Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Thomas of Gresford: My Lords, the noble Lord is treating us to a most interesting and informed debate, but, with the greatest respect, I should like to turn to the amendments. Can the noble Lord marry the population-based approach of the Barnett formula, as advocated in Amendment No. 105, with the emphasis on the needs of the Welsh people, as set out in Amendment No. 103?

Lord Crickhowell: My Lords, that is precisely why I support my noble friend's amendment which mentions matters being relative to the UK as a whole. That applies not just to population but to the changing needs of regions in the UK as a whole, and to the possibility, implicit in the amendment of the noble Lord, Lord Elis-Thomas, that the Barnett formula may have to be changed and replaced. That is exactly the argument I was coming to. Anyone who has seen the changes that have taken place, not just in Wales but also in the English regions and in cities such as Newcastle and Glasgow--to pick out two obvious examples--will realise that we are in a changing world where the industrial and social conditions in 10 or 20 years' time will be different from those which exist today, and still more so from those which existed 10 or 20 years ago.

In successive years I sat through Cabinet committees in which all my colleagues reached considerable agreement--except with the Secretary of State for Scotland--that Scotland was over-provided by the special arrangements. I do not think that situation has changed. For the reasons that have been referred to, in terms of the relative prosperity of people as measured by GDP per head, I believe that the needs of Wales have

9 Jul 1998 : Column 1379

probably grown. Therefore, I believe that there is now a need to review the Barnett formula. I believe there will be a need to change these arrangements in the future. What I find difficult to accept is the reluctance of Government to acknowledge these facts and to make some arrangements in the Bill before us.

I also find it difficult to make judgments as to the adequacy of the arrangements when we cannot get any answers out of the Government about the necessary detail. I shall not repeat all the important questions that were raised by Mr. Wigley in another place. He asked some pretty important questions about the present funding under the Barnett formula, the changes which would occur if there were changes in the map and the resources which would be made available. Mr. Alan Williams asked some equally significant questions. What was extraordinary about that debate was that when Mr. Hain replied he gave no answers at all. Indeed, so far did he fail to do so that it was almost insulting. When he replied to Mr. Rowlands' question, he produced that old non-answer; instead of answering the question that was asked, he said that it was clear that the Tory strategy on job growth would not have solved the problem that Mr. Rowlands had identified. However, he had been asked how the present Government would solve that problem.

At a time when we have this document before us, when these points have been identified with the clarity of the noble Lord, Lord Elis-Thomas, when legitimate questions are being raised, and when we are being asked to pass a Bill in which the funding of the Welsh assembly is of central importance, we are entitled to have some answers. Perhaps it was symptomatic of the Government's attitude that it took a lot of effort on our part to ensure that copies of this document were placed in the Printed Paper Office of this House. Originally they were not sent there. They were sent to another place but apparently they were not thought initially to be necessary for this House although we were to debate Welsh affairs today. I had to apply pressure to persuade someone in the Printed Paper Office to collect copies of the document so that we could read it before this debate. However, there were copies in the Library.

We cannot be treated like this. I hope that we shall be given some clearer answers today about the future funding of the assembly and if the Government seek to reject these amendments I hope that they will give some clear reasons for doing so. These amendments appear to be wholly sensible and do not impose any great problems or burdens on the Government. They provide a foundation for better arrangements for the long-term future. I support them.

Lord Dixon-Smith: My Lords, in rising to support my noble friend on the Front Bench it would be wise for the House to remind itself that what we are discussing is not an exclusively Welsh problem. We are discussing a United Kingdom problem, of which Wales is but a part. On the matter of finance, although this may sound a tough way of putting it, the case for finance for Wales is easier to make than the case for additional finance for

9 Jul 1998 : Column 1380

Scotland because Wales is relatively less well off than many parts of the country. That point was clearly made by the noble Lord, Lord Thomas of Gresford.

That said, the Bill as drafted says nothing about how money for Wales is to be calculated. I have had long experience of permanent division between a lower level of authority and government over matters of finance. There was never satisfaction. We had the most sophisticated, detailed formula that government statisticians could devise which changed annually to take account of the changes that were occurring. There was permanent dissatisfaction. The financial arrangements on which the national assembly has to run will be either the foundation on which the whole edifice stands successfully, or the rock on which the ship founders. The key is how we make the arrangements in this Bill. That is an important matter.

At the moment, the Bill contains nothing. It simply says that the Secretary of State will make payments although there are statements elsewhere which give some guidance and put some flesh on that, for which we should all be extremely grateful. However, the difficulty that we all need to face is the following. This matter will be discussed more and more, not specifically in relation to Wales but also in relation to the other regions of England and in particular to Scotland. If the noble Lord, Lord Dean of Beswick, were present, he would speak up for some of the English regions. He would be right to do so. If we do not put on the face of the Bill some such words as my noble friend on the Front Bench suggests, we leave an opening for the future which will be likely to cause the same kind of dissatisfaction which existed for so many years--and which still exists--in local government where one is dealing with a different form of devolved authority, but (dare one say it?) one that has real tax raising powers. If they ever escape from capping, there is some way in which they can help themselves which the national assembly for Wales will not have available to it.

4.30 p.m.

Lord Rees: My Lords, this cluster of amendments brings us to the heart of one of the central problems of devolution. I have no doubt that the same range of problems will occur when we discuss the Scottish devolution Bill again in Committee. It is idle for the Government in their more bombastic moments to suggest that Wales or the assembly will have control of the economic destinies of Wales. Of course, it can make an important contribution, but the economic destinies of the United Kingdom, for example, do not lie entirely within its powers or those of the Chancellor of the Exchequer. We must get our own situation as a country, and we must get our own situation as a Province--if I dare call Wales that--into perspective. Nonetheless, it is important that we should consider what will be the financial underpinning available to the assembly when it applies its mind--as I am sure it will--from time to time to the economic problems of the Principality.

It does not assist the debate to suggest that Wales is in a state of total demoralisation and economic collapse. No one is able to speak with more authority and with more approval from his colleagues than my noble friend

9 Jul 1998 : Column 1381

Lord Crickhowell, who did so much to improve the economic and social state of the Principality. I am sure that he would be the first to admit that it is possible to take matters slightly further. We shall study the situation critically over the years to see whether the present Government have improved on the efforts of the previous government.

One recognises that Wales, like many of the outlying parts of the United Kingdom, has a special range of problems which may have to be treated in a special way and may deserve special financial support. It is rather idle to imagine that the Government could devise a detailed financial framework for the operation of the Welsh assembly and Wales in respect of legislation. Had they tried to do so, in the event, we should probably find it more uncomfortable than the looser, more general terms employed in Clause 80 and subsequent clauses. I am sure that the Government wish to see a fair approach to the financial problems of devolved legislatures. Approaching matters in that light, let us see what they have achieved.

I shall turn in a moment to the detailed phraseology. It raises some interesting questions which I hope the noble and learned Lord the Solicitor-General will take up in replying. First, let us consider the special problems that arise in parts of the United Kingdom such as Wales. I am sure other noble Lords, who have greater knowledge of, let us say, the north-east, Cornwall and similar areas will say that they have a similar range of problems. I am not sufficiently equipped to deal with those problems. The virtue of the amendment in the names of my noble friends Lord Roberts and Lord Mackay of Ardbrecknish is its reference to:

    "recognising the needs of Wales in relation to the United Kingdom as a whole".
That is very important. Those of us who are fortunate enough to come from or live in Wales are concerned with the problems of the Principality. Any financial settlement that is worked out must take account of that fact. If we were to achieve--by the eloquence that comes all too readily to people of Welsh descent, to the tedium of debates on the subject in this Chamber!--too favourable a settlement, it would generate hostility, jealousy and friction throughout the United Kingdom. In that case, we should not be able to sustain the settlement over the years. What we are looking for is a fair settlement. That is why I find the words of the amendment particularly appropriate--

    "recognising the needs of Wales in relation to the United Kingdom as a whole".

I now turn to the attractive amendment standing in the name of the noble Lord, Lord Elis-Thomas. It returns to the Barnett formula, which the noble Lord touched on. We have had the advantage of hearing the noble Lord, Lord Barnett, speak on the formula which he evolved. Subsequent Chief Secretaries have grasped it with gratitude, as slightly simplifying their tasks.

The Barnett formula is all right to a degree, based on population and other factors. I very much doubt whether it could be encapsulated in a piece of detailed legislation short of about five appendices. That would no doubt generate a whole range of debates upon which we should not wish to embark. It was a useful, slightly

9 Jul 1998 : Column 1382

rough and ready tool, which enabled one, during the course of the public expenditure round, to shorten--only slightly--the debates that one had with colleagues, and particularly with the Secretary of State for Wales in relation to the basis for the package for Wales. It was not by any means the sole determining factor. It was merely the base from which one started. Problems were thrown up during the course of the year which went way outside the Barnett formula. So let us not imagine, even if it could be formulated in legal terms, that it would resolve all our problems. What we need to have set out is a general principle.

The noble and learned Lord the Solicitor-General is listening closely. When he comes to reply, if he does not feel able to recommend the adoption of this amendment, perhaps he will tell us how the Government propose to approach the financing of the problems with which the new assembly will be concerned.

I do not have the Chancellor of the Exchequer's words in front of me, but I understand that he is rather in favour of a triennial settlement. There are certain constitutional difficulties. Anyone who has spent even a short time examining Treasury matters will know that supply is voted on an annual basis. It might be of assistance if the government of the day could indicate in broad terms what their plans in that area would be for three years or so. It would be very helpful for a new assembly, coming afresh to Treasury questions, to have some indication beyond merely the current financial year. I am sure that the Solicitor-General's brief is bristling with textual criticisms which his devoted civil servants have devised. However, if he can rise above the detail for a moment, perhaps he could indicate some sympathy with the approach enunciated in Amendment No. 103.

Returning to Clause 80, perhaps the noble and learned Lord will enlighten us. The clause is interesting. It is divided into two subsections. Subsection (1) deals only with the money provided by Parliament. Perhaps other noble Lords are better acquainted with these constitutional details. I wish to know what other moneys the Government have in mind in relation to subsection (2), and moneys paid out by,

    "Any Minister of the Crown, and any government department",
and not necessarily moneys provided by Parliament. What is the precise distinction? What are those moneys?

I wish to make a practical suggestion, which I hope will commend itself to the Committee and to the Government. I wonder whether, in practical terms, it would not be better if the moneys, even though disbursed over various fields of governmental activity, were in the first instance channelled from central government through the department of the Secretary of state for Wales rather than being diffused over the whole area of government. Then, both in Wales and in the Westminster Parliament, we should know whom to approach in the first instance if detailed questions arose. I do not think that the assembly itself would want to have dealings with a whole range of government departments, or indeed quangos or other bodies if they are embraced by Clause 80. That might make for a slightly tidier approach to the whole question.

9 Jul 1998 : Column 1383

I do not want to cover ground that has been more ably covered by other noble Lords. The approach embodied in the amendment is both sympathetic and practical. I hope that the Government will give an appropriate response.

Next Section Back to Table of Contents Lords Hansard Home Page