WELSH LOCAL GOVERNMENT ASSOCIATION

Evidence to Richard Commission
On the Structure, Powers & Electoral Arrangements of the
National Assembly For Wales

Relationship between the Assembly in Cardiff and the Parliament at Westminster

• How effective has the Assembly been in influencing UK Government policy making in relation to Wales?
• What are the advantages and disadvantages in principle of having a law making process which is shared between Cardiff and Westminster and what are the effective contributions of AMs, MPs and Peers?
• What would be gained or lost if powers to make fundamental policy changes through primary legislation were passed from Westminster to Cardiff?
• How would Welsh interest be affected if the role of Welsh MPs were to be reduced as a consequence of the acquisition of primary law making powers by the National Assembly?

49.   The Welsh Affairs Select Committee recently published a report on the relationship between Cardiff and Westminster which determined that an effective relationship between the two is critical for the success of Welsh devolution. We echo that sentiment. The House of Lords Select Committee on the Constitution report published in January reinforces this relationship as it emphasises the extent to which the National Assembly relies on Westminster co-operation.

50.   One of the biggest obstacles to successful devolution within the current settlement is clarity. Both the House of Commons and House of Lords reports emphasise that the way the Assembly derives its powers is neither consistent nor reliable which causes confusion. The effect has been described as "patchwork". One of the best examples of where lack of clarity caused confusion was the foot and mouth crisis. The veterinary staff had been transferred to the Assembly from MAFF in 1999, but the Assembly did not have the legal powers to deal with the crisis. Overall the crisis was resolved and worked through by the sheer hard work of Ministers and officials but there is no guarantee that if this was to be repeated the outcome would be the same. We are not recommending that extra powers be placed on the Assembly but there need to be clear boundaries drawn over what can be exercised by the Assembly. This would aid Cardiff-Westminster relations.

51.   Since 1999 improvements in the way the Assembly have worked within the primary legislation process with Westminster has been noticeable. Improvements would be aided by increased co-operation between the Assembly and Parliament at an early stage, and Parliament taking into consideration Assembly timetables when determining their own timetables for the passage of bills etc. When possible, the publication of draft bills should become good practice. Although it is recognised that this procedure was followed in the case of health but overtaken by the reality of the parliamentary timetable.

52.   The limitations on the passage of distinctly Welsh Bills within the current settlement is well known and the WLGA feels that it is right for the Richard Commission to investigate this and make recommendations as to whether Wales needs more space in Parliamentary time. We recognise that greater clarity has been sought by the Assembly through the publication of the "Rawlings" principles which have attempted to set a framework to be observed in determining the approach to devolving new powers. Should the use of these principles bring clarity then that would be welcome.

53.   It is becoming more common for new Bills to be drafted with "piggy backing elements" setting out Wales only specific sections. This practice has led to significant new measures in the Welsh context particularly within education provision. An increasing practice is for the Bills to only outline the purpose of the primary legislation allowing the Assembly to introduce the detail through secondary legislation. As an approach this allows Local Government, to be involved in ensuring that Welsh solutions are applied to Bills. We would support the continuation of this practice as it allows greater flexibility in implementing solutions whilst ensuring that policies between England and Wales are complementary and compatible. However greater volume on secondary legislation requires greater investment by the Assembly in legislative scrutiny and a more transparent and streamlined process for ensuring partners are consulted and involved during the process.

The Role of MPs

54.   In terms of the role of MPs the WLGA has been active in using Welsh MPs for lobbying at Westminster and for ensuring a "Welsh Local Government" voice in key debates. The Association clearly believes that the role of all elected representatives in Wales needs greater codification, however we do not wish to see a reduction in the role of MPs at the present time within the current devolution context. Indeed one of the lessons emerging from the Scottish devolution settlement is that even with primary legislation Westminster continues to legislate for matters "north of the border". Through the procedure known as the Sewel resolutions the Scottish Parliament can grant consent to Westminster on legislating on matter devolved to Scotland. While Sewel was expected to be rarely used, it has in fact been extensively utilised. There have been as many Sewel motions as Acts of the Scottish Parliament. This points to a vitally important role for Scottish MPs in a framework of primary legislation.

The role of the UK Government and the Secretary of State for Wales

• How would Welsh interests be affected if the Secretary of State’s role was reduced as a consequence of the acquisition of primary law making powers by the Assembly?

55.   Developments during the recent Government Cabinet reshuffle have heightened the debate surrounding the future role of the Secretary of State for Wales and added a new dimension with the creation of a Department for Constitutional Affairs.

56.   The WLGA maintains that the existing constitutional settlement demands retention of the Secretary of State and is reassured that the position remains in place.

57.   The Secretary of State for Wales has membership of the UK Cabinet and a wide range of Cabinet Committees, and has the opportunity to comment on all relevant Parliamentary business and legislation and ensuring effective working relations between the Government and the devolved administrations. This is a vital "conduit" role that aids the current devolution configuration.

58.   The consultation seeks to develop what would the role of the Secretary of State be if the Assembly acquired more powers. It is clear from the recent events that Secretary of State’s post will be subject to eventual review, but it still has a great deal of current resonance. Besides, the Association does not want a "Fortress Wales" approach to Westminster relations and believes that the devolution settlement is not about undermining the wider UK constitutional position. Indeed part of the purpose of devolution is to consolidate this position.

59.   The Secretary of State plays a pivotal role in Cardiff-Westminster relations, particularly in the prior constitution of new policy and the passage of Bills, an important role in influencing other Cabinet colleagues on the importance of Welsh considerations within their departments and representing wider Welsh interests. We would not support any change to the function of this office at this stage and support its continuation as set out in the Government of Wales Act 1998.

Relations between the Assembly and Whitehall

• What would be gained or lost if there was a clearer separation between England and Wales in policy development and implementation?

60.   It is our view that the interface between the two spheres of government vary both in terms of functions and relationships. We have seen perverse situations where the Assembly in partnership with the Association has vigorously pushed a particular policy to be met with Westminster resistance in the first instance, but then is followed by a UK-wide assimilation of that same original policy, and then Wales is overlooked in the subsequent legislative process. The recent promotion by the Assembly and local government of a Members’ pension scheme is a case in point. The proposal for such a scheme to apply to all councillors in local government emanated from Wales. In England the original proposal was for such a scheme to apply to Executive members only. Somewhere in the English process this stance changed and legislation was proposed which subsequently failed to include Wales in the equation. The result is that the English legislation came on stream in April 2003 while in Wales this may not occur until October 2003 or even April 2004.

61.  Our experience of this and other examples tends to suggest a process where in certain UK central departments there is an implicit view that devolution is actually more profound than its reality. This is underpinned by a presumption on the positive level that Wales "can take care of itself" but on the negative level where the Welsh dimension is at best an afterthought.

62.   It is well known that within the Assembly there is some frustration that the significance of the presentation of Bills at Westminster marked "Wales only" is not impacting with sufficient regularity. It marks the relative weakness of the Assembly as a legislature when compared to Scotland. The passage of the health reforms in Wales showed the heavy dependence of the Assembly on Parliament to reorganise the NHS in Wales.

63.   In the Assembly Record dated 19 March 2002,the First Minister, Rhodri Morgan noted that the Scottish Parliament had been passing ten such "Bills" per year and that the Assembly compared poorly even to the much lower Whitehall departmental average which could at best hope to achieve one or two measures per year.

64.   We understand this as a source of frustration but also feel that sole focus on primary legislation hides a wealth of work in terms of secondary legislation and policy development. If we consider education, we can see that without resort to secondary legislation there is considerable policy variation including the introduction of Assembly Learning Grants, non-ringfenced funding, the rejection of proposals for specialist schools, the end of league tables and testing for 7 year olds and the greater spirit of co-operation with local education authorities. This agenda is widely admired in schools in England.

65.   It also demonstrates that as a "rule of thumb" where the Assembly and local government have sought to work in concert some of the more radical and successful achievements of the Assembly can be found. The call by Morgan and Mungham "for the division of labour between the Assembly and local government to show that it can work better in practice³" is therefore partly rejected in this submission as not recognising the reality of considerable joint work, but the sentiment behind this challenge is endorsed.

• How should we evaluate the costs and benefits of moving to a different form of devolution in Wales?
• What are the benefits which should be included in this evaluation – and what values should be attached to them?

66.   Local Government in broad terms consistently argues for a fairer balance of funding in terms of the vertical financial imbalance in the UK which sees all councils dependent on central grant mechanism with limited revenue raising opportunity at the local level. If local government is to respond to local needs and to play an effective part in the governance of Wales, it needs more responsibility for its finance. The combination of spending controls and central government grants mean that only 16% of council expenditure is now funded from local tax. Against any comparable country, Welsh local government is more dependent on central funding: in France, Germany and the United States of America the percentage raised through local tax is 40%. Even when fees and charges are taken into account, Welsh authorities raise only 25% of their income themselves. The current balance of funding undermines local accountability and autonomy, leaving local politicians with little discretion over the level of funding for local services or over council tax levels. The local revenue base is simply too small, leaving very high "gearing" on council tax. Local taxation, fees and charges should raise a much more significant proportion of local government income if there is to be real accountability between a council and its electorate and an effective relationship with central government.

67.   It would be inconsistent in light of this position if the Association did not also consider the position of the Assembly to raise its own funding and the current constraints of its own financial relationship with Westminster.

Direct or Indirect Taxation?

68.   All the mechanisms for the Assembly to raise finance at the current time would appear unpopular with the electorate and politically controversial. In England the White Paper "Your Region, Your Choice" suggests a precept on the Council Tax as the main option revenue raising option. The Association would contest this for the following reasons -

• the continuing debate about the levels and impact of council tax in Wales,
• the relative poverty of Wales compared to more prosperous English regions and
• the current debate about the long term contribution of this stream of funding (currently being examined in a wider review by the Office of Deputy Prime Minister).

It must be for the Assembly to make its own case in terms of finance raising powers. The fact that such a provision exists in Scotland but has not been used tends to suggest that that any moves to devolved direct taxation are essentially contested.

69.   Besides this we would also argue that the ability for the Assembly to raise its own finance, however limited, amounts to a fundamental change from the intent set out in the Government of Wales Act 1998 and would require some form of public approval for this to occur. If such fundamental changes were to be considered, it must be endorsed by the public via a referendum. Bearing in mind the huge public and political considerations we conclude that at present such a debate is redundant before it commences. The First Minister has reinforced this when he has stated on record that he would not use such a power even if it were at the Assembly’s disposal.