Political developments in to December 2012

Standard Note: SN/PC/06542 Last updated: 31 January 2013

Author: Hazel Armstrong Section Parliament & Constitution Centre

This note provides an update on political developments in Wales between January and December 2012. It updates the previous Library Standard Note (SN/PC/06177), Political Developments in Wales to December 2011.

Contents

1 Electoral arrangements 2 1.1 The Boundary Commission review 2 1.2 Future electoral arrangements for the National Assembly for Wales 3

2 Policy developments 4 2.1 Status of Acts of the National Assembly 4 2.2 First Act of Welsh Assembly 7 2.3 Other legislation in progress 7 2.4 Consultation on Welsh law 8 2.5 Parliamentary Committees 9 2.6 Badger controls 10

3 Political Parties 10

4 The Silk Commission 11

This information is provided to Members of Parliament in support of their parliamentary duties and is not intended to address the specific circumstances of any particular individual. It should not be relied upon as being up to date; the law or policies may have changed since it was last updated; and it should not be relied upon as legal or professional advice or as a substitute for it. A suitably qualified professional should be consulted if specific advice or information is required.

This information is provided subject to our general terms and conditions which are available online or may be provided on request in hard copy. Authors are available to discuss the content of this briefing with Members and their staff, but not with the general public. 1 Electoral arrangements 1.1 The Boundary Commission review The Boundary Commission for Wales published its initial proposals for the review of Parliamentary constituencies, mandated by the Parliamentary Voting Systems and Constituencies Act 2011,1 on 11 January 2012. Under the new arrangements, Wales will be entitled to 30 seats instead of its current 40. The United Kingdom Electoral Quota is 76,641 while the average electorate of the existing 40 constituencies in Wales is 57,040. Under the initial proposals all of the current 40 constituencies would be changed. Further details on the initial proposals can be found in Library Standard Note 6195, Initial proposals for new constituency boundaries: Wales.

The Electoral Reform Society Wales attacked these proposals and claimed they did not take notice of Welsh geography. Stephen Brooks, Director of the Electoral Reform Society Wales said:

If Wales’ new boundaries seem to fly in the face of common sense then responsibility rests with the UK government. The Boundary Commission for Wales was dealt a bad hand. The UK Government’s 'One Size Fits All' approach was never going to work for Wales. The UK Government chose to ignore the existence of our mountains and valleys in order to fit a bureaucratic formula. It’s a vision of equality where the maths matters but our communities don’t.2

Following a consultation period the Boundary Commission published revised proposals on 24 October 2012. Revisions were made to 21 of the 30 proposed constituencies. The main changes made by the Commission affect the seats covering Cardiff (except Cardiff West) and the valleys of Rhondda Cynon Taff, Merthyr Tydfil and Caerphilly. The Commission stated its reasons for the revisions as:

The Commission has sought in its revised proposals to take into account the views that were submitted during the public consultation and to better reflect factors such as: geographical considerations (the size, shape and accessibility of a constituency); local government boundaries; boundaries of existing constituencies and any local ties that would be broken by changes in constituencies. In response to the views raised the Commission has decided to revise its initial proposals for the composition of 21 of the 30 proposed constituencies in Wales. The revisions include:

• Widespread changes to the constituencies in South East Wales to take account of responses received in relation to Cardiff and the South Wales Valleys.

• Changes to the composition of the Llanelli, Gower and Swansea West and Swansea East constituencies to reflect submissions made about community ties in that area.

• Changes to the composition of constituencies in mid and north Wales to reduce the division of the existing Montgomeryshire constituency and to take account of local ties in specific areas.3

1 Boundary Commission for Wales, Initial proposals, January 2012 (accessed 29 January 2013) 2 Electoral Reform Society, News release , 11 January 2012, Wales’ new political map, (accessed January 2013) 3 Boundary Commission for Wales, Boundary Commission publishes revised proposals for Parliamentary constituencies, Press Release, 24 October 2012 [accessed 22 January 2013]

2 Further details on the revised proposals can be found in Library Standard Note 6226 Constituency boundaries: the Sixth General Review in Wales.

1.2 Future electoral arrangements for the National Assembly for Wales The Secretary of State issued a consultation document on future electoral arrangements for the Assembly on 21 May 2012.4 At the moment the constituencies used to elect Assembly Members are the same as those used to elect Members of Parliament. The changes to a smaller House of Commons which would be a consequence of the Boundary Commission review of parliamentary constituencies would break that link. The Green Paper looked at the effect of these changes on the National Assembly for Wales and asked whether people would be better served by continuing to have 40 Assembly constituencies, but with modified boundaries to make them more equal in size, or whether to re-instate the link with Parliamentary constituencies by changing to an Assembly of 30 constituencies. In each case the size of the 60 Member Assembly would not change and so the number of regional Members would increase from twenty to thirty if the link with Parliamentary constituencies were re-established. The Green Paper also sought views on whether the National Assembly for Wales should have four or five year terms; removing the prohibition on standing as a candidate in an Assembly election in both a constituency and a region; and whether Assembly Members should be prohibited from sitting in Parliament.

In response to the publication of the Green Paper, the First Minister stated that

There is no mandate for this. The electoral system for the assembly is a matter for the people of Wales and no one else. The Prime Minister has assured me that there would be no change to future electoral arrangements without the agreement of the assembly.5

The Green Paper was the subject of a debate in the Welsh Assembly on 12 June 2012. The motion agreed by the Assembly was:

NDM5006 Jane Hutt (Vale of Glamorgan)

To propose that the National Assembly for Wales:

1. Notes the Green Paper on future electoral arrangements for the National Assembly for Wales; and

2. Believes that no change to the current electoral arrangements should be introduced by the UK Government without the consent of the National Assembly for Wales.

3. Notes that under the Government of Wales Act 2006 the power to make provisions about the National Assembly for Wales' elections resides with the Secretary of State for Wales.6

The Green Paper was also the subject of a debate in the House of Lords, in Grand Committee, on 18 June 20127 and in the House of Commons, in Westminster Hall on 3 July 2012. 8 The Secretary of State tabled a motion for a debate in Welsh Grand Committee to

4 Wales Office, A green paper on future electoral arrangements for the National Assembly for Wales, Cm8357, May 2012. 5 BBC News, Welsh Assembly voting: Cheryl Gillan proposes new seats for 2016 election, 21 May 2012

6 National Assembly for Wales Record of Proceedings, 12 June 2012, p.94 &ff 7 HL Deb, 18 June 2012, cGC125 8 HC Deb, 3 July 2012, c187WH

3 take place on Monday 2 July, but this was objected to by the Labour Party, who wanted the debate to take place in the Commons chamber.9 The Secretary of State canceled the Grand Committee debate.

The consultation period closed on 13 August 2012. The Wales Office published a summary of the sixty-eight responses received.10 This showed that of the options offered, almost all respondents favoured reinstating the link between parliamentary and Assembly constituencies:

Assembly constituencies

Question 1: Do you prefer Option 1: 40 Assembly constituencies, each containing a broadly equal number of electors and constituency boundaries periodically reviewed; or Option 2: reinstate the link between Assembly and Parliamentary constituencies by changing to an Assembly of 30 constituencies, with an equal number of constituency and regional members (30:30)?

Assembly constituencies are currently the Parliamentary constituencies in Wales. The Parliamentary Constituencies Act 1986, as amended by the Parliamentary Voting System and Constituencies (PVSC) Act 2011 provides for the number of Parliamentary constituencies to reduce to 600, and for constituencies to be made more equal in size. The number of parliamentary constituencies in Wales would reduce from forty to thirty as a result. The 2011 Act also breaks the link between Parliamentary and Assembly constituencies to ensure that these changes would not result in a smaller Assembly.

The four UK Boundary Commissions are currently consulting on proposals for new parliamentary constituencies and must present their final recommendations to the Secretary of State before October 2013. Parliament would need to approve the final proposals.

The Green Paper sought views on whether forty Assembly constituencies should be retained, but made more equal in size, or whether the link between parliamentary and Assembly constituencies should be reinstated. Almost all respondents to this question favoured Option 2: reinstating the link between parliamentary and Assembly constituencies.

On 27 November David Jones, the Welsh Secretary, confirmed in answer to written question, that the Government would need to wait decisions on the reviews being conducted by the Parliamentary Boundary Commissions before deciding how to proceed on constituency boundaries for the National Assembly. 11

2 Policy developments 2.1 Status of Acts of the National Assembly Following the March 2011 referendum, primary legislative powers for the Welsh Assembly contained in the Government of Wales Act 2006, came into force on 5 May 2011. The introduced the Local Government (Byelaws) Wales Bill in the Welsh Assembly on 28 November 2011. The Bill gave effect to the Welsh Government’s proposals to simplify procedures for making and enforcing local authority byelaws. The Bill introduced an alternative procedure for local authorities to follow in making a number of byelaws. For

9 HC Deb, 26 June 2012, c275 10 Wales Office, A green paper on future electoral arrangements for Wales: A summary of responses, August 2012. 11 HC Deb, 27 November 2012, c275W

4 these, the Bill required authorities to consult locally before making a byelaw and removed the requirement for confirmation by the Welsh Ministers or by the Secretary of State. The Bill passed through all its stages in the Welsh Assembly and was agreed by the Assembly on 3 July 2012, becoming the first Bill to have been passed in Wales.

On 30 July 2012 the Attorney General, on behalf of the UK Government, referred the Bill to the UK . If there is an issue as to whether a provision of a Bill passed by the Assembly exceeds legislative competence, the issue can be referred to the Supreme Court. As the requirement for confirmation of byelaws made by local authorities is set out in the Local Government Act 1972, and is a matter for concurrent action by both the Assembly and the Secretary of State, so the Local Government (Byelaws) Wales Bill altered a function of the Secretary of State. The Government of Wales Act 2006 provides that devolved legislation can only affect pre-commencement functions of UK ministers if it does so incidentally or consequentially to its main purpose, or if the Secretary of State gives consent. The Secretary of State did not give consent in this case.12

This is the first time the Attorney General has used the power to refer any devolved bill to the UK Supreme Court. This power of referral exists in all of the devolution settlement Acts, but the reference in July broke new legal ground so the case was keenly followed by the legal officers for Scotland and Northern Ireland. The blogger Alan Trench gave a detailed discussion of the case and the politics of the referral on the Devolution Matters blog, 2 October 2012 and 17 September 2012.13

The Supreme Court considered whether sections 6 and 9 of the Bill were outside the legislative competence of the Assembly because they removed or enable the removal (respectively) of pre-commencement functions of UK Government Ministers of the Crown without the consent of the Secretary of State to do so.

The Supreme Court handed down a unanimous judgement on 21 November 2012 that the Bill was within the competence of the National Assembly for Wales.14 The reasons for the judgement were (numbers in square brackets refer to paragraphs in the judgement):

Section 6 is within the legislative competence of the Assembly [66],[83]. The removal of the Secretary of State’s confirmatory powers in relation to the scheduled enactments would be incidental to, and consequential on, the primary purpose of removing the need for confirmation by the Welsh Ministers of any byelaw made under the scheduled enactments [52],[53]. The primary purpose of the Bill cannot be achieved without that removal [54]. The Secretary of State’s confirmatory power is concurrent with that of the Welsh Ministers [55]. It is open to either the Secretary of State or the Assembly to exercise any functions which are exercisable concurrently [37]. Where a function is vested in two Ministers concurrently, either may perform it, acting alone, on any occasion [40]. It is far more sensible and consistent with the purpose of the Welsh Government legislation to conclude that the Assembly and the Secretary of State were each intended to have the power to exercise the concurrent functions, and that it was to be left to their good sense to decide which should exercise a particular function in a particular case [41]. The confirmatory power is only given to the Secretary of State if no other statute (including one passed after the 1972 Act) confers the function on any

12 Both the Presiding Officer of the Welsh Assembly and the Dept for Local Government and Communities stated that the Bill was within the legislative competence of the Assembly, as part of the passage of the Bill. 13 “Welsh byelaws and the UK Supreme Court”, Alan Trench, Devolution Matters, 17September 2012 and 2 October 2012 14 [2012] UKSC 53 Judgement Local Government Byelaws (Wales) Bill 2012, 21 November 2012

5 other body or person, which supports the notion that it is not an important function [56]. The scheduled enactments relate to byelaws in respect of which the Secretary of State is very unlikely ever to exercise his confirmatory power [57].

Section 9 is within the legislative competence of the Assembly [66],[84]. Section 9 has a limited effect, because the jurisdiction of the Assembly is limited to removing, or delegating the power to remove, functions of the Secretary of State where this would be incidental to, or consequential on, the purpose of removing the need for confirmation by the Welsh Ministers of any byelaw made under the scheduled enactments, and the Assembly cannot therefore bestow wider powers than this on the Welsh Ministers [63]. The same conclusion can be arrived at by invoking section 154(2) of the 2006 Act, which provides that a provision of a Bill which could be read in a way as to be outside the Assembly’s legislative competence is to be read as narrowly as is required for it to be within that competence [64].15

Commenting on the Judgement the Secretary of State expressed the belief that the judgment would assist both governments in defining the devolution boundary:

Both the Attorney General and I are grateful to the Supreme Court for providing clarity on this issue. As Lord Hope stresses in his judgment, it was entirely proper for the Attorney General to refer the Bill to the Supreme Court at that stage. By doing so, this has removed uncertainty about the Assembly’s competence to enact the provisions before they come into force.

This judgment will assist both the Welsh and UK Governments as to where the devolution boundary lies. In particular, it clarifies the extent to which the Welsh Ministers can exercise their powers to amend byelaw making procedures in the future.

The Government appreciates this clarification, as the referral was made to clarify the boundary of the Welsh devolution settlement, not to interfere with the policy objectives of the Welsh Government.

The UK Government will continue to make every effort to ensure that the legislative arrangements work effectively. Any referrals to the Supreme Court should not be seen as hostile, but rather the appropriate mechanism of ensuring devolution works smoothly. I am committed to ensuring that and working with the Welsh Government in the future.16

In his welcome for the judgement the First Minister, , stated:

I’m very pleased the Supreme Court has ruled in our favour in this case. Their judgment is confirmation that the Welsh Government's position was right.

As part of our evidence to the Silk commission, we will be making a strong case for the Welsh devolution settlement to be reconstituted on a reserved powers basis. This would have the benefit of reducing the differences between the UK devolution settlements, and ensure that we are considerably less likely to have to appear before the Supreme Court in future.

15 Supreme Court, Local Government Byelaws Wales Bill 2012, Press Summary, 21 November 2012 16 Wales Office, Welsh Secretary Byelaws judgement statement, Press Release, 21 November 2012 [accessed 22 January 2013]

6 I now look forward to continuing to deliver the Welsh Government’s ambitious legislative programme, which will help improve public services and create opportunities for everyone in Wales.17

The Institute for Welsh Affairs drew attention to what it saw as ongoing issues in the boundaries of legislative competence in a series of articles on its Click on Wales site, during and after the judgement.18

The Bill received and became an Act on 29 November 2012.

2.2 First Act of Welsh Assembly The National Assembly for Wales (Official Languages) (Wales) Bill was introduced into the Assembly on 30 January 2012. It passed through all stages and received Royal Assent on 12 November 2012, becoming the first Act of the Assembly. The Act clarifies the duties of the Assembly and the Assembly Commission to operate as bilingual bodies, and place these on a sound statutory footing. The passing of the act was marked in a ceremony to apply the Welsh seal to the letters patent, by the First Minister Carwyn Jones, in the National Assembly. The UK Government Wales Office had referred the Bill to the Attorney General, inviting him to consider whether to refer it to the Supreme Court. The arguments involved were discussed on the Click on Wales website in October.19 In November the Attorney General decided not to make a reference to the Supreme Court.

2.3 Other legislation in progress20 During 2012 the Welsh Assembly Government introduced a Bill into the Assembly on school standards and organisation. This seeks to improve the standards in Welsh schools and strengthen the powers for local authorities to intervene in schools causing concern. The Bill will also put greater responsibility onto local authorities for delivery of education through the Welsh language and require all schools to offer counselling services to pupils. The Bill was broadly welcomed by all political parties in the National Assembly, by the local authorities and the main teaching unions.21

A Bill to introduce a food hygiene rating scheme was introduced in May 2012. This fulfils a commitment made by the Welsh Government within their 5-year strategy Together for Health. The Bill creates a statutory food hygiene rating scheme and introduces an obligation that food businesses registered or approved in Wales must be inspected and must display their ratings to the public. This scheme is based on the (UK) Food Standards Agency Food Hygiene Rating Scheme, which has been in operation since 2000 on a voluntary basis. The legislation will make Wales the only part of the UK where participation in the scheme is mandatory for local authorities and where display of ratings certificates is mandatory on the premises inspected. All political parties have welcomed the Bill, but the Conservative party

17 Welsh Government, First Welsh bill is lawful-Supreme Court rules unanimously, Press Release, 21 November 2012 [accessed 22 January 2013] 18 Click on Wales, Supreme court rejects ‘bizarre ‘Wales Office objection to Assembly Bill, 22 November 2012 19 Click on Wales, Supreme Court dictates pace of Welsh devolution, 15 October 2012 20 NAW Website, Progress of Assembly Bills 21 WGLA, WGLA welcomes the publication of the School Standard and Organisation Wales Bill, Press Release, 23 April 2012 [accessed 15 January 2013] ; NUT Cymru, NUT comment on Standards and Organisation Bill, Press Release, 24 April 2012 [accessed 15 January 2013]

7 flagged up the need to achieve consistency within Wales and other AMs raised the issue of cross-border food services. The Food Standards Agency has worked closely with the Welsh Government on the introduction of this legislation.

A Bill to strengthen and improve the governance arrangements relating to the Auditor General for Wales and to strengthen the involvement of the National Assembly in these arrangements was introduced in July 2012. The Bill would also establish the Wales Audit Office as a corporate body, able to undertake executive functions. This follows on from concerns expressed by the UK Parliament Public Accounts Committee in 2011.

In November 2012 a Bill to make changes to local government democracy was introduced. The main impact was to reform the work of the Local Government Boundary Commission for Wales and to develop consultation procedures on their proposals, implementing the recommendation of the Mathias Review from June 2011. The Bill also makes changes to the work of a number of other regulatory bodies in local government and makes provisions to enhance the information local authorities must provide on their websites.

In December 2012 a Bill was introduced to give effect to the Welsh Government’s commitment to change the system for organ donation. Currently, Wales is subject to the same regime as England, in which explicit consent must be given to use the organs of a deceased person in any transplant. The Bill would introduce a “soft opt-out” system, whereby those resident and dying in Wales would be presumed to have consented to their organs being donated unless they had explicitly stated otherwise. The provisions will apply to people who have lived in Wales for six months or more, but can also apply to Welsh residents who die in other parts of the UK. If the new system passes into law it will have an impact on the transplant consent procedures for health workers in all parts of the UK. This change of system has been under consideration for several years, with consultation exercises carried out in Wales during 2008 and in 2009. If the new system goes ahead it will be introduced in 2015.

Labour, the Liberal Democrats and Plaid Cymru will support the Organ Donation Bill in the Assembly. Conservative AMs will have a free vote. The Bill has been welcomed by health campaigners and charities, but has been opposed by the Archbishop of Wales, leader of the Anglican Church.22 The Welsh Government has also launched a campaign to encourage people to talk to relatives about their wishes for organ donation, side by side with the passage of the legislation.23

2.4 Consultation on Welsh law On 27 March 2012 the Welsh Government issued a consultation document on a separate legal jurisdiction for Wales. The remit of the consultation was:

• what is meant by the term “separate legal jurisdiction”;

• whether there are any essential features for the existence of a separate legal jurisdiction and, if so, what they might be;

• what the consequences of having a separate Welsh legal jurisdiction might be; and

22 David Williamson, “Organ donation system bid is ‘misguided’ says Archbishop, Western Mail, 28 December 2012 23 Julia McWatt, “Campaign calls for a heart to heart talk on organ donation”, Western Mail, 4 December 2012

8 • what the potential advantages and disadvantages of a separate Welsh legal jurisdiction would be.24

Sixty-eight responses to the consultation had been received when the consultation closed on 19 June, and the Welsh Government published a summary and its initial response on 17 August 2012.25 The main output would be to feed into the Welsh Government’s submission to the second part of the inquiry of the Commission on Devolution in Wales (the Silk Commission) in 2013. The Counsel General, Theodore Huckle, made an oral statement to the Welsh Assembly on 26 June, where he updated members on the responses received to the consultation and on other steps being taken by the Welsh Government, with the National Archives, the Law Commission and legal publishers to improve recording and access to the law applying to Wales.26 Theo Huckle also made reference to the responses to the consultation in a speech made to the Society of Legal Scholars at Cardiff Law School on 15 November 2012, and made comments on the Welsh Government’s position about the need for a Welsh Judge on the UK Supreme Court. In his speech he stated:

The case for establishing a separate legal jurisdiction is intimately related to the developing constitutional position of the UK, and Wales’ place within it.

One of the most prominent themes in the responses to the consultation was the belief that a separate legal jurisdiction in Wales without a distinct court system would be like, to quote one respondent: “a cart without a horse”.

Respondents drew attention to the increasing divergence of Welsh law from that applying in England. Respondents believed that as this divergence will continue as the Assembly continues to legislate in its subject areas, the current joint jurisdiction may well gradually come to be seen as untenable over time, thus strengthening the need for a Welsh legal jurisdiction sooner rather than later to avoid a purely reactive and passive response to this inevitable legal and practical development. 27

2.5 Parliamentary Committees The Welsh Affairs Committee published reports on the representation of consumer interests; inward investment and broadband services. The Committee continued to take evidence for its inquiry into support for armed forces veterans. It also began inquiries on the future of dairy farming; future of the Welsh regiments; and cross-border road and rail connectivity. The UK Government published responses to the three Committee reports during 2012.

The Committee held two oral evidence sessions with Paul Silk and other members of the Commission on Devolution in Wales.

The Welsh Grand Committee held a debate28 in February on agriculture and a debate in June on the legislative programme and the Budget.29

24 Welsh Government, Consultation document: A separate legal jurisdiction for Wales,WG-15109, 27 March 2012. 25 Welsh Government , A summary of consultation responses document: A separate legal jurisdiction for Wales,WG-16277, 17 August 2012 26 National Assembly for Wales Record of Proceedings, 26 June 2012, p.54&ff 27 Theodore Huckle QC, Wales: a jurisdiction?, 2012 SLS Centenary Lecture, Cardiff Law School, 16 November 2012. 28 HC Deb 8 February 2012, c1GC 29 HC Deb 20 June 2012, c1GC

9 2.6 Badger controls In 2010 the Welsh Government made plans to carry out a pilot cull of badgers in selected areas of Wales, to attempt to control bovine tuberculosis. This had to be halted, following a Court of Appeal ruling. After the Labour Party won a majority in the Welsh Assembly in May 2011, it made an announcement that proposals for badger culling would be suspended pending a review of the science. This was followed by an announcement in March 2012 by the Environment Minister, John Griffiths, of new Strategic Framework for Bovine TB Eradication30 and the cancellation of the proposed culling, which would be replaced by a badger vaccination programme and other measures.

Wales is the only part of the UK following a vaccination programme, and in England the government intends to carry out a trial culling programme in 2013. On 28 November 2012 John Griffiths announced that more than 1400 badgers had been vaccinated and thanked 31 farmers and landowners for granting access to their land. Further details of the programme can be found in the Library Note on TB vaccination in Badgers SNSC 6447.

3 Political Parties Ieuan Wyn Jones stood down as leader of Plaid Cymru, following twelve years in the post. Leanne Wood was elected as the new leader, securing victory with 55.1% of the votes, over Elin Jones who polled 41% in the second round of voting on 15 March 2012. Former leader Lord (Dafydd) Elis-Thomas also stood but was eliminated on the first round of voting. Leanne Wood became the first woman to lead the party and also the first not to speak fluent Welsh. She has been an AM since 2003, and made headlines that year for refusing to attend the official opening ceremony of the National Assembly by the Queen. In her acceptance speech, she defined Plaid as a party of the left.32 In July 2012 Elin Jones was appointed Deputy Leader of the Plaid group in the National Assembly.

In local government elections held on 4 May 2012, Labour won 10 of the 21 Welsh councils, taking control in Cardiff, Swansea and Newport. The Conservatives lost 405 councillors, while the Liberal Democrats lost 336. Labour gained 823 extra seats, the party’s best result since local government reorganisation in 1996.

On 14 May 2012 Peter Hain resigned from the role of Shadow Welsh Secretary, stating that he wished to pursue other interests and campaign for a Severn barrage, but that he intended to remain MP for Neath and stand again at the next election. Peter Hain served as Secretary of State for Wales from 2002 to 2008 and again from June 2009 to May 2010, when he became Shadow Secretary. Owen Smith, the MP for Pontypridd since 2010, was appointed Shadow Welsh Secretary on 16 May 2012.

A by-election for the Westminster constituency of Cardiff South and Penarth was held on 15 November 2012. This was caused by the resignation of Alun Michael, who had held the seat for Labour for twenty-five years, to stand as new Police and Crime Commissioner for South Wales. Labour held the seat, with Stephen Doughty becoming the new MP.

David Jones was appointed Secretary of State for Wales on 4 September 2012, having been a Parliamentary Under-Secretary since 2010. He replaced Cheryl Gillan, who had been Welsh Secretary since the May 2010 General Election. There was some comment on the

30 Welsh Government, Environment Minister announces programme of badger vaccination, 20 March 2012. 31 Welsh Government, Badger vaccination total tops 1400 , Press Notice, 28 November 2012 32 Matt Withers. “Victorious Wood in pledge to take Plaid in new direction” Western Mail, 16 March 2012

10 fact that David Jones represented a constituency in Wales, which Cheryl Gillan did not, and that he had previously been an Assembly Member in 2002-3, the first Welsh Secretary to have been an AM.

4 The Silk Commission Details on the establishment of the Commission on Devolution in Wales, chaired by Paul Silk, can be found in Library standard note SN/PC/6108. The Silk Commission was established to review the financial and constitutional arrangements for Wales and to report to the Secretary of State for Wales. Its first remit was:

Part I: financial accountability

To review the case for the devolution of fiscal powers to the National Assembly for Wales and to recommend a package of powers that would improve the financial accountability of the Assembly, which are consistent with the United Kingdom’s fiscal objectives and are likely to have a wide degree of support.

The Commission used ICM to carry out opinion polling in Wales and published the results in July 2012. These showed support of up to two in three people sampled in Wales for devolution of tax and borrowing powers to the Welsh Government.

The membership of the Commission changed in October 2012, when the Labour Party nominee and former Finance Minister, Sue Essex, resigned. Her resignation was interpreted by some commentators as a sign that she had become disillusioned with the process and that all was not well within the Commission.33 Sue Essex however stated that she was particularly interested in the financial elements of the commission’s work and felt that was the appropriate time to withdraw. Jane Davidson, a former Education and Environment Minister in Wales, was nominated by the Labour Party to join the Commission.

The Commission published its first report, Empowerment and Responsibility: Financial Powers to strengthen Wales, on 19 November 2012. The report makes 33 recommendations which, if implemented, will increase the financial accountability of the National Assembly for Wales and make it responsible for determining a proportion of its own budget for the first time. These include:

The Commission recommends that the National Assembly for Wales should be empowered to take tax decisions in devolved policy areas, starting with the smaller yielding taxes:

• landfill tax, stamp duty land tax, and aggregates levy should be devolved and business rates should be fully devolved;

• Air Passenger Duty should be devolved for long-haul flights initially, with future full devolution possible;

• the Welsh Government should have increased power to introduce levies reflecting Welsh priorities.

To make the Welsh Government responsible for funding a material amount of the money it spends, significantly improving financial accountability, the Commission recommends:

33 Martin Shipton, Sue Essex resigns as Labour’s nominee on Silk Commission, Wales Online

11 • responsibility for income tax should be shared between Cardiff Bay and Westminster, with the Welsh Government being able to vary income tax rates within the UK income tax structure;

• the transfer of income tax powers should be conditional upon resolving the issues of fair funding in a way that is agreed by both the Welsh and UK Governments;

• income tax devolution should be subject to a referendum and provisions for the referendum should be contained in a Wales Bill, which should be introduced in this Parliament to take forward the report’s recommendations;

• corporation tax should not be devolved unless it is devolved to Scotland and Northern Ireland. However, Wales should be able to have more than its population share of Enterprise Zones with enhanced capital allowances if the Welsh Government pays the incremental cost.

Where an existing UK tax is devolved, the report proposes fair mechanisms for determining the reduction in the block grant that would follow.

The report also makes a number of recommendations in relation to borrowing powers, including:

• a power to borrow to support increased investment in infrastructure;

• a power to borrow to fund current spending to manage greater variability in tax revenues;

• borrowing powers to be subject to prudent limits agreed with HM Treasury.

The report also recommends other improvements in financial accountability, including publication of more information on the Welsh public finances, the development of a Welsh Government Treasury function and allowing the National Assembly to decide its own budget scrutiny processes.

The package of recommendations would ensure that around one quarter of devolved spending in Wales would be determined by taxes decided in Wales (including Council Tax and Business Rates).

The Commission’s Chair, Paul Silk, said:

Our package of recommendations meets the test of our Terms of Reference: to come up with recommendations which improve financial accountability, are consistent with the UK’s fiscal objectives and command a wide degree of support. In order to achieve this, we placed great emphasis on gathering evidence, consulting widely and listening to the wide range of views presented to us.

The Commission worked closely as a team over the past year and have all agreed recommendations which we firmly believe would benefit Wales and strengthen its democracy and economy. Our proposals would provide the Welsh Government with an important set of fiscal levers and would enable political parties in Wales to offer people real fiscal choices.

12 What we are recommending is significant and historic. It will give Wales its own tax and borrowing system for the first time. The Commission is delighted to present our agreed report to the UK Government and we hope for speedy implementation.34

The UK Government welcomed the report, but so far has not given any commitment on when it will respond to the recommendations.

The Chief Secretary to the Treasury, Danny Alexander said:

I am grateful to Paul Silk and the Commission for the expertise and rigour that they have brought to this important work. We look forward to reviewing the Commission’s recommendations and working with the Welsh Government and all parties in the Welsh Assembly to deliver an ambitious outcome that best meets the needs of the people of Wales. 35

34 Commission on Devolution in Wales, Commission present their Fiscal Powers Report to the Treasury, Press release, 21 November 2012 35 Wales Office, UK government welcomes report on Welsh fiscal devolution, Press release, 21 November 2012

13