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St. David's Day devolution deal due

Senedd Photo: ITV News Cymru Wales

David Cameron and Nick Clegg will be in South Wales this morning to unveil proposals for a range of new powers for the Welsh Government and National Assembly.

The announcement follows months of talks between the leaders of the four different parties at Parliamentary and Assembly levels.

The details will come in a joint announcement to be made by the Prime Minister and Deputy Prime Minister this morning. Among the proposed transfers, the following are expected:

  • Power over energy decisions up to 350MW. Currently the Welsh Government only has say over projects up to 50MW
  • Power to agree or ban fracking
  • Development of ports
  • Speed limits

It's thought there'll be an agreement by the UK Government to ensure fairer funding for Wales by introducing a limit or 'floor' to the Barnett formula used to work out how much funding the Welsh Government gets. This has been a long-standing thorny issue in Welsh politics because all parties agree that the formula over-compensates Scotland and under-funds Wales. The National Assembly is expected to be given control over its own affairs so that it can change its name to 'Welsh Parliament,' change the electoral system used to choose Assembly Members and to change the number of AMs if it wishes.

David Cameron and Nick Clegg are also expected to say that there'll be a formal move to a 'reserved powers' model of devolution, where it's assumed that the Assembly has full control over all areas which are devolved.

They'll announce the publication of the proposals in a 'Command Paper' which the UK Government says 'fulfills the Government’s commitment to deliver cross-party consensus on further devolution to Wales by St David’s Day.'

A UK Government spokesperson said:

The St David’s Day Agreement will transfer new powers to Wales, enabling the Welsh Assembly to move forward from constitutional debate and focus on delivering economic growth, jobs and prosperity for people in Wales.

– UK Government spokesperson

'Devolution with a purpose'

Speaking ahead of the announcement, the Prime Minister said:

This is the latest step in finding lasting settlements across the country to make our United Kingdom stronger and fairer. We are delivering on devolution in every part of the UK.

We want to deliver new powers to Wales so that more decisions are taken closer to the people and give greater responsibility to the Welsh Assembly.

That means those who spend taxpayers’ money must be more responsible for raising it.

This is devolution with a purpose, working for Wales.”

– David Cameron MP, Prime Minister

Meanwhile the Deputy Prime Minister said:

I've been banging the drum for years now for greater devolution for Wales, and the rest of the United Kingdom.

So I am delighted to be coming to Wales to announce this new constitutional settlement, another landmark on the journey of decentralisation.

Putting real power into the hands of the Welsh people is a vital part of creating a stronger economy in a fairer society for everyone.

– Nick Clegg MP, Deputy Prime Minister

St David's Day deal

Today's announcement follows months of talks which were launched by the Welsh Secretary, Stephen Crabb, in the wake of Scotland's independence referendum. Mr Crabb said:

This is a strong package that creates the foundations for a stronger, fairer, lasting devolution settlement for Wales. These new powers create an important opportunity for Wales, they are powers with a purpose. As a UK Government we believe in rebalancing the economy to enable wealth to be created more fairly and evenly across the whole country. This St David's Day package provides a toolkit to help strengthen the economy here in Wales too.

– Stephen Crabb MP, Secretary of State for Wales

Sources close to the Welsh Secretary are underlining what they say is the remarkable double achievement of winning agreement, sometimes grudgingly, from every Whitehall department as well as reaching consensus between all parties so close to a UK General Election. After initial suspicion as the talks began, there was a spirit of rolling up sleeves. 'It's like Reservoir Dogs,' I was told 'We're all bound in together.

I'm told negotiations reached the very top of government, with the Prime Minister personally intervening to ensure that the funding deal was agreed.

David Cameron and Nick Clegg previously announced financial powers on a visit in 2013 Credit: Adrian Masters/ITV News

There's less agreement surrounding some of the detail of that funding deal. Liberal Democrat sources say it was originally linked to a commitment by the Welsh Government to a referendum on devolving income tax powers, until Welsh Lib Dem leader Kirsty Williams intervened to insist that it be changed. I'm told that, despite agreement by the decision-making 'quad' of David Cameron, George Osborne, Nick Clegg and Danny Alexander in a meeting this week, the Deputy Prime Minister re-opened the discussion and it's now thought to refer, simply, to 'an expectation' of a referendum. 'Good luck with that expectation,' a Welsh Government source said to me.

UK Government sources don't recognise the story of a 48-hour change of mind. They tell me that 'nobody's arm is being twisted' but they say that they were firmly led to believe by senior Welsh Government politicians that Welsh Labour would agree to an income tax referendum that it has been deeply suspicious of in return for fair funding.

Welsh Government sources say there was never any deal. The First Minister and other senior figures had repeatedly said there would be no discussion of income tax devolution without funding reform, but that that did not amount to 'a causal link.' I'm told that there had been no mention of a funding deal during the talks until Tuesday of this week.

Those same sources told me they still hadn't had official notification of what's likely to be included in the deal when I spoke to them late Thursday afternoon.

I'm not expecting an official Welsh Government response today. The First Minister will make a statement in the Assembly next Tuesday. He won't be around for today's historic announcement anyway because he's on a trade visit to the United States.

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