Devolved elections and the timing of the EU referendum

All three devolved first ministers have now written to the Prime Minister seeking to ensure that the referendum on the UK’s EU membership is not held in June. The current thinking suggests that 23 June may be in David Cameron’s mind, assuming all goes well in reaching a final agreement with the other member states in the renegotiation. The First Ministers’ concern is proximity to devolved elections, and they are right to be concerned; the surprise is that their concern is not shared by Conservatives, or Labour, at Westminster.

The timetable for the EU referendum is not clear, but there are two fixed dates running up to the process. The first is the deadline for publication by the UK Government of

a report which contains … information about rights, and obligations, that arise … as a result of the United Kingdom’s membership of the European Union, and … examples of countries that do not have membership of the European Union but do have other arrangements with the European Union (describing, in the case of each country given as an example, those arrangements).

This is required by section 7 of the European Union Referendum Act 2015, and must take place not less than 10 weeks before the referendum date.

The second is the formal referendum campaign period, during which the two designated In and Out campaigns will have referendum election broadcasts, rights to public funding, and be required to keep detailed accounts. All that is complicated and requires effort and engagement from those involved in campaigning (and can easily be got wrong).  It also means engaging the public with issues about the UK’s future relationship with Europe rather than parties’ plans for taxation, housing policy or the health service.  That period starts 10 weeks before referendum polling day.

Thursday 23 June falls seven weeks after polling day for the devolved elections, 5 May. If 23 June is referendum day, the information report will have to be circulated at least three weeks before the devolved legislatures’ polling day – so, quite probably, in the middle of the devolved election campaigns. Referendum activities, broadcasts and expenditures will be starting three weeks before election day. And the activists who can be expected to be campaigning for both Leave and Remain votes will probably also be campaigning, or wanting to campaign, in the elections.

Moreover, at least three of the major parties have clear internal divisions about the EU. While the SNP, Plaid Cymru, the Lib Dems and the DUP may be clearly on one or other side, there are significant divisions among supporters of Labour, the Conservatives and (perhaps surprisingly) UKIP about the EU. At least for the Conservatives and Labour, those divisions are mirrored among their leadership and elected representatives.  If the two campaigns coincide, party activists will be torn between working on one of two different campaigns, which is bad enough. But worse, in one of those they may be allied with people from other parties – and in the other they will be publicly and conspicuously disagreeing with their party colleagues. What is a list Conservative candidate in Cardiff or Glasgow meant to do if they are pro EU but the person above or below them on the list, or running for the constituency seat, is an Out-er? Labour will have the same problem, and so might UKIP (which has serious prospects in the Assembly elections in Wales). These questions will be asked on the doorstep and by TV, radio and press interviewers.  They cannot be avoided. News coverage will be full of ‘party splits’, which will do no-one any good – whether in the devolved elections or in the EU referendum.

As the most divided party the Conservatives will be most hit by this clash of campaigns.  It will undermine their electoral prospects in both Scotland and Wales, where they have well-founded hopes of gaining votes and seats.

There are of course other arguments why polls should not coincide.  The Electoral Commission emphasises organisational readiness on the part of those who will deliver the referendum and whether voters might be confused by two simultaneous or near-simultaneous campaigns in arguing for separation of the timing of polls.  The devolved first ministers have emphasised ‘due respect’ for elections to their institutions. Each of those concerns overlooks the practical difficulties which face parties and campaigners and which are even further-reaching than those issues of principle.

This is not, in fact, a new issue. Exactly the same question cropped up regarding timing of the referendum in Wales on the National Assembly’s law-making powers, which was eventually held on 3 March 2011 and followed by Assembly elections on 5 May. That was a separation of 10 weeks between polls. The Welsh situation was easier for several reasons.  The referendum came first, so politicians from across the party spectrum could campaign together in that and then disagree in the election campaign – easier than doing it the other way round. Three parties officially supported a Yes vote (Labour, Plaid Cymru and the Lib Dems), and the bulk of Conservatives did so too though the party stayed neutral.  Ironically, the failure to have designated Yes and No organisations may have helped too, since that meant limited media coverage and so reduced the public emphasis on party division or unity in the run-up to elections. It is doubtful those factors will apply in the EU poll.  The Welsh situation still made for an exhausting five months for those involved in the two campaigns.

What to do about this? There are compelling domestic reasons why Cameron would be well advised to want a referendum to be held sooner than later, and at all costs to avoid 2017 (let alone the later autumn). Moreover, apart from those domestic concerns, elections loom in Germany and France, Schengen countries are deeply concerned by the migration crisis, and much work remains to be done about the nature of the Eurozone. None of this directly concerns the UK, but it concerns key participants in the negotiations and everyone will want to know where the UK stands. A referendum date in early or mid-summer presents serious problems, though. Holding the EU referendum 10 weeks after the devolved elections would mean holding it on 14 July; well into the Scottish holiday season, when school holidays are just starting or are about to start in England and Wales, and in the middle of the marching season in Northern Ireland. Going any later into July is impractical because of the holiday seasons. So that makes the first part of September look much better. That is far from problem-free – party conference season looms, in particular –  but it avoids the problems of trying to hold a referendum so close to the devolved elections and lets campaigns for devolved elections dissolve before referendum campaigns start in earnest.

David Cameron should make his decision very soon, though, and let the public know. That needs to be before the scheduled European Council meeting on 18-19 February (let alone the March follow-up).  The date of the 2011 Welsh referendum was known more than eight months before the poll. For the 2014 Scottish independence referendum, it was eighteen months. Each of those may have been flawed, but were better than what we have: serious confusion about the date of a referendum which could be held in as little as four and a half months, with the alternative being seven months. Neither such confusion nor potentially short notice is good for democracy.

Leave a comment

Filed under Conservatives, Elections, EU issues, Northern Ireland, Referendums, Scotland, Wales

The Draft Wales Bill: analysing the specific reservations

As part of work on the Constitution Unit/Wales Governance project on the Draft Wales Bill leading to the report Challenge and Opportunity: The Draft Wales Bill 2015, I analysed all the specific reservations proposed in the new Schedule 7A in the draft bill.  The point of this analysis was to establish two points.  First, whether the reservations corresponded to reservations or exceptions for Scotland or Northern Ireland – some do, but many do not.  Second, in the absence of any explanation for the reservations in the Explanatory Notes to the draft bill, what the policy rationale for them might reasonably be – whether they related to other functions being reserved, for example.  This repeated an exercise I undertook for the earlier report on the general principles underpinning the ‘reserved powers’ approach.  This analysis underpins the discussion of reservations and their appropriateness in chapter 7 of Challenge and Opportunity.

The resulting table is long and complicated, and including it in the published report would have added hugely to the printing costs but not greatly to its argument or intellectual weight.  Nonetheless, we thought it should be available to those interested.  It runs to some 74 pages, and can be downloaded HERE as a PDF file.

Regarding use of the table, each numbered reservation in Schedule 7A has its own box.  Not all comments do – some apply to several reservations on the same overall matter.  There are some formatting gremlins that affect lay-out (for which apologies), but not clarity or legibility.  The table includes all exceptions from reservations, but in some cases lengthy interpretation clauses have been edited.

 

Leave a comment

Filed under Conservatives, Legislation, Wales, Westminster, Whitehall

Not meeting the challenge: The failings of the Draft Wales bill

This blog post first appeared on the LSE’s British Politics and Policy blog, here. It also appears on the Constitution Unit’s blog, Constitution-unit.com, here, on the Edinburgh Centre for Constitutional Change’s blog, here and on ClickonWales, the blog of the Institute for Welsh Affairs, here.

I have forborne from commenting in any detail on the Draft Wales Bill before now, other than in giving evidence to the Commons Welsh Affairs Committee, because of my involvement in the joint Constitution Unit/Wales Governance Centre project. The report was published on Monday 1 February, and can be downloaded here as a PDF.

When the Draft Wales Bill was published in October 2015, it was described by Stephen Crabb, the Secretary of State for Wales as delivering on the UK Government’s commitment ‘to create a stronger, clearer and fairer devolution settlement for Wales’. This is badly needed; the history of Welsh devolution since 1998 has been one of short-term solutions that have needed to be revised or replaced within a few years. Hopes were high that the present round of constitutional debate – triggered by the appointment of the Commission on Devolution in Wales chaired by Sir Paul Silk in 2011 – would mark a departure from that established pattern.
Sadly, a close analysis of the Draft Bill shows those hopes to have foundered. A joint project hosted by the Constitution Unit at UCL and the Wales Governance Centre at Cardiff University has been looking at the Draft Bill in detail, and publishes its report Challenge and Opportunity: The Draft Wales Bill 2015 today. Our group has been chaired by Alan Cogbill, former Director of the Wales Office in Whitehall, and had Professor Rick Rawlings from UCL as rapporteur. Other members have included Sir Paul Silk and Sir Stephen Laws (formerly First Parliamentary Counsel), academic and practising lawyers from Cardiff, as well as myself. This work follows an earlier joint CU/WGC report published in September 2015, entitled Delivering A Reserved Powers Model of Devolution for Wales (available here as a PDF, and summarised HERE.) Our examination of the Draft Bill has found it to be flawed in many respects.
The first flaw is a conceptual one. The draft bill’s key commitment is to deliver a ‘reserved powers’ approach to Welsh devolution, like that used for Scotland (and with modifications for Northern Ireland). At the same time, it tries to avoid making wider changes to how Welsh devolution works while delivering that. The assumption that the ‘reserved powers’ approach can simply be grafted onto the existing division of law-making powers between Westminster and Cardiff Bay is wrong. The ‘reserved powers’ model necessitates a sequence of other changes, which were already in place for Scotland in 1998, and which need to be considered for Wales.
That flaw is reinforced by the way the Draft Bill has come about. It results from a party-political deal reached by political parties at Westminster, the St David’s Day process, which did not consider the issue of the ‘reserved powers’ approach in any detail. Elaboration of it in the time between publication of the Powers for a Purpose Command paper and the Draft Bill was spent not in an attempt to understand those issues but in a trawl through Whitehall departments to establish what functions they did not wish to see devolved. That sort of approach simply cannot deliver the sort of careful, principles-based legislation needed to create the durable and lasting settlement the Secretary of State seeks.
In order to make the narrow vision of ‘reserved powers’ set out in the draft bill work, it then takes a very narrow approach to how devolved powers should work. The National Assembly will only have a constrained power to legislate where it can show that is necessary, and any further legislation beyond that will be stopped – what our report calls the ‘leeway and lock’ approach. In particular, the Assembly will have restricted powers to make changes to ‘private law’(the law of contract, torts, equity, land law and so on) or criminal law, which in general are common to England and Wales. Such changes will be subject to a ‘necessity test’; the National Assembly will only be able to legislate on those matters when it is necessary for it to do so to give effect to its legislation for a ‘devolved purpose’. This is a high hurdle for any legislation to overcome, and undermines both the ability of the Assembly to pass laws effectively, and the respect due to an elected legislature. It invites the courts to second-guess any legislation the Assembly passes. That in turn will be a horrendously difficult job as it is far from clear what a ‘devolved purpose’ might be – the whole logic of the reserved powers approach is to say that any purpose is devolved, except those specifically reserved to Westminster.
The ‘necessity’ test is also designed to enable the draft bill maintain a single legal jurisdiction for England and Wales without making any change to how that works. The law applicable in Wales (made partly by the National Assembly and partly by the UK Parliament) and that applicable in England (all made by Westminster) will increasingly diverge, and a robust way of addressing such legal differences is essential. The ‘necessity’ test is not it. The result is a further dimension of ‘lock’ on the National Assembly’s powers. One solution – now supported by the Welsh Government, but first proposed by me some time ago (and see also HERE)– is to create a distinct Welsh legal jurisdiction that would continue to share courts and other legal institutions with England. Another would be a robust, ‘rules-based’ approach to resolving conflict-of-law issues. Fudging the matter, as the draft bill does, will not work.
Then we come to the specific reservations set out in the bill. This list is much longer and more extensive than for Scotland. It not only includes such matters as foreign affairs, defence, currency and immigration, but also alcohol and entertainment licensing, the safety of sports grounds, and public sector pay-outs. Many of these are matters reserved only for Wales, and perhaps the reason for reserving them relates to maintaining the shared England-and-Wales legal jurisdiction – but as no explanation is given, it is impossible to tell. They could equally result from matters which particular Whitehall departments wish to hang onto. The result is a complex web of reserved matters, many of which impact on non-reserved (devolved) ones. (A detailed table analysing the reservations can be downloaded in PDF format HERE.) Legislating under such constraints will be an intricate task, the more so with the protection for private and criminal law. Framing a robust, clear and lasting devolution settlement for Wales is incompatible with satisfying bureaucratic concerns about the minutiae of policy variation.
Similar concerns arise with protections for UK ministerial functions relating to Wales. Again, these will be protected unless the Secretary of State consents, so legislation will be subject to a ministerial veto as well as the intervention of the courts.
None of this accords with key constitutional imperatives; the sort of fair, clear and lasting settlement that the Welsh Secretary seeks, or the respect due to an elected legislature with its own democratic mandate. It will certainly drag the courts into deciding what is within Welsh devolved powers and what is beyond them, at almost every turn. The result would be a messy, inconsistent and incoherent settlement, quite unlike the approach for Scotland or Northern Ireland, which will probably be short-lived and in need of being replaced in a few years’ time. It is little wonder that the Draft Bill has attracted such widespread criticism in Wales, whether from the Welsh Government, its Counsel General, the National Assembly’s Constitutional and Legislative Affairs Committee and all parties in the Assembly as a whole, or a range of professional bodies and other civil-society actors.
So what should be done now? There needs to be a much more considered process that addresses the difficult issues that a ‘reserved powers’ approach creates, and tries to find lasting and workable solutions rather than quick fixes. The constitutional imperative should be a clear, fair and lasting settlement, based on principles which voters can understand and which not keeping Whitehall departments happy or minimising the impact on the legal system and shared jurisdiction of England and Wales. The ‘necessity’ test will need to go; the Assembly has to be able to act freely when it comes to using the mechanisms of private and criminal law to make its legislation work, and substitutes like a test based on ‘reasonableness’ or ‘appropriateness’ will not serve – they will still require the courts to scrutinise in detail the Assembly’s legislative decisions. An effective form of devolution means transferring meaningful authority to the National Assembly – as has already been conferred on the Scottish Parliament and Northern Ireland Assembly.
The Welsh Secretary has had a commendable ambition to put Welsh devolution on a clear, fair and lasting footing. Sadly, the draft bill does not meet up to the challenge he set himself, but the opportunity remains to be seized.

Leave a comment

Filed under Conservatives, Publications and projects, Wales, Westminster, Whitehall

Launch of report on the Draft Wales Bill

With a number of colleagues from the Constitution Unit and the Wales Governance Centre, I have been working for some time on a major examination of the Draft Wales Bill published in October. This follows our earlier report written over the summer on issues of a ‘reserved powers’ model more generally. We’ve now finished our work and are shortly going to launch our new report, which is entitled Challenge and Opportunity: The Draft Wales Bill 2015. There will be two events – one in Cardiff at lunchtime on Monday 1 February, and one in Westminster late in the afternoon of Tuesday 2 February. Both events are free to attend but registration is necessary.

The Cardiff event starts at 12.30 pm in the Main Hall of the Pierhead. Speakers will be Professor Rick Rawlings from UCL, who drafted the report, Alan Cogbill who chaired the group, and Emyr Lewis of Blake Morgan, another member of the group. Fuller details and registration (through Eventbrite) are here.

The London event will be at 5 pm and takes place in the Wilson Room in Portcullis House, on the Parliamentary Estate Committee Room 6 in the Palace of Westminster. Speakers will include Rick Rawlings, Richard Wyn Jones and myself.  Please allow plenty of time to get through Parliamentary security. Email wgc@cardiff.ac.uk to register your attendance.

UPDATE, 2 February: The report Challenge and Opportunity: The Draft Wales Bill 2015 can now be downloaded from here as a PDF.

 

1 Comment

Filed under Courts and legal issues, Events, Legislation, Publications and projects, Wales, Westminster

The Enterprise bill: public sector pay-outs and devolution

Having made its way through the Lords, the Enterprise bill will get its Commons second reading next Tuesday. In many ways, this bill exemplifies bad post-devolution legislation, as it’s a portmanteau bill with provisions on a range of subjects including a Small Business Commissioner, non-domestic rates, late payment of insurances claims, regulatory reform and other matters. Some of these provisions relate only to England, some of them mainly affect England but have knock-on effects for devolved functions in various parts of the UK, some of the bill’s provisions are UK-wide or GB-wide and relate to reserved/non-devolved matters – but others are intended to apply across the UK or Great Britain while affecting devolved matters. To make matters worse, it extensively amends existing legislation, so working out exactly what it does is no easy task.

One clause that is particularly striking is clause 35, which deals with ‘public sector exit payments’ – redundancy and similar payments made to people leaving public sector employment. It covers not only redundancy and ex gratia payments but also contractual obligations such as pay in lieu of notice or for outstanding leave entitlements, and limits the sum total of such payments to £95,000. The bill delivers a Conservative manifesto promise to ‘end taxpayer-funded six-figure payoffs for the best paid public sector workers’.  These have been particularly notable in recent times with the shake-out of the public sector arising from austerity and also major reorganisations of services, which have often led to individuals taking a pay-off from one job and then moving straight into another.  Another side of the coin, for very senior posts, is how to remove a senior figure like a chief executive who cannot work with a changed political leadership, a common problem in local government. An amicable redundancy settlement has usually been the way to resolve that. (As an aside, putting the figure of £95,000 onto the face of the bill is unusual and likely to cause serious practical difficulties in future, as inflation erodes the value of that amount.)

As is well known, the management of the public sector generally is a devolved matter for Scotland, Wales and Northern Ireland. However, employment law is reserved in Scotland (by Head H in Schedule 5 to the Scotland Act 1998), an undevolved ‘silent subject’ not mentioned in Schedule 7 to the Government of Wales Act 2006 for Wales, though devolved in Northern Ireland. (For Wales, this means the Assembly can legislate for matters affecting employment law where this is necessary for enforcement or making effective a provision relating to a devolved subject, or otherwise incidental or consequential to such legislation; see section 108(5) Government of Wales Act 2006.) So clause 35 has the scope to affect devolved matters considerably if it applies in Scotland, Wales or Northern Ireland.

The Enterprise bill itself is silent about the territorial extent of this clause, which means it extends to all parts of the United Kingdom. The Explanatory notes contain a table confirming that the provision applies to Scotland, Wales and Northern Ireland and saying ‘not applicable’ when identifying whether it is devolved or not. That conclusion is doubtful in each case. In Scotland the Scottish Parliament is to consider a legislative consent motion assenting to the clause – approval has been recommended by both the Scottish Government in its legislative consent memorandum and by the Parliament’s Economy, Energy and Tourism Committee. Similarly, in Northern Ireland the matter has been considered by the Assembly’s Finance and Personnel Committee which expressed a number of concerns about the bill but recommended approval via an LCM. In Wales, although there has been an LCM, this relates only to the ‘Small Business Commissioner’ and non-domestic rating provisions of the bill and not the public sector payout ones.  Those have not been considered by the National Assembly.

What makes the Welsh position even odder is the provision in the Draft Wales Bill published in October to make such public sector payouts a reserved matter. Reservations 144 and 145 in the new Schedule 7A included to the draft bill reserve the following:

144. Schemes for the payment of compensation for or in respect of public sector workers in respect of—
(a) incapacity or death as a result of injury or illness,
(b) loss of office or employment, or
(c) loss or diminution of emoluments.

145. Regulation of amounts payable, or paid, to or in respect of public sector workers in consequence of leaving office or employment.

The upshot would be that Scotland and Northern Ireland will be free to alter the application of the UK rules at some future time, if they wish, while accepting arguments at present for the desirability of having similar rules across the UK. Wales will not; the proposed reservation would prevent it from ever doing so, if it makes it into enacted legislation. That not only distinguishes Welsh devolution from that for Scotland and Northern Ireland, for no very clear reason, but also hampers the ability of the National Assembly and Welsh Government to organise and management the devolved Welsh public sector effectively.

BIS, and its predecessor departments, have never had a reputation for being particularly supportive of devolution. (The department is of course also currently promoting the Trade Union bill, which has raised much anger, and questions of whether devolved legislative consent is needed – previously discussed HERE.) It has also a long track record of being insensitive to devolution questions when they arise, which the Enterprise bill exemplifies. What it doesn’t appear to have realised is that times have changed. Ten years ago, such mis-steps were merely inconvenient and inconsiderate. Now, they have much wider political and constitutional implications.

3 Comments

Filed under Conservatives, Legislation, Northern Ireland, Scotland, Wales, Westminster, Whitehall

Tax devolution and the block grant: a solution for Scotland that doesn’t work anywhere else?

This is a guest post by Gerald Holtham, who chaired the Welsh Government’s Independent Commission on Funding and Finance in Wales and is adviser on finance to the Welsh Government. The question he addresses – of how to manage a reduction in the block grant to allow for tax devolution while maintaining the Barnett formula – is a highly timely one, given the ongoing discussions about the ‘fiscal framework’ for Scotland (for which this is the key issue) as well as corporation tax devolution for Northern Ireland and moves on income tax devolution for Wales announced in the Spending Review.  (My own comment on this post can be found here.)

In all the discussions about tax devolution for all parts of the UK, a key issue has not been clarified. That issue is how to reduce block grants when a tax is devolved. Indeed there still appears to be no general agreement between the devolved governments and the UK Government about how to proceed. It is a particularly knotty question in discussions about income tax but also VAT and it has the capacity to delay devolution to Scotland and to stall it altogether for Wales.

There is little problem in the first year of devolution. An estimate can be made of the revenue foregone by the Westminster government, given prevailing tax rates, and that can be deducted from the block grant. Subsequently the deduction can be revised when actual revenues differ from the estimate. The difficulty comes for subsequent years when the deduction must be expected to grow with the economy and its tax base but must not be affected by changes in tax rates by the devolved administration – otherwise devolution of tax powers is not real.

Continue reading

3 Comments

Filed under Devolution finance, Guest posts, Intergovernmental relations, Whitehall

Wales and the 2015 Spending Review

The 2015 Spending Review makes two significant changes to the Welsh Government’s finances: it removes the requirement for a referendum before introducing the partial devolution of income tax, enacted in the Wales Act 2014, and it proposes to introduce a ‘Barnett floor’ for the overall envelope of devolved funding.

The referendum on the Welsh rate of income tax was a way of ensuring that devolution did not happen automatically (as is the case for Scotland) – a rare case of common ground between David Jones and Carwyn Jones. It never made much sense intellectually; if the rationale for income tax devolution was ‘financial accountability’, why should that be optional? And why should the body that would be made accountable get to choose whether it should be accountable? It made even less sense politically, if the aim was to make income tax devolution happen rather than ensure it could not. A referendum campaign would be hard to stage and harder to win. It would mean asking voters to vote for potentially higher taxes, with no guarantee that they would even enjoy additional spending as a result given the lack of clarity about the mechanism for reducing the block grant as a result. There would be little chance of a cross-party consensus, so while Conservatives had a strong interest in seeing income tax devolution since it would enable them to offer a tax cut, they would struggle to find allies for a referendum campaign (unlike 2011). Abandoning the referendum had become the only way to create even a possibility of income tax devolution, and now has support from not just Conservatives but Plaid Cymru.

Continue reading

Leave a comment

Filed under Devolution finance, Wales, Whitehall