The Holtham methodology may or may not have been right, though it has generally been accepted that it was. That indicates there has been a closure of the gap, though there probably is still a gap, of maybe £200 million rather than £300 million to £400 million. We do not know. Taking the comments that the Minister made a moment ago in response to the noble Lord, Lord Richard, if there is a gap of £200 million which could be put right, it would bring us on to roughly what a needs-based formula would generate.

The assumption is that Holtham was looking for a communality of standards in public services in Wales, as might be expected in England. Whether it be £300 million or £400 million as it was, or £200 million as it is now, if that could happen with a one-off

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adjustment and by bringing in a floor and making sure that the changes—convergence or divergence—were on percentage rather than absolute terms, so that we are not missing out, we would at least have a system that would be sort of needs-based. It is not the radical needs-based formula that a lot of us are looking for, where you have determinants that generate entitlement to certain funding, but at least it would meet the Holtham assessment of the needs as he saw them at that point in time.

9.30 pm

If it were possible for the Secretary of State, between now and Report, to come forward with some statement—not necessarily to this House, but to find a platform where this could be spelled out—at least we could then come to some consensus on whether that would do the job and, if it does, move on. The last thing I like doing is coming to this or any other Chamber, perpetually moaning and groaning that we in Wales are being short-changed. I do not want that argument. I want to have the resources to do the job and get on with it. So we need to put this one to bed. I am grateful to the Minister for her response. I hope she will take back the message, which came through fairly loud and clear both in this debate and in the debate earlier. I beg leave to withdraw the amendment.

Amendment 56 withdrawn.

Clauses 24 to 28 agreed.

Clause 29: Commencement

Amendment 57

Moved by Lord Anderson of Swansea

57: Clause 29, page 31, line 18, leave out from end to “is” in line 25 and insert—

“(1A) Subject to the other provision made by this section, Parts 1, 2 and 3 come into force on such day as the National Assembly for Wales shall determine.

(1B) Parts 1, 2 and 3 may not come into force until the recommendations of a constitutional convention examining the distribution of power between Wales and the rest of the United Kingdom have been considered and voted upon by each House of Parliament.

( ) Subsection (1A)”

Lord Anderson of Swansea: My Lords, the last two amendments—and I hope I will not detain your Lordships too long—are in my name. They refer to the constitutional convention and the relevance of the Williams report: a report which is not mainly about the structure of local government but which contains important clauses on that. My contention would be that, just as we have looked at the relationship between the component parts of the United Kingdom, we should look also at the relationship between the Welsh Government and local government in Wales.

On the constitutional convention, there seems to be an increasing consensus that we need to look at the British constitution in the round. I fear that the response

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of the Minister would be: if you are so keen on your constitutional convention, why not put it in the manifesto for the next election when it can be debated? But that was Monday’s argument—since when, as we say, an amendment has been moved.

As an assiduous reader of the Western Mail I notice that, on the front page of yesterday’s paper, the Secretary of State, no less, is quoted as saying:

“Up to now, we’ve been saying, ‘Well, these are just matters for the individual parties and their manifestos at the next election’, but actually I think we can do better than that”.

Clearly, the noble Baroness appeared not to be on message on Monday; perhaps she will be a bit more on message today when she comes to respond.

So there is an increasing consensus. I hear the argument from time to time that to suggest a constitutional convention is no more than a device for delay and for kicking the matter into the long grass. The answer is that promises were made to Scotland—and some might argue that never has so much response been made by parties in the United Kingdom to one maverick opinion poll. When the Sunday Times YouGov poll suggested that there was a majority for independence, there was a certain panic among all parties, resulting in a response that may now be regretted at leisure.

The promises made to Scotland are clear and should be honoured, but they can be implemented on their own grounds. However, there are implications for the rest of the United Kingdom and, in my judgment, for the constitution—and I think that the Liberal Democrats have broadly been the leaders in this field. Clearly, the quasi-federal constitution needs to be viewed with all the difficulties that may arise. We need to have concern across the board, including in relation to your Lordships’ House. If there is to be a new regionalism, it should be reflected in the way that this House is elected, directly or indirectly—possibly, as in France, using the notables from local authorities. I think that the electorate of the French Senate is roughly 80,000. These are the people who are in the localities, the regional assemblies and the local authorities, and they come together having been elected indirectly to work together in the Senate. Your Lordships’ House should not be excluded from this consideration.

I think it was Alastair Campbell who said, “We don’t do religion”. That may or may not be the case but in the United Kingdom we don’t do constitutions—except for other people. We are pretty keen on delivering constitutions to colonial powers from high to low but we are not so good at doing it for ourselves. I have spoken to many groups from the Commonwealth Parliamentary Association and have been tempted to use the phrase “the Mother of Parliaments”, but clearly things are creaking in our own constitutional structures at the moment. Perhaps the 45% vote for independence in Scotland is a means of alerting us to the fact that the status quo cannot continue.

I recall Lord Weatherill, who was both a distinguished Speaker of the other place and the Convenor of the Cross-Bench Peers in this House, telling me a little story. He worked in the family firm of tailors and on his first day there was an old Jewish tailor to monitor him. One of the senior people came to the old Jewish tailor and said they wanted a suit made. He said, “Do

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you want it quick or do you want it good?”. There is an element of that in terms of constitutions. After all, we have agonised over changes for so long, going from precedent to precedent with a little tweak here and a little tweak there.

Now there must surely be a case for a group to make an initial analysis by looking at foreign examples and then for the elected representatives, so far as they are able, to take a considered view. It may be a federal system. Even within a federal system or a quasi-federal system one can have a range of very different powers. We know that in the different autonomía of Spain, for example, it is federalism à la carte. An autonomía such as Valencia has relatively limited powers, whereas Galicia and Catalonia have far more extensive powers—all within the same system. There is no reason why, according to demand, there should not be asymmetric devolution.

The key question is: are we happy to continue with constitutional tinkering or do we feel that we have reached the point where we need to look at the whole constitution from this place and the other place. I recall that one of the major cogent arguments used when we were discussing the future of this House was that there was no attempt to place it in the context of the relationship between this House and the House of Commons. We need to look at the devolved assemblies, and we also need to look at local authorities.

If we are not happy to continue tinkering, it is clearly right that we should now recognise that after the Scottish referendum we are in a new context, and that the status quo has proved insufficient. I recall that when the three party leaders made a vow, they came together quite properly. If they accept the case for a constitutional convention that is good although perhaps not quick, what is now stopping them? Is there not a reason for them to now make a similar vow on a consensual basis that this country deserves a constitutional convention?

I turn now to my second point, on which I shall be quite brief, which is the question of the Williams report. I submit that it would be wrong to ignore the position within Wales: that is, the relationship between the Assembly and the local authority. I recall that during the initial debates on devolution in the 1970s the Welsh Office, as it was then called, totally ignored local government. It was only at a fairly late stage of the debate that it was recognised and brought within the discussion that there were substantial implications for local government.

There is clearly a temptation for Cardiff Bay to hold on to what it has. However, I am encouraged by the response of the leader and, indeed, all the parties in the Assembly. Although the Williams commission hoped that there would be action by Easter of this year, we know that on 1 July the overview on broad public service recommendations was addressed, and on 8 July the local government reorganisation was addressed with a general White Paper. Now we are promised that on 28 November there will be a voluntary merger of local authorities. On 28 February there will be a White Paper setting out the process for merging councils that do not want to merge. There is already a timetable in process.

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I will not labour the point that there is no ideal local government structure in Wales. I recall that many years ago when I was the Member for Monmouth there were certainly at least a dozen local authorities: rural district councils, urban district councils and town councils. That was done away with in the Walker reforms, with counties and districts. Clearly, it was right that the counties had responsibility for education and social services, but the divisions were not easily made.

We have now had further elements of reform. City regions are being considered. However, perhaps the failures over food safety are very good examples of the fact that, for certain areas of expertise, local authorities need to be able to employ experts in the field. I end on the plea that we do not forget local government. There appears to be a consensus within the Assembly on implementing the recommendations of the Williams commission, and the timetable is such that these could well be implemented before the provisions of the Wales Bill become law. I beg to move.

Lord Thomas of Gresford (LD): My Lords, it is such a delight to hear from the noble Lord, Lord Anderson, who had a somewhat feckless youth when he was passionately anti-devolution. Clearly, somewhere between Monmouth and Swansea he was struck with the true light of liberal principle. As I understand his speech, he now supports not merely Liberal Democrat policy but also what was, in his feckless youth, Liberal policy.

9.45 pm

Lord Anderson of Swansea: My position then was as it is now. Devolution within a unitary system is flawed in many respects, including the fact that there is no end position, whereas a federal or quasi-federal system with a constitutional court to adjudicate on the differences between the component parts is logical. We were embarking in the 1970s on a strange new journey and perhaps it was Mrs Thatcher, with her own form of centralisation, who was the major recruiting sergeant for me on that.

Lord Thomas of Gresford: The noble Lord, Lord Anderson, has disappointed me slightly with this recantation of what he said earlier, but never mind. I am entirely with him that we need a constitutional convention and that we should be looking for the abolition of the House of Lords and some form of federal, directly elected or proportionately elected Chamber that could consider the situation as a whole, perhaps with a Supreme Court charged with the sort of duties that attach to the Supreme Court in the United States. That is not, however, any reason for holding up the provisions of this Bill, which are urgent. The Bill needs to go through because Wales cannot wait for a future nirvana when we have got it all together, it is all very logical and all the problems are at an end. We cannot keep the Bill waiting for that moment.

Lord Howarth of Newport: If my noble friend Lord Anderson’s Amendment 57 is passed it will be a very long time before the provisions of this Bill are brought into force. I am against that delay because I want the

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Welsh Government and the people of Wales represented by them to have the new borrowing powers that are built into the Bill. However, if there is to be a constitutional convention, I am in favour of it taking its time. In the field of constitutional reform, more haste means less speed, as we saw rather painfully in the attempt at reform of your Lordships’ House in this Parliament.

I also think that the constitutional commission, if there is to be one, should be very much at arm’s length from the political parties and the Westminster and Whitehall establishment. It will be important that the public should not suppose that this is any kind of stitch-up or a device for the existing establishment to protect its own interests. The public would want to see that members of the commission were deeply versed in constitutional theory and constitutional law, and that while they may have close affiliations and loyalties to the different nations and regions of this country, they were prepared to take, as far as they could, an objective view of the long-term interests of the United Kingdom.

It would also be essential that they should receive submissions from the public. Those submissions would be numerous and would take a very long time to consider. I am sure that if a committee of wise people formed on these principles were to set to work, they would perform a valuable task in clarifying the issues, educating us all and pointing the way forward. They would probably succeed in coming up with a blueprint for a new federal model of the United Kingdom. However, it is one thing to come up with a blueprint; it is quite another to implement it, and then politics would re-enter. I anticipate that the processes of constitutional change would then be, as has always been the case in this country, incremental, and they would be the better for that.

I cannot support my noble friend’s amendment, but as we reflect on what we might be seeking in a constitutional commission we should disentangle it from our continuing day-to-day requirements of legislation and politics. We should get on with enacting this Bill. We should get on with implementing it and think generously, spaciously and patiently about how to develop a future framework for the government of the United Kingdom.

Baroness Morgan of Ely: My Lords, we have to understand what the Scotland referendum was really about. It was a cry from the people of Scotland who feel cut out of the political process. Of course, that has had an impact not just in Scotland because of the commitments that were made in the last days of the referendum, but it is having and will have an impact across the whole of the United Kingdom. It makes sense for us to place the discussion within a broader context.

We are not in favour of stopping this Bill in its tracks. A lot is in the Bill and there is a lot more to come with Silk 2. It is important that the Welsh devolution process does not stop because of a huge transformation in Scotland. However, it is worth saying that we have to think in a broader way about the constitutional arrangements of our country. What happens in Scotland is having an impact in Wales.

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Those commitments on Barnett are already having an impact in Wales and there is a problem if they continue to do so. We need to get the balance right and we need to have a broader discussion.

For two years the First Minister of Wales has been calling for a constitutional convention to be established where a discussion about the power relationship between Wales and the rest of the United Kingdom would be undertaken. Who would be on such a constitutional convention? Obviously there would have to be representatives from the devolved Administrations and local government representatives from England. But, crucially, we would also want to see representatives of civil society and the general public. The disconnection between politicians and the public absolutely has to be halted. We would need to work to a clear timetable. The last thing we want is a discussion that goes on for years and years without end. We would also need to think clearly about what the convention would do. We would have to define the core elements of a new constitution that would enshrine a programme of fundamental reform for the UK. The new settlement, while recognising the different circumstances of the four nations, must be based on common principles that reflect the multinational and multi-union character of our United Kingdom.

The referendum in Scotland was a wake-up call for all members of the political class. We must acknowledge the depth of disillusionment in this country and the distance that people feel from the political process. Through establishing a convention, we would have a one-off opportunity fundamentally to reform the system of governance of this country. A constitutional convention is needed and it is well overdue. We recognise, however, that the Wales Bill is not the ideal mechanism for introducing the idea of a constitutional convention, but it seems rather odd for us to be ploughing on with constitutional changes as if nothing has happened. As Carwyn Jones, the First Minister of Wales, has said, the current constitutional settlement is dead. We recognise the need and the demand for more devolution in Wales, but we need to set the whole within the broader UK framework. To proceed in isolation from the wider discussion would be to miss the opportunity to elaborate on a new vision and a constitution for this country, a constitution that would involve, include and invigorate the population so that people would feel as if they had ownership of their own country.

Baroness Randerson: My Lords, the noble Lord, Lord Anderson, has pointed out the flaws in the devolution settlement for Wales. I say to him that I have campaigned for devolution for virtually the whole of my adult life. I have faced downright nasty opposition at worst and a lack of enthusiasm and total incomprehension at best. Long ago, I came to the conclusion that the overwhelming majority of people simply were not interested. It is a really exciting time for me because devolution is suddenly fashionable and a lot more people understand what it is about. Noble Lords will not be surprised, therefore, that I am keen to seize the moment; I am keen to get this Bill through as a basis on which we can take the next step. The Bill is a very important step forward in devolution in its own right.

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Yes, there is a great deal to be said for a constitutional convention. The noble Baroness, Lady Morgan, said that the First Minister has been calling for one for two years. My party has been calling for one for 40 years. On that basis, I would argue that one should not place too much faith in the immediate production of an outcome of the concept. I agree with the noble Lord, Lord Howarth, when he says that this is something that we need to think about widely and in the long term. The message from my noble friend Lord Thomas and the noble Lord, Lord Howarth, is that, despite the great advantages of a constitutional convention, we have to get on with it now.

To the noble Lord, Lord Anderson, I say that if I accepted his amendments, it would ensure that Parts 1 to 3 of the Wales Act could be commenced only by the Assembly on a day of its choosing, but the Assembly could not decide to commence the provisions until the recommendations of a constitutional convention had been voted on by both Houses of Parliament or until the Welsh Government had implemented the Williams report. I would say that would mean a minimum of five years. My noble friend Lord Bourne, being a member of the Williams commission, assures me that that should be implemented a lot sooner, but we all know that local government reform in Wales does not prove easy. Therefore, I am not betting my political reputation on the timescale for either of those events.

The last few months have been momentous for our United Kingdom. It is now time for us to come together and move forward, but we also accept that it is not “business as usual”. The referendum in Scotland has led to a demand for reform across the UK. We now have a chance—a great opportunity—to change the way we are governed, and change it for the better. The Government have made it clear that we want a debate on how to make the United Kingdom work for all its nations. We have introduced a new devolution committee, chaired by the Leader of the Commons, to consider how we can best do this. The Wales Office is fully represented on that committee and my right honourable friend the Secretary of State for Wales is also having meetings across the parties to pursue this agenda.

We have as a Government already committed to devolving further powers to Scotland as a result of the referendum, and we will deliver on that commitment. England, Wales and Northern Ireland are now on the agenda. This is the time to put our foot on the pedal of devolution. I regret that the noble Lord’s amendments would apply the handbrake. Wales needs the powers this Bill provides now, not in several years’ time, which would be the case if the noble Lord’s amendments were accepted.

The noble Lord’s amendments would also enable the Assembly to decide the commencement of the provisions in the Bill, subject to his other conditions being met. I regret to say that they are very imprecise conditions and it would be difficult to know when they are satisfied. We will of course—this is a commitment—work with the Welsh Government and the Assembly on the commencement and implementation of the provisions in a Wales Act.

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The Bill is about creating truly accountable devolved government for Wales. It is about providing the Welsh Government with the levers to grow the economy in Wales and ensuring clarity for Welsh voters when they go to vote in 2016. All these things would be prevented if commencement of the Bill was delayed in any way, including through the amendments put forward by the noble Lord. I therefore respectfully ask him to withdraw his amendment.

10 pm

Lord Anderson of Swansea: My Lords, the Minister vastly overstates her case by claiming that this Bill would lead to a truly accountable Welsh Government. If we look at this objectively, it is pretty small beer. It is a Wales (Miscellaneous Provisions) Bill. It was framed in a very different context from that which we have now, after the Scottish referendum. I assure her that the purpose of these two amendments—

Baroness Randerson: Is the noble Lord saying that a Bill that provides fiscal accountability for the very first time for the Welsh Assembly and Welsh Government is not a big step forward? Is he saying that the provision of borrowing powers for the first time for them is not also a big step forward? Does he not accept that the devolution settlement has been sadly lacking up to now because there has not been that proper accountability and that this is a vital development?

Lord Anderson of Swansea: I hear what the Minister says about accountability but given the relatively small changes and the small amount of money involved in these taxes which are to be transferred, I doubt that one can properly say that there is real accountability. There is considerable scepticism in the Assembly in relation to the tax powers, which may be stillborn in any event. Yes, I accept that borrowing powers are a major innovation in the Bill but these borrowing powers, albeit in diluted form, are available to local authorities in Wales in any event so why not to the National Assembly?

On the general point she made, my purpose in having this formula of,

“may not come into force until”,

was clearly only to provoke a debate. It was not intended as a freeze or delaying device. I accept that after the result of the Scottish referendum we cannot return to business as usual. Finally, I also accept the point made by my noble friend Lord Howarth that there are great problems in the concept of a constitutional convention. Even if we have the so-called constitutional experts, no doubt there will be minority opinions—as there have been on similar issues. It may be extremely difficult to find—as we saw in respect of reform of your Lordships’ House—any reasonable consensus following that.

Having provoked the debate that I set out to provoke by using the formula that, I say again, was not intended to freeze in any way the progress of the Wales (Miscellaneous Provisions) Bill, I will withdraw the amendment.

Amendment 57 withdrawn.

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Amendments 58 to 60 not moved.

Clause 29 agreed.

Clause 30 agreed.

In the Title

Amendment 61 not moved.

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Amendment 62

Moved by Baroness Randerson

62: In the Title, line 3, leave out “a rate” and insert “rates”

Amendment 62 agreed.

Amendment 63 not moved.

Title, as amended, agreed.

House resumed.

Bill reported with amendments.

House adjourned at 10.06 pm.