We live in extraordinary times for Wales. Unfolding devolution offers new opportunities to influence the future of the country while the prospects for the United Kingdom look more uncertain than at any time in the last three hundred years. The pace of change is breathtaking: until recently, few people were discussing either a separate Welsh legal jurisdiction, or the limiting impact of the conferred powers model on the National Assembly. Current events, not least in Scotland, lend urgency to the need to understand divergent public opinion across the United Kingdom, and for the people of Wales to express their will. Debate on these topics too often relies on emotional sound bites rather than strategy or evidence. Wales does not have so much a democratic deficit as a ‘debate deficit’ about its options and objectives.
The Welsh exploration cannot be considered in isolation. The Scottish Parliament has announced a referendum on that country’s independence, to be held on 18 September 2014. The outcome will be significant for the other countries of the United Kingdom, and for the international relationships of the UK. The local elections of early May 2013 also saw a rise in the English vote for the UK Independence Party, prompting the UK Government to publish a bill proposing a referendum on membership of the European Union by the end of 2017. Current survey evidence suggests that a clear majority in Scotland would vote to remain in the EU. Evidence in Wales is more mixed but there can be no doubt that the Welsh electorate is less hostile to membership than that of England.
The increasing divergence within the UK and across the EU challenges Wales to determine whether and how it should shape its own approach in a wide range of policy fields. Meanwhile, attractive features of European engagement have been jeopardized by the economic and fiscal crises. The conferences placed Wales firmly within its European context and provided a substantive review of the issues of fiscal autonomy and capacity at the sub-national level in Europe. They were informed by research led by academics at Cardiff University, which enabled a detailed examination of experience in comparator countries.
Wales: defining the future in two Unions
Wales – its people and its Government – is increasingly active in defining its own future. The Silk Commission was established in October 2011 by Welsh Secretary Cheryl Gillan to review the present financial and constitutional arrangements in Wales. The first part of the Commission’s work looked at fiscal powers, and the second reviews the powers of the National Assembly for Wales. The recommendations of Part One of the Commission, endorsed by the whole Assembly after extensive consultation, set out a path towards greater financial responsibility. Moves towards enhancing fiscal capacity come as a package, not as individual measures, and so individuals and parties in the debates need to look at the emerging picture of devolution as a whole. The under-performing Welsh economy must be a core priority.
There are real constraints: resources and fiscal capacity, political leadership and national capacity, the costs of change and honesty about the first ten years of devolution. The appetite for more devolution needs to be matched by delivery and transparency. A constructive debate will rely on better political communication both with the people of Wales and more broadly across the United Kingdom.
What next for Wales in Europe?
Devolution takes place within the arenas of the European Union and the United Kingdom. Wales needs to be proactive in discussions about the developing role of the larger EU and both ambitious and competent in using the opportunities for sub-national regions within its institutions. The future of the UK as a whole is the subject of emotional debates: Wales must speak for its own distinctive interests and national character, and play a full role in a mature UK-wide discussion about what comes next.
The future constitutional arrangements of the European Union, and the nations and territories within it, are potentially being transformed by the on-going banking, sovereign debt and euro crises, as well as by the uneven economic performance of EU member states. More broadly across the European Union, localities and regions are having to comply with restrictive new budgetary rules piloted by the EU. This new debate frames territories as saints and sinners, with the EU seeing non-compliant players as in some sense moral failures.
At a country level also, the demands of fiscal rectitude are straining the long-held tenets of financial equalisation and the transfer of resources from richer regions to poorer ones. Even in the co-operative federalism of Germany, the debts of regions such as Berlin are putting pressure on solidarity. Across the European Union, this conflict is intensifying. Within the UK, a much more centralised currency union, equalisation is also under threat.
Even though the UK is not a member of the euro, Wales still has reason to be concerned about these developments. The European Union provides substantial resources for Wales through its regional funds, the Common Agricultural Policy (CAP) and the Single European Market, securing precious jobs. The UK is a powerful member-state and, in key respects, Wales benefits from being part of this large entity.
Those benefits would be threatened in the event of Wales being forced to leave the EU, or at least significantly alter the terms of its relationship, in the wake of changing European policy of any future UK Government. The counterpart to Welsh solidarity within the UK must be participation in crucial choices for Wales. The determination of the UK’s future constitutional relationship with the EU, whether or not ultimately the subject of a referendum, must also involve consultation and negotiation with the Governments of Wales and Scotland. The Welsh Government has gained confidence over time and been emboldened to make a more resolute case in defence of Welsh European interests, which are not automatically aligned with those of the UK as a whole, whether in relation to the CAP, to structural funds or to social Europe.
What next for the United Kingdom?
Is the UK moving towards a new Union or some kind of federalism? The broad direction of travel is to looser ties, but with no agreement even on the nature of discussion about the constitutional settlement. There is, though, widespread unhappiness with the status quo, ranging from the campaigns for independence in Scotland to Sinn Fein’s call for a poll on Northern Ireland’s constitution. Alternatively, an independent Scotland could leave behind a rump UK which is more opposed to devolution than before.
The ‘English question’ is central to debates about the UK’s future, for it is in England that national identity, euro-scepticism and a feeling of disenfranchisement are closely interwoven with dislike of multi-level governance. The surveys show different pictures in Wales, Scotland and Northern Ireland. Debates about changing constitutional arrangements need to recognise these differences; for example the history of Wales seems to have made its people much more comfortable with power-sharing – across parties, with London, within Europe – than the English.
The picture is further complicated by the interaction between the two Unions. Scotland’s referendum has UK Government agreement and so some form of fast-track accession to the EU might be achieved. Challenges would arise around the terms of membership and the application of current UK opt-outs. Of course, if the rest of the UK then withdrew from the EU, Scotland might be forced to abandon any UK links which the Scottish National Party (SNP) presently proposes to retain, including sterling. The SNP is firmly in favour of remaining in the EU and part of the party’s referendum platform is now the argument that the only way for Scotland to remain in Europe may to be vote for independence.
Given the particular ambitions of Wales and its potentially powerful relationship with pan-European resources and structures, this presents a major challenge. It is hard to see how Wales would prosper in a ‘little Britain’ outside the EU. Now, more than ever, Wales needs to share and encourage confidence and pride across the Union, fostering an open, evidence-based and mature debate about the future.
Centralisation to post-sovereignty: what price independence?
Many complex situations and alliances may be envisaged within nations and between them even more so within the unique supra-national alliance of the European Union, but some are not politically or fiscally feasible in the foreseeable future.
Currency union is a major pressure for convergence, both in the Eurozone and within the UK. Constraints have tightened in the banking crisis, but many of those pressures existed before 2008. The financial situation has not prevented increasing divergence in a wide range of policy fields, from environmental protection to urban renewal. This is obvious at sub-national level: within Belgium, for example, there is significant divergence on issues such as regulation of genetically modified crops, while the UK is seeing growing variation in education practices. Some regional governments are even moving away from devolution; for example those Spanish regions, such as Murcia, returning powers to Madrid.
Territories have different motives for seeking autonomy, devolution, partial sovereignty, independence, secession or departure from the EU. Some are external, particularly the pressures of the Fiscal Compact (the Treaty on Stability, Coordination and Governance). Many are internal, arising from history, pride or a sense of unfairness. Frustration with national governments is a significant motivator in Catalonia and Scotland, highlighting changes in ambitions and capacity over time and in different circumstances.
The practical challenges of the relationship between decisions on autonomy and the structures of the EU are important, not least with regard to the financial issues. In effect, the pro-independence parties within minority and stateless nations have come to campaign for what, in Scotland, is known as ‘independence-lite’ within Europe despite the centralising pressures of the banking crisis.
Conclusion
Public will, local ambitions, cultural pride and harsh financial reality form a tight knot. Untangling the opportunities and challenges for Wales, the United Kingdom and the European Union relies on informed and honest debate. Wales must continue to promote a mature debate about national identity and multi-level governance. The impact of the Scottish referendum emphasises, especially for Wales, that the actions of one region have enormous implications for their neighbours, historical allies and other communities articulating their own ambitions. At the same time, the growth of English concerns risks a paradoxical outcome: a push for English sovereignty outside Europe could significantly affect the integrity of the UK as the smaller nations see the EU as the more attractive place in which to operate. The situation emphasises why stateless nations, such as Wales, increasingly seek to define for themselves what they want, what is achievable and their path to its delivery.
Wales is poised to take more responsibility for its future and undertake that strategic work of self-direction within the real financial and political constraints. The unanimous support for the devolution of taxation proposed by the Silk Commission is one strong sign of the country’s determination to work in a practical and coherent way to improve the accountability of the Welsh Government and to seize some of the levers which will further enhance Welsh solutions. The Welsh experience of multiple layers of government, negotiation and practical problem solving can be of service in shaping and sustaining the two Unions, both of which are fundamental to Wales’s continuing success.
Note:
The full conference report from the
British Academya
nd
Learned Society of Wales, ‘Wales, the United Kingdom and Europe’, written by Sarah Tanburn, is
available here
.
The report and above post record the views expressed by speakers and attendees at the two conferences and do not represent an established position of either the British Academy or the Learned Society of Wales.