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Lord Prys-Davies: I agree that the relationship will surely develop over time. It must be clear from the

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outset that the Welsh assembly is not an agent or a trustee of the Secretary of State. It is not accountable to the Secretary of State; it is accountable to the Welsh people. Amendment No. 67 misses the point. Even if the Secretary of State takes the view that the assembly is not performing a function in a manner which is acceptable to him, that is a political decision. If that be the view of the assembly members, so be it. Of course, if the assembly acted outwith its powers, that is a matter to be referred to the judicial committee. From the outset we must be clear that the assembly is not an agent or a trustee of the Secretary of State.

Lord Simon of Glaisdale: As I did not speak to this amendment, not having heard the noble Lord, Lord Mackay, say what had to be said, perhaps I may add this. The noble Lord, Lord Rees, is quite right. There is an overriding responsibility on the British Government in the United Kingdom and on Parliament as to the affairs in any part of the United Kingdom. The amendment envisages a major breakdown, a deplorable breakdown, in administration by the assembly. That is a major matter and it can be corrected. The way to correct it is obviously by primary legislation. That is always within the power of Parliament.

However, that is not what the amendment proposes. It proposes that this should be done by secondary legislation on the say so of the Secretary of State, subject of course, as the noble Lord, Lord Mackay, emphasised, to parliamentary approval. But it must be wrong that such a momentous constitutional step should be carried out by secondary legislation.

My own view is that the more the Secretary of State keeps his nose out of Welsh affairs, the better it will be both for him and for Wales. I have the gravest doubt whether the proposal that he may intervene in the legislative affairs of the assembly is justifiable. But certainly to give him this power, to write it into an Act of Parliament, is both to insult the forthcoming assembly and to create the worst kind of atmosphere, when, as I think all your Lordships hold, the assembly should be set up in the best kind of atmosphere.

The Earl of Balfour: I should like to comment on Amendment No. 53. Clause 22 commences with the words:

    "Her Majesty may by Order in Council ... provide for the transfer to"--

but it does not allow for the transfer from--

    "the Assembly of any function so far as exercisable by a Minister of the Crown".

Circumstances do change from time to time. I feel that the Government need to protect themselves a little where there are changes so that a Minister can then change his mind over anything in particular.

Lord Williams of Mostyn: A good deal of what underpins the discussion on these linked amendments depends on what kind of creature it is wished should inhabit the new assembly when the committee of the noble Lord, Lord Callaghan, has decided on its architectural design. I recognise entirely, and recognise with gratitude, the fact that in all corners

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of the Chamber--virtually without exception--the overwhelming majority has come to the generous conclusion that because there was a majority in the referendum, though modest, all efforts should be put to making the Bill work. But that means that the philosophy underlying the Bill and how we deal with matters--whether we start with an emotional approach which is suspicious or whether we look on it as a confident opportunity for a brand new assembly and a new constitutional device--is very important.

The noble and learned Lord, Lord Simon of Glaisdale, made two points. I agreed with one of them and disagreed with the other. I start with the area of disagreement. It simply is not right to say that the Government have been inflexible. I said at Second Reading on a number of occasions--it was repeated by the Solicitor-General on the same occasion--that any suggestion which improved the Bill would be carefully considered. We have demonstrated that. It simply is not factually correct to say that we have been rigid. Indeed, the whole tone and tenor of what was said by the noble Lord, Lord Roberts of Conwy, demonstrates that. He was a keen and influential participant in the discussions about whether we should have a cabinet system or a committee system. Having reflected on the arguments that he and his colleagues put forward, we changed our mind. That is not a sign of inflexibility.

Suggestions were put forward, including some from the party opposite, that we should carefully consider having an ombudsman for the assembly. We considered that and were flexible on it. So it simply is not right to say that we have been rigid.

Lord Simon of Glaisdale: The Minister will remember that he used the same words on the amendment to allow the Armed Forces to have a say in a matter that affected them. He said, "It would be considered carefully" and "It would be considered sympathetically". The outcome was that they were disenfranchised.

4.30 p.m.

Lord Williams of Mostyn: They were not disenfranchised. They were held to the registered franchise which they had formerly had. That is quite different. In fact, the noble Lord, Lord Campbell of Alloway, among others, put forward the proposition which was supported by a number of your Lordships. I went away and came back with, I hope, a reasoned response. We were not able to accept that amendment. However, we accepted the thrust of the argument, which was, "Do you have a cabinet system or do you have a committee system?" That is extremely important and I would say, I hope without stirring up any fury, a good deal more significant than the extent of the franchise that we had and whether or not an Italian waiter might or might not be able to vote when the daughter of the noble Lord, Lord Mackay of Ardbrecknish, could not.

Where I agree with the noble and learned Lord, Lord Simon of Glaisdale--I hope therefore that he will not immediately snatch away his agreement from me--is that if one is to have a change to the constitutional arrangements set out in the Bill then, as the noble Lord,

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Lord Hooson, said, that would be a matter ultimately for the residual sovereignty of the Westminster Parliament. But if powers are to be taken away--I do not use the words "snatched back" for fear of being accused of being intemperate in my language--if powers are to be recovered, then, constitutionally, it should be done in the way described by the noble and learned Lord, Lord Simon of Glaisdale, and by the noble Lord, Lord Hooson.

It is right that Clause 22 is the heart of the Bill. There is no difference between us on that. I do not detect any hostility to the concept of the assembly in anything that has been said in various degrees of reproach by noble Lords this afternoon. I welcome what was said by the noble Lord, Lord Rees, but it is our duty to get the best possible outcome, the basic frame, as it were, now having been the subject of the positive verdict in the referendum. Therefore, all these amendments--they are by no means internally consistent, if I might gently point that out--deal with the mechanism by which the assembly is to gain the majority of its functions. It is the heart of the constitutional settlement.

A number of noble Lords have made interesting comments. Perhaps I may apologise in advance for being rather longer in my response than I would normally have been. Clause 21 states that the assembly is to have the functions transferred to it or made exercisable by it by virtue of this Act. That is a clear reference to the transfer of ministerial functions under Clause 22. Clause 21 also says perfectly plainly that the assembly is to have the functions,

    "conferred or imposed on the Assembly by or under this Act or any other Act".

The noble Lord, Lord Hooson, is quite right in that this is a process and not an event: were it an event it would be foolish to embark on it.

Initially, the vast majority of the functions are dealt with by order under Clause 22. But from this autumn onwards other Bills brought forward by your Lordships may confer appropriate functions directly on the assembly. This Bill gives a number of functions directly to the assembly--that is to say, the powers to reform public bodies in Wales in Clauses 28 and 29. I am bound to say that I have not met any opposition to that power. There are powers to support culture in Clause 33 and to hold polls under Clause 37.

Amendments Nos. 50 and 51 are inappropriate because they do not recognise that this Bill itself confers functions on the assembly and we cannot accept them. We cannot accept Amendment No. 52 or its sisters, Amendments Nos. 53, 54, 56 and 65. Amendment No. 52 means that the transfer of functions will lack precision. If the intent of Amendment No. 52 is to make sure that your Lordships' House and the wider public know what the transfer functions are to be, it will fail. The transfer order, which we published on 14th May in second draft, will spell out precisely the functions under which Acts are transferred to the assembly.

We believe that we can give clarity. I agree that it is a somewhat laborious clarity, but that is the nature of legislation. I remind the Committee, as has been said earlier, that quite a lot of functions have already been

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transferred to the Welsh Office over the years. Apart from the occasional political anorak in Wales, I doubt whether anyone has immediately to hand, mind and heart precisely what all the Welsh Office functions are. That is the purpose of the draft transfer order.

We believe that, with the best will in the world-- I impugn no one's motives at all on these occasions--what will happen if any of these amendments are accepted by the Committee, is to bring about confusion and dispute. The point was made about Caldey Island and what it meant. It is equally true, as always, that the noble Lord, Lord Crickhowell, had the answer readily to hand. I believe that he must be unique in your Lordships' House. I make my own public confession that I did not have the answer immediately to hand. However, I had others to assist me, but the noble Lord did not. As is well known to every Welsh schoolboy, the Caldey Island Act gives the Welsh Secretary of State powers in respect of elections, coroners' courts--rarely held, I imagine, in that peaceful island--and the district health authorities on that island, which clearly ought to pass to the assembly.

The noble Lord, Lord Crickhowell, is absolutely right. He said that we have to take the Bill on trust. To an extent that is true, but I hope that we are playing our reciprocal part in that process. We are publishing drafts as we go along as soon as we have them. I am grateful for what the noble Lord, Lord Roberts, has said. I have been as open as I possibly can with him and all Members of the Committee and at as early a stage as possible. I recognise that it is difficult to labour through these drafts which are extremely lengthy. We shall be consulting publicly on a complete draft before making the order and that order will require the resolution of both Houses. So there will be an examination of it by the Joint Scrutiny Committee in the usual way.

Amendment No. 52 purports to transfer all functions to the Secretary of State in the fields specified in Schedule 2. But that is not what we propose. We said in the White Paper that virtually all the functions would be transferred to the assembly, but some would not. I give as an illustration the Secretary of State's function in advising Her Majesty on certain appointments that she makes. That is not intended to be transferred and that is deliberate. That is why the draft transfer order shows that we do not intend to transfer to the assembly functions to do, for instance, with the appointment of the chief inspector of schools in Wales under the School Inspections Act 1996 or the local government commissioner for Wales under the Local Government Act 1974. We have been selective and, I hope, prudently so.

We are also considering transferring powers to the assembly of some functions which are not exercised by the Secretary of State for Wales. Some examples include joint powers where the legislation requires that he acts jointly with his Cabinet colleagues. We aim to remove the requirement for joint action wherever practicable so that the assembly will be free to exercise such powers on its own in and for Wales. Where we believe that to be

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the right course the transfer order will need to transfer to the assembly not only the Secretary of State's functions, but also some of those of his colleagues.

A question was raised about international obligations. I believe that the noble Lord, Lord Elis-Thomas, is right because in Clauses 108 to 110 we see there the mechanism for ensuring that whatever the assembly does in the international and EU context has to be compliant.

Perhaps I may spend a moment or two on the amendment which has appealed to the Committee perhaps more than some and that is the amendment in the name of the noble Lord, Lord Roberts of Conwy, which was moved by the noble Lord, Lord Mackay of Ardbrecknish; namely, Amendment No. 67. I had thought that the long tradition of Stalinist state centrist control had gone from the Conservative Party, but I was wrong. It really is an extraordinary proposition that the noble Lord has put forward. It may well be tongue in cheek, otherwise known as probing, but what he actually said was that if one has subordinate assemblies which do something which the Secretary of State is not satisfied with, the Secretary of State can have that draconian override.

It is quite interesting to look at the phraseology. It is not, "If the assembly behaves unlawfully"--as the noble and learned Lord, Lord Simon of Glaisdale, said, the judicial mechanism for putting that right on a vires basis is there--but what is said here, as a result of due deliberation, is this. If the assembly, in the Secretary of State's opinion,

    "failed to discharge any of the functions transferred to the Assembly in a manner that the Secretary of State considers adequate,"

he must serve notice on the assembly. Then, if he is not satisfied with the response, he may himself transfer those powers,

    "to such extent and for such period as may be therein specified".

That is the apotheosis of the nanny state--asking for trouble and likely to get it.

4.30 p.m.

Lord Mackay of Ardbrecknish: I must be helpful to the noble Lord and stop him walking into too much trouble of his own making. He drew our attention to Clauses 108 to 110 about the inter-relationship between the assembly and Europe. Perhaps I may read out and remind the noble Lord of Clause 110(3) which states,

    "If the Secretary of State considers that any subordinate legislation made, or which could be revoked, by the Assembly is incompatible with any international obligations, he may by order revoke the legislation".

I do not believe that the noble Lord should go too far in accusing me of the nanny state.

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