The Wales Bill could have far reaching consequences for the governance of the whole UK

Amidst the noise of the fallout from the Scottish independence referendum, the issue of what will happen next in Wales has been largely missed. Although independence isn’t on the cards, the forthcoming Wales Bill, if it survives current political wrangling, could have a profound effect on governance of Wales and the whole UK, argues David S. Moon.

Credit: Ben Salter, CC BY 2.0

In the fallout from September’s Scottish independence referendum, much focus has been paid to subsequent changes planned for the governance of Scotland and England. Specifically, interest has focused on fulfilling Unionist “vows” to grant the Scottish Government ‘devo-max’ powers and Conservative-led proposals for English Votes for English Laws (EVEL) at Westminster, as an apparent quid pro quo.

Alongside these debates, however, a process has been also running since October 2014, led by Stephen Crabb, the Secretary of State for Wales, with the aim of reaching cross-party consensus on – in his words – “a blueprint for changes to the way Wales is governed”. Following months of cross-party talks, David Cameron and Nick Clegg jointly unveiled the government’s plans on the 27th of February, meeting the agreed deadline of St. David’s Day, March the 1st 2015. The plan now is that a new Wales Bill will be introduced early in the next Parliament, whatever the colours of the government following the General Election.

Representing a further shift in constitutional power within the Union, these plans affect everyone across the UK just as ‘devo-max’ in Scotland and EVEL at Westminster will/would. For those who have not been paying attention to these talks and are looking for a quick catch-up, there are three key points to take away:

1) Cross Party Consensus

There is cross-party consensus that more powers will be devolved to the Welsh Government. These include giving the National Assembly control over its own elections (including the power to lower the voting age to 16), as well as control over areas such as fracking, sewerage, ports, speed limits, and taxi and bus legislation. The National Assembly will also be granted the power to change its name and increase its size, heralding a future Welsh Parliament, and a major constitutional shift from a ‘conferred powers model’ to a ‘reserved powers model’ of devolution.

This will mean moving from a situation whereby the Assembly is granted powers to legislate only in specific subject areas, to one where it has to freedom to do so in any subject, provided it is not specifically named as being ‘reserved’ to the UK Parliament (as currently is the case in Scotland). This sounds technocratic, but is a major tidying-up of the existing mess whereby, following the passage of some Welsh Bills, they have been referred to the Supreme Court by the Attorney General, claiming the Bills’ provisions fell outside of the Assembly’s legislative competencies. A reserved powers model will provide clarity, ending this practice.

2) The limits to consensus

This consensuses only goes so far, breaking down when it comes to the question of devolving income tax powers and central government funding – and whether or not the two should be linked together. Put simply, the coalition want the Welsh Government to hold a referendum on devolving income tax powers to Wales, David Cameron arguing that the powers set out in the deal “remove the last remaining barriers” to doing so. The Welsh Government, and Welsh Labour in general, are unwilling to agree to any referendum without an agreement on funding figures.

The key context for this stand-off is simple: Wales needs money. For the third time now, Wales has qualified for European structural funding, aid given to the EU’s poorest regions. The independent Holtham Report has shown that the Barnett formula, which Unionist leaders desperately “vowed” to keep in September, is far from the boon it is in Scotland for Wales, being calculated in 2009 as relatively underfunding Wales by £300m a year.

For a Welsh Government faced with a £1.5bn cut in the Welsh budget this term, underfunding matters, especially for a nation suffering from a legacy of ill health and neglect which puts a heavier burden on public services than elsewhere. That funding is a problem is recognised across the parties in Wales, with all four party leaders in the National Assembly calling for an agreement last October over how much extra funding is needed. The deal itself has set a funding ‘floor’, a limit the budget cannot go below – an agreed first-step.

Labour’s stated problem with the St. David’s Day deal, however, is it lacks specific figures guaranteeing that funding for Wales has, as First Minister Carwyn Jones puts it, “been put on a fair and sustainable footing”. Until shown these figures, Labour say they will not sign up to the deal – and even then they will “decide” whether or not to hold a referendum on income tax powers, seeking to break any link between the two issues. Labour fear that devolution of tax-raising responsibilities will provide an excuse for Westminster to institute a matching cut in the block grant, leaving Wales worse off than before. Hence the message to central government: “show us the money!”

This unwillingness to sign-up to the deal has led to Conservative accusations that Labour is ‘blocking’ devolution, with Stephen Crabb – who has previously rejected the claim of an “underfunding issue” in Wales – declaring he is “concerned that momentum may now be lost” in moving to “a clearer, stronger and fairer devolution settlement for Wales”, having already had to “move mountains” fighting against Whitehall intransigence to get to the deal offered. Andrew R.T. Davies and Kirsty Williams, Conservative and Lib Dem leaders in the Assembly, have blamed Owen Smith, Labour’s Shadow Secretary of State, claiming that it is he who “stopped” further areas of agreement and was “less-devolution friendly than some of his colleagues” – accusations Smith called “cobblers”. Nevertheless, beyond the genuine points and concerns about funding and responsibility there are clearly also party political reasons to put a damper on the deal.

3. Current Constitutional Reform Debate

This brings us to the third point – which has to do with the current debate over constitutional reform of the Union in general. The process has been led by the Conservative Secretary of State, and mere weeks before a general election, Labour have no incentive to make him look good – especially as the Conservatives seek to put Welsh devolution to bed, all the better to focus on promoting their economic strategy. I previously wrote on the PSA blog about the dangers surrounding the heavily politicised nature of the current debate over EVEL, months before the coming election. What we see in Wales, albeit to a lesser extent, is similarly part of a wider problem.

The three elements of the current constitution/devolution reform agenda – focused on Scotland, Wales and English Votes – are being treated separately, as only tangentially related concerns, not collectively. This is typical of a general make-it-up-and-muddle-through approach to major constitutional change in the UK and stores up further problems for the future. Carwyn Jones has rightly been calling for a wide-ranging constitutional convention since 2012 and long highlighted the danger of a lack of planning for what would come after the Scottish referendum – whether a ‘Yes’ or ‘No’ vote. People didn’t pay attention to the message coming from Wales then – including, evidently, Ed Miliband. Maybe post-election, that time will come.

—

Note: this post represents the views of the author and not those of Democratic Audit or the LSE. Please read our comments policy before posting.

—

Note: This post originally appeared on the PSA blog and is reposted with permission. It represents the views of the author and not those of Democratic Audit or the LSE. Please read our comments policy before posting.

—

David S Moon is Lecturer in Politics at the University of Bath. He tweets @David_S_Moon.