Wales: Current devolution proposals 2014-15 Standard Note: SN/PC/07066 Last updated: 3 March 2015 Author: Hazel Armstrong Section Parliament & Constitution Centre The independence referendum in Scotland raised interest in aspects of devolution and increased the pace of change throughout the UK. In Wales there are also significant changes in progress and new proposals which have been announced. This note traces proposals for further devolution, including a change to a reserved powers model, which has been agreed, following the second report of the Silk Committee. A commitment was announced by the UK Government in November 2014. On 27 February 2015 the UK government published proposals for further devolution to Wales. The package formed part of the St David’s Day Agreement between the main political parties in Wales. The full proposals were published as Powers for a purpose: towards a lasting devolution settlement for Wales. The Wales Act 2014 received Royal Assent on 17 December 2014, and once brought into force, will bring enhanced powers to the Welsh Assembly and Welsh Government over elections and taxation. Further details can be found in a number of House of Commons Library publications including: Paul Bowers et al, Wales Bill 2013-14 , Research Paper 14/19, 27 March 2014 Further details on devolution proposals for Scotland and on the way the UK Parliament legislates for England can be found in House of Commons Library publications including: Hazel Armstrong, Paul Bowers, Scotland: Devolution proposals, Standard Note SN/PC/6987, 27 November 2014 Paul Bowers, Richard Kelly, The English Question, Standard Note SN/PC/7027, 18 November 2014. Richard Keen, England, Scotland and Wales: MPs & voting in the House of Commons, Standard Note SN/SG/7048, 5 December 2014. This information is provided to Members of Parliament in support of their parliamentary duties and is not intended to address the specific circumstances of any particular individual. It should not be relied upon as being up to date; the law or policies may have changed since it was last updated; and it should not be relied upon as legal or professional advice or as a substitute for it. A suitably qualified professional should be consulted if specific advice or information is required. This information is provided subject to our general terms and conditions which are available online or may be provided on request in hard copy. Authors are available to discuss the content of this briefing with Members and their staff, but not with the general public.
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Wales: Current devolution proposals 2014-15
Standard Note: SN/PC/07066
Last updated: 3 March 2015
Author: Hazel Armstrong
Section Parliament & Constitution Centre
The independence referendum in Scotland raised interest in aspects of devolution and
increased the pace of change throughout the UK. In Wales there are also significant
changes in progress and new proposals which have been announced.
This note traces proposals for further devolution, including a change to a reserved powers
model, which has been agreed, following the second report of the Silk Committee. A
commitment was announced by the UK Government in November 2014.
On 27 February 2015 the UK government published proposals for further devolution to
Wales. The package formed part of the St David’s Day Agreement between the main political
parties in Wales. The full proposals were published as Powers for a purpose: towards a
lasting devolution settlement for Wales.
The Wales Act 2014 received Royal Assent on 17 December 2014, and once brought into
force, will bring enhanced powers to the Welsh Assembly and Welsh Government over
elections and taxation. Further details can be found in a number of House of Commons
Library publications including:
Paul Bowers et al, Wales Bill 2013-14 , Research Paper 14/19, 27 March 2014
Further details on devolution proposals for Scotland and on the way the UK Parliament
legislates for England can be found in House of Commons Library publications including:
Hazel Armstrong, Paul Bowers, Scotland: Devolution proposals, Standard Note SN/PC/6987,
27 November 2014
Paul Bowers, Richard Kelly, The English Question, Standard Note SN/PC/7027, 18
November 2014.
Richard Keen, England, Scotland and Wales: MPs & voting in the House of Commons,
Standard Note SN/SG/7048, 5 December 2014.
This information is provided to Members of Parliament in support of their parliamentary duties
and is not intended to address the specific circumstances of any particular individual. It should
not be relied upon as being up to date; the law or policies may have changed since it was last
updated; and it should not be relied upon as legal or professional advice or as a substitute for
it. A suitably qualified professional should be consulted if specific advice or information is
required.
This information is provided subject to our general terms and conditions which are available
online or may be provided on request in hard copy. Authors are available to discuss the
content of this briefing with Members and their staff, but not with the general public.
be devolved to the Welsh Assembly and Government unless specifically listed and reserved
to the UK Parliament in future legislation.
For Scotland the reserved matters include constitutional issues such as the Crown, the Union
of Scotland and England and the UK Parliament, foreign affairs and related fields such as
defence, regulation of international trade, and international aid, and economic matters such
as currency, most aspects of fiscal and monetary policy, financial services regulation and
action against money laundering. National security, ownership of oil and natural gas, nuclear
energy, social security and pensions, and immigration and nationality are reserved, as are
most aspects of data protection and freedom of information, and bioethical issues such as
abortion, embryology and xenotransplantation.
Moving to a reserved powers model has been the stated preference of the current Labour
Party Government of Wales for some time. On 11 November 2014 a Minister from the Wales
Office announced in the Lords, during debate on The Wales Bill 2013, that the UK
government had accepted the recommendation to change to a reserved powers model and
that it was intended to produce a framework and set of commitments agreed by all political
parties by St David’s Day (1 March) 2015.
That commitment was further announced by the Prime Minister, David Cameron, in Cardiff
on 27 February 2015. He referred to a new model of devolution described as:
In Scotland – where there is a so-called Reserved Powers model. The default
position is that everything is devolved except those things that are reserved by
Westminster.
But in Wales it has been the reverse. Nothing has been devolved except those
specific things which Westminster legislates to let go of.
Now, today’s agreement will change this.
Introducing the Reserved Powers model to Wales will mean much greater
clarity about the responsibilities of each Parliament and each government
respectively, bringing more transparency to the operations of government.1
The Command Paper2 published with the Parties agreements and proposed way ahead, also
contained an Annex giving a checklist of issues to be considered as part of the process of
moving to a new model.
Issues to be Considered in moving from a Conferred to a Reserved Powers
Model
This checklist sets out what needs to be considered in preparing a reserved powers
model for Wales. This is not an exhaustive list.
What subjects need to be delivered on a UK-wide basis to ensure that citizens
throughout the UK are subject to the same obligations and receive the same rights and
protections?
What subjects are listed as conferred in Schedule 7 to GoWA? What are the
exceptions to those subjects reserved to the UK Parliament? Does the drafting of the
1 Welsh devolution, St David’s Day Agreement, News Release, Prime Minister’s Office, 27 February 2015. 2 Powers for a purpose: towards a lasting devolution settlement for Wales, Cm 9020, February 2015.
we are satisfied that the case for the change is clearly made, there is a broad
consensus in favour and it can be implemented quickly and easily.7
3 Developments in Scotland
In the last two weeks before the Scottish independence referendum on 18 September 2012,
the three main Unionist parties made commitments to further devolution in Scotland, in the
event of a No vote.8 Independence in Scotland was rejected. These commitments made to
look at the devolution settlement have also involved consideration of the position in Wales.
UK party leaders’ “vow” On Tuesday 16 September the leaders of the UK political parties issued a joint signed
statement of undertakings, which was published in the Daily Record, under the headline,
“The Vow”. The statement included:
The Scottish Parliament is permanent and extensive new powers for the
Parliament will be delivered by the process and to the timetable signed and
announced by our three parties, starting on 19 September….
We agree that the UK exists to ensure opportunity and security for all by
sharing the resources equitably across all four nations to secure the defence,
prosperity and welfare of every citizen.
And because of the continuation of the Barnett allocation for resources, and the
powers of the Scottish Parliament to raise revenue, we can state categorically
that the final say on how much is spent on the NHS will be a matter for the
Scottish Parliament….
We will honour these principles and values not only before the referendum but
after.9
The commitment to the continuation of Barnett Formula, for funding devolved
administrations, caused some consternation in Wales, because this would potentially lock in
a lower level of funding for Wales. But at First Minster’s questions in the National Assembly,
Carwyn Jones stated:
I remind the Member that Ed Miliband has made it clear—and this is something
that I agreed with him—that Wales’s underfunding will be addressed with the
election of a Labour Government. He has made that quite clear, Barnett or not.
That is something that will be delivered by a Labour Government, elected in
May—something that Plaid Cymru can never deliver. 10
Smith Commission
On 19 September 2014 the Prime Minister announced the establishment of the Smith
Commission, to consult with the political parties and others and take forward the devolution
commitments in Scotland. The Prime Minister also stated:
It is absolutely right that a new and fair settlement for Scotland should be
accompanied by a new and fair settlement that applies to all parts of our United
7 HC Deb 3 March 2014, col 42WS 8 See Commons Library Standard Note 6987, Scotland: devolution proposals, 27 November 2014. 9 Three leaders sign promise to Scotland, Daily Record, 15 September 2014. 10 National Assembly for Wales, Oral questions in plenary, 16 September 2014.
Kingdom. In Wales, there are proposals to give the Welsh government and
Assembly more powers. And I want Wales to be at the heart of the debate on
how to make our United Kingdom work for all our nations…..
So, just as Scotland will vote separately in the Scottish Parliament on their
issues of tax, spending and welfare, so too England, as well as Wales and
Northern Ireland, should be able to vote on these issues and all this must take
place in tandem with, and at the same pace as, the settlement for Scotland.
I hope that is going to take place on a cross-party basis. I have asked William
Hague to draw up these plans. We will set up a Cabinet Committee right away
and proposals will also be ready to the same timetable. I hope the Labour Party
and other parties will contribute.11
The Cabinet Committee has the following terms of reference:
To consider matters relating to the devolution of powers within the United Kingdom.12
The Cabinet Committee met for the first time on 25 September. The Secretary of State for
Wales, Stephen Crabb, is a member of the Committee and other Wales Office ministers may
be called to join meetings.13
In a House of Commons debate following the Scottish referendum, William Hague
made these statements on Wales:
As in Scotland, the Government have been making good on our promise to
deliver further devolution to Wales, with the referendum on law-making powers,
setting up the Silk commission and introducing the Wales Bill. The Bill takes
forward almost all the recommendations of the Silk commission’s part I report
and devolves a significant combination of tax and borrowing powers to the
Assembly and to Welsh Ministers. It is important that Wales, too, is at the heart
of the debate on how to make the United Kingdom work for all nations….
The structure of the devolution settlement in Wales is an important matter for
our consideration, particularly as the Silk commission recommended a move to
a reserved powers model in its part II report, partly for the reasons that my right
hon. and learned Friend gives. It will fall to the next Parliament to introduce
legislation to make that change, but my right hon. Friend the Wales Secretary
has made it clear that he wants to hear views from across the political
spectrum in Wales. He has invited the leaders of the Welsh parties to discuss
the way forward, and I believe he held a productive meeting yesterday. As he
has announced, the first step in giving further devolution to Wales is to amend
the Wales Bill by scrapping the lockstep and allowing the Welsh Assembly the
power to vary income tax rates. The new income tax powers are a tool to help
the Welsh economy potentially to become more dynamic and to make the
Government in Wales more accountable.14
The Smith Commission published a Report 15on 27 November 2014, containing
agreements for further devolution made by the political parties. This included a 11 Scottish independence referendum: statement by the Prime Minister, Press release, 19 September 2014. 12 Cabinet Office, Devolution Committee (membership) 13 Cabinet Committee for devolved powers: statement on its first meeting, Press release, Cabinet Office, 25
September 2014. 14 HC Deb 14 October 2014, col 172 15 Report of the Smith Commission for further devolution of powers to the Scottish Parliament, 27 November
recommendation for a significant amount of income to be raised from setting rates
and bands for income tax in Scotland. In announcing the report to the House of
Commons the Secretary of State for Scotland, Alistair Carmichael, stated:
Mr Carmichael: The Barnett formula remains in operation, but only for the portion of
the budget going to the Scottish Parliament that is not accounted for by the taxes that
are currently reserved here and are going to be devolved. Detailed technical work is
currently under way on this between the Treasury and the Scottish Government.
Announcements will be made on its practical application in relation to the 2012 powers
in fairly short order.16
Responding to the Smith Commission report, Carwyn Jones stated:
Whatever has been offered to Scotland today must be also offered to Wales, so we
can better determine our own preferences for the future. However, we have
consistently said that before any consideration can be given to income tax we must
see fair funding delivered. It would completely irresponsible to lock in underfunding.
We would certainly expect to be offered full control over our electoral arrangements
and Air Passenger Duty, in common with Scotland. It would unfairly discriminate
against Wales if these were not on the table, and I would expect the UK Government to
make this clear in the coming days.17
4 Political parties’ positions 2014
As the Silk Commission had only presented its final report in March, no equivalent of The
Smith Commission was set up in Wales. But the Wales Secretary, Stephen Crabb, met with
the Westminster leaders of the three main Welsh political parties, on 13 October 2014, to
explore common positions on the devolution settlement for Wales.18
On 14 October the leaders of the four main parties in the National Assembly for Wales
(Labour, Conservative, Lib Dem and Plaid Cymru) tabled a combined motion for debate in
the Assembly, on the future of devolution for Wales.
Motion NDM5605 Jane Hutt, Paul Davies, Elin Jones, Aled Roberts
To propose that the National Assembly for Wales:
1. Welcomes the Prime Minister’s commitment that Wales will be at the heart of the
debate on the future of the United Kingdom.
2. Calls for bilateral talks that are informed by the Holtham and Silk 1 Commissions’
findings, including an updated assessment of the current level and likely future
direction of Welsh relative funding.
3. Calls for those talks, which should begin immediately and be completed by January
2015, to have a particular focus on fair funding, with the goal of securing rapid
implementation of a funding floor which both addresses underfunding in a way that is
consistent with Welsh needs and halts future convergence.
4. Calls for the UK Government to:
16 HC Deb 27 November 2014, col 1100 17 First Minister responds to Smith Commission Report, Press Release, Welsh Government, 28 November 2014. 18 Welsh Secretary meets party leaders, Press Release, Wales Office, 13 October 2014.
On 18 October 2014 Welsh Conservative leader, Andrew R T Davies, commented on moves
for further devolution. He indicated that his party was currently opposed to devolution of
policing powers to the Welsh Government. Andrew Davies also stated:
The issues surrounding future devolution in Wales are hugely important. Of that
there is no doubt. This week’s cross-party agreement on the broad principles to
take forward and collaborate upon reflects that. There is work to do and there
are discussions to take place. But constitutional change doesn’t take place
overnight.
There are other issues too. Urgent, life-changing issues for Wales. For the child
in school. For the patient in hospital. For the business owner in the
marketplace…
We’ve jumped the first hurdles. We’ve made progress since the Scottish
referendum. Now it’s time to give a voice back to the people. We must turn our
attention to community opinion. Community views.
Carwyn Jones has called for a constitutional inquiry as many times as I’ve
called for an independent NHS inquiry. Those who understand what he means
could debate for hours. But I speak to troubled patients every single week –
and I know which one they’d prefer.21
Welsh Liberal Democrats
On 19 September 2014 the leader of the Welsh Liberal Democrats, Kirsty Williams,
welcomed the result of the referendum in Scotland and called on other political parties in
Wales to follow the Liberal Democrats in fully signing up to the recommendations of the Silk
Committee in its second report.
Labour and the Conservatives need to get their houses in order and make it
clear to the people of Wales about where they stand on devolving powers. I
challenge all parties to fully sign up to the recommendations of the second Silk
commission as the Liberal Democrats have already done.
Wales needs its own say on taxation, policing, rail franchising, large energy
projects and much more. Any further dithering on these powers will cost Wales
dearly.
Liberal Democrats will continue to be the driving force behind bringing power
closer to the people, fighting for a federal UK. We must unite to promote and
build a new Union, not continue to stubbornly defend the old. Wales must have
a properly functioning Parliament of its own, and I will not accept anything less
for our nation.22
Plaid Cymru
Leanne Wood, the leader of Plaid Cymru, addressed the Scottish National Party Conference
on 15 November 2014. In her speech she advocated Wales moving to the reserved powers
model and pressed for future agreements to be made amongst the UK devolved
governments:
21 ‘No’ to devolution of policing, Press release, Welsh Conservatives, 17 October 2014. 22 Wales must unite in call for more powers, Press release, Welsh Liberal Democrats, 19 September 2014.
Reserved powers should mean shared powers and let me make clear that a
Plaid Cymru government from 2016 will insist on major decisions at a UK level
requiring consensus between the governments.
The people power that grew from a grass roots movement in Scotland during
the referendum campaign I’m sure will result in power being delivered to the
people.
A new state was not born in September but you’ve built a new democracy and
no party, no government can disestablish that.23
5 Government proposals, November 2014
On 11 November 2014, during debate in the Lords on the Report stage of the Wales Bill
2014, the minister Baroness Randerson announced that the UK government would take
forward work to produce a reserved powers model for Wales, as recommended by the Silk
Commission:
Rather than waiting for Royal Assent of this Bill, the Government intend to take
forward work over the next few months to produce a reserved powers
framework for Wales. Through cross-party discussions and discussions with
the Welsh Government, my right honourable friend the Secretary of State and I
intend to produce that reserved powers framework and a set of commitments to
further devolution agreed by all the parties by St David’s Day 2015. This will be
a comprehensive look at the whole picture. 24
Questions were raised by other Peers on the method of bringing this into operation:
Lord Anderson of Swansea (Lab): The Minister has made a very important
concession. Clearly, the Government have listened very carefully to what was
said in Committee, but the problem remains of what vehicle will be used to
bring this new consensus into operation. The noble Baroness will know how
difficult it is to find a slot in the legislative programme. It is also very difficult,
obviously, for the Government to give any firm undertakings. How does she
respond to that?
Baroness Randerson: The noble Lord makes an important point. By moving
forward on a cross-party basis, it is the intention to ensure that there is
commitment across the four parties in Wales to ensure that the Bill can come
forward in the early stages of the next Parliament.
On 17 November the Secretary of State made a speech at the Institute of Welsh Affairs,
setting out plans for further devolution in Wales.25 He indicated how the process should
progress:
My goal is to seek a cross-party consensus on a stable long-term settlement for
Wales…
Through this cross-party process I intend to announce, by St David’s Day, a set
of commitments, agreed by the four main political parties in Wales, on the way
forward for Welsh devolution. Those commitments would form a basis, a
“baseline”, for taking forward Welsh devolution after the General Election next
May. 23 Powers reserved are powers shared, Press release, Plaid Cymru, 15 November 2014. 24 HL Deb 11 November 2014, col 145 25 Secretary of State sets out long term vision on devolution, Press release, Wales Office, 17 November 2014.
Welsh Ministers should have the power to appoint one member of the Ofcom
board to represent Welsh interests.
A review should be carried out of Air Passenger Duty which could open the
door for it to be devolved to Wales.
As part of the framework, the UK government has also pledged to examine the
Smith Commission’s recommendations that are relevant for Wales.
This will enable the new government, following the General Election, to take
decisions early in the next Parliament on whether any further Smith
recommendations should be implemented for Wales.27
In constitutional terms the Government agreed that the Welsh Assembly and Welsh
Government should be formally recognised as permanent and that this should be set out in
legislation. The Command paper also goes beyond the Silk recommendations on the way
that the Assembly should be able to take future decisions of constitutional importance. These
will require a two-thirds majority within the Assembly. This super-majority provision echoes a
provision set out in the Draft Scotland Clauses 201528.
The UK government position on these is given in the Agreement as:
2.2.19 To provide an adequate check on Assembly legislation proposing
changes to the franchise for Assembly or local government elections in Wales,
the electoral system or the ratio of constituency and regional Assembly
members, the UK Government’s firm view is that such legislation should be
passed by a two-thirds majority of all Assembly Members. We believe there
would be broad support in Wales for these safeguards, and in the Assembly
itself.
The Assembly Presiding Officer, Dame Rosemary Butler, welcomed the proposals, whilst
expressing some disappointment that the full range of Silk Commission recommendations
would not be implemented.
I am pleased to see a commitment to ensure that the Assembly will:
have the power to increase its capacity to match the size of its task. This will
allow us to fully scrutinise the growing policy and legislative programme of the
Government and its new tax raising powers;
be able to decide its own electoral arrangements as well as important symbolic
and practical matters such as the name of the Assembly itself and its internal
operation;
need to consent formally before the UK Parliament makes laws in areas which
are devolved to the Assembly. The current non-statutory protocol is not a
robust safeguard of the devolution settlement. We need to be treated with
parity with Scotland where the Sewel Convention will in future be enshrined in
law.
I also welcome the transfer of powers to determine the appropriate voting age
for Assembly elections and look forward to sharing and considering the
outcome of the Assembly's votes@16 consultation in July. 27 Landmark funding announcement and new powers for Wales..., News release, Wales Office, 27 February
2015. 28 Scotland in the UK: an enduring settlement, Cm 8990, January 2015.
He alleged that there had been “no negotiation at all on this issue” and that the
first time there was “any kind of discussion was on Tuesday.”30
In an exchange of letters with the Secretary of State, on 3 March 2015, Carwyn Jones is
quoted as saying that the process leading to the Agreement was flawed:
It was slow to start, ad hoc and poorly prepared. I and others, repeatedly asked
for details of your financial proposals and you were unable to provide any at
any stage…
I have no intention of seeking a referendum on partial devolution of income tax
to Wales unless and until the long term funding of Wales has been addressed
satisfactorily.31
7 Academic and other commentary
The attention given to Scotland during the referendum campaign led some commentators to
fear Wales and its interests had been side-lined.32
A BBC/ICM opinion poll in Wales taken the week after the Scottish referendum, on 24
September 2014, found a low level of support for independence but 49% support for more
powers for the National Assembly.33
There has been much discussion of how far the proposals for Scotland constitute “home
rule”, the history of that term and what it might mean in a Welsh context.34
The speech made by Stephen Crabb on 17 November 2014 has been hailed as evidence of
a change of attitude towards devolution in Wales by the Conservative Party.35 But there has
also been concern that the timetable may be too tight for detailed consideration and
involvement of voters, before March 2015.
At Westminster, the Political and Constitutional Reform Select Committee launched an
enquiry on Devolution after the referendum on 19 September 2014. The terms of reference
for the enquiry were:
Should England, Wales and Northern Ireland be offered the level of devolution
that has been discussed in relation to Scotland?
If so, what should be the next stages to take forward devolution in a) Scotland,
b) Wales, c) Northern Ireland, d) England?
To what extent is the Government’s timetable for considering the future of
devolution realistic?
What measures, such as a written constitution, could most effectively entrench
future devolution settlements?
Given that different parties have put forward different proposals for further
devolution to Scotland, what is the best way forward?
30 Income tax referendum call sparks political row between Welsh and UK Governments, Wales Online, 27
February 2015. 31 First Minister’s fresh blast at St David’s Day Agreement, Wales Online, 3 March 2015. 32 John Osmond, Wales sidelined by Scottish referendum debate, IWA Click on Wales blog, 17 September 2014 33 Record low back independence, BBC News, 24 September 2014. 34 Andy Bevan, Home rule all round, IWA Click on Wales blog, 25 October 2014 35 Daran Hill, The significance of Crabb’s speech, IWA Click on Wales blog, 17 November 2014
When it comes to responsibility for revenue raising, the Welsh government has always
been more reluctant. The Welsh and English economies are even more intertwined
than the English and Scottish ones so distortions introduced by tax divergences would
be greater in the Welsh case. The “no detriment” clause would be unworkable and if
pushed vigorously would inhibit any move to different tax rates. 37
36 David Phillps, Business as usual?, IFS Briefing Note BN155, November 2014. 37 Gerald Hotham, Holtham on Smith, IWA click on Wales blog, 28 November 2014.