FINANCIAL PROVISIONS

HC Deb 26 March 1998 vol 309 cc757-87

Amendments made: No. 103, in page 71, leave out lines 7 to 9.

No. 104, in page 71, leave out lines 13 and 14.

No. 05, in page 71, line 19, leave out from 'Ace to end of line 22 and insert '(apart from any required to be paid into the National Loans Fund).'. —[Mr. Jon Owen Jones.]

Order for Third Reading read.

8.1 pm

The Secretary of State for Wales (Mr. Ron Davies)

I beg to move, That the Bill be now read the Third time.

The Bill is a landmark piece of legislation. It is an integral part of the Government's long-overdue modernisation of the British constitution. It discharges both Labour's manifesto promises and our referendum mandate, giving Wales its first ever democratically elected and accountable Government.

Since last December, when I moved Second Reading, we have spent considerable time on the Floor of the House examining the Bill in detail. We have demonstrated that the Bill that we introduced was fundamentally sound, and that it was capable of significant improvement in its detail.

I and my colleagues have repeatedly emphasised that the assembly must adopt a new and more inclusive style of government. In that spirit, we have listened to the persuasive contributions from both sides of the House and from interests outside it. I thank right hon. and hon. Members for their role in scrutinising the Bill and thereby helping to make the assembly work.

I pay particular tribute to right hon. and hon. Members sitting below the Gangway on the Opposition Benches, from the Liberal Democrat party and Plaid Cymru, for their constructive role in examining the Bill. I also pay tribute to the Conservative party, because I understand that, as a result of our deliberations it has now accepted the Bill's legitimacy and will support it on Third Reading. That is a welcome development, and I am sure that, when the right hon. Member for Devizes (Mr. Ancram) replies, he will say that his party fully supports the principle of devolution.

The result of our deliberations is an improved Bill that reflects a wider range of interests and concerns than when it was introduced. I attach great importance to that.

Devolution is now becoming a reality. The Bill will mean that the people of Wales will have the assembly for which they voted and for which they have waited for a long time. There is a constructive spirit in Wales today that runs across the political spectrum. It is a mood which says that we must seize this opportunity to make absolutely sure that we are creating the best and most effective institution that we can. This is our one chance and we must work together to ensure its success. That is the feeling in Wales. That has also been the feeling in most—unfortunately not all—of our debates in this House.

Constitutional change is vital if we are to achieve constitutional stability. If the Union is to prosper, it will surely be on the basis of bringing government closer to the people whom it serves, not on the basis of an unbending and devoted reverence for constitutional traditions.

That approach lies at the heart of the Bill, as with the Government's other constitutional reform proposals. Our plans will extend to the assembly the trust and responsibility appropriate to a democratic body. If and when it makes mistakes, it will rightly be solely accountable to the Welsh electorate at the ballot box. In the long run, what results will be a system of government that better understands and responds to the wishes of the electorate. That is the essence of devolution, and if it is a constitutional novelty, it is none the worse for it.

We have heard much in our debates about the result of the referendum. I believe that it serves one vital purpose. It reminds us of the need, in establishing the assembly, to reach beyond the majority who voted yes to the substantial number of people in Wales who did not. That is what my right hon. Friend the Prime Minister pledged that we would do on 19 September and that is what we have done.

We have listened to what Opposition Members have said—for, example, in relation to the Cabinet system. We have listened to what the national assembly advisory group said about the advantages of a Cabinet system for the assembly. We have listened to what the CBI said about consultation with business in Wales. We have also listened to what environmentalists have said about sustainable development. In each case, and in others like them, we have acted to amend the Bill.

I freely admit the importance of a listening and responsive Government. This is unusually complex and wide—ranging legislation, and it is vital that the assembly carries with it the support of all interests and opinions in Wales if it is to represent them properly. We need to get the detail right now, both in the Bill and through the advisory group, which is doing sterling work on the assembly's internal procedures.

The Bill's principles are clear. Wales needs and deserves its own form of government, reflecting its own particular demands, and the Bill delivers that. The Bill's progress through the House has allowed us to take into account many valid points from hon. Members on both sides of the House, and elsewhere. It has allowed us to clarify points of doubt and to lay to rest concerns and misapprehensions.

What we now have is a Bill that delivers what the people of Wales want in a way that will best ensure that their needs are properly and fully represented. It is a good Bill, and I commend it to the House.

8.6 pm

Mr. Ancram

This major constitutional Bill is coming to the end of its journey through the House before it moves on to another place, and I have to agree that it will fundamentally alter the constitutional landscape of Wales.

I fear that, despite the Secretary of State's enthusiasm for the Bill, it has not exactly fired the imagination of the Welsh public or their journalistic representatives. Each day, I have opened the Welsh newspapers to read the Secretary of State's pearls of wisdom, but I have yet to find them. If the Bill is landmark legislation, it is rather surprising that only half the right hon. Gentleman's supporters from Wales have bothered to turn out on the Benches behind him tonight.

I begin by thanking you, Mr. Deputy Speaker, and your fellow members of the Chairmen's Panel, for the way in which you conducted the Bill's Committee stage on the Floor of the House. We are grateful to you for the courtesy and firmness with which you dealt with all our problems. I ask you to pass on our thanks to your colleagues and to the Clerks of the House for the help and advice that they have given us during the course of the legislation. Once again, we are grateful to them.

I should also have liked to thank Ministers, but I fear that I have little to thank them for. I do not think that I have ever come across anyone with such an obstinate, intransigent belief in the infallibility of their draftsmen. Even where there have been clauses which Labour Members have told them are wrong, they have simply not been prepared to move on them, as we saw a moment ago on amendment No. 21. They have been a strange mixture—a version of the three wise monkeys who could see no evil, hear no evil, speak no evil about their Bill, with the posture of the school playground bully, who takes all criticism personally and regards any admission that he might have been wrong as somehow a weakening of his virility.

I should like to award one or two points. For charm, to the hon. Member for Bridgend (Mr. Griffiths), I give five points; to the hon. Member for Neath (Mr. Hain) I give two points; and to the Secretary of State, as the Prime Minister might say, I give "nul points". For response to the arguments that have been put forward, to the hon. Member for Bridgend I give one point—he has listened to some of the points that we have made; to the hon. Member for Neath I give no points whatever; and to the Secretary of State I give almost one point as a result of yesterday's debate—unfortunately, he blew it.

Mr. Dalyell

For charm, how many points is the right hon. Gentleman awarding himself?

Mr. Ancram

The first time that I came across the hon. Gentleman was when I fought him in his then constituency of West Lothian in 1970. I was 24 years old and he was a little older. I remember that, when I sought to shake hands with him during the course of the campaign, he looked at me carefully and said, "I never shake hands with my opponents until after the votes are counted." So I have always taken a lesson from him in respect of charm.

We almost made progress on the experiment of an agreed programme, until, much to my regret, the Government cynically hijacked the time that we could spend on Report and refused to make up that time, thereby breaching the spirit of the agreed programme. They have thus added considerably to the work load that will have to be undertaken in another place.

We also nearly made progress on the Cabinet structure. We moved the Government from a position of "won't" at the beginning of our proceedings, to a position of "will" some 10 days ago when they announced that they would adopt such a structure, to a position of "possibly, if that is what the assembly wants" when we started the debate on it yesterday, to what I understood at the end to be a system consisting of partly Cabinet and partly Committee, if that is what turns out to be popular. It was another example from the Secretary of State of leadership by dithering indecision. That characteristic has become fairly familiar to us in this devolution process, not least in respect of deciding where the assembly will eventually find its home.

We approach the Bill on the basis that the principle of establishing an assembly in Wales was confirmed by the Second Reading vote. As hon. Members know, the referendum was indecisive. It was conducted on a small proportion of the poll and the majority was very small. However, as constitutional democrats, we accept that the Second Reading vote established the principle of an assembly. We did not like the form of the proposed assembly in the Bill. We were aware of the fears expressed by the Welsh people through the votes that they cast in the referendum. We sought constructively to amend the Bill and I must admit that we have pretty well failed. We are now saying a temporary farewell to an unsatisfactory scheme and a deeply flawed piece of legislation, which does not bode well for the National Assembly for Wales.

I was amazed to read that, on Monday, the Secretary of State went to Belfast to tell Northern Ireland politicians how to do it.

Mr. John Smith

That is a outrageous assertion.

Mr. Ancram

The right hon. Gentleman went to Belfast on Monday, having told the Western Mail that he was going, to explain to Northern Ireland politicians what they could learn from his experience. I know a little about Northern Ireland. Northern Ireland needs institutions that unite rather than divide; schemes that protect minority rights; financial security; strong representation in both the United Kingdom and Europe; and certainty rather than doubt. So, in different ways, does Wales. On Monday, the Secretary of State told Northern Ireland politicians about a scheme that fails on all those requirements.

Far from learning from the divided nature of the referendum result, the Bill creates an assembly that will entrench regional division in Wales and do nothing to help the north in relation to the south, or the east in relation to the west. The Government studiously refused to accept any measure that could protect permanent minorities. Indeed, they dismissed with disdain amendments that would have introduced safeguards of the sort that will almost certainly be in any scheme that comes out of Northern Ireland.

Mr. Hain

The comments that the right hon. Gentleman has made in the past few minutes are extremely degrading and not worthy of him. My right hon. Friend was invited to Northern Ireland by those seeking peace there—an objective that the right hon. Gentleman should support. My right hon. Friend was asked to talk to participants in the peace process and everyone concerned regarded his contribution as very valuable. The right hon. Gentleman should withdraw his dishonourable remarks.

Mr. Ancram

I am merely making the point that, if we are to find a solution to the problems in Northern Ireland, the same devolution requirements apply throughout the United Kingdom. One of the Bill's fundamental flaws is that it fails in the requirements that I set out. I said that it fails to provide assurance to those who fear divisions within Wales, and gives no assurance on financial security or the provision of finance. The right hon. Gentleman dismisses attempts to insert references to relative need in the Bill, despite the fact that Wales would have benefited from those. The Bill asks Wales to rely on unenforceable and valueless concordats, which we learnt last night can be breached unilaterally. It rests its case on the argument that nothing has changed when the whole point about devolution is that things have changed, and in future there will be not one unitary Government but two Administrations—one in Cardiff and one in London.

I find it strange that, at the same time as assurances on finance in Wales are given, we get a nod and a wink to England that, in time, the Barnett formula will be changed. My hon. Friend the Member for North Essex (Mr. Jenkin) received a letter from the Home Office about the Referendum (English Parliament) Bill. The letter was originally sent to the hon. Member for Linlithgow (Mr. Dalyell). To my surprise, the letter does not say that there will be no review of the Barnett formula, which was our understanding during the course of this Bill, but says that the Government see no case for reviewing … the Barnett formula now. The word "now" is underlined. That type of nod and wink to the English, contrary to the assurances given to the Welsh people, who have been given no statutory provision for financial security, is totally unsatisfactory and a flaw in the Bill.

Mr. Öpik

Would the right hon. Gentleman entertain the possibility that, far from being an objective analysis of what we have spent so much time debating, his assessment simply belies the Jurassic non-acceptance of the importance of devolution to Wales? It is because we have done something of great significance within the United Kingdom—and done it very effectively—that the Secretary of State's visit to Northern Ireland was of such interest to the people of Northern Ireland and such a great success in sharing valuable and constructive experience from this Chamber with those seeking to do something similar in Northern Ireland.

Mr. Ancram

I give the hon. Gentleman seven points for charm but 10 points for fantasy in respect of how he has dealt with the Bill.

Mr. John Smith

I understand why the right hon. Gentleman wants to make speedy progress, but in respect of the deplorable remarks that he made earlier, will he now say for the record that he was not trying to compare divisions in Wales with the tragic religious divisions that exist in Northern Ireland?

Mr. Ancram

The hon. Gentleman will remember that, when I raised the subject of Northern Ireland at the beginning of our proceedings, I was told that the subject was not applicable and that I should not refer to it in the context of this legislation. I am perfectly entitled to point out that the Secretary of State went to Northern Ireland, publicly and with a great deal of fanfare, to talk to politicians there about the experience of this Bill. I set out four requirements: the need to unite; the need to protect minority rights; the need for financial security and strong representation in Europe; and the need for certainty rather than doubt. Those are requirements for Wales as well, and if the hon. Gentleman says that they are not, he is doing his constituents a disservice.

Mr. Flynn

I am grateful to the right hon. Gentleman for giving way, but what shocks us about his grotesque remarks is the contrast between the way in which the Conservative party ran Wales—despite holding only a handful of seats, it insisted on exercising power not only through national institutions, but through the quangocracy that it created in Wales—and the essence of the Bill, which will spread power throughout every corner, every community and every political party in Wales through a strong element of proportional representation. The Bill is not a grab for power, which the Labour party has traditionally held in Wales with a democratic mandate, but an attempt to spread power—the reverse of what the right hon. Gentleman claims.

Mr. Ancram

The hon. Gentleman has not been a great attender of the debates, and obviously did not hear those on concordats and the other unsatisfactory ways in which the Bill will be applied in Wales.

I shall continue to describe the Bill's fundamental flaws, because before it leaves the House people must understand that it is not the great and glorious project that the Secretary of State says it is. There is no reassurance on Europe and nothing in the Bill even remotely suggests that Wales will have a continuing voice in the Councils of the European Union. Even the pathetic words "may assist", which appear in the Scotland Bill, have not been used. All that we are promised are concordats, but we learned last night that they are not worth the paper that they are written on; indeed, if they are worth the paper that they are written on, they are not democratically accountable to the House or to the assembly. Concordats are an unsatisfactory way of dealing with the European interest.

Mr. Ieuan Wyn Jones (Ynys Môn)

The right hon. Gentleman referred to a continuing voice for Wales in Europe. What voice did Wales have during 18 years of Conservative rule, and exactly how many times did Conservative Secretaries of State for Wales deign to visit Brussels?

Mr. Ancram

The hon. Gentleman makes a valid point: I tabled a question to hon. Member for Bridgend, asking when he was next attending the European Council of Ministers; he will attend next week. That facility exists, but it will no longer exist after the Bill has been enacted. The interests of farmers in Wales, who are in crisis at the moment, will suffer as a result, which is another fundamental flaw in the Bill.

The Bill offers no reassurance on the means of avoiding the marginalisation of Wales within the United Kingdom and does not set out a role for the Secretary of State for Wales. It does not even suggest that the term "Secretary of State" refers to the Secretary of State for Wales. There is every possibility that the role of the Secretary of State will be reduced to what it once was, when a junior Home Office Minister dealt with the interests of Wales.

The Bill offers no assurance on a role for Welsh MPs in the House. We understand that the Grand Committee will wither on the branch and, if rulings from "Erskine May" on previous efforts at devolution are correct, so will Welsh questions. Ministers have rejected our attempts to give Welsh MPs a real role in co-ordination with the assembly; indeed, we tried to add to the Bill a mild clause reminding us of the sovereignty of Westminster, but it was rejected despite the patent inclusion of a similar clause in the Scotland Bill.

On those counts, we have received no reassurance, which I believe is bad for Wales. On top of that, there is uncertainty about what functions and powers will be transferred to the assembly and how; uncertainty about the effects of cross-border authority on the rights of the individuals affected; uncertainty about abuses that could arise out of the electoral system; and uncertainty about how disputes arising out of devolution issues will be resolved. At the end of yesterday's debate, we faced further uncertainty about whether the assembly will have a Cabinet structure or a Committee structure.

That uncertainty is dangerous, because it could give rise to conflict. The failure to provide reassurance on those uncertainties could create a focus for misunderstanding and resentment between Cardiff and London. There has already been conflict between the chairman of Cardiff county council and the Secretary of State about the assembly's location. We are in danger of setting Welsh people against Welsh people, and Welsh people against English people. Such conflict will serve only those whose interest is even greater division in the United Kingdom.

The voices of the people of Wales, as expressed in the divided and indecisive referendum in September, have been cynically disregarded by the Government. The people of Wales will have noticed that. The Bill is deeply flawed; it started out a mess and, because of the obstinacy of the Secretary of State, it goes to the other place a mess. It weakens rather than strengthens the chances of stable devolution in Wales, and answers none of the fears and doubts expressed in the referendum result. If anything, it has created greater doubts, greater uncertainties and greater causes for fear.

The Bill will set up an assembly that does not know where it is going, whether it will have a Cabinet or a Committee structure, what powers it will have, what will be its relationship to the United Kingdom and Europe or what money it will have. The assembly is a ship without a mast, without a compass, without an engine and without a rudder. It is also full of leaks.

The assembly in its present form does no service to Wales. We have tried to rectify the faults before the ship is launched, and before it meets the storms into which it will inevitably run. The other place will have to do that work for us. I only hope that it is more successful.

Wales can and must have a brave and bright future, within itself and within the United Kingdom. To give Wales such a future is our unflinching aim, and we shall never give up.

8.26 pm

Mr. Denzil Davies

I shall be brief, because we have had lengthy debates in Committee and on Report and many of my hon. Friends want to contribute.

My right hon. Friend the Secretary of State has rightly sought constitutional change that contributes to constitutional stability. None of us can foresee whether that will happen, because it is in the hands of forces outside our control and outside the technicalities of the Bill, but we hope that it will.

Those of us who have thought that the British state was overcentralised have always supported decentralisation. The worry has always been that this asymmetrical form of decentralisation may create instability: the Scottish Parliament will have legislative powers and some taxation powers; the Welsh assembly will be executive, but not legislative; and there is little or nothing for England yet, and there may not be for a long time.

Some of my hon. Friends have visited Catalonia—indeed, debates sometimes sound almost like a homage to Catalonia—and others have referred to the German Lander. Devolution in Spain is more symmetrical, but I suspect that constitutional settlements were reached in those countries. My worry has been that we do not have a constitutional settlement that covers the whole of Britain. I shall leave Northern Ireland aside, and shall not venture to deal with that difficult issue.

Will constitutional change create constitutional stability? I am worried about three matters, the first of which is the financial and budgetary stability, or lack of it, that may be created by the failure to entrench the Barnett formula in legislation. Many of my hon. Friends have expressed concern, and I suspect that most hon. Members are also worried about the issue. There is not a majority for a specific scheme and it is not easy to see how the problem can be solved. I should have preferred entrenchment in legislation, than to leave the matter as it is. There is a danger of future instability in the relationship between Her Majesty's Treasury and the Welsh assembly if the Barnett formula is merely an expression of intention.

The second concern is with the transfer of power. The Secretary of State said that devolution was a process.

Mr. Dafydd Wigley (Caernarfon)

indicated assent.

Mr. Davies

The right hon. Gentleman shows that he is pleased about that.

The danger is that a process may go on and on, which would create instability. Nothing can be written in stone, but if powers can be transferred by order from the Home Office, the Department of Social Security or other Departments after a debate lasting only an hour and a half, cries may come from the assembly and from some right hon. and hon. Members for more powers to be transferred simply by order. The English may want to flex their muscles and may be happy to make orders to hand over more and more powers to the Welsh assembly. Perhaps the right hon. Member for Caernarfon (Mr. Wigley) assumes that the English will resist every transfer of power from the British Parliament to the Welsh assembly.

There should be a slowdown in the process, in the interests of stability and of the Welsh assembly. The assembly will have enough to do: it is a new body, and its work will not be easy. If there are constant calls for more powers to be transferred, that will destabilise the assembly and its relationship with the British Parliament and Government.

The third concern is with the relationship between the assembly and Whitehall. The concordats are an heroic attempt by my right hon. Friend to solve the problems and to enable the assembly paradoxically to stick close to nurse. I suspect that nurse will move on and will not be very interested in this child once the devolution process has begun.

We have not had satisfactory answers on Europe: perhaps there are none. We have not had satisfactory answers on how Wales will relate to Europe and on bargaining in the Council of Ministers. It is an extremely difficult time for Welsh agriculture. The common agricultural policy will have to change, with what consequences we know not. It is a difficult time for the structural funds. However strongly my hon. Friends in the Welsh Office argue to maintain the present position, it cannot be maintained, given the enlargement of the European Union towards the east and away from the countries on the western periphery.

The essence of devolution is that we should not be at the centre. We have not worked out the relationship between the Welsh assembly and the Council of Ministers, the Agriculture Council, the structural funds and the Department of Trade and Industry. Perhaps those problems cannot be resolved. I believe that Wales's position in Europe will be much weaker as a result of these proposals. That may be an inevitable consequence of devolution, but it is a bad one.

The well-being of the assembly and of Wales will depend on the Welsh economy. I am sorry to say that the assembly will be peripheral to the Welsh economy, because the £7 billion will be a social budget. The assembly may bite the bullet and divert to economic matters the funds that currently go to local government, education, health and other worthy causes. I would not criticise the assembly if it did not do so, because it would cause a political row and a political clamour.

The assembly will not be an economic powerhouse, nor will the Welsh Development Agency. The assembly's functions will be peripheral to the Welsh economy, which will face considerable difficulties. Sadly and unfortunately, we have the lowest gross domestic product per head in Britain. We have a far too heavy dependency on public expenditure. There is a massive transfer of funds from the Treasury. Let us not be romantic about this: those funds come from England. They will be topped up with funds from the European Union, which will possibly dwindle over the next five years. That is the reality of the Welsh economy, and the assembly will have great difficulty operating in that climate. The European Union and the European currency will exert pressure that will lower wages in Europe. That will depress further our GDP.

I hope that the assembly works well. It should concentrate on its tasks and should not try to do too much. I hope that, in a spirit of inclusiveness, all the Members of the Assembly accept it as it is and do not try to make political points and to use it for the purposes of separation. If there is a spirit of inclusiveness, the assembly will do a good job for the people of Wales. I hope also that it will preserve and enhance the Welsh identity in a changing global economy.

8.36 pm

Mr. Wigley

I am glad to follow the right hon. Member for Llanelli (Mr. Davies). I noted his emphasis on inclusiveness. I listened to his significant contribution in Committee and on Report, but I was not always sure that he took an inclusive approach to the assembly. The right hon. Gentleman and I shared platforms during the referendum campaign in 1979. I remember his enthusiasm for the cause of an elected assembly or Parliament for Wales. When he looks back on his contribution to the debate in recent weeks, and when he sees how the assembly is working in practice, I hope that he will not be tempted to say that he warned us that this or that was wrong. I hope that those of us who aspire to being Members of the Assembly and those of us in Westminster who watch the assembly as it develops can unite in our determination to ensure that it works.

This is an historic day for Wales, although the assembly offers significantly less than my party wanted. That does not make the assembly not worth having: it is worth having for what it is. We shall play our part positively and constructively to the extent that we are elected. We have every intention of making the assembly work for Wales, notwithstanding the fact that it will not have all the powers that we believe are necessary to get the best deal possible for Wales. If weaknesses come to light, we shall of course argue for the assembly to have powers to deal with them.

I listened to the right hon. Member for Devizes (Mr. Ancram) with interest. The signals which we have received suggest that the Conservative party will not oppose the Third Reading. If so, I hope that it does that in a genuine spirit of acceptance. A decision has been taken and the people of Wales will have a national assembly, even though the Conservative party felt that it was not appropriate. The leader of the Conservative party gave the impression that the intention was to accept the decision and to build on it constructively. I see those on the Opposition Front Bench nodding in agreement. However, having listened to the debates last night, and during the past two or three weeks, it is difficult to believe that that was their positive intention.

Mr. Jenkin

That is the right hon. Gentleman's opinion.

Mr. Wigley

Yes. It is my opinion, and I have the right to express it in the House. If Conservative Members genuinely wanted an elected tier of democracy in Wales, they would have tabled positive amendments—here or in another place—to address the weaknesses in the Bill. With respect, the amendments that we discussed between 11 pm and midnight last night were totally spurious. I accept that the hon. Member for Ribble Valley (Mr. Evans) opened the debate in a perfectly reasonable way, but then we heard a cascade of arguments that did no justice to the cause that he might have been trying to advance.

Mr. Ancram

I am grateful to the right hon. Gentleman for giving way. It is important to put it on record that, on the two major flaws in the Bill which I identified—the first in relation to Europe and the second in relation to finance—we tabled an amendment to ensure that there was a voice for Wales in Europe and another in respect of the relative need to protect the position of Wales. In both cases, we were turned down by the Government.

I hope that the right hon. Gentleman will agree that we made constructive attempts to amend the Bill in a good way.

Mr. Wigley

Some of the proposed amendments would have been helpful. The Government took on board the point that was made in the context of Cabinet provision and acted on it. Had there been more such proposals with a positive intention, the debate would have been improved. Be that as it may, there will be further opportunity in another place.

If the Conservatives are looking for a symmetrical model that is more stable and accept that there will be an assembly for Wales, a Scottish Parliament and a regional tier of government in London—they advocate that there should also be an elected assembly for Northern Ireland with law-making powers—I look forward to hearing about the balanced platform that they propose to provide that symmetry and stability for the future. As yet, they made no such proposal. I do not criticise them for that, as they may be in transition. However, if it is a journey of transition, perhaps they should have held some of their fire, rather than re-running the referendum campaign and divisive issues time after time. The right hon. Member for Devizes referred to division and fear and undermined the issues.

Wales needs a new confidence to take the opportunity that the national assembly provides, albeit to a limited extent. It needs confidence not just in political terms but in economic terms, to enable the people of Wales—particularly young people—to take responsibility on their own shoulders, instead of complaining for ever and a day that London has not done this or Brussels has not done that. We need to start doing things for ourselves. In political terms, the assembly encourages us to take responsibility for our own communities.

Of course there will be difficulties ahead. The assembly will have neither the power nor the resources to solve problems overnight. Some problems may not be soluble even in the longer term, but at least if we make mistakes within the limited capacity that we are allowed, we will be making them ourselves and we will have to live with the consequences.

I hope that it is a process that, over time, will strengthen the national assembly which is established by the Bill. As hon. Members no doubt understand, although some may disagree, I should like the assembly to have primary law-making powers. The Bill provides for a secondary law-making function and a limited right to amend primary legislation. It is nonsense that the national assembly will not have a legislative role in respect of issues such as local government in Wales, the Welsh language and education, where legislation deals exclusively or in part with Wales. In seeking the symmetry and the stability to which reference has been made, and given that Scotland and Northern Ireland will have those powers, at some point Labour Members and even some more enlightened Opposition Members may address that issue.

As the right hon. Member for Llanelli said, there is also a weakness in the Bill, which we may not be able to correct through legislation, in respect of the links with Europe. We had assurances on the publication of the White Paper, during the referendum campaign and thereafter that there would be a link between the national assembly and European institutions and that the Assembly First Secretary would have the right to participate in the Council of Ministers as part of a United Kingdom ministerial team when relevant matters such as agriculture were discussed. Of course that is a step forward.

As my hon. Friend the Member for Ynys MÖn (Mr. Jones) pointed out in an intervention, during 18 long years under the Conservatives, how many times did a Secretary of State go to Brussels to argue the case for Wales? I am not aware of a Secretary of State for Wales having addressed the Council of Ministers, although I remember an Under-Secretary going there once. Now at least there will be an opportunity for the assembly to have a role, but that is not enshrined in the Bill. Therefore, we are dependent on the assurances which have been given. I assume that those assurances still hold good, as they are extremely important.

Likewise, in respect of representation at an administrative level, there should be a senior civil servant in the United Kingdom permanent representation office scrutinising working papers from the Commission before they are finalised so that the needs of Wales can be transmitted. The United Kingdom permanent representation office has said to Wales and Scotland that it is more than happy to facilitate that worthwhile step forward.

Mr. Ancram

The right hon. Gentleman is referring to a point that is central to the working of devolution without being a matter of conflict and resentment. He has referred to what he hopes will happen, but does he agree that this should be in the Bill?

Mr. Wigley

I would have been very much happier had our amendment on the issue been debated on Report. I accept that entirely and I hope that the other place will return to the issue. The question is whether it is possible to write those mechanistic provisions into legislation. Provided that there is a declaration of intent from the present Government, who will remain in office for another four years and perhaps longer—only time will tell—and the Conservatives accept that it is a reasonable way of working, at least we will have some assurance from Westminster of good will towards that procedure. I am sure that the national assembly in Wales and the Scottish Parliament will wish to avail themselves of those opportunities.

Mr. Dalyell

I seek clarification, as I may have misinterpreted the right hon. Gentleman. Did he say that, on some occasions, a representative from the Welsh assembly should speak in Brussels on behalf of the United Kingdom?

Mr. Wigley

Yes. I believe that should be the case. However, as that would be under the umbrella of the United Kingdom representation at the Council of Ministers, it would have to be with the agreement and consent of those leading the United Kingdom team. That is not altogether new, and I am glad to see the Secretary of State nodding in agreement. I recall the Secretary of State for Scotland taking the United Kingdom seat in the Council of Ministers at the fisheries meeting, although I accept that he did so as a United Kingdom Minister.

We seek the right to have a voice in Europe. If Scotland in the context of its Parliament, or Wales in the context of our national assembly, considers that a dimension is overwhelmingly significant to Wales or Scotland and may not be so significant to the United Kingdom, a representative from the Scottish Parliament or the Welsh national assembly should have the opportunity to express a view from within the United Kingdom team.

The hon. Member for Linlithgow (Mr. Dalyell) has maintained a very assiduous presence at our debates and, although we disagree, I certainly salute him for that. If he is saying that we should not have an opportunity to have that voice, he is doing no service to Scotland or Wales. Whether or not he agrees that there should be a Scottish Parliament and a Welsh assembly, if they articulate the wishes and hopes of Scotland and Wales respectively, that channel should be facilitated. If it is not, the tensions and disagreements about which he warned the House will arise. The channel will at least ensure that the message can get through.

Mr. Jenkin

Does the right hon. Gentleman believe that the elected mayor of London should be afforded a similar facility? After all, he will represent an electorate of 8 million people.

Mr. Wigley

I would not for a moment deem to speak for the good people of London, but I have not yet heard them aspire to national status—perhaps that will come in due course.

As for Wales and Scotland, the interface with the European Union currently exists through the Welsh and Scottish Offices. Vital decisions are taken in Europe. Only this week, we have been talking about the effect of structural funds on Wales. I have no doubt that the assembly will want to have an opportunity at least to influence such decisions.

Equally important, as I said, the assembly will want to have a voice in the UKREP office; I think that the Secretary of State has said the Bill could enable someone from the National Assembly for Wales to be linked with that office. The right hon. Member for Llanelli mentioned Catalonia. I know from meeting members of the Catalan permanent office that the benefits of its presence in Brussels really came to bear fruit when it started to see the working papers before they were finalised.

The lack of flexibility to vary finance will be a serious problem. I know that this question was not put in the referendum, but I believe that such flexibility should exist in due course. If parish and county councils can vary finances, surely a national assembly should have some freedom to make financial decisions.

I hope that there will be an opportunity in the other place—there was not one here—to discuss an amendment relating to the additionality of European funds. It is vital that funds from Europe reach Wales and are spent as they were intended to be, and that they are not purloined by the Treasury in London. I have no doubt that the National Assembly for Wales, like the Scottish Parliament, will keep a close eye on that.

The argument for an elected all-Wales tier of democracy has continued for 100 years and more, during which time we have been warned that all sorts of bad things would happen if we took decisions for ourselves on an all-Wales basis—it would be the end of civilisation as we knew it. The same warnings were given a century ago in the context of the disestablishment of the Church in Wales—we were told that it would be the end of Christianity in Wales.

When the Church was disestablished, however, people asked what the fuss was about; they carried on living perfectly reasonably with the Church. The original leader of the campaign against disestablishment became the first Archbishop of Wales—he was, I think, the grandfather of a previous Secretary of State for Wales, Nicholas Edwards, who used to be the hon. Member for Pembroke.

I believe that that will be our experience of the national assembly. In five or 10 years, people will be asking what all the fuss was about from those fighting a rearguard action. The establishment of the assembly will be the start of a process which must go further, but today we are taking an historic step down that road—we are determined to make it work.

8.52 pm

Mr. Rowlands

Devolution is about democracy and the democratisation of many aspects of our public administration and public life. I believe that the Bill will achieve its purpose and meet the democratic deficit that has grown up over the past 30 years in Wales. That is why I have supported the principle of devolution.

It is important to make it clear that the Bill will democratise many of our decision-making processes in key areas of our life. The danger is that people will believe that the process that has been initiated will do so much more than it was intended to do that they will become disillusioned—they will not realise that the Bill has enhanced democracy. A careful balance needs to be struck—that has been a vital aspect of our discussions.

As the right hon. Member for Caernarfon (Mr. Wigley) suggested, the path to devolution has been long, and many who have been down that path have argued that the Bill represents a natural continuation of a process that began at least 40 or 50 years ago, with the development of administrative devolution and then devolution of the political executive in the form of the Welsh Office and the Secretary of State for Wales.

For a large part of my political life, I believed that to be the case, but, as I have listened to and taken part in our debates—I think that I have been a reasonably assiduous attender—I have concluded that that is not a proper interpretation of what is happening. I no longer believe that the Bill represents a natural continuation; like my right hon. Friend the Secretary of State, I believe that it is a radical constitutional departure.

Because of the constant comparison with the Scotland Bill, the truly radical nature of the change on which we are embarking has unfortunately been masked. The Bill is a big constitutional step, which draws the line under the form of devolution that has been argued for during much of the past 40 and 50 years—devolution in the context of a Westminster-Whitehall structure.

Although I believe that the Bill will meet one of the fundamental purposes of devolution—the democratisation of Welsh administration and decision making—I also strongly believe that we have not yet come to terms with the British dimension of the process, which is another major factor in the radical change. That has struck me forcefully as I have listened to our debates—I have grown more and more concerned about the issue. I do not need to repeat the arguments of my right hon. Friend the Member for Llanelli (Mr. Davies), but I believe that, sooner or later, we shall have to return to the issue. As my right hon. Friend the Secretary of State said, this is a process, not an event. Therefore, the situation will not be stable, and there will be demands and pressures for further devolution. We must address the British dimension as well as our particular needs and wishes.

I am a proud Welshman and also a British politician. I believe in the democratisation of our national life, but I also profoundly believe in the House of Commons. The longer I have been here—perhaps it is a sad sign—the more I have grown to believe in it. One of the great achievements of the House of Commons has been to provide political stability when, in all other parts of western Europe, there has been, for one reason or another, an inability to sustain democracy. The House of Commons has sat every year since 1690—no other assembly, Parliament, Cortes or Reichstag can make such a claim. We have managed to devise, in a curiously British way, an incredible political stability, which has enabled us to fight wars and raise taxes with public consent. That is the curious—I shall not say "magic"—quality and alchemy of the British Parliament.

The die has been cast and we shall try to make our Welsh assembly and the democratisation of Welsh public life work in every possible way. However, I believe that we must also ensure that the British system continues to work, because of the role it has played in providing stability not only for England, for Scotland or for Wales but for us all. I believe strongly that those fine distinctions are not just marginal issues. As we have discussed concordats, the future role of Secretaries of State and the link between the assembly and Westminster and Whitehall, I have been concerned that we have not devised a proper, effective and stable relationship for the future link between a British Whitehall, a British Government and our own assembly and democratic institutions in Wales. That is the other big project which has to be undertaken.

In a very personal way, I have been wondering what I should recommend to my sons or daughter, or perhaps my grandchildren, whenever they arrive, should they want to pursue the privilege of being an elected representative. Where should they go? I have reluctantly come to the conclusion that I would tell them to go either to the Welsh assembly or, sadly, to the European Parliament. That concerns me, not because I do not believe that those bodies have important functions, but because it is saying quietly to myself that we may have done a certain amount of damage to the role and importance of this place.

I came here 30 years ago because I thought that, by doing so, I could help to change things. I still believe that, and I believe that we will also do that through the Welsh assembly. At the same time, I hope and believe that we will resolve the British-Welsh and British-Scottish relationship. In the next Parliament, if not in this one, that will have to be addressed.

I am sure that my right hon. and hon. Friends feel a sense of satisfaction at having overseen this entire project, through the referendum and its translation into a piece of landmark legislation. The majority of the people in Merthyr Tydfil and Rhymney voted for devolution in the referendum, and my votes have reflected and will continue to reflect the wishes of my constituents.

9.1 pm

Mr. Livsey

I congratulate the Secretary of State and his team, together with the civil servants, on the enormous amount of hard work they have put into preparing the Bill and seeing it through to its Third Reading. The fact that we have the Bill at all is a considerable achievement and is the result of the close co-operation of all those who want to see progressive government for Wales. In an historic context, the people of Wales have waited a long time for such legislation, and there have been many false dawns.

We can say proudly that the Liberals invented devolution, and we are glad that the Government have joined us in that crusade. Gladstone would be pleased, too, as we celebrate his centenary—he passed away in Hawarden in north-east Wales.

Those of us in Welsh politics who have long championed this cause are delighted to see the legislation reach this stage. As Liberal Democrats, we can say with honesty that the legislation is not entirely what we wanted, but it encapsulates many of the principles that we should like to see. We would have preferred a Parliament with legislative powers, the ability to vary taxation and to achieve elections by the single transferable vote system, to name but three of our aspirations, but the Bill is a definite step in the right direction.

The Government won a convincing victory in the general election, which gives considerable legitimacy to their proposals. I did not favour a referendum, but the Government made that decision and we were happy to join them and all those who supported the move towards an assembly. That was a combined effort, which we believe had considerable benefit for the future of politics in Wales.

It could be said that the referendum may have hamstrung the Government with some of the proposals that were based on the initial White Paper. We have seen the recasting of some of the issues raised in the White Paper in the light of our debates during the passage of the Bill, and that is how things should be.

In one sense, the Bill reinforces the control of Westminster over Wales, but it puts Wales into a far better democratic context than previously. As a federalist, I believe that many of the problems mentioned by the right hon. Member for Llanelli (Mr. Davies) and the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) about the British relationship could be overcome in that way.

The Bill outlines the boundaries of the assembly and its functions. Some might say that the legislation could have been more adventurous and given the assembly a sharper cutting edge. However, the Bill has been improved as a result of our debates, and the introduction of a Cabinet system will undoubtedly make the assembly much more effective than it would have been under the original drafting of the Bill.

There is still a great deal of scope for securing the rights of minorities in Wales. The electoral system and the introduction of closed lists in relation to the additional member system is unproven and may have to be revised in the future to introduce greater proportionality in the voting system. I owe a debt to my former colleague, Alex Carlile. In Committee, it was said that should the result of the assembly elections not be proportional, the electoral system would be reviewed before the second assembly elections take place. I am pleased that the Secretary of State has given us that assurance.

The fact that the assembly can deal only with secondary legislation means that its teeth are drawn on its effectiveness to carry out many important functions. That may need to be reformed in time. What will soon become apparent is what the assembly cannot do, as well as what it can do. I trust that the expectations and optimism in Wales, which are running high, will not be dashed in the light of cold experience. The assembly must be an effective body and we must not be afraid of improving it as years go by. I am sure that we will see it evolve meaningfully.

The need for all of Wales to be represented in the assembly means that a strong regional presence needs to be realised within the assembly's structure. We believe that that should be an essential part of the assembly. We must have the power to have influence from all parts of Wales, and to ensure that effective decision making takes place. The assembly must not be remote, but must be well informed of the needs of every corner of our country.

There are places in Wales that need special attention. Some of our more remote declining industrial valleys are in desperate need of attention. The rural areas of Wales are in a dire situation, and agriculture's current needs should be paramount.

We are on the verge of losing the bedrock of our rural economy and, indeed, of the possible flight of families from the land. The impact of that on the rural economy would be nothing short of devastating. Such is the urgency that action must be taken even before the assembly has started. Once the assembly commences, we will have to construct an integrated rural policy that will create balance in the rural economy and support business—whether it is in farming or in our rural towns and villages.

Relations with Europe and the European regions will have an increasing impact on how Wales is governed. We must be outward looking and benefit from the type of constructive, sustainable policy making that has strengthened so many other regions in the European Union.

We believe that the legislation will offer opportunities to all who live and work in Wales. The assembly must, first, boost work and wealth creation. Secondly, it will have to ensure that there is quality education and a high standard of skills training. Thirdly, it will have to deliver a first-class health service, and caring facilities combined with good housing. Fourthly, it will sponsor sport and the arts. Fifthly, and most important, it must encourage the younger generation to contribute and to get involved in the development of their own country.

The aim is to build a new Wales of which we can all be proud. We believe that this legislation gives us a really good chance to do just that. I say well done to everyone who has been involved positively in the Bill's passage.

9.8 pm

Mr. John Smith

Thank you, Mr. Deputy Speaker, for calling me in a truly historic debate, to speak to a truly historic Bill. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) said earlier that constitutional Bills such as this appear only once every 300 years or so. I therefore think that everyone in the Chamber should congratulate my right hon. Friend the Secretary of State. Hon. Members on both sides of the House have tended to forget just how difficult it is guide a constitutional Bill through the House. My right hon. Friend and his team have done a marvellous job, with support from most hon. Members—although it has been very grudging support from some hon. Members.

You, Mr. Deputy Speaker, can rest assured that tonight there will be a welcome for the Bill in the hillsides across Wales. I only hope that the Bill will receive an equally warm welcome in the Lobby and is passed with all-party support—to ensure that its passage through the other place is smooth and quick, and that what emerges from the other place is the fine Bill that we are debating.

We should pay tribute not only to our Ministers and hon. Members who spoke in our debates but to staff at the Welsh Office and the parliamentary draftsmen and Whitehall officials who have worked on the Bill. The Bill has 151 clauses, 15 schedules and 135 pages, compared with—in that fine Welsh tradition—only 116 Scottish clauses, eight Scottish schedules and 88 Scottish pages. Work on the Bill has been a tremendous task, and we should express our thanks to everyone who has contributed to it.

Mr. Dalyell

Are we to take it that the more the clauses, the better the Bill?

Mr. Smith

In Wales, that is certainly the fact. If my hon. Friend knew the country as well as we do, he would know why.

Our assembly will have so much to offer the country. To me and to most of my colleagues, the Bill is not a matter of draftsmanship or of constitutional niceties—although we realise that it must be properly done and provide the right framework to do the job—but a statement about Wales. It is a statement about our nation, and the confidence that we have in ourselves as a nation. Most important, it is a statement about our country's future identity.

On Second Reading, I raised three points, which I should like to reiterate quickly. The first was that the new assembly will have to provide a sufficiently flexible structure of payments, terms and conditions for assembly Members, to ensure that we attract the widest possible support across the country and include everyone. We can do that with a payment structure that is modest but accurately reflects the needs of the people. I am confident that the new assembly will do that.

Secondly, I mentioned establishing the right relationship between the assembly and business. That issue has been more than adequately covered in our debates, thanks partly to my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence). New clause 19, which was passed yesterday, will provide exactly the right

relationship for the future. Moreover, that new clause demonstrated the manner in which the Bill has been passed. The thinking on the Bill has not been rigid.

Mr. Jenkin

It is a mess.

Mr. Smith

Ministers have listened to the arguments, and they have made necessary, major changes to the Bill—not least on the framework for a Cabinet structure. [Interruption.] Ministers should be congratulated. It is outrageous that, even at this late stage, Opposition Front Benchers are still criticising.

I remember, earlier in the debate, warning the hon. Member for South Holland and The Deepings (Mr. Hayes) that some hon. Members should be careful about the unconstructive and negative role that they have played in the debate, because they will pay the price for it—the ultimate price. He said that if the price of their behaviour was unfortunate electoral consequences, so be it. I say, so be it.

Mr. Ancram

What other significant amendments have the Government made during the passage of the Bill?

Mr. Smith

If I had more time, I should be delighted to tell the right hon. Gentleman, but others want to speak.

My third point was about the location of the assembly. I felt that it was vital, largely because of the impact on business in Wales and the perception of Wales by businesses elsewhere, that the assembly was located in Cardiff. I did not express a preference for a building, but I am delighted that we are to have a new building in the capital city to house a new assembly for a new Wales.

The Bill will transform the image and identity of our country. There have been major changes in our country, and we have started to transform our economy, but, tragically, that is not recognised outside Wales. My right hon. Friend the Member for Llanelli (Mr. Davies) rightly said that gross domestic product per capita is slipping. We have to address that. The wage levels in manufacturing industry were the highest in the United Kingdom only 20 years ago—just before that shower on the other side took office—and they are now the lowest.

We must not talk down our nation. Wales is one of the motor regions of Europe. It is one of the most attractive locations for investment in the world. It offers a unique combination of competitive prices, an unparalleled quality of life and easy access to the central consumer markets of Europe. The assembly will work on that.

This is an historic occasion. I congratulate my right hon. and hon. Friends, and look forward to the Bill receiving Royal Assent.

9.17 pm

Mr. Paterson

I am conscious that others want to speak, so I shall be brief.

I am sad to have to be a Cassandra in this evening's euphoric atmosphere, but throughout our debates, I have been conscious of those who voted no and those who did not vote. Hon. Members have mentioned division. Wales is divided. There is no overwhelming enthusiasm for the project.

Last night, the Minister said that water does not flow neatly. People do not flow neatly; society does not flow neatly; economies do not flow neatly. The project is being driven through by the political class of Wales, which will gain enormously. It will not help the people I know in north-east Wales, who are very worried about the crisis in farming and about their businesses. The Bill has been driven through in the teeth of their apathy or their expressed opposition.

Mr. Öpik

Apathy?

Mr. Paterson

They were apathetic—and they still are. I talk to them whenever I am home at the weekends. There is no enthusiasm for a new Government agency in south Wales. Wales is still divided. North does not talk to south. The Bill will not heal those wounds.

Mr. Öpik

The hon. Gentleman is obviously jealous because the Welsh border is on the wrong side, to the west of his constituency rather than the east. Is he not highlighting the fundamental difference between the Conservative party and every other party represented here: the difference between being progressive and understanding the basis of devolution, and' being regressive and centralist and failing to understand the wonderful gift of autonomy that the Bill gives to Wales?

Mr. Paterson

Successful societies have fewer politicians and less government, bureaucracy and taxation. Sending one coachload of superannuated county councillors to an enormous and magnificent modern building three hours away in Cardiff will not solve the problems in north Wales.

Mr. Öpik

The hon. Gentleman says that Cardiff is three hours away, but will he acknowledge that it is only about 40 minutes away if one flies from Welshpool airport, for example, and that such infrastructure building, which will be facilitated by the creation of the assembly, would never happen if we had to depend on people such as him and his party in Westminster?

Mr. Paterson

The people I know in Welshpool and Oswestry have far better things to do than get in an aeroplane and fly down to Cardiff from Welshpool airport. That is a ludicrous suggestion, and shows how out of touch the hon. Gentleman is.

The Bill as it stands is flawed. The assembly was conceived to replace the executive functions of the Secretary of State, we went through a muddled phase when it appeared to be some sort of county council, and it is now emerging that there will be a flawed Cabinet system in which the assembly cannot claw back powers to make the Cabinet Committees accountable to itself.

The Bill has not been thought through. It is certainly not Madison and Hamilton working here. There have been muddle and fudge all along, and I foresee that the concordats that have been thrown in as a glue to make it stick together will come undone. They are not legally binding, and if they are, they are not democratically accountable.

Serious flaws in clauses have not been discussed properly. I bitterly resent the fudge that we had late last night. The cross-border issue is critical to all those who live along the border, but, because of the outrageous guillotine that was slammed on the legislation, I, as the representative of a border constituency, was not able to discuss it properly.

The Minister showed the most crass obtuseness in refusing to understand the point I made, that currently, as an English Member in a British Parliament, I can discuss matters that affect my constituents that have been decided by agencies in Wales, but that once the assembly is set up, my constituents' vote will have less value, because the assembly in Cardiff will be able to change education policies, for instance; that could affect children coming over the border to a school in my constituency, yet I will have no recourse to a democratic assembly. That is wrong, and— [Interruption.]Is this an intervention?

9.22 pm

Mr. Dalyell

This is not an intervention: it is a speech.

My right hon. Friend the Secretary of State was right graciously to pay tribute to those in the Conservative party, the Liberal Democrat party and Plaid Cymru who disagree with him, but there was a lacuna or black hole, in that he might also have paid tribute to my right hon. Friend the Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who have been here throughout our debates and made educative, witty and extremely pertinent contributions.

My right hon. Friend the Member for Llanelli said that the United Kingdom was being unbundled. That de-wiring and unbundling will be of great concern in time to come. I feel a bit of an intruder; I shall speak for only one minute more.

My hon. Friend the Member for Merthyr Tydfil and Rhymney referred to the British dimension. There will be great difficulty, and it will arise first on the question of money. If money is tight in the next two or three years, there will be trouble. If money is not tight, trouble may not arise for five or 10 years. But, sooner or later, discontented Members in Cardiff will attribute all that they have been unable to do in fulfilling expectations to the parsimonious Treasury in London. Therein lies trouble.

Having sat through all the debates, I notice that another question that has not been answered is to whom the civil service is to be loyal. A civil service cannot serve two masters. In debate after debate, it has been clear that we are seeing the break-up of the British civil service. When there is agreement, it is all right; when there is disagreement between two separate institutions, civil servants will be a little bewildered about where their loyalties lie. In that, there will enormous difficulty.

The issue of Catalonia has been raised throughout our debates. I understand that members of the Select Committee on Welsh Affairs went to Catalonia, and were extremely well received in Barcelona and by the Catalans. I am not in the least surprised by that, because the prosperous Catalans may like the set-up very much. I also understand that Committee members were less well received—to put it mildly—in Madrid. That I very much understand. The rest of Spain takes a rather different view of the set-up in Catalonia from that of the Catalans. Catalonia is at an advantage, because it is the economic powerhouse of Spain.

Mr. Martyn Jones (Clwyd, South)

Will my hon. Friend give way?

Mr. Dalyell

No, excuse me. I will not, due to lack of time.

I am concerned that, by our legislation, we do not inadvertently light the slow fuse of English nationalism.

9.26 pm

Mr. Desmond Swayne (New Forest, West)

The Secretary of State began the debate by saying that this measure was a landmark. The landmark to my mind is that, after all the many hours of discussion, we do not know precisely where the assembly will be. Many Welsh local authorities were led a merry dance on that. More importantly, we do not know what the assembly will be like. There was an extraordinary discussion late last night about whether there was to be a Cabinet structure, a Committee structure, or some combination of the two. It strikes me as extraordinary that we are still so imprecise about the very nature of the assembly that we are creating.

Another thing that strikes me as extraordinary is the democratic deficit, the lack of legitimacy, with which the assembly will begin its life. We had all those tired discussions about the poor nature of the response in the referendum, and the fact that people voted against the proposals. Our debates on regional aspects of the Committee structure showed that those points simply had not got home, and that there would be no direct redress of those fundamental areas of weakness.

The democratic deficit will persist and grow as a consequence of the extraordinary electoral system that has been chosen for the assembly. When we discussed the system in Committee, I pointed out that no one would understand the benefits of the system that owes so much to Mr. d'Hondt. The Minister replied that there was no requirement for voters to understand the electoral system. That is one of the fundamental weaknesses of the legislation.

The Prime Minister announced that, as a consequence of the rather tepid result of the referendum, great sensitivity would be shown as the measure proceeded. Despite the euphoria that has been evident tonight, Opposition Members are left wondering precisely of what that sensitivity consisted.

9.29 pm

Mr. Martyn Jones

1 for one welcome this historic Bill. Of the measures that I have seen come through the House, it alone justifies the 10 years that I have spent in this place. I admit to having taken little part in the Committee proceedings—not through lack of interest but because, like most of my colleagues, I had every confidence in the good will and competence of our Ministers.

I should like to address most of my remarks, as Chairman of the Welsh Affairs Select Committee, to our recent report entitled, "The impact of the Government's devolution proposals on economic development and local government in Wales", which is pertinent to the Bill. The two key issues that the Committee considered were, first, the likely effect of the projected merger of the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales into the enhanced WDA; and, secondly, the impact of devolution on the operation of local government, the relationship of which with central Government will inevitably change as a result of the delegation of the Secretary of State's powers to the assembly.

Mr. John Hayes (South Holland and The Deepings)

Does the hon. Gentleman agree that not only the relationship between local and central Government but the nature and status of local government itself will be affected by the assembly? The assembly will draw down powers from this place, but will inevitably suck up powers from local government.

Mr. Jones

That is not the evidence that we received, so I cannot comment on it. I want to restrict my remarks to the report.

The Select Committee conducted the inquiry with the intention of informing the continuing debate on devolution—a debate that will go beyond the mechanics of the new system set out in the Bill, and will continue as the new institutions evolve.

Great hopes are being placed on the enhanced WDA as a vehicle for continuing the economic regeneration of Wales. Many organisations would like to see the agency expand its activities in various directions.

For example, the general secretary of the Wales Trades Union Congress pointed out to the Committee that, as heavy industry has contracted, the industry of Wales has undergone even greater structural changes than have the economies of England and Scotland. As a result, well-paid jobs have been lost, and replaced by jobs that are less well-paid and sometimes part-time. The Wales TUC would like to see growth in areas such as management, research, and the creation of supply chains in Wales.

The Committee believes that devolution will bring greater democracy to public sector investment, and the Committee welcomes the project, although there remain several detailed issues to which thought will have to be given. Up to now, there has been a lack of democratic accountability in decision making about economic development in Wales. The Committee suspects that that may have contributed to the relative imbalance in investment between east and west Wales, and between the urban areas and the countryside, and to the emphasis on encouraging inward investment at the expense of support for indigenous small and medium enterprises.

With the intent of informing the continuing debate on devolution, the Committee offers its recommendations and conclusions gathered from the inquiry. Many of them are directed to the enhanced WDA.

With regard to the merger, if the enhanced WDA is to be a success, it will need to be adequately resourced, focused and funded. Therefore, the enhanced agency and the assembly will need to address the reality that the existing funds of the three uniting bodies may not prove sufficient for the tasks of regeneration when they are spread across the whole of Wales.

The Committee also believes that the time has come for agriculture to be seen as an industry like any other, and an important one at that, and for economic development policies to reflect that reality. The Committee also feels that devolution is important to the higher education sector in Wales. Devolution should not cause disturbance to that sector, which is important to the culture, economy and self-image of Wales as a modern, progressive society.

With regard to the continuing economic health of Wales, the Committee holds that it is vital that the enhanced WDA maintain financial services for small and medium-sized enterprises throughout Wales. The Committee also acknowledges that it is vital that the problems of rural areas be tackled under the devolved system, and welcomes the vigorous rural development policy to which the Secretary of State and the chairman of the WDA are committed. However, the Committee recognises that there are conflicting pressures involved in a vigorous rural development policy.

The Committee also believes that the positions of the Welsh Office Industry Department and the Wales Tourist Board outside the enhanced WDA are matters which may have to be re-examined by the assembly. Likewise, the concerns of small business in Wales will need to be addressed. The Committee recommends that further consideration should be given to the system of calling in planning applications and determining appeals. The Committee prefers the panel option—to make a small panel within the assembly structure responsible for the exercise of these particular powers—rather than a full Committee.

At the very least, our opinion is that serious thought should be given to making proper medium-term transitional arrangements for the calling in of planning applications and the determination of appeals in the event of the transfer foreshadowed in the draft Transfer of Functions Order 1998. The Committee believes that this would be best achieved by the Secretary of State retaining a reserve power for a 12-month interim period.

In addition, when those powers are transferred, the assembly's Standing Orders should provide clear criteria to govern appeals and the type of planning application which should be called in. In developing the criteria, the Committee hopes that the WDA will have regard to the need to promote sustainable development wherever possible—which it can now do, thanks to a Government amendment.

The Committee also urges that the regional Committees of the assembly be established on the same boundaries as the regional structure for the Welsh Development Agency, training and enterprise councils, the regional economic forums and similar groupings. The Committee suggests that the Secretary of State should draw the matter to the attention of the national assembly advisory group.

Under devolution, Wales will continue to need a strong voice in the Cabinet to ensure that its special needs are addressed in UK-wide policy making. The Committee believes that the continuation of the office of Secretary of State for Wales will provide that voice. It seems appropriate that there should be some formal mechanism by which the Secretary of State is able to attend meetings of the assembly. However, in the Committee's view, attendance should be only by invitation of the assembly.

As the inquiry progressed, it became apparent that the debate over the most effective means of encouraging economic growth was not only the most important issue facing the enhanced WDA, but far too complex to address within the context of what had become a wide-ranging investigation. The Committee is therefore conducting a further investigation into industrial investment in Wales. A report will be made available before the end of the year.

During the Committee's visit to Barcelona last week, we looked at the policies of Barcelona and Madrid. I must correct my hon. Friend the Member for Linlithgow (Mr. Dalyell): it was not Madrid's attitude to Barcelona which was the problem—the attitude of the chairman of the financial committee of the Spanish Parliament to the Committee was the problem. We had a good response from the Spanish Department of Trade, who recognised the opportunities that devolution gave Catalonia in terms of gaining finance from Europe.

Mr. Hayes

On a point of order, Mr. Deputy Speaker. The Select Committee report is available for us to read. All we are getting from the hon. Gentleman is a verbatim account.

Mr. Deputy Speaker

The hon. Member for Clwyd, South (Mr. Jones) ought to remember that this is a Third Reading debate, and it is not really the occasion to debate the Select Committee report.

Mr. Jones

I was coming to an end. I am gratified that the hon. Member for South Holland and The Deepings (Mr. Hayes) suggests that he has read the report. If he had read it, he would know that this is not a verbatim account. I suspect he has not read it.

I hope that the work of colleagues on the Committee from all parties has been justified by its use by the Government in the application of the detail of the Bill. I hope that it will also be of use to the assembly in due course. That is the pertinence of the report to the debate. On a personal note, I am delighted to be here tonight on this historic occasion as we create an assembly for my country.

9.38 pm

Mr. Letwin

I have two minutes, and I do not think that I need more. I wish to pay tribute to the right hon. Member for Caernarfon (Mr. Wigley), who spoke with passion and sincerity—although wholly mistakenly, in my view—and to Opposition Members, three in particular, who, throughout the debates, have contributed with similar passion and sincerity.

I wish to pay tribute also to the Government Front-Bench team, who have done the impossible. They have taken a Bill that is the prisoner of its history, which started with one image—of an executive agency—and moved successively through various permutations, each a mess, and they have managed to carry it through the House. No doubt, their counterparts will manage to carry it through the other place and enact it.

For us in this place, the Bill is a terror. I fear deeply that the Bill will become the model for similar Bills in relation to regional assemblies in England—heaven forfend. Let us at least hope that these debates, and the contributions of my right hon. Friend the Member for Devizes (Mr. Ancram) and other Conservative Front-Bench spokesmen, and of Labour Members, will be looked back upon, and that when people come, if they do—I hope that they will not—to frame legislation for regional assemblies, they will work out from the start what kind of animal they are creating, how it is related to this place, and how it is to act in a way that preserves the fundamentals of democracy and accountability, without creating an entity that can serve only to exacerbate every kind of division and strife, in the courts and elsewhere.

If these debates have served that purpose, the frustrations that many of us have felt at Ministers' intransigence will, after all, not be so great.

9.40 pm

Mr. Evans

The Secretary of State for Wales did not like the speech by my right hon. Friend the Member for Devizes (Mr. Ancram). He will not like this one either, because he said that the Bill was landmark legislation and he kept a straight face when doing so, so I assumed that he was serious.

I have lost a lot of sleep in the past few weeks, during the Bill's passage, and it might have been worth it—especially if it saves me from many sleepless nights after the assembly becomes a reality. However, our view of the Bill is like the Downing street source's view of the Chancellor of the Exchequer—we think that it is psychologically flawed.

At the end of our debates on the Bill, I am roughly where I began. I do not like this devolution Bill. I do not like the idea that 60 more politicians will be foisted on Wales. I do not like the new cobbled, fudged voting system. I do not like the sloppy way in which the three quarters of Wales that did not support the devolution proposals in the referendum has been treated. I do not like the fact that the proposals will fuel English nationalism.

In short, I do not like the arrogance of the Government—a Government who have become grand in their approach to politics. They boast a Lord Chancellor with a panache for the finer detail of his own sumptuous surroundings—he knows what he likes, and is determined to spend our money getting it. Meanwhile, the Secretary of State for Wales is confused by the finer detail and is prepared to bequeath to Wales an assembly that was ignored by half of Wales in the referendum, and which split the other half of Wales in two during that vote.

As a consequence of the referendum result, the understanding—the concordat—which Russell Goodway, the Cardiff Labour leader, and the Secretary of State had signed, became a worthless document. It led to a consultation sham, which involved local authorities squandering their limited money to save the face of the Secretary of State for Wales. It did not work. Dithering became an art form as the date of the final announcement was repeatedly put off, and then, with the full glare of publicity, the great announcement was made that the site of the assembly would be—er—decided at a later stage. Did we really need a press conference for that announcement?

The dithering continued, to the embarrassment of Wales. Even members of the Labour party were embarrassed. We still do not know where the final resting place of the assembly will be. We know that Swansea, Wrexham and other areas outside Cardiff fought valiant battles, but it will not be in their area. They failed to win the bid because the Secretary of State discovered, late in the day and to his surprise, that the capital of Wales was Cardiff, and that was where the assembly should go. What a shambles. It is little wonder that the Secretary of State cannot make up his mind whether to go to the assembly. The Prime Minister should make up his mind for him. Even the Labour party in Wales has caught the Secretary of State's dithering ailment: it was going to have twinning arrangements for its gender balance, but changed its mind.

So powerful is the attraction of the new Welsh assembly that only one Labour Member has announced that he will stand for election to the assembly. We wish him well. At least he can make up his mind—he wants to be First Secretary.

Ms Julie Morgan

The hon. Gentleman is hardly in a position to comment about the gender balance in the new Welsh assembly in view of the total lack of women or men representing Welsh constituencies on the Conservative Benches. At least women will have the opportunity to add their voices to debates in the Welsh assembly—and that has not happened here tonight.

Mr. Evans

We have quality if not quantity on our Benches. I understand that the hon. Lady will not be going to the Welsh assembly, although her husband, the hon. Member for Cardiff, West (Mr. Morgan), has decided to seek election to that body. I wonder what conversations will take place between the hon. Member for Cardiff, West and the present Secretary of State for Wales if he decides to stay in this place. I can imagine the tussles that they will have. Who will speak for Wales?

Mr. Rhodri Morgan

Will the hon. Gentleman give way?

Mr. Evans

No. I have only five minutes left, so I must carry on. The idea that the Secretary of State may become First Secretary of the Welsh assembly is a chilling prospect.

Mr. Morgan

Give way.

Mr. Evans

I congratulate—

Mr. Morgan

rose—

Mr. Deputy Speaker (Mr. Michael Lord)

Order. The hon. Member for Ribble Valley (Mr. Evans) has indicated that he will not give way.

Mr. Evans

I congratulate the right hon. Member for Llanelli (Mr. Davies), who expressed his worries about the new assembly.

Mr. Morgan

Will the hon. Gentleman give way?

Mr. Deputy Speaker

Order. Does the hon. Member for Ribble Valley intend to give way?

Mr. Evans

No, I do not.

Mr. Deputy Speaker

I therefore ask the hon. Member for Cardiff, West (Mr. Morgan) to resume his seat.

Mr. Evans

The hon. Member—

Mr. Morgan

On a point of order, Mr. Deputy Speaker. You are the defender of Back Benchers' rights and thus you will be aware of the conventions of the House even better than I am. If an hon. Member speaking from the Dispatch Box refers to another hon. Member who wishes to respond to the particular point that was made—the hon. Member for Ribble Valley (Mr. Evans) actually referred to me—and if that hon. Member who has been mentioned rises and seeks to intervene, almost without exception, the hon. Member at the Dispatch Box gives way.

Mr. Deputy Speaker

Order. I understand the point of order raised by the hon. Member for Cardiff, West. That is a convention of the House, but it is nevertheless entirely for the hon. Member who is speaking to decide whether he will give way.

Mr. Evans

I suspect that it is not a convention of this place for Labour Members to waste time and abuse the procedures of the House by raising bogus points of order.

The will of the Welsh people is unsettled, and the Bill that we shall send to the House of Lords is unfinished. Having had a difficult birth in the delivery room of this place, it is now on its way to the accident and emergency ward of the other place where, without the necessary surgery, it will grow into an obnoxious and troublesome object—some would say the spitting image of its parents.

The financial aspects of the assembly are in a muddle. The regional Committees border on a riddle. The electoral arrangements are a fiddle and the work of Welsh Members of Parliament in this place will be a doddle. The Secretary of State for Wales will be a poodle because the First Secretary will be in the saddle. The people of Wales will be left in the middle—the middle of an enormous mess created by this Government.

Only two things will help. First, the Government must look again at the Bill; they must listen to some of our suggestions and to the people of Wales who did not endorse it. The Government should consider the areas of geography and finance, which several Labour Members have mentioned. They should sort out the assembly Cabinet structure. Wales must have a proper voice in Europe. The Government should sort out the concordats and the retrospective legislation, to which my hon. Friend the Member for North Essex (Mr. Jenkin) referred earlier.

Secondly, the people of Wales—317,000 of whom voted Conservative at the general election, which is the second largest Conservative vote in Wales by a clear margin—will see what the Government have done to betray them in many areas, by attacking students, pensioners, lone parents, motorists and the countryside, which covers most of Wales. They will make their judgment on polling day.

The Conservative party in Wales will do its utmost to gain seats in the assembly. It will fight to win the trust of the Welsh people and it will not fail them, because it believes in Wales and the Welsh people and supports the United Kingdom. The Conservative party in Wales and in the rest of the kingdom is united in its vital defence of the Union. We will never allow the Government, with their supine supporters in Plaid Cymru and the Liberal Democrats, to break up the Union. The Government's numbers may be strong, but they know that they tamper with the constitution of this great country at their peril.

Conservatives in the new assembly and Conservatives in the Westminster Parliament will work together and fight together and will be as one in their pursuit of the same policies of low taxation, cutting away the burdens of unnecessary bureaucracy, attracting inward investment and allowing businesses to grow and prosper. We will fight hard for Britain's voice in Europe, not Europe's voice in Britain, as is the Government's wont.

We in the Conservative party want a strong Wales, a strong Scotland, a strong England and a strong Northern Ireland, but we do not want a weak United Kingdom with warring, jealous factions talking only to themselves. Conservatives at Westminster, in this United Kingdom Parliament—this supreme and sovereign Parliament—will never let that happen.

9.50 pm

Mr. Win Griffiths

The Government of Wales Bill is a major, detailed and important piece of constitutional legislation. It will set the basis for the government of Wales for years to come. It creates a robust framework with sufficient flexibility—which obviously terrifies Opposition Members, who cannot get used to the idea of flexibility—to enable an elected institution to establish itself, to grow, to respond to change and, I am certain, to flourish.

The Bill's fundamental effect is simple: to put our existing Welsh administration under the democratic control of an elected Welsh assembly. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) rightly pointed out that that is qualitatively different from all the change that has taken place since the creation of the first Welsh Office, and is a radical departure and improvement.

During the debates on the Bill in the Committee of the whole House, there have been many constructive criticisms, to which we have listened and responded. There has been some destructive criticism—all too much of it, unfortunately, from the Opposition—but even so, that has had its use in testing the robustness and coherence of our proposals, and we have come through with flying colours. It has shown their fundamental soundness and resilience.

As my right hon. Friend the Secretary of State said in opening the debate, the passage of the Bill through the House has been a useful and enlightening process, at least for most of us. There has been a minority on the Opposition Benches who have found it difficult to come to terms with that. As a result of our debates, the Bill is now clearer and more representative of Welsh interests.

During the debates, we have found a great new interest in the affairs of Wales among hon. Members representing constituencies in England. Let us hope that they will benefit from that knowledge and understanding, although this evening we have seen a continuing lack of understanding and lack of confidence in the ability of the people of Wales to take decisions and to govern themselves within the structure of a United Kingdom.

It is appalling that at the opening of this Third Reading debate, the right hon. Member for Devizes (Mr. Ancram), a man who can be quite affable, should so demean himself. We heard a disgraceful, negative and rather sour attempt to drag in important and fundamental issues relating to Northern Ireland, in connection with the fact that my right hon. Friend had been invited to come and speak about the way in which devolution in Wales was intended to work out. That was a process in which my counterpart in the Scottish Office and I were also involved. The discussions took place in London. Hon. Members representing Northern Ireland constituencies were at those meetings. They asked us how we were coping with such a departure—a fundamental and important way of achieving a measure of self-government within the United Kingdom.

The right hon. Member for Devizes demeaned himself and spoilt the reputation that he had had until that stage, of being a fair-minded person with a great deal of concern for success in the Northern Ireland project.

The right hon. Gentleman's remarks and those of his hon. Friends can be characterised as being the last whimpers of colonialism from the old Conservative party. If there has been a ship of state with any leaks that have been evidenced in these debates, it has been the Tory Opposition sinking without trace in a miasma of confusion about matters relating to constitutional progress.

I realise that the Tories have great difficulty in coming to terms with those matters. Every attempt to achieve constitutional progress in the United Kingdom, or in the old counties of England, Scotland, Wales and, in this instance, Northern Ireland, has been opposed from Simon de Montfort onwards. There has been consistent Conservative opposition.

My hon. Friend the Member for Merthyr Tydfil and Rhymney talked about the glory of the British constitution being its stability. I remind him that the stability of the United Kingdom's constitution has been its ability to change when there has been a mood for change in the United Kingdom. Simon de Montfort, John Hampden, Oliver Cromwell, Earl Grey, William Ewart Gladstone and Lloyd George would all realise that before us is a significant step forward in the way in which the United Kingdom is governed. I am sure that they would welcome the changes that we propose, because they are all part of constitutional progress.

I hope that the House recognises now that in little more than a year, the assembly will meet for the first time. That will be a truly historic day. I am sure that the fears expressed by my right hon. Friend the Member for Llanelli (Mr. Davies), and by my hon. Friends the Members for Merthyr Tydfil and Rhymney and for Linlithgow (Mr. Dalyell), will turn out to be entirely unfounded as the new assembly steps forward with confidence. It will be a departure for the British constitution, along with many others. For example, the Reform Act 1867 was referred to as a leap in the dark, but it worked. We had greater democracy. Therefore—[Interruption.] We had greater democracy. That was the only occasion that I can think of when some Tories accepted the need for change.

We now have a great opportunity to establish a powerful Government in Wales reflecting the democratic voice of people in Wales. We shall be able to step on to the European scene with the other Governments in Europe within states—regional Governments—who have a distinctive voice and are able to speak in Brussels. We shall be able to do that as well.

The Bill delivers on our promises to Wales and on our election and referendum mandates. It will implement reforms that are long overdue, and it reflects the wishes of the people of Wales. On those terms, I commend this epoch-making Bill to the House, on what is truly an historic constitutional occasion for the United Kingdom and for Wales.

Question put and agreed to.

Bill accordingly read the Third time, and passed.