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Wales Bill

I echo the Secretary of State’s thanks to colleagues from all parts of the House who have engaged in debate and scrutiny of this Bill on the Floor of the House over what feels like quite a long period of time. We have had a constructive set of discussions, which have revealed some of the divisions between Ministers and their Conservative colleagues in the Welsh Assembly and exposed the clarity of the Opposition’s support for devolution.

I join the Secretary of State in thanking Paul Silk and the members of his commission for preparing the groundwork for this Bill, and also for reflecting on the future of Welsh devolution, not just in respect of fiscal powers but beyond that. I am sure that we will debate the measures in the second part of the Silk report at some future stage.

Labour supports much of this Bill, and will not oppose it on Third Reading. In particular, we support the Government’s decision to afford Wales borrowing powers. I have said on many occasions in this House that, in not being able to borrow, Wales has been at a disadvantage compared with other parts of the UK. We have acknowledged that that was a mistake of previous devolution legislation. Wales is a legislature that should be able to borrow in order to invest in vital infrastructure. It is welcome that the Government have recognised that, and are moving to afford Wales those borrowing powers. It is a shame that the borrowing powers are not the same as those that will be enjoyed in Scotland, but, overall, we are supportive of the measure.

We are supportive, too, of the proposal to devolve stamp duty, land tax, landfill tax and other minor taxes. Business rates are also to be fully devolved to Wales. We look forward to the Welsh Government, with their progressive values, using those powers in a fair and progressive manner to deliver, hopefully, innovative and progressive solutions for Welsh people in respect of land and businesses taxes.

I also welcome the move towards a more symmetrical position between Wales and Scotland. Wales is not Scotland, and the history of our two countries is very different. The way in which we came to support devolution is very different, and I have often said that. That asymmetry can be explained by our different histories and the different degrees of support for devolution in Wales and Scotland at the point of the initial referendum. However, that position has changed, which could be due in part to the impending referendum in Scotland. The Secretary of State rightly referred to it as a momentous moment for British democracy and for our country. It is right that we consider how things have moved, and why

people’s support for Welsh devolution has strengthened. It seems increasingly clear to us, and also to the Government, that a more symmetrical system of devolution might add to the stability of the devolution settlement and diminish the cause of separatism.

We are disappointed that the Government have failed in this Bill to undertake any serious analysis of how the costs and benefits of tax devolution will be weighed for Wales. Any Government who were truly serious about affording these powers to another Parliament and Assembly should have undertaken that sort of analysis. Indeed, this Government did undertake that sort of analysis in respect of the Scottish proposals to take on taxation powers. I cannot therefore understand why the Government and the Secretary of State for Wales in particular have refused to insist that colleagues in the Treasury undertake a similar measure for Wales.

The argument has been made that a considerable gap is now expected between the passing of the Bill and the adoption of these powers, but there was a considerable gap—three years or so—between the passing of the Scotland Act 1998 and the uptake of its powers, and that did not prevent the Government from seeing the necessity of undertaking the work in advance.

It is also disappointing that the Government have failed to offer any real guarantee about whether Wales will be better or worse off under these provisions. We still do not know whether the block grant will be eroded over time. Initially, it will be protected, but the Exchequer Secretary told us again here today that if Welsh gross domestic product and revenues grew more slowly than those of England, Wales would have less money over time to spend on vital public services. Given the problems of meeting the demand for public services in Wales because of our specific demographics and history, and of a £1.6 billion cut to the Welsh budget since the Conservatives came to power, it would be better for the Government to give some sort of guarantee to the Welsh people that they would not be worse off.