offer tax-raising powers in order to freeze the block grant and end up with a semi-detached Wales, with less representation, thereby securing a permanent Tory-run Westminster, fracturing or destabilising the Union?

Mrs Gillan: I do not know what tortuous mental processes the hon. Gentleman goes through, but I assure him that I have no ambitions in that direction whatsoever. He has been spending too much time with the right hon. Member for Neath, who sees conspiracy theories in every quarter. This is a genuine open consultation, and the hon. Gentleman will hear as I develop my speech

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that the Silk commission is giving us an opportunity to reflect and try to shape the architecture of devolution in Wales.

The commission provides a coherent opportunity to review the working of devolution in Wales and the financial accountability of the devolved institution. Assembly Members are accountable to the people of Wales at the ballot box. They are judged on their record, on the decisions they make and on the outcomes of their policy decisions. We all know that government is a difficult business that involves administering complex issues and looking after the totality of the system for the people of Wales. We therefore need the commission to examine how the devolution system is working, and whether changes might improve its performance.

Mr David Hanson (Delyn) (Lab): Will the Secretary of State ensure that the commission looks carefully at the impact of the border? My constituency, and that of many others, is close to the English border. People who live in my constituency work in England, and people who live in England work in my constituency. The differing rates of VAT, corporation tax and quarrying tax, and of expenditure, are important on both sides of the border. I do not want the commission to look specifically at Welsh issues without taking representations from the English side of the border.

Mrs Gillan: I could not agree more with the right hon. Gentleman. I refer him to the commission’s specifications, in which we state that it should

“consider and make recommendations on how best to resolve the legal and practical implementation issues from devolving a package of fiscal powers”.

I think that says it all: we are keeping an open mind. The right hon. Gentleman knows that since becoming shadow Secretary of State, I have been concerned about the implications of the permeability of the border. The commission offers us the chance to look not only at recommendations that might be made but at the practical difficulties.

Mr Hanson: Does the Secretary of State agree that one of the factors that the commission should take into account is that Welsh Members of Parliament such as me, whose constituents use hospitals in England and work in English businesses, should have the right to vote on those matters, too?

Mrs Gillan: We proposed to hold this debate before the first meeting of the commission to enable Paul Silk and the other commissioners to hear Members’ views. The right hon. Gentleman’s point is well made, and I know that when the commissioners read Hansard they will take it on board. I do not want to tie the commissioners’ hands; they must decide how they will work.

Alun Cairns (Vale of Glamorgan) (Con): The right hon. Member for Delyn (Mr Hanson) makes a principled point, the logic of which should have been extended to the previous referendums on devolution. Why did that not happen?

Mrs Gillan: If I recall correctly, the Richard commission reported before the Government of Wales Act 2006 was enacted. Reaction to the commission—a pick-and-mix

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effect—was interesting. The 2006 Act contained some items that had not been telegraphed quite so clearly, and the House certainly did not have the opportunity to debate it as fully as I am trying to ensure that we debate things today and in future. My hon. Friend is quite right about that.

Mr Hain: I do not understand whether the Secretary of State is saying that we did not have time to debate the Richard commission, which is a fair point, or that we did not have time to debate the 2006 Bill, which is not a fair point as we had plenty of time.

Mrs Gillan: I am glad that the right hon. Gentleman agrees that we did not have enough time to debate the Richard commission, which is indeed a fact. I was thinking of the changes to the Assembly’s electoral system, which were not telegraphed extensively and we did not have a chance to discuss—

Mr Hain: We did.

Mrs Gillan: We may have had plenty of time in Committee, but not beforehand, and there was no wide or extensive consultation. I take the right hon. Gentleman’s point, however.

Hywel Williams (Arfon) (PC): May I just recommend to the House in general, and perhaps to the Silk commission, that the commission look at the reports of the Welsh Affairs Committee on cross-border issues—which were what started this little exchange? Although the reports recognised that there were problems, they also recognised that there was a great deal of good will across the border, and that the systems were working very well indeed.

Mrs Gillan: That is a very constructive intervention, and in my experience the system does work exceedingly well in some instances, but that will be a matter for the commission to consider, and it will want to look at examples of what is working well and what needs adjustment.

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC) rose

Mrs Gillan: I will give way to the right hon. Gentleman, then I must make some progress.

Mr Llwyd: Further to the point that my hon. Friend the Member for Arfon (Hywel Williams) made, the right hon. Lady will be aware that in the most recent referendum the majorities along the border in favour of further devolution were very high, apart from in Monmouth.

Mrs Gillan: The right hon. Gentleman will be very pleased, therefore, that the Assembly now has primary legislative powers, and I am sure that he will be spending a lot of his time constructively trying to encourage the Welsh Government to come forward with some legislation, because it is now many months since the election, and correct me if I am wrong—I see the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) and the hon. Members for Carmarthen East and Dinefwr (Jonathan

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Edwards) and for Arfon (Hywel Williams) nodding their heads—but we have not yet seen any draft legislation from the Welsh Government, even though they were well prepared in advance of the referendum.

David T. C. Davies (Monmouth) (Con): My right hon. Friend will be aware, of course, that the loyal county of Monmouthshire voted no in the recent referendum, as it always has in previous referendums.

Mrs Gillan: That shows the advantage of this approach to constitutional change: all hon. Members, no matter where they come from, how they speak and from what direction they approach constitutional matters, will have an opportunity to express their views. I am grateful to my hon. Friend, and I am sure that he will speak later in the debate and let the House know what he feels the Silk commission should consider.

Before I took that series of interventions, I was saying that neither the Assembly nor the Welsh Government are accountable to the people of Wales for the money that they spend on the policies that they implement. The Welsh Government simply receive the Welsh block grant voted by Parliament, and spend it.

That cannot be right. With power comes responsibility, and it is surely better for the devolved institution to be accountable to the people of Wales not just for decisions on public spending in Wales, but by being responsible for raising some of the money needed to pay for those decisions. Even local authorities, despite receiving block grants, have responsibility for raising local council tax, and consequently they recognise the difficulty of raising tax moneys before they spend money. There is no reason why one institution—

Owen Smith (Pontypridd) (Lab): Will the right hon. Lady give way?

Mrs Gillan: I have been very generous, and would now like to make some progress.

There is no reason why one institution should be immune from raising taxes, and instead simply spend money and continue to ask for more—but the Labour party seems to think that that should continue. Only last Friday the right hon. Member for Neath said in The Western Mail that seeking more accountability for the Assembly and the Welsh Government was a “curiously disturbing motive”, so I certainly look forward to hearing his further observations in a minute, because I should like him also to explain the contradiction between his position and that of the Labour First Minister, who welcomes the commission and its objectives.

The first part of the Silk commission’s remit is to look at financial accountability. It will consider the case for devolving fiscal powers and recommend a package of powers that could improve the Assembly’s financial accountability. Those powers would need to be consistent with the United Kingdom’s wider fiscal objectives.

The commission will consider the tax and borrowing powers that could be devolved to the Assembly and the Welsh Government. Those include powers in relation to landfill tax, air passenger duty and stamp duty, but they are not limited to those taxes. The commission’s remit, however, is to recommend the devolution only of taxation powers that are likely to have wide support, and it will need to consult broadly to secure that support not only in Wales but in other parts of the United Kingdom.

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Huw Irranca-Davies: I thank the right hon. Lady for giving way again; she is generous. I wish to ask about her position as Secretary of State on a point of principle underlying the Silk commission’s consideration of such fiscal powers. Does she agree that it would be wrong of any review to make recommendations that were to the financial disadvantage of the people of Wales, recognising, good Unionist that she is, that the nature of the Union depends on ensuring that economically disadvantaged areas receive greater subsidy from other parts of the UK? On that point of principle, does she concur that today we should all agree that any review of fiscal union does not disbenefit the status quo in Wales, and should if anything improve its lot?

Mrs Gillan: The hon. Gentleman makes a valid and good point, but once again I do not want to prejudge or tie the hands of the Silk commission, although I cannot imagine a situation in which an agreed solution, as I have anticipated and laid out in the terms of reference, would disadvantage Wales. That is far from my motivation, as he will see as I progress with my speech.

The commission already has contributions to its evidence base from work such as the Holtham commission’s reports, which were prepared to a Welsh Assembly Government remit, but crucially, unlike Holtham, the Silk commission can take things a step further. The terms of reference require the commission to consider implementation and to make recommendations on how best to resolve the legal and practical implementation issues that arise from devolving a package of fiscal powers and having consistency within the United Kingdom.

The commission will aim to report on part 1 of its remit in the autumn of next year, and the Government will consider its recommendations very carefully. Members may wish to contribute directly to the commission as well as in today’s debate, but I very much hope that we will be able to hold a debate, again on the Floor of the House, at some stage following the delivery of part 1 of the commission’s findings, because the intention is to take the matter forward as consensually as possible.

The commission will then turn its attention to the second part of its remit—to look at the current constitutional arrangements in Wales. Specifically, it will consider the powers of the Assembly and the boundary between what is devolved and non-devolved, and make recommendations to modify the boundary, if they are likely to enable the Welsh devolution settlement to work better. Again, the commission will need to consult broadly on its proposals and make only those recommendations for change that are likely to have wide support.

Currently, the Assembly has powers in all 20 devolved areas, and it will be for the commission to decide whether there is a requirement to tidy up the devolution boundary, but any further changes to the settlement will need to be right for Wales and right for the United Kingdom as a whole. I anticipate the commission reporting on part II of its remit in 2013.

With the exception perhaps of the right hon. Member for Neath, there is broad agreement on the basis for moving forward and considering issues of both fiscal devolution and accountability. The Government have moved forward collaboratively with all four political parties in the Assembly, in establishing the terms of reference and the members of the commission, and I

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thank in particular all four party leaders in Cardiff Bay for the positive and co-operative spirit in which they are engaged with me and my office to agree the way forward.

David T. C. Davies: We are at an early stage in proceedings, but will my right hon. Friend and, perhaps, the right hon. Member for Neath (Mr Hain) when he speaks explain whether those nominees will be representatives who represent what their parties think, or delegates who simply pass on what their parties suggest?

Mrs Gillan: That is a matter not so much for me, but for the right hon. Gentleman, who I am sure will want to deal with it when he addresses the House. As far as the Conservative party is concerned, I want to be as inclusive as I can of people’s views, and that is why I am trying to create a period in which any member can make a contribution. The Conservative party, in particular, will make contributions to the Silk commission’s proceedings.

Hywel Williams: I merely wish to note that some distinguished members of the commission are not strictly aligned to political parties. I am sure that they will make a contribution that might even satisfy the hon. Member for Monmouth (David T. C. Davies). Given the quality of the representation, it would be strange if they were there merely to be mouthpieces for political parties. Clearly, they have a great deal to contribute as individuals.

Mrs Gillan: I am about to come to the composition of the commission, and I will pick up the hon. Gentleman’s point then.

Huw Irranca-Davies: On a point of detail about the possible extension of powers that the Silk commission is considering, will that include energy consents? The matter has been debated a lot recently, as the Secretary of State knows, and it has some support, and opposition, on both sides of the House. Ministers have made it clear that they do not think that it should be part of the commission’s deliberations. Will she clarify the situation?

Mrs Gillan: I am grateful to the hon. Gentleman for raising that matter, particularly as before the debate I was looking at the party manifestos for the Assembly elections. He will know that I regularly receive requests for powers over all sorts of areas, and I expect those areas to be looked at. It is fair to say that I expect the commission—this is subject to the way in which it wishes to conduct its business—to consider requests for energy consents for projects of more than 50 MW, and to consider trust ports, rail and separate Welsh legal jurisdiction, all of which have been raised up the agenda by one or other party, or the Welsh Government. It is right that it should have the opportunity to consider energy consents, but I have an extremely long list of things that other parties want fully devolved, which will not stop until the point of separatism is reached. He and I agree that that is not the way to go. The commission may find itself having to consider several other areas, but I am not going to restrict its operation by anything we say in the House. Indeed, I am looking forward to seeing the outcome.

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Jonathan Edwards (Carmarthen East and Dinefwr) (PC): Will the Secretary of State give way?

Mrs Gillan: May I make a little progress? The commissioners bring a wealth of experience to their important task. The commission is chaired by Paul Silk, a distinguished former Clerk to the National Assembly and to this House, whom we all know. Paul is already getting to grips with his task and introducing himself to those with an interest in the commission’s work.

The hon. Member for Arfon referred to the two independent members, and they are very distinguished. Dyfrig John CBE is chairman of the Principality building society and a former deputy chairman and chief executive of HSBC bank. Professor Noel Lloyd CBE is a former vice-chancellor and principal of Aberystwyth university. Neither is on the commission with a political remit. They are there as independent members to offer their best advice and to support the other members. I am sure that absolutely nothing from them will have a political bias. They will consider matters objectively and with expertise.

There are also four party political nominees on the commission, each nominated by one of the four political parties in the Assembly. Professor Nick Bourne is the Conservative nominee, and former leader of the Welsh Conservatives in the Assembly; Sue Essex is the Labour nominee, and a former Welsh Assembly Government Minister; Rob Humphreys is the Welsh Liberal Democrat nominee, and director of the Open university in Wales; and Dr Eurfyl ap Gwilym is the Plaid Cymru nominee, and best known for giving Jeremy Paxman a run for his money. I am sure that the commission’s debates will be lively. I believe that that is a first-class team, and it will meet for the first time tomorrow to consider how it will work through the next two years. The commission has a challenging brief because, importantly, we hope that it will build consensus on its proposals.

Guto Bebb (Aberconwy) (Con) rose—

Mrs Gillan: I will give way first to the hon. Member for Carmarthen East and Dinefwr—I have not given way to him previously—and then to my hon. Friend.

Jonathan Edwards: Based on what the Secretary of State says about consensus, which we hope the commission will be able to achieve, will she outline the process, how its recommendations will reach the statute book, and the time frame? No one in Wales is interested in a kicking-into-the-long-grass game.

Mrs Gillan: It depresses me a great deal to hear hon. Members say that I am kicking the matter into the long grass. I am certainly not. I am trying to take a mature and adult look at the financial structures and the constitutional and legislative structures affecting Wales. However, I will not prejudge the outcome, and I will not be prescriptive, but I have to look at potential timetables. Three have been set out. One has a shorter time scale, which assumes that, whatever the recommendations, no manifesto commitments or referendum would be necessary. In fact, it would be very difficult to produce a Bill by the time of the next general election, and the time scale could be unfeasibly short. However, again, I am not ruling that out; I am simply saying that it would be

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difficult. If we did that, and if there were new fiscal and constitutional powers, they would be implemented post-2015.

Another scenario is based on a manifesto commitment and no referendum, which would lead us to believe that there would be legislation after the next general election. However, I do not know what the Silk commission will recommend, or whether it will require both manifesto commitments and a referendum, in which case the time scale would be slightly longer.

I would like the hon. Gentleman to take me at my word. We are taking a long, hard look at the matter in a genuinely cross-party way. I think he knows that I made some effort to ensure that his party was included, because I thought it was important to start as we mean to go on. I hope that we will continue in that vein, although I appreciate that anything could happen at any time.

Guto Bebb: I share the view that the membership is impressive and that it will do a good job, but I have been contacted by a small number of constituents who have asked whether it will be remunerated for its work on our behalf.

Mrs Gillan: My hon. Friend can reassure his constituents that no member of the commission is being remunerated. They have all agreed to waive remuneration, but their expenses will be met from my Department. We have set aside a sum of money over three years to meet those expenses. At this stage, we are not sure how they will pan out, because I want the commission to decide how it will do its work, as it rightly should, and I do not want it to be restricted. He can reassure his constituents that the commission is doing this work for its love of Wales.

Jenny Willott (Cardiff Central) (LD): I apologise for my voice being about an octave lower than normal. This is not a point I often make, but there is only one woman on the commission. Will the Secretary of State assure the House that it will take evidence from and talk to a wide range of people to obtain a broad range of views from both genders and across all communities in Wales, including different ethnic minority groups, so that it can take account of different perspectives?

Mrs Gillan: That point was well made. I, too, was concerned, and I looked at the gender balance, having been a former Minister for women. I think Sue Essex will be a doughty and robust member—[ Interruption. ] As my hon. Friend the Member for Lichfield (Michael Fabricant) says, she is equal to two men. I am sure she will give us a run for our money.

I agree entirely that many of the matters that the commission will discuss will be of great interest not only to women, but to ethnic minorities. I am sure that Paul Silk will take on board the concerns of my hon. Friend the Member for Cardiff Central (Jenny Willott).

We now have 12 years of experience of devolution in Wales. That has involved not one but two pieces of legislation that have been used to try to shape devolution to the purposes of the previous Government. There is obviously much that could be said about the effectiveness of the Assembly and the Welsh Government, but that can be better examined and tested with more accountability and the benefit of that experience.

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The Government are now trying to ensure that we have a process to assess the position of Wales within the United Kingdom and to take a detailed, objective and structured examination of the architecture of devolution. This is a mature way to ensure that the Assembly and the Welsh Government get the responsibility they need to ensure accountability, and that the dividing lines on devolution benefit Wales and do not leave the Administration perpetually demanding more powers and more money rather than getting on with the business of running the devolved areas for which they have responsibility.

This is also an important statement of intent by the coalition Government. The Welsh Government receive nearly £15 billion a year from the Treasury, but, as I have said, are not accountable for raising a penny they spend. We do not think that is right, and I am certain that taxpayers do not think it is right either. I want the argument, for once, to move away from whether there is enough money to how it is spent and whether it is spent effectively. It is true to say that a Government who take from Peter and give to Paul can always rely on the support of Paul. We are asking the commission to see whether Paul can also make a contribution.

I look forward to hearing Members’ contributions and maintaining an open mind on how we can improve devolution and, through that, the economy of Wales and the well-being of its people. I hope that we will hear moderate, realistic and interesting views on the balance of powers between Westminster and Cardiff. I am sure that everyone in this House will send Paul Silk and the members of the Silk commission their best wishes for the task ahead.

1.41 pm

Mr Peter Hain (Neath) (Lab): Let me begin, Mr Deputy Speaker, by welcoming the fact that we have a Welshman in the Chair for this debate—a Swansea boy who is, I am sure, delighted that Swansea City is in the premiership playing some very good football this season.

Just for the record, I cannot let the Secretary of State continue to repeat the fiction that when she arrived at the Wales Office in Gwydyr house in early May, the cupboard was bare and nothing had been done about the referendum. She knows that that is not the case. She will also know that a couple of days before she went up the stairs at Gwydyr house to occupy the office, I had sought confirmation that we could have delivered the referendum by the autumn, if we really had to; it would have been a tight squeeze, to repeat the phrase used. Let us hear no more nonsense from her about that, or about the housing legislative competence order. As my hon. Friend the Member for Caerphilly (Mr David) reminded her, the housing LCO was ready for Royal Assent, and she sabotaged it; the Conservative party refused to carry it through. She knows that that is true, so I am surprised that she is continuing to say these things.

Alun Cairns rose—

Mr Hain: I am happy to take an intervention a little later.

I am intrigued by accountability; that is why I picked up the Secretary of State on that issue in The Western Mail. I am glad that she reads The Western Mail, and

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my comments in it, assiduously. It is not for the Secretary of State for Wales to decide in which way the Welsh Government or the Welsh Assembly should be accountable to the people of Wales. The Welsh Assembly is elected by the people of Wales; she is not elected by anybody in Wales. That is the true line of accountability that operates.

Mrs Gillan: All I can say is that, as my hon. Friend the Under-Secretary once remarked, I am a Welshwoman born in Wales and therefore have a great interest in the land of my birth.

I read the right hon. Gentleman’s article in The Western Mail very carefully, and one of the things I objected to was his fear-mongering among the people of Wales. He gives the impression that we would halve public spending in Wales, and that is absolutely not the case. He should be ashamed of even suggesting that and frightening people in Wales in that way. He knows that this is an open consultation to see how we can do things better. Any fool can spend money, but those who spend money need to have some responsibility for raising it so that they can spend it rightly.

Mr Hain: My, my—the Secretary of State sounds rather furious. I seem to have touched a sensitive spot. I shall deal with this point later.

We welcome the establishment of the Silk commission, which, as the Secretary of State said, has been established on an all-party basis. The Welsh Assembly, which is well over a decade old, is now truly embedded into Welsh civic society, so there may be a case for looking at increasing its financial powers and flexibility. As the First Minister, Carwyn Jones, has indicated, devolving stamp duty, aggregates tax and new borrowing could be advantageous to the Welsh Government and, indeed, to the people of Wales.

I agree that Paul Silk is a very good choice for this task—a distinguished Clerk in this House before he became the first, and even more distinguished, Clerk of the Assembly. I welcome what the Secretary of State has said about wanting to go forward on a consensual basis. It is important that any Bill emerging from the work of the Silk commission is born out of consultation and consensus, unlike the Parliamentary Voting System and Constituencies Bill or the Fixed-term Parliaments Bill, which were forced on Parliament with little or no engagement with Opposition parties, the public or interested groups and experts.

Mrs Gillan: May I put the record straight? As the right hon. Gentleman knows, I gave every Welsh MP the opportunity to meet the relevant Minister on an open-ended basis. The PVSC Bill was debated on the Floor of the House for 53 hours and 40 minutes; there were plenty of opportunities for Members to contribute.

Mr Hain: Let me say this to the Secretary of State: when in a hole, stop digging. She knows that she denied Members the opportunity of a Welsh Grand Committee debate, which was requested by my right hon. Friend the Member for Torfaen (Paul Murphy) and by the leader of Plaid Cymru, the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd). Every member of the Welsh Labour group and other Members wanted

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that debate as well, because Wales is being savagely penalised by this Bill, on which there was no consultation at all.

Mrs Eleanor Laing (Epping Forest) (Con): I speak as someone who was here in this Chamber for most, if not all of the 54 hours on the Bill that the Secretary of State mentioned. Does the shadow Secretary of State accept that that Bill, in changing the parliamentary boundaries, affects not only Wales but the whole of the United Kingdom, and that matters that affect the whole of the United Kingdom, including Wales, have to be dealt with in this House?

Mr Hain: Of course it had to be dealt with in this House, but the impact on Wales received virtually no debate. There is clearly a lot of sensitivity among Conservative Members on this matter, and I am not surprised. The Secretary of State rejected the request for a Welsh Grand Committee to discuss the fact that Wales is suffering a cut of 25%—a quarter—of our representation, which will affect a lot of parties and communities in Wales. That was never debated properly.

May I make one other point—

Guto Bebb: Will the right hon. Gentleman give way?

Mr Hain: If I am allowed to finish my response to the hon. Member for Epping Forest (Mrs Laing).

My other point is that such constitutional matters, particularly parliamentary boundaries, have traditionally always been dealt with on a consensual basis. This is the first time that a politically partisan rigging of the parliamentary boundaries has been introduced in this House and forced through.

Huw Irranca-Davies: This is very pertinent in learning the lessons in terms of how the Silk commission operates. We cannot have a debate when none of the voices are heard. The Secretary of State has said that she wants these voices to figure as part of the work of the commission, but that did not happen in the boundaries review. None of the Welsh concerns was heard and none was acted on; it was a travesty of democracy.

Mr Hain: I absolutely agree.

Mr Deputy Speaker (Mr Nigel Evans): Order. As was intimated by the intervention by Huw Irranca-Davies, we are now straying off the subject of the Silk commission, so could we get back on to that, please?

Mr Hain: Indeed, Mr Deputy Speaker, I am happy to, and I will not be led astray any more by interventions from the Conservative Benches.

The Labour Government, recognising the call from the majority within the Scottish Parliament, commissioned the Calman report, to instigate a serious and thorough analysis of how a new settlement in Scotland might be achieved. Crucially, it was based upon cross-party consensus, expert analysis and real engagement with the Scottish public. It is fundamentally important that this Government adopt a similar approach to Wales. I am encouraged by

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what the Secretary of State said in that respect, but in truth I am deeply suspicious of the real Tory agenda that lies behind the Silk commission.

The commission’s terms of reference state that any devolution of powers must be

“consistent with the United Kingdom’s fiscal objectives”.

Can the Secretary of State explain what is meant by that? I wonder whether, in drawing up the terms of reference, the Chancellor, the Secretary of State and others were thinking of Switzerland, which has a highly federalised and separate tax system in its various cantons, and which demonstrates how such a system can lead to lower public expenditure—not a model that we desire or will accept for Wales. Silk must not become an excuse for this right-wing Government to offload their financial obligations to lower-income parts of the UK, such as Wales.

Geraint Davies: Does my right hon. Friend accept that given that gross value added in Wales is 74% of the UK average, and that we therefore have a lower tax base to tax from, if an equivalent to the Scotland Bill passed 10 points of marginal taxation over to Wales, we would end up raising only 74% of the money possible? We could end up with 20p taxpayers contributing only 17.5p in the pound. That may be one of many methods used to reduce the amount of public expenditure in Wales, but the Government could say, “Oh, don’t worry, you’ve got tax-raising powers. You’ll be all right.”

Mr Hain: My hon. Friend makes a significant point that the Silk commission will need to take account of in its deliberations.

Mrs Gillan: The right hon. Gentleman asked me a direct question, and I will give him a direct answer. Devolved funding rules, as set out in the statement of funding policy, operate within the UK’s fiscal framework. We therefore expect any changes that come out of the commission’s work or intergovernmental talks to be consistent with that framework, for example as set out in the programme for government. As he knows, that is because macro-economic policy is a reserved matter for the UK.

Mr Hain: I am grateful. The Secretary of State is confirming, then—I am not challenging her on this point—that should there be a derogation in the case of, for instance, stamp duty, that would be taken from the Welsh funding block. That is what I understand her reply to mean.

My second element of disappointment is that the Silk commission will not consider the Holtham commission’s proposals for funding reform in Wales. It was the previous Labour Welsh Government who established the Holtham commission, and it produced conclusive evidence that Wales is now underfunded compared with its needs. As I think both Government parties here in Westminster now acknowledge, it was either naive or cynical of them to promise in their manifestos swift and radical reform of the Barnett formula—a promise that they had to betray after just one week in government.

We are aware that Holtham does not offer a quick solution, and that there would be impacts on the other devolved nations and regions. The introduction of a Barnett floor, which was a Labour manifesto commitment

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and a proposition featured in the Holtham commission’s two reports, would have ensured that Wales’s position did not become worse. Why have the Government not considered introducing a floor similar to the one that we proposed, which was agreed with the Treasury? It could be implemented relatively straightforwardly, again with the agreement of the Treasury.

The green budget published last year by the Institute for Fiscal Studies entirely vindicated Labour’s approach to the funding of Wales. By showing that the Barnett formula is only now beginning to disadvantage Wales for the first time, it proved that we were right to stick with it until last year, and equally right to proceed with reforming it thereafter. Make no mistake, up until that point the Barnett formula had served Wales well. There is no doubt that had we ripped it up several decades ago, as the nationalists advocated, Wales would have lost out. The collapse of the banks and the scale of the financial crisis suffered by Iceland and Ireland have been devastating to the nationalists’ arguments for fiscal autonomy.

Mr Llwyd: I take it that the right hon. Gentleman read the deliberations of the Holtham commission. If so, he will have seen that Gerry Holtham opined that the year-on-year underfunding of Wales went back quite a few years. It is absolute revisionism to suggest that it goes back just to the last year of the Labour Government.

Mr Hain: If the right hon. Gentleman looks at the whole Holtham commission report, he will notice that spending was converging with the English average and coming towards the point that it reached last year, when it started seriously to disadvantage Wales. That was the point I was making.

Huw Irranca-Davies: To the best of my knowledge, the Holtham report did not mention the fact that in successive years of the Labour Administration, it was vital that we recognised Wales’s particular needs through the Barnett-plus funding settlements, which increased funding for Wales from some £7 billion to something in excess of £14 billion—way above Barnett. That reflects how the Labour Government ensured that Wales had the proper funds to do the work we needed to do.

Mr Hain: My hon. Friend is absolutely right. The Welsh budget more than doubled under our Government, and special additional funding meant that it went above what Barnett would have offered.

Alun Cairns: The right hon. Gentleman underlines the fact that the Welsh budget doubled in that period, but will he recognise that Holtham also reported that in a period of spending constraint and public spending reduction, the Barnett formula protects the Welsh budget?

Mr Hain: I accept the hon. Gentleman’s point to the extent that Holtham did recognise that when there is a period of spending restraint, or even cuts, underfunding and funding convergence do not happen to the same degree. However, I am not sure what the hon. Gentleman is arguing. Is he saying that spending cuts and restraint have a good impact on Wales?

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Roger Williams (Brecon and Radnorshire) (LD): Does the right hon. Gentleman agree that reform of the Barnett formula is about not just Wales but Scotland as well? Of course, circumstances are very different in Scotland, and trying to reform the formula when there is a contracting economy would be very difficult for Scotland.

Mr Hain: We are talking about Wales, but I think most people, including the Scots, would concede that Scotland has done pretty well out of the formula compared with Wales. Wales is now losing out under it.

As the Barnett formula reaches the end of its life, now is the time to act. In refusing to address the convergence problem that is now occurring, the Government are penalising and disadvantaging Wales. We always acted responsibly and in the interests of Wales, and we are the only party with a deliverable and fair funding plan for Wales. Silk cannot be used to let the Government off the hook on Barnett. Although we are open to the idea of Wales raising some of the money that it spends—perhaps, as the First Minister has indicated, through stamp duty and aggregates tax—that must not be at the expense of the needs-based settlement that is vital for Wales.

Jonathan Edwards: As the right hon. Gentleman knows full well, the issue of Barnett will now be dealt with through discussions between the Welsh Government and the UK Government. Rather than try to undermine the Silk commission, would he not be better off turning his guns on the First Minister so that he gets his act together?

Mr Hain: I do not think I want to turn my guns on the First Minister at all, but I know the hon. Gentleman is fond of doing that. The First Minister is seeking to make progress on these matters, as he has very effectively so far.

Geraint Davies: Will my right hon. Friend give way?

Mr Hain: I will make a bit of progress, then I will happily take interventions.

Holtham calculated that approximately £17.1 billion of tax revenue is raised in Wales every year. Total public spending in Wales is about £33.5 billion—almost twice the amount raised. We should not be ashamed or embarrassed by that. Wales’s needs are greater than those of other parts of the UK. We have a history of relatively high levels of ill health, caused by our industrial legacy of mining and heavy industry. Also, we suffered the cataclysmic shock of sudden and mass unemployment, with the wholesale pit and traditional industry closures in the 1980s, which left high levels of economic inactivity and, because the then Tory Government did not drive investment to create new industrial sectors, relatively lower levels of business activity. That is why we should look before we leap. The so-called devolution-max or independence-light settlement advocated by the nationalists —and, I suspect, tempting to the Tories—could be disastrous for Wales.

Jonathan Edwards: The shadow Secretary of State is quoting figures from the Holtham commission, but that commission reported that the revenue raised in Wales

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by UK-wide taxes was £17.1 billion and that UK expenditure was £25 billion, not the £33 billion that he has been quoting in the press today.

Mr Hain: I disagree. I checked with the House of Commons Library, and it was in the same territory as the Holtham commission.

Alun Cairns: I am not sure whether the right hon. Gentleman has a brass neck or simply selective hearing or a selective memory. Does he not recall that Wales, in the 1980s, was not the poorest part of the UK, and that, in spite of Labour Governments in Cardiff Bay and a Labour Government in Westminster, Wales is now the poorest part of the UK?

Mr Hain: I am astonished that a Member of Parliament for a Welsh seat is trying to defend the Government’s impact on Wales in the 1980s. As a result of Tory policies, there was mass unemployment and people were smuggled on to incapacity benefit to disguise the unemployment figures and left there—a whole generation of young people—never to work again. I am astonished that he is trying to defend that.

Geraint Davies: I have figures from the House of Commons Library on the difference between expenditure and revenue showing net contributions of £14.6 billion in Wales and £14.3 billion in Scotland. Does that not demonstrate that independence for Scotland and Wales would only result in an impoverished Scotland and Wales? We need a fair system based on needs.

Mr Hain: That is exactly what I have been arguing.

Under devolution-max, as we understand it from the Scottish model, Wales would be responsible for raising all its own revenue, but we simply could not do it. It would be impossible suddenly to halve public spending in Wales. With devo-max, income tax and other taxes would literally have to double overnight just to maintain current spending levels, which is clearly a preposterous scenario—if ever implemented, it would have a devastating impact upon the Welsh economy and people’s way of life. However, I can see how it would be an attractive solution to some Tory stockbrokers in the south-east—people in Chesham and Amersham, for example—because it could mean massive tax cuts for them. Devo-max is yet another example of shared interests by the Conservatives and nationalists. It is no wonder that Plaid Cymru is so reluctant to criticise the Government, preferring to focus all its fire on Labour, as has happened in the past few minutes. They have much in common, which explains why they have consistently refused to rule out a coalition in Wales.

We should celebrate both the successes of devolution and the economic, social, cultural and political ties that bind us together—they are probably stronger now than ever before—but devo-max, or independence-light, is not the answer to the economic problems that Wales still confronts. Labour’s vision is of a Britain in which the stronger, richer parts support the weaker, poorer parts—a Britain fairer, more just and more equal, not an unfair, unjust, unequal Britain where the weakest go to the wall. I hope that the Silk commission will take close account of that important principle.

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Guto Bebb: Is it not the case that, during the 13 years of Labour Government, the Labour party’s ambition for Wales was to create a dependency culture, in which we were given handouts by England, rather than to encourage the entrepreneurial activity that we saw in the 1980s?

Mr Hain: If that nonsense is true, why did we have record employment under our Labour Government, why were there more jobs in Wales than ever before in our history under our Labour Government and why were there higher levels of business activity under our Labour Government? We had a record of economic success before the global financial crisis that was second to none. I am astonished that the hon. Gentleman is seeking to dispute that.

Alun Michael (Cardiff South and Penarth) (Lab/Co-op): Does my right hon. Friend agree that it is amazing to hear Government Members trying to rewrite the history of the ’80s? Many of us entered the House because of the experience of seeing young people abandoned by a Conservative Government and their economic policies so that they were unable to make their way in the world.

Mr Hain: My right hon. Friend makes a powerful point with great passion precisely because he was one of the people who entered Parliament to fight for the rights of young Welsh citizens who were denied by that callous Conservative Government.

I hope that the Silk commission will take account of the principles of fairness and justice in its deliberations. Some resources from the south-east of England are, and in future should still be, redistributed to Wales, the north-east of England and other areas of England with lower levels of economic activity and prosperity in order to help everywhere in Britain to become economically more sustainable. However, I remain suspicious that this right-wing Government do not share this vision for Britain and may exploit the Silk commission for their own ulterior motives.

Compared with Scotland, there is a much more significant amount of commuting across our border with England, as pointed out earlier by my right hon. Friend the Member for Delyn (Mr Hanson). Traffic flows across the Wales-England border are substantial. North-east Wales is highly integrated into the economy of Merseyside and north-west England, while in south Wales the bulk of traffic movement is focused along the M4 corridor. About 80,000 people live in Wales but work outside Wales in the UK, and about 50,000 people work in Wales but live in the UK outside Wales. This gives a total of about 130,000 people who travel across the border to work every day. A little over half of this cross-border traffic is accounted for by people commuting in and out of north Wales. Despite Scotland’s much larger population, the number of commuters crossing its border is roughly one third of the number commuting in and out of Wales.

More than 1.4 million people in Wales—nearly half its total population—live within 25 miles of the border with England, and nearly 5 million people in England live within 25 miles of the border with Wales. In aggregate, 30% of the population of Wales and England—nearly one third, or more than 16 million people—live within 50 miles of the border between the two countries. In

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contrast, the number of people living close to the Scotland-England border is much smaller. Only 5% of the combined population of Scotland and England—just one sixth of the equivalent for Wales, or about 3 million people—live within 50 miles of the border between those countries. Given that the Welsh economy is much more closely bound into the economy of England than is the Scottish economy, the potential for economic distortions and tax avoidance as a result of tax devolution is of greater concern in Wales than in Scotland, which is why the Calman agenda cannot simply be transposed wholesale on to Wales. We would like a clearer indication from the Government of how they intend to deal with these crucial cross-border issues, and I hope that the Silk commission will address them.

Something else is not within remit of the Silk commission, however, but the issue is much bigger than the Barnett formula or tinkering with the constitution—it has felt like the elephant in the room during today’s debate. There is a serious jobs crisis in Wales, and the Government need to wake up urgently to that. For example, Tata Steel employs 20,000 people in the UK, of whom 8,000 are in Wales, in overwhelmingly highly skilled, well-paid jobs, with three to four times that number of dependent jobs in the economy outside. In Wales, that means perhaps 25,000 or more jobs. Last week, MPs were briefed by Tata’s European chief executive. He did not mention corporation or any other tax, which the Silk commission is considering. Instead, his overriding criticisms of Government policy, which he worried was threatening the future of steel manufacturing in the UK—at Port Talbot, for example—were very different. He said that the Government had to act on raising demand for UK steel through infrastructure investment—in other words, through more growth and jobs. He also argued that energy costs were far too high—fully half as high again as in France. What are the Government going to do about that? Nothing.

David T. C. Davies: I had similar representations from Tata. The company is clearly worried about energy costs rising as a result of environmental taxes, which are being implemented because of a perception of increased temperatures, which do not seem to be increasing at the moment. Does the right hon. Gentleman think it is time to look at the issue again?

Mr Hain: I know that the hon. Gentleman has a reactionary view on the climate change agenda—perhaps that is reflected in his question—but the briefing that we had from the European chief of Tata Steel was clear. He said that it was overwhelmingly the lack of Government support and investment in the economy—and the demand for steel that comes from that—that was hitting his industry so badly, along with energy prices, thereby risking future investment. Incidentally, the hon. Gentleman’s question also gives me the opportunity to remind him that although he celebrated the county of Monmouthshire’s no vote, the fact is that 49.36% voted yes, while 50.64% voted no. That does not seem to be a massive rejection of devolution in Monmouth.

Huw Irranca-Davies: Will my right hon. Friend confirm from the discussions with Tata Steel and others that they are not opposed to environmental taxes per se? They are opposed to the Government’s inept handling of taxes such as the CRC, or carbon reduction commitment,

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and the carbon floor price, which are rightly perceived not as stealth taxes—there is nothing stealthy about them—but as a deliberate blow to our energy-intensive users. What they are saying to the Government is: “When you’re dealing with taxation issues”—as the Silk commission is—“you should do it with industry, not tell industry what’s happened to it after the event.”

Mr Hain: My hon. Friend, who has expertise in this matter from his previous shadow ministerial job, makes a valid point. Indeed, Tata Steel also talked to us about the carbon price element that is threatening the future of its industry in areas such as Llanwern and Port Talbot.

Mrs Gillan: The right hon. Gentleman will therefore be greatly reassured to know that I was at Tata Steel for our business advisory group meeting at the end of last month, where I had long discussions. I am sure that he would not want to cause any anxiety to the work force. I was pleased to hear that long-term investments continue to be made by Tata Steel and that it welcomes its good relationships and exchanges with my colleagues in the Cabinet on matters pertaining to the success of that business.

Mr Hain: I am glad that the Secretary of State had that conversation, but all I can do is report to the House—and it is important that she hears it too—what the European chief of Tata Steel told a group of Members who met him last week, which is as I have described it. He was not concerned about any of the issues to do with the Silk commission, as we are in this debate. It is important for the Government to recognise that they should not ignore the economic realities and flirt with tax devolution—by, for example, devolving corporation tax—when that is not even on Tata’s agenda.

As for investment, Tata Steel’s European chief pointed out that the new and welcome investment at Port Talbot might not have been made had he been aware of the climate now affecting the company as a result of the Government’s incompetence, which is damaging steel production. Instead of addressing that, the Government are, through the Silk commission, considering matters such as devolving corporation tax.

A review undertaken in 2007 by Sir David Varney for the Treasury pointed to academic research that suggested that only about half the impact of a corporation tax cut was usually recovered through increased growth and investment. The question is: would lowering corporation tax in Wales to, say, the Irish level—if the Silk commission is to consider that—generate enough extra tax, including income tax, to compensate for the £400 million or so that is likely to be lopped off the Welsh block grant to comply with European Union state aid rules and compensate the Treasury for lost revenue?

The Secretary of State for Northern Ireland is an enthusiast for devolving corporation tax. Nevertheless, he told me that he thought it would take at least 15 years for the Northern Ireland economy to generate the growth and jobs that he anticipated from halving corporation tax, as is planned there, that would be sufficient to produce an equivalent income to compensate for the loss to the Northern Ireland block grant. What Welsh Government would choose to lose around £400 million now and each year for the best part of two

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decades in the hope—and only the hope—that extra inward investment and business activity would eventually make up the shortfall?

Mr Hanson: To return to the cross-border issue, in the event of the Silk commission determining that corporation tax could be varied, would not the north-west of England then make the same demands on the Treasury for varying powers for its region? The point that my right hon. Friend should emphasise to the Secretary of State is that the Silk commission should look at the consequences of those variations for both Wales and the English side of the border.

Mr Hain: My right hon. Friend makes a powerful point that I hope the Silk commission will take account of.

It is simply no answer to offload tax-raising powers to Wales that will at best have a marginal impact and at worst—because of the compensating cuts in the Welsh budget—worsen the prospects for jobs, business and infrastructure investment in Wales. Meanwhile, in the real world, unemployment in Wales is rocketing. Six people are chasing every vacancy—many more in some areas of Wales—and the Government have no plan to deal with the problem. Unless they change course, it will get worse and worse.

Mr David: Does my right hon. Friend accept that a huge problem in Wales is that the private sector is dependent on the public sector, which means that cuts in the public sector affect the private sector as well?

Mr Hain: Absolutely. I have had many discussions with businesses in Wales that have been severely damaged—some have even been threatened with extinction and bankruptcy—as a result of public spending cuts, because they depend for their activities, whether they be providing services, procurement or whatever, on the public purse.

By all means consider the Silk commission agenda, but unless the Government change course, things will get worse and worse for Wales. It is the most vicious of circles: fewer working means fewer people paying taxes, which means less money to pay off the deficit. As Wales gets poorer, how can it be expected to raise its own money through taxes, as the Secretary of State would like, if the revenue coming in is being cut? There are serious questions for the Silk commission to consider, because the Government’s cuts are choking off growth, and tax revenue in Wales is diminishing substantially. I do not want the Welsh budget to be cut because of what might be deemed to be the gap in the revenue going to the Treasury arising from devolving taxes—which might happen as a result of the Silk commission—only to find that those taxes do not make up that gap.

Huw Irranca-Davies: Will my right hon. Friend give way?

Mr Hain: I will, but then I had better make some progress, because I have been on my feet for a while.

Huw Irranca-Davies: My right hon. Friend is generous in giving way again. May I urge him to advocate from the Dispatch Box a tax change that we can introduce right now, namely a national insurance tax holiday for small businesses? That would encourage far more people

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to take on more employees, including women, who are significantly disadvantaged at the moment. We do not have to wait for the Silk commission; the Government should adopt our five-point plan right now.

Mr Hain: I completely agree, and I have been urging that on the Secretary of State in this debate. Cutting VAT to 5% for businesses involved in home maintenance and repairs could revitalise a building industry that is on its back in Wales. That should be the priority for the Secretary of State.

Families across Wales are struggling with rocketing food prices and electricity, oil and gas bills, and are worried about their jobs and their children’s futures. Far from our economy being a safe haven, our recovery was choked off last autumn, well before the eurozone crisis. Our economy has stagnated for over a year now. However, there is a better way. We need a plan for jobs and growth to get the Welsh economy moving again and help get the deficit down in a steadier and more balanced way. That is what the Secretary of State should be focusing on for Wales, not simply the Silk commission’s tax and powers agenda.

Jessica Morden (Newport East) (Lab): My right hon. Friend has been generous in giving way, and I agree with him wholeheartedly. What my constituents want more than anything is for the Government urgently to come up with a jobs and growth strategy, which is currently missing. Does he agree that the establishment of the Silk commission, although a great thing in the long run, should not deflect from the urgency of the current situation?

Mr Hain: I completely agree; I could not have put it better myself. I hope that the Silk commission will consider the context in which it is operating, and that, if it does advocate some tax devolution, which I think would be sensible in some respects, it will consider the wider picture and the impact of the lost revenue, indirectly, to the Welsh budget.

Geraint Davies: Will my right hon. Friend give way?

Mr Hain: I want to make some progress, if my hon. Friend does not mind. If there is time at the end, I will certainly give way to him.

Labour has set out a clear five-point plan to create jobs, to help struggling families and to support small businesses in Wales. Our jobs plan includes tax breaks for small businesses taking on extra workers, a temporary VAT cut that would give families a boost of around £450 a year, and a tax on bank bonuses to fund jobs and training for young people. I urge the right hon. Lady’s Government to implement it, alongside the work of the Silk commission. If the Chancellor were to come to the House with such a plan for growth, we would support him.

Thanks to devolution, Wales is showing that there is an alternative. The Welsh jobs fund will provide 4,000 job and training opportunities for 16 to 25-year-olds each year, along with an extra 500 police community support officers for safer communities, and support for Welsh students so that they do not have to pay higher tuition fees. Labour First Minister, Carwyn Jones, is proving that, although cuts are unavoidable, they do not have to

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be allied to the chaos of a privatisation plan for the NHS, or to a plan to close down opportunities in our universities, or, with the greatest hypocrisy of all, to the simultaneous devaluation of vocational education while making it even harder for young people leaving school to get a job.

Guto Bebb: Was it not rather unreasonable of the right hon. Gentleman to say what he did about the health service in Wales, given that the National Assembly is cutting health expenditure in Wales while those cuts are not happening in England? My constituents are very aware that the Betsi Cadwaladr health trust is facing serious financial difficulties, not as a result of changes in Westminster but as a direct consequence of choices made by the Labour Government in Cardiff.

Mr Hain: Labour’s Government in Wales are not adopting a back-door privatisation plan for the health service in Wales, thank goodness—unlike what is happening in England. In addition, did the hon. Gentleman not see the important report in the media recently that leading health officials and clinicians are now stating conclusively that the health service in England is being cut as a result of his Government’s policies? All services in Wales are having to be reduced—of course they are—but why does he think that is happening? It is a result of the programme of cuts by the Government whom he supports.

Of course our Labour Government in the Welsh Assembly cannot insulate Wales from this Government’s damaging policies. But they can show that, for schools, for hospitals, and for jobs and skills, even in the toughest of times, there is and always will be an alternative to this right-wing Westminster agenda. It was wrong to say that there was no alternative to Margaret Thatcher’s destructive policies in the 1980s. That was paid for by hundreds of thousands of people across Wales in lost jobs, futures and, yes, even lives as that Government systematically undermined the national health service.

In Wales, thanks to devolution, we can protect ourselves just a little from the consequences of Tory-Liberalism. It is not full protection—it never could be—but it makes a real difference, a Labour difference, because the people of Wales voted for the only party committed to standing up for Wales: the Labour party. Wales is an example to the rest of the United Kingdom of devolution working as it should do. We have in Wales a new devolution generation led by Carwyn Jones. That new generation are not devo-sceptics or nationalists, but devo-realists who are at ease with devolution and who recognise the benefits of empowering people.

The strength of Welsh devolution is a testament to Labour’s achievements in office. We should not forget that the Prime Minister and the Secretary of State tried to prevent it from happening. They both stood on an anti-devolution platform as Tory party candidates in 1997. They both voted against the Government of Wales Act 2006, which I brought in as Secretary of State, and which delivered the full law-making powers now enjoyed by the Assembly. Now, in 2011, we will not allow them to use the Silk commission to diminish the devolution project, or to cut Wales adrift to appease the little Englanders on their own Benches. We will give the Silk commission a cautious welcome, but we are suspicious of the Government’s motives, as are the more than

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130,000 people in Wales who are now out of work, and who are desperate for the Secretary of State to focus on jobs and growth, not on contriving devices to abandon her responsibilities in Wales.

For us, devolution has always been a means to an end. Labour has never fought elections solely on the issue of constitutional change. That would be a diversion from the real task, which at this moment requires above all taking a stand on the side of the people in the face of the most reactionary Government since the 1920s. Our vision for Wales does not involve a defence of the status quo. Our stance is one of modernisation and progress, even as we face the most difficult of policies inflicted on us by this Government. We urge the Silk commission to join us in standing up for Wales, and not to be seduced by this Government’s real agenda of hiving off their obligations to Wales.

2.25 pm

David T. C. Davies (Monmouth) (Con): It is always a pleasure to be here on a Thursday discussing Wales. Unlike some Members, I shall not be offering a welcome, cautious or otherwise, to the Silk commission. I have no doubts about the motives or the knowledge of any of those taking part in it, some of whom are well known to me, but I feel that we could save ourselves a lot of time and money by doing away with the commission and getting on with what we all know is going to happen. We know that the commission is going to spend until the summer of 2012 looking into the granting of fiscal powers to the Welsh Assembly. I suspect that all sorts of things will appear in the newspapers and on BBC Wales, and that there will be a debate or two. The usual faces of the great and the good in Wales will be wheeled out in support of all of this, and there will be public meetings on wet weekday evenings in various parts of Wales, to which a small representative sample of the public who all like the idea of giving further powers to the Assembly will turn up. At the end of it all, we will be told that the vast majority of people who responded were in favour of giving further powers to the Assembly, and those further powers will be given. Then phase 2 will begin, in which, I see from the report, we will consider “varying” the powers of the Assembly. Well, we all know what that actually means. It means increasing the powers.

Hywel Williams: The hon. Gentleman seems to be taking a rather “conspiratorial” view of these developments in Welsh politics. Does he think that the referendum, too, was a conspiracy?

David T. C. Davies: It is not a conspiratorial view; it is a view based on the history of what has been going on. We seem to be locked in a kind of constitutional groundhog day, with the same sequence of political events repeating itself over and over again. The process starts with the Welsh Assembly being granted a whole load of powers and saying, “That’s it, we’ve got all the tools we need for our toolkit.” That seems to be the popular term at the moment. “We’ve got everything we need now. We’re just going to get on with the job.” Then, a few years—or, in this case, a few months—later, it says, “Well, actually, we can’t do the job we need to do. We just need a few extra powers.” Then a commission of the great and the good is set up, often with the same people appearing

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time and again. They go off and consider the matter, public meetings are held, and they come back and say, “Yes, we need a bit more.” Perhaps a referendum is held, or perhaps there is just another Act of Parliament or some statutory instrument. The Assembly gets what it is given and everything goes quiet for a few months. Then the whole thing starts up again. We are in the first phase of the cycle at the moment. This is not a conspiracy; it is just how things have been happening in Wales since about 1999.

I would be delighted if we really were going to consider varying the powers of the Welsh Assembly, because I assume that varying can cut both ways. It could mean that, rather than just handing the Assembly new powers, we could look at taking a few powers away from it, once in a while. I suggested that in a Westminster Hall debate a few years ago, when Wales was doing particularly badly on the health service, but it did not seem to meet with much approval from anyone—certainly not anyone in my political party. The very fact that it had been suggested was a source of outrage to many.

The Welsh Assembly can take powers away from local authorities that are failing in Wales and, quite rightly, it has used them from time to time, so I see no reason why the Silk commission should not look realistically at the possibility of removing powers from the Welsh Assembly in devolved areas if standards have clearly dropped below those that all in the United Kingdom are entitled to expect.

Another area that I suspect the Silk commission will not look into—the right hon. Member for Neath (Mr Hain) mentioned it—is environmental taxes. To my mind, that would be very interesting indeed. As the right hon. Gentleman rightly said, Tata and other manufacturing companies in Wales that use large amounts of electricity are very angry about the way in which the environment has been used as a means to impose all sorts of extra tax burdens. The issue of the environment is worth exploring, but now is not the time or place—[Hon. Members: “Come on.”] It is very tempting, but I see Mr Deputy Speaker imperceptibly shaking his head at me. It is not for me to pose the question of why the temperature has not got any hotter since 1998, despite the fact that large amounts of carbon dioxide have gone into the atmosphere. That is not a question for today, but it is a very interesting one none the less—and I have never heard a satisfactory answer to it.

Let me move on to a more important question. If we accept that things will at some point start getting hotter because of carbon dioxide, requiring us to put all sorts of taxes on our industries, and if Welsh industries such as steel are affected, surely it is only right that those taxes be applied not just across the whole of the European Union or Europe but across the whole world. If we do not insist on that as a starting point, all that will happen is that those manufacturing industries—so important to us in Wales for jobs—will simply relocate to other parts of the world where those taxes are not being applied. It will not make a jot of difference to global carbon emissions, which will continue to come from wherever those factories relocate, but it will make a difference to jobs and the amount of tax that the

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Treasury collects within the UK. I would love to see the Silk commission looking into that idea, but I am afraid that I shall probably be disappointed.

You might conclude, Mr Deputy Speaker, from what I am saying that I am in some way against devolution—[Hon. Members: “No, never!”] I am not. I am devo-realist. I was against the idea of a Welsh Assembly and I have voted no at every opportunity ever since, but I say genuinely that I have a very high opinion of the abilities of the individual Members of the Welsh Assembly. I had the pleasure of working with them for eight years. I do not doubt their motives. I do not doubt the credibility of people like Rhodri Morgan, Dafydd Elis-Thomas or Nick Bourne, even though I might disagree with them on many fundamental issues.

My problem with what we are doing is very simple. The West Lothian question is the elephant in the room here. Every time we give further powers to the Welsh Assembly, we are weakening the United Kingdom. I believe that even some Labour Members, in their quieter and more reflective moments, share some of these concerns. Surely the priority for us constitutionally should not be thinking about granting further powers to the Welsh Assembly, but ensuring that all citizens of the UK have the same constitutional powers. The issue is about addressing the fact that we here in the Westminster Parliament vote on how the English run their schools, discuss how the English run their hospitals, yet we do not accept the right of anyone, including Members of Parliament, to have any say in how these issues are dealt with in Wales.

Jonathan Edwards: May I take it from the hon. Gentleman’s comments that he is arguing for a fully federal United Kingdom, whereby all the historic nations of the UK are treated on an equal basis?

David T. C. Davies: The hon. Gentleman is right. I have made that view public in the past. I think there is a strong case for looking at some form of English Parliament or some means to prevent Welsh and Scottish MPs from voting on matters that affect only England. I repeat that I have already made that viewpoint public. I do not pretend to know the exact answer, but I am in favour of something along those lines. It might well be that at that point, we would have to consider increasing the powers of the Welsh Assembly in line with those of the other parts of the United Kingdom. The hon. Gentleman will know, however, that that is something that happens in many countries across the world—in Canada, Germany and countries with a Commonwealth tradition such as Australia, for example. If that is thought through properly, it can work. My current difficulty is with the asymmetric nature of our arrangements. Giving further powers to Wales in this way—through the Silk commission if that is what it decides—is going to make them even more asymmetric.

Mark Tami (Alyn and Deeside) (Lab): Would the hon. Gentleman not accept that in a border area such as mine, people go across the border to use hospitals, for example, so it is quite reasonable for me to be concerned about what is happening to the health service in England, because many people in my area use it?

David T. C. Davies: Of course I agree with the hon. Gentleman. I live on the border as well. Many of my constituents go across the border, but what right do he

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and I have to tell the English how to run their health service if we are not prepared to accept that English MPs whose constituents might come over into Wales should also have a voice over what happens within the Welsh health service?

Mrs Gillan: No doubt my hon. Friend will therefore give a warm welcome to the statement made on 8 September by the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), the Minister responsible for political and constitutional reform, announcing our intention of establishing a commission to look into the West Lothian question. I understand that in the not too distant future there will be further statements on the subject, which will of course address the important questions that my hon. Friend is raising today.

David T. C. Davies: I do indeed welcome that statement, and I look forward to participating, but I hope that we do not end up putting the cart before the horse. I hope that we do not all go off in different directions, rather than getting things done in an orderly fashion. The constitution is a very delicate thing, and it needs to be balanced.

Mr Hain: I agree with the hon. Gentleman that the constitution is delicate and needs to be balanced, but is not the answer to his question—the answer to the English question, if you like—that we should remedy the asymmetrical nature of devolution in the United Kingdom by devolving powers to the English regions, not just to the London region, which already has considerable powers? [Interruption.] The Secretary of State mutters from a sedentary position that that has been rejected, and I accept that it was rejected under our Government in the north-east referendum, but I felt at the time that that was a very low-grade form of devolution. One of the things that people told me on the doorsteps in such places as Middlesbrough and Tyneside was that they did not believe in another form of regional government if it did not involve any real powers. If it did involve real powers, however, that would be the answer to the hon. Gentleman’s question.

David T. C. Davies: I suspect that there may be something in what the right hon. Gentleman says. The referendum on powers in the north-east took place quite early in the process, and there is now a much wider understanding of the implications of devolution throughout the United Kingdom. Nevertheless, there is still a problem.