Lib Dems, the Silk Commission, and Labour's internal conflicts

The Lib Dems have made a very credible submission to the Silk Commission, with news emerging that they are calling for half of Welsh income tax revenues (and the ability to vary them by 3p) to be collected by the Assembly, complete control over the tidbit taxes (the stuff even Carwyn Jones and Peter Hain have agreed on such as air passenger levy, stamp duty, landfill tax), borrowing powers for infrastructure investment, and a fair funding formula.

According to Glyn Davies MP "this is seriously radical stuff". Not really! It's completely normal in federalised countries for the sub-central parts of the state to get some of their money from a central handout (that they have paid into in various ways), and the rest from their own revenue-raising efforts. The Lib Dems' recommendations stem directly from the Holtham Commission. Glyn thinks this is very radical because the British state is so abnormally centralised compared to states like Spain, Germany, Australia or the USA. That is not to say it is not welcome though.

But while it is not radical, Glyn Davies is right that it is serious. If translated into results (and it's a big "if"), these proposals are far bigger than the March 2011 referendum. If and when the Assembly becomes responsible for people's taxes, that's a game changer in terms of the institution's maturity and credibility. I don't see how they could soldier on with 60 AMs for starters. Tellingly, Glyn notes that Paul Silk's job is to decide "how" the Assembly gets fiscal powers. I think the likes of Peter Hain and Paul Murphy would take the view that Silk's remit is in fact to decide "whether" Wales gets those powers! None of this will fall into the laps of the pro-devolutionists; the forces of stagnation will try and sabotage Welsh progress at every turn, as they always have done.

That brings me to the topic of the Labour party. While broadly welcoming the Lib Dem stance, it is not true that they have significant influence; although you would expect Danny Alexander and Nick Clegg to be sympathetic to these kind of powers, Wales will be the battleground where these kind of proposals are either won or lost. The Commission needs cross-party support for its objectives. That inevitably includes the Labour party which as we were reminded last week is the most popular party in Wales.

At the same time, my previous comments about having power and having control being two different things ring true. Labour's massive electoral weight does not always translate into political influence. From the Government end they will be making their own official submission. This will be important and deserves to be treated with respect and given a fair hearing. Carwyn Jones will play a key role in this and the hope must be that he is progressive and open-minded about Wales growing up as a nation and becoming more responsible for its own affairs, and also being treated fairly by London. It would reflect well on his leadership if he steered through significant changes. No matter what might be said about his administration, as a politician the First Minister does support devolution and wants to see it benefit Wales.

At the other end, the party officially will be taking soundings after the Commission's recommendations are published. This means either that they have nothing constructive to say, or that they are incapable of producing a report because of the internal differences within the party. Simply put, they are not united and wouldn't be able to come up with a line that would be accepted by both the AMs and the MPs. They still haven't recovered from the fact that a legislative Assembly means fewer MPs centrally, and this is alot more serious than the dispute over Wales' electoral system. All of the real thinkers in Labour in Wales will be involved in the Welsh Government side of things, rather than the moribund partyist aspect. After the Commission publishes its verdict, there will no doubt be an internal ideological struggle, but until then the focus should be on the Welsh Government.

I don't lightly raise the idea of a Labour internal struggle as an attack or as wishful thinking. Part two of the Silk Commission is about further powers- last week we had Welsh Labour MPs voting against the Welsh Labour manifesto on energy powers. These are the contradictions that ensure that while Labour is always in power in Wales, it can't really deliver anything meaningful.

I haven't yet mentioned Plaid Cymru, who will no doubt be issuing their submission at some point. But the reality is that the late Phil Williams would now be very pleased to see his ideas being developed and accepted across a wide part of the political spectrum. Even in very recent years you would have been laughed out of a room if you had suggested the Assembly could ever raise its own money. The Assembly was only meant to be there to administer limited spending functions. The Holtham Commission was a crucial gain from Plaid's time in government and could end up being a game changer for Wales.