The Secretary of State has told us that he will clarify that, so we will know whether that will be possible. I understand from what he has said today that it is very unlikely, because he said it was about people who can vote, not the system itself, but we await clarification from him to know where we are going.
The Bill is designed to strengthen and streamline the current devolution settlement. For example, clause 18 allows the Assembly to implement European Union legislation directly where it relates to devolved matters. That is a sensible development, and one that I sincerely hope does not become redundant by the time the Bill goes into Committee after the referendum recess.
The biggest structural change in the Bill is the move to a reserved powers model, as recommended by the Silk commission. As Silk said, that should allow the Assembly to legislate
“with greater confidence and with greater regard to the purpose of the legislation, rather than being constrained by uncertainty”.
That change will bring greater clarity to our devolution settlement and, if the Government get the Bill right, it should result in fewer cases being taken to the Supreme Court. Too much public money has been spent on such manoeuvres.
I welcome the important statement on the permanence of the Assembly and of Welsh government in clause 1, and the inclusion of the Sewel convention that the UK Parliament will seek consent from the Assembly before legislating on devolved subjects. This recognises that just 17 years since the process of devolution began, the Assembly has become a fundamental part of our constitutional landscape. In 2011 the Welsh people voted for the Assembly to have full law-making powers, an important sign of confidence in the institution. Together with this Parliament, the Assembly should now be recognised as one of two significant legislatures that represent the people of Wales.
It was the Assembly’s ability to pass laws in devolved areas that the draft Bill put at risk in the most unnecessary and short-sighted way. It is a simple fact that as a law-making body, the Assembly must have the ability to change the law, but the draft Bill would have required it to pass a number of necessity tests before being able to amend the civil or criminal law. In the words of David Melding, the Conservative Chair of the Assembly’s Constitution Committee, these tests would have created
“an atmosphere of profound uncertainty”.
He went on to say:
“Taken to extremes, the very exercise of the legislative function could be compromised.”
I am pleased that the Government have seen sense and removed these tests so that the Assembly can amend the law when it needs to, but there are other tests that I will return to later.
The removal of the necessity tests means that a distinct body of Welsh law will continue to grow over time, a fact that poses a challenge to the single legal jurisdiction of England and Wales. We understand that the justice impact assessments outlined in clause 10 are intended to address this point, but a more long-term solution may need to be found at some point in the future. We trust that the working group consisting of the Ministry of Justice, the Lord Chief Justice and the Welsh Government will keep this issue under review.
On the areas of the Bill that require more work, I want to deal with the reservations, the necessity tests, and the devolution of income tax. It was a common theme in the response to the draft Bill that the list of reservations was far too long. Even the Secretary of State’s predecessor expressed surprise at the number of reservations—an unusual admission, given that it was his Bill. This rather suggested that there was a lack of a clear rationale for the compilation of that list. I note that the list of reservations in this Bill is very slightly shorter but still runs to 34 pages, and the justification for reserving some subjects is far from clear.
The root of the problem with the reservations in the draft Bill was that the Wales Office allowed Whitehall to have free rein in deciding which areas it was willing to devolve, rather than adopting the principled process that the Silk commission recommended. In its report on the draft Bill, the Welsh Affairs Committee said that Whitehall Departments should be given
“clear guidance about the questions they should ask themselves before deciding whether or not to reserve a power”,
and that this guidance
“must be published prior to the publication of the Bill, so that the final list of reservations can be assessed against the criteria given.”
It is regrettable that no such fresh guidance has been published, which would allow us to decide whether the list of reservations has been drafted with clear criteria in mind.
In response to the Select Committee’s report, the Secretary of State said:
“The explanatory notes that accompany the Bill provide a clear rationale for each reservation included in the list.”
I am afraid that this is not the case. The justifications offered in the explanatory notes are patchy at best. Most just state what is reserved, without explaining why. We will consider the list in more detail as the Bill proceeds, but the Secretary of State must be ready to justify each of the reservations and to present a rational basis for the final list.
It is already clear that some of the reservations are unjustified. The decision to create a special category of reserved trust ports is one example. This means in practice that control of every Welsh port except Milford Haven will be devolved to the Assembly. The Government have presented no sensible justification for this, or for the turnover requirement in clause 31, based on the Ports Act 1991. As the Bill stands, ports that meet an annual turnover requirement of £14.3 million or more remain under the control of the UK Government, while powers over those with a smaller turnover would be transferred to Welsh Ministers. This seems to create a perverse incentive, because if the Welsh Government foster economic development in smaller ports, which significantly increase their turnover as a consequence, the Welsh Government could find that they lose control over those ports.
In the absence of an explanation, we can only assume that the Government want to keep control of the most profitable ports, with a view possibly to privatising them in future, as indeed the Government considered doing in 2011. Strange, is it not, that this annual turnover is the same threshold above which ports can be privatised
under the 1991 Act? Previous privatisation proposals have raised serious concerns about asset-stripping by speculators and the fragmentation of ports, and these dangers would be just as real in the case of Milford Haven.
On the necessity tests, I am pleased that the most problematic of these, relating to civil and criminal law, have been removed from the Bill. This has made the Bill markedly clearer and more workable than its predecessor. However, two necessity tests remain in clause 3 and in paragraph 1 of new schedule 7B. As many witnesses noted during the Welsh Affairs Committee’s inquiry into the draft Bill, the problem with these tests is the uncertainty surrounding the word “necessity”. A representative from the Law Society described it as “certainly not a term that is as well understood by lawyers as a concept”, which raises “the potential of legislation being challenged” not just in the Supreme Court, but in the course of other civil and criminal proceedings. Given these very real concerns, would it not be preferable to ditch the necessity tests entirely and retain the wording in the Government of Wales Act 2006, which avoids invoking this legally difficult concept?
On the ministerial consents, we welcome the simplified system proposed in the Bill, but the Government could go further. The Welsh Affairs Committee has recommended introducing a 60-day time limit for consent to be given or refused. A change to this effect would give greater confidence and I urge the Government to consider adopting it in law.
Finally, on income tax, the current situation is that the Welsh people would have to support the devolution of income tax in a referendum before the powers could be transferred to the Assembly. This Bill removes that requirement, meaning that the Secretary of State could devolve income tax powers via an Order in Council, without the Assembly even having to agree to it. That cannot be right. Allowing the Assembly to levy taxes is a very significant constitutional development, and one which should not take place without a clear democratic decision, so we are asking the Secretary of State to consider amending the Bill to require the Assembly to agree to the devolution of tax powers before they are devolved.