Welsh devolution has not been adequately theorised. Following the narrow vote for Welsh devolution in 1997, many academics in Wales adopted a nakedly ‘celebratory’, uncritical view of devolution as a radical change to the British state, taking at face value the claim that it was designed to rejuvenate Welsh democracy. The power relations inherent to the transformation of the British state are rarely discussed in Wales. As a consequence, the developments which have occurred in Wales since devolution – political disengagement, the rise of the far right, the vote for Brexit – seem hard to grasp: it is simply presumed that something has ‘gone wrong’ with the application of devolution. This dominant way of thinking assumes that devolution was designed to ‘work’. Using Gramsci’s concept of passive revolution, this article argues that devolution to Wales (and Scotland) was a central plank of New Labour’s transformation of both the Labour Party and the British state. Building on a reading of the post-war British state as a historic bloc, I draw attention to the power relations inherent in Welsh devolution and the ‘top down’ nature of the process, which was led by the Labour party in order to preserve its hegemony in Wales and the United Kingdom as a whole. After outlining the political struggles and strategies of transformismo which occurred within the process of passive revolution, where hegemony is temporarily ‘thinned’, I contend that contemporary Wales represents a period of interregnum, where the old world (the traditional centralised British state) has died, but a new Welsh state cannot be born. As Gramsci predicted, this has led to the emergence of a host of ‘morbid symptoms’ in Wales. I conclude by reflecting on the nature of the interregnum and whether ‘restoration’ or ‘revolution’ is likely to triumph in Wales.