Reaching agreement on changes to Wales’ devolution settlement

31 October 2014

Article written by Steve Boyce , National Assembly for Wales Research Service

Image from Wikimedia Commons by National Assembly for Wales. Licensed under the Creative Commons

Image from Wikimedia Commons by National Assembly for Wales. Licensed under the Creative Commons

 

In the flurry of activity following the Scottish referendum some commentators have wondered how Wales’ voice will be heard in the discussions about new constitutional arrangements for the UK. The first step, it has been suggested, is to reach some agreement on what Wales wants.

Recent developments suggest that progress is being made on establishing a consensus on a new devolution settlement for Wales. On 21 October the four Assembly parties agreed a joint motion in plenary on the future of devolution in Wales. The motion calls for bilateral talks with London, with a particular focus on the funding settlement for Wales. It calls for new powers over taxation (including Corporation Tax if these are devolved to Northern Ireland and Scotland), a review of the levels of borrowing currently in the Wales Bill, and for work to enable the Welsh Government to issue its own bonds. It also calls on the UK Government to give the Assembly powers over its own electoral arrangements, and for progress on Silk II, including confirmation that Wales will move to a reserved powers model. The motion states that these matters should be taken forward in legislative proposals published before the end of the current Westminster parliamentary session.

The Assembly’s Presiding Officer, Dame Rosemary Butler AM, called on the UK Government to ensure that Wales is at the heart of the UK’s devolution debate. She believes there is a need to recognise the sovereignty of the Assembly, to increase its capacity, and to move to a reserved powers model.

Earlier in October MPs from the Labour Party, the Liberal Democrats and Plaid Cymru met with Welsh Secretary Stephen Crabb to seek common ground on their aspirations for new powers for Wales. The Secretary of State spoke positively about the meeting when giving evidence to the House of Commons Welsh Affairs Select Committee on 22 October and said that he envisaged a monthly cycle of meetings with the party representatives in future. The meetings would consider a reserved powers model, the second Silk Commission report, funding for Wales, and which of the outputs of the Smith Commission on powers for Scotland might be taken forward in Wales. He aims to achieve agreement by St David’s Day 2015 on what the next stage of devolution will look like.

Speaking to the Committee Mr Crabb appeared open to discussions about the reform of funding for Wales, although Prime Minister David Cameron had earlier ruled out major changes to the funding formula. Mr Crabb was clear that funding reform and the devolution of some powers over income tax are not mutually dependent; one could happen without the other.

First Minister Carwyn Jones, by contrast, believes the two issues need to be addressed together, as he made clear in evidence to the Assembly’s Committee for the Scrutiny of the First Minister on 9 October. He fears that if Wales had tax raising powers a future Westminster government would expect the Welsh Government to make up any funding shortfall from taxation and that the ‘historic underfunding’ would be locked in.

In the meantime, scrutiny of the Wales Bill in the House of Lords is progressing, meaning that its provisions, which include limited income tax raising powers for Wales (minus the “lockstep”), along with other taxing and borrowing powers, are likely to become law soon. Wales will then have to wait until the next parliament for any further legislation although by that time the shape of the UK’s constitutional landscape should be somewhat clearer.