WLA and Welsh Tories agree “Daffodil Coalition”

The new government will cut all departmental budgets by 1.5%, require that all new schools be bilingual or Welsh-only, and raise teacher pay by 3%.

Wagbo_’s WLA has negotiated a coalition with the Welsh Conservative Party.

The Welsh Liberal Alliance and Welsh Conservative Party have signed a coalition agreement that will see them forming a 5 seat government in the new Welsh Assembly. The pact, nicknamed the “Daffodil Coalition” according to documents seen by the Guardian, will have a majority of 1 seat in the Cardiff Bay Senedd following last week’s elections that saw the Welsh Liberal Alliance win record support on the regional list vote. Before the election, the Welsh Liberal Alliance had been in a 6 seat government with Welsh Labour.

The election, held last Thursday alongside polls in Scotland and Northern Ireland for the Parliament in Holyrood and Assembly in Stormont, saw First Minister Wagbo_ lose his own seat, despite an increase of 2.29% and 1.83% in the WLA’s list and constituency votes, and a total haul of 4 seats. The election also saw a surprising surge for the Tories – who did not stand at the previous election last December – who came second in the constituency vote, ahead of Plaid, and third in the regional vote, overtaking Welsh Labour whose vote share collapsed, leading their losing half of their seats.

The coalition agreement, approved after a vote in both parties, will see Wagbo_ remaining First Minister and Conservative pjr10th becoming Deputy First Minister, replacing Labour’s ARichTeaBiscuit in that post, and the sole Conservative cabinet minister. The Welsh Conservative leader during the campaign, Zhukov236, is not mentioned in the agreement, but remains Welsh Conservative Leader according to a spokesperson. The WLA will retain the Finance portfolio in the new government – which is currently occupied by SDP Leader Saunders16 – and they will also fill the Transport and Local Government ministries. These jobs will be occupied by former British Transport Secretary Bloodycontrary and Countbrandenburg respectively, while no Finance Minister is named. The First Minister will also have jurisdiction over Education and the Welsh Language while Mr 10th takes charge of Environment and Rural Affairs.

The new government will also have three “Party Representatives”, who are not-assembly members, with a Conservative Finance Representative, Conservative Representative without Portfolio and WLA Representative without Portfolio. The copy of the agreement seen by the Guardian does not name the two Conservative representatives but lists Ruijormar as the WLA Representative without Portfolio.

The agreement also sets out some terms for the structure of the government, perhaps in response to the instability experienced by the first WLA government at the beginning of last term. It states that “were the Welsh Liberal Alliance to select a new leader, provided that leader sticks to the coalition agreement, the Welsh Conservatives would support that leader for First Minister.” When First Minister redwolf177 stepped down earlier this year, the Welsh Labour Party abandoned the WLA agreement in favour of a deal with Plaid, in return for a Labour First Minister. In terms of the government’s approach to policy, the agreement makes clear “departments’ main focus shall be on implementing the ‘Pre-agreed upon Policy’. After this, the Leadership can set a new policy direction, which must be approved by both leaders.”

Of the new government’s policies, the most eye-catching is a commitment to cutting “core departmental spending by 1.5% in all departments” which the document claims will save £160 million a year. This plan is a step up from the WLA-Labour promise last term of 1% efficiency savings across departments, amount to a saving of £70 million every year. Despite those planned savings, there are some significant spending plans, especially in education, where the government commits over £100mn more, on policies including a 3% pay rise for teachers, £30 million for an increase to the pupil premium to £1,500, from the current level of £1,050 a year, and £50 million to help reduce class sizes. Besides those spending promises, the government will also reform the curriculum, though there’s no detail about the shape this might take.

Other big financial commitments by the government includes bringing unallocated spending up to recommended levels, raising £120 million. The previous government had said last term that the Welsh government was “wasting around £90 million a year on inefficient allocation of conditional block grants. We can save a huge amount of money by simply bringing this spending up to recommended levels.” The new government will be keeping income taxes at current levels while providing £10 million for a rural access fund for GPs, a £25 million program to provide a hill farming support grant, and £10 million for community councils in areas with a less than 25% rate of Welsh speaking which promote the language. The Daffodil Coalition will also protect health spending with ring fenced, inflation-level increases to funding, as well as hiring an additional 1,000 doctors and 5,000 nurses.

As well as a financial incentive for councils to promote the Welsh language, the government plans to make all new schools either bilingual or “Welsh medium” – meaning teaching is done through the medium of Welsh – and commits to the building of a new Welsh medium school in Montgomeryshire, with unspecified incentives for schools to become bilingual also planned.

On environmental issues, the government will be introducing new penalties and enforcement measures for fly-tipping, with the details so far unclear, land restoration on former mining sites to promote productive use of these areas, and a new counseling and education service to help farmers learn about land succession options. The latter policy is presumably to ensure that family farms remain sustainable. Food will also have to list the place of origin, helping people to buy local. Alongside increased transparency on food packaging, the government will also require that the cost of prescriptions are printed on the box.

The new government says they will finally build the M4 relief road, first discussed in 1991, before being dropped in 2009, resurrected in 2011 but now long delayed. The purpose of the new road was to increase capacity without the need to expand the Brynglas Tunnels, which become heavily congested at peak times. The road will be built, according to the coalition agreement, along the least environmentally damaging – the so-called “blue route” – with an independent commission advising on the mitigation of the environmental impact. The government also commits to pursuing the South Wales Metro project, which is a proposed integration of heavy rail and development of light rail and bus-based public transport services and systems in South East Wales around Cardiff Central.

Analysis: the manifestos versus the reality

There’s no doubt, reading the agreement struck between the WLA and the Welsh Tories, that the latter recognise Wagbo_’s strong mandate to carry on in office. In fact, his party was just a few hundred list votes from an overall majority. The new government’s cabinet and policies reflects this. The lion’s share of posts goes, as you’d expect, to the WLA, who have 4 out of the Daffodil Coalition’s 5 AMs. The hiring of “party representatives” does seem to be an attempt to redress the power balance slightly, particularly when it comes to finance, where the Conservatives get their own representative. Presumably this person – whoever gets the job – will act much like the Chief Secretary to the Treasury at Westminster.

That being said, the WLA didn’t get everything they might have wanted from this deal. Certainly, an increase in the pupil premium to £1,500, inflation based increases to NHS funding, and curriculum reform, £10 million to encourage councils to increase Welsh fluency rates in their areas, a hill farming support grant, and a redrawing of local government boundaries are major victories for the party, but there’s also a lot in their manifesto that has been dropped in this agreement.

Most noticeably, and perhaps most controversially, is the WLA’s promise to raise the higher rate of income tax by 2.5%, which would have raised £85 million according to their manifesto, replaced instead by a promise that income taxes will be static for the next 6 months. Instead of higher taxes for the wealthiest funding the new spending priorities, that money looks set to come from the 1.5% cut that departments will take in their core spending under the new administration. Those cuts are not a policy that appeared in either manifesto for Thursday’s poll, and there will likely be angry accusations by Labour and Plaid Cymru figures that there is no mandate for them.

That’s something that a Conservative spokesperson sought to dismiss tonight, telling the Guardian that “the Conservatives have always made clear that we support the public’s money not being spent wastefully. This means moving wasteful spending in departments and using it to invest in education and other services. One could say that we are saving money that is being wasted and spending it on things that people actually use.

“Broadly, yes efficiency does have a mandate. Every person when they cast their vote on Thursday last week did so with the intention of leaving the Welsh economy in a better state. They did so with the intention of ensuring better services and with their money not going to waste. To make it clear, no vital services will be cut nor damaged as a result of efficiency savings. If a efficiency savings hurt the effectiveness of the service in question, then they will not go ahead. That’s the limit on what will and will not be cut. For the Welsh Conservatives that is.”

First Minister Wagbo_ said tonight that “the Welsh Liberals are committed to making savings on efficiencies as per the motion backed by our AMs last term, as well as by some Plaid and Labour AMs. We will pursue these departmental savings whatever government we are in.We want to make the most of taxpayers’ money, and ensure that local people can direct local spending where possible. We’ve found ways to ensure that taxes may not have to rise this term unnecessarily, and will ensure that every penny is spent efficiently.

“The Welsh Liberals have always been in favour of decentralising government, and ensuring that central departmental spending is efficient and fair. We are trying to find ways that ensure that we can create a stronger economy and fairer society without increasing taxes, whatever party we may be looking to work with. If we had won a majority, I would implement every letter of our manifesto with ease. We did not, and are having to work with AMs from across the Siambr to create a workable moderate majority which ensures a budget can pass. If that means we have to work harder to find savings and prioritise keeping taxes down than before, then I welcome the challenge.”

Likewise, there is no mention of the last government’s prepared, but never delivered, budget – possibly dropped, with the Tories looking for more influence than that with a new, fresh budget. The £30 million fund to help cut or freeze regressive local taxes, and a commitment to an LVT, are both missing – perhaps they will yet pop up in a budget, but there’s no sign of them here. The First Minister, when asked by the Guardian, raised the possibility that we could still see an LVT, saying “the idea of a Land Value Tax is still on the table, however whether Wales can implement one this term is doubtful.” There’s also no commitment to a £5 million investment aimed at boosting Cardiff’s visitor numbers, a target of 1 million Welsh speakers by 2050, a commitment to support stage two of the Silk Commission, a report on the Senedd’s democratic links to the public, or a promise to protect the Community First approach to local powers.

While some of these are policies that could appear at a later date – either from ministers who have completed their other takes, or in a budget – the point here is that all of the policies listed in the agreements are the “Pre-agreed upon Policy”, and this the only policy absolutely guaranteed from the very start. Any further policies will have to be agreed at a later date, and only after, according to the deal, everything else has been enacted.

What about the Conservatives? How does their manifesto compare to the policies they will now implement? Big Tory victories include the M4 relief road, to which the party is unambiguously committed, the printing of prescription prices on boxes, new measures on fly tipping, land restoration on former mining sites, place of origin label on food products, education of land succession for farmers, and commitments to bilingualism in schools. The Tories also said that more powers should be devolved to Wales through a royal commission and referendums only – perhaps explaining the disappearance of the WLA’s commitment to the Silk Commission. The Tories have had the most influence over environmental policy, where 4 out of 5 government policies are straight from their manifesto.

Aside from that, a total of 29 Tory policies have seemingly been chopped. This includes ensuring that the Welsh government always looks to use Welsh steel, a ban on building on flood plains, streamlining stamp duty, the tripling of the free childcare allowance for 3-4 year olds to 30 hours a week, £50 million for cancer research, CPR and defibrillator training in schools, and an energy efficiency program for poorer households. It’s not surprising that the Tories lost a lot of policies, and the WLA got many of theirs into the agreement, but some of the policies that have not made it out of the Tory manifesto are surprising. A caveat worth applying, again, is that these policies could make a comeback later in the term or in the budget, but there’s certainly no initial or definite agreement to them.

“The coalition agreement between the Welsh Conservatives and the Welsh Liberal Alliance is just that – a coalition in which not every party will be completely satisfied,” said the Tory’s spokesperson. “Of course we’re disappointed not all of our policies are in, but despite only having one seat, we have ensured a lot of key Welsh Conservative policies are part of this document that the Welsh Liberals may not have necessarily agreed with . These include bringing our public finances under control and ensuring money is being spent more efficiently and backing projects such as the M4 relief road being built. Not only that, we have also ensured a clear focus on the environment this term and in the coalition, as evidenced by the fact our party won control over the Environment and Rural Affairs portfolio.”

Besides the policies mentioned as having made it out of each parties’ manifestos, the others don’t seem to have featured in either. This agreement will strike an immediate debate about the loss of some key policies, but the biggest argument will be over those cuts – 1.5% in all departments, remember – and whether there is a mandate for them. What appears to be the case with these is that after his 2.5% tax hike for the highest earners was vetoed, Wagbo_ and his new partners have settled upon these as an alternative source of income to fund some ambitious spending, but there will be questions about what will be lost to pay for these, and whether it will all be, ultimately, a pyrrhic victory. That will be for the politicians and the voters to decide now that they have this information.