HL Deb 21 April 1998 vol 588 cc1033-135

3.9 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn)

My Lords, I beg to move that this Bill be now read a second time.

The Bill sets out the Government's detailed legislative proposals to establish the national assembly for Wales, to take action to reform public bodies in Wales, and to bring effective accountability for public services. It delivers our manifesto commitment for constitutional change in Wales. It brings democratic control and accountability to the existing tier of government in Wales. Virtually all the functions of the Welsh Office and its budget will transfer to the assembly. The quangos in Wales will come under the control of a democratically elected authority.

The assembly is given the power to build on the Bill's reforms of public bodies in Wales and to take responsibility for determining the structure of the main public bodies which will deliver services in Wales. The assembly will be an inclusive body. It is for all parts of Wales and answerable to voters across Wales, regardless of political persuasion or origin.

This Bill provides for a long-overdue reform which brings democratic and accountable government to Wales for the first time. I hope that noble Lords on all sides will feel able to accept not only the principles underlying the Bill, but also the necessity and desirability of the measures which it sets out and which another place has considered in some depth and over some time.

There is broad consensus in Wales that the decision has been taken that there will be an assembly; and that it must be made to work as effectively and successfully as possible. That is a view shared by those who supported the "Yes" campaign and those who voted "No". The Government's response is to want to ensure that the form the assembly takes is one which commands the widest support. I pay tribute to the noble Lord, Lord Roberts of Conwy, for what he said in October last year: that he wanted as effective and efficient an assembly for Wales as could possibly be devised.

The Prime Minister pledged to listen to the people of Wales. The Secretary of State for Wales has done so. He has made a number of major amendments to the Bill in another place to reflect concerns raised across the political spectrum, both inside and outside Parliament. He took advice from his advisory group. That shows that when we say "inclusion", we mean it. That group included representatives of all the main political parties. It has been chaired in a masterly way by John Elfed Jones. It was a pleasure to many to see the noble Viscount, Lord St. Davids, and Mr. Nick Bourne willing to give their respective talents from different viewpoints to that body. The outcome is a Bill which implements a major, vital constitutional reform and which does so in a way that is responsive to the various representations put forward.

I do not pretend to your Lordships that the Bill is now beyond improvement. We remain committed to listening to the views of noble Lords from all sides over the forthcoming weeks. We undertake to look carefully at each and every suggestion put forward which is aimed at improving the terms of the Bill. We believe that it is in that spirit of consensus that we should proceed. I hope your Lordships will share that view.

Clause 1 of the Bill is its heart. It provides simply that there shall be a national assembly for Wales—the first democratically elected all-Wales body ever known. It is strange that it is only now, near the end of the second millennium, that a country like Wales should be permitted to take responsibility for its own affairs.

We shall by those means strengthen the Union. Others in another place spoke about devolution bringing about all manner of difficulties for the long-term economic and social well being of the people of Wales and the rest of the Union. I reject those propositions. It is Parliament that is to confer authority upon the assembly and for that simple reason Parliament remains the supreme legislative body. The office of the Secretary of State for Wales and the Welsh Office have been in existence for almost 34 years. They exercise significant responsibilities that affect almost every aspect of day-to-day life in Wales: the National Health Service, education, economic development, agriculture, planning and so on. The more powers the Welsh Office acquired under previous administrations of both complexions, the more anomalous has become the lack of democratic accountability for those powers to the people of Wales.

The assembly will provide that democratic accountability within Wales. We believe it will increase the confidence and trust of the people of Wales in our system of government and by so doing strengthen the Union to which this Government remain adamantly and unshakeably committed.

The same spirit informs the Government's choice of electoral system for the assembly. Part I of the Bill proposes that the assembly will consist of 60 elected members. Forty will be decided by the first-past-the-post system. A further 20 will be elected for assembly electoral regions. The introduction of proportional representation will ensure greater fairness in the overall distribution of seats than is possible under the first-past-the-post system.

Wales has particular experience of the effects of the current system. The Labour Party gained 85 per cent. of the Welsh seats in another place at the last general election, with only just over half the votes cast. The Conservative Party gained 20 per cent. of the votes cast, but had no representation at all. I ventured to suggest to your Lordships on an earlier occasion that we do not think that that is a fair system in the outcome. We have therefore deliberately chosen the additional member system, not simply as a form of outdoor relief for distressed Conservatives. It is a deliberately chosen—perhaps I may say "generously" chosen—means for ensuring that assembly members fully represent all shades of opinion in Wales. We believe that we shall thereby have a better assembly.

Part II sets out the assembly's functions. What we propose is an assembly which, in effect, takes responsibility for the powers exercised by the Secretary of State. It will be enabled to make secondary legislation and to reach its own conclusions about the resources allocated to it. It will not have a primary law-making function, nor will it be able to vary taxes. This is a proposal for Wales, responding to Welsh needs and preferences.

We want to bring democracy to the administrative arrangements which already exist. We are doing so by conferring powers under the provisions of Part II, which brings Schedule 2 into effect. The schedule lists the fields in which the Secretary of State currently has functions. He will be required to consider transferring those functions to the assembly. This will be achieved by an Order in Council—the "transfer order". That order is to be subject to the affirmative resolution procedure in both Houses, so there will be amply sufficient opportunity to examine the detail before the powers are formally transferred.

The Secretary of State has published a working draft of the order. He will make a further version available before Committee stage in this House. There is much work still to be done before the order is formally placed before Parliament next spring, but before then we want all interests—in Westminster, Whitehall, Wales or elsewhere—to have the clearest indication of the responsibilities that the assembly will have.

The draft order is bulky. That is perhaps sufficient reason for not including it on the face of the Bill, but we hope that your Lordships will find the draft informative for your further consideration of the Bill in Committee.

I draw your Lordships' attention to the memorandum from the Leader of the House of Commons on arrangements for the scrutiny of delegated legislation by the assembly and the Scottish parliament which was set out in the recent report from the Joint Committee on Statutory Instruments, published on 27th March.

Parliament is giving the assembly a legitimacy of its own to take responsibility for its actions and to be accountable through the ballot box to its constituents in Wales. The arrangements for the assembly might be seen as novel; they are; they are intended to be. They are devices to ensure that the assembly is able to exercise real responsibility and to be accountable to those who matter; namely, those who vote.

We have decided that it would be inconsistent therefore to subject the assembly to the scrutiny or approval of Westminster or Whitehall for the vast majority of the responsibilities it is to exercise. Part II therefore provides that in most cases there will be no need for the assembly to seek the consent of Ministers, including the Treasury, before taking action, even where the Secretary of State must do so now. We do not believe that the assembly should need parliamentary approval for most of the subordinate legislation it is to make. Indeed, if Parliament attempted to second-guess the actions of the assembly, that would turn it, as some of its opponents have described it, into a mere "talking shop".

Clause 23 removes the requirement for ministerial consent and Clause 45 removes the need for parliamentary procedures. However, the assembly is not completely unfettered. Schedule 7 sets out special judicial procedures by which disputes as to the assembly's exercise of its powers are to be resolved by law; that is, whether or not purported or proposed actions are within its statutory powers.

Your Lordships will recognise the strong views which we hold about the need to bring effective accountability to unelected public bodies that operate in Wales. Clauses 28 and 29 thus give the assembly the power to decide whether to reform, merge, or indeed abolish many of the bodies mentioned in Schedule 3.

The assembly will need to operate on the basis of sensible working relationships with the rest of government. It is important to have clear, mutual understandings about the working relationships between the assembly and government departments. That is why we propose concordats, which are not intended to be statutory, to delineate those working relationships. We wish to preserve the good working relationships which the Welsh Office has with Whitehall departments so that we can continue government in Wales smoothly and efficiently. The concordats will set the framework for administrative co-operation, exchange of information, dealing with common processes and the main features of good working relationships.

Part III deals with the internal architecture of the assembly. The guiding principle has been that the assembly must be given maximum discretion to order and control its own affairs. We came to the conclusion that the Bill, as introduced into another place, was too clearly directed towards a committee system for the internal workings of the assembly. The noble Lord, Lord Roberts of Conwy, and Mr. Ancram put forward views which were listened to with great care. That is why we came to the conclusion, on the basis of representations including suggestions from the National Assembly Advisory Group, that the Secretary of State should introduce amendments to allow the assembly to adopt a more Cabinet-like system. It is clear from the views of all parties concerned that that is the starting assumption about the way in which the assembly is to work.

That is now reflected in the present form of the Bill. The first secretary would be able to appoint assembly secretaries and allocate portfolios. The Secretary of State made clear that that would be reflected in the initial standing orders of the assembly which he will make following consideration of the draft standing orders prepared by the Standing Orders Commission, provided for in Clause 51. The Cabinet-like structure will reflect the expressed wish of many in Wales; it will also increase accountability and efficiency. I hope that your Lordships will come to the same conclusion in respect of the Cabinet-like structure as did another place.

We are providing safeguards against the centralisation of assembly power by means of the executive committee. The assembly will be required to establish subject committees to mirror the responsibility of assembly secretaries and to scrutinise the actions of the secretaries in the exercise of their functions. They will reflect the party balance in the assembly as a whole.

Clause 62 requires the establishment of regional committees for each part of Wales. They will ensure that the needs of their areas are fully and properly understood by the executive committee, the subject committees and the assembly as a whole. There has been a perception in Wales for far too long that governmental attention was too much focused on the south-east, and on the M.4 corridor between Newport, Cardiff and Bridgend in particular. The regional committees are designed to dispel that perception and to bring about an effective mechanism to ensure that the needs of all areas of Wales are a focal point for debates within, and decisions taken by, the assembly.

Part IV deals with funding, accounting and auditing arrangements. When the assembly is established, it will become responsible for most of the £7 billion annual budget currently controlled by the Secretary of State. The resources are allocated principally under the Barnett formula. Annual changes in the Welsh block will continue to be determined by the Barnett formula so as to ensure automatic changes to reflect changes in comparable English spending programmes. The Financial Memorandum makes that clear.

The Secretary of State and the Chief Secretary to the Treasury are on public record as saying that that process is to continue after devolution. They have published the principles by which the Barnett formula operates—copies are to be found in the Library. We do not believe it to be appropriate or practicable to place those, or the detailed rules which underpin them, on the face of the Bill. The degree of detail and complexity would make the Bill unwieldy. We therefore provide for an open, transparent funding system; the Secretary of State being obliged to inform the assembly in advance of its funding for the year and the means by which it has been calculated. We believe that that approach, together with the publication of the detailed Barnett rules, will ensure that funding for the assembly will be fair and readily open to scrutiny.

We establish in the Bill a new and independent office of auditor general for Wales. He or she will provide a similar role to the Comptroller and Auditor-General. The auditor general will audit the accounts of the assembly and a range of public bodies; will report to the assembly and will help it to ensure that the most effective use is made of its resources by carrying out value-for-money studies.

Part V sets out the assembly's relationships with outside bodies. We have not tried to be over-prescriptive. It is, of course, important that the assembly acts in a way which is consistent with the United Kingdom's international obligations and within the powers delegated to it. Clauses 108 to 112 do that; Schedule 7 sets out the legal processes which will apply if questions arise as to whether the assembly acted within its legal powers.

This assembly will not work unless it works with all in Wales. If the assembly is to be a success, that will be achieved by its democratic character. But the assembly is not the only facet of democracy in Wales. Part V sets out how the assembly is to relate to local government, the voluntary sector and business. It requires the assembly to have regard to sustainable development, to equal opportunities and—this is not the least important matter—to the equal treatment of the Welsh and English languages. In making those provisions we do not seek to dictate the policies the assembly is to adopt; that would be wrong. But we aim to entrench an inclusive and consensual approach in the way that the assembly does its work.

Part VI starts the process of reform of the most significant public bodies in Wales. It brings the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales under a single umbrella with an all-Wales strategic remit nonetheless able to deliver programmes locally, tailored to local needs. We believe that those arrangements will be of real benefit to all areas of Wales. The rural expertise of the DBRW will not be lost. It will now be available for rural communities across Wales, no longer constrained by administrative boundaries which we believe to be artificial. The expertise of the Land Authority is to be kept in a specialist division within the new agency. The assembly itself will ultimately assume the functions of Housing for Wales—Tai Cymru, the Welsh housing agency. Prior to the establishment of the assembly, the functions will transfer to the Secretary of State for Wales.

This is a deliberately brief introduction to the key components of the Bill. As I said, the other place has made significant changes to the original proposals. I repeat that we still wish to address a number of areas where the Bill needs improvement. We shall bring forward amendments in Committee to establish the office of the Welsh administrative ombudsman, to ensure that the Bill is consistent with other legislation currently before Parliament, such as the Human Rights Bill, and to offer further clarification on the role of the assembly in respect of Wales-England cross-border issues.

Possibly, there will be minor drafting and technical changes. But your Lordships will know that in another place we undertook to re-examine the question of how the Official Secrets Act might apply to members of the assembly. That was a legitimate question of concern. It remains our intention to bring forward appropriate amendments in Committee.

The underlying issues are complex. The assembly will be a body with both executive and legislative functions. We have no desire at all—quite the reverse—to fetter free speech. It is possible, however, that at least some members of the assembly might need to be privy to protected information under the terms of the Act; for instance, relating to police investigation.

We believe that this legislation responds to the needs and aspirations of Wales and what its people now desire. One hundred years and more have passed since the first days of Cymru Fydd, which was the start of the grand debate on the modern governance of Wales. Many have laboured for a very long time in that vineyard and some—I include myself—came late. I remember the adnod my father taught me for Sunday School, Rwy'n gweld o bell y dydd yn dod…That dawn has broken and that day has come. What a country Wales is: what a country it can be and become! It offers mean-minded threats to no one; it offers inclusive, full-hearted, genuine co-operation to all. That is the true virtue and determined purpose of this Bill.

Moved, That the Bill be now read a second time.—(Lord Williams of Mostyn.)

3.32 p.m.

Lord Roberts of Conwy

My Lords, we are all grateful to the Minister for his presentation and exposition of the Government of Wales Bill. At first sight, this Bill could be regarded as a fairly innocuous measure to transfer some of the powers of the office of the Secretary of State for Wales to a directly elected Welsh assembly, which will govern Wales rather like a grand regional council, but not too grand, we hope. It is not proposed to have an assembly with primary legislative and tax varying powers. The assembly's legislative role, as we have heard, is confined to secondary legislation, but of course, that can be extensive and far reaching. More things are wrought by secondary legislation than many of our noble citizens ever dream of. Although the assembly will not be able to vary tax rates, it may be able to exert pressure on local authorities to increase local taxes. It is one of the uncertainties in the Bill that we shall wish to explore.

But some of your Lordships will take a very different view of the measure and see it as part of the package of measures outlined in the Labour Party manifesto to deal with what was described there as a, national crisis of confidence in our political system". Not all of us would regard that description as true to reality as we know it. Some of us believe that the Government's package of so-called constitutional reforms will create a worse situation than anything that currently exists. Included in the package is the Scotland Bill which takes devolution somewhat further than this Bill relating to Wales, as indeed does the Northern Ireland assembly which may emerge from the Belfast agreement. A plethora of other far-reaching measures is promised or threatened, depending on one's viewpoint, including the possible introduction of some form of proportional representation in elections to the other place and changes to the composition of your Lordships' House.

It seems to me a great pity that we do not, as yet, have a complete picture of the constitutional changes proposed by the Government—"the big picture" as the Prime Minister calls it—because we would then have a clearer idea of the final form of the constitution that the Government wish to create. But there is no such conceptual vision in prospect and we must content ourselves with the sketchy, inchoate revelations as they appear. This Bill is one of them.

The Bill arises from a clear manifesto commitment to hold referenda in Scotland and Wales on proposals for devolution as outlined in the Scottish and Welsh White Papers. The key sentences in the manifesto were as follows, A simple majority of those voting in each referendum will be the majority required. Popular endorsement will strengthen the legitimacy of our proposals and speed their passage through Parliament … Following majorities in the referendums, we will introduce in the first year of the Parliament, legislation on the substantive devolution proposals outlined in our white papers". There has, of course, been much comment on the tiny majority in favour of the Government's proposals which resulted from the referendum in Wales on 18th September last year, in which 25.2 per cent. of the electorate voted in favour and 24.9 per cent. voted against, giving a majority of 0.6 per cent. or 6,721 votes in favour. To put the result another way, only one in four electors supported the Government's proposals. Even the wildest of the Government's spin doctors would hesitate to describe that result as the ringing "popular endorsement" that the Government had wished for. But it was the simple majority specifically required in the manifesto and the fact of that majority cannot be gainsaid or turned on its head. In spite of the early concern expressed by the Prime Minister about the narrowness of the margin and the need to allay people's fears—that was his expression—the Government felt justified in bringing forward this Bill which was given a Second Reading in the other place by a majority of 231. Its Third Reading was unopposed.

It is not the custom of your Lordships' House to seek to deny a Second Reading to a Bill to which there is a manifesto commitment unless it is "outrageous constitutionally", if I may borrow a phrase used by the noble and learned Lord, Lord Simon of Glaisdale, on another occasion; and it is not the intention of Her Majesty's Opposition to vote against this Bill this evening. While we have many misgivings and concerns, not all of which were discussed in the other place, we shall do our best to change the Bill for the better in Committee and hope that the Government will listen to our arguments. I was glad to have the Minister's assurance on that point.

One of our first concerns is that this Bill introduces a system of proportional representation for the election of one-third of the membership of the assembly. Although the Conservative Party may stand to gain some seats in consequence, we are strongly opposed in principle to the introduction of proportional representation and believe that the current first-past-the-post system is much to be preferred for sound democratic reasons. However, we are pragmatic enough to realise that the Government are unlikely fundamentally to change the electoral proposals in the Bill and so we shall concentrate upon some inherent defects and shortcomings in these proposals when we come to the Committee stage.

An analysis of the voting pattern and results of the referendum suggests—and as the Prime Minister's comments in the immediate aftermath implied—there are many real fears (and some hopes) about the practical consequences of the implementation of this Bill. One of the most frequently voiced fears is that it will lead to the break-up of the United Kingdom. It is difficult to foresee just how that could happen when all the powers and resources of the Welsh assembly are granted by the United Kingdom Parliament and could be taken away again, as happened with the Stormont Parliament in the early 1970s—an event that some noble Lords will vividly recollect.

But devolution is an ongoing process, as the Secretary of State for Wales has said, and potentially a one-way street, if not to separatism then to widespread dissatisfaction. The scope for fomenting discontent is immense. The likelihood of friction and conflict between the assembly and Westminster over powers and resources is very real, irrespective of which party is in power at Cardiff and Westminster. There is already an incipient demand for more powers and resources, and the call does not come necessarily from extreme nationalists. Similarly, there is a possibility of what might euphemistically be called strained relationships between the Welsh Executive and central government, and even between assembly civil servants and their Whitehall counterparts.

The Government hope to avoid much of the potential conflict by establishing concordats between government departments and the assembly. Your Lordships may share my view that this new-fangled device, which will have no legal basis whatsoever, is no substitute for a proper scheme of devolution, clearly and firmly drawn and written into the Bill as far as possible. One acknowledges the need for flexibility but that must not be a cover-up for uncertainty of aim and purpose; nor should too much be left outside the Bill to be sorted out later by some other body. Sound devolution law should provide the good fences that make good neighbours. If devolution is to strengthen the Union, as the Government have argued it will, the proposed scheme of devolution must be clear to all concerned: there must be no ambiguity.

As a Welshman living in Wales, my greatest concern is that Wales will be marginalised and may lose many of the benefits that come to it from its close association with its powerful and, on the whole, generous neighbour. It is an open secret that Wales is one of the poorer regions of the United Kingdom in spite of a great deal of inward investment in recent decades and that public expenditure per head is therefore higher in Wales than in England. My fear is that devolution may put at risk the favourable treatment that Wales has received to date as part of the United Kingdom and under the banner of its unity.

There is no guarantee of proper and adequate funding on the face of the Bill; it is all left to the determination of the Secretary of State and intra-governmental haggling. At present, the Barnett formula ensures that the Welsh block grant is automatically increased in line with higher spending in England, but pressure is already mounting for a change in the formula itself. Indeed, the entire basis of regional funding may well be changed when the Government's review of public expenditure is complete. Wales should benefit if United Kingdom resources are allocated according to need, but there is no guarantee that they will be. The voice of Wales may be strong in the assembly and in the Principality but the fear is that it will be reduced to an inaudible whimper here in Whitehall and Westminster.

Another deep concern in Wales is the fear of total domination of minorities of one kind or another within Wales itself and the abuse that may flow from it. The current predominance of the Labour Party in Wales is a fact of life. It holds 35 of the 40 parliamentary seats and may well be the dominant party in the assembly, at least in the early stages. The Secretary of State is well aware of the fact that power tends to corrupt and has done all he can in this Bill to prevent it happening.

For my part, I was certain from the beginning that the cosy, all-party subject committee system of government provided in the Bill as originally drafted was not the best way to govern Wales. It was a recipe for indecision and blurred accountability. No one would dream of trying to rule the United Kingdom with such committees. I am therefore very glad that the Secretary of State for Wales has listened to the representations and introduced clauses at Report stage in the other place to allow for a cabinet style of government, not unlike that contained in the Scotland Bill. Others who have examined the issue, including the constitution unit of the University of London and the Government's advisory group also favour the change. But the cabinet style of government is curiously optional when the assembly comes to delegate functions under Clause 63. That is an area we shall wish to probe.

But domination by one political party is not the only kind of spectre that the prospect of an assembly raises in Wales. There is the fear that the needs and interests of the rural areas will be ignored or made totally subservient to those of the more populous industrial areas. The Development Board for Rural Wales is absorbed into the new all-Wales "economic powerhouse" which unites that body with the Welsh Development Agency and the Land Authority for Wales. Magnitude has its advantages but there are drawbacks too. The fear that rural areas and interests will not be given the attention they deserve is very real in many people's minds, especially in the farming community. The Bill recognises this concern to some extent and proposes an advisory committee to represent the interests of North Wales and that there should be other advisory regional committees whose areas have yet to be defined. Clearly, the Government have not thought through this proposal which was further considered by the Secretary of State's advisory group. They too are as yet undecided as to the best way forward. This is yet another example of the Government's uncertainty which we shall try to remove by an appropriate set of amendments at Committee stage.

During the referendum campaign much was made of the claim that an assembly would give Wales a stronger voice in Brussels, but there is nothing in the Bill to substantiate that claim and all that has been said subsequently tends to confirm doubts as to whether anything much can be achieved in Brussels after the assembly comes into being that cannot be achieved now; indeed, it may be less. Wales may lose out if its interests are not fully represented there by a Secretary of State who is a member of the UK Government. This issue looms ever larger as the European Union is enlarged to include new potential claimants for European agricultural and regional funds. The voice of Wales must not be drowned in the cacophony accompanying the implementation of Agenda 2000.

Additional economic benefits will come to Wales with devolution—so it was argued during the referendum campaign—but some of us fear that the strong thrust towards improving the economy developed by successive Secretaries of State in recent years, and which produced a promising legacy for the present Government, will be lost in destructive internal bickering and pointless parochial rivalry. We are all anxious that that should not happen and that the impetus to raise living standards will not be lost in muddled thinking and a maze of costly diversions.

Many other aspects of Welsh life, social and cultural, will be subject to the decisions of the assembly when it comes into operation. We must ensure that the help and protection of this Parliament are available to the assembly to which we are devolving power and responsibility and that that protection extends to the people of Wales if circumstances arise where they need such protection. Of course, it is to be hoped that all our fears will be dispelled or proved groundless. We shall all have cause to rejoice if that is the case.

The noble Lord the Minister knows Wales well and does not underestimate the difficulty of providing a system of regional government which is fair to all and seen to be fair, not only to individual citizens generally but fair to the inhabitants of different areas, with their diversity of interests and needs. I share the hope that the assembly will in time bring a new spirit of unity to Wales and its people the kind of unity which we display on the international rugby field from time to time—and that this in turn will re-invigorate the sense of nobility of our, old and haughty nation, proud in arms", as Milton described us, and bring greater prosperity and confidence all round. It is a very challenging task, requiring the continuous support of the United Kingdom Parliament if it is to be successfully accomplished and the sympathetic understanding of the mother of parliaments, which is England herself.

3.50 p.m.

Lord Thomas of Gresford

My Lords, I add my congratulations to the Minister on the moving way in which he presented this historic Bill. The Bill is about good government. Good government depends upon understanding. Understanding creates flexibility and responsiveness to the needs of people. We on these Benches wholeheartedly welcome the Bill because we believe that those who participate in the decision-making of the national assembly for Wales will bring fresh, creative and understanding minds to the great debate about the future of our country.

We can count ourselves fortunate in Wales that we suffer no sectarian divide. There is no alienation between republican and unionist. Nationalist violence in Wales is dead and buried. I entirely reject the suggestion made by the noble Lord, Lord Roberts, that there is scope for fomenting dissent as a result of the Bill. This is a Bill which will bring the various parts of Wales together. Although people talk about the domination of south-east Wales, it is a matter of considerable interest that the three opening speakers in this debate are all from north Wales.

There are practical issues to be tackled: the desperate state of agriculture; the urgent need to encourage home-based businesses and sustainable development; the continued attraction of inward investment; better education; and improved communications. There is much to be done for the state of the nation's health, neglected housing, the debasement of the environment and the retreat of the language. Yet there is a broad consensus among Welsh people of all political persuasions as to how these problems should be tackled.

We on the Liberal Democrat Benches are abundantly optimistic that the national assembly for Wales will succeed. Our approach to the Bill is to ensure that it has a fair passage. The Bill does not achieve all that the Liberals and the Liberal Democrats have campaigned for over so many years. It is 32 years since I drafted a Bill to provide a scheme for the domestic self-government of Wales, which was introduced in the other place by my noble friend Lord Hooson on 1st March 1967. That Bill provided for a senedd of 72 members, elected by proportional representation, with powers to legislate for the peace, order and good government of Wales, including powers to raise taxes, other than income tax and some other taxes. It reserved for the Westminster Parliament defence, foreign affairs, international trade, law and order, major taxation, social security and other issues. It promoted a ministerial system of government. It is now so long ago that Clause 9(5) of my Bill provided for the salary of members to be £2,250 a year. I chose that sum because it was £250 more than I was myself earning at that time and it seemed an appropriate figure.

But we do not propose to use the passage of the Bill as a platform for promoting Liberal Democrat policies: I do not seek the distant scene—one step enough for me". The decision by the Government, as endorsed by the people of Wales, has been made. There were times when I thought that the noble Lord, Lord Roberts, was fighting the referendum "No" campaign all over again. The essential thing is to make the new assembly workable and effective. If it is successful—and only if it is successful—events will carry it forward nearer to the legislative assembly which we think it will logically become.

Let us therefore face up squarely to the problems that the chosen type of devolution will bring. As your Lordships are only too well aware, at the moment policy is formed by a Minster and his department. The Minister brings forward the secondary legislation, for which he is responsible; he fleshes out the primary legislation; he implements the policies; and he receives the feedback to discover how the policies are operating. At present, if the legislation impinges upon Wales, the Welsh Office and the Secretary of State have a right to intervene, to participate in the Bill team, to introduce amendments to the Bill and, later, to propose amendments to secondary legislation. The Welsh Office is involved at all stages at the present time.

The system to be adopted under the Bill breaks that chain of consultation, legislation and implementation. The Welsh assembly can act by passing secondary legislation only within the scope of the policies set by the primary legislative framework at Westminster. For example, if Westminster were to abolish the single-parent allowance or to introduce something like a poll tax, the Welsh assembly must follow in enacting the necessary secondary legislation; it cannot refuse to do so.

Further, the power of the Welsh assembly to enact secondary legislation at all depends upon the powers which the primary Act devolves to it. Those powers are certain to differ in every Act of the Westminster Parliament, depending on the needs of the particular policy area. A well-motivated government at Westminster may lay down only broad principles in the primary legislation and leave broad delegated powers to the Welsh assembly. A hostile government at Westminster could pass primary legislation down to the very last detail and leave it to the Welsh assembly to decide only the salary of the caretaker. In future each Act at Westminster affecting Wales will therefore become a separate and distinct instrument of devolution in itself.

That is not ideal, and we on these Benches would not for a moment say that it was. But we do not throw up our hands in despair. The noble Lord, Lord Roberts, said that he had many misgivings and concerns: he feared that Wales may be marginalised; he feared that Wales's voice may be reduced to an inaudible whimper. When I listen to Conservative spokesmen, at times it reminds me of my appearance in the Wrexham Little Theatre as the Chorus in Anouilh's Antigone, when I was required to go round the stage in a dressing-gown crying out, "Woe, woe", and in particular of an occasion when the Messenger came dashing onto the stage crying: Hail, Kreon, I bring you news of fresh disasters". He declaimed his only line in the play with such enthusiasm that his false teeth shot out across the stage.

A means has to be devised which will permit the Welsh assembly maximum flexibility in developing its own distinctive policies through the powers that are necessarily limited by the Bill in fashioning secondary legislation. There must be input by the Welsh assembly, through the Secretary of State, the first secretary and the executive committee, and from the civil servants who serve that assembly, into the framing of the primary legislation at Westminster. It has been done before by the use of concordats. The word "concordat" need not frighten the horses. It is not, as the noble Lord, Lord Roberts, said a moment ago, a new-fangled device. It simply means a non-statutory agreement for regulating the relationships between governing bodies. There are examples from the previous Northern Ireland government and examples from existing relationships between the Welsh Office and Whitehall. The Barnett formula is an example of a concordat. There are similar concordats as a basis of consultation between the Welsh Office and local government organisations.

Concordats are flexible, they may differ between different areas of responsibility. Unlike a statutory agreement, they can be easily changed in the light of practice. There is no reason—and I hope that the Minister will note this—why concordats should not be in the public domain and subject to debate and to scrutiny. Those who complain melodramatically, like Mr. Michael Ancram in The Times of 4th March, that a concordat is "a shadowy and sinister animal", should also be complaining about our unwritten constitution which contains many such constitutional devices and understood conventions.

In order to ensure there is maximum communication between the Welsh Assembly and Westminster we would propose that there be incorporated in the Bill a broad duty on the part of the United Kingdom Government to consult with the assembly concerning primary legislation affecting Wales and a right for the assembly to be consulted. Let that duty and that right be spelt out in terms in this Bill. The Secretary of State for Wales will, of course, be central to that consultation process and the Welsh Westminster Members of Parliament will have a crucial role in monitoring how it takes place.

Clause 77 of the Bill entitles the Secretary of State to attend and participate in the proceedings of the assembly. Other clauses in the Bill give him powers: for instance, power over the moneybags—he determines what comes to Cardiff—and power to prohibit action incompatible with international obligations. We believe that it would be appropriate to incorporate a power for the assembly and its subject committees to require the Secretary of State and his officials to attend their meetings so that he can both be informed of the concerns of the assembly and questioned about the responses of the United Kingdom Government to those concerns. In that way, problems can be highlighted, discussed and ironed out. It is a two-way process of consultation and communication, and it should not be forgotten that the Secretary of State may well be of a different political colour from the Cardiff administration. Therefore a machinery whereby problems are highlighted and discussed is essential.

Another area where we would suggest that the Government should develop their thinking is on the way in which devolution issues are dealt with in Schedule 7; that is, the judicial overseeing of issues which may arise out of the devolution proposals. It would obviously be appropriate that the High Court and the Court of Appeal should sit in Cardiff with judges who have day-to-day familiarity with the constitution and the work of the assembly and its relationship to the United Kingdom Government. For litigants constantly to have to outline the constitutional background in every case heard in London would clearly be a waste of time. A permanent Lord Justice of Appeal in Cardiff—and we have three distinguished such judges who have homes in Cardiff or thereabouts—would deal not only with Schedule 7 issues, but also with judicial review cases brought by litigants in Wales who seek to challenge the administrative procedures and decisions of the Welsh assembly and other public bodies. After all, it was Henry VIII in his Act of 1535, which incorporated Wales into England and established that the laws and justice should be ministered in Wales in like form as in England, who laid down, through his singular zeal, love and favour that he bore to the Welsh people: Forasmuch as the Counties and Shires of Brecknock. Radnor, Montgomery and Denbigh be far distant from the City of London, where the Laws of England be commonly used, ministered, exercised and executed: and the Inhabitants be not of Substance Power and Ability to travel out of their countries to seek the Administration of Justice … the King, our Sovereign Lord, shall have one Chancery and Exchequer at his Castle of Brecknock and one other at his Town and Castle of Denbigh. We have today a permanent Chancery judge in Wales and two presiding High Court judges. Why should we not have a Chief Justice of Wales? Perhaps it would be one step more for the noble Lord who has opened this debate.

We welcome the introduction that was announced by the noble Lord of the position of an ombudsman. That is an issue which has clearly been overlooked in the preparation of the Bill and is now a matter which is to be addressed.

We must, in the course of our discussions, revisit the composition of the membership of the assembly. The Bill provides for an executive committee. The advisory group has suggested a membership of nine. There are to be subject committees; the advisory group suggests that there should be six covering broad themes of social issues, economic issues and environmental issues. There will be regional committees. Four have been suggested by the Welsh Office, although the advisory group has also considered seven. In addition, the Bill proposes an audit committee and a subordinate legislation scrutiny committee. The advisory group also recommends an assembly procedure committee. All this work, in addition to the plenary sessions of the assembly, is to be done by no more than 60 members with a party balance being kept on each committee. It was very interesting for those of us in Wales to note that the Northern Ireland proposal is that those should be 108 members to govern 1.6 million in Northern Ireland. Why 60 members for 3 million and 108 members for 1.6 million?

Finally, I return to the inevitable issue of proportionality. I thought that the noble Lord, Lord Roberts, was looking a gift horse in the mouth. In the publication Representation, Mr. Russell Deacon, a lecturer in politics at University of Wales Institute, Cardiff, compared the Welsh model in the Bill to the Scottish model in the Scottish Bill. He concluded that the Welsh model rewards the larger parties at the expense of the smaller ones: Both the Labour and the Conservatives' share of the seats is higher than their share of the vote under the Welsh system, whereas the Liberal Democrats' and Plaid Cymru's shares are lower. The Scottish system achieves a higher degree of proportionality than the Welsh system. The Conservatives and the Liberal Democrats come within 0.5% of true proportionality. Only Plaid Cymru loses out, but to a lesser degree than under the Welsh system. In March 1997, the then Welsh Liberal Democrat Leader Alex Carlile, obtained from Ron Davies a guarantee that if the proposed electoral system did not turn out to be truly proportional, then it would be reviewed". The reason is that the ratio of the first-past-the-post system to the additional member system split in Scotland is 57:43 in percentage terms, but in Wales is 67:33. Just one extra member in each of the five European constituencies in Wales would make a significant difference and, indeed, bring the count of members nearer to my 1967 total of 72.

There are, therefore, reasons, both practical in relation to the amount of work that the assembly has to do, and of principle approaching proper proportionality, to increase the proposed membership of the assembly. We have heard from the Conservative spokesman a speech which I respectfully suggest was fearful, timid, lacking in confidence and certainly not resonant of the old and haughty nation that he referred to in his peroration. We on these Benches do not for one moment believe that that is the true voice of the noble Lord, Lord Roberts of Conwy. No doubt, the problem of balancing patriotism and party prevents him from saying something along the lines that we have put forward.

The noble Lord, Lord Williams, referred to an inclusive and consensual approach. I agree. I see a coming together of all the people of Wales of all political persuasions and from all parts. Cymru Fvdd it certainly is; that is the traditional liberal call. We welcome this Bill.

4.10 p.m.

Viscount Tenby

My Lords, I, too, congratulate the Minister on his eminently fair, clear and moving introduction to the Bill. To those of us who had the pleasure of labouring with him in the vineyard of the recent Crime and Disorder Bill, that comes as no surprise.

It is with some trepidation that I rise to speak in this Second Reading debate. That is not only because most noble Lords taking part are far more experienced and informed on the subject than I am—even to the extent of there being a member of the admirable advisory group in this House—but also because for various reasons, sadly, I do not have the pleasure of living in Wales—the first of the traitors speaks today—and am therefore somewhat diffident about speaking on a Bill designed for the Welsh people and those who live in Wales. However, I hope that noble Lords will at least concede that my credentials are adequate.

I am further emboldened by the presence on the speaking list of some who may not, perhaps, be readily identified with the Principality but who nevertheless no doubt have an important contribution to make to the debate. I should say at the start that I support the Bill and the projected assembly which everyone who has the interests of Wales at heart should make as effective as possible. In saying that, I am heartened by the thought that on one of the rare occasions in my life I am probably speaking on the side of the majority in this House.

The recent history of Wales in the matter of devolution is unpredictable. In 1979, the concept was decisively rejected by the electorate almost certainly because of hostility towards it within the ranks of the predominant political party within Wales. Mercifully, that hostility was less intrusive in the run-up to the referendum last September.

I cannot understand the philosophical or practical objections to an elected Welsh assembly. During the campaign we were told that, for example. X number of hospitals could be built with the money needed to finance such an assembly. If so, and they were required, why were they not built earlier? We were told that Wales was an inherently divided country and it is true that as long ago as the 12th century Geraldus Cambriensis—who I am sure is familiar to all noble Lords—was ruefully observing that the only way to conquer the Welsh was to stir them up against each other.

We were told that it was, and always would be, a matter of North versus South and East versus West; or, in the case of Pembrokeshire, those North of the Cleddau and those who live south of the river. That is an in-joke! It was also said that the concept of Gwerin was only a philosophical dream from the heartland of Wales which did not touch the hearts and minds of those living in Anglo-Welsh areas of Gwent and Glamorgan. If any of those assumptions were true—a view which I do not accept anyway—they would surely provide all the more reason for having a symbol of national unity; something which might unite disparate groups and lifestyles.

The reasons for the change of heart within Wales since 1979 are not hard to find. A country which was overwhelmingly non-Conservative felt that nearly 20 years later it had little say in the direction of its own affairs—and this despite (and this must be stressed) a succession of outstanding Welsh Secretaries of State, some noble Lords among them, who made major contributions to the Welsh economic revival and to the country's future prosperity.

Nevertheless, unaccountable quangos composed largely of political appointees, a lack of an identifiable national forum, no visible expression of national unity other than at the national stadium two or three times a year or at the annual eisteddfod all contributed, I believe, to a new desire for a national voice and a more directly accountable form of democracy.

Major decisions have been taken since the referendum and, indeed, during the passage of the Bill through the other place, but, I suggest, more remains to be done here. There would, thankfully, appear to be a consensus in favour of Cabinet-style government as opposed to government by committee and, it is hoped, this consensus will be reflected in the recommendations of the advisory group to the Standing Orders Commission, no doubt together with other serious and constructive recommendations as a result of their far reaching and lucid consultation paper and their meet-the-people road show covering the whole of Wales, which I believe is due to kick off a week today in Llandrindod Wells. Proper accountability at committee level is always difficult to establish and having clearly identifiable executives answerable to an elected assembly must be the right way forward.

Other points have been resolved or are in the process of being resolved following the passage of the Bill through the other place. In view of the considerable amount of expertise on display today and the time factor, your Lordships will be relieved to hear that I do not propose to go into detail about them; apart from asserting in passing that, unlike some, I do not see Clause 22 as catch-22, and regard leaving open for future governments the question of additional transfers of power as eminently sensible.

I should, however, like to mention very briefly a number of points. First, I believe that it is probably unfortunate that the debate on where the future assembly building should be, activated by the inability of the city council in Cardiff and the Welsh Office to agree terms, should have taken place at such length and so publicly. The resulting "competition" between east and west—namely, Cardiff and Swansea—in which it was only too obvious that Cardiff would emerge as the winner, has done little to soothe the tensions which have historically existed between the two centres. Secondly—and I agree that some may view this as peripheral to the major preoccupations—perhaps I may say how delighted I am to see the undertakings relating to the transfer of Welsh records from Kew to the projected Welsh record office. I wonder whether the noble and learned Lord the Solicitor-General who is to reply at the end of the debate is able to make any further comment today as to the timescale for this important development.

Two further points occur. It seems to me that building an assembly from scratch, as it were, provides a heaven-sent opportunity, which I am sure will be in the minds of the members of the advisory group; namely, to devise a working regime which is both civilised and user-friendly. Why should it not be possible to have the kind of working day enjoyed by most people engaged in business instead of the obsolescent practices so revered at Westminster? This particular proposition might indeed be assisted by the current rumour that any future assembly building would be "dry" and bereft of bars. And why, come to that, should there not be provision for crèches for young women members?

Finally, experience may show that a membership of 60 for the assembly, no doubt desirable in terms of financial constraints, as opposed to, say, 80, may place too great a burden on the original members and result in doubling up, or even worse, on committees. Only time will prove whether this is an unduly pessimistic reservation. I hope that it will not be, but I wonder.

It may well be—and I have not seen any market research on the subject—that one of the factors accounting for the small "yes" majority on the referendum proposal was that, unlike its Scottish counterpart, the new assembly was viewed as a mere talking shop and, by inference, as an unnecessary additional tier of government. Words are cheap, the argument runs, and if you can buy off the legitimate Welsh aspirations with this currency, so much the better. But I say this: if the new assembly creates no more respect—and, yes, fear—in the corridors of the Treasury than a county council, then this bold initiative will have failed. Let it have teeth, and dragon's teeth at that.

The uncomfortable truth is that a majority of 7,000 out of I million voters on a low turnout is hardly a ringing endorsement of a devolved Welsh assembly. It is, however, enough. But let there be no triumphalism about it from any quarter; rather a resolve to sell the concept to all the people and, by the subsequent record of the assembly, to turn that wafer thin majority into a genuine and lasting seal of approval from the whole Welsh electorate.

4.20 p.m.

Lord Onslow of Woking

My Lords, I made my first maiden speech in 1964 and I am particularly conscious of what an honour it is today to have this opportunity to make another maiden speech in your Lordships' House. I hope that I shall be forgiven for being both brief and, I hope, non-controversial.

The noble Viscount spoke of the trepidation that he felt. I assure him that that is small compared with the trepidation that I feel on this occasion, even though, as I hope to explain, I have some claim to intervene in what is obviously a very important Welsh debate and a very important constitutional debate.

For the past 25 years I have been fortunate enough to have a home in Wales. In that I follow a family tradition. My great-grandfather retired from the Indian Army shortly before the mutiny and settled, as it happens, in Tenby. I do not wish the House to draw any comparison between the behaviour of the Indian Army in the early 1850s and the behaviour of the 1922 Committee at the time that I was chairman. But I hope that it will at least satisfy your Lordships that I have some claim to speak as a member of the Welsh electorate, even though I confess that I stand before your Lordships today as one of the 74.9 per cent. of that electorate who did not vote in favour of the assembly.

However, as my noble friend Lord Roberts said, that is water under the bridge and I certainly share his expressed ambition to improve the Bill where it needs to be improved. I was encouraged to hear from the Minister that there is to be scope for improvement. That detail is not something into which I can properly seek to go today. Instead, I wish to concentrate on two aspects of the Bill, both of them in Clause 4, which your Lordships may feel are of more importance than Committee points.

The first concerns the need for legislation to register political parties, without which this Bill, the Scotland Bill and the European Parliament Bill cannot operate. That legislation has yet to be framed and brought before Parliament and we await it with interest. For my part, I shall be disposed to welcome it for one particular reason; that is, the experience of the official Conservative candidate of my constituency at the last general election. Your Lordships may not have noticed this small point, but when the nominations in Woking closed, it was discovered that a gentleman who had no obvious connection with politics, let alone with the Conservative Party, and who did not live in the constituency had nevertheless managed to get his name on the ballot paper being described as the official Conservative candidate of the official Conservative Party. Since his name began with the letter "B", he appeared at the top of the ballot paper, and since that caused great confusion among some of my electors, he came away with nearly 4,000 votes.

That did not affect the result overall, but it is an example of a spoiling device which some outside politics regard as good clean fun; a poke in the eye with a sharp stick for the pompous politicians. I am not sure that all your Lordships would see it in that way. When electors go to vote, they are entitled to vote for candidates who are not there simply to confuse the issue, to put it mildly. Therefore, I very much hope that, when the register of political parties is drawn up, we shall see that duly constituted political parties will be given some exclusive rights over their name on the ballot paper in particular. Of course that will apply to the ballot papers used for the purposes of the assembly elections.

There is a connected point because party lists are to be part of that process. I concede readily that an effective party must be disciplined, but I believe that it must also have room within it for some dissenters. It would be a tragedy for democracy in this country if the authority of party leadership were to become autocracy. So long as the party leadership dominates the choice of the candidates to stand in the party's name, those candidates will tend to wish to please the leaders in order to maintain their place on the list. That seems to be a negation of democracy. I hope that that is not expressing the matter controversially. However, when we reach that clause in the Bill, I hope that we may be able to include in the criteria for registration of political parties some account of the way in which candidates are chosen to go before the country for election.

Having made those two points, I have just one more point to make. Your Lordships will know from the newspapers, from common knowledge and from previous debates in your Lordships' House that in mid-Wales there are some very difficult times facing the rural economy. Farmers, traders and contractors are deeply worried about the failure of the agricultural sector which appears to many of them to be threatened. Elsewhere there are other problems which require prompt attention—the effect of budgetary pressures on the Probation Service; there are the cuts which it must implement; and yet there is expenditure arising from implementing the requirements of the Welsh Language Act. That is one example and there are others to go with it.

Perhaps I might touch on a matter which is close to my heart and in which I declare an interest. I am a trustee of the Wye Foundation. There is an urgent need to restore the decline which has affected freshwater fisheries throughout Wales and has threatened to see the extinction of many of the valuable salmon fisheries which people have visited Wales to enjoy for so many years.

Therefore, I hope that it will not embarrass the Government if I say that people in mid-Wales would welcome reassurance that the advent of the assembly—if this legislation passes, as it will—in a year's time will not be a reason for delay in taking decisions which cannot wait that long to be reached. There must be no hiatus in the transitional period. That seems to me to be of great importance.

I am most grateful to your Lordships for listening to me with such patience and courtesy.

4.28 p.m.

Lord Callaghan of Cardiff

My Lords, my first pleasant task is to congratulate the noble Lord, Lord Onslow, on his maiden speech. He confessed to feelings of trepidation. I am not at all sure that some of his colleagues sitting on these Benches and in the other place might not feel that it was perhaps a Daniel come to judgment, if I am to believe some of the stories of his fearsome reputation when he was chairman of the 1922 Committee. How true that is, I do not know. All I can say is that he inspired a great deal of awe in us and I understand also in his colleagues.

The noble Lord overcame his feelings of trepidation extremely well. He made a number of points of which I am sure the Government Front Bench will wish to take notice. I hope that he will speak again, especially on Welsh matters. There are not so many Members who represent Welsh interests in this House that we cannot welcome another ally. However, my impression of him from over 30 years' knowledge is that he was more at home behind the arras than making speeches in the House, and I dare say we shall find that that continues to be true.

I should also like to congratulate my noble friend Lord Williams of Mostyn on introducing the Bill. I also appreciated very much the contribution of the noble Lord, Lord Roberts. I was wondering until about three-quarters of the way through his speech how to interpret it, but then it became quite clear. It seemed to me, if he will not mind my saying so, that he was addressing as much the sceptics behind him as the Government Front Bench; but he could not at all times prevent his pleasure breaking through. Indeed, if I may reverse the old adage, instead of damning with faint praise, I thought he was praising with faint damns the Bill that was being introduced. However, he made a number of extremely important points.

I do not often take up the time of your Lordships nowadays but I should like to make a few points about this venture. We must make the assembly a success. It is no use trying to re-fight, as perhaps one or two speakers might have indicated, the referendum battle all over again. The Bill is going to become an Act; devolution is going to take place; and it will be effective.

The Bill has a number of important issues in it. After all, no one can complain that the transfer of health, education, housing, economic development and, as the noble Lord, Lord Onslow, said, agriculture and its plight to the assembly is anything more than rhetoric.

These issues are extremely important and they will be dealt with by the assembly, so let us not be half-hearted about this. It is important both for the constitution of our country and for the prosperity and the welfare of Wales that we make a success of this measure. I am sure that the approach that the noble Lord, Lord Roberts, will take on behalf of the Opposition will assist to that end, even though we may have some differences on the way.

In passing, I should like to congratulate the Devolution Unit in the Welsh Office and also the parliamentary draftsmen on making what I regard as a splendid effort in grappling with the structure and powers contained in the Bill. I have had experience of devolution in more than one way in the past, and this Bill, although it will certainly need amendment, is as good an approach as I have seen. Changes, as has been said, are bound to emerge in practice when a new assembly of this sort is being set up. Therefore there must be flexibility in making such changes. Of course, if the changes are fundamental there is a case for primary legislation, and the Government should not rule that out. However, on balance I have no doubt that the normal procedure of Orders in Council will satisfy what is required, together with a positive debate. I am sure that that will satisfy whatever may be needed. But we must have flexibility because I am certain that it will be needed.

On the political aspects of the Bill, a splendid job has been done in making it possible to have a Cabinet style of government—I agree with those who take that view—with a First Secretary holding a few colleagues together as secretaries of these assembly committees. However, like others, I am less happy with the party-list system. It has been devised with motives that are certainly worthy in the sense of ensuring that there shall be representation, without which some of the minority parties might feel that they were totally excluded. So I go along with it reluctantly, but we shall want to examine carefully as time goes by how far this system is in the interests of Wales as a whole. That, combined with the total membership issue—although I am not in favour of expanding the membership at the moment—will need to be looked at carefully.

The approach in the Bill of setting up a system of sub-committees, especially including the committee for North Wales, is very valuable indeed. Although party issues will no doubt be vehemently fought, whether the system of committees may not lead to some interesting cross-alliances when the members for North Wales of whatever party get together—geographical, constituency and regional interests may emerge quite strongly. It will be interesting to see whether the existence of these committees—for others are to be set up—will have the effect of ameliorating some of the party controversies that exist at the present time.

On the important role to be played by the Welsh Development Agency, it is to have a new element added to its work, quite apart from the absorption of the other agencies that exist in Wales, with its responsibility in a new social role. That needs a little explanation. How is that expected to become a responsibility, and what will the implications be? It is clear that this new Welsh Development Agency will not only become the most important agency in Wales but in some ways it will be the operational arm of the assembly. As such, it is extremely important that the division of functions should be made quite clear.

As I understand it—I shall be corrected if I am wrong—it will be for the assembly to lay down the objectives that the Welsh Development Agency should follow. There should then be no fussiness about interfering with the operational side. But there must be the most stringent oversight of accountability and the way in which it is handling the large sums of money which will be entrusted to it. There is little doubt that the Welsh Development Agency will need great vision. Its staffing needs to be of the highest quality and there must be great efficiency in carrying out what it has to do. I was not surprised to see that Mr. David Rowe-Beddoe is already planning ahead and is coming here to meet Members of both Houses.

I should like to say a word about public expenditure. There is a slight odour of sanctity about the Barnett formula which did not exist when it was invented in my time. It came about as a result of the acerbic struggle year by year between a stern Chancellor of the Exchequer and two stubborn Secretaries of State. As everybody who was in the Cabinet knows, in order to try to ease matters and prevent this issue coming in front of the Cabinet every year, with the most fearsome quarrels taking place—and, what is more, lunch being delayed considerably—we invented this system called the Barnett formula. It was devised by my noble friend. I do not think he shared any feelings of sanctity about it, but it was a vote on expediency. It was intended to prevent the haggling which usually resulted from talking about the formula that decided how much money was to be given to Scotland and to Wales for these purposes. It had a superficial air of rationality because it was based on the needs of the population: if you took the relative population of England and the relative population of Wales, you said, "Now Wales obviously gets x per cent. based on population, and that is it". It was adding something which was fairly rational on to something which was completely irrational.

I have no hesitation in saying to my noble friends on the Front Bench that, when these new eagle-eyed legislators start to investigate such matters, I am absolutely certain that the Government will find themselves faced with vociferous demands for a more rational basis of fixing expenditure in the future. Frankly, the basis of it at present is horse trading, to which the Barnett formula has been added.

I do not blame the Government for starting off on that basis because, after all, nothing has been done about it for 20 years, since we left office. However, they will have to face the problem in the future. I have a suspicion—it is no more than that—that if, as it must be, the basic principle continues to be observed that the formula should be related to providing the same measure of provision in Wales as in the case in England, it may yield increases for Wales rather than the decreases that the noble Lord, Lord Roberts, seemed to fear. One has only to walk around Wales anecdotally to see that the needs there are not met as they are overall in England. That is not to say that there are no problems in England in certain areas. But I think that the formula will have to be re-examined before very long.

I turn now to what I might call "domestic housekeeping". A new opportunity is being given to Wales and to Cardiff after the fiasco of the Opera House, which I very much regret. The new assembly must be housed in a building that will have national significance. Indeed, it must be something that will be bold enough to attract international attention and even—who knows?—applause for its elegance of design and its functional efficiency.

Can my noble friend say whether the Government have anything to say at this stage about local transport? I cannot escape my history as the Member of Parliament for that area, even though it is now so well represented by my good friend Alun Michael in the other place. A proposal has been put forward about the access through Bute Avenue and the eastern link road to the M.4, which ought to be undertaken as soon as possible. I do not know whether they are being too ambitious in talking about a light rail system; indeed, they probably are. However, there is a problem there as regards access and I hope that the Government will consider it.

I should like to say a few words about the composition of the new assembly. I should like to emphasise, as other speakers have indirectly, the absolute importance of there being the highest quality among candidates who put themselves forward for election. Ron Davies and Donald Dewar in Wales and in Scotland are going to stand for election in their respective assembly and parliament. They are front-rank parliamentarians. That is a good omen which I hope will be followed up. It is Westminster's loss that those two Members will be leaving. But, on the other hand, it will help to give a proper dimension and importance to the tasks of their respective bodies.

We need a new broad outlook among the candidates. I hear people whispering, but they do not care to say out loud that they are worried that Wales might become inward looking unless we have absolutely first-class candidates. There is a need to maintain those close links which exist at present between all the professions and all the scientific and technical institutions in England and Wales. It would be a great misfortune if, through a misplaced national pride or through excessive bureaucratic zeal, we tried to duplicate or reproduce the knowledge and skill which already exist in abundance in many of these areas.

We are living in a period during which a growing significance is being placed on the role of small nations because of globalisation. The fact that the interdependence of our economies and our financial institutions has become so intertwined on a global basis has created a backlash. I have not always been absolutely over the moon about devolution; indeed, I have been ambivalent, as, indeed, have many other people, while others are very much for or very much against it. I am bound to say that I have been rather ambivalent throughout my life. However, one of the reasons why I have come to the conclusion that it is very important—quite apart from the fact that we should accept that it is going through and, therefore, make the best of it—is that the age of small nations has arisen as a kind of backlash to what is happening globally.

For example, when the fortunes of a large company on the other side of the Pacific (in an area which most people have certainly never visited) determines whether a young man or woman will find a job in the South Wales valleys or in Newport in a new investment because of the misfortunes of the country on the other side of the Pacific, people begin to feel in our nation—and, indeed, in Europe as a whole—that we are moving into an area where the powers to make decisions are extremely limited.

The Government are wise to take notice of that situation. As has been said, this is one of a series of constitutional changes which are taking place. I do not believe that we should fear them. Of course, there will be different views about them; but the British constitution is tough yet very elastic in the way in which it works. Changes are now taking place which I did not dream of—indeed, they did not cross my mind—when I entered Parliament as long ago as 1945. I believe that we may end up with a Westminster over the next half century which will have fewer powers, while the member countries of the British Isles may have more, as indeed will Europe. That is the way in which we are likely to move. We should face that possibility and not shrink from it. We should welcome it and make the best of it. I believe that that will be in the interests of our people.

Let no Welsh Nationalist believe that independence, drawing in on ourselves, will make us stronger. Indeed, to do so would make each of us weaker. I firmly believe in the continuing unity of the British Isles. I also believe that this Bill, together with some of the other measures which are being proposed, will make it stronger.

4.47 p.m.

Lord Crickhowell

My Lords, I should like to congratulate my noble friend Lord Onslow on his admirable maiden speech. I must say that I have never seen him as a Polonius-like figure. I shall start by repeating the opinion that I put to the House in our debate on Welsh affairs on 10th December; namely, that, although by no stretch of the imagination can the Government claim to have the whole-hearted support of the Welsh people, they are entitled to proceed with this Bill.

The Bill was improved during its passage through the House of Commons, but it still remains flawed. It is a Bill which has at least as much potential for harm as it has for good. Not for the first time it will be the job of this House and its duty to improve the legislation and to seek to minimise the dangers that it presents. I should like to touch upon two points which were made in earlier speeches today. I thought that the Minister stretched truth almost to breaking point when he said that this Bill introduces democratic accountability into Wales for the first time. If he is right, then democratic accountability has not existed anywhere in the United Kingdom. The noble Lord, Lord Thomas of Gresford, made an important point. He emphasised that every subsequent Bill which passes though this House will have implications for devolution and will require the closest possible scrutiny.

It is a big Bill; and today I intend to refer only to a few key issues. The first concerns the organisational structure that now approximates to a cabinet style of government. I welcome the fact that the Secretary of State has accepted the arguments that many of us advanced and has made this change. However, we now seem to have a hybrid that combines some of the features of the local government system with some of the cabinet system. It is also a hybrid with the characteristics of a chameleon, capable if it wishes of turning itself back to its original colour. I concede that in some circumstances adaptability can be a virtue, but I believe that in Committee we shall need to probe hard to discover whether we now have on offer a system that can provide the combination of effectiveness, clarity and democratic accountability required in constitutional arrangements of this importance.

Whatever structure is finally adopted, its success will depend on the presence of an effective civil service and equally effective arrangements for the assembly to work with the UK Government and the European institutions. First, I shall discuss the civil service. All but a handful of those who work at present in the Welsh Office are to transfer to the assembly, but are to remain members of the home Civil Service. It is important that those who do so are content with what is to happen to them and are confident that their career prospects are not prejudiced by this change. I confess to some anxieties on this score despite soothing words in high places.

We need to understand where their responsibilities lie and to whom they are accountable. In an intervention in another place on 25th March (at col. 548 of Commons Hansard) Dr. Marek asked some shrewd and important questions which did not receive an adequate answer. Originally it was envisaged that the civil servants would be servants of the assembly carrying out its collective will. Now things have changed. With a cabinet system most of them will have primary responsibility to the executive, but the assembly will need its own servants—its clerks and those who are responsible for its administration. All that the Secretary of State was able to say about this important subject in another place on 25th March (at col. 574 of Hansard) was that the position was being considered by his assembly advisory group. Mr. John Elfed-Jones told me on Saturday that it has not yet done so. In this House we shall need to insist on an adequate response to those important questions.

The civil servants have to operate under concordats, which are to cover the relationships with those who serve the UK Government and the European institutions. The Government's guidance note on the concordats states that the relationships they deal with, are vital to the effectiveness of government Despite the fact that the concordats are, vital to the effectiveness of government", we know virtually nothing about them. The Secretary of State was unable to make them available to Members of Parliament before Third Reading in another place. I want to know whether we shall get them before Third Reading in this House. We need rather more than what the Secretary of State referred to as, a feel for the Government's thinking on the matter". As Mr. Ted Rowlands observed on 25th March (at col. 609 of Commons Hansard), it helps to imagine a particular scenario. He suggested a situation in which assembly officials turned up at MAFF to discuss one of the sensitive issues such as animal welfare or meat on the bone. The assembly officials discover that MAFF thinking is political dynamite for Welsh farmers. What do the officials do? They are no longer in a situation where they report back to Ministers and everyone is operating within a common system. To whom do they report? Is it to the first secretary? What is the status of this information which is political dynamite? How is it to be transmitted to the assembly or the subject committee dealing with the issue? On the information that we have from the Government at the present time, we do not know the answer to such questions. The truth is that the Bill has gone through its proceedings in another place without Parliament having any meaningful knowledge of the content of the concordats.

Mr. Rowlands gave a UK example. My anxieties are even greater when I think about the arrangements for dealing with European issues. Again, let us take agriculture as our example. There are those in Wales who delude themselves into thinking that the assembly will be able to represent Welsh interests more effectively in Brussels and in the Council of Ministers than they are represented at present. My own view is that Wales is in for real trouble on this front. When crucial issues arise, of the kind that threaten the whole future of rural communities—as they do at present—the presence of a few officials stationed in Brussels or some prior discussions with Ministers and Whitehall officials before Council meetings are unlikely to produce solutions. Indeed, what we are likely to see is a falling out between the assembly and the UK Government on a massive scale.

The National Assembly Advisory Group states (at paragraph 2.8) that the assembly will participate fully in the discussions which take place within the UK Government on the formulation of policy. Well, the word "within" can hardly be right. It may influence policy, but not from within. The group also states that, with the agreement of the UK lead Minister, the relevant Assembly Secretary could speak to the agreed UK line in the Council of Ministers". But how can that be? The secretary will not be a UK Minister. Could the representative of an independent assembly be guaranteed to stick to an agreed line? I hope the Minister will be able to give us a clear statement of the Government's position on this vital issue.

I attended only one Council of Ministers meeting. It was not neglect that made me decide not to go again but because I quickly came to the conclusion that the most effective way to represent British interests, including Welsh interests, was to have the MAFF team of Ministers doing the job on an ongoing basis. In my judgment, Welsh interests were best secured by the system we followed in which all important agricultural issues were invariably discussed and agreed by all four Ministers with responsibility for agriculture (from England, Scotland, Wales and Northern Ireland). We then went into Cabinet with an agreed policy, united and speaking as one, and the policy was presented in Brussels. How is that kind of agreement and that kind of effective representation to be secured by the spokesmen of different administrations with different objectives, answerable to different electorates, only one of whom is to be at the negotiating table where the crucial decisions are taken? That is a question on which this House will need to dwell in Committee.

Now I turn to seek the shadow, the ghost, the Secretary of State for Wales after this Bill is passed. The Welsh Office has informed us in its explanatory note on the draft transfer of functions order that, The Government's intention is that the Transfer Order will pass to the Assembly virtually all the functions of the Secretary of State for Wales". That phrase was repeated by the noble Lord who introduced the Bill. I have two comments to make. Those who believe that, with the very limited functions that remain, the Minister who holds them can for long remain in a UK Cabinet delude themselves, although it would seem that Mr. Ron Davies does not really believe it and is planning his escape. He has already indicated that it is his wish to lead a Welsh government in the assembly.

That leads me to my second comment. He apparently thinks that if the post survives for a short time he might also succeed in remaining Secretary of State for Wales and a member of the UK Cabinet. That proposition is untenable. It would involve conflicts of interest of the gravest kind. You cannot be a member of two separate cabinets, each with collective responsibility and separate interests, without such conflict being an unavoidable fact. I believe that we should remove the temptation from Mr. Davies and introduce a clause making such a dual role impossible.

When we reach the Committee stage we shall want to consider the draft transfer of functions order in some detail. I raise only one point today, the position of the University of Wales and its constituent colleges. Included in the list of Acts conferring functions to be transferred is the Further and Higher Education Act 1992 which, among other things, established the Higher Education Funding Council for Wales. The Act enables the Secretary of State to make grants to each of the funding councils of such amounts and subject to such terms and conditions as he may determine. The explanatory note to the draft order explains how responsibilities can be shared between the assembly and UK Ministers. I want to see express provision in the Bill to ensure that the UK Government retain joint responsibility for the university. It is a matter that should not be left until the transfer order in its final form is brought forward.

Cardiff University, of which I am president, like the other constituent parts of the federal University of Wales, is important as a Welsh institution, but it is also one of the largest and most significant universities in the United Kingdom. A majority of its students come from outside Wales, many from abroad. It has to compete on a level playing field with other universities. Its funding requirements do not derive from a population based "Barnett" formula. In short, it is not just a Welsh university and must therefore remain, at least in part, the responsibility of the UK Government. I have to tell the noble Lord, Lord Williams of Mostyn, who is Pro-Chancellor of the University of Wales, that some of his most senior colleagues on the Court of the University told me in Cardiff last week that they share my concerns and my determination that the university must be protected.

The time available to me does not allow me to discuss the "Barnett" formula and financial and budgetary issues. But undoubtedly we shall have to return to those matters in Committee because in the financial arrangements lies the atom that is capable of producing an explosion of massive and disruptive force. In eight years in Cabinet I sat through sufficient debates about these financial issues to know the tensions that they can create within a single administration. The "Barnett" formula, to which the noble Lord, Lord Callaghan, referred, did not prevent that happening, or prevent us from getting away to an earlier lunch. It will be far more dangerous when those debates are conducted in the open between a government at Westminster and an ambitious and distrustful administration in Cardiff.

Finally, there is the question of the dog that did not bark in the night—at least he hardly barked in the debates in another place. I refer to the English dog. I fear that in due time he will bark and may bite. There are commentators in Wales who delude themselves that the West Lothian Question does not apply to Wales. If called on, on another occasion I shall explain to them how and why it does. The English dog will bark if it thinks that the Welsh are getting too big a share of what is on the bone; or that Welsh Members of Parliament, without power or responsibility for domestic policy in their own constituencies, are deciding what happens to those in England. It is an issue that we would be foolish to put completely on one side while the Bill is before us if we care for the stability and good government of Britain as a whole.

Our job in the coming weeks is to do what we can to make these arrangements strong and effective and to minimise the risk that they may create conflict and disruption.

5.2 p.m.

Lord Cledwyn of Penrhos

My Lords, I count it a special honour to support this historic Bill establishing a directly elected national assembly for Wales. I appreciate the thoughtful speech of my noble friend Lord Callaghan. I am sure that our Front Bench will note the relevant advice that he was good enough to give tonight.

The historians have said that only twice in our long history have the Welsh achieved any kind of unity against invading forces encroaching against them: once under Llewelyn Fawr in the 13th century, and once in Owain Glyndwr's Parliament in the early 15th century. I believe that the national assembly established by the Bill will be a powerful expression of the unification or reunification of Wales. Incidentally, I should inform your Lordships that Llewelyn's capital was in Anglesey!

The need for a Welsh parliamentary assembly, having slumbered for centuries after the days of Owain Glyndwr, was articulated at the end of the last century by Tom Ellis, the scholastic Liberal Member of Parliament for Merioneth, whose friend Lloyd George described himself as a radical and Welsh nationalist, without separatism.

Some of your Lordships will know that throughout my life I have played my part, together with others, in seeking an Act of Parliament to establish an assembly. What the Government of Wales Bill provides is the logical culmination of a process which started in 1964 with the creation of the office of the Secretary of State for Wales. Administrative devolution therefore started, in Welsh terms, at that point—decades after our fellow Celts. My noble friend Lord Prys-Davies was tireless in his efforts to persuade the Labour Party of the need for devolutionary powers and a more accountable system of government for the Welsh people. I pay tribute to him today for his ceaseless, painstaking work.

In the 1950s I found myself active with the Parliament for Wales Campaign under the chairmanship of Lady Megan Lloyd George. In the early 1960s I supported a Private Member's Bill introduced by the late S.O. Davies, the Member for Merthyr Tydfil. In 1966, when I became Secretary of State for Wales, it was my privilege and duty to do my best to persuade my colleagues in the Labour Cabinet of the day to set up an elected Welsh council. In the 1970s I worked with others to win support in the House of Commons and in Wales for the Wales Act 1978 introduced by John Morris then Secretary of State for Wales, now Attorney-General. Alas, all the efforts which I have mentioned were unsuccessful. But now, very late in this remarkable century, the Bill which is before us today will at long last establish the national assembly of the people of Wales. The Bill represents a momentous constitutional change in the United Kingdom. I am very moved by the debate.

I pause for a moment to express the gratitude we owe all those who worked so splendidly in their day to establish a Welsh assembly but who passed on without seeing their aspirations fulfilled. I believe that the Bill is a testimony that their labour was not in vain.

My noble friend Lord Williams of Mostyn, whose excellent speech we much appreciated, is not the first Minister of the Crown to rise at the Dispatch Box in this House to introduce a government Bill establishing a Welsh assembly. But he is the first Minister to do so supported by the results of a referendum. That is a formidable advantage.

The "yes" campaign brought together many dedicated people of different political party allegiance and outlooks. That was a valuable experience. It showed what can be achieved given goodwill and a willingness to compromise and co-operate. In that experience there are valuable lessons for members of the Welsh assembly in the future. The Welsh people from Anglesey to Gwent are anxious that the assembly should be effective.

Apart from the important Clause 57 which was introduced at Report stage in another place, with the broad support of all parties, it seems to me that the Bill reflects pretty closely the principles and aspirations of the White Paper, Voice of Wales, which stemmed from the Labour Party manifesto of last year. As has been explained by my noble friend the Minister, the Bill vests almost all the powers of the Secretary of State for Wales in the assembly. This means that the exercise of those powers will now become more directly accountable to the people of Wales.

We have heard a good deal about the difficulties which may occur in the future. I am not prepared to consider them at the moment. I am positive that, after centuries, when the Welsh people have their opportunity they will take it. Of course I wish that the Welsh assembly were as powerful a body as the proposed Scottish parliament—we have not heard a great deal about that—a plea which I made in my National Eisteddfod lecture in 1996. Nevertheless, I have no doubt that the Bill presents an exciting prospect which opens the way to embark on constructive work for Wales and its people in the new century.

I greatly welcome the partnership council and the proposed local government scheme, which should enable the relationship between the assembly and Welsh local government to be rebuilt on the concept of trust, which is the cornerstone of partnership.

I am very pleased that the Bill provides that the proceedings of the assembly will be conducted on the basis of equality of Welsh and English, "ar sail cydraddoldeb y Gymraeg a'r Saesneg", which is broadly equivalent, in my view, to the concept of equal validity for which I fought and secured in the Welsh Language Act 1967. I hope that the practice will be consistent with the principle. Moreover, I hope that the national assembly will at the outset resolve to implement the mission enshrined in Clause 33 to support the Welsh language in the life of Wales. That has always been, and continues to be, one of my dearest ambitions.

I welcome Clauses 116 to 118, which place a duty on the assembly to arrange for the preservation and management of its records. My hope is that in the longer term the records office maintained by the assembly will also become the repository of all the Welsh historical records which are now in the Public Record Office at Kew and in the Strand.

But to return to the main theme of the Bill, the workings of the assembly will affect the whole of Wales, from Anglesey to Gwent. Its concepts will require to be operated in the co-operative spirit intended by the White Paper. Effective co-operation cannot be ordered. At best it can be encouraged and facilitated. It is my earnest desire that enthusiastic co-operation will now be forthcoming from all political parties in Wales to make the national assembly work smoothly, efficiently and successfully for the benefit of Wales and its people. It is in the interest of the parties themselves and in the interest of Wales that they should do so.

After this Bill has become law, we hope to see England and Wales working together effectively in the interests of both countries. I believe that that will be achieved.

There are those who take a different view, and this I greatly regret. But I am much encouraged by some important remarks made by Her Majesty the Queen in her Christmas message last year. Referring to the Commonwealth Conference in Edinburgh, the Queen said: the meeting showed that unity and diversity can go hand in hand. Recent developments at home which have allowed Scotland and Wales greater say in the way they are governed, should be seen in that light and as proof that the Kingdom can still enjoy all the benefits of remaining united". As we consider that far-seeing view, let us all do our utmost to ensure that the Bill works in the general interest of all our people. I commend it strongly to the House.

5.13 p.m.

Lord Elis-Thomas

My Lords, I do not know where to start, following my noble friend Lord Cledwyn, the noble Lord, Lord Callaghan and the noble Lord, Lord Crickhowell. In that context, the only remark that occurs to me is that all the important words in the Welsh language begin with the letter "C".

It occurs to me that I should at the start put myself in the position of Lloyd George, who apparently regarded himself as a Welsh nationalist without separatism. As the nearest thing to a Welsh nationalist in this House, I stand here as someone who believes that separatism and independence are not only impossible goals, but goals that should not be part of any post-modern political programme. I would apply that to any country, any nation and any state. We live in a world of interdependence, brought about by that very globalism so clearly described by the noble Lord, Lord Callaghan. What we should be seeking for the smaller nationalities in regions within that global environment is the adequate power to be able to be represented within a broader federal framework. That is the position that we now adopt as we near the end of the 20th century.

In the sense in which the noble Lords, Lord Williams, Lord Callaghan and Lord Cledwyn, have set matters out, we return to an issue which has dominated the politics of Wales for the past 100 years, and which has dominated the politics of the United Kingdom also. It is not insignificant that we come to a serious step forward in the history of Northern Ireland—I say that with my noble friend Lord Molyneaux sitting on my right—at the same time as we come to an important stage in the history of Scotland and of Wales. I hope that all three nations—regions, historic unities—within the United Kingdom can maintain their relationships within the British Isles. That, after all, was the programme originally proposed by the Liberal Party at the turn of the century. We are in a sense rewriting the history of the British Isles. However, I shall not do that in the next 10 minutes. I merely wish to emphasise some of the aspects that I wish to pursue in Committee, and which other noble Lords have also outlined.

The noble Lord, Lord Crickhowell, referred in detail to the European dimension. I am convinced that those aspects should not be on the face of the Bill; they are relationships between different levels of government. However, it is essential that the way in which the Government see those relationships being developed and worked out should be stated in this House. For those reasons I hope that a suitable amendment will be tabled to enable us to debate the European dimension in detail.

There is one particular example that I have discovered in the course of my work on your Lordships' Select Committee on European Communities; namely, that some member states ensure better relationships between their Members of the European Parliament, members of the Committee of the Regions and members of regional and member state legislatures by inviting Members of the European Parliament to sit, where appropriate, as members of their regional and national assemblies, but without voting rights. Such measures could be very attractive: we could involve the other levels of government which directly affect us in the working of the assembly.

I also share the concern expressed about the whole subordinate legislation procedure. The noble Lord, Lord Crickhowell, strongly emphasised that. As has been rightly stressed during this debate, there are implications for the whole of primary legislation in this House. I tried to make that point during the recent Second Reading debate on the School Standards and Framework Bill. From now on, we shall be writing primary legislation for England and Wales—for Scotland in other cases, but in terms of devolved powers it will be for England and Wales—with a view to its implementation by very different structures. Domestic matters relating to England will be implemented by the Secretaries of State within a Cabinet governing England directly. The assembly (which will consist of an executive committee of secretaries) will implement legislation relating to Wales. That also has implications, as I have suggested previously, for our procedures for dealing with primary legislation.

It is important that the assembly will be able to influence the legislative process to enable it, where it feels it necessary, with the agreement of the UK Government and by promotion of the Secretary of State, to bring primary legislation before both Houses here on its own initiative. That matter is not exactly spelt out in the Bill but there is clearly nothing to prevent it happening. A faster-track process of primary legislation in relation to Wales would be required in this House and in another place for that to happen effectively. Noble Lords will note that I am not arguing for legislative powers to be devolved to Cardiff; I am asking for some rational means to be found by which the Westminster Parliament can deal with those aspects.

That brings me to the other interesting relationships, the concordats. I was grateful to my noble friend Lord Thomas of Gresford for pointing out that these concordats are not a recent invention; something similar existed in law, although they may not have had the force of statutory law. Concordats are relationships and it is important that we have sight of exemplar concordats. They may not be the final agreed versions between departments, but exemplar concordats should be published. The European concordat, as it applies to MAFF, the Foreign and Commonwealth Office and other departments, will be important, but there may be other simpler exemplars, in relation to environmental policy, which is another major devolved function. Indeed, there might be a concordat on education which is relevant to what has already happened with the School Standards and Framework Bill. It seems to me that substantial powers are being transferred to the Secretary of State in order for the assembly to devise its form of subordinate legislation to implement those aspects.

Another area which we shall have to explore in detail in Committee is the extent to which we should put material on the face of the Bill (or on any other England and Wales Bill) in order to ensure that the assembly operates in certain ways, rather than allowing it the flexibility to do so. I must say to my old, long-standing friend, the noble Lord, Lord Roberts of Conwy, who owes his election to another place entirely to me at one stage in his career, that I was a little surprised by what he said. He appeared to me to be a great centralist, wanting to specify in great legislative detail what the assembly would do. I should have thought that every decent Conservative, and particularly a Welsh one, should be a subsidiarist and a decentralist. But we shall come to that in greater detail in Committee.

As regards funding and the Barnett formula, the wonderful thing to me about being a Member of this House is that recent history is described to us, as it happened. We all had the great delight of hearing from my noble friend Lord Callaghan. Those of us who were in the other place at the same time but who were not privy to the actual discussions understood that the Barnett formula had something to do with the arguments from Wales and Scotland that were taking place then in the political arena of another place as well as outside that building. Therefore, it was no surprise to us that it was political convenience that brought about the Barnett formula. But such is always the relationship between governments.

The noble Lord, Lord Roberts, talked with great fear and trepidation about the future. The noble Lord, Lord Crickhowell, mentioned the importance of maintaining discussions in secret because they might be acrimonious. However, it seems to me that they are denying the reality of democracy. When the debate between London, Wales, Scotland and Northern Ireland and between Dublin, Brussels and wherever else, happens with a public transparency, it is much more likely to bring about acceptability of the outcome of the discussions than is the development of a private grievance which is publicly aired only some time later.

Thus we should not fear serious debate about the funding mechanisms between different parts of the United Kingdom. I do not think the English dog will bark in the night in that context; neither an English dog, nor the Welsh mad dogs, to which, if he was properly reported, the noble Lord, Lord Roberts of Conwy, apparently referred at the weekend. We are not in a canine style of politics any more, not even in the United Kingdom. Therefore, it is important that we realise that we are dealing with a rational public.

The English regions are under financial pressure, as economic changes overtake them—so too are Wales, Scotland and Northern Ireland in different ways. The public airing of debates about resource transfers between levels of government seems to me a much safer bet than the private discussions that went on in the heyday of the noble Lord, Lord Callaghan—although listening to him tonight, I believe that he is still in his heyday—and in the time of the noble Lord, Lord Crickhowell.

There are two other issues. The first is the internal structure of the assembly. We shall have to explore in Committee in detail the implication of the decision to go for a cabinet structure. The relationship between the cabinet structures, the secretaries and their committees is very important. Here I put in a plea—as someone who should declare an interest before I sit down—as a potential member of a minority party in the assembly. Having said that, I know that all parties in the assembly might conceivably be minorities. It has been reported in the press that I have applied for selection and I am awaiting the outcome with trepidation so I shall say nothing tonight that might prejudice my chances. I am sure that all the constituency delegates of Plaid Cymru in Meirionnydd Nant Conwy read Hansard avidly.

We need to look at the role of all members of the assembly equally. I do not wish to create an assembly in which there will be Back Benchers who will feel they are no part of the process. We have a great chance with the committee structure—the subject committees, balanced with the executive committee—to create a system in which all members will feel that they are part of governance and government. That implies servicing the assembly members adequately, as the noble Lord, Lord Crickhowell, flagged up. We shall have to return to that. I believe the assembly should be adequately serviced by the Welsh Office structure which will become the assembly structure. But it needs to be separated in some way from the Civil Service advising the executive. There was no time for those issues to be fully explored in the other place and we shall have to return to them. Similarly, we shall have to explore the role of the regional committees. I am attracted by the development of a regional consensus, but I am also concerned that the regional committees should not become merely advisory bodies which have no impact on policy-making.

The schemes for sustainable development, for ensuring equality of opportunity—a duty which is on the assembly—the relationship with business, the scheme for the voluntary sector and the promotion of local government, are all aspects of Part V. They are issues which we will have to pursue.

In particular, we will have to follow through the notion of accountability which is set out in the Bill. There is now a clear chain of accountability for decision-making to the secretaries working within their committees and for their accountability to the whole of the assembly.

Finally, there is the wonderful issue of the standing orders. When I first read the Bill, I decided I would mark out the number of references to standing orders. I have already discovered 60 and there may be more. The way in which the standing orders for the assembly are devised and the way they are brought forward in draft and discussed are crucial issues. The National Assembly Advisory Group has done sterling preparatory work, but the operational mode of the assembly and its standing orders will need to be aired in this House. Then it will be for the assembly itself to deal with the issue as it becomes a self-governing unit as a body corporate and within the powers laid upon it by Parliament.

I agree with what has been said so clearly in the debate: that the new national assembly is a creature of Parliament; that it is a body corporate created by Parliament and that it therefore operates within the unity of the United Kingdom Parliament and its powers and legislation. But in order for it to operate effectively, there must be no suggestion of overriding it or of exercising default powers in extremis. We are not dealing, if I may be so bold as to suggest it, with the issue of the Isle of Anglesey County Council. We are dealing with a national assembly which will have the ability and the duty to represent the whole of Wales. The suggestion has been made in certain quarters—and I caught a taste of it in the speeches made by the noble Lord, Lord Roberts, at the weekend—that somehow the Welsh assembly could not be trusted with the responsibility laid upon it by Parliament. I believe that if we imply to the Welsh assembly that it is not trustworthy, it may turn out not to be so. Real devolution is about the transfer of powers which enable people to have confidence in a political culture and to build upon it. For that reason, I warmly welcome the Bill and feel it a privilege to be here to speak in favour of it.

5.28 p.m.

Lord Rees

My Lords, I start by offering my apologies that owing to a long-standing prior commitment I shall be unable to remain to hear the wind-up speeches. However, of course, I shall read them closely in Hansard. I add my congratulations to my noble friend Lord Onslow of Woking on his very elegant maiden speech. With his detailed knowledge of the intricate byways of politics in Westminster, he will bring valuable experience to bear. He will help to construct the new assembly and, as a resident in Powys, he will be extremely valuable in all our debates on Welsh rural and agricultural life.

This is a constitutional Bill of considerable importance, yet it starts in a most unfortunate fashion. First, there was the referendum, the results of which have been analysed by keener eyes than mine. Secondly, because the debates in another place were truncated, additional work will fall on this Chamber. There will no doubt be many provisions which were either added at a late stage or which could not be debated in another place which we shall inevitably have to go through in considerable detail.

I may have misunderstood the scope of the process of consultation being carried out by the National Assembly Advisory Group. However, it is extremely unlikely that the process of consultation will be complete by the time we finish our debates. Perhaps the Minister can deal with that point. In that case, how will we be able to take account of those views, if they commend themselves to the House, in reaching a conclusion on the Bill itself? When will we have a chance to make amendments on the basis of that consultation and how will the Government feel enabled to introduce amendments before the Bill becomes law?

As the noble Lord, Lord Callaghan, said—his knowledge and experience of this subject are longer and deeper than mine—the British constitution is a robust constitution; but it is not a written constitution. It depends to a considerable degree on the observance of conventions and on sensitivity to a range of issues. An issue such as this involves a new departure in our national life. I shall not go back over the history of the Principality and its interrelationship with that of England. On the whole we have not done too badly. We contributed a dynasty to the government of this country. We contributed our share of senior Ministers and, indeed, Prime Ministers. However, I suggest that in looking at a new development such as that which the assembly embodies, we must be sensitive of past precedents and certain conventions.

It may be that I should approve of the role of concordats, but it alarms me a little. I want to know the scope that is envisaged. Is it a mere statement of administrative practice or an idle way of avoiding the business and time taken for formal legislation? Can we be sure that they will be published so that we are fully aware of their application and scope; and will it be possible to challenge them in the courts? As other noble Lords said, there are precedents for that. The one with which I am most familiar relates to extra-statutory concessions in the field of taxation. But people who have studied the subject recognise that, though in the pressure of events it may be necessary from time to time to introduce extra-statutory concessions, on the whole it is much better that they be embodied in the law of this country so that they can be challenged, if an individual feels oppressed by them, in the courts of this country, subject to close analysis.

I am concerned that when we are considering the Bill against the background of an unwritten constitution, we should preserve the delicate balances that operate throughout British life. First, there is the delicate balance between the United Kingdom as a whole—between England, Wales, Scotland and Northern Ireland. Other noble Lords who have great experience of these matters touched on that point. Indeed, some touched on another matter that concerns me. There has been little evidence in debates so far of any deference to English opinion, to English sensitivities or, indeed, to the opinions and sensitivities of Welsh people living in England—across Offa's Dyke. For honourable reasons, such as government service, they may have chosen to make their careers outside Wales.

For all those reasons we must consider carefully what will be the real impact on the United Kingdom as a whole; the interchange of experience between professions—again, something that was touched on by a noble Lord—the real cost to the United Kingdom and, as the noble Lord, Lord Thomas of Gresford, said in his speech, much of which I appreciated, the multiplication of offices that he seemed to envisage, starting with a Lord Chief Justice of Wales down to High Court judges and goodness knows what else. That will strike a rather chill note to people in the rest of the United Kingdom who may find themselves financing all those honorific, though perhaps useful posts.

Perhaps I may touch on the balance between the Secretary of State and the first secretary. My noble friend Lord Crickhowell has direct experience of the role of Secretary of State for Wales and he touched on that with great perception. However, if the Bill is enacted in its present form, the Secretary of State will become a mere broker between central government and the assembly. What weight will colleagues in Cabinet be prepared to concede to a Secretary of State who has that limited role? It is noticeable, if rumour is correct, that the present incumbents of the offices of both Secretary of State for Wales and for Scotland may be preparing to make the rest of their careers in public life in the assembly of Wales and in the parliament of Scotland. Could that be because they sense that the reality of power is to rest with the first secretary or whatever the principal executive is in the parliament of Scotland, rather than with the posts that they currently hold?

Again, it is noticeable that civil servants, who always have a keen eye and a keen sense of the realities of power, will remain on a composite UK list of civil servants although, as my noble friend pointed out, it will be important to ensure—it is one of the virtues of the existing system—that civil servants who devote their lives largely to the assembly, still manage to derive a little wider experience from service in Westminster, Whitehall and perhaps even in Edinburgh.

One then comes to the financial balance between Parliament and the assembly. Of course, the block grant remains firmly in Westminster hands. I enjoyed the speech of the noble Lord, Lord Elis-Thomas, and, if I can say this to him without sounding patronising or offensive, I never thought that I should find so much with which I could agree in his contribution to this great debate. However, it is right, as he said, that we should make our compatriots across Offa's Dyke feel that they have a worthwhile political system to which to devote their energies and loyalties. Equally, we must acknowledge the realities of life. The financial strings must lead back fairly directly to Westminster. Again, there will be a price to pay for that. I have no doubt that that will be a point of friction between Westminster and Cardiff.

Much discussion has been devoted to the Barnett formula. I have had some experience of its operation, if not its conception. It limits the scope of the debates that I used to enjoy with my noble friend Lord Crickhowell when we were able to discuss. I will not say more agreeable subjects, but subjects that perhaps pressed a little more closely on our attentions.

Beyond that, I am a little concerned that indirectly the assembly may exercise undue financial control over the local authorities. It will be able to place burdens on those local authorities which will almost inevitably compel them to raise the weight of local government taxation in Wales. It may be that I misunderstood what was intended and that there are safeguards, but I hope that when we come to debate these matters in more detail in Committee, the Minister will be able to reassure us on that point.

I come to the balance between the different regions and communities of Wales. We have to recognise that although we tend to talk in these debates as though Wales is totally homogeneous, that is not so, even historically. Those with a greater grasp of Welsh history than myself will recall that up to about the 7th century AD two separate languages were spoken in Wales. It could be that the ethnic ties between south-west Wales and south-east Ireland are rather closer than those between South Wales and North Wales. I do not want to open up such delicate ethnic questions, which perhaps do not go very directly to what we are debating today, but it is right to emphasise that there are considerable differences between the different regions. I am sure that it would not be alleged that it was the Government's intention that powers should rest with the solid industrial vote in the south-east, but that is the impression that is being put about. That is the anxiety which is felt. I come from the agricultural part of the south-east where we have a fairly close vantage point from which to observe the way in which power has been exercised in local authorities in certain parts of the industrial south-east.

Finally, there is the connection which will inevitably follow, when this Bill becomes law, between the assembly and the various—I do not like to call them quangos because that would be almost offensive after what was said about them during the course of the last general election—bodies such as the Museum of Wales. Here I declare a slight interest in that I used to have the privilege of serving on the court and council of the museum. I am still a member of one of its committees. I refer also to the Forestry Commission and the Welsh Development Agency.

Over the years, a very delicate web of relationships has been built up by those organisations and central government. I hope that it will be possible for an equally healthy relationship to develop with the assembly. I fear that in perhaps what one may call the first flush of youth of its creation, the assembly may be a little tempted to flex its muscles and to involve itself a little too closely in the activities of such bodies. I hope that it can be delicately indicated that bodies such as these have a vitality, experience and history of their own and that that should be respected.

In conclusion, I believe that it has been remarked on more than one occasion in our debates—and no doubt by the honourable Member for Linlithgow in the other place and by my noble friend Lord Crickhowell in this House—that in Bills of this kind the devil is in the detail. There is much to be explored. I say that having listened in admiration and with interest to the speech of the noble Viscount, Lord Tenby. Of course, we all want to see this project succeed. Nothing could exacerbate relations between Wales and the other parts of the United Kingdom more than the creation of something which turns out to be a political fiasco. There is so much that we must probe in considerable detail. So I hope that the Government will be patient with us in the course of our debates, recognising that we are only probing, amending and debating this Bill because we wish to see something emerge which will be of benefit to Wales and the United Kingdom. After all, that must be the motive that actuates all of us in taking part in this debate.

5.43 p.m.

Lord Prys-Davies

My Lords, this Bill, which we have been discussing for the past two and three-quarter hours, takes the crucial step of establishing for the first time ever a democratic assembly for Wales. I believe that, for once, the description "historic" is warranted. For my part I should very much like to congratulate Mr. Ron Davies, the Secretary of State for Wales, on his leadership and hard work in securing this Bill.

During the past 100 years much has been written and spoken in Wales about the need for a Welsh parliamentary assembly. That is a tradition which I have inherited. My noble friend Lord Cledwyn, who himself has for over 50 years contributed with conviction to the devolution debate, drew the attention of the House to the aspirations of Tom Ellis, the former Member for Meirionnydd. Perhaps I may be allowed to quote the words which Ellis spoke in 1894, after the passing of the two local government Acts of 1888 and 1893. Ellis said: We have now two great statutes…for the better government of Wales…These two statutes demand and will inevitably lead up to a third statute which will confer upon the whole Welsh people a National Assembly, elected on a democratic suffrage, which shall form the highest embodiment of the national unity and the main instrument for fulfilling the national will and purpose of Wales". It may be said that we have been waiting a long time for the third statute, but we are discussing it this afternoon.

On a personal note, I regret that we in Wales were unable to do more over the years—and particularly after 1992—to rally public opinion behind an agreed scheme of devolution, despite the efforts of the most reverend Primate the Archbishop of Wales. That was a disappointment. However, whatever our personal views on devolution may have been earlier—and I accept that there are some who are still reluctant to see its merits—I believe that broad opinion in Wales is now behind the Bill. More and more people come to see it as a middle way of reconciling regional interest with the benefit of harmonious co-operation.

I wholeheartedly support this major reform for those reasons. I also support it because I believe that it will maintain a more exacting and continuing scrutiny of public expenditure in Wales and, in the result, make for improved government over the range of domestic functions which are devolved to the assembly. It will give fuller expression to the distinctive individuality of Wales. At a different level it will be part of the process of modernisation of government of the United Kingdom—a union of nations or countries, each with its own separate identity and devolved government. I welcome the Bill. I entirely reject the allegation that it will favour one group at the expense of others.

I should now like to touch on a few specific issues. The Government throughout have been anxious to strike the right balance between the requirements of effective government and participatory government. They have listened to other views, as we have heard this afternoon. They have introduced very important changes to the Bill in order to confer executive functions directly on the executive committee whose members are to be selected by the first secretary. I accept that that will go a long way to ensure efficiency. However—and this has been mentioned by the noble Lord, Lord Elis-Thomas—to give greater power to the executive committee has the equally obvious consequence of reducing the power of the subject committees and back-benchers. I confess that I have this uneasy feeling: if back-benchers and the minority party or parties in the assembly become dissatisfied with their role and their position, that could create a grievance. So I suggest that that is a message which could usefully be taken on board. No doubt it is an error which we could examine in Committee.

I now turn to subordinate legislation. I am sure that the assembly will attach considerable significance to its power to create statutory instruments. I understand that in an average year the Secretary of State for Wales makes about 50 statutory instruments on his own and about 400 with other Ministers. Unlike Westminster statutory instruments, the assembly documents will have to be debated and can be amended in subject committees. I suggest that that should mean better government. It is my hope that from next autumn primary legislation affecting the devolved subjects will be framed by Parliament so as to allow greater scope for the details in respect of Wales to be determined by the Welsh assembly.

It would be helpful if the Minister could clarify a few issues relating to subordinate legislation. Where the order-making power is currently exercised jointly by the Secretary of State for Wales and another Secretary of State, when will we see the list of the powers that will continue to be exercised jointly after the assembly has been set up? On what principle will they continue to be so exercised? As long as they are to be exercised jointly, clearly, to avoid disputes, the assembly and the Whitehall departments will have to learn to operate together within the terms of a concordat. Should this be spelt out in the Bill? That echoes a question asked by the Institute of Welsh Affairs.

I put another question on delegated legislation. Many statutory instruments and regulations are derived from Brussels. I am sure that many noble Lords will have seen a recent statutory instrument relating to young people and children which stems from Brussels. That makes many amendments to two pieces of primary legislation. Given the growth both in the volume and importance of EU legislation which can affect almost all of the devolved topics, should there not be a statutory requirement on the department with the lead responsibility in London to consult with the Welsh executive on a proposal as soon as it emanates from the Commission and throughout all stages thereafter?

I turn briefly to the allocated block grant. Its size is obviously of importance because its distribution between the different services is one of the assembly's most significant tasks. We have heard a great deal about the Barnett formula which I do not claim to understand, but there is no guarantee that that formula will continue in future. Therefore, would it not be fairer to the assembly to spell out in the Bill at least the principles which should determine its allocation? As the principles are not formulated in the Bill, there is some unease that the assembly will have no statutory right to participate in the negotiations to determine its amount. Should not the assembly have a decisive role in determining the size of the grant for the functions for which it has statutory responsibility?

I welcome the Bill's insistence on the key role of elected local government which, after all, is the other arm of democracy. I believe that Clause 110, which sets up the partnership council, is a notable provision and is long overdue. But one wonders whether the Bill should go further and place the assembly under a duty to create conditions to help local authorities develop their role as leaders in local government of their own communities. Your Lordships will recognise that that is a question asked by the Welsh Local Government Association. There will still be unmet needs in Wales as elsewhere, and the assembly and local elected authorities will need to support and promote voluntary bodies in relief of that need. Can the Minister inform the House whether the standing orders will address the need for a permanent mechanism to foster the relationship between the assembly and the voluntary organisations?

I am delighted that the Welsh language, being the national language of Wales, is to become one of the official languages of the national assembly. At least that is how I understand Clauses 48 and 67(4). Perhaps the Minister can confirm that that understanding is correct.

I have not dealt with the staffing requirements of the assembly. However, it is pretty clear that it will need to be staffed by a team of draftsmen, lawyers, translators and interpreters of the highest quality, and possibly a team to authenticate the accuracy of documents published in both languages. My experience as a member of the Joint Committee on Statutory Instruments prompts me to say that the quality of the work of the assembly's subordinate legislation scrutiny committee will depend to a very large degree on the quality of the legal advice that it must receive from a source independent of the assembly's departments. Who will give such advice to the assembly? That question is also asked by the Federation of the Law Societies of Wales.

To conclude, the Bill is based on the underlying principle of devolving decision-making closer to people. That principle is defensible. What is proposed in the Bill is machinery for constructive policies designed by the authority of the elected representatives of the people of Wales to meet the domestic needs of Wales. Of course, it will be a challenging task, but along these lines the Welsh assembly, followed possibly before too long by regional assemblies in several areas of England, will bring into being a new dimension of democracy. That is surely the best way forward to the new century.

5.57 p.m.

Lord Dixon-Smith

My Lords, I assure the House that as Essex man I intervene in this debate with considerable diffidence, but this is a United Kingdom Bill and therefore I do not feel that my place is in any way inappropriate. The principle of devolution is unexceptionable. As an ex-local government man, in general I find much in the Bill to commend and approve. However, devolution is not a one-way street. It affects not only those to whom matters may be devolved but at the same time those who undertake the devolution. In the case of this particular Bill and the Scottish Bill still to come before us, some of the more dramatic effects will occur in ways that are not the direct subject of the legislation itself. I shall return to that aspect later in my remarks.

With so many noble Lords taking part in this debate today I intend to confine myself to those areas of the Bill that I consider to be either wrong or inadequate in the hope that in his reply the Minister may be able to allay some of my concerns. I begin at the beginning. The English language is a wonderful language that can and should be used with great precision. I regret that I am a poor practitioner, but I am disappointed to find an inaccuracy at the top of the front page of the Bill. This Bill deals only with particular aspects of the government of Wales. Wales will remain a part of the United Kingdom, still subject in many significant ways to the United Kingdom Parliament and laws, of which this Bill is to become one. Other government power will continue to reside with the various local authorities in Wales. The Bill does not define in any detail the relationship between local government and the new assembly. It may well be that it will be an uncomfortable one until they learn to work with one another under the putative local government scheme. With those thoughts in mind, my view is that the title of the Bill is incorrect. This is not a government of Wales Bill; I believe that a preferable title would be "Government in the United Kingdom (Creation of a National Assembly for Wales)". Only some such change will clarify at the start the correct status of the Bill.

My next area of concern relates to Clause 22. Neither I, nor this House, nor indeed the Welsh people, can be absolutely certain what the Government intend for the assembly because of this clause. I echo in a different way the words of the noble Lord, Lord Prys-Davies. Those who might think of standing as initial members of the assembly cannot be sure what their responsibilities will be after election, other than having an assurance of being a consultee.

I paraphrase slightly, but Clause 22 says that Her Majesty may, by Order in Council, (a) provide for the transfer to the assembly of functions exercisable by a Minister: (b) direct that any function shall be exercised concurrently with the Minister; or (c) direct that a function exercisable by a Minister shall be so exercised only after the agreement of, or in consultation with, the assembly. It says, secondly, that the Minister shall lay the draft order before Parliament before the first election.

Really, my Lords, what are we about? I assume that it is hoped that people with scope and experience will be willing to stand for the assembly, bringing with them knowledge, vision and perhaps distinction. Such people are likely to be busy people already, committed to family, career and community. Joining the assembly will mean that they must consider a radical change in the way they organise their lives. And we have no obligation to tell them what their functions and responsibilities might be until it is too late—say, one day before the election. If I were directly affected by these proposals, I would find such an approach insulting. At the very least, this order should be published well before the close of nominations for the first election—say, three months before—to enable those for whom this will be a very serious matter, to consider their position in relation to some kind of job specification. Is the job to be executive, is it to be consultative, or, as I suspect will he the outcome, will the mix of these functions be attractive to the individuals concerned? I assume that people will stand for a greater reason than the opportunity to draw a salary. At the very least, we must ensure that people can consider their position well before they enter the selection process for potential candidates.

My next area of concern is the financial arrangements under which the assembly will operate. Some of that concern arises from the wording of the Bill itself and some from words in the Explanatory and Financial Memorandum.

Clause 82(1) states: The Secretary of State shall from time to time make payments to the Assembly … of such amounts as he may determine". That also applies to other Ministers and government departments. Clause 83 expands the detail, but the fact is that, despite what the Minister said in his introduction, as presently drafted the Bill makes finance for the function of the assembly subject to ministerial whim. I am all too aware of the difficulties that exist in the financial field when trying to achieve some degree of certainty of funding from Whitehall. I spent many years wrestling with such problems. I was never aware that I was subject to ministerial whim in addition to all the normal hazards one expected. Even if I was, we really ought to produce a greater degree of certainty in legislating for a national assembly for Wales.

I do not intend to go into the broad issue of the need to look carefully at the relationship between Welsh expenditure and English expenditure. Pressure on that front is inevitable. The existence of the assembly will highlight the relevant figures and increase their exposure. However, I wish to raise two other specific matters.

First, the financial arrangements between the assembly and local government do not appear to be clear. I detect no obligation in the Bill for the assembly to pass on to local government the relevant funding as might be agreed at Westminster. This absence could lead to a situation where the assembly might decide to reduce its payments to local government, transferring the burden for its expenditure to the ratepayer. Money thus saved could be spent elsewhere and thus create a real increase in public expenditure in Wales. We should seek to remove the possibility for that to happen as the Bill passes through this House.

Finally, Clause 84 puzzles me. The Secretary of State—on whom the Bill seems to put a preservation order, despite what my noble friend Lord Crickhowell said on the matter—will have power to make loans of up to £500 million for the purpose of,

  1. "(a) meeting a temporary excess of expenditure … or
  2. "(b) providing the Assembly with a working balance".
We know that about £7 billion of expenditure will go, as existing commitments, through the assembly's hands. I do not recall hearing that within that vast sum the Welsh Office was unable to manage its affairs and keep a reasonable working balance. Why will that satisfactory situation not continue under the assembly? Why the need for additional working balances? Still less can I accept the possibility that the assembly should be allowed to indulge in deficit financing. We should take steps to prevent such laxity in financial management as we pass the Bill onwards. However, if the clause is simply intended to provide funds to enable the assembly to meet its expenditure before it receives its normal working funds, the Bill should be amended to state that that is the case, although for those purposes £500 million seems an inordinately vast sum.

When I began, I noted that the effects of devolution do not occur in only one place. When the Bill is passed into law it will have a considerable effect here in the Palace of Westminster. If the assembly is to work properly, it will be necessary for the Secretary of State for Wales to refer to the assembly for answer in the first instance any MP who wishes to question him on any matter delegated to the assembly. I wonder whether that will happen or whether ego will take over, as it has where local government matters are concerned. In any event, the handling of Welsh business here in Parliament will change. The effects of this change, combined with other changes to come and the likely consequential pressure for change in the way that English business is handled, will compel such changes in the parliamentary structure and process as to make the present pyrrhic debate over who should sit in this House look very trivial indeed. Perhaps we would be wise to defer that subject until the impact of these dramatic changes can be seen and we have a clearer picture of what is required of a remodelled House of Lords.

With those comments, I none the less welcome the Bill.

6.10 p.m.

Lord Geraint

My Lords, many decades ago, when I was in my early 20s, I decided to stand for election to Cardiganshire County Council. It was not a convincing win; I had a majority of nine. I won because I believed that devolution played a major role in those days when I contested the seat. But in my wildest dream I never dreamt that 46 years later I would be standing in your Lordships' House simply to say thank you to the government of the day. We have waited 50 long years or more for this day and here we are, able to say thank you to the Government.

In 1952, there were more than 50 aldermen and councillors on Cardiganshire County Council. Every one of us were Welsh speakers. All members of staff except one were Welsh speakers. He was an Englishman, an architect, who had just moved to Cardiganshire. We all spoke English when we were debating in the chamber, which is unbelievable. Our Welsh was not too good, but our English was even worse. Suddenly, one day, I decided—and told a few of my friends—that I would address the council in Welsh, which I did. There was a deathly silence. I was breaking with tradition. I and my fellow councillors had been taught to toe the line; that we were not to speak in Welsh in that chamber. But we did it and achieved it.

How the scene has changed over the past 50 years. We owe a great debt of gratitude to the noble Lord, Lord Roberts of Conwy. He was responsible for the Welsh Act and the Welsh Language Board. The people of Wales will say thank you to the noble Lord. That was a wonderful achievement on his part.

We are proud that the present chairman of the board, the noble Lord, Lord Elis-Thomas, is here today. His perseverance and influence to ensure that their children are taught through the medium of Welsh have incensed many parents in Wales. That is a great success story. May the noble Lord have many more years at the helm of the board to carry on his excellent work.

How the scene has changed from the 1950s when we had no political clout in Wales. In 1964 we had the first Secretary of State for Wales. That was a wonderful achievement. People opposed the setting up of a Welsh Office in those days. They were against a Secretary of State for Wales, but today that office is held in very high esteem. In 1975 the Welsh Development Agency was established. For decades, it remained as an economic powerhouse in Wales and did a wonderful job. The Development Board for Rural Wales was established in 1976. Many people opposed the establishment of these authorities, which was a great pity. These authorities did much to help the economy of Wales and to stem depopulation. At the turn of the century in Cardiganshire there were 61,000 people. By 1951 the number had decreased to 53,000. Today, due to the excellent work of the Development Board for Rural Wales and the Welsh Development Agency, the population of our county has increased to over 70,000.

We need self-respect in Wales, and our aspirations at last are being upheld. We owe a great deal to many people. For me, this is a day to say thank you to many people, a day of thanksgiving. This day has dawned and we should pay tribute to many people who fought so hard for us to have our own parliament in Wales. I am delighted to see the noble Lord, Lord Callaghan, in his seat today. The noble Lord has fought a hard battle and played a major role in our Wales of today.

I am also delighted to see the noble Lord, Lord Cledwyn of Penrhos, here today. He made a very good speech. He has been involved in all aspects of Welsh life over the past 50 years.

We owe a great deal to the present Attorney-General, John Morris, for his excellent work. We owe a great deal too to the present Secretary of State for Wales, Mr. Ron Davies, to the Leader in this House, the noble Lord, Lord Richard, to the noble Lord, Lord Williams of Mostyn, and to others for their contribution.

We, as Welshmen, should thank the Prime Minister, Tony Blair, and his Cabinet for our national assembly. The tradition of confrontation and criticism is all too prevalent in politics today. I thought that I would break with this tradition and offer praise to my opponents. One can only say thank you. I do not think that I can find another two words to equal thank you.

I served as a Member of Parliament in another place for 18 years. One of my main reasons for being there was my passionate wish to see a measure of home rule established in Wales. The Bill before us today may not be—indeed, is not—what we as Liberals and then as Liberal Democrats have fought for over many years. But I believe that it is the start of a new beginning and part of a wider reform that will bring better governance to the whole of Britain, as well as Wales, in due course.

In 1979 we lost the day—for reasons that I shall not go into now—but I feel that we should thank the Labour Government at that time for at least planting the seed. The noble Lord, Lord Callaghan, was, I believe, genuine in his wish to see change, and many of the Labour Members were as disappointed as I was with the result of that early referendum. As one who was very much involved with the negotiations, I also know how much effort the present Attorney-General put into that campaign to try to persuade the Welsh electorate to put their trust in self-government. However, it was not to be.

Today it is a different story altogether. Another generation of politicians has bravely challenged the status quo and this time there has been substantial progress. I should like to put on record my appreciation of the vision and determination of the present Secretary of State for Wales, who, against the odds, has given the people of Wales the opportunity to shape their own parliament.

As one who has fought for a Welsh parliament throughout my political career, it is a privilege and pleasure to support the general principles of this measure. In my view, we need to give the national assembly more status. We will debate the Bill in detail in Committee, but perhaps I might be able to convince the Minister that we need a Prime Minister and Cabinet Ministers for Wales; and to call the national assembly a parliament. That is my wish and my dream and—who knows?—I may achieve it. I have no doubt that the day will dawn when we will have our own parliament, with legislating and tax-raising powers. My advice to the younger generation is, "Don't give up until you achieve that goal".

I wish to ask the Minister one or two questions. Mention has been made of the agricultural industry and rural affairs in Wales. Can the Minister ensure that at least one of the subject committees of the assembly will concentrate on rural affairs and agricultural matters? How will the interests of rural Wales be represented in the EU institutions? Nothing in the Bill guarantees a voice for Wales at the Council of Ministers, for example. What will be the function of Welsh Members of Parliament once the assembly is up and running? Finally, what will be the role of the Secretary of State for Wales, if we have one? Will he have Cabinet status? I believe that the Minister should answer those questions today to the best of his ability.

I wish the Welsh assembly the best in the years to come and hope that it will look after the interests of the people of Wales.

6.21 p.m.

Lord Patten

My Lords, I rise as a representative of that species, the English dog, to which my noble friend Lord Crickhowell referred in his penetrating analysis. He suggested that the English dog was likely to remain quiet through the night. Alas, his hopes or predictions were poorly founded, for I intend to bark a little this afternoon in your Lordships' House on behalf of the English. Any remarks that I may have wished to make in detail about the Bill were made for me by my noble friend Lord Roberts of Conwy in his marvellous and robust speech. It would be otiose for me to cover that ground again and therefore I shall concentrate on one argument which has not been fully examined today, the implications of the Bill for the wider constitutional state of the nation.

I do not question for one moment the legitimacy of the Labour Government in pressing forward with this legislation. Of course I do not. They won a stunning victory and deserve to do what they wish to do within our parliamentary conventions. Furthermore, I certainly do not accept that the Government should not press on simply because of the scant majority they received in the referendum. The noble Lord, Lord Geraint, recalled that when he won his first seat on Cardiganshire County Council he had a majority of nine. When I first stood for Oxford City Council I was elected by the even more slender majority of precisely one. I believe that I was in the same entry as the noble Lord, Lord Hunt of Kings Heath, his majority being considerably more substantial than mine. One vote is certainly enough to give legitimacy to what the Labour Government wish to do.

I genuinely admire the clarity, zip and vim of the Labour Administration in getting on with what they want to do. It is an object lesson to any government. However, I deplore their lack of a clear constitutional vision as to where the process set out in this and other legislation might end for the United Kingdom. It seems to me that the Government have not faced up to the fact that at the end of their programme of devolution with the regional assemblies which the Bill seeks to set up, "Britain" (as we once understood it) is likely no longer to be a political entity, but a geographical expression. Our nationhood will be subverted, as I believe our people will be more and more overgoverned and divided.

Your Lordships' conventions enjoin us to eschew asperity of language, so I shall simply think the unsayable about the view of the noble Lord, Lord Williams of Mostyn, that the Bill will somehow strengthen the Union. I believe that to be profoundly wrong. I shall go no further. The noble Lord, Lord Callaghan, said that he believed that the British constitution was enormously elastic and able to encompass a great deal of change. Of course it has done so over the generations, but sometimes elastic snaps and not every set of constitutional arrangements will be good for all time.

With this Bill, the Welsh are being encouraged to split themselves off more and more. Already we have heard of the pressures, as outlined in speeches such as that of the noble Lord, Lord Geraint, who enjoins his fellow countrymen to seek a Prime Minister, just as others from the Liberal Democrat Front Bench want to have a Welsh chief justice. We see in this Bill pressure for more and more division in what was once a united kingdom and a terrible harbinger of what might happen in the English regions. Much the same logic that has been applied to the land beyond Offa's Dyke could reasonably enough be applied to, for example, south-western England where I and my family live.

Therefore, as the process ignited by this and similar Bills resonates more and more on this side of Offa's Dyke, I believe that the resultant explosion of assemblies and the accompanying fragmentation will perhaps in a generation lead to people eventually waking up to the need to reinvent the Union. I can see some future Tory government needing to bring forward and carry on an updated 1707 Act suitable for the new millennium to repair the damage which Bills such as this will cause to the traditional cohesion of Britain and the United Kingdom.

Perhaps I may say a word to Members of my own Front Bench, whom I greatly admire. Between now and the time when the public mood changes, Tories must beware of getting into the position of our party, for example, in the 1960s when we were so slow to see that we no longer needed an East of Suez policy because of the changed circumstances and so we wasted much political capital in the process, trying to hie after the past, but trying also to accommodate and make the present work. I do not believe that that is a correct approach. I believe that in due course we may have to reinvent the Union. But in the years until the next general election, as we promote the health and welfare of our party in Wales, we should also be promoting a vigorous "me, too", and "let us keep our own money", pan-English nationalism. For why should the English dog, the English citizens—we will reasonably be asking in future years—be second-class compared to the Welsh or, for that matter, the Scots in terms of expenditure or representation in parliament or in an English regional assembly?

In conclusion, in this Bill the Government have set off on a constitutional magical mystery tour. They have done what they said they were going to do in their manifesto. They have got on with it, but they have no idea or vision of where the establishment of such assemblies will end. They have no constitutional end game. I believe that in this way the Government's approach in respect of devolution in Wales and in Scotland, and potentially in the English regions, is similar to their approach towards the reform of your Lordships' House; that is, "Let's abolish the hereditaries and see what happens after that". There is no stated end view; no constitutional end game. The setting up of assemblies represents "one club" constitutional change. I believe that "one club" constitutional reform, just like "one club" economic management, will always end in failure.

6.30 p.m.

Lord Thomas of Gwydir

My Lords, the noble Lord, Lord Cledwyn of Penrhos, at the beginning of his excellent speech gave the House a little history of the past 100 years in Wales and the dominant issue in political life of devolution. He described what pressures he himself had exerted over almost half that time.

He referred to the campaign for a parliament for Wales, which was chaired by Megan Lloyd-George, and he referred to a debate in the other place on a Private Member's Bill sponsored by S.O. Davies. Having listened to the noble Lord, Lord Cledwyn, and having rather enjoyed what he said, I wonder whether I might crave the indulgence of the House to give noble Lords a little of my personal history as well. As the noble Lord, Lord Geraint, managed to give us that pleasure, and, indeed, we have had a little personal history from others, perhaps I might tell the House that over 60 years ago, in the debating society of my school in North Wales, I moved a motion. It was seconded by a fellow pupil who came from Nottingham. The motion was that Wales should have home rule. There were about 50 members (pupils) of the debating society. About four or five came from Wales and the remainder came from England. The masters who were present all spoke and voted against the motion. When the result came, the motion was defeated by two votes. I am entering into competition now with the noble Lord, Lord Geraint, and the noble Lord, Lord Patten, as regards the result of an election.

In the following years I was at Oxford, in the Royal Air Force during the war and at the Bar thereafter. Along with the noble Lord, Lord Cledwyn of Penrhos, I joined the House of Commons in 1951. I had lost all memory of that particular—some might think quite surprising—result. It was only in 1958 that the memory resurfaced. That was when the S.O. Davies debate took place for a parliament for Wales. I spoke and voted against it. Someone recollected that schoolboy debate and, in condemnation of my vote against the Bill, fed to the North Wales newspapers that in the 1930s I had been an ardent and active Welsh nationalist.

I mention that because those of your Lordships who were polite and patient enough to listen to my speech on the Welsh debate last December may have reached the firm conclusion that I was against the national assembly which is provided by this Bill. They may be somewhat surprised to hear from me today that I am a supporter of the Bill. Probably in a few years' time it will be alleged that I was an enthusiastic supporter of the new Labour Party's major reform.

But it is not quite as simple as that. It has been mentioned already that the Welsh assembly was in the Government's manifesto. The referendum produced a marginal majority, but according to the referendum Act, irrespective of the extent of the vote, a majority of one would have been enough. The decisive issue for me was the overwhelming vote in favour of the Bill secured by the Government in the House of Commons. Therefore, my view is quite simple. It is that we in this House must accept that there will be a Welsh national assembly.

We have a duty. Our duty is to support the purpose of the Bill and, by amendment if necessary, to help to produce an assembly which can operate for the benefit of all people of Wales. My noble friend Lord Roberts of Conwy, in his admirable speech, set out many of the matters which should be subject to amendment. I know that the noble Lord, Lord Williams of Mostyn, accepted that there will have to be amendments to the Bill.

All the amendments which have been mentioned are constructive. There is no intention to wreck or delay the passage of the Bill. I do not wish to detain the House for long and, therefore, I shall not go into any detail about the amendments which I consider to be important. I shall mention only one in some detail and that is the sovereignty of the Westminster Parliament.

There is no doubt that the Government intend that Westminster sovereignty will remain and that Wales will continue to be an integral part of the United Kingdom. Their White Paper and manifesto both affirm the continuation of that sovereignty, as did the noble Lord, Lord Williams of Mostyn, today. But for some inexplicable reason, the Wales Bill, unlike the Scottish Bill, fails to reaffirm the Westminster sovereignty. It is a small matter of amendment, but, if made, would alleviate the anxiety of many people in Wales that the current Bill could threaten the Union. That is to be avoided.

I have now spoken for nine minutes. There are something like 20 more speakers this evening. I know that the House will wish them all to speak shortly. However, the funding of the assembly is one matter about which I feel strongly. I believe that the Barnett formula should, if possible, be given statutory protection. We must look carefully at the role of the assembly in Europe, to which many people have referred.

I am grateful to the House for being tolerant. I am now happy to say that I shall give every support to the Bill in the hope that it will emerge from this House of benefit to Wales. I hope that the Bill will provide an assembly of which we, throughout Wales, can be proud in future.

6.40 p.m.

Lord Islwyn

My Lords, it is a great pleasure to follow the noble Lord, Lord Thomas of Gwydir. I recall him in the other place as a distinguished Secretary of State for Wales. After listening to him today regarding his experiences, I am sure he will be the first to recognise that we are all mirrors of our own experiences.

At the general election the Labour Party made a specific promise that if elected to power it would consult the people of Wales with a view to creating an elected assembly. In the event, the Labour Party won by one of the biggest majorities in history—an overall majority of 177—and in this Bill the new Government are honouring their commitment to Wales. Mr. Ron Davies, the Secretary of State for Wales, has put his heart and soul into this measure to create an elected national assembly. What is more, he has bent over backwards to answer and accommodate his critics. In the process he has often alienated some of his own supporters; for example, I am just a little dubious about the proposed voting system and the element of proportionality. First-past-the-post is a tried and proven system, and it brings with it stability of government. Nevertheless, the Secretary of State deserves and is entitled to our full backing, for this legislation is a vital milestone in the life and destiny of Wales.

We have heard a scintillating contribution this afternoon from the noble Lord, Lord Callaghan. I recall the days of 1978–79, when I was one of those who went around Wales and repeatedly spoke in the other place backing the proposals of the then government for an elected assembly. In the event the government's proposals were soundly defeated and the then Secretary of State for Wales, Mr. John Morris, was forced to recognise a pink elephant on his doorstep—at least that was how he described it at the time. In this referendum there was an overall majority, albeit a small one; but this was a tremendous turn-around compared with the 1979 result.

As I see it, in this Bill the Labour Government, as I said previously, are honouring their commitment to the people of Wales. The new assembly, once established, will take control of a staff of over 2,000 people in the Welsh Office, together with a budget of over £7 billion. This is, by any standards of judgment, a formidable undertaking. Here, of course, accountability and democratic control are the vital issues. In the other place such accountability was, and is, very much lacking. All we had there was half an hour of Welsh Parliamentary Questions once a month. Then, to add insult to injury, the Order Paper was filled with Questions from Conservative Members of Parliament representing English constituencies, whose interest in Wales was derisory, to say the least. Over the period in which they held office from 1979 to 1997, the policy of the Conservative Government seemed to be one of centralisation. Now I am pleased to be associated with a Government who believe in decentralisation and in handing power back to the people. That is essentially what this Government of Wales Bill is about.

The Welsh Office and the quangos cover a wide range of matters that affect our everyday life in Wales: how our children are taught in school; investment in National Health Service facilities; protecting the environment (which is a very important aspect, bearing in mind the pollution and congestion to which our people are subjected today); the building of factories and the creation of jobs. In the past 20 years, Wales has lost many thousands of jobs. Our coalfields were wiped out. The Welsh steel industry suffered very badly from works closures and heavy redundancies. With the ending of the Cold War and the rundown of the defence industry, Wales again suffered severely in terms of job losses.

Efforts have been made, not without success—I pay tribute to the noble Lord, Lord Crickhowell, for his efforts in this regard—to replace the thousands of jobs that were lost. But unemployment black spots remain in Pembrokeshire, in the Valleys, such as Blaenau-Gwent, the Cynon Valley and Merthyr. I know that other areas in North Wales are similarly affected. Personally, I have always regarded unemployment as the worst scourge of all. It is soul destroying. In economic terms, it is like a tap left running: it is sheer waste. The prime task of the new assembly will be to tackle the issue of unemployment in Wales.

Then there are the quangos. The last government seemed to create such bodies at random, often taking away functions from our local authorities in the process. In turn—I am sorry to say this—those bodies seemed to be filled with Tory place-men so that what could not be achieved through the ballot box was made up for in this way. If I can offer a word of criticism to the present Government, it is that in the past 12 months they have failed sufficiently to clean out the quangos and to make them more representative of the people of Wales. On this aspect, too, I am not clear about how the assembly will control the quangos. I feel that more explanation is needed from the Government.

One of the bugbears of Wales has always been what is known as the north-south divide. I trust that with these new constitutional arrangements the gap can be bridged. The assembly must be seen as a body for the whole of Wales, in which all can participate in the democratic process. An important way to bring north and south together is to improve communications. That has not been made easier with the privatisation of our railways. Nevertheless, the new owners must be prevailed upon to improve the linkage between north and south. There is a concerted campaign at the present time against new road building, but we need new roads in Wales. Llangollen is my favourite Welsh resort, but to get up there from the south is sheer agony. I trust that the assembly will put aside blind prejudice and realise that new roads are required in Wales.

I do not believe that our divisions in Wales are as insurmountable as some people would have us believe—whether it be the north-south divide or the language. I recall that seven or eight years ago when the Royal National Eisteddfod was due to be held in Newport, there was a great deal of anxiety and apprehension beforehand as to how the residents would react and whether the whole thing would be a flop. But Newport is perhaps the most Anglicised part of Wales. In the event, the eisteddfod was a huge success and, stemming from it, came a renewed interest in the Welsh language. There is now a Welsh school in Newport and Welsh classes seem to be flourishing in the area.

It has been decided that the assembly will be based in Cardiff. That is a choice which is well justified. Cardiff is our capital city and a city of which we can all feel proud. I believe that it is the duty of all of us who have the best interests of Wales at heart to try to ensure that the new national assembly for Wales is a huge success. For my part, I wish it well and I fully support this Second Reading of the Government of Wales Bill.

6.51 p.m.

Lord Griffiths of Fforestfach

My Lords, like many others who have spoken, I consider it a great privilege to take part in this Second Reading debate. As has been said, the Bill is not only of major constitutional importance but is also an historic landmark in the self-governance of Wales. Therefore, despite its shortcomings, which have been recognised, I welcome the Bill. I do so with enthusiasm because I believe that it is a workable basis for the devolution of areas of government to a national assembly for Wales. In that respect, I believe that the noble Lord, Lord Williams of Mostyn, should be congratulated on what he has done.

My starting point for welcoming the Bill is a recognition that it has both a validity and a legitimacy. I believe that a national assembly will enable discussion and scrutiny of matters affecting Wales by more people with first-hand knowledge of the issues than is possible at present. It will mean greater transparency and accountability. That surely must make for informed and better government.

The legitimacy of the Bill derives—and I say this with some regret—from the general election result of 1st May, from the narrow but clear majority in the referendum vote and from the results of various Divisions in the other place. In my judgment, therefore, it is not for us on this side of the House to oppose the principles embodied in the Bill.

I have not always held the view that I now hold. I have the same ambivalence as has been expressed by other speakers. When I was a young lecturer at the London School of Economics, I remember a colleague of mine publishing a very distinguished paper on the economics of nationalism. He argued that one of the major consequences was a redistribution of income from the lower paid to the middle classes—the lower paid being taxed to finance new jobs created for middle-class people.

One significant event which made me change my mind occurred in the mid to late-1980s. It happened at a meeting in the Prime Minister's study with the then Minister of State for Wales which, as noble Lords can imagine, was a fairly heated occasion. The debate was on the subject of the teaching of the Welsh language in the national curriculum. As I cast my mind back to that meeting later, I thought how inappropriate it was that such an issue was debated in London and not in Wales.

However, it may be argued—and we have already heard something of this—that the Bill is so flawed because the devil is in the detail that it is simply a slippery slope which will lead ultimately to an independent Welsh state and the break up of the United Kingdom. I have to say that I see little if no evidence to support such a claim. The separatist voice in Welsh political debate is very muted. I believe that the reason the referendum proposed an assembly rather than a parliament, with tax-raising powers and powers of primary legislation, is that such a parliament could easily have been rejected by the Welsh electorate.

Moreover, Wales recognises the benefits of being part of the Union, not least through the flow of inward investment and job creation, the work of the Welsh Development Agency and the financing of a public sector deficit for Wales—the difference between income raised through taxation and public expenditure—which, on the last calculation I saw, was running at something like £4 billion to £5 billion a year.

Therefore, the strength of the Union should not be judged by the list of functions to be transferred by this Bill or future orders. Even if more functions are transferred to Wales in time—for example, Home Office, Social Security, culture, media and sport, and so on—the case for such changes would be of a wholly different character from the arguments for a totally independent Welsh state with its own currency, exchange rate, tax structure, defence capability and separation from the Union.

I believe that the case for devolution is so different from the case for separation that I cannot, therefore, accept intellectually or practically the idea of a slippery slope which links the two. I believe that subsidiarity has a great deal to recommend it and that that judgment is a thoroughly inadequate reading of what people in Wales think today. Therefore, our response should be to welcome the Bill, not grudgingly and with a mean spirit. On the other hand, we should be prepared to put forward proposals for changes in a constructive way with the clear aim of wanting to make the Welsh assembly effective and robust. So I strongly support the Bill.

However, I should like to raise one or two issues of principle in a probing way. One has to do with money and the funding of the Welsh budget. Despite its success in attracting inward investment and in the creation of jobs—and, hence, in the reduction in unemployment—judged either by per capita GDP or by real disposable income per head, Wales remains the poorest country in Britain. The Government have made it very clear that they see, as the previous speaker said, a clear role for the assembly in changing the situation. As a result, the financial arrangements associated with devolution take on a special significance and are potentially a very serious source of conflict between Wales and Westminster. Indeed, I believe that we have heard some echoes of that view in today's debate. It is because of that that I find Clause 82, as mentioned by my noble friend Lord Dixon-Smith, which says that the, Secretary of State shall from time to time make payments to the Assembly out of the money provided by Parliament of such amounts as he may determine", to be rather an inadequate financial basis for a financial settlement accompanying devolution. The seeming flimsiness of this as a way of going forward on a permanent basis is really quite marked when contrasted with the historical nature of the Bill in granting devolution.

I recognise that the Government cannot guarantee a particular figure for public expenditure into the future, and nor can this Parliament bind the decisions of a future parliament. The Government have also given us an assurance that the rules which have operated well for the past 20 years will not be changed and they have published details relating to the Barnett formula and other details which have not been published before. However, we have to accept that the present formula and rules could well be altered or replaced. That could in turn have a significant impact on the functioning of the assembly. It must surely be possible to put on the face of the Bill a clause—not the details because they are far too complex—which assures the House that the Welsh block grant will continue to be calculated on the basis of, or with reference to, certain principles. If something could be done to anchor a financial settlement to a political settlement I believe that that would remove a great deal of heat from the potential conflict.

A second issue has to do with the powers that will be transferred to the assembly and the procedures by which future transfer of powers should be made; namely, whether by primary legislation or Orders in Council. I believe that we all share the desire to achieve a stable constitutional settlement. My personal preference in these matters is to have a clean and clear settlement which is black and white and which contains as little ambiguity and ambivalence as possible so that both the assembly in Cardiff and we in Westminster know precisely where we stand. That suggests that an attractive option is to make all future transfers of power subject to primary legislation. At the same time it seems to me that if we wish to see the establishment of a successful Welsh assembly, the spirit in which we are seen to approach the issue must be one of trust and of encouragement to the assembly, with the result that devolution—correctly, I believe—must be seen as a process, not an event. We must accept that certain functions comparable to those being transferred at present may be transferred simply by an order.

On the other hand, if for example this Government or a future government were to consider transferring a function such as giving tax-raising powers to the Welsh assembly, that clearly should be the subject of primary legislation. As I read the Bill, I must say I am not clear as to exactly what will happen and how much discretion lies with the Secretary of State or indeed the Government. Some clarity in that area could help to defuse any heat and conflict which may emerge.

The third issue I wish to raise is that of broadcasting. It has not been raised at all. Among the fields which are to be transferred in the Bill are culture and the Welsh language. I believe that both are important matters. I have always seen a major benefit of the assembly as the preservation and encouragement of Welsh culture and language. Therefore I am surprised that broadcasting is omitted. I understand the principle on which the Government have approached devolution; namely, that existing powers of the Secretary of State should be transferred and nothing else. However, I think that broadcasting is rather special. The assembly will debate broadcasting issues but it will not have much power in that regard. I believe that is a recipe for frustration and conflict.

HTV and BBC Wales clearly have an enormous impact on the culture and the thinking of Wales. As for S4C, the very aim of its existence is to further the Welsh language. At the very least therefore I see a strong case for transferring the present budget of roughly £70 million a year—which finances S4C and rests with the Department for Culture, Media and Sport—to the Welsh assembly. It seems to me that that is wholly the kind of thing that the Welsh assembly was set up to do. The assembly has a crucial role to play in the development of the language. I cannot see how it can adequately carry out its responsibilities without greater control in this area.

This is not the time to dwell on further details. In conclusion I simply say how much I feel this Bill is a major landmark in the history of Wales. My noble friend Lord Roberts said that the Bill offered hope to Wales. I believe he was absolutely right to say that. Now that the referendum debate is over, the Bill has been published, we know exactly what will happen through the Bill, and we also know that it will become law and devolution will be a reality, I genuinely believe that we must accept the assembly for Wales not grudgingly but with a great expectation that it will lead to the better governance of Wales. Already I believe there is in Wales a greater self-respect and self-confidence as a result of what is happening. A consensus is emerging. We in this House and we on these Benches have a responsibility to ensure that such expectations are realised.

7.6 p.m.

Lord Dean of Harptree

My Lords, I, too, hope that the assembly will be successful. I hope that it will be good for Wales and for the United Kingdom as a whole. Your Lordships will be relieved to hear that at this hour I intend to speak briefly. I do not intend to refer to subjects which have already been mentioned.

I welcome the possibility of the dual mandate which this Bill and the Scottish Bill envisage. I believe it is highly desirable that Members of both Houses of Parliament here should be able to stand for the Welsh assembly and the Scottish parliament, thereby helping to provide a link between Westminster and the new bodies. That will clearly be of great importance and it should help to reinforce the concordats which are proposed. The dual mandate possibility may not work too well in another place. The European example is not encouraging in that respect. The reason is perfectly obvious and understandable. The Whips of all parties will want to keep their "troops" under surveillance. They will not want them "swanning off" to Cardiff or to Edinburgh when they would prefer to have them in Westminster. Therefore, there may be difficulties in that regard. However, I suggest to your Lordships that those difficulties do not apply to your Lordships' House. I very much hope that many of our Members here will feel that they would like to make the benefit of their Westminster parliamentary and political experience available to the new bodies in Edinburgh and Cardiff.

My noble friend Lord Roberts of Conwy said from the Opposition Front Bench that we do not have the complete picture. I wish to develop that with regard to two aspects. The first concerns the number of Scottish and Welsh MPs at Westminster. I understand that the Government have said that they are prepared to consider this matter after the next general election. I suggest to your Lordships that this is a matter which should be considered now. Assuming that the new parliament and the new assembly are in being at the next general election, it seems to me that is the time when the number of Members of Parliament from Scotland and Wales should be reduced.

I say that for two reasons. The first is that Scotland and Wales are somewhat over-represented already at Westminster in comparison with England. I think that is generally accepted under the present arrangements as being a fair and reasonable settlement. But would it be as acceptable under the new arrangements? After all, Wales and Scotland will have a tier of representation which England will not have. I believe that that is asking for an English backlash.

Secondly, under the new arrangements the workload of Members of Parliament for Wales and Scotland will be substantially reduced. Most of the work of an MP these days concerns domestic issues. The postbags of constituency surgeries deal with matters which will be devolved to the new bodies. I suspect, therefore, that the Members who remain at Westminster will not have too much to do on domestic issues. I suggest strongly to the Government that there is a danger of resentment building up under the new arrangements unless the matter is tackled straight away.

The so-called West Lothian question was mentioned by my noble friend Lord Crickhowell. I prefer to call it the English question. It primarily concerns England. The essence of the problem—it is familiar to your Lordships—is that English MPs will have no say in a whole range of domestic issues devolved to the Welsh assembly and the Scottish parliament, but Scottish and Welsh MPs at Westminster will have a say in English domestic issues decided at Westminster. The English are a fairly tolerant lot, but I suggest that leaving that problem unresolved is asking for trouble and inviting an English backlash. Were that to develop, it would be ominous for the unity of the United Kingdom. This issue should have been resolved preferably by all-party agreement before the devolution Bills were introduced. However, so far as I am aware, no solution has been offered.

Another ominous sign is the Barnett formula. I had almost forgotten what the Barnett formula is. But the reality is—I shall not develop the point; it has been developed already—that the matter is now being discussed and questioned.

What is the solution to the English problem? Some people have suggested that we should have an English parliament. That would imply a federal system for the United Kingdom. I believe that that would be unworkable largely because over 80 per cent. of the population as a whole come from England. That would make the system unbalanced. Another suggestion is that there should be English regional assemblies. I am glad to note that the Government seem to have grown somewhat colder on that solution after they nearly lost the Welsh referendum.

I do not believe that it is a satisfactory solution. The regions these days are artificial. They do not have the community of interests which existed in the old days with Wessex, Mercia, Northumbria and the like. I come from the West Country. If one asks people from Somerset, Devon or Cornwall if they would prefer to be governed from Bristol or London, they say, "London every time". Therefore that solution is not an option.

Another suggestion which is worth serious consideration is an English grand committee. The concept of a grand committee is well precedented in another place. It has worked well. There have been Scottish and Welsh Grand Committees for a long time. More recently there has been an Irish Grand Committee. I believe that that would be the best solution. It could be accomplished within Parliament itself with precedents already well created. It would be a large grand committee composed of English members. It would be more like a Committee of the Whole House. That seems to me to be a possible solution worth serious consideration. Noble Lords might like to consider a similar arrangement for your Lordships' House. I do not want to be dogmatic about what constitutes the right solution to the English question. However, if we do not find solutions before the new bodies start, we shall be in grave danger.

There is a risk in any change. The Government are embarking on big constitutional changes. To modernise is not always to improve. I hope for the sake of all of us that these proposals will succeed. However, to succeed, the four countries of the kingdom must feel comfortable. Real dangers lurk in these unanswered questions, in particular concerning Westminster and England. I hope that the Government will endeavour to find agreed solutions on an all-party basis. This should surely be done while the devolution Bills are still being discussed in Parliament.

7.15 p.m.

Lord Moran

My Lords, for the past 35 years my wife and I have made our home in Wales. We are there by choice. Every week we go back there. It is there in mid-Wales that we have our very small hill farm. Wales is not only a singularly beautiful country, but it is a very lively place. Unlike some of the English, the Welsh, happily, are by no means somnolent and docile.

I would be totally opposed to the separation of England and Wales. I believe that all but a tiny number of Welsh people do not wish to be cut off from England. Unlike the Scots, they appear to feel no need to define their identity by denouncing the English. They have far more self-confidence. Their current problems, especially in agriculture, can, they know, be solved only with the help of the English.

I think that the Welsh need the English. Likewise the English need the Welsh. Just consider, for example, the sparkle and sagacity that the noble Lord, Lord Williams of Mostyn, brings to the handling of Questions to the Government Front Bench. It would surely be a much duller and less effective Bench without him. I welcome what the Minister said about preserving the Union when opening the debate.

Being an immigrant to Wales, and believing that all immigrants should exercise a certain circumspection, I refrained from saying anything about devolution while the referendum was pending. But last September it took place and we all know the result. Despite vigorous campaigning in favour of a "yes" vote by the Government and all the parties in Wales represented in the other place, and a poorly financed "no" campaign, the vote was won by only a whisker. My own county of Powys voted "no". So did Cardiff, Flintshire, Denbighshire and indeed half of Wales. I believe that it would have been wiser not to have embarked on such a fundamental constitutional reform without a much stronger endorsement from the people of Wales. But the Government have decided to press ahead and we must deal with the situation as it is. As the noble Lord, Lord Callaghan, said, we must make the best of it.

Nevertheless, I think that it is important that the Government should not forget the narrowness of that vote. The Prime Minister wisely said after it: It is important that we respond to the fears that were expressed by people … We take account of the narrowness of the margin". I hope that the Government will stick to that line and not get carried away by enthusiasm for the new arrangements. They should, I believe, tread carefully and seek the widest possible consensus in Wales for everything they do. I am concerned not only by the predictable pressure from Plaid Cymru for this to be just the first step along the road to separation, but by voices like the Institute of Welsh Affairs which claim that the future assembly: is being made to look anomalous [since] of all the constituent components of the new British-Irish Council, the National Assembly for Wales will be the only body without full legislative powers". Of course everything depends on who the members of the new assembly will be and how it will work. The Prime Minister said in September that the Government had: to carry on explaining to people that this is about taking all the powers of the Secretary of State for Wales and giving them to a body which is directly elected by them". In practice that is not an easy thing to do. The Welsh Office has been an administrative body, heavily dependent on policy direction from Whitehall. Parliaments and assemblies are mostly engaged in debate, discussion and criticism and are not naturally well equipped to administer. But some aspects of the change are certainly welcome. Whitehall in general has not paid enough attention to Welsh affairs and a Welsh assembly will be nearer and more accessible for people in Wales.

The detailed consultation paper produced by the advisory group seems to me a valuable contribution and it contains many sensible ideas. The setting up of this group was a very welcome step by the Secretary of State.

I wish to say a word about the handling of the Welsh language. It is a great, indeed a splendid, thing that it has survived all these years and is still a living language. It would be a sad day if it were to die out. It is clearly right that those who know and speak it should be able to use it freely and that in Wales it should enjoy equal status with English. However, the assembly should remember that only a minority of people in Wales are at home in Welsh, and should be careful not to go too far in imposing Welsh on everybody. As it is, every report produced in Wales has to be in both languages, at double the cost; most people in Wales cannot pick up Channel 4 because that wavelength is given over to S4C; and every road sign has to be duplicated—so when you drive into Wales from the north you find that Wrexham is spelt with an "x" for English speakers and a "cs" for Welsh speakers.

If we go too far—and Clause 33 of the Bill allows the assembly to "promote" the Welsh language—we may create difficulties. I spent three years as High Commissioner in Canada and was able to observe the effect there of a militant language policy in Quebec, promoting French and discouraging the use of English. Businessmen who came to the province were forced to send their children to French schools. Advertising in English was prohibited. That was carried to extraordinary lengths. A restaurant that had photographs of film stars on the walls with inscriptions such as, "Sincerely Yours, Red Skelton", was told by the language police that that was illegal. An inscription of that sort, they said, must read: "Très sincèrement, Skelton le Rouge".

The result of all that was that business after business folded its tents and abandoned Quebec for Ontario. I even discovered that the chief executive officer of the Bank of Montreal was quietly living and working in Toronto. Toronto has benefited hugely, and Montreal, once Canada's liveliest centre of business and the arts, has, sadly, become something of a ghost town. I hope that we shall never see the introduction of language police in Wales, or the adoption of policies which are burdensome to business and drive firms to relocate from Cardiff, Swansea and Newport to the obvious alternative of Bristol. Bilingual debates in the assembly, with simultaneous interpretation, will be practicable but they will be expensive.

I share the doubts about the proposed party list system expressed by the noble Lord, Lord Onslow of Woking, in his admirable maiden speech, and by the noble Lord, Lord Callaghan. I hope that the Government will consider seriously what two such distinguished politicians from opposite sides of the House have said about that.

The Government introduced in the other place Clause 121 on sustainable development. The intention is commendable but the clause is pretty opaque. It is important that, in Wales of all places, the environment should be given the highest priority. Indeed, I made suggestions to that effect to the then Permanent Secretary at the Welsh Office way back in 1990. I suggested to him then that if environmental aspects could be considered at a very early stage, development could then be proposed in the most suitable way environmentally and many acrimonious public disputes could be avoided. That has not been done in Wales in the past. I hope it will be done in the future. I hope that in Committee we can improve the environmental aspects of the Bill. There is a strong case for some sort of environmental audit and environmental appraisal of subordinate legislation. There should be environmental duties for the assembly and the Welsh Development Agency, to ensure that environmental aspects are given proper weight. We should also seek to ensure that the interests of rural Wales are taken fully into account when the assembly is set up.

The Environment Agency is strongly, and in my view rightly, attached to the principle of integrated catchment management for our rivers. When I was associated with the National Rivers Authority in Wales, we were glad that that applied to those two great rivers, the Severn and the Wye, both of which have half their lengths in Wales and half in England. The Severn has been managed throughout its length from England and the Wye throughout its length from Wales. That arrangement has worked well. It is important that it should continue after the setting up of the assembly.

I am a little puzzled by the wording of Articles 108 and 109 of the Bill, which deal with observing Community law and Community obligations. I should be interested to know how those provisions will work. The Notes on Clauses are not particularly illuminating. Who is to tell the assembly that its subordinate legislation may conflict with Community law or that it is to be bound by Community obligations? Will it be the Secretary of State? I should welcome elucidation of those clauses by the Minister who is to reply.

Finally, I have a positive suggestion to make about the Bill. It is a large and complex measure; there are 142 pages of it, with a hefty volume of Notes on Clauses. Inevitably, it has had to be produced in a hurry. We shall no doubt be able to correct some mistakes at subsequent stages, but much will depend on how it works in practice. If after some time it becomes clear that there are aspects of the new arrangements which do not work well, the introduction of new, amending legislation might well cause disquiet and controversy by suggesting that the Government might be going back on their commitments. Would it not therefore be sensible, and very much in the interests of the people of Wales, to have a clause in the Bill providing for a review of the arrangements after, say, two years, so that any necessary or desirable changes and improvements could be made without bringing in new legislation? I commend that proposal to the Government, and I should be glad to know whether they think it would be helpful.

7.26 p.m.

Lord Stanley of Alderley

My Lords, I hope that the noble Lord, Lord Elis-Thomas, is getting ready to be a policeman and getting his hat ready to enforce all these rules. I presume that I do not have to declare any Welsh interest or background, since I did so fully during the passage of the Wales Bill in 1978.

In the referendum I voted against the formation of an assembly. I accept with regret that Wales is in many ways a divided nation, as was indicated by the referendum. Sadly, it is divided geographically, religiously, and town-versus-country; and we have a language problem, as was pointed out by the noble Lord, Lord Geraint. I fear that an assembly could make those divisions worse. For instance, I am saddened that the Welsh Language Society has already objected to inviting Her Majesty to the opening of the assembly.

Like my noble friend Lord Roberts, the noble Viscount, Lord Tenby, and others, I sincerely hope that the assembly will foster co-operation and unity. I accept, therefore, the electoral decision and it will be my purpose to try to ensure that the assembly works efficiently, in a non-divisive way—and, of course, in the best interests of farming and the rural economy. To that end, I shall raise a number of points in Committee: for instance, on food safety and animal health, and on Agenda 2000, which was dealt with by my noble friend Lord Crickhowell. I shall raise a further dozen or so matters that were not answered in the other place. I shall try to explain my queries to the noble Lord, Lord Williams, so that he will not accuse me, as he did during the passage of the Wales Bill, of living in the Dark Ages. I thought the noble Lord intended his remark to be uncomplimentary—but I wonder, since I thought my family did rather well for Wales in the Dark or Middle Ages.

There is, however, one overall matter that concerns me. I was pleased to hear it referred to by the noble Lord, Lord Callaghan. It is one which I believe all noble lords will support; namely, the need to ensure that the quality and integrity of the members and staff of the assembly are second to none. The assembly will fail unless that is so. Both the elected members and the civil servants operating it must be seen to be accountable and responsible for any mistakes that they may make. I realise that Clauses 94 to 106 attempt to deal with accountability; but I wonder whether they are sufficient to remedy and avoid problems such as those referred to by the noble Lord, Lord Elis-Thomas, which are occurring in Anglesey. My county council has become a laughing stock for alleged corruption and incompetence by both councillors and executives. That saddens and demoralises me, not just because my mother was, like the noble Lord, Lord Cledwyn, a county councillor of that county, but because the majority of those who are councillors and civil servants do their best, although they may on occasions, I am sure, have left undone that which they should have done.

I am therefore anxious to avoid a similar tragedy happening to the assembly. I would very much welcome any reassurance that the Minister can give me as to how such future problems might be resolved. I was particularly interested in the remarks made by the noble Lord, Lord Williams, about an ombudsman. I look forward to the amendment and to seeing what his remit will be. Of course, the old-fashioned and obvious way to solve any such problem is for those in charge, either elected or non-elected, to resign, whether or not they consider themselves responsible. As the Secretary of State for Scotland made plain in a statement yesterday, the buck stops at the top. Will the Secretary of State, or whoever will be responsible for Wales, have similar powers?

We have before us a Bill that was supported by only one in four of the Welsh electorate. I disliked such a narrow decision; I wish it had been better, one way or the other. But I hope and pray that your Lordships can, with the Government's help, make sure that the assembly works in the best interests, not just of the 25 per cent. who voted for it, but also of the 75 per cent. who did not.

7.31 p.m.

Viscount St. Davids

My Lords, I have an interest to declare, for as you have heard, I am at present serving as a member of the Secretary of State's National Assembly Advisory Group. Your Lordships should also be aware that while this Bill was in another place, Mr. Michael Ancram used the occasion of a press release to brand me as being the Secretary of State's "stooge". Therefore, my words this evening should come with a "former government health warning"! However, I do not think that this is likely to cause my noble countrymen in your Lordships' House any concern. I know that what I have to say will not gain me any favour on these Benches but I sincerely believe that we should recognise the reasons why this Bill is before us today. The errors of the past must not cloud a vision for the future.

There are those who call into question the validity of the proposals in this Bill, given the very narrow majority in the referendum held on 18th September last year. But this majority should be seen in the context of the 79.7 per cent. who voted against similar proposals in the referendum held in 1979.

What happened during the intervening 18 years to bring about the 30 per cent. swing in public opinion? The dates 1979 and 1997 are, unfortunately, no coincidence. As the Welsh withdrew their political support at both national and local levels from the then government, so that government imposed their will through an ever increasing use of the quango system. I recognise that it is reasonable for government to appoint people into their administration who share their political philosophy. The danger for any United Kingdom government is when they assume that their mandate in one or more of the four constituent countries extends to those that have decisively rejected that philosophy. The quango system must not become a proxy for the democratic process.

To say the very least, it would be naïve to believe that quango appointments were made in Wales on a politically neutral basis. I myself witnessed such appointments and can assure your Lordships that competence took second place to known political loyalty. By 1997 such appointments outnumbered the total of those decided through the ballot box. Furthermore, this move to a system of undemocratic government took place during a period when powers were transferred from local to national government.

Failure at the polls meant that a Secretary of State could no longer be appointed who represented a Welsh parliamentary constituency. One was sent among us who, despite a hard-fought public expenditure round, returned many millions of pounds to the Treasury. I believe it was to the detriment of his ministerial charge but no doubt to the resounding applause of the Conservative voters of Wokingham. Any notion of one nation Toryism was dead. The Welsh could quite reasonably ask who governed them. For it certainly was not themselves and they had little say in it.

As it was with Caesar so it is with governments. It is my party's unfortunate legacy that it will be remembered not for its many successes in Wales but rather for the manner in which it governed. One only has to look at the way in which the jobs lost from the iron and coal industries were replaced with a more diverse economy with a highly paid workforce to see that a Conservative Government worked for Wales.

Daily my noble friend Lord Crickhowell's unique dream becomes a reality in Cardiff Bay. But little of this mattered on 18th September; the time had come for the people of Wales to take responsibility for much that governs their daily lives. The clock could not be turned back to re-introduce the government systems of a former era. The agenda has changed.

However small the majority on 18th September last, it reflects a substantial swing in the wishes of the Welsh people and requires the Government to deliver their manifesto pledge under the terms of the White Paper and the referendums Act. The legitimacy of this Bill cannot be contested.

Before we examine the proposals in the Bill, your Lordships should recall the aims and claims made by those who campaigned to secure a "No" vote in the referendum. It is well known that Mr. Michael Ancram's knowledge of Welsh affairs is one of my party's greater glories. What he and his followers sought was the maintenance of the existing system—quangos and all; no suggestion that any reform was needed. It is interesting to note that those who destroyed the concept of one nation Toryism now hide behind the Union flag. I have no doubt that if a former leader of the Westminster City Council had been a current student in the Conservative constitutional class of 1998 she could also have devised a political system that would have avoided legal challenge. Recall, too, the claim that an assembly would be nothing more than a "talking shop". What have we so desperately needed all these years, my Lords? A forum in which the north would meet with the south, the west with the east, that would bring all Wales together in the common interest—in other words a small part of the proposals contained in the White Paper and now in this Bill. Recall the claim that the assembly would be the "old Glamorgan County Council on stilts", but that is a matter that I will return to.

The national assembly created by the Bill will serve all the people of Wales well for it is unlike any other mechanism for government. Its ethos is provided by three key principles: inclusiveness, transparency and accountability. These principles were also given to us who serve on the National Assembly Advisory Group as the criteria which we must apply to our work on the standing orders, consultation and our final recommendations as to how the national assembly should work. These principles require that the Bill is not too prescriptive and is flexible enough to allow the national assembly to evolve without recourse to the frequent amending of primary legislation. Much of this flexibility can be gained through the standing orders.

Part I of the Bill may well be the greatest act of political forgiveness in modern times. The provisions in Clauses 4 to 7 offer my party the road back into Welsh politics, for it was down this road in the opposite direction that the quango system operated. I hope that the introduction of an element of proportional representation is a sign that the Government will consider its use in the reform of local government, but that is an argument for another day. Although the PR provision will greatly enhance the political acceptability of the national assembly, one has to recognise that the Bill will bring into being an instrument of government that will be dominated by a single party for some time in the future, a party that in Welsh local government has misused such power in the past. I believe that the quality of any system of government is ultimately determined by the quality of its opposition. To that end, I wish to give my party a head start.

I recall some five years ago a very interesting television debate in which the noble Baroness, Lady Symons of Vernham Dean—then the general secretary of the Association of First Division Civil Servants—put forward the idea that in order to improve the quality of the opposition, opposition spokesmen should be given greater access to officials. I have taken that idea a little further and through the National Assembly Advisory Group I proposed that the opposition parties should be given a private office or offices staffed by the Civil Service. I am pleased to be able to tell your Lordships that the Civil Service has recognised that the national assembly is unlike local government and it is also unlike Westminster and will need new mechanisms that will require the Civil Service to change some of its long-held practices. I am not there yet but the omens are good! If I succeed, it will go a long way towards answering the question raised by the noble Lord, Lord Elis-Thomas.

While we all recognise that accountability and transparency are key virtues that we must demand of governments, how do we ensure that governments deliver them? As your Lordships know, the government amendments in another place, which have redrafted Part III of the Bill, will allow the national assembly to operate through a "Cabinet-style" administration. While there is a danger of patronage, that is adequately compensated for by the clear line of accountability. There is no good reason why our national assembly should follow either the Westminster or local government models for each have their faults. This Bill will allow for the creation of a new model drawing on the best of both. Let us not forget that it is not required to replicate the functions of either for it has a new role to play in the manner in which Wales is governed. It will bring government closer to those who are governed.

How do we avoid creating a political vehicle which will, in time, resemble the worst of local government or, for that matter, the worst of Westminster after 18 years of rule by a single party? I fear that there is no answer to that and the danger is one that was reflected in the referendum vote. The Government have made a great gift to the people of Wales, but this gift needs to be followed by another which is not in the hands of the Government but is in the gift of the government party. I refer to the manner in which the Labour Party selects its candidates. This will have implications for local democracy, for local choice, but I pray that the Labour Party will take the long-term interests of the national assembly as being the moral rather than the political priority.

I know that the phrase "the people" is overused and debased. However, it is "the people" who will have many aspects of their daily lives governed by the national assembly. In recognition of that, the National Assembly Advisory Group has prepared a consultation paper entitled, The National Assembly for Wales: Have your say on how it will work. Copies of this paper are in the Printed Paper Office and in your Lordships' Library. Over the next month the paper will be presented at seven or more public meetings held at different locations in Wales. Many of the issues that your Lordships will raise during the Committee and later stages of the Bill are addressed. I therefore suggest that the paper is required reading. Your Lordships may be surprised to know that the 14 of us who serve on the NAAG have seldom had a political debate. It has not been necessary. "Goodwill and a common purpose"; should not that be the motto for the national assembly?

Although my family's motto is "Ducit amor patrie", my political allegiance has been called into question. My noble friend Lord Roberts of Conwy is undoubtedly Welsh; he is also undoubtedly a Conservative. Can I tempt him to table an amendment that requires a Welsh emblem to be placed on the Union flag? It would be a recognition of our nationhood and our place within the United Kingdom. As your Lordships know, I am the only Member on these Benches to have given these proposals unconditional support and I worked for the "Yes for Wales" campaign. I want to see the end of the "begging bowl" mentality. I want to see Wales grow in political maturity, cease to be a community of communities and as a nation be recognised as an equal partner in the United Kingdom.

In conclusion, our famed Welsh choirs will continue to sing Verdi's mighty "Nabucco" chorus with fervour, and in wet-eyed harmony, but now in the certain knowledge that with the passing of this Bill the last gauleiter has ruled in Wales.

7.44 p.m.

Lord Hunt of Kings Heath

My Lords, as a non-Welshman, I rise to speak with some diffidence in this debate. This Bill has enormous implications not just for Wales, but for the rest of the United Kingdom. Like many other noble Lords, I welcome the Bill as a visible and powerful indication of the far-reaching constitutional changes upon which we are embarked. Indeed, we are embarked upon a journey, the outcome of which I suspect not one of us can predict with absolute certainty. However, unlike the noble Lord, Lord Patten, I am convinced that it is a journey which will lead this country to enhanced democracy, better governance and decisions more in tune with the wishes of the public whom we are here to serve; but, crucially, within the parameters set by the overall sovereignty of the Parliament of the United Kingdom.

The noble Lord, Lord Roberts, doubted that there is a national crisis of confidence in our current political system. I am not so confident. For far too long our system of government and democracy has seemed jaded and out of touch; a system of government which was one of the most centralised systems in the world; a system of government which, in Wales and Scotland, placed far too much power in the hands of one individual; a system of local government whose decision-making structure owes more to its Victorian inheritance than the needs of the 21st century. No wonder the public display such indifference to the political process. Is it not striking and somewhat alarming to reflect on that public indifference? Look at the falling numbers of electors voting in elections; look at the apathy of many young people towards politics; look at the cynicism displayed by many people towards politicians. We must turn that around. We must energise our democracy. We must awaken public interest. Surely this Bill is a major step towards doing that?

By however narrow a margin, the people of Wales voted to be part of this democratic awakening. The potential for Wales is considerable. The noble Lord, Lord Thomas of Gresford, and other noble Lords would have wished to see more powers transferred to the assembly. But, as my noble friend Lord Callaghan said, let us not be half-hearted. The powers that are being transferred are substantial. But more than simply a transfer of powers, the national assembly will give political leadership to Wales in a way which a Secretary of State alone could never do.

It will maintain, enhance and strengthen the cultural heritage of Wales; it will allow for much more open debate about the key issues facing Wales; it will bring much greater democracy and accountability to the numerous quangos and appointed bodies whose links to the democratic process in Wales have seemed somewhat tenuous, as some noble Lords indicated.

In sharing my enthusiasm as a non-Welshman for the potential of this Bill, let me refer to the dogs who constantly threaten to bark, if not bite, in this debate. I suspect that, far from being resentful English dogs, we will actually see extremely interested English dogs, particularly in the English regions. They will be looking at the advantages of devolution in terms of inward investment and the jobs it will bring; in terms of new approaches to governance; in terms of the increased public support which will result. I suspect that those English regional dogs will be saying, "Can we too enjoy some of the benefits? Can we have regional government in England?"

There are two specific areas in the Bill to which I wish to draw attention. The first concerns Clause 113 which requires the assembly to set up a scheme to promote local government and to establish a partnership council for Wales consisting of members of the assembly and members of local government. The attention to partnership is entirely understandable. The right balance of power between the national assembly and local councils will be absolutely crucial. The temptation for the assembly to wish to suck powers from the locality to the centre is all too obvious. Hence, the advantage of a council in which there can be a mature debate between the heads of assembly and local government seems very apparent.

But what about the relationship between the assembly and other bodies and quangos whose membership will actually be determined by the assembly? Of course, the track record of some quangos in Wales has not been without controversies and problems. It is entirely understandable that the assembly will wish to maintain close scrutiny of the activities and affairs of those appointed bodies. But there are risks in an over-prescriptive approach. I take the National Health Service in Wales as an example. I accept that the relationship of local authorities and NHS organisations to the assembly will be different. Local authorities are independent bodies accountable to their electorate. NHS authorities and trusts are not independent. They will be appointed by, and will be directly accountable to, the national assembly.

Nonetheless, if the NHS is to be led and well managed at local level, there has to be maturity in that relationship. The assembly will need to resist the temptation to interfere unduly in operational issues, the effect of which could only be to undermine the confidence of those leading the NHS locally. Aneurin Bevan, the founder of the NHS, always wanted and aimed for direct accountability of the NHS to Parliament. He went on to say that as many decisions as possible should be delegated to local bodies. I hope that that will cement the relationship between the assembly and the NHS in Wales.

I would have hoped that the Bill would have allowed for a partnership arrangement similar to that which will be allowed between the assembly and local government. I hope that we can return to this matter during Committee stage.

The second aspect of the Bill to which I wish to draw attention is the relationship between public services in Wales and those in the rest of the UK. Nowhere is this more apparent than in relation to the National Health Service. The Bill gives the assembly wide responsibilities as regards the NHS, such as the allocation of resources; holding NHS bodies to account; monitoring the health of the population; and ensuring adequate and well-trained staff.

Already the NHS in Wales starts from a strong base and the assembly can build upon that by allowing greater innovation without being under the shadow of a Department of Health all too concerned with English priorities and problems. The assembly can introduce a more effective appointment process to NHS bodies. It can introduce a democratic process to the national strategic direction which has to be given. It can develop cross-sectoral working between health, housing, local government and the environment, all of which can have an impact on improving people's health. It can tailor resources into special areas of need; it can encourage European links and proactive public health policies.

But just as the assembly will have many advantages, so we have to ensure that those advantages enhance the UK characteristic of the NHS as well. Of course, throughout the United Kingdom the NHS does not have complete uniformity, but by and large it offers the same broad service. We have to ensure that that continues. Whatever the organisational or governmental structure, wherever one goes in the United Kingdom it is the same National Health Service: there is the sharing of good practice and innovation between different services; there is movement of staff between the four countries; a cross-service flow of patients across the borders; harmonisation of broad policy areas; and understanding of the respective relationships between Europe, the assembly, the parliament and the UK Parliament.

It is already clear that in order that the NHS in Wales continues to operate as part of the United Kingdom NHS, the United Kingdom Government will retain responsibility for national standards; for arrangements covering professional education and training and the pay and conditions of staff. The assembly will also be represented in appropriate national forums to ensure that the interests of Wales are reflected.

The noble Lord, Lord Williams of Mostyn, has already sketched out the wider relationship between the assembly and the UK Government. Concordats will set the framework for administrative co-operation; the exchange of information; participation in joint boards and in European relationships. This is all good, sensible stuff.

To take the example of the NHS again, I believe that we have to go further. I would like to see a mechanism established whereby the health Ministers from Wales, England, Scotland and, I hope, Northern Ireland, can come together in order to agree and sustain the fundamental framework and principles under which the NHS will operate throughout the United Kingdom, thus ensuring its comprehensive nature, the harmonisation of policy and development, and the free flow of patients and staff.

That surely offers us the best of both worlds; namely, devolution to encourage innovation; democratic engagement; decisions closest to the people, but within the context of a UK public service. That surely must be in tune with the principles set out in this Bill, which is devolution to the assembly of a whole range of responsibilities, but within the overall sovereignty of the UK Parliament. Here I depart from the noble Lord, Lord Patten. My hope and expectation is that our constitutional arrangements will be enhanced and not reduced as a result of the Bill.

We have a choice to obstruct or to speed constitutional change in the United Kingdom. That constitutional change is not without its risks. It would be foolish for anyone to deny them. But the risks of doing nothing are so much greater. Our current democratic processes are tired, lack confidence and fail to inspire public involvement and interest. We have to change. We have to change the way in which the House of Commons conducts its business and we have to change your Lordships' House. We have to push decision-making closer to the public. I see this Bill as a most powerful step in that direction and certainly deserving of the support of your Lordships' House.

7.55 p.m.

Lord Beloff

My Lords, some five hours ago—it feels more like a month after this orgy of self-congratulation—the noble Lord, Lord Roberts of Conwy, pointed out that this was one Bill in a great programme cluster of Bills which have been, or will be, presented to reform our constitution. Unlike the noble Lord, Lord Hunt of Kings Heath, I see no need for any of that.

We are told that, as the Upper House, we may not oppose these Bills because the Government have received a mandate in the approval allegedly given by the electorate to their party manifesto. I know of no serious student of elections who believes that the last election was won because of the widespread applause given to the Labour Party manifesto. I believe it more likely that people will say that after 18 years or so they got tired of one set of faces and thought that they might experiment with another. It is a dangerous thing to experiment.

Therefore, I believe that we are in entitled to say so, if we believe that these Bills are wrong and damaging to the United Kingdom of whose Parliament we are part and, if necessary, to vote them down.

But on this particular Bill I have a different kind of feeling because I am very fond of the Welsh. I remain fond of them even after hearing five hours of them this afternoon. My fondness derives—and many personal experiences have been given in our debate—from the winter of 1940 when, with my rifle and a rather inadequate supply of ammunition, I guarded the coast of north Wales against a possible German invasion. I believe it is well known that the Germans did not invade and therefore I have always regarded myself as Wales's ultimate deterrent.

Therefore, liking the Welsh, the problem for me is why the English through the ages have been so horrid to the Welsh. I regard this Bill as simply the latest example. I shall not go back to prehistory, but Offa's Dyke has been mentioned by several noble Lords. What was Offa's Dyke? It was a device to prevent the Welsh from coming into England. Immigration control was rather simpler in those times and I sometimes think that Mr. Jack Straw would have made a rather good king of Mercia. It was not enough to keep out the Welsh; the English decided that they had to conquer them and rule them. Thus, in the 13th, 14th and 15th centuries battles were fought and castles built to keep down the Welsh, and for a time they were ruled as a conquered people.

But the Welsh were very nice and did not bear malice. They said that they had to do something for the English and so gave them the most successful dynasty that this country had ever known: the Tudors. The admirable monarchs Henry VIII, who employed the genuine Cardinal Wolsey, and his daughter Elizabeth I really put Britain on the world map as an independent, self-propelling country. We can be absolutely certain that Henry VIII would never have signed the Treaty of Rome. As it is my view that the Treaty of Rome is the source of most of our troubles, both economic and political, that is something for which we should look back to Henry VIII with respect. In the Tudor period Wales was assimilated in its institutions and forms of government into England and for several hundred years the Welsh played a very active part in the national life of the United Kingdom. They produced two Prime Ministers, one of them the noble Lord, Lord Callaghan. The other is to be represented later in the debate by the holder of his title. We are still in the fortunate position of having hereditary Peers. Another idiotic proposal of this Government is to remove them. We shall have a reminder of Lloyd George. When we think of Lloyd George we should consider the following. Suppose that Lloyd George had been successful in his early attempts to deal with the constitutional position of Wales. In those days "devolution" was not the word used, but never mind. Can one imagine what England and Europe would have lost if the ultimate ambition of David Lloyd George had been to be first secretary of the Welsh assembly? After all, if we go through with this we may condemn future geniuses from Wales to similar obscurity.

Why in the face of all this are the English now determined to press upon Wales a system of government for which the Welsh people have shown no desire? We have a government today that is really run by Scotsmen and a Parliament, in which the vast majority sit for English constituencies, that has produced a Bill to confer some kind of devolution upon Wales. When they asked the Welsh they received a very marginal reply. When they asked the Welsh whether they wanted a Welsh assembly half of the people believed the question to be so silly that they did not bother to vote. Of those who did vote, nearly half said "no". It is extraordinarily presumptuous of an English majority to wish upon the Welsh something for which they clearly have no enthusiasm.

Why are the Welsh right to have no enthusiasm? I believe that the noble Lord, Lord Patten, said that there existed a constitutional structure which, largely but not wholly through financial means, enabled those parts of the United Kingdom which prospered to come to the assistance, through the financing of public services and other ways, of those who did less well. To tamper with that is quite extraordinary, particularly at a time when Wales to an even greater extent than Scotland is suffering very severe economic hardship. A government that really cared about the Welsh would in a year have done something for Welsh agriculture and not let the Welsh delude themselves that by some form of devolution the common agricultural policy would suddenly be changed in their favour. The idea of Scotland in Europe and Wales in Europe is equally absurd. The constitution of the European Union so long as it persists—that may not be too long—recognises only states, not parts of states or would-be states. Therefore, it is quite understandable that the Welsh would rather be part of a larger structure and have the possibility or likelihood of their services being maintained, whether through the Barnett formula or any other formula, irrespective of the amount of money that they could raise from tax.

I agree with the noble Lord who pointed to the argument sometimes made that bodies of this kind, whether it be the Welsh assembly, an advisory council or this and that, provide a degree of employment for members of the chattering classes at the expense of those who do the work. In this way we are diverting funds. Cardiff, which has been proclaimed by one or two noble Lords as the natural capital of Wales, decided in the vote that it had no wish to play that role. It did not want to have an institution that would require a capital. Cardiff is not to be allowed to do as it wishes. Money is to be spent on erecting a vast palace, probably on the Brussels or Strasbourg model, for the new assembly with all its hangers-on, officials, concordats and all the rest; whereas that money could have been spent on the admirable project for the establishment of an opera house in Cardiff. The Welsh are much better at singing—that is one of the reasons why I like them—than running assemblies or concordats. Down to the very last detail this Bill does not deserve the confidence of your Lordships' House and I hope that it will not get it.

8.8 p.m.

Lord Ellenborough

My Lords, it is always a great pleasure to follow my noble friend Lord Beloff and his most interesting historical discourses. Unlike most speakers today, I claim no Welsh connections. Unlike many speakers, I intervene in this Bill as one who is increasingly concerned about the future existence of the UK, and in particular about the way in which the Government have proceeded with constitutional changes such as devolution with little thought of the consequences.

In this Bill we are debating not just the constitution of Wales, but the constitution of the entire UK in which every UK citizen has an interest. That includes even the English who after all are a mere 83 per cent. of the entire population of the United Kingdom. I hope that, in saying that, I shall not be considered too much of an English dog.

I view the Bill with some misgiving and fear that we are beginning on a path which may lead to the separation of England from Wales in perhaps the not-too-distant future. I have no doubt that the Bill can be much improved. I am sure that it is right to include a clause asserting the constitutional sovereignty of Westminster, and no doubt an attempt will be made to do that during the later stages of the Bill. I feel that the Bill could undermine the Union and upset the constitutional balance which has existed hitherto.

There is no disputing that the Welsh people are perfectly entitled to vote for an assembly. It may well be that there are parts of Wales to which devolution will bring some benefits. But, once Wales has its own national assembly, it is likely to prove divisive, with Wales split down the middle, as shown in the close referendum result. The Secretary of State has described it as a "process rather than an event". But a "process" to where? Others have described it as a journey and not a destination, and others have described devolution as a springboard for further separation.

I do not believe that it will be long before the Welsh demand a full Parliament. There will be resentment that the Scots are being treated differently, the inference being that the Scots are more responsible and are worthy of a full Parliament, but that the Welsh are not. It is difficult to see the logic in denying to Wales what the Government are giving to Scotland.

All the seeds of dissent are there. My noble friend Lord Dixon-Smith pointed out that Clause 22 provides for a transfer mechanism for other powers to be given to the assembly. I believe that that will lead to acrimonious arguments between those who continue to believe in the Union and those in the assembly who will wish to expand its powers and distance it further from Westminster. It is unlikely that the assembly will satisfy those who wish for it to be developed into a full-blown parliament with tax-raising powers. It is almost inevitable that politics in Wales and Scotland will now become more constitutional, and after a while, will be not so much between the old political parties as between unionists and nationalists. One wonders whether Labour members—not only Labour members, but particularly Labour members—of these devolved institutions will prove loyal to the unionist cause. When the crunch comes and there are pressing constituency pressures, will they go native and, in the case of Wales, put the assembly and Cardiff first rather than the Union and Westminster?

This Bill is widely seen as the first step towards the Government's objective of fragmenting the UK and moving closer to a Europe of regions and away from the concept of a Europe of nations.

Any proposal for regional assemblies for England as the Government's answer to the English question is nonsense. I cannot believe that England will in any way submit to being split up into artificial, fabricated regions with no sense of loyalty or identity. That has been described as a process of Balkanisation. At least the Welsh assembly and the Scottish parliament will be constructed on historic national borders and national identities. Any regional assemblies in England would become faceless bureaucracies, with a total lack of interest among the population they are supposed to represent. No regional assembly would be comparable to the Scottish parliament; yet it would need to be so if the West Lothian problem is to be solved. If the constitutional settlement does not offer equal powers to all parts of the kingdom, it will not be a fair or durable solution.

Discussion of this Bill, and of the Scotland Bill which will follow shortly, highlights the problem that the Government will not face, of how to balance the constitution of the Union. It will now be grossly unequal and totally incoherent and unstable. All four parts of the UK will have a different form of government. The English elector will not be on equal terms with the Welsh elector. The average electorate of a Welsh constituency is 55,000 as against 69,000 in an English constituency. Welsh MPs will be able to vote at Westminster on secondary legislation affecting England. That may not be the most potent form of the West Lothian problem, but some have called it the "West Glamorgan problem". Neither the English elector nor the Welsh elector will be on remotely equal terms with the Scottish elector. The average electorate of a Scottish constituency is also about 55,000 as against 69,000 in an English constituency; yet Scots MPs will be able to vote on almost all English domestic matters and on many Welsh domestic matters. Both Wales and Scotland will continue to receive a higher proportion of government spending at the expense of England.

The Government may continue to be held in popular esteem, for a while, but things have a habit of changing suddenly and it is not difficult to visualise a situation after the next general election in which the Labour Party, assuming it is returned, will be able to form a government only by way of Scottish and Welsh seats. It seems extraordinary that the Government cannot see the danger of 73 Scottish MPs voting on English domestic matters and a further 40 Welsh MPs voting on secondary legislation. There is talk of a potential English backlash. I resent the use of the word "backlash"; it is not the right word to describe the concern of the English, who only expect fairness and who are just as entitled as the Scots, Welsh and Irish to express a national identity. Already much concern is being expressed. The English are normally very quiescent and slow to be aroused, but history shows that they wake up in the nick of time in the face of disaster.

The Government should not take too much for granted. They should remember the words of G.K. Chesterton: Smile at us, pay us, pass us; but do not quite forget. For we are the people of England, that never have spoken yet". I do not know whether the Minister is aware that a Private Member's Bill was introduced in the other place a short time ago to provide for a referendum to be held for an English Parliament. It obtained highly significant support before it ran out of parliamentary time. There is an increasing amount of press comment advocating an English Parliament.

It was argued during the general election that the new devolved institutions for Wales and for Scotland would bind the Union together. Every indication is that the reverse will happen. In Scotland, it is the SNP that is gaining ground. What worries me is the defeatist talk about the future of the UK and how England had better go it alone. Nothing could be more disastrous, in my opinion. The world is a dangerous place. It is of paramount importance that all four parts of the UK stay part of the Union, particularly bearing in mind what may happen with regard to developments in Europe.

Some solution must be found if the UK is to survive. Probably the most practical and sensible solution, once the devolved institutions have been set up, would be for Scots MPs to withdraw and for Welsh MPs to withdraw, where applicable, when secondary legislation is being discussed and for only those who represent English constituencies to conduct English business—in effect, providing for "English Days". I believe that that would go a long way to solving the so-called "West Lothian problem".

It might be that such an arrangement would eventually lead to separate parliaments being established in the four parts of the UK—Wales, Scotland, England and, I hope, Northern Ireland. This would necessitate the formation of a federal structure which would recognise and enforce appropriate powers for the provincial parliaments and local government and establish a clear, if reduced, role for a federal UK government. The problem of the English preponderance, mentioned by my noble friend Lord Dean of Harptree would simply have to be surmounted.

Looking further ahead, the main question may well be, as argued by the distinguished constitutional expert, John Barnes, in his book A Federal Britain No Longer Unthinkable, that the question is not so much whether we move to a federal structure, but whether any such federation is based on the existing nations of the UK or on artificially created regions with unequal powers submerged into Europe.

8.20 p.m.

Baroness Young of Old Scone

My Lords, I shall be brief. It has been a long but fascinating debate. I feel presumptuous in standing here. Your Lordships may have noticed that I am not Welsh, but I can claim to be a fellow Celt, and I declare an interest as a chief executive of a major landowner in Wales and of the largest environmental NGO in Wales.

I should like to mention one issue which has already been touched on by the noble Lord, Lord Moran, in his eloquent speech. Wales is a green and pleasant land. Its mountains, valleys and wildlife are among its greatest assets. They stir the hearts not only of singing Welshmen but of many visitors. Tourism is a major contributor to the Welsh economy and a major generator of jobs.

I should like to tell a short story about kites. Some of your Lordships may have seen the totally scurrilous rumours in the press that the dragon of Wales is to be replaced by the red kite of Wales as the assembly emblem. I should say that the RSPB has slapped in a patent application on the red kite. But we have an excellent example in the red kite, which is close to the hearts of many Welshmen, as a generator of tourism and employment. The Kite Trail in mid-Wales has now created 128 jobs and £2.9 million per year for the economy in an area where the creation of employment is extremely difficult. So we are talking of a new economy for Wales which depends heavily on the state of its environment, its wildlife and on Wales remaining a green and pleasant place. But all is not well with the natural assets and heritage of Wales. I do not think I overstate the case by saying that the biodiversity of Wales has declined to a far greater extent and faster than any of the other three countries of the United Kingdom. Development, agriculture and forestry in inappropriate places and over-intensively have all taken their toll, so something must be done.

The Bill before us is an opportunity for a new way forward. The assembly and its related institutions must, right from the start, promote sustainable development, combining economic objectives with environmental and social ones.

Turning to the Bill and the sustainable development duty of the assembly, Clause 121 is tortuous and equivocal. I thought I might read it out but I shall not because I think it might be in Welsh. I do not recognise it as plain, understandable English. The Secretary of State for Wales, speaking in another place, stressed that it was essential for there to be a wholehearted commitment to the promotion of sustainable development by the assembly. The phrase setting up that function in the Bill does not sound to me like a rallying cry. I hope when we come to Committee stage we see debate around the assembly having a clear function, stated in plain language, of promoting sustainable development for the economic and environmental prosperity of Wales.

I looked at the Bill also in terms of the Welsh Development Agency. That will be probably one of the most important instruments in terms of sustainable development for Wales. I cannot read out that part of the Bill which speaks of the sustainable development function for the Welsh Development Agency because there is not one. The Welsh Development Agency will operate under some rather creaking powers, set up well before the days when sustainable development was even invented. I believe at Committee stage we must see a clear and strong sustainable development purpose given to the Welsh Development Agency to ensure that its work is compatible with the assembly.

The noble Lord, Lord Roberts of Conwy, stressed the rural role of the old Wales powerhouse. I would concur with that. The Welsh Development Agency needs to be able to focus on the sustainable development of the rural economy as well as the urban economy. It needs to lead a development process that sees the environment of Wales as an economic benefit, not a blockage to development and jobs.

The number of tourists who flock to Wales every year is huge and growing. They know that what is important in Wales is natural heritage. This Bill promises, quite rightly, a heroic future for Wales to mark its heroic past, but it must be a sustainable future.

8.25 p.m.

The Earl of Northesk

My Lords, I have no wish to rake over the embers of a spent fire but discussion of the Bill cannot be divorced from the referendum. I should say at once that, like my noble friend Lord Roberts of Conwy and other noble friends, I do not dispute the result. It is beyond doubt that within the terms of the referendum the Welsh people voted for their own assembly.

That said, it has to be accepted that the result was not a ringing endorsement of the Government's proposals. The closeness of the result may explain why the Bill gives me the impression of being something of an unfinished symphony. Wherever each of us may stand on the principle of devolution, it could—and, based upon the Government's rhetoric, should—have been a masterpiece achieving new heights of constitutional harmony. Instead, as drafted, there has to be a fear that the assembly will hover somewhat tunelessly between local and national government, unclear of its status within the constitutional settlement.

There is a strange aura of hesitancy in the drafting of key areas. To a degree, that hesitancy was a persistent sub-text of the Bill's passage through another place. Amendments were consistently declined on the basis that the matter in hand would be more appropriately left to the assembly. Of course, such an approach has merits. I do not argue against the need for the assembly to have the right and facility to determine its own operation and procedures. In every sense it will belong to the Welsh people and, given acceptance of the Bill, it is entirely right that they should decide how to administer their own affairs. Flexibility on the face of the Bill is a necessary corollary to that.

But we cannot ignore the fact that the Government's proposals—the measure before us today and its Scottish bed-fellow—signify an entirely new constitutional settlement, not only for Wales and Scotland but also for the United Kingdom as a whole. In common with my noble friend Lord Patten, this represents my major concern with the Bill. It has no constitutional glue. As a result, we are left uncertain as to whether it is the Government's intention that the assembly will remain as an integral part of the overall United Kingdom governmental system or whether it will become a freestanding administrative unit unshackled from the interference of Whitehall and Westminster.

I am not even sure that the Government know the answer to this discrepancy. Certainly it has been reinforced by the comments of the Secretary of State for Wales as the Bill has progressed through another place. At Second Reading he stated: This United Kingdom Parliament is sovereign. The provisions of the Bill do not challenge that sovereignty in any way—nor could they".—[Official Report, Commons, 8/12/97; col. 671.] And yet at frequent intervals he also alluded to his perception that devolution is a "process and not an event". These two positions, while not mutually exclusive, are slightly contradictory, certainly in terms of how we should perceive the pace and direction of devolution.

At specific levels, the relationships that will exist between the assembly and this Parliament and their respective elected Members will not be explicit in statute. Funding is left to whimsy and chance. Mere lip service is paid to the capacity of Wales to be properly represented in the Council of Ministers. The future role of the Secretary of State is clear as mud. All in all, wherever there should be clear and intelligible joins between Cardiff and Westminster which will stand the test of time and possible dispute, there are, instead, only weak sticking plasters.

In my view, what is required is some certainty and clarity for these key areas on the face of the Bill rather than non-statutory concordats. Without that, these issues will be a recipe for constitutional instability. I do not suggest for a moment that the glue used should be too binding or rigid. Clearly, it will need to be elastic enough to permit some give and freedom of movement to both Cardiff and Westminster. But, come what may, the Government's new settlement, if it is to last and be successful, needs glue.

I mentioned the future role of the Secretary of State. Unlike some, including my noble friend Lord Rees, I perceive that this will be pivotal rather than peripheral once the assembly has been established. Ironically, this infers a weakening rather than a strengthening of democratic accountability. Essentially, there are two reasons for this. The first revolves around three Ds; they are, devolution, decentralisation and delegation. The Government's intent is undoubtedly devolutionary in character. And the Bill may well have a decentralising focus. But I cannot help believing that it will be delegatory in effect.

The point is that, notwithstanding the considerable transfer of functions proposed—a passing on of responsibility for the decision-making process—the key mechanisms of political power are retained firmly and absolutely within Westminster. In the main, this is achieved by virtue of Clauses 22, 23, 82 and 108 to 110 which, according to my interpretation, give the Secretary of State total control over the funding of the assembly and its competence for subordinate legislation, particularly in relation to Community law. Without greater clarity in respect of these reins—after all, they are the real levers of power in our modern age—the assembly could well end up being toothless. There is an essential truth in the proverb, "He who pays the piper may call the tune". And, while this may be a cause for regret in some quarters, it is an indisputable constitutional fact that European law has supremacy in a whole host of areas.

There is more to it than this. It is of course the case that the Secretary of State will remain accountable to this Parliament. But, having delegated functions to the assembly, there is no corresponding mechanism on the face of the Bill to ensure that he or she can be held to account by its elected members. There is no glue. In the circumstances, this is a worrying anomaly.

My second reason, referred to by the noble Lord, Lord Elis-Thomas, relates to the assembly's legislative powers. The Government's stated intent is that it will have competence only over subordinate legislation. Debates in another place demonstrated that this is a moot point as the Bill is currently drafted. That is enough of a problem in itself. But the greatest difficulty arises in relation to any future primary legislation in this Parliament.

The Bill gives effect to the White Paper statement that: As a general principle, the Government expects Bills that confer new powers and relate to the Assembly's functions, such as education, health and housing, will provide for the powers to be exercised separately and differently in Wales; and to be exercised by the Assembly". Accordingly, it will be the role of the Secretary of State to negotiate with ministerial colleagues in other departments as to how appropriate provision is made for Wales in Bills considered in this Parliament. As the Constitution Unit's Commentary on the Welsh White Paper states: because the Assembly has no legislative power the Secretary of State will be needed to ensure that laws passed at Westminster meet the needs of Wales". At one extreme, it will be open to the assembly to adopt entirely different, even contradictory, policies from England and the rest of the United Kingdom—a case almost of primary legislation by stealth. Clause 127(6) and the general provisions of the School Standards and Framework Bill give an insight into this approach. At the other extreme, it is conceivable that primary legislation could be framed to all but deny the assembly any role at all in the scrutiny of subordinate legislation. Obviously, this would be a wholly credible scenario if the Government in Westminster were of a different political persuasion to that in office in the assembly. What is crucial is that the assembly's powers—whether it will have real legislative teeth even at secondary level or will simply be a side-show—will be entirely in the gift of the Secretary of State of the day. But, again, while provision that the assembly should be consulted is on the face of the Bill, there is no mechanism for enabling the assembly to hold the Secretary of State to account in this context. Again, there is no glue.

We could have reasonably hoped that the Bill would be drafted to achieve some measure of permanence in Wales. But it is clear that, as it stands, it could well give rise to a witches' brew of constitutional instability. There are legitimate doubts as to whether, once enacted, it will bed down into an integral part of an enduring new settlement for the governance of the United Kingdom. The relative indifference manifest in the referendum result and the Secretary of State's allusions to devolution being a "process, not an event" tend to confirm that. I simply hope that, as the Bill progresses through this House, the Government will accept that it is far from perfect and will acquiesce to sensible and constructive amendment where necessary. In that, I am extremely grateful for and much encouraged by the comments of the noble Lord, Lord Williams of Mostyn. Whatever the misgivings some of us may have about the approach the Government have adopted, what is necessary above all else is to try and ensure, so far as we can, that the Bill provides for a Welsh assembly that works and lasts well into the future.

8.37 p.m.

Lord Gibson-Watt

My Lords, the Bill, which will establish an assembly for Wales, is a further constitutional change in the government of Wales. I say, "further" because ever since I can remember—and long before that—there has been pressure from certain quarters to introduce a measure of this kind. When I became a member of a local council in Radnor, we spoke of it then. A Conservative government created a Parliamentary Under-Secretary within the Home Office and then a Minister of State in the shape of Lord Brecon, also in the Home Office. It was left to a Labour government to bring in a Secretary of State, of whom Mr. Griffiths was the first. The post was held by members of both parties, several of whom have sat in your Lordships' House today and who have done much to attract inward investment.

I regret the Bill because I believe that the Welsh Office has been most successful. I have some experience of that, having served under my noble friend Lord Thomas of Gwydir for four and a half years. I believe that there will be an endless tug of war between the Welsh Office and the assembly over functions and the control of finance. We are told that the Barnett formula on funding for Scotland and Wales will remain in force. The noble Lord, Lord Callaghan, gave us an interesting look at the pre-prandial reasons for its origin. I fear that English politicians will have some influence in determining the size of the funding for Wales and I can envisage the dead hand of the Treasury playing a part.

I admit to being a committed member of the "no" men. In 1979 I was chairman of them and in those days we won by 4–1—a result which no doubt had not much to do with me. This time, the majority was really so marginal that some of us were surprised that the Government decided to go ahead. It is a curious situation.

Each one of your Lordships must decide whether to support the Bill. Although I dislike the idea of the Bill in many ways, I shall certainly not vote against it. We must make the best of it and work so that this new alteration in the constitution will benefit the people of Wales. The Secretary of State will continue to sit in the Cabinet and I hope that he will still be responsible for attracting inward investment into Wales. That has been a great success under both parties.

I hope that the powers of the Secretary of State will not be too much diminished but I fear they will and I fear that Welsh influence in Brussels will diminish also. I suppose that historians will assess the assembly on its merits.

There are one or two other matters about which I should like to ask the Minister. The first and most important is in relation to the forestry world. Will the Forestry Commission be looked after by three separate assemblies or will it be centred, as it is now, in Scotland under the Secretary of State for Scotland as the senior Minister? Having been a commissioner—and I am still honorary president of the private forestry growers in the United Kingdom—I say only to the Government that divided responsibility in an industry which is under severe pressure and which is highly complicated and misunderstood by most people in the country would not be a very good idea.

Therefore, I say to your Lordships that the Bill will go through and during the process of the Committee stage, it will no doubt be improved. I shall certainly not oppose the Bill and I wish it well.

8.41 p.m.

Lord Rotherwick

My Lords, like my noble friends Lord Patten and Lord Ellenborough, I am one of the English dogs of my noble friend Lord Crickhowell. I wish to ensure that the national assembly for Wales is formatted in the best way possible but not to the detriment of the rest of the United Kingdom. I hope that amendments brought forward by this House will metamorphose this Bill into a better one.

The Bill is in the growing tradition of New Labour. A White Paper which contains a fair amount of detail is followed by a Bill which refers to regulations and to the powers of the Secretary of State to intervene, decide, allocate, control or use his discretion. The Government have done that as regards education and are doing it now with this Bill.

For example, the White Paper assures Welsh voters that, The changes to the size of the Welsh Block will largely be determined by the Barnett Formula. The Secretary of State for Wales will decide an appropriate sum for the running costs of his own office … The remainder will be available to the Assembly as its Block". The Bill states: The Secretary of State shall from time to time make payments to the Assembly out of money provided by Parliament of such amounts as he may determine". The assembly relies on the goodwill of the Secretary of State, and what if he belongs to a party which does not control the Welsh assembly? I wonder whether that is a mean and mealy-mouthed way to ensure that powers devolved to the assembly and recoverable only through specific primary legislation can be controlled, through the Secretary of State, by the Westminster Cabinet.

Not only has this poorly-drafted Bill backed away from specifying the formula to be used in funding the national assembly for Wales but it also fails to tackle a number of issues. For example, the Bill outlines mechanisms for stopping the assembly from acting contrary to the UK's international obligations. However, there is nothing to stop it passing secondary legislation harmful to any, or all, of the other members of the United Kingdom.

The Bill does not redress the balance of Welsh over-representation at Westminster, where 40 MPs should, if calculated on the same basis as for England, be reduced to 34. Nor does it resolve the unfairness of Welsh MPs continuing to meddle in secondary legislation for England when, if the Bill passes as it stands, English MPs will lose all rights to reciprocate.

At times, this Bill, coming as it does from a Cabinet about one-third of whose members hail from north of the Border, causes one to reflect wryly on the fabled determination of the Scots to avenge an insult. While I am on that subject, once Wales has its assembly and Scotland its parliament, what will be the justification for Scottish or Welsh MPs to hold the senior offices of state at Westminster?

The Bill devolves power to the assembly but omits to set out a mechanism for its safe return if necessary, not even in the case of war, insurrection, plague, pestilence or invasion from outer space. I have in mind particularly the Gulf War and the central directions to hospitals on how to prepare for military and civilian casualties.

The Bill is most vague in the area of funding, but I need not comment further on that as I believe that many noble Lords have already touched upon it.

For all that, the Bill is the outcome of a White Paper and the decision by one-quarter of the population of Wales to vote for an assembly of their own. It is reasonable to suppose that the intentions highlighted in the White Paper will, in the absence of contradiction in the Bill, be honoured. This Bill fails to reaffirm the sovereignty of Westminster. Therefore, are we to expect that the Queen or perhaps the Prince of Wales will be asked to open the new assembly? And, as primary legislation will remain a responsibility of Westminster, are we to assume that the role of the Monarchy will continue in Wales as in England?

However, what are we to think of Ron Davies's statement in his foreword to the White Paper, which states: An elected Assembly will give Wales a voice—in Britain and in Europe—after years of neglect". That is "neglect" which saw extra MPs, extra money and a Welsh Secretary with the right to participate in the preparation of Welsh Bills; the right to introduce amendments to those Bills; and the right to amend secondary legislation and formulate primary amendments. That is a stronger voice in Britain than from an assembly which will have power over secondary legislation but will be represented at Westminster by a Secretary of State who attends the assembly, is part of the Cabinet but does not have to follow the assembly line in that Cabinet. That is an assembly that has no participation in the preparation of primary legislation and no formal way to present its views or raise amendments.

The contradictions in this Bill make it a doubtful basis for successful legislation. The White Paper failed to persuade three-quarters of the Welsh population to vote in its favour, and this Bill is much weaker for it. Even the Constitution Unit has warned that, executive devolution is unlikely to be stable or long-lasting, because it is so heavily dependent on co-operation between Cardiff and Westminster".

8.48 p.m.

Earl Lloyd-George of Dwyfor

My Lords, this is the most important piece of legislation affecting the people of Wales since the appointment of the first Secretary of State in 1964. Therefore, it demands the keenest attention from all of us who live in Wales.

A great deal has been said about the method and conduct of the referendum and it is regrettable that, unlike the referendum in 1979, which was held after legislation had been debated in Parliament, this time it was carried out two months before the Bill was even published. I conclude that the low turn-out, however, was due more to the lack of precise detail of what the Government had in mind than to lack of interest. Nevertheless, there was a majority. A number of noble Lords have touched on the "majority" question. The noble Lord, Lord Geraint, quoted the majority to which he was subject. The noble Lord, Lord Patten, also quoted such a figure. I cannot help reflecting that in 1890 my grandfather was elected to another place by a majority of 17. If 17 voters in the Carnarvon Boroughs on that January day over 100 years ago had changed their minds, I would not be here addressing your Lordships this evening.

Nevertheless, it seems to me that because of the low vote, the low turn-out and the slender majority, there is a heavy responsibility on the Government to reassure the people of Wales that this measure is really going to work for the benefit of the country and that the "new economic powerhouse" is not just rhetoric but can become reality. The very clear introduction that we had from the noble Lord, Lord Williams of Mostyn, has, I believe, gone a long way to reassure this House—and I only hope that that reassurance reaches across the Severn.

Nevertheless, the timing has not been particularly happy. Living as I do in rural Pembrokeshire, I am only too well aware of the current struggles that farmers are having with the prices of milk, beef and sheep. Prices are half what they were only a year ago. Most farmers to whom I talk say that the last thing that they require at this moment is another tier of government; and as the noble Lord, Lord Crickhowell, reminded us, there is very little hope of comfort in that direction from Brussels.

There are three points on which I should particularly like to touch, and because it is late I shall be as brief as I can be. Clause 33 allows the assembly to promote art, culture and heritage. For nearly 25 years from 1971 I was privileged to serve on the Historic Buildings Council for Wales which, as your Lordships will know, advises the Secretary of State on the making of grants to listed buildings and the like. I rather think I was appointed by the noble Lord, Lord Gibson-Watt, who has just spoken, and who was a notable Minister of State at the Welsh Office at the time. I am very glad to see him here today. Since I retired, it seems that members of that body are now appointed for only three years, with an optional three years' reappointment. When the assembly is up and functioning, the minutes and advice of the Historic Buildings Council, which in the old days were always submitted to the Secretary of State, will be scrutinised by a sub-committee. In the past members of the Historic Buildings Council included Welsh architects and historians of the highest repute, who gave the Secretary of State the best possible advice without interference.

This may seem a rather narrow point to raise on a Bill of such complexity, but it is something that I happen to have been involved in. My main concern is that in its zeal to remove anything resembling what is considered to be a quango the assembly may discourage men and women of independent mind from serving, unpaid of course, on this and other bodies whose sole function is the protection of the built heritage of Wales, thus contributing to one of our foremost revenue earners; namely, the tourist industry.

My second concern is what I regard as the somewhat anomalous position of the Secretary of State after the transfer of his powers to the assembly. Several distinguished former Secretaries of State are here today, including the noble Lord, Lord Thomas of Gwydir, the very first one. All of them have given Wales tremendous service, backed up by the wonderful civil service in Cardiff. The White Paper says that the Secretary of State will not be accountable for the activities of the assembly. On the other hand, after the transfer order, he will still, in the words of the White Paper, continue to be Wales' voice in the Cabinet. He will therefore have the ear of the Prime Minister and will be handing over all the money, but he will have no vote in the assembly. Surely for an interim period, say at least for the first four years of the assembly, his role should be strengthened. Perhaps that can be discussed in Committee, but I should be glad to know whether the Minister can enlighten us further on that point.

My third point relates to inward investment. Successive Secretaries of State have played a pivotal role in encouraging overseas companies to invest in Wales. It has been a continuing success. Why do the Americans, the Japanese and other companies want to build their plants in Wales? Why is the Emperor of Japan coming to Cardiff next month? It is hardly for the climate. No, it is because of the innate skills of Welsh workers to produce the goods—plus, of course, the very substantial grants that central government have provided.

The importance of keeping this momentum going will be only too apparent to the new assembly, I hope. But I do make a plea that serious efforts are made to try to divide the cake more evenly. Figures provided by the Welsh Development Agency show that during the past five years, 90 per cent. of foreign investment has been in either the south-east or the north-east of Wales. There is plenty of scope and plenty of labour waiting for investment in west Wales. I am thinking of places like Milford Haven and Pembroke Dock, where one in four males is out of work and where refineries as well as Ministry of Defence bases have been closed. I hope that the new regional board under the WDA will look in that direction.

A number of people have expressed fears that a Welsh assembly might damage the United Kingdom. I do not believe this to be the case: if I did I could not support the Bill. It is reassuring that the Bill provides that the Queen and possibly the Prince of Wales may open assemblies at each session. I think that would show the continuing link. There is no doubt that this is a very important and radical measure, and it has my full support.

8.56 p.m.

Lord Kenyon

My Lords, like many of my colleagues on these Benches, I was one of the 25 per cent. who voted against this assembly in the referendum, but, as has already been said, we must now put that behind us and work together to make sure that it works.

When you are the 30th speaker on the list—that is half an assembly by coincidence—and when you follow former Prime Ministers, Secretaries of State and Cabinet Ministers, all of whom have said already and far more eloquently what you had to say, there is little point in keeping the audience in their seats for too much longer. Therefore I shall first express my concerns about the future funding of the assembly.

Much has already been said about the Barnett formula, which directs proportionately greater funding to Wales and Scotland than to England. Even if the assembly does not have tax-raising powers it certainly has spending powers, and the first is already in the Bill, in Clause 16, which gives the assembly the right to determine the salaries of its members. Why should the people of England be expected to contribute to the salaries of members of the national assembly of Wales? I can hear a few wags saying—or should I say a few dogs barking?—that they would be prepared to pay to get rid of the petulant Welsh. Perhaps that is not too far from the truth. This Bill is just a stepping stone into the federal dream of European nations, in which the nations are mere channels to the devolved regions, each one fighting with the rest for a bigger slice of a diminishing cake.

It is said that this assembly will bring the government of Wales closer to the people. My fear is that that should read "closer to the people of South Wales". After all, the people of mid and North Wales—those who do not represent Plaid Cymru at any rate—gave the referendum a resounding thumbs down. I know that Clause 62 establishes a committee for North Wales, to provide advice to the assembly about matters affecting North Wales: advice, my Lords, nothing more. If the assembly, dominated as it certainly will be by South Wales, does not wish to follow that advice, it is not obliged to do so. When north and south, east and west are all calling for attention, advice does not pay the bills.

I take a particular interest in the provisions of Clauses 113 and 114. I believe that they started off as Clauses 110 and 111, but the numbers are increasing. They deal with the setting up of the partnership schemes with local authorities and the voluntary sector. I have spent a long time wondering about the relationship with local government, which has itself just gone through the wringer following the local government reorganisation of 1994. Just as the machinery was beginning to run smoothly again, along comes another spanner, hovering and about to drop into the works.

I have already asked what functions the Secretary of State for Wales would retain after the creation of this assembly, but now I have to ask: what functions will be left to local government after the creation? A powerful body of 60 men and women taking over the functions of one Secretary of State, are they not rather likely to have time on their hands—indeed, time to think about what functions they can take away from local authorities? At the very least, they are hardly likely to want to give anything away. I do not see any way that this brief clause gives any protection to the local authorities from a power-hungry assembly.

Likewise, Clause 113 sets up a scheme setting out how the assembly proposes to promote the interests of voluntary organisations. I have some knowledge of the working of voluntary bodies in Wales. I do not suppose that they are too different from their counterparts in England, Scotland or Northern Ireland. But, at least for those in Wales, I know how many of them work. I can tell noble Lords what they do not want and what they do want. What they do not want is more red tape, more regulation and more form filling to satisfy yet another level of bureaucracy. What they do not want is cuts in their grants from local authorities, as has happened in most, if not all, authorities in Wales this year. What they do want is to be allowed to get on with their job and do what they do best.

I hope that the Minister will tell me that I am wrong, but my reading of the clause suggests that those voluntary organisations that are currently being funded by their local authorities will now become, in the words of the Bill, "relevant voluntary organisations", subject to the provisions of the scheme, although I cannot find mention in the clause regarding any discussion whatever with the voluntary organisation before the scheme is published. There is only a reference to how the assembly proposes to consult about the exercise of its functions, and that only after the scheme is published. That is a rather one-sided interpretation of the word "consultation", if I may say so.

I expressed earlier my concern that functions currently being carried out by the local authorities are likely to be taken over by the assembly, while nothing would be delegated to local authorities. It seems to me now that the assembly will take over the relationship with the voluntary organisations and that that function will also be lost to the local authorities.

However, we must accept that, as the tiniest of majorities has voted in favour of this assembly, it will go ahead and we should not stand in its way. However, we will look at the legislation clause by clause and line by line to ensure that the body we are creating is not just the super-quango that so many see it to be, but that it genuinely serves all the people of Wales and, more importantly, improves on the system that is already in place and that has served so well for so long.

9.3 p.m.

Lord Hooson

My Lords, I am very glad to see that the noble Lord, Lord Beloff, has returned to his place in the Chamber. I want not only to reassure him that we are grateful to learn how fond he is of the Welsh but also I want him to know how fond we are of him. That is not largely because of his doughty and defensive action to protect our threatened shore in 1940, but because he is such an eloquent representative of the chattering classes. There is only one class that is known in Wales and that is the chattering class. So I really do not understand why the noble Lord is opposed to Wales having its own chattering house. Nevertheless, I am most grateful to him for explaining his position. With the noble Lord's European and world interests, I never understood why he was opposed to the Treaty of Rome. However, he disclosed to us today that Henry VIII, his great hero, would not have supported it. As I said, we are grateful to the noble Lord for his contribution.

We have had a most interesting and largely constructive debate on what I believe is an epoch-making Bill. To my mind, its greatest significance is that, for the first time in its history, Wales will have a representative, democratically elected body which will be solely concerned with Welsh affairs. I think that the great contribution will be a forum where Welsh issues will be regularly debated generally. They will be debated against a background of detailed knowledge of Welsh finances. It will not be an irresponsible debate; it will be a debate conducted in the knowledge of how much money is coming into Wales and how much money is going out. It will make a world of difference to the quality of such debates.

I am sure that we in this House should have a very different approach from that which was demonstrated in the other place. I hope that we shall not be troubled with amendments which have been tabled merely with the objective of scoring a few transient party political points. I suspect that the electorate is moving in the direction of a desire to see a much more consensual, constructive approach on this as on other matters.

I have always made it clear that I am in principle not a supporter of a referendum. I suppose that a referendum provides a method of enabling a government largely to ignore the contribution of directly and democratically elected representatives who are, as we all hope to be, exercising independent judgment on matters which go outside the parameters of the endorsed cheque from the electorate which is obtained by means of a referendum. But there it is. I do not believe that any government who embark on a referendum on a constitutional matter can go outside the parameters of the paper on which the referendum was fought.

I should like to refer briefly to a few of the contributions made in today's debate. However, I should like, first, to congratulate the noble Lord, Lord Onslow, on his maiden speech. I was amazed at the skill that he showed in avoiding a controversial speech. For a former chairman of the 1922 Committee with a fearsome reputation, that must have been a difficult matter. Nevertheless, we very much enjoyed his speech.

I have known the noble Lord, Lord Roberts, for many years. I hope I may tell him that it is time he came off the fence on this great issue. I know that he is astride so many fences that he is not sure to which one I refer. He was defensive and stressed the points that he said troubled people. He went one way and then the other. It is time that he let his heart speak to make sure that we have a constructive contribution from the Conservative Front Bench. I am sure that he was reassured by the contributions from the Benches behind him from many former Secretaries of State for Wales who revealed a more constructive approach than did the noble Lord.

I refer to the English question or what has been called the West Lothian question. I shall mention it in a different context in a moment. I remember when I was an elected representative in the other place I and the vast majority of Welsh Members were completely outvoted by the numerical superiority of the English vote. If there was a strong Conservative majority, for example, the government could legislate on matters concerning Wales as there were only 36 Welsh votes in all, but hundreds on the government side. This is a case of the West Lothian question being turned on its head. I do not think there is a solution to that at the present time.

The two most constructive or trenchant criticisms of the Bill that I have read or heard have both been made by supporters of the Bill. I refer this House to the noble Lord, Lord Griffiths of Fforestfach, who is obviously an ardent supporter of the Bill. However, I believe that he made trenchant criticism of certain parts of it. In the other House Mr. Denzil Davies criticised the Bill while supporting it. He said: My worry has been that we do not have a constitutional settlement that covers the whole of Britain".—[Official Report, Commons, 26/3/98; co1.764.] Many of your Lordships have mentioned this problem today. Mr. Denzil Davies developed his concern—again at col. 764—under three heads. First, he referred to, the failure to entrench the Barnett formula in legislation". He said that this could lead to a lack of budgetary stability. Secondly, he said that the ongoing process of devolution could lead to instability. Thirdly, he mentioned his concern about the relationship between the assembly and Whitehall. I am sure that we should and shall consider those three important matters during the course of our debate. That was in many ways the most penetrating criticism of the Bill that probably the foremost intellect in the other House brought to bear on it. Although I have been a friend of Denzil Davies for years, I think I can say that his critics might say that his judgment never quite matched his intellectual ability. However, despite his great expertise in financial matters and his undoubted devotion to Wales and to the cause of decentralisation, I believe that he was largely wrong.

It is far too early for us to have a constitutional settlement that covers the whole of Britain. We are embarked on what is really an evolutionary process which began years ago, as has been pointed out in your Lordships' House. What we must ensure is that this important step for Wales is sensible, workmanlike and sufficiently flexible to enable the undoubted problems which will emerge between Scotland, Northern Ireland, Wales, the new City of London corporation, the regions of England and Whitehall—and the problems of each of those vis-à-vis Europe—to be properly and sensibly adjusted and settled as the need arises.

A decade from now, given the speed of development of the world economy, the effect of global and swift communication, European development and so on, much will have changed and modification and rethinking will be necessary. But even then I believe it will be far too early for a constitutional settlement of the kind which Denzil Davies had in mind.

I have mentioned my next point in this House before. I remind your Lordships that it would be a good exercise for many Members, especially on the Conservative Benches, to read the lectures of the noble and learned Lord, Lord Hailsham, on the elected dictatorship. He wrote those while he was in opposition. It was his view that we would eventually reach a stage in our country when we would probably need a written constitution because the evolutionary process of decentralisation and the development of Europe would require some form—whatever form that may be—of written constitution. When that eventually takes place, we do not know whether it will take place under a UK or European umbrella, or both. Most of us will assuredly not be here to see it. What we cannot do is to achieve anything like what may be termed to be a final constitutional settlement in a Bill of this kind.

I think that most noble Lords agree that the steps towards administrative devolution should be set in a flexible Bill with provision for adjustment and should not be set in stone. We are not living in that kind of age. We are influenced by and subject to constant new knowledge, new ideas and new appreciation, and we must leave the future development of Wales to our successors in the knowledge that if we leave behind us a decent heritage they can build on it in the light of the situation in their day.

I have never made any secret of the fact that I believe that eventually we shall evolve into some kind of federal arrangement. We are far away from it at present. Inexorably we shall be driven in that direction. Of course there have to be better arrangements eventually for the financial relationship, especially in a global economy. I know of any number of people—for example, great English patriots—who will do anything but live in England or pay their taxes here. We know that that happens all over the world. We know that in the past century Wales contributed more to the overall British economy rateably than any other part of the United Kingdom, but most of the money went to the south-east of England. I have seen companies started in Wales which paid their taxes in Wales. But as soon as they become public they move their headquarters elsewhere. Every Secretary of State has observed that process.

In the end we have to think of Wales as part of Britain. I have always thought of myself as Welsh, British, European and a world citizen too. There are different spheres. Years ago I became a convinced European and federalist when I heard a marvellous address by the ex-Secretary General of the League of Nations, Salvador de Madriaga. In 1947 I heard him talk at the university about the end of the nation state being in sight, not necessarily in this century. I think that he was right. He pointed out that Europe is really a great river, with enormous contributions to make to the great civilisations of the world. There were various contributories and Britain was probably one of the main, if not the main, contributory. I have thought of Wales in that context ever since. Wales is a little mountain stream—Nant y Mynydd—contributing, but no river can flow without its tributaries. No tributaries can contribute without mountain streams. It is in that context that we want to see Wales. It is for us to make sure that we provide Wales with the means of maximising its contribution. We shall not do so through fighting the old battles of the past but by appreciating the world in which we live.

We have a separate heritage in Wales. We share a common heritage with England, Scotland and Ireland, as well as with the other countries of Europe. What we need to do in the Bill is to see Wales in its proper context. This is no more than a devolution of executive power to an elected assembly. In that respect it is highly innovative. Eyes from all over the world will be on this experiment. It is up to us to make sure that it works. That should be our approach to the debate in this House, for if there is any justification for your Lordships' House it is not as an instrument to perpetuate adversarial party games but as a reflective, mature advising Chamber, ensuring that the Bill is as workable as we can make it in accordance with the parameters of the referendum.

Perhaps your Lordships will permit me to conclude by saying this. I was sorry to read in Hansard for another place during Third Reading of the Bill an attack on Mr. Ron Davies, the Secretary of State for Wales, by Mr. Ancram—I am sure that Mr. Ancram does not normally indulge in that kind of attack—virtually pointing to Mr. Davies' lack of charm and general approach. I thought that it was highly unfortunate. However, I wish to say this.

The Secretary of State for Wales, Mr. Ron Davies, is to be congratulated all round. I was rather dismayed at the rather graceless opening remarks in another place. In rugby terms, Mr. Ron Davies is perhaps not a scintillating fly-half; nor is he a flying winger; nor is he a back who suddenly appears out of nowhere in the JPR tradition. No, he is to be found in the powerhouse; he is in the front row of the scrum. He has led from the front and, if he achieves the goal of putting this Bill on the statute book, as he surely will, he will deserve the acclamation of Wales. He will have achieved what, over the centuries in different forms, many Welshmen and Welsh women have dreamt of and aspired to.

I am one of those who aspired to this. I have introduced Bills into the other place but I have never achieved anything like this. I am sure that if he becomes a chief secretary in the assembly, his views will often be contrary to mine. However, that will not lessen my admiration for his determination, dedication and achievement. I hope and believe that he will continue to listen carefully to the arguments, as he has hitherto, and that among us all in this House we can bring about the spirit that has been clearly indicated in this debate; namely, a desire to make a constructive contribution so that this Bill is as good as we can make it.

9.21 p.m.

Lord Mackay of Ardbrecknish

My Lords, your Lordships may wonder why I am rising to wind up the debate. I am wondering that myself. I wonder what I did to deserve the suggestion by my noble friend Lord Strathclyde, the Opposition Chief Whip, that I should help my noble friend Lord Roberts in the endeavour of the Welsh Bill. My conclusion is that it is so that I can adjudicate on whether my countrymen or the Welsh are the more loquacious.

I begin by pleasantly and warmly welcoming my noble friend Lord Onslow of Woking to the House and congratulating him on his maiden speech. As a number of noble Lords have pointed out, my noble friend was the chairman of the 1922 Committee—which means that he is a formidable operator. He is also a formidable operator with a fishing-rod. He and I have spent the odd hour or two attempting to catch trout. I cannot remember which of us was more successful. If I was sensible, I probably allowed him to win, given the important position that he held in another place.

As I should have expected, towards the end of his contribution my noble friend raised some interesting points about fishing, especially in those rivers that border Wales and England. Indeed, the noble Lord, Lord Moran, also raised the position of the Wye and the Severn; I believe that the Dee is also in a similar position. While these may not seem hugely important issues, they are important to the people who live there and to those of us who enjoy the odd hour by the water. I have not fished in Wales. From what I gather, I am too late, since most of the fish appear to have gone.

My noble friend Lord Onslow made a very important point with regard to the registration of political parties. This Bill, like the Scotland Bill and the European Parliamentary Elections Bill, depends for the electoral part on the registration of political parties. My noble friend rightly pointed out that we needed to see what the registration of political parties Bill would look like. My noble friend understandably pointed to the spoiler tactic which had been used in Woking and was used in other places by people who pretended that they were of a party when they were not.

My concern is that any registration of political parties by somebody or other could involve the non-registration of a political party just because we did not particularly like it, or a particular group of politically correct people did not like it. The noble Lord, Lord Williams of Mostyn, assured me on Maundy Thursday that the Government would publish the registration of political parties Bill shortly after Easter. I am counting the number of days. We are rapidly arriving at a number of days which goes slightly beyond my definition of "shortly after Easter"; however, I am prepared to give the noble Lord a few more days before I start asking: how long is "short"?

It is difficult to sum up a long debate like this. Perhaps I may start with the referendum. My noble friends Lord Kenyon and Lord Stanley of Alderley indicated that they voted against having an assembly, as did I in the referendum in Scotland. I found myself in a fairly significant minority—not a particularly unusual position for a Conservative in Scotland. However, my noble friends did not find themselves in a minority in Wales; they were in the same position as three-quarters of the people in Wales who did not vote for the assembly. The noble Viscount, Lord Tenby, described it accurately when he said it was hardly a ringing endorsement. The noble Lord, Lord Cledwyn of Penrhos, managed to laud the referendum without mentioning the result. I am not surprised, but my noble friend Lord Beloff made up for it in his normal robust way.

After the battle of Killiecrankie in Scotland, a poet wrote these words: Some say that we won, some say that they won And some say that none won at a', man". That sums it up. A number of your Lordships tried to vie with the smallest majority. My noble friend Lord Patten, the noble Lord, Lord Geraint, and the noble Earl, Lord Lloyd-George, on behalf of his illustrious grandfather, all pointed out to us that one, 17 or nine were all that was needed. The referendum was won by the "Yes" campaign. The moving finger, having writ, moves on and we accept that result, as my noble friend Lord Roberts made clear at the beginning.

It is interesting—and I thought that the noble Lord, Lord Hooson, was going to mention it but he did not—that in the United Kingdom we are seeing quite different forms of devolution developing: one in Wales which we are discussing; one in Scotland which we shall shortly discuss; and one in Northern Ireland that we shall shortly discuss. I am not sure that I would call London the same kind of devolution, it is more akin to the local government situation or the local government change. But we are seeing things happening. Some people describe them as variable geometry. It is certainly not geometry because one of the important strengths of geometry is the concept of symmetry. The one thing this is not is symmetrical.

A number of my noble friends introduced the important English dimension of which we all ought to take account in Wales, Scotland and Northern Ireland. There is the English point of view. My noble friend Lord Patten said that those who believed that the Bill would strengthen the Union could be profoundly wrong. The interesting thing is that it does not appear to be happening in Wales yet but, my goodness me, the opinion polls in Scotland show that it is happening. We were told across the Dispatch Box here and in another place that devolution would destroy the nationalists. The opinion polls in Scotland are showing that the nationalists are winning in Scotland. Far from destroying them, the Bill has stimulated them. So we must look carefully at these matters and at the English dimension.

My noble friend Lord Dean of Harptree mentioned that after all this is over there will be MPs down the corridor with different roles and responsibilities. We must address those issues. My noble friend Lord Ellenborough also mentioned it. He pointed out that both the Scottish parliament and the Welsh assembly are based on historic nations. But what he feared would happen in England was a kind of Balkanisation. If I were an Englishman, I would not want to see my country split up. If England has to have some form of devolution, then I do not believe that Balkanisation is the right way to go.

The noble Lord, Lord Williams of Mostyn, in his elegant opening, said that the assembly would bring "democratic accountability". Two or three of us who were members of the other place, such as my noble friend Lord Roberts and the noble Lord, Lord Crickhowell, were a bit puzzled at that. I can remember how accountable government Ministers in the other place are to Welsh or Scottish Members. I do not think that the noble Lord, Lord Williams of Mostyn, has much idea of what happens in the other place when it comes to accountability. Every government Minister is held to account in the other place—the Welsh ones as well. It is a bit of an insult to Welsh MPs in the other place over the years to suggest that they did not hold the government to account on Welsh affairs. They did.

I shall now turn to some of the other points in the Bill. First, the Bill does not give the Welsh assembly any kind of legislative powers. I was not sure whether the noble Lord, Lord Thomas of Gresford, was seeking those powers. I found it a little hard to follow that part of his speech. The noble Lord, Lord Elis-Thomas, in an extremely interesting speech, made it clear that he was not asking for those powers, though he was asking for powers by which the Welsh assembly could arrange for primary legislation in this House. A number of other noble Lords mentioned that also and that is another important point that we should address during Committee. The noble Lord, Lord Cledwyn of Penrhos, was quite clear that he wanted the same powers as those we have in Scotland, where we will have primary legislative powers. My noble friend Lord Ellenborough pointed out that considerable difference between the Welsh and the Scottish proposals.

Related to those primary powers is how any future transfer of powers will he achieved. My noble friend Lord Griffiths of Fforestfach in his interesting speech made a major point in that regard. He felt—I am inclined to agree—that Orders in Council were not a satisfactory way to move more power and that in fact any change in the future, any additional powers going to Wales, any additional transfers ought to be carried out by primary legislation.

When we look from the primary legislation which will be kept here to secondary legislation, I am in some difficulty as to what extent the Welsh assembly will be able to vary secondary legislation from what would happen here. The noble Lord, Lord Thomas of Gresford, chose as one of his examples a social security issue; that is, single parent payments. I am sorry to tell him that that will not be devolved. The secondary legislation will be kept here; it will not go to Wales.

The noble Lord, Lord Prys-Davies, reminded us of the importance of the Delegated Powers Scrutiny Committee of your Lordships' House, and of your Lordships' justified anxieties about Henry VIII clauses and skeletal Bills. Secondary legislation is what it says. It arises from primary legislation. It has its boundaries and content firmly fixed by that primary legislation and often, in the passage of Bills through this House and another place, Ministers are asked to give details about how they envisage secondary legislation working out. Indeed, the noble Earl, Lord Russell—he is not in his place this evening—is one of the foremost authorities on that issue. Having been at the receiving end of some of his comments, I have a lot of sympathy, as I had when I was in government, with his view.

The Welsh assembly could find its hands tied by the way in which primary legislation sets out secondary legislation and what is said over the Dispatch Box. Government Ministers say what they envisage as the parameters of secondary legislation. That can now be prayed in aid in courts if governments either here or in Wales decide to go further. That was a point illustrated by my noble friend Lord Northesk.

I now turn to concordats. The noble Lord, Lord Williams of Mostyn, said clearly that concordats were not intended to be statutory. I am not sure about that. I can understand why they cannot be statutory in the way we normally envisage statute. But we ought to consider a mechanism by which this Parliament and the Welsh assembly can, if they choose, discuss a concordat which has been drawn up. The noble Lord, Lord Thomas of Gresford, also suggested that.

My noble friend Lord Rees made the valuable point that because concordats will not be legal documents, an individual will have no recourse to law if he feels aggrieved by the way in which a concordat impinges upon him. We will no doubt want to explore that with the two serious legal luminaries who are to deal with the Bill on the government side. My noble friend Lord Crickhowell said that we needed to know more about concordats, how they impinge on the Civil Service and how civil servants will deal with the interplay of issues between Cardiff and London.

That leads me to one or two other issues which concern me about both this Bill and the Scottish Bill. The noble Lord, Lord Hunt of Kings Heath, talked about health. I do not have any great difficulty about health being a devolved matter. I have no problem about that at all. It seemed odd to me that the noble Lord spent a few minutes of his speech saying how important it was for health to be devolved and then spent the remainder of his remarks on health saying how important it was for all the health Ministers to get together and make sure that the service is delivered in a uniform way throughout the United Kingdom. If that is what he wants, why does he want to change the existing situation whereby the health Ministers of one United Kingdom Government can make sure that there is that uniform delivery?

But it is issues such as agriculture and fishing, which are very much European, about which I have my greatest worry. My noble friend Lord Crickhowell drew attention to a paragraph in a document from the National Assembly Advisory Group which says that the assembly will participate fully in discussions which take place within the UK Government. But such discussions cannot take place "within the UK Government" because we are talking about a different government. Even if members are in the same party, they cannot be considered to be "within the UK Government". I remain to be convinced that somebody who is not a member of the United Kingdom Government can lead a delegation or form part of a negotiating team in the Council of Ministers on behalf of the United Kingdom. I remain to be convinced of that, as does my noble friend Lord Beloff who remains to be convinced about the whole idea of a Council of Ministers, but that is entirely another matter.

A number of noble Lords mentioned agriculture, including the noble Lord, Lord Thomas, and my noble friend Lord Stanley and others. But I wonder what role the Welsh assembly will have in agriculture. Agriculture's current problems are caused, first, by the value of sterling, which is the responsibility of the Monetary Policy Committee. That is another issue with which I shall be dealing later this week. Secondly, they relate to the way in which the European Community's common agricultural policy is working. Thirdly, they relate partly to the problems of beef and the beef-on-the-bone issue. It is interesting that a court in Scotland this morning threw out the Government's ban on beef-on-the-bone sales. That raises many more questions, but I do not want to go into that. Forestry is the other industry I am concerned about and we shall need to look at that.

I shall not refer to my last point in detail; namely, the Barnett formula. The noble Lord, Lord Callaghan of Cardiff, explained its history and detail. He said rather nicely that it has a "superficial air of rationality". That is very good. It adds something rational to something which is irrational. Far too many people believe that the Barnett formula is about the total amount of money. It is not; it is about the annual changes. The real problem for both Scotland and Wales will be the fundamental expenditure review and what that will do to the underlying block of money which goes to both Scotland and Wales.

Like my noble friends Lord Griffiths and Lord Rotherwick, I am concerned about Clause 22 and the way in which it would appear that the Secretary of State continues to have control over the purse strings. My noble friend Lord Kenyon also raised the issue of money, as did my noble friend Lord Thomas of Gwydir. As a former Secretary of State he knows a lot about it.

We are already seeing the problem for Scotland and Wales in that the people who are standing for election as mayor of London are all saying that too much money is going to Scotland and Wales and—dare I say it—probably to Northern Ireland as well, and that more money should be coming to London. My fear is that we are going to see a lot more of that.

I shall deal briefly with two other issues. My noble friend Lord Crickhowell mentioned the position of the universities. That deserves attention. My noble friend Lord Griffiths mentioned broadcasting. Surprisingly enough, no one mentioned the electoral system to any extent except, I believe, the noble Lord, Lord Thomas of Gresford. I am inclined to agree that if one is going for proportional representation and one wants to be a purist, four additional members are too few to allow the D'hondt formula to work properly. I may well bore your Lordships later on with a few words in Committee on that general question.

I conclude by referring to the most impressive speech by the noble Lord, Lord Callaghan of Cardiff. I hope that he will not turn out to be the last Prime Minister of the United Kingdom who represented a Welsh seat. Many of the responsibilities of the noble Lord when he was Prime Minister related to English matters for which he would have no electoral responsibility after the passing of this Bill. I am not sure that people would stand for a Prime Minister from Scotland or Wales who did not carry the can for decisions on health, education and so on.

I agree with the noble Lord, Lord Callaghan, on two matters. First, he said that he had been rather ambivalent on the subject of devolution. So have I. However, as I said at the beginning the die is cast on this matter. Secondly, I firmly believe in the continuing unity of the British Isles. Those were the very words of the noble Lord, Lord Callaghan of Cardiff. To have that continuing unity, we must make this assembly work and make it a success. That is what we shall attempt to legislate for during the Committee stage of this Bill.

9.40 p.m.

The Solicitor-General (Lord Falconer of Thoroton)

My Lords, I do not believe that anyone doubts that this has been a most impressive and at times moving debate. I add my voice to the tributes that have been paid to the noble Lord, Lord Onslow of Woking, for his maiden speech. He made an impressive and original contribution. I am very glad that he has been tempted to come from behind the arras where he had been since his previous maiden speech in 1964.

Before I address some of the specific points that have been raised in the debate I remind the House of the broad context. The simple aim of the Bill is to improve the government of Wales. The assembly to be created by the Bill will be a modern institution that is accessible to the whole of Wales and in keeping with the mission of the assembly to serve the whole of Wales.

Some points have been made, although not by many speakers, about the result of the referendum. I put the assembly in its democratic context. At the time of the general election we made a promise to devolve. No Conservative was elected in Wales. We said that the matter would be put to a referendum and it was. The referendum was won by a clear but small majority. That clear but small majority gives us the right to proceed but makes it all the more important to listen to legitimate points that are made about the Bill.

In the course of the passage of the Bill through another place it passed its Second Reading by a majority well in excess of that won by the Labour Party in the general election. As the noble Lord, Lord Roberts of Conwy, pointed out, at Third Reading it was not opposed by the Conservative Opposition. In those circumstances, it is difficult to suggest that the assembly does not have a democratic basis. But, quite apart from that, the Government believe that it is a step which is in the interests of both the people of Wales and the good government of the whole of the United Kingdom.

My noble friend Lord Williams of Mostyn outlined earlier how for the first time the people of Wales will have their own democratic and accountable government to meet their needs and to be answerable to their concerns. The noble Lord, Lord Mackay of Ardbrecknish, found difficulty with that. He recalled how fearsomely Welsh Members of Parliament held Welsh Ministers to account. I believe that that completely misses the point. There will be an election by the Welsh people of an assembly to deal with their affairs, and their affairs alone. It will be a totally different kind of election from that where throughout the whole country Welsh MPs are elected as opposed to an assembly to serve the people of Wales alone.

It is wrong to view the Bill and the assembly as being based solely on the demands of political and constitutional theory. People in Wales have made it clear that they will judge the assembly by what it does and not just what it is. We have to create an institution that works. The theme that has emerged from the vast majority of the speeches in this impressive debate is the obligation to try to create an assembly that works. That was the view of practically every noble Lord who spoke today. We have to create an institution that works. There is no doubt that the assembly will have important work to do to tackle some of the deep-seated economic and social ills that Wales faces.

My noble friend Lord Williams provided the House with an explanation on the key elements of the Bill, including how the assembly will be funded and how its democratic representation means that it will be able to ensure that the needs of all parts of Wales will be fully understood and fairly met. That alone is a major improvement on the current system. But the Bill also provides the framework to enable the assembly to address the fundamental issues affecting Wales, not the least of which is to bring about a co-ordinated accountability for the effective delivery of services by public bodies in Wales.

A key aspect of our proposals, which is inextricably linked to the assembly, relates to the revamped Welsh Development Agency. There would be little point in creating the assembly without giving it the tools it needs to tackle economic under-performance in Wales; and there would no more be point in enhancing the powers of the agency without subjecting them to proper democratic control. The Bill needs to be viewed also, therefore, as a powerful, integrated package for the political and economic regeneration of Wales as a whole.

Perhaps I may now deal with the most important points that were made in the course of the debate and around which the debate revolved. The first was the question of funding. I believe that the position as to how the funding will operate has been made clear by the Government. Block funding will be provided to the assembly, the amount of which will be increased by the application of the Barnett formula. These are not simply matters that have been set out in the course of debates in Parliament; a statement of principles on the determination of the block budgets for both the assembly and the Scottish parliament has already been published and made available. The full block and formula rules will be published before elections to the assembly in May 1999.

The block and formula rules have operated satisfactorily on this basis for the past 20 years and have produced fair settlements for Wales and Scotland. Changes to the rules will be made only after consultation with the assembly. The Government have no plans for a fundamental review of the current block and formula arrangements, as was stated in the White Paper A Voice for Wales. Any such review would need to be preceded by a full study of relative spending needs, to be carried out in consultation with the assembly and the Scottish parliament.

What does it mean in practice? It means that the existing arrangements for the funding of Wales will continue. If there is to be a change, the change will not take place in the course of a debate within Whitehall, which will not be apparent; it will take place after consultation with the assembly, with the assembly's voice being heard.

The issue of Europe was the next point raised in the debate. As far as Europe is concerned, it must be the case—the noble Lord, Lord Crickhowell, was right in this respect—that the UK Government must and will continue to have overall responsibility for foreign policy and issues arising from membership of the European Union. However, the assembly will have an important role to play. It will be able to scrutinise fully European Union documents and proposals and to take evidence on their impact and therefore put a Welsh eye on what the impact will be on Wales.

Where appropriate, assembly secretaries, as well as officials, will have a role to play in delegations to the Council of Ministers, as agreed by the UK Minister leading those negotiations. Assembly secretaries will be able, subject to the agreement of the lead UK Minister, to take part in relevant negotiations on policy at the Council of Ministers. Assembly secretaries will be able, subject to the agreement of the lead UK Minister, to speak on behalf of the UK in relevant negotiations in Brussels. And why should they not do so if the UK Minister agrees and that appears to be the appropriate course in relation to those negotiations?

For example, if it is an issue that affects—and effectively only affects—Wales, why should it not be the assembly secretary, in agreement with the UK lead Minister, who does the talking? He may well be the person who knows most about it. I cannot believe that it is not possible for the Welsh assembly, talking to the UK Government, to come to sensible arrangements in relation to how that may work in practice.

The assembly will liaise closely with government departments to ensure that the assembly's views are fed into UK policy formulation on Europe and are taken into account during negotiations in the Council of Ministers and working groups.

The assembly will have an obligation to ensure the implementation and enforcement of relevant EU obligations in Wales. The UK Government will have powers to ensure the proper implementation of such obligations through the judicial mechanisms in Schedule 7.

I believe that the part that Wales can play in relation to Europe is strengthened by the assembly. This does not involve, in any respect, detraction of the obligation of the UK Government to deal with the European Union but gives Wales the means of feeding in its views and, subject to the agreement of the UK Government, to express its views directly to the European Union where appropriate.

Much was made of the question of concordats. The purpose of concordats is that there be proper arrangements between the assembly and the central UK Government. It might assist your Lordships if I give some specific examples of the matters that we expect to be covered in concordats, although obviously the content of each document will need to be settled by the assembly and the government department concerned.

Concordats would cover consultation arrangements in relation to proposals for legislation and executive action; the exchange of information, including policy papers, analysis and statistics; and joint working, including participation in working groups, official committees and so on. These would all be two-way processes, to and from the assembly. Concordats would need to address these issues not only in the context of domestic policy legislation but also in the context of the European Union. The assembly's role in policy discussions, both in the UK and in Europe, on matters within its fields of responsibility would therefore be a central feature of relevant concordats.

In line with current arrangements, the concordats would provide for such matters as access to relevant papers, attendance at inter-departmental meetings, consultation with the assembly about the development of the UK negotiating line, and participation in UK delegations to Brussels. These would all be set down in written documents.

The terms of concordats would be agreed between the assembly and government departments after the assembly has been elected. I obviously cannot give any undertaking to publish them while the Bill is going through this House. That is a matter for the assembly to agree with the Whitehall departments. But they will be published documents after they have been agreed between the assembly and Whitehall.

Any draft concordats that the Welsh Office produces in preparation for the assembly will be published, subject to the provisos mentioned in the Government's White Paper on freedom of information. As I have indicated, we do not expect that draft to be ready until well after this Bill has completed its passage through Parliament. That underlines the point that concordats are practical documents dealing with working relationships rather than matters that need to feature on the face of legislation. I think it would be broadly accepted in this House that it would be inappropriate for them to be included on the face of the legislation. They will not take the form of binding contracts; they will not take the form of statutory documents, but it may well be the case that they will create a legitimate expectation of consultation. For instance, if one party to a concordat suddenly ceased to consult the other in accordance with the concordat, the result might be that its decisions could be challenged by way of judicial review, so it is wrong to say that there will be no legal underpinning to these concordats. The precise limits of that underpinning would have to be worked out by the courts in the context of the terms of the concordat itself. But the important point about judicial review is that it will not permit one party suddenly to whip away the concordat and then act entirely contrary to its terms.

I move on to the position of the Civil Service—

Lord Mackay of Ardbrecknish

My Lords, I am grateful to the noble and learned Lord. I am puzzled by his use of the expression, which I heard on a number of occasions, "concordat between the Welsh assembly and Whitehall". That implies that the Welsh assembly, as an assembly, will agree the concordat but Parliament here will not have any say in it. I wonder if he means between the Welsh executive and Whitehall?

Lord Falconer of Thoroton

My Lords, it will depend on the precise circumstances of each concordat. The purpose of the concordats is to provide co-operation between the Welsh assembly and its executive on the one hand and central government on the other. The precise parties to those concordats—which particular agencies—must be decided as we determine the most appropriate way of dealing with the issue.

I turn to the issue of the Civil Service. The noble Lord, Lord Crickhowell, pointed out that one must be clear to whom the Civil Service owes its obligation. As is well known, the Home Civil Service owes its duty to the Crown. Those within the Civil Service who serve the Welsh executive and those who serve the Welsh assembly will continue to owe that obligation to the Crown. They can continue to owe that obligation to the Crown irrespective of whether the Welsh executive is in the hands of one party and central government is in the hands of another. Civil servants have been doing that for many years and I believe that there will be no difficulty in relation to this issue.

I turn to agencies. Noble Lords asked about the precise role of the new powerhouse—that is the three agencies put together—under the new assembly. That is a matter for the assembly to determine. The assembly will appoint people to the agencies. It will determine its funding and theirs. It is for them to decide how to use the powerhouse and how other agencies will operate within the context of the new assembly.

The noble Lord, Lord Callaghan of Cardiff, asked what was meant by the new social role of the Welsh Development Agency. The new powers of the WDA provided in the Bill merely replicate the existing powers of the Development Board for Rural Wales. The development board is currently empowered to spend money for community development and similar projects in the area of mid-Wales for which it is responsible. The Bill conveys those powers instead to the WDA, thus allowing them to be exercised for the benefit of all parts of Wales. It will be for the assembly to direct how the WDA might exercise those powers, as with all its other powers.

Those were the major issues around which the debate focused. Perhaps I may now deal with important points which did not form the focus of the debate to the same extent. First, the noble Lord, Lord Thomas of Gresford, asked whether there should be a duty on the Secretary of State and the assembly to consult with each other about primary legislation. There is already a duty under Clause 32. He then asked about the possibility of a Lord Justice sitting permanently in Wales. His ambitions then increased to a Lord Chief Justice. His demands became all the more voracious as the debate went on. He suggested that there should be a Lord Chief Justice for Wales, but I can offer him no comfort in that respect. The proposal goes way beyond anything which was mandated in the course of the referendum, or in the manifesto, or in anything that has been said. The noble Lord should not hold out too much hope in relation to that.

The noble Lord, Lord Griffiths, asked whether it was right that there should be a transfer of further powers to the Welsh assembly simply by way of order and not by way of primary legislation. The structure of the proposal is clear; it is that the administrative function of the Secretary of State for Wales should be transferred to the assembly. The powers which can be transferred are set out in the schedules to the Bill. They are contained in primary legislation and it appears to us to be an appropriate and properly protected way of dealing with the powers which should be transferred.

It is perfectly conceivable that to begin with we will get the precise extent of the powers wrong. It seems inappropriate that one should have to return with primary legislation to deal with that. It is much more sensible to deal with the matter by way of secondary legislation. I believe that that was a perfectly legitimate argument—indeed, the correct argument—in support of secondary legislation.

The noble Lord asked about tax-raising powers. We do not have the power, nor do we have the intention, to transfer tax-raising powers to the assembly. Any such proposal, which is not in our minds, would require primary legislation. Therefore, that particular route is not available to us under the terms of the Bill.

Much was made of the role of the Secretary of State once the assembly is up and running. We have made it clear that we are committed to retaining the post of Secretary of State for Wales to represent the interests of Wales in the Cabinet. Some noble Lords during the course of the debate maintained that there would not be a role for the Secretary of State for Wales because all his powers were being transferred to the assembly. Parliament will continue to make primary legislation for Wales. Therefore, one of the Secretary of State's key roles will be in the development of the Government's primary legislation. The Secretary of State will continue to represent the interests of Wales in policy areas which will not be the responsibility of the assembly; for example, defence and social security.

The Bill confers some specific duties and functions on the Secretary of State, such as providing funding to the assembly and consulting it about the Government's legislative plans. The Bill does not prevent one person being both assembly first secretary and Secretary of State for Wales. Whether one person would fill both posts is a matter for the political parties in selecting candidates for the electorate at the ballot box, for the assembly in choosing who is to lead it and for the Prime Minister of the day. The Secretary of State will be chosen by the Prime Minister and will be bound by Cabinet collective responsibilities while the first secretary will depend on the confidence of the assembly. Therefore, there will be a role for the Secretary of State in Cabinet in the UK Government. The Secretary of State can also be the first secretary, subject to the views of the assembly and the Prime Minister.

The noble Lord, Lord Crickhowell, asked about the University of Wales. The Higher Education Funding Council for Wales funds universities in Wales. The Bill does not change that because the assembly's powers to reform public bodies in Wales does not allow it to abolish the Higher Education Funding Council for Wales. The assembly will assume the functions of the Secretary of State for Wales for appointing, funding and directing the funding council and holding it to account for its performance. The ability of the research councils to fund research undertaken by universities in Wales is not affected by the Bill. I am not sure whether that precisely answers the point raised by the noble Lord, Lord Crickhowell. I shall read Hansard and, if appropriate, write to him to deal with the particular issues he raised.

The noble Viscount, Lord Tenby, asked whether we can give any time-scale in relation to the transfer of records from London to Wales. I am afraid that I cannot. First, it will be necessary to review the options for housing those records to the necessary standards for both presentation and public access. Those options will require to be costed. It will then be for the assembly and my noble and learned friend the Lord Chancellor to agree the best way forward. Therefore, I can give no undertakings now as to the timetable for all that. But the provisions hold out the prospect in due course for a Welsh records office of a very high standard indeed.

The noble Lord, Lord Dixon-Smith, referred to relationships with local authorities. The assembly's duties and powers in respect of funding local authorities in Wales will be conferred on it by an Order in Council under Clause 22 by transferring to the assembly the Secretary of State's functions in local government finance legislation. Any powers which the assembly has over local government funding will be no more than the Secretary of State exercises at present. The difference is that the assembly will be directly accountable to the electorate in Wales for the way in which it uses those powers.

I am sure that I have not answered every point which has been raised in this very important debate. I shall read Hansard and, if necessary, write to noble Lords. We have listened attentively to the contributions from all sides of the House. I do not share all the views and opinions which have been expressed.

The provisions of the Bill are fundamental and far-reaching, but it would be misconceived to try to paint them as some kind of threat to the future of the Union. In fact, they are the least that is needed by way of reform and modernisation to equip Wales to move into the next millennium as a successful and integral part of the Union.

What we have here is a comprehensive measure for bringing government closer to the people, for ensuring that government money is better directed to meet the express needs of Wales and for driving forward the economy of the whole of Wales, bringing the prosperity that some parts already enjoy to the rest. It is about the creation of a political framework capable of improving the quality of life for people in Wales. Those are objectives that I hope your Lordships on all sides can share and, in so doing, can work with us to make the assembly the success that Wales deserves. I formally commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

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