UK’s Changing Union – One year until the referendum

Mae’n bleser bod yma bore ma i agor y gynhadledd bwysig hon. Dim ond blwyddyn sydd i fynd tan y Referendum yn yr Alban. Mae’n siwr gen i y bydd hon yn flwyddyn ddiddorol dros ben.

Beth bynnag fo’r canlyniad, fe fydd yna oblygiadau pwysig iawn i Gymru. Dyna pam dwi’n awyddus i gyfrannu at y drafodaeth.

Mae’n holl bwysig bod Cymru’n rhan o’r drafodaeth ar lefel Brydeinig.. Mae’r un mor bwysig bod y drafodaeth yma yng Nghymru yn ystyried cyd destun ehangach y Deyrnas Unedig.

Thank you for inviting me to give the opening speech today. This is a very timely event. The Wales Governance Centre provides a stimulating forum for discussing the key political and constitutional issues of the day. Scotland’s future, within or without the Union, certainly falls into that category.

Scotland in the Union

The question of Scottish independence will ultimately be a matter for the people of Scotland, but I want to make a couple of points from a Welsh perspective.

First, I have made clear consistently my hope that Scots will vote for Scotland to remain within the Union. I hold firmly to that view. I would like, at an appropriate time, to make that case in Scotland, in support of the Better Together campaign. I will want to argue that Scotland’s legitimate national aspirations, like those of Wales, can be satisfied in a flexible framework of devolution within the United Kingdom.

Silk Part 1

My ability to make that case will however depend largely on the UK Government’s response to the first Silk Report, on devolution of taxation and borrowing powers.

I know that there is a lot of interest in the progress of the Silk discussions and I’ve seen plenty of media speculation about what might be holding up the UK Government’s response to the Commission’s report. As far as the Welsh Government is concerned, our position is crystal clear. We are seeking full implementation of the Silk proposals, in their entirety. That means:

–      borrowing powers to support investment;

–      full devolution of smaller taxes including stamp duty;  and

–      legislating for income tax devolution, with powers to enable a future Assembly to call a referendum on whether that should be implemented.

So there is absolutely no ambiguity about where I stand. If there is any dispute about the way ahead – and I know the Deputy Prime Minister alluded to this yesterday – then it is taking place between the pro- and anti- devolution forces within the UK Coalition Government.

Despite the delay, I remain confident that we will secure an ambitious response to Silk. Certainly, we’ve got very broad cross-party support here in Wales in favour of implementation, and I know many business organisations are also keen that we gain powers in areas such as borrowing and stamp duty so that we can boost the economic recovery. I believe that in the end, the arguments for reform are too powerful to ignore.

Most recently we have worked with the UK Government on the Treasury’s consultation on stamp duty devolution which focused on the potential for cross-border risks to business. I have to say that concerns about those alleged risks appear greater in Gwydyr House than they are among businesses in the real world. Nonetheless, we take seriously our responsibility as a Government to move this agenda forward on the basis of consensus. We will continue to act as constructive partners of the UK Government as it puts the finishing touches to its Silk response.

If we are to secure legislation on Silk in the lifetime of the current Parliament, then the UK Government will have to keep to its latest deadline and make a definitive announcement on Silk part 1 this Autumn. (And I use ‘Autumn’ in the generally accepted sense of the word; let’s hope no one tries to claim that Autumn extends to the Winter solstice on 21 December.)

To repeat, I want to be able to go to Scotland and say, “Look, devolution can develop to meet changing circumstances and new aspirations. It can work in that way for Scotland too”. So let us see how the UK Government responds to the Silk Report. I hope, in light of that response, I will be able to make that convincing case for devolution within the UK.

Negotiations post referendum

My second point is rather different. It is clear that, whatever the outcome of the referendum, a process of discussion and negotiation will follow. If the vote is for independence, the negotiation will be about the terms of Scotland’s departure from the Union, and the new relationships it will need to establish with the remaining UK. If the Scots vote to stay within the Union, the negotiation will be about the terms of its continuing membership.  Either way, the voice of Wales needs to be heard in those negotiations.

If a new relationship is to be negotiated between an independent Scotland and the remaining UK, all parts of the UK should be able to contribute to the discussion. We all have our respective responsibilities for public services which will be affected. For example Scottish citizens’ access to the Health Service in Wales will need to be considered, and vice versa. So we must have a seat at those discussions, whatever their exact character.

The Union and its Future

I turn to the issue of the Union. I am in favour of the Union because I believe we all achieve more through our common endeavours as the United Kingdom than we could as separate nations. However, our Union needs reform.

So let me say something about our future Union, and let’s assume for the sake of argument that the Scots will vote to stay with us. Over the past fifteen years we’ve seen repeated ad hoc tinkering with the constitution. I want this to stop.

I agree with what Jim Gallagher said in a recent Scotsman article: we need now to make devolution less of a process and more of an event. Once the referendum is out of the way, I want to see reforms which complement one another, reforms which viewed together create the coherent constitution which the UK currently lacks. And if that constitution can be codified, so much the better.

The UK has a history of taking a pragmatic approach to problems and issues; allowing us, in effect, to experiment and develop strong institutions by seeing what works and what doesn’t work. And looking at what works and what does not, we can now see that the current devolution settlement for Wales is ripe for reform.

We have recently had our second referral of Assembly legislation to the Supreme Court in as many years since having full-law making powers. This is no viable way to work – having to repeatedly test the settlement in Court.

There has to be something fundamentally wrong when two Acts of the Assembly in as many years are referred to the Supreme Court by the UK Government. Neither Scotland nor Northern Ireland have had any such government referrals. Their settlements, on the Reserved powers model, have stood the test of time. The logic must be to apply those same underpinning principles to Wales.

Yes, the different histories, and our different relationships with England need to be reflected in our respective settlements. I have spoken previously in support of that catchy phrase “asymmetric quasi-federalism”. But in an equitable United Kingdom there have to be common fundamental principles underpinning devolution. So I want to see a new constitution for the UK, and I think it should include three key principles for devolution across the Union. These are

• First: respect for the devolved legislatures

• Second: parity of structure

• Third, there should be a presumption in favour of devolution of legislative and executive competence where this is practicable.

On the first point, by “respect for the devolved legislatures” I mean their essential sovereignty, manifested in their continuing constitutionally-guaranteed right to exist.

The National Assembly should not have to depend for its very existence on the good will of Westminster. The same is true of other devolved legislatures. No ‘proper Parliament’ should have to rely upon the good faith of another for its very existence. The fact that a legislature has been established with popular support makes the point even more compelling.

A new constitution should guarantee the continuing existence of all of the devolved legislatures as permanent features of the Union, unless they themselves agree to their own abolition. So I agree with those in Scotland who have been making that case in respect of the Scottish Parliament, and I want to extend the principle to the other devolved legislatures.

Secondly, asymmetrical devolution should not mean creating different structures for the devolution of powers. There is no logic in having different statutory methods for devolving legislative competence to Wales and Scotland. A reserved powers model in Wales would not only benefit the people of Wales, it would benefit the Union as well. It would help make clear to everyone, who is responsible for what. It would make clear what responsibilities Westminster still has in relation to the devolved administrations. In essence, the powers of each devolved legislature should be defined by what it cannot do, rather than, as is currently the case of Wales, what it is permitted to do.

So we need the same basic method of devolving powers across the UK. Specifically what should be reserved will vary depending on circumstances and history. But the structure and underlying principles should be consistent. This is both pragmatic and principled. We can tailor the powers for each nation and keep fundamental equality in the system.

My final fundamental principle is a presumption in favour of devolution. I firmly believe that where it makes sense to take a decision in Wales, it should be taken in Wales. Unless a wider UK interest is at stake, it is difficult to see why this should be in any way controversial.  That, of course, applies equally in Scotland and Northern Ireland too – and, indeed, to England were it to choose to follow the same devolutionary path.

In the Imperial Tobacco case the Supreme Court judge Lord Hope – a Scottish judge – said that “matters in which the UK as a whole has an interest should continue to be the responsibility of the UK Parliament at Westminster.” I agree.  And the flip side of that coin is that matters in which there is no essential UK-wide interest are potentially suitable for devolution.

The point of devolving more powers to Wales is to strengthen the accountability of the Assembly and to make it possible for the Welsh Government to take action in line with the priorities of Welsh people.

Public opinion is on our side in taking this forward. As the recent opinion poll evidence published by the Silk Commission reveals, I am firmly reflecting Welsh public opinion when I call for more powers to be devolved to the National Assembly.

Some will raise the spectre of ‘cross-border issues’ as a reason to roll back, or halt devolution. No: the fact that we share populous border regions with England is no reason to prevent or slow down devolution. We have an established track record of sensible management arrangements for such issues. Across Europe, literally millions of people live contentedly in border regions without undue difficulties.  All of this is perfectly manageable, with goodwill and good sense on both sides.

I have not much mentioned England – far be it from me to lecture on the suitable governance arrangements there.  We look forward to the UK Government’s response to the McKay Commission’s report.

I simply emphasise that any changes in the way UK or England and Wales legislation is handled, will affect Wales and I repeat that our voice should be heard. That is why the issues addressed by McKay should be included in the wider constitutional convention I am calling for.

Closing Remarks

To conclude, we have to take a long term perspective. Over centuries, the UK has had ups and downs but it seems clear enough to me that this small windswept land on the Atlantic’s edge has achieved much more through the coming together of our four nations than we could have ever done as our separate parts.

I am both pro-Union and pro-devolution.  I see absolutely no contradiction between the two positions. I believe devolution allows for different and distinct policy decisions to be taken with the consent of the people while still retaining the key benefits of the Union.

But I go further – I believe that being pro-devolution is an essential part of a modern pro-Union philosophy. Devolution is a fact of life in the UK. It enjoys broad public support, as shown in the outcome of the 2011 referendum. This is consistently confirmed in opinion poll evidence, and it is clear that there is an appetite to go further.

So a mindset of drawing endless lines in the sand, resisting every proposal for further devolution no matter how reasonable, is doomed to fail. Worse, hostility to reform ultimately strengthens those who argue that the UK is incapable of change; it pushes people towards a polarising choice between an unreformed status quo and the slippery slope of separatism. We have to avoid such false choices.  The danger has always been that some in Whitehall and Westminster who would defend the Union may unwittingly and uncomprehendingly preside over its dissolution.

If we are going to secure Scotland’s position in the Union, we need to have a credible and lasting commitment to devolution in the UK. This has to be a commitment which transcends the varying short-term fortunes of political parties.

I want to be able to go to Scotland and say that there is a true commitment to devolution, set out as a key plank of the British constitution. This would present a real and positive alternative to the separatist agenda. And a codified constitution, incorporating these principles, would perhaps enable us then to describe devolution as a concrete achievement, not an uncertain process.  So I say to the UK Government: let’s put away the scattergun and move towards a binding, durable settlement based on agreed principles.

So in conclusion I welcome you all to the Pierhead today, and I trust that you will enjoy a stimulating and productive series of discussions. Diolch yn fawr.