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Two years on, and the basis of the Labour-Plaid alliance is facing calls for a re-boot

The Welsh Assembly Government has marked two years since the signing of the One Wales agreement between Labour and Plaid Cymru with a series of twenty-four special events in Wales held last week and this week. That’s one for each month, if you can’t work out why twenty-four matters.

The mid-way juncture is worth noting. It is a good point to take stock of the last two years and to look forward to the next two years until the next Assembly election in May 2011. This was the main reason that my company, Positif Politics, co-hosted this week with the Bevan Foundation a conference on “One Wales, Two Years”. Our intention was ambitious. We hoped to look at not just the process of coalition making that happened in 2007, but to look forward to what might happen in 2011 too; and to evaluate and discuss the progress made by the Welsh Assembly Government on delivering its policy pledges.

To do all this in just one day was always a challenge, and was hugely dependent on the quality of speakers and participants. The choices we made did not let us down. From the Welsh Assembly Government side, Elin Jones AM outlined why Plaid Cymru had joined One Wales in the first place; Carwyn Jones AM stressed the strides the Government had made in two years; and Mark Drakeford, the senior Special Adviser to the First Minister, provided an impressive philosophical overview of the purpose it was trying to achieve, and why the current Welsh Assembly Government was philosophically the correct fit for the times.

Other perspectives were critical too. Nick Bourne AM used the opportunity of a keynote speech to set out the pillars of his vision of modern Welsh Conservatism, while Kirsty Williams offered a frank appraisal of what had motivated her party in 2007 and what might be different in 2011. On the same theme, Vaughan Roderick from BBC Wales concluded the day with a compelling account of the politics that had underpinned the 2007 negotiations and his views on why the circumstances of 2011 would be radically different.

It was a very well rounded day. Other participants gave us perspectives from academia on what makes coalitions work, or offered diverse civil society opinions on the performance of One Wales. Some of the brightest of the new AM intake of 2007 provided frank assessments of how the last two years had been for them, illustrating diversity within party groups to the challenges that are faced in governing.

There were clear narratives underpinning the day. One constant theme for the day was whether the One Wales agreement should be re-negotiated. Both David Rosser from CBI Wales and Steve Thomas from the Welsh Local Government Association argued that One Wales had been written for a different time. Nick Bourne added his voice too, calling for an end to key One Wales policies based on the same unversalism that Mark Drakeford had advocated as the underpinning intention of the Government. But without a doubt there was a case certainly to be made and answered that One Wales was now in need of refinement. Having been originally negotiated before the world recession and the consequent reduction in Assembly budgets, the argument was put that One Wales now needed to be re-negotiated so that budget reductions were made explicit and that new priorities were set out which reflected defending core services. Quite naturally, representatives from both parties in One Wales were staunch in their defence of the agreement, not just in terms of its achievements but also in respect of the plans for the next two years. Renegotiation was not an option, they said in a single voice.

The same call for change was set out by Kirsty Williams, who also used the conference to also address rumours that the make up of the One Wales government itself needed to be renegotiated. On Saturday the Western Mail ran a story that mooted the suggestion that some unnamed Labour strategists were calling for the Liberal Democrats to join Labour and Plaid Cymru “in an enlarged left-of-centre Assembly Government after Rhodri Morgan steps down as First Minister.” Such a suggestion provided an interesting backdrop to the conference. But the conference also provided Kirsty with an opportunity to put on the record that such a fundamental alteration was not on the cards. But don’t expect this to be the last time someone suggests such an idea.

Without a doubt though, the one thing that united every speaker was the reality that for One Wales – and indeed Wales as a whole – is that the next two years are likely to be tougher than the last two. The severity of the economic situation means that hard choices will need to be made. Carwyn Jones, seen as the front runner for Welsh Labour leadership in the autumn, stressed this in his contribution to the conference. The challenges of the next twenty-two months are going to be considerable, especially against a historical backdrop where the Assembly’s budget has basically doubled during the decade of devolution. Until now there has been no real overpowering financial pressure to make large economies across budgets, even if such an intention has been set out through agendas like Making the Connections for some years. A new world where Assembly funding is now going to become ever more pressured is a different one indeed.

There is no space any longer for easy financial fixes. But it is also clear that political fixes need to be durable and well-argued too, not just with the public but within the two party groups in One Wales too. The fault-line in One Wales is not between Labour and Plaid. It is more likely on an issue by issue basis between groupings within parties. They will do what parties always do – discuss issues internally and sometimes disagree. Without a doubt financial pressures will lead to some financial plans being changed, no matter how up front the Welsh Assembly Government is about doing this. But providing such discussions are properly handled and the participants feel dealt with honestly, the political fixes will compliment the financial ones. By maintaining political and financial confidence at the same time, the One Wales government can and will survive until 2011.