I will speak first to the Government amendments in the group, before turning to the amendments tabled by Opposition Members. Most of the Government amendments deal with technical changes to the energy and environment provisions in the Bill; I will discuss those first.
Clause 36 delivers the St David’s Day agreement on the devolution of energy consents, giving the Assembly and Welsh Ministers a substantially greater degree of autonomy in determining the shape of devolved energy policy in Wales. We implemented the decentralisation of consenting responsibilities for all onshore wind projects earlier this year. The Bill will devolve to Wales specific consenting responsibility for all other electricity generating projects up to and including 350 MW in size.
It is important that the Welsh consenting authority has the ability to take measures to ensure the safety of offshore renewable energy installations and those who might come in contact with them. Discretionary powers already exist in the Energy Act 2004 for the Secretary of State to designate safety zones around such installations and to determine the conditions that will apply to the operation of such zones. New clause 5 extends those designation powers to Welsh Ministers in respect of offshore installations up to and including 350 MW in size in Welsh waters—that is, territorial waters up to the 12 nautical mile limit, and beyond, into the Welsh zone—and establishes appropriate arrangements for managing instances where an intended safety zone is likely to extend beyond Welsh waters.
Amendments 50 and 59 make consequential changes arising from new clause 5. Amendment 50 amends the 2004 Act to establish that regulations made under the new clause will be subject to the negative resolution procedure in the Welsh Assembly. Amendment 59 introduces tailored transitional provisions for the purposes of the offshore renewable energy safety zone provisions in the new clause. It provides that applications for the determination of safety zones received prior to the commencement of the devolution provisions will continue to be the responsibility of the Marine Management Organisation.
Government amendments 45, 46, 53 and 58 make consequential changes to ensure that the new consenting regime put in place by the Bill operates smoothly. The Bill devolves to Welsh Ministers the ability to use the consenting regime that already exists under section 36 of the Electricity Act 1989 for the purposes of granting consent for electricity generation projects up to and including 350 MW in scale in Welsh waters. We recognise that, in due course, Welsh Ministers may wish to modify and improve the offshore consenting regime and, in doing
so, apply a consistent regime between territorial waters and the Welsh zone, where the Assembly does not exercise legislative competence.
Amendment 45 will give Welsh Ministers the ability, through a regulation-making power, to make modifications that can apply in territorial waters and the Welsh zone, avoiding any inconsistencies between the two areas and providing more clarity for developers. In establishing regulation-making powers to enable Welsh Ministers to modify and improve the offshore consenting regime in due course, we are keen not to encumber them with restrictions and requirements that might frustrate them in doing so. Amendment 46 therefore serves to disapply in Wales certain aspects of the 1989 Act, leaving Welsh Ministers with greater flexibility for the future.
Amendment 53 makes technical changes consequential on the new devolution boundary that will operate between Welsh Ministers and the Secretary of State once the devolution of electricity generation consenting powers in Welsh waters and marine licensing functions in the Welsh zone is in place. The changes cater for the fact that a marine licence might in future be deemed by Welsh Ministers to be part of a development consent order under the Planning Act 2008.
Amendment 58 introduces tailored transitional provisions for the purposes of the devolved electricity generation consenting provisions of the Bill. In effect, it provides that applications received prior to the commencement of the devolution provisions will continue to proceed to a final decision by the Secretary of State.
Amendments 23 and 24 make technical drafting changes to clause 38 to reflect the fact that, in the onshore context, devolved electricity generation consenting in Wales will be carried out within the regime of the Town and Country Planning Act 1990. To avoid ambiguity, the inclusion of the concept of “planning permission” simply reflects the language of that Act.
Clause 42 provides Welsh Ministers with further executive responsibilities in the Welsh offshore region. However, we need to ensure that licensing functions that are reserved activities under the Marine and Coastal Access Act 2009 remain with the Secretary of State in the Welsh offshore region. Amendments 25 and 54 to 56 modify the 2009 Act to clarify the devolution boundary so that, for example, enforcement officers appointed using devolved powers have no powers to enforce part 4 of the 2009 Act, relating to petroleum production or exploration; the amendments also exclude the Welsh inshore and offshore regions from waters in respect of which the Marine Management Organisation exercises certain consenting and safety zone functions.
Amendment 56 modifies the 2009 Act to give Welsh Ministers powers to make regulations about the application procedure when they are both the marine licensing authority and the harbour order authority or generating station authority. Finally, amendment 47 simply removes an obsolete reference to Assembly measures.
The Government amendments are all sensible and necessary, and serve to deliver a clearer devolution boundary, one of the key aims of the Bill.
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New clause 1, which Opposition Members tabled, would provide Welsh Ministers with greater influence over the strategic priorities of the delivery of coastguard functions in Wales, the protection of people on ships, and the safety standards that apply to both ships and
people on ships in Wales. They are all reserved matters. The Secretary of State would be required to consult Welsh Ministers when exercising functions under two pieces of primary legislation—the Coastguard Act 1925 and the Merchant Shipping Act 1995—when setting the strategic priorities in relation to the Secretary of State’s delivery of functions in Wales.
The new clause seeks to give effect in Wales to a proposal of the Smith commission. As Members on both sides of the House know, the Government gave a commitment in the St David’s Day agreement to consider whether non-fiscal Smith proposals should be implemented in Wales. We are implementing some of the Smith commission’s proposals relating to the Maritime and Coastguard Agency for Scotland through the agreement of a memorandum of understanding. I am therefore not persuaded today that there is a case for putting in place a statutory duty on the Secretary of State to consult the Welsh Ministers.
New clause 6 was tabled by Plaid Cymru Members. As the Government committed to do in the 2015 St David’s Day agreement, we have considered the case and options for devolving air passenger duty to the Assembly, informed by a consideration of the impact on nearby English airports. The review was necessary given the specific issues faced on the England-Wales border and the legitimate concerns expressed by English regional airports that if APD were devolved to Wales, the Welsh Government would likely propose significantly lower APD rates, if not scrap it altogether.
As hon. Members will no doubt be aware, Cardiff and Bristol airports are only 60 minutes apart and the population density of the border means that more than 4 million people live within the overlapping catchment area of the two airports. Many travellers and businesses in south Wales currently rely on a thriving Bristol airport for their main air connectivity, and its traffic and route network is substantially greater than that which Cardiff airport can currently offer.
The Government must ensure that devolution does not lead to undue market distortions with negative consequences for both English and Welsh consumers. The Welsh Government have argued for a number of years that the devolution of APD is necessary to support Cardiff airport, Wales’s only international airport. They have also argued consistently that because APD is devolved to Scotland and to Northern Ireland, it must be devolved in Wales. I disagree with both assumptions, as I indicated on Second Reading. What is right for Scotland or Northern Ireland is not necessarily right for Wales, as the asymmetric devolution settlements first put in place by Labour clearly demonstrate. Supporting Cardiff or any other airport does not necessitate giving it special tax status to distort the market artificially in its favour. Indeed, I am very pleased that Cardiff airport is thriving and has increasing passenger numbers without any need to create an un-level playing field for Bristol.
If Welsh APD rates were lowered, it would cause significant and unjustifiable disadvantages for Bristol airport, probably leading to a large decrease of passenger numbers—there could be a decrease of up to 25% if Welsh APD is scrapped altogether.