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Cathrine Grubb discusses Welsh devolution under the 'St. David's Day Agreement'

On Friday 27th February 2015 the House of Commons published Command Paper 9020 Powers for a Purpose:  Towards a Lasting Devolution Settlement for Wales (‘the Paper’) setting out proposals for new devolved powers in Wales.  The proposals contained in the Paper were unveiled by David Cameron and Nick Clegg at the Millennium Stadium that same day. 

 Current Devolution in Wales

Devolution is a process of decentralisation of power from Parliament.  The perceived benefit is that local factors are better recognised in decision-making.

 In September 1997, referendums were held in Scotland and Wales, and a majority of voters chose to establish a Scottish Parliament and a National Assembly for Wales.  This resulted in the passing of the 3 devolution Acts:  the Scotland Act 1998; the Northern Ireland Act 1998; and the Government of Wales Act 1998 (which has since been effectively superseded by the Government of Wales Act 2006). These acts established the 3 devolved legislatures, which were given some power previously held at Westminster.

 Wales currently has a conferred model of devolution.  Under this model the National Assembly for Wales (Cynulliad Cenedlaethol Cymru) only has legislative competence where this is specifically conferred by statute, with the UK Parliament having responsibility for the remainder.  By contrast, Scotland has a reserved powers model of devolution, which means that all legislative competence is devolved to the Scottish Parliament in all areas except those expressly reserved to Westminster by statute. 

 Parliament remains sovereign, and retains the power to amend the devolution Acts or to legislate on anything that has been devolved, however there is an understanding that the government will not normally legislate on a devolved matter without the consent of the devolved legislature.

 The Government of Wales Act 1998 provided for the establishment of the National Assembly for Wales. The Act also provided for the transfer of all the powers of the executive functions of the Secretary of State for Wales to the new Assembly. 

 The Government of Wales Act 2006 (GoWA) continued the devolution process, providing for enhanced legislative powers and greater clarity in the separation of powers between the legislative and executive.  On 3rd May 2007 the provisions of the GoWA creating a separate legislature (the National Assembly for Wales/Cynulliad Cenedlaethol Cymru) and executive (the Welsh Government/Llywodraeth Cymru) came into force.

 Following a further Welsh referendum on 3 March 2011, the Assembly assumed its enhanced legislative powers on 5 May 2011 with further relevant sections of the GoWA being brought into force including sections 103 to 115 GoWA. 

 The Assembly’s enhanced legislative competence is set out in Part 4 of, and Schedule 7 to, GoWA 2006, collectively known as the ‘Assembly Act provisions’. These provisions enable the Assembly to legislate in relation to the subjects listed under the 20 headings in Schedule 7, as qualified by the exceptions and restrictions in that Schedule and in section 108 of GoWA.  For example, traffic management and regulation are devolved to Wales, but specific aspects such as road traffic offences are not. 

 Under s. 108 (4) of the GoWA the Assembly has the power to legislate where the Bill:

 (a)   it relates to one or more of the subjects listed under any of the headings in Part 1 of Schedule 7 and does not fall within any of the exceptions specified in that Part of that Schedule (whether or not under that heading or any of those headings), and

 (b)   it neither applies otherwise than in relation to Wales nor confers, imposes, modifies or removes (or gives power to confer, impose, modify or remove) functions exercisable otherwise than in relation to Wales.

 The subjects listed in Schedule 7 are:

 

1.agriculture, fisheries, forestry and rural development

2.ancient monuments and historic buildings

3.culture

4.economic development

5.education and training

6.environment

7.fire and rescue services and promotion of fire safety

8.food

9.health and health services

10.highways and transport

11.housing

12.local government

13.National Assembly for Wales

14.public administration

15.social welfare

16.sport and recreation

17.tourism

18.town and country planning (except major energy infrastructure)

19.water and flood defence

20.Welsh language

 Any Act passed by the National Assembly for Wales which is outside its legislative competence is not law and so effectively a nullity:  s. 108 (2) GoWA. 

 In determining whether an Act is within the Assembly’s legislative competence has to be determined in accordance with s. 108 and schedule 7.  Difficulties of interpretation of are to be resolved by bearing in mind that the purpose of the GoWA was to define, in fairly abstract terms, permitted or prohibited areas of legislative activity with the aim of achieving a constitutional settlement, Attorney General v National Assembly for Wales Commission [2012] UKSC 53, [2013] 1 A.C. 792.  The term ‘relates to’ in s. 108(4)(a) GoWA indicates more than a loose or consequential connection, Martin (Sean) v HM Advocate [2010] UKSC 10, 2010 S.C. (U.K.S.C.) 40.

 It is important to note that the GoWA does not require that a Bill is only capable of being characterised as relating to a devolved subject for the Assembly to have legislative competence under the Act.  A Bill can therefore be within the Assembly’s legislative competence when it relates to both a devolved and non-devolved subject as was the case in Attorney General for Wales v Council General for Wales [2014] UKSC 43.  In this case the Supreme Court held that the Agricultural Sector (Wales) Bill 2013, which provided for the regulation of agricultural wages in Wales was within the Assembly’s legislative competence.  Whilst the regulation of wages could be characterised as an area relating to employment and industrial relations, neither of which were listed in schedule 7 of the GoWA, it also had the effect of protecting and promoting the agricultural industry in Wales which was a devolved function.

 Since May 2011 legislative competence of the National Assembly has been further increased.  Most recently, on 17th February 2015 further provisions of the GoWA came into force which devolved further powers of taxation in respect of devolved subjects (for example s. 108(4a) and para 7A Part 3 Schedule 7 GoWA as added by Wales Act 2014).

Moves towards Change

On 11th October 2011 an independent commission was set up to report on the future devolution of Wales.  Its official name was Commission on Devolution in Wales (Comisiwn ar Ddatganoli yng Nghymru), but is more commonly known as the ‘Silk’ Commission.  Its report was unanimous and delivered in 2 parts:

 Part I - delivered in November 2012.  This considered the case for devolving fiscal responsibility and powers to the Assembly and Welsh Government.  

  • Part II - delivered in March 2014.  This considered the case for the further devolution of powers and made 61 recommendations.

 The Wales Act 2014 implemented almost all of the recommendations of Silk 1.  Since 17th February 2015 the Assembly can now legislate in respect of taxes on transactions involving an interest in land and disposal to landfill (para 16a Sched 7 in conjunction with ss. 116 A-N GoWA).  The act further provides powers for the National Assembly to hold a referendum on whether to devolve powers in relation to income tax.  A ‘yes’ vote would result in the bringing into force of ss. 8 – 10 of the Wales Act 2014.  Sections 20 – 22 of the Wales Act 2014 provide powers to Ministers to borrow by issuing bonds for capital expenditure.  These provisions are not yet in force. 

 At the end of 2014, the UK and Welsh governments further noted proposed amendments to the provisions on local government finance in Part 1 of Schedule 7 GoWA 2006 providing for full devolution of business rats and council tax.  

As part of the ‘no’ campaign in the Scottish referendum on whether it should remain part of the Union, the three main UK parties promising increased devolution.  On 18 September 2014 Scotland voted ‘no’ and consequently the Smith Commission was tasked with achieving consensus on how the powers of the Scottish Parliament should be increased.  The further changes proposed in respect of Scotland have further catalysed the existing debate as to the future of devolution in Wales.  

The Paper:  Powers for a Purpose:  Towards a Lasting Devolution Settlement for Wales

The Paper is divided into 5 chapters with chapters 2 – 4 dealing with the substantive proposals.    Chapter 2 considers the proposals of Silk 2 whereas Chapters 3 and 4 consider whether, and if so to what extent, the non-fiscal and fiscal recommendations in the Smith report in respect of Scotland should be implemented in Wales.

 In essence, the Paper proposes very few increases to Wales’ devolved powers than were already envisaged in the reports of the Silk Commission.  The Paper additionally suggests that licensing of onshore oil and gas extraction in Wales to be devolved although offshore licensing will remain reserved to the UK Parliament.  Furthermore, the Paper additionally recommends introducing a floor in the level of relative funding it provides to the Welsh government as a further part of fiscal devolution.

The most significant change proposed by the Paper and Silk II are to strengthen devolution in Wales at an institutional level:

  • The existing conferred powers model of devolution in Wales is to be replaced with a reserved powers model of devolution in line with the Scottish Parliament.  Lawyers will need to look to the cases relating to challenges to legislative competence in Scotland as further guidance once this has been implemented. 
  • The permanence of the National Assembly for Wales as part of the UK constitution is to be enshrined in legislation.  It is however difficult to see what significant legal effect this would have given that the principle of Parliamentary sovereignty would mean that this could be repealed by the UK Parliament at any time.  We will have to wait and see whether such legislation would seek to implement additional safeguards such as requiring a referendum or larger majority in parliament to bring about change. 
  • The Assembly should be responsible for deciding how it conducts its own affairs including devolution of powers relating to National Assembly and local government elections.   This package includes the power to lower the voting age to 16.  Correspondingly, the right of the Secretary of State for Wales to participate in proceedings of the National Assembly should be removed and powers to prevent bills receiving royal assent should be brought in line with Scotland. 
  • Lastly, it is proposed to increase the size of the Assembly so that it can better deliver on its increased functions. 

In tandem with these proposals are further recommendations on structuring better cooperation and dialogue between the Assembly and Westminster in areas of overlapping competencies.   The other main recommendations proposed by the Paper and Silk II are to devolve further powers in respect of:

 

  • Sewerage.
  • Responsibility for energy planning development consents of up to 350MW onshore and in Welsh territorial waters to the National Assembly.  This would include powers to ban fracking in Wales.
  • Speed limits.
  • Bus and taxi regulation.
  • Port development
  • The Wales and border rail franchise.

 

Looking Ahead

The Paper makes clear that it is only a blueprint for further devolved powers to Wales and a great deal of detail still need to be agreed.  In particular, it is uncertain what the fiscal proposals will mean for funding in Wales.  There are concerns that the proposals will give a Westminster government the chance to make further cuts which will force the National Assembly to make the unpopular decision to increase income tax.  There is some concern that the proposed introduction to a floor in funding relates only to ‘relative funding’ and the uncertainty this will cause. 

 Furthermore, disappointment has been expressed that policing, welfare and some aspects of the criminal justice system remain undevolved and the campaign for further devolution is likely to continue.   However, the proposed strengthening of devolution in Wales is part of a continuing trend of a decentralised shift of power as can be seen by not only the proposals to increase the powers of the Scottish Parliament, but also the proposed shift of fiscal to major cities in the UK.  Correspondingly, there is likely to be increased debate on the case for further devolution around the UK and how this will affect the current set-up in Westminster, in particular MP’s voting rights.  The Command Paper 8969 “Implications on Devolution for England” considered one option to be to implement a ‘devolution on demand’ model devolving powers to areas where there is a genuine demand and popular support for it.

 By Cathrine Grubb

6th March 2015