Broadening vision of new Wales

Mr Blair and his cabinet colleagues never intended Wales to have a First Minister

Mr Blair and his cabinet colleagues never intended Wales to have a First Minister. When they drafted the legislation establishing the Welsh National Assembly, Jack Straw and others reportedly insisted the head of the newly devolved administration would be known as the First Secretary. And, of course, the Prime Minister famously determined that Alun Michael would succeed Ron Davies as Labour's leader in the principality, following his enforced resignation as Secretary of State before the assembly elections in 1999.

Yet here he sits in Cardiff, most emphatically First Minister in the Welsh "cabinet" - Rhodri Morgan, like Ken Livingstone in London, is a famous victor over New Labour's notorious control-freak tendency. So how are relations now between First Minister and Prime Minister? When Mr Blair was here at the weekend some journalists thought they detected a hint of lingering frost. Mr Morgan thinks some visiting journalists may have arrived with the "story" predetermined . . . "they are looking for it and they just write it". But he insists Wales is now benefiting from his partnership with Mr Blair.

So is Mr Blair a bit more enthusiastic about Welsh devolution? Some old Labour hands in Wales fancied he wouldn't have cared had he lost the 1999 referendum. "But he was going to abide by it either way," says Mr Morgan, noticeably not meeting that suggestion head on. "I mean there was never any doubt about that. And certainly there was awareness in Millbank [Labour's London Headquarters] that in Wales the degree of enthusiasm for the devolution project was very different from that in Scotland and that, if you like, the kind of civic society you would normally expect to be in place before devolution, as is certainly the case in Scotland, would probably come into place after devolution in Wales because we are a very centrifugal society."

Mr Morgan himself has likened observing the assembly at work to watching paint dry. Why was that?

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"Well, I mean . . . the Undersized Whiting Order." He laughs as he explains this piece of secondary legislation about putting fish back, then mentions the Sheep and Goats Identification Order 2001. "My God, you know, the secondary legislation we have to debate because we don't have primary legislative powers, can lead you to either laughter or frustration."

It's not that the debates they have lack passion, simply that the "average diet" of secondary legislation generated thus far is not the stuff of great oratory. So presumably he'd like the assembly's powers greatly expanded?

First off, the First Minister insists they have to "stretch much more the ability to generate secondary legislation that can produce good debate". Whether that will lead to primary legislative powers "only time will tell". But an independent commission will look at the assembly's powers and its report will coincide with the 2003 assembly elections. They will then be able to take an independent view on the first term experience and put that to the UK government. The timing of this will also fit well with the 2004 Inter Governmental Conference - on the so-called Charter of Competencies or constitution for Europe - agreed at the Nice summit last December.

So, he agrees with Ron Davies's description of devolution as "a process" rather than an event? "Oh yes, I have always agreed with that, and that's why we've put these steps in motion."

Despite the limits on its powers, Mr Morgan thinks their record so far is actually good and quite creative. From April next year, six weeks' free homecare for people returning from hospital, free dental check-ups and free prescriptions for the 18-25 age group. Frozen prescription charges for those who pay. Free bus travel for pensioners and the disabled.

All very worthy, but not exactly riveting stuff, I suggest. The First Minister quotes St David's famous dictum, translated to mean "Look after the little things", and ventures: "I think the assembly could be said to be abiding by the spirit of St David in the sense of a lot of these little things altogether - they add up to a gradual deviation to Welsh traditions, Welsh policy-making, but within the budget and legislative restraints."

Having delivered devolution, has Labour actually given Welsh people an incentive now to vote Liberal Democrat or for Plaid Cymru maybe to push London to develop the project further? Mr Morgan thinks not. What people want is evidence that the assembly is responding to what they want.

"They want a society that is not sharply defined from England but in which, when the occasion calls for it and the budget permits, we'll deviate when deviation is called for."

Mr Morgan's Lib Dem partners argue that the logic of devolution ultimately is federalism. Is that where the process is headed?

"I wouldn't use the word federalism because I think the key thing is whether you have a written constitution. I think in about 10 years' time the British systems will be creeping - from English devolution, the House of Lords reform, the royal family reform, the Northern Ireland peace process having settled in well - all these different aspects and they may well in the end require all of this to be written down."

The Irish Government, of course, was quick off the mark in establishing its consular office here. And some British unionists suspect Ireland's diplomatic activity in Cardiff and Edinburgh is based on an underlying calculation that devolution does ultimately point to the break-up of the United Kingdom. Does he think there might be something in that?

"No, not really," he replies. "I had assumed it was to do with the unionist demand for east/west links and that the purpose of the Consul General's appointment here was to be the link-person with the Welsh Assembly with a view to the effective operation of the British Irish Council. That was how it was always explained and that was a unionist demand in a way to counterbalance the North/South arrangement."

Mr Morgan says the "big disappointment" resulting from continued difficulties in the peace process has been the failure so far to develop the British Irish Council. And he clearly entertains none of the sceptical notions that this perceived "sop" to the unionists would in any event be just another talking shop. "The relationship with the Irish Republic, which is our immediate neighbour to the west, is of huge potential importance and it is a great pity the problems in Northern Ireland have prevented the British Irish Council getting off the ground."

Unlike Henry McLeish in Scotland, Rhodri Morgan doesn't publicly purport to lead "the government" of Wales. There may be sensitivity here to protocol and the role of the Foreign Office, but for all his emphasis on the BIC context it is clear Mr Morgan is impatient to develop the potential for a strong bilateral relationship with Dublin - with possible joint initiatives on everything from tourism and transport, to agricultural development and marine conservation.

He is certain that it will happen, as he is that an early decision on the euro is important for Wales. Thinking of the number of ferry ports alone, Mr Morgan explains that truckers and tourists won't expect to have to change their money along those transport zones.

Then there is the dependence on manufacturing and the way in which companies like Toyota, Honda, Nissan and BMW already insist that people quoting for business do so in euros. "Even a British buyer of British steel pays for it in euros."

The First Minister sounds like a man who sees it as all but inevitable. "The euro zone in a way will include specific economic sectors near ferry ports and in certain industries like steel and heavy engineering," he says.

But does he think it inevitable that the Blair government in the next parliament will decide to go for membership of the euro? Free of the Millbank controllers, Labour's Welsh leader is crystal clear. "That's exactly what I expect to happen, yes. Whether it is this year, straight after the election if Blair wins a landslide, I just don't know . . . but certainly whenever I talk to industrialists contemplating investment, the uncertainty of the relationship between sterling and the euro is a major disadvantage for us."