Welsh tax powers will show Scotland devolution can work

John Osmond on Carwyn Jones’ belief that unless there is a positive response to Silk he will be unable to defend the Union in Scotland

In a thinly veiled threat directed at the UK Government First Minster Carwyn Jones said yesterday that unless Wales gets a positive response to the Silk Commission recommendations on tax and borrowing powers he would be unwilling to go to Scotland to defend the union in the run up to next year’s independence referendum. For a video and transcript of the speech, click here.

He said, “I want to be able to go to Scotland and say, ‘Look, devolution can develop to meet changing circumstances and new aspirations. It can work in that way for Scotland too’ ”.

One year to go

With just 12 months before the Scottish referendum on 18 September 2014 we are running a series of articles this week:

Tomorrow Plaid Cymru leader Leanne Wood argues that the cause of national independence is essentially about renewing old friendships


Friday Stephen Noon, chief strategist with Yes Scotland, says whatever the result of the referendum, Scotland and the rest of the UK will be closely intertwined.

Saturday: Charlie Jeffery, of Edinburgh University, describes a project that aims to keep us informed as the debate gathers pace.

Sunday:  James Mitchell, of Edinburgh University, analyses how the Yes and No campaigns are framing the referendum debate.

However, before he could do this he needed evidence of a positive UK Government response to the Silk recommendations. Speaking at a conference in Cardiff Bay organised by the UK Changing Union project that brings together the IWA, the Wales Governance Centre and Cymru Yfory/Tomorrow’s Wales, he said:

“I want to go to Scotland and say there is a real commitment to devolution in the UK. Hostility to reform ultimately strengthens those who argue the UK is incapable of change. It pushes people towards a polarising choice between an unreformed status quo and the slippery slope of separatism. We have to avoid such false choices.”

A litmus test was how the UK Government would respond to the Silk Commission recommendations on tax and borrowing made in its Part I report published at the end of last year. The UK Government had originally promised a response by the Spring of this year but that timetable had slipped.

Speaking at the Liberal Democrat conference in Glasgow earlier this week Deputy Prime Minister Nick Clegg said he was in favour of following through on the Silk recommendations but conceded that a consensus within the coalition had still to be hammered out. He said he hoped there would be a positive announcement before the end of the Autumn.

Over the summer the UK Government has ben undertaking a period consultation on the Silk proposals for devolving stamp duty over the summer (see here), a period that came to an end last week.

Yesterday Carwyn Jones ratcheted up the pressure saying, “We want progress now on borrowing power plus full devolution of the smaller taxes, including stamp duty.” He said the Welsh Government was prepared to go along with the Silk Commission recommendations on devolving income tax, so long as reform of the Barnett formula was in place to ensure that Wales did not lose out on UK block grant funding.

If legislation at Westminster to put the Silk recommendations into force was to be secured within this Parliament then the UK Government needed to make a positive announcement before the end of the Autumn, which Carwyn Jones specified as 21 December.

In a wide-ranging and radical intervention in the UK devolution debate, the First Minister declared it needed to become less of a process and more of an event. He said devolution needs to move towards a durable, lasting settlement according to key principles which apply equally to all devolved legislatures. There should be an end to the scattergun approach and a new maturity underpinning relationships across the Union.

He argued for a new written Constitution for the UK to introduce a presumption in favour of devolution – “where it makes sense to take a decision in Wales, it should be taken in Wales.”

He said the the sovereignty of the people of Wales should be acknowledged in a clause in the new Constitution that would guarantee the right of the National Assembly to exist, along with the other devolved legislatures in Edinburgh and Belfast. The National Assembly should not have to depend for its very existence on the good will of Westminster. Equally it was not right for the Secretary of State for Wales to be able to veto Welsh legislation passed by the Assembly.

Reaffirming his hope that Scotland will vote to remain in the UK, the First Minister said that a true commitment to devolution by the UK Government, would present a real and positive alternative to breaking up the United Kingdom. Full implementation of the Silk Commission’s proposals on tax devolution and borrowing powers for Wales would send a clear signal and enable him to make a strong case for the Union.

The new Constitution would not need to require that each of the devolved legislatures had equivalent powers, but it would need to provide parity in the way powers were devolved. This meant that Wales should move to a reserved powers model, as is the case with Scotland and Northern Ireland, in which everything is devolved save those areas such as defence and foreign affairs which stay with Westminster. At present Wales has a conferred powers arrangement in which its powers have to be individually specified and which leads to constant arguments about the boundaries of devolution.

Carwyn Jones said:

“I believe being pro-devolution is an essential part of a modern pro-Union philosophy. Devolution is a fact of life in the UK. It enjoys broad public support, as shown in the outcome of the 2011 referendum. Over the past fifteen years we’ve seen repeated ad hoc tinkering with the constitution. I want this to stop. We need now to make devolution less of a process and more of an event. Once the Scottish referendum is out of the way, I want to see reforms which complement one another, reforms which viewed together create the coherent constitution which the UK currently lacks.

And he added:

“I have made clear consistently my hope that Scots will vote for Scotland to remain within the Union. If we are going to secure Scotland’s position in the Union, we need to have a credible and lasting commitment to devolution in the UK. This has to be a commitment which transcends the varying short-term fortunes of political parties. My ability to make that case will depend largely on the UK Government’s response to the first Silk Report, on devolution of taxation and borrowing powers.”

John Osmond is Editor of ClickonWales.

13 thoughts on “Welsh tax powers will show Scotland devolution can work

  1. The time really is here for the UK to split into four independent countries and look after our own finances, raise our own revenues and make our own laws. We are all aware that it is only money that holds it together and that is no basis for a relationship. It breeds resentment and it is about time that we cut the cord and trade with each other on a business basis with no preferential treatment for anyone. England is portrayed as the oppressor, this is a Westminster scam, we are the slave. The British government is of no use to anyone but those that are employed by it and those that run it. It needs scrapping in the interests of the indigenous people of the UK and those countries that have been invaded and victimised in the quest for American/British domination for the banking cartels.

  2. Since polls show that a fifth of people in Wales don’t know anything about the First Minister I can’t see him making much of an impact in Scotland, whatever he decides.

  3. This speech is dire. He’s contradicting himself all over the shop. Where is Labour’s fight and ambition? He complains that Wales is being ignored but he needs to ask himself why! Scotland have a government fighting tooth and nail for every little thing that would make life better for Scots whilst our Welsh Government is prancing around the sidelines making weak attacks on Westminster, refusing to take responsibility for any significant amount of money raising and blaming anyone and everyone but themselves when anything and everything goes wrong.

    I’m tired of listening to it!

  4. With Scotland, independence would give the Scottish people the best of both worlds, an oil rich economy, and more equal society, co-operating with the family of nations of the rest of uk, eu and the un.. Carwyn Jones is wrong about devolution, its a process not an event.

    Trouble with the unionists is this, they think Wales & Scotland is too small, too poor, too stupid to govern themselves. Wales & Scotland have resources and the talent to succeed, but do not have the political & economic powers to do the job.

  5. I fully agree that we need to draw up a modern, federal constitution for the UK, with equal treatment for all the UK nations. However, I don’t see how we are going to get a proper strategic vision of what the UK could be by simply threatening not to support the UK Government’s line on Scotland. It seems that Labour are relying on the SNP to push for radical change, while they ride on their coat tails, pleading with the Con Dem government for a few crumbs. If we want things sorted out, surely the Welsh Labour Government could do more than this? If we want Wales to be treated equally, we have to start acting as if we deserve to be treated in this way, showing that we are ready to take on more devolution. Let’s be more assertive about what Wales wants. Relying on the SNP to do our work doesn’t make us look like equals, while relying on the good nature of the UK government is unlikely to deliver the goods!

  6. I disagree on your support for federalism, but great comment Rusell. Wales needs its own leader to drive progress, not rely on another country’s.

  7. It’s an interesting argument, trying to pressure the UK Govt to take notice of the Welsh Govt and speed up the Silk submission. However, it’s also a play to the people of Wales to say that the Welsh Labour are doing all they can for parity for Wales.

    I’m actually rather impressed by his gusto (moreso had he restated his call for a Welsh judiciary) but I think the truth is that Wales is but a fly in the UK’s ointment. We are economically burdensome, legally challenging and culturally (at least linguistically) inconvenient. However, maintaining overlordship over Wales is crucial to the England’s sense of self and I don’t see Cameron or Milliband supporting a grand new constitution for the UK.

    In devolution we have set paths of divergance and, ultimately, I believe this will lead to the future sovereignty of the UK nations devolved to them as separate states. I feel that 2014 will be another 1979 for Scotland – an unsuccessful bid for home rule followed by a later referendum a generation later.

  8. If Carwyn Jones wants devolution to be an event rather than a process, isn’t that calling a halt to any further progress?! What if what’s best for Wales is to get more powers in the future?

    Sincerely doubt his meagre proposals will do the country any good in the long run. ‘Welsh’ Labour are always in the pockets of UK Labour who are against devolution, whether it’s best for Wales or not.

  9. Carwyn Jones ambition for Wales utterly feeble. Wales needs to escape London Tory rule in all aspects of government affairs both internal and external. We have as much right to rule ourselves without Westminster meddling as Scotland. As in Scotland we have got to get rid of Carwyn Jones and New Labour and get a dynamic nationalist party running the country.

  10. Gareth Davies, unfortunately Scotland and Wales are in very different situations. It’s no good using pejorative language to disguise a feeble case. No-one thinks the Welsh are too stupid to govern themselves, but here’s the plain truth. Wales gets a subsidy of over one third of its national output. If Wales were independent its people would immediately be 30 per cent worse off. If you think you can make them want that – good luck. Back in the real world you had better think how to develop the economy before dreaming of independence. Natural resources? What natural resources? This isn’t 1890. Wales doesn’t have any. We have to develop know-how and new businesses to earn a living at the level that the electorate expects. Grow up and face reality.

  11. Not only will Welsh taxes show Scotland that devolution works, but the rest of the Commonwealth Nations as they gather in Scotland next year. Canada, Australia, India and Pakistan will doubtlessly join Scotland in demanding that they, too, can exchange their independence for what Wales has. Britannia will rise from the ashes of the Scottish referendum, an old superpower reborn, as former colonies flock back to the Empire. Devolution will have won the day, and ultimately it will all be thanks to this speech by Carwyn Jones.

    Far-fetched? Yes.

  12. R. Tredwyn 10.10

    Your economic realism is only half ‘real’. Independence certainly brings immediate fiscal responsibility, and if the Holtham data is to be believed (and there is much room for debate about that) then Wales would inherit a fiscal deficit of 30 per cent or whatever figure can be agreed amongst friends (let’s at least agree that it would be a deficit and probably significant).

    But independence also brings fiscal freedom and wider levers of economic control. It is not beyond reasonable conjecture that those fiscal levers could be turned in rather short course in support of the economy and any deficit removed rather quickly.

    Again, amongst friends, we all know what some of the levers are and how they might be used and we don’t need to go into detail here. Suffice to say that if I were an American, Chinese or Arabian investor I would be quite interested in funding a small deficit in a small country for 5-10 years, knowing that a low tax and low spend (no military/security/energy overhead) off-shore style regime was emerging on the geographic shoulder of one of the world’s richest cities but without that city’s fat underbelly (the rest of England) and expensive vanity projects (UN Security Council seat and attendant distractions)…

    It requires imagination, but then again so does the scenario you paint where a Welsh government is completely oblivious to its competitive pricing opportunities…

  13. Phil Davies. Don’t get me wrong. I favour more autonomy for Wales and if the people wanted independence, well fair enough. We both know that’s not the case and probably it won’t be as long as it would require a big financial sacrifice. Don’t underestimate the powers the Welsh Government has and could have. If they made more productive use of those and we saw some relative economic progress and improving educational standards, people would have more confidence in getting more autonomy for Wales. It’s a hard sell to argue that Welsh politicians are not doing well at the moment but give them independence and they’ll suddenly start making all the right decisions! That’s why it would be more productive to argue about what we should be doing right now with existing powers and obsessing less about independence. People love to argue about the constitutional settlement but the current policy debate is of a low standard.

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