Government and Politics

Cymraeg

Relationship Problems

Inter-governmental relations: Wales and the UK


Elin Royles, Institute of Welsh Politics


Executive summary


Although devolution transferred power to the Assembly Government and the National Assembly for Wales, the United Kingdom Government and Westminster Parliament continue to be central to governing Wales, arguably more so than in Scotland and Northern Ireland. To date, good relations have meant that arrangements between the different governments have worked. Will this continue?

This article argues that in the context of different parties in power at different levels of government, there is likely to be pressure on the constitutional, institutional and financial arrangements for devolution to Wales.


Introduction


The relationship between the UK Government, Scotland, Wales and Northern Ireland is a key part of the structure of a devolved United Kingdom. Central government is responsible for non-devolved issues, such as foreign policy, defence and national security, the economy and immigration. Furthermore, the division of power means that there is much overlap between the UK’s activity and the powers of the devolved administrations. Another central reason is that central government is the government for England, and at 84 per cent, it is the largest proportion of the UK population.


The centrality of the relationship between governments at the centre and the devolved level is more obvious with Wales. Many policy areas and legislation operate on an England and Wales basis. In addition, the Assembly’s powers are similar to a ‘jig-saw of ever changing pieces where there are no straight edges’ (Richard Commission Report 2004: 114). Also, under the Government of Wales Act 1998, the Assembly was thus dependent on Westminster’s willingness to pass primary legislation on issues relating to Wales. The Government of Wales Act 2006 provides the Assembly with enhanced legislative powers by granting it measure making powers in the twenty fields of devolved competence. It depends on Westminster gradually giving the permission to transfer legislative powers to the Assembly (through either parliamentary measures or Legislative Competence Orders), a process which has increased the importance of the relationship between both levels of government.


The arrangements: Memorandum of Understanding


So, how does the relationship between both levels of government work? Originally, the aim was informal inter-governmental arrangements based on the administrative and political arrangements that existed prior to devolution. There was very little discussion of how relationships between the governments would work in practice and little acknowledgment of the degree of co-dependence that would exist after devolution (Mitchell, 2010). The main document outlining the formal structure is the Memorandum of Understanding that was agreed by the UK Government and the devolved administrations. This Memorandum established the principles that were to provide the basis for inter-governmental relations. The document was in reality a statement of political intent as it wasn’t legally binding. The Memorandum established the Joint Ministerial Committees as a forum for ministers of the United Kingdom, Wales, Scotland and Northern Ireland governments. The system intended to co-ordinate relations between them, to discuss devolved and non-devolved issues, as well as any disagreements between administrations.


 

Memorandum of Understanding


The principles for intergovernmental relations:

  • Communication and exchange of information: good communication between the administrations.

  • Consultation: consultation in advance and pre-warning of legislative or policy proposals, particularly in cases of overlapping competences between administrations.

  • Confidentiality: sharing information and co-working should take place in the context of arrangements to respect confidentiality on important issues.

Formal structures:


The Memorandum established a Joint Ministerial Committee as a forum for Ministers from central and the devolved governments. It was revised in March 2010. 

 

Concordats and the Secretary of State for Wales 


Concordats between Whitehall departments and civil servants in the devolved administrations were agreed that focused on day to day working relations. Reflecting the Memorandum, they established guidelines to promote administrative cooperation and exchange of information and aimed to secure the continuity of the good relations that had existed at official levels prior to devolution. Again, the concordats weren’t legally binding.
 

It was anticipated that the Secretary of State for Wales would play an important role in inter-governmental relations. For example the Secretary of State would attempt to ensure that Assembly legislative requests were included in the Queen’s Speech, would liaise with relevant Whitehall departments, and would be responsible for steering the legislation through Parliament.
 

Secretary of State for Wales


Established in 1964 during administrative devolution to oversee the work of the Welsh Office and to hold a cabinet position.


Under the Government of Wales Act 1998 the post was retained. A Wales Office was formed to support the Secretary of State for Wales’ role that included:


  • The voice of the United Kingdom Government in discussions with the Assembly Government

  • promoting the devolution arrangements within the UK Government

  • a voice for Wales in the United Kingdom Government Cabinet, for instance in discussions on the budget and in dealing with primary legislation for Wales.

Under the Government of Wales Act 2006, the position has become more influential due to the legislative process and the key role of the Secretary of State in a referendum on further powers.

 

First glance: consensus and cooperation


During the first decade of devolution, at first glance, the relationship between Wales and the United Kingdom Government and Westminster was characterised by consensus and cooperation. With the exception of meetings between the European ministers of central and devolved governments (Joint Ministerial Committee (Europe), little use was made of the Joint Ministerial Committees. No meetings were held from October 2002 until May 2008. In practice, ministers met more frequently informally and also at the British Irish Council, a result of the 1998 Belfast Agreement. The Secretary of State for Wales and the Wales Office were the main connection between the United Kingdom Government and the Assembly Government. For instance, Peter Hain and Rhodri Morgan met on a weekly basis and spoke on the phone many times a week. As regards coordination between Whitehall and the Assembly, there are many examples of good relations, with some departments treating the Assembly as an equal partner.


A deeper examination: lack of co-ordination and understanding


A more complex picture becomes evident on a deeper examination of inter-governmental relations. Informal arrangements, largely through bilateral and informal contact through the civil service and Labour Party relations are the essence of the relations between the governments. These arrangements reflected Labour dominance over the different levels of government. Any instances of disagreement were not made public and were discussed and resolved informally and privately, behind closed doors. Examples of issues that have arisen in relation to Wales are Rhodri Morgan’s ‘clear red water’ 2002 speech distinguishing Welsh Labour from the Labour party at an UK level and issues such as the abolition of prescription charges in Wales (Trench, 2009).


Evidence submitted to the Welsh Affairs Committee ‘Wales and Whitehall’ inquiry in 2010 by politicians and prominent civil servants drew attention to a lack of central co-ordination within Whitehall regarding devolution. In addition, consideration of the implications of devolution within different Whitehall departments varies, often due to a full agenda and political demands. The committee’s report argued that there is a lack of understanding among the civil service in Whitehall regarding the devolved arrangements for Wales. While some evidence suggested that the Government of Wales Act 2006 raised Wales’ profile inside Whitehall, the opposite view was more prevalent.


The Act has exacerbated the complexities of the devolution legislation making it harder for civil servants to keep up with the evolution of devolution. The result, according to some witnesses, is that the level of understanding today is worse than in 1999. This supports comments made by Gillian Morgan, the Assembly Government Permanent Secretary, chief civil servant in Wales at the end of 2009, regarding the lack of commitment to devolution in parts of Whitehall. This has resulted in a ‘culture of arrogance’ and a lack of acknowledgement of Wales (Osmond, 2009: 20). The Welsh Affairs Committee’s report criticised the slow pace of Whitehall departments when dealing with Legislative Competence Orders (LCOs), the Assembly Government requests for further powers. It was argued that some requests disappeared into ‘the black hole of Whitehall’ for over two years (Livingstone, 2010).


Questions have also been raised regarding the Secretary of State for Wales and the Welsh Affairs Committee. The 2006 Act gave the Secretary of State extensive powers, and amongst these are deciding whether to sponsor and shepherd Assembly Government requests for LCOs through Whitehall and Westminster. The Minister also has a say in whether a referendum should be held on fuller legislative powers. In both cases, the Secretary of State for Wales has a veto power. Trench argued: ‘The Secretary of State will therefore be a gate-keeper for the use of Wales’ devolved powers and any increase in them, and also an important actor in how Wales uses them’ (2007: 41).


The Welsh Affairs Select Committee has been active in its pre-legislative scrutiny of LCOs. As part of the scrutiny process it has required the Assembly Government to submit detailed information explaining how exactly it intends to use its powers to legislate. It has requested LCOs to be tightly drafted, thus placing constraints on the powers granted to the Assembly. A key controversy was the draft Housing LCO in 2009, aimed at devolving the right to buy council housing, including the power to abolish or suspend such activity. The select committee recommended that these powers should not be devolved fully. A compromise position was reached that the powers would be devolved but subject to the consent of both the Welsh Assembly Government and the Secretary of State for Wales. Another Westminster committee deemed that giving the Secretary of State a veto power over a proposed Assembly competence was contrary to the Government of Wales Act 2006. More generally, the committee’s active stance in influencing the Assembly Government’s legislative proposals has raised the potential for tension within the ‘One Wales’ coalition government and between Labour Party elected representatives in Wales.


The response


In Whitehall, the Devolution Capability Review was conducted in 2010 by senior civil servants into how it’s dealing with devolution. For its part, the Assembly Government is trying to develop understanding and good relations with the UK Government. It has reorganised civil service structures and has made senior civil servants of higher status responsible for relations, and is encouraging more secondments to work at Whitehall. Will this be adequate to secure better relations in the future?


General Election 2010: the implications


Many factors suggest that the climate of these relations is changing. The fact that Labour has been in government in Westminster and in the Assembly has been vital to the arrangements. Despite efforts to distinguish between them, such as Rhodri Morgan’s ‘clear red water’ speech, being part of the same party has encouraged collaboration to the benefit of the party’s electoral position. In addition, there was a strong desire to present devolution as a success and avoiding disagreements was considered a sign of this. The 2010 General Election has resulted in a Conservative-Liberal Democrat coalition government. Can the same informal collaboration work with entirely different parties in power at different levels of government? On presenting evidence to the Welsh Affairs Committee, the previous chief civil servant in Wales, Jon Shortridge claimed ‘I think civil servants are very professional and will get on with it. The strain will be on these issues of trust’ (Williamson, 2010).


Implications of constitutional and institutional arrangements


It is not clear that the present constitutional and institutional arrangements will work as well with different parties in power at central and devolved levels of government. What would be the implications for the mechanisms of transferring powers to the Assembly from Parliament and Whitehall’s point of view? A scenario can easily be imagined. There could be clear differences in the ideology and priorities of the Assembly Government and the Westminster Government affecting the process of devolving power and creating disagreements. We can draw on the example of a Scottish National Party (SNP) Government in Scotland since 2007. While media attention has focused on partisan and adversarial intergovernmental relations, informal and pragmatic cooperation between governments on a substantial amount of public policy has continued.


As Cairney (2010) explains: ‘The SNP has been willing to adopt an insider strategy which tends to include an acceptance of the ‘rules of the game’, or a willingness to engage in self-regulating activities.’ The main example of formalising relations has been reaffirming the Joint Ministerial Committee. One direct result is updating the Memorandum of Understanding with a new dispute resolution system. Certainly, the last resort in resolving any disagreement would be to use the courts, but that would be unexpected. Initially, if devolution disputes could not be resolved through the Joint Ministerial Committee, the Judicial Committee of the Privy Council was expected to adjudicate. Due to the emphasis on informality and political relations, in practice the courts have played no role in resolving devolution disputes that have arisen. Since 2009, devolution jurisdiction has been transferred to the new Supreme Court. While it is possible that the Supreme Court may make judges more active, Trench argues ‘the politicians’ dominance of decision-making in relation to devolution has been remarkably strong and remarkably durable’ (Trench, 2009: 17).


Financial issues on the agenda


The last factor is finance and budgetary issues. During the first decade of devolution, the arrangements for financing devolution in the United Kingdom were given little attention and this is quite unique as finance is usually highly controversial. The Barnett formula determines the budget for Wales, Scotland and Northern Ireland based on Whitehall departments’ expenditure for England’s population. The Assembly has not voiced many discontents with the formula although academic evidence has continually pointed that Wales is missing out financially. Of course, during the first decade of devolution public spending increased substantially and Assembly gains compounded by the position of dependency on the UK Government for its finances explain why financial issues have had such a low profile.

 

Barnett formula


The Barnett formula has been in place since 1978


It determines the budget for Wales, Scotland and Northern Ireland based on the expenditure of Whitehall departments for England’s population. The formula is based on population size and doesn’t take account of spending needs. Allocation of funding in the UK is viewed as a highly centralised process.


The formula’s merits are that it provides the devolved administrations with considerable autonomy in determining funding priorities and it attempts to contain political conflict over allocating funds. There is pressure to reform the funding arrangements for the devolved governments.

 

As the climate changes and the public purse is more limited, there is increasing pressure to revise the Barnett formula arrangements. As part of the ‘One Wales’ agreement, Labour and Plaid Cymru established an Independent Commission on Funding and Finance, the Holtham Commission. This is one of many recent investigations on the issue. The Commission to date has argued that Wales is missing out on £300 million each year. It has contributed to securing the Treasury’s acknowledgement that this is a problem. Discussions on the financial arrangements for different parts of the United Kingdom are on the agenda and are likely to affect relationships between the governments.

 

Conclusions


The arrangements between governments across the United Kingdom have attempted to emphasize the continuation of the system that existed prior to devolution and the system has worked well whilst Labour have been in power. We are now in a period when inter-governmental relations are becoming more complex and more significant while the input of the UK Government continues to be key to understanding Welsh politics. Time will tell whether Cameron’s commitment on his first visit to Wales as Prime Minister to ‘collaboration not confrontation’ in his dealings with the Assembly Government will be achievable in practice (Withers, 2010).

Rhodri Morgan and Tony Blair