Previous Section Back to Table of Contents Lords Hansard Home Page

The Earl of Lauderdale: My Lords, before the noble Lord sits down perhaps I may thank him for his great courtesy in inviting me to attend the committee when the point of the noble Lord, Lord Marlesford, was

9 Jun 1998 : Column 900

discussed. I was not a member of the committee and I greatly appreciate the courtesy and welcome that the Chairman of Committees gave me.

One other matter arises from the initial remarks by the noble Lord, the Leader of the House. I gather that at some stage we shall have a statement on various matters under consideration. Will the carry-over issue be included in the document? It has been discussed adequately today. I prefer to refer to it as the product of a cabal. As a Lauderdale I regard the title Cabal with some respect. However, I treat the usual channels with some suspicion having been a rebel when I was in another place.

I have said enough. I wish again to thank the Chairman of Committees for his courtesy in inviting me to attend the committee.

The Chairman of Committees: My Lords, I am grateful to the noble Earl, Lord Lauderdale, for his kind remarks. We were pleased to have him at the Procedure Committee debate. Indeed the noble Baroness, Lady Blatch, had also expressed considerable interest in these matters. We were delighted to offer her an invitation as well.

I confess that I was a member of the usual channels in another place; I hope that the noble Earl will forgive me for having been so. As regards the noble Earl's observations on that point, those are precisely the considerations which I feel sure the usual channels will take into account on the rare and highly unlikely occasion--if I may so predict--that they have to consider those matters.

Lord Marlesford: My Lords, I am grateful to all noble Lords who have supported my amendment and the reason underlying it. I am particularly grateful to the noble Lord the Lord Privy Seal for his gracious remarks. I immediately withdraw the word hubris. I commend the amendment to the House.

On Question, amendment agreed to.

On Question, Motion, as amended, agreed to.

Community Care (Residential Accommodation) Bill

4.29 p.m.

Read a third time, and passed.

Government of Wales Bill

4.30 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Williams of Mostyn.)

On Question, Motion agreed to.

9 Jun 1998 : Column 901

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (The Viscount of Oxfuird) in the Chair.]

Clause 82 [Grants to Assembly]:

Lord Roberts of Conwy moved Amendment No. 205:

Page 41, line 15, after second ("time") insert (", recognising the needs of Wales in relation to the United Kingdom as a whole,").

The noble Lord said: We have just had an important debate involving noble Lords in all parts of the House. Important though that debate was, we are one-and-a-half hours short of time for this all-important Government of Wales Bill.

If the national assembly is at the heart of the Bill and the assembly's functions are its arteries, Clause 82 provides the assembly's life blood--its finance. It has come as a surprise to most readers of the Bill that the entire financing of the assembly and all its works is largely dependent on that one clause and the absolute discretion of the Secretary of State. There is no guarantee to the assembly that it will be provided with adequate funds to perform its statutory duties and to enable others within its sphere of responsibility to do so.

There is no mention in the Bill of needs in the context of Wales alone or in relation to the whole of the United Kingdom. We regard a reference to the needs basis of spending--the traditional basis recognised by successive governments--as all important. We include such a reference in Amendments Nos. 205 and 206.

It is well known that public spending per head is higher in Wales than in England for a variety of factors, including lower gross domestic product, that add up to the need to spend at a higher rate. Without some acknowledgement of that fact and an assurance that the needs of the Welsh people will be properly and fairly considered, and that the assembly's grants will not be entirely dependent on the whim of the Secretary of State, the people of Wales will be taking an almighty gamble with their future. The bareness of Clause 82 as it stands sends a shiver down most Welsh backs.

Underlying it all is the uncertainty of the Government and Ministers as to the resources that will be available and who will be there to claim them. Will the Secretary of State have a strong voice in the Cabinet after the assembly is established? More importantly, will he have a strong voice in the Treasury? The fear is that the Secretary of State will be a fading figure in the higher reaches of government.

Clause 88 does make provision for the assembly to consider its financial requirements and to state them publicly before the start of the financial year, but that is far removed from the statement of estimated payments required of the Secretary of State in Clause 83. What is to be the relationship between the two statements? What will happen if the financial expectations of the assembly greatly exceed the expenditure proposed by the Secretary of State--as I suspect will be the case? Will the matter be resolved by some Star Chamber procedure involving the Treasury? The least we should expect is consultation and dialogue between the Secretary of State, assembly and other interested parties--as proposed in our Amendment No. 207.

9 Jun 1998 : Column 902

I note in the Guide to the Transfer of Functions Order that the Treasury is withdrawing from the position where its consent and approval is required in the exercise of a multiplicity of functions and powers. When I was a Minister, I could never quite understand why the Treasury had to be so deeply and intimately involved in day-to-day matters. I came to appreciate its value as a long-stop guardian of the public purse. I am not sure whether to welcome or regret the Treasury's withdrawal from many areas of the assembly's expenditure. That development suggests a disinterested view of detailed expenditure and concentration on the main allocations on the part of the Treasury.

There has been much discussion here and in the other place of the Barnett formula. I am delighted to see the noble Lord in his place. That formula decides the public expenditure increases appropriate to Scotland and Wales following agreement on similar increases in the budgets of major Departments of State in England. The formula, which is based on population shares, deals only with year-on-year increases in public expenditure. The noble Lord, Lord Barnett, believes that there is a case for a review and revision of the formula 20 years after he devised it, and the Treasury Select Committee is of the same opinion.

Assurances are given in the Financial Memorandum in this Bill and in the Scotland Bill that the Barnett formula, with minor modifications, will continue to apply--at least in the initial stages of Welsh and Scottish devolution. One understands the Government's reluctance to write the formula into the Bill but I hope that the Government appreciate the wish to see something more concrete than the Secretary of State's discretion. Amendments Nos. 207A and 208B in the name of the noble Lord, Lord Elis-Thomas, express the desire for greater certainty.

Even more important than the Barnett formula are the baseline allocations that are the real foundations of public expenditure in Wales. It is argued that they have developed over time in relation to perceived and proven needs, but the needs of different parts of the United Kingdom are relative and constantly changing. We heard recently the demands of north-eastern England for parity of treatment, and south-west England is also becoming increasingly vociferous. The Government are undertaking a comprehensive survey of public expenditure and it is becoming increasingly clear as time passes that a special survey of the needs of the regions is required, to ensure fair and equitable distribution of resources. If such a survey clearly to spell out the common criteria by which needs are assessed and allocations made is not undertaken, there will be bitter wrangles for resources and recriminations that can only damage the unity of the kingdom.

The Government appeared to acknowledge that argument obliquely in response to the Treasury Select Committee's second report of 10th March. The Government, after referring to their undertaking to update population figures underlying the application of

9 Jun 1998 : Column 903

the Barnett formula from 1999 to 2000 and annually thereafter, quoted the Scottish White Paper, stating that

    "any more substantive revision of the Barnett formula would 'need to be preceded by an in-depth study of relative spending requirements and would be the subject of full consultations between the Scottish executive and the UK Government'. An equivalent commitment was given in the Welsh White Paper."

I am sure that the Minister is aware that GDP in Wales is well below the UK average, and that full-time earnings, household income and economic activity rates are also lower, so Wales should be expected to gain from any equitable reallocation of resources on a needs basis. But meanwhile Wales is being asked to rest content with the status quo and to take a gamble as to the future.

The Welsh Affairs Committee is rightly concerned about the non-statutory basis of the Barnett formula and agrees with the Treasury Committee,

    "that the needs assessment within the Formula should be brought up to date".

That appears in paragraph 90. The longer this issue is allowed to lie on the table, the more agitated people will become at the unfairness of the system within the United Kingdom as a whole. Feelings both within and outside the assembly may be exacerbated by the capital and running costs of the assembly itself, which will be subtracted from other expended areas at a time when the anticipated receipts from Europe are falling away.

While the assembly will have no tax varying powers "initially"--as the Secretary of State once famously said--there is clearly the looming possibility that it could raise extra money in Wales through the local authorities, especially after rate capping is abolished and the business rate returns to local authority control. Local authority grant from the assembly can be reduced and council taxes increased. We hope to return to that subject in due course, but meanwhile Ministers may care to enlighten us as to the Government's intentions in this area where there is a great deal of anxiety which some of us have expressed time and time again. I beg to move.

Next Section Back to Table of Contents Lords Hansard Home Page