Devolution

HL Deb 20 June 2003 vol 649 cc1066-96

11.32 a.m.

Lord Norton of Louth

rose to move, That this House takes note of the report of the Select Committee on the Constitution on Devolution: Inter-Institutional Relations in the United Kingdom (2nd Report. HL Paper 28).

The noble Lord said: My Lords, it is a particular pleasure to move this Motion. The Constitution Committee was established by your Lordships' House in February 2001. It has been a very busy committee but this is the first report that it has recommended for debate. Because of the debate's change of date, a number of members are not able to be present and have asked me to convey their apologies.

Our inquiry was a major undertaking. It was made possible by the commitment and expertise of members of the committee, to whom I pay tribute—it is a splendid committee to chair—as well as by the exceptional efficiency of our then Clerk, Andrew Mackersie, and our specialist adviser, Alan Trench, whose knowledge and understanding of the subject were invaluable to us.

Let me begin by explaining what we do not cover in the report. We are not concerned with the principle of devolution. We have taken devolution as a fact. Nor are we concerned with the internal operation of the devolved administrations. That is not a matter for us. Our focus is inter-institutional relationships in a United Kingdom context. Given that, we necessarily concentrate on institutions that have been brought into existence. We do not have a separate institution, or institutions, for England, so we have not explored the English dimension.

I turn to our findings and recommendations. Our principal findings are summarised in the conclusion on page 51. First, each devolution settlement is different. We should speak of devolution settlements rather than refer to a generic devolution settlement. That may appear an obvious point, but it deserves stressing. Secondly, devolution has bedded in with remarkably few problems. However, problems attach to each finding. The differences in the arrangements for the devolved bodies have given rise to complaints. The commission under the noble Lord, Lord Richard, whom I am delighted to see in his place, is presently considering the workings of devolved arrangements in Wales. There are, of course, pressures for the English question to be addressed.

It is, however, on the second finding that I wish to concentrate. Crucial to devolution bedding in smoothly has been the good will on the part of those responsible for inter-institutional relationships. This good will can be attributed to the dominance of one party in the administrations in Westminster, Edinburgh and Cardiff; to the fact that many of those involved in establishing the new structures had shared experiences as MPs at Westminster and therefore not only understood the processes of British government but knew personally those involved; and to the professionalism of the Civil Service. The good will has facilitated a high level of informality in the contact that takes place. Issues are resolved on the basis of personal contact and without the need for a great many formal meetings.

The problem we identified is prospective rather than immediate. Conditions will change and, in some respects, are changing. One cannot proceed on the basis that one party will always dominate the administrations in Westminster, Holyrood and Cardiff Bay. The number of Ministers in the devolved administrations with experience of Westminster is diminishing. We now have a Scottish First Minister who has not been a Member of another place; few of his Ministers have been MPs. In the Welsh Assembly government, only the First Minister, Rhodri Morgan, has sat at Westminster. Although one retains the high level of professionalism of the Civil Service, one cannot proceed on the basis that the good will that underpins relations and gives rise to a high level of informality will continue.

Given that, we believe that preparations need to be made for the time when there will be administrations in place of different political persuasions. In particular, we see the need for relations to be put on a more formal basis, and on a more transparent basis. One of the problems of informality is that little is open and recorded.

We stress in the report that it is important not to wait. We think it prudent to anticipate and to start taking action now. For that reason, we recommend that further use should be made of the formal mechanisms for intergovernmental relations. These encompass regular meetings of the formal Joint Ministerial Council, the regular updating of concordats and a strengthening of the devolution unit in the Office of the Deputy Prime Minister.

In order to achieve greater transparency, we want more put into the public domain about meetings of the JMCs and also more information supplied about the funding arrangements. It is not always clear, for example, what increases in funding devolved administrations are entitled to under the Barnett formula. We would also like to see a dispute resolution procedure introduced to deal with disputes arising outside the scope of the Barnett formula.

There are also changes that we recommend to the arrangements made within UK government for dealing with inter-institutional arrangements. Again, we believe it important to look at the process as a dynamic one, rather than taking a single snapshot approach. The roles of the Secretaries of State for Scotland and for Wales were important in delivering the devolution settlements and enabling the devolved arrangements to bed in. but our report said that we were sceptical about the value of the political role of the Secretaries of State. In each case the Secretary of State is not accountable to Parliament for what the devolved administration does, has no financial responsibility for how the devolved administration spends its funds and has little direct involvement in policy-making. The relationship that does exist is primarily between the devolved administration and the relevant UK government department.

Although some important roles remain, we were not convinced that they need to be fulfilled by three Secretaries of State. We therefore recommended that the Government consider the appointment of one Minister with responsibility for intergovernmental relations overall, possibly supported by Ministers of State to deal with particular policy sectors or devolved areas.

We also recommended merging the devolution and English regions team, located in the Office of the Deputy Prime Minister, and those parts of the Scotland and Wales offices dealing with intergovernmental relations to create a single group of officials able to deal with the full range of intergovernmental issues. For rather obvious reasons, I shall return to those proposals.

Let me mention briefly other recommendations embodied in the report. We were struck by the fact that although intergovernmental relations are well developed, interparliamentary relations are not, and, furthermore, there is little scope for systematic scrutiny of intergovernmental relations. We recommend that a review of intergovernmental relations be conducted at least once every Parliament—or at least once every five years. We consider that this would be best undertaken by a Joint Committee of both Houses of Parliament.

We also believe that steps need to be taken to improve the process of dealing with Westminster legislation affecting Wales. We want to see greater consistency in how legislation affecting Wales is dealt with, and consideration given to how Members of the National Assembly can have a greater input into our deliberations. We also raise concerns about the use of Sewel Motions in Scotland and the fact that they are brought forward as the product of agreements between executives rather than between parliaments. That is something we think should be corrected. As part of our inquiry, we considered what lessons may be learned from the experience of Holyrood, Cardiff Bay and Stormont. The use of a business committee is something worthy of further consideration.

That is a brief introduction to our report. I turn to the Government's response and the recent announcements about the structure of government for dealing with devolution. The Government's response—published as Command 5780—is, in the committee's view, disappointing. Whereas the main message of our report is that, while devolution has bedded in, one has to anticipate what is likely to happen in the future, the Government's response essentially takes the line that things are fine as they are.

The response comments on our specific recommendations but fails to engage with the reasoning that led to the recommendations. Although the response states that the Government will review certain practices in the light of our report, its basic point is that there is, no overriding need to make greater use of the formal mechanisms for managing relations". The Government believe that the current machinery has shown itself well able to maintain effective and constructive relationships between the administrations and that informal contact contributes to that success. At paragraph 2 we are told: The evidence to date supports this conclusion, as the Government has had productive working relationships not only with the coalition administrations in Scotland and Wales but also with the Northern Ireland Executive, which consisted of Ministers from parties which are not represented elsewhere in the United Kingdom". That last part is the crucial observation. The parties in Northern Ireland are not competitor parties to those in Westminster. That is why they are able to co-operate as they do. One is not dealing with one's political opponents in the way that one would be if other parties gained control in Scotland or Wales.

There is no need for me to go through each of the Government's points in detail. If your Lordships read the response, you will see that the message is the same: there is no acceptance of the need for change, though occasionally there is the statement that the matter will be kept under review. That creates a worrying state of affairs. It is not sufficient to leave things as they are. I reiterate our point that it is important not to wait.

I turn to our recommendation about the posts of Secretaries of State for Scotland and Wales. The government response, published in March, said that the Prime Minister had, no plans to merge either the roles of the territorial Secretaries of State or their Departments". On Thursday of last week, the Downing Street press notice announced that, there is no longer a requirement for full-time Cabinet ministers and freestanding departments to conduct the remaining Scottish and Welsh business within Parliament and Government". The Scotland and Wales offices are to be located in the new Department for Constitutional Affairs. We have since had the letter from the Lord Chancellor and his colleagues explaining the new structure.

It follows from our report that we welcome the locating of the devolution team from the Office of the Deputy Prime Minister in the new department, along with the officials responsible for intergovernmental relations in the Scotland and Wales offices. We look forward to having details of the resources that will be made available to them and the structure of accountability. The change itself makes sense, for the reasons that we give in our report. Indeed, it appears that the new structure follows our recommendations in most respects but one—retaining the Secretaries of State for Scotland and Wales.

The government response to our report lists the responsibilities of the Secretaries of State, but on any reading of those responsibilities it is not clear why they could not be filled by a single Secretary of State. The Downing Street statement concedes that they are not full-time posts. That is reflected in the appointments made. Why, then, retain them in addition to the new Secretary of State for Constitutional Affairs? Why not follow the committee's recommendation and, in effect, do away with the posts, with Ministers of State responsible, if necessary, for each of the devolved areas? That would make for a more coherent, and integrated, structure.

I believe that the committee's report and the accompanying evidence volume—the two should be taken together as they comprise the source volume on inter-institutional relationships—provide important contributions to understanding how devolution is bedding in and the challenges that it faces. We believe that our report makes a constructive contribution to the debate. Now that we have the new Secretary of State for Constitutional Affairs, I hope that he will be able to offer a fresh response. In the absence of the Secretary of State, we look forward to the noble Lord, Lord Filkin, detailing the contribution that he believes the new department can make to inter-institutional relations in the United Kingdom. I beg to move.

Moved, That this House takes note of the report of the Select Committee on the Constitution on Devolution: Inter-Institutional Relations in the United Kingdom (2nd Report, HL Paper 28).—(Lord Norton of Louth.)

11.45 a.m.

Baroness Gould of Potternewton

My Lords, I start by thanking the Chairman for chairing this very interesting session of the Constitution Committee. I should also like to thank our Clerk and our adviser, Alan Trench.

Examination into aspects of the progress of devolution by the Constitution Committee provided the opportunity not only to consider the subject in the title of the report, but to consider the devolution settlements more widely. It is important to read the report as a whole, together with the substantial and informed evidence that was presented to the committee.

As the report states in paragraph 6, devolution is now treated as a settled part of the UK's constitutional arrangements, as reiterated by the noble Lord, Lord Norton. Polling evidence produced by the Electoral Commission towards the end of last year confirms that, indicating that there was greater trust in the devolved bodies to act in the best interests of Scotland and Wales than there was confidence in the UK Parliament. That is not a surprising fact, as decision-making is brought closer to the people, which is what devolution is about.

Support for devolution has risen in both Scotland and Wales since the referendums were held. That support was echoed by all those who gave evidence, irrespective of political persuasion. As the noble Lord said, the committee was therefore right not to get into an argument about the concept of devolution but to concentrate on its implications on a more day-to-day and practical level.

I intend to concentrate my remarks on Scotland and Wales. I do not intend to discuss the Barnett formula—which the noble Lord, Lord Norton, did not discuss either—over which we spent interminable hours. However, I reiterate the words of the report that the committee did not have a neat ready-made alternative to Barnett. There may be a time when a review is necessary, and thought needs to be given over a period of time to how we should replace Barnett, appreciating the complexity of a needs assessment process. We should also appreciate that my noble friend Lord Richard's commission is considering the issue.

I do not intend to follow the noble Lord, Lord Norton, on commenting on the new ministerial arrangements, except to say that it is clear that there is no longer the requirement for a full-time Secretary of State in both those areas. Instead, I want to put on record a bit of the background to the devolution legislation.

Paragraph 7 of the report refers to the question of asymmetry, and the consequent fundamental differences between the settlements for Scotland and Wales. Certainly, at the beginning of our deliberations there was concern about the possible effects of those differing settlements, which one interviewee referred to as a haphazard system. That negative attitude was wrong. Differing societies do not fit into nice neat little boxes.

Account has to be taken that the history, dynamics, local needs and local circumstances of Scotland and Wales are quite different. Scotland has always seen itself as a sovereign nation; the Treaty of Union in 1707 was seen as a marriage of convenience between two sovereign nations. It was asserted by one witness that devolution works well in Scotland, because it has always been part of Scotland's agenda.

The committee was reminded by the interesting and informative memorandum of Professor McCrone, professor of sociology at the University of Edinburgh, that the Scottish Parliament simply provided direct democratic accountability over the extensive apparatus of government that already existed. The situation in Wales could not have been more different. Mr John Osmond, director of the Institute of Welsh Affairs, referred to the Scottish Parliament as being the keystone in an arch of an already existing institutional structure, while the National Assembly for Wales, rather than being the keystone to the arch, had to set about building that arch. The institutions as in Scotland did not exist; rather the Welsh identity is built around a sense of locality, language and culture.

Wales has also historically been much more closely integrated with England, and its systems reflect that closeness, the Welsh Office being in effect an administrative arm of Whitehall departments in Wales. Scotland had been planning for its Parliament through its convention for about 10 years. Wales went into devolution comparatively unprepared, so started from a lower baseline. A crucial difference is that Wales did not have a distinct Welsh legal system. Therefore, I marginally disagree with the noble Lord, Lord Norton, because I think there was a logic for the differing administrative and legislative arrangements and for the differing devolution settlements.

The consequences of those very different backgrounds are that the Scotland Act defines all matters which are reserved, while the Government of Wales Act defines those matters which are devolved—basically, the Assembly taking on the powers of the Secretary of State for Wales. Crucially, paragraph 11 of the report reminds us that although all the devolution arrangements differ, they are against the fundamental background and position that the UK Parliament at Westminster retains its sovereignty and continues to be able to legislate throughout the United Kingdom. However, during passage of the Scotland Bill, it was laid down that by convention Westminster would not normally legislate on devolved matters without the consent of the Scottish Parliament. The Sewel convention, much talked about during our weeks in Scotland, was born on that occasion. The Scottish Parliament agreed to more than 40 Sewel Motions, I believe, during its first Session. So the legislative pattern as it affects Scotland is reasonably clear cut and understood.

However, it was pointed out to us that that was not necessarily the case in Wales. Mr John Osmond took us through what he described as a very complex formulation. To work out what the powers of the Assembly are means trawling through very many different Acts, the functions being spread over 300 Acts of Parliament and statutes and a transfer of functions order which runs into a massive number of pages. He was also of the view that there was some confusion over the means by which legislation affecting Wales is presented and there was sometimes difficulty in interpreting the legislation as it affects Wales.

However, those were not the views of the leader of the Welsh Assembly, Rhodri Morgan. He stated that experience on the legislative process had so far been reasonably positive, whether it be by a Wales-only Bill, Welsh clauses or a clearly demarcated section on Wales in an England and Wales Bill. He said: it is an odd bit of a settlement, when you think about it in theory, but in practice it is not that bad". I think that we have to bear in mind the difference between theory and practice. Disappointment was expressed all round, however, that in the bid for Bills, Wales has to date been allocated only one Bill each Session. We make recommendations on those issues in the report, in Recommendations 14 and 15, and the issues are also under consideration by the Richard commission.

In welcoming my noble friend the Minister to his new post, may I ask him whether he believes that there is not a need for greater consistency in the way in which legislation in respect of Wales is framed and how sympathetically the Government would look at a demand for greater legislative powers for the Assembly?

I should like to comment only briefly on the queries around the effectiveness of the inter-institutional relationships as they have already been outlined in detail by the chair, the noble Lord, Lord Norton. We were told by the Ministers we interviewed that the arrangements set out in the memorandum of understanding are robust and flexible and that the informal inter-relationship arrangements were working well and smoothly. Of course we would not dispute that. However, I also appreciate that we cannot always foresee the future. But like the noble Lord, Lord Norton, I think that the question still has to be asked. If the waters were to become choppy, would the current arrangements be robust enough? I am sure that all problems ultimately would be resolved, but my concern is that the process would become protracted and that would have serious consequences for the progress of the legislative programme.

Does not my noble friend the Minister believe that one should not wait for a problem, but rather prepare for it and hope that one never has to use that preparation? Perhaps we need to examine the experience of the Canadians, who looked at more formal arrangements which were established pragmatically and over a period of time.

The final point I wish to raise relates to the section of the report—paragraphs 144 and 148, already touched on by the noble Lord, Lord Norton—on the lessons for Westminster on practices and procedure. In Scotland, pre-legislative scrutiny is not a matter of determination for each individual Bill but is an established and integral part of legislation. It follows through, I think, their long-term commitment to a civil society. The 17 parliamentary committees hear from civic groups, business interests and other stakeholders. They meet in different locations and so allow different channels to be engaged in the political process and provide, I believe, for greater democracy.

Both Scotland and Wales determine their business arrangements through business committees. Those are formal committees involving all party groups, but are considerably more open than our procedures through the usual channels. The business is more clearly determined in advance while at the same time still allowing for emergency changes to be made to the timetable. The programme of business is seen to be based on consensus and provides for much greater transparency and understanding.

Another feature in both Scotland and Wales is that of greater accessibility for the media and the public. As the report states, the arrangements in Westminster are getting better, but the resources for dissemination of information and for public relations pale beside those enjoyed by the Scottish Parliament. Those points may be seen as peripheral to the overall picture and to the volume of the report, but I firmly believe that increasing public engagement with democracy and bringing greater openness and increased participation of the stakeholders in the process of government could help to overcome the low esteem in which politics and politicians are currently held.

I close with the words of Sir Richard Wilson, Secretary of the Cabinet, in his evidence. He said: I think the implementation of devolution policy has been a remarkable success".

11.57 a.m.

Baroness Gibson of Market Rasen

My Lords, I, too, begin by congratulating the noble Lord. Lord Norton of Louth, on instigating today's debate on the Select Committee's report on devolution. which I read with great interest.

I would not have been taking part in this debate if I had not attended an event in Cardiff last weekend. Before I became a Member of the House, I was able regularly to visit both Scotland and Wales, and to a lesser extent Northern Ireland, as part of my union work. I always enjoyed those occasions. Sadly I am no longer able to participate in them. However, last weekend I took part in a memorial lecture held to remember a dear friend and former union National Executive Committee member, and I had the pleasure of renewing contact with many of my friends and acquaintances in Wales. Your Lordships will realise that, on Friday last, feelings in Wales were running quite high. As an Englishwoman going to Wales I wondered what I was going towards. However, there was the usual Welsh welcome.

There was confusion about the proposal relating to the Wales Office and in particular to the position, or non-position, of the Secretary of State for Wales. Of course there had been conflicting reports. The first reports appeared to say that the Wales Office had been subsumed under the new constitution department. which was to be headed by our new Lord Chancellor, and that there was no longer a post of Secretary of State for Wales. By the time I arrived in Wales, thank goodness, the second round of reports and the Secretary of State himself. Peter Hain, had made it clear that the position had not been abolished and that, indeed, he was exceedingly alive and well in his post. Yesterday I was greatly pleased to hear the noble and learned Lord the Lord Chancellor tell the House that he could confirm that he could not override the wishes of the Secretaries of State for Wales and for Scotland and that there were no plans to change devolutionary powers.

At the event in Cardiff. I was pleased to share the platform with a very old friend who is now a member of the National Assembly for Wales. Edwina Hart, who is the Minister for Social Justice, is a strong and extremely competent woman. She gave us a rundown of what the Assembly had achieved in the fields of equality and social justice since its inception—issues close to my heart and to the hearts of many others present today. I cannot today outline all that she said, but she spoke for a considerable time about the issues and the progress which had been made. It made very good listening indeed. She also proudly pointed out that the Assembly for Wales now has gender equality within it, which certainly made me envious. I yearn for the day when we can say the same for another place.

On speaking to friends later in the day, it was obvious that there is a great deal of satisfaction with the way the Assembly is working. Indeed, there is not just satisfaction but great pride in the way it is working. I noticed the difference particularly because I had not visited Wales for a couple of years. I was told that the Members of the Assembly respond more positively and quickly to local issues than Westminster can. I was told that they understand what local issues and wishes are about and why they have come to the forefront, and that they want to make the Assembly a success for the people of Wales. That was not said lightly; it was impressed upon me by a number of those with whom I spoke.

I came away from Wales deeply impressed with how devolution appeared to have empowered the people of Wales in a most tangible way. I also felt that the dynamics within that process in no way diminished their linkage with other parts of the United Kingdom, rather they enhanced that. I always thought that there was a logic in the devolvement of power to Scotland, Wales and Northern Ireland. Unlike some, I did not believe that devolution would lead to the break-up of the United Kingdom.

My visit to Wales reinforced my feelings about the importance of devolution; hence my short speech this morning. I read the report of the Select Committee, and the Government's response to it, with interest. It struck me as I read it that the recent changes affecting both the Wales Office and the Scotland Office would be welcomed by the committee, and the noble Lord, Lord Norton, confirmed that this morning. It is a move to bring the devolved institutions closer together and yet they retain their voices in the Cabinet, which is very important. In both cases, Scotland and Wales have people who know and understand them to champion their causes.

I have three issues which I should like to raise stemming from the report's recommendations. First, I welcome the assurances which were given yesterday by the noble and learned Lord the Lord Chancellor that the close workings of the devolved administrations would continue. I hope that my noble friend will be able to rebut the suggestions in the Select Committee's report that the Government have been rather too complacent because things are working well.

Secondly, has the Minister any further information about improving Westminster legislation which affects the National Assembly for Wales? For example, in their response the Government stated that they were considering expanding the advice in the devolution guide affecting Wales. My third point was referred to by my noble friend Lady Gould. Does my noble friend agree with the committee that there are lessons that can be learnt from the various devolved assemblies which may benefit our deliberations here in the Houses of Parliament?

I have concentrated my contribution on Wales but I believe devolution settlements generally to be a most positive step forward, and one which is here to stay, as noble Lords have already stated. I have enjoyed taking part in the debate.

12.4 p.m.

Lord Morgan

My Lords, this subject has become more exciting since the Motion was originally tabled. The changes have occurred with which we are all familiar and which other noble Lords have mentioned. That indicates the great importance of devolution. It is a policy that does the Government credit. It is perhaps the boldest and most radical thing that the Government have done in six years along with their other measures of constitutional reform. Curiously enough, there is little discussion of it. Constitutional reform seems to me a kind of elite issue. It is not widely discussed and does not attract large attendances in this House. Therefore, it is valuable that the Select Committee produced the report. It is to its credit and, if I may say so, very much to the credit of our chairman. We are extremely fortunate in having the noble Lord, Lord Norton, as our chairman. He embodies a combination of fine scholarship and good humour, which is greatly to our benefit.

Devolution has been a success. It has made government more democratic and more locally responsive. It takes the Labour Party back to its older roots of local civic accountability and to the message of the ILP, Keir Hardie, George Lansbury and, indeed, the young Aneurin Bevan before the Labour Party embarked upon the bureaucratic centralism of the view that, "the gentleman from Whitehall knows best". Devolution has been a success. It has also been a success for the Conservative Party which resisted it but has found in both Scotland and Wales that it now has a constructive role that it has not had for many, many years; indeed, in the case of Wales, since Mr Gladstone won the election of 1868, which is quite a long time—precipitate reform!

The appendix to the report questions—this is an important point—how popular devolution is and how much interest it attracts. Clearly there is much more to be done. The polls are low. There is a theory that the low polls show that the Assembly and the Parliament are as little regarded as people in Westminster, so it is almost a kind of triumph. But that is a specious argument. Clearly we have to do more to make devolution acceptable. I am sure that in Wales a major problem is that the Assembly does not do enough, and that there would be much more interest in the Assembly if it had more effective powers. One matter that I believe is a very welcome feature of devolution is divergence. That is the whole point. The fact that there are separate policies on the elderly and student fees, and so on, in Scotland, and in Wales on prescription charges, for example, and also on student fees is welcome. As the noble Baroness, Lady Gibson, said, forecasts of the break-up of the United Kingdom—what one of our civil servants called "the nightmare scenario", by which I think he meant an SNP government in Edinburgh—have not been fulfilled.

Our report calls for more coherence, for the Constitution Unit in the secretariat to be strengthened, for the Joint Ministerial Committee to be beefed up and for the Council of the Isles actually to meet now and again. I hope that the new ministry under the noble and learned Lord, Lord Falconer—perhaps my noble friend the Minister can respond to this point—will help to provide some of that coherence, and put intergovernmental relations in the United Kingdom on a new footing and be proactive. I hope that the new ministry will not be merely a co-ordinating, tidying-up ministry but something that will energise and give life, coherence and substance to this whole important process.

As the noble Lord, Lord Norton, observed, devolution has been a very British development so far. It has all been very informal with lots of good will. We always have good will in Britain, as we know; indeed, we have done over the centuries, except in the seventeenth. The report highlights that informal style. The system works partly due to the highly skilled, highly trained and professional Civil Service and partly, as the noble Lord said, through the political affinity of the various governments. But that can be overdone. We have heard from Rhodri Morgan of the "clear red water" in Cardiff. I assure the House as an historian that the political affinity between Wales and England can be highly exaggerated. But it seems to me that we need more open mechanisms, not merely because of possible points of conflict but to make devolution work. Informality in some ways works against devolution and, as it were, confirms the system that we now have.

I should like to deal with two particular problems, both of which were covered in some measure in the fascinating speech of my noble friend Lady Gould. As regards Secretaries of State, clearly the new moves are a recognition of the fact that the process of reform is still very much under way. Helen Liddell had no real job. That emerged from our report. She had 85 civil servants, compared to 41 in the Wales Office. I would be grateful if the Minister would tell me where those 85 people will go. It is not merely a question of under which roof they will operate, but what they will do, and I suppose one might ask whether they are necessary at all.

There is still a job for the Secretary of State for Wales but, in my opinion, as a transitional figure. Whoever he is—it has always been a "he"—it is very odd when he acts as a kind of Janus-faced intermediary between the Welsh Assembly and the Cabinet. He can present the Assembly's views, but also say that he does not agree with them. That seems unsatisfactory.

The Government's response—I agree that it is thin—talks about the Wales Office and the Scotland Office as centres of excellence. I am not quite sure what is implied there. However, I would be grateful to hear from the Minister precisely what will be the status of the new constitutional affairs ministry. What will be the conduit that transmits proposals or ideas, including even the report of my noble friend Lord Richard when it appears, from Cardiff to Westminster? What will happen if the two conduits disagree, if such a thing is physically possible? What will be the process?

My other point was admirably made by my noble friend Lady Gould. The legislative process of course reflects asymmetry—we understand the reasons for that—but also incoherence and instability in government. I do not wish to say much about Scotland, for the very good reason that I do not know much about it, but I observe that the famous Sewel Motions have been very much used—more so than anticipated. It would be worth exploring whether the excessive use of Sewel Motions does not mitigate against the process and principle of devolution.

The situation in Wales is totally unsatisfactory. I declare an interest as a member of the Institute of Welsh Affairs, headed by John Osmond, and I agree with what that institute says. The Welsh legislative process is all over the place. We sometimes have Welsh Bills; there have been two in four years. There are Welsh provisions dotted about in other Bills, such as the Communications Bill: indeed, one needs an extremely shrewd detector system to find out where the Welsh bits are in that legislation. Incidentally, I think it a great mistake that broadcasting does not come under the Welsh Assembly. Alternately, English Bills have separate Welsh clauses that can be struck down here, quite beyond the control of the elected representatives of Wales. There can also, of course, be extensions to secondary legislation. That is profoundly unstable.

The two Welsh Bills both show some of the problems. The children's Bill was actually rescued in this House after going through the processes of the Home Office, which had weakened the Bill and thereby diminished the original point established by the Welsh Assembly. Why the Welsh health Bill came to this Parliament at all I simply cannot imagine. It was side by side with a UK—England and Wales, at least—health Bill. That illustrates the lack of coherence in the process of Welsh legislation.

The Welsh Assembly has little control over output or outcome. As our admirable constitutional adviser Alan Trench explained the other day, it does not have control of compliance under the proposals made by Professor Rawlings on whether measures purporting to relate to Wales comply. That is a great problem. I am very grateful for the presence of my noble friend Lord Richard, whose commission will report. It has received important proposals from Professor Rawlings about the need for the Welsh Assembly to have primary powers comparable with Scotland. I hope very much that that will be the outcome. I hope that the Department for Constitutional Affairs will be of assistance and not an obstacle to that process.

Like my noble friend Lady Gould, I propose to say very little about the Barnett formula. It is like the Schleswig-Holstein question, of which Palmerston said that the only person who understood it was in a lunatic asylum. No doubt my noble friend Lord Barnett understands the formula. The main point is a constitutional one, rather than in terms of how the money is allocated—

Lord Acton

My Lords, I am sorry to interrupt my noble friend, but did not Palmerston say that only three people had ever understood that question? One was dead, one was mad, and he himself had forgotten.

Lord Morgan

Yes, my Lords, that is right. In the interests of time, I shall merely say that I am most grateful to my noble friend. To be interrupted by him on history is a privilege.

The main point about the Barnett formula is a constitutional one. As the Government say, it is for the Treasury and the United Kingdom Government to decide the Treasury policy that describes the contours and the processes of the Barnett formula.

Devolution seems to be at the crossroads, more so with the European convention emerging and throwing light on the whole principle of subsidiarity in all the different countries, regions and sub-regions of Europe. One consequence that we do not cover in our report is the need for something to be done about England. It is astonishing that we have these great changes in Wales and Scotland—and, indeed, in Northern Ireland—but that nothing has been done about England. I hope very much that the proposals on regional referendums will promote that. I shall be most grateful if the Minister can explain why regional government does not come under the new constitutional ministry. The regions and the nations should fit together.

In a previous debate, the noble Lord, Lord Norton, rightly asked what the constitution was for. What is devolution for? Is it: Secretary of State plus, with a few unco-ordinated and unrelated expedients; or is it a move towards a more democratic and pluralist Britain? I hope that new Labour, moving towards the democracy. if not the socialism of democratic socialism, is promoting the latter and that the report will show that the reform process is continuing.

12.17 p.m.

Lord Prys-Davies

My Lords, as a non-member of the Select Committee, I am bound to thank the noble Lord, Lord Norton of Louth, and his colleagues on the Select Committee for their educative report. I congratulate the noble Lord on the way he has taken us through the main findings of his committee and given us the benefit of his observations on the Government's response, which I also found somewhat disappointing. It is a splendid report, and I should like to offer one or two comments on it before I come to detailed issues.

The committee has told us that this is the first comprehensive review of the practical working at inter-governmental level of the current devolution settlements since they came into operation in 1999. The evidence that the committee received from very senior politicians and civil servants directly involved in the working of the settlements, and also from highly respected scholars, is authoritative. I believe that it is the best available evidence. The report has picked up with unerring exactitude the main challenges emerging. It contains findings that require further considerable thought by the Government, and also by all those who have at heart the future of devolved government within the United Kingdom. Therefore, the House was absolutely right to set up a Select Committee on the constitution.

I shall comment on four issues out of very many and I do so as a supporter of devolution. That is the only interest that I have to declare. First, I support the committee's first recommendation that further use should be made of formal structures of inter-governmental relations. That recommendation was emphasised by the noble Lord, Lord Norton, this morning. Paragraph 25 of the committee's report says, we are concerned by the sheer extent of the reliance on goodwill as the basis for intergovernmental within the united Kingdom". Naturally, everyone welcomes goodwill—goodwill matters—but the committee wisely looked to the future, when the present of level of goodwill in the system may come under great strain or when goodwill will be absent. That could arise when the administrations are run by conflicting political parties in London and Cardiff or London and Edinburgh.

The First Minister of the National Assembly told the committee: It is not possible to estimate now how robust the present system would be if you did have a different party in power down here —that is, in Cardiff, — and Labour in Westminster, or not Labour in Westminster and coalition similar to ours down here. I do not know how that would work, to be honest". No one quite knows what the future will bring, but it is always relevant to recall Murphy's law—if something can go wrong, one day, it will. Now is the time, therefore—when the relationship between the administrations, so we are told, is cosy and Comfortable—to put it on a more formal basis. Perhaps I may borrow the words of the Select Committee: It is important not to wait. We think it prudent to anticipate and to start taking action now'. That is to be found in paragraph 194, but the same concern emerges in about seven or eight different parts of the report. The Government's statement passes over that precise concern of the committee in silence. I sincerely hope that in the coming weeks, the new department will give fresh consideration to that seriously worrying point.

I turn to the second issue; namely, the role of the Welsh and Scottish Secretaries of State. That issue is now obviously very much alive and has been addressed by the noble Lord, Lord Norton, and my noble friend Lord Morgan. We are bound to acknowledge that the role of the Welsh and Scottish Secretaries of State has changed almost beyond recognition. Their departments have greatly diminished since the setting up of the National Assembly and the Scottish Parliament. Sooner or later, changes along the lines of those announced last week were inevitable. The question is whether the change leads to a need for a further change. Perhaps I may ask the Minister whether the First Minister of the National Assembly had been consulted about that proposed change and its consequences. I have written to the Secretary of State giving notice that I intended to ask that question.

I believe deeply that the voice of the National Assembly should be an important influence on the decision to make the post of Secretary of State for Wales a part-time post. I base my opinion in particular on the written evidence of the First Minister to the committee. He wrote: from the Welsh Assembly Government's perspective, the role of the Secretary of State for Wales remains vital … That is particularly the case on issues relating to primary legislation …At present, it is hard to imagine this aspect of the settlement functioning well without a full-time Secretary of State for Wales". That quotation comes from page 231 of the evidence in paragraph 8. In that extract, the First Minister was making an extremely important point, but it has not been mentioned in anything that I have seen or read which has been issued by the Government.

If the First Minister's conclusion is right—his words have been approved here today in another context—I believe that the loss of a full-time Secretary of State strengthens immeasurably the case for conferring on the National Assembly the power to enact primary legislation in the devolved fields.

That point leads me to the major issue, which is that of primary legislation for Wales, which was discussed in paragraphs 119 to 124 of the report, and which the noble Lord, Lord Norton, discussed in his excellent contribution. There is widespread criticism that the National Assembly is empowered only to pass subordinate legislation. That criticism is reflected in many scholarly articles, in particular those of Professor Rawlings and Professor Patchett.

It appeared to the Select Committee that in Westminster Bills, which also affect the responsibilities of the Assembly, Wales figures in such arrangements largely as an after-thought appended to a process driven by the UK Government's concerns and priorities, rather than those of Wales in general or the National Assembly". Those words are to be found in paragraph 123 of the report.

In addition, there is the difficulty experienced by the Assembly in obtaining a Wales-only Bill, or Wales-only provisions in an England and Wales Bill. Of the four Wales-only Bills which it requested for the 2000–01 Session, one was accepted. Of the eight requested for the Session 2002–03, one was accepted. To be blunt, that does not seem to be a very good record, although I accept that it is quite impressive compared with the pre-1999 record of the Welsh Office.

Meanwhile, it is not being overlooked in Wales that the Scottish Parliament has passed 62 Public Bills, eight Private Members' Bills and one Private Bill. Of course, some of the Scottish Bills have their roots in Scottish law, but at least some of the rest tackle problems which in greater or lesser measure are common to the four countries of the UK, but tackle them in a Scottish way.

I am glad that the committee recommended that steps be taken to ensure a greater measure of consistency by Whitehall departments in their approach to primary legislation affecting the responsibilities of the Assembly. The committee has endorsed in particular the general principles advocated by Professor Rawlings as a very useful starting point. That is to be found on page 37 of the report. Of course there may be debate about the details of the Rawlings formula, if I may so describe the principles, but the case for such a formula has surely been made out. That is why I read with gratitude that the Government are not slamming the door on this recommendation.

However, the Rawlings formula is not the end of the story. As my noble friend Lord Morgan mentioned, Professor Rawlings has further pursued his thoughts, and in his written evidence to the commission set up by the Assembly and chaired by my noble friend Lord Richard, he has developed a powerful case for not denying to the National Assembly the primary legislative competence enjoyed by the Northern Ireland Assembly, and ultimately the legislative competence of the Scottish Parliament.

While I warmly welcome the Select Committee's endorsement of the Rawlings principles as, a very useful starting point'. its recommendation will have to be looked at afresh in the light of last week's constitutional development and in the light of the report of the Richard Commission when it is to hand.

I was especially glad to note that the side title on page 7 of the report, "Reviewing the Barnett Formula", is immediately followed by a question mark. I am glad that the question mark is in place and that the committee has an open mind on the need for a review.

I conclude by repeating my thanks to the noble Lord, Lord Norton of Louth, and the members of his committee. The Select Committee is on track to achieve the target suggested by the very respected Oxford scholar, Professor Vernon Bogdanor; that is to say, to establish for itself the authority of a delegated powers committee.

12.32 p.m.

Lord Holme of Cheltenham

My Lords, this has been a short but rich debate, with some outstanding contributions from members of the committee and from two noble Lords who were not members of the committee. The noble Baroness, Lady Gibson, gave us the benefit of some perceptive direct observation of Welsh institutions in action, and the noble Lord, Lord Prys-Davies, put questions of wisdom and penetration.

As a member of the committee—I declare an interest as Chairman of the Hansard Society for Parliamentary Government—it has been a great pleasure to serve under the chairmanship of the noble Lord, Lord Norton, who shows in the chair a rare combination of scholarship and effectiveness. I hope that that is not an oxymoron. It has been evidence of the quality of the committee's work that the report has been commended by the House as it has. It was right that we took devolution, in depth, as our first subject. I regret the absence of the noble and learned Lord the Lord Chancellor, whom we had understood would reply to this morning's debate, but we are glad to see the noble Lord, Lord Filkin, in his place.

Perhaps it would be appropriate to pass on to the noble and learned Lord congratulations on his new responsibilities for constitutional affairs. He now has the most gloomily romantic role possible in British public life; he is "the last Lord Chancellor". That sounds like a novel by Edward Bulwer Lytton, or by Disraeli himself. It is not a role in which I readily see the genial and practical figure of the noble and learned Lord, Lord Falconer, but I am getting used to the idea, as I am sure he is. If he is not here today, let us hope that he has gone to Scotland or Wales to pursue government business.

I shall not be as reticent as committee colleagues on the Labour Benches. Unhappily, the Department for Constitutional Affairs over which the Lord Chancellor now presides seems to be a different story. It is uneasily poised between those two stages Karl Marx identified, of tragedy and farce; it is somewhere in the middle of that spectrum. It is extraordinarily difficult to conceive it possible to take such an important set of changes and execute them so ineptly, and to the great damage of the cause of constitutional reform.

As today's Financial Times reveals, the new department was cobbled together at the last moment, as an afterthought. It is certainly discourteous to Scotland and Wales; it may also be damaging. I reiterate my question to the noble Lord, Lord Filkin: were the First Ministers of Scotland and Wales consulted by the Government before this announcement? It is alarmingly ill-thought out in detail—and as always, the devil is in the detail—and appears to be the product not so much of joined-up thinking—that much vaunted attribute of the Government—as dismembered improvisation. For those of us—certainly all on these Benches—who support the thrust of the reforms, who are committed to greater separation of powers, who have for years regarded ourselves as close allies in the great causes of devolution and constitutional reform, the coming and going of the past week has been discouraging. I say that plainly to the Minister.

Moving on, it was not the task of our committee to review devolution as a whole. However, I should like the noble Baroness, Lady Gould, to say a word about where devolution now stands. It seems that devolution at least has not lived up to the fears of those who opposed it so bitterly, and who saw it as the slippery road to independence. The opinion polls in the appendix to the report show, if anything, that the slippery road to independence has become somewhat firmer as a result of devolution. It is not a ratchet that moves inexorably in one direction, as some of its opponents feared.

It is clear that no political party in Scotland wants a reversal of devolution. It is clear, despite a relentless campaign of hostility by elements of the Scottish press—including, sadly, that once great newspaper. the Scotsman—that the Scottish public have a high level of acceptance of their institution, even if, as the same polls show, it has not lived up to its greatest promises. Nevertheless, the institutions are well on their way. The most interesting thing about them is that, although devolution is demonstrably working. it is working in an untested way. It is untested because of the party alignment of the parties in government in Scotland and Wales—still a coalition in the case of Scotland—and because of the great professionalism of the Civil Service which serves all three Governments.

The noble Lord. Lord Prys-Davies, is right to warn us that this is the time to test the mechanisms, as the committee recommended, to make sure that should the party alignment change and tensions of interest arise, the institutions can continue to work as relatively robustly as they have done so far.

I understand why we all shy away from the Barnett formula; on a Friday morning it is enough to frighten the horses. Nevertheless, it is important to recognise that there is a first stage to devolution. Although Scotland and Wales have considerable discretion on spending, they do not have any responsibility—save a marginal responsibility in Scotland—for raising revenues. There is no representation without taxation and government becomes real at the point politicians have to consider what taxes they should ask for from citizens to support their purposes. That is not the stage we are at in Scotland and Wales.

It may take some time to reach that stage—some would say that it should be never. However, it will be interesting to know from the Minister, first, whether the Government are reviewing the Barnett formula and by what process and over what time-scale we may hope to hear what "son of Barnett" is. We would like to know, secondly, whether the Government can envisage within the new Department for Constitutional Affairs a way of considering an evolution of the status of government in Scotland and Wales so that it becomes more fully responsible to its citizens in the way I have described.

I have one detailed question in connection with the homogeneity of the Civil Service. Civil servants have a loyalty to the Crown and in that spirit they can deal with governments of different political complexions in an impartial and professional way. To what and how should civil servants in Scotland, Wales and the Northern Ireland Civil Service, which is separate, express their loyalty to the settlement? Let us suppose that there were a conflict between the demands of the centre and those of Scotland, Wales or Northern Ireland and the settlements that have established the form of government they have. How would they mediate that? For instance, would it require specific amendments to the Civil Service code in respect of civil servants in Northern Ireland and Scotland?

Finally, I want to move to a topical matter. It was reliably reported on the BBC and in some newspapers today that the colleague of the noble and learned Lord the Lord Chancellor, the Leader of another place, who appears to moonlight as a junior Minister responsible for Wales, is to make an interesting speech tonight. It is reported that he is to speak about income tax. I suppose that the Chancellor of the Exchequer is having a wretched enough weekend without my dwelling on that. But I want to ask about the constitutional issues which the Leader of another place is intending to raise and whether they are the position of the Government.

It is reported that he will say tonight that his commitment to a second Chamber with a substantial elected element remains undiluted by his translation. Is that the position of the Government as a whole? Members of this House would like to know whether that is the latest word on constitutional thinking.

And what about proportional representation? Your Lordships are well accustomed to hearing that tune from these Benches, but the Leader of another place seems to be in favour of proportional representation. He appears to believe that it is an important part of the Scottish and Welsh settlements. It is clear from our observations that that is part of what makes it work in Scotland and Wales. It has saved the Conservative Party from oblivion in Scotland and Wales, although it seems reluctant to draw the appropriate conclusions from that.

Moreover, it seems to represent a change of mind on PR by the Government as a whole. I understand that Mr Hain will say that it should be introduced for Westminster elections. That is music to the ear of these Benches, but if it is the position of the new Department for Constitutional Affairs—although I shall be most interested to hear what it is, I recognise that the Minister may be slightly on the back foot—can we expect a full Statement from the Government on this interesting development in policy?

12.44 p.m.

Lord Glentoran

My Lords, first, I thank my noble friend Lord Norton for bringing this report to your Lordships' House and all noble Lords who have taken part and made for such an erudite and interesting debate. I am grateful for this opportunity to discuss the important issue of the stability of the devolution arrangements.

There is certainly no room for complacency, given that the turnouts in the recent elections to both the Welsh Assembly and the Scottish Parliament fell below 50 per cent—38 per cent and 49 per cent respectively.

While these declining turnouts will be, in part, a reflection on the performance of the Scottish and Welsh administrations over the past four years, we cannot reject out of hand concern among the public about the devolution settlement itself.

I noted with interest the findings of John Curtice's survey, included in the Select Committee's report at Table 14, of public opinion about devolution. It is significant that the survey finds that only 35 per cent of Scots believe that the way Britain as a whole is governed has been improved by the creation of the Scottish Parliament, with 54 per cent saying it has made no difference and 8 per cent thinking that it has been made worse.

This debate on the report of the Select Committee on the Constitution is most timely. It is of paramount importance that the roles of the Scottish Parliament and the executive—and their Welsh and Northern Irish counterparts for that matter—are both clearly understood by the electorate and are stable and durable in the long run.

One of my principal concerns is the arrangements for intergovernmental relations in the United Kingdom, which are discussed in chapter 1 of the report. During the 1997 devolution referendum debates and subsequent consideration of the Scotland Act in this House and in another place, many concerns were expressed about what would happen in the event of a fundamental disagreement between governments in London and Edinburgh. The noble Lord, Lord Prys-Davies, made those points.

However, I am happy to concede that, bar one or two skirmishes which are part and parcel of parliamentary and governmental life, significant conflict between the two has not materialised. That is unsurprising. As the report notes, governments of the same political persuasion pursuing broadly similar objectives have been in power in London and Edinburgh since 1999. It is reasonable to expect that that would minimise disagreements.

Furthermore, it is pertinent to note that personal familiarity among both Ministers and officials between the two governments has also facilitated a relatively smooth operation—a product of the infancy of the arrangements, I suggest.

While this is all well and good, the absence of significant problems does not mean that the concerns are no longer valid. The questions asked are still very pertinent. The Select Committee's report notes: we are concerned by the sheer extent of the reliance on goodwill as the basis for intergovernmental relations within the United Kingdom. We are also concerned that goodwill has been elevated into a principle of intergovernmental relations: it is used to explain the avoidance of disputes and to justify maintaining the present informality of the system". Later, having reviewed the use of concordats and the three mechanisms for resolving devolution-related disputes, the report notes: We have an unresolved concern that these mechanisms may not prove adequate to the challenges arising from a highly-charged political dispute, especially if the parties are accustomed to informal rather than formal dealings with each other". Is this another area of government policy where we are left to "hope and pray" for the best in the future? Is it not essential that much greater thought is given to this matter? If and when a serious dispute arises, is it not right that everyone should at least know where they stand and understand the process for resolving the matter? The report acknowledges that steps should be taken to achieve just this in "peacetime" when everyone is friendly and all is peace and quiet.

Perhaps I may paraphrase the committee's recommendations: it urges greater use of the formal mechanisms already in place. It is hard to disagree with that, but I wonder whether it will be sufficient. I cite the issue of concordats as an example. The report recommends that concordats, be made for a fixed term only, capable of being varied during that term if necessary but to terminate at the end of that term and be renegotiated. During that term, it would not be open to a party to withdraw from or repudiate a concordat". That is an eminently sensible proposal and workable when the two governments are in broad agreement and only minor practical issues need to be resolved. However, will the concordats be of any use in the event of serious conflict? On what legal basis are they agreed? Could either side not unilaterally withdraw from a concordat, irrespective of its terms?

I do not wish there to be serious dispute between the two governments, but we must surely have effective conflict resolution mechanisms in place in order to minimise the damage that such disputes could cause.

I do not have time in this relatively brief contribution to detail a comprehensive package of such measures, but I wish to elaborate on one important issue, already touched upon by the noble Lords, Lord Prys-Davies and Lord Holme; that is, the future role of the Secretary of State for Scotland. The recent reshuffle—"shambolic" reshuffle, I might say—has profound implications for the representation of Scottish and Welsh interests in the United Kingdom.

I regret to say that, even now, many details of the new structure are unclear. It appeared initially that the Scotland Office and the Wales Office, along with the Secretaries of State for Scotland and Wales, were to be abolished and their functions taken over by the new Department for Constitutional Affairs. Then it appeared that the offices would be under the auspices of the DCA but would survive as separate entities. Now, according to the Government's newly published list, Alistair Darling will be part-time Secretary of State for Transport and part-time Secretary of State for Scotland and Peter Hain will be part-time Leader of the House and part-time Secretary of State for Wales. Anne McGuire will be Parliamentary Under-Secretary of State for the Scotland Office and Don Touhig will be the Parliamentary Under-Secretary of State for the Wales Office.

If the media are to he believed—and they are not always, by any means—the hand of the Scottish First Minister has been strengthened by these changes. With the office of Scottish Secretary very much diminished, direct bilaterals between the Scottish Executive and the UK Government can be expected to increase. I think that the noble Lord, Lord Prys-Davies, made that point in relation to the Welsh Office; the noble Lord, Lord Holme, certainly did.

There are still, however, many unanswered questions. For example, does the Secretary of State for Constitutional Affairs have any kind of veto over decisions made by the part-time Scottish and Welsh Secretaries? Who is ultimately responsible for such important legislative issues as the re-opening of the Scotland Act, which is primarily to amend provisions for the number of seats in the Scottish Parliament?

That confusion, unhelpful as it is, will no doubt be cleared up in the fullness of time. I am more concerned about whether this diminution of Scotland's and Wales's voice in the Government is strategically desirable. It is true that the end of separate Scottish and Welsh offices and Secretaries of State is a proposal that the committee, in its report, urges the Government to consider. Superficially, it may seem both logical and desirable to parcel up into one the offices of the Scottish and Welsh Secretaries and Ministers responsible for devolution in the English regions.

It is also true that in the past my party has considered that approach. On paper, and in the absence of problems, it may seem ideal, but I doubt whether it is as well suited to the dynamics of devolution and the current realities of politics. Certainly, it is clear that the Prime Minister's proclamation last Thursday and his reshuffle were not thought through.

Critically, the devolution model varies considerably in Scotland, Wales, Northern Ireland, and the English regions. The Scottish Parliament has primary legislative power; the Welsh Assembly does not. The English regional assemblies, should they ever be created, will have different powers again, and what Northern Ireland will end up with remains to be seen. I hope it will be legislative.

The primary role of the Secretary State for Scotland is to be the interface between the Edinburgh and London governments. He or she should be lobbying for Scotland's interests in the United Kingdom.

It was revealed in the recent debate in another place that the Secretary of State and the Under-Secretary of State for Wales sit on 25 Cabinet committees. Will the fact that there are now only part-time Secretaries of State for Scotland and Wales inevitably mean that such representation will be diminished? There are also potential conflicts of interest. When key transport decisions have to be made, will Alistair Darling he acting in the best interests of Scotland or for the transport needs of the UK as a whole? As a Scottish newspaper recently commented: Who in the cabinet should lobby the transport secretary over better cross-border rail and air links, or the upgrading of the A l? The Scottish secretary, of course. And what if the transport secretary and the Scottish secretary are the same man? Darling is on to a loser—damned by the Scots if he doesn't give them what they want and damned by the English if he does". These are important considerations in the day-to-day political issues that arise. I suggest that they are doubly so when strategic issues are being decided.

I turn now to an issue which has been avoided by all other noble Lords. I shall do the same in part. The issue is the Barnett formula. Whatever the future course of the financial relationship between the Scottish and UK governments, is it not the case that Scotland needs a direct voice in the UK Cabinet to make its case and that that voice should be unfettered by Welsh or English regional interests, which may or may not be consistent with Scotland's?

The Select Committee's report is a most timely and helpful contribution to the ongoing debates about the dynamics of devolution. I have only touched on a few of the areas covered by the report. There has been reference to several others. However, we have also had a considerable amount of repetition, which should help the Minister to answer the key points.

I may not be entirely in agreement with all the committee's recommendations, but, in summary, I believe that the report highlights key areas of concern; principally, that there needs to be more robust liaison arrangements between the Scottish and UK governments and parliaments. We believe the report is a sound basis on which further debate may be founded.

12.58 p.m.

The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Lord Filkin)

My Lords, I am very pleased to respond to the debate initiated by the noble Lord today on the report of the Select Committee. It could not be more timely, given both the importance of its contents and the announcement this week of the establishment of a Department for Constitutional Affairs. I have read the committee's report with interest. I acknowledge that it has had—and I trust will continue to have—a valuable and important role in its oversight on constitutional affairs.

I am particularly pleased that the Select Committee emphasised the smooth transition that took place to devolution in 1999 and the successful way in which the first term has gone. That is indeed a tribute to all those involved. But we are talking about a process so far of success.

We also saw the second devolved elections take place on 1st May. I congratulate the incoming administrations in Scotland and Wales. I also take the opportunity to assure the House that the Government will continue to work closely with the devolved administrations to deliver for the people of Scotland and Wales.

As the Prime Minister made clear in his Statement on Wednesday, it is precisely because devolution is operating smoothly that it makes sense to combine the roles of Secretary of State for Scotland and Wales with other Cabinet posts. My right honourable friends the Secretaries of State for Scotland and for Wales represent Scottish and Welsh interests in Cabinet and account for them in another place. They are assisted by the Scotland and Wales Offices, which continue as distinct entities reporting to those Secretaries of State but located in my department.

My noble and learned friend Lord Falconer is responsible for the overall devolution settlements and overall government policy on devolution, a responsibility previously that of the Deputy Prime Minister—including the Memorandum of Understanding, the Joint Ministerial Committee and the British-Irish Council. The team of officials responsible for co-ordinating devolution issues has moved from ODPM to the Department for Constitutional Affairs.

The noble Lord, Lord Norton, acknowledged many of those facts. He acknowledged that the settlement is working well and that there is no present problem. but he and the committee raised the question of whether there will be a problem in future. That is a perfectly proper question. Governments and parliaments should look to the future, rather than simply considering whether things are presently satisfactory. First, having just had elections, and not facing new elections to the Scottish Parliament and the Welsh Assembly until 2007, it seems unlikely that there will be an immediate problem. Of course, that does not remove the need to reflect, but one can hardly say that that is something that is about to hit us in the face.

Secondly, I emphasise that there is existing strong formal machinery. The impression has been given that this is all done between chums and that there is no structure or system of government in place to try to ensure that it works. First, there is a Memorandum of Understanding—about which I shall not go into detail. Secondly, and importantly, there are bilateral concordats with the devolved Administrations. Thirdly, there is a Joint Ministerial Committee chaired by the Prime Minister and including the First Ministers of the devolved administrations to oversee the operation of devolution, which meets in both plenary and functional sessions. Taking the two combined, there have been 16 meetings of the JMC in its various guises.

Fourthly, the Government emphasise that we will keep the operation of those liaison arrangements under review. I shall return to that later. Lastly, as has been recognised, we have a common UK Civil Service. I think that all parts of the House share the belief that that is important in making the United Kingdom constitution work in the circumstances. The way in which they have co-operated and continue to co-operate through and between the devolved administrations and central Government is a tribute to civil servants.

I turn to the role of the Secretary of State. The noble Lord, Lord Norton, also acknowledged—I thank him for this—that there is no sensible case for three separate full-time Secretaries of State. Perhaps with one exception, I have heard no one argue the case for that. Obviously, there was a case for a full-time Secretary of State for Scotland and for Wales before devolution—the UK Parliament was running many matters concerning Wales and Scotland.

There was an arguable case for keeping a full-time Secretary of State for Wales and Scotland during the period of bedding in of the devolved settlement, so that we could monitor how things were going and ensure focused political attention. But there is now hardly an informed or respected commentator who does not recognise that the world has changed since 1999 and that there therefore is no justification for a full-time Secretary of State for either Wales or Scotland. That leaves only two alternatives.

Lord Glentoran

My Lords, will the Minister comment on the comments of the noble Lord, Lord Holme, and I about the moonlighting of Secretaries of State? We do not argue for one Secretary of State for Wales and one Secretary of State for Scotland; from these Benches, we say that to have a senior Secretary of State for one of the major departments moonlighting, to use the terminology, as Secretary of State for Wales or Scotland cannot be right.

Lord Filkin

My Lords, I am no senior wrangler, but it seems to me that there are three options: no Secretary of State for Wales, a full-time one or one who shares some of his responsibilities between Welsh and other issues. There are no more than three options. So one must take the position that there should be a full-time Secretary of State for Wales, even though no one seriously thinks that there is sufficient work for one; or that there is no need at all for a Secretary of State for Wales in the Cabinet, which is not the Government's position; or, logically, that there should be a Secretary of State for Wales in the Cabinet who, sensibly, undertakes other functions as well.

I fear that that is the only sane answer to the allegation of what is a rather loose use of the term moonlighting".

Lord Holme of Cheltenham

My Lords, I am grateful to the Minister for setting out the alternatives, but the burden of our report was that there should be one Secretary of State responsible for the devolved parts of the United Kingdom. He did not address that in his schema of alternatives.

Lord Filkin

My Lords, I grant that there is a further option, which is to bundle them all in together and have one Secretary of State. The Government's view is that it is clearly better to have an identifiable Cabinet Minister who is seen to speak for Wales and for Scotland, arguing that case simply and clearly in Cabinet. We have taken a view on that and we think that we are right.

Lord Biffen

My Lords, if the Secretaries of State have to share their functions with other government departments, will they also be answering to Select Committees in respect of Scotland and Wales and taking parliamentary Questions? That all begins to add up to a substantial addition to their current burdens.

Lord Filkin

My Lords, there has been no change whatsoever to the responsibilities of the Secretaries of State for Scotland and Wales. They still carry the functions that they carried two weeks or so ago. The Government are in a reasonably good position to make an assessment as to the weight of those responsibilities, because they have been carried out during the past few years since the devolution settlement. We judge that, supported by the two other Ministers for Wales and Scotland in the Commons, there is no problem with my right honourable friends Peter Hain and Alistair Darling carrying out all of those responsibilities, including answering, either themselves or through their relevant junior Ministers, to Select Committees.

I turn to the question raised by the noble Lord, Lord Norton of Louth, about improving the process for legislation affecting Wales and Scotland. That is a correct challenge, to which I shall return in more detail. We have not reached perfection there; there is room for progress.

The noble Baroness, Lady Gould, raised the thorny issue of the Barnett formula, to which many members spoke. Is there a better way? One thing about the Barnett formula is that, compared to the distribution settlement for local government, it is relatively simple and clear. It may seem complicated, but it is a masterpiece of clarity and simplicity compared with some of the alternatives. I suspect that that is why the committee, which is not alone in this respect, found it difficult to find something that was a wonderful improvement on it. We have no current plans to change it; on the other hand, one always keeps an open mind on such issues.

The noble Baroness also spoke in some detail about the importance of addressing improvements to the handling of legislation. As I said, we are actively reflecting on that. For example, we are considering how to make more explicit in explanatory memoranda to Bills the exact effect on Wales or the powers of the National Assembly. The Welsh Affairs Select Committee recently made several further suggestions to improve procedure and the Government are considering their response to those recommendations—including on the relevance of the so-called Rawlings principle.

We do not think that there have been significant procedural difficulties in relation to Scotland. Nevertheless, our guidance makes clear that the Scottish Executive must be consulted on all relevant legislative proposals, whether or not the Sewel Convention applies.

Lord Morgan

My Lords, I apologise for interrupting my noble friend, but I should like to ask about Wales. It is not simply a matter of procedure. The point is trying to establish or carry into effect the wishes or will of the Welsh Assembly. How can it be satisfactory when it asks the Government for eight Bills and gets none?

Lord Filkin

My Lords, I do not think that the influence of the National Assembly for Wales can be measured in terms of the number of Bills that it gets in a parliamentary Session. As has been signalled already, there have been two since the devolution settlement. The Government have passed a considerable number of Bills that have had major implications for Wales. There is an active process, which I indicated earlier, for intergovernmental discussions on those issues.

We are not complacent; we do not believe that necessarily the arrangements are perfect. Let me give a homespun example in how this House scrutinises UK-wide legislation on Scottish issues. The noble Baroness, Lady Carnegy of Lour, who appears against me on the other Benches on various Bills, makes powerful contributions about how Scotland would be affected. She constantly raises those issues. That seems extremely important and necessary.

Furthermore, we have also looked to bring key civil servants down from Scotland to discuss with noble Lords from opposite parties how a Bill would affect Scotland—even before we move into Committee—in an attempt to inform our considerations in Committee. That illustrates the need for us to keep an open mind on how we improve the process of UK-wide legislation and how we consult and involve devolved nations.

The noble Lord, Lord Morgan, made the general comment that the process has been a success, as most people in the debate said. He gave a rather novel argument as to why it had been a success, saying that Conservatives now have a stronger role in Wales. As a pluralist, I must acknowledge that argument, even though it is slightly against my natural mindset.

As to whether the Joint Ministerial Committee is to be beefed up, in essence, it is government machinery that can be taken up or down according to necessity and demand. I was asked where the civil servants would go. There is a relatively clear answer: politically, civil servants in the Wales Office or the Scotland Office report to the respective Secretaries of State as they have always done. Departmentally, for pay and rations purposes, they are in the Department for Constitutional Affairs. We do not want to have to move them between departments every second the Secretary of State might move. Physically, they are in the great historic office buildings that they have occupied for some time—well may that continue.

Noble Lords asked questions about the report of the noble Lord. Lord Richards, on the National Assembly for Wales. If, as we would expect, the National Assembly for Wales refers it to the Government, they will respond as a Government when the Secretary of State speaks. Secretaries of State speak for the Government, not just their department—I do not need to tell the House that. Formally, the Secretary of State for Wales, in that instance, will respond on behalf of the Government.

I must not detain the House for too long. I was slightly saddened by some of the points that the noble Lord, Lord Holme, raised. I cannot believe that he was saying the Government were wrong to indicate that after a proper process of consultation and legislation they would move towards a supreme court, an independent judiciary, at least offering the House of Lords the opportunity to elect its own chairman or, presumably, to oppose stronger arrangements in Government for overviewing constitutional relationships—that will be my department's responsibility. In a sense, it came down to a presentation issue. If that is it, so be it. But, in essence, I would have hoped—

Lord Holme of Cheltenham

My Lords, I am grateful to the noble Lord for giving way. The sadness is probably more on my side that a set of reforms that we on these Benches support—as I made clear—had not been thought through in detail. They were not simply presented badly but in a process that betrayed that they were more an ad hoc reaction to events than a thought through set of constitutional changes.

Lord Filkin

My Lords, I hear the noble Lord's point. I do not agree with it. Those issues have been argued by many commentators. They are changes that should have been made for many years. I would have hoped that the Government's indication that they will now do so would receive a warm welcome. In response to a further question, we have no current intention to change the Barnett formula.

On civil service loyalty, the Civil Service code was amended in 1999 before devolution took effect to make clear that civil servants in the Scottish Executive and the National Assembly for Wales owed their loyalty to the administrations that they served. The Civil Service code also provides that civil servants must comply with the law, as one would expect.

I can confirm that both First Ministers were told in advance about the DCA. Both were happy and are happy with the arrangements.

The noble Lord, Lord Glentoran, asked whether the arrangements were risky for the future. I have signalled already that formal structures of government are in place that can be expanded or contracted to deal with future events.

It is germane to the establishment of the Department for Constitutional Affairs to say that we now have a department led by my noble and learned friend Lord Falconer, who very much wished to be with you today but is on pressing business in the North. He would like to have responded to the debate in person. I am pleased to have had the opportunity to do so because, working to him, I will have a ministerial responsibility for these issues. I am afraid that noble Lords will not escape from me on these issues today.

I will be pleased to have further discussions, both with the committee and with leading members who have spoken on these issues, if there are any matters of interest or concern to them. That is an offer. My noble and learned friend Lord Falconer would also wish to say that he will be most pleased to talk further with the committee of the noble Lord, Lord Norton, at any time that suits it, about issues that concern it now or its future work programme.

I shall conclude on that note. The Government's commitment towards devolution, which was not always universally applauded, but is respected around the House, has succeeded in Scotland and Wales. Nobody ever says that any change you make—at least in our constitution—is rigid and firm for all time. Devolution seems to us to work, although there is a responsibility to keep matters under review, both in Government and aided by the Select Committee.

As signalled by several speakers, we must learn from different practices of government, politics, consultation and public involvement in the devolved administrations. There are good lessons to be learnt, and I hope that we get guidance on some of them from expert research and advice. The process of pre-legislative scrutiny in Scotland, particularly as it has a unicameral system, must be strong. But it works well, and people in Scotland value that. We should look at the process and listen to it.

I am not convinced at this stage that there is an urgent need to set up new bureaucratic structures. However, there is a responsibility on the Government, the Department for Constitutional Affairs, my noble and learned friend Lord Falconer and me to keep under active review, and to monitor, how the devolved relationships are working and, respectively, how they might work in future. I am therefore pleased to take the kernel of the Select Committee's advice, albeit with a slight difference of emphasis on the exact mechanism for responding to that advice. It seems right that the Government should look forward, consider what might happen and put in place suitable contingency arrangements come the day. I am therefore very glad to welcome the report. I look forward to working with the committee on future studies.

1.20 p.m.

Lord Norton of Louth

My Lords, I thank everyone who contributed to what has been a short but very rich debate. There have been some excellent contributions. 1 echo the words of the noble Lord, Lord Holme, in commending especially the contributions from the noble Baroness, Lady Gibson of Market Rasen, and the noble Lord, Lord Prys-Davies, which were much appreciated.

The subject of our report is extremely important, but, as the noble Lord, Lord Morgan, said, it is not widely discussed. It deserves and needs to be discussed. I hope that this debate will contribute significantly to the discussion.

I am most grateful to the Minister for his response to the debate. He covered a great deal of ground and offered a much more positive response than that of the command paper. I welcome that. The machinery is in place; we are not suggesting new machinery, our concern is that it is working intermittently. At present, with the new structures I am not clear about who controls the switch. I welcome the Minister's offer on his own behalf, and that of the Secretary of State, to assist the committee. There are a number of issues that we would welcome the opportunity to pursue.

I emphasise the point touched on by the Minister and drawn out by the noble Baroness, Lady Gibson. Our recommendations are not simply confined to being directed at Government; we are raising a number of recommendations directed at Parliament. There is a lot that we must consider and that we can learn from devolved bodies. At the same time, we must look at how our machinery works, particularly in dealing with legislation affecting Wales. I emphasise that a lot is to be done by Parliament and not just by the Government. I reiterate my thanks to those who have taken part. It has been a helpful debate. This is not the end of a process but prompts further discussion and consideration.

On Question, Motion agreed to.