Orders of the Day — Government of Wales Bill

House of Commons, 2 March 1998.

FORESTRY COMMISSIONERS' FINANCES

Ron Davies (Labour, Caerphilly)

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

Michael Martin (Deputy Speaker, Glasgow Springburn)

With this, it will be convenient to discuss the following: Government new schedule 1—Forestry Commisioners. Government amendments Nos. 542 to 544.

Ron Davies (Labour, Caerphilly)

I made it clear on Second Reading that I would table amendments about forestry in Wales, to combine the advantages that come from the Forestry Commission retaining an overall strategic role for forestry in Great Britain, with our aim that the Forestry Commission should be answerable for its operations in Wales to the National Assembly for Wales. Forestry is important to the economy and environment of Wales. At 31 March 1997, the forest area stood at 247,000 hectares, or 12 per cent. of the total area of Wales, of which the Forestry Commission owned 120,000 hectares. Current production levels represent 15 per cent. of the British total. The latest figures suggest that 4,750 people employed in Wales are dependent on forestry, including 1,270 employed by the Forestry Commission, and more than 1,700 employed in wood processing industries, in which Wales has benefited from substantial investment. Forestry can also provide farmers with an opportunity to diversify farm business through woodland planting as an alternative to agricultural production. Well-designed forests can provide high-grade landscape and wildlife habitats, and can be used to advantage in the reclamation of derelict sites, and provide excellent recreational opportunities. The Government are not proposing the establishment of a separate Forestry Commission for Wales. The Government amendments will ensure that, in future, the assembly will have responsibility both for setting policy in respect of forestry in Wales and for funding the activities of the Forestry Commission in relation to Wales.

Rhodri Morgan (Labour, Cardiff West)

Is my understanding correct that responsibility for the Forestry Commission—a UK-wide body—in relation to Wales will transfer from the Secretary of State for Scotland to the Welsh assembly? For the past 10 or 20 years, the Forestry Commission has been anomalous, in that it is the only body with a remit outside Scotland for which the Secretary of State for Scotland has ultimate departmental responsibility. Will my right hon. Friend go into detail about the relationship between the Scottish Parliament and the Welsh assembly in respect of forestry?

Ron Davies (Labour, Caerphilly)

As my hon. Friend will know, with my right hon. Friends the Secretary of State for Scotland and the Minister of Agriculture, Fisheries and Food, I currently have responsibility for all forestry matters. My hon. Friend is correct in his understanding that, post-devolution, the responsibility that I currently exercise will devolve to the Welsh assembly, and the responsibility currently exercised by my right hon. Friend the Secretary of State for Scotland will devolve to the Scottish Parliament. On matters that operate GB-wide, it will be necessary for the Ministry of Agriculture, Fisheries and Food, the representative of the Welsh assembly, and the appropriate Minister in the Scottish Parliament to agree. It will be open to the Scottish Parliament, because it will have jurisdiction in this matter, to legislate by means of primary legislation. It will be open to the Scottish Parliament to decide to introduce further changes. My hon. Friend is correct in his understanding. If he will bear with me, I shall deal with this point in a moment.

Tam Dalyell (Labour, Linlithgow)

A number of my constituents work at the Forestry Commission's headquarters in Edinburgh, and there is real concern and a lack of clear understanding about their future. I am trying to be constructive about this, but can some document be placed in the Library fairly soon, outlining in detail precisely what the thinking is, because there are quite a number of worried people? They are worried about whether they will have to move their homes yet again, having recently moved north to Edinburgh. They are asking, "Do we have to move south, or somewhere else?" Families' futures are very much at stake here.

Ron Davies (Labour, Caerphilly)

My hon. Friend raised that matter on Second Reading, when he asked me particular questions about the likely employment consequences for people in his constituency. Later in my remarks, I want to answer fairly specifically some of the questions that my hon. Friend asked. However, I take this early opportunity to assure him that there is nothing in the Bill that will in any way prejudice the livelihood, or the opportunity for continued employment within the present work force, of my hon. Friend's constituents. As I said in reply to the intervention of my hon. Friend the Member for Cardiff, West (Mr. Morgan), the Scottish Parliament will have jurisdiction in this matter. No one can foretell what it might want to do in future. New clause 40 deals with the devolution of responsibility for funding. The Forestry Commission's funding is currently provided from a single vote approved by the House of Commons. Discussions are in progress on the appropriate transfer of resources into the Welsh block as a result of a significant shift of responsibility. At present, the commissioners' functions relate to Great Britain as a whole. Paragraph 1 of the new schedule accordingly contains an order-making power for me to provide for the separate exercise, in relation to Wales, of the commissioners' functions, and for their functions to be exercised differently in respect of Wales. If an order under paragraph 1 amends Acts of Parliament, it will be subject to the affirmative resolution procedure. That is the purpose of amendments Nos. 542 to 544, to clause 144. I currently have wide-ranging powers in respect of the commissioners enabling me to direct the exercise of their functions in relation to Wales. As I explained to my hon. Friend the Member for Cardiff, West, I exercise these powers jointly with my right hon. Friends the Secretary of State for Scotland and the Minister of Agriculture. These powers will be transferred to the assembly and made separately exercisable with respect to Wales in the transfer order under clause 22. The forestry commissioners have powers to regulate activities in their forests. They may also make regulations to prevent the introduction into Great Britain of, for example, forestry pests and diseases. Paragraph 2 of the new schedule provides for such subordinate legislation, where it contains only provisions relating to Wales, to be subject to procedures in the assembly instead of in Parliament. The overall effect is that the assembly will approve the commissioners' subordinate legislation. Paragraph 3 of the new schedule provides that the status of the commissioners as a Government Department and the status of their staff—the point raised by my hon. Friend the Member for Linlithgow (Mr. Dalyell)—are not affected by these changes. I take this opportunity to tell the Committee that, in my view, these amendments in themselves are most unlikely to reduce the number of staff employed by the Forestry Commission. It will remain a Great Britain body, and any changes to this arrangement would require primary legislation. My hon. Friend the Member for Linlithgow raised that point on Second Reading. Obviously, as I have said, we cannot predict how the assembly will choose to exercise its functions, including that of funding the commissioners, but the drafting of new clause 40 ensures that, if the assembly wishes to exercise its functions in a certain way, it must have a proper dialogue with the commissioners. The arrangements for Scotland are broadly similar, although the details will be a matter for my right hon. Friend the Secretary of State for Scotland. They will differ from those for Wales, because of the different structure of the Scotland Bill, and in particular because it is proposed that the Scottish Parliament should have legislative competence over forestry. If the Scottish Parliament were to legislate to create a separate forestry commission for Scotland, the Government would need to reconsider the issue, and in particular to decide whether to retain the commission on a Wales and England basis or whether to create separate bodies. As I have said, such changes would require primary legislation.

Sir Sydney Chapman (Conservative, Chipping Barnet)

I wish this matter to be clarified: if and when the Bill is enacted, and any Member of this place wishes to ask a question or seek information about the Forestry Commission working in Wales, for example, would he or she table a question to the right hon. Gentleman, to the Secretary of State for Scotland or to the Minister of Agriculture, or would he or she not be able to table a question?

Ron Davies (Labour, Caerphilly)

I say to the hon. Gentleman, in the gentlest possible way, that it is a question not of whether the Bill goes through, but of when. Last weekend, the leader of the Conservative party made the position absolutely clear. My understanding is that his party is now in favour of devolution. I assume that the right hon. Member for Devizes (Mr. Ancram) will lead his troops into the Lobby in support of Government policy. It would be inappropriate for me to comment on which questions Madam Speaker would deem to be in or out of order, because I would be trespassing on matters for which I am not responsible. My current responsibilities will transfer to the assembly, and where those powers need to be exercised jointly, they will be so exercised by my right hon. Friend the Minister of Agriculture, the Scottish Parliament and the Welsh assembly. The Table Office or Madam Speaker could advise the hon. Gentleman on tabling a parliamentary question to a Minister in this House who would answer on those broad policy matters. To influence the implementation of detailed policy in Wales, the hon. Gentleman would have to join the happy and growing band of Welsh Conservatives who will seek election to the assembly. Now that he has expressed an interest, he must look for what passes as a safe seat in Wales, although finding one may be difficult.

Michael Ancram (Conservative, Devizes)

I am interested to hear the Secretary of State singing the praises of the Welsh assembly and inviting my colleagues to stand for election. Will he stand for election to the Welsh assembly?

Ron Davies (Labour, Caerphilly)

In fact, I suggested to the hon. Member for Chipping Barnet (Sir S. Chapman)—

Nigel Evans (Conservative, Ribble Valley)

Answer the question.

Ron Davies (Labour, Caerphilly)

I shall certainly answer now. I said that the hon. Gentleman should try to find a safe seat; if I were to stand for the Welsh assembly, I would not have as much difficulty finding one as he would. Paragraph 4 of new schedule 1 deals with the forestry commissioners' receipts. [Interruption.] The right hon. Member for Devizes has spent the past month or so berating me for arrogance; now he chunters from a sedentary position and accuses me of being coy. The transition from brutishness—I am supposed to have cast aside public and political opinion in Wales—to coyness is remarkable.

Cynog Dafis (Plaid Cymru, Ceredigion)

Will the Secretary of State give way?

Ron Davies (Labour, Caerphilly)

Of course. I am sure that the hon. Gentleman's question will bring me back to the matter of the Forestry Commission.

Cynog Dafis (Plaid Cymru, Ceredigion)

We are speculating about Conservative intentions, and the Secretary of State will be as intrigued as I am by the proposal of the leader of the Conservative party for a more equal pattern of devolution within the United Kingdom. Does that not imply that there should be a Parliament in Wales with powers equal to those of the Scottish Parliament, and, further, that such a Parliament should have the power to establish a forestry commission for Wales? Would that not be an excellent idea, because forestry is an important industry in Wales and has many distinctive qualities that should be addressed at an all-Wales strategic level?

Ron Davies (Labour, Caerphilly)

The idea might be excellent, but it is outwith Government policy, which, as the hon. Gentleman knows, is to transfer to the assembly the powers that I currently exercise. He will not be surprised if I describe devolution as a process. It is for those who come after, in the assembly and in the House of Commons, to decide whether to modify the powers of the Welsh assembly. I am not proposing that; I am proposing sensible and practical arrangements for the transfer to the assembly of my current forestry responsibilities. I was referring to paragraph 4 of new schedule 1, which deals with the Forestry Commission's receipts. The measure has been drafted to allow the assembly to choose whether to fund the commission's activities in Wales on a net or gross basis—that is, to decide whether the commission should retain its operating income to help it to meet its own expenditure. We must also recognise that the commission's forestry assets in Wales have been built up using United Kingdom taxpayers' money.

Dafydd Wigley (Plaid Cymru, Caernarfon)

We have paid for them.

Ron Davies (Labour, Caerphilly)

Paragraph 4 provides an overriding power for the Treasury to direct that certain receipts, such as those arising from major asset sales, should be returned to the Consolidated Fund. The right hon. Member for Caernarfon (Mr. Wigley) was right to say that we had paid for the assets. That is why I say that a balance must be struck. I assume that, if the Forestry Commission disposed of certain assets to assist its annual operations, the asset sales would be retained by the commission. In the event of a major act of privatisation, however, the Treasury would understandably want to retain the right to ensure that the contribution of United Kingdom taxpayers as a whole was properly safeguarded. Paragraphs 5 to 9 deal with the accounts and audit arrangements. The Forestry Commission will produce separate accounts for Wales, which will be audited by the Auditor General for Wales. He or she will also be able to carry out value-for-money studies, and the Comptroller and Auditor General will retain access rights. Paragraph 10 provides for the forestry commissioners to produce an annual report about their activities in Wales, and for it to be laid before and published by the assembly. The Government amendments devolve to the assembly responsibility for funding the forestry commissioners' activities in Wales, and make the commissioners properly accountable to the assembly.

Nigel Evans (Conservative, Ribble Valley)

The new clause, new schedule and amendments deal with an aspect of rural Wales that needs to be protected. They deal with our natural environment—trees, plants and wildlife, conservation and preservation, jobs and tourism, recreation and nature, and our ancient woodlands and forests. The rural community feels threatened. Yesterday, 284,000 people marched here in London, crying out in frustration and fear that their voice was not being heard. Many demonstrators travelled from Wales to be here, and I hope that the Secretary of State—who was not on the march—was at least able to hear what they said. They were good-natured, but they were extremely frustrated. Large numbers turned out from all parts of Wales to join yesterday's demonstration, because they care for the countryside. I assume that that is what new clause 40 purports to do as well, and I shall ask a number of questions about it towards the end of my speech. The Forestry Commission has a profound effect on our land. It was established in 1919 as an answer to first world war deforestation. In fact, deforestation had been going on for some time. At the turn of the century, only 5 per cent. of our land was forested; today, thanks to the commission's work, that percentage has more than doubled. Forests are vital, not only for their value as timber but for their natural beauty and their part in conservation and recreation. The nation's forests need protection from, for instance, disease. The commission's research division is very important in that regard, and I shall want to know how it will be ensured that that research function will be properly protected in Wales under the new arrangements. We need to prevent the reduction of crops by pests. We also need research into ways of increasing the productivity of forests, and the establishment of forests on difficult sites, if areas throughout Wales are to benefit. The conservation of rare and endangered species is important, as is the protection of our ancient and semi-natural woodlands. The Forestry Commission's research is mainly done in house, but it also commissions outside work. We shall need to know how that will be done under the new arrangements, and what impact the assembly will have in directing key commissioning in certain areas. As the Secretary of State said, the commission has a large staff, and we shall need to know more about how staff will function after the changes. The commission also has an international impact. Will the assembly have a say in some of the international commitments in which we are involved on behalf of the commission? Forests and woodlands support much of the rural economy, and they are environmentally and socially important. The White Paper entitled "A Working Countryside for Wales" spoke of the economic role of forestry and of the Government's aim to increase Welsh woodland by about 50 per cent. by 2050. Are the commitment and the target still operative, and how will they be affected by the proposed changes? In January 1996, the Government's panel on sustainable development, which was chaired by Sir Crispin Tickell, spoke of the need to draw up a national forestry strategy that was supported by regional strategies containing targets that were related to the main economic, environmental and social benefits that forestry could provide. The incentives needed to meet those targets were identified. Will the relationship with regional strategies remain the same? What will be the impact on the Forestry Commission's national picture?

Ron Davies (Labour, Caerphilly)

I am grateful to the hon. Gentleman for the way in which he raises these matters. I do not want to be too brutal with him, but I have to say that many of the issues he raises are policy matters, on which the assembly and the Scottish Parliament will decide. We are debating structures—the way in which my current powers will pass to the assembly. It is not for me to decide how the assembly will formulate and implement its policies—unless I seek election to it. Those are matters for the assembly.

Nigel Evans (Conservative, Ribble Valley)

We can tell that the Secretary of State is seriously considering whether to move from this place to the assembly in 1999. I do not want to be brutal with him, but I hope that he decides to go to the assembly, because not many Labour Members have shown themselves keen to move there from Westminster. Perhaps he can lead the rush of his Back Benchers. [Interruption.] I shall not seek election to the assembly. I suspect that the people of Ribble Valley would not wish to have representation there.

Ron Davies (Labour, Caerphilly)

How on earth can the hon. Gentleman square that stupefying statement with the comment over the weekend by his party leader that the Conservative party wants to make the assembly work? How on earth will it work without the hon. Gentleman?

Nigel Evans (Conservative, Ribble Valley)

I, too, find that a difficult question.

Nigel Evans (Conservative, Ribble Valley)

We shall have to leave the question unanswered, and return to the debate on the new clause. I hear what the Secretary of State says. It is important to look not only at the policy functions that are to be devolved to the assembly but at the national strategy, and how it will weigh with what the assembly wishes to do. I shall shortly come to the funding arrangements. I assume that the Forestry Commission will wish to continue its important consultations with local communities on such matters as planting and felling. It is important for it to carry on with its policy of ensuring that, where necessary, there are prosecutions for illegal felling, and warnings in less serious cases. It should enforce the restocking of illegally felled areas. I have spoken about only some of the Forestry Commission's work, because it has an important and diverse role. The commission and the timber trade could do much for Wales. We import £7.5 billion-worth of wood materials and manufactures, and export £2.3 billion-worth. That leaves a gap of more than £5 billion. That shows the potential, and if Wales can exploit that, it will be an important boost to the Welsh economy. My fears about changes to the Forestry Commission centre on the factionalism that may break out if the Welsh assembly pursues one route when a national strategy dictates that the Forestry Commission will pursue another route. We must ensure that both bodies work together absolutely, with one policy and with the same priorities. The Forestry Commission's funding arrangements will be vital. The Secretary of State for Wales said that Ministers are currently talking about how much money will be provided in the block grant, part of which the assembly will provide to the Forestry Commission. However, we have been given no assurances on how much money will be earmarked for the Forestry Commission. Moreover, the money that is provided to the assembly for the commission will be only notional, and it will not be ring-fenced. The Welsh assembly will decide what priority to place on the Forestry Commission's work. 4 pm The Welsh assembly may not necessarily say, "The Forestry Commission is an easy target; we'll cut its money." The assembly—perhaps because of the Committee's debate on sustainable development, on 25 February—may take the opposite view, and decide that the Forestry Commission's work is vital. It may therefore decide to spend more money on the commission than the Treasury had originally notionally allocated. We must get the Forestry Commission's funding right, especially as so many competing demands will be placed on the assembly. As hon. Members have said during the Bill's passage, the assembly will have to determine how to order its priorities. Last Wednesday, for example, in the Committee debate on the assembly's role in promoting business in Wales, "business" was interpreted very widely. The right hon. Member for Llanelli (Mr. Davies) also mentioned the tin can that will be rattling outside the Welsh assembly, and the inevitable calls that the assembly will face for all sorts of money for all sorts of worthy projects. The Forestry Commission will be only one of those worthy projects. There is enormous ignorance of the Forestry Commission's good work, of the depth of its remit and of the vital nature of its role. In future debates on whether money should go to education, to social services or to the Forestry Commission, my fear is that the commission will be an easy target for Members of the Assembly, and that it will suffer cuts. Such cuts cannot be made currently, because the national budget allocates the commission's funds. After devolution, because of competing interests, the assembly could decide to downgrade the Forestry Commission's role. I assume that the Secretary of State is involved in negotiations on the funding arrangements. We know that there will be—although the Bill does not mention it—a type of Barnett formula in Wales, which the Secretary of State has assured us will apply after devolution. Will such a Barnett-type formula be devised to fund the work in Wales of the Forestry Commission, so that the definite needs of Wales are emphasised, and the funds allocated to the Forestry Commission are not simply divided into three?

Ron Davies (Labour, Caerphilly)

The hon. Gentleman's earlier interpretation is broadly correct: the assembly will have responsibility for deciding whether to increase or decrease the resources going to forestry. There is nothing exceptional in that responsibility, as that is the importance of devolution. Furthermore, the assembly will occasionally want to reassess its priorities in, for example, education, the environment and the health service. Any Secretary of State currently has that discretion, and it is one that the assembly will enjoy. He was therefore correct in that assertion. On the hon. Gentleman's latter, specific question, I am currently in the process of discussions with my colleagues in the Government to determine how the Forestry Commission's budget can be disaggregated. I will want to ensure that the Welsh assembly gets its fair share of the disaggregated Forestry Commission budget once the new financial arrangements apply. It will then be a matter for the Forestry Commission to decide whether, by using additional money from the block grant, to supplement the resources that will provided to it by disaggregation of the existing Forestry Commission budget.

Nigel Evans (Conservative, Ribble Valley)

I am grateful to the Secretary of State. He will appreciate that we in Wales are interested in ensuring that we get our fair share. I was wondering whether special needs, tasks or projects within Wales would be able to get more. Will there be some form of Barnett formula after devolution?

Ron Davies (Labour, Caerphilly)

I am sorry to interrupt the hon. Gentleman yet again, but his two points are inconsistent. He cannot suggest that there should be a Barnett formula and then ask for special consideration. The two positions are mutually exclusive. However, I can assure him that, during the discussions about the disaggregation of the budget, I shall press as hard as I can to ensure that the particular interests of Wales are reflected in the financial settlement. I share the hon. Gentleman's great admiration and respect for the Forestry Commission, and attach the same importance as he does to its work. It has done a superb job over the years. I am glad that it is now following better policies than it did several decades ago, although not necessarily in the past decade.

Nigel Evans (Conservative, Ribble Valley)

Under several Governments, I presume. It is important that the Forestry Commission gets it right, but it needs resources. The hon. Member for Linlithgow (Mr. Dalyell) mentioned his concern about his constituents who are employed by the Forestry Commission. The Secretary of State said that there would not necessarily be any reduction in staff because of the changes. I wonder whether additional staff will be required, because of the way the budgets will be allocated and because there will be more of a regional bent to the way in which the Forestry Commission will work in future. If extra staff are required and the resources are not increased, its task will not be as well fulfilled. I would be interested to know whether, as a result of the changes, the Forestry Commission is likely to need extra staff. I spoke earlier about the goal of 50 per cent. more woodland by the year 2050. Is it the Secretary of State's understanding that the same targets will exist? Will the Welsh assembly be able to alter that target to a greater or lesser extent?

Ron Davies (Labour, Caerphilly)

indicated assent.

Nigel Evans (Conservative, Ribble Valley)

We are dealing with a vital chunk of devolution, and a major change. We want to ensure, therefore, that the assembly is given not only the resources, but the knowledge of how important it is that the money is not channelled off to meet other priorities. The assembly must understand the importance of using the money it will receive for the particular task at hand. The Secretary of State also mentioned sales—whether some of the proceeds could be given back to the Forestry Commission to use in pursuit of its targets within Wales, whether the assembly could take any of that money, and how much could be retained by the Treasury. Will he clarify exactly how the system will work? It all sounds very vague, and as if the Treasury will be able to step in. We know that the demands on the Treasury are constantly rigorous, and that it is always keen to ensure that it gets its fair share of the money. How will it be worked out? Will it be through a concordat or a general understanding, or will there be a more specific definition of what is a major sale and what is a minor one? Obviously, the Forestry Commission is constantly buying and selling, so we are talking about rather large sums of money. Of course, privatisation would involve an enormous sum of money. Will the Secretary of State say a bit more about the various roles and where the money will end up? Could the proceeds of sales be siphoned off from the Forestry Commission to the assembly? If so, given the priorities that the assembly will set itself, it may wish to use some of the money for other projects, so it would not be reinvested into the Forestry Commission's tasks and targets.

Ron Davies (Labour, Caerphilly)

It is probably best to deal with these issues as we go along, rather than trying to deal with them all at the end—if that is all right with you, Mr. Martin. The hon. Gentleman seems to be arguing that we should ring-fence the Forestry Commission budget. It would then be both a ceiling and a floor. That would merely fix in time the spending pattern for the Forestry Commission, making it difficult for the assembly to embark on new policies or change its priorities. If the forestry budget should be ring-fenced, why not those for health, the Welsh Development Agency or education? The purpose of devolution is to allow the assembly to change its priorities from time to time, reflecting local circumstances and its political will. I had an exchange about funding earlier with several hon. Members. If the Forestry Commission wanted to dispose of assets and recycle the money as part of its annual operations, it would be able to do so as at present. If, on the other hand, there was a major privatisation, it would be open to the Treasury to recover part of the money because it reflected previous Great Britain investment. I cannot give the hon. Gentleman a precise definition of what would be a major privatisation and what would be considered annual operations. We shall have to make such judgments as we go along.

Nigel Evans (Conservative, Ribble Valley)

I am grateful for that response. The Secretary of State will understand why we are asking such questions. As my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) said earlier—the response to his point reinforced it—after devolution we shall have limited powers to question the Secretary of State for Wales on matters relating to the Forestry Commission in Wales. I suspect that we shall usually be ruled out of order because our questions will be considered not the responsibility of the Secretary of State. It is right that we should ask questions now, because the opportunity to do so will be curtailed. There is a fear that, after devolution, if the assembly gets part of any money raised from sales, it may spend it elsewhere, particularly when budgets are tight. The assembly will not have direct tax-raising powers, but here we have the possibility of an indirect tax. The assembly may be keen to award itself other indirect tax-raising powers.

Ron Davies (Labour, Caerphilly)

The hon. Gentleman is misconstruing what I said. I made it clear that, if the forestry estate was rationalised or certain sales were made to fund other forestry projects in Wales, the matter would remain within the assembly's discretion. The hon. Gentleman is suggesting that there will be privatisation, with the proceeds used to fund other services. I do not expect that. The hon. Gentleman should not raise the spectre of the Welsh assembly selling off the forestry estate in Wales wholesale to fund its other priorities. That is not what I said.

Nigel Evans (Conservative, Ribble Valley)

The Secretary of State likes to look at the devolution proposals through his rose-tinted spectacles, believing that everything will be fine and there will be sunshine. Expectations about what the assembly will do must already be high in Wales. It is right to consider worst case scenarios in Committee, to ensure that devices are in place to prevent them from coming about. That is all we are asking of the Secretary of State. We want him to clarify his interpretation of the Bill to ensure that it is carried out when devolution takes place. The Forestry Commission is doing a good job. I have no problems with the way in which it is performing its functions in Wales, Scotland and England. It is fulfilling its targets with its limited budgets. The Secretary of State's passion for devolution is evident, although he is being rather coy—as my right hon. Friend the Member for Devizes (Mr. Ancram) said—about whether he will run for the assembly. Such a description does not normally sit easily with him. We need to be certain why, if the Forestry Commission is not broken, we trying to repair it.

Denzil Davies (Labour, Llanelli)

I did not intend to speak, but I was intrigued by my right hon. Friend the Secretary of State's mention of disaggregating the Forestry Commission's budget. I think that that is what he said; he certainly used the word "disaggregating". I am totally ignorant about the Forestry Commission's finances, but I was surprised that it is necessary to disaggregate its budget. I should have thought that the Welsh Office would already know how much the Forestry Commission spends in respect of Wales—perhaps I am wrong. If the Welsh Office does not know, the Secretary of State will have to conduct the disaggregation exercise every year in order to arrive at a hypothetical disaggregated figure, which will be added to the rest of the block grant and handed to the assembly. If I am right—I could be completely wrong—the assembly would not, in this rather convoluted procedure, hand back the hypothetical disaggregated sum to the Forestry Commission. I do not know. The assembly might or might not hand back the equivalent of the disaggregated hypothetical sum. Is that the position?

Ron Davies (Labour, Caerphilly)

indicated assent.

Denzil Davies (Labour, Llanelli)

My right hon. Friend is indicating that I may quite correctly have reached such a convoluted end. I find it strange that, at the moment, the Welsh Office does not know how much the Forestry Commission spends or what its budget is for Wales. Who—I ask, perhaps rhetorically—decides the Forestry Commission's budget? Presumably, it is decided by the Treasury at the moment. Is it decided in negotiation between the Treasury and the Ministry of Agriculture, Fisheries and Food? My right hon. Friend said that he was responsible for the Forestry Commission in Wales.

Ron Davies (Labour, Caerphilly)

The essence of my right hon. Friend's case is absolutely correct. Forestry Commission operations in Wales are not funded at the moment out of the block grant. They are subject to a separate vote, which is negotiated with the Treasury by the respective forestry Ministers. His argument is correct that, post devolution, the forestry budget will be disaggregated. The block will increase, and that will form the basis of any future decisions that the assembly might want to take in funding forestry.

Denzil Davies (Labour, Llanelli)

Perhaps one is playing with words. The budget must already be disaggregated if the Secretary of State for Wales is one of the three Ministers who negotiate with the Treasury on the total Forestry Commission budget. The Welsh Office must know what part of that relates to Wales, otherwise there would be nothing to negotiate. There is no need to disaggregate the budget because it is already disaggregated.

Ron Davies (Labour, Caerphilly)

Certain elements of the Forestry Commission's operation may or may not relate directly to Wales. That matter will have to be discussed. Indeed, it is the basis of current discussions. I cannot give my right hon. Friend a precise figure, because we have not yet arrived at the appropriate adjustments that need to be made. I shall try to help the Committee by making it clear that, during the current financial year, the Forestry Commission expects to spend £27 million in Wales and generate income of £29 million. In addition, there is the appropriate Welsh share of Great Britain expenditure and income, which has to be calculated. The Welsh share of net GB expenditure is nearly £30 million.

Denzil Davies (Labour, Llanelli)

In effect, the budget is £27 million-plus. That is the figure about which—possibly—there is some doubt, although the Welsh figure is fairly clear. Will the "plus" figure also go to the Welsh assembly, which will decide whether to hand it back to the Forestry Commission? In effect, the Welsh assembly could pocket the GB figure. Is that what my right hon. Friend is saying?

Ron Davies (Labour, Caerphilly)

That is the effect of it, yes. My right hon. Friend says that the Welsh assembly could pocket the money, but it could not do so and simply walk away. As he knows, the money will be in addition to the block, and the assembly will then have to decide its spending priorities. It will be for the assembly to decide whether forestry is a higher or lower priority and whether the programmes will vary from year to year.

Denzil Davies (Labour, Llanelli)

I do not want to pursue the point, but I find it rather bizarre that the £3 million, being a "GB" or British figure, will be handed over to the Welsh assembly. No doubt the assembly will do its job properly and not abuse its position, but this point highlights some of the difficulties in dealing with a Great Britain body that is based in Scotland and which will be answerable, in part to the Scottish Parliament, in part to a Minister in England and in part to the assembly in Wales. One can only hope that matters will work out all right.

Oliver Letwin (Conservative, West Dorset)

After that fascinating exchange about the financial side, I wish to raise what I suspect the Secretary of State will describe as a legalistic point, but one that is of considerable interest to Opposition Members, as it is part of a general pattern. Incidentally, I am still waiting for the Secretary of State to write to me about the errors that he made during our previous Committee sitting. Will the Secretary of State, either now or when he winds up the debate, tell us whether the order-making power given in paragraph 1(1) of the new schedule is one that could, at least in theory, be transferred to the Welsh assembly through a transfer of functions order or a subsequent version thereof? If so, is it true that if that were to happen—even if it is not the current Government's policy—the Welsh assembly would itself have the ability to make orders in respect of the Forestry Commission? If so, how would that relate to the powers of the Scottish Parliament in respect of the Forestry Commission and to the activities of the UK Parliament?

Rhodri Morgan (Labour, Cardiff West)

I welcome the new clause, the new schedule and the Government amendments, because it seems to me that one could not fail to devolve forestry to the Welsh assembly. It would have been a great mistake had forestry and the funding responsibility for it not been devolved.

Nigel Evans (Conservative, Ribble Valley)

indicated dissent.

Rhodri Morgan (Labour, Cardiff West)

I see the hon. Gentleman shaking his head—I take it that he does not believe that forestry should be devolved in the way proposed in the new clause. Because of forestry's intimate relationship with agriculture and rural life generally and because of its impact on the sustainability of rural life, responsibility for dealing with agriculture, forestry, tourism and other aspects of rural life should be devolved to the assembly, so that those matters can be dealt with according to the way in which the assembly sets democratic priorities. My first point relates to the one raised by my right hon. Friend the Member for Llanelli (Mr. Davies). It would be useful to know when the disaggregation exercise will be completed. I do not know whether it will be done before the Bill goes to another place, or whether it will be carried out in connection with proceedings in another place, but, like my right hon. Friend, I should like to see the figures. The Committee should know what the present funding position is in respect of the Forestry Commission's various responsibilities, both those that are clearly a Wales responsibility and those that are the Wales share of the wider United Kingdom or Great Britain responsibility. That is because of the switch taking place in the Forestry Commission's work and within forestry generally—from the giant monocultural plantations that formed the basis of the commission's work for 60 or 70 years, to the microforestry work that it increasingly emphasises nowadays. That change of emphasis is designed to achieve greater sustainability and to assist farmers to diversify from, for example, sheep farming in the uplands to being able to harvest a proportion of each year's growth in hardwood forests. The switch from big monocultural plantations to the harvesting of natural growth in small coppices—a switch, therefore, from softwoods to hardwoods—is important, and requires a totally different approach not only to funding, but from Forestry Commission officers, in terms of the intimacy and local control that they need in working with farmers, landowners, local conservation groups and community forestry groups, for example. We should also consider the job consequences of that switch and the number of jobs that can be created by harvesting only the natural growth of local hardwoods. If those woods are fed—through local sawmills or even, as I have seen in hardwood forests in south Wales, mobile sawmills—into furniture and similar industries, a massive number of jobs could be created in rural areas, to replace some of the jobs that are threatened in upland farming and other rural occupations. Will my right hon. Friend the Secretary of State say what the implications of the switch from soft to hardwoods—and from the big to the small scale—will be for the funding questions to which he referred and the disaggregation exercise? We all hope that that exercise will be finalised as soon as possible, so that, as has been said so many times in this interesting micro-debate, we have the information that we need.

Ron Davies (Labour, Caerphilly)

I am grateful for the comments of my hon. Friend the Member for Cardiff, West (Mr. Morgan) because, as the hon. Member for Ribble Valley (Mr. Evans) said, what happens to forestry is an important part of devolution. My right hon. Friend the Member for Llanelli (Mr. Davies) properly drew to the Committee's attention the difficulties that could arise. The Forestry Commission is a unique body that is, by and large, answerable for policy to the House of Commons through the Secretary of State for Scotland, as it is based in Scotland. By establishing a Scottish Parliament and a Welsh assembly, we shall create an asymmetrical structure, so we need to ensure that there are appropriate arrangements in Wales, just as our colleagues in Scotland will have to make appropriate arrangements there. I believe that the new clause, the new schedule and the amendments will enable us to have the best of all worlds. We shall retain the overall advantage of the Forestry Commission's status as a Great Britain body, but there will be an opportunity for greater flexibility to reflect the priorities in Scotland and Wales. In response to the question asked by my hon. Friend the Member for Cardiff, West, it is likely that the new financial arrangements will apply from 1 April 2000, so we have some way to go before they are finalised.

Tam Dalyell (Labour, Linlithgow)

I think that there is a real difficulty. Some of us have had discussions of a fairly confidential nature—no one wants to be embarrassed, and I am honestly not out to make trouble—and we know that there are real difficulties from the Edinburgh perspective about how the arrangements will work. Will the Forestry Commission put a candid paper into the Library to make public, before Report, its view on these difficult technical questions about investment and other aspects of its work?

Denzil Davies (Labour, Llanelli)

My hon. Friend will have to take up that question, if he feels it appropriate, with my right hon. Friend the Secretary of State for Scotland, who is the lead Minister on these matters. We need not make too much of this, as the functions of the Forestry Commission will not change, and the powers that I currently have to influence those functions will be transferred to the assembly. After devolution, the Scottish Parliament may want to exercise its powers of primary legislation to bring about more fundamental changes, but we cannot properly address that in our consideration of the Wales Bill. My hon. Friend should pursue his concerns elsewhere, not in this forum—although he should not for a moment take that to mean that I am encouraging him to pursue my right hon. Friend the Secretary of State for Scotland on the matter. My hon. Friend the Member for Cardiff, West rightly referred to the changing emphasis of the Forestry Commission, with its shift from a monoculture of softwoods to more varied hardwood production and the introduction of more small-scale enterprises. I strongly endorse those policies. It would be for the assembly to discuss with the commission the policies that should be pursued. The assembly could influence those policies by direct discussion with the commission and, in extremis, by exercising jointly the powers of direction that I currently hold. By its ability to fund the commission, it could ensure that its priorities were properly adopted.

Richard Shepherd (Conservative, Aldridge-Brownhills)

Will the Secretary of State give way?

Denzil Davies (Labour, Llanelli)

I shall happily give way to the hon. Gentleman, if he will first let me deal with the points that have already been made. I was trying to wind up the debate, not the hon. Gentleman.

Richard Shepherd (Conservative, Aldridge-Brownhills)

The Secretary of State is not winding me up.

Denzil Davies (Labour, Llanelli)

I am glad to hear that. The hon. Member for Ribble Valley spoke about the functions of the Forestry Commission. The new clause and our other changes will not affect those functions. As I have explained, an order under schedule 1(1) will provide for the commission's functions to be exercised separately, and differently, in Wales, but the functions themselves will remain. The policies that the commission follows in Wales will have to be discussed with the assembly. The funding that the assembly provides will reflect its priorities.

Richard Shepherd (Conservative, Aldridge-Brownhills)

Am I correct in understanding that the assembly can, if it deems it appropriate, reduce the block grant from £27 million or £30 million to £20 million, for instance, so that the Forestry Commission's objectives, which were the basis of the original grant, could be frustrated by a cut decided on by the assembly?

Denzil Davies (Labour, Llanelli)

I would have given the hon. Gentleman a far more robust response if he had asked whether the assembly could choose to reorder its priorities and increase the amount available to the Forestry Commission. He would have been entirely correct in that suggestion. That is the essence of devolution. In pursuance of policies to support and rebuild the countryside—we are dealing as best we can with a terrible crisis created by the legacy of 18 years of neglect—it may well be that the assembly will want to devote more money to forestry. If that is what the hon. Gentleman is asking, the answer is yes. The assembly will be able to vary the amount going to forestry.

Nigel Evans (Conservative, Ribble Valley)

The Secretary of State said that the Government wanted to do as much for the countryside as they possibly could. Was he on the march yesterday?

Denzil Davies (Labour, Llanelli)

My Sunday arrangements are a matter for me. I do not propose to tell the Committee, because it may be that I was doing far more interesting things than coming to London to demonstrate on behalf of the countryside. The hon. Gentleman will know that I am a country man: I was born and have lived all my life in the countryside. I venture to suggest that, if the Government of the day had listened to the warnings that I and others gave them as far back as 1989 about bovine spongiform encephalopathy, for example, they would not have got into such a dreadful mess and wasted £3.5 billion of public money. I have a good understanding of the countryside dimension. I believe that it is important that we follow a holistic approach, and I have no doubt whatever that the Welsh assembly will pull together the strands that are necessary to ensure that we have a vigorous policy to address the problems of the countryside. The hon. Member for West Dorset (Mr. Letwin) raised a specific point. I was unaware of the fact that he had raised matters earlier to which I have not yet responded, but I assure him that I shall make inquiries and, if my officials have been negligent, I shall certainly not be negligent myself. The hon. Gentleman will understand that. If my officials have been negligent in giving him a precise answer, I shall remonstrate with them whole-heartedly. I have no doubt that as I speak scribes are looking back at each and every intervention by the hon. Gentleman in the debate and ensuring that he receives a reply. Of course, he is correct that if I fail to provide him with satisfaction, that is my responsibility, not my civil servants'. However, they will know what fate will befall them if they put me in that unfortunate predicament. The order-making power in new schedule 1 could not be transferred to the assembly because, under clause 23(3), only functions in part VI of the Bill can be transferred. As the power would, in all likelihood, be used only once to set up the arrangements that I have described for forestry in Wales, there would be no need for such a transfer.

SUSTAINABLE DEVELOPMENT

ABOLITION OF RESIDUARY BODY FOR WALES

Ron Davies (Labour, Caerphilly)

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

Ron Davies (Labour, Caerphilly)

The White Paper made clear the intention to wind up the Residuary Body for Wales before 2000. The view was taken that the Local Government (Wales) Act 1994 provided the necessary legal framework to effect the wind-up before the assembly was established. However, further consideration has concluded that the powers in the 1994 Act do not allow the certainty that will be necessary to wind up the residuary body in the time scale necessary. The issue is not a point of controversy between the Government and the Opposition, and new clause 29 and Government amendment No. 515 are intended to provide the necessary certainty. From the outset, I wish to make it clear that the residuary body and the local authorities in Wales agree that an early wind-up is desirable. Following the local government reorganisation of 1996, the residuary body inherited 21 properties, of which only six remain to be disposed of. The residuary body hopes to sell them in the coming months, although there is no guarantee that that will happen. None the less, new clause 29 and Government amendment No. 515 are designed to ensure that the residuary body can be wound up by 1 April 1999, irrespective of whether it still has any unresolved property disposals. Furthermore, the residuary body will be required to submit a wind-up scheme that includes proposals for the subsequent transfer of property within three months of the Bill being enacted. Local authorities will be consulted on the residuary body's draft scheme before any wind-up order is made. The new clause does not stipulate how, at the wind-up, property vested in the residuary body should be disposed of, and we await its proposals in the wind-up plan on whether the properties, if unsold, should be transferred to an appropriate local authority by agreement or, in the absence of such agreement, by order.

Nigel Evans (Conservative, Ribble Valley)

As the Secretary of State says, the new clause is not controversial. He referred to the six properties that will remain in the hands of the residuary body. Is there any controversy about any of those six properties? Does he expect any problems with their sale or transfer to local authorities? The Secretary of State said that he had talked with the local authorities and found that they were keen for the residuary body to be wound up early. In his discussions, did he encounter any reservations about the possibility of the residuary body being wound up? Has he had talks about the residuary body—gosh, that is difficult to say; the sooner it is wound up, the better—and, if so, what representations have been made to him about the early winding up?

Ron Davies (Labour, Caerphilly)

I have had no talks with the residuary body, but my officials have and, to answer the hon. Gentleman's question directly, I am given to understand that both local government and the residuary body are anxious for the residuary body to be wound up. The hon. Gentleman asked whether any problem attached to the remaining properties. I hesitate, when talking about property in Wales, to give him a categorical statement that there is no unresolved problem, but he asked specifically about the six properties that remain. They are the staff club at Westgate street in Cardiff; Greyfriars house and offices, Cardiff—which I understand are the subject of some offers at the moment; Nos. 3 to 5 Goring road, Llanelli; unit 7, Castle park, Flint; phase IV of county hall, Mold; and No. 3 High street, Caernarfon.

DOCUMENTARY EVIDENCE

Ron Davies (Labour, Caerphilly)

I beg to move, That the clause be read a Second time. As a body corporate, under common law the assembly will automatically be entitled to a seal. The new clause relates to the significance that courts attach to documents submitted in evidence and bearing the assembly's seal. Such documents are to be regarded as properly made unless the contrary is proved. There have been many similar clauses in recent legislation, including equivalent clauses in the Welsh Language Act 1993 and the Local Government (Wales) Act 1994.

PRIVATE AND LOCAL LEGISLATION

Dafydd Wigley (Plaid Cymru, Caernarfon)

I beg to move, That the clause be read a Second time. The new clause relates to the issue of private legislation and is, to some extent, a probing new clause, if that term may be used. Clarification is needed on several questions regarding private Bills—I emphasise that we are talking about private Bills, not private Members' Bills. I imagine that the answer to the first question will be yes. Does the assembly, as a geographically defined body within the United Kingdom, have the right to promote private Bills, as would a local authority or any other body, and the right to oppose private Bills? The second question is: can Wales, as a unit, be considered as an area for which it is appropriate to initiate private Bills—can the assembly initiate private Bills that apply to the whole of Wales but which would need to pass through the private Bill mechanisms in the House? The third aspect of the new clause concerns the extent to which the assembly may deal with private Bills. In the fairly recent past, fairly controversial private Bills from Wales have taken hours and hours on the Floor of the House. The Cardiff Bay Barrage Act 1993 is a perfect example of legislation that should be dealt with in the assembly instead of swallowing time on the Floor of the House of Commons. There are less controversial examples—such as the Porthmadog harbour revision order that affects part of my constituency. From time to time, all hon. Members become involved with such legislation. The hon. Member for Conwy (Mrs. Williams) is in the Chamber. A few years ago, a Bangor Market Bill passed through the House by way of the private Bill procedure—and no doubt another resembling it will do so again in future. 4.45 pm Such matters need not be dealt with in the House of Commons; it should be possible to deal with them in the assembly. However, the Houses of Parliament have a very tight procedure for dealing with private Bills and I am not convinced that the Government intend to make it easier for all that procedure to take place in the assembly. There is some parallel with the order-making facility that is within the assembly's purview. The fact that the assembly may pass secondary legislation gives it a fair amount of power. If the Government are worried about the amount of power that may be transferred and about the need for checks and balances on the use of that power, I argue that it is no more radical to transfer to the assembly the power to deal with private Bills than to give it order-making powers because, as we heard earlier in the Committee, the power to pass secondary legislation is substantial. Those are the three aspects of the new clause. We do not intend its wording to be wide enough to cover all three adequately. Our intention is to discover what will be the role of the assembly when dealing with private legislation and to express the hope that it will be possible to develop the assembly into—if it is not so from the start—a body that can deal entirely with these matters. The time of the House of Commons should not be used on matters that are essentially local and should be dealt with by people from Wales, in Wales.

Oliver Letwin (Conservative, West Dorset)

I shall briefly ask the Secretary of State a question that is in line with the probing new clause. In the context of the developing argument about the legal status of the National Assembly for Wales, it would be interesting to know whether the Secretary of State believes that, in the absence of such a new clause—although the right hon. Member for Caernarfon (Mr. Wigley) may disagree with me, I think it likely that the Government will not accept it—the vires exist for the assembly to promote private legislation. When I inquired, the Clerk in the Private Bill Office told me that any individual in the United Kingdom can promote a private Bill without having any special rights, duties or powers. Is the National Assembly for Wales, in that sense, a legal person? Does it have, therefore, the right to promote a private Bill and, if so, what would be the scope of that right and which moneys would it deploy in its promotion? Would the assembly have the right, in promoting such a Bill, to use moneys that the Secretary of State had allocated to it for its general purposes? If so, would there be any constraint on that, or might the assembly spend 100 per cent. of its budget on the promotion of one private Bill? Finally, to illustrate why I ask the extreme and apparently ludicrous question about the 100 per cent., if the nature of the private Bill in question were very special—if it were one which the right hon. Member for Caernarfon and his colleagues might want to be promoted, relating to the governance of Wales—would it be debarred by some means, or would it have to be debarred only by the ordinary processes of the House in considering private Bills?

Ron Davies (Labour, Caerphilly)

I thank the right hon. Member for Caernarfon (Mr. Wigley) for opening the debate and I am pleased to tell him that the Government accept the broad principle of new clause 7. I hope that we will return at a later stage with an appropriate new clause because, as he suggested, the wording of his new clause is somewhat defective. The Welsh Office has previously promoted at Westminster legislation that would have been local legislation if it had not been promoted by the Government; examples are the Conwy Tunnel (Supplementary Powers) Act 1983, the Cardiff Bay Barrage Act 1993 and possibly the Caldey Island Act 1990. We do not want there to be any doubt about the power of the assembly to promote or oppose essentially local legislation, as the Secretary of State for Wales has done in the past. I cannot give the hon. Member for West Dorset (Mr. Letwin) a direct answer to his question at this moment, but it is because we want to avoid doubt that the Government are minded to accept the thrust of the new clause 7. The right hon. Member for Caernarfon asked whether Wales would be regarded as an acceptable geographical entity for the purposes of promoting private legislation. The answer is yes, I understand that that would be accepted. Acceptance of the thrust of the right hon. Gentleman's case would not confer on the assembly the power to make primary legislation. The assembly could promote only a private Bill in Parliament. The Government are considering further the precise terms of their new clause. For instance, it may be desirable to require a decision to promote or oppose local legislation to be supported by more than a simple majority of the assembly. We are looking into such matters and if the right hon. Gentleman wishes to make representations during this brief debate or subsequently, I shall listen carefully to them. We must also consider the interaction with the Transport and Works Act 1992. The right hon. Gentleman referred to the many hours of happy debate that the House had on the Cardiff Bay Barrage Bill. Those proceedings have largely been overtaken by the Transport and Works Act 1992. We must ensure that the assembly could not promote an order for development under that Act and approve it itself. We will ensure that the new clause is technically correct in that respect. In view of the undertakings that I have given, I hope that at the appropriate time the right hon. Gentleman will withdraw the motion.

Dafydd Wigley (Plaid Cymru, Caernarfon)

I am grateful to the Secretary of State and I am glad to have had positive responses from him on two of the matters that I raised. At the end of his remarks, he touched upon, but did not clarify, the third. The right hon. Gentleman acknowledged that the assembly is a developing body. To what extent is it possible—and to what extent is the possibility constrained—for the assembly to develop into a body that not only promotes Bills, but can dispose of them? For example, local authorities in Wales could propose their private Bills to the assembly if the Government deemed that to be appropriate. The order-making facility in the Bill—in clauses 22 and 141, I think—may indeed allow that to happen. I realise that there must be checks and balances in the process of private legislation, that there may be private interests that need to be balanced and that there is a role for the House of Lords as well as the House of Commons. None the less, it may well be that the assembly could handle some aspects of private legislation from within Wales—that from local authorities, for example—without their needing to come through to Westminster. What is the Government's thinking on that?

Ron Davies (Labour, Caerphilly)

We shall have to consider the matter carefully before we table the new clause that the right hon. Gentleman seeks. The problem is that private legislation is effectively primary legislation. I made it clear that we cannot through this mechanism confer on the assembly the power to make primary legislation. I said earlier that such a provision would have to be made by the promotion of a private Bill in this Parliament. I understand that it would be largely a matter for the House authorities to decide whether a private Bill was an appropriate private Bill or whether it exceeded the provisions of this place for the handling of private legislation. I regret that I cannot give the right hon. Gentleman a precise answer on that point. We must examine closely the operation of the Transport and Works Act 1992. The assembly cannot use order-making powers under that Act to create de facto primary legislation. That is not the purpose of the Act and we will have to ensure that our new clause takes that into account. The hon. Member for West Dorset asked a fair question and I tried earlier to answer it. He asked whether the absence of new clause 7 would mean that the assembly would not have the power to promote private legislation. The assembly is a creature of statute and is given certain powers. That particular power is not conferred by the Bill, although there may be arguments about whether, de facto, the assembly could decide to do that. The Government have accepted the argument advanced by the right hon. Member for Caernarfon to avoid doubt. Once we have tabled our own new clause, there will be no doubt and the assembly will have the power to promote primary legislation. The answer to the hon. Gentleman's question about whether that would be in order in the present circumstances is that there is an element of doubt. Instead of prolonged debates about whether that can or cannot happen, the Government have decided to clarify the position by tabling their own new clause.

Oliver Letwin (Conservative, West Dorset)

I am grateful to the Secretary of State. His surprising response to the right hon. Member for Caernarfon (Mr. Wigley) invalidates part of my question, as the problem will not arise. I repeat the second part of my question. Under the Government's version of the right hon. Gentleman's new clause, will there be any limits on the expenditure that the assembly will be able to incur in promoting private legislation?

Ron Davies (Labour, Caerphilly)

I am trying to be helpful to the hon. Gentleman, but we do not have the new clause written yet, so I cannot tell him whether there will be such limits. Perhaps I can give him a steer. I do not think that it would be appropriate for us to lay down financial limits that should apply to the assembly in the exercise of its powers. The purpose of the Bill is to create the assembly and give it substantial powers to decide its own priorities. A pretty good case would have to be put to me for circumscribing the powers with a financial limit.

Dafydd Wigley (Plaid Cymru, Caernarfon)

I am grateful to the Secretary of State for his positive response to at least part of the thrust of my new clause. I hope that the Government's new clause will be ready for our consideration, otherwise we shall have to look to the House of Lords to deal with it and we shall have a further opportunity to consider the matter when the Bill returns to this House. I put it to the Secretary of State that given that there is a facility in the Bill to amend primary legislation by order in certain restricted areas—the Henry VIII powers, as they are fondly known, and we are all growing more knowledgeable about what Henry VIII could and could not do—

Michael Ancram (Conservative, Devizes)

On legislation.

Dafydd Wigley (Plaid Cymru, Caernarfon)

Of course. I would not for a moment suggest that heads should be rolling around the Chamber. Given that those powers exist, if that principle is applied to private Bills, as it may be applied to certain limited areas of public Bills, it might be a way of ensuring that the assembly can deal with certain matters without having to take up the time of Parliament on them. A range of issues arise and it is ridiculous that they become centralised to Westminster and take up the time of the House of Commons. In drawing up the new clause, the Government may bear that in mind and give the assembly the flexibility to get on with scrutinising and deciding on some local matters, without every single one having to come through Westminster. That would accord with the general tenor of the Secretary of State's approach to other aspects of the Bill. I hope that the Government will move in that direction at the appropriate time.

Ron Davies (Labour, Caerphilly)

I shall reflect on the points that the right hon. Gentleman has made. The Henry VIII powers to which he refers apply only to specified legislation that is stipulated in the Bill. I have listened carefully to the right hon. Gentleman's comments and, on the basis of our dialogue, I hope that he will withdraw his new clause and give the Government the opportunity to reflect on his case.

Dafydd Wigley (Plaid Cymru, Caernarfon)

I intend to do precisely that. We look forward to seeing the wording of the amendment or new clause that the Government will propose at the appropriate time. No doubt we shall return to our discussion of the detailed questions then. Although the Henry VIII powers apply to specific legislation, the powers of clause 141 are fairly broad with regard to existing legislation to the extent that they impact on certain matters dealt with in the Bill. Flexibility along those lines would be helpful not only to the assembly but to successive Governments in this place. The ultimate control of granting an order to facilitate matters may rest with Governments in Westminster. There is no question of the assembly's marching away with those powers, but it should have the flexibility to ensure that matters are dealt with reasonably in Wales rather than centralised in Westminster. On that basis, I beg to ask leave to withdraw the motion.

POWER TO CONDUCT REFERENDA

Cynog Dafis (Plaid Cymru, Ceredigion)

I beg to move, That the clause be read a Second time. Thank you for your patience, Mr. Martin. This new clause concerns the power of the assembly to hold referendums. I want to probe whether the assembly will have that power—I certainly believe that it should and I believe that the absence of primary legislative powers strengthens our case. The power exists already at varying levels of government. Parliament has the power to hold a referendum after it has passed an Act specifically for that purpose. The Scottish Parliament will also be able to do that as it will have primary legislative powers. At the bottom level of government, schedule 12, part IV of the Local Government Act 1972 confers the power to hold community polls on any question to be decided at a community meeting if the chair of the meeting consents and if the poll is demanded by at least 10 local government electors present at the meeting, or by at least a third of local government electors present at the meeting. That power exists at the basis of government at the community level. The power of unitary or county councils to hold referendums is more ambiguous. However, section 141 of the 1972 Act allows those bodies to conduct an investigation and collect information concerning the county or any part of it. I am told that that could involve holding a countywide poll in certain circumstances. A parallel power in Scotland enabled Strathclyde regional council to conduct a referendum in March 1994 on the Government's proposals for the water industry in Scotland. That referendum was influential in the debate about whether the Scottish water industry should be privatised. I believe that the national assembly should be given this power unambiguously—although it might not use it and, if it did, it would be used sparingly. It could be particularly useful in the kind of circumstances that arose in Scotland—if a future Government tried to impose upon Wales a set of policies that were unacceptable to Wales, which is not unheard of in Welsh history. For example, a future Government might wish to impose selection in the school system. We are currently debating education legislation that does that to a limited degree: it allows schools to apply to select pupils for certain subjects on the basis of aptitude. A future Government might introduce far more sweeping selection proposals. If the national assembly could not prevent the introduction of such policies through secondary legislation—it might not be able to do that because of the way in which the legislation is designed—it might express its objections. Although the Government should take the assembly's views into account, they might decide to override them. The Secretary of State of the day could claim to have public opinion on his or her side—it would not be the first time that politicians have claimed to speak for the people; they have an unpleasant tendency to do that. Even my colleagues are sometimes guilty of claiming to speak for the community at large. If a Secretary of State did that, a referendum would settle the argument by revealing the people's views. It would be a powerful tool for the assembly in establishing that it had a democratic mandate beyond that which it was given initially through the electoral process. I believe that the assembly should have that kind of power.

Nigel Evans (Conservative, Ribble Valley)

I can understand why the hon. Member for Ceredigion (Mr. Dafis) was rather reluctant to move new clause 11—particularly in light of what happened the last time there was a referendum in Wales. I am surprised and shocked that the hon. Gentleman is even considering using the referendum process as a device for testing public opinion. The last experience was not a tremendous or a ringing success, with only 50.1 per cent. of electors voting in that referendum. The hon. Gentleman has said that new clause 11 is probing and is designed to determine whether the assembly will be able to instruct that a referendum be held in Wales. In light of all the evidence that the hon. Gentleman produced in the local sphere, I suspect that the assembly will have that power. It will be interesting to see whether the Welsh assembly will be able to instruct that a referendum be held in Wales on a constitutional question. Will the Secretary of State respond to that issue? Does he believe that the assembly will have the power to hold a referendum in any event? The hon. Gentleman said that he thought that the power would be used sparingly—I suspect that that is because referendums are very expensive. We must also consider voter fatigue and the fact that electors do not like being asked to vote constantly. Under devolution, we are establishing an assembly with 60 politicians who will represent Welsh constituencies and regions. They will consider carefully events in Wales and will speak on behalf of Wales in that body. A referendum would devolve power away from the assembly to individuals. I suspect that the proposal is a product of new Plaid Cymru or Plaid Cymru Newydd—I know that the hon. Gentleman and his colleagues are having problems deciding what to call their party. If the assembly has the power to instruct that referendums be held, could Parliament instruct that those referendums be conducted following certain guidelines? For instance, Newport council has been criticised for spending £8,000 of taxpayers' money during the Welsh devolution referendum campaign on a leaflet publicising the yes vote. The Government have claimed that no taxpayers' money will be used to promote a particular side in a referendum campaign. However, I have reservations about copies of the White Paper that were sent to every letterbox in Wales, and I suspect that taxpayers' money was used to promote that case. Local authorities should not have the power to issue propaganda that is paid for with taxpayers' money from a very limited budget and delivered to every house in the area. It should be established at the outset that that should not occur. Perhaps referendums will be used to sort out problems between the Secretary of State for Wales and the First Secretary of the assembly, both of whom might say that they speak on behalf of Wales. If they are not one and the same person—they might be because of Cabinet responsibility—a referendum might be used as a device, whereby the First Secretary will say, "I am speaking for Wales, and I shall hold a referendum to prove that that is the case," against the policy of the Government of the day. Referendums might also be used to trample the wishes of minorities. We saw a fine example yesterday with the march through London, in which the Secretary of State for Wales did not take part; he said that he had better things to do on a Sunday than to march with rural people. Will minorities be protected to ensure that they are not trampled as a result of the wishes of the majority on country pursuits, including angling? Backed by a referendum, the majority might say that it should not take place in Wales. Referendums on Sunday closing used to be held regularly in parts of Wales. I think that only one part of Wales is dry on a Sunday, but I might be wrong. One area held out rigidly. Perhaps referendums will be held in parts of Wales. If the previous referendum in Wales proved anything, it was that 11 areas of Wales were in favour of devolution and 11 areas were against. The other important aspect is whether the assembly will have direct tax-raising powers. We know from earlier debates in Committee that the Liberal Democrats are not in favour of such a referendum. In fact, they tabled an amendment and said that they were not interested in another referendum in Wales. They thought that the assembly would be sensible enough to know when it was appropriate to use its tax-raising powers, without consulting the Welsh people. That is completely wrong. Scotland held a referendum on a Parliament and on whether it should have tax-varying powers. The electorate chose to have a Parliament and, to a lesser extent, but with a majority, for it to have such powers. In Wales, the referendum was on the establishment of an assembly without any tax-raising powers whatever. It would be completely wrong not to have a referendum to establish whether it should. I give a commitment to the Secretary of State and to the people of Wales that under no circumstances would tax-raising powers ever be introduced for an assembly in Wales by a future Conservative Government without the Welsh people stating that that is exactly what they wish.

Richard Livsey (Liberal Democrat, Brecon and Radnorshire)

I apologise for my absence at the start of the debate. My train should have arrived at 2.20 pm, but because of the railways policy of the previous Government—now the official Opposition—it arrived at 4.45 pm, so I deserve an official apology from them. This is an extraordinary state of affairs. The hon. Member for Ribble Valley (Mr. Evans) did not make in his recycled speech what I would describe as substantial points.

Dominic Grieve (Conservative, Beaconsfield)

I have to interrupt the hon. Gentleman. I seem to remember—he belongs to the same profession as me—being reminded during the early days of my career, "You shall take the train you need before the train you need to get to the court on time."

Richard Livsey (Liberal Democrat, Brecon and Radnorshire)

I shall not be diverted. The fact that the train was one and a half hours late speaks for itself. The new clause is an important aspect of the possibility of giving the assembly powers that could be useful. The hon. Member for Ribble Valley referred to the Sunday closing referendums that we used to have in Wales. We recognise that the clause on referendums applies only to secondary legislation; the assembly does not have the ability to make primary legislation. The assembly might seek a view on primary legislation to represent to Parliament. Parliament might wish to grant tax-varying powers to the assembly if that were the wish of the people of Wales. Westminster might enact primary legislation for that to occur. Is such a referendum possible? What provision is there to implement legislation that follows a referendum? If the Welsh voted overwhelmingly in favour of tax-varying powers, would Westminster have any power to implement such legislation? 5.15 pm There are other areas where referendums would be of great use in Wales. Perhaps county councils—particularly in the present climate with regard to the countryside—could be enabled to expand their smallholding schemes. It might involve enabling county councils to get hold of more capital to carry out such a policy. Would such a referendum be possible within a county in Wales, supported by the assembly? There are many issues where referendums could be useful. I, too, was on the countryside march yesterday, and proud of it.

Oliver Letwin (Conservative, West Dorset)

I shall, if I may, intrude a little further on the Secretary of State's good will and press slightly further the point raised by the hon. Member for Ceredigion (Mr. Dafis), who asked whether the Welsh assembly would have the power to conduct referendums in the absence of the new clause. I draw the Secretary of State's attention to clause 39, in which we are told that the assembly may do anything that is calculated to facilitate or is conducive or incidental to the exercise of any of its functions. Does clause 39 give the assembly the power to hold referendums? If it does not, it would be extremely interesting to know whether that is because of the disconnection between a referendum and the functions of the assembly, or whether it is because the holding of a referendum could not be regarded as calculated to facilitate such functions. In other words, is the problem that a referendum might not be connected with the functions allocated in the Bill? Or could a referendum be construed as not facilitating those functions? If the answer is the second rather than the first, there could be forms of referendum that would be legitimate under the Bill as drafted, whereas other forms might not be. It would help the Committee to know, as we have not enlarged sufficiently in Committee on the general scope of the powers in clause 39.

Gareth Thomas (Labour, Clwyd West)

I speak in opposition to the new clause. It is extraordinarily vague and has the potential for great confusion, disruption and mischief-making. It is not circumscribed in any way. [Interruption.]

Ron Davies (Labour, Caerphilly)

I am grateful for the robust defence of the Government's position, but I should tell my hon. Friend that our position is flexible on this matter. He should not dig a deep hole for me, which I might find it difficult to get out of.

Gareth Thomas (Labour, Clwyd West)

If my right hon. Friend had contained himself, I would have gone on to enlighten him, by explaining why I regard the new clause, as drafted, to be extraordinarily vague. It refers simply to an ability for the assembly to conduct a referendum … on any matter affecting Wales. That ability is not circumscribed and is not confined to secondary legislation within the areas of government devolved to the assembly. This is an extraordinary omission. As the new clause stands, it raises several crucial questions. The clause makes no reference to what rules should apply in relation to how the referendums should be conducted or to who will pay for them. It fails to take account of the important issue that the raison d'être for an assembly is to give Wales an elected voice through that assembly and through its elected representatives. Any attempt to use such a device as is proposed too speedily would, in my view, undermine the principle behind the assembly. That is why I object to the new clause.

Dominic Grieve (Conservative, Beaconsfield)

Will the hon. Gentleman give way?

Gareth Thomas (Labour, Clwyd West)

I have finished speaking.

Ron Davies (Labour, Caerphilly)

I am grateful to my hon. Friend the Member for Clwyd, West (Mr. Thomas) for making, as he normally does, a forthright and vigorous defence of the Government's position. It was a particularly well-considered speech. I wish to express my disappointment. I had hoped that the hon. Member for Ribble Valley (Mr. Evans) had learned something over the past couple of weeks. For the first one and a half hours of the debate the hon. Gentleman was the model of circumspection—he was considered and well researched and it was a pleasure to listen to him—but then he degenerated into his old diatribe, which we have heard time after time. At the end of it, I was not sure whether he was speaking in favour of the new clause or against it. It is worth reminding the Committee that new clause 11 is very brief. It reads: The Assembly may conduct a referendum in Wales on any matter affecting Wales. The contribution of the hon. Member for Ribble Valley was astonishing. He talked about fox hunting, local councils, Parliament instructing the assembly and taxing powers. I am rather surprised that he did not suggest that we should have a referendum on the right to roam. If anyone wants the right to roam enshrined in legislation, it would seem to be the hon. Gentleman, having roamed all over the place. He made no reference to the new clause. I wish to put one point to the hon. Gentleman forcefully. He reverted to type and talked about the referendum of 18 September, which the people of Wales won and which embarked us on this course of legislation. It was, of course, a consultative referendum. If the hon. Gentleman wishes to pursue the matter, let me remind him that the House of Commons voted by a majority of 231 on Second Reading to endorse the proposed legislation. That is what has given the present process of legislation real authority. We had an advisory referendum and the Bill has the vigorous, whole-hearted and full endorsement of the House of Commons. I hope that the hon. Gentleman will put aside, as he managed to do for the first one and a half hours this evening, all his worst prejudices against the people of Wales. I hope that he will accept—I know that the right hon. Member for Devizes (Mr. Ancram) would be the first to do so—and acknowledge how reasonable the Government are on these matters, and how flexible and emollient we are when the Opposition make any reasonable suggestion, whether it comes from the Liberal Democrats, Plaid Cymru or even the Conservatives. If there is a shred of substance or rationality in proposed amendments, I am prepared to consider them. I hope that the right hon. Member for Devizes will persuade his hon. Friend to acknowledge that the Government are exercising discretion and operating in the most delicate way possible in embarking on this process of legislation.

Nigel Evans (Conservative, Ribble Valley)

That is, of course, entirely in character with the way in which the Secretary of State conducts himself in the House of Commons. I was trying to be as reasonable as I possibly could in speaking to the new clause. However, I believe that the assembly would have the power itself to conduct a referendum. That is why I asked several questions, especially on constitutional matters. I am merely stating—it is a clear fact, irrespective of how we wish to rewrite history—that the most recent referendum held in Wales was not a great success, with only 50 per cent. of the people turning out.

Ron Davies (Labour, Caerphilly)

The hon. Gentleman may believe that the Bill empowers the assembly. He will forgive me if I choose to rely on advice other than that which comes from the Opposition Dispatch Box, from the hon. Gentleman. The hon. Gentleman's point was taken up by the hon. Member for West Dorset (Mr. Letwin), whose contribution I shall refer to before I take up the remarks of the hon. Member for Ceredigion (Mr. Dafis), who introduced the new clause. I refer the hon. Member for West Dorset to my reply to a previous debate, during which a similar question was asked. The assembly is a creature of statute. Unless power is spelt out in the founding, primary legislation, there must be a question whether that power can be properly exercised. That is my answer to the hon. Gentleman. The hon. Member for West Dorset asked about the general power that exists in clause 39. It may well be that that clause could be used if the referendum being proposed was in pursuance of other powers that the assembly was exercising. There is some doubt whether clause 39 would provide the authority for a referendum to be held, if it were being held on a matter not in pursuance of other powers that the assembly was implementing. I hope that the hon. Gentleman will accept that there is doubt whether at present the assembly has such power. I return to the hon. Member for Ceredigion. I do not want to give a commitment at this stage to return with a Government amendment relating to the new clause. However, the hon. Gentleman has raised a serious issue and I would like to examine further the points raised by the new clause. I have a number of concerns about the proposal that is at present before the Committee in the form of the clause. First, the clause does not make clear what electoral rules would apply for any referendum. The Government are determined to ensure that whenever a referendum is held, the rules are laid down clearly by the House of Commons and that they are followed scrupulously by the various electoral officers who are appointed to undertake the task. I want to ensure that any amendment that the Government were minded to bring forward would make clear what electoral rules would apply for any such referendums. The referendums that have been held in the United Kingdom on several occasions over the past 25 years have been authorised by an Act of Parliament, as was the case last year, which led to the Referendums (Scotland and Wales) Act 1997. If the assembly were to have a power to conduct referendums in Wales, it would need to be constructed in such a way that it did riot involve a power to make primary legislation. Paragraph 34 of schedule 12 to the Local Government Act 1972—the point raised by the hon. Member for Ceredigion about community polls in Wales—may be a precedent. That is one of the matters to which I want to give further consideration. Finally, any explicit power for the assembly to conduct referendums would have to be limited in some way to its range of responsibilities and make it clear that the assembly would meet the cost of holding them. I repeat that I cannot give a commitment—

Nigel Evans (Conservative, Ribble Valley)

The Secretary of State has just made the important point that the assembly would not be able to instruct that a referendum be held on an issue involving primary legislation. What would be the position if it were to have an advisory referendum as opposed to one involving primary legislation directly—that is, if it did not have that power anyway—and decided that it wished to have one on the independence of Wales, for instance? Would it be able to do that?

Ron Davies (Labour, Caerphilly)

With respect, the hon. Gentleman has missed my point. I was saying that referendums that have been held previously have been the result of primary legislation that has passed through this Parliament. If the assembly were to have a power to conduct a referendum, it would need to be constructed in such a way that it was not seen to be itself exercising a power which was similar to primary legislation. It is the process by which the referendum is authorised that is of concern, and not so much the question that would form the matter for public debate. I hope that that deals with the hon. Gentleman's point.

Michael Ancram (Conservative, Devizes)

Under the Bill as it stands, or under any amendment that the Secretary of State might table, would the Welsh assembly be able to instruct that a referendum be held on whether Wales should become independent or remain within the United Kingdom? Because of the reserved nature of constitutional matters in Scotland, there is genuine doubt about whether the Scottish Parliament would have such a power.

Ron Davies (Labour, Caerphilly)

There is no doubt in my mind that the Bill as drafted does not give the assembly authority to hold referendums, which is why I shall consider the point raised by the hon. Member for Ceredigion. I cannot give the right hon. Gentleman a precise answer, because this is not a Government amendment and I am not proposing such a power.

Michael Ancram (Conservative, Devizes)

Will the Secretary of State write to me on the matter?

Ron Davies (Labour, Caerphilly)

If I do not table an amendment, I shall certainly write to the right hon. Gentleman. However, if we decided not to table an amendment, it would not be necessary to clarify the position because there would be no opportunity to hold referendums. The principle must be that any referendum would have to be properly authorised and on a matter for which the assembly was responsible. If we were to go down that path and the Government were to propose such a power, there should be a debate about the matters on which the assembly should have the authority to hold referendums.

Oliver Letwin (Conservative, West Dorset)

Earlier, the Secretary of State mentioned the promotion of private Bills. Would any amendment that he tabled give the assembly the right to hold a referendum on its proposed promotion of such a Bill?

Ron Davies (Labour, Caerphilly)

I gave way to the hon. Gentleman to enable me to reply to a point that he made in that previous debate. I wrote to him on 26 January and 19 February, giving detailed answers to questions that he had asked. I hope that he will put the record straight and acknowledge that my civil servants and I have been diligent and forthright in answering the questions that he has quite properly asked.

Oliver Letwin (Conservative, West Dorset)

I referred not to those illuminating letters, for which I am duly grateful and to which we might return on Report, but to Wednesday's debates on the Welsh Development Agency. The Secretary of State said that if he was mistaken in what he was telling me, he would write to me. Subsequent researches have shown that he was mistaken, and I hope that he will write to me.

Ron Davies (Labour, Caerphilly)

If I undertook to write to the hon. Gentleman if I was mistaken, I shall do so, but I find such circumstances difficult to conceive. Nevertheless, I shall allow for the possibility and assure the hon. Gentleman that if I have made a promise, I shall keep it. The hon. Gentleman should not interpret my remarks as a commitment to table an amendment allowing for referendums to be held. I shall consider such a provision, but I specifically said that I am not giving any commitment. However, he made a fair point: if the assembly were to promote a private Bill, I should have thought that it would want to ensure that there was wide support for the measure. The assembly might decide that there should be a referendum on a private Bill, but that is a matter for the assembly. It is not for me to speculate on how the assembly would use its powers to hold a referendum or to promote private legislation, should it be given them. Such matters will have to be considered some way down the road. I repeat that I am not giving a commitment to table a Government amendment. However, I want further to consider those serious questions, and hope that the motion will be withdrawn.

Cynog Dafis (Plaid Cymru, Ceredigion)

The debate has been useful and I am grateful to the Secretary of State for his responses. I must place on record my undying and profound admiration for the hon. Member for Ribble Valley (Mr. Evans), who is exceptionally skilled in flogging a dead horse. I am not sure whether his skills are becoming more or less admirable, but he seems to have an unending capacity in this regard. He also has a remarkable ability for losing track of the substance discussion. My special skill is mixing metaphors, but we shall leave that matter to one side. The hon. Member for Clwyd, West (Mr. Thomas) questioned the appropriateness of referendums for making decisions. That is not what the debate is about: the question is whether the National Assembly for Wales should have such powers. Local bodies and bodies with responsibility for national legislation have such powers, so it would be wrong for the assembly to be unable to resort to referendums, should it wish to do so. I am glad that the Secretary of State will consider these matters further, and I urge him to do so. I had not envisaged the assembly holding referendums on major constitutional issues. The power should be used sparingly and only when necessary, to ensure that policies that it had advocated were acceptable in Wales and were strengthened by a democratic mandate. We have some confidence that the Secretary of State will bring forward a proposal. I beg to ask leave to withdraw the motion.

ADVICE FROM UNITED KINGDOM GOVERNMENT STAFF

Dafydd Wigley (Plaid Cymru, Caernarfon)

I beg to move, That the clause be read a Second time. The new clause deals with the important matter of the right of members of the Executive Committee of the assembly to obtain advice from staff of United Kingdom Government Departments, or other public bodies, on matters that are relevant to their functions. Existing, and particularly proposed, legislation on subjects whose executive and administrative dimensions have been devolved will have implications for Wales. A member of the Executive Committee who is in charge of, for example, education or health in Wales might need advice from UK governmental staff in London who are drawing up legislation that affects Wales.

Denzil Davies (Labour, Llanelli)

I am interested in the right hon. Gentleman's reference to UK Government Departments. He also mentioned education and health. As I understand it, no UK Government Departments will cover education and health in Wales.

Dafydd Wigley (Plaid Cymru, Caernarfon)

The right hon. Gentleman may want to move an amendment on Report to deal with that matter if the new clause is agreed to. As he well knows, legislation dealing with education in Wales will be passed at Westminster, not in our National Assembly for Wales. However, a member of the Executive Committee of the assembly will be responsible for the implementation of such legislation in Wales. Particular circumstances in Wales may bear on the framing, content and implementation of such legislation. I accept that the new clause may be defective because it refers to Government Departments, but it is a probing amendment. We are trying to establish whether the right to advice exists. I hope that the Secretary of State will be able to confirm that such a right exists, or that, if it does not, a provision along the lines of my new clause is needed. If it would better meet the requirements of the right hon. Member for Llanelli (Mr. Davies), a new clause could be tabled, worded differently from mine but at least going in the same direction. The Bill needs to be clear. Those charged with making decisions in the Cardiff Executive need to know where they stand. The door needs to be open. Subsection (2) of the new clause provides for the drawing up of "a concordat governing arrangements" for that approach to be possible. The concordat is necessary, for the simple reason that there may be an Executive in Cardiff of one political persuasion, and a Government in London of another political persuasion.

Denzil Davies (Labour, Llanelli)

That is devolution. The right hon. Gentleman wants devolution and a unitary state at the same time.

Dafydd Wigley (Plaid Cymru, Caernarfon)

This particular Member of Parliament would he very happy for all the law-making powers to be in our own national assembly in Cardiff, where the problem would not arise. The problem arises because of the split function, and the need to ensure that those in charge of framing legislation have some interface with those who must act on the implications of the legislation. My party would be very happy for the assembly to have the full powers available to the Scottish Parliament to make its own laws on, for instance, education, without having to come to Westminster; but that is not what we are discussing. The new clause tries to deal with the difficulty that may arise because of the split function. We need a concordat of some kind, although whether it is enshrined in legislation may be another issue. We need ground rules to ensure that those who, from May 1999 onwards, will be carrying out their new responsibilities in the assembly know exactly what they can and cannot do. We do not want their route to be blocked by certain political considerations at Westminster. We want certain rights to be embedded in primary legislation—rights on which they can fall back when necessary.

Denzil Davies (Labour, Llanelli)

I will speak briefly. The right hon. Member for Caernarfon (Mr. Wigley) became more and more confused as his speech went on—

Dafydd Wigley (Plaid Cymru, Caernarfon)

Rubbish.

Denzil Davies (Labour, Llanelli)

That is the kind of reaction that we receive from members of Plaid Cymru—is it still Plaid Cymru?—when we criticise them. The right hon. Gentleman mentioned a split function. There is no split function; there are two separate functions. The right hon. Gentleman is talking about the function of the assembly, and the function of United Kingdom Departments. The Treasury, the Foreign Office, the Home Office, the Department of Social Security, the Department for Education and Employment and the Ministry of Defence will be involved, but I can think of no other functions that will be carried out on a United Kingdom basis. That goes to the heart of the problem. The right hon. Gentleman says that it is just a matter of drafting, but drafting often shows up defective thinking, and in this instance there has certainly been defective thinking. There is no reason why the assembly should go to United Kingdom Departments for advice. It can go to the Secretary of State for Wales, who presumably is considered to come within the ambit of the phrase "United Kingdom government departments". After all, he will have nothing much else to do.

Dafydd Wigley (Plaid Cymru, Caernarfon)

I should have thought that it was fairly clear that the Welsh Office is a UK Department for this purpose. The new clause covers the Secretary of State for Wales, but it also covers other Departments. It includes the Treasury—with which a link may well be needed—as well as Departments such as the Department for Culture, Media and Sport. When it comes to national heritage, the relationship between UK and Welsh responsibilities is very unclear.

Denzil Davies (Labour, Llanelli)

Why on earth should a member of the Welsh assembly be able to demand advice from Her Majesty's Treasury about UK matters? I understand the point about the Secretary of State for Wales. I would not object if the new clause said that a member of the Executive Committee could request advice from staff of the Secretary of State for Wales—although he may not have staff—because, as a member of the Cabinet, he can presumably ask other Departments what effect this or that legislation will have on Wales. It is being suggested, however, that a member of the assembly should be able to roam around under powers not available to Members of Parliament. I am not in favour of the Official Secrets Act, but it exists. Will members of the assembly sign it when they ask for information? Not only is the new clause misconceived: it shows how much confusion there is. Subsection (2) asks for a concordat. Apparently, there are to be concordats in any event, because there is a real problem. Perhaps, when he responds to—and, I hope, rejects—this rather silly new clause, my right hon. Friend the Secretary of State will tell us when we shall see those concordats. Will they appear before Third Reading? My right hon. Friend indicates that that is possible. How will we be able to debate them, and with whom will they be drawn up? I cannot imagine that the assembly and the Cabinet Office will have their own little concordat. I do not see where the Cabinet Office comes into it.

Dafydd Wigley (Plaid Cymru, Caernarfon)

May I press the right hon. Gentleman, to ensure that I fully understand his objection? Does he object to the fact that we refer to a member of the Executive Committee? Does he assume that there would be some links on a civil service level between those serving the Executive in Cardiff and civil servants here, given that we have a unified civil service?

Denzil Davies (Labour, Llanelli)

That is not what the new clause says.

Dafydd Wigley (Plaid Cymru, Caernarfon)

I asked the right hon. Gentleman a question.

Denzil Davies (Labour, Llanelli)

There is not much point in the right hon. Gentleman asking me. We are debating his new clause, and his new clause says that a Member of the Assembly—an elected Member, albeit a member of the Executive—can roam around Departments and ask civil servants for advice. It goes on to ask for a concordat to ensure that that happens. It makes no sense. I do not want to go on about the drafting, but subsection (2) also refers to public bodies. Who are those public bodies? Again, Members of the Assembly can roam around and ask them questions. Does that apply to all public bodies? The new clause is wholly misconceived, but that is not the point; the point is that there is complete confusion in the right hon. Gentleman's mind—and, indeed, in his party.

Richard Livsey (Liberal Democrat, Brecon and Radnorshire)

We support the new clause. The right hon. Member for Llanelli (Mr. Davies) seems almost to be asking whether there is a right to roam among civil servants, but I do not think that that is the context in which the new clause was tabled. I believe that it would give access to UK civil service expertise in regard to, for instance, important Ministry of Defence issues. There is a danger that a camp may be closed in my constituency, which would have a considerable impact on employment in the area. I am curtailing my speech, but I think that Members of the Assembly should have access to expertise on such matters.

Nigel Evans (Conservative, Ribble Valley)

I, too will speak briefly. The right hon. Member for Caernarfon (Mr. Wigley) referred to the Executive sitting in Cardiff. I am not sure whether such a decision has been made. Presumably that was a Freudian slip, unless there is something going on which we have not yet been told. Will the Secretary of State clarify the relationship that will exist between his Department, with its own civil service, and the assembly? Obviously, members of the assembly's Executive will make policy at a secondary level, but I suspect that they will want to have constant discussions with the Secretary of State. During our debates, we have been led to believe that there is a great hope that the assembly and the Secretary of State—irrespective of the political colours under which they happen to be flying—will work together in the best interests of the people of Wales. Perhaps he will put some flesh on the bones of the matter to show exactly what the Secretary of State will do after devolution. I suspect that much of his work will be negotiation and consultation with the assembly. Plaid Cymru is trying to have its cake and eat it. It wants the best of both worlds.

Ron Davies (Labour, Caerphilly)

My right hon. Friend the Member for Llanelli (Mr. Davies) was absolutely right in his critique of the new clause. The right hon. Member for Caernarfon (Mr. Wigley) said that there should be consultation between the assembly and Whitehall Departments, but his new clause refers to a member of the executive committee", and that is its weakness. The hon. Member for Ribble Valley (Mr. Evans) spoke about relationships. Obviously, there will have to be a close working relationship between the Secretary of State and his Department and the assembly. The better, closer and more clearly defined that relationship is, the better will be the government of Wales. I cannot pretend that in my inside pocket I have a list of do's and don'ts or prescriptions or rules that will apply to ensure that relationship. However, the holder of my office when the assembly is in being will realise that there is a heavy responsibility to ensure that the relationship operates as effectively as possible. I shall write to the hon. Member for Ribble Valley if he requires further information. I understand why the right hon. Member for Caernarfon moved the new clause, but, as I have said, it is defective and does not seem to achieve what he wants. However, it is right to explore the nature of the relationship between the assembly and Whitehall Departments. It is important to remember that the Welsh Office does not operate in isolation from the rest of Government. There was discussion about the continuing role of the Department for Education and Employment and the Health Department. The assembly will derive its changing powers to operate under secondary legislation from the nature of primary legislation that has been passed by Parliament. It is important that the desires of the assembly should be transmitted to people in Departments that are responsible for drafting legislation to facilitate the assembly's work. There will certainly be a need for a continuing relationship not only on the non-devolved matters that my right hon. Friend the Member for Llanelli spoke about—he mentioned the Home Office, the Treasury and the Ministry of Defence—but on devolved matters. At the moment, departmental work proceeds smoothly because information and professional advice are shared, and policies and secondary legislation are developed in consultation within Government. It is a two-way process. The assembly will want a framework of liaison arrangements with relevant Departments, and they will be based on the existing positive relationships between civil servants in the Welsh Office and their counterparts in other Departments. Of course, those are relationships between civil servants and not between Executive Committee members or assembly Secretaries. The Government concluded that that relationship is best provided by a series of non-statutory concordats, whose nature has already been debated. My right hon. Friend the Member for Llanelli spoke about those. It is most unlikely that the concordats will be available before Third Reading, but my right hon. Friend will know, and other hon. Members may be interested to know, that I published on Friday a statement of the principles for drawing up concordats. Copies have been placed in the Library. Hon. Members who wish to get a feel of the Government's thinking on the matter should study that document, which consists of two and a half pages. It could not be classified as a ripping good yarn, but it is worth reading. It will be for the assembly to agree the concordats. In the meantime, we shall work up drafts based on the principle of providing the assembly and Whitehall Departments with the confidence that working relationships will be conducted properly and in accordance with agreed processes such as adequate consultation, and will avoid constraining either the assembly or Whitehall Departments in their fields of competence.

Dafydd Wigley (Plaid Cymru, Caernarfon)

Perhaps I could be clear. Is the Minister saying that the non-statutory concordats that may be developed will enshrine a right to ask for advice at civil servant level from Departments other than the Welsh Office if those Departments are in charge of drawing up legislation that may affect Wales? May I take it that that right would not be unreasonably refused?

Ron Davies (Labour, Caerphilly)

As I have said, it will be for the assembly to agree the concordats, so I cannot give the right hon. Gentleman a categorical assurance about a right. I cannot bind the Government or the assembly on that, but I can make it clear that we shall certainly work up the drafts of the principles. There must obviously be proper working relationships, and they require an exchange of ideas and information. While I cannot say to the right hon. Gentleman that rights will be enshrined in the concordats, which will be non-statutory, I can assure him that the Government wish to make sure that the concordats provide the necessary framework for consultation between the Government and the assembly.

Michael Ancram (Conservative, Devizes)

Last week, the Secretary of State answered a question on concordats and set out the basis on which they would operate. Am I right in thinking that they will not come before Parliament or, indeed, the assembly for debate?

Ron Davies (Labour, Caerphilly)

We discussed those matters in some detail in earlier proceedings. The concordats will be non-statutory, and they will not be finalised until the assembly is established. As I have said, it will be a matter for the assembly and the Government of the day to decide how those matters are to be presented to Parliament. That is not to say that they will be presented to the House. The concordats will be agreements between the Government and the assembly and will not have any legislative force as a result of measures that have been passed by Parliament. I should be happy to discuss the matter.

Denzil Davies (Labour, Llanelli)

Will the Minister give way?

Ron Davies (Labour, Caerphilly)

As my right hon. Friend knows, the knife is about to fall, but I shall give way briefly.

Denzil Davies (Labour, Llanelli)

Will there be separate concordats for each Department or will there be one giant concordat?

Ron Davies (Labour, Caerphilly)

Just as there will be not one giant dome but a dome with a baby, so there will not be one giant concordat. I am not promising baby concordats, but there will be a concordat for each Department. We have already explored the matter. The working relationship between the assembly and the Ministry of Agriculture, Fisheries and Food will be close, and, because of the European dimension, it will be important. The concordat for that Ministry will be different from those for other Departments in which the assembly's involvement will be less. There will be a series of concordats. I take direct advice on only a few matters from officials in other Departments. We debated forestry policy earlier, and that is a good example, because on that I am advised directly by officials from the Forestry Commission, which is a public body. Of course, I also receive advice from my own officials. The new clause provides for almost unfettered rights for assembly Secretaries to request advice from officials in any Government Department or public body. That goes far beyond current practice, and risks placing unreasonable work loads on officials in those Departments without any constraints on cost, time or good working practice. On that basis, we cannot accept the new clause as drafted. However, where appropriate, the relevant concordat will provide for assembly Secretaries to have access to advice on the basis on which I have access now, but it will be via civil servants of the assembly. It will be for them to have relationships via the concordats with Whitehall Departments before feeding the information to the assembly Secretaries. I hope that the right hon. Member for Caernarfon—having initiated the probing debate that he wanted—has been satisfied by that response. I invite him to withdraw new clause 12.

Dafydd Wigley (Plaid Cymru, Caernarfon)

I am grateful to the Secretary of State for that response. Obviously, we will have to wait to see the detail of those concordats before we can reach any firm conclusion on them. However, I am glad that this short debate has facilitated an opportunity for the Committee to give some attention to the matter, and for the right hon. Member for Llanelli (Mr. Davies) to ask questions which were clearly worrying him on a matter that would not have been dealt with otherwise in our debates. On that basis, I beg to ask leave to withdraw the motion.

CONSULTATION WITH BUSINESSES

Jackie Lawrence (Labour, Preseli Pembrokeshire)

I beg to move, That the clause be read a Second time. New clause 14 would require the assembly to establish a scheme stating its proposals on sustaining and promoting business in Wales. From the commencement of our debates on the Bill, and following publication of the White Paper, the Secretary of State has maintained that the legislation is built around partnership and inclusivity. In clause 64, the Bill is already innovative in stating a commitment to consult business in Wales, which has not previously been consulted. The new clause attempts to recognise that innovation, but goes a little further and gives business interests parity with the interests of both local government and the voluntary sector, which are already more comprehensively provided for in clauses 110 and 111. The proposals in the new clause attempt to establish a proactive approach in the relationship between the assembly and the business sector, rather than a merely reactive approach by the assembly, which might have a knock-on effect on the Welsh business sector. I have determined from my discussions with businesses in my constituency that there is widespread support for the Bill's proposals requiring the assembly to assess the cost implications for business of any proposed regulations and to consider businesses' views. There is widespread support also for a strategic approach to economic development in Wales—via the new Welsh Development Agency—by establishing links with the four economic forums, by placing renewed emphasis on indigenous businesses and, therefore, by implication, by placing emphasis on sustainable development. The Federation of Small Businesses has stated that there are 3.45 million small and medium-sized enterprises across the United Kingdom, and that if the economic climate enabled each of them to take on one more employee, there would be no unemployment in the UK. UK-wide, 80 per cent. of jobs are provided by companies employing fewer than 20 people. In my constituency, that percentage is even higher. In the spirit of the partnership and inclusivity promised by the Secretary of State, the views of SMEs must be heard and listened to if we are to make real progress in the battle to improve gross domestic product in Wales. Within the framework of the national assembly, there must be a recognition of the role of business in that process. Every effort must be made to improve Wales's ability to produce competitive goods and services. The assembly's economic structures and policies must promote Welsh business as the basis of improving the standard of living of everyone—not only selected parts of Wales. Establishing in the Bill a scheme specifying plans to promote and maintain Welsh business will give Welsh business parity with local government and the voluntary sector. Clauses 110, 111 and 33, for example, provide for the assembly—quite rightly—to create a scheme to sustain and promote local government in Wales, to promote the interests of the voluntary sector and to support cultural aspects of Welsh life. However, it is equally right that similar arrangements should be made to promote the interests of businesses in Wales, on which the vitality of the Welsh economy ultimately depends. New clause 14 would meet that need, and ensure that the assembly listened to business and worked in partnership with it. New clause 14 would also have the benefit of ensuring that outside expertise from the business community was available, ensuring that the assembly's Committees were well informed in their decision making. As a member of the Select Committee on Welsh Affairs, I have been involved in recent investigations into the effects that the national assembly will have on economic development in Wales. Evidence given to that Committee, which was published last week, shows that business believes that the assembly holds tremendous potential, but also that it is essential that extra burdens are not placed on Welsh business in comparison with business in England. Businesses' concerns related to both the implementation of secondary legislation and to such pragmatic matters as the assembly's handling of issues such as planning appeals and call-ins. The Confederation of British Industry, for example, feared that proposals to handle in Committee the Secretary of State's current role in determining appeals and call-ins might cause delays that would disadvantage Welsh business. That concern provides a simple example of the need for the assembly to think not only proactively but strategically in maintaining its links with business, and to think through the impact of all its actions on Wales's businesses. A scheme such as that outlined in new clause 14 would create the framework for such an interchange. Clause 41(2) provides for the assembly to make subordinate legislation provision for Wales that is different from that for England, recognising Wales's and England's different needs. However, it is vital to ensure that businesses in Wales are not disadvantaged in economic development, by having to bear greater compliance burdens than businesses in England. A local cheese maker in my constituency informed me that the business's compliance burden increased tenfold during the time when the previous Government were in office. The assembly will have the responsibility not only to ensure that that burden is not increased but, I hope, to reduce it. Similarly, the new clause will ensure that a mechanism is established to avoid such increases in compliance burdens. The opportunities offered to Wales by the establishment of the national assembly, as stated in the Bill, are exciting and innovative. However, the additional benefits gained by implementing a scheme such as that outlined in the new clause would be even more significant.

Nigel Evans (Conservative, Ribble Valley)

At this juncture, I should declare my interest in having a small business in Swansea, which I still own, and in having—as have several generations of my family—many years of business experience in the retail trade.

Ron Davies (Labour, Caerphilly)

Was it handed down?

Nigel Evans (Conservative, Ribble Valley)

Yes, of course; like new Labour, we believe in the hereditary principle. [Interruption.] I am generally in favour of new clause 14. I hope that the proposed scheme will make transparent the assembly's plans for supporting businesses. The super-quango consisting of the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales will also have policies to promote businesses in Wales. In Wednesday's debate, we discussed the CBI's concern about whether the assembly would meddle too much in the new super-quango's daily functions. The question arises as to whether new clause 14 enables the new WDA to formulate strategic policy and to eliminate confusion. If the new clause does that, it is a good idea. The new clause's proposals to consider businesses' interests on the same level as those of the voluntary sector and of local government are also absolutely right, so that there is no confusion in the super-quango's demarcation of its various roles. We shall have to do a bit more than merely pay lip service to our desire to promote business in Wales. I am sure that all political parties in Wales want Welsh businesses to do well, whether they are established by inward investment or are new indigenous Welsh businesses. We want all businesses in Wales to prosper. We know that businesses in Wales already must confront problems such as the 48-hour working week, a minimum wage and works councils. Moreover, with the introduction of regional development agencies in England, we shall want to ensure that businesses in Wales are able to compete on an equal footing with businesses in the rest of the United Kingdom. I support the ethos of the new clause. I hope that whatever scheme is set up—irrespective of whether it is under the new clause—consultation will go further than the CBI and the Institute of Directors, as many other all-Wales bodies are equally relevant. The hon. Member for Preseli Pembrokeshire (Ms Lawrence) was absolutely right to mention small businesses, as they represent the vast majority of businesses in Wales. We have to look to that sector to increase employment. We can no longer rely on the large industries that employ 15,000 to 20,000 people to generate extra jobs. Small and medium-sized enterprises are spread around Wales, and they should be given every encouragement, as that will benefit the whole of Wales. We should consult the Federation of Small Businesses and local chambers of commerce throughout Wales and listen carefully to their views on promoting business. The hon. Lady mentioned that the gross domestic product in Wales is very low, especially in certain areas. That was demonstrated by the reply to my recent question to the Secretary of State for Wales. There is clearly inequality in that respect. Therefore, we need to ensure that areas that are doing badly will be boosted by any new scheme. On Wednesday, we agreed that "business" should have a wide meaning, and that certainly applies to the new clause. Given yesterday's events, we should remember that many farms in Wales are desperate for support. I hope that any new scheme will also consider how the assembly can establish policies genuinely to assist small businesses in the rural community, and particularly farmers. We must also consider the ripple effect. Businesses that supply farms with tractors and capital goods, and which repair barns and erect fences and walls, are also affected by the current crisis. The next debate will be about the regional aspect. Any new scheme must reach all parts of Wales.

Richard Livsey (Liberal Democrat, Brecon and Radnorshire)

I congratulate the hon. Member for Preseli Pembrokeshire (Ms Lawrence) on introducing the new clause. It is absolutely essential that the assembly should consult business. The proposed scheme would provide business advice to the assembly and would undoubtedly benefit the Welsh economy and investment prospects for Wales. The hon. Member for Ribble Valley (Mr. Evans) referred to small businesses, which are particularly important as they are more likely to provide indigenous growth, which is vital to increasing employment and wealth creation throughout Wales. In many of our constituencies, particularly rural ones, up to one third of the population is self-employed. Many self-employed people run small businesses and are often burdened with a great deal of bureaucracy. There will be a need for businesses—particularly small businesses—to liaise with the assembly in respect of how they can best be assisted. There is evidence of a lack of a level playing field for small native businesses as compared with inward investment schemes from other parts of the world. Certainly in mid-Wales, businesses from other parts of the United Kingdom appear to have greater advantages than indigenous enterprises. Reference has been made to the agriculture industry. About 56,000 people are involved in farming in Wales—I was one of them for a considerable time, although I was never a newsagent. I hope that the new clause will enable a policy to emerge, to assist those small businesses to develop for the benefit of everyone in Wales.

John Smith (Labour, Vale of Glamorgan)

I also congratulate my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence) on introducing the new clause, which the Government should consider carefully. It is vital that the new assembly consults business, but there is already a requirement in the Bill for it to do just that. It is a welcome innovation. We should be careful, however. It is my view that the assembly's relationship with business is crucial to the success of the assembly and to economic development in Wales in the coming years. We have to get that relationship absolutely right. There are dangers in thinking that we can legislate on a relationship between Government and business in Wales and thereby solve most of our problems. It is not quite that simple. We have to establish a relationship that allows business and Government to do what they do best without interference. We should not ask business to behave as a philanthropic or democratic organisation or expect Government to behave as a business. Traditionally, the record on that is not terribly good. Wales has been particularly good at establishing just such relationships. Our economic success in respect of inward investment has been due almost exclusively to the "team Wales" approach and has set the standard for the rest of the United Kingdom. It is one reason why other regions look to us with envy—and so they should—in respect of attracting direct foreign investment. However, trying to attract the English investment to which the hon. Member for Brecon and Radnorshire (Mr. Livsey) referred presents a more difficult problem. We have to be clear about making sure that we get our fair share. We should remember that London and the immediate surrounding area accounts for 40 per cent. of our GDP per capita. Wales has the lowest percentage in the United Kingdom and the gap is widening, so we have to take a balanced approach to developing indigenous small and medium-sized companies. Of course we have to do that, especially in areas that depend on small businesses, but we must also recognise that we must continue the battle to attract our fair share of United Kingdom investment and build clusters of small Welsh companies to service incoming companies. That means that we have to get the formula right, so I ask the Government to consider the new clause carefully.

Dafydd Wigley (Plaid Cymru, Caernarfon)

I welcome the opportunity that the new clause provides to examine the opportunities for business. The National Assembly for Wales should provide a stimulus for the business sector and encourage people to take the initiative, take risks and set up enterprises because of the atmosphere of confidence that we hope will be engendered. It should not tie businesses in knots and prevent them from undertaking ventures. In examining the phrasing of the new clause, I fear that businesses might expect to play a greater role in determining policy than might be possible in practice. The hon. Member for Preseli Pembrokeshire (Ms Lawrence) gave the example of the town and country planning function. Businesses are understandably worried that the processes may be slowed down. They may hope that subsection (4) would provide them with a means of influencing planning decisions as matters affecting or of concern to them. That might give them inappropriate leverage in the planning function. If the provisions are to mean anything, businesses will want such influence, but it may not be possible to provide it in the mechanism for even-handed planning at assembly level. The assembly must feel itself to be a partner with business and industry in Wales, working hand in hand with them to create the conditions for a thriving economy. The hon. Lady obviously has the creation of such a partnership in mind. The thrust of the new clause must be of relevance to the Government and the assembly.

Tam Dalyell (Labour, Linlithgow)

I should like to raise a practical problem. Last year, I had the good fortune of opening a branch unit of Personnel Hygiene Services in the small village of Blackridge in West Lothian. The Secretary of State will know that the headquarters of Personnel Hygiene Services are in his constituency, in the Western industrial estate in Caerphilly—the postcode is CF83 1XH. I expect that he knows it well. They are good people. The Welsh leaders were most welcome among us. However, the company has a problem. On 19 February, Mr. Louis Howe wrote to me on behalf of the company about the Special Waste Regulations 1996. He said: Of particular interest is point two, which brought to the attention of the Environment Agency the fact that the Scottish Environmental Protection Agency are interpreting the Regulations differently to the Environment Agency. We find this particularly annoying as we believed the establishment of the Agencies would lead to common national standards enabling us to standardise our practices and procedures nationally. Unfortunately, we must now regard England/Wales and Scotland as two separate entities and we wonder what disparities will occur in the future to further complicate our businesses. The House of Commons should be careful about complicating people's businesses. I shall ask the relevant Ministers for the full answers to the details in the letter. Such problems are bound to arise when, to use the phrase of my right hon. Friend the Member for Llanelli (Mr. Davies), we start unbundling the United Kingdom.

Win Griffiths (Labour, Bridgend)

I congratulate my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence) on presenting the new clause in a positive spirit, with the strong support of all sectors of business in Wales. She has clearly had considerable consultation with the larger business sector and small businesses. I am also pleased that the Opposition are taking a new constructive view, with the hon. Member for Ribble Valley (Mr. Evans) supporting the important issues raised in the new clause. My hon. Friends the Members for Vale of Glamorgan (Mr. Smith) and for Clwyd, West (Mr. Thomas) raised some relevant points, which I shall try to deal with later. Coming in from the flank, the right hon. Member for Caernarfon (Mr. Wigley) and the hon. Member for Brecon and Radnorshire (Mr. Livsey) also supported the principles of the new clause. We have always believed that the assembly should provide an environment in which business can flourish. In our White Paper, "A Voice for Wales", we laid great stress on the importance of the assembly's role in creating a growing and sustainable economy. That will largely be a matter for the policies of the assembly, which we should not attempt to predetermine in the Bill. As a democratic body, the assembly must develop its own policies and account to its electorate for their effects. We can create an effective institutional framework for it. We have created a mechanism to ensure that the assembly's legislative procedures take proper account of their effect on business. My hon. Friend the Member for Clwyd, West mentioned clause 64, which provides for statutory regulatory appraisal. That is a significant and radical legislative innovation in Britain, which the CBI has recognised and welcomed. The new clause is a different matter, going beyond that. In providing for the assembly's relations with local government, the voluntary sector and business, we are not trying to create a blockbuster clause to deal with all the issues, such as sustainable development. We have tried to tackle the issues in a way that will be suitable for each sector. For local government, we have a duty to promote, a scheme and the partnership council—that builds on the existing concordat with local government and the established negotiating machinery. For the voluntary sector, we have consultation arrangements and a duty to promote, building on and strengthening the existing consultation arrangements and the concordat that we are finalising. For business, we have the statutory recognition of a process of regulatory appraisal. The new clause would knit all those factors together and add them on top of statutory regulatory appraisal. That would create a risk of greater complexity and a slowing down of decision making, referred to by the hon. Member for Ribble Valley. The assembly could become too bureaucratic, which is what business fears most. We shall resist the detail of the new clause, but I am pleased to tell my hon. Friend the Member for Preseli Pembrokeshire that we accept the spirit of it: there should be regular, open and constructive dialogue between business and the assembly—not just with big business but with small business, as the hon. Member for Ribble Valley said, and not just with traditional industries but with business in rural areas. My hon. Friends the Members for Vale of Glamorgan, for Clwyd, West and for Preseli Pembrokeshire all laid stress on encompassing all business in order to get the framework right. We propose to return to the matter with a Government amendment. In the light of that, I invite my hon. Friend the Member for Preseli Pembrokeshire to withdraw the motion.

Jackie Lawrence (Labour, Preseli Pembrokeshire)

I thank the Minister very much for accepting the new clause's principles. Bearing in mind his commitment to take them on board, I beg to ask leave to withdraw the motion.

DECISIONS AFFECTING VITAL INTERESTS OF A REGION

Michael Ancram (Conservative, Devizes)

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

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this, it will be convenient to discuss new clause 24—Decentralisation within Wales— '.—The Assembly shall give active consideration to the decentralisation of appropriate functions from Cardiff to other parts of Wales, and shall actively seek to encourage other public sector bodies over which it has control, or which are answerable to it, to do likewise.'.

Michael Ancram (Conservative, Devizes)

It is appropriate that we are debating this important new clause on 2 March, the day after St. David's day. I genuinely regret the absence of a St. David's day debate. I was looking forward to participating in my first such debate, as I was told that they were occasions on which matters relating to all interests and parts of Wales could be properly aired. I only hope that the absence of such a debate this year is not a forerunner for future decisions and the beginning of the marginalisation of Welsh Members of Parliament following devolution.

Michael Ancram (Conservative, Devizes)

The hon. Gentleman cannot have been listening. I said that it was most appropriate that we were debating the new clause on this date. I was merely making the point that I hope that we are not having a St. David's day debate just because we are having this debate. For the sake of hon. Members who represent Welsh constituencies, who will continue to do so after devolution, I hope that we are not seeing an end to the traditional St. David's day debate, which was certainly welcomed by Welsh hon. Members, if not the hon. Member for Clwyd, West (Mr. Thomas).

Ron Davies (Labour, Caerphilly)

My hon. Friend the Member for Clwyd, West (Mr. Thomas) would not know, because he was not a Member during previous debates.

Michael Ancram (Conservative, Devizes)

I am sure that the right hon. Gentleman will advise his hon. Friend on the value of St. David's day debates. The new clause stems directly from the result of the referendum on 18 September, when the people of Wales—we cannot avoid the fact that, more precisely, just over 25 per cent. of the people of Wales—voted for an assembly. That tiny minority, about which much has already been said, was not replicated evenly across Wales. Indeed, Wales was effectively split down the middle. The most significant aspect of the result was the regional variation in the yes and no votes. It reflected deep differences and different outlooks—and, indeed, fears—between the various parts of the Principality. The geographic split in the vote was both instructive and not a little alarming. As politicians who are used to studying the nuances of votes, we should be most unwise to ignore the way in which the votes were distributed. I may not be Welsh, nor can I claim to know Wales as well as I know Scotland but, since June, I have travelled extensively in Wales and regularly visited various parts. It does not take a great deal of expertise to realise that Wales is fundamentally divided. It is not just, as one Labour Member said, that Offa's Dyke has moved west, but that the north fears domination by the more populous south, the east expects and fears favours for the west, and both English and Welsh speakers fear losing out to one another. I think that we all realise that the north looks not to the south for its economic centre of gravity but to Merseyside and beyond. Monmouth feels more affinity with its erstwhile historic English county neighbours than with its quarter of a century of Welshness. There is fear, resentment and a feeling of a democratic voice being ignored. To turn a blind eye to that would risk storing up immense problems for the future and build in a destabilising factor of unacceptability in the assembly. That would serve nothing, least of all the concept of devolution in Wales.

Win Griffiths (Labour, Bridgend)

I want to pull up the right hon. Gentleman on the travesty of history in referring to Monmouth and Wales being connected for a quarter of a century. He may recall that the only reason why Monmouthshire has any English connection is that the Laws in Wales Acts of 1535 and 1542 placed Monmouthshire in the Oxford circuit for judicial purposes—but that was all. One only has to look at the place names in Monmouthshire. In fact, in Herefordshire, the right hon. Gentleman will find a similar good dose of Welsh place names. It could be argued that Offa's Dyke should be moved a little east.

Michael Ancram (Conservative, Devizes)

I listen with great care to what the Minister has to say. However, judging by my visits to Monmouth and the correspondence that I have received from there, his view is not unanimously held. I shall be corrected if historically I am wrong, but I think that Monmouth was made a county of Wales in 1972, having previously been a county of England. [Interruption.] I shall certainly be corrected.

Dominic Grieve (Conservative, Beaconsfield)

My right hon. Friend may care to bear in mind when praying in aid the position of Herefordshire that, if questions of national identity are anything to go by, during the disestablishment of the Church of Wales, the parishes on the Radnorshire side of the border were offered the choice of whether to stay in England, and they chose to stay in England. The argument that, somehow, Herefordshire should always be viewed differently is complete bunkum.

Michael Ancram (Conservative, Devizes)

I accept your strictures, Mr. Lord, and turn back to regionalisation in Wales.

Rhodri Morgan (Labour, Cardiff West)

Will the right hon. Gentleman give way?

Michael Ancram (Conservative, Devizes)

Yes, I always enjoy giving way to the hon. Gentleman.

Rhodri Morgan (Labour, Cardiff West)

On Wales and Monmouthshire, I am afraid that the right hon. Gentleman has committed the most ghastly historical solecism. Monmouthshire was never in England. For centuries, legislation has referred to Wales and Monmouthshire, which clarified Monmouthshire's position. That is anything but Monmouthshire being in England. To say that, since Monmouthshire was not in Wales, it must therefore be in England is completely wrong. The right hon. Gentleman should withdraw that remark straight away before he receives letters from history teachers throughout Wales—and England.

Michael Ancram (Conservative, Devizes)

I said that I stood open to correction. The hon. Gentleman used a fair amount of what the right hon. Member for Llanelli (Mr. Davies) was accused of the other day: legalistic talk. The position is absolutely clear. The referendum results showed a marked difference in views between north Wales and south Wales and between east and west Wales". I do not think that any of us would deny that we need to do a lot more work to bring Wales together. We must continue to listen to what people in Wales tell us.

Ron Davies (Labour, Caerphilly)

The right hon. Gentleman is compounding his mistakes. First, he is making a grave error in trying to overemphasise the counts that were conducted on the basis of unitary authorities. They were merely the mechanisms for counting. The count itself was an all-Wales count. As history recalls, in that referendum, the people of Wales voted yes. The right hon. Gentleman's second error is to disregard the thousands of people in the unitary authorities of Monmouth, Wrexham, Flint and Conwy—the local authorities that voted no—by suggesting that they share a monolithic view that there should not be an assembly. That is just not so. There is a broad base of support right across Wales. He should also have regard to the fact that the swing in Monmouth from the 1979 vote was huge.

Michael Ancram (Conservative, Devizes)

The right hon. Gentleman says that, when I say that the referendum showed a marked difference in views between north Wales and south Wales and between east and west Wales and that we need to do a lot more work to bring Wales together"— [Official Report, Welsh Grand Committee, 18 November 1997; c. 12.] I am compounding my error; but those are not my words—they are his, spoken in the Welsh Grand Committee on 18 November. It seems strange that, when I quote them back to him, I am told that I am compounding an error and that I have somehow misunderstood the position. When I read his words of 18 November, I agreed with him and because I am repeating what he said, I hoped that he would agree with me, but that may be too much to hope for. The point is that nothing in the legislation as it stands works to bring Wales together. Nothing heals the rifts or quells the fears that the Government have created by this legislation and which, as the Secretary of State admits, were reflected in the referendum result. In the setting up of regional Committees, there is a cosmetic attempt to assuage the fears of north Wales, but, in practice, that is a meaningless gesture, and north Wales knows it. The southern-dominated assembly gets to decide how many regions there will be; it draws up the boundaries for those regions; and, because the regional Committees are only advisory, they can simply be ignored by the southern-dominated assembly. In short, nothing in the Bill addresses the fears and concerns of people outside south Wales. People in the north of Wales will have watched the cavalier way in which the Secretary of State cast aside their bids to home the currently itinerant National Assembly for Wales. The fear is not temporary: it is a fear of long-term, if not permanent, domination. In any democracy, the fear of permanent domination by a majority is a recipe for ultimate breakdown. We cannot allow such a democratic deficit to be built into the new National Assembly for Wales, first, because that would be a mockery of its name and, secondly, because it would create a long-term legacy of resentment. I accept that our new clause might not provide all the answers, but it is designed to build in a safety net that would bring some much-needed comfort and reassurance to the Welsh people, both those who live outside the south and those who live in the south. Essentially, the new clause would ensure that any decision that might affect the vital interests of a particular region would have to be authorised by a vote of the assembly in which at least one third of the Members from the region affected—however they were elected—gave their approval. That is a variation on the principle of weighted voting, which is often used in cases of this nature to mitigate what would otherwise become an oppressive majority.

Rhodri Morgan (Labour, Cardiff West)

I am interested in the underlying principle. The right hon. Gentleman is right to say that south Wales is more populous than the rest of Wales: south Wales contains about 2 million people out of the 3 million living in Wales as a whole, and if industrial south Wales were compared with north Wales, the population ratio might even be 4:1. However, the right hon. Gentleman was always against devolution, even though Wales had only about 5 per cent. of the United Kingdom population, whereas England had about 85 per cent. of the population. Why was he not in favour of devolution if he believes that people worry about being dominated by a majority with different political patterns?

Michael Ancram (Conservative, Devizes)

The hon. Gentleman was obviously concentrating so hard on campaigning for the yes vote that he did not listen to the arguments made on the no side during the referendum campaign. We argued that the White Paper opened up the danger but provided no solution to it and that, unless a solution were found, it would be a fundamental flaw that could undermine the concept of devolution in the longer term. That fear was clearly shown in the way in which votes were distributed within Wales.

Rhodri Morgan (Labour, Cardiff West)

indicated dissent.

Michael Ancram (Conservative, Devizes)

The hon. Gentleman may shake his head but, according to The Guardian of 20 September, the Prime Minister said in Downing street the day after the referendum: We must take account of the narrowness of the margin and that is why we carry on, allaying their fears, and making sure they know that this is about decentralising power. The Independent of the same day quoted the Prime Minister as saying: moves to create a Welsh assembly would carry on while the Government concentrated on 'allaying the fears of people that were expressed during the campaign'. The Prime Minister accepted that there were fears, that the margin was narrow and that something had to be done to address that; but, having waited since the referendum to find out what measures were to be taken to address those fears, we find that there is none. For that reason, we tabled our new clause. We are trying to supply what the Prime Minister inferred would be produced by the Government, but which they have singularly failed to produce.

Rhodri Morgan (Labour, Cardiff West)

It is the consistency of the right hon. Gentleman's argument that I am questioning. If that is what he believes, given the 4:1 ratio between the populations of industrial south Wales and north Wales, why was he against Wales being given any devolved powers, given that, in the United Kingdom, there is a 17:1 ratio between the populations of England and Wales?

Michael Ancram (Conservative, Devizes)

I am finding it difficult to understand whether the hon. Gentleman believes that it is healthy that one part of Wales may be able permanently to dominate another. Those who believe in devolution think that that is wrong and, if devolution is to work, we need to apply the sort of remedy that is contained in our new clause. The one-third threshold is not a major hurdle and it is not obstructive—it is reasonable. The test of what decisions should be subjected to the threshold would be for the Presiding Officer to determine, having clear regard to the views of the regional Committee. It is right that the Presiding Officer should be able to exercise independent judgment as to whether to apply the threshold. I suspect that such decisions would most often involve economic and industrial issues, where fairness was essential to the future economic cohesion of Wales as a whole; or cultural or social matters, where parity of esteem was crucial to the smooth working of devolution. Given the nature of Wales and of the referendum result, it is surprising that Labour Members find it so difficult to accept our fairly modest remedy. The overall intention is not to create gridlock, but to ensure that, in specific and important matters, the interests of any region cannot be overridden roughshod by a geographical majority. The provision would probably not be used often, but where and when it was used, it would work to bring Wales together. It would provide a protection that democracy would welcome, but that Wales's geography denies. It would give teeth to the concept of regions within Wales, which the current proposal for toothless advisory Committees singularly fails to do. It would remove the causes of the real concern and fear that have been expressed to me in my travels. It would reduce hostility by giving all parts of Wales the confidence to try to make devolution work, in the knowledge that it was no longer weighted to work against their interests. The new clause would remove one of the deepest flaws in the Bill and the nature of devolution to the assembly as proposed. It is central to making devolution work constructively, rather than destructively. In that spirit, I commend the new clause to the Committee.

Cynog Dafis (Plaid Cymru, Ceredigion)

I rise to speak in support of new clause 24, which stands in my name and those of my right hon. and hon. Friends. I should say first that the reference to Cardiff in the new clause is not based on any assumption about the location of the assembly; it refers to the relocation of functions that are currently at Cardiff. We want that sort of radical decentralisation. New clause 24 represents an infinitely preferable approach to dispersing activities and power than that suggested in new clause 21, which would place a totally unreasonable constraint on the assembly's ability to develop national policies, and would make it difficult to take any strategic decision that could be interpreted as being to the disadvantage of any region. It is a curious idea that the final decision about whether the interests of a region were seriously threatened should be taken by the Presiding Officer of the assembly—I cannot imagine that the Speaker of the House of Commons would want, even after consulting hon. Members from throughout the United Kingdom, to decide whether a policy constituted a sufficiently serious threat to a region that it should be changed. The proposal is inappropriate and improper. I despair of the Tory party. Centralists have always advocated the policy of divide and rule. The British empire was adept at it, and the Tory party is the remnant of the British imperial way of thinking. New clause 21 would entrench the purported divisions that Conservative Front Benchers say that they want to heal. Does the Conservative party intend to campaign for election to the assembly with such an appallingly negative agenda? If so, it will find it difficult to enter the assembly. New clause 24 would create a presumption in favour of decentralising functions throughout Wales. There are various reasons for such an approach, including such elementary ones as the financial savings that would come from locating functions in areas of lower property values. More importantly, we must use the location of Government Departments, functions and arm's-length bodies—such as the remaining non-departmental public bodies—as an instrument of regional policy. That policy has been widely used at the UK level to create employment: when the Employment Service was created, it was located at Sheffield, and one of the best examples in Wales is the establishment of the Driver and Vehicle Licensing Agency at Swansea. I welcome the further moves in that direction in Wales. The Welsh European programmes executive will be based in the Cynon valley and in Machynlleth, bringing high-quality jobs to areas that need such a transfusion. Unfortunately, the trend has largely been in the opposite direction. In 1993, I think, it was decided to transfer a section of the Welsh Office Agriculture Department from Trawscoed outside Aberystwyth to Cardiff, which led to significant job losses in an area where such jobs are scarce and getting scarcer. That was done on the spur of the moment. The decision was taken in June or July 1993 on the basis of short-term cost savings—it was certainly a short-sighted policy—and was a disgraceful example of the tendency to centralise for the most superficial reasons and in the teeth of strong opposition. I do not believe that it would have happened if a national assembly had existed, as the assembly—unlike the Welsh Office at the time—would have had a strategic view of the location of jobs. Another example was the removal from Aberystwyth to England of all but an outpost of the British Geological Survey. I trust that both those actions will be reversed over time—soon, in the case of the Welsh Office Agriculture Department. The department would appropriately be located in rural Wales, particularly rural Ceridigion—although I would say that, wouldn't I? That would create high-quality, well-paid employment and the spin-off of other job opportunities. The use of electronic communications would facilitate further decentralisation as the pattern for future activity in Wales, and we should consider the assembly's activities in that context. It has been suggested that there should be access points to the assembly in various parts of Wales. I hope and trust—that is the right word to use—that the National Library of Wales will, in effect, be the assembly's library. It would be absurd to try to replicate the massive resource at Aberystwyth wherever the assembly is located—electronic communications would make feasible the use of that tremendous resource. Other Welsh Office departments, such as the one responsible for industry, could be located in the valleys, Swansea or even further west. The new Welsh Development Agency must operate in a much more decentralised way than before. It seems inevitable that a core headquarters, which will be responsible for strategic functions, should be located in the capital, but the regional offices should also be powerful, and should become centres for the development of expertise in some of the agency's functions. Business services, for example, could be located in one of the regional offices, as could the policy unit itself. The regional office for the central region—the canolbarth, as we call it in Welsh—should certainly be responsible for rural policy for the whole of Wales. I also believe that the office should be in the west, which tempts me to utter the name Aberystwyth once again, although perhaps that would be to overstress my point. The location of the WDA office for the central region will be a live and real issue. The new super-TEC—the new training and enterprise council—should be established in the south-east, but away from Cardiff and Swansea: in the valleys, perhaps. The Welsh Language Board or its functions—however they are to be delivered—would appropriately be located in Welsh-speaking areas, and why not move the Arts Council from Cardiff?

John Smith (Labour, Vale of Glamorgan)

I have much sympathy with the hon. Gentleman—

Rhodri Morgan (Labour, Cardiff West)

Does he want anything in Cardiff?

John Smith (Labour, Vale of Glamorgan)

I think that there is case for rewriting the new clause to mention Ceredigion. Surely the location of those bodies is for the new assembly to decide; it is not our business to pre-empt it. The hon. Gentleman used the word trust—he should trust the assembly to make the right decisions.

Cynog Dafis (Plaid Cymru, Ceredigion)

Yes, but it is our business to probe policy issues, consider the ways in which the assembly will operate and lay down some principles in advance. Decisions that may be made before the assembly is established could also benefit from the application of those principles.

Rhodri Morgan (Labour, Cardiff West)

The hon. Gentleman is talking about the principles. I wonder whether he wants to leave Cardiff, the capital city of Wales, with anything at all. The last speech along those lines that I heard from a major political leader was by Pol Pot in Cambodia, who believed in getting rid of the capital city altogether and dispersing its entire population to the countryside. Is that really what the hon. Gentleman has in mind?

Cynog Dafis (Plaid Cymru, Ceredigion)

The hon. Gentleman is being untypically facetious. I see no danger of Cardiff being left with nothing; a lot is happening in, and concentrating on, Cardiff. No less a person than Mr. Russell Goodway, in his advocacy of locating the assembly at Cardiff, suggested that certain departments should be located well outside Cardiff, and mentioned the Welsh Office Agriculture Department as an example. Spending on government is an important reality, and the dispersal of that spending is worth advocating seriously. In the new Wales that we want to create, we should certainly consider the dispersal of the high-status activity that is associated with government; of prosperity; of vitality; and of influence. We are devising a system of government at the very time when electronics is revolutionising communications, and when distance, however great, is becoming far less of an obstacle to the co-ordination of activities. It is also important to overcome the perception that the government of Wales will be remote from the people. That is a similar theme to that of the right hon. Member for Devizes (Mr. Ancram), but I hope that I am being more constructive and positive about it. On the United Kingdom level, that perception has been influential in bringing about the devolution proposals enshrined in the Bill and in the Scotland Bill. We must avoid the perception—however inaccurate—of a single centre where the members of the power elite socialise, drink coffee, wine and dine, and cobble together deals that serve their own interests rather than those of the people at large. Much of the debate about the location of the assembly has sprung from such concerns.

Nick Hawkins (Conservative, Surrey Heath)

I am following the hon. Gentleman's argument closely. Will he be more specific? When he talks about the perceived elite, is he referring to the Government party?

Cynog Dafis (Plaid Cymru, Ceredigion)

When I think of elites, I normally think of Tories; that is deeply ingrained in the culture in which I was brought up, so I shall not apologise for it. Elites are people who, for various reasons, have power and influence and tend, if their power is not curtailed, to look after their own interests.

Dominic Grieve (Conservative, Beaconsfield)

Is that not a most compelling argument for new clause 21?

Cynog Dafis (Plaid Cymru, Ceredigion)

I spoke about that new clause earlier, and I do not need to go over that ground again. It is an absolutely cockeyed new clause. We have the opportunity from the outset to establish an approach to government that avoids the geographical imbalance that has disfigured Britain; that typifies the United Kingdom; and that people fear may be replicated in Wales.

Cynog Dafis (Plaid Cymru, Ceredigion)

I am sure that there are civil servants sitting not far from us at the moment who are keen to educate themselves about the needs of Wales in its entirety. Among Welsh Office civil servants, I have never come across anything but a desire to understand the needs of Wales as a whole; the problem has often been with their political masters. New clause 24 was drafted to highlight at the outset the importance of the principle that I have outlined.

Richard Livsey (Liberal Democrat, Brecon and Radnorshire)

The right hon. Member for Devizes (Mr. Ancram) made a divisive speech in support of new clause 21. He could perhaps have concentrated more on the advantages of having strong regional bodies within Wales. He talked about permanent domination and democratic deficits. None of us wants to be permanently dominated, but in 33 of the final 50 years of this century we have tended to be dominated in a certain way. The assembly will set us free from such domination. We do not want to replicate that domination in the Welsh assembly. The regions are vital, and there is a great difference between all the regions in Wales. I often liken Wales to a jigsaw puzzle in which people in different parts of the country think entirely differently. The challenge to the assembly is to unify the regions and give them a common purpose. We need the generosity of spirit to reach out into all the regions of Wales and bind them together; but they also need their independent voices. I agree with the right hon. Member for Devizes that there is not much in the Bill to give us hope. Ministers must give us more meat on the bone—if I may use that phrase—for the regions of Wales. The regional Committees must have real teeth. Ministers must prove to us that that will be the case. They have alluded to the matter in rhetoric, but they have not made any concrete proposals. I hope that they will not ride roughshod over the regions. That phrase was used by the right hon. Member for Devizes. No region of Wales would want to be ridden roughshod over by Swansea, Cardiff, Wrexham or anywhere else. The regions want a life of their own, but in close association with the assembly. What are the vital interests referred to in the new clause? A definition would be most illuminating and would assist me in making a judgment on the new clause. Inclusivity is vital, but we need to ensure that the regions have a fair deal; after all, they have strong characteristics and individual needs. We need to be persuaded that the legislation will meet that challenge. The notion of one third of the assembly's members having to support any decision that might affect the vital interests of a region is interesting, although I am not sure why it should be specifically one third. I have more confidence in new clause 24 when it provides that the assembly should decentralise functions from Cardiff. That provision is similar to an amendment that we have tabled recently. Functions should be decentralised from Cardiff—or Swansea, as the hon. Member for Ceredigion (Mr. Dafis) pointed out—to the regions whenever possible and we should encourage public bodies to do likewise. I totally agree with the hon. Gentleman about the importance of that point. I was professionally involved in the work done by Trawscoed. It was obvious that the staff were doing a job that was relevant to rural Wales and accessible to a large proportion of the population—the farming community in particular. When I lived and worked in Aberystwyth, the administrative section of the Welsh Office Agriculture Department was removed to Cardiff and I did not think that that was an especially good idea. The assembly will need to consider such moves. We want to enable more local people to become involved in the decision making in their areas. We all know about the difficulties in Wales of communication and transport and the inadequacy of the infrastructure. It is vital that the assembly appears inclusive; the regions must have adequate powers. The assembly must react to and accept proposals from the regions. Many people from the regions of Wales will have great confidence in an assembly that behaves like that, and I hope that the Minister will convince us that it will do so. Otherwise, we shall have to adopt the new clause to ensure that it does so.

Desmond Swayne (Conservative, New Forest West)

I shall speak in favour of new clause 21. I should have preferred the opportunity to speak in favour of new clause 17 but, unfortunately, it was not called for debate.

Michael Martin (Deputy Speaker, Glasgow Springburn)

Order. The hon. Gentleman should not mention any clause or amendment that has not been selected by the Chair.

Desmond Swayne (Conservative, New Forest West)

I apologise, Mr. Martin. New clause 21 will do very well. It is appropriate that the new clause provides a mechanism that would address the interests and outlook of the regions that are at variance with the Welsh mean. If we take Monmouthshire as an example, we find that in the referendum only 10,592 voters were in favour of the assembly, against 22,403—more than double—who voted against. That was true not only in Monmouthshire: it was mirrored all the way down the March. Such results should be set in the context of an overall majority in Wales for the assembly of only 6,700-odd. The Prime Minister said that sensitivity would be exercised. New clause 21 would be evidence of such sensitivity, were it accepted. However, the sensitivity shown in the remarks made by the Secretary of State for Wales only two hours ago, when he said that the people of Wales won on the night of the referendum, leaves those of us who are anxious about the future of the interests of the regions I have mentioned feeling that our anxiety is well placed. Such regions are characterised by small market towns whose economic and political outlook is at variance with that of industrial south Wales, and our anxiety about them must be addressed. The Secretary of State would do well to appreciate that Owen Glendower failed to take Monmouth and, shortly after that, he met his end. The Monmouthshire and Berwick-upon-Tweed Act 1756 specifically excluded Monmouthshire from the provisions of legislation pertaining to Wales except when it was explicitly included.

Rhodri Morgan (Labour, Cardiff West)

First, perhaps the hon. Gentleman could tell us more about how and when Owen Glendower met his end, because—according to the history books—nobody knows how he met his end. Secondly, what is the hon. Gentleman's definition of a region?

Desmond Swayne (Conservative, New Forest West)

I shall not pursue that matter. The hon. Member for Cardiff, West (Mr. Morgan) asked about the definition of a region. We are constrained by the Bill and the new clause, but I acknowledge that another definition might have been more appropriate. To avoid being ruled out of order, I shall not pursue the subject any further. All I would say is that there must be a mechanism to address these issues. I know that Labour Members dispute that because, on Second Reading, there was much talk of a new politics. It was said that the assembly would be very different; that it would have a gender balance; that it would be inclusive of all minorities; and that children would trip about in the aisles. In all, it was going to be an assembly for the new Jerusalem. I wondered where I had heard all that before—and then it dawned on me; we are back in Praise-God Barebones' "Parliament of the Saints" in the 1640s. However, setting that aside, there must be a means of securing the interests of the regions that find themselves unsympathetic to the political outlook of the industrial areas in south wales that will dominate the assembly. New clause 21 provides such a mechanism.

John Smith (Labour, Vale of Glamorgan)

I strongly resist new clause 21, on the ground that it—if nothing else we have heard during seven days in Committee—blows the cover on the Tories. This is the new clause that proves that they have no intention of behaving constructively during the Bill's passage through Parliament or of campaigning during the assembly elections except in the divisive manner that we have heard tonight. The Tories' hypocrisy is breathtaking. Theirs is the party that opposed devolution tooth and nail to the bitter end; and tonight they expect us to believe that they now want devolved regions within Wales—our country. What a nonsense; what hypocrisy.

Michael Ancram (Conservative, Devizes)

The hon. Gentleman has obviously not read our new clause. We do not set out what the regions are, other than to accept the definition of electoral region that is already given in the Bill and for which Members will be elected both directly and by the additional member system. We are not inventing those—they are in the Bill. They were created by the Government.

John Smith (Labour, Vale of Glamorgan)

Yes—and let me tell you what else this ludicrous new clause does, Mr. Martin. It proves once and for all that its authors have no understanding of what it is to be Welsh and what it is to be part of one nation. The proposal that our new national assembly, the single voice for our country, should be undermined by this bureaucratic nonsense, exposes them for what they are. It is an appalling new clause.

John Smith (Labour, Vale of Glamorgan)

I would draw attention to the different ways in which this issue has been dealt with—there is one approach in new clause 21, which is a nonsense, and another in new clause 24, which raises some serious issues about these regional anxieties. That is the difference. [Laughter.] Let the Tories laugh; they may laugh all the way to the next election, when they will be wiped out because of their behaviour during the Bill's passage and in this Committee. Unfortunately, the new clause lowers the tone of the debate and the behaviour of the Opposition. Instead of constructively criticising the Bill and making realistic suggestions and proposals, they table wrecking new clauses such as the one before us and have no intention of giving the Bill principled support. My final point is practical. We have already gone out of our way to set up the regional Committees. By doing so, we have recognised the differences within our country—one country, one nation, which is about to inherit its mature nationhood. We have restructured the powerhouse; we are recognising the differences that exist within our country by restructuring the training and enterprise councils. We are fully aware of the differences that exist in our country. The fact that the north-east Wales corridor—

Michael Ancram (Conservative, Devizes)

rose

John Smith (Labour, Vale of Glamorgan)

I give way to the right hon. Gentleman, but I hope that he will not mess about.

Michael Ancram (Conservative, Devizes)

Under the hon. Gentleman's system, how many regions will there be?

John Smith (Labour, Vale of Glamorgan)

They will be regions established to reflect the genuine differences and the genuine interests of our people, which do vary. It is crucial that we throw out, and have nothing to do with, new clause 21. Any country, any democratic body, any democratic forum, must be able to take decisions that are in the strategic interest of the whole constituency. One of the terrible legacies of local government reorganisation in Wales is that the strategic county councils have been done away with and a tier of unitary authorities has been created. Those authorities do a damned good job in representing their own areas but they cannot represent the country as a whole.

Tim Collins (Conservative, Westmorland and Lonsdale)

The hon. Gentleman is waxing lyrical on the importance of clarity in local government in Wales. He has had a moment or two to think about it; will he now answer the question? What number of regions does he favour?

John Smith (Labour, Vale of Glamorgan)

This is typical of the behaviour that has characterised tonight's debate. The Tories are not serious; they are out to wreck this constructive Bill. It is vital that there is one voice for Wales: that one national body has the authority to speak for the whole country. For generations, if not centuries, the Tories tried to rule on the principle of divide and rule; they will not get away with it tonight.

Tim Collins (Conservative, Westmorland and Lonsdale)

We had a note of—perhaps unintentional—hilarity from the hon. Member for Vale of Glamorgan (Mr. Smith). Earlier, he waxed lyrical about how appalling, ludicrous and scandalous it was that there should be any suggestion of creating regions within Wales. When it was pointed out to him that regional Committees are in the Bill as proposed by the Government, he tried to change tack, but when he was asked—twice—how many regions or regional Committees he wanted, he was unable to say. That may show that there is some confusion on the Labour Benches just as, earlier, there seemed to be some confusion on the Labour Benches about whether Herefordshire should be inside the borders of Wales. Perhaps a new Welsh imperialist party is taking shape on the Labour Benches.

Win Griffiths (Labour, Bridgend)

I was only saying that parts of Herefordshire used to be in the diocese of St. David's, that many place names in Herefordshire are Welsh and that at one time it would have been part of Wales.

Tim Collins (Conservative, Westmorland and Lonsdale)

The Minister is making my point for me. Earlier, he suggested that Monmouthshire was as Welsh as Herefordshire, which slightly undermined his argument. Plaid Cymru Members rightly drew attention to what, from their point of view—and, I suspect, from that of many Labour Members—is the problem with new clause 21. It was said that new clause 21 is unacceptable because similar provisions will not apply in the Westminster Parliament. That slightly gave the game away, because we have been told throughout that the Bill will not create a Parliament and that the assembly will not have a power to make primary legislation. Nor will it have the power to introduce taxation. It is an assembly, not a Parliament comparable to Westminster. If it is argued that new clause 21 would not be accepted by Westminster, that gives part of the game away. My primary concern, however, is to reveal the heart of the reason new clause 21 is needed. The argument has been voiced a little in this part of the debate, but not sufficiently during the Committee's consideration of the Bill. New clause 21 is needed to deliver on the clear promises given by the Prime Minister and the Secretary of State the day after the result of the referendum, to which my right hon. Friend the Member for Devizes (Mr. Ancram) referred. 7.30 pm The Prime Minister and the Secretary of State said that they would take on board the fact that the result was exceptionally narrow, that they would listen to the arguments advanced by the no campaign—which did far better than anyone expected—and that they would present new proposals that would take account of the fact that the referendum result indicated not a huge mandate in favour of change, as the Secretary of State said, but the fact that the Welsh population was at best split down the middle, if not split one quarter in favour and three quarters apathetic or opposed. Where are those new proposals in the Bill? We have heard a little about the regional Committees, but if we do not know how many regional Committees there are to be, as has been amply demonstrated, it can hardly be said that they are a central part of the Bill or that a great deal of thought has been given to them.

Cynog Dafis (Plaid Cymru, Ceredigion)

The right hon. Member for Devizes (Mr. Ancram) suggested that the regions referred to in the new clause are the electoral regions from which the additional Members will be elected. Are Opposition Members seriously suggesting that we should regard the Mid and West Wales electoral region, which extends from the coast in the north right down through the centre of Wales, including Llanelli, Carmarthenshire and Pembrokeshire, as a coherent regional entity for the purposes of the new clause?

Tim Collins (Conservative, Westmorland and Lonsdale)

I agree to some extent with the hon. Gentleman. He makes a powerful case against the Bill, which was not introduced by my party, and against the electoral system, which throws up such absurdities. That is what happens when the Government try to introduce a new system of elections—we heard in Home Office questions that five different electoral systems will apply in the United Kingdom during the next 24 months. That is absurd. As my right hon. Friend said, we are proposing new clause 21 as a genuine attempt to get the Government to deliver on the promises that they made. They were not forced by us to make them. No member of the Conservative party was pulling the strings of the Prime Minister when he came out on the steps of No. 10 after the election and volunteered that the Government would listen and address the issues. The Secretary of State was not bullied or blackmailed into making the announcements that my right hon. Friend quoted earlier. He said that he recognised that the results showed that different parts of Wales had different attitudes towards the national assembly. It has been suggested that Conservative Members are being divisive, but it was the Secretary of State who said that there were different attitudes in the Welsh regions. The new clause may not be the ideal way to deal with the problem, but no one has come up with a better way. At least there is some substance to the new clause— unlike the nebulous regional Committees, which seem to have only advisory functions, which can be overruled by the assembly and whose number is to be guessed at or plucked from the mind of the Secretary of State at some time in the future. Now, when the Bill is being considered by the Westminster Parliament, we are not to be told how many regional Committees there will be. New clause 21 deals with a serious concern. We have heard from the Secretary of State and others who are in favour of the Bill that it is a major problem that needs to be tackled. The new clause deals with it in a responsible way. It provides that where there are to be decisions affecting the vital interests of a region, one third of the representatives of that region should vote in favour of that proposal. That is quite a low threshold by many standards. The new clause is constructive and would enable the Government to deliver on their promises. It would reflect the fact that the referendum result did not indicate, as we have heard repeatedly from the Secretary of State, that the Welsh people are of one mind and one determination, for they were not, according to the referendum result. Parliament has a responsibility to deliver on the undertakings made from the doorstep of No. 10 that the Bill would be amended to take account of those differences. We have the chance today, in the discussion on new clause 21, to make the Bill a great deal better and to give the Welsh people what they were led to believe, the day after the referendum, they would get. For that reason, I support new clause 21.

Rhodri Morgan (Labour, Cardiff West)

Despite the attempts at elegant advocacy by Conservative Members, new clause 21 remains, as I think was admitted by the hon. Member for Westmorland and Lonsdale (Mr. Collins), legislative junk mail. They know that it will not work. They are trying to tap into a wellspring of those who voted no, and to use them as a springboard for a modest electoral revival in Wales in the assembly election campaigns, the Euro-elections or the local government elections next year. I am afraid that Conservative Members are sadly mistaken if they think that trying to balkanise Wales is a constructive way forward. To provide for blocking minorities implies a degree of split in Wales that was not the purpose of the regional Committees, which were proposed in the White Paper and are mentioned in the Bill. Admittedly, only one is specified to serve the northern part of Wales. That may well be a northern Committee, but the rest of the structure of the regions is a matter that can be left until a later date, possibly to the assembly itself, to take account of the views of those elected to the assembly on the question of how many regions are needed in order to administer Wales in an appropriately decentralised way. To install blocking minorities as the new clause proposes is absurd. It is an attempt to balkanise Wales. It is a sound principle that any new legislative body should not attempt to run before it can walk, but this is a proposal to hobble the Welsh assembly before it can walk. There must be a balance in a democratically elected Welsh assembly, with a proportional representation component as to a third of the seats, which will enable people who are not of the majority party in any of the Euro-regions of Wales to have a fair chance to give them an incentive to take part in the election, even though they may never win a majority. That applies to Conservatives in the south Wales valleys and to Labour people in some remote rural parts of Wales. They may never win a majority, but their supporters have every incentive to vote because the party may have a candidate elected under the list system. It will be inclusive in that respect. The adoption of a committee system rather than a cabinet system in the modus operandi of the assembly is another way of ensuring that those who may not be able to win a majority nevertheless have some share of power. That also is intended to cover the fact that in areas of Wales there may be people who feel that they are not part of the dominant political culture. In democracies we always count heads—we count majorities, and majorities could conceivably oppress minorities. We accept that. The ways around it are those that have been proposed: proportional representation, the committee system and the establishment of regional Committees, with an obligatory northern Committee and others to be sorted out by the assembly or at a later date. The Welsh assembly must be given room to breathe. It must be able to act and to take a strategic all-Wales view at the times and on the subjects where that is appropriate. It must disperse and decentralise where it can, but it must have the strength to make decisions and to deliver on manifesto promises, taking as many of the people along with it as it can. Democracy requires the ability to get decisions made. To tie the Welsh assembly's legs together before it has had a chance to take a few strides, as new clause 21 would do, is absurd. It is an attempt to say to the assembly, "You don't exist yet, but, before you do, we want to make sure that you will be as weak as possible in case you do something to those who voted no in the referendum or those who vote Conservative in general elections". Is there any evidence to suggest that, under the proposed structure—given the absence of primary legislative powers and given the existence of an obligatory north Wales Committee, of a proportional representation voting system and of a modus operandi by committee—the assembly will oppress minorities in Wales? We do not know the answer to that question, so why should we assume that the assembly—which, unlike Parliament, will have all sorts of special features designed to prevent oppression of the minority by the majority—will do that? If those protections are not built into the Westminster system, why should we assume—even before the assembly is established—that it will oppress minorities because many people happen to live in the industrial south and north-east of Wales? It is true that 50 per cent. of the Welsh population live within 25 miles of central Cardiff—that is not a sin, although the hon. Member for Ceredigion (Mr. Dafis) might think so. That is the population distribution in Wales that we have inherited as a result of the various economic factors that lead people to live where they live. That is the way it is in Wales: many people live in industrial south Wales. We are heavily outnumbered by sheep in Wales by a ratio of about 9:1.

Rhodri Morgan (Labour, Cardiff West)

It is not as many as that—perhaps it is 5:1. The sheep to people ratio in mid and north Wales is different from the ratio in the industrial south. That is due to the nature of economic activities in different areas of Wales. We cannot, on the basis of some absurd fears, hobble the Welsh assembly with leg-irons before it is established. There are many protections in place as a result of the voting system, the modus operandi, proportional representation, and the obligatory north Wales Committee and the assumption of other regional Committees. If we were to accept new clause 21, myriad other new clauses would be suggested to provide further protection for those who voted no in the referendum. Those people would be offered individual opt-outs so that they would not have to pay obeisance to the Welsh assembly.

Michael Ancram (Conservative, Devizes)

The hon. Gentleman referred to "absurd fears". Were those the fears to which the Prime Minister referred? If not, to which fears did he refer?

Rhodri Morgan (Labour, Cardiff West)

The Prime Minister said that the narrowness of the majority in the referendum implied that the Welsh assembly would have to work very hard—and we would have to work hard in framing the legislation—to carry the people of Wales with us and overcome the apathy shown by 49 per cent. of electors who did not vote and those who voted no. How will we carry those people with us? One thing we must not do is exaggerate their fears and extend the natural centrifugal forces in Wales that are created by the population distribution in industrial south Wales, with the mountains in the middle and another population belt along the north Wales coast. We must overcome those centrifugal forces. We will not carry the people of Wales with us by balkanising Wales or—like the United Nations mandate in Bosnia—by installing blocking minorities for this or that and giving people the impression that they can opt out. That is not the correct way forward. We must generate enthusiasm for the new Welsh democracy that the legislation creates. We should not let people think that they can opt out in some way: they must opt into the new democratic structure. The Tories are trying to replay the referendum in an attempt to cash in on the high proportion of those who voted no and to create the impression that, in some way, the Tories are looking after their interests by helping them to opt out mentally, as it were, and not be part of the new democratic Wales. That is an absolutely pernicious way of thinking, which is a reversion to the old Tory colonial mentality: when all else fails, try divide and rule. We will not allow that to happen in our proceedings tonight.

Dominic Grieve (Conservative, Beaconsfield)

The more I listen to the arguments advanced by Labour Members—particularly the hon. Member for Cardiff, West (Mr. Morgan)—the more convinced I am about the correctness of new clause 21. The hon. Gentleman manifested real anger and passion when it was suggested that the new clause might appeal to voters in many parts of Wales. It is extraordinary to suggest that new clause 21 is a wrecking measure and an Opposition conspiracy designed to exploit differences in Wales. That is rather similar to the suggestion that the countryside rally was a conspiracy planned by landowners who gathered together 284,000 forelock-tugging retainers. The two arguments have exactly the same lack of discernment. 7.45 pm The fact is that tensions are currently present in Wales—the passion with which Government Members have opposed new clause 21 shows that they know that very well. It is a tribute to the hon. Member for Ceredigion (Mr. Dafis) that he recognises that those tensions exist. The question is: will those tensions be addressed?

Cynog Dafis (Plaid Cymru, Ceredigion)

I did not mention tensions. I spoke about the need to develop a decentralised pattern of government in Wales, unlike the grossly centralised pattern of government that Britain has had for so long.

Dominic Grieve (Conservative, Beaconsfield)

I apologise to the hon. Gentleman if I have misquoted him. I took the thrust of his argument to mean that he recognised that there is immense diversity of view in Wales. We know that from the referendum result. Numerous regions of Wales do not want the assembly. One might infer that they are suspicious of the assembly for a host of different reasons, ranging from a lack of desire for another tier of government to the fact that their regional identity is so markedly different from the areas of south Wales that they believe will become dominant that they are seeking protection. Those problems will not go away. Over time, the sense of national identity reflected in the comments about a "national assembly"—and descriptions of it as such—may prevail. However, one can only apply one's own experience and what one sees for oneself when one travels through Wales. When I visit Wales, I get the impression that there is immense diversity and a great sense of local identity. Many people are deeply suspicious of the Cardiff assembly.

Donald Anderson (Labour, Swansea East)

What about the Swansea assembly?

The rest of the debate is in Hansard.