Thursday, 9 June 2011

More cash wanted

“No taxation without representation” was an effective political slogan used by the colonists in the New World to tackle their lack of representation in the mother Parliament.  

“Representation without taxation” as a slogan doesn’t have the same resonance. But this is the line that Carwyn Jones seems to be pushing in his dealings with Mr Cameron.

Yesterday, the First Minister ruled out the Welsh Assembly having tax varying powers. His line seems to be that Wales is underfunded, so give us more cash to spend. End of story.

He is right in arguing that Wales is underfunded but quite wrong in closing his mind to taxation powers.

With Scotland and Northern Ireland pushing for more fiscal autonomy from HM Treasury it is doubtful if Mr Cameron will concede to Wales a system that increases the Treasury contribution without some measure of responsibility resting on Welsh Ministers shoulders.

After all even the smallest Community council has to raise its own money for its pet projects. Why should the Welsh Government be treated differently?

The thrust of the First Minister for Wales case that the country is under funded, rests on the cogent arguments produced by Aberdare born economist Gerry Holtham. In a report produced for the Welsh Government he proved conclusively that Wales was being short changed.
In Holtham’s view the Welsh Government should pursue with the UK government a needs based formula as a means of determining the Welsh block grant.
To be fair to Carwyn Jones it is this strategy that he was pushing in Number Ten, yesterday.
But in pushing that strategy the First Minister seems to be blinkered to the rest of Holtham’s recommendations. Namely, that part of a Treasury block grant should be replaced with revenue raised from Welsh taxpayers.
Holtham and his fellow commissioners wanted ministers to be able to vary the basic and higher rates of income tax by up to 3p in the pound.
The First Minister’s opposition to such proposals beggars belief.
Surely there is something inherently wrong in a democracy for a government not to want to raise its own cash.  It prefers to push for an increase donation to its begging bowl from central government and seek no direct payment from the voters that put them in the job.
It surely should be the aim of government here in Wales in the next five years to reduce dependency on central government grant and increase its reliance on revenue from the voters that elect it. This would surely make for a more accountable government.
The announcement, today, that Scotland will have increased borrowing powers must point to Wales shortly been granted the same. So more fiscal control will come despite Carwyn Jones’s is reticence. Taxation would be a good place to start.
Lord North lost the colonies because he didn’t make the connection between taxation and representation.  It’s always a mistake not acknowledging that they go together. The Welsh Government should wise up to the fact.

1 comment:

  1. Wales is not underfunded, it is merely wasteful of the funds it receives.

    More funds would lead to more waste.

    Just like any other addict, addicted as we are to spending other people's money, we need to endure a long period of 'cold turkey'.