Wales Bill — House of Lords, 2016-11-23
Topic: Macroeconomics
Paul Murphy (Labour, Centre-left): I am grateful to my noble friend. I want in particular to support my noble friend Lord Hain and his two amendments. For the whole of the Labour Government—from 1999 onwards, anyway—he and I held the position of Secretary of State for Wales between us. Two things emerged which were themes in that job—he has already touched on this. One was ensuring that there were good relations between the Assembly in Cardiff and the Government and Parliament in London. It seems to me that Amendment 120, which talks about the legislative consent Motion, is a vital link. I do not think that this Bill would be worth anything unless the Welsh Assembly agreed with it. It would be a pointless, meaningless Bill More particularly, on Amendment 120A, with regard to the fiscal framework, the Minister—and his boss—will know that relations between spending departments and the Treasury are never easy. Most of my time as a territorial Secretary of State was spent in negotiations with a less than benevolent Treasury, even when we thought that there was a lot of money about. It would try to stop and, occasionally, it would try to obstruct. I will not rehearse the arguments that we had some days ago on the devolution of income tax and a referendum but the danger with the devolution of income tax is that the Treasury will do its best to ensure that it keeps as much money as it can in negotiations between the Welsh Assembly—and the Secretary of State and Minister acting on the Assembly’s behalf—and the Treasury. There is an important issue here that, if the way in which the Assembly gets its money is to be dramatically changed—it is a dramatic change; I expressed earlier that I am quite dubious about the good effects of that—it will not necessarily be in terms of the democratic nature of income tax but the practical, realistic figures that result from its introduction. The people of Wales must not lose out upon the introduction of income tax powers for Wales and, ultimately, there should be a benefit to the people as a consequence of this new fiscal framework I know that we cannot hold up a crystal ball, but my noble friend made a very powerful case with regard to the resource base in Wales. We are not a rich nation and the amount of money that we can raise in income tax is low, as has been indicated even today in the figures that the Government have put out with the Autumn Statement. The amount that comes from every penny raised in Wales is effectively much less than can be raised in the rest of the United Kingdom, because of the need to ensure—as my noble friend rightly said—that we share and distribute our resources This amendment asks the Minister to tell us—on Report I assume, by which time there will hopefully have been an agreement on the fiscal framework—that the Bill should not proceed unless that fiscal framework is such that it is, at worst, neutral, and, at best, an improvement for the people of Wales in terms of what they get out of the settlement. There is no point in having a Bill that introduces the devolution of income tax if the Welsh people are going to be worse off because of the interrelationship between that and the block grant I have great pleasure in supporting all the amendments that have been proposed this evening.