UK Government could revive M4 relief road under new post-Brexit rules

160720 M4 Motorway near Newport PA
The First Minister announced an M4 relief road would not be going ahead last year

The UK Government has acknowledged that under post-Brexit rules to be published Wednesday it could be able to move forward with plans for an M4 relief road which have been rejected by the Welsh Government, if they were supported by Welsh MPs and local authorities.

The Welsh Government says the Internal Market bill is "an attack on democracy" which will "sacrifice the future of the union by stealing powers from devolved administrations."

And Plaid Cymru has called it "the single biggest assault on devolution since its creation."

It would certainly mean a significant change to the current system which gives ministers in Cardiff the final say over projects such as an M4 relief road, but the UK Government insists that it wouldn’t mean overriding the wishes of people in Wales, because it would still need the support of Welsh MPs and local government.

It’s an example of a new relationship between the way the devolved governments of the UK will work which is set out in the UK Internal Market Bill. 

The Bill is designed to replace the European Union rules and regulations which currently shape the relationships of trade and investment here in Britain. 

Ministers in London have argued the new law is needed to ensure a "level playing field" for businesses in all four nations of the UK. They say it will "protect trade and jobs across the UK by preventing new burdens on business when the Transition Period ends."

For example, a clothes manufacturer in Wales would have to follow the same subsidy and tax rules as a similar firm in Scotland or Northern Ireland. 

UK cabinet ministers say the changes will ensure a smooth transition for businesses trading mainly in the UK.

But the Welsh and Scottish Governments have expressed serious concerns about the law, describing it as a "power grab" which is designed to undermine devolution. 

The Counsel General, Jeremy Miles, says he was only briefed about the content of the bill by Alok Sharma late on Tuesday "some two hours after the media were provided the same courtesy."

He says it's now clear "that our concerns on behalf of the people of Wales, have not been addressed."

He went on to say that "vital decisions over support for Welsh businesses, important infrastructure and investment opportunities and the safety of the food on the shelves of Welsh supermarkets should be made in Wales, by the government of Wales, and with the consent of the Senedd – and not at the behest of Conservative backbenchers."

When it is published, the bill will introduce an independent organisation to oversee the system and resolve any disputes, to be called the “Office of the Internal Market.” The UK Government says this meets one of the main concerns of the devolved governments but it has refused to back down in other areas of controversy.

The bill sets out what will happen to powers currently operated by the European Union when the transition period finishes at the end of the year. Most of those powers will be shared out between the UK Government and the devolved administrations depending on which level is currently responsible for them. However there are major disputes about some significant areas of power.

  • State Aid

Government state aid could be used to help firms like Tata Steel Credit: ITV Wales

Ministers in London will take control of state aid rules when the Brexit transition period ends, against the wishes of the Welsh and Scottish Governments. 

The EU is in charge of it currently, and imposes strict limits on governments’ ability to invest in companies either to help them grow or to cope with financial difficulties. Ministers in all governments have wanted to be able to offer state aid to companies like Tata Steel for instance.

The devolved governments say that it is a power which should belong to them because they are responsible for economic development in each country. But, the UK Government says that it hasn’t been exercised by devolved governments since they came into existence, proving that it should be held centrally.

It says that the Bill will clarify in law that state aid will be a "reserved matter." The devolved governments say that’s a clear power grab. 

  • Spending powers

What they also claim is a power grab is a change in law to give ministers in London new spending powers that will enable them to commit money to projects in all parts of the UK, even if that overlaps with the existing powers of a devolved government. 

It is designed to pave the way for a UK Shared Prosperity Fund, the long-awaited successor to EU funding programmes. Wales receives nearly £1bn year from these EU funds, but has to bid for them every six years and must agree to strict conditions on their use. 

In future, that investment will be managed by the UK Government which says it will match the levels of funding and be able to set priorities better suited to the needs of different parts of the UK by involving Welsh, Scottish and Northern Irish MPs in the decision-making process. 

Whitehall officials say they will be able to use those powers to push through "projects of national significance" and that worries the devolved administrations. 

For example, a relief road to ease congestion on the M4 could be considered such a project of national significance. However, it has been rejected by the Welsh Government on cost and environmental grounds. First Minister Mark Drakeford insists that the decision will not be revisited even though Boris Johnson has repeatedly promised to build it, including in election manifestos.

Whitehall officials believe that the changes included in the Internal Market Bill would provide the UK Government with the power to fund an M4 relief road. They acknowledge that what they call "local planning arrangements" meaning they can’t force it through against public opinion, but say that if enough Welsh MPs and Welsh local authorities wanted it, it could be funded directly by Westminster.  

Such a situation which would see overlapping powers exercised in devolved areas is nothing unusual, say UK Government sources. They cite Germany and the United States as examples of central governments financing projects in self-governing parts of the country.

In any case, those sources add, these are powers that the devolved administrations were perfectly content to leave with EU commissioners and which will now be subject to the scrutiny and input of Welsh MPs.

Nevertheless it does signal a radical change in the relationship between the devolved nations and will strengthen criticism of the bill as a "power grab."

Plaid Cymru's Westminster leader Liz Saville Roberts said 'This Bill is the single biggest assault on devolution since its creation" and that her party would "oppose it in its entirety, every step of the way."

But the UK Government says that devolution isn’t "a one-way ticket to separation" but an ongoing, evolving relationship which includes debate and discussion about who makes which decisions. 

It is also true that the Internal Market Bill reflects an increasingly aggressive approach to the union of the UK from ministers in London. It is being met in Wales by an approach that Mark Drakeford calls "assertive devolution."

That would lead to enough arguments, but add Scotland into the mix and Scottish ministers saying that such moves only increase support for independence.

It wouldn’t be overstating it to say that the approach of Boris Johnson to the union of the United Kingdom is a gamble. It could make it or break it.