Wales gets its finance-raising powers

David Cameron and Nick Clegg today visited Wales to give their response to the Silk Commission into further Welsh devolution.

Almost a year after the Silk Commission into devolution Wales published its first report calling for the Welsh Assembly and government to be given a plethora of fiscal powers, the Prime Minister and his Lib Dem deputy today visited Wales to give their response.

Among the announcements made, Whitehall is pledging to provide the Assembly with powers to raise the finances needed for vital improvements to the M4 as well as over stamp duty.

However, perhaps the most significant of all the announcements is the decision to pave the way for a referendum in Wales on whether the devolved institutions in Cardiff Bay should be granted certain, limited powers, over income taxes.

Outlining the plans in a guest piece for the Western Mail today, David Cameron and Nick Clegg conclude:

“This is a government that believes in devolution and is determined to deliver on devolution. If you get the balance right between the UK Parliament and a devolved institution then you can get the best of both worlds – and that’s true whether you live in Wales, Scotland or Northern Ireland.

“Although there’s a long way still to go, there are a number of reasons to be cautiously optimistic in Britain today. The economy is growing. The deficit is falling. And in the past three years, more than a million people have got back into work.

“The challenge now is to make sure that all parts of the country share in the recovery, and no more so than Wales.”

They continue:

“We want young people growing up here today to know that there’s a future for them – that they don’t have to move to London or go abroad to get on in life and achieve their dreams.

“This is our mission for Wales – and that’s what today’s announcement on devolution is about. We’ve got a plan, its working and now we’ve got to finish the job we started.”

The announcement comes following a recent meeting of the Joint Ministerial Committee at which Wales’ First Minister, Carwyn Jones accused the Prime Minister of “holding Wales back” over the slow progress in responding to the first part of the Silk Commission report.

Welcoming the announcement, finance minister Jane Hutt said:

“This is excellent news for Wales, and a significant milestone in our story of devolution.  It gives the National Assembly and the Welsh Government new responsibilities and significant opportunities to boost jobs and support the Welsh economy.”

The developments come as one former holder of the office has called for the post of secretary of state for Wales to be abolished in order to find the savings needed to finance a greater number of Assembly Members to cope with the increased legislative responsibilities Cardiff Bay now has.

Speaking this evening at the National Library of Wales in Aberystwyth, Lord Morris of Aberavon, who served as Welsh secretary in a Labour government between 1974 and 1979 and as Attorney General for two years under Tony Blair, will say:

“I am now persuaded, following the granting of the right to legislate in the Assembly, that the case for increasing the number of members has strengthened, and I accept it.

“The public will take quite a bit of persuading about this. Unfortunately, parliamentary representatives are not too popular. To increase their number is another story. Democracy is not without its cost. The more members, the more will be the cost. The public will expect some sacrifice to meet the costs.”

Calling for the Wales Office to be abolished as a way of making such savings, he will continue:

“The fifth wheel on the parliamentary coach is the existence of the Secretary of State in Scotland and Wales. There are two junior ministers in the Wales Office, one in the House of Commons and one brand new one for the first time ever in the House of Lords.

“What on earth they do on a day-to-day basis, goodness only knows. They have few duties following the advent of devolution, and even fewer after the transfer of legislative powers to the Assembly.

“From my experience as the holder of the office for over five years, it is impossible to justify these posts today.”

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