Monday, 19 November 2012
Silk and taxes
Community councils have it, County Councils have it, the Westminster government has it, even those dreaded European’s have it and maybe, just maybe, the Welsh Assembly might have it. What? you may ask. The right to raise some of its own cash from taxes.
A Commission set up by the Westminster government under the Chairmanship of Paul Silk, has come to the startling conclusion that the Welsh government would be more responsible with its money if it had to raise it itself. It needs an year long Commission to tell us what is obvious to anyone that manages a household budget.
They put in much grander language though. That’s the benefit of a posh education for you. “Devolving tax and borrowing powers to Wales would empower the Welsh electorate and Government, increase responsibility.”
The report called ‘Empowerment and Responsibility: Financial Powers to strengthen Wales’ has 33 ways to make the Assembly more grown up and responsible.
By grown up it means not giving it the powers straight away ‘cos in their light, the Assembly is seen as some wayward teenager. The Commission’s task is to make the Welsh Government learn to be responsible. And the way to do it? That well and trusted principle of not allowing anyone to run before they’ve learned to walk.
The polite way of saying it without causing upset. “The proposals to give Wales its own tax and borrowing system for the first time represent a significant change which should be implemented step-by-step to build experience and balancing risks to the Welsh and UK budgets.”
So the Assembly is given the equivalent of a paper round - taxes that don’t generate to much tax. These are landfill tax, stamp duty land tax, and an aggregates levy. Also business rates should be fully devolved.
Just to underline the point that the Assembly only get the right over the cash a bit by bit. They say that Air Passenger Duty should be devolved for long-haul flights initially, with future full devolution possible. So that occasional flight to distant lands from Cardiff you can have the money from, but the large numbers going to Malaga on holiday generating loads of cash, well CarwynJones can forget that. It’s far to much cash and that amount of cash would just go to Carwyn Jones’s head.
One day children you’ll inherit the earth. Well, if the Welsh people agree after yet another referendum perhaps not the earth but certainly power over income tax.
Meanwhile to help you learn all about it we’ll make it a shared responsibility between Cardiff Bay and Westminster, with the Welsh Government being able to vary income tax rates within the UK income tax structure.
They do acknowledge that Wales might have been short changed in the past and that the proposals on income tax should not go ahead until the heads of Jane Hutt and Danny Alexander are knocked together and they resolve the issues of fair funding in a way that is agreed by both the Welsh and UK Governments.
All in all if the report gets the green light about a quarter of Wales’s spending will be raised in taxes raised in Wales.
The report is now in the hands of David Jones, the Secretary of State to do with it as he sees fit.