The First Minister announced this afternoon which financial powers he thinks should be given to the Welsh Government over the next few years:
- Fair funding through reform of the Barnett formula as “a priority”.
- Borrowing powers “for parity with other devolved nations”.
- Some taxation powers including landfill tax stamp duty land tax, aggregates levy and air passenger duty.
- Corporation tax, potentially, but would need to see the details.
- Emphatically NOT income tax.
What is really fascinating is the political context this comes in.
First, remember his position: newly re-elected with a strong personal mandate and enough Assembly seats to drop his coalition partners in Plaid Cymru, but not enough to make it easy for him to do so.
Add to that the fact that he leads a Labour administration in a UK governed by political opponents.
That means he has nothing to lose and everything to gain from a series of confrontations with the UK government. There’s every indication that he intends to use constitutional demands to fuel those fires.
In the last few weeks alone, he’s called for borrowing powers to be devolved, sent an admittedly mixed message on corporation tax (essentially, we’d rather not have it, but if Northern Ireland gets it, Wales should), and surprised everyone by demanding the power to make planning decisions on major energy projects, such as windfarms.
It’s not the prettiest of politics. It leaves him facing accusations of making u-turns, of failing to push for these things when Labour was in power in Westminster and of shamelessly picking fights in areas he knows he has no chance of succeeding in.
But that’s clearly the point, at least partly, and the early evidence seems to suggest that he’s succeeding.
Take yesterday’s demand for energy powers at the British-Irish Council. By the end of last night, the UK Government had clearly ruled out any such move in a terse statement.
But before that the First Minister had told reporters that in private he hadn’t been given the brush-off and had been promised “further communication” from the UK Government.
And in his public response, the Deputy Prime Minister, Nick Clegg seemed to leave the door open:
Devolution is not… a tablet of stone. It’s a constant process; we must constantly compare notes where policies are evolving in this and that direction. I think the key thing is always to listen in mutual respect, not to rush to conclusions, to allow things to be examined clearly and closely. And that’s clearly the spirit in which we look at the points Carwyn has raised.
It all led to a late-night statement from the Welsh Government calling Westminster’s publicly hardened position a “slap in the face for Wales”.
But if the Conservatives in the Wales Office and the Department of Energy and Climate Change are only too clear (publicly) that there won’t be any such devolution, Conservatives in Cardiff Bay are in a more difficult position.
Today, while pointing out what they said was the First Minister’s hypocrisy and attempts to distract from his u-turn, they also had to admit that, in principle, they’re in favour of exactly what he was calling for and in fact it was in their manifesto.
Acting leader Paul Davies said
We believe it would be beneficial to have these powers and we’ll continue to make the case to devolve them to Wales.
But he and Russell George, the Montgomeryshire AM, said now is not the right time so soon after a referendum.
And the Welsh Liberal Democrats, too, are finding themselves in a similar tricky position.
After criticising the First Minister for playing politics with funding reform, the party’s leader Kirsty Williams found herself being asked why it’s her colleagues in Westminster (after all, Chief Secretary to the Treasury Danny Alexander is a Lib Dem) who are standing in the way of funding reform. *
Of course Plaid Cymru is also in a difficult position. It, too, agrees with the devolution calls that Carwyn Jones is making.
That means it has to restrict much of its criticism to claims of hypocrisy and Labour’s previous failure to do anything about transferring these powers.
It’s also arguing that the First Minister doesn’t have a coherent plan for the extra powers he’s demanding. Rather, he’s picking fights with the UK government for political reasons and stopping short of calling for the devolution of things, which would really transform Wales.
Some of the criticism from the other parties is at least partly justified — particularly those that focus on the First Minister’s rewriting of history and apparent sudden conversion to causes he’d previously either dismissed or ignored.
But call it shamelessness or call it holding his nerve, Carwyn Jones is — at the moment at least — brushing off the critics and pushing ahead with what is clearly emerging as a deliberate strategy that defines himself and his government against the previous coalition, against the other parties and against the UK government.
* On that by the way she told me “You’ll have to wait and see what’s in the Calman-style process.”
I took that as a hint that the Welsh Lib Dems have good reason to believe Barnett reform WILL be in that review despite strong suggestions from the Wales Office that it won’t.
Perhaps they’ve been told someting. ‘That’s your interpretation’ the party’s spokesman replied.
A clue on timing came yesterday when Nick Clegg told reporters after the British-Irish Council that the UK government hoped to publish details before the summer recess.