HC Deb 10 February 1999 vol 325 cc384-400

'.—(1) Sections 1 to 11 above shall apply in England only.

(2) The National Assembly for Wales shall, within twelve months of this Act receiving Royal Assent, consider the provisions of this Act and make decisions concerning—

  1. (a) whether the provisions of sections 1 to 11, 16 and 17 shall apply in Wales; and
  2. (b) whether to substitute different provisions in the case of Wales in place of the provisions of sections 1 to 11, 16 and 17, dealing with the matters provided for in each section.'.—[Mr. Dafis]

Brought up, and read the First time.

Mr. Cynog Dafis (Ceredigion)

I beg to move, That the clause be read a Second time.

The new clause would give the National Assembly for Wales maximum discretion on water policy in Wales. I spoke on Second Reading about the significance of water as a political, economic and ecological issue of major importance to Wales. I do not intend to rehearse the series of arguments that I made; I shall simply recall the main points.

Water is a priceless asset—we are only just beginning to realise just how priceless it is. As a resource, it will be in increasingly short supply over coming years and decades. Wales should be allowed to utilise that asset responsibly—of course—and in the interests of Wales and its people, in the context of sustainable development, which the National Assembly for Wales has a specific duty to promote.

The circumstances of water supply in Wales are very different from those in much, if not all, of England. Wales has a plentiful water supply. There is no prospect of Wales suffering a shortfall in water supply, even in the worst-case scenario of increasing demand and a diminution of supply as a result of climate change and other factors. There is, however, likely to be a significant shortfall of supply in parts of England, especially the south-east. Such different circumstances will result in different priorities, as on investment, as I spelt out on Second Reading. That could mean that Wales adopts a different charging system, because charges reflect such issues as the availability of supply.

I argued on Second Reading that it is unacceptable to bundle together legislation for Wales with that for England, when the Bill makes separate provision for Scotland. The new clause would allow decisions on the Bill's provisions to be delegated to the National Assembly, which would enable it to make different provision on matters such as disconnection, charging, and so on.

An example of the need for different provision is found in the recent Environment Agency proposals for limitations on angling in rivers in England and Wales. Angling is enormously important socially, culturally and, in large parts of Wales, economically, due to tourism, for example. The Environment Agency is proposing byelaws that impose uniform limitations on angling, such as on seasons, throughout England and Wales. That is a bad approach. Such limitations ought to be devised on the basis of river catchment areas. I believe that the proposals have more to do with the Environment Agency's administrative convenience than ecological or economic realities.

I and other hon. Members have written to the Secretary of State for Wales asking that implementation on this very important issue be postponed until after the Assembly has been able to debate it and come up with appropriate byelaws for Wales—different ones, I dare say. I hope very much that the Secretary of State will listen to what is being said to him on a cross-party basis. It is an illustration of the need for a different approach in Wales that reflects its reality.

What is the point, one might ask, of devolution, unless we can make our own different policies in Wales? Many might ask what is the point of establishing a National Assembly if it is not able to make decisions on such important subjects as water policy.

8 pm

The new clause is not especially about disagreeing with the specific proposals in the Bill. I do not disagree with the proposals in relation to disconnection, although I would have serious reservations about the process of facilitating and promoting metering as a method of charging. The new clause is about the powers of the National Assembly for Wales, and about how legislation in London that affects Wales should be drafted.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

I am glad that the hon. Gentleman has said that he does not object to key parts of this provision, because the continuation of rateable value as the basis for unmeasured charging is vital for most of our communities. I trust that he will not cast any doubt on that issue.

Mr. Dafis

I am grateful for that intervention, and I have much sympathy with what the hon. Gentleman says. I feel that we need a better basis for charging than rateable value, which is well out of date. The best proposal is to charge on the basis of council tax banding; we should adopt that method. The danger of continuing to use rateable value is that, by doing so, we postpone the day when we can adopt such a method.

However, the issue before us is how legislation that has such an important impact on Wales should be drafted. The Government of Wales Act 1998 gives English Ministries—I suppose that, technically, I should say England and Wales Ministries, but, from the point of view of Wales, they will be seen as English Ministries—specific override powers in relation to water policy in Wales. The Welsh Office guide to the powers of the National Assembly, entitled "Making a Difference in Wales", puts it thus: The Assembly will have all relevant functions to deal with water supply and water quality in Wales. That is good. However, if UK Ministers believe its actions in authorising discharges into rivers flowing into England, or allowing water to be abstracted from such rivers, or its actions in time of drought, would have a serious impact on England, they would be able to intervene to prevent the Assembly acting in such a way. It speaks similarly about the Environment Agency.

I do not believe that such override powers are the right answer to what is a reasonable question. The guide does say—rather graciously—on the previous page that the Government do not believe that the National Assembly would wish to prevent people in England from having adequate water supplies. That is big of them; I am sure that the Assembly would not want to do that. However, I do not think that override powers are necessary. Other methods could have been used. There could have been a requirement for there to be consideration—a requirement for meetings to reach a consensus on how any conflict of interest might be resolved.

I do believe, however, that the National Assembly should be able to override policy proposals in Westminster legislation if it does not agree with them. It should have that power in general terms. Would that we had had such powers many, many times in recent years. Wales would be in better shape if we had had such powers.

The time will come—the sooner, the better—when the National Assembly will have full legislative powers, as the Scottish Parliament has. I am confident that that day will come. We might as well get it done as soon as possible. However, meanwhile, any primary legislation drafted in London surely must in future give the National Assembly maximum latitude to vary provision by secondary legislation. The Government should surely accept that principle. Legislation should routinely contain such provision when drafted. It should have been done in the case of the Bill.

The new clause applies to clauses 1 to 11—the clauses that relate to England and Wales—and there are consequential changes to be made to clauses 16 and 17. The new clause would do what the drafters of the Bill should have done. We are merely putting right a deficiency in the legislative approach.

There has been much debate in Wales and Westminster on the National Assembly's limited legislative functions. Apologists for the Government's approach—giving the National Assembly only secondary powers—would argue that not having primary powers is not a big deal, because primary legislation can be drafted so as to allow the National Assembly, which will have total democratic legitimacy in Wales, to draft legislation to make provision appropriate for Wales, however different that might be.

I am not arguing for difference for the sake of difference; I am arguing for the right to be different in order to be appropriate to the special circumstances that apply in Wales. In that spirit, and bearing in mind the fact that we merely want to correct a deficiency—that we are doing what the drafters of the Bill should have done—I hope that the Government will accept the new clause. It is an opportunity to show willingness to legislate to empower the National Assembly for Wales, while retaining the primary legislative function in London. I expect and hope—well, I hope—that the Government will accept the new clause on that basis. If they do not, that augurs rather badly for future legislation.

Alternatively, the Government might like to say that they consider that the issue is serious enough to merit further consideration in what is quaintly called the other place. If the Government were to say that they would consider exempting Wales from the requirements of the Bill by tabling an amendment in the Lords, we would be very pleased.

However, I want to say something to the Under-Secretary of State for Wales, the hon. Member for Cardiff—which one is it?

The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones)

Cardiff, Central.

Mr. Dafis

That is right. I should like to hear the hon. Gentleman and other Ministers say that they recognise that future legislation should be universally drafted so that the secondary powers of the National Assembly give it the latitude that it needs if it is to put in place the strategies to enable us to build the new Wales. I look forward to the Government's response.

Mr. Oliver Letwin (West Dorset)

When I first arrived in the House, I was instructed that, among the many people whom I would come across, bizarrely, the nicest would be Welsh nationalists. The hon. Member for Ceredigion (Mr. Dafis) is no exception to that rule, and he has treated us to the delightful—and apparently charming—prospect of a slight technical amendment to the Bill to achieve what he described as an efficiency.

As a matter of fact, the Conservative party in Wales strongly disapproves of the hon. Gentleman's views. [Laughter.] Yes, it is a matter of amusement to us that the Government's actions in these matters will have substantially recreated the Conservative party in Wales and its representation, as Ministers were good enough to admit—perhaps more than the Government originally reckoned on. However, the Conservative party in Wales differs from the hon. Member for Ceredigion on the matter of substance, in that its position is that if this is a good Bill for England, it cannot see why it would be a bad Bill for Wales.

The Minister for the Environment has waxed eloquent on the Bill's virtues, and my hon. Friend the Member for West Chelmsford (Mr. Burns) and I have never opposed the general principles underlying it, as Ministers know. Therefore we have argued that it is—taken by and large, and with some defects—good for England, and so good also for Wales.

However, it is not on that matter of substance that I want to argue very strongly against the new clause. The hon. Member for Ceredigion raised, in a short speech, just about every major constitutional mistake that could be made in taking forward the relationship between the House and the National Assembly, and his new clause, alas, accurately reflects that programme.

Water, as the Minister will very well know, is included as item 17 in schedule 2 to the Government of Wales Act 1998. Hence it is appropriate that it also appears as a subject in the remarkable set of documents that the Transfer of Functions (National Assembly for Wales) Order 1999 and its appendices have become. I do not think that the Minister was present for the entirety of our discussion on the order during the proceedings on the Government of Wales Bill. However, he may recall that there was a great deal of discussion of just what that order would do. No one doubted that its sole intent—the structure of what became the Government of Wales Act ensured that it would have as its sole intent—was to allow Ministers through the order, under the aegis of the House and Parliament, to transfer authorities that now reside with a Minister at Westminster to the Welsh Assembly.

It is a critical component of the architecture of the Government of Wales Act that there was no suggestion that there would be under that transfer of functions any transfer of powers that resided elsewhere than with the Minister, and certainly no transfer of powers that resided with this Parliament under that order. That would have carried the Henry VIII principles far further than even Ministers in their most daring moments were willing to take them under that transfer of functions order.

There is a large range of powers relating to water residing with Ministers. They are well covered, if not completely, in the descriptions of all the powers that are to be transferred under the order in relation to the Water Industry Act 1991 and its sequels and accompaniments. Every one of those powers is, as it should be, a power currently with the Minister. There is no suggestion anywhere of the transfer of anything other than a power that resides with the Minister.

Unfortunately, the power that is the subject of the new clause—this takes us back to section 61 of the Water Industry Act 1991—is not the main power; it is not a power of the Minister—it is the power of the water undertakings to disconnect. The new clause would do something wholly outwith the spirit of the Government of Wales Act. It would arrange things so that the Welsh Assembly was able to legislate on a power that belongs to a third party. It would achieve that effect in another piece of legislation taken through this Parliament and not in the transfer of functions order.

There are three reasons why that is of the greatest possible constitutional significance. First, there is what we can properly describe only as the ratchet effect. I am sure that the hon. Member for Ceredigion will not disagree with this part of my analysis, though he will certainly disagree with my conclusion. It is fair to say that although this is hardly a packed Chamber, even some Labour Members present would have been extremely disheartened if anyone had suggested that the Bill and the new clause would be used as a method of doing the opposite of what the hon. Gentleman is seeking to do—that is to diminish rather than augment the powers of the Welsh Assembly. Had that been proposed by myself or my hon. Friends this evening, the hon. Gentleman would rapidly have left his place and shot off to the nearest porthole of the BBC or its Welsh equivalent to start broadcasting vehemently about the appalling attack on everything that matters in the world being perpetrated by Members who were suggesting a diminution of the powers of the Welsh Assembly.

However, not many days—certainly not many weeks or months—after the passage of the Government of Wales Act, we find the hon. Member for Ceredigion and his entire parliamentary party coming forward with a new clause that significantly augments the powers of the Welsh Assembly. I prophesy—I am sure that the hon. Gentleman and his hon. Friends will not mind my so doing—that this will not be the last such attempt. I rather think that for as long as they, with their eloquence and persistence, hold their seats in this place, and for as long as the Government bring forward legislation that includes the words "England and Wales", we shall see on almost every occasion amendments brought forward to augment the powers of the Welsh Assembly in respect of a wide range of legislation.

The new clause is just the first example. That is why I am strongly labouring the point that it is a ratchet. We shall never be allowed to get away with proposing any diminution, in any other legislation, of the powers of the Welsh Assembly. However, if we are not careful, we shall see before us dozens, if not hundreds, of amendments to every form of legislation seeking insidiously to increase the powers of the Welsh Assembly.

8.15 pm

That is not anything that the hon. Gentleman and his hon. Friends would be ashamed of doing. On the contrary, it is part of their programme. I fully accept that. However, it is important that the House recognises how radical a proposal that is, and that tonight it sets a precedent—I hope very much that my remarks will have the support of Ministers—by refusing to be a party to that sort of ratchet.

If the new clause is pressed to a Division, and if, by any strange mischance, Ministers should find themselves and their colleagues in the same Lobby as the hon. Member for Ceredigion and his colleagues, Ministers will have fulfilled in the most unfortunate fashion that dreadful phrase that the former Secretary of State for Wales used when we discussed these matters on Second Reading and in Committee on the Bill that became the Government of Wales Act. The right hon. Member for Caerphilly (Mr. Davies) used to say that devolution was not an end point but a process. In the circumstances that I have described, it will become a process—[Interruption.] I rather thought that the hon. Member for Ceredigion and his hon. Friends would not object to that. It will become a process that will lead us ineluctably to the very point that the hon. Gentleman lightly animadverted to when he said—I think that I paraphrase him accurately enough—that in due course, almost inevitably, there will be legislative powers to transfer legislative powers to the Welsh Assembly.

Apart from the ratchet effect, the second reason why I think that it is of the greatest importance that the House pays serious attention to the new clause, and why I think that it is of the greatest importance that the House rejects it, is that the new clause, if it were accepted, would drive a coach and horses through the very mechanism which the Government of Wales Act sets up and which the Government believe that they have had established in order to get a grip from Westminster over affairs in Wales.

There is a reason why the transfer of functions order is as it is. There is a reason why it is not cast in a way that mirrors the new clause. The text of the new clause says nothing about transferring functions. Instead, it states: The National Assembly for Wales shall … consider the provisions of this Act and make decisions". What relationship does that set up between the House and the National Assembly for Wales? It is a relationship of advice on the part of the House and consideration and decision on the part of the Welsh Assembly. By contrast, the transfer of functions order allows the House to allow a Minister to transfer some Executive authority from himself to another body. These are wholly different constitutional relationships.

The attempt behind the structure and architecture of the Government of Wales Act was to give Ministers a grip on what was transferred and hence to create a natural obstacle to the ratchet effect by ensuring that no new powers would be automatically transferred and that no new scope would be given to the Welsh Assembly, whereas the new clause would obviously militate in exactly the opposite direction. If it were mirrored in a series of subsequent pieces of legislation, the National Assembly for Wales would gradually acquire the powers to consider the provisions of a range of English and Welsh Acts and to decide whether it would implement them. At that point, the distinction between a secondary legislative body and a primary legislative body would have virtually disappeared. That is, of course, the modest intent of the hon. Member for Ceredigion.

Mr. Dafydd Wigley (Caernarfon)

The hon. Gentleman will, of course, accept that the Welsh Assembly will have the power to change primary legislation with regard to the Welsh Development Agency Act 1997 and some other Acts associated with that.

Mr. Letwin

I regret to say that, not surprisingly, the right hon. Gentleman is right. I and various of my hon. Friends lamented that at an earlier stage, but you will tell me, Mr. Deputy Speaker, that that is not an appropriate matter for us to consider tonight.

There is no doubt that precedents are already established, but they are strictly limited. The new clause would greatly extend the scope of those precedents and carry them into legislation other than the Government of Wales Act 1998. There is no doubt what that programme is—I would say "game", but it is in deadly earnest; it is a serious constitutional programme.

The Welsh nationalists are attempting to use the new clause as the basis for getting to the point where the Welsh Assembly becomes de facto a primary legislative body. Unless Ministers were willing, as we would be if the motion were pressed to a Division, to state clearly that that is unacceptable, they would be driving a coach and horses through the structure of their own Government of Wales Act.

There is a third point. This is a question not merely about the form of what is being done, but about the scope. In new clause 1, it is suggested that the Welsh Assembly should have the power to consider, first, whether the provisions of an English and Welsh Act should apply, and secondly, whether to substitute different provisions. The substitution of different provisions carries us a stage beyond what I have described—not simply into a matter of form, but into a matter of substance.

The new clause, surprisingly, is a new constitution for Wales in the making. It gives the Welsh Assembly directly, in UK law, the ability to make law. At that point, the distinction between primary and secondary legislation disappears. It is a remarkably cunningly drafted clause. It has been drafted in such a way that as the ratchet effect occurs and as such a provision is introduced for Bill after Bill, a new constitution will have been made without ever having been discussed or declared. Quite apart from whether the Welsh people want a primary legislative body in Wales—they were never asked—that is no way for a constitution to be made. That is my third point.

Even if it were right that the Welsh Assembly should have the power to consider and decide on the provisions of the Act, and even if it were right that it should, in general, have the power to substitute for Acts new de facto primary legislation, it would not be right that that should be introduced in this manner. It should be introduced only after mature consideration, possibly with a referendum and certainly with a White Paper and a great deal of debate and discussion.

The third reason that Ministers would be acting wrongly if they had the slightest inclination to go into the Lobby with the hon. Member for Ceredigion and his colleagues is that they would be admitting that it was proper to introduce such constitutional change on the sly.

Mr. James Gray (North Wiltshire)

My hon. Friend makes a powerful constitutional point. Has he considered the practical question of what would happen if Welsh Water, by this means, charged or applied regulations differently in Wales and in the large area around Bristol that it supplies? For example, Welsh Water could use the council tax in Wales, but would still have to use the rateable values in Bristol and elsewhere.

Mr. Letwin

My hon. Friend is right. That brings us to the question of the borders. I treat the subject with some hesitation because there are hon. Members present who remember that it was not my most glorious moment when I mistook the location of certain schools. That was due to a postal address confusion. That episode, shameful as it was in my case, illustrated all too clearly the very problems to which my hon. Friend refers.

There are issues of great complexity that relate to the borders, and problems might arise in practice if the new clause were enacted and if, as a result of its enactment, the Welsh Assembly decided to take steps that led to Welsh Water behaving quite differently from the English undertakings.

There is nothing in the new clause—this is what is so remarkable about it—that substantively causes that problem. The clause is drafted in a constitutional spirit. It says nothing about the outcome or about what the Welsh Assembly should or would decide. The hon. Member for Ceredigion made that clear. It is, so to speak, a permissive clause. It is, in other words, a transfer of powers.

The new clause is a constitutional clause. It is intended to be that and has been drafted well. Unfortunately, it has none of the surroundings that would make it legitimate. If the House has any purpose—especially at 8.26 on an evening when it is hardly full—it is to bring to light the fact that something is being done that has consequences far beyond the apparently modest intent of the clause.

I apologise to the House for having laboured the point. I know that some hon. Members present would have wished me to be more concise or to say nothing. However, it is of the utmost importance that these matters be put on record. I hope that we will hear from Labour Members who share the constitutional concerns that I have expressed—I see some of them in their places. I hope that it will be established that those concerns are not merely the concerns of the Opposition, but are widely shared in the House.

I hope that when subsequent Bills are considered, and similar clauses are moved, people will be able to point back to the debate tonight as proof that we were awake and alive to the problems, and that we understood the implications, rejected them and set no such precedent.

I look forward to hearing from the Minister how much he agrees with everything that I have said and how strongly he will move his colleagues into the No Lobby if there is a Division. If that occurs, we can let the Government off the hook of any complicity in this gunpowder plot, little and delightful as it may appear to be.

Mr. Richard Livsey (Brecon and Radnorshire)

I shall be brief, but I shall make some fundamental points. We Liberal Democrats support new clause 1, which would restrict sections 1 to 11 and 16 and 17 to England, and determine that such a decision should be in the ambit of the Welsh Assembly.

Mr. Letwin


Mr. Livsey

I have just started my speech. I will give way at an appropriate moment. The hon. Member for West Dorset (Mr. Letwin) said that this would occur in Bill after Bill. We are considering the Water Industry Bill. He said that arrangements in England and Wales had to be virtually the same, but we have our own water company—Dwr Cymru or Welsh Water—which already behaves differently. It prefers to run a charging policy based on rateable value. As the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) said, we want such flexibility because it might, as the hon. Member for Ceredigion (Mr. Dafis) said, be based on council tax banding, for example. In short, it might be more appropriate.

8.30 pm

That brings me to the subject of metering. Welsh Water would prefer to stick with the rateable value. I believe that it is open-minded about the council tax banding issue. But because Wales requires a huge water pipe infrastructure, because the sparsity of population in many places requires miles and miles of piping, different circumstances obtain in Wales.

New clause 1 says that the Welsh Assembly should have an input into how the matter is proceeded with. I am a keen fisherman, and the issues of compensatory flow, for example, in Welsh rivers, and the abstraction of water from rivers in different places, are important. I have asked many questions in the past about whether compensatory flow is adequate in certain circumstances to sustain the ecology, the fish population and many other matters. Sometimes we must look carefully to see whether rules exist.

As the hon. Member for West Dorset knows full well, there is a precedent. The Government of Wales Act 1998 acknowledges, for example, that if reservoirs are constructed in Wales the Welsh Assembly should be consulted as to their acceptability.

Mr. Letwin

I fear that the hon. Gentleman may be embarking on a speech even more profoundly inclined to make people sleep than mine, but will he keep the House awake an instant further and tell us whether it is Liberal Democrat policy that a precedent should be set in this case permitting the constitutional transfer of powers—legislative powers—from this House to the Welsh Assembly; or is he merely making the point about this Bill, and is willing to state that it is not his party's policy to allow such a precedent to be set?

Mr. Livsey

The hon. Gentleman will realise that the Liberal Democrats are federalists and believe that decision making should occur at the appropriate level in the Government of the United Kingdom. Perhaps even the hon. Gentleman will admit that water, Wales's greatest natural resource, is an important issue to the Members of the Welsh Assembly. They will want to contribute to and influence policy on, for example, water regulations. Water is a politically sensitive issue in Wales, of which the House is surely aware. New clause 1 is a way of satisfying the needs and circumstances of Wales where they differ from those of England.

Mr. Letwin

I am grateful to the hon. Gentleman for giving way again, but I beg him to answer the question, which is perfectly fair and clear. Is he trying to establish a precedent, or does he think that this is a one-off measure which should not be regarded as a precedent?

Mr. Livsey

I do not wish to extend my speech to the length of the hon. Gentleman's. I merely say that we are discussing the Water Industry Bill and I am addressing—

Mr. Simon Burns (West Chelmsford)

Will the hon. Gentleman give way?

Mr. Livsey

No, I shall not give way now.

We are specifically debating the Water Industry Bill. The hon. Member for West Dorset led me on to other paths, to which I have referred. If the hon. Gentleman insists that we have no influence in Wales on policy governing our greatest natural resource, that is an extreme view indeed.

Mr. Jon Owen Jones

New clause 1, proposed by the hon. Member for Ceredigion (Mr. Dafis), effectively allows the National Assembly for Wales to pass its own water industry Acts, amending or undoing all the provisions in the Bill which apply to England and Wales. Effectively, the hon. Gentleman wishes to redraft not the Bill, but the Government of Wales Act. I can well understand why the hon. Gentleman would wish to do that. I understand his motivation. I can well understand that many of his constituents who voted for him would sympathise with him.

The hon. Member for West Dorset (Mr. Letwin) argued at length that this is a major constitutional step and that the real argument is about the Government of Wales Act. I can understand why Plaid Cymru wishes to raise the matter, but I cannot understand why the Tory party wishes to go through the devolution argument at such length on a Bill concerned with the management of water.

However, the House is well aware that the Assembly will not be empowered to pass primary legislation. The new clause goes well beyond the powers given to the Welsh Assembly in the Government of Wales Act. That Bill allows the Assembly to work within a framework of primary legislation which has been passed here. Thus each Bill needs to reflect the role and status of the Assembly in Wales, and to give it the necessary powers to reflect the needs of Wales. In this case, we believe that we have done so.

The Bill provides for the industry in England and Wales to operate within a consistent charging framework, providing consistent protection against disconnection and giving the same rights to customers.

At the same time, the Assembly will have significant powers in this area. We propose that the Secretary of State's powers in clauses 4 and 5 should transfer to the Assembly in respect of water undertakers operating wholly or mainly in Wales—currently Dwr Cymru and Dee Valley Water.

The Assembly's powers include the power to give its own guidance to the Director General of Water Services in approving water undertakers' charges schemes. The director general must have regard to such guidance. They also include the power to make regulations concerning charges schemes.

Those regulations may cover, for example, items for which water consumers do or do not have to pay; the way in which charges are calculated and on what basis; alternative methods of charging, which should be made available to customers; a requirement for special provision to be made to assist those whom the Assembly considers to need special protection; and the criteria for entitlement to special provision and the means to establish it. Thus there are powers within the Bill to allow the Welsh Assembly to reflect the different needs of Wales in the management of water resources.

Mr. Dafis

I ask for clarification; it is better to have it at this stage than later. Is the Minister saying that the Assembly could ensure that a charging policy significantly different from that in England might be pursued in Wales? May we in Wales not implement any proposal that would encourage and facilitate the slide towards metering? Could the Assembly ensure that we move towards a fair system of charging, based on council tax banding, for example? Is he saying that the Assembly would be able to ensure such an outcome?

Mr. Jones

The Government are still open to considering whether we should move towards a charging system based on council tax banding, but the hon. Gentleman knows full well that the Bill allows for free metering to be established on both sides of the border. I am surprised that he would want Welsh consumers not to have the right that would apply on the other side of the border. I realise that his constituency of Ceredigion is not that close to the border, and he might feel a bit more wary about presenting such a policy were he representing a constituency such as Brecon and Radnorshire. Clearly, Plaid Cymru's ambitions do not extend much further east than the Cambrian mountains.

We consider that—

Mr. Letwin

Will the Minister give way?

Mr. Jones

The hon. Gentleman had sufficient time to make his contribution, but I will give way.

Mr. Letwin

I am grateful to the Minister for giving way. My question is purely for clarification. Before he took the intervention from the hon. Member for Ceredigion (Mr. Dafis), was the Minister referring to clause 5 and the powers of the Secretary of State by regulations to make provisions for charging? Does he accept that any such transfer would of course be by a transfer of functions order or by the enlargement of the draft transfer of functions order?

Mr. Jones

As I understand it, there are powers that would allow the Welsh Assembly to make different provision for charging procedures within Wales.

We consider that these powers represent a significant and appropriate transfer of responsibilities, complementing the many other responsibilities relating to the water industry which the Assembly will inherit. In the light of that reassurance, I hope that the hon. Member for Ceredigion will withdraw his new clause.

Mr. Burns

I had not intended to make a speech at this stage, but the Minister said something so fundamental that it is important to clear the matter up now, so that we are under no misapprehensions as to what he said.

I understood from our debate in Committee that clause 5 and the words the Secretary of State by regulations apply to the Secretary of State for the Environment, Transport and the Regions and that he, within the ambit of the Bill, will make the regulations and give the instructions to the regulator. It never occurred to me during those debates that there was any intention to transfer those powers to the Secretary of State for Wales or any other individual.

I would appreciate it if the junior Minister intervened to settle the matter, on a point of information. He will agree, in the light of our debate, that the matter is very important.

Mr. Rowlands

Will the hon. Gentleman give way?

Mr. Burns

I will, and I hope that the Minister will respond to that point.

Mr. Rowlands

Through the hon. Gentleman, may I ask my hon. Friend the Minister whether some of these issues will be the subject of a concordat?

Mr. Burns

I am grateful to the hon. Gentleman for that intervention. Through me, he invited the Minister to reply. I should be grateful if the Minister replied to my point and then dealt with the point made by the hon. Gentleman. I ask the Minister to clear this point up, so that there can be no mistake and no misunderstanding. Will he clarify the reference in clause 5 to "the Secretary of State"? Which Secretary of State is referred to? Are there any proposals to transfer the powers in clause 5 to the Secretary of State for Wales? That is an urgent and important point for the Assembly.

Mr. Jon Owen Jones

So that there will be no misunderstanding, I should say that the powers to be transferred will be only secondary powers and powers of the Secretary of State to give guidance. No powers to make or set aside primary legislation will be transferred.

Mr. Burns

Is the Minister saying that, for Wales, there will be a transfer of functions from the Secretary of State for the Environment, Transport and the Regions to the Secretary of State for Wales?

Mr. Jon Owen Jones

indicated dissent.

Mr. Burns

Will the Minister clarify?

8.45 pm
Mr. Deputy Speaker (Mr. Michael J. Martin)

Order. Interventions should come voluntarily: in the other direction, as it were. The hon. Gentleman makes matters untidy by inviting interventions. He should make his point so that we can get on with the business.

Mr. Burns

I am grateful, Mr. Deputy Speaker. I understand that that is untidy, but the Minister unexpectedly made some comments that made the whole subject somewhat untidy and confusing. I thought that the easiest way to tidy it up would be to take that slightly unconventional approach. However, I fully accept your ruling.

Obviously, we will read Hansard extremely carefully tomorrow morning because a potential problem has unexpectedly arisen with regard to the Welsh Assembly and the Secretary of State. The problem may not exist and if we can clear that matter up, it will put all our minds at rest.

Mr. Dafis

I am grateful to you, Mr. Deputy Speaker, for allowing me to bring this debate to an end. I had not realised what a constitutional can of worms I was opening in moving the new clause. My intention was much more modest than that for which the hon. Member for West Dorset (Mr. Letwin) gives me credit. Clearly, the hon. Gentleman regards with horror the idea that Wales should be allowed to evolve, for example, its own charging policy. He seems to think it an awful prospect that Wales should be allowed to develop different policies of that sort.

Such a decision could be important if the Assembly is, for example, to deliver its social justice agenda. For example, it is important for the Assembly to be able to consider what charging policy is likely to be equitable and to favour low-income families who have high water demands—of course within the context of environmental sustainability.

Mr. Letwin

I am grateful to the hon. Gentleman, who gives way with his customary courtesy. I want to clarify that I do not view with any horror the making of regulations by the Welsh Assembly, under a transfer of functions order, when, under clause 5 of the Bill, a Secretary of State here would be given that power. That is entirely within the spirit of the Government of Wales Act 1998. I regard with horror the hon. Gentleman's new clause, which goes far beyond that in its constitutional intent.

Mr. Dafis

If the Government were prepared to table an amendment to achieve what I am trying to achieve in my new clause, but in a less constitutionally earth-shaking manner, I should be happy to hear about it from the Under-Secretary of State. It is terribly important for the Assembly to be able to deliver its own agenda on an issue of this sort.

The hon. Member for West Dorset said that the Government of Wales Act gave Ministers a "grip"—I did not particularly like the metaphor—on the situation and that he wanted them to retain that grip and not let the Assembly gradually slide into acquiring greater powers and discretion. He spoke at length about transfer of functions and so forth. It was not my understanding that my new clause recommended any transfer as such. I was looking for a mechanism to allow the Assembly latitude to work within the functions that it already has. If that cannot be achieved without a transfer of functions, then the case for such a transfer is obviously strengthened. I make no secret of the fact that I want such a transfer.

It is important to understand that the agenda for the next five years is to establish a useful working relationship between the Assembly and this place to enable devolution to be a success. In its first stages, that will involve give and take on both sides. It involves designing and drafting legislation—without transferring functions—that will enable the Assembly to have as much discretion as possible. It should have considerable discretion in education and other policy areas.

Mr. Rowlands

That was the whole concept of concordats. Has the hon. Gentleman thought about that?

Mr. Dafis

Yes, I have, but I will not pursue that issue in detail at this stage, if the hon. Gentleman will forgive me.

Legislation should be designed in such a way as to give the Assembly maximum latitude and flexibility. I listened carefully to Minister, because I was hoping to have absolute clarification. I asked him whether the Assembly could ensure a distinct charging policy in Wales. I got the impression that that was not the case, and that that could not be done satisfactorily. If it is not the case, I am not satisfied.

Mr. Letwin

I admire the hon. Gentleman's interpretive and exegetical skills. I was wholly unable to discern any clear meaning in what the Minister said. I wonder whether the hon. Gentleman would invite the Minister—if your patience would allow, Mr. Deputy Speaker—to clarify what on earth he was on about.

Mr. Dafis

If the Minister wants to intervene, I shall allow him to do so. I shall not urge him to intervene, however, given what Mr. Deputy Speaker has said.

Mr. Jon Owen Jones

If it helps the House, I shall reiterate that clause 5 refers to the Secretary of State, and that the Secretary of State is a single entity. The Government of Wales Act 1998 transfers the powers of the Secretary of State to the Welsh Assembly. The National Assembly will have the regulation-making powers in clause 5.

Mr, Dafis

Right then, I have a further question. Will the Assembly be able to depart from the provisions in the Bill to facilitate metering? I do not want to go into the rights and wrongs of metering, but will the Assembly be able not to allow free metering and the right to revoke the arrangement after a year? It is important to have that power. I do not want more and more metering to be encouraged, because the price that those who are not on meters would have to pay would put them at a disadvantage. That would be a regressive social policy.

My understanding is that such latitude would not be available to the Assembly. I am therefore unable to withdraw the motion, and we shall force it to a Division.

Question put, That the clause be read a Second time:—

The House divided: Ayes 30, Noes 313.

Division No. 64] [8.53 pm
Allan, Richard Livsey, Richard
Beggs, Roy Michie, Mrs Ray (Argyll & Bute)
Beith, Rt Hon A J Moore, Michael
Bottomley, Peter (Worthing W) Oaten, Mark
Brake, Tom Öpik, Lembit
Brand, Dr Peter Ross, William (E Lond'y)
Campbell, Menzies (NE Fife) Russell, Bob (Colchester)
Chidgey, David Sanders, Adrian
Cotter, Brian Smith, Sir Robert (WAb'd'ns)
Dafis, Cynog Stunell, Andrew
Davey, Edward (Kingston) Wallace, James
Ewing, Mrs Margaret Webb, Steve
Feam, Ronnie Wigley, Rt Hon Dafydd
Harris, Dr Evan
Heath, David (Somerton & Frome) Tellers for the Ayes:
Hughes, Simon (Southwark N) Mr. Donald Gorrie and.
Keetch, Paul Mr. Ieuan Wyn Jones
Abbott, Ms Diane Clarke, Charles (Norwich S)
Ainsworth, Robert (Cov'try NE) Clarke, Eric (Midlothian)
Alexander, Douglas Clarke, Rt Hon Tom (Coatbridge)
Anderson, Donald (Swansea E) Clarke, Tony (Northampton S)
Anderson, Janet (Rossendale) Clwyd, Ann
Armstrong, Ms Hilary Coaker, Vernon
Atkins, Charlotte Coffey, Ms Ann
Austin, John Cohen, Harry
Barnes, Harry Coleman, Iain
Barron, Kevin Colman, Tony
Bayley, Hugh Colvin, Michael
Beard, Nigel Connarty, Michael
Begg, Miss Anne Cook, Frank (Stockton N)
Bell, Martin (Tatton) Corbett, Robin
Benn, Rt Hon Tony Corbyn, Jeremy
Bennett, Andrew F Corston, Ms Jean
Benton, Joe Cousins, Jim
Bermingham, Gerald Crausby, David
Berry, Roger Cryer, Mrs Ann (Keighley)
Best, Harold Cryer, John (Hornchurch)
Betts, Clive Cummings, John
Blackman, Liz Cunliffe, Lawrence
Blears, Ms Hazel Cunningham, Jim (Cov'try S)
Blizzard, Bob Curtis-Thomas, Mrs Claire
Borrow, David Dalyell, Tam
Bradley, Keith (Withington) Davey, Valerie (Bristol W)
Bradley, Peter (The Wrekin) Davidson, Ian
Bradshaw, Ben Davies, Rt Hon Denzil (Llanelli)
Brazier, Julian Davies, Geraint (Croydon C)
Brinton, Mrs Helen Davis, Terry (B'ham Hodge H)
Brown, Russell (Dumfries) Dawson, Hilton
Browne, Desmond Dean, Mrs Janet
Burden, Richard Denham, John
Burgon, Colin Dewar, Rt Hon Donald
Burns, Simon Dobbin, Jim
Campbell, Mrs Anne (C'bridge) Donohoe, Brian H
Campbell, Ronnie (Blyth V) Doran, Frank
Campbell-Savours, Dale Dowd, Jim
Canavan, Dennis Drew, David
Cann, Jamie Dunwoody, Mrs Gwyneth
Caplin, Ivor Eagle, Angela (Wallasey)
Caton, Martin Eagle, Maria (L'pool Garston)
Chapman, Ben (Wirral S) Edwards, Huw
Chaytor, David Efford, Clive
Chisholm, Malcolm Ellman, Mrs Louise
Clapham, Michael Ennis, Jeff
Clark, Rt Hon Dr David (S Shields) Etherington, Bill
Clark, Dr Lynda Field, Rt Hon Frank
(Edinburgh Pentlands) Fisher, Mark
Clark, Paul (Gillingham) Fitzpatrick, Jim
Fitzsimons, Lorna Lewis, Ivan (Bury S)
Flint, Caroline Linton, Martin
Flynn, Paul Livingstone, Ken
Follett, Barbara Lloyd, Tony (Manchester C)
Foster, Michael Jabez (Hastings) McAllion, John
Foster, Michael J (Worcester) McAvoy, Thomas
Galloway, George McCabe, Steve
Gapes, Mike McCafferty, Ms Chris
George, Bruce (Walsall S) McCartney, Ian (Makerfield)
Gerrard, Neil McDonagh, Siobhain
Gibson, Dr Ian McDonnell, John
Gilroy, Mrs Linda McGuire, Mrs Anne
Godman, Dr Norman A McIsaac, Shona
Godsiff, Roger McKenna, Mrs Rosemary
Gordon, Mrs Eileen Mackinlay, Andrew
Gray, James McNulty, Tony
Griffiths, Jane (Reading E) Mactaggart, Fiona
Griffiths, Nigel (Edinburgh S) McWalter, Tony
Griffiths, Win (Bridgend) Mahon, Mrs Alice
Grocott, Bruce Mallaber, Judy
Grogan, John Marek, Dr John
Gunnell, John Marsden, Gordon (Blackpool S)
Hall, Mike (Weaver Vale) Marshall, David (Shettleston)
Hall, Patrick (Bedford) Marshall, Jim (Leicester S)
Hamilton, Fabian (Leeds NE) Martlew, Eric
Heal, Mrs Sylvia Maxton, John
Healey, John Meacher, Rt Hon Michael
Henderson, Ivan (Harwich) Meale, Alan
Hepburn, Stephen Merron, Gillian
Heppell, John Michie, Bill (Shef'ld Heeley)
Hesford, Stephen Milburn, Rt Hon Alan
Hill, Keith Miller, Andrew
Hinchliffe, David Mitchell, Austin
Home Robertson, John Moffatt, Laura
Hood, Jimmy Moonie, Dr Lewis
Hoon, Geoffrey Moran, Ms Margaret
Hope, Phil Morgan, Ms Julie (Cardiff N)
Howarth, George (Knowsley N) Morley, Elliot
Hoyle, Lindsay Mountford, Kali
Hughes, Ms Beverley (Stretford) Mullin, Chris
Hughes, Kevin (Doncaster N) Murphy, Denis (Wansbeck)
Humble, Mrs Joan Naysmith, Dr Doug
Hurst, Alan Norris, Dan
Hutton, John O'Brien, Bill (Normanton)
Iddon, Dr Brian O'Hara, Eddie
Jackson, Ms Glenda (Hampstead) Olner, Bill
Jackson, Helen (Hillsborough) O'Neill, Martin
Jamieson, David Organ, Mrs Diana
Jenkins, Brian Palmer, Dr Nick
Johnson, Alan (Hull W & Hessle) Perham, Ms Linda
Johnson, Miss Melanie Pickthall, Colin
(Welwyn Hatfield) Plaskitt, James
Jones, Barry (Alyn & Deeside) Pollard, Kerry
Jones, Helen (Warrington N) Pond, Chris
Jones, Ms Jenny Pound, Stephen
(Wolverh'ton SW) Powell, Sir Raymond
Jones, Jon Owen (Cardiff C) Prentice, Ms Bridget (Lewisham E)
Jones, Dr Lynne (Selly Oak) Prentice, Gordon (Pendle)
Jones, Martyn (Clwyd S) Prior, David
Keeble, Ms Sally Prosser, Gwyn
Keen, Alan (Feltham & Heston) Quin, Rt Hon Ms Joyce
Keen, Ann (Brentford & Isleworth) Quinn, Lawrie
Kemp, Fraser Radice, Giles
Kennedy, Jane (Wavertree) Rapson, Syd
Khabra, Piara S Raynsford, Nick
Kidney, David Reed, Andrew (Loughborough)
King, Andy (Rugby & Kenilworth) Reid, Rt Hon Dr John (Hamilton N)
Kingham, Ms Tess Roche, Mrs Barbara
Kumar, Dr Ashok Rooney, Terry
Ladyman, Dr Stephen Ross, Ernie (Dundee W)
Lawrence, Ms Jackie Rowlands, Ted
Laxton, Bob Roy, Frank
Leigh, Edward Ruane, Chris
Leslie, Christopher Ruddock, Joan
Letwin, Oliver Ruffley, David
Levitt, Tom Russell, Ms Christine (Chester)
Ryan, Ms Joan Thomas, Gareth R (Harrow W)
Salter, Martin Tipping, Paddy
Savidge, Malcolm Todd, Mark
Sawford, Phil Touhig, Don
Sedgemore, Brian Trickett, Jon
Shaw, Jonathan Truswell, Paul
Sheerman, Barry Turner, Dr Desmond (Kemptown)
Sheldon, Rt Hon Robert Turner, Dr George (NW Norfolk)
Simpson, Alan (Nottingham S) Twigg, Derek (Halton)
Skinner, Dennis Twigg, Stephen (Enfield)
Smith, Angela (Basildon) Vaz, Keith
Smith, Miss Geraldine Vis, Dr Rudi
(Morecambe & Lunesdale) Wareing, Robert N
Smith, Jacqui (Redditch) Watts, David
Smith, John (Glamorgan) White, Brian
Smith, Llew (Blaenau Gwent) Whitehead, Dr Alan
Soley, Clive Wicks, Malcolm
Southworth, Ms Helen Wilkinson, John
Spelman, Mrs Caroline Williams, Alan W (E Carmarthen)
Squire, Ms Rachel Wilshire, David
Starkey, Dr Phyllis Winnick, David
Steinberg, Gerry Winterton, Ms Rosie (Doncaster C)
Stevenson, George Wise, Audrey
Stewart, David (Inverness E) Wood, Mike
Stewart, Ian (Eccles) Woodward, Shaun
Stinchcombe, Paul Woolas, Phil
Stoate, Dr Howard Worthington, Tony
Strang, Rt Hon Dr Gavin Wray, James
Stringer, Graham Wright, Anthony D (Gt Yarmouth)
Stuart, Ms Gisela Wright, Dr Tony (Cannock)
Sutcliffe, Gerry Wyatt, Derek
Taylor, Ms Dari (Stockton S) Tellers for the Noes:
Taylor, David (NW Leics) Mr. David Hanson and
Temple-Morris, Peter Mr. Graham Allen.

Question accordingly negatived.

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