The Implications of Brexit for Wales and Devolution

Location Westminster
Date 20 March 2018

When the UK leaves the European Union, many powers and responsibilities will return to the UK Parliament. One issue that has not received enough attention is the implications of Brexit for devolution and public policy in Wales and the other devolved administrations. Many of the policy areas in which power will return from the European Union are devolved, such as agriculture and fisheries. How these returned powers are allocated, and the frameworks in which they operate, will be crucial not just in Cardiff but in Westminster too.

It is in this context that we showcased our research on these issues to an engaged audience in Westminster on 20th March 2018. Since the Brexit vote, we have produced reports for Welsh Government on immigration, agriculture, fisheries, labour rights and trade negotiations, and these were presented to a Westminster audience to highlight the complexities of the Brexit process for devolved governance in the UK.

Immigration and the fair movement of people was hotly debated during the referendum campaign, and Professor Jonathan Portes (King’s College London) conducted research for us on this key issue. His work highlights the complexity of the Brexit negotiations. There remain numerous legal and administrative issues to resolve for the 80,000 EEA nationals currently in Wales, and it remains unclear how sectors reliant on immigration in Wales (such as health and social care, manufacturing and higher education) will be catered for in a post-Brexit immigration system. Streamlining permanent residence for EEA nationals, continuing free movement for a defined period after Brexit, carefully phased implementation of a new immigration system, avoiding caps and quotas, considering regional immigration schemes and a greater openness to non-EU nationals would all minimise risks to the Welsh economy and labour market.

Jonathan’s research for us was complemented by Dr Heather Rolfe, who presented the available evidence on immigration and the attitudes of employers. She showed that the lack of available British workers is the main reason employers hire immigrants, and that this has been the case for years. Employers have very little support for regional immigration schemes, nor do they support targets. Wales is unlikely to benefit from either, as demographic changes are not on Wales’s side. Should Wales want economic growth in the future, it will likely require immigration to achieve it. Heather’s work in this area can be read in more detail here.

Professor Janet Dwyer (Countryside and Community Research Institute) presented her research for us on the implications of Brexit for agriculture and rural land use, arguing that the most likely changes in trading conditions will leave Welsh agriculture in a disadvantaged position compared to its main trading competitors. Sheep and beef farmers could be in a particularly disadvantaged position after Brexit. A decline in the economic viability of sheep production is likely. On a brighter note, dairy, horticultural, mixed and other farm types may be best placed to benefit from changes after Brexit. There may also be environmental consequences of Brexit. Supporting farmers to manage land or to move it into other sectors will be important, as well as ensuring adequate funding for natural resource management in Wales.

Griffin Carpenter (New Economics Foundation) discussed his research for us on the implications of Brexit for fisheries policy in Wales. Analysis of various Brexit scenarios reveals that, while the Welsh fishing fleet as a whole could gain, there are large divisions in the industry, with most vessels, fishers, and ports likely to be ‘net losers’ from Brexit. Only a smaller number of vessels face large potential gains, including some ‘flagships’ that land much of their catch in Spain. The Welsh fleet also comprises mainly small-scale vessels that would not benefit from exclusive access to an extended fishing area. They catch primarily shellfish species that are not managed through quota limits. Most of the seafood produced by the Welsh fleet is exported to EU countries or through EU trade agreements, therefore potential tariff and non-tariff trade barriers could significantly impact market access and competitiveness. Griffin highlighted that the Welsh fleet is unique, and targeted changes to how fisheries is managed in Wales will need to be made by both the UK Government and Welsh Government.

Professor Richard Wyn Jones (Wales Governance Centre) brought the presentations together by breaking down the issues surrounding Brexit and devolution. He highlighted the extent to which devolution in Wales has been slow and disjointed, and that Brexit is generating yet more instability in how the Welsh political system works. The UK Government’s approach so far appears to be one in favour of ‘recentralisation’, while the Welsh and Scottish governments are co-operating with each other in an unprecedented fashion. This is all taking place in the context of the electoral complexities of Brexit, in which vote choice was influenced by people’s perceptions of their British, Welsh and English identities.

Alongside the research presented to a Westminster audience, we have also conducted research for Welsh Government on the implications of Brexit for labour rights in Wales, and how the Welsh interests might be represented in future trade negotiations. Together, it amounts to a body of evidence and research that hopefully informs understandings of public policy and Brexit not just in Wales but across the UK and EU more broadly.