Wales ‘still powerless in crucial policy areas’
AKEY architect of devolution for Wales has warned that trust between the UK and Welsh Governments is at an “all-time low”.
Professor Kevin Morgan, one of the main figures behind the Yes campaign in the 1997 referendum, has also claimed that Wales remains effectively “powerless” to act in important areas of industrial policy, almost two decades after the advent of devolution.
Writing in a new book on the role of nations and regions in the UK’s Industrial Strategy, Prof Morgan argues that “political conflicts over Brexit have soured relations between the devolved administrations and Whitehall to such an extent that the level of inter-governmental trust has plummeted to an all-time low.”
WALES is “almost powerless” over key aspects of industrial policy nearly two decades after the birth of devolution, and trust between governments has plummeted to an “all-time low”, according to the professor who chaired the 1997 referendum Yes campaign.
Kevin Morgan, Professor of Governance and Development at Cardiff University, warns of the potential for a major “crisis” as the UK leaves the European Union.
He argues that “years of devolution have left Scotland and Wales almost powerless to influence the fundamentals of fiscal policy, trade policy and overseas student recruitment policy”.
A key flashpoint could be conflict over the future of regional development cash. Wales has received billions of pounds in EU funding but there is wariness in Cardiff and Edinburgh about proposals to introduce a UK Shared Prosperity Fund.
Warning this could “trigger a major inter-governmental crisis”, he notes that the Welsh Government has already stated it “explicitly and vigorously” rejects “any notion of a UK centralisation of regional economic development policy, including the creation of a Whitehall-managed UK Prosperity Fund”.
Prof Morgan argues that “political conflicts over Brexit have soured relations between the devolved administrations and Whitehall to such an extent that the level of inter-governmental trust has plummeted to an alltime low” and warns this will make it harder to secure the partnerships needed to take forward the UK Government’s Industrial Strategy.
Meanwhile, devolved administrations are “acutely aware of the constraints on their ability to pursue a bolder, more integrated economic development strategy”.
Noting the cancellation of the planned electrification of the Cardiff to Swansea Great Western line and the continuing uncertainty about the Swansea Bay Tidal Lagoon, he said the Welsh Government “feels constrained by its lack of powers in key priority sectors”.
Prof Morgan’s comments come in a chapter he has contributed to a forthcoming book which looks at the role of nations and regions in the UK’s Industrial Strategy.
Nothing less than the “territorial integrity” of the UK is at stake, he claims, writing: “One of the key issues to be resolved in the Industrial Strategy will be the role of the state and this is likely to expose deep political tensions between the social democratic values of the Scottish and Welsh Governments and the neoliberal proclivities of the (current) UK Government.
“Managing these tensions will be one of the great challenges of the post-Brexit era, not least because the territorial integrity of the UK as a multi-national state could stand or fall on its ability to secure unity-in-diversity.”
Prof Morgan says that “Brexit poses both economic threats and political challenges” but he claims these are not acknowledged in the UK Government’s Industrial Strategy White Paper, which is “ideologically fixated on the alleged opportunities of EU withdrawal”.
A key challenge facing the UK Government is securing Welsh and Scottish support for “frameworks” to ensure that different policies across the nations do not impede trade postBrexit.
Prof Morgan sees an “urgent need to fashion new federal-like governance structures to ensure that the common frameworks for the postBrexit period respect their devolution settlements”.
He argues that “radically reformed joint governance mechanisms – like a UK Council of Ministers – would seem to be necessary to resolve intergovernmental disputes within the Industrial Strategy”.
Ministers from across the UK already sit down together at meetings of the Joint Ministerial Committee (JMC) but Prof Morgan calls for a new approach.
He said: “Whitehall would need to change its attitude to joint governance mechanisms like the JMC because, in the eyes of the Scottish and Welsh Governments, it has shown little interest in them to date because it has no respect for them.”
He also notes the differences between Wales and Scotland in how economic development is pursued. Controversially, the Welsh Development Agency (WDA) was brought into the civil service in what became known as then First Minister Rhodri Morgan’s “bonfire of the quangos”.
Prof Morgan writes: “Whereas Scotland retained Scottish Enterprise to spearhead its place-based economic development strategy, the Welsh Government abolished the WDA more than a decade ago and has struggled ever since with the lack of place-based institutions.
“To fill the vacuum left by the WDA, the Welsh Government recently launched a new ‘regionally focused model of economic development’ based on regions in north Wales, mid and south-west Wales, and southeast Wales...
“As things stand, Wales has neither a national enterprise agency, as in Scotland, nor a locally-based [Local Enterprise Partnership] structure, as in England.”
PROFESSOR Kevin Morgan chaired the Yes campaign which secured a victory in favour of the creation of the Assembly in 1997 by just 6,721 votes.
Having helped launch the devolution age in Wales, he has closely followed key developments in the nearly two decades since AMs first arrived in Cardiff Bay – and he does nothing to play down what is at stake as the UK confronts Brexit.
He now warns that “inter-governmental trust has plummeted to an all-time low”.
At the start of the devolution era there were Labour-led governments in Westminster, Cardiff and Edinburgh. Pundits wondered what would happen when people from different political tribes were in power in the UK and Welsh governments, and since 2010 we have repeatedly seen rows erupt into the open.
The cycle of regular council, Assembly, European and Westminster elections gave politicians plenty of moments when it seemed politically advantageous to take potshots at one another’s record on the NHS, education and the economy.
But the current concerns over Brexit are doubly charged. Devolution was born at a time when there was no expectation that the UK would leave the EU, and the ties to Brussels have arguably been a source of stability in the early chapters of the institutions.
The livelihoods of farmers in all parts of the UK have been directly tied to the workings of the Common Agricultural Policy. European Union funding has supported investment across Wales, and the necessity of keeping within Single Market rules has limited the scope for divergence between the different UK nations.
But now the UK is faced with the question of how it will operate outside the EU. How will Britain’s own internal market be governed – and will this ultimately be decided by Westminster or negotiated between the governments?
Theoretically, the UK Parliament remains sovereign – it has “devolved” powers to the new legislatures rather than formally given up the ability to make law on any subject in any part of the UK – but a constitutional crisis would erupt if it attempted to override the will of elected AMs and MSPs.
Theresa May’s administration faces the challenge of negotiating a Brexit deal while also keeping increasingly vocal backbenchers in line; yet it must also engage the devolved administrations with respect and take seriously deep and valid concerns. Occasional meetings of the Joint Ministerial Committee or sit-downs with senior figures won’t cut it – unhappiness in Cardiff and Edinburgh will only intensify pressure to move to a formal federal arrangement postBrexit.
Prof Morgan notes that nearly “20 years of devolution have left Scotland and Wales almost powerless to influence the fundamentals of fiscal policy, trade policy and overseas student recruitment policy, all of which are highly pertinent to the UK Industrial Strategy”. Present uncertainty will only strengthen the desire of devolutionists to control levers of real power.