Osborne's Spending Review to reveal size of Welsh budget
Wales to be offered income tax powers without referendum
(about 1 hour later)
The size of the budget for the Welsh government following the 2016 assembly election is to be revealed.
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.
Chancellor George Osborne's Spending Review will set out the UK government's spending plans for the next four years.
It means Welsh ministers could control £3bn of tax a year by 2020.
Higher spending on the English NHS will trigger increases in Welsh ministers' £15.3bn budget, but cuts to council spending in England could reduce it.
Mr Osborne also promised that spending on devolved services in Wales would not fall below £115 for every £100 spent in England.
First Minister Carwyn Jones urged the chancellor to "take the shackles off Wales" to help its economy grow.
The news came as he outlined details of his Spending Review to the House of Commons.
Fair funding for Wales, a city deal of investment for Cardiff, and rail electrification would be "a boost to our economy", he said on Twitter.
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 has said her government has £1.3bn less to spend on public services than it did in 2010.
A UK government source described the changes as a "landmark" settlement for Wales.
Mr Osborne has argued if Britain does not deal with its national debt, it runs risks with its economic security.
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."
The Spending Review is expected to shape domestic UK politics between now and 2020, but Welsh politicians will be looking at its immediate impact in the run-up to the assembly election in May.
Announcing details of his Spending Review, Mr Osborne said Britain had to tackle its national debt and put its economic and national security first, saying they provided "the foundations for everything we want to support".
The chancellor had to rethink plans to cut the 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.
There is likely to be better news for Welsh pensioners, with the chancellor confirming an increase in the basic state pension to £119.30 a week from April 2016.
He also ruled out any cuts to police budgets in England and Wales, after the Home Office had previously urged forces to prepare for cuts of 25% or 40%.
Mr Osborne is also expected to set out how he will guarantee that public spending in Wales will remain higher per head than in England, by introducing a "floor" under the so-called Barnett formula that decides changes in the Welsh budget.
The chancellor was also due to confirm details of the Welsh government's budget, currently £15.3m,
But Plaid Cymru said the floor was no substitute for fair funding, with public spending in Wales still lower per head than in Scotland.
Labour Welsh Finance Minister Jane Hutt has said her government currently has £1.3bn less to spend on public services than it did in 2010.
Analysis by David Cornock, BBC Wales Parliamentary correspondent
Earlier in November, she wrote to Mr Osborne urging him to think again about further public spending cuts, saying investment was vital for a "balanced recovery".
Today's Spending Review may shape UK politics for years to come, but Welsh politicians will be looking at its more immediate impact.
George Osborne may have one eye on his chances of succeeding David Cameron before 2020, but Welsh politicians have their eyes firmly on the upcoming assembly election.
The chancellor's decisions will effectively set the budget for whoever wins next May - and help frame the debate during the election campaign.
His decision to prioritise NHS spending in England should deliver extra cash for Wales, as should any protection given to the schools budget.
But cuts in local government in England could be reflected in Wales if the Welsh government displays similar priorities.
Mr Osborne will unveil changes to his plans for tax credits, paid to 238,000 families in Wales. The 243,000 who receive housing benefit will watch anxiously to see if he cuts their payments.
Some UK government departments have been asked to plan for budget cuts of either a quarter or two-fifths by 2020.
Any reductions will be reflected in the Welsh government's budget, under a spending formula.
Earlier in November, Ms Hutt wrote to Mr Osborne urging him to think again about further public spending cuts, saying investment was vital for a "balanced recovery".
She said the Welsh government's budget had already shrunk by 8% in real terms over the past five years.
She highlighted plans for a metro-style transport system in south east Wales, a tidal lagoon in Swansea Bay and a "city deal", unlocking major investment in Cardiff, as major funding priorities to boost economic growth.
Ms Hutt also urged Mr Osborne to give Welsh ministers "maximum" financial flexibility to invest in major infrastructure projects, but not at the expense of day-to-day funding for public services.
The UK government has said Wales has been "thriving" under its long-term plan and must contribute to the savings needed to make the UK's finances more secure.
