This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/uk-wales-politics-34910531
The article has changed 15 times. There is an RSS feed of changes available.
| Version 10 | Version 11 |
|---|---|
| Wales offered income tax powers without referendum | Wales offered income tax powers without referendum |
| (35 minutes later) | |
| Control of some of the income tax levied in Wales can be devolved to the Welsh government without a referendum, Chancellor George Osborne has said. | Control of some of the income tax levied in Wales can be devolved to the Welsh government without a referendum, Chancellor George Osborne has said. |
| It means Welsh ministers could control £3bn of taxes a year by 2020. | It means Welsh ministers could control £3bn of taxes a year by 2020. |
| Mr Osborne also promised that spending per head on devolved services in Wales would not fall below 115 percent of spending per head in England. | Mr Osborne also promised that spending per head on devolved services in Wales would not fall below 115 percent of spending per head in England. |
| Welsh ministers said their budget would fall in real terms and they needed more details on the minimum funding pledge. | Welsh ministers said their budget would fall in real terms and they needed more details on the minimum funding pledge. |
| Key points of the Spending Review | Key points of the Spending Review |
| Announcing plans for £20bn worth of cuts in the Commons on Wednesday, Mr Osborne told MPs Britain had to tackle its national debt but put its economic and national security first, saying they provided "the foundations for everything we want to support". | Announcing plans for £20bn worth of cuts in the Commons on Wednesday, Mr Osborne told MPs Britain had to tackle its national debt but put its economic and national security first, saying they provided "the foundations for everything we want to support". |
| However, the chancellor said he had dropped plans to cut tax credits, paid to 238,000 families in Wales, after the House of Lords effectively blocked them. | However, the chancellor said he had dropped plans to cut tax credits, paid to 238,000 families in Wales, after the House of Lords effectively blocked them. |
| He also ruled out any reductions to police funding in England and Wales, after the Home Office had previously urged forces to prepare for cuts of 25% or 40%. | He also ruled out any reductions to police funding in England and Wales, after the Home Office had previously urged forces to prepare for cuts of 25% or 40%. |
| Dyfed-Powys police and crime commissioner Christopher Salmon said it was "encouraging news". | Dyfed-Powys police and crime commissioner Christopher Salmon said it was "encouraging news". |
| 'Smoke and mirrors' | 'Smoke and mirrors' |
| Mr Osborne confirmed that block grants to the Welsh government would rise to just under £15bn by 2019/20. | Mr Osborne confirmed that block grants to the Welsh government would rise to just under £15bn by 2019/20. |
| The Welsh government's total budget for 2015/16 is £15.3bn, including £14.4bn of block grants, plus around £950m from the proceeds of business rates. | The Welsh government's total budget for 2015/16 is £15.3bn, including £14.4bn of block grants, plus around £950m from the proceeds of business rates. |
| The chancellor said he would also help fund a "city deal" backing infrastructure projects for Cardiff and the surrounding areas, to which the Welsh government and local authorities have already pledged £580m. | The chancellor said he would also help fund a "city deal" backing infrastructure projects for Cardiff and the surrounding areas, to which the Welsh government and local authorities have already pledged £580m. |
| Labour Welsh Finance Minister Jane Hutt described it as "another smoke and mirrors" Spending Review. | Labour Welsh Finance Minister Jane Hutt described it as "another smoke and mirrors" Spending Review. |
| "The reality looks like an overall real terms cut to our budget," she said, predicting it would fall by 3.6% between 2015/16 and 2019/20. | "The reality looks like an overall real terms cut to our budget," she said, predicting it would fall by 3.6% between 2015/16 and 2019/20. |
| Ms Hutt added that there was "nothing to relieve the ongoing and significant pressures on public services in Wales"'. | Ms Hutt added that there was "nothing to relieve the ongoing and significant pressures on public services in Wales"'. |
| Welsh Secretary Stephen Crabb hailed it as a "landmark" settlement for Wales. | Welsh Secretary Stephen Crabb hailed it as a "landmark" settlement for Wales. |
| "By removing the need for a referendum on income tax, the Welsh Assembly will finally take its place alongside other mature legislatures by being accountable to the people it serves," he said. | "By removing the need for a referendum on income tax, the Welsh Assembly will finally take its place alongside other mature legislatures by being accountable to the people it serves," he said. |
| Although First Minister Carwyn Jones told BBC Wales he was in favour of devolving some income tax powers "in principle", the Welsh government needed more details on the plans and timescale involved, he said. | Although First Minister Carwyn Jones told BBC Wales he was in favour of devolving some income tax powers "in principle", the Welsh government needed more details on the plans and timescale involved, he said. |
| Mr Jones said Mr Osborne's minimum funding pledge for Wales, the so called "funding floor", offered no long term guarantees. | Mr Jones said Mr Osborne's minimum funding pledge for Wales, the so called "funding floor", offered no long term guarantees. |
| "One of the problems we have, of course, is that the UK government has said we will put a funding floor in place, to keep Welsh funding at a constant level, but only for the length of this Parliament," he said. | "One of the problems we have, of course, is that the UK government has said we will put a funding floor in place, to keep Welsh funding at a constant level, but only for the length of this Parliament," he said. |
| "That's not a permanent solution - we need to have full reform of the Barnett formula to see that." | "That's not a permanent solution - we need to have full reform of the Barnett formula to see that." |
| Plaid Cymru MP Jonathan Edwards welcomed the tax changes, saying: "A referendum would have been a complete waste of time and resources, and we are pleased that the UK government has finally seen sense on this matter." | Plaid Cymru MP Jonathan Edwards welcomed the tax changes, saying: "A referendum would have been a complete waste of time and resources, and we are pleased that the UK government has finally seen sense on this matter." |
| Welsh Lib Dem leader Kirsty Williams also welcomed the dropping of the referendum requirement, saying: "Tax varying powers will bring much-needed accountability to Wales' political system. | Welsh Lib Dem leader Kirsty Williams also welcomed the dropping of the referendum requirement, saying: "Tax varying powers will bring much-needed accountability to Wales' political system. |
| "For too long, successive Welsh Governments have been able to spend money without having the responsibility for raising it." | "For too long, successive Welsh Governments have been able to spend money without having the responsibility for raising it." |
| However, UKIP Wales leader Nathan Gill said: "It's frankly outrageous that Osborne has opened the door to devolve tax raising powers to Wales without a referendum for the people." | However, UKIP Wales leader Nathan Gill said: "It's frankly outrageous that Osborne has opened the door to devolve tax raising powers to Wales without a referendum for the people." |
| Rachel Banner from True Wales, the group which campaigned against further devolution in the 2011 referendum, claimed that introducing income tax powers for Wales without a referendum was "illegitimate and brings the devolution settlement into disrepute". | Rachel Banner from True Wales, the group which campaigned against further devolution in the 2011 referendum, claimed that introducing income tax powers for Wales without a referendum was "illegitimate and brings the devolution settlement into disrepute". |
| Analysis by Sarah Dickins, BBC Wales economics correspondent | |
| For the 238,000 families in Wales on tax credits, there may be relief that the chancellor has walked away from bringing in the tax credits he proposed in the Summer Budget but it is in effect just a delay. The savings will still be made and will be factored into Universal Credit when it is fully rolled out across the UK. At the moment it is in all but three local authorities in Wales, not Cardiff, RCT nor the Vale of Glamorgan, but not all areas within those authorities. | For the 238,000 families in Wales on tax credits, there may be relief that the chancellor has walked away from bringing in the tax credits he proposed in the Summer Budget but it is in effect just a delay. The savings will still be made and will be factored into Universal Credit when it is fully rolled out across the UK. At the moment it is in all but three local authorities in Wales, not Cardiff, RCT nor the Vale of Glamorgan, but not all areas within those authorities. |
| The decision by the chancellor that Wales will have the powers to raise and vary income tax are part of his policies of bringing decision making about economic development closer to home. For example, in England local authorities will be financed by council tax and business rates rather than grants. | The decision by the chancellor that Wales will have the powers to raise and vary income tax are part of his policies of bringing decision making about economic development closer to home. For example, in England local authorities will be financed by council tax and business rates rather than grants. |
| But Scotland has had powers to raise of lower income tax by 1p in the pound for many years and not used them. In Wales there are very few people, only 4,000 in 2014/15, paying higher rate tax of 45%. The vast majority pay basic rate tax and a 1p increase or decrease is estimated to only raise an extra £180m on 2012 estimates. A Welsh government that raised income tax by 1p would have to decide whether that was worth the potential political pain. | But Scotland has had powers to raise of lower income tax by 1p in the pound for many years and not used them. In Wales there are very few people, only 4,000 in 2014/15, paying higher rate tax of 45%. The vast majority pay basic rate tax and a 1p increase or decrease is estimated to only raise an extra £180m on 2012 estimates. A Welsh government that raised income tax by 1p would have to decide whether that was worth the potential political pain. |
| The ten local authorities behind the Cardiff City Deal, a request for around £500m from the Treasury as part of a £1.2 billion project, will be pleased that the chancellor confirmed support in principle. The team behind the City Deal now have to develop detailed plans for projects, involving the public and private sectors, that will make the economy of south-east Wales stronger. That may not be as straight forward as it seems. | The ten local authorities behind the Cardiff City Deal, a request for around £500m from the Treasury as part of a £1.2 billion project, will be pleased that the chancellor confirmed support in principle. The team behind the City Deal now have to develop detailed plans for projects, involving the public and private sectors, that will make the economy of south-east Wales stronger. That may not be as straight forward as it seems. |