Commons Sitting of 25 July 1997

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MADAM SPEAKER in the Chair]

Welsh Assembly
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jon Owen Jones.]
9.35 am
The Secretary of State for Wales (Mr. Ron Davies): I very much welcome this opportunity to open the debate on the Government's proposals for Welsh devolution, as outlined in our White Paper published earlier this week, "A Voice for Wales". I trust that hon. Members have now had an opportunity to read it, so I do not intend to take up the time of the House either by summarising our detailed proposals or by repeating the general points that I made last Tuesday. There are, however, some very important issues with which I want to deal as an introduction to the debate.
This is a new Government, who have an agenda for change. At the general election, we promised the electorate a new approach to government and we put constitutional change at the heart of our programme. We did so because we believed that the excessive over-centralisation of the British state, after 18 years of rule by the Conservative party, had led to bad government and a weakened democracy. It has produced sleaze and incompetence in equal measure, and damaged the social fabric of our country.
We want to make a fresh start. We are committed to decentralising power and to extending the rights of individuals, rather than constraining them. We want to modernise procedures in this House and reform the composition of the House of Lords. The country voted for change on 1 May. We promised to modernise our democracy, and we will deliver on our promises.
Devolution to Wales is, of course, nothing new. Throughout this century there has been a developing programme of administrative devolution, which was reinforced by the establishment of the Welsh Office in the 1960s. It is interesting to note that the Conservative party opposed each significant stage of devolution, as well as the creation of bodies such as the Welsh Development Agency. To its credit, however, the Tory party has realised its errors, and is now reconciled to the process of administrative devolution. Indeed, by its actions over the years since 1979, it has in part accelerated the process—but it still seems to have difficulty with the concept of democracy.
Mr. Piers Merchant: The right hon. Gentleman said that the Conservative party had opposed
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devolution at each stage. Will he confirm that the Welsh people, when they were last given the opportunity, roundly opposed devolution?
Mr. Davies: That is a matter of fact. No one can dispute that the 1979 referendum produced a no vote. However, it is not a novel idea that people should change their minds, especially when they lose elections. I would have thought that that message is one that the Conservative party would take to heart. The circumstances of this country have profoundly changed since 1979, and it is therefore perfectly reasonable that we should now ask the people again.
As Secretary of State, I have sweeping powers, and a budget of some £7 billion. So did my immediate predecessors. Devolution allows for variations of policy. Indeed, devolution is there precisely to allow variations of policy to reflect local circumstances, local priorities and local aspirations.
However, my immediate predecessors exercised their powers to suit their own interests and ideologies—for example, the restrictions on the budget of the WDA; the restriction on the promotion of Welsh economic interests in Europe; the assault on the budget of the Countryside Council for Wales; the forced council tax increases; the nursery voucher scheme; grant-maintained schools; the popular schools initiative; and the appointment of cronies to quangos—none of which would have happened under a democratic form of devolution.
The right hon. Members for Wokingham (Mr. Redwood) and for Richmond, Yorks (Mr. Hague), and the former Members David Hunt and Peter Walker, used the Welsh Office to promote themselves, not the best interests of Wales.
The existing constitutional arrangements allow us as Welsh Members neither to take the decisions ourselves nor to challenge the decision makers. It is a myth to claim that the right hon. Members for Wokingham and for Richmond, Yorks were held accountable in this Parliament for their actions in Wales.
We propose to legitimise that undemocratic and unaccountable regime with a new democracy, with an Assembly directly elected by and answerable to the people of Wales, sensitive to Welsh needs as expressed through the ballot box rather than to an alien ideology expressed through an over-centralised Government with an attendant flotilla of quangos. There has long been scope for Wales to do its own thing, but we have seen where that can lead when that desire for diversity is not in tune with local values.
I shall put our Assembly proposals in the overall context of the governance of the United Kingdom. Wales will remain an integral part of the United Kingdom. Parliament will make primary legislation for Wales. The Secretary of State will remain a member of the Cabinet, and Welsh Members will be in the House of Commons, in full force. The Assembly will be able to make its views known and contribute effectively to public debate as well. These proposals add to Wales's opportunities to gain a hearing in the United Kingdom, not reduce them. The charge that Wales will be marginalised or sidelined is simply wrong.
The fact that the Secretary of State for Wales will no longer have to make decisions on important but essentially local issues, such as planning matters,

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appointments and road schemes, will free him or her to make a more effective contribution on behalf of Wales at a strategic level.
Mrs. Teresa Gorman: Is it not true that Welsh Members were elected to make decisions about housing and education, for example? If the Government's proposals were to go through, those elected to this place to represent Wales would be marginalised, in the sense that they would no longer have a say when it came to vital decisions on housing and education, which the Welsh people sent them to Westminster to decide upon.
Mr. Davies: In part, the theory may be correct that Welsh Members are elected to take decisions on matters such as housing. Our experience over the past two decades, however, is that we, Welsh Members, do not take such decisions, and that is the problem. Decisions relating to the administration of housing, economic development, education and the health service in Wales are not taken by Welsh Members.
Primary legislation passes through the House, and we are involved in that legislative process. That is true of the past, in the sense that we were opposing proposed legislation. Administration and detailed application of policies in Wales, however, has never been carried out in accordance with the direct wishes of the people of Wales.
I shall give the House what I consider to be the best and clearest example, which is nursery vouchers. The voucher scheme was imposed on Wales. There was no public support for it in Wales. We knew that it would be wasteful, divisive and bureaucratic. It was opposed by 32 out of 38 Welsh Members and by every local authority in Wales.
There were petitions and letters in their thousands—I understand nearly 5,000—in opposition to the scheme. There was no support for it but it was introduced. It was forced on us in Wales, and it was wasteful, expensive and bureaucratic. There was enormous relief when—it was one of the first actions of the incoming Labour Government—we were able to get rid of the scheme.
Several hon. Members rose—
Mr. Davies: I know that many hon. Members wish to contribute to the debate. I want to make my remarks as brief as possible, but I have a case to put to the House. It would not help the debate if, at this stage, the House were detracted from the main principles that I want to develop.
Mr. Allan Rogers: Will my right hon. Friend give way?
Mr. Davies: I have taken two interventions from Opposition Members, so I shall gladly take an intervention now from my hon. Friend, who I know will
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be anxious to support me on these matters. My hon. Friend having intervened, I should like to proceed and to make a little progress.
Mr. Rogers: My right hon. Friend has said several times that he wants to have a balanced view. Does he accept that every Labour authority in England—
Mr. Tam Dalyell: And in Scotland.
Mr. Rogers:—and in Scotland—opposed nursery vouchers, and that opposition to the scheme was not a Welsh phenomenon?
Mr. Davies: As I have said, 32 out of 38 Welsh Members opposed the scheme. We had all the local authorities behind us. The scheme was completely out of keeping with the pattern of nursery provision in Wales, which is different from that in England. The voucher scheme was especially ill suited to our needs in Wales. That is the point that I was making.
I am proud to be the first Labour Secretary of State for Wales for 18 years. I know full well the value to Wales of my seat at the Cabinet table, and am pleased to be able to reiterate to the House that, under our proposals, there is a clear and continuing role for the Secretary of State for Wales. The voice and influence of Wales will continue to be heard in Cabinet and in Parliament, and all the more strongly for being informed by the work and deliberations of the Assembly.
Costs will, of course, be incurred, and—in reply to my right hon. Friend the Member for Swansea, West (Mr. Williams)—I have placed details of these costs in the Library. I felt that it was a proper thing to do, so that the argument could be informed today on the basis of fact rather than unfounded speculation.
We have no plans for a new Assembly building. We are considering a number of alternative existing buildings, and will work to make the most effective use possible of those available buildings. The median-range estimate for running costs is £17.5 million, and within this, and for estimating purposes only, is provision for salaries for full-time members.
The Conservative party prefers the quango system. Under its system, some quango bosses receive £35,000 a year for two days a week. The Government prefer the democratic system, and the salaries of Assembly persons will be properly and independently assessed by the Senior Salaries Review Board.
The Assembly is not only about costs—it is about opportunities and progress as well. I am confident that more accountable, and therefore more responsible public bodies can also be more cost-effective. The costs of the Assembly have also to be assessed in the context of the overall impact of the Assembly on the Welsh economy. Cardiff business school estimates that about 500 new jobs will be created directly as a result of the Assembly. More importantly, in the longer term there will be great benefit for Welsh identity and for Welsh industry and commerce, stemming from a confident Wales with its own strong will.
We can gain greater benefit from Europe with the clear identity and international recognition that will come from having our own democratic government. Marketing opportunities for Wales and Welsh products will be enhanced.

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Contrary to the claims of the "Say No to Wales" campaign, the Confederation of British Industry has given a cautious welcome to our White Paper. I shall be having an early meeting to reassure it on the points that it has helpfully raised with Welsh Members in advance of today's debate.
Mr. Richard Shepherd: All this adds to the marginalisation of Welsh Members of the House of Commons. Is not the way to meet that to give all the powers that have been outlined to the Welsh Grand Committee, for example? I include in that legislative powers and the disbursement of moneys.
We would thereby retain the integrity of the Union, plus the integrity of the role of the directly elected and responsible Welsh Member of Parliament, who is elected on a franchise that surely covers issues such as transport, education and social services. At the same time, we would maintain—this is the point that worries my right hon. and hon. Friends—the integrity of the Union.
Mr. Davies: I understand the hon. Gentleman's argument, but I find it difficult to take it from a Conservative Member. I say that with the greatest respect, because I know that he is an honourable and independent-minded Member. The House will know that I value independent-minded Members.
For four years in opposition, I tried to persuade the then Conservative Government to allow the Welsh Grand Committee to meet and to have the power to debate the matters to which I have referred, let alone to take decisions. The Conservative Government's track record on these matters was pretty poor. They would not even let the Welsh Grand Committee meet.
The House is, of course, part of our sovereign Parliament, and nothing that is included in our proposals for devolution will in any way impinge on the integrity of the House. We are talking about the administration of Welsh affairs, which are currently devolved to me as Secretary of State. It is those powers that enable me to act in an administrative capacity and to initiate secondary legislation that will be transferred to the directly elected Assembly of the Welsh people. There is no question of the sovereignty of the House being impinged.
I was talking about the impact of an Assembly on the Welsh economy. One of Wales's leading economists, Brian Morgan, has studied the most authoritative report yet on the economics of devolution produced by MacKay and Aras. It shows that, in the modern world, factors such as education and training, innovation and communication infrastructure, drive economic growth. Macro-economic factors, such as money supply and interest rates, are best left as stable as possible, with diversity and flexibility pursued locally.
That is just what the Welsh Assembly is about: local democratic control of the locally delivered services that make an economy thrive. It is our best chance ever to break out of the vicious circle of decline that has left the Welsh economy languishing for two long and weary decades.
Brian Morgan said:
"The elements favoured by the new growth theorists are exactly the areas in which the Assembly will have power to influence developments."
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How long will Conservative Members, who are still sentimentally attached to centralist theories, take to realise that it is local democracy delivering local growth in an environment of national and, indeed, European stability that strengthens regions and nations?
The Assembly will provide excellent value for money, by giving the people of Wales a greater say in their own affairs and in how those resources should be spent. We will ensure that the Assembly observes the highest standards of propriety in handling those resources. It will apply the principles of government accounting, and an accounting officer will be answerable to an audit committee chaired by a member of a minority party in the Assembly.
There will be an auditor-general for Wales who will, in addition to auditing the Assembly's accounts, be able to examine particular areas of spending to ensure that maximum economy, efficiency and effectiveness is being achieved. The auditor-general's reports will be published, and the audit committee will be able to consider them and pursue issues as necessary.
Only the highest standards of propriety will be acceptable, and propriety does not begin and end with finances. The highest standards of conduct will be required of the Assembly and its members. It will conduct its business openly and in a spirit of partnership with local government, business, unions and the voluntary sector. It will promote sustainable development and equal opportunities for all. The use of the English and Welsh languages will be equally valid. Those principles will be reflected in the standing orders of the Assembly that will govern its procedures.
From the outset, we shall apply the strictest codes of conduct for members with a full declaration of interests. The Tory system of sleaze and greed and peddling of political influence to serve personal not public interest will have no part in our new system of government.
The Assembly will serve Wales's interests. It will have to improve the performance of the Welsh economy and the quality and delivery of services such as education and health. I want to ensure that the Assembly has the tools to do the job from the outset. We shall therefore create in the primary legislation a new economic powerhouse and introduce immediate further changes as we dismantle the Tory quango state.
I know that some of my colleagues would urge me to go further and faster, but I believe that we have the right approach. We said in our manifesto that we would specifically empower the Assembly to reform and democratise the quango state. That is precisely what the White Paper proposes. All public bodies that operate solely in Wales will be subject to the democratic control of the Assembly. It will make the appointments, set the strategic framework, provide the funding, and hold the bodies concerned to account.
The Assembly will be given sweeping powers to restructure the quango state. It will be able to abolish most of the executive and advisory bodies that report to it. However, I cannot empower it to restructure five bodies that, like those for the national lottery and the museums, were established under royal charter or warrant. Moreover, the Government have concluded that three other bodies—the Countryside Council for Wales, the

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Higher Education Funding Council for Wales, and the Welsh National Board for Nursing, Midwifery and Health Visiting—should retain their independent status.
Mr. Ieuan Wyn Jones: Will the Secretary of State clarify the position of the Welsh National Board for Nursing, Midwifery and Health Visiting? The chief nursing officer currently reports directly to him. Will he tell us and the people of Wales whether, under the new arrangements, the chief nursing officer will report to the Assembly or to him?
Mr. Davies: I shall provide a general explanation so as to put the answer into context. The principle that we are applying is that those responsibilities that are currently vested in me will, with one or two minor exceptions, be transferred to the Assembly by transfer order. It follows, therefore, that the functions that I discharge will become the responsibility of the Assembly. Those people who report to me directly and exclusively will report to the Assembly.
Mr. Ted Rowlands: Will my right hon. Friend give way?
Mr. Davies: I shall give way in a moment, because I know that my hon. Friend is concerned about this matter.
The Welsh National Board for Nursing, Midwifery and Health Visiting is currently subject to a review on a United Kingdom basis, and it would be wrong to pre-empt that review and to pass to the Assembly the discharge of professional responsibilities.
Mr. Rowlands: Will my right hon. Friend clarify the position of the Higher Education Funding Council for Wales, which is not a minor body? It has a budget of £145 million, and is one of the largest, top-ten quangos. If the Welsh Assembly is not to be responsible for that budget, presumably the council will remain accountable to the Secretary of State. Will responsibility for the budget stay with the Secretary of State? If not, where will it lie?
Mr. Davies: The Countryside Council for Wales, the Higher Education Funding Council for Wales and the Welsh National Board for Nursing, Midwifery and Health Visiting will not be subject to the Assembly's specific powers to restructure quangos. We took that decision in respect of the Higher Education Funding Council for Wales, because the principle has been established, certainly for the greater part of this century, that university funding should be the responsibility of an arm's-length body.
Mr. Rogers: Where will it lie?
Mr. Davies: With respect to my hon. Friend, he should let me answer my hon. Friend the Member for Merthry Tydfil and Rhymney (Mr. Rowlands), and if he then wishes to intervene, I shall give way to him. These are important matters, and I want to ensure that we deal with them sensibly.
For the best part of this century, the case has been well established that the funding of universities is best done at arm's length to ensure academic freedom. That is why we
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have decided that the Higher Education Funding Council for Wales will not be subject to these specific powers. However, funding is through the block grant, and the Assembly will decide the level of funding available for university education in Wales. Currently, I am responsible for the division of the block grant among higher education, further education and other parts of the education system.
Mr. Richard Livsey: Will the right hon. Gentleman give way?
Mr. Davies: I want to make progress, because many hon. Members want to contribute to the debate, but I shall give way when I know that a hon. Member has a particular concern. However, I am not anxious to encourage interventions.
Mr. Livsey: I thank the right hon. Gentleman for giving way. It is a simple point. As I understand it, the Higher Education Funding Council for Wales is responsible for the higher education sector, whereas the further education sector will be the responsibility of the Assembly. Why have the two sectors been split? There is some concern about that in further education in Wales.
Mr. Davies: They have not been split: there are two separate funding councils. For the reasons that I explained to my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), we want to ensure academic freedom and the independence of the university sector. We decided that it would not be appropriate to give the Assembly these specified powers to restructure the Higher Education Funding Council for Wales.
However, as the recent report of the Select Committee on Welsh Affairs shows, there is a considerable diversity of provision in further education. There is competition among schools, independent colleges and others that are funded by the Further Education Funding Council for Wales.
We felt that there was a strong case for the Assembly to be specifically empowered to get rid of the Further Education Funding Council for Wales if it so wished, so that it could better plan the delivery of post-16 education. The Under-Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain), is working with a task group to consider how best to ensure the proper integration of post-16 education. That responsibility will pass to the Assembly, so it should be properly empowered. If it wants to achieve a better integration of post-16 education, it will be empowered to do so. That is the principle that we have followed.
What we are doing, we are doing. The reform of the quangos will be done in the first wave of reform. The important point is that we shall then empower the Assembly to carry forward the process later to reflect its own views and priorities. That, of course, is the purpose of all our changes—to pass power from here in Westminster to Cardiff, where the elected representatives of Welsh people can make their own decisions to reflect their electorate's wishes.
I realise—to turn to another point which I know is of concern to the hon. Member for Brecon and Radnorshire—that some concern has been expressed about the consequences for mid Wales of our plans for

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the new economic development agency. The development board, like the Welsh Development Agency, has a long history of success in bringing greater prosperity to the communities it serves, some of which are now among the most prosperous in the United Kingdom.
The board has provided the land and the premises needed for business growth. It has attracted welcome job-creating investment to the area and it has been instrumental in developing a range of quality services for small businesses. It has a good track record, too, as an innovator and force for change in tackling the problems of rural Wales.
None of the skills and organisation that has earned that success will be lost under my proposals. On the contrary, an important new benefit from the merger with the WDA will be to allow preparation of a single development strategy for the whole of rural Wales, which embraces the best of the policies and practices of the two bodies.
The creation of the Assembly offers new prospects and opportunities for key public services, as well as promoting economic development. Nothing is more important for the transformation of the Welsh economy than that we should have a world-beating education and training system in Wales. I have already mentioned our intention to empower the Assembly to deal with post-16 education. At present, decisions are taken at a distance from the hard-earned, practical experience of the classroom and the workplace. Instead, the Assembly will be accessible, responsive, and determined to do what is best for Wales as a whole.
Education and training can help to transform society in Wales. Both are central to realising my goals of a world-beating, job-creating economy and a better quality of life for everyone. A radical improvement in the skills and educational attainments of all is needed if Wales is to survive and succeed in an increasingly competitive global economy, and if everyone is to reap the rewards of a demanding future.
I fully expect that the Assembly will want to press on to secure still greater improvements in school performance, to ensure that all our young people reach satisfactory standards by the end of compulsory education. The Assembly will also want to ensure that education and training deliver the skills needed by the Welsh economy.
The Assembly will use the potential of new information and communications technology to expand access to education and training of the highest quality. For the first time, Wales will have an open and vigorous democratic institution concerned to achieve excellent results from all of the partners with an interest in education and training, across the country as a whole.
As well as promoting economic prosperity, the Assembly will want to improve our quality of life. At the outset, the Welsh Office's health staff, the Health Promotion Authority, and some elements of the Welsh Health Common Services Authority will be brought together, enabling the Assembly to play a decisive role in the national health service in Wales, developing its own strategic priorities and deciding on the allocation of resources to address them.
The Assembly will also be able to consider the evolving role of health authorities and to decide whether it wishes to take over particular responsibilities from them or to allocate them to other bodies. It will have all the tools it needs in its hands to bring about those changes.
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The Under-Secretary of State for Wales, my hon. Friend the Member for Bridgend (Mr. Griffiths) has already announced our decision to re-configure NHS trusts by 1 April 1999. This will release much-needed resources for direct patient care. However, this is not an exercise in centralisation. The development of primary care is vital, and we are committed to locality commissioning of services, which will empower GPs and nurses to say what their patients need.
The health service will still be part of the national health service, with all that that implies for clinical standards, research, the professions, and the handling of pay, terms and conditions of service. The Assembly's staff will participate in national discussions, and it will have the same role in making appointments that I now have.
The Assembly will also work with local government. Here, the uniqueness of what we are proposing comes into focus. Compared to anything that we have seen before, the Assembly itself will be uniquely placed to develop an holistic approach, not simply to illness but to health, and to the determinants of health. In forming its policies, it will be able to look at the health impacts of employment, housing and education. In implementing its programmes, it will be able to draw together the work of the NHS, especially new developments in primary care and public health, with the work of its partners in local government.
There is another unique element. We now have in Wales a new structure of unitary local authorities that can each pursue coherent programmes across the full range of their responsibilities, working towards tangible achievement of health and social gain for their people. I am thinking not only of social services and environmental health functions—although those are extremely important—but of all their many powers that bear directly or indirectly on people's health and well-being. I know that local government in Wales, no longer undermined by creeping centralisation or the insidious growth of the quango state, is committed to examining the formidable contribution to health that local government services, taken as a whole, can now make.
Thus, we shall have a fully equipped, inclusive Assembly, working locally with newly empowered doctors and nurses, and with unitary local authorities that are taking on an increasingly holistic approach to the full range of local government services. That has to be an unprecedented and winning combination for improving the quality of life for people in Wales.
Mr. Rogers: Will my right hon. Friend give way?
Mr. Davies: I will certainly give way to my hon. Friend. I want to deal with the point about local government. Before I give way to him, perhaps I could again acknowledge the report that he has prepared, which gives his clear views on the relationship between the Assembly and local government.
Mr. Deputy Speaker (Mr. Michael Lord): Before the Secretary of State gives way, I remind the House that an awful lot of hon. Members want to speak today, and that repeated interventions and long speeches simply mean that others will not get a chance to make any contribution.
Mr. Rogers: I accept that, Mr. Deputy Speaker, but I find extremely cheerful and helpful the point that my right

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hon. Friend makes about the health functions in relation to local government. Am I to understand from what he just said that he and his Ministers are considering transferring some health functions back to local government, where they were before the most recent Tory reorganisation?
Mr. Davies: Our general approach has two elements. First, the Assembly will exist to create a partnership with local government not only in respect of health but in respect of all aspects of social provision, including economic development, housing, environmental matters and so on. Health is certainly an important part of that. Secondly, we shall empower the Assembly to do things it believes are necessary to improve the democratic working of Wales in relation to the quango state.
I said earlier that, in relation to the health authorities, for example, the Assembly will be empowered to reallocate responsibilities within the statutory framework. We have already said that there will be a reconfiguration and a reduction in the number of trusts. Central to that is our determination to ensure that local authorities are represented in trusts. So the answer to my hon. Friend's question is yes.
I am sure that my hon. Friend will be interested to know that the Welsh Local Government Association issued a statement yesterday, in which it said:
"The leaders of councils representing all political groups in Wales said the White Paper's approach to democratising the quangos is very positive."
The Welsh Local Government Association's leader, Harry Jones—this relates directly to the point that my hon. Friend raised—said:
"The White Paper sets out a broad framework which we fully endorse. We do not share the criticism being levelled at Ron Davies' decisions about the quangos whose function will be determined by the Assembly. Once the Assembly is in place we look forward to further transfer of functions from the quangos to local government. We look forward to working closely with the Secretary of State in drafting the Bill for the Assembly under the new partnership approach we have established with the Welsh Office under its new regime."
I know that my hon. Friend the Member for Rhondda will be delighted at the letter that I received yesterday from the leader of Rhondda Cynon Taff authority. He concluded:
"The White Paper offers the prospect of a positive partnership between local government and the Assembly and I am very pleased therefore to welcome its publication and endorse its contents."
It is therefore the case that we will develop the partnership to which my hon. Friend the Member for Rhondda refers.
The new relationship will be in stark contrast to the past 18 years, when the views and potential contribution of local government in Wales was all too often overlooked. The relationship will be a dynamic one, as the Assembly will be expected to promote and foster local government. It will also be expected to leave local decisions to local people and concentrate its efforts on the broader policy framework—one within which local government can do business effectively and be held properly to account by local people for their success or otherwise in achieving publicly declared standards of service and value for money.
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The Assembly will be required to take account of local government interests when overseeing the development of public bodies in Wales. Councils will be given a greater say in the running of quangos which can show that they are capable of adding real value to the way in which services are delivered. The restructuring of Tai Cymru, for example, and the extra responsibilities that local government will have for promoting housing strategies shows what can be done.
The Assembly will be given the power to transfer quango functions to local government, and the Welsh Local Government Association will be given every opportunity to highlight the case for devolution from Cardiff to our local communities across the full range of economic and social policy.
In terms of paying for local services, the Assembly will assume all my current responsibilities for local government finance. Therefore, it will provide revenue support to local councils and capital spending approvals. However, as the entire local government finance system in England and Wales will be subject to a comprehensive spending review, details of the Assembly's role in areas such as council tax, business rates and revenue support will depend on the outcome of that study and any related further primary legislation passed by this House.
Whatever the result, the Assembly's approach will be heavily influenced by its general responsibility to promote and foster local government in Wales, and it will be held to account for its performance in so doing by the ballot box. The Assembly will not have the power to take existing functions from local government. Local government has its own legislative base, and that can be changed only by further primary legislation in this House. I am delighted that the Welsh Local Government Association has been so positive and enthusiastic in its support for our proposals.
Mr. Dafydd Wigley: Could the Secretary of State address the question that I raised a few days ago about Europe and representation in it? He did not deal with that in detail in his speech. Page 22 of the White Paper states:
"The Secretary of State for Wales may participate in relevant meetings with the Council of Ministers and, where appropriate, represent the United Kingdom on relevant items."
On Tuesday, the Secretary of State said that Wales would not be disadvantaged in representation in Europe compared with a Scottish Parliament and Ministers. Yesterday, the Secretary of State for Scotland said that Ministers of the Scottish Executive—
Mr. Deputy Speaker: Order. I have asked for reasonably short interventions, but the hon. Gentleman's intervention is developing into a minor speech. Will he come to the point quickly?
Mr. Wigley: I am about to conclude. Yesterday, the Secretary of State for Scotland said:
"Ministers in the Scottish Executive will have an opportunity to participate … and in appropriate cases could speak for the United Kingdom."—[Official Report, 24 July 1997; Vol.298, c.1043.]
If there is a Conservative Secretary of State and a non-Conservative Assembly, how on earth can the interests of Wales be safeguarded unless the Assembly itself can represent Wales in the Council of Ministers?
Mr. Davies: I could not find the paragraph to which the hon. Gentleman refers, but I shall ask the Under-

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Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain), who will be winding up, to reply to the hon. Gentleman's point if he is not satisfied with my reply. [Interruption.] The matter is not funny. The hon. Gentleman raises a serious and genuine inquiry, and I want to give him a fair answer. I fail to see why that should give rise to childish, schoolboy mirth among Opposition Members.
We have made it clear that the Assembly will be empowered to ensure that the Welsh voice is heard directly in delegations to Europe. I have given the assurance that Scotland and Wales will have an equivalent relationship with Europe. The executive members of the Welsh Assembly will be able to be part of those delegations. I shall ask my hon. Friend to clarify that in winding up.
Our proposals are important for Wales, and for Britain. The Government's programme for constitutional reform is now well on course. Wales will remain firmly a part of the United Kingdom but we are delivering our manifesto commitment to constitutional change and bringing openness and democracy to the processes of government in Wales. We are modernising the quango state and ensuring that decisions on public services will be taken for and in Wales by an Assembly that is accountable to Wales. That is the right way forward for our country, and I invite the House to support our proposals.
10.14 am
Mr. Michael Ancram: The more I listen to the Secretary of State speaking about his proposals, the more I am reminded of Del boy in "Only Fools and Horses" trying to sell his latest doubtful wares. Behind the sales patter, there is the faint but somewhat charming impression that he does not really believe his sales pitch, and that he does not expect any of us to believe it, either.
I also have the feeling that, inside the new Labour Ron, there is a more real Ron trying to get out—the Ron who tells things as they are, the Ron of 1979, who voted against devolution and who called proposals for Scottish tax-raising powers "economic illiteracy". It has been rather painful to watch the old Ron trying unsuccessfully to get out, but I urge him to keep trying, to be true to his beliefs, and to turn his back on what is essentially a constitutional mess that will sideline Wales and threaten this United Kingdom.
Mr. Paul Flynn: The right hon. Gentleman had another painful day yesterday, when he heard the triumphant welcome by Scots Members from all parties except one for the proposals. He has also heard the proposals for an elected body for London, which I understand his party supports, and calls about East Anglia, the north-west of England and the north-east of England. If a great Parliament is to be set up in Scotland and if there are to be strong bodies throughout England, why on earth should Wales be left behind?
Mr. Ancram: The hon. Gentleman should check on our policy on London. We back the concept of an elected mayor, but we do not back the concept of a strategic authority. He should not necessarily take as gospel what he hears from his Prime Minister at the Dispatch Box, because frequently it is not. He makes an interesting point, and it is one that I was about to deal with. The Secretary
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of State for Wales keeps on telling us that we are debating not just a Welsh matter but the issue of constitutional reform throughout the United Kingdom. My concern is that any constitutional reform affects the whole of the United Kingdom.
It is fairly evident from the Government Benches that Labour does not see this as a matter for the United Kingdom. There is one Scottish Member present, and a smattering of English Members. The rest are Welsh Members. That shows that there is still a belief in the House that devolution is a matter only for Scotland and Wales. We argue that it is a matter for the United Kingdom as a whole, and we say that what is done in Scotland and Wales affects England as well. We are firm in that belief.
Mr. John Smith: Does not the hon. Gentleman accept that devolution was a key element in Labour's manifesto at the general election, and that we had the biggest endorsement of the British people for a long time, while the hon. Gentleman's party had its worst result for 150 years?
Mr. Ancram: The hon. Gentleman obviously thinks that the election was fought solely on the issue of devolution. I do not think that that is true, and it certainly was not the case in England.
It also raises the question: if the election result resolved the issue whether devolution should go ahead, why we are now to have referendums in September? Surely the point of that is to allow the people of Wales to consider the arguments not only for an Assembly but against it, and to make up their minds on the basis of those arguments. In that democratic process, is it not right that our sincere and fundamental arguments that the proposals will lead to the break-up of the United Kingdom should be put to the people of Wales at that referendum? The suggestion that is often put to me—that somehow we are being undemocratic, given the election result, in expressing our views—defies the logic of democracy.
Mr. Dalyell: Simply as a matter of fact, there are two Scottish Members present—myself and the hon. Member for Moray (Mrs. Ewing). Is it not the reality that Scottish people will have to choose between the two of us?
Mr. Ancram: Perhaps I could answer one intervention at a time.
The hon. Member for Vale of Glamorgan (Mr. Smith) has put his finger on it. This is a democratic process, in which the people of Wales and of Scotland are going to have to make a fundamental decision, which, if they get it wrong, they will not be able to change five years later. It will have profound and lasting consequences, not only for Wales and Scotland but for the whole of the UK. Therefore, this debate should be conducted in all seriousness, with both sides of the argument being heard and being put.
Mr. Donald Anderson: The right hon. Gentleman asked a simple question: why are we having a referendum? There is a simple answer—because that was promised in the election. Is that an alien concept to Conservative Members?
Mr. Ancram: What is an alien concept is the idea that the only reason for having a referendum is that it was in

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the manifesto. Are the Government telling the people of Wales and of Scotland that this is all a totally cosmetic exercise? Is that what the hon. Gentleman suggests—that we are having the referendum only because it was in the manifesto? The referendum is important, because it allows the people of Wales and of Scotland to consider this single issue and to make a judgment on it.
It is easy to jeer at the people who warn that half-baked proposals of this sort will undermine the stability of our constitution and lead to the break-up of the United Kingdom. Of course it is not explicit in the White Paper, but it is implicit in the dynamic that it will create. The Assembly will be the first step along the road to that break-up.
Mr. Martyn Jones: Will the right hon. Gentleman give way?
Mr. Ancram: No—I am going to make some progress, because you, Mr. Deputy Speaker, suggested that we should try to keep our speeches brief.
The Secretary of State said on Tuesday that he considered the Assembly to be "an evolving concept". He does not see it as what he is promising us today; he sees it as something that will change, as the hon. Member for Caernarfon (Mr. Wigley) obviously did in his welcome to the White Paper. I think that I can fairly say that his welcome was not so much for what is currently on offer as for what he believes it might become in due course. What he is looking for is not consistent with the Government' assurances that all their devolution plans are intended to strengthen the United Kingdom.
Mr. Wigley: I have made it clear in the House and outside that the model being offered by the Government is different from what we in Plaid Cymru seek. However, that model has certain benefits in its own right. We would prefer a fully fledged democracy in Wales, with law-making and tax-varying powers; but, even if we do not get that, there are advantages in having a directly elected Assembly that can democratise the quangos and ensure that we are never again ruled by the Tories, as we have been for the past 18 years.
Mr. Ancram: I find it hard to believe that the hon. Gentleman is trying to tell the House that he does not seek to use what is on offer to achieve his concept of independence for Wales in the long term.
The White Paper is the thin end of the wedge. The fact that it seeks to carry both nationalists and those who cherish the United Kingdom shows the constitutional mess it is.
Mr. Jon Owen Jones (Lord Commissioner to the Treasury): The right hon. Gentleman said that yesterday.
Mr. Ancram: I may have said it yesterday, but something that is worth saying is worth saying again, and I can say it over and again, because it is key to our objections.
The White Paper cannot achieve both those aims, because they are mutually exclusive. If it seeks to do that, it can create only disillusion, disappointment, resentment
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and impatience in both Wales and the rest of the UK, which will play into the hands only of the people who wish to pull our system down rather than to build it up. Expectations will be dashed, leading to alienation, further demands in terms of both power and money, and growing pressures within the constitution, until the breaking point is reached and the link snaps.
Those are what Conservative Members see as the consequences of the White Paper. That is why we have a responsibility, whether the Government like it or not, to warn the people of Wales and of the whole of the UK of the real dangers before this referendum takes place because, once we have set foot on this path, the die may be cast and there may be no going back.
History teaches us that events can often have a life of their own, leading to unintended consequences. Constitutional reforms of this sort are even more prone to that. That is why Conservative Members reject the White Paper and oppose the concept within it. Quite simply, we believe that it is bad for Wales.
Mr. Martyn Jones: Will the right hon. Gentleman give way?
Mr. Ancram: I am not going to give way for the moment; I will give way a little later.
Marginalisation is the most immediate threat facing Wales under these proposals. It is simply naive to believe that, were Wales to have an Assembly as proposed, the voice of Wales at Westminster and in Government would remain undiminished, let alone enhanced. The main Welsh voice at the centre of government and power would, to put it bluntly, be castrated.
The Secretary of State would be no more than a messenger boy, a voice without power or influence, a broken reed, bleating on the margins of Cabinet government, because the harsh reality of government is that, when someone abdicates his powers and gives away his responsibilities in an environment that has both in abundance, he is left with no influence and no ability to attract attention.
The extent of the Secretary of State's abandonment of power and responsibility is most chillingly summed up in paragraph 1.19 of the White Paper:
"The Secretary of State will retain a small team of civil servants to support his work"—
a small team for a non-job; a sounding board for a tinkling cymbal.
Incidentally, we are told that Welsh Questions will continue in the House. What on earth are they going to be about if all the matters that normally come up at Welsh Questions have been devolved to a Welsh Assembly? Perhaps we could have an answer to that. What is the House's role going to be in terms of questioning the Secretary of State about what is happening in Wales?
If the voice of Wales at the centre of government will have been eunuched, what of the Members of Parliament? The first cry at Westminster will be who speaks for Wales—Assembly members, who, according to the answer to a parliamentary question will be on more than £80,000 a year in terms of salaries and allowances for their glorified council jobs, or Members of Parliament? In Wales the voices will be local, and at Westminster the

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Welsh voices will, in the nature of politics, become increasingly irrelevant. History demonstrates that with chilling impact.
The tragic reality is that "A Voice for Wales", in terms of the wider influence of Wales, would quickly become an introverted voice that would end up speaking only to itself, because no one else would be listening. In a necessarily outward-looking world, the Welsh people would pay a heavy price for what the Secretary of State, euphemistically and improbably, referred to on Tuesday as
"a real say in the way public services in Wales are run."
The concept that more local levels of government more closely represent local opinion than Members of Parliament is not one that I readily accept, not least because of the work that many Labour Members do in that regard. It is an insult to them to claim otherwise.
The choice for me is between the genuine and effective democratic accountability over Welsh affairs exercised by Welsh Members of Parliament and the expensive talking shop, stacked under the additional member system, with vested and extremely well-paid party interests, which the White Paper offers. I say in passing that it is difficult to accept that having additional members is more democratic, because the additional member system is the very stuff of political patronage.
Mr. Ron Davies: Given the right hon. Gentleman's recent experience, I should have thought that he would have seen some merit in having a system that ensured that, if a party gained 20 per cent. of the vote, it had at least some representation. In his recent past, he had responsibility for these matters in Northern Ireland. Is he saying that the electoral system in Northern Ireland, which ensured a measure of proportionality, does not have merit?
Mr. Ancram: I am going to stick to what I have said to the right hon. Gentleman before, and I will it say it again. If he wishes to draw Northern Ireland as an analogy, he should consult the Secretary of State for Northern Ireland before he does so, because he will find that, in Northern Ireland, for real reasons to do with the way in which society there is divided, in a way that it is not anywhere else in the UK, three forms of elections are used for various electoral purposes. Each has a political and social purpose designed specifically to meet an objective in Northern Ireland. To draw analogies from that is dangerous.
The point that I was making and that the Secretary of State cannot deny is that he will have friends in Wales who will be delighted at the concept that, if they are nice to him, they may find themselves elected to a Welsh Assembly without having to fight a constituency, because they will get on to a list.
That brings me to costs. When my hon. Friend the Member for Ribble Valley (Mr. Evans) suggested on Tuesday that, in its first four-year term, the Assembly would cost the Welsh taxpayer around £100 million, the Secretary of State said:
"I am afraid that the hon. Gentleman's figures do not add up."—[Official Report, 22 July 1997; Vol. 298, c. 753-74.]
Let us try the Secretary of State's figures. The White Paper allows for set-up costs of £17 million, and running costs are estimated at £20 million per year—which is
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£80 million over four years. The total is £97 million so far. We know that the White Paper will cost about £1 million by the time it is distributed, and the referendum will cost some £3 million. According to my mathematics, that totals about £100 million. I find it odd that the Secretary of State should claim that those figures do not add up.
Since then, the Government have supplied a parliamentary answer—to which the Secretary of State referred—in reply to a question from the right hon. Member for Swansea, West (Mr. Williams) of 23 July. It gives detailed estimates of Assembly running costs of more than £17 million a year—including £82,100 a year for Assembly Members' salaries and allowances—with more expenditure for
"committee chairmen and other senior figures."
Who are those "other senior figures"? How much more will they receive, and what will they be doing? I find those figures interesting, and I hope that the Minister will explain what they mean.
Mr. Rhodri Morgan: In referring to salaries and allowances mentioned in the parliamentary answer, would it not be fairer for the right hon. Gentleman to mention that they are estimates prepared for planning purposes? They are simply borrowings from the study conducted for BBC Wales by the Cardiff business school, and do not represent any final decision. According to the same parliamentary answer, that decision will be made by the Senior Salaries Review Body. Why did the right hon. Gentleman not mention that?
Mr. Ancram: The answer is given by the Government, not by me. I am entitled—at least, I think I am—to rely on information supplied by the Government. I refer the hon. Gentleman to another part of that answer, which states:
"The Assembly might in due course take a different view on its needs in this area, in particular. It might need to take on more policy staff depending on its priorities."
That means that the Assembly is likely to cost more than the sum mentioned in the White Paper.
The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): What percentage of the total Welsh Office budget does the right hon. Gentleman think the predicted cost of the Welsh Assembly will be?
Mr. Ancram: I am not interested in percentages: I am interested—as the Minister should be—in the amount of money that will come out of the Welsh block that could otherwise be spent on education, health and the like. They are the areas in which the people of Wales are interested.
It is quite clear that the figure cited by hon. Friend the Member for Ribble Valley (Mr. Evans) is not far out: £100 million will come out of the Welsh Office budget in the first four years in order to pay for this talking shop. Some £90 million will come from the Welsh block that could have been spent on schools, hospitals, roads, and other services that the people of Wales need.
What happened to the Government's election priorities of education, education and education? Does the Secretary of State believe that Welsh schools have enough? If he does, I am sure that Welsh schools will be interested to hear it.

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I ask the Minister: how many new teachers would that money employ in Wales over the next four years? I suspect that the Government will tell us to consider the savings to be made from the reorganisation of quangos. What happened to the much vaunted bonfire of the quangos? The Government have been in power for 12 weeks, and suddenly quangos are not so bad after all. On Tuesday, the Secretary of State said:
"I want not so much to abolish those quangos as to ensure the services they provide are democratically accountable".—[Official Report, 22 July 1997; Vol. 298, c. 769.]
Ms Jackie Lawrence: My hon. Friend the Member for Cardiff, West (Mr. Morgan) referred to a parliamentary question. The last paragraph—we should examine it in its entirety—states:
"The total running cost based on the above would be £17.1 million per year."
Will the right hon. Gentleman accept that, in 1996, the then Government's figures showed that the top 10 quangos in Wales cost £52 million a year to run? What is more, that figure had increased from £26 million in 1994—a 100 per cent. increase, at a time when the retail price index rose by 6 per cent. Clearly, the Welsh Assembly would save running costs, not increase them, as the right hon. Gentleman suggests. The money saved can be devoted to front-line services in Wales.
Mr. Ancram: I am grateful to the hon. Lady for making her speech. I suggest that she asks the Secretary of State for Wales how much of the cost of quangos will be saved. I understand that, in the same answer, he said that he could not make that calculation at the moment. We are talking about additional, not alternative, expenditure, which could be spent on schools, hospitals and so on.
Before the hon. Lady's intervention, I was quoting the Secretary of State. He has changed his mind about quangos—did he find that they were not so unaccountable after all? Is it not true that 13 elected councillors serve on the boards he is seeking to merge—and that eight of them are Labour councillors? Perhaps that is the explanation of the fact that the right hon. Gentleman is not abolishing, but merging, those quangos.
I welcome the tribute that the Secretary of State paid on Tuesday to the public bodies for the way in which they have significantly improved the economic prospects of people in Wales and the quality of the public services they enjoy. Presumably that is why there have been so few bonfires in the past few weeks, and why we can be sure that there will be few job losses.
If the natural law of public sector mergers applies, I suspect that we will see that new super-quango—under its politically correct new name of "economic powerhouse"—employing more, rather than fewer, people. Although I congratulate the Secretary of State on his conversion to the merits of public bodies, I do not see how the suggested merger of three quangos is consistent with his remarks this morning that he is seeking to decentralise power—that seems to be an effective means of centralisation.
Turning to the powers of the Assembly, as the Secretary of State said, we have now had more time to digest the White Paper and the answers he gave following the statement on Tuesday. Together, they have not made pleasant or reassuring eating.
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For instance, I asked whether it would be possible for the Assembly to reduce the revenue support grant by top-slicing it to increase expenditure on its own programmes, therefore effectively requiring the councils to raise their council taxes to make up the shortfall. With the predicted removal of capping, that will be even more possible, and, I suspect, even more tempting for a Welsh Assembly. I suggested that that might be an indirect way for the Assembly to raise taxes, contrary to all the undertakings given that it would not be able to do so.
The reply I received—that the Assembly would not have direct tax-raising powers—was indistinct, to say the least. On the back of that reply, I must ask: will it have indirect tax-raising powers or back-door methods of raising tax of the sort that I have outlined? Is there anything to prevent the Assembly doing what I have suggested? I do not believe there is, and the people of Wales should be well aware that a vote for this Assembly in the referendum would, in the fulness of time, almost certainly be a vote for higher council taxes, with nothing to protect them.
The people of north Wales should be even more wary. My hon. Friend the Member for South Dorset (Mr. Bruce) asked the Secretary of State whether it would be wholly in the hands of the Assembly to decide which councils would get how much of the revenue support grant, and whether, with south Wales making up two thirds of the membership, it could vote more to its local authorities than to those in north Wales. With commendable brevity, the Secretary of State replied, "Yes." So now north Wales knows—and I am sure that the people of that region will want to take that into account when they vote in September.
Mr. Ron Davies: I am sorry that the right hon. Gentleman has sought to misrepresent me in that way—that is the only reason why I seek to intervene upon him.
The hon. Member for South Dorset (Mr. Bruce) asked me a theoretical question, and I answered directly that of course it was theoretically possible. The fact is that things do not work like that.
At present, we have in place a system of distributing the block grant involving detailed discussions with representatives of Welsh local government. I fully understand that the right hon. Gentleman's knowledge of civic affairs in Wales is fairly limited, but I assure him that that is the system. It involves agreement between the Welsh Office and local government in Wales. After the Assembly is in place, agreement will be reached by arrangement through discussions between the Assembly and local government on the basis of an agreed formula.
Mr. Ancram: The hon. Gentleman puts a lot of faith in such consultation. He cannot guarantee what he has said. My hon. Friend the Member for South Dorset asked:
"If this House votes a certain amount to local government, will it be wholly in the hands of the new Assembly to decide which councils get how much? If south Wales makes up two thirds of the membership, will it be able to vote itself more for its local authorities than north Wales will get?"
The Secretary of State replied:
"The hon. Gentleman has asked three questions"—
not hypothetical questions—
"The answers are yes, yes and yes."—[0fficial Report, 22 July 1997; Vol. 298, c. 771.]
Mr. Donald Anderson: Leaving aside the precedents of Wandsworth and Westminster, does the right hon.

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Gentleman agree that it is absurd for him, as a non-Welshman, to try to put the frighteners on Wales, pretending that north will be set against south and Welsh speakers against non-Welsh speakers? There is an element that perhaps he cannot understand: the people of Wales have a basic sense of fair play. I am sure that that will prevail.
Mr. Ancram: The hon. Gentleman is continuing with the suggestion he made earlier this morning: that the possible implications of the White Paper should not be put before the people of Wales before they vote in a referendum. I find that a disgraceful suggestion for democracy.
When the Secretary of State addressed the issue on Tuesday, he talked about regional committees in the Assembly. I should like to know more about those committees. What powers would they have to guard against the dangers that I have talked about? Are they not more likely to highlight rivalries and differences rather than to cure them? We should be told why the committees should be regarded as anything more than politically cosmetic.
One further area needs to be clarified this morning—the hon. Member for Caernarfon (Mr. Wigley) touched on it earlier. On Tuesday, he asked the Secretary of State about the position in relation to Europe. The Secretary of State answered:
"Wales will not be disadvantaged in our representation in Europe as compared with the Scottish Parliament and its Ministers."— [Official Report, 22 July 1997; Vol. 298, c. 761.]
The Secretary of State for Scotland told us yesterday—somewhat to our surprise and horror—that Ministers from the Scottish Parliament will be able not only to participate in European Council of Ministers negotiations, but, when appropriate, to speak on behalf of the United Kingdom. I shall continue to point out, as I did yesterday, that that is a disturbing concept, because those Ministers, who will speak on behalf of the United Kingdom, will not be answerable to this House of Commons. That is a departure from the normal rules of accountability.
The Secretary of State says that the people of Wales are not to be disadvantaged in comparison with the people of Scotland. Where in the White Paper for Wales is the power given for members of the Assembly, or the chairmen of committees of the Assembly, to participate in negotiations of the Council of Ministers, or, when appropriate, to speak on behalf of the United Kingdom? It is not there. There is only an indistinct power to discuss with and consult the UK delegations before they enter the negotiations.
Mr. Rogers: I find it a bit much for a Tory shadow Minister to talk about the representation of Wales in Europe, when a previous Secretary of State for Wales struck a dirty deal with the nationalists so that they could have representation on the Committee of the Regions ahead of the Liberals, simply to keep the Tory Government in power.
Mr. Ancram: I am asking a relevant question. When the Secretary of State made his comment on Tuesday, was he aware of the power that would be given to Ministers of the Scottish Parliament? If so, how does he explain his comment that there will be no disadvantage or difference?
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Perhaps he would like to respond to that now. I am giving him the chance to do so. If he does not respond, it raises the question—which is central for a balanced constitution—why Wales is once again being treated differently from Scotland. We believe that there should be no devolution. It is incumbent on those proposing devolution to explain the differences, discriminations and discrepancies.
Since Tuesday, I have seen nothing to change my opinion that the proposals are bad for Wales and bad for the United Kingdom. They create an expensive talking shop that will do nothing to improve the lives of the people of Wales. Indeed, they will pay for it, in jobs and services lost. It will set Wales aside from the rest of the United Kingdom, removing its clout in the Government and its voice at Westminster. It will create a focus for discontent, playing into the hands of nationalism and those who wish for the break-up of the United Kingdom.
The White Paper is built on the false premise of strengthening Wales and the United Kingdom, but it will do the opposite. We comprehensively reject it, and we call on the people of Wales to do the same.
10.44 am
Mr. Alan Williams: I start with a few personal comments. My hon. Friends, with whom I have served in the House for many years, know my opinion on devolution. We have argued about it amicably, and we have lived amicably with our differences. We have differed, and we have remained friends. They know me well enough to accept that if a constituent told me that they believed that Wales needed an Assembly as a focal point for its identity and culture, I would tell them that yes was the only way for them to vote. That is not a matter of evidence, but a matter of belief. There is no proof one way or the other. It is a personal decision.
My hon. Friends also know that I asked for a referendum two years ago. I asked for support in the Welsh Labour group, but the views expressed there were different from mine. I felt that a referendum would give us an opportunity for an open and intelligent debate on issues that are crucial to the long-term future of Wales.
I am not joining the yes campaign, obviously, but I am also not joining the no campaign. I have tried in the past few weeks to help the people who have to make their decision, particularly those who are not yet convinced either way, by obtaining the information necessary for an honest, informed and tolerant debate. That is why I have not done television interviews, but have asked parliamentary questions. I have been trying to get at the facts that the public need to know to make their minds up.
I was vastly reassured by my right hon. Friend the Secretary of State's comment earlier, in response to an intervention, that he greatly values independent-minded Members. I wish that he had not kept it a secret for so long. In the new spirit of consensus and good will that is now being generated, I hope that he will join me in condemning those outside the House who are turning the debate into one based on personal venom and vituperation. No one has been more of a victim of that than my hon. Friend the Member for Blaenau Gwent (Mr. Smith). I hope that the Secretary of State agrees that that must end. I hope that the Minister will take the opportunity to say so when he winds up.
In pursuit of some of the facts that are not always evident, I asked the other day whether the concept was evolving. When voting in a referendum, the public should

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know exactly what they are going to get. In all fairness, the Secretary of State admitted, as the Under-Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain) has said, that the concept would be evolving, and that they would not be involved once the Assembly was set up. He said that any future decision on development would be made by the politicians. If I understood him correctly, he meant the politicians here, not the politicians down there.
I was glad to hear my right hon. Friend's comments about my question on the detailed costing of the Assembly. He said that he gave the information because it was the proper thing to do. I accept that. He may say that the information was not in the White Paper because one has to draw a limit to how much detail one puts in a White Paper. In that case, why did I need to table a parliamentary question?
There is a well established system whereby Ministers who want to get information out plant questions for written answer, so that they have the opportunity to give that information. With only a week to go before the recess, we nearly missed the opportunity. I hope that the Secretary of State will tell us whether there is anything else we need to know that has not yet been made public.
In pursuit of reasoned debate, I was astonished by the demand by the Under-Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain), for a loyalty oath. We are to have a referendum on the future of Wales, yet the Under-Secretary was saying to the people of Wales, "Suspend your powers of judgment. Vote out of blind loyalty." Blind loyalty has had a mixed history in Europe. It has led to some of the greatest acts of heroism, but it was also the most frequently quoted defence at Nuremberg. Blind loyalty has always been the aspiration of zealots and the demand of despots. I hope that we shall hear no more of it.
Mr. Flynn: Will my right hon. Friend give way?
Mr. Williams: I would prefer not to, because time is limited. I do not want to give way, because I want to let my hon. Friends make their own speeches.
Mr. Flynn: Will my right hon. Friend give way on the point about loyalty?
Mr. Williams: I am sorry—I will give way to my hon. Friend.
Mr. Flynn: There was an occasion in Parliament when my right hon. Friend was unjustly sacked from his position as shadow Secretary of State for Wales. One of his colleagues, in an act of personal loyalty, wrote a suicidal note in his favour, and was then himself sacked. Does not my right hon. Friend think that, when we have a courageous Secretary of State who is fighting a brave battle for us all in Wales, his loyalty should go to him?
Mr. Williams: There is a difference. When my hon. Friend did what he did—I have always respected him and appreciated his loyalty—I went to the Leader of the Opposition and asked for and secured his reinstatement.
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The difference is that my hon. Friend showed loyalty with integrity. The Under-Secretary of State was asking for blind loyalty.
If the debate is to progress sensibly, we must strip away irrelevancies and myths. I tabled a parliamentary question as a result of a statement made by the Under-Secretary of State that thousands of jobs would be lost in Wales if the people of Wales did not vote yes. When challenged in the House by my hon. Friend the Member for Blaenau Gwent (Mr. Smith), he said that that was not what he had said. He claimed that he had said that thousands of jobs would be threatened in Wales. My hon. Friend, however, had the press release issued by the Welsh Office, as did my right hon. Friend the Member for Llanelli (Mr. Davies).
I asked what studies the Department had undertaken on the effect on jobs and investment in Wales of the creation of a Welsh Assembly. The Secretary of State replied:
"None, but my Department is keeping these issues under review."—[Official Report, 19 June 1997; Vol. 296, c. 272.]
Why can we not just stick to the facts? Why do we have to fabricate evidence when none exists in support of a case? If a case stands, it stands on its own; we do not need to make statements that have no foundation in reality.
Since the previous referendum, two major factors have influenced public opinion. The first is the 18 years of Tory devastation, and the second is the proliferation of quangos. I take first the greatest myth, which was well-exposed by my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) in an article at the weekend—that somehow, if Wales had had an Assembly in the 1980s, it could have escaped the impact of Thatcherism. If I for one moment thought that that was true, I would not be in a position of dissent. I would be out there campaigning vigorously in favour of the Assembly.
However, when they think about the matter, most of my hon. Friends must realise that the myth is based on incorrect economic and constitutional assumptions. In the White Paper, the Secretary of State makes it clear that macro-economic policy will remain in the hands of central Government. The first Howe Budget would still have destroyed the jobs of Wales, as it destroyed the jobs of England. Even if, by some miracle, Wales had initially escaped the first impact, as the factories closed down in England, the factories in Wales and the steelworks in Wales that supplied them would have closed down as well.
Furthermore, there would have been no escape from the other policies that are associated in Wales with Thatcherism. The Prime Minister has made it clear that, even after this devolution—as would have been the case after the previous devolution if it had taken place—Parliament will be sovereign. Even with nursery vouchers and the poll tax, if a Government in Westminster were determined to impose such policies on Wales, they would be imposed on Wales. That will be the case in future, whether we have the Assembly or not. I am sure that my right hon. Friend the Secretary of State will accept that that is so.
Mr. Ron Davies: This is an important point, which is why I want to take issue with my right hon. Friend on it. I accept his analysis of the economic case. Clearly, the devastation inflicted on this country during the 1980s would have happened whether we had an Assembly or not. I fully endorse that point.

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On the latter point about the constitutional question, however, the poll tax as it was constructed was implemented in Wales by means of three separate pages of secondary legislation. My right hon. Friend is correct in his assertion that Parliament is sovereign and that that will continue to be the case. Any Government, if they wanted to implement a poll tax, could implement it. No Government, however, could implement a poll tax in the way in which it was implemented in the 1980s.
If we had had an Assembly in the 1980s and the Government had tried to implement the poll tax in the way they did, there would have been an impact. Either the initial primary legislation would have had to impose a poll tax on Wales or the Government would have had to recognise a different political system in Wales and to decide that it would not proceed.
I entirely accept my right hon. Friend's argument that this House is sovereign. Parliament is sovereign and can always do what it wishes to do. It is my hope, however, that our political systems are not fossilised and that they are capable of growing, maturing and responding to different circumstances. When we have an Assembly, that evolution of our political practices will hasten.
Mr. Williams: I thank my right hon. Friend for conceding my point. If the Government of the day chose to incorporate a poll tax in primary legislation, it would be enacted. I thank him for that clarification.
This matter concerns not only legislation, but the implementation of power and of policy. The Treasury can always ring-fence the money the Budget gives. There is an enormous difference between handing the whole loaf over, handing it over in a couple of pieces, or handing it over in thin slices. That option is always available to the Treasury, as our councils have, unfortunately, found out. The Treasury, even with an Assembly, would still have the capacity to constrict and almost to eliminate any discretion by the Assembly. The Assembly would have been forced to become a council, as it were—an agent of Government policy.
If there had been an Assembly during the Thatcher times or subsequently, the interface with the Cabinet, as the White Paper of my right hon. Friend the Secretary of State makes clear, would still be the Secretary of State. Thus, the Secretary of State would still have been a Tory, and an English Member of Parliament representing an English constituency—and may well be so again. So an Assembly in no way addresses that problem.
Although Parliament is sovereign, as most of us here believe—I know that the hon. Member for Caernarfon (Mr. Wigley) believes this, for perfectly understandable reasons, and will, I think, endorse my point—there can be no escape from another surge of policy such as that enacted by Mrs. Thatcher. I must be careful—I am going on for too long.
Another feature is the quango state. On his white charger, my right hon. Friend the Secretary of State has stood, challenging the quango state. Many hon. Members will accept that it is not vanity to say that, over the past seven years, I have probably done as much as anybody in the House to expose the shortcomings of quangos. Indeed, if I may say to my right hon. Friend, my position is less ambivalent than his. After the first hearing on the Welsh Development Agency, he came to see me in my room to see whether it was essential to have a second hearing—
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not for any dishonourable reason, but because he felt that the WDA was so important to Wales that we had to try to protect it from damage.
Mr. Flynn: Quite right.
Mr. Williams: Quite right, says my hon. Friend. Quite wrong! As I told my right hon. Friend the Secretary of State at the time—I am not in any way impugning him; he did not dispute this—what was imperative was that the WDA stables had to be seen to have been swept clean, and a second Public Accounts Committee hearing was needed to do that.
As has been suggested already, we were promised a crusade and a bonfire, but all we have had are a couple of burned-out coals. The Residuary Body for Wales was looking after the already completed changeover of local authorities without the White Paper. That is as dead on the ground as anything can get. The death sentence of the Cardiff Bay development corporation was already enshrined even before my right hon. Friend the Secretary of State included it in his White Paper.
My right hon. Friend has quoted the Development Board for Rural Wales and the Land Authority for Wales as quangos that are being abolished. That is a nicety of language. They are being abolished by being force-fed into the WDA. I am not interested in arguing whether it is right or wrong that they should go there, but they still exist. My right hon. Friend says that it is all about power. Well, their powers still exist—it is just that fewer people will exercise more power.
It is the same for hospital trusts. Every year, £3.5 billion is spent by health service bodies in Wales. We are told—again, one has to read the wording carefully—that there will be fewer trusts. That does not mean that there will be any less command at the heights of the NHS in Wales: it just means that there will be a few more mergers. There will be no change in the power or in who exercises it.
My right hon. Friend really gave the game away in an interview in The Western Mail, when he said that it was essential that the important quangos were dealt in advance of the Assembly being set up. He was also reported as saying:
"many of the quangos which will survive were small, had a small budget, had little or no economic impact, and were advisory bodies retained by every Government."
Of course they are. He goes on to say that the Government want
"to leave decisions to the Assembly on how it would deal with other quangos."
It does not seem the greatest act of confidence to say that, when it comes to the big ones, they have to deal with them themselves. In fact, one is bound to ask: why bother? Why not do it all ourselves? If my right hon. Friend has the power to deal with the big ones, he has the power to deal with the small ones—just as he can give power to the councils. He does not have to wait for an Assembly to give powers to the councils.
Why should they wait two years? Give it to them now. I do not know whether the Opposition would support the legislation, but I am sure that all of us on the Labour Benches would do so immediately in order to transfer powers to councils.
Mr. Davies: The reason why I am not proposing that is because it is not the policy on which I was elected. The

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Labour party fought the election with a clear prescription to introduce devolution to Wales, and that is what I am now trying to deliver.
On the construction of the economic powerhouse, it was my view—I firmly hold to this—that, if we had said that the power to restructure the quangos would go to the Assembly, and that that power would not be exercised for two and a half or three years, there would be a period of uncertainty during which the work of the WDA, the Land Authority and the DBRW would be hampered by such insecurity. I wanted to prevent that, and to create the powerhouse, ensuring that it had the supporting structure of the training and enterprise councils and so on, so that the work of economic development could proceed. The other matters are properly left to the Assembly.
Mr. Williams: I do not disagree with my right hon. Friend's intention at all. I am just asking why it should be so limited. Why does not he go ahead and do it all himself? Then we would not need to create a permanent 60-member Assembly to do something that he could do in the next 18 months by simple legislation and administrative action.
Mr. Davies rose
Mr. Williams: I am sorry, but I am telling you that your policy is wrong. That is what debate is about—
Mr. Davies rose
Mr. Deputy Speaker: Order. Members on the Treasury Bench will have time to wind up at the end of the debate. There is little point in responding to all the questions and taking time away from Back Benchers who are very anxious to contribute to the debate.
Mr. Williams: One is bound to ask why, if it is so impossible to deal with matters without an Assembly, my right hon. Friend is saying that our right hon. Friend the Deputy Prime Minister, for example, will be unable to achieve many similar objectives in England because he will not have an Assembly. Is he saying that his colleagues are failing in their duties?
I am trying to cut my comments short. I was interested in a written answer a week last Wednesday, in which my right hon. Friend the Secretary of State talked about launching his crusade. He said:
"I shall play a vigorous part in securing a yes vote, along with my right hon. Friend the Prime Minister, other Cabinet colleagues and hon. Members representing constituencies all over the United Kingdom".—[Official Report, 16 July 1997; Vol. 298, c. 378.]
From him of all people, I thought that that was rather a strange proposition. An improbable picture crossed my mind of St. Ron, his white gown flowing, brandishing his manifesto above his head, striding across the Severn bridge backed by a horde of English Members of Parliament. Once again, he is taking the English to Wales to tell us Welsh what is good for us.
11.8 am
Mr. Richard Livsey: I want to make a much more positive speech than did the right hon. Member for Swansea, West (Mr. Williams). I have
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some respect for him, but I think that he is opening doors that have been open in Wales for centuries. We have not achieved democracy in Wales because our divisions have been exploited by the enemies of Wales who have fed on them. I do not think that we should give succour to those who are negating democracy in Wales.
The White Paper is entitled "A Voice for Wales"; I want to address what kind of voice that should be. I cannot pretend, as a Liberal Democrat, to be entirely in agreement with the total thrust of Government policy, but I think that in this case it brings a very worthy element of democracy to Wales. It is incredible, in view of the democratic deficit in Wales, that the official Opposition question the need for an Assembly.
Why does Wales need an Assembly? Since 1951, the Conservatives have ruled in Wales for 35 years and Labour for 11, yet no Conservative majority has been achieved in Wales in that time—far from it. The Conservatives had a high point in 1979, when 13 Conservative Members were elected to Westminster from Welsh constituencies. Wales has never voted Tory in the past 100 years, yet it has been ruled by them for most of that time. Careful consideration of the arithmetic shows that, between 1897 and 1997, the Tories have been in power for 51 years, Labour for 21, Liberals for 10 and coalitions for 18. In all that time, the Welsh electorate has not voted Conservative.
We have had to stomach policies to which we would never subscribe, and that has culminated in the past 18 years in which we have been marginalised. Four Secretaries of State were imposed on us from English constituencies, like governors of a colony. The 1,400 appointees to some 84 quangos have mainly been Conservative party members. We have been ruled by the Tory party in exile.
Mr. Dominic Grieve: The part of the country that I represent has never returned a Labour Member and has had to experience periods of Labour government. If we live in a Union and believe in a United Kingdom, why should that be of concern?
Mr. Livsey: I do not believe that the White Paper is a threat to the Union, and when England gets regional government, those problems will be addressed. The quangos have spent £2.5 billion in an act of political privilege that must be banished. I agree with those who say that the bonfire of the quangos is not big enough, but at least it is a start.
Wales has been ruled by a party that does not practise democracy itself. The Tory party is only now starting to think about giving its members one person, one vote to elect its leader. Only now, in 1997, is the Tory party beginning to practise democracy, yet it lectures us about how Wales should be ruled. We know better, and we have a far better track record of democracy in Wales.
Wales has a great need for democracy. We have 22 local authorities with 1,200 members elected through the ballot box, which is the best way to achieve democracy. The Assembly will extend that. In the 1997 election, not one Conservative was elected to Westminster from Wales. That was the logical outcome of the points that I have made so far.
The Liberal Democrats have no quarrel with the principle of an Assembly, but what should we measure the White Paper's proposals against? An Assembly is

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necessary, but the degree of devolution is a matter for debate. We need a debate about the functions of the Assembly, the number of seats it will have and its method of election.
We need to discuss, for example, the degree of proportional representation. We must promote political and geographical inclusiveness, including representation for individual political parties. Gender is also important; the role of women should be given its proper priority in any Welsh Assembly. We must ensure that the electoral system helps to achieve those objectives, and ask how they compare with the model in the White Paper.
Labour's Welsh Assembly will control the Welsh Office budget of £7 billion, but it will not be able to make primary legislation or vary taxes. The Liberal Democrats would prefer that it had powers to do both. Indeed, even the former Welsh Office Minister, Sir Wyn Roberts, has said that he likes the idea of a power to vary taxes, because Wales could then have lower taxes and become a tax haven. We should consider that advantage of tax-varying powers, but they are not on offer in the White Paper.
The legislation presaged in the White Paper would bring greater accountability to Wales, and we welcome that. The Welsh Assembly will have secondary legislation powers, but they could be stronger. No doubt in time devolution will strengthen those powers. The functions of the Assembly will reflect those of the Welsh Office, including powers over education. The Secretary of State mentioned nursery vouchers. Most Welsh local authorities had more than 90 per cent. of their children in nursery education when nursery vouchers were forced on us. That is why they were nonsense. We need to discuss powers over transport, agriculture, the environment and industry.
I have always been intrigued by the fact that powers over transport in Wales, especially the railways, have been exercised by the Secretary of State for Transport. I hope that the Minister will explain that when he sums up. I have always felt frustrated that we have not been able to influence transport policy sufficiently and I hope that the Minister will explain the powers that the Welsh Assembly will have over transport.
It is logical that powers over foreign affairs, macro-economics, defence, taxation and social security should remain at Westminster. Primary legislation powers will also, for the moment, remain at Westminster. I hesitate to raise the issues of the police and broadcasting. I do not understand why broadcasting is outside the remit of the Welsh Assembly, because there is a strong case for bringing it in. We want strong local government, and the Secretary of State has emphasised that he will not take powers from local government. He will be held to account for that statement in future years, and I trust that he means what he says and that local government will be strengthened by the transfer of powers from the quangos.
Local government has had a rough time in recent years, and many able people have not thought it worth their while to stand for election to local government. Local councillors have been like eunuchs, who were mentioned by the right hon. Member for Devizes (Mr. Ancram) in a different context, because the Conservatives took so many powers from local councils.
Another matter I wish to address is the number of seats in the Assembly. We know that the Labour party started out with a model of 80 seats for the Assembly, but that
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figure has now been whittled down to 60, which does not enable a good enough system of proportional representation to be put in place. That will be the subject of substantial debate later on, when we achieve a yes vote.
There is a case for having more seats elected by PR: it has been calculated that the correct ratio of seats would be 40 elected directly to 35 elected by PR. That would give the Assembly much better proportionality in terms of geography, political party and gender. If the inclusiveness that has been spoken of is not merely rhetoric, but sincerely meant, the principle would be better served by having more seats in the Assembly.
The reception of the White Paper in Wales has been interesting. It provides much food for thought and, as its implications are digested, there is a gathering enthusiasm for it. However, recognition of the issue of rural Wales is important. After the announcement of the economic powerhouse, with the demise of the Development Board for Rural Wales, there was a feeling of great unease in mid-Wales. Welsh Office Ministers would be well advised to continue doing what the Under-Secretary of State, the hon. Member for Neath (Mr. Hain), started to do in his instructions and address to the staff of the DBRW at the Royal Welsh show in my constituency this week. He has started well, and I am sure that he will take on board the DBRW's concerns and translate them into positive action to ensure that rural Wales is properly administered in terms of economic development. I know that he wants to do that, but a great deal of work is required.
The powerhouse Welsh Development Agency proposals for four divisions really split rural Wales. I am sure that the Under-Secretary will have noticed that, this week at the Royal Welsh show, the Institute of Welsh Affairs announced a paper relating to the reform of the common agricultural policy and the problems of rural areas. We know that the objective 5b areas will suffer a demise by 1999 and that objective 2 is being introduced. That needs special attention. The Institute of Welsh Affairs has stated clearly that there is a need for a rural development agency, and on Wednesday it repeated that such an agency was needed over and above the proposed four divisions of the powerhouse agency.
The Government should not be afraid to devolve power within Wales. They are right to have a policy that devolves power from Westminster to Wales. Given the difficult infrastructure within Wales, although some of the problems can be overcome by using information technology, I am sure that the Government will recognise the need to devolve powers within Wales, and they should not be afraid of doing so.
Mr. Martin Caton: The hon. Gentleman surely knows better than anyone that the Development Board for Rural Wales has not served all of rural Wales, but only mid-Wales. As an observer of its work, I have been impressed, but also jealous that we in rural areas not covered by the DBRW did not benefit from that service. It is to be hoped that the new powerhouse agency, with its rural function, will ensure that we get the same quality of service as other rural parts of Wales.
Mr. Livsey: I am pleased to hear the hon. Member for Gower (Mr. Caton) supporting the ideas and principles of the DBRW. Sadly that was not the historical view of representatives of Carmarthenshire, Pembrokeshire and

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some of the counties of north Wales when the DBRW was formed. They did not want to join it, but the DBRW's track record proves that it has exercised its powers successfully, and that is a reason for reform. The DBRW was pushed by past Liberal and Labour Members of Parliament: Jim Griffiths, the first Secretary of State for Wales, was very keen, as was Cledwyn Hughes, another Secretary of State for Wales, along with Emlyn Hooson, Peter Garbett Edwards of the board and, of course, Emrys Roberts.
We must not forget that the DBRW was brought into being because of 100 years of depopulation in rural Wales, which was a serious problem. Five local authorities in central Wales agreed, so the DBRW was formed. The Highlands and Islands development board in Scotland was founded for similar reasons. I do not know what is to happen in Scotland but, given that the Highlands and Islands development board area has objective 1 status, I would guess that it will remain. In terms of policy and recognition—especially within the European Union—that has a kick back to Wales.
The whole topic needs careful consideration. I do not want a rural committee of the Welsh Assembly to be set up only to find that many of the decisions that it should address have been set in concrete before it can debate them. That is a somewhat worrying prospect.
Youth depopulation in rural Wales continues to be a problem. In many of the rural counties, elderly people over the age of 65 constitute 22 per cent. to 25 per cent. of the population. The new problem in rural Wales is one of population exchange; young people leave and older people come in, resulting in an imbalance of economically active people. That needs to be addressed.
In many parts of rural Wales, up to 25 per cent. of the population are involved in agriculture, either directly or indirectly. Reform of the common agricultural policy will therefore be a major issue over the next five years. In the past 10 days, the President of the European Commission, Jacques Santer, has issued an agenda 2000 paper that contains serious problems for areas such as rural Wales.
As Liberal Democrats, we believe that there is a need for a Welsh Assembly. The rejection of the Tory agenda at the last general election means that they are disqualified from telling us what to do. The status quo went out at that election. The Liberal Democrats would go further than Labour's proposals, but we regard them as an interim measure and a useful step towards a better governed Wales. There is a philosophical chasm between the parties who were elected to represent Wales on 1 May and the Tories who were chucked out. The voice of Wales has been heard, and I believe that it will endorsed on 18 September by a resounding yes vote.
11.28 am
Mr. Denzil Davies: Like my right hon. Friend the Member for Swansea, West (Mr. Williams), I hope that, now that the White Paper has been published, and in the short time available between now and the referendum, we can have a reasonably balanced debate. Until now, the debate outside this place has been mainly characterised by verbal abuse, and I am sorry to say that most of that abuse has come from members of what is described as the yes campaign.
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The case for an Assembly and for the White Paper is, as my right hon. Friend the Secretary of State has said, a case for better democracy in the governance of Wales. My right hon. Friend went a bit far when he implied that democracy and cronyism do not sometimes lie together. A long time ago, I spent two years at the university of Chicago, where Mayor Daley—a true Democrat—was in charge of that great city. He would not have subscribed to my right hon. Friend's view. It is possible to say also that Tammany hall was a product of democracy.
The argument is, as it was in 1979, for better democracy in the governance of Wales and in fulfilling the functions presently carried out by the Welsh Office and by the quango state. If it stopped there, it would be easy—we are all in favour of democracy—but it does not. There are constitutional consequences, be they good or bad, of having a Welsh Assembly. There are consequences for the position of Wales in Britain which go beyond the arguments about democracy.
It is necessary—I hope that people will do this—to balance improvements in Welsh democracy with the constitutional consequences for Wales. The referendum was lost in 1979 because the Welsh people were not sufficiently convinced of the benefits of democracy when set against their real fears of the consequences for Wales within Britain. These proposals are not so different, although they go further in some respects because of the need for greater democracy.
There will be changes in the relationship between Wales and Britain. My right hon. Friend the Secretary of State says that sovereignty will remain in Westminster, and of course it will. He also says that those matters will evolve. Legal sovereignty can remain as a shell while the political realities move ahead, and there are examples in history of that. If we have an Assembly, a new generation of Welsh people will look less to the political institutions of Britain and more towards the new institutions that we are creating in Wales.
My generation is very loyal to our language and culture, but we tend to look towards Britain and its institutions, including this House of Commons. Previous generations did the same, and perhaps the next generation after ours will also do the same but, if we make this change, future generations will look less to Britain and more towards the institutions of Wales. The House of Commons will become less important in the life of Wales—that is the reality. It is not a question of arid legal sovereignty, as the Scottish White Paper shows clearly.
The Scottish White Paper goes further—I accept that—and comes to the conclusion that there should be fewer Scottish Members in this House. That is supposed to address the West Lothian question—although it does not—which does not apply in Wales. It is an attempt to address the point that, once Scottish legislation is taken away, Scottish Members will have less to do in this House. I am not advocating that the number of Welsh Members should be reduced because the Welsh proposals do not go as far as those for Scotland, but this House and its Members will become less important in Wales as a result of the changes. That is a constitutional and practical fact.
The other day, I was successful in acquiring an Adjournment debate on the finances of the Dyfed Powys health authority, to which the Under—Secretary of State for Wales, my hon. Friend the Member for Bridgend

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(Mr. Griffiths), replied so well—as he always does. I do not want to make a niggling point but, in future, such a debate would not take place here because the Minister would not be accountable—assuming that he was still a Minister, which he probably would not be, although through no fault of his own—for the finances of the Dyfed Powys health authority. Accountability would lie where the money was—at the Welsh Assembly.
I am making a trite observation, but a host of matters—health, education, transport and others—will go from here. We may still have Welsh Questions, but other matters will go to the Assembly, and Wales will look less to us and to the institutions of Britain. There will be a constitutional shift. It may not seem to be a seismic shift, but it is a shift that we have to recognise and either reject or accept, depending on our point of view.
I am sorry to bring the subject of Europe into the debate, but there is a difference with 1979. Europe was not such an issue in 1979. Over the past few years, I have detected that Welsh politicians have looked far more to Europe than they did during the 1979 referendum. Indeed, the Welsh chattering classes— [Interruption.] They do exist, and I could tell the House where they live. I can see some of them when I look around this Chamber. However, I am referring to a different breed of Welsh chattering class, which lives in Wales. The Welsh chattering classes are very keen on Wales in Europe. They write learned articles and books about a new kind of sub-tribe known as "Welsh Europeans". We know where they live, as well.
The Welsh Europeans are a new group—they are not Welsh British. Britain is seen as a declining entity. I see some of my hon. Friends nodding at that. The European factor was not an issue in 1979. The gaze of the Welsh political establishment—and, perhaps, of a minority in Welsh society—has moved away from British institutions and towards Europe. Wales is seen as a European nation, and I shall come to the hon. Member for Caernarfon (Mr. Wigley) and his party in a moment. They believe that, as the British nation is controlled by the 'orrible English, we must look to Europe.
The Welsh-European project, as I like to call it, is not just a project of the hon. Member for Caernarfon and his hon. Friends. If it were so, one would not refer to it, as his party is a fringe group. The project of looking to Europe rather than to Britain has reached even the highest echelons of the Labour party in Wales. Those concerned are still a minority, but a pretty influential one.
We must add to the situation the mirror-image in Scotland. The Scottish Parliament will be more powerful and will look even less to the House of Commons and to Britain. Scotland also will look more towards Europe than Wales will because of its history, its legal system and its connection with Europe.
When we put all those factors together, if we go through with devolution, we shall see that it is a question not of sovereignty, but, if I may use corporate jargon, of a substantial unbundling of the British unitary state—or, as The Guardian now describes it, the "British state". Sovereignty can reside here, and of course it will, but devolution is bound to lead to the unbundling of the present unitary state. We must ask ourselves again, in a reasoned way, whether that is to the benefit of Wales.
The unbundling of the British state does not just mean that Wales will be loosened from England; it means that England will be loosened from Wales. That is not often
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mentioned in our debates, but the relationship between Wales and England will change. Mr. Gwynfor Evans, who used to be leader of Plaid Cymru and Member of Parliament for the constituency next to mine, used to say that a federal system was not suitable for Britain. His main reason for saying that was that England was too large, relative to Scotland and Wales, to create a federal system.
I did not often agree with Mr. Evans, whom I respected as a patriot and a very learned man, but I believe that he was right about that. He then argued—I did not agree with this—for a kind of confidence in the European Union, in the days before the European Union, when even Plaid Cymru had decided that it would be in favour of it.
However, as we see the unbundling of Britain, we shall see a semi-federal Britain, with England becoming increasingly conscious of itself, as Wales and Scotland become more and more conscious of themselves. To use again some corporate managerial language, the relationships between those countries will take on a new transparency. What worries me is that the new transparency may have a bad effect on Wales, which is by far the poorest country of the three that make up Britain.
I should like to mention public expenditure, although I know that it is boring. I do not want the hon. Member for Caernarfon jumping up, because I shall not give way to him. I have heard his arguments on this subject and they are pretty poor.
Mr. Wigley: We have heard yours, too.
Mr. Davies: The two of us can sit down and discuss this matter on another occasion.
Wales does not raise enough taxation to finance its present level of public expenditure. Indeed, the gap is £5 billion to £6 billion every year.
Mr. Wigley: What a load of rubbish.
Mr. Davies: Those figures are produced by the Welsh Office. The hon. Gentleman is a friend of my right hon. Friend the Secretary of State and has had several dinners and discussions with him.
May I put this matter in context? I hate to bring up the Maastricht treaty, but this means a borrowing requirement of 15 per cent. of GDP, which no country in the western world could sustain. Wales therefore is in an extremely difficult position. Scotland may not be in the same position and is perhaps able to balance its books, but £5 billion to £6 billion each year have to be transferred to Wales from the British state.
My right hon. Friend the Secretary of State is worried enough to set out in the White Paper what is called "the Barnett formula", which has now taken on great importance. I am second to none in my respect for my former Treasury colleague, Lord Barnett. The formula existed even before he put his name to it. The implication is that the formula will somehow protect Wales in terms of public expenditure.
Frankly, I do not believe that such a formula can survive for long the unbundling of Britain, because it is the consequence of a unitary state. It could not survive a semi-federal system with far greater transparency and with each constituent nation of that system looking at

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matters much more closely. I refer particularly to England, because the money comes only from England, not from Scotland or Ireland.
The Barnett formula is not entrenched in legislation; it is only a formula. Actually, it is only a rule of thumb to make matters easier for Chief Secretaries. It could probably be changed by a Chancellor, and certainly by a Cabinet. What kind of Cabinet would it be? Would it include the Secretary of State for Scotland? My hon. Friend the Member for Linlithgow (Mr. Dalyell) is not here. If he were, he may have been able to tell us. Over the past six to nine months, I have been diligently reading The Scotsman and the Glasgow Herald, as it used to be called, and I am not sure whether there would be a Secretary of State for Scotland for long under the new arrangements. He might be there, but sitting just inside the door.
Foreseeing that problem the other day, one Scottish academic suggested that the Secretary of State should now be called the Secretary of State for territorial areas—shades almost of colonialism there—to protect the smaller British nations against the dreadful English. He suggested that the Secretary of State for territorial areas should be Scottish, but such a suggestion is only natural coming from somebody in Scotland. My right hon. Friend the Secretary of State for Wales would be in the Cabinet, although perhaps close to the table. We are not sure how much power he would have. I have no doubt that he would fight hard for Wales, as he always does. It would be a mostly English Cabinet, rather than the current Cabinet with a unitary British state.
I fear for Wales as a small country that cannot, in those circumstances, defend itself. The Scots may be able to cope—we know that the English can—but the Welsh will have lost much of their power. What happens if the Barnett formula is thrown overboard with the new fashion of balancing budgets, and of putting bankers in charge of stability of public finances? Would the funding gap be allowed to remain? I should be surprised if it would. Who would protect Wales and my constituents?
Mr. Martyn Jones: We would.
Mr. Davies: The Welsh are marvellous people, but the English are ruthless. When a country starts to look solely at its own interests, it tends to become ruthless, but let us not pursue that argument now. I fear for Wales and I am entitled to do so, and those matters must be debated and considered.
Against all those problems we must set the democratic benefits of the White Paper. My right hon. Friend the Secretary of State has been extremely bold with regard to the Welsh Office. I did not believe that he would do so, but he has almost put himself out of a job. Not many people in this insecure, global economy would deliberately put themselves out of a job, although he has not quite done so. He is still just inside the Cabinet Room sitting at a little desk—whether he is sitting at the table, I do not know—and he has transferred powers, which are no longer debated, to a Welsh Assembly.
Having paid my right hon. Friend that compliment, a blow punch is coming: he has been extremely weak on quangos. I did not say that there should be a bonfire of
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quangos—I did not know what that meant—because quangos perform a useful function, which must be carried out by somebody. If by "a bonfire of quangos", he meant a bonfire of the boards of quangos, I would be with him. However, he did not mean that. Yet, as I understand it from a newspaper article, he agreed that that could be done by this House. Of course it could. The boards of the 10 or 11 major executive quangos could be abolished through the devolution Bill.
We are told that this House is still sovereign in those matters, so why on earth should not the boards of the quangos be abolished and their functions performed by the new Assembly's committees? I do not understand why that cannot be done by legislation in this sovereign Parliament. I am sure that it could and should be done, but I am sorry to say that my right hon. Friend has run away from it. I do not know why he has run away. We have heard various reasons, such as that it will be done by the Assembly—but the Assembly will not have primary legislation powers. What about those terrible royal charters? People say, "Oh, you can't touch royal charters." Of course we can—we can do anything we like in this place. My right hon. Friend has accepted that.
My right hon. Friend has missed a great opportunity to reform the quango state in Wales and to do it now. Sadly and unfortunately, the Welsh establishment—I shall not call it the chattering classes—still has its bottom firmly on the Consolidated Fund of quangos, drawing its money.
It is a balancing act, and it forms the basis of the debates that I hope that we shall have over the next month to six weeks. On the one hand is greater democracy, but on the other is the change in the constitutional relationship between Wales and Britain and, perhaps more importantly, between England and Wales.
11.51 am
Mr. Ieuan Wyn Jones: I listened with great care, as I always do, to the speech of the right hon. Member for Llanelli (Mr. Davies). His speeches are often intelligent, informative and coherent—but today was not one of his best efforts.
Mr. John M. Taylor: Oh, yes, it was.
Mr. Jones: All the nods of assent come from the Tory Benches.
The right hon. Member for Llanelli comes from a fine tradition in Welsh politics. The problem is that he has failed to recognise the Wales of 1997; he has recognised, possibly, the Wales of 1979. The debate has moved forward considerably since then. He represents—it is an honourable position for him, although I disagree with it fundamentally—the opinion that sovereignty resides in one place and one place alone. He must accept that, since 1979, sovereignty has moved. He may not like that, but it has happened. Indeed, it has moved fundamentally. We need to ensure that people's participation in democracy is at the appropriate level for them. All we are doing when talking about constitutional change to Wales is completing the picture.
When I put that point to the Prime Minister on his return from Amsterdam, he acknowledged that power must shift and be as close to the people as possible. We recognise that power has gone to the European Union in certain areas, but Members on both sides of the House

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must also recognise that people have been alienated from the democratic process to such an extent that a whole generation of young people have not voted since 1979. They have a right to be heard, and they will be heard when the referendum comes in September.
We have heard speeches from two long-standing Labour Members highlighting the shortcomings of the White Paper and reaching one conclusion. I come to the debate from another direction. I acknowledge that there are shortcomings in the White Paper, but it is fair to point out that the Secretary of State announced his proposals for Wales on the basis that he was looking for inclusive politics. He wanted to ensure that all the Members voted in by the people of Wales on 1 May were part of a constructive debate.
My party has made it perfectly clear that it wants to be part of a constructive debate. The Secretary of State and his colleagues are aware of our view that this is an historic opportunity for Wales to achieve a measure of democratic accountability the like of which our country has never before seen. We want a much stronger body—we make no bones about that; it is our stated position—a body similar to that proposed for Scotland.
Mr. Shepherd: The secession party.
Mr. Jones: It is not the secession party. I have never argued for separation and I never will. I want that to be on the record. I believe that the relationship between Wales and the remainder of the United Kingdom and the European Union must be considered positively and constructively.
Mr. Alan W. Williams: Will the hon. Gentleman give way?
Mr. Jones: No, I am not giving way. [HON. MEMBERS: "Give way."] What I find rather strange in the context of this debate is the alliance between certain Labour Members and Conservative Members.
Mr. Shepherd: A British alliance.
Mr. Jones: There was a message to the Conservative party on 1 May when the Welsh people spoke. They rejected the Conservative party—
Mr. Evans: How well did you do?
Mr. Jones: I have never seen Ribble Valley on the map of Wales.
We must examine carefully the relationship between what is contained in the White Paper and the future as we see it for Wales. There is an opportunity for us to have, for the first time, a Welsh-elected body. Although it will have the powers that we would wish it to have, it will be a body that will be able to speak for Wales.
I recognise that the White Paper makes a significant commitment to the strengthening of Wales's relationship with Europe, and that is important. It is a concept that is of interest to a great many and not only to academics. Farmers and others living in rural Wales want Wales to have a clear voice within the institutions of Europe, and within the next three years there will be significant changes to that economy.
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We recognise that support is given to our farmers and agriculture generally through the European Union and the common agricultural policy. We recognise also that there will be changes to the way in which the common agricultural policy operates, and we must remember that they will have profound implications for the rural economy. It is right in the context of the forthcoming changes that a Welsh voice is heard clearly. I agree with the point made by the Secretary of State in reply to an intervention from my hon. Friend the Member for Caernarfon (Mr. Wigley), that we shall be seeing Welsh influence for the first time and in a clear way in the institutions of Europe.
The hon. Member for Brecon and Radnorshire (Mr. Livsey) made a third point about structural funding, which is an important part of sustaining the rural economy. I think that we all agree that the rural economy is fragile. I certainly agree with the right hon. Member for Llanelli about that. It is an economy that needs to be supported. At the same time, we must remember the contribution that structural funds make to defending the rural economy. It is vital in the context of future changes that there is a strong and clear Welsh voice in the institutions of the EU.
Mr. Llew Smith: Will the hon. Gentleman give way?
Mr. Jones: The hon. Gentleman will have an opportunity to make his own speech. A very long article of his was printed in yesterday's edition of the Western Mail. I am sure that he will have other opportunities to contribute to the debate.
Any Welsh elected body needs to be an inclusive body. It needs to include shades of opinion that are reflected in the House, even with members of the Conservative party standing for election to the Assembly. One of the most remarkable statements that I have heard from the Conservative Front Bench, as the Conservative party joins the no campaign, is that Conservatives will be standing for the Assembly. Of course they will, once the Assembly or whatever it is called is set up. It is right that they will be standing for such a body. As I have said, it is a body that should reflect all shades of political opinion in Wales. It is important that it is inclusive.
The proportional element that is included in the voting system is important. I recognise that what is proposed does not go as far as the Liberal Democrats or Plaid Cymru would want, but an important statement about the nature of inclusive politics has been heralded by Welsh Office Ministers, and they should be complimented on that.
The establishment of regional committees is an important recognition of the fact that different parts of Wales have different needs. Within an inclusive body, there may be different priorities for different parts of Wales. There may be different views about different things. The regional committees will provide an opportunity for various parts of Wales, whether it be the north or the west, to scrutinise more effectively the work of various bodies. That will be a considerable step forward.
It is important that we recognise that, if Wales does not take the opportunity to move ahead, it will be left behind. I do not recognise the dangers that are put forward by

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those who sit on the Opposition Front Bench. We hear what they say about the disaster that will befall Wales if the people vote yes on 18 September. I recognise, however, a Wales that could be left behind. It is obvious to me that the Scots will vote for a Parliament. I cannot conceive of a position where the people of London would not vote for a regional assembly. Once there is a regional body in London, I cannot conceive of the people of the north-west or north-east of England not wanting their own regional assemblies. What is the future for Wales in that context? Wales has a real opportunity to begin the process of constitutional change. My party will, as ever, play a constructive part in that debate.
12.4 pm
Mr. Donald Anderson: I follow the hon. Member for Ynys Môn (Mr. Jones) in saying that this is an historic day for Wales. To try to assess its significance and to find a precedent, I refer to the debates in 1831 on the eve of the Reform Act 1832. The Whigs were on one side and the Tories were on the other. For the Whigs, Grey said:
"The right of the people is to good government."
Wellington, replying for the Conservative Government, said that he was
"totally unprepared with any plan"
for parliamentary reform, and added that
"he would go further, and say that he had never … heard of any measure … which could in any degree satisfy his mind that the state of the representation could be improved, or be rendered more satisfactory to the country at large … He was fully convinced that the country possessed at the present moment a legislature which answered all the good purposes of legislation, and this to a greater degree than any legislature ever had answered in any country whatever. … He would go still further and say that if at the present moment he had imposed upon him the duty of forming a legislature of any country … he did not mean to assert that he could form such a legislature as they possessed now, for the nature of man was incapable of reaching such excellence".
That change came 1832 after the great Wig victory, and the change now is 1997 after the great Labour victory. The equivalent of Old Sarum and the rotten boroughs before the reforms of 1832 is the quangocracy that was built upon and used by the Conservative Government.
Mr. Rowlands: I remind my hon. Friend that the 1831 Reform Bill led to the Merthyr riots, when the vast majority of working-class people in Merthyr found that they were not included in the Bill.
Mr. Anderson: It was the start of a process of reform that led to the present position. Opposition Members may have been on the side of the Tories in 1831, but I would have been on the side of the Whigs. Certainly the people of Wales would have been on the side of the Whigs in that debate on the great Reform Act 1832, and they have shown where they stand now by electing parties that support devolution.
I support with excitement what the Secretary of State said. I broadly support his propositions on greater democracy, accountability and greater inclusiveness in the Welsh political system. Of course we shall argue about details, but the essential debate is about whether we want progress and greater accountability in Wales—and this is
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the only show in town—or whether we want to keep the present system of quangocracy that has stifled movement towards a greater Welsh identity.
The Conservatives follow Wellington, as they did in 1831, and apparently believe that our system has achieved such a plateau of perfection that we cannot move forward. That was their position then, and it is their position now: the status quo and no further. If, as seems likely, Wales votes for reform, it will be interesting to see whether Conservatives Members adjust their position.
I also follow the hon. Member for Ynys Môn in saying that sovereignty now is a different concept from what it was in the latter part of the 19th century in the writings of Dicey and others. Sovereignty is now shared. At the time when Dicey was elaborating his own position of sovereignty, who would have thought that we would choose to give up sovereignty to NATO in a key area such as defence? Who would have thought that sovereignty would now be shared at different tiers, with some sovereignty going to European institutions, some to Westminster and a proposed degree of shared sovereignty at regional level?
So I welcome what the Secretary of State has said. I do so as a member of what was called in the 1970s the gang of six. Six members of my party echoed dissent and worked against the then proposals for devolution, for some good and some bad reasons. Much has changed since then, as I shall attempt to show. Three members of the gang of six—Fred Evans, Joan Evans and Ifor Davies—have since died. Leo Abse recently celebrated his 80th birthday. There was another man called Neil Kinnock—I am not sure where he is now. I remain as the sole representative in the House of that group. I have changed my views, and I want to tell the House why.
First, I believe that Governments should be accountable. I believe in the dispersal of power, one key feature of which is some greater move towards regionalism. The record of the Thatcher Administration was one of centralisation and of removing the intermediary bodies—the corps intermédiare—which acted as a diffusing structure between Westminster, Whitehall and the people. Mrs. Thatcher was, for me and for many in Wales, the great persuader. We saw the elimination or neutering of some of the bodies that stood between the state and the citizen such as local government and the trade unions. The Greater London council was abolished. The Government even made attacks on the BBC.
Regional assemblies are healthy in themselves and allow the proper expression of local views. They are a healthy check on Governments, as they are in Europe. It is Europe which is the second persuader. As my right hon. Friend the Member for Llanelli (Mr. Davies) properly said, in 1979 Europe hardly figured in the debate. There are two elements to the European dimension. One is the vitality of the European regions. We in Wales talk of linkage with the motor regions of Europe. Catalonia, Rhône-Alpes, Lombardy and so on all have the vitality

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that an elected Assembly brings. We cannot have proper linkage with those regions unless we have an Assembly. I also think of the Atlantic arc.
Mr. Rogers: Does my hon. Friend accept that what is proposed in the White Paper is not what exists in Spain and Catalonia? The autonomous committees in Spain have political and financial autonomy, and legislative powers.
Mr. Anderson: There is no exact precedent, but each of our European partners has a degree of regionalism that we do not have. For example, in Spain there is devolution a la carte. Catalonia has a degree of autonomy that Valencia has not, because there is greater demand for it. In Germany, Saxony and other lander may push for greater control under the constitution. There are other examples. My hon. Friend cannot dispute that there is greater healthy and vital regionalism in all our partner countries. Yet Catalonia is still an essential part of Spain.
The second element is the maximisation of Welsh impact at Brussels level. Time presses, so I shall simply commend to my right hon. Friend the Secretary of State the report recently published by the Institute of Welsh Affairs, which suggested various means by which we in Wales could seek to maximise our impact. Many of those suggestions are covered in the White Paper.
The third element is the threats to and the importance of Welsh identity. The Welsh culture should be encouraged, not eliminated. The White Paper provides for that by its inclusive theme. The electoral system of proportional representation will ensure a greater coming together within Wales. I hear what the Opposition say about the Assembly being based on the Euro-constituencies, which may be abolished, but that is a quibble. The essence of the Euro-constituencies is that they are an agglomeration of Westminster seats, and remain so whatever the pattern of future European elections. I am pleased about that, and also about the regional committees within the Assembly's proposed structure.
Increasingly, an imbalance has developed within the Welsh economic and social structure in which the south-east in relation to the rest of Wales occupies a position not unlike that of the south-east of England in relation to the rest of England. The Welsh regional committees within the Assembly structure could help to counter that imbalance. The effect of the Tories' attachment to the status quo is to separate them decisively from the prevailing mood in Wales.
I shall end on two general and fundamental points. I could make many detailed criticisms of the proposals, in the same way as I criticised proposals in the 1970s. I could raise bogeys such as the Welsh language and north against the south. The right hon. Member for Devizes (Mr. Ancram) demeaned himself by seeking to do that. I have more faith in the good sense of the Welsh people.
The essence of the Tory claim is that the proposals could lead to the fragmentation of the United Kingdom. Who can forget the Tory platform at the general election? They were little Englanders abroad and the English national party at home. It is clear that our European partner countries practise a regionalism that has not led to their fragmentation. It is wholly patronising to tell the Welsh people that we do not have the political sophistication that allows the people of Germany, France and Spain vital regional assemblies that do not lead to the dissolution of the sovereignty of those countries.
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In the United Kingdom, alas, we do not plan our constitutional changes. We drift, or we walk crablike, along the path of constitutional change. The proposals for Wales can only be an interim constitutional settlement. The English problem—that is to say, the size of England in terms of a possible federation—will remain.
Mr. Grieve: Will the hon. Gentleman give way?
Mr. Anderson: No, I must press on.
Eventually, we shall have to recast the United Kingdom as a whole, and perhaps move to a quasi-federal state, but that is not a matter for today's debate. The proposals are welcome, but only as a first step. In Tuesday's exchanges on the White Paper, my right hon. Friend the Member for Swansea, West (Mr. Williams) spoke about a mystery tour. Any new constitutional advance can be a sort of mystery tour. When we joined the European Union, no one could say with certainty what lay at the end of the road, but to use such an argument is to speak against change in itself.
I recall the fine story of a Welsh mystery tour by bus from Cwmrhydyceirw in my constituency. There was a sweep about where the tour would end, and it is said that the driver won. The people of Wales are driving this mystery tour. They will decide the pace and the direction, and I have confidence in our people.
12.18 pm
Mr. Andrew Rowe: I have been asked to be brief, and I shall therefore confine myself to one topic and shall not go into the details of the proposal.
I congratulate the Secretary of State for Wales and the Government on their tactical skill. They have taken advantage of the notorious lack of public interest in the details of government and have used their huge temporary majority to impose a dangerous deception on the people of England. How can the Government claim that their current proposals are of interest only to the 15 per cent. or so of the electorate to be found within the boundaries of Scotland and Wales?
The Prime Minister's preface to the White Paper makes the Government's strategy entirely clear: there is to be a Welsh Assembly, a Scottish Parliament, an elected mayor and new strategic authority for London, more accountability in the regions of England, and a referendum on the voting system for the House of Commons. The key point from all this is that the people of England are directly affected by the Welsh and Scottish proposals, and the people of England should be part of the referendum.
Mr. Grieve: Has my hon. Friend noted how, in the Scottish White Paper on devolution, the word "England" does not feature? The future of this country is apparently a new entity called Wales, Scotland and the regions.
Mr. Rowe: That is part of my concern.
Because the proposals directly affect the way in which the United Kingdom Parliament works, it is an obscenity that we in England should have no part in the referendums. The proposals affect the powers and the position of a UK Cabinet Minister—in fact, in relation to

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Scotland, they affect the position of more than one. They affect the accountability and scrutiny powers of the UK Parliament.
It seems probable, if the Welsh vote for the proposal, that the proposals will, for example, affect the size of the social security bill. If the Assembly is given powers to alter the uniform business rate, it may adopt policies that will lead to some companies leaving Wales, thus putting up the social security bill—which will, of course, be met from the UK Parliament.
The proposals change the electoral system in the UK, with the clear intention of ultimately changing it throughout the nation, yet the English are to have no say in the proposals. The Government cannot take the first effectively irreversible steps along a road that will for ever change the way in which the UK Parliament works and base their claim to public support on a referendum from which some 85 per cent. of the electorate are excluded.
It is clever, all right, in a tactical, short-term, anything-for-a-Labour victory way, which is the hallmark of the Government, but it is potentially lethal. It will create a slow-burn, long-term anger and division, which could tear the United Kingdom apart.
I confess that I do not know yet exactly where I stand on all the ramifications of the proposals—but nor, of course, do the Government. The White Paper is shot through with concordats to be published later, reviews on local taxation and capping powers, and compacts with the voluntary sector, for example. As one of the Secretary of State's colleagues, the right hon. Member for Swansea, West (Mr. Williams), so eloquently put it, we are being asked to join "a mystery tour" whose destination remains unknown, even to its promoters.
In election after election, almost all UK parties have campaigned on the belief that most people, faced with a choice between peace and prosperity, and the impoverishment that follows blind support for atavistic prejudice, will choose the former. In one part of the UK, as the new Government are learning daily, that is already not the case.
I confess to being somewhat frightened now about the rest of the United Kingdom. In its mad rush to reshape this nation root and branch, will new Labour unleash nationalistic forces that the Union has traditionally kept under control for centuries, to the benefit of us all, and find itself eventually unable to control them? The strategists of new Labour may be offering my party a poisoned chalice. They are creating the conditions in which a Conservative party, already in some danger of an exaggerated fear of the European Union, could seek populist advantage in fuelling English nationalism.
I pray that we shall resist any such temptation—for we can see in one part of the United Kingdom how hard it is to set such emotions at rest once they have been aroused. I believe that the Labour Government are setting the scene for a similar scenario by refusing the English any say in these momentous decisions.
New Labour's insouciant willingness to accept that it does not know how its revolution will eventually develop chills my blood. If London has an elected mayor, will Manchester, Birmingham, Liverpool and York be prepared to do without? What are the implications for
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English local authorities? If the Welsh Assembly or the Scottish Parliament—which are unaccountable to the United Kingdom Parliament in any serious way—take decisions that result in higher costs, will England and Northern Ireland be willing to pay for them?
If the Government think that they will be allowed to rely in future on Scottish or Welsh Members of Parliament to shape the education service in Kent, they will ignite an anger that will eventually impoverish us all.
I do not claim that there should be no change in our electoral or government arrangements. A world in which the economy is global, competition is fierce and universal, capital free to move where it will, and massive trading blocks dominate, demands that we change our arrangements. However, I object to the arrogance and the speed with which the Government have moved, and to their extraordinary assumption that the English and the Northern Irish should have nothing to say in the fundamental referendums to be held in six weeks.
The Government seem to believe that regional referendums in England are all that the English require. In my view, they are absolutely wrong. If Scotland votes for a Parliament and Wales for an inferior Assembly, the English equivalent is Westminster. We do not want south-east education service or a midlands national health service: we want an English Parliament, located where it has always been—in Westminster. As a result of the changes proposed in Wales and Scotland, there would be no place for Scottish or Welsh Members in debates about those matters.
The Secretary of State for Wales sits smirking in his seat, but there will be considerable anger in England if the shape of English education or the national health service is determined by Members of Parliament who, in every other way, exclude the English from taking decisions on similar matters in their regions. The Government are clever in trying to finesse this demand by making their programme of balkanisation a rolling process, with each decision confined to a tiny part of the total electorate.
Mr. Livsey: If the hon. Gentleman were a Welsh Member of Parliament, how would he feel about seeing the decisions to which he has referred made by English Members for the past 100 years? We seek only justice and democracy—and that is proposed in the White Paper.
Mr. Rowe: Is the hon. Gentleman prepared to give up the right of Welsh Members to take decisions on behalf of the English? That is all I am asking. The Government's proposals will not do. I urge the Government and the entire nation—not just the Scots and the Welsh—to pause before rushing headlong to taking decisions in a mere six weeks that will shape the nation for the next 100 years.
12.28 pm
Mr. Chris Ruane: Thank you, Mr. Deputy Speaker, for the opportunity to deliver my maiden speech on such an important day for Wales, when we are discussing the referendum and a Welsh Assembly.
I am a new Member of Parliament in a new seat. It is composed of parts of three former seats—Clwyd, North-West, Clwyd, South-West and Delyn. I pay tribute to my three predecessors: my hon. Friends the Members for Delyn (Mr. Hanson) and for Clwyd, South (Mr. Jones)

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and the former Member for Clwyd, North-West, Mr. Rod Richards. I have followed their progress over the years, through the local press and in Hansard. Each had qualities that I can learn from, as a new Member.
Mr. Richards was a tenacious and passionate fighter for the policies that he believed in. I did not share his belief in those policies, but he fought his corner. Some of those policies, such as nursery vouchers, were unpopular, and were rejected by the Welsh people. However, he was a party player, who played his full role.
My hon. Friend the Member for Clwyd, South has taught me the importance of specialising in a subject early in a parliamentary career. In his case, it was agriculture. He has concentrated his time, resources and energy on it, to the benefit not just of his constituents but of the whole country.
My hon. Friend the Member for Delyn has shown me the importance of treating constituents with respect. In the past Parliament, he answered 60,000 letters personally. That is a mark of his dedication.
Many Members stress the beauty of their constituency in their maiden speech. I can say, hand on heart, that my constituency is beautiful. That is official, since a large part of it lies in an area of outstanding natural beauty, along the Clwydian range. Towns such as Cwm, Rhuallt, Llandyrnog, Bodfari and Tremeirchion dot the beautiful landscape.
Tremeirchion has a large Jesuit college called St. Bueno's. I have often attended mass there, and my daughter Seren was christened there two years ago by Father Damian Jackson. The Victorian poet Gerard Manley Hopkins studied there in the last century. When he walked along the Clwydian range, he was inspired by the beauty before him. His poem, "The Vale of Elwy"—the Elwy is a tributary of the River Clwyd—contains the lines:
"Lovely the woods, meadows, combes and vales All the air things that build this world of Wales."
Anyone who has walked that route along the Clwydian range will share the opinions expressed in that poem.
There are other beautiful towns in my constituency, including Dyserth, in the shadow of Hiraddug mountain, and Meliden, nestled into Craig Fawr mountain. The city of St. Asaph boasts a cathedral and Bodelwyddan a marble church.
The two largest towns in my constituency are Rhyl and Prestatyn, containing 66 per cent. of the population. Both have faced difficulties in the past 20 years, with the decline of the traditional seaside holiday. The people of those towns are proud and industrious, facing the changes with fortitude. The advent of a new Labour Government, believing in justice, jobs, investment, education and training, will help my constituents to gain the skills they need to face the new millennium.
The last two towns that I wish to mention provide a link with the business under discussion today. They are Rhuddlan and Denbigh. Both have castles built by Edward I in the 13th century. With a minimum amount of popular support in Wales, Edward I followed an aggressively expansionist policy against the people of Wales. He wished to dominate Wales from his centre of power in London. He did so by building an iron ring of castles around north Wales, including those at Rhuddlan and Denbigh.
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Edward I was an obvious role model for some 20th-century rulers—Queen Margaret of Finchley, honest John of Huntingdon and their henchman, the young pretender, Prince William of Richmond. During their rule, their stranglehold in Wales was achieved not by castles, but by quangos-80 of them stuffed with lords, ladies and barons loyal to the party line. They were able to wield unaccountable control over our nation's dissatisfied population.
As the erstwhile court jester, Jeremy Hanley, observed in 1994, responding to the blatant appointment of all-Tory boards:
"We want people who are committed to the success of the boards they join. Why should we appoint people who are dedicated to the failure of our reforms and the destruction of these institutions?"
Such arrogance. Members of the boards received their master's patronage. They were rewarded with dowries, some as much as £80,000 a year, and many were rewarded for incompetence. They presided over cuts in services the length and breadth of Wales.
That out-dated mode of political rule belongs to another time. It has failed to deliver what the people of Wales want, which is strong, effective and accountable government. The people of Wales want a system of government that is responsive to their needs and wishes. They want a system of government that can deliver popular policies which will create wealth and prosperity for all and enhance our prestige in the world.
My right hon. Friend the Secretary of State has made an excellent start in abolishing the quango state in Wales, but we should not rest until every one of the quangos has been either scrapped or brought under democratic control. When the task is complete, when the dust has settled and when the history is written, my right hon. Friend should commission a film on the demise of the quangos in Wales. The title of the film—there could only be one—should be "Last Quango in Powys".
12.35 pm
Mr. Owen Paterson: I congratulate the hon. Member for Vale of Clwyd (Mr. Ruane) on his excellent, witty, fluent and amusing maiden speech. I am sure that we shall hear more of him, and I am sure that he will not be surprised to hear that I disagree with him.
I live not far from the hon. Member's seat, right on the border; my bottom gate is 50 yd from the Welsh border. I have family connections with Wrexham, a seat that I fought in 1992. I was defeated in a fair fight by the hon. Member for Wrexham (Dr. Marek), but I remind the House that 18,114 people agreed with what I was saying, and it is worth remembering that, in the 1997 general election, we got more than 317,000 votes. The Tory voice in Wales should be listened to.
Mr. Lembit Öpik: Do the hon. Gentleman's comments mean that the Conservative party has finally accepted the case for proportional representation?
Mr. Paterson: No. I do not want to comment on proportional representation; I want to comment on the White Paper.
Towns such as Wrexham did extremely well under the 18 years of Tory rule. I remember going to Wrexham with my grandmother when I was three or four years old. It

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was a grim place with declining steel and coal industries and no future. Now, there is a kaleidoscopic variety of new industries, which is very much due to the system of having a strong Secretary of State for Wales answering to a British Cabinet in London and doing a good job for Wales. I could quote numerous examples. The most obvious is the good work done by my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) who brought in 6,500 jobs with the Lucky Goldstar investment, the largest inward investment into Europe.
There has been much talk of the quangos and how to reform the manner in which they are run. I totally agree with the hon. Member for Blaenau Gwent (Mr. Smith) who, sadly, is not here. The quangos were set up by Parliament and they can be reformed by Parliament. At local level, we have reformed the system of local government and many of my neighbours are delighted that they no longer have a muddling second tier in Mold representing Clwyd; instead, they have a simple system in Wrexham.
Many of the issues in the White Paper could have been devolved to the new simplified system of local government. It is bizarre that we are increasing government and bureaucracy when we want simpler government. The move runs counter to the very reason for the White Paper: that the Government should be near and local to those whom they purport to serve.
What concerns me most, to pick up the comments of my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe), is that the whole devolution programme presupposes the passive acquiesence of the English. The English, primarily, pay the bills. They constitute 85 per cent. of the population. There is a deficit in Wales. Wales contributes £9.9 billion of the £15.6 billion spent by the Government. That leaves nearly £6 billion, which comes primarily from English taxpayers.
The English are patient, and English nationalism has not yet been stirred. The exercise is primarily one in fudging differences between old and new Labour and in assuaging the demands of Welsh nationalism. The Indians know about partition. There is a very good Indian phrase: he who rides a tiger cannot dismount. We do not know where this tiger is going. It will inevitably lead to divisions and a breakdown of the Union, which was clearly and eloquently described by the right hon. Member for Llanelli (Mr. Davies).
It is absolutely wrong that this Union, which works so well for all of us, in which we all have an equal vote and in which each hon. Member has equal power, should be broken up by a majority vote with no threshold in the two smallest constituent parts. The hon. Member for Swansea, East (Mr. Anderson) talked about fairness. I am alarmed that English nationalism, which is currently passive, may be awakened.
I shall give a very graphic example. Offa's dyke runs through my constituency. King Offa was a great man, who built the enormous construction right down the length of the Welsh border. The boundary should evoke horrible memories for Labour Members who represent Welsh constituencies. King Edgar said that, if any Welshman was caught on the wrong side of it, he would be put to death. Harold Harefoot, who was obviously a softy, said
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that any Welshman caught would have his hand chopped off. [Interruption.] You are all presuming that the English will remain passive.
Why should my constituents, who welcome the Welsh and trade with them on market day every week, and who have relations in Wales, have an unequal vote? A vote in England will have less value, because agencies in Wales such as the Welsh Development Agency, which canvasses businesses in my constituency, will be responsible to a new, distant and alien organisation—the Assembly in Cardiff—over which I shall have absolutely no say or influence; yet every Welsh Labour Member will retain the right to cross Offa's dyke, at no risk, I am very happy to say, to their heads or hands, to speak on roads, hospitals and schools in England.
To give an even more graphic example, every Welshman receives £690 more from central Government than an Englishman. That cannot be right. You Welsh Members and the Secretary of State are presuming that the English will pay up and play the game. I fear that you may have presumed wrong—
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. Will the hon. Member refrain from using the word "you"? He is implying that I am involved in his argument.
Mr. Paterson: I apologise, Mr. Deputy Speaker. I looked the Secretary of State in the eye, which provoked the use of the word "you".
That is my final point.
Hon. Members Hear, hear.
Several hon. Members rose—
Mr. Paterson: Do not presume on the acquiescence of the English.
12.44 pm
Mr. Ted Rowlands: The patronising character of the speech that we have just heard would make us rabid nationalists very quickly if we heard many more of the kind.
I congratulate my hon. Friend the Member for Vale of Clwyd (Mr. Ruane) on an amusing speech. He is a refreshing change from his predecessor—my hon. Friend had to pay him compliments, but the rest of us do not. We welcome my hon. Friend, not least because we got rid of someone who, at times, abused the House in his language and personality. I am sorry to have to say that, but it is true. My hon. Friend is a wonderful and welcome change. The fact that old and new parliamentarians alike represent seats such as Merthyr Tydfil and Rhymney and Vale of Clwyd is an important aspect of our democracy. I congratulate my hon. Friend, who will stand up for his constituents.
Before I make one or two comments on the White Paper, I have something to say to some of my hon. Friends, especially my hon. Friend the Member for Swansea, East (Mr. Anderson). We should stop peddling the notion that individual Labour Members who dare to criticise the White Paper or who are opposed to devolution—such as my hon. Friend the Member for Blaenau Gwent (Mr. Smith) and, in different ways, my

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hon. Friend the Member for Rhondda (Mr. Rogers) and my right hon. Friend the Member for Swansea, West (Mr. Williams)—are, in some way, Tories. I ask Ministers to take a lead in that respect.
My hon. Friend the Member for Swansea, East lined up with people such as Nick Edwards in 1978 and 1979, but I did not accuse him of being a Tory. I respected his views, and we argued it out honourably. I respect his change of mind, and he should not impugn the motives of people who do not share his views. After all, halfway through the Thatcher period, in 1985, my hon. Friend described Welsh Members who supported devolution as
"sleepwalking … into the constitutional cul-de-sac of devolution, a spectre that haunted the Welsh Labour Party until it was decisively exorcised by the 1979 Referendum."
Let us argue about the issues and the contents of the White Paper, not personalities. We should not describe people who hold different views as crypto-Tories. They are not. They have held their views consistently, and represent a not insignificant percentage of Welsh public feeling. Let us get on with the argument.
I support the White Paper, but I have reservations. One cannot suspend one's personal critical faculties simply because we will have a referendum campaign, so I wish to take this opportunity to mention two important reservations and to ask Ministers how much of the White Paper is written in stone. Is the White Paper the last word, or is it a substantial contribution to the debate that can be revised?
My first point is one that my right hon. Friend the Secretary of State for Wales understands. Indeed, we have discussed it from the start. I believe that we have missed a big opportunity to dismantle the quango state. The devolution Bill should dismantle it, but those bits of dismantling that my right hon. Friend has offered us so far are more of a gesture than a serious attempt to address the issue. I do not need to make that case in my terms, because I can make it in his. I cannot think of anyone who has been a more vitriolic—or a more powerful and vehement—critic of the quango state than my right hon. Friend. In his speeches and written contributions he has denounced the quango state. He has used language that would not fall from my lips. He has repeatedly referred to the 180 quangos, the £2.5 billion and the 850 appointees—more than the number of elected councillors—that constitute the quango state.
What concerns me is that I do not see anything like all that being swept away, either between now and 2000 or after 2000. We are being offered the nightmarish prospect of the Assembly sitting down and voting people on and off all the existing quangos. The thought of having to put 800 appointees through the democratic process is a nightmare. I presume that it would be something like the American Senate procedure, with the Assembly in continuous session deciding whether to approve the credentials of the appointees to the various boards accountable to it. The whole concept is a bit of a nightmare, which is why I would greatly prefer the more fundamental approach of doing away with the vast majority of appointees of the character described by my right hon. Friend the Secretary of State.
In the spirit in which we have argued this point, I would point out that it was my right hon. Friend, not me, who used terms at which I blanched about the "wasteful", "excessive" and "vast" expenditure on the running costs
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of many quangos. On more than one occasion we have implied that much of the cost of our new Welsh Assembly will be financed by considerable savings on those running costs. Indeed, my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence) said that in an earlier intervention. I do not foresee our making the sort of savings that would be associated with the words he used—excessive, wasteful and vast—to describe the administrative and running costs of quangos, albeit not the remuneration of staff. I do not envisage those savings emerging from the White Paper's proposals to a time scale that would meaningfully offset the costs of the Assembly.
My right hon. Friend referred to the excessive, wasteful overheads of the Arts Council of Wales and the vast sums spent on the Curriculum Assessment Authority for Wales and the Welsh Language Board. When we hear such language and then read the White Paper, which states that the Arts Council and Sports Council for Wales
"will be invited to suggest amendments to their Charters",
it is not surprising that we notice a difference between rhetoric and action.
My right hon. Friend and I disagree on what can be done about royal charters. I sought advice and was told that an Act of Parliament—a section in a devolution Act—can remove charters, assuming Royal Assent is given. What is not required is grovelling before the boards on our hands and knees, asking them for their consent, which is the inference I draw from the White Paper.
I have one further specific point. I hope that my right hon. Friend will seriously consider going further. As the debate emerges over the next few weeks in the run-up to the referendum, we shall demonstrate our case far more forcefully if we can say that we will unwind and dismantle the quango state.
Several hon. Members rose—
Mr. Ron Davies: I am grateful to my hon. Friend for giving way, because the matter he raises is important and I want to deal with it now. Let me assure him that my determination is as strong as it ever was and that the proposals in the White Paper will allow us to achieve that which we want to achieve. All the quangos to which he referred will be made accountable. Many of them will be abolished by the legislation that will follow from these proposals and we are getting rid of nine.
On the question of the charter bodies, I assure my hon. Friend that the advice that he has been given and that given to me is correct and that there is no inconsistency. Paragraph 3.25 of the White Paper refers to the amendment of charters. As he says, as Parliament is sovereign, so Parliament can abolish charters; but the amendment of charters requires action to be initiated by the charter bodies themselves.
Mr. Rowlands: I do not want to get into a lengthy debate. From the number who rose when they thought I was finishing my speech, I am aware of the pressure on time. I hope that the White Paper is not the last word on the issue and that between now and the referendum, we sound more convincing about dismantling the quango state.
I believe that another aspect of the White Paper goes a step too far—the function and role of the Secretary of State. Our judgment on the role of the Secretary of State

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should not be clouded by the unrepresentative individuals who have held the post in the past 18 years. We should concentrate on the significance of the office of state and the role that the Secretary of State has played in the past and can play in the future.
Irrespective of who has held the post, one of the great success stories of the past 20 years—led by the office and by the nature of the budget—has been the Secretary of State's role in attracting inward investment. He has been a pivotal force in delivering investment into Wales—double the average for the rest of the country.
Mr. John Smith: My hon. Friend is right about direct foreign investment, but wrong about gross domestic capital formation—in other words, UK investment into Wales is under-performing.
Mr. Rowlands: I was just about to refer to that distinction. One of the reasons for our success in attracting inward investment has been the role of the Secretary of State alongside the Welsh Development Agency. We must not damage the powerful economic role that a future Secretary of State could play as the voice for Wales outside Wales. I do not see that voice being effective under the White Paper's proposals.
My right hon. Friend the Secretary of State will not have a penny of the regional selective assistance budget to use on behalf of Wales. We have all been involved in inward investment in various ways. The flexibility to manipulate funds and to offer competitive packages at short notice has been due to the Secretary of State and the WDA. Frankly, it is not a democratic process—it is the ability to move quickly and to shift funds and make offers swiftly. I cannot see under the structure proposed in the White Paper how a Secretary of State can continue to play this role. He will not have the budget, to start with.
The figures for the regional selective financial assistance budget in a previous White Paper compare the grants offered to overseas companies with those offered to others. It should be a part of a Secretary of State's functions to have a budget equivalent to the regional selective financial assistance that is available to overseas investors, and he should have a powerful economic role. The White Paper will make him something of an economic eunuch, because he will have neither the budget nor the power.
A combination of the Secretary of State with a Welsh inward investment agency working in partnership with a Welsh Assembly could retain and sustain the drive that we have had in inward investment. A key part of the Welsh Office budget, and a key part of any future Secretary of State's role, might be damaged by the White Paper's proposals and may mean that we are unable to create jobs and attract investment at the levels we have enjoyed in recent years.
I invite hon. Members to read these curious and unexplained words in the White Paper, which my right hon. Friend may explain later. Point 2.24 of the White Paper mentions "published concordat", "common … guidelines" and "consultation". All those concepts may be developed to produce some sort of straitjacket around the actions of the Welsh Assembly in the use of selective financial assistance. Such a straitjacket could do
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considerable damage to the future of the Welsh economy and inward investment in Wales. There should be no concordats and guidelines because those must sometimes be broken, or at least fudged, squeezed and amended as opportunities for major investment come along.
I hope that I have made two constructive criticisms within the context of the debate, but I wish to ask one serious question. I presume that the White Paper, in its summary form, is about to be sent out to every household in the land. Is it the last word? Are the Secretary of State and his Ministers willing to accept that serious points have been made—not just marginal points or cosmetic consultation, but effective consideration by hon. Members and commentators outside the House? Can they shift their ground to accommodate both the quango issue, which a number of us have raised, or the new point that I made about the Secretary of State's role in inward investment? I hope so, or we shall be in a dilemma. If we achieve a yes vote, it will not endorse the whole of the White Paper but we shall have every right to return to our debate. I would rather that we changed our minds en route to make the case for devolution stronger in the eyes of the Welsh people.
1.1 pm
Mr. Dominic Grieve: I am grateful for the opportunity to take part in the debate, and I shall try to be brief. I wish to cover three important points.
I was particularly interested, in reading the White Paper, to see that one of the great selling points will be the Assembly's ability to deal with secondary legislation. I have the privilege—albeit sometimes a slightly purgatorial privilege—of going upstairs every Tuesday afternoon to the Joint Select Committee on Statutory Instruments to scrutinise the gobbledegook that comes out of central Government. Statutory instruments and secondary legislation are the Achilles' heel of our democracy, allowing rafts of legislative provision, including criminal offences, to be introduced without anybody knowing what goes on and often with a hideous lack of clarity, some of which derives directly from the Euro-directives.
The Government now say that they will transfer scrutiny of that secondary legislation to the Welsh Assembly, which will have the ability to regulate it. Superficially, that may seem to have a few attractions, but when one sits back and thinks about it, one realises that the Assembly will have no role whatsoever. The vast majority of statutory instruments which it will have the pleasure of rubber-stamping will have to go through willy-nilly, because they come directly from central Government diktat and the majority are imposed through Europe.
What has not been explained—I find this fascinating—is how the content of such instruments will be co-ordinated centrally. We spend a great deal of time in our Committee meetings having explained to us by Speaker's Counsel, who is extremely experienced on the matter, the extraordinary failings and lack of co-ordination between Government Departments in achieving comparable legal provisions, which we must constantly refer back and regulate.
How will that be done if it is not done centrally in this House? It defies credibility that those with ultimate responsibility for good government should simply hive off

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to an Assembly that has neither the ability nor the input from specialist staff for the scrutiny of secondary legislation, especially given that the occasions on which it will be able to intervene directly and change the legislation will be extremely limited.
On that score, the Secretary of State and the Government are selling the House and the country a pup. There will be no ability to scrutinise or influence secondary legislation. The reform that is, heaven only knows, badly needed, is in this House. Hon. Members of all parties need to sit down and look at this stuff and prevent it from coming out in such a hideous form. It needs to be referred back to this Chamber if there is to be any opportunity to influence it.
That is not a party political point. Half the statutory instruments that we have been examining over the past few weeks came from the last Government. We are beginning to examine those from this Government, but frankly it does not make a bean of difference—they are equally badly drafted.
I was fascinated to read in the White Paper that, in the resolution of disputes between the Assembly and this House and central Government.
"The Attorney General and Solicitor General will continue to serve Wales and England. Any disputes about the Assembly's use of its powers will be referred to the Law Officers. This should allow disputes to be settled speedily, without recourse to the Courts."
The Law Officers are servants of the Government. If I were in dispute with the Government, I would not go to their lawyers to get my advice. I cannot understand the assumption that disputes will be settled easily through recourse to the Law Officers. Indeed, they have no provision or power to do any such thing, so I assume that some statutory power will be introduced to enable them to do so. To believe that one can go off to the other side's lawyer to get advice is to live in cloud cuckoo land. It is another part of the White Paper that is wholly redundant.
What does shine through in the White Paper is the emphasis on the holistic approach. We heard that two or three times in the Secretary of State's speech. I hope that I came into politics intending to conduct myself with integrity and courtesy—that is important—but politics and its processes are not about an holistic approach. That is the decorative pap and mush that the Government have put out to justify serious constitutional changes that, ultimately, will affect accountability in government.
The basic principle behind the justification for the legislation is that it will make government more accountable; yet we are the sovereign legislative body, and accountability rests with us. The buck stops with us. We are the only people who, ultimately, can call the Secretary of State and the Government to account. The White Paper states, in black and white, that, when the legislation is enacted, the Secretary of State will not be accountable for the activities of the Assembly. A better recipe for bad government could not be found.
I do not want to follow the English nationalist road. I am British. My ancestors come from every corner of the United Kingdom and I see myself as British through and through. The complaint that has been made throughout the whole of the devolution process, and that we have heard again today, is that people want to parochialise their politics. They are no longer prepared to accept the concept that they have to lump majority views within the United Kingdom if they disagree with them. They claim the right
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to parochialise their politics and, provided that within their own parish they have a majority view, to buck the view of everyone else.
There is absolutely no doubt that sovereignty ultimately lies with the people of this country, through the sovereign and her coronation oath.
Mr. Flynn: The Queen?
Mr. Grieve: Yes, it lies with the Queen through her coronation oath to her subjects. That is what the oath is all about. It is worth re-reading.
The people have the right to change the circumstances by which they are governed. However, to do that in a way that does not include consulting the people of England is about as crass a piece of policy as we could imagine, especially when all these measures—in particular Scottish devolution, but also Welsh devolution—directly affect the way people are governed.
1.9 pm
Mr. Allan Rogers: I congratulate my hon. Friend the Member for Vale of Clwyd (Mr. Ruane) on his maiden speech. I am sure that he will represent his constituency with great force.
Bearing in mind what has gone on over the past couple of months, there seems to be a Welsh national newspaper that is a broadsheet for the Welsh Office. Those of us who happen to have a different view about the Welsh Assembly from other colleagues in the Labour party might well be in favour of devolution. I am strongly in favour of it, but I am not in favour of the Labour party's proposals as encapsulated in the White Paper. A fundamental reason for not believing in them is that I do not want subsidiarity. At the same time, I do not want devolution to stop at an all-Wales level.
I happen to be a strong proponent and supporter of local government. It is an institution that we take for granted all the time. Selfless people spend their lives—many of them prejudicing their careers—to serve others at a local level. They undertake fairly awesome responsibilities. When I was involved in local government I participated more in the democratic process than I feel that I have ever done in England, where the Executive runs the state and where Parliament has little say.
Local government is the largest employer in Wales, and it spends more money than any other organisation in Wales. For the life of me, I cannot understand why, if they wanted to abolish quangos, the Government did not first restore to local government the powers of those quangos. It was the Tories who took the powers of local government and handed them to the quangos that they set up.
That is what happened over the past 18 years. The Tories could not govern Wales. Indeed, they could not govern England. They never won local elections. We know that they were hammered at that level. So what did they do? In London, in other parts of England and in Wales, they took powers from local authorities and gave them to unelected quangos, where they could put their placemen. That has been the pattern of politics in Wales.
We should not fall for the false nationalistic answer to the problems of democracy and accountability. Surely we should first undo what the Tories have done. It was the

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Tory party that created bad government in Wales. That is why I, and some of my hon. Friends who hold a different view from others in the Labour party, resent the imputation that there is a move to get into bed with the Tories.
I happen to come from what many people in the valleys of south Wales refer to as the heartland of British socialism. The very thought of collaborating with the Tories would get me kicked out of the House by my constituents and by my family, right through to those who would rise from their graves at the very thought of it.
I and my hon. Friends the Members for Islwyn (Mr. Touhig), for Ogmore (Sir R. Powell), for Merthyr Tydfil and Rhymney (Mr. Rowlands) and for Cynon Valley (Ann Clwyd) are prepared to fight against the Tories all the time. We also fight against the nationalists because we think that they present a false road for the Welsh people to travel down.
Our patriotism and our love of Wales is not based on resentment of the English. We are not fighting for a Wales in Europe. We do not trust the French, the Germans and those from Luxembourg any more or any less than we trust the English. If we have to be part of a pattern of government, I would rather be within the pattern of government of a British state, of Great Britain, rather than following Plaid Cymru's policy of a Wales in Europe. I will not go down that road, because it does not serve my constituents. Let it be understood that we are all here to serve our constituents.
I see my colleagues in the Chamber, and I see no one who is an absolutely dogmatic politician. We must all realise that politics is often the art of the possible. Our surgeries are not full of people who fly to the stars on great political philosophies. They are full of people who are concerned about their rents and their welfare payments, because the ravages of the Tory Government decimated our communities and collapsed our industries. The Tories did that purely out of selfish spite against coal miners. We fight for those people every day.
I am not hung up on any particular structure of governance in Wales, but I want good government for my constituents, and quite frankly I am not convinced by this White Paper. My right hon. and hon. Friends have already made some of the points that I was going to make, but I want to raise one issue in particular. It has been suggested that, if we had had a Welsh Assembly, we would not have had the ravages of Thatcherism, and that somehow Toryism and Thatcherism would have stopped at the Severn bridge or at the border by the A5, near the constituency of that English nationalist, the hon. Member for North Shropshire (Mr. Paterson).
There is a railway bridge in Nelson that the Secretary of State and I know very well, from when we were both campaigning for a no vote in 1979. I have seen written on that bridge, "We voted Labour and we got Thatcher." That is true—we had Thatcher and she hammered our constituencies—but an Assembly will not save the people of my constituency from poverty, it will not cure the sick, and it will not put the unemployed back to work.
A previous Labour Government felt that the best way to regenerate the Welsh economy was to establish a Welsh Development Agency, for the reasons that my hon. Friend the Member for Merthyr Tydfil and Rhymney gave. It
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was decided that we needed something outside the normal organs of government that could energetically pursue investment in Wales. By and large, the WDA has worked.
The issue of accountability has been raised. When the Welsh Development Agency did not work and performed badly, it was made accountable. Tribute was rightly paid to my right hon. Friend the Member for Swansea, West (Mr. Williams) for his work on the Public Accounts Select Committee. I can go back a little further. When I was a member of the Public Accounts Select Committee, we considered the Parrot Corporation and its relationship with the WDA. I feel that such accountability will be missing under this proposal.
I have been elected to make such bodies accountable, and if they are not, it is my failure and the failure of every hon. Member. We have the Select Committee on Welsh Affairs, the Welsh Grand Committee, the Public Accounts Select Committee and the Chamber, and, if democracy has gone from Wales, it is our fault. We may not have been diligent enough. We fought the Tories, but they had a majority and were able to railroad proposals through. That is greatly to their shame.
It is the fault of Conservative Members that we are in this mess. If there is a break-up of the United Kingdom, as is quite possible as a result of this slope that we are sliding down, people should not blame my right hon. and hon. Friends on the Government Front Bench.
Mr. Ancram: They will.
Mr. Rogers: They will not. My right hon. and hon. Friends are responding to the democratic deficit that the Tories created. It is the Tories' fault that we are in this pickle, not ours. At least we are trying to do something about it.
I finish on the point that my hon. Friend the Member for Merthyr Tydfil and Rhymney made. My right hon. Friend the Secretary of State has thanked me on a couple of occasions for contributing a paper. I have it here. It is called "A Welsh Assembly: Quangos and Local Government". I pay tribute to one person who helped enormously in compiling it. It was done during the election period. It is a fairly reasonable contribution to the debate.
I am sorry that some of the questions that I posed in the paper have not been answered. If my right hon. Friend the Secretary of State is prepared to answer some of those questions and to take up the issues that we have brought to him this morning, we can look at the matter again. However, if we are simply to stay as we are, and if all that we are doing this morning and shall do in the next few weeks is going through the motions, I am afraid that I cannot alter my position on the Assembly.
There is a democratic deficit in Wales. I know that, if it continues with the Assembly, my Front-Bench colleagues will have to redress the problem yet again.
1.20 pm
Mr. Andrew Hunter: On one point the hon. Member for Rhondda (Mr. Rogers) can rest assured. Although we may occasionally have fleeting personal regard for him, we have neither intention nor desire to form any alliance with him.
My speech will be brief, because I realise that other hon. Members wish to catch your eye, Mr. Deputy Speaker. I shall select just two of the themes that suggest

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themselves from the White Paper. The first relates to Europe. The second relates to one aspect of the workings of the proposed Assembly.
The White Paper points not only to the Assembly's role in promoting, protecting and furthering the interests of Wales and the Welsh people in the United Kingdom but to its potential in furthering the interests of Wales in the European Union. Notwithstanding what the hon. Members for Ynys Môn (Mr. Jones) and for Swansea, East (Mr. Anderson) said, the latter point is open to question. I understand that it is being questioned.
The relevant paragraphs in the White Paper are 46 to 56 in chapter 3. Those paragraphs are clearly intended to give the impression that the creation of an Assembly will give Wales a stronger voice in Europe, but I submit that, on closer analysis, most of the functions and activities which are listed there would not remotely do that. With two key exceptions, which I shall come to shortly, the functions outlined for the Assembly in respect of Europe fall into two categories.
One category is those functions and activities that already exist and are fulfilled mainly by the Secretary of State, in part by the United Kingdom permanent representation in Brussels and in part by the Wales European Centre—as I understand the activities of that body. We are talking about a transfer of existing powers, not the assumption of greater, new or more intensive powers.
The second category of functions in respect of Europe relates to scrutiny and enforcement of European legislation, and their assumption by the Welsh Assembly will not give a stronger voice to Wales in the European Union. None of those functions remotely amounts to an exciting new dimension of Welsh involvement in the European Union.
There are two key paragraphs on the European dimension—paragraphs 53 and 56. In those paragraphs, the White Paper envisages that the Assembly will administer structural funds and have representation on the Committee of the Regions. In those two paragraphs, the Government's thinking reflects the European Union's vision of a Europe of regions rather than the counter-view of a Europe of sovereign national states.
There is a problem here. Notwithstanding what the hon. Member for Swansea, East in particular said, I find it hard to accept the argument that European regionalism will enhance the nationhood of Wales. It will diminish it: it will relegate Wales to the status of a region. Regionalism is ultimately incompatible with nationhood, and it is intended to be. The stronger argument is that the nationhood of Wales is best protected and promoted within the nation state of the United Kingdom of Great Britain and Northern Ireland and in a Europe of nation states. It is neither protected nor promoted by diluting or risking the integrity and sovereignty of the United Kingdom through devolution and choosing to follow the route of European regionalism.
I can pursue my second theme even more briefly. It arises from a chapter in the White Paper on the Assembly and the Welsh economy, and I do not think that the issues that I am about to raise have yet featured in the debate.
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According to the summary on page 11, the Assembly will
"provide leadership in setting a new economic agenda for Wales."
It also states that it will
"develop its policies in partnership with local authorities, industry, further and higher education, Training and Enterprise Councils and the voluntary sector".
The White Paper anticipates the concern that those themes may provoke, and tries to give a reassurance on page 11. It is that the Assembly will
"protect Wales's wealth-creating capacity by assessing and publishing the potential cost to business of any new policy proposals."
I do not find that reassuring. Fear persists, and with good reason, because assessing and publishing the potential cost does not prohibit costly measures from being taken and implemented by the Assembly. There is scope for unwarranted interventionism by the Assembly. Far from its activities being the best way to raise living standards to those enjoyed in the more prosperous parts of the UK and Europe, the White Paper proposals could, if implemented, create a mechanism for unwarranted intervention in the wealth-creating process in Wales.
Many genuine concerns arise from the White Paper. I have picked two, the first of which is the proposition that the interests of the Welsh nation lie in taking the path of European regionalism. That is open to serious question. The potential for the Assembly to intervene adversely in the workings of the Welsh economy is self-evident. Those and other matters are genuine causes for concern.
1.27 pm
Dr. John Marek: It was an honour to listen to the maiden speech of the hon. Member for Vale of Clwyd (Mr. Ruane).
It is a little unfortunate that those hon. Members who have caught your eye, Mr. Deputy Speaker, have been somewhat critical of the White Paper. That is no fault of yours, but many hon. Members hoping to catch your eye are 100 per cent. behind the White Paper, and will commend it to the Welsh people. I hope that some of them will be able to contribute to the debate.
Negative arguments against change are always appealing. It is easy to say that a proposal will cost a great deal, will produce more bureaucrats and will lead to domination of one part of the Principality by another. Such appealing arguments are easy to understand, but that does not mean that they are right. The White Paper has successfully addressed those arguments, and people who read it will be convinced that change is necessary, and that the way to bring it about is to vote yes on 18 September.
Those of us who wish to do that need to come together. People who want to keep the first-past-the-post voting system use the same old argument: that we know what it is and it is simple, which is easy to say. If people want to change to any form of proportional representation—and there are many—they can argue for this and for that, and it is easy for PR's opponents to decry their arguments. It has happened this morning.
I worry a little about the additional member system. Appointments should be made not by any party secretary sitting in his or her office, but by the membership of a party. If that were the case, there would be no problem, but I am not going to create any problems or to do anything more than simply mention that caveat.

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I accept the White Paper's decision to have the 40:20 system, where 40 members are directly elected and 20 are elected by the additional member system. That will be better than all members being directly elected. I implore all people who want change and who want Wales to enter the 21st century alongside other nations, regions and nation regions in Europe to accept the proposals of my right hon. Friend the Secretary of State for Wales.
There are things that we will need to see in the Bill. At the moment, we have only a White Paper. Details will need to be fleshed out, and I have no doubt that the devil will be in the detail—it is always like that. My right hon. Friend the Secretary of State will, I am sure, be able to give an indication of his thinking over the next four or five weeks.
Clearly, my right hon. Friend the Member for Swansea, West (Mr. Williams) has made an important point about secondary legislation. It would be possible for a succeeding Conservative Government to put secondary legislation into primary legislation. As it is, any Administration can introduce what is called an enabling Bill, where the primary legislation says little, and it is all done by secondary legislation.
We need to flesh that out and to be absolutely clear—or reasonably clear—what we would regard as permissible for the Welsh Assembly, what would be the norm for this Parliament, and how to resolve any conflicts or differences of opinion that may rise. That does not stop me one inch from saying that this is a good White Paper and that those are details that will need to be thought through before the Bill is published.
My right hon. Friend talked about the Higher Education Funding Council for Wales. I read of a little problem about that. Of course, the different colleges of the university of Wales—I speak as someone who was a lecturer in one of those colleges for 18 years—are little quangos themselves. The college principals always argue about academic freedom, but if anyone has got rid of academic freedom, it is those principals.
During my tenure, I did not have necessarily to get research funding or grants, to do this or to do that or to have to teach certain amounts, but that is not so now. By and large, lecturers now have one-year or three-year contracts, and if they do not produce an equivalent amount of grant or so many papers a year, they are out; so we need not take any lessons from the people in the hierarchy of the university. They always argue for keeping their responsibilities and power.
I ask my right hon. Friend to consider the matter in the working party. I would hate a binary divide to be to established in the constitution, where we have higher education on one side and further education on the other. If there is any way of bringing them together and giving that responsibility to the Welsh Assembly, I urge him to consider it seriously. It is an acceptable point; I will say no more than that.
There are worries in north Wales. Last time, north Waleans were worried about the domination by south Wales. The White Paper has overcome that difficulty. It is not two thirds to one third in favour of the south. Of course, a preponderance of people live in the area of the old Glamorgan county council.
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If the voting system had been by first past the post—let me be absolutely clear about this—the Labour group from within the boundaries of the council could indeed have dominated the Assembly. I do not say that it would have done that, but it could have. Under the 40:20 system, the Assembly will not be a south Wales, a south Wales Labour or a Labour Assembly: it will be a Welsh Assembly. The change in the voting system means that no single group can or will dominate the Assembly.
I was also happy to hear the Secretary of State say that he does not want the Assembly to be a rest home for elderly, retired councillors or Members of Parliament.
Mr. Rowlands: What is the retirement age?
Dr. Marek: There is a retirement age in this place.
We want capable people to serve on the Assembly. If the conditions are right and there is a job worth doing—the White Paper shows that there will be—I am confident that we will attract people of quality and ability to the Welsh Assembly. They will run the internal affairs of Wales better than anyone in this place.
Why do we need an Assembly? It appears that there will be a Scottish Parliament, that London will have an elected mayor, and that there may be elected regional bodies throughout the United Kingdom. I agree with such moves. If the regions want their own elected bodies, I shall support those proposals.
A north-west development agency will be located in my area. With such an agency located six miles beyond my constituency boundary, it would be foolish for my constituents and the people of Wales to vote no in the referendum: they must have an equal ability to attract investment, jobs and prosperity to their side of the border. It is a question of equality. I believe that the Welsh people will recognise that, and will vote yes in the referendum.
The Assembly will mean more democracy for Wales. For the past 18 years—indeed, for most of this century—the Conservative party has ruled Wales. Although the Welsh people have never elected a majority of Conservative Members of Parliament—they elected no Conservative Members in the recent election, which is a pity, but is one result of the current electoral system—they have had their decisions and way of life determined by the Conservative party. That cannot be right, and the Welsh Assembly will change that state of affairs once and for all.
I conclude by referring to the remarks of the hon. Member for North Shropshire (Mr. Paterson), whom I congratulate on winning his seat. He was my opponent in the last election. He said that the English pay the bills.
It is true that, under the Barnett formula, spending per capita in Scotland and Wales is a little more than in England. However, Wales suffers much higher unemployment, lower average wages and a lack of well-paid jobs. Well-paid jobs are found not in Wales, in Scotland or even in the regions of England—in Birmingham, Manchester or Leeds—but in the south-east: the Thames valley. Most Rolls-Royces are garaged within 25 or 30 miles of Whitehall. More importantly, well-paid research and development jobs, decision-making jobs and defence jobs are located in that area. The Welsh Assembly

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will break up the central London and south-east class-dominated system of government and administration.
Mr. Grieve: Will the hon. Gentleman give way?
Dr. Marek: I shall give way, as long as the hon. Gentleman takes no more than 15 seconds, because I must finish.
Mr. Grieve: How does the hon. Gentleman explain the fact that the south-east of England has been the most prosperous part of these islands since the Roman period, long before Whitehall came into being?
Dr. Marek: It has been the most prosperous area for the reasons that I have mentioned. Where has all the wealth been produced? It has been produced in the coal mines of south Wales and the industries of the midlands and the north, but those regions of the United Kingdom have not benefited. A Welsh Assembly will start to redress the balance.
The location of the decision-making structures has always ensured that the greater part of the benefits—an unfair distribution of the cake—goes to that area. I am confident that, when we have a Welsh Assembly, centred in Cardiff but representing the whole of Wales, and a Scottish Parliament, centred in Edinburgh but representing all of Scotland, the living standards of the Welsh and Scottish people will be improved.
Like my hon. Friend the Member for Rhondda (Mr. Rogers), I do not decry the English. They are my friends, just as the French and the Germans are. If any region of the United Kingdom wants devolved, local, hands-on regional government, I shall support it.
1.40 pm
Mr. Desmond Swayne: It appears from the White Paper that the Secretary of State is to become a messenger. It says on page 9:
"The Government expects that the Secretary of State will meet the Assembly's Executive Committee regularly to exchange views and information about Government policy."
My experience over the past couple of weeks is that it is better to read the newspapers before a Government announcement than to wait for anyone on the Treasury Bench to tell us about it. I hope that the experience of the Welsh Assembly will be different.
The primary purpose of a Member of Parliament, as I understand it, is to provide a restraint on the Executive and to hold it to account. According to the White Paper, the Assembly will be part of the Executive by assuming the executive powers of the Secretary of State. However, Members of Parliament—this particularly affects Welsh Members—will be unable to hold that part of the Executive to account. What diminished role will they have? Will they accept a diminished status and diminished remuneration?
In the White Paper, the Government attempt to deal with areas in which disputes may arise between the Assembly and the Government. I continue from where my hon. Friend the Member for Beaconsfield (Mr. Grieve) left off about the determination of such disputes. On page 21, the White Paper says:
"If the Law Officers considered that the Assembly had used, or was proposing to use, its secondary legislation powers unlawfully, the matter could be put to the Judicial Committee of the Privy Council for a speedy decision."
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Oh, so that is it. There will be a speedy resolution, and the Assembly men will go back to Wales, confident that they have overstepped the mark; and that will be an end of the matter. Do we really expect them to put their feet up and say, "Oh well, we tried it on, but it did not come off'?
We have already heard from Opposition Members—and on Tuesday we heard from Labour Members—who claimed that the proposals were not nearly enough, and would be merely a starting point on the evolutionary road to Welsh government. We heard from the right hon. Member for Swansea, West (Mr. Williams) about not a magical mystery tour, but a constitutional mystery tour. A tour implies that somebody knows where he is going, and that there will at least be a guide, or perhaps an interpretative centre as they are now called, masquerading as a motorway service station. There is at least some assumption that someone has a notion of the destination. That is not the case with the White Paper.
The people of Wales—wrong, the residents of Wales—
Mr. Öpik: I have one question for the hon. Gentleman. If his own party is so clear about its direction, how does it have such mutually contradictory positions on devolution for Wales and devolution for Northern Ireland?
Mr. Swayne: My right hon. Friend the Member for Devizes (Mr. Ancram) has already answered that question. A very different situation obtains in Northern Ireland. The social circumstances for which that form of government is designed do not obtain—and, I hope, never will—in Wales. It is not a question of making a distinction in the way that the hon. Gentleman implies.
In the referendum, the residents of Wales will make a decision. Residency is the narrow definition used in the Referendums (Scotland and Wales) Bill, although the people of Wales stretch far beyond such a description. Nevertheless, the residents of Wales must decide in the referendum whether we in these kingdoms are a nation, or merely a collection of tribes. If they make the wrong decision in the referendum, you may discover, Mr. Deputy Speaker, that you have presided over the last Parliament of these kingdoms.
1.46 pm
Ann Clwyd: I am glad to be able to correct the considerable imbalance in this morning's debate. First, there has been a gender imbalance and secondly, an imbalance in the number of people who have spoken in favour of the Welsh Assembly. From listening to the debate, one would not think that the majority of Welsh Members are in favour of a Welsh Assembly. One would not think that, now that we have more women from Wales in the House, they would have no voice at all.
One of the many attractions of the Assembly for people in Wales is that it will, we hope, correct the gender imbalance that exists here and which makes this a totally unrepresentative House of Commons. Women should form 50 per cent. of the membership here. I hope that, when we have the Assembly, my right hon. Friend the Secretary of State and other Labour members will do everything possible to ensure a better representation in it.
Many points have been made today to which I would like to respond, but there is not enough time and I want to give some of my hon. Friends an opportunity to speak

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in the debate. I am sorry that 20 years ago, we did not get an Assembly. If we had, much of the havoc wreaked on Wales in the past 18 years would not have taken place.
I represent Cynon Valley which suffers from high unemployment, which has a high percentage of people who are disabled as a result of working in the former industries there and which has a high percentage of young people who are unable to find jobs. The injustice of that is obvious to all Labour Members. What has made me angry during the 13 years I have been here is the fact that there were rarely occasions on which I was able to question the Executive about the policies they were imposing on Wales.
The hon. Member for Aldridge-Brownhills (Mr. Shepherd) seems to believe that the Welsh Grand Committee is a substitute for an Assembly. He cannot ever have been to a meeting of the Welsh Grand Committee. Those of us who have had to endure the Welsh Grand Committee for many years have constantly been in the majority, yet we have seen policies imposed on the people we represent which have been contrary to the opinions expressed in that Committee.
Mr. Shepherd: Will the hon. Lady give way?
Ann Clwyd: No, I am not giving way. There is not enough time.
I believe that the people of Wales will vote yes for an Assembly. I would have liked a parliament, as I have said many times. I believe that public opinion in Wales will eventually support a parliament and will not be content with only an Assembly. I am sorry that we are not getting the same as Scotland. The Tory rout in Scotland and Wales shows that, if the status quo were ever an option, it certainly is not now.
The current system of government in Wales is glaringly undemocratic, and everybody knows it. At Welsh questions every three weeks in the House of Commons, the majority of Welsh Labour Members who represent the majority of people in Wales are not even able to put their questions. Somebody calculated that a Welsh Labour Member was lucky if he or she were able to ask two oral questions in an entire year.
Mr. Evans: Will the hon. Lady give way?
Ann Clwyd: No, I am not giving way.
How can anybody possibly argue that, given such a statistic, the system is democratic? It is not, was not and cannot be.
I should like to cite one example of the way in which the health service has been run in Wales over the past few years. Between 1970 and 1974, I served on the Welsh hospital board. That board was not a perfect arrangement, but at least it could question the Welsh Office's policies. We were lay people. People in Wales knew our names, addresses and telephone numbers, and could contact us if they wished. We travelled all over Wales; we tried to put forward the best policies for health in Wales.
In 1974, the hospital board was taken away and the health service in Wales became less democratic than that in England, which continued to have regional boards.
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Over the years since 1974, while the Welsh Office has been making very important decisions about the health service in Wales, we as Welsh Members, have not been able properly to call to account the people who made those decisions. As a consequence, much of Wales has a third-world health service. The people of Wales will certainly not be content with such a health service when they have a Welsh Assembly, and they will be able to put detailed questions to the people who represent them in that Assembly.
In the preface to the White Paper, my right hon. Friend the Prime Minister says that the new Labour Government
"is pledged to clean up … British politics."
He lists the Welsh Assembly and the Scottish Parliament as bodies which will give
"the people of Wales and Scotland more control over their own affairs within the United Kingdom".
He mentions new citizens' rights under the European convention on human rights and states the Government's commitment to freedom of information. I hope that we do not have to wait much longer for a freedom of information Bill to become law.
The new Assembly wants to consider what sort of standing orders and working procedures it has in order to enable Members of the Assembly to assess official information and hold the Executive to account. I hope that we will no longer hear answers containing the words "disproportionate cost", "the information is not available centrally" and all such things about which the Scott report urged Members of Parliament to do something. Members of the new Assembly should make it clear very quickly that they are not prepared to take such answers.
Devolution is not about separatism; it is about doing a better job of work. The measure of the Assembly's success will be what it does to foster proper jobs, paying proper wages, in the many parts of Wales where there has been a collapse of traditional heavy industry and employment opportunity. Historically, Wales was a major part of Britain's industrial base. After 18 years of Tory blight, areas such as the south Wales valleys have very low economic activity and the lowest income per head in Great Britain. What kind of fairness within the United Kingdom is that?
Much criticism has been made of the democratic deficit. My right hon. Friend the Secretary of State has said what he intends to do about that, and I welcome it.
Broadcasting policy should also come within the remit of the Welsh Assembly, because both north and south Wales have real concerns about broadcasting. In south Wales, Channel 5 appears on the screen like a snowstorm on the Brecon Beacons and there is considerable resentment that the UK Channel 4 is not available. BBC Wales, under the royal charter, is classified as a national region of the BBC, on a par with Scotland and Northern Ireland, and the chairman sits on the BBC's main board of governors as the BBC's national governor for Wales. That is a colonial arrangement and must be reconsidered because, regardless of the postholder's fitness or lack of probity, he can be removed only by the Queen.
Reform of the constitution, in the specific proposals in the White Paper, is not a Labour party pipe dream: it is the only way to deal with the social, educational, health, employment, transport and agricultural issues that face

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Wales today. The proposals in the White Paper are enormously important to every man, woman and child in Wales and I have no hesitation in supporting them.
Several hon. Members rose—
Mr. Deputy Speaker: Order. The winding-up speeches will begin at 2.10 pm. I can call three Back Benchers if they take only five minutes each. I apologise to hon. Members who will not be called, but they will be remembered in later debates.
1.55 pm
Mr. Don Touhig: This debate is important for the people of Wales, for the way in which Wales is governed and for all the people in this United Kingdom. Wales, like much of the United Kingdom, already has devolved government, but it is government by quango and is not accountable. The proposals in the White Paper begin to address that problem and, for that reason, they are both radical and progressive. They are radical because they will lead to a directly elected Assembly that will provide an opportunity to hold to account those who run vital services, such as health and education, for which they are presently not accountable.
Many problems in Wales stem from the fact that we have devolved government that is not accountable. The White Paper is progressive, because it will give the Assembly responsibility for ending the financial waste, corruption and patronage of the quango state. The ending of the quango culture is necessary, and will be a central task for the new Assembly.
In the 18 years of the Tory Government, we became the most centrally governed country in western Europe. I spent 20 years in local government before coming to the House and I can testify to the many powers that were drained away from local communities and brought here to the centre. Decisions that should be taken by local people are no longer taken by them.
Wales has only three Ministers, who together share responsibility for everything, from economic development to agriculture, fisheries, food, industry, training, health and education. That whole panoply of responsibilities rests with them and, with the best will in the world, my right hon. Friend the Secretary of State and his two Ministers—no matter how hard they work—cannot always be on top of their job. That is no reflection on them and, indeed, has been recognised in past years. Tory Ministers shared the powers that the House gave them with the quangos, because that was the only way that they could deliver services in Wales.
The number of quangos in Wales greatly increased, while the number of elected councillors fell. The late and unlamented Tory Government created 64 new quangos and made 40,000 appointments in the last year in England and Wales. Two thirds of those appointments were paid, and many went to Tory placemen, yet the Tories accuse us of trying to create jobs for the boys. All the quangos must be brought under democratic control, because vital services such as health and education should not be controlled by bodies that meet behind closed doors, spend millions of pounds and are not even truly accountable. That is why I welcome the proposals by my right hon. Friend the Secretary of State for Wales.
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When people in Wales have a problem, they can contact their Member of Parliament or their local councillor. Local people cannot so easily get hold of whoever runs the local ambulance trust, the local hospital or the local further education college. My hon. Friends from south-east Wales and I can tell stories of recent problems with the tertiary college in Gwent and how impossible it is to contact the quangos that run education in our country.
In spite of the fact that there is a problem with a college in Gwent, Members of Parliament from Gwent have been asking for a report on that college that has been produced, and the Minister has requested that information be passed on, the quango has so far refused to co-operate. Those people are simply not accountable. The quangos that control such vital services must be brought under democratic control. In his statement earlier this week, my right hon. Friend the Secretary of State made it clear that he sees the White Paper as marking the end of the quango expansion and one of the prime tasks of the new Assembly will be to tackle that.
The proposals before us provide a practical way to improve accountability and to decentralise power within Wales—that is the way we should be going. My right hon. Friend has already made it clear that the Assembly will have the entire budget of the Welsh Office—£7 billion. I hear Conservative Members, like the nationalists in a previous incarnation, saying that the Assembly will be a talking shop, but with £7 billion to spend it will be a pretty big talking shop.
The Government are committed to devolution and I look forward to campaigning with my right hon. Friend across Wales to put Labour's case; but it will be Labour's case, not the nationalists' case or the Liberal Democrats' case, because the Labour party is not in favour of breaking up the United Kingdom or creating some sort of federal structure. The Government have set out their devolution stall and, with the White Paper, what you see is what you get—no less and no more.
Devolution is not about nationalism; it is not about separation; it is not about the break-up of the United Kingdom; it is not even about being Welsh. It is about making the system by which we run our country as open and as accountable as we can possibly make it. The only way forward is to extend devolution throughout the whole United Kingdom. The only way to answer the West Lothian question is to have devolution throughout these islands and an elected authority for London and chambers for the English regions are part of Labour's policy. Devolution is about giving people a sense of ownership of the political system, ensuring that they count, their opinions matter and their vote counts, wherever they live.
The relationship between the Westminster Parliament, the Assembly and local government is very important. Only last year, my right hon. Friend the Secretary of State said:
"Devolution does not end in Cardiff',
and I agree with him. I recognise that there are some, even in my own party, who think that it is clever and smart to denigrate local councillors or local councils as if they were political dinosaurs or throwbacks to the past—not the sort of people we want to sit in the Assembly. I say that we want people from all areas of Welsh public life to sit in the Assembly.
I read articles in newspapers and magazines and see interviews on television in which people talk of some mythical boyo culture—some Welsh Taffia that runs local

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government. They tell us that those are not the sort of people we want involved in the new Assembly. They want the experts and the specialists, but an old friend of mine—Councillor Ray Owen—used to tell me, "Always be careful of experts. Remember, experts built the Titanic; ordinary folk like you and me built the Ark."
Local councils have a part to play in devolving government throughout Wales and I welcome the thrust of the White Paper in that respect. My right hon. Friend the Chancellor of the Exchequer, speaking to a local government audience in Manchester this week, told them that they were the democratic leadership of our cities and towns. He went on to say:
"Over the last two difficult decades, it is in local government that the principles and beliefs of social justice have been applied in practice. And, as a result, you have led the way for the new Government".
I certainly endorse that.
I caution those whose enthusiasm for devolution leads them to verbally abuse councillors and portray some of them as old Labour and therefore unworthy of being associated with our campaign. They might also knock former members of this House or the other place, or make digs at geriatric tax exiles who do not share our views on devolution. We will lose the argument and we will lose the referendum if we prefer the easy target of personal attack to the more difficult, but ultimately more rewarding, objective of putting the case for devolution and campaigning on that throughout Wales. We will win the debate and the referendum only by making devolution relevant to the everyday lives of the people of Wales. If some find that too intellectually challenging, they had better be quiet, because they will not be helping our cause.
I am conscious that others want to speak, so I shall make one final point. The White Paper confirms the Government's commitment to local government and to decentralising power. I argue that that is the way we should be going. A Welsh Assembly which has the power to act on a wide range of matters and which is seen to be accountable is not another tier of government—it is a better system of government.
2.4 pm
Mr. Lembit Öpik: My first comment is one of slight surprise. It has become clear throughout the debate that the constructive opposition to devolution has come not from the official Opposition, but from within the Government. That has contributed positively today, because the useful and serious points about what might concern the Welsh public have been heard in the House. Unfortunately, the official Opposition choose to argue in a way which manifestly contradicts other aspects of their policy positions.
The right hon. Member for Llanelli (Mr. Davies) referred to his concern at a shift from our current constitutional settlement to a different one. That is exactly what will happen, but I do not regard that as a negative. As Liberal Democrats, we have campaigned for exactly this shift for more than a century. We welcome the courage of the Government in coming forward with this proposal. It will not destroy the United Kingdom. One has only to look at the format in the United States of America—the wealthiest nation on earth—which has a state and federal structure to understand that the shift is not necessarily negative.
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Secondly, it has been said that devolution will weaken the Union. That is manifestly not the case. Anyone who has worked in a large team in business knows that one increases the effectiveness of that business by delegating to individual team members. Delegation in business is akin to devolution in politics. We must look again at the professional experience and trust ourselves to make sensible decisions.
I wish to refer to some of our concerns. We believe that the proposed electoral system—although an improvement on the first-past-the-post system—remains inadequate. It is not fully proportional, and I am sure that we will return to this issue in the House and outside. I welcome the reassurances that we have had from the Secretary of State about the Development Board for Rural Wales and the transfer of its operations to a new regional development agency, but we want to be absolutely sure that that happens.
We must discuss what secondary legislative power means. The Liberal Democrats support primary legislative powers for the Welsh Assembly, similar to the powers that the Scottish Parliament is likely to obtain. Once again, we expect to make a contribution on that score. As far as the Wokingham question is concerned—the possibility that a future Secretary of State could once again lord it over Wales, even with a Welsh Assembly—we believe that there is some constitutional work to do on that score to obtain a reasonable settlement. That should not deter us from moving forward with devolution.
As Liberal Democrats, we will continue to make a contribution in good faith, believing that our ideas will be considered—and included, to a reasonable extent—by the Government as we move towards the final proposals in the House. Good words about inclusiveness are not the same as good deeds, and we will watch to make sure that the Assembly passes that crucial test of inclusiveness.
Finally, there are the "What ifs?", as in, "What if it doesn't work?" I am glad that the Wright brothers did not think that. I am glad that Nelson Mandela did not say that. We must have the courage of our convictions and simply say, "We will make it work and we will overcome the barriers which prevented us from doing it before." We must not live in a penumbra of self-doubt, wondering whether we have the ability to move forward. This Parliament represents 60 million people and a successful United Kingdom, and it will be more successful if we devolve our powers to those more able to make decisions.
My challenge is not just to my Liberal Democrat colleagues but to the official Opposition to stop dragging their heels and living in the past. They must stop trying to turn this issue into a political football and start giving the Welsh people the respect that they deserve. By all means argue the case, but in a constructive context, so that, ultimately, we can look back at this Parliament and say that we all made a personal contribution to a truly great reforming Parliament.
2.9 pm
Mr. Nigel Evans: First, I congratulate the hon. Member for Vale of Glamorgan (Mr. Smith) on his maiden speech. At least his was made in daylight hours—unlike mine, in 1992, which was made at 2 am. I also congratulate our 1997 intake—my hon. Friends the Members for Beaconsfield (Mr. Grieve), for North Shropshire (Mr. Paterson) and for New Forest, West

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(Mr. Swayne)—as well as my hon. Friends the Members for Faversham and Mid-Kent (Mr. Rowe) and for Basingstoke (Mr. Hunter).
We heard the green-tinted spectacles view from the hon. Members for Islwyn (Mr. Touhig), for Brecon and Radnorshire (Mr. Livsey), for Ynys Môn (Mr. Jones), for Wrexham (Dr. Marek), for Swansea, East (Mr. Anderson), for Cynon Valley (Ann Clwyd) and for Montgomeryshire (Mr. Öpik). We also heard the voice of realism—never mind the voice of Wales—from the hon. Member for Rhondda (Mr. Rogers) and the right hon. Members for Llanelli (Mr. Davies) and for Swansea, West (Mr. Williams).
Ms Julie Morgan rose—
Mr. Evans: The hon. Member for Cynon Valley said that she hopes that there will be a gender balance in the new Assembly. That is only a hope and an aspiration; unless the Labour party loads its list system, it may not happen—and loading the list system for the Assembly will simply give power to the party rather than to the people. She also mentioned the problem over questions to the Executive.
Ms Morgan rose—
Hon. Members: Give way.
Mr. Deputy Speaker: Order. The hon. Member for Cardiff, North (Ms Morgan) must know that the hon. Gentleman does not wish to give way.
Mr. Evans: I have only 10 minutes, Mr. Deputy Speaker.
If Labour Welsh politicians would table more questions on the Order Paper, they would have more questions called.
In 1979, the Welsh people voted four to one against devolution. There has been no change. If the answer to the question is that we need 60 more politicians and extra civil servants, I worry about the question being asked. The people of Wales want better government, not more government; they certainly do not want more expensive government. We have been able to squeeze out of the Government the fact that, for the first four years, the Welsh Assembly will cost £100 million. Let every Labour politician go back to his or her constituency and say that they want that money spent on a Welsh Assembly rather than more teachers in schools, more nurses in hospitals and more policemen on streets and then listen to what the people of Wales have to say. That is the voice of Wales.
We shall see a turbo-charged county council with Assembly members on turbo-charged salaries. The Secretary of State admits that the Assembly can always be overruled by the Westminster Parliament. The right hon. Member for Swansea, West managed to squeeze that concession out of him. If so, why bother going ahead with an Assembly? It is as if the people of Scotland will have a Parliament with tax-raising powers, yet Wales will be offered something less.
Being a Welshman, I know that Wales can sing. Despite the delights of Wales with Bryn Terfel and the Morriston Orpheus choir, Wales will be turned into the land of talk and each word will be extremely expensive,
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with a £100 million start-up. Welsh taxpayers, along with my constituents in Ribble Valley, will help to pick up that tab. That is where the common sense of the Welsh people will come in.
Furthermore, the Assembly is regarded by nationalists and many in Wales as a stepping stone to an independent Wales. We have heard that before from members of Plaid Cymru and other nationalists in Wales. In 1977, Lord Crickhowell said that the Assembly
"threatens the unity of Britain by seeking to establish a system that would focus discontent and concentrate it in a form likely to create hostility to this Parliament and the constitutional arrangements themselves".
He was right in 1977 and he is right 20 years later. It is inevitable that, once the Assembly is set up, it will go on a power grab. Unlike the Secretary of State, it will want something real to do. It will grab many powers not only from Westminster, but from local authorities, as the hon. Member for Rhondda pointed out.
The right hon. Member for Swansea, West said on Tuesday that this was a constitutional magical mystery tour. I am not sure that he was right. We can picture the Secretary of State with his hands on the wheel of his tired old jalopy, with 11 points on his driving licence for driving without due care and attention and his eyes more on his unwilling, hostile and complaining passengers than on the road ahead. The louder the shouts from his passengers to stop the bus, the harder he pushes his foot down on the accelerator, believing that speeding towards the cliff will allow him to jump the gap in his flawed logic—that it is possible to create the Assembly without giving it any real powers, and more and more powers in the future. It is not a magical mystery tour, because we know exactly where it will end.
What is the point of setting up the Assembly? If it is designed to satisfy the demands of Welsh nationalists, it fails because of its limited powers. If it is designed to safeguard Welsh culture, it is unnecessary because the previous Conservative Government did more to promote the Welsh language and culture than any of their predecessors. If it is designed to promote business in Wales, people need only look at the Conservative Government's record on investment in Wales, especially during the past 12 months when my right hon. Friend the leader of the Opposition was Secretary of State for Wales. The proposal is an ill-thought-out hotch-potch that will cause discontent and nationalist fervour to flourish.
We wonder about the role planned for the Secretary of State. We can imagine him sitting at the Cabinet table acting as the errand boy. We can imagine the Prime Minister stuttering, "G-G-Granville, t-take these groceries t-to the Welsh Assembly. D-d-don't forget to p-pick up its order on t-the way back." It is a messenger boy role for the right hon. Gentleman.
Will the Secretary of State go to the Assembly? If he does, will he be its leader—something with which the Western Mail tried to frighten the Welsh people recently. Who will he speak for—the Assembly or the Westminster Parliament?
Mrs. Betty Williams rose—
Mr. Evans: No. I shall not give way.
We need to know the answer, because the proposal for an Assembly will put the Barnett formula at risk, as we heard from the right hon. Member for Llanelli. It will risk

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the over-representation of Members of Parliament from Wales at Westminster, as we heard from my hon. Friends the Members for Shropshire, North and for Faversham and Mid-Kent. It will put at risk the rate support grant to local authorities as the Welsh Assembly tries to take some of the money for itself. It will force up council tax for the Welsh people. They will have to meet the £100 million cost and higher taxes.
Mrs. Williams: Will the hon. Gentleman give way now?
Mr. Evans: Some people—
Hon. Members: Give way.
Deputy Speaker: Order. It is clear that the hon. Gentleman is not giving way.
Mr. Evans: Some people will say that the Government's proposals are half-baked. If only they were. They are still in the mixing bowl, congealing. They are being rushed through the House—we have just this one debate today. The Welsh Grand Committee will not examine them. We do not have a Bill to examine, just a White Paper. The people of Wales have eight weeks to study these proposals—over the summer, when many of them will be on holiday. It is a measure of the Government's confidence in their proposals that they are pushing them through with as little open debate as possible. At the same time, they intend to stuff Welsh letter boxes with their White Paper, but no funding will be provided for the other side of the debate.
Mr. Ron Davies: Is the hon. Gentleman suggesting that we should make public money available for the yes and the no campaigns?
Mr. Evans: No. I am suggesting that £700,000 could be saved by not stuffing the White Paper through the door of every household in Wales. After all, it was printed in the Western Mail, so every household could have read it this week.
Why is the referendum in Wales being held a week after the referendum in Scotland? Is it a cynical ploy by the Government, who might think that they have a better chance in Scotland of getting their proposals through? Do they think that, after the referendum in Scotland, they will be able to bounce the Welsh people into voting yes on 18 September? I can tell the Secretary of State now that the Welsh people will not be bounced into voting yes. They will use their common sense on 18 September. They will not be treated as the dessert to the Scottish dog's dinner, and they will be voting no.
If we are being presented with Labour's flagship, I can say only that it is badly holed. I am not surprised, given its motley crew. The members of its crew are steering the ship on to the rocks of common sense.
Our constitution cannot be compared with Cardiff Arms park—it cannot be dismantled and then put back together, brick by brick, with the expectation that it will be the same. Once the foundation bricks are removed, the entire structure is in danger. The Government's proposals will
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be bad for the United Kingdom and especially bad for Wales. That is why the people's movement is gaining strength. It is also why Viscount Tonypandy, a respected former Speaker, said that the Welsh people must not be misled
"by this foolish proposal of a Welsh Assembly. A Welsh Assembly will fan the flames of nationalism, and that would do no good at all for jobs or the cultural life of Wales."
"Mae hen wlad fy nhadau yn annwyl i mi".
The land of my fathers is dear to me. It is dear to all those who live in Wales as it is to those who live in Scotland, England, Northern Ireland and the rest of Europe, along with those who live in other parts of the world. They and I have pride in Wales. They and I see the strength of the United Kingdom. They and I will be campaigning and hoping for a no victory on 18 September.
2.20 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): I admire the cheek, if nothing else, of Conservative spokesmen. The fat-cat party is quibbling about Assembly levels of expenditure that will be determined not by Members of the House of Commons or by Assembly members, but by the independent Senior Salaries Review Body. If the cost of the Assembly amounts to 0.3 per cent. of the total budget, a figure of which the right hon. Member for Devizes (Mr. Ancram) is apparently ignorant, it will be money well spent in beginning to dismantle the Tory quango state. We shall start to make huge savings in the cost of the quangos.
Mr. Ancram: How many teachers' jobs?
Mr. Hain: The right hon. Gentleman asks how many teachers' jobs will be equivalent to the expenditure to which I have referred. That is enormous cheek when we remember that the Conservative Government over the past year cut 600 teaching jobs. They cut also hundreds of nursing jobs. It is—[Interruption.] The right hon. Gentleman lectures us about council tax. The Conservative Government—[Interruption.]
Mr. Deputy Speaker: Order. The right hon. Member for Devizes (Mr. Ancram) has had his say, and he must allow someone else to speak.
Mr. Hain: The Conservative Government imposed swingeing council tax increases on almost all Welsh unitary authorities over the past year or two, and it is not for them to bleat on about the council tax issue.
The right hon. Member for Devizes talks about millions of pounds and plucks figures out of thin air, as did two Conservative Secretaries of State for Wales. The right hon. Member for Wokingham (Mr. Redwood) said that the Assembly would cost £100 million. The right hon. Member for Richmond, Yorks (Mr. Hague) halved that and said that it would cost £50 million. At the same time, there are many crocodile tears about nurses and teachers.
The right hon. Member for Devizes and his Conservative colleagues on the Opposition Back Benches claim to speak for the people of England. I remind them that the people of England overwhelmingly supported the Labour party's policy for a devolved United Kingdom. The Conservatives polled only 34 per cent. of the vote in

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England. They may be a little Englander party, but they do not speak for England. They certainly do not speak for Wales or Scotland.
I welcome the fact that my right hon. Friend the Member for Swansea, West (Mr. Williams)—I have a close relationship with him as a colleague in West Glamorgan and as a fellow Labour Member—will not be joining the Tories in the no campaign. I agree with him that any personal abuse that there has been should end.
Mr. Llew Smith: Will my hon. Friend give way?
Mr. Hain: No. I am not giving way to anyone. I do not have the time to do so.
Any personal abuse that there has been in the campaign so far must end. I agree fully with my right hon. Friend the Member for Swansea, West on that score.
Having been a bit of a rebel myself over the years, I do not ask for blind loyalty. No one is asking for that. However, the Labour Government were elected overwhelmingly in Wales on the policy of a Welsh Assembly. All 34 Labour Members were elected on a manifesto commitment that was crystal clear. In addition, the Labour party has unanimously passed this policy at successive conferences. We are entitled to expect Labour party members up and down the country to take note of that.
The hon. Member for Brecon and Radnorshire (Mr. Livsey) made an important point about rural policy, as did my hon. Friend the Member for Gower (Mr. Caton). We believe that the powerhouse agency will provide a more comprehensive and coherent policy for all rural areas of Wales. Far from retreating from a strong rural policy, we shall strengthen and upgrade the rural perspective of our policy across Wales.
I welcome the maiden speech of my hon. Friend the Member for Vale of Clwyd (Mr. Ruane), who is a worthy champion of north Wales and of his constituents. I draw the House's attention to what he said, which no doubt others, such as my hon. Friends the Members for Clwyd, West (Mr. Thomas) and for Conwy (Mrs. Williams), would have said if they had been able to speak in the debate. All the north Wales Members support a Welsh Assembly, because they know that it will give north Wales a new voice not just in Wales, but in Britain, in Europe and internationally.
I assure my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) that, like the Welsh Development Agency and the other economic agencies, the powerhouse will have operational independence. He asked about paragraph 2.24 of the White Paper, which refers to inward investment. It does no more than describe the existing situation as it affects the Invest in Britain Bureau, which prevents bidding wars between the different constituents of the United Kingdom. There is certainly no watering down of protection for Wales.
The White Paper lays out a series of principles on an Assembly for Wales. It will be up to hon. Members, such as my hon. Friend the Member for Merthyr Tydfil and Rhymney, to put detailed points in Committee. If their points have merit, we shall take them on board in the spirit of inclusivity with which we have governed Wales in our first three months. The White Paper stands as the manifesto on which we shall go to the people of Wales on 18 September with confidence.
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My hon. Friend the Member for Rhondda (Mr. Rogers) made a number of points about local government. Every local authority in Wales has enthusiastically supported the Government's programme for a Welsh Assembly. I agree with him that there should be no false nationalism. Indeed, I believe that the policy for a Welsh Assembly will bury for ever the separatist fantasy that Wales can go it alone as an independent republic.
My hon. Friend the Member for Wrexham (Dr. Marek) make some fair points about higher and further education, which we shall have to take into account. I agree that it will not be a Labour Assembly or a Cardiff Assembly: it will be a Welsh Assembly that represents all the people of Wales.
My hon. Friend the Member for Cynon Valley (Ann Clwyd) made some telling points about the under-representation of women not just in this Parliament but in Welsh cultural life at senior levels. It is incumbent on all political parties, when selecting candidates for the Welsh Assembly, to ensure that we achieve the goal of equal representation for women and men. I reassure my hon. Friend that the Labour will take a lead on that. I also welcome the point made by my hon. Friend that the vast majority of Labour Members, including many who have not had a chance to speak today, support the Government's policy, and will campaign actively for a yes vote.
The Government propose a modern constitution for Britain, which will include regional government in England, starting with a referendum in London and the setting up next year of powerful English regional economic development agencies. What the Conservatives and other opponents of a Welsh Assembly are really saying is that Scotland will have its own Parliament, the English regions will have their own regional bodies and Northern Ireland will have a measure of self-government, but Wales must be isolated as the only part of the United Kingdom that chooses to be ruled from London. Even by the Tories' own standards, that is an utterly incredible and insulting position.
The Tories are again treating Wales with contempt, as if it were a second-class nation deserving second-class treatment. My hon. Friend the Member for Swansea, East (Mr. Anderson) made the telling point that the Tories have always opposed democratic advance, throughout the history of British parliamentary democracy and its origins. Why do they not come clean and mount their own no campaign? The Labour party has mounted a yes campaign. Why are the Tories so shy? Why are they sheltering furtively behind other no campaigners? Why are they using the no campaign as a Tory front organisation—because that is what it is?
The Tories should stop trying to hoodwink the people of Wales again. They should be in no doubt that the referendum campaign will be an action replay of the general election campaign. Once again, it will be Wales against the Tories. Not only will a big yes vote deliver a voice for Wales but the referendum will be an opportunity to beat the Tories for a second time.
The Tories have attacked Wales for decades, if not for centuries—
It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Mr. Flynn: On a point of order, Mr. Deputy Speaker. While I make no criticism of you or the other Deputy

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Speaker who chaired this very good debate, could we make the point that, while some say that the Welsh Assembly will be a talking shop, for 10 hon. Members this morning who represent Welsh constituencies, this Parliament was a non-talking shop? We had no opportunity to express our enthusiasm, excitement and exhilaration about the prospect of a Welsh Assembly.
Mr. Deputy Speaker: That matter is not in my hands but in the hands of other hon. Members. If their speeches had been shorter, I would have called more hon. Members.

SELECT COMMITTEES RELATED TO GOVERNMENT DEPARTMENTS
Ordered,
That—
(1) Standing Order No. 152 (Select committees related to government departments) be amended, in the Table in paragraph (2), in the item relating to the National Heritage Committee, by replacing the words 'National Heritage/Department of National Heritage' with the words 'Culture, Media and Sport/Department for Culture, Media and Sport'; and
(2) all proceedings of the House and of its Select Committees in this Session in respect of the National Heritage Committee shall be deemed to have been in respect of the Culture, Media and Sport Committee.[Mr. Jon Owen Jones.]

SITTINGS OF THE HOUSE
Ordered,
That, at the sitting on Thursday 31st July, the Speaker shall not adjourn the House until she shall have notified the Royal Assent to Acts agreed upon by both Houses.—[Mr. Jon Owen Jones.]

LIAISON
Ordered,
That Mr. Donald Anderson, Mr. Andrew F. Bennett, Mrs. Gwyneth Dunwoody, Mr. Derek Foster, Mr. Bruce George, Mr. David Hinchliffe, Ms Margaret Hodge, Mr. Jimmy Hood, Mr. Martyn Jones, Mr. Gerald Kaufman, Mr. Archy Kirkwood, Mr. Peter Luff, Mr. John McWilliam, Mr. David Marshall, Mr. Rhodri Morgan. Mr. Chris Mullin, Mr. Martin O'Neill, Mr. Giles Radice, Mr. Robert Sheldon, Mr. David Tredinnick and Mr. Bowen Wells be members of the Liaison Committee.—[Mr. Jon Owen Jones.]

PUBLIC ACCOUNTS
Ordered,
That Mr. Alan Campbell, Mr. Geoffrey Clifton-Brown, Mr. David Davis, Mr. Ian Davidson, Mr. Geraint Davies, Maria Eagle, Jane Griffiths, Mr. Phil Hope, Mr. Christopher Leslie, Mr. Andrew Love, Mr. Robert Maclennan, Mr. Richard Page, Mr. Charles Wardle, Mr. Dafydd Wigley and Mr. Alan Williams be members of the Committee of Public Accounts.—[Mr. Jon Owen Jones.]

Pensions (Mis-selling)
2.31 pm
Mr. Andrew Love: I am grateful to Madam Speaker for giving me an opportunity to raise this critical issue before the summer recess.
"One of the biggest financial scandals in British history."
Those are not my words, but the headline from a Sunday newspaper earlier this year, which described its view of the mis-selling of pensions scandal. A bit of journalistic licence, no doubt, but the headline reflects the true scale of the scandal in terms of both the numbers of people directly affected and the level of financial loss that they have incurred. It also reflects the impact that the events have had on the wider pensions industry.
Pensions are about providing security in old age. It can be provided only through long-term savings, which depend critically on trust and consumer confidence. Both have been undermined as part of the fallout surrounding the scandal and the failure of the pensions industry to identify and compensate those affected.
The scandal could not have reached the proportions it has had it not been sustained by a potent mix of ideological prejudice and institutional incompetence. The conditions for it were created by a Government intent on offloading those on state pensions into individualised schemes in the private sector. That was done through a combination of bribes at the taxpayer's expense and an expensive advertising campaign to promote such schemes.
It was fuelled by a pensions industry unable and unwilling to restrain the baser instincts of its sales staff, whose salaries were almost exclusively dependent on making a sale and earning a commission. It was sustained by a regulatory regime that failed adequately to tackle the mounting evidence of mis-selling or set effective deadlines for redress. It was writ large by a combination of pensions industry indifference and the palpable failures of self-regulation.
It all started in 1988, the year in which personal pensions were launched and when the main provisions of the Financial Services Act 1986 came into force. However, it was not until December 1993, a full five years later, that the issue of mis-selling first came to light. At that time, the Securities and Investments Board commissioned KPMG, a leading firm of City accountants, to review the files of a sample of clients who had been sold personal pensions. Only 9 per cent. of those files showed evidence of substantial compliance with the rules, and the report classified 37 per cent. of the files as suspect.
Personal pensions were supposed to be sold against rigorous standards that were set out in the Financial Services Act. Not only should clients receive best advice on the choices before them, which would have included remaining with their existing pension providers, but sales staff also had a duty to find out about current pension arrangements and financial circumstances. To underpin those standards, the Government set up a number of watchdogs. The problem was that, under self-regulation, the watchdogs were those who were selling personal pensions.
Despite the overwhelming evidence of mis-selling that emerged in late 1993 and early 1994, it was almost a year before the SIB published a programme for securing

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redress for the victims of mis-selling. The extent of the scandal began to emerge at that time. It was on an unprecedented scale, with more than 570,000 priority one cases—those at or near retirement—and a further 1 million to 2 million cases involving younger people. There is some evidence that those may be underestimates, because some sections of the industry have shown a marked reluctance to alert their clients to the fact that they may have been mis-sold pensions and are due for compensation.
Various deadlines in 1995 and 1996 were set for the review of cases of the different priority groups. None has been met. In the two and a half years following the first evidence of mis-selling, the pensions industry was able to deal only with just under 1 per cent. of priority one cases.
That lamentable record was matched, if not exceeded, by that of the Conservative Government. They did nothing, because they were responsible for creating the climate in which mis-selling could take place. Their failure can be summed up by the fact that more than 18,000 people who were mis-sold personal pensions died during their administration without receiving compensation.
I am pleased to see that the Government have been and will be more robust in meeting the new deadlines for case review and for the payment of compensation. The decision to get tough, and to name and shame those who are dragging their feet, has been universally welcomed by Labour Members, by those directly affected, and by the public. They have been welcomed by everyone except some of the companies involved, and by Opposition Members, who are absent for the debate and who remain strangely silent on the issue.
I note the new determination of City regulators to enforce the review deadline with a threat of heavy fines for companies that do not comply. All that is welcome.
Before I am accused of knocking the pensions industry as an easy target, I shall put to the Minister two of its concerns about the continuing delay in the processing of claims. I have been told by those companies that want to clear up the mess that they are being hampered by the pension funds of small and medium-sized companies, which do not have the resources to respond with the basic information that is necessary to agree compensation.
There is also concern over the prospects of reaching an agreement with the regulatory organisations about practical schemes which, I am told, many companies are anxious to develop to resolve outstanding claims. Perhaps the Minister will comment on that. Even assuming that its concerns are valid, the pensions industry would have to accept that the latest published figures to the end of June, which show that only two of the 24 companies have managed to compensate more than one in 10 of their cases are deplorable.
Even allowing for the argument of the Association of British Insurers that the figures include a considerable number of cases where no mis-selling has been found—and I would certainly wish to argue with it about the numbers—there is still a considerable mountain to climb to complete the review by the end of the year.
Recognising that the Government's freedom of action is somewhat constricted by the threat of litigation, I wonder what further action the Minister could contemplate, to achieve, in her own words:
"the Government's determination that this matter be resolved with dispatch".
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What scope does she have for the extension of sanctions against companies that simply refuse to take the steps necessary to deliver the targets for completion of case reviews set by the regulators?
If companies continue to refuse to adopt the type of practices that the Government believe will hasten the conclusion of case reviews, will my hon. Friend consider further sanctions? Recently, the Minister for Welfare Reform suggested extending the powers of the Personal Investment Authority to include fines on directors. What scope exists to disqualify company directors who continue to refuse to comply?
In the context of the recently announced pensions review, I hope that the Minister will confirm that the Government will not consider extending the scope of privately funded pension arrangements before the issue of mis-selling has been resolved, and that those companies that fail to meet the targets set by the regulatory authorities will prejudice their inclusion in any new arrangements following that review.
The mis-selling of pensions exposed all that is wrong with self-regulation. As a result, I welcome the Government's commitment to statutory backing through a new financial services Act and the creation of what has been called Super SIB. However, we must recognise the concern of much of the industry that those changes should not lead to an increase in industry compliance costs, which will inevitably filter through to the consumer.
Regulation must be at a level that has the confidence of the consumer, and re-establishes the trust that has been so badly dented through this whole fiasco; but regulation must also be delivered at a cost that can be justified. Achieving a balance that creates a framework of effective regulation that is appropriate, responsive and flexible will be one of the foremost challenges facing the new arrangements.
One of the lessons of the recent past is the need for greater transparency, in terms of both the financial arrangements underpinning personal pensions and the degree of independence of so-called "independent" financial advisers. The Consumers Association has campaigned for a fee-based system, under which people pay for genuine advice from truly independent financial advisers, rather than having people posing as such, as at present.
Although changes have been made in the financial arrangements for personal pensions, there is some evidence that sales staff are still too dependent on commissions, and that the level of training is not appropriate. As a result, human nature could again undermine confidence in the industry, which is so vital to its future.
The Minister has made it clear more than once that her decision to review progress and to publish information is in the public interest. I agree. One of the problems that has undermined consumer confidence in the industry is the lack of published information. Real benefits to the consumer would accrue from the provision of simple and easily understood information about the financial aspects of personal pensions.
Much of the excuse for the obsessive secrecy of the industry is the highly technical nature, it is claimed, of much of that information, but that could be presented in a more user-friendly way, and it should be possible to

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introduce chartermarks to help consumers to find their way with confidence through the maze of pension products available in the marketplace.
It is only by a combination of prompt and determined action to end this sorry saga, and new and more effective regulation, that it will be possible to re-establish that trust with the public, so that private pensions, for defined groups in certain circumstances, can hold out the promise of security in old age.
2.44 pm
The Economic Secretary to the Treasury (Mrs. Helen Liddell): I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on his success in securing this debate, which is of great interest to many of my hon. Friends. I congratulate him also on his truly superb speech, which has put the issue in context. He is right to draw attention to the fact that no Conservative Members are present to discuss an issue that affects 600,000 people in the short term, and possibly 2 million more. Perhaps it is a measure of the Conservatives' guilt, or their lack of concern for the many innocent people who were duped as a result of legislation introduced by the previous Government.
My hon. Friend is right: the previous Government created a climate in which it was acceptable to rip people off by selling pension products. He is right to draw attention to the expensive advertising campaigns that were launched. He is correct also to draw attention to the previous Government's almost complete inaction when the scale of the problem became obvious.
My right hon. and hon. Friends are concerned about this matter because many people visit our constituency advice offices as a consequence of pension mis-selling. Some of the cases are horrendous. There are many widows of miners in my constituency, and it is heartbreaking trying to deal with the consequences caused by the mis-selling of pensions to their late husbands, who thought that they were providing well for their wives, but who, through no fault of their own, have left them in penury.
I turn to the actions of the new Government since our election on 1 May. With the encouragement of the Chancellor of the Exchequer—who also represents a mining area and whose constituency, like those of many of my hon. Friends, comprises many public sector employees—I called a meeting of the 24 worst-performing companies in an attempt to resolve the pension mis-selling problem. My main priority was to get them to act on the 600,000 priority cases involving people who are at or near retirement.
Some 24 people met me at the Treasury, and I could see from the looks on some faces that it had only just dawned on them that the problem affects real people, is causing real anger in the country and is affecting the reputation of a very valuable sector of the British economy. It is deplorable that a key high-performing, high-profit industry should have an appalling reputation that rivals that of Arthur Daley as a result of pensions mis-selling. It is in the interests of the industry and of the people affected to resolve the matter.
I challenged those companies to come to me within a month with details of how they intended to handle the cases, and I undertook to publish every month the details
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of their progress. I did not take such action in order to name and shame, as the newspapers have claimed, but because the people affected have a right to know that their Government are as concerned and as horrified about the problem as they are.
When I published the first results of the inquiry at the beginning of this month in answer to my hon. Friend the Member for East Ham (Mr. Timms), I was horrified. The situation is worse than even I had expected. There is nothing to be gained by condemning the companies involved: they stand condemned by their own actions. I am anxious to ensure that people get redress quickly. I say to those companies—through you, Mr. Deputy Speaker—that it is not acceptable to take short cuts that result in people being worse off at the end of the process than at the beginning.
I am worried by reports from some of my hon. Friends that some individuals are being put under unacceptable pressure to settle by companies that mis-sold them pensions as a means of improving their statistics in the returns that I am asking for. I am not prepared to be hoodwinked by such action. I know that responsible companies will be appalled that that is going on.
I am aware that companies are experiencing some difficulties. I have made it clear that, if they come to me with their difficulties and if they stand up to investigation, I shall be happy to act. If necessary, my hon. Friend the Minister for Welfare Reform and I will talk to small and large companies in difficulty. I have asked those of my right hon. and hon. Friends whose ministerial responsibilities relate to pensions to ensure that pension funds in their areas are diligent in settling cases.
I accept the point that the insurance companies made to my hon. Friend the Member for Edmonton. I am tired of excuses, but I shall take action if excuses are justified.
I understand that discussions are going ahead on the slowness of the regulatory authorities in dealing with special schemes to settle. The regulators are in no doubt about my determination to resolve the issue.
I have nothing to gain from criticising the regulators. We have to work together to resolve the issue. I am sure that those in this House and further afield will not miss the fact that one of this Government's early acts was to announce our determination to review and reform financial services regulation.
My hon. Friend has asked what further action I shall take. He has made several excellent suggestions, which I shall consider. I shall not go into detail, and I am sure that my hon. Friend will understand why. In the autumn, I must decide what further action I must take to ensure the swiftest possible progress on the issue. I shall rule nothing out. That means that I shall take account of the powers I already have, and if new powers are required, I shall not hesitate to seek a means of acquiring them.
My hon. Friend is right to raise the question of independent financial advisers. They have managed to escape the main brunt of the Government's criticism—not because we are lax on them, but because there are 6,000 of them and we are currently researching their performance. I am largely appalled by the stories that I have heard from that sector as well. There is a need for better training and better standards. My hon. Friend is right to point to the plans that we are likely to have for the future of pensions. We shall bear in mind our

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experience in resolving the mis-selling of pensions when we look to the future. My hon. Friend is also right to make the case for transparency.
My hon. Friend has given me an opportunity to tell the pensions industry that I want to co-operate with it to ensure that it gives people security well into the next century. The only way to secure that is by ensuring that we resolve this fiasco as quickly as possible. In the next few months, I shall encourage those of a younger generation who have bought personal pensions to check those products so that we can be sure that there is not a
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time bomb for the future, left to us by a previous Government who were more interested in a quick buck than in the well-being of the most vulnerable in our community.
I congratulate my hon. Friend again. He can be assured that the new Labour Government will do everything in our power to resolve the problem of the mis-selling of personal pensions.
Question put and agreed to.
Adjourned accordingly at seven minutes to Three o'clock.