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Introduction

Our final chapter sets out our conclusions and recommendations for improvements to the governance of Wales.

Overview

When we began our work, we thought we were embarking on an inquiry about constitutional principles, sovereignty, and governance. These have indeed been major themes of our work, as indicated by our interim report. Once we embarked on our conversation with the people of Wales it became clear that there were important issues with the workings of democracy in Wales that also needed our attention. We began our report with a summary of citizens’ views and our proposals to strengthen Welsh democracy.

A national conversation

In chapter 2 we set out the findings of our engagement and research into the views of the people of Wales. Our experience has been that by using multiple channels to reach people and speaking to them in everyday language, it is possible to have a serious and constructive conversation about the future they would like to see. Chapter 2 sets out the key messages we heard from the conversation, which are summarised here.

Citizens’ views: key messages

People’s understanding of government structures (at UK, Wales or local level) is low, and most people do not feel informed enough to contribute to the debate about changing them.

In general, citizens’ interest in constitutional reform increases as they become aware of the connection between possible reforms and the issues that most concern them.

Many people conflate constitutional structures with the actions of the government of the day.

Identity and political affiliation influence people’s view of the way forward.

Most people in Wales support devolution and would favour greater autonomy, in some form.

For some people, federalism is an attractive concept, but it is ill-defined, and their support diminishes when the practical challenges of creating a federal structure for the UK are spelled out.

There is support for unwinding devolution and for an independent Wales; currently these are strongly held but minority positions and support for both has increased in recent years.

Democracy

In chapter 3 we note that representative democracy is under threat across the world, as we set out in our interim report. We believe that Wales has the opportunity to build a stronger democratic culture to withstand these threats, based on consent for, and active engagement in, its system of governance.

Principle of consent

The starting point for any consideration of constitutional options should be the principle that the UK is a voluntary union of nations (expressed by Prime Minister Theresa May in her speech on the Union on 4 July 2019: "Our Union rests on and is defined by the support of its people… it will endure as long as people want it to – for as long as it enjoys the popular support of the people of Scotland and Wales, England and Northern Ireland"). Therefore, the people of Wales should have the right to determine the constitutional future of their nation. Our Commission has begun an evidence-based debate designed to inform the exercise of that right as and when it might be invoked. We have not had time to consider fully the question of what specific processes should be followed to enable a referendum to be held on major changes in the relation of Wales to the United Kingdom as a whole. However, we believe that this question needs urgent consideration by the governments of Wales and the UK so as to clarify the specific conditions under which a referendum could and should be held.

Senedd reform

We welcome the current proposals for Senedd reform to enable it to do a better job of scrutiny and challenge. The legislation currently before the Senedd will introduce, in 2026, an expanded membership, 4-year terms, an option to elect a Deputy Llywydd, and a reformed electoral system with a single category of Member (replacing the current system of constituency and regional MSs).

This will deliver greater proportionality but means that voters will no longer have a direct connection with their local MS. Voters will only be able to choose between lists put forward by political parties and individual independent candidates, should they stand for election; they will not be able to vote in favour of, for example, a candidate who has been ranked in a lower position than another by their party.

We welcome the commitment to a full and proper review by a Senedd committee of the first election to operate under the new system. Our recommendation is designed to ensure that it is adequately resourced to provide robust evidence.

Civic education and democratic literacy

A thriving democracy requires informed citizens who understand how their country is governed and have the skills to evaluate choices and trade-offs. Our engagement indicates that these skills are in short supply. Tackling this requires better civic education for all age groups, and opportunities for citizens to learn about the practice of government. A revitalised democracy requires investment in participative and deliberative mechanisms to enable citizens to contribute to resolving critical challenges facing Wales.

To take this forward, Wales needs new capacity and leadership, supported by an expert advisory panel, to draw together expertise and experience across government and public services and inject new energy and ideas. The objective is to build a democratic culture to combat the cynicism that erodes trust in government, elected representatives and democracy itself. This requires leadership from all the political parties, and dedicated capacity to promote democratic innovation in Wales.

We propose a project to create a statement of constitutional and governance principles for Wales, as a way of consolidating constitutional principles in the devolution legislation and involving citizens in the way their country is governed.

We make 3 recommendations to strengthen our democracy These initiatives are important, whatever constitutional model is ultimately supported by the people of Wales:

Recommendations to strengthen Welsh democracy

Democratic innovation

1. The Welsh Government should strengthen the capacity for democratic innovation and inclusive community engagement in Wales. This should draw on an expert advisory panel, and should be designed in partnership with the Senedd, local government and other partners. New strategies for civic education should be a priority for this work, which should be subject to regular review by the Senedd.

Constitutional principles

2. Drawing on this expertise, the Welsh Government should lead a project to engage citizens in drafting a statement of constitutional and governance principles for Wales.

Senedd reform

3. We recommend that the planned review of the Senedd reforms should be resourced to ensure a robust and evidence-based analysis of the impact of the changes, including from the perspectives of the voter and of democratic accountability.

These initiatives are important, whatever constitutional model is ultimately supported by the people of Wales.

Vulnerability of the current settlement

In chapters 4 and 5 we set out why we believe the current devolution settlement is vulnerable and unstable. This instability is due to the way the UK government has appealed to UK Parliamentary sovereignty to override the powers of the Senedd and the Welsh Government, thus undermining the established conventions on inter-parliamentary and inter-governmental relations.

As a result, the current settlement is vulnerable to continued erosion by the Westminster Parliament and Government; it is not capable of delivering the degree of consistent Welsh control of devolved matters which has been confirmed by Welsh voters in the referendums of 1997 and 2011 and is essential for the Welsh Government to deliver its manifesto commitments.

Governments working together

Chapter 4 notes that inter-governmental relations are crucial to Welsh governance, and that successful co-operation relies on the commitment of all parties. It notes that since 2019 progress has been mixed, with positive developments undermined by the UK government’s actions in overriding convention to push through its Brexit legislation.

Citizens place a high priority on governments working together in the public interest and take a dim view of arguments between governments. There is strong public support for more robust mechanisms for regulating how governments interact. Chapter 4 concludes that inter-governmental relations should be put on a statutory basis as part of a more secure devolution settlement.

Boundaries of devolution

Chapter 5 reports on the work of the 6 sub-groups we established to review the areas of tension at the boundaries of the devolved powers: broadcasting and public service media, employment, energy, justice and policing, transport and welfare benefits. The groups’ objectives were to review the debate on each topic, drawing on recent and concurrent expert inquiries, and determine the constitutional implications.

Sub-groups took evidence in proportion to the case for change being made. There are other policy areas that could benefit from a review of the current powers, but we did not have the time and capacity to consider them. These too should be subject to rigorous review to strengthen accountability and delivery.

Based on the evidence gathered by the sub-groups, we recommend that the Welsh devolution settlement should be reformed to place it on a stable footing and resolve long standing tensions that undermine delivery in relation to justice and policing, rail services, and budget management. We further recommend strengthening the voice of Wales through stronger inter-governmental co-operation and shared governance.

Tackling the immediate flaws in the current settlement should be a priority for all the political parties committed to devolution, whatever their view of the long-term destination. Our recommendations to protect devolution are set out below.

Recommendations to protect devolution

Inter-governmental relations

4. The Welsh Government should propose to the governments of the UK, Scotland and Northern Ireland that the Westminster Parliament should legislate for inter-governmental mechanisms so as to secure a duty of co-operation and parity of esteem between the governments of the UK.

Sewel convention

5. The Welsh Government should press the UK government to present to the Westminster Parliament legislation to specify that the that the consent of the devolved institutions is required for any change to the devolved powers, except when required for reasons to be agreed between them, such as: international obligations, defence, national security or macroeconomic policy.

Financial management

6. The UK government should remove constraints on Welsh Government budget management, except where there are macro-economic implications.

Broadcasting

7. The Welsh and UK governments should agree mechanisms for a stronger voice for Wales on broadcasting policy, scrutiny and accountability, and robust work should continue on potential routes to devolution.

Energy

8. The Welsh and UK governments should establish an expert group to advise urgently on how the devolution settlement and inter-governmental engagement in relation to energy could be reformed to prepare for rapid technical innovation in energy generation and distribution, to ensure that Wales can maximise its contribution to net zero and to the local generation of renewable energy.  The remit of the group should include advising on the options for the devolution of the Crown Estate, which should become the responsibility of the devolved government of Wales as it is in Scotland.

Justice and policing

9. The UK government should agree to the legislative and executive devolution of responsibility for justice and policing to the Senedd and Welsh Government, on a timescale for achieving the devolution of all parts of the justice system to be agreed by the 2 governments, starting with policing, probation and youth justice, with necessary funding secured, and provision for shared governance where needed for effective operations.

Rail services

10. The UK government should agree to the full devolution of responsibility for rail services and infrastructure to Wales, with fair funding and shared governance on cross border services.

Constitutional options

Having considered the changes needed to strengthen the workings of Welsh democracy and protect the devolution settlement, Chapter 7 presents our analysis of the constitutional options identified in our interim report: enhanced devolution, Wales in a federal UK, and an independent Wales.

Options

Enhanced devolution

This option would require further changes to make devolution viable for the long term, building on the changes recommended above. It would not require a referendum and would avoid some of the risk (and opportunity) of wholesale change. It is strong on capacity and cost, co-ordination of cross-border services, economic stability, flow of people and goods across borders, and public finances. It would not fundamentally change the fiscal and economic position of Wales in the United Kingdom economy, with the risk of continued relatively poor economic performance, low incomes and poverty.

Wales in a federal UK

In principle, a federal model for the UK currently offers a middle way between some form of continuing union and full independence. It is strong on accountability, stability, sustainability, cross-border movement, finances and economic prospects. It also faces fundamental obstacles because it depends on support from the rest of the UK for a basic constitutional re-set. There is currently little appetite for this in England, and it runs counter to the aspirations of the Scottish Government, and equally of those in Northern Ireland who prefer a future outside of the UK.

Independence

Wales as an independent country is strong on agency, accountability, subsidiarity (at national level) but has the highest risks in terms of currency, borders, trade, cost and capacity. These risks are greater post-Brexit but may decrease if the UK adopts a closer relationship to the EU in the future. The theoretical advantages of full agency to chart our own future would in reality be constrained by financial markets and other dependencies.

This is by far the most uncertain option: independence could offer potential for long term positive change by having the powers to make significant improvements in the economy, but most commentators agree that in the short to medium term Wales could be significantly worse off, with substantial risks in relation to government finances, currency and the border.

Our assessment of the options

We undertook the assessment of the constitutional options in an objective way, based on the analysis framework we published in May 2023, and applied this to each option equally. It is not possible on this basis to identify a single ‘solution’ to the governance of Wales. The judgement on what is best for Wales depends on values and choices. The greater the degree of change, the greater the opportunities and risks.

We conclude that all the options are viable, all have strengths and weaknesses, and all present opportunities and risks. Each scores high on some measures and low on others. The preferred solution depends on the value placed on each measure. Citizens’ views of options may well change if there are changes to the UK’s constitutional make-up.

The choice as to which of the 3 options should be the ultimate destination for Wales depends on whether the priority is:

  1. to achieve greater control by the people of Wales over the widest range of policy areas and the opportunity to shape our future as a nation and change the current economic trajectory – and to accept the risk that this may leave people in Wales financially worse off in at least the short and medium term, or
  2. to pursue a lower-risk strategy, based on whatever reforms of the current settlement can realistically be achieved, and grounded on the idea of solidarity with the rest of the UK’s population. This is less disruptive but risks no improvement in Wales’ relative economic prospects.

Radical change entails short-term uncertainty as well as longer-term opportunity. Moving to a federal structure for the UK, or an independent Wales, would require a referendum, or referendums, preceded by extensive debate and public information. A federal structure would require the support of the rest of the UK.

Avoiding radical change provides greater short-term certainty, but economic and social policy will continue to be determined by the tax and spending policies of the UK government, with the risk that Wales’ relative economic position will not change.

Conclusion

Our recommendations offer a forward-looking response to the views of citizens and the other evidence we have received and considered over the past two years. The evidence has led us to these recommendations which we believe will strengthen the governance of Wales, and lead to better decisions and better outcomes for its citizens.