House of Lords - Constitution

Select Committee on Constitution Eighth Report

Government of Wales Bill

1. Our terms of reference are to "examine the constitutional implications of all public bills coming before the House; and to keep under review the operation of the constitution".[1]The subject-matter of the Government of Wales Bill clearly demands attention under both these heads. We have followed our usual practice of focusing only on those issues of principle that affect a principal part of the constitution, and therefore do not comment on the merits of the Government's devolution policy, as these are for the House as a whole to consider.

2. The report summarises the aims of the bill, sets out some of the background to the developments in Welsh devolution, and goes on to examine in outline the main issues of constitutional principle that emerge from the bill. We are grateful to the Secretary of State for Wales for agreeing to give evidence on the bill on 15 February 2006. A transcript of that meeting is set out as an appendix to our report, as are a written memorandum from the Secretary of State and a copy of a letter from the Parliamentary Under-Secretary for Wales to the Shadow Secretary of State for Wales, which helpfully gives illustrative examples of proposed legislative competence Orders of the type envisaged by Part 3 of the bill.

AIMS OF THE BILL

3. It is often acknowledged that "devolution is a process, not an event". The Government of Wales Bill seeks to take the next step, and the one after that, in this process. In essence, the bill seeks to achieve five main goals:

Parts 1 and 2 alter the corporate status of the National Assembly for Wales ("the Assembly") to differentiate the Assembly and the Assembly Government. This aspect of the bill has broad cross-party support. Indeed, to some extent it formalises in law some of the practical developments that have occurred since 1999.

The bill retains an Additional Member System for elections to the Assembly, but clause 7 seeks to prevent persons standing simultaneously as a candidate on a regional list and for a constituency. This proposed bar has aroused considerable controversy.

Part 3 of the Bill creates a complex process by which the Assembly may acquire enhanced law-making powers. The Government says that this "is not about broadening the terms of devolution but deepening it".[2] Over the areas that the Assembly currently enjoys executive powers, it will be able to enact a new form of law called Assembly Measures. The power to do so will be delegated by Parliament on a subject-by-subject basis. The Secretary of State for Wales retains considerable control over the acquisition of those powers by the Assembly, and all delegations of power will be subject to approval by both Houses of Parliament.
Part 4 of the bill is a blueprint for the future. It sets out a scheme for the devolution of primary legislative powers to the Assembly. The model chosen is different from that of the Scottish Parliament. Part 4 will be brought into force at an unspecified point in the future and only after a "yes" vote in a referendum of the Welsh people. The Bill has been criticised for not including the wording of the referendum question.
Part 5 of the bill deals with finance and the creation of a Welsh Consolidated Fund.

BACKGROUND

4. The Secretary of State told us that although the scheme of devolution established by the Government of Wales Act 1998 has in many respects worked well, "there has been a number of shortcomings exposed in the process and experience"[3].

Corporate status

5. Only months after the first elections to the National Assembly in 1999, there was growing concern about one feature of the scheme established by the 1998 Act—that the Assembly was a corporate body without a formal separation between its legislative and scrutiny activities on the one hand, and executive functions on the other. The corporate body model of government, by subject-specific committees, had been borrowed from local government. Powers were conferred on the Assembly as a whole and then delegated to the First Secretary by Assembly Members. Many people took the view that this arrangement generated considerable confusion among the public and provided inadequate scrutiny of policy initiatives and implementation. A cross-party review of Assembly procedures in 2001-02 resulted in a greater de facto separation between the Assembly and the executive. Parts 1 and 2 of the bill put the separation on a statutory footing and have broad cross-party support.

Richard Commission

6. Other dissatisfactions also arose. In July 2002 the First Minister (as the First Secretary was by then styled) set up a ten person Commission on the Powers and Electoral Arrangements of the Assembly, chaired by the Rt Hon the Lord Richard QC. Its remit was to review the adequacy of the Assembly's powers and its electoral arrangements. The Richard Commission held nine public meetings and issued two consultation papers before the publication of its report in March 2004.[4] The report was commended by one commentator as supplying "a clear constitutional vision, more especially in terms of legal and political accountability".[5] The Commission worked on two assumptions in relation to constitutional principles: "First, those gains in democracy and accountability are valuable in themselves. Second, that more open, participative and responsible governance is likely to produce better policy outcomes".[6] The majority of the Commission reached the following conclusion:[7]

"We do not think the status quo is a sustainable basis for future development. Although there has been significant evolution in the Assembly's powers since 1999, it has been an ad hoc, piecemeal development, on a case by case basis, not founded upon any agreed general policy, or informed by any clear set of devolution principles. The legislative relationship between Cardiff, Whitehall and Westminster has grown significantly, but remains dependent upon particular situations and even individual departmental inclinations".

7. In Box 13.5 of their report, the Commission set out their preferred model for a reformed legislative Assembly for Wales.[8] They recommended a bill to confer primary law-making powers on the Assembly along the lines of the Scotland Act 1998, with specified reserved areas of policy on which Westminster would legislate and everything else devolved.[9] The reserved areas could include: defence; fiscal and monetary policy; immigration and nationality; competition; monopolies and mergers; employment legislation; most energy matters; railway services (excluding grants); social security; election arrangements (except local elections); most company and commercial law; broadcasting; equal opportunities; police and criminal justice. The Commission suggested that the Assembly's corporate body structure be replaced with a separate executive and legislature. The Commission took the view that the membership of the Assembly should be increased from 60 to 80, elected on a Single Transferable Vote system. Tax-varying powers would be desirable but not essential. The Commission stated that these changes should be put in place by 2011, or sooner if practicable. Although the issue was not within the Commission's terms of reference, they considered whether a referendum of the people of Wales should be held. The Commission concluded that the "judgement is one for the UK Government and Parliament to make in the light of their assessment of the response to our report and the ensuing debate in Wales".[10]

The May 2005 General Election

8. The May 2005 General Election took place before the Government formally responded to the Richard Commission report. The Welsh Labour Party manifesto 2005 stated:[11]

"The nations and regions of the UK. In our first term, we devolved power to Scotland and Wales and restored city-wide government to London. Britain is stronger as a result. In the next Parliament, we will decentralise power further. Labour is the party of devolution in Wales. We campaigned for and secured a "Yes" vote in the 1997 referendum and since 1999 have led an Assembly Government committed to achieving full employment and record investment in our schools and hospitals. But the experience of the last six years shows the need for further reform. In a third term we will legislate for a stronger Assembly with enhanced legislative powers. We will improve the accountability of Ministers by ending the confusing corporate status of the Assembly, thereby ensuring that the people of Wales know who is responsible for the decisions taken in their names. Alongside these changes we will prevent candidates from standing on both the list and in a constituency in order to make all candidates genuinely accountable to the electorate and to end Assembly Members being elected via the backdoor even when they have already been rejected by voters."

Wales Office White Paper

9. The Government's formal response to the Richard Commission report came in June 2005 in the White Paper Better Governance for Wales (Cm 6582). In one important respect the White Paper accepted recommendations made by the Commission—that there should be a parliamentary style of government, with a separation between executive and legislature. The White Paper differed from the Richard Commission in relation to other central questions. The Commission's "Box 13.5" model for the future of the Assembly, and the timetable for achieving it, was rejected. Instead the Government proposed "to give the Assembly, gradually over a number of years, enhanced legislative powers in defined policy areas where it already has executive functions".[12] This gradualist approach has attracted criticism in some quarters, being described as "something of a messy compromise between the status quo and a swift move to full legislative devolution, as enjoyed by Scotland and as recommended in the Richard Report".[13]

10. The White Paper rejected the Richard Commission proposals for changes to the size and electoral arrangements of the Assembly. Instead, the Additional Member System of election would be retained, but with a new bar on candidates simultaneously standing for both a constituency and also being on a regional list.

11. The Government envisages three broad phases in Welsh devolution:

Phase 1 is the current situation. This includes framework provisions in Acts of Parliament granting broad powers to the Assembly to make delegated legislation[14] and the enactment from time-to-time of Wales-only Bills.[15]
Phase 2 is to provide a system to enable the Assembly to request the Secretary of State and Parliament to confer law-making powers in relation to a list of "fields". This power to make Assembly Measures is provided for in Part 3 of the bill.
Phase 3 is to confer powers to make primary legislation (Acts of the Assembly) in relation to a list of defined fields over which the Assembly will have full legislative competence. This would only occur after a "yes" vote in a referendum. Part 4 of the bill makes provision for this.

THE MAJOR CONSTITUTIONAL ISSUES

12. At our meeting on 15 February 2006, we examined three key areas:

The operation of Part 3 of the bill, which will in the near future bring about the next phase of devolution by enabling the Assembly to make Assembly Measures.[16]
The constitutional implications of Part 4 of the bill, which provides for devolution of primary law making powers at some point in the future, after a referendum.[17]
The proposed alteration to electoral arrangements for the Assembly, to bar candidates standing concurrently for a constituency seat and on a list.[18]

We also draw attention to:

the bill's provisions relating to the party political composition of Assembly committees:
the calls that have been made for the bill to provide a referendum in relation to Part 3:
the dormant condition of the Joint Ministerial Committee, a subject previously examined by this Committee in their report Devolution: Inter-Institutional Relations in the United Kingdom,[19] and discussed with the Lord Chancellor in 2004.[20]

We discuss these issues in the order in which they arise in the bill.

PART 1 OF THE BILL

Electoral Arrangements

13. Under the Government of Wales Act 1998, elections for the 60 Assembly Members (AMs) take place under a proportional representation system known as the Additional Member System (also known as a Mixed Member System). 40 AMs are elected on a first-past-the-post basis for 20 constituencies which are coterminous with the parliamentary constituencies. To achieve some degree of proportionality, a further 20 AMs are elected from party lists in five regions. Thus there are two types of AMs—constituency AMs and regional AMs.

14. The Richard Commission recommended that the number of AMs be increased to 80, elected on a Single Transferable Vote system. The Government rejected this proposal. The bill retains 60 AMs and the Additional Member System, but with one controversial modification—the banning of dual candidacy. Clause 7 seeks to prevent a candidate simultaneously standing for one of the 20 constituencies and having his or her name on a party list for election as an additional member. The White Paper stated "In the Government's view, for losing candidates to be able to become Assembly Members regardless of their constituency election results both devalues the integrity of the electoral system in the eyes of the public and acts as a disincentive to vote in constituency elections".[21]

15. The bar on dual candidacy was debated at length in the House of Commons.[22] We note that, among other organisations, the Electoral Commission (the public authority established in 2000 to foster public confidence and participation in elections) and the Electoral Reform Society (an organisation that campaigns for electoral reform) have criticised the proposed reform.[23] It is said that the bar on dual candidacy has very few international precedents; and that, on the contrary, dual candidacy is a common and accepted feature in proportional systems across the world. It is also said that the bar will disadvantage opposition parties more than the Labour party in Wales. Moreover, critics add that in January 2006 a bar on dual candidacy was considered and expressly rejected by the Arbuthnott Commission in relation to the Scottish Parliament.[24]

16. The Secretary of State told us that when he helped to take the Government of Wales bill forward in 1998, and put forward the Additional Member System, he "never anticipated the consequences in terms of regional list members competing with constituency members, in the bulk of cases people who had defeated them"[25].

17. We note that the Government's commitment to introducing a bar on dual candidacy was contained in the Labour Party's General Election manifesto in 2005 and do not seek to comment on the merits (as opposed to the constitutional implications) of the policy. We hope, however, that the Government will take care to explain to the House what other options have been considered (for example replacing the regional lists with a single national list across the whole of Wales) and why they have been rejected. All electoral systems have defenders and critics, and the Additional Member system is no exception.

Composition of Assembly committees

18. Clause 29 of the bill requires the standing orders of the Assembly to make specific provision as to the party political composition of committees. The Explanatory notes explain that "Generally speaking, political groups' entitlement to membership of each committee is to be determined by the d'Hondt method of distribution which is used to allocate regional seats at Assembly elections; but standing orders permitting, some other distribution method may be applied in the case of a particular committee if
two-thirds of Assembly members voting on a resolution support such a proposition". There is no comparable provision in the Scotland Act 1998 in relation to committees of the Scottish Parliament, though the d'Hondt formula is used under the Northern Ireland Act 1998 to determine chairs and deputy chairs of committees in the Northern Ireland Assembly. It may be thought that clause 29 is an inappropriate incursion into matters that should be left for the Assembly to determine for itself.

PART 3 OF THE BILL

19. Part 3 of the bill sets out the procedures to be followed in the next phase of devolution. This will provide the Assembly with enhanced legislative powers in relation to subject areas which are broadly similar to those over which it currently has executive powers. Schedule 5 to the bill contains a list of 20 "matters" over which the Assembly may seek to have legislative competence. They include, for instance, "Field 1: agriculture, fisheries, forestry and rural development", "Field 2: ancient monuments and historic buildings" and "Field 3: culture". Clause 94(1) creates a Henry VIII power for the Minister to add a new field, vary or remove any field. The Government have, however, said that they have no plans at present to extend the responsibilities of the Assembly.

20. If the Assembly wishes to have greater legislative powers over a field than it already possesses, it will request that the Secretary of State take steps to create a "matter" under the appropriate "field". If the Secretary of State agrees, he will seek approval by Parliament for a "legislative competence Order", which will have the effect of amending Schedule 5 to the bill to include the new "matter". The process envisaged by the bill is broadly as follows:

(a) There will be debate in the Assembly about the desirability of seeking powers to make Assembly Measures in relation to a particular field;

(b) If the Counsel General[26] or the Attorney General takes the view that a proposed "matter" does not relate to a "field", they may refer the issue to the Supreme Court.[27] The Court is likely to consider "the pith and substance" and "the true nature and character" of the provision. The Government have given the following as an illustration of the type of issue that may arise: "We will soon be debating the Health Bill, which deals with, among many other things, a ban on smoking in public places. Within that bill there are provisions to give the Assembly secondary legislation powers. Some may argue that that is a licensing issue rather than a health issue, but the purpose of the regulations that will ban smoking in public places is clearly health-related";[28]

(c) Assuming the Secretary of State, Counsel General and Attorney General are all content with the Assembly's initiative, a "proposal for an Order" (also referred to as a "preliminary draft Order") will be laid before both Houses of Parliament, along with an explanatory note. The Secretary of State has said that "the Order will not be long and will not set out the detail of the policy that the Assembly wishes to implement, although that will be explained in an explanatory memorandum, because that will be a matter for the Assembly to determine";[29]

(d) There will be pre-legislative scrutiny of the proposal for an Order by Parliament and the Assembly. Amendments may be suggested at this stage. The Assembly will reconsider the proposal for an Order in the light of comments from the parliamentary committees and any committee of the Assembly that has conducted pre-legislative scrutiny. A final text of the Order ("the draft Order") will be produced;

(e) The Secretary of State will have 60 days to consider whether to lay the draft Order before each House, or give notice in writing to the First Minister of his refusal to do so and the reasons for that refusal. There have been calls for the Secretary of State's power at this stage to be limited to refusing to proceed with the draft Order on procedural grounds rather than on the merits of the policy which the Assembly wishes to pursue.[30] There is a possibility of litigation to challenge the Secretary of State's decision. No specific procedure for legal challenge is set out, so the matter would be dealt with at first instance by a claim for judicial review in the Administrative Court (sitting in London or Cardiff);

(f) The draft Order in Council will be laid before both Houses of Parliament. The text will not necessarily incorporate amendments suggested during the process of pre-legislative scrutiny, as these will not be binding on the Secretary of State. The procedure for scrutiny and debate will be for each House to decide. Both Houses must approve the draft Order before it is made. Once made, the Order will amend Schedule 5. Parliament will have no further routine role in the process after this point;

(g) Within the ambit of the legal competence conferred by the new "matter", the Assembly will be free to make Assembly Measures in accordance with its Standing Orders. Assembly Measures will have similar legal effect to Acts of Parliament: they may modify the effect of legislation made or enacted before or after this bill is enacted, or make entirely new provision:

(i) The bill requires that the Assembly provide three stages of consideration—on the principle, the detail and the final text of draft Measures. The Assembly's Standing Orders will provide more detailed requirements on the procedure to be followed;

(ii) The Secretary of State has a power to intervene on specified grounds to prohibit the Clerk of the Assembly from submitting a proposed Assembly Measure to Her Majesty in Council (clause 100). The Counsel General or Attorney General may refer a draft Assembly Measure to the Supreme Court if there are doubts as to whether it is within the legislative competence of the Assembly. If they do not intervene, other persons may be able to make a claim for judicial review in relation to the draft Measure in the Administrative Court;

(iii) The proposed Assembly Measure is submitted to Her Majesty in Council for formal approval;

(iv) An Assembly Measure may confer on the Assembly Government powers to make subordinate legislation, so there is the likelihood of a further level of delegation here. Scrutiny of that delegated legislation will be a matter for the Assembly;

21. The relative breadth or narrowness of the "fields" set out in Schedule 5 and the "matters" that may come to be added by Orders under each field is of obvious practical importance. The fields in Schedule 5 are generally similar to those in Schedule 2 to the Government of Wales Act 1998 (which stipulates the functions initially transferred to the Assembly). There are three new fields: "fire and rescue services and the promotion of fire safety"; "National Assembly for Wales" (which will allow the Assembly to make legislation under Assembly Measures); and "Public Administration". The 1998 field of "social services" is widened to "social welfare". As already noted, there are Henry VIII powers in clause 94 enabling the Secretary of State to vary, remove and add new fields to Schedule 5. The illustrative examples of "matters" provided by the Government suggest that at least in some contexts these are going to be fairly broadly drafted.[31] Thus one illustration in relation to "Field 10: highways and transport" is "Matter 10.1: Provision requiring the making of plans and strategies relating to public transport facilities and services by the Welsh Ministers or local or other public authorities".

Parliamentary pre-legislative scrutiny of proposed Orders in Council

22. The provision of effective pre-legislative scrutiny in Parliament of requests for enhanced powers (stage (d) in paragraph 14 above) is clearly essential. We were concerned that in debates so far little has been said about what role the House of Lords might play at this stage. Informed estimates are that there are likely to be five or six legislative competence Orders coming before Parliament each year. It has often been assumed that the House of Commons Welsh Affairs Committee, perhaps working in conjunction with members of the Assembly, will have a monopoly over this important scrutiny work.[32] The Secretary of State told us that the Government sees the House of Lords as having a "crucial role". The precise arrangements will, of course, be a matter for the House not the Government. It is however clear from the Secretary of State's remarks that the Government foresees limits on the role for the House of Lords in this particular context. The Government accepts that there would be scope for both Houses to conduct concurrent (but not consecutive) pre-legislative scrutiny of proposed legislative competence Orders but that it would "create quite a difficulty" if a process of scrutiny in the House of Lords were to reach a different view from that of the House of Commons Welsh Affairs Committee[33].

23. In due course the House will need to consider how best to contribute to scrutiny of proposed legislative competence Orders. This work might be done by the Delegated Powers and Regulatory Reform Committee or by the Constitution Committee. In this context we may recall the recommendation made in 2000 by the Royal Commission under Lord Wakeham's chairmanship that the "reformed second chamber should be so constructed that it could play a valuable role in relation to the nations and regions of the United Kingdom whatever pattern of devolution and decentralisation may emerge in future".[34]

24. The scale of work involved in scrutinising the proposed and draft legislative competence Orders is likely to be relatively modest. It will be necessary for the Procedures and Liaison Committees to decide how this should be done. If the task is undertaken by one or more of the existing committees (for example, the Delegated Powers and Regulatory Reform Committee or the Constitution Committee, on the basis that the Orders are a form of delegated power but may raise constitutional issues), a clear demarcation of roles would be desirable to ensure effective scrutiny and avoid repetition of effort. It will be important for the committee involved to have sufficient expertise and experience of Welsh affairs. Thought will also need to be given as to how the work of this House, and its committees, can complement rather than merely duplicate the work of the Welsh Affairs Committee in the House of Commons. In reviewing the options for scrutiny, the House may wish to view the situation strategically and consider whether there is a case for a new committee charged with a broad responsibility for keeping the whole of the United Kingdom's devolution settlement under review.

Legislative powers and scrutiny by the Assembly

25. Part 3 of the bill will delegate significant legislative power from Parliament to the Assembly to make Assembly Measures. The Secretary of State reminded us that the delegation of law-making powers to an elected body that is itself accountable to the Welsh people is a different proposition from the situation where the delegation of powers is to a Minister[35]. This is clearly correct. Nonetheless, it is legitimate for the delegator of legislative power to express an interest in how that legal authority will be exercised. It is generally acknowledged that the Assembly needs to improve its capacity to provide detailed scrutiny of draft legislation. The Richard Commission, in the context of their proposals that the Assembly should have primary legislative powers, concluded that "if the powers of the Assembly are increased, scrutiny will have to be given a greater priority in the work of the Assembly, particularly of committees" (p.258). It needs to be remembered that a least a dozen Members will form the Assembly Government. The Richard Commission recommended that the number of Assembly Members should be increased from 60 to 80. Moreover, it needs to be remembered that at least a dozen will be members of the Assembly Government. The Secretary of State told us that it was not a "particularly attractive proposition at the moment" for the Government to advocate more politicians and that the solution instead lay in the Assembly "just actually working harder"[36]. Currently the Assembly has a 33-week working year and meets for two or three days a week.

26. Part 3 of the bill will require a significant step-change by the Assembly. We share the concerns expressed by the House of Commons Welsh Affairs Committee about the strains that the new law-making powers may place on the ability of the Assembly to carry out effective scrutiny of proposed legislative competence Orders and the draft Assembly Measures that will follow.[37] It will be important for the Assembly to keep the arrangements under review. We also believe that it is legitimate for Parliament to take an interest in the matter under the regime created by Part 3 of the bill, which creates shared responsibilities for law-making stopping short of full devolution of primary law-making powers.

Feedback from the Assembly to Parliament

"the Assembly might produce a Measure substantially different in detail from the draft proposal on which this House votes. That problem must be inherent in the procedure that the Secretary of State proposes. Although this House will retain responsibility for primary legislation in this country, there is a danger that it will abdicate some of that responsibility."[38]

28. We explored a different idea with the Secretary of State, namely that the Assembly or Assembly Government might lay before Parliament an annual reportof its work that could provide the basis of a dialogue with Parliament[39]. The First Minister already publishes an informative annual report.[40] The Secretary of State was against any legislative requirement that the Assembly produce an annual report specifically for Parliament, on the grounds that it would be a novel and odd constitutional principle "for Parliament to hold a separately elected legislature to account" and he suggested that would "signal an unravelling of the political settlement, and indeed the very principles of devolution"[41]. The Secretary of State said that there is already "constant communication" between this House and Assembly Members and that there was nothing to stop committees of this House conducting inquiries into particular aspects of Welsh affairs.

29. There are dangers associated with over-reliance on informal methods of communication between members of institutions. Most public bodies, including this House,[42] produce annual reports explaining their achievements and challenges. We see much to be gained by both the Assembly and Parliament for having in place a requirement (or expectation) that a summary of the exercise of its Part 3 powers be included within the Assembly Government's annual report laid before Parliament. Such an arrangement would provide a valuable formal channel of communication with this House and its committees.

Complexity of sources of law

30. A further issue we raised with the Secretary of State was that of the proliferation of sources of law in Wales, a problem that will be exacerbated after Part 3 of the bill comes into force. Professor Keith Patchett has identified that there will be nine sources of Welsh-related legislation and he has expressed concern about accessibility of law.[43] The House of Commons Welsh Affairs Committee in its December 2005 report called for progress to be made on developing a Welsh statute book, which would act as a register of relevant legislation.[44] While this would go some way to addressing the most pressing problems of accessibility of law, it is not a panacea. The Secretary of State responded to our concerns by saying that "several sources of legislation is not a new phenomenon, and certainly is not unique to Wales" and was "probably a feature of any devolved or federal system of government in which political power is exercised at different levels"[45].

31. As Professor Himsworth has noted in a paper commissioned by this Committee in September 2004, "we can expect not a simpler but a more complex future" for legislative processes and legislation relating to Wales.[46] Part 3 of the bill does nothing to simplify either the sources of law relating to Wales or the process by which those laws are made. Problems with access to law, whether for citizens, public authorities or legal professionals, are not merely practical inconveniences but go to the heart of the constitutional principle of the rule of law. Confusion about who makes legislation, caused by complexity in the legislative processes, also risks undermining public confidence. We believe that there is a clear risk that the gains in transparency and promotion of public understanding by ending the corporate status of the Assembly in Parts 1 and 2 of the bill may be obscured by the intricacies created by Part 3.

A referendum on Part 3

32. There have been calls in the House of Commons for the bill to require a referendum before Part 3 of the bill is brought into force.[47] It is said that Part 3 will transfer significant legislative competence from Parliament to the Assembly, and the fact that this will be done on a piecemeal basis and brought about by secondary legislation does not diminish the significance of the change. In short, Part 3 is a major constitutional shift. In opposing calls for a referendum, the Government present Part 3 of the Bill as an incremental change and point also to the mandate for enhancing the Assembly's powers flowing from the Labour Party's 2005 General Election manifesto. We draw the issue to the attention of the House, noting that the absence of well-developed conventions and criteria in the United Kingdom as to when and why referendums should be held makes it difficult to assess the rival arguments against the benchmark of constitutional principle.

PART 4 OF THE BILL

33. Part 4 of the bill is intended to provide a blueprint for the future development of the Assembly and will not be brought into force until after a "yes" vote in a referendum. The Secretary of State told us that he did not expect there to be any popular demand for a referendum "soon"[48]. Given this state of affairs, we discussed why Part 4 of the bill needs to be put on the statute book now. The Secretary of State accepted that this was a good question and explained that the Government had reached this view after a lot of thought[49]. In essence, the Government's reason for deciding to go down this route is that it is important that the constitutional status of the Assembly is settled. The Secretary of State told us that it was destabilising for the future of the Assembly to be under constant challenge and debate as this diverts "attention from the policy, so instead of focusing on whether a policy being adopted by the Assembly is good or bad, or whether the delivery is effective, people always say that there is a shortcoming because there are not enough powers, whereas in fact that is not usually the case"[50].

34. We do not, in this report, seek to comment on the merits of the Government's general policy on devolution. We note, however, that the Government's 2005 General Election manifesto, while promising that "In a third term we will legislate for a stronger Assembly with enhanced legislative powers", did not contain an express commitment to legislate for an Assembly with fully devolved primary law-making powers. It will be for the House as a whole to consider the policy contained in Part 4 and the wisdom of seeking to place onto the statute book a scheme of devolution that is unlikely to be brought into force for several years.

The Part 4 referendum question

35. Previous referendum questions have been specified on the face of the Act of Parliament that makes provision for them.[51] Under the bill, a referendum will be triggered by a two-thirds majority of Assembly Members voting in a plenary session, followed by the Secretary of State tabling an Order in Council to be approved by both Houses of Parliament. The bill does not set out what the question will be and leaves this to be settled in the Order. The Secretary of State explained to us that the "Political Parties, Elections and Referendums Act sets out the principles and the template for conduct of referendums and section 104 of the Act clearly envisages that referendum questions could be set out in subordinate legislation, which is what the bill proposes, an Order in Council at the appropriate time"[52]. He added that "if, say, you had a referendum in the next decade we do not know what the political circumstances might be"[53].

36. We accept that Part VII of the Political Parties, Elections and Referendums Act 2000 provides a framework for consultation about a proposed referendum question. Nonetheless we share the view of the House of Commons Welsh Affairs Committee that wording of the referendum question should be included on the face of the bill rather than laid down in secondary legislation at some future time.[54] A referendum is one of the few opportunities for individual citizens to express a formally binding view on a matter of great constitutional significance. It is therefore preferable that elected representatives be able to scrutinise the question fully and, if needs be, to move amendments to the proposed question in Parliament. This House, too, has a special responsibility to ensure the constitutional acceptability of the question. Secondary legislation provides an inadequate means of achieving this.

Model for defining the Assembly's legislative competence

37. In any federal or devolved system of government there are two main options for setting out the relative legal competence of the two levels.

(a) The lower level (state/region/province) has competence over all matters except those which are expressly reserved to the higher (federal/national) level. This model was chosen for Scotland in the Scotland Act 1998.

(b) The higher (federal/national) level retains competence over all matters except those which are expressly conferred on the lower (state/region/province) level. This was the model chosen for Wales under the Government of Wales Act 1998, and also under the Scotland Act 1978 which of course never came into force.

38. The Richard Commission preferred option (a). The Government has opted for (b) in the bill. The bill therefore has the effect of perpetuating the fundamentally asymmetric character of the devolution settlement in the UK. We acknowledge that the arguments for and against the method of definition adopted in the bill are finely balanced. The Secretary of State told us that the Government did not choose this model "in any kind of dogmatic way"[55]. The Government did consider model (a), but rejected this option after advice from the Law Officers and Parliamentary Counsel that it would be "extremely difficult to draft and its effect would be rather uncertain"[56]. Different models were appropriate in Scotland and Northern Ireland because they are separate legal jurisdictions, "whereas Wales is part of a single England and Wales jurisdiction, so what works well in relation to Scotland and Northern Ireland cannot simply just be, as it were, transferred across to Wales"[57].

39. We note the Government's reasons for adopting the model of division of powers contained in Part 4 of the bill. It will be for Parliament to decide whether it concurs.

THE JOINT MINISTERIAL COMMITTEE

40. In our December 2002 report Devolution: Inter-Institutional Relations in the United Kingdom,[58] we drew attention to the "heavy reliance on good will in intergovernmental relations". We stated:

"We would certainly not seek to recommend the absence of goodwill as an element of intergovernmental relations. We are pleased to note that goodwill exists and acknowledge its value to date. However, we are concerned by the sheer extent of the reliance on goodwill as the basis for intergovernmental relations within the United Kingdom. We are also concerned that goodwill appears to have been elevated into a principle of intergovernmental relations: it is used to explain the avoidance of disputes and to justify maintaining the present informality of the system. Some also argue that it works against the pluralist concept of devolution in that informality helps perpetuate previous practices. While matters may be relatively straightforward now, we wish to ensure that good and effective relations between governments can continue even if the present level of goodwill should decline."[59]

41. The Committee speculated that the levels of goodwill present in the early years of devolution would diminish over time and recommended that:

"further use should be made of the formal mechanisms for intergovernmental relations, even if they seem to many of those presently involved to be excessive. Formal mechanisms, such as the Joint Ministerial Committee (JMC), are not intended to serve as a substitute for good relations in other respects, or for good and frequent informal contacts, but rather to serve as a framework for such relations and to act as a fall-back in case informal personal relations cease to be sufficient. Such mechanisms are likely to become increasingly important when governments of different political persuasions have to deal with each other."[60]

42. The Memorandum of Understanding establishing the JMC sets out two formats for JMC meetings.[61] There should be a plenary session meeting at least once a year attended by the UK Prime Minister, UK Deputy Prime Minister, Secretaries of State for Wales, Scotland and Northern Ireland,[62] and the First and Deputy First Ministers from Scotland, Wales and Northern Ireland. The Memorandum also provides for "functional" meeting of the JMC with relevant Ministers gathering to discuss policy areas (currently specified as Health, the Knowledge Economy, Poverty and Europe). Of these four, only the JMC on Europe meets most regularly[63] (though there is no public notification of the dates, attendance or agendas). There was no plenary meeting of the JMC during 2003, 2004 or 2005.

43. We continue be concerned about the dormant condition of the JMC arrangements. It is important for the long-term future of devolution for the formal machinery of inter-governmental relations to be kept in good working order.

CONCLUSION

44. The bill plainly contains provisions of constitutional significance not only for Wales but for the future of the United Kingdom's scheme of devolution generally. The new forms of legislation provided for in Part 3 of the bill—legislative competence Orders (made by Parliament) and Assembly Measures (made by the Assembly)—also have broad implications for Parliament's role as a legislature. The legislative competence Orders are secondary legislation in which both Houses of Parliament would have less influence than is the case with the passage of bills. This is because each House would consider proposals for Orders and draft Orders simultaneously rather than (as with a bill) consecutively, and there are no opportunities to move amendments to draft Orders; any influence over Government proposals must be made more informally and in a non-binding manner during whatever pre-legislative scrutiny takes place.

45. The Government of Wales Bill, which makes extensive use of secondary legislative powers to achieve important constitutional ends, is introduced to the House against a backdrop of controversy about delegated powers provisions in other recent bills. The Company Law Reform Bill[64] has sought to give Ministers "a Henry VIII power of enormous proportions" to make Orders for the purpose of reforming the law relating to companies.[65] As we have pointed out elsewhere, the Legislative and Regulatory Reform Bill seeks to confer even broader powers to change the law by Order[66]. Understandably, the Secretary of State expressed the hope that the Government of Wales Bill will be considered on its own merits with the interests of Wales in mind, and kept separate from concerns about delegating legislative powers on Ministers[67]. We accept that this should be so in that the delegation of law making powers to an elected body is indeed very different from delegating them to Ministers.