Oral evidence: Pre-Legislative Scrutiny of the Draft Wales Bill, HC 962Thursday 16 January 2014

Oral evidence, 16 January 2014.

Witnesses

Neil Brierley, Chair, Royal Institution of Chartered Surveyors Wales, and Dr John Ball, gave evidence.

Chair

Dr Ball and Mr Brierley, thank you so much for bearing with us. Apologies for the slight delay; we will try and get things back on track.

Nia Griffith

I will start off with stamp duty land tax again. Does our RICS representative have any particular views on how that power should be used—the potential, the risks? What would you like to see?

Neil Brierley

Certainly, we welcome the ability to look at varying stamp duty land tax. One element we would be keen to explore and have scrutiny of is the slab element. At the moment you have sizeable jumps between certain bands. We would ask whether it should be a similar process to income tax, for example, where you pay a certain amount on a first value and then when you step up it is only on the increment rather than on the whole. In terms of your point about where it may or may not be expanded, again infrastructure is obviously a key area. I was interested in the comment made by the IOD in terms of skills and the like. We are keen to ensure that there is spending on health and education, which, in terms of my membership, will drive investment in construction as well, and hopefully generate jobs and wider benefits for the economy. Broadly, yes, it is something that we see as a very good move. It is also important that we bear in mind that stamp duty is often talked about just in terms of the domestic market, but it quite clearly has wider implications on land purchases and the like. We see it as a very positive thing, and hopefully it is something that can be correctly implemented.

Nia Griffith

Can I ask about cross-border issues? Do you think there would be any jumping from one side to the other? What level of change might trigger different behaviour? Do you think there is a danger, because the Welsh Government will not have that many things it can vary or change, that it might over-react on this one?

Neil Brierley

You can take a lot of the things that have already been discussed today in isolation, but we need to think about them in a broader sense. Looking at stamp duty on its own, one of the things we have been thinking about with our members is whether, if you were to look at amending the structure or reducing stamp duty, you would do it across the entire country or by looking at enterprise zones, for instance. Could you try and make an enterprise zone more attractive by reducing it? You asked about the levels at which it might attract investment. Without doing the research, it is very difficult to give a view about the level at which you might see a trigger. We would certainly want to have a conversation with a lot of the primarily private sector developers. We find more and more that there are cross-border issues for many developers working in both England and Wales. Stamp duty is probably not one of the primary reasons why a developer or investor may look to go to England rather than Wales. There are other broader issues that need to be addressed to make Wales more attractive in terms of inward investment. That is possibly something we could explore later.

Chair

Don’t worry, Dr Ball, we have questions aplenty for you later. Mr Brierley, I have a simple question. Do you think stamp duty is too high or too low?

Neil Brierley

It is perhaps less whether it is too high or too low, and more how it is structured.

Chair

Wouldn’t you rather see it lower, as somebody in that industry?

Neil Brierley

A lowering would certainly be our preference, but it would need to be done in a considered way. We have already said that the amount of revenue you actually get from stamp duty is not that significant. You need to look at it in conjunction with other measures as well, rather than looking at it in isolation. If pushed on a view as to whether it should be higher or lower, we would probably say lower.

Nia Griffith

I understand what you are saying about getting rid of the big steps and having a gradual progression, but if that is such a good idea, why has it not already happened across the UK?

Neil Brierley

That is a very good question and one for which I do not have an answer. In terms of getting rid of the slab, it would probably have the biggest impact on the domestic market and private housing. That would be the biggest effect. Obviously going from 1% to 3% is quite a sizeable chunk for people, particularly in the current climate where deposits are so much greater. It is a real wrench. I am surprised it has not been done in terms of the domestic market. It is something we would obviously encourage, given the fact that, if the domestic market picks up, there is construction activity for our members.

Chair

Do you have a view, Dr Ball?

Dr Ball

Yes. Thank you for the opportunity to speak.

Chair

Don’t worry, we have questions that are nothing to do with property, so I have you in mind for those.

Dr Ball

There are one or two things in the debate today, such as the whole idea of devolution and tax. To a great extent, stamp duty landfill tax is toying with the idea. Having said that, my submission was on the basis of using taxation in terms of economic development. It is perfectly clear in my view that stamp duty can be an important driver of economic development. It is often seen as a duty paid on new construction. In fact, the vast majority of buying and selling in the property market concerns existing property. When people move, they tend to buy curtains, fridges and all kinds of things. There is a very substantial multiplier effect from people buying houses, and not just new houses. It is not just the construction sector. Therefore, devolution of stamp tax and indeed lowering of stamp tax—changing the numbers along the way—could have a significant effect on the Welsh economy. As you know from when we met some years ago, my view is very strongly that the Welsh economy is in the doldrums, big time. We should grasp strongly whatever steps can be taken to improve the state of the Welsh economy.

Chair

Is it too high or too low at the moment?

Dr Ball

As has already been mentioned, the problem at the moment is the steps. It is utter nonsense that you can sell a house for £299,000 at 1%, and if you sell it for £1 more you pay 3%. That is utter nonsense. What is clearly required is some kind of sliding scale. I am being very careful with the words I use, but houses at the top end of the market would probably have a greater multiplier in terms of further adjustment and modernisation. This idea that you jump from 1% to 3% at a certain level is frankly utter nonsense.

Glyn Davies

I want to ask you about landfill tax. I will truncate my points into one question as time is short. Do you anticipate that the existence of a landfill tax and the pressure not to pay it is going to reduce the amount of tax over a period of time? I would have thought it is bound to have some impact, but if it reduces it significantly, what other land taxes might you suggest that could take the place of that shortfall?

Dr Ball

The landfill tax, according to Her Majesty’s Revenue and Customs, is worth only £50 million a year anyway. It is a negative tax. I am genuinely surprised that the Bill includes this in terms of devolving it to the Assembly; £50 million is a drop in the ocean. It is a negative tax, and the whole point of the tax is to stop landfill anyway. The tax is likely to disappear within the next x number of years, especially since the Assembly has a statutory duty on the environment. The whole question of the devolution of the landfill tax, if I may say so, is a non-starter.

Nia Griffith

Wouldn’t the temptation be that, as everybody gets better at having less landfill, you increase the rate of tax so you get the same take on less landfill?

Dr Ball

That is a possibility, but at the end of the day landfill by its very nature is finite. In the areas where we live, there is substantial recycling by local authorities; there is the incinerator in Neath. That recycling is going to continue. Landfill as a concept will disappear very soon. You may well replace this with perhaps a development land tax, for example, or planning consent land tax—I don’t know. Certainly the landfill tax is very much a non-starter. It is a negative tax. Why it is included in the draft Bill is frankly entirely beyond me.

Geraint Davies

On stamp duty, given that you have already described this kink in terms of the jump in the rates at £250,000, it means that people who are selling houses worth more than £250,000 tend to reduce them to just under £250,000, and other people try and raise their price. If there was a more even tax, do you accept that in many instances this would increase the price of houses? If a house was worth £260,000 and was being suppressed at £250,000, it could then be marketed at £260,000. I am not saying this is a good or bad thing, but would you agree?

Neil Brierley

I know what you are saying: there is a manipulation of market value. Residential valuation is not my specialism, but I think you can see examples where that does happen. If stamp duty was adjusted, you might see some adjustment in the market valuations of some properties. One would hope that it would mean that people could perhaps move more regularly, which is another thing. Taking Dr Ball’s point about the wider benefits in terms of the consumer market, that is the bigger picture beyond property and construction.

Geraint Davies

And the Government would get more money at a lower tax by more movement.

Neil Brierley

Yes.

Dr Ball

It is the movement, Mr Davies. At the end of the day we often think of land tax in terms of new build. It is the existing market which drives a very strong multiplier.

Nia Griffith

There are a couple of things to explore on this. We have been told that one of the reasons in the logic for devolving these taxes is to allow for more borrowing powers. I would like to know what your view on that is. The other aspect, of course, is the effect on the block grant and the way that is calculated. Do you see that as being effective, or do you see any difficulties arising in how you would adjust the block grant in relation to these? Thirdly, do you see room for other types of taxes? One of the things that has been suggested—I am sure the Chair would like to remind you—is fees for bridges. Again, there are possibly opportunities for the Welsh Government.

Dr Ball

I will comment on this initially, if I may. One of the interesting things about the debate that preceded the Bill is the fear of taking devolution a stage further. The principle of different taxation in the UK exists by its very nature and it has always been the case. Council tax differs; selective employment tax at 60 differs; VAT differs: the principle is set for different levels of taxation in different ways throughout the UK. It is a long-established principle, and it is therefore important to accept that, in terms of the wider debate on powers for the National Assembly. That principle of different levels of taxation is long set. Having said that, I am concerned that the Assembly will therefore have the power to borrow upwards of half a billion pounds when there is no way that money can be raised to repay it. I am honoured to have the opportunity to speak this afternoon. I am not a lawyer but I read through the draft Bill very carefully, and thought that it is all very well to say to Cardiff that they can borrow half a billion pounds from the market to build the new M4—which by the way is not needed and is a nonsense anyway. There are some serious issues here about the M4.

Chair

We had better not get on to that.

Dr Ball

You don’t go and borrow money from the bank and then say to the bank manager, “Well, actually, Mr Jones or Mr Davies, I can’t pay you back.” It is nonsense. Although the powers to be able to borrow are important, how the Assembly is able to repay those funds is entirely outside the spirit and indeed the letter of the draft Bill at the moment, as I see it. On the third part of your question, if I may, if there is not going to be further devolution of other taxes—by the way, according to HMRC, there are 24 separate taxes ranging from airport duty to cider taxes—arguably there may be a case for different forms of taxation. I said in my submission that we should be looking at the tourist industry. For example, if Wales is worth as much as it is allegedly worth, then apply a bed tax as other parts of the world do. There is no argument over additional sales tax. We could look at these things in terms of devolution of power. They would not necessarily be up front. If you are on holiday, these are very inelastic prices. People will pay it. I said this in my submission. By the way, my apologies; the figure should be £60 million, and not £6 million, in the last part of my submission. I got B for mathematics a long time ago, but I have obviously lost it. I suggested that those two taxes between them would raise something like £100 million a year as an approximation.

Chair

I think we had better continue with the questions or we will get even more behind.

Hywel Williams

Dr Ball, you said in your submission that the power to lower income tax would help the Welsh Government improve economic growth and performance. Exactly how would you see that working?

Dr Ball

The answer is to go back to straightforward economic theory and practice. At the end of the day, the driver of the economy is one thing only, and that is the level of demand in the economy. It is as crude as that. If there is a high level of demand in the economy, other things being equal, the economy will drive itself forward. If there is a low level of demand in the economy, as there currently is, the economy goes into decline. I would be the first to admit that it is a very simplistic view, but it is a very realistic view. I quote John Maynard Keynes in 1936. He was the first to identify that a high level of demand in the economy drives an economy. Obviously, there are issues in terms of income tax. At the moment, if you could wave a magic wand, I suspect a great deal of any savings would probably be paying off debt, or would be saved, because of the current economic situation. In the wider scheme of things, an economy is driven by levels of demand. Levels of demand are driven by the amount of money floating about in the economy. I am sorry, with respect, if this is a simple idea; but it is a simple idea and it is something we should be prepared to address.

Geraint Davies

With respect, isn’t it a question of who has got the money? If you gave the money to people who spend their money on things from abroad, or abroad, as opposed to a public service where they commission all the services locally, the level of demand would be higher in the second case. It is not that clear-cut, is it?

Dr Ball

No, it is not. The problem with income tax reduction is not necessarily its effect on public service; that is a debate for another day. The issue with reducing income tax, particularly within the Welsh economy, is leakages from the economy. Although in theory reducing income tax would increase demand, if that money is immediately spent on a Sony camcorder, it leaks out of the economy. That is the big problem in terms of increasing demand. I genuinely do not see an issue in terms of reducing income tax in relation to the effect on public services. I would have thought there is a connection between high levels of public services and high levels of demand in the economy, because people are working and spending money. If people are spending money, there is a higher level of tax elsewhere. There is an issue in terms of recovering that tax. If people are spending money, they are by definition, in most instances, buying products that attract value added tax. It is interesting: people are blind to things like value added tax. When you go and buy a car or a refrigerator, you don’t say to the salesman, “How much is the tax?” You say, “That is £150; I’ll have that.” You can hide these things; I am a great believer in taxes that you can’t see.

Geraint Davies

Should VAT be devolved? I know it is against European rules.

Chair

It is not going to be in this Bill.

Dr Ball

There are arguments for bravery in terms of devolving taxation, because the principles already exist. The principle of devolved taxation already exists. With great respect, I wonder whether in this very room, in Gladstone’s reforming ministry at the end of the 19th century, they had the same debate on devolving power to local authorities. I can imagine the same debate taking place 130 years ago.

Chair

With great respect, some of the arguments you are making sound more like Milton Friedman than John Maynard Keynes.

Dr Ball

I am delighted to be associated with John Maynard Keynes.

Chair

Can I turn back to you, Mr Brierley, fascinating though this is? In your written evidence, you strongly supported the changes in the draft Bill relating to the Law Commission in Wales. I am sure Dr Ball is going to have an opinion on this as well. Not being a lawyer, my view is that, if we end up with a separate legal system in Wales, we would end up with a whole load of extra costs. On the other hand, there is an issue about whether the Law Commission itself, as it is currently appointed, has enough knowledge of Wales. Can you elaborate on what you said to us?

Neil Brierley

As I said in my submission, it is important to ensure that any devolved legislation operates smoothly alongside UK-wide legislation. We want to make sure that anything that is brought in does not conflict or cause friction with wider UK legislation. We have certainly canvassed some opinion with our members, but in terms of a full opinion on the potential for this, we have not had an opportunity to engage with them thus far.

Chair

Do you want to see a separate legal system in Wales? Are you against that, for it or do you have no opinion on it?

Neil Brierley

My opinion in my day job as a chartered surveyor, as opposed to the RICS Wales opinion, is that I would prefer not to see a separate system. I think there would be huge cross-border issues. It would be incredibly complex. So many organisations work cross-border across the UK. If I take the organisation I work for, it would be incredibly problematic having different terms of appointment and different terms and conditions, if it was to affect that.

Chair

You do not see that allowing Welsh Ministers to commission work from the Law Commission would be leading towards a separate legal system, and you would not want to see that.

Neil Brierley

Again, my personal opinion would be that I would not want to see a separate legal system in Wales.

Hywel Williams

Laws in Wales can be different from those in England, given that it is a legislature. We are talking about something which is de facto rather than speculative, are we not?

Neil Brierley

Yes; so long as we are careful and there are checks and balances in place so that whatever is put in does not grate against the wider UK legislation.

Dr Ball

I have no strong views on this, Chair. Being an economist, I am going to duck this. I think Mr Williams’s point is relevant. If there is a legislative body called the National Assembly, by definition there has to be some form of separate legal duties and powers. That is a fact. If you have a legislature, it has legislative support, if you like. That has to be the case.

Chair

On that happy note, I am going to call this part of the session to an end. Thank you very much. Once again I apologise to the next panel for the fact that we are running slightly late, but we are catching up. Examination of Witnesses

Witnesses

Stephen Brooks, Director, Electoral Reform Society Wales, and John Turner, Chief Executive, Association of Electoral Administrators, gave evidence.

Chair

Mr Brooks and Mr Turner, thank you very much indeed for coming along today.

Nia Griffith

I want to start with the ban on dual candidacy. You have come out in favour of removing that ban. In the Government’s own impact assessment, there is the comment that the majority of respondents said that they did not want it removed. People find it very confusing that the person they did not vote for then seems to win. Obviously Clwyd West is the perfect example, where three candidates who did not win all became Assembly Members at the same time as the candidate who did. Could you comment on why you think it should be removed?

Stephen Brooks

In terms of the 47 respondents, I looked at the list of respondents and I remain to be convinced that it is an entirely representative sample of Welsh public opinion. Obviously it is a formal Government Department consultation process, and due consideration needs to be given to those views. I am more minded to think about the evidence that the Electoral Commission gave in 2006 to this Committee, when it was previously discussed. From their own attitudinal research done after the 2003 Assembly elections, they could find no evidence to suggest that there was any kind of dissatisfaction among the electorate over the situation of dual candidacy. If you look at each and every single independent inquiry that has taken place in different territories across the world, as I think Roger Scully explained on Tuesday—Prince Edward Island and New Brunswick in Canada, the recent inquiry in New Zealand and also the Arbuthnott Commission in Scotland—they did not identify any kind of public disquiet with the system. What you hit upon, Chair, is perhaps the least attractive aspect of the additional member system. Glyn Mathias, when he came here in 2003, said that it was by no means the best advert for AMS. I appreciate and understand the frustration that exists among some constituency Assembly Members, in terms of how they interact with regional Members. I completely understand that, but to go from tolerating a situation which is perhaps undesirable to saying that we should therefore legislate to prevent it from happening is an overreaction. Yes, it is not particularly pleasant, but introducing a statutory ban on candidates who are contesting both a constituency seat and a regional seat is an overreaction.

Chair

Mr Turner, do you have a view?

John Turner

Yes. As you will know, Chair, we are the technical people who run the elections, so we try to stay outside the political angle. I support my colleague. I found the Electoral Commission’s evidence compelling, in the sense that they had done the attitudinal research and could find no real evidence of voters—the man on top of the Clapham omnibus or the woman on top of the Cardiff omnibus—being upset about this. Using international experience, I can find no good electoral reason why you should have such a prohibition. There are many examples of that internationally which work well. On a technical issue, the provisions contained within clause 2 of the Bill appear workable and practicable. Therefore, I would raise no objection to removing the prohibition.

Nia Griffith

Let me follow up on that. If a candidate puts themselves down as a constituency candidate and they lose, it is a bit of an insurance in a way, because they might pick up on the list. Does it sometimes give an impression to people that that was their second choice and therefore they are a second-rate representative?

Stephen Brooks

The difficulty in terms of how we view constituency seats and regional seats—this is partly about how we all talk about it and partly about how political parties campaign about it in elections—is that sometimes the 20 regional list Members can be seen to be additional Members, and are somehow second-class Assembly Members. Obviously you wait to see how many constituencies have been elected in a region before calculating who gets through on the list, but each and every single one of those 60 Assembly Members sat in Cardiff Bay this afternoon is equal. They all have the same legal mandate regardless of how they were elected and regardless of the size of their majority in their first-past-the-post constituency or whether they were elected on a regional list. Ultimately, the Electoral Reform Society would like to move to a situation where all Assembly Members were elected under the same system. You remove the problem of dual candidacy; it is fair, proportional and it also retains a constituency link. That is the single transferable vote. I am guessing that at this stage we are probably not there in terms of talking about it for this Bill, but we should by no means see regional list Members as second-rate.

Geraint Davies

I want to give an example. I got elected to Parliament by only 500 votes against the Liberal Democrats. If I was in an equivalent Assembly situation, the person standing for an individual seat would be both standing for the individual seat and for a list seat. They would have double election expenses, which would be focused in one area—say it was an area which was basically red with one glint of orange, for argument’s sake. Do you see the possibility of unfair manipulation of election expenses if the list candidate is the same as the regional candidate?

John Turner

Clearly that could happen, but it seems to be more of a problem about the way in which expenses are regulated and spent within a particular area. If somebody spent all their allocation in one particular area—

Nia Griffith

Which has happened.

Geraint Davies

Putting expenses to one side, what about the case where one person stands both for the constituency and the region, so he or she is standing in the knowledge that they are going to win anyway? They could say anything they like in the constituency, and, even if people did not like it, elsewhere in the broader sweep they might just get in anyway. Do you think that is good for democracy?

Stephen Brooks

You can also make that argument about a safe Labour seat, a safe Conservative seat, a safe Liberal Democrat seat or a safe Plaid Cymru seat, in terms of constituency—everybody is shaking their head. A candidate could say what they like and think, “Well, a national swing will take me anyway,” or, “It’s a safe Labour seat and people will always vote for Labour regardless of what I say.” I go back to the evidence that the Electoral Commission gave in 2006. I think the ideas have been floated again. It is potentially looking at reforming how the regional list works, moving from a closed list system, where the parties themselves choose the rank order of candidates and the elector has no choice within that, to a more open list system where there is a greater degree of choice for the elector. In some senses, that would mitigate what you are saying in terms of—

Geraint Davies

I do not mean to personalise it to me, but if you had Jones versus Davies, and Jones is going to win anyway—if he does not win against Davies he is going to win in the regional list—from the point of view of the electorate, isn’t that a sort of mockery? “Vote for Jones, Vote for Jones; by the way, I am going to win anyway.” It is a bit strange, isn’t it?

John Turner

It seems to me that you are making a very good argument for doing away with regional lists.

Geraint Davies

No; for dual candidacy. I am saying that, if you put up Jones and he says, “Vote for me, I want to be your representative,” and he is going to be individually anyway, that is slightly different from saying, “Vote for Jones, but if you don’t like Jones there will be a Liberal representative because there is a broader Liberal list.” When you vote in the regional thing you are voting for a party; when you vote in the constituency you are voting for a specific person.

Stephen Brooks

As I said, the additional Member system is not ideal. To remind ourselves why we have it, in terms of going back to exclusively first past the post—where we were in the late 1990s when we were debating devolution—it is pretty much accepted that Plaid Cymru and the Liberal Democrats would not have supported any kind of Labour legislation or the subsequent referendum had the Assembly not had some degree of proportionality within it. Again, I understand that sometimes people do not particularly like the system, and it is born of a compromise, but it was a necessary compromise to get devolution. Just to remind people, if you look at the last Assembly elections in South Wales Central, which comprises eight constituency seats, the Labour party won 49.9% of the vote across the constituencies and won all eight of those constituencies. Just under 50% of the vote won 100% of the seats, so those four regional seats are there to compensate the 51.1% of voters, whose votes, you could argue, were wasted. I do not think any vote is wasted, but it was not reflected in a winner. Yes, you can pinpoint an individual race and say, “I don’t like how that candidate operated.” You can have ugly situations like Clwyd West, which has happened once out of the 80 times there have been first-past-the-post elections, but ultimately the system overall is working all right.

Hywel Williams

The temptation to get involved in the theology of the electoral system is enormous, I have to say. The arguments made might be ones for getting rid of the list system as it is now and just having a new form of election for everyone. From your knowledge, are there any lessons to be learned from what has happened in Scotland, where I believe that dual candidacy is allowed? If memory serves properly, there was in fact a Labour Minister at one time who was the beneficiary of dual candidacy. What is the experience in Scotland? Does the fact that it is a slightly larger body have any bearing on any lessons?

Stephen Brooks

In terms of the lessons from Scotland, there are more party political lessons than constitutional lessons. Although dual candidacy is allowed in Scotland, the Scottish Labour party adopted a policy whereby it said that its candidates would not contest both list and constituency seats. There were some notable exceptions. That was where there were boundary reviews, and they were not entirely certain exactly what the electoral performance was. By and large, Scottish Labour candidates had to choose between a first-past-the-post constituency or a regional list. What you saw was a swing towards the SNP. The SNP were very successful in breaking the system. Most people anticipated it operating to prevent, if you like, landslides from happening. In effect, what the SNP achieved was that; they breached the wall. The result for Scottish Labour was that it lost a lot of experienced Front Benchers and it lost a lot of Back Benchers who were rising through the ranks. It’s to be debated party politically, but on balance I would say that Scottish Labour in Holyrood is probably weaker for having that voluntary policy in place than had it otherwise been the case. I have an anecdote from something I was involved in. The Scottish parliamentary elections were held on the same day as the alternative vote referendum. One of our activists in Scotland, who was fourth on the regional list for the Scottish Labour party, was at the count wearing T-shirt and jeans, just observing and taking numbers for the AV referendum. He never thought for one moment that he might become an MSP, but somebody pulled him aside and said, “Actually, we have lost so many constituency seats in the region that you have to go home and put a suit on because you are going to be on the stage in an hour.” It does work both ways. There will be some Labour smirks in Wales when high-profile people like Nick Bourne and Helen Mary Jones lose constituency seats and don’t get in on the regional list. Equally, it is not kind to any particular party. It can happen the other way, and Scotland is evidence of that.

Chair

We may be veering a little bit from the Bill.

Glyn Davies

I would like to ask about this. I was one of those who had to go home and take my suit off, as it happens. We talk about Clwyd West to exaggerate the issue, but it perfectly applied in Montgomeryshire. I stood in 1993 and in 2003 in both. I knew perfectly well that the chance of winning in the constituency was pretty remote at the time. The one opportunity you do have is the experience of going out and asking people to vote for you. The position we have at the moment is that 20 Assembly Members, when there is not an open list, are barred from going out to ask people to vote for them. We have 20 Assembly Members who just simply do not ask anybody to vote for them. Do you think that is a healthy position or not?

Stephen Brooks

What concerns us are the trends happening with regional lists and the way the parties handle the election. I think I am right in saying that, at the last Assembly election, the individual names of list candidates were not printed on the ballot paper. I do not think that is particularly healthy. It may be that individual list candidates have something like a personal vote, whether that is through standing in a constituency, from being a local authority councillor or from being a personality or an incumbent. There may be a personal vote, and I think we are losing something by not having the names on the ballot paper. I do not think legislation is needed to address that. Equally, you do not need open lists to do that; you could have it on closed lists.

Chair

We are slipping behind again. The next question is on double-jobbing MPs. This is where I have to declare an interest, of course, having done it for two years. I am surprised at this being in the Bill. I do not think it is that difficult to get around, especially if you are the MP and AM for the same area. That is my opinion, but we are not here to listen to that. What do you both think, and what do you think about the time limit of only eight days if somebody wants to go from one institution to another? What do you think about the fact that it is still possible to be an Assembly Member, a Member of the House of Lords, a Member of the European Parliament or a member of the local council? Is that consistent with banning Members of Parliament?

John Turner

I go back to what the Committee on Standards in Public Life had to say about it. I find it difficult to quarrel with the statement they made two years ago. In terms of your particular question about linkages between the various bodies, the real issue here is one of legislature. We have this place and you have a similar law-making body sitting in Cardiff. There is always that potential for conflict of interest. It becomes even more so if the constituents being represented are different constituents, depending on which place you are sitting in.

Chair

But if they are the same constituents, surely the interest is your constituents’ interest, whether it is Parliament or Cardiff.

John Turner

Indeed. But the problem with that is that you then get into a hybrid situation where you could allow it in some places and not in others, depending on how boundaries are drawn. We all know that boundaries change from time to time.

Chair

I hear what you say. It is not for me to debate this. Mr Brooks, if Mr Turner is correct and there is an issue about conflicts of interest and legislation, surely that would also apply certainly to MEPs and possibly to councillors. Why single out AMs and MPs? What do you think?

Stephen Brooks

We are sympathetic to the argument that it should be voters who ultimately decide this. If an elector wants one individual to be their councillor, their Assembly Member, their Member of Parliament and their MEP, then why not? At the moment, we cautiously welcome restrictions on double-jobbing, but we are not happy with the time frame in the Bill. That does need to be extended.

Chair

The eight days?

Stephen Brooks

Yes.

Chair

What would you put it up to?

Stephen Brooks

It is healthy that there is a two-way flow between the two institutions, so something that would cover a period of time between those elections. If that is a year, then a year, but whatever that might be.

Nia Griffith

I want to ask for clarification on that. At the moment it says six months, which seems to raise the practical difficulty that, if someone who is now an Assembly Member were elected an MP in 2015, you have that year before 2016, or you have a by-election literally within three months of the purdah period before the next election starts.

Stephen Brooks

I completely agree with you. If the routine difference between a general and an Assembly election is a year, the period of time should be a year to allow that combination—that travel between the two institutions.

Glyn Davies

I would like to pursue the conflict of interest issue. If it does exist, why doesn’t it apply to a Member of the European Parliament and a local councillor? I cannot grasp that. If you can have a conflict of interest between two institutions, why can’t you have it between two others? I would like to know a little bit more about that. If you are fighting a seat, you represent the constituency. Your view would not be different if you were representing one institution. There is the idea that you are sitting in a Parliament and you agree with everything; I disagree with quite a number of issues in this Bill and I shall say so. That is what people do. Whether I was in the Assembly or here, I would be saying the same thing. Just explain what this conflict of interest is.

Geraint Davies

The whole issue of devolution is that health and education will be decided in Cardiff and not here, yet if you are representing that area there is no conflict of interest because we don’t do the health and education.

John Turner

My problem comes with the point that the Chair raised, and I added to, which was to do with boundaries. If you take your example of a local authority that is coterminous with a parliamentary boundary, you are not going to have that problem. In my previous life I was deputy chief executive of a city council. We had a council of one persuasion and two MPs of other persuasions. You only had to sit in meetings to see how that conflict would represent itself. It was largely because, in the southern constituency, there was just a small part of the city, and a much larger part of the rural area came from a different political persuasion. At times I felt sorry for the Member of Parliament, because they were on a pretty marginal majority and they had to be very careful what they said about matters of dispute between what I might call the rural council and the city council. That played itself out into all sorts of difficult practical issues. That will always be the case where boundaries cross constituencies.

Chair

That is if you have different boundaries. An MP and an AM with the same boundary do not have that problem. An MEP is always going to have a different boundary from an AM or an MP.

John Turner

Yes, but the advantage with an MEP—I am not now talking in favour of closed lists, before Stephen gets excited about this—is that there are seven, eight or nine of them and it is very easy for an MEP to say, “Actually, I would much rather you talked to my colleague about this particular matter,” for whatever reason. I think you get the three things: electoral systems, constituency boundaries and the potential of not being able to be in two places at the same time. That is why I come to the view I do.

Stephen Brooks

For the Electoral Reform Society, it is more a conflict of time than a conflict of interest, so with the capacity of the National Assembly so small, as Professor Wyn Jones discussed on Tuesday, in our opinion, you are effectively talking about 42 Back Benchers. I can envisage situations where you will have your Chief Whip here on the phone screaming at you to come down for a vote that is going to be close, and at the same time you might want to speak in a debate in the Senate about the closure of a district general hospital in your constituency. The pattern of business in both institutions seems too similar. Given that the capacity of the National Assembly is small, in our view, it just feels like there would be too much conflict of time for a Member who was permanently double-jobbing.

Glyn Davies

I want to ask you a question about fixed term. Clearly we have a fixed term in both institutions. One is four years and one is five. The proposal is that it increases to five. A lot of people—I would be one of them—think that four years is a suitable fixed term for a Parliament. That is what it is around the world in most places and I think it is a suitable term. What we are proposing is a five-year term for the Assembly. What is your view on that? Does it have to be a five-year term so they are not on the same day? What are the implications of them being on the same day?

Stephen Brooks

In principle, we obviously support fixed-term Parliaments. I share your feeling that five years just feels a little bit too long for a Parliament. Historically, if you look back, Parliaments that have lasted five years have tended to be at the end of a single party’s Administration where the Prime Minister is stretching it out. Historically, the precedent has been that five-year Parliaments are unusual. There are two points. If this place remains on five-year fixed-term Parliaments, it probably makes sense for the Assembly to move to five-year terms, although I still have those lingering doubts. It just feels a little bit too long to have a programme of government and a fresh mandate from the people. There might be a common-sense argument to say that the two should be the same. In terms of holding elections on the same day, in some respects that is almost unavoidable given the number of public elections we now have. In terms of the order of elections, it is important that elections for the National Assembly for Wales and UK general elections are not held on the same day. It is important that both institutions are given their individual time in the sun for voters to consider what the issues are, which party they want to represent them and which party they want to form a Government. Those two things should have space between them.

Glyn Davies

Aren’t you diminishing the significance of the European elections?

Stephen Brooks

I would not diminish them. Every election is important.

Glyn Davies

It sounds like it.

Stephen Brooks

If you look at the research, there is a clear order in the public’s mind of the importance of public elections, and that is reflected in turnout. The UK general election to this place seems to be No. 1, the National Assembly seems to be No. 2 overall in Wales, and the others fall below that, so it makes sense for Parliament and Assembly elections to be on different days.

Chair

Mr Turner, you have organised a lot of elections. Do you see any problems with having them on the same day?

John Turner

Yes, I do. I also agree entirely with what Stephen said. There is a great danger in putting together what I would call national elections to different bodies on the same day. The fact that the European cycle is five years and this place’s cycle is five years absolutely screams for five years for the other. If everyone is happy to reduce everything to four years and then run them in sequential years, that is absolutely fine. The problem if you do it in different periods is that you are going to end up at some point in time with a super-Thursday or whatever it is, with six elections all on the same day.

Glyn Davies

And police commissioners.

John Turner

Yes, I was thinking of police commissioners. That was going through my head as a classic case of how this will compound itself in the fullness of time. I would come down very much on the proposition in the Bill for five years. You also have to have regard to the voter in this. If you are asking voters to turn out in three or four different electoral systems and cast their vote, there is the danger that they will become confused. There is more danger though that the primacy of one place—this place—can affect the vote in the other elections, and that can lead to unintended consequences.

Glyn Davies

We don’t do five years in this place. Governments can collapse for various reasons and there has to be an election. What you are suggesting is that, if it suddenly collapsed, we would then have to change the Assembly term again to match the new term. If it collapsed, there would have to be an election. Clearly, there would be a five-year term running from that date, which would then clash with the—

John Turner

My recollection of the new legislation on fixed-term Parliaments for this place is that, even if there is a collapse, the cycle remains the same.

Glyn Davies

So we have another general election.

John Turner

It could well be, yes.

Glyn Davies

I didn’t know that.

John Turner

I may be wrong, but that is my memory of the debate.

Hywel Williams

My questions are about the referendum. If political parties are elected on a manifesto pledge to devolve income tax, for example, do you think it is necessary for there to be a referendum on something like the partial devolution of income tax if it has already been tested at an election?

Chair

Mr Brooks, you must believe in lots of elections.

Stephen Brooks

Don’t mention the referendum. Advocates of a referendum and people who say a referendum is not required can cite constitutional precedents to back up their argument; because we do not have a single codified written constitution we can have this debate and go round. One argument is that, because the people of Scotland were offered a referendum on income tax, the people of Wales should have the same. The other side of the argument is that having some kind of tax-bearing powers instils discipline in Government. It is good in terms of accountability and good governance; therefore, how can that possibly be optional? We do not necessarily take a view on either side, but I am real to the politics of it, which is that it seems likely, if not more than likely, that if we do get income tax powers in Wales it will be following a referendum.

Hywel Williams

What do you make of the argument we heard on Tuesday that both the poll tax and the council tax were brought in without referendums? Those were substantial and highly controversial changes.

Stephen Brooks

We can say that the police and crime commissioners were brought in without a referendum. Does the logic follow that you would question their political mandate? There are discussions that go on about having fair votes for local government in Wales and England by moving towards STV. Some people say that, if you do that, you need some kind of referendum, but we have revolutionised the governance of police authorities without a referendum.

Hywel Williams

What do you think of the model in the Government of Wales 2006 Act, which states that you have to have a two-thirds majority in the Assembly and agreement from both Houses of Parliament? Is all that appropriate, or should the Assembly itself just have a referendum if they want it, with a simple majority?

Stephen Brooks

There is almost a wider issue in terms of how the National Assembly enacts constitutional change. Two thirds comes from the figure required to alter the Standing Orders of the National Assembly. One of the things that we called for—this Bill might be a vehicle for it—is the devolution of the electoral arrangements of the National Assembly to the National Assembly. We said that if that were the case we would be looking for a two-thirds voting majority in the National Assembly. I think Roger Scully said three quarters. It feels appropriate that two thirds is the right number. Why the difference? Why should it be that this place can enact a referendum with a simple majority and the National Assembly needs a two-thirds majority? That is a fair enough question. It is more interesting when the Assembly has voted for more proportionality, using a slightly fairer voting system than this place. At the moment, we would say that there are greater checks and balances here than there are in the National Assembly. There are two Houses here and there is only one House in the National Assembly. It is entirely feasible, as we have seen in Scotland, that one party can sweep to victory and have an overall majority in the National Assembly and use that to push through constitutional change, which perhaps they have a mandate for but perhaps they don’t, and all the other parties are completely against. Two thirds seems about right as a check and balance on the Senate.

Hywel Williams

There is one other thing. I might be the person who has voted most in referendums, given that I voted on Sunday closing a number of times. It is a nice Welsh precedent to point to. A more recent example was the 2011 referendum. In relation to how that was conducted and the implications of it, are there any implications for the referendum on tax-varying powers? I am just thinking in terms of turnout and enthusiasm.

Stephen Brooks

The 2011 referendum on the alternative vote or the Welsh powers?

Hywel Williams

The Welsh powers.

Stephen Brooks

The message from both referendums is to have a solid clear question that political party activists—the people who are going to be out knocking on doors— understand. From the electorate’s point of view, they should have a good enough reason to come out—a referendum on a subject where you can quite clearly see what the differences would be if you voted yes or no. If you look at the Scottish independence referendum, it is quite clear what would happen if you voted yes or if you voted no. Similarly, if there was a European Union membership referendum, it is quite clear what would happen as a result. To be honest, I am not entirely certain it is as clear-cut with income tax, or certainly how it is couched in the Bill at the moment, and whether that would be as black and white an issue for the electorate to understand and feel motivated to get involved with. The same is probably true for the alternative vote referendum. One of the weaknesses of that was that it was not clear what the difference would be if you voted one way or the other. Politically, it seems almost inevitable that if we were to go down that road a referendum would be needed, but I would have anxieties as to whether the question, the campaign around it and the debate leading up to it would be sufficient to engage the public and mobilise them to turn out.

Geraint Davies

Mr Brooks, would you be happier if the Bill had a situation where the entire election process went to a list system? Obviously, that would be an issue for democracy and accountability, with the BNP and the like. Secondly, in terms of the comments about the second Chamber, do you agree and do you think there should be a House of Lords for Wales as well? Maybe we could all have gold cars as well. What do you think?

Stephen Brooks

I do not know how much time I have, but I can answer both questions.

Geraint Davies

Forget the question about gold cars; just the House of Lords and the list.

Stephen Brooks

The reason why we do not support lists as our preferred system, and the reason why we certainly would not support a national list for Wales in electing AMs exclusively from a national list, or indeed moving from five regional lists to one national list, is that I think you break the constituency link. Perhaps the only strength of first past the post is that it delivers a strong constituency link between the elected representative and the electorate. We may disagree on this, but we think that the single transferrable vote, where you have constituencies with three, four or five representatives, preserves enough of a constituency link whilst at the same time delivering some element of proportionality. You are right that a list would ultimately deliver the greatest proportionality, but for us it is a trade-off between the constituency link—that relationship between the elector and the elected—and overall proportionality. That is why we settled on STV. People raise the issue of national lists. If you crunch the numbers in terms of how those 20 seats would be redistributed if you had a national list, both the Conservative party and Plaid Cymru go down in representation, and one would expect to see UKIP, the Greens and possibly the BNP there. I think it is politically unlikely that we would ever move to that, but from a principle standpoint it totally moves away from the British tradition of having a constituency link.

Geraint Davies

And the Lords?

Stephen Brooks

If you had a fairer voting system for the National Assembly you would not need that kind of level of check and balance. I think True Wales calls for a second Chamber.

Chair

We are a little bit beyond the draft Bill at the moment. On that note, I shall call the meeting to an end. Thank you both very much indeed. Oral evidence: Pre-Legislative Scrutiny of the Draft Wales Bill, HC 962 11