5.1 One Wales Government
2007 saw Labour returned with 26 seats – their lowest number in the three Assembly elections to date. With Labour in a weakened position, the Conservative, Liberal Democrats and Plaid Cymru briefly considered a ‘rainbow coalition’ but this was rejected by a special conference of the Liberal Democrats.
Rhodri Morgan stood unopposed as leader of a minority government and was elected First Minister. A month later, the One Wales coalition with Plaid Cymru was agreed giving the government a majority of 22. There were two major components of this agreement which drove reform of the devolution settlement: a commitment to a review of the Assembly’s funding and finance and a commitment to a referendum on full law-making powers, as permitted under the GoWA 2006.