St David's Day Agreement - Fair Funding Plans for Wales (article from the Western Mail)

The UK Government will today publish proposals to put Wales on the path to fairer funding when the coalition parties commit to deliver a sweeping package of new powers to the Assembly.

27th February 2015

It is understood Welsh Secretary Stephen Crabb with the support of the prime minister and deputy prime minister, overcame Whitehall resistance to secure a pledge to introduce a funding “floor” to ensure that the cash the Welsh Government receives under the Barnett formula from the Treasury is not eroded,

Although the Wales Office refused to comment on speculation ahead of the announcement, WalesOnline understands such a move would be in the “expectation” that a referendum will be called on income tax powers for the Assembly in the next parliament.

New powers to decide on votes for 16-year-olds

It is further understood Welsh Liberal Democrat leader Kirsty Williams was adamant that the introduction of the funding floor should not be wholly dependent on an income tax referendum and lobbied hard on this issue.

Mr Cameron and deputy prime minister Nick Clegg will be in Wales today to announce the result of the St David’s Day process, a push by Mr Crabb to get all of Wales’ major political figures around the table and thrash out the future of devolution.

The huge behind-the-scenes effort has also seen the Welsh Secretary vigorously pursue a resolution to the constant attacks on successive Governments from within Wales for not resolving the unfairness of how funds are allocated to the nation.

It is believed he also turned to a leading Tory statesman, William Hague, for advice and support to help crush any Whitehall barriers put in his path.

Related: What is the Barnett Formula?

Today’s command paper is also expected to propose that the Assembly will gain the power to decide on its own name, its number of members, and the system used to elect AMs. It would also, it is anticipated, be able to decide how elections are run and whether 16-year-olds gain the vote.

It is further anticipated that the Welsh Government would have its borrowing powers extended so it can issue bonds to borrow for capital expenditure.

If the pledges are delivered, it is expected the Assembly would gain responsibility for energy projects up to 350MW and licensing of onshore oil and gas extraction.

Powers to make laws on Welsh speed limits?

One of the most significant changes predicted to be in the announcement is that the Assembly would move to a system where it can make laws in any area unless it has been specifically “reserved” by Westminster. AMs would also gain responsibility for marine licensing and conservation, port development, bus and taxi regulation, speed limits and local government elections.

The UK Government is also expected to pledge to:

  • Consider the case for devolving powers over Air Passenger Duty (APD);
  • Set up a team drawn from the two governments to work towards aligning the boundary for powers over water with the border of Wales; and
  • Enable Welsh Ministers to nominate a member to the board of communications regulator Ofcom, with the BBC and S4C providing annual reports to the Assembly.

However, no pledge is expected on devolving policing and justice.

'An important landmark in Welsh devolution'

Prime Minister David Cameron called the announcement “an important landmark in Welsh devolution”.

He said: “By securing fair funding for Wales, we have removed the final barrier to the Welsh Government holding a referendum on income tax.

“As Conservatives, we believe that politicians should be responsible for raising some of the money they spend, and it is now time that the Welsh Government gives the people of Wales the chance to decide on this matter.

“Right across the UK it is the Conservatives who are delivering on devolution.

“In Scotland, Northern Ireland, the regions and cities of England, on English votes for English laws and on devolution for Wales, we are giving people more say over the decisions that affect them.”

Both the Liberal Democrats and the Conservatives are holding conferences in Cardiff.

'We want proper Home Rule for Wales'

Welsh Secretary Mr Crabb said: “This is a strong package that creates the foundations for a stronger, fairer, lasting devolution settlement for Wales. These new powers create an important opportunity for Wales, they are powers with a purpose.

“As a UK Government we believe in rebalancing the economy to enable wealth to be created more fairly and evenly across the whole country.

“This St David’s Day package provides a toolkit to help strengthen the economy here in Wales too.”

Opinion: Richard Wyn Jones on Welsh politics after The Vow

Deputy Prime Minister Nick Clegg will say: “To build a stronger Wales, we need to give you the powers you deserve.

“That’s why I am proud that Liberal Democrats in Government in Westminster have delivered greater devolution to Wales than anyone could have expected in 2010.

“Thanks in no small part to the brilliant work of Jenny Randerson, we have started the work of delivering the Silk recommendations through last year’s Wales Act, giving the Welsh government the opportunity to have more control over tax.

Liberal Democrat Wales Office minister Jenny Randerson

“Today we have taken another step towards Home Rule for Wales with the new powers in the St David’s Day Agreement.

“This means a plan for fair funding for Wales and a new constitutional settlement, moving to a reserved powers model and handing over more control of important areas like renewable energy.

“Make no mistake, this would not have happened without the Liberal Democrats. Giving away power does not come naturally to the Conservatives.

“Silk would not be being implemented at all without Liberal Democrat Ministers sitting at the cabinet table, making the case over and over again for devolving power to Wales.

“But we will not rest here. The genie is out of the bottle.

“We want proper Home Rule for Wales. We will be the guarantors that fair funding will be delivered.

“And we will continue to campaign to give Wales more control over its own affairs in areas like policing and transport. The Liberal Democrats are fighting Wales’ corner in Westminster, just as you are fighting for your communities day in and day out.”

'There's no parity with Scotland'

A Welsh Labour spokesman said: “Any progress on putting the Welsh devolution settlement on a firmer footing in terms of powers and funding should be welcomed.

“However, this process has shown one thing above all others – that Wales remains an afterthought for the Tories.

“There’s no parity with Scotland in the offer being mooted and people will rightly ask why that is.

“They’ve slashed £1.5bn from our budget and they have waited until the last days of this parliament to start talking about fair funding for Wales.

“The Labour offer in the general election is clear – an ambitious devolution package, fair funding and a commitment to tackle the cost of living crisis.”

Plaid Cymru leader Leanne Wood

Plaid Cymru leader Leanne Wood said: “[We] entered talks with the Westminster parties in a spirit of co-operation and we stated clearly what the next steps for Wales should be.

“We look forward to reading the command paper upon its publication.”

Former Plaid Cymru Presiding Officer Dafydd Elis-Thomas said he wanted to see the National Assembly have the same status as the Scottish Parliament so that it is established a “permanent part of the United Kingdom constitutional framework”.

He was also keen to see the devolution of major energy powers