Welsh tax powers will show Scotland devolution can work

In a thinly veiled threat directed at the UK Government First Minster Carwyn Jones said yesterday that unless Wales gets a positive response to the Silk Commission recommendations on tax and borrowing powers he would be unwilling to go to Scotland to defend the union in the run up to next year’s independence referendum. For a video and transcript of the speech, click here.

He said, “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’ ”.

One year to go With just 12 months before the Scottish referendum on 18 September 2014 we are running a series of articles this week: Tomorrow Plaid Cymru leader Leanne Wood argues that the cause of national independence is essentially about renewing old friendships   Friday Stephen Noon, chief strategist with Yes Scotland, says whatever the result of the referendum, Scotland and the rest of the UK will be closely intertwined. Saturday: Charlie Jeffery, of Edinburgh University, describes a project that aims to keep us informed as the debate gathers pace. Sunday:  James Mitchell, of Edinburgh University, analyses how the Yes and No campaigns are framing the referendum debate.

However, before he could do this he needed evidence of a positive UK Government response to the Silk recommendations. Speaking at a conference in Cardiff Bay organised by the UK Changing Union project that brings together the IWA, the Wales Governance Centre and Cymru Yfory/Tomorrow’s Wales, he said:

“I want to go to Scotland and say there is a real commitment to devolution in the UK. Hostility to reform ultimately strengthens those who argue 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.”

A litmus test was how the UK Government would respond to the Silk Commission recommendations on tax and borrowing made in its Part I report published at the end of last year. The UK Government had originally promised a response by the Spring of this year but that timetable had slipped.

Speaking at the Liberal Democrat conference in Glasgow earlier this week Deputy Prime Minister Nick Clegg said he was in favour of following through on the Silk recommendations but conceded that a consensus within the coalition had still to be hammered out. He said he hoped there would be a positive announcement before the end of the Autumn.

Over the summer the UK Government has ben undertaking a period consultation on the Silk proposals for devolving stamp duty over the summer (see here), a period that came to an end last week.

Yesterday Carwyn Jones ratcheted up the pressure saying, “We want progress now on borrowing power plus full devolution of the smaller taxes, including stamp duty.” He said the Welsh Government was prepared to go along with the Silk Commission recommendations on devolving income tax, so long as reform of the Barnett formula was in place to ensure that Wales did not lose out on UK block grant funding.

If legislation at Westminster to put the Silk recommendations into force was to be secured within this Parliament then the UK Government needed to make a positive announcement before the end of the Autumn, which Carwyn Jones specified as 21 December.

In a wide-ranging and radical intervention in the UK devolution debate, the First Minister declared it needed to become less of a process and more of an event. He said devolution needs to move towards a durable, lasting settlement according to key principles which apply equally to all devolved legislatures. There should be an end to the scattergun approach and a new maturity underpinning relationships across the Union.

He argued for a new written Constitution for the UK to introduce a presumption in favour of devolution – “where it makes sense to take a decision in Wales, it should be taken in Wales.”

He said the the sovereignty of the people of Wales should be acknowledged in a clause in the new Constitution that would guarantee the right of the National Assembly to exist, along with the other devolved legislatures in Edinburgh and Belfast. The National Assembly should not have to depend for its very existence on the good will of Westminster. Equally it was not right for the Secretary of State for Wales to be able to veto Welsh legislation passed by the Assembly.

Reaffirming his hope that Scotland will vote to remain in the UK, the First Minister said that a true commitment to devolution by the UK Government, would present a real and positive alternative to breaking up the United Kingdom. Full implementation of the Silk Commission’s proposals on tax devolution and borrowing powers for Wales would send a clear signal and enable him to make a strong case for the Union.

The new Constitution would not need to require that each of the devolved legislatures had equivalent powers, but it would need to provide parity in the way powers were devolved. This meant that Wales should move to a reserved powers model, as is the case with Scotland and Northern Ireland, in which everything is devolved save those areas such as defence and foreign affairs which stay with Westminster. At present Wales has a conferred powers arrangement in which its powers have to be individually specified and which leads to constant arguments about the boundaries of devolution.

Carwyn Jones said:

“I believe 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. Over the past fifteen years we’ve seen repeated ad hoc tinkering with the constitution. I want this to stop. We need now to make devolution less of a process and more of an event. Once the Scottish 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 he added:

“I have made clear consistently my hope that Scots will vote for Scotland to remain within the Union. 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. My ability to make that case will depend largely on the UK Government’s response to the first Silk Report, on devolution of taxation and borrowing powers.”