
Moving
to a durable constitutional settlement:
Evidence
for Change
Proposals
for a solution
The Welsh Liberal Democrat Submission to the Commission on the Powers and Electoral Arrangements of the National Assembly for Wales
February 2003
Contents
A.
Introduction 3
B.
Executive Summary 4
PART
ONE
1.
The restricted policy-making framework 7
2.
The failings of the Barnett Formula 14
3.
The limitations of back bench scrutiny 17
4.
The Wales-UK relationship and its current implications 20
5.
The Durability Argument 21
6.
Wales and the European Union 23
7.
Public perceptions 25
8.
Restricted ambitions 27
PART
TWO
9.
The Welsh Liberal Democrat solution 32
10.
The transfer of primary legislative powers to Wales 33
11.
Funding Wales 34
12.
A Welsh Senedd: a new policy delivery mechanism for Wales 36
13.
A criminal justice and legal system for Wales 39
Introduction
A.1 Welsh Liberal Democrats and our antecedents have argued the case for devolution to Wales for more than 100 years. We supported legislation for devolution to Wales in the late 1970s and again in the successful referendum of 1997. One of our fundamental beliefs is that, where appropriate, decisions are best made as close to people as possible.
A.2 Although
the establishment of the National Assembly in 1999 has been a major step
forward for Wales, we believe it to be a half-hearted attempt at real
devolution.
A.3 It
was the Welsh Liberal Democrats that sought the establishment of a Commission
to examine the Assembly’s powers in the Partnership Agreement. As partners in
the Welsh Assembly Government, we therefore welcome the work of the Richard
Commission.
A.4 Our submission is made in two sections.
A.5 First,
we highlight the way in which the National Assembly for Wales has been hampered
by the current constitutional arrangement across all policy areas that fall
within its remit. We also question the failings of the way in which Wales is
funded by the UK government. The Assembly’s scrutinising abilities are
considered, as are the relationships between the Welsh Assembly Government and
the UK Government and between the Welsh Assembly Government and the European
Union’s institutions. We also consider public perception of the National
Assembly for Wales and examine the way in which our own policy priorities would
be restricted should we receive another electoral mandate to participate in
government.
A.6 Second,
we propose a way forward. We argue for primary legislative powers, a new
funding formula for Wales and the re-establishment of the National Assembly for
Wales as a Welsh Senedd. It is only with primary legislative powers and a
robust legislature in which to use those powers that Wales can really be free
to make the decisions best suited to its citizens.
Executive
Summary
Part One
B.1 This
submission presents evidence which demonstrates that the National Assembly is
unable to pursue its own unique policy agenda for Wales within the current
constitutional framework.
B.2 The
policy-making framework is restricted. The Welsh Assembly Government has been
unable to enact policy initiatives, due to the National Assembly's lack of
primary legislative powers, in every area of its remit. There are a number of
examples of primary legislation which have been sought but not granted
Parliamentary time. There are more examples of policy which could not be
pursued because of the lack of power.
B.3 The
mechanism by which Wales receives its funding from the UK Government, the
Barnett Formula, fails to acknowledge greater Welsh needs and fulfil
obligations in relation to matched funding for EU receipts. Public expenditure
increases in England are exacerbating these failings.
B.4 Back
bench and committee scrutiny of the Welsh Assembly Government is limited by a
lack of time and resource and by the limited number of Assembly Members.
B.5 An
over-reliance upon Westminster for primary legislative measures restricts the
policy making abilities of the Welsh Assembly Government as there is not enough
parliamentary time to meet all of its requests. This reliance upon the UK
Government places additional pressure upon an already over-burdened UK
Parliament.
B.6 The
current constitutional settlement is not durable. In the event of different
political parties holding majorities in the UK and Wales there is the
likelihood of a constitutional crisis. The Welsh Assembly Government depends
too heavily on co-operation with the UK Government and it would be easy for the
latter to frustrate the former.
B.7 EU
regions with primary legislative powers are leading the debate in calling for a
greater regional contribution to the policy-making structures of the European
Union. Wales is being left behind in this debate: it is less influential than
Scotland.
B.8 Public
opinion research demonstrates that the electorate is increasingly supportive of
moves towards further powers for Wales, and that a strengthened Welsh
legislature will reduce voter apathy in Welsh elections. There is a growing
understanding and expectation that Wales needs a Parliament.
B.9 As
well as actual restrictions to policy ambition so far, it is clear that the
policy ambitions of some Welsh political parties are greater than could be
enacted within the current settlement. It is possible that an electoral mandate
could be granted by the Welsh electorate to a Party for policies it could not
implement.
Part Two
B.10 Welsh
Liberal Democrats propose the transfer of primary legislative powers to Wales
across a broader spectrum of public policy.
B.11 We
propose the replacement of the Barnett Formula with a revenue distribution
formula, to be determined by a Finance Commission for the Nations and Regions
of the UK. The Commission is to be made up of representatives of all the
regions and nations of the United Kingdom and chaired by a new Secretary of
State for the Nations and Regions. Our proposed UK-wide NHS contribution is
highlighted as another way of raising extra Welsh revenue, with Wales being given
the power to vary it.
B.12 We
propose the establishment of a Welsh Senedd where the powers of the executive
are separated from those of the legislature.
B.13 The
Senedd would elect 80 Members using the Single Transferable Vote. The greater
number of Members will allow for greater scrutiny of the Welsh Government's
actions, but should be subject to review in the future. A fully independent
Welsh civil service should be created to support the Welsh Government.
B.14 We
propose to abolish the post of Secretary of State for Wales once a Welsh Senedd
is established. Most of the post’s functions would be transferred to the Welsh
Senedd and it would be replaced by a Secretary of State for the Nations and
Regions, with a remit to liase with all devolved bodies in the UK and represent
them at UK Cabinet level.
B.15 The
role of Welsh Members of Parliament would be diminished considerably with the
advent of a Senedd. We propose to reduce the number of Welsh MPs from 40 to 28,
as part of wider Liberal Democrat proposals to reduce the number of MPs at the
UK level to 450.
B.16 Finally,
we propose a Welsh legal and criminal justice system to cater for what will
eventually become a substantial body of unique Welsh law.
The
case for reform: the restrictions of the current constitutional arrangement
The
restricted policy making framework
1.1 Welsh Liberal Democrats and our Welsh Labour partners in Government have had first hand experience of the difficulties, delays and disappointments that the Assembly’s lack of powers have had upon the Welsh policy-making process. Beyond the remit covered by the Partnership Agreement, both parties share many policy proposals that would be of huge benefit to Wales and its people. We are however conscious that, under the current constitutional arrangement, we could never implement these initiatives should we be given an opportunity to do so by the Welsh electorate.
1.2 Although referred to as Ministers, the Government of Wales Act 1998 actually terms Welsh Cabinet members as Cabinet Secretaries. The language has been abandoned in practice as confusing and lacking in status but, even here, there is no basis in law.
1.3 To demonstrate clearly why the National Assembly needs primary legislative power, we draw attention to some of the policy initiatives that the Assembly has either tried to implement, or would like, but has been unable to implement.
1.4 We take each of the Assembly’s main policy portfolios to cite supporting evidence.
Health and Social Services
1.5 Primary
Legislation has played an important part in health and social services policies
for Wales. Jane Hutt, the Minister for Health and Social Services, supports our
view.[1]
Two of the Assembly’s policy achievements in relation to health policy,
establishing the Children’s Commissioner and the NHS (Wales) Bill, were enacted
via Acts of Parliament as the Assembly did not have the powers to do so itself.
From this, it is clear that the Assembly is unable to set its own policy agenda
in relation to health.
1.6 Children’s Commissioner for Wales -
The Children’s Commissioner for Wales emerged from an Assembly Health and
Social Services Committee report recommending that the post be established
following the findings of the Waterhouse Report. It secured all-party support
in the Assembly, and yet the UK Government initially did not accept the need
for such a Commissioner, with the UK Government citing a lack of Parliamentary
time as the reason for not doing so.[2] It was only through the persistence of the
Welsh Health Minister and the Secretary of State for Wales that the Children’s
Commissioner for Wales Act 2001 eventually worked its way through Parliament,
almost two years after the Assembly first requested it.
1.7 The
Assembly’s Health Committee had recommended that the Commissioner’s power
should include the ability to shape policy and organise services affecting
children in Wales, but this was not ultimately devolved.[3]
Even with the UK Government agreeing to pass the necessary primary legislation,
the Assembly was still unable to pursue its own policy agenda in full.
1.14 St. David’s Day – The National Assembly for Wales is committed to making St. David’s Day a public holiday. The Assembly has placed a ‘bid’ for primary legislation to allow this to happen, but the UK Government has refused this request. Consequently, the power to determine bank holidays in England and Wales remains the responsibility of the Department of Trade and Industry.
1.15 Any decision relating to the status of St. David’s Day should be the responsibility of Wales alone as it has unique cultural implications for the people of Wales. It is not appropriate for the UK government to make such a decision on Wales’ behalf.
1.17 This scenario serves to demonstrate that,
under the terms of the 1981 Animal Health Act, the Assembly is unable to meet
new needs or set its own priorities. This would still be the case if additional
functions were transferred to Wales under section 22 of the Government of Wales
Act.[8]
Although the Animal Health Bill currently before Parliament provides for the
amendment of the 1981 Act, it is dependent upon the UK Government allocating
Parliamentary time and, even where Welsh provisions do appear in UK Government
bills, instructions to Parliamentary Counsel have to be agreed with UK
Government officials. These proposals remain under discussion between the Welsh
Assembly Government and the UK Government, and have been for the past eighteen
months.
1.18 Fisheries
- The majority of fisheries primary legislation relates to the area of sea
within 200 miles of the UK coast. The Government of Wales Act 1998 defines
Wales as including the sea up to 12 miles from the Welsh coast. When devolution
took place in 1999, the power to control Welsh fishing vessels outside the 12
mile limit was retained by the Secretary of State for Wales, and has since been
transferred to the Secretary of State for Environment, Food and Rural Affairs.
This means that the Assembly is reliant upon DEFRA to control the activities of
the Welsh fishing fleet outside of the 12 mile limit.[9]
Environment, Transport and
Planning
1.19 Public transport - The National Assembly’s powers regarding public transport are limited. The Transport Act 2000 calls on each local authority to prepare separate Local Transport Plans and Bus Strategies. In November 2001 the Welsh Assembly Government published a strategy document entitled The Transport Framework for Wales, highlighting the need for greater transport integration. Moves towards an integrated transport policy in Wales have been hampered by this, as there are no powers to require Welsh local authorities to act together on a regional or national basis.
1.20 The Welsh Assembly Government also lacks the power to direct the Strategic Rail Authority, unlike the Scottish Parliament, or to appoint a member. This prevents Welsh Assembly Government input into the Welsh rail network and hampers its ability to produce an effective integrated transport policy.
1.21 Flooding - Following the serious floods across Wales in 2000, the Environment, Planning and Transport Minister, Sue Essex said that the Welsh Assembly Government was keen to support measures that would address the problems arising from flooding and to reduce the future problems it may cause.[10] With six local flood-defence committees, Wales has an unusually high number of these bodies for such a small nation. However, rationalisation of the structures, as the Welsh Assembly Government would like, would require primary legislation.
1.22 National Parks - The appointment of members of National Park Authorities are subject to the arrangements set down in the Environment Act 1995, meaning that any changes in the balance of members appointed by the Assembly and by the constituent local authorities would require primary legislation. National Park Authorities will be subject to an Assembly review in the near future, one of the central issues being the adequacy of current membership arrangements. Introducing directly elected representatives is one of the steps that is currently being considered. If this were to be agreed, as was the case in Scotland in 2000, then primary legislation would be necessary for the Assembly to push its policy agenda forward.
Local, Government, Finance
and Communities
1.23 Local Authority plans - Freedom and Responsibility in Local Government, published on 1st March 2002, is a Welsh Assembly Government policy statement that gives a commitment to rationalising the burden of requirements on local authorities to produce plans for the National Assembly. As some of these plans are required by primary legislation, the power to alter or remove these requirements lies with the relevant Secretary of State in the UK Government under the terms of the Local Government Act 2000. Consequently, the Assembly has no direct ability to remove requirements to produce statutory plans.
1.24 Licensing of privately rented housing - The Welsh Assembly Government is committed to developing licensing arrangements for the private rented sector. This covers Houses in Multiple Occupation and the selective licensing of landlords. Such a policy commitment requires primary legislation. It has not yet been possible to get the UK Government to agree to the necessary Bill.
1.25 Instead, UK ministers have agreed new arrangements that will enable the Assembly to introduce licensing arrangements by including much of the necessary detail through secondary legislation. This agreement with the UK Government will allow the Assembly to develop separate arrangements for Wales but, as stated by the Minister for Local Government, Finance and Communities, they lack the flexibility to develop a more comprehensive and inclusive licensing regime for Wales.
1.26 Overall progress on this policy – a manifesto commitment of both government parties - has also been very slow as a consequence.
1.27 Policing - Devolution in Wales has led to complex and cumbersome arrangements for police finance.
1.28 The financial settlement for the Welsh police forces is complicated. 49 per cent of the Police Revenue Settlement comes from the Assembly and the remainder comes from a Home Office Grant. This year the Home Office has top-sliced £21 million of the Assembly’s contribution and has allocated it to specific grants that can be bid for in both England and Wales. Although Welsh police forces can bid for this money and may get more than £21 million there is no guarantee that bids will be successful.[11] If the National Assembly had power over policing it would be able to devise a funding formula appropriate to Wales
1.29 Sunderland Commission - The findings of the Sunderland Commission examining local government electoral arrangements in Wales recommended a whole raft of measures designed to improve the nature of local government in Wales. Included in these measures were initiatives to introduce a new proportional system to elect Welsh councillors using the Single Transferable Vote and lower the voting age from 18 to 16. Both of these recommendations could not be taken forward by the National Assembly without first securing the necessary primary legislation from the UK government.
1.30 Business Rates - The Welsh
Assembly Government wants the power and the discretion to determine methods of
funding local government in terms of business taxation. This would allow
control of business rates to be given back to Welsh councils. The ability to do
this was requested of the UK Government but declined.
Arts, Culture, Sport and the Welsh Language
1.31 Lottery Funding Streams - The Assembly’s Culture Strategy, Creative Future, includes a commitment to ensure that all lottery-funding streams have a distinctive Welsh direction. Under current legislation, the UK government’s Department of Culture, Media and Sport (DCMS) directs the UK lottery distributors. DCMS therefore determines the direction taken by lottery funding streams. The Assembly is usually consulted on them, but a specific Welsh direction can only be determined by the Secretary of State for Culture, Media and Sport. This situation creates a major barrier to securing strategic direction of lottery funding streams in Wales that are appropriate to Welsh needs.
1.32 Only
two of the five lottery distribution agencies operating in Wales, the Arts
Council of Wales and the Sports Council for Wales, are directly accountable to
the National Assembly. Wales is consulted on the policy directions of the ‘UK’
distributors, but power to direct lottery distribution agencies in Wales would
allow the Welsh Assembly Government to:
o Make sure that all communities in Wales have the
chance to benefit from Lottery funding.
o Set up its own new distributors or have a single
distributing body.
o Vary the proportions of funding for different good
causes.
o Analyse funding outcomes more rigorously in Wales by
making lottery distributors effectively responsible to the National Assembly.[12]
1.33 Welsh Language Act - The Welsh Language Act does not cover Crown Bodies, including Whitehall departments. Such departments have complied with the Act however, as if they were named bodies. This arrangement had worked effectively, but recently the Criminal Records Bureau (CRB) refused to provide bilingual services of the quality expected by the Welsh Assembly Government and the Welsh Language Board.
1.34 The CRB was unable to provide bilingual clearance forms for youth workers who, as they wished to work with children, required vetting. As the forms were not bilingual, some of the candidates threatened to refuse to fill them in, creating insurance problems for the organisations for which they worked.
1.35 As a result, the Welsh Language Board has refused to endorse the Welsh Language Scheme of the Criminal Records Bureau. However, there is no legal framework in which the Welsh Language Board or the Welsh Assembly Government can compel the Bureau to make changes.
The
Failings of the Barnett Formula
2.1 The
Barnett Formula was devised in 1978 in preparation for a devolution settlement
that never happened. It is used to share out changes in public expenditure plans between the nations that make
up the United Kingdom based upon their relative population size. As such, any
consequent changes to spending plans produced by the Barnett Formula add to, or
subtract from, the block budgets at the disposal of the devolved authorities.
2.2 Following
devolution to Wales and Scotland, the Barnett Formula has become a way of
transferring money between tiers of government rather than transferring it
internally between UK Government departments. The results are now more open to
public scrutiny following devolution, making its deficiencies only too obvious:
it is calculated on the basis of opaque Treasury figures.
2.3 Wales
has greater needs than England taken as a whole. A formula based upon population
statistics and the increases awarded to UK Government departments in the
Comprehensive Spending Review is too crude, and fails to take into account
crucial factors such as differing levels of health, rurality and transport
infrastructure needs. An example of where the Barnett Formula fails to meet
Welsh needs can be found by looking at Welsh GDP as a percentage of the UK
average. Since the Formula’s instigation, the relative prosperity of the
different parts of the UK has changed considerably. Wales’ Gross Domestic
Product (GDP) was 87% of the UK average in 1978. This dropped to 80.5% in 2000.
By comparison, Scotland’s GDP had increased from 93% of the UK average in 1988
to 96.5% in 2000.[13]
2.4 Crucially,
Assembly budget increases under the Barnett Formula are totally dependent upon
increases being awarded to UK Government ministries, whose prime responsibility
is England, during the Comprehensive Spending Review. This leads to the absurd
situation where largely English needs determine Welsh funding. Barnett
therefore restricts the Assembly’s own spending priorities. The House of
Commons Treasury Select Committee highlighted the problems associated with this
arrangement even before devolution had taken place:
2.5 “It is for the Secretaries of State (for Scotland,
Wales and Northern Ireland) themselves to decide how to employ their budget in
light of local priorities, although, with much public expenditure being
on-going or demand led, the scope for the exercise of this discretion is
limited in practice”.[14]
2.6
Perversely, although
Wales has a proven need for higher public expenditure than England, the effect
of the Barnett Formula is that, as public expenditure increases, the rate of
convergence of spending per head between England and Wales also accelerates, effectively
nullifying any small advantage Wales may have. This is underscored by the fact
that increases in Assembly spending is dependent on a Comprehensive Spending
Review dominated by English needs.
2.7
For this reason, it has
been argued that the Barnett Formula is leading to convergence of the health
budgets of England and Wales. Year-on-year growth in NHS provision is lower in
Wales than in England because of the formula, even though the health care needs
of Wales are greater.[15]
2.8
In his evidence to the
Treasury Select Committee in 1997, Lord Barnett, the architect of the formula,
admitted that it was out of date, commenting that a “Barnett Formula Mark II”
taking into account needs, income per head and expenditure per head was needed.[16]
Lord Barnett is also quoted as saying that he had “always assumed that its use
would be temporary, until a more sophisticated method that took account of
needs could be devised”.[17]
2.7 A
Centre for Reform report said of Barnett “its non statutory non needs-based
character may be a destabilising force” in the devolution settlement.[18]
This has certainly been the case in Wales. On 10th November 1999,
the National Assembly supported an amendment to the motion noting the draft
budget stating, “Attempts to revitalise Wales are frustrated by the
deficiencies of the Barnett formula”, placing it at odds with the stance taken
by HM Government in favour of retaining Barnett.
2.8 In
the Comprehensive Spending Review of July 2000, the UK Government awarded money
to Wales to cover match funding for European Structural Funds in addition to
the provisions made by the Barnett Formula. This followed the political angst
that arose around the EU matched funding debate in the National Assembly, the
outcome of which cost the then First Secretary his position. Assembly Finance
Minister Edwina Hart stated, “For the first time, we have been able to persuade
the Treasury to provide additional amounts for structural fund programmes over
and above the Barnett consequential”.[19]
In awarding this additional money to compensate for the shortfall in European
Structural Fund match funding, we believe that HM Treasury effectively
acknowledged that the Barnett Formula was unable to meet the spending needs of
the National Assembly for Wales. The CSR of July 2000 also saw additional
provisions being made above the Barnett Formula to provide matched funding for
Common Agricultural Policy Pillar two funding.
2.9 G.
Bristow and N. Blewitt highlight the fact that the amount that Wales receives
from EU structural funds is reduced as ERDF receipts are determined by the
population-based Barnett formula rather than by eligibility. The EU and UK
allocation mechanisms are at odds with one another. The EU allocates on the
basis of need, contrary to Barnett’s population-based mechanisms.[20]
2.10 We
share the view of Professor Kevin Morgan who believes that the major threat to
the integrity of post-devolution Britain could come from the burgeoning
conflict surrounding the Barnett Formula.[21]
2.11 To summarise, Welsh Liberal Democrats believe that the Barnett Formula fails to meet Welsh needs, it fails to take into account the change in the Welsh GDP and it restricts the National Assembly for Wales’ ability to determine its own spending and policy priorities. If a future UK government had fundamentally different priorities, this could give rise to major conflict.
The
limitations of backbench scrutiny
3.1 There are too few Assembly Members to allow Assembly Subject Committees to meet on a weekly basis. Weekly meetings are needed to ensure that both the policy-making and scrutiny roles of AMs are given adequate time. The Chair of the Health and Social Services Committee has drawn attention to the fact that many Assembly Members sit on more than one subject committee, making it impossible to timetable more frequent committee meetings.[22]
3.2 This
point serves to highlight Welsh Liberal Democrat concerns that the current
structure and make-up of the National Assembly for Wales is inadequate in
providing effective and rigorous scrutiny of the Welsh Assembly Government and
its actions. More subject committees are needed to ensure the effective
scrutiny of Welsh Assembly Government Policy.[23]
3.3 There
are nine members of the Welsh Assembly Cabinet under the provisions of the
Government of Wales Act 1998. They are complemented by a further five deputy
ministers, although they have no official status under the Act. Collectively,
14 Assembly Members are therefore involved in running the Welsh Assembly
Government. When the roles of Presiding Officer and Deputy Presiding Officer
are taken into consideration, a total of 16 Assembly Members, or 27 per cent of
the total, are unable to scrutinise the work of the Welsh Assembly Government
either through their participation or required impartiality.
3.4 Not
including the Assembly’s regional committees, there are 14 Assembly committees,
each with its own chair. The table on the following page lists those Assembly
members that do not serve in the Cabinet or work in the Presiding Office,
indicating their committee workloads.
3.5 The table demonstrates that:
o 14 of the 49 (29 per cent) Assembly Members listed
below sit on more than One Subject Committee
o 13 of the 49 (27 per cent) Assembly Members listed
above sit on more than three committees in total
o Two of the three Assembly Members that do not sit on a
Subject Committee have responsibilities as Assembly Group leaders
o Not one Assembly member fulfils the role as a
backbencher without any Committee or Governmental responsibility
|
Assembly Member |
Party |
Subject Committees |
Other Committees* |
Total |
|
Barrett, Lorraine |
Lab |
2 |
1 |
3 |
|
Bates, Mick |
W. Lib Dem |
2 |
1 |
2 |
|
Black, Peter |
W. Lib Dem |
1 |
1 |
2 |
|
Bourne, Nicholas |
Con |
0 |
1 |
1 |
|
Burnham, Eleanor |
W. Lib Dem |
1 |
2 |
3 |
|
Butler, Rosemary |
Lab |
1 |
2 |
3 |
|
Cairns, Alun |
Con |
1 |
1 |
2 |
|
Champan, Christine |
Lab |
2 |
1 |
3 |
|
Dafis, Cynog |
Plaid Cymru |
2 |
1 |
3 |
|
Davies, David |
Con |
1 |
0 |
1 |
|
Davies, Geraint |
Plaid Cymru |
1 |
0 |
1 |
|
Davies, Glyn |
Con |
2 |
0 |
2 |
|
Davies, Janet |
Plaid Cymru |
0 |
1 |
1 |
|
Davies, Jocelyn |
Plaid Cymru |
3 |
2 |
5 |
|
Davies, Ron |
Lab |
2 |
1 |
3 |
|
Edwards, Richard |
Lab |
1 |
0 |
1 |
|
Evans, Delyth |
Lab |
2 |
0 |
2 |
|
Gibbons, Brian |
Lab |
1 |
0 |
1 |
|
Graham, William |
Con |
1 |
2 |
3 |
|
Gregory, Janice |
Lab |
1 |
2 |
3 |
|
Griffiths, John |
Lab |
1 |
1 |
2 |
|
Gwyther, Christine |
Lab |
1 |
1 |
2 |