TC09680 - [2025] UKFTT 01332 (TC)

The first three stages of Welsh devolution were summarised by Lord Reed and Lord Thomas in Agricultural Sector (Wales) Bill (AG Ref) [2014] UKSC 43; [2014] 1 WLR 2622 (“Agricultural Sector (Wales) Bill”) as follows:

“The first phase of devolution: executive devolution under the Government of Wales Act 1998

19.

The Government of Wales Act 1998 (the “GWA 1998”) established the first phase of devolution to Wales in the form of what has been described as executive devolution. That Act established the Assembly as a single body corporate. It was given the function to make subordinate legislation in place of the Secretary of State and to elect an Assembly First Secretary who with Assembly Secretaries appointed by him were to exercise administrative functions.

…

The second phase of Welsh devolution: the [Government of Wales Act 2006 (“GWA 2006”)], the split of legislative and executive functions and the competence to legislate under Legislative Competence Orders

24.

In 2004 a Commission under Lord Richard of Ammanford recommended significant changes to the scheme of devolution for Wales. As a result the Secretary of State for Wales published in June 2005 a White Paper, Better Governance for Wales (Cm 6582). It proposed a second phase of devolution by separating the legislative and executive functions of the Assembly and creating powers under which the Assembly could be enabled by Orders in Council to make or modify primary legislation.

25.

The White Paper also proposed provision for a possible move to a third phase of devolution:

‘3.22 … However, it may prove in the future that even these additional powers are still insufficient to address the Assembly’s needs and the option of providing the Assembly with further enhanced law-making powers needs to be available.

3.23

This would mean transferring primary legislative powers over all devolved fields direct to the Assembly. The Government is clear that this would represent a fundamental change to the Welsh settlement and would have to be endorsed in a referendum. The Government has no current plans for such a referendum but, in order to avoid the necessity of a third Government of Wales Bill, it proposes to provide for the possibility in this legislation.

…

3.26

Conferring primary legislative powers on the Assembly would mean that, like the Scottish Parliament, it would be able to make law on all the matters within its devolved fields. This would not include those subjects which remain the responsibility of Whitehall Departments for Wales as well as for England. Like Scotland, these would include Fiscal and Monetary Policy, Immigration and Nationality and Social Security. Also excluded would be fields where the Scottish Executive, and the Secretary of State for Scotland before devolution, have functions but the Assembly does not, such as civil and criminal law, the administration of justice, police and the prison service.’

26.

The GWA 2006 gave effect to each of these proposals.

i)

Parts 1 and 2 separated and redefined the functions of the Assembly and the Welsh Assembly Government.

ii)

Part 3 provided for the second phase of devolution by giving the Assembly competence to make Assembly Measures which could amend primary UK legislation or take effect as primary legislation within the conditions set out in sections 94-95 and Schedule 5. Section 94 enabled the Assembly to make Assembly Measures which related to one or more of the ‘matters’ specified in Schedule 5. Section 95 enabled Schedule 5 to be amended by Order in Council so as to add, vary or remove matters relating to the ‘fields’ listed in Schedule 5, and so as to add, vary or remove such fields…

iii)

Section 103 of Part 4 and Schedule 6 provided for a referendum to take place in the future on the question of whether the remaining provisions of Part 4 providing for the Assembly to have power to make Acts within the competence set out in sections 107-109 and Schedule 7 should come into force.

27.

The separation of the functions of the Assembly and the Welsh Government came into effect on 4 May 2007 and the powers under Part 3 and Schedule 5 took effect then…

The referendum in 2011

28.

In June 2010 a decision was made to hold a referendum under section 103. Following the referendum in March 2011, the remaining provisions of Part 4 of the GWA 2006 were brought into force on 6 May 2011, giving effect to the third phase of devolution.

The third phase of devolution: the power of the Assembly to make Acts under Part 4 and Schedule 7

29.

The legislative scheme for the third phase of devolution under Part 4 of, and Schedule 7 to, the GWA 2006 did not follow the scheme of devolution for Scotland and Northern Ireland. Under those schemes, often referred to as reserved powers models, competence is given to the devolved legislatures in respect of all matters, unless the matter is excepted by way of reservation to the UK Parliament. The GWA 2006, despite the recommendation of the Richard Commission that the reserved powers model of Scotland and Northern Ireland be adopted, gave legislative competence only in respect of enumerated matters, in other words what is referred to as a conferred powers model.”

Under this third phase of devolution, the Regulation and Inspection of Social Care (Wales) Act 2016 (“RISW 2016”) was passed by the National Assembly for Wales, introducing a new regulatory regime for the registration and regulation of certain social care services.

In outline, RISW 2016 provides for persons who provide regulated services to register with Welsh Ministers. RISW 2016 gives Welsh Ministers broad powers to regulate such persons, including requiring information, performing inspections and taking action where requirements are not met. The functions and duties of Welsh Ministers under RISW 2016 are undertaken by CIW.

CIW commenced its regulation of welfare services in Wales on 1 January 2018. At all relevant times until 1 January 2018, the Care and Social Services Inspectorate Wales (the “CSIW”) regulated welfare services supplied in Wales. The CSIW was regulated pursuant to the Care Standards Act 2000, an Act of Parliament. It is agreed that any supplies of welfare services (or related goods) made by Cascade in Wales whilst regulated by the CSIW were exempt from VAT.

For completeness I note that a further stage of devolution took place with the enactment of the Wales Act 2017. This switched Wales from a conferred powers to a reserved powers model (like Scotland since 1998).

Section 16 of the Wales Act 2017 also inserted a new s150A into GWA 2006. By Section 2 of the Senedd and Elections (Wales) Act 2020 the National Assembly for Wales renamed itself as “Senedd Cymru or the Welsh Parliament”.