New taxation powers for Wales should be put to public vote - Welsh Affairs Committee

New taxation powers for Wales should be put to public vote - Welsh Affairs Committee

New taxation powers for Wales should be put to public vote - Welsh Affairs Committee

First published in News
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NEW taxation powers for Wales should be put to a public vote, according to a report written by Parliament’s Welsh Affairs Committee scrutinising the UK Government's draft Wales Bill.

The draft bill, published following the recommendations of the Silk Commission a year and a half ago, sets out to devolve tax and borrowing powers to the Welsh Government and Assembly; make changes to the electoral arrangements of the Assembly; and clarify and update the devolution settlement in a bid to make Welsh politics more accountable.

The committee's report, released today, claims the partial devolution of income tax to the Welsh Government should be put to the people of Wales in a referendum.

The cross-party committee, which has Newport East Labour MP Jessica Morden and Monmouth Conservative MP David Davies among its membership, said: "We agree with the provision in the draft Wales Bill to make the partial devolution of income tax to the Welsh Government contingent on a ‘yes’ vote by the people of Wales in a referendum.

"We recognise that there are differences of opinion on whether there should be a narrowly focused question on the current proposals, or a more general question which would allow wider tax raising powers to be granted in future without a further referendum.

"We conclude that either approach would be reasonable provided that, if the wider question was posed, the Welsh public was aware that the consequences of a “yes” vote would be that further powers over income tax could be transferred in the future."

Members said they had sympathy with the argument that the issue of "fair funding" must be resolved before any income tax powers are devolved, so Wales is "not unfairly disadvantaged".

Fair funding, or how the size of the block grant from the UK Government is determined, needs to be examined and should not wait until after the 2015 General Election, said the committee.

Currently the size of the grant is determined by the Barnett formula, which has been criticised as providing an unfairly low allocation to Wales.

The National Assembly for Wales should have power to decide its own term length, rather than this being decided at Westminster, the report states, and recommends the clause in the draft Wales Bill which permanently extends the length of the Assembly from four to five years should be scrapped.

It should be replaced with provisions that give the Assembly the powers to determine the length of its own electoral term, the committee say.

This is the first time a bill related to Wales has been the subject of pre-legislative scrutiny.

While there was general consensus that MPs should not simultaneously serve as Assembly Members, the committee believes "it may be more practical" to extend the exemption period where an AM can simultaneously sit as an MP from six to 12 months.

David Davies MP, chairman of the Welsh Affairs Committee said it must be made clear to the public exactly what additional powers could be devolved in future if the referendum is passed, for example if the income tax model was changed.

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