Reacting to Holtham

I've found the reaction to the Holtham Commission's report interesting. There was a good selection of differing views on last week's Dragon's Eye:


It's probably fair to say that a good number of people think this report has come at just the wrong time ... or at least that the second part of it has. The recommendations contained in the first part of the report over replacing the Barnett Formula with a formula based on need remain unchanged, and the report has also incorporated the Commission's model for how a needs-based formula could be calculated. But the second part looked beyond the immediate problem at how Wales should be funded in future.

Betsan Powys might well have a point when she said that the range of political reactions to the second part has actually resulted in people from all sides of the political spectrum reaching a remarkable degree of consensus about the first part. Personally, I think the consensus was already forming, and that the only reason why the parties were not in open agreement was because of the election in May. But I suspect that the force behind that consensus is not primarily one of fairness or principle, but simply of wanting to get more money. If operating on the same principles happened to result in Wales getting less money, we can be sure that most politicians would find some new principles. But that is the one thing we cannot afford to do. If anything is clear from the interview with Gerry Holtham, it's that the power to tax is a fundamental part of government, and therefore the principle of having a Welsh Government that can just spend the money it is given without being accountable for how that money is raised is flawed. Even the most local level of government can set its own precept, which is then collected as part of Council Tax.


But against that backdrop, politicians from across the political spectrum seem anxious to say how much they are opposed to the Assembly getting tax varying powers, even though they are all in favour of devolution and even of extending the devolution settlement we have. Glyn Davies and Rhodri Morgan are two who made their opposition to tax varying powers perfectly clear.

Rhodri Morgan justified his position by saying that if the 1997 referendum had included an option on tax varying powers it would certainly have been lost. But I have to question that. As I see it, the issue was that we were being offered a very limited form of devolution not because we did not have the appetite for anything more, but because a tranche of Labour MPs were determined not to let us have anything better. It was very hard to stir any great enthusiasm for something so watered down, and that is why the turnout was low.

But, irrespective of what may or may not have been the case then, it is very clear what the situation is now. In a YouGov poll last year, this question was asked:

To what extent, if at all, do you agree or disagree with the following statement?

"The National Assembly for Wales should have the same level of powers as the Scottish Parliament."

Strongly agree ... 35%
Tend to agree ... 28%
Don't know ... 9%
Tend to disagree ... 15%
Strongly disagree ... 13%

YouGov, 23 October 2009

The margin of agreement was 63% to 28% ... over two to one. By clicking the link for the full data, we can see that supporters of every party agreed with the statement: the Tories by 54% to 42%, Labour by 68% to 24%, the LibDems by 59% to 34% ... and Plaid by a margin that makes me blush with pride.

So doesn't it seem rather odd that people like Rhodri Morgan and Glyn Davies should be so adamantly against what the people that vote for their parties want?


In the programme Betsan Powys also said that the polls commissioned by the BBC showed that about a third of people in Wales wanted a Senedd with powers of taxation ... and that this high a figure was unexpected. I have to tell her that she should be very much more surprised, because that was only those who want Wales to have powers of taxation as a devolved nation within the UK. It excluded those who want Wales to set its own taxes as an independent country.

These are the options and percentages for the past two years:

February 2010 (with 2009 in brackets)

Wales should become independent, separate from the UK and the European Union ... 4% (was 5%)

Wales should become independent, separate from the UK but part of the European Union ... 7% (was 8%)

Wales should remain part of the UK with its own Assembly which has full law making powers and some taxation powers ... 40% (was 34%)

Wales should remain part of the UK, with its own Assembly which has full law making powers BUT NO taxation powers ... 13% (was 10%)

Wales should remain part of the UK with its own elected Assembly which has limited law making powers only (as it has now) ... 18% (was 21%)

Wales should remain part of the UK and the Assembly should be abolished ... 13% (was 19%)

ICM, February 2010 and February 2009

So the latest margin in favour of taxation powers stands at 51% to 44%. In fact the answer to this question was very close to the 52% to 39% margin for those who said they would vote in favour of primary lawmaking powers in the same poll. So Betsan's "third" is considerably short of the mark. The appetite for the Assembly to have some tax setting powers is very much stronger than she and her colleagues thought.

In fact the question has been asked, although with slightly different options, for several years. The margins in favour of the Assembly having taxation powers were:

55% to 41% in 2006
47% to 44% in 2007
50% to 46% in 2008

I'm showing these figures to demonstrate that the appetite for powers of taxation is much stronger than some people would have us believe. I fully accept that people like Rhodri Morgan and Glyn Davies are against powers to set taxes and I respect their candour, but I have to say that I find the attitude of those who do want taxation powers slightly more difficult to understand.

Apart from in 2009, the BBC's annual poll has shown that more people are in favour of tax varying powers than are against. So those of us who want to see it shouldn't be frightened off saying so for fear that it will make next year's referendum on primary lawmaking powers harder to win. First it won't really make any difference one way or the other but, more importantly, I can imagine those who want to see it backing themselves into the position where they are kept on the defensive. I don't want people in Plaid Cymru to feel they have to answer the "slippery slope" question by saying, "Let's not talk about tax, this referendum is only about primary lawmaking powers."

It's true, but it's not a good enough answer. When asked, we should be bold enough to say that this referendum is just one step on the road to the Wales we want. When asked, we should say that we are working towards devolution of not only taxes and borrowing, but of police, justice and prisons, of large scale energy, and of the welfare and benefits system as well. As I noted here 59.5% of us want us to make decisions on the benefits system in the Senedd, compared to only 22.7% who want those decisions made in Westminster. We need to display the courage of our convictions, for we know where we want to go and people will follow us because we have a coherent vision. Look again at how Betsan characterized the "drama of the day" shock reaction of other parties to what the three economists said in the report ... but Plaid's reaction was to point out that they have now said something not dissimilar to what we've been saying for a very long time.


So if Yes campaigners from other parties want to explain that they are only in favour of primary lawmaking powers, but may or may not take a position on further devolution at some point in the future, we should let them do that explaining for themselves. But what is the point of us in Plaid Cymru—and those in other parties who have said that they want to take devolution yet further—trying to hide what we believe?

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Anonymous said...

i think the important point to remember is that next year's referendum will be on the issue of the welsh assembly gaining primary lawmaking powers. The issue of the assembly gaining tax varying powers will not be a matter for consideration in that ballot.

I feel strongly therefore that the priority for those of us who wish to see the devolution process continue to develop and evolve in wales should put their energies into ensuring there is a yes vote in next years referendum rather than getting distracted by other 'considerations'.

As we should be in no doubt that if we cannot secure support from the people of wales for lawmaking powers for the welsh assembly there is little prospect of further progressive developments for devolution in wales - indeed a defeat in next years referendum will endanger the entire devolution project for wales!

Leigh Richards

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