The Art of the Deal – Where will Welsh Labour Turn?

No party has ever held a majority of seats in the Senedd. While Welsh Labour has consistently had the most MSs, it has either possessed precisely half the seats (30 out of 60) or fallen short. This has meant that Welsh Labour has had to get other parties on board to stay in power and get its agenda through..

In 2016 Welsh Labour was sharply reminded of this need when Plaid Cymru, Conservative and UKIP Senedd Members briefly combined forces to block Carwyn Jones from being reappointed First Minister. 2007 also saw a scare for the party as a “rainbow coalition” between Plaid Cymru, the Welsh Liberal Democrats and the Welsh Conservatives was agreed, though ultimately abandoned.

Before the 2021 election, the Welsh Government had one Welsh Lib Dem and one independent minister, essentially giving them a coalition with a majority of seats. After the election, the Co-operation Agreement with Plaid Cymru was signed: essentially a three-year budget deal that includes an agreement over a range of policy areas.

While the Agreement is continuing, there has been disquiet on both sides. Some backbench Members of the Senedd are wary of appearing too close to the other party and feel they are not getting enough from the deal. Some in Welsh Labour think ad hoc deals on an issue-by-issue basis would give them better negotiating leverage. 

The new leader of Plaid Cymru, Rhun ap Iorwerth MS, was the party’s only Senedd Member to vote against the deal in an internal party vote (though not on the Senedd floor).

Despite this opposition, the Co-operation Agreement will likely continue for the short term. The leadership of both parties are likely to want to see out the process of Senedd expansion and reform, which will need both parties to vote for the same proposal. A Senedd Reform Bill is due to be tabled in the coming Autumn. After this Bill passes, however, the agreement is on much less stable ground and could break down before its scheduled end. Both parties' disquiet with the current situation indicates little appetite for continuing formal cooperation.

Even if the Agreement survives until it lapses in Autumn 2024, it is unlikely to be extended. A new Leader of Welsh Labour, and First Minister, will likely be elected around that time and will have a mandate to negotiate new deals. This will be exacerbated by the run-up to the next Senedd election, where parties will seek to emphasise their differences.

The Welsh Government will therefore have a choice when the Cooperation Agreement ends: either come to an arrangement with Lib Dem MS Jane Dodds, possibility offering her a cabinet position, or make ad-hoc deals on a case-by-case basis, choosing to work with Dodds or Plaid Cymru. The former would make life easier and more secure for the new First Minister, but it is unclear whether Jane Dodds, or her party, would agree to a deal which would only last until the next Senedd election.  

Then there is the question of what will happen after the 2026 Senedd election. Exactly how an expanded Senedd and new electoral system will impact the Senedd’s make-up is unclear. It seems likely, however, that, on current polling, Labour and the Lib Dems will not control a majority in the Senedd. This would put Plaid Cymru in a stronger position as a Welsh Labour Government would need its support (as it is unlikely to get or seek this from the Conservatives).

What any deal would look like after then will heavily depend on the strategy and ideology of each leadership team and the election campaign and results. It is probable in this scenario, though, that Plaid Cymru would have greater leverage for negotiations than currently.