Devolution in Wales

Monday 06 May 2024 marked 25 years since the first election to the Senedd in 1999.? It is understandable, perhaps, that devolution in Northern Ireland and Scotland get most media coverage and the situation in Wales largely forgotten.?

On the anniversary, I was disappointed to read and see coverage that devolution in Wales was not even respected by the people of Wales.? This must be because they do not understand the powers that have been devolved from Westminster.? Yet, also, we should be looking at the devolution of future powers.?

So, as someone who calls themselves British (not Welsh, although I am a Welsh Taxpayer), I thought I would write about why individuals and professionals should be paying attention to Wales.

When we look at the United Kingdom, it is important to realise that devolution means we must look at each nation individually.? The nations of England, Scotland and Wales are collectively known as Great Britain, with Northern Ireland being the fourth nation.? Hence the reason our passports say, 'The United Kingdom of Great Britain and Northern Ireland’.?

As I always say, just because an announcement is made at Westminster in, for example, a Budget or Autumn Statement, does not mean that it applies UK-wide.? Equally, an announcement in the Parliament of a devolved nation does not mean it applies UK-wide.? However, because payroll and reward are UK-wide professions, we must take notice (think Income Tax, justice and employment law).

Following a July 1997 UK Government White Paper ‘A Voice for Wales’, a Welsh referendum in 1997 asked nationals their views on two questions:?

1. ‘I agree there should be a Welsh Assembly’ (Yr wyf yn cytuno dylid cael Cynulliad i Gymru), or
2. ‘I do not agree there should be a Welsh Assembly’ (Nid wyf yn cytuno dylid cael Cynulliad i Gymru)

Over 2 million individuals could vote once, essentially, for or against the establishment of some form of self-governing in this nation of the United Kingdom.? The ballot saw a turnout of just over 50% of those eligible to vote, with a 6,721 majority supporting the establishment of a Welsh Assembly (50.3% to 49.7%).?

The UK Parliament passed the Government of Wales Act 1998 which came into force following Assembly elections in 1999.?

The Government of Wales Act 2006 (GOWA 2006) subsequently separated the Assembly into two:?

1. The Welsh Government (think UK Government of one political party) and
2. The National Assembly for Wales (think UK Parliament comprising all Members of Parliament)

The National Assembly was renamed the Senedd in 2020 – Senedd is the Welsh for Parliament.? Acts have been passed since 2006, all updating GOWA 2006 which is the governing devolution legislation for Wales.? This largely repealed the 1998 Act, though some parts remain in force, mainly for technical reasons.?

Anything to do with devolution powers in Wales is contained in GOWA 2006 or comes because of powers in the Act.? Think, for example, of the power to vary Income Tax rates for Welsh Taxpayers.? This came because of the Wales Act 2014; however, this updated GOWA 2006 which remains the primary devolution legislation.

Welsh devolution operates under a ‘reserved powers model’.? This means that the Welsh Senedd can legislate for anything that is not expressly reserved for the UK Parliament.? The Wales Act 2017 updated GOWA 2006 with two sections in GOWA 2006 that define Welsh devolved powers in practice:?

1. Schedule 7A defines ‘reserved issues’.? These are areas where only the UK Parliament can legislate
2. Schedule 7B sets out the ‘general restrictions’

As per Schedule 7A on GOWA 2006, ?if a topic is explicitly listed, the Welsh Government cannot legislate.? These areas include:?

• The single legal jurisdiction of England and Wales
• Tribunals
• Employment rights
• Home and Foreign affairs?
• Defence
• UK currency and
• Energy

?Essentially, these are issues of national importance.

In addition to the areas where the Senedd cannot legislate, Acts cannot breach any of the restrictions detailed in Schedule 7B.? This is a complicated area and if there are disputes about Wales’ legislative competence (between the Welsh Senedd and the UK Government), it often comes because of disagreements about the breadth of the restrictions imposed.?

As an example, Acts of the Senedd must not modify certain criminal offences (such as serious offences against the person and any sexual offences).? Neither can they modify private law (such as contract, tort, property) unless it is for a devolved purpose – and this is where there is sometimes confusion between whether an issue has been devolved totally or whether there are restrictions (in 7B).

So, when it comes to the devolved issues, if they are not specifically mentioned in 7A or restricted by 7B, by default, Wales can legislate.? This is defined as Wales having ‘legislative competence’.?

There are 20 areas which I set out below – there are many areas where the devolved responsibilities cross-over:?

(1) Agriculture, forestry, animals, plants and rural development

Natural Resources Wales (NRW) is the Welsh equivalent of the Environment Agency in England.?

(2) Ancient monuments and historic buildings

Think Visit Wales instead of Visit England.?

(3) Welsh Culture

Including arts and crafts, museums , galleries, libraries archives.?

(4) Economic development

Think, for example, about Wales devolved taxes, collected by the Welsh Revenue Authority not HMRC.? Income Tax is not a devolved tax.?

(5) Education and training

Apprenticeships and, to some extent, Student Loans (though powers are limited as they are collected by HMRC as the UK’s tax collection agency).

(6) The environment

Again, think Natural Resources Wales (NRW).?

(7) Fire safety and rescue services

Including Building Regulations (which are not the same as those in other parts of the UK) and fire and rescue service (the fire engines and stations).?

(8) Food and drink

Including issues such as recycling and minimum alcohol prices but not food hygiene ratings which are governed by the Food Standards Agency (or Foods Standards Scotland).?

(9) Health and health services

The Welsh Government has authority over the way NHS Wales is run (or GIG Cymru).? You will often hear references to comparisons of performance in NHS England (run by the Conservative-led UK Government) and NHS Wales (run by the Labour-led Welsh Government).? Plus, think about the different responses in each nation during the Covid-19 pandemic.?

(10) Highways and transport

Think about the nationalised rail system in Wales (Transport for Wales), the 20 mph speed limit and how bus passes are given at the age of 60 (like Scotland and Northern Ireland but unlike England).?

(11) Housing

Including housing supply and homelessness but powers also cover Land Transaction Tax (the Welsh devolved equivalent to Stamp Duty and not the same as Land and Buildings Transaction Tax in Scotland).?

(12) Local Government

Think about how Wales did not have Local Government elections at the start of May.? ‘Local’ means community and town councils responsible for services in their own local area.?

(13) The Senedd

Including the role and composition of the Senedd.? Think about the vote to increase the number of MSs (Members of the Senedd) from 60 to 90.

(14) Public sector

A wide sector that brings in other services – GIG Cymru is public sector for example. Public sector bodies have had a duty to report gender pay gaps figures since 2011, unlike England where it didn’t come in until 2017/18.

(15) Social welfare

The provision of social care in Wales.? Think about the now-forgotten Health and Social Care Levy which was only ever intended to fund the English system? (much like the Apprenticeship Levy only funds the English apprenticeship regime).

(16) Sport and recreation

Including sport and physical activity spending priorities, supported by Sport Wales (which is not the same as Sport England established by the Department for Culture, Media and Sport).?

(17) Tourism

?Again, think Visit Wales for the promotion of tourism in Wales.?

(18) Town and country planning

This applies to both building and planning permission in Wales which are not the same as permission in other parts of the UK – don’t I know it!

?(19) Water and flood defences

Wales is not the same as England and it is sensible this is devolved.? The provision of water is nationalised in Wales to D?r Cymru (Welsh Water).

?(20) The Welsh language

The fascinating world of using and preserving the Welsh language, essential if you live in a Welsh speaking area as I do.? Both my MP and MS are Welsh speakers and it helps to communicate in that language, if only at the start and end of an E-Mail.

All the devolved powers are important for Welsh residents which is why I was so surprised that it is not realised in this country, even by members of my Welsh language group.?

However, some of the devolved powers may impact the payroll and reward profession.? For example:?

• The fact Local Government and powers of the Senedd are devolved meant that we had to consider changes to Council Tax Attachment of Earnings Orders (CTAOEs) issued by Welsh Local Authorities in April 2022.? This led to payroll software having to cope with different earnings thresholds when comparing a CTAEO issued by an English Local Authority versus one issued by a Welsh Local Authority
• Although not a devolved tax (Income Tax is a shared tax), payroll, reward and software developer professionals always need to look for the annual setting of the Welsh Rates of Income Tax (WRIT)

Then, of course, we must look for developments.? Possibly, a UK and Welsh Government of the same political colour will progress issues such as:?

• Bank Holidays, perhaps along the lines of the powers already in place in Scotland and Northern Ireland who can set Bank and Public Holidays different than those in England and Wales
• Justice, again, perhaps along the lines of the devolved nature in Scotland and Northern Ireland, breaking the ‘England and Wales’ justice system
• Rail infrastructure, perhaps exacerbated by the classification of HS2 as an England and Wales project when all lines are England only
• Taxation, perhaps along the lines of the Income Tax sharing powers of the Scottish Government – or more
• Welfare, perhaps along the lines of powers already in Scotland

I have written far too long on this issue, save to say that support for devolution is growing in Wales from its near 50/50 split in 1997.? Dare I also say that support for independence from the UK is also growing though, possibly, the devolution of further powers and more self-governance will quieten this debate.?

Fundamentally, Wales is a separate country just as it is different from Scotland and Northern Ireland.? If we are to truly call ourselves UK payroll and reward professionals, we do need to pay respect to that.?

Going back to one of my first lines, just because an announcement is made at Westminster does not mean that it applies UK-wide.? It all depends on whether the issue is devolved or applies UK-wide.

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