Political cross-dressing comes to Wales

John Osmond reports on a conference looking forward to the Assembly election in May

We can expect a good deal of political cross-dressing when the parties launch their manifestos for the Assembly election if advance notices given at the IWA’s After the Referendum conference at the end of last week are anything to go by. At times it seemed as though Conservative leader Nick Bourne, Labour’s Andrew Davies, Plaid’s Nerys Evans and the Liberal Democrats’ Peter Black were all singing from the same hymn sheet.

Foremost in four AMs’ minds was the Welsh economy which all agreed, and both Nick Bourne and Andrew Davies described, as being the next Welsh Government’s “major challenge”. Davies said Labour would be committing to a Welsh Jobs Youth Fund. Bourne said they would be targeting a cut in business rates to help small businesses. SMEs with a rateable value of £12,000 or less would pay no rates at all, with amounts tapering up to £15,000.

All the parties underlined the problems facing the next government as a result of the 41 per cent cut to Welsh capital spending over the next four years. Peter Black said the Liberal democrats’ priority would be to establish an Innovation Fund to support investment in new ideas coming out of the universities. Plaid’s Nerys Evans repeated the party’s pledge to establish a £500 million financial vehicle Build for Wales to lever in infrastructure investment.

Andrew Davies added that Labour would be committing to giving the First Minister a key role in leading on investment in renewable energy, following the lead taken by Scottish First Minister Alex Salmond on the issue – an intriguing case of Welsh Labour following an example set by the SNP in Scotland.

There was agreement, too, that a key priority would be reforming the Barnett formula to deliver fairer funding for the Assembly. “Barnett is bust,” was the way Andrew Davies put it. However, Nick Bourne emphasised that reform couldn’t be pursued on a Wales-only basis which was why the Conservative Liberal Democrat coalition in London was committed to establishing a Calman-style commission for Wales to examine the situation in the round.

Bourne said the two Holtham Commission reports, produced at the behest of the present Labour Plaid coalition, pointed the way, but warned, “You can’t pick and choose what to take out of the Holtham process.” In effect, he said, Holtham had to be swallowed whole, which meant Wales should be getting tax raising and borrowing powers. If the Welsh Government had borrowing powers it wouldn’t need to go down the route of establishing investment vehicles to raise money on the bond investment market as Plaid Cymru was advocating.

In all of this there was an emerging consensus that the needs of the Welsh economy required another, radical step on the devolution road in terms of fiscal powers for the National Assembly. This left Nerys Evans merely nodding her head in agreement as she listened to the case being made by the Labour and Conservative AMs sitting alongside her.

It was a remarkable moment in Welsh politics and underlined a point made earlier by Professor Richard Wyn Jones, Director of the Wales Governance Centre with whom the IWA organised the conference, along with Public Affairs Cymru. This was that although the referendum had been fought on the relatively narrow question of moving to Part 4 of the 2006 Wales Act, to give the Assembly direct primary legislative powers in the areas of its existing competence, the impact of the emphatic Yes vote was much more significant. He said it had provided a major impetus for the next stage of the Welsh devolution journey which was happening much faster than many were predicting only a few weeks ago.

Devolving further powers, greater fiscal autonomy, a distinctive jurisdiction, and moving to Scotland’s reserved powers model (in which everything is devolved except specific functions such as defence and foreign affairs), even increasing the number of AMs, were now firmly on the Welsh agenda. He predicted another Wales Act at Westminster quite soon, possibly before 2015.

Richard Wyn Jones also referred to what he called the Welsh coalition paradox. This was that while, in policy terms, a coalition between Labour and the Liberal Democrats in the National Assembly offered a relatively easy path, in political terms it was a non-starter. On the other hand a deal between Labour and Plaid looked relatively easy in political terms, but in policy terms it was hard to see what Labour could now offer Plaid to persuade it to come on board.

We will get some clues when the parties publish their manifestos within the next few weeks. Meanwhile, on the evidence of last week’s conference, the difficulty is going to be distinguishing the parties one from another.

John Osmond is Director of the IWA.

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