Wales and the UK: settling the settlement

Background

The relationship between Welsh and UK Governments and their respective powers and responsibilities are a consequence of the devolution settlement, which sets out who controls what in Wales.

Earlier this year, the Independent Commission on the Constitutional Future of Wales published their final report. It paints a thorough, but concerning picture of Wales’ relationship with the rest of the UK, and how it currently fails to deliver for people in Wales.The report has provided an evidence-based analysis of policy areas which require, at the least, further devolution of powers, such as justice, borrowing powers, the Crown Estates, the rail network and an empowered Sewel Convention (ensuring that the Senedd has to vote to support UK Government when it acts in areas that are devolved to Wales).

Welsh Government (supported by Plaid Cymru, as part of the prematurely ended Co-operation Agreement) has therefore kicked off the conversation around further devolution of powers to Wales, a process which inevitably requires UK Government involvement to proceed.

Devolution – a journey, not an event

This UK General Election takes place in the year of the 25th anniversary of devolution in Wales. The Welsh Government and Senedd/Welsh Parliament we see before us today is a far cry from that opened in Cardiff in 1999. Back then, the (then) National Assembly more closely resembled an enlarged local authority than a national Parliament.

Wales’ relationship with the UK has been in a state of constant flux, a journey, not an end point

Over time, the roles, responsibilities and structures of UK and Welsh government activities in Wales have considerably evolved, with increasing powers devolved to Cardiff Bay. The Senedd can now make laws, create its own taxation and control its own electoral arrangements (leading to reforms to the next Senedd election in 2026, and allowing sixteen-year-olds and EU citizens to vote).

As such, Wales’ relationship with the UK has been in a state of constant flux, a journey, not an end point (to paraphrase Ron Davies). This UK General Election is a moment when parties should seek to strengthen relations between governments across the UK, and consider further devolving powers from Westminster to the UK’s nations and regions.

The parties’ perspectives

Of course, different political parties have different perspectives on Wales’ constitutional future. For some, the devolution settlement majorly constraints Welsh Government’s ability to make positive change. Others state that powers are best held more centrally at UK Government level. Others still state that independence is the only way that Wales will effectively govern itself. These tussles over powers, money and control over Welsh affairs are a source of perennial debate.

Devolution is part of a UK-wide conversation on governing better and bringing powers closer to the communities they seek to serve.

Yet, they also take place in a context when devolution is still evolving across the UK. In recent years this has been notable with the expansion of devolution to city regions in England. So-called City Deals have gained more powers over the local economy to regions. Further powers over transport, skills, housing and retrofitting have been devolved to Greater Manchester and the West Midlands city regions. Devolution, then, is part of a UK-wide conversation on governing better and bringing powers closer to the communities they seek to serve. Importantly, this process is also happening within Wales, with newly incorporated Corporate Joint Committee’s (previously city or regional growth deals) taking on funding and delivery in areas including transport, planning and regional economic development.

Each party standing at the election will highlight how they will ensure that powers are better spread across the UK. For instance, the UK Labour Party commissioned former Prime Minister Gordon Brown to produce a report suggesting further devolution of powers across the UK, in addition to replacing the House of Lords with an elected chamber made up of representatives from the UK’s nations and regions.

It is important to see conversations around how government in and for Wales functions as part of a wider set of policy debates at this election. Ensuring that the overly-centralised British state is set up to deliver transformative change to nations and regions across the UK should, therefore, in our view, be a central plank in efforts to improve outcomes and reduce significant regional inequalities. 

The IWA stance

At the IWA, we have been clear that, over recent years, the devolution settlement between the UK and Wales has failed to deliver for people. Post-Brexit, the relationship between UK and Welsh Governments has come under significant strain, with conventions on how governments across the UK have related to one another consistently overridden. This increased strain has shone a spotlight on the inadequacies of current arrangements.

We are also clear that these problems will not simply be solved by having Wales and the UK governed by members of the same political party. These are structural issues which are constraining good policymaking, and therefore, leading to poorer outcomes for the people of Wales.

We have proposed areas where further devolution is needed, giving more powers to government that is closer to communities in Wales. Some of the policies we have called for include:

• The devolution of prudential borrowing powers to Wales – alongside greater flexibility in Wales’ budget
• Giving Welsh Government a key role in shaping post-EU funding arrangements
• Devolution of the Crown Estate to Wales, as a means to turbo-charge renewable energy investment, and deliver benefits to communities in Wales
• Devolve energy subsidy regimes
• Commit to a clear pathway for the devolution of Justice, as highlighted by the Thomas Commission
• Further powers to regulate trade unions
• The transfer of some functions over broadcasting to Welsh Government or an independent commission.

There are other key ways through which a UK Government can set a positive course for areas of devolved competency including:

• Reinforcing the mechanisms that underpin the Senedd and Welsh Government, including the Sewel Convention.
• Fully deliver on the Dunlop review reforms – ensuring positive engagement across all policy areas between devolved and central government
• Establishing a clear pan-UK plan to reach our shared net zero ambitions, rooted in the Carbon Budgeting mechanism.
• Formalise the role of parliaments (UK and Senedd) in scrutinising intergovernmental relations.

We urge any party aiming to form the next UK Government to consider how they will seek to ensure the long-term sustainability of the Welsh devolution settlement. Such efforts should aim to: reinforce the stability of the current settlement, devolve further powers that have thus far been partially delivered, as well as creating the conditions for a better political relationship between all governments of the UK.