Wales in the UK

This article is part of our 'What's next? Key issues for the Sixth Senedd' collection.

Brexit has fundamentally changed the responsibilities of governments across the UK, making it more important than ever for them to cooperate. Can they find ways to work together effectively?

We think of responsibility for policy as either devolved to the Senedd or reserved to Westminster. The reality is more complex. The boundaries of where power lies are often blurred. Governments across the UK need to find ways to work together to manage these tensions – or risk failing to make effective policy decisions and tackle shared challenges.

Brexit blurred these lines of responsibility further by transferring powers previously exercised by the EU to Wales and Westminster. Since 2016, the governments have worked to develop new ways of managing these powers. But they have struggled to agree on how these new structures should work and where responsibility should lie.

Brexit has shifted powers to governments in Wales and Westminster

The Welsh Government is now responsible for about 4,000 new functions previously exercised at EU level. To take just one example, it can now change how water safety and quality are monitored. Constraints on the Senedd’s powers set by EU law have been removed – so if the Senedd wanted to change retained EU law on water quality, it could do that too.

The UK Government also has a wide range of new responsibilities in reserved areas which impact on devolved policy, from establishing a new UK residency scheme for EU citizens to negotiating new international trade agreements (see the article on Wales in the new international landscape).

Control of funding in devolved areas has changed too. For example, where the Welsh Government previously managed about £295 million per year in EU structural funds, the UK Internal Market Act 2020 now gives the UK Government powers to spend money in devolved areas like health and education. The UK Government plans to use these powers to establish a new Shared Prosperity Fund and a Levelling Up Fund (see ‘budgeting for recovery’ article). The total value of this funding is not yet known.

The governments have developed ways of managing their new responsibilities – but tensions remain

The governments recognised that they would need to change the way they worked together to manage these new responsibilities. For example, if the UK Government negotiates an international trade agreement that requires animal health checks on exports, the Welsh Government has to make or agree legislation to implement those checks. Equally, if the Senedd decides to ban the sale of certain sugary drinks, that could affect drinks producers based outside Wales too.

They sought to develop ‘common frameworks’ in about 26 policy areas, including food safety and air quality. These are agreements to work together to decide when to align policy and when to diverge, sometimes underpinned by legislation. The aim was to have all frameworks agreed by December 2020. But progress was slowed by delays in the UK-EU negotiations and final agreement hasn’t yet been reached.

In July 2020, the UK Government said that it didn’t believe that common frameworks would be sufficient to manage divergence. It proposed what would become the UK Internal Market Act 2020.

The Act establishes a new system for managing trade within the UK. At its heart is the idea that goods and services that meet standards set in one country of the UK should be able to be sold unhindered in the others, even if standards there are different.

If the Senedd wants to ban the sale of certain sugary drinks, can it do this?

For example, the Senedd could ban single-use plastics. However, the Act means any single-use plastics permitted or imported into the rest of the UK could still be sold in Wales. The ban would apply to businesses based in Wales, but not to those based elsewhere in the UK. So the Senedd would need to consider if a ban would put businesses in Wales at a disadvantage – and if it would achieve its intended purpose.

The last Welsh and Scottish Governments opposed the proposals. They said the Act would go further than the rules of the EU single market in limiting divergence within the UK. Committees in the Fifth Senedd also argued that it would set a new limit on devolved powers. The UK Parliament passed the UK Internal Market Bill in December 2020, after the Senedd and Scottish Parliament voted not to grant legislative consent.

The future of intergovernmental relations is still emerging

With the Internal Market Act now law and the UK-EU Trade and Cooperation Agreement reached, there are still questions about how the governments should make decisions together and resolve disputes.

The Joint Ministerial Committee (JMC) has been the main structure for managing intergovernmental relationships since 1999. The JMC is a set of committees bringing together ministers from the UK and devolved governments. They meet on an ad hoc basis to discuss common policy interests and address disputes.

As things stand, the JMC can reach non-binding agreements, but can’t make executive decisions. It can consider disputes between governments, but devolved governments have criticised the dispute resolution process as weighted towards the UK Government.

In 2018, the governments began a joint review of intergovernmental structures to “ensure they are fit for purpose in light of the UK’s exit from the EU”. Politicians from different parties and parliaments agreed that “substantial reform” was needed.

Three years on, the governments set out progress with the review, including proposals for new intergovernmental structures and a reformed dispute resolution process. The then Counsel General Jeremy Miles called this progress, but said he wanted further negotiation on how the governments should work together on EU and international relations and on finance. The next Welsh Government will need to decide how it wants to help shape the outcome of the review.

The Senedd will need to find ways of scrutinising how the governments work together

Without finding effective ways to cooperate, the governments will risk failing to develop law and policy that works for Wales. This means that the Sixth Senedd will need to scrutinise how well the Welsh Government is working with the other governments of the UK. It will also need to consider how proposed legislation and common frameworks could develop alignment with, or divergence from, other parts of the UK.

Understanding and influencing intergovernmental working can be difficult. People and businesses can influence each government individually, but monitoring and influencing negotiations between them is more challenging. And parliaments must hold their own governments to account, so scrutiny of intergovernmental working could fall between the cracks.

One way to improve scrutiny of intergovernmental working could be increasing interparliamentary cooperation. The Interparliamentary Forum on Brexit (IPF) was set up in 2017 to bring together representatives of committees from UK legislatures. As well as recommending reform of intergovernmental relations, it called for better parliamentary oversight. The IPF last met in September 2019.

The Fifth Senedd’s External Affairs and Additional Legislation Committee supported increased interparliamentary working in its legacy report, saying this “offers at least the prospect of occasional scrutiny outcomes that are greater than the sum of their individual parts”. However it chooses to do it, the Sixth Senedd will need not just to hold the Welsh Government to account for how it works across the UK but to articulate and develop its own role in the UK’s constitution.

Article by Lucy Valsamidis and Nia Moss, Senedd Research, Welsh Parliament