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| Version 1 | Version 2 |
|---|---|
| Tax and budget review for Wales | Tax and budget review for Wales |
| (10 minutes later) | |
| An independent commission is to investigate how Wales receives public money from the UK Treasury and look at possible tax-varying powers. | An independent commission is to investigate how Wales receives public money from the UK Treasury and look at possible tax-varying powers. |
| The issue has been central to talks on a possible coalition deal between Labour and Plaid Cymru. | The issue has been central to talks on a possible coalition deal between Labour and Plaid Cymru. |
| Wales is funded under the Barnett formula, which critics have long claimed does not take into account the nation's needs properly. | Wales is funded under the Barnett formula, which critics have long claimed does not take into account the nation's needs properly. |
| But the UK Treasury reacted by saying it had no plans to abandon the formula. | But the UK Treasury reacted by saying it had no plans to abandon the formula. |
| A spokesperson for the Treasury - which has the final say on how public money is allocated across the UK - said the formula was "a fair allocation which reflects population shares in the different nations of the United Kingdom." | A spokesperson for the Treasury - which has the final say on how public money is allocated across the UK - said the formula was "a fair allocation which reflects population shares in the different nations of the United Kingdom." |
| It will also consider tax-varying powers including corporation tax... and importantly, borrowing powers Budget Minister Jane Hutt | It will also consider tax-varying powers including corporation tax... and importantly, borrowing powers Budget Minister Jane Hutt |
| As AMs voted unanimously in favour of establishing the commission, Budget Minister Jane Hutt said now was the right time to hold such a review. | As AMs voted unanimously in favour of establishing the commission, Budget Minister Jane Hutt said now was the right time to hold such a review. |
| It has also been a key issue in negotiations between Plaid, the Tories and Liberal Democrats to set up a so-called "rainbow coalition" . | It has also been a key issue in negotiations between Plaid, the Tories and Liberal Democrats to set up a so-called "rainbow coalition" . |
| Labour is five seats short of a majority and ruling as a minority assembly government. Discussions have been under way since the 3 May election on various options which could see Labour either remain in power or be removed. | Labour is five seats short of a majority and ruling as a minority assembly government. Discussions have been under way since the 3 May election on various options which could see Labour either remain in power or be removed. |
| The funding review announcement came during a debate on a Lib Dem motion calling for an independent commission to investigate issues relating to the funding and financial powers of the assembly government. | The funding review announcement came during a debate on a Lib Dem motion calling for an independent commission to investigate issues relating to the funding and financial powers of the assembly government. |
| Plaid Cymru has long wanted a review of Wales' funding | |
| Ms Hutt responded to the call by saying: "We've concluded that the time has now come to put in place such an independent commission and I think the commission which we intend to appoint will not only review assembly funding and finance. | Ms Hutt responded to the call by saying: "We've concluded that the time has now come to put in place such an independent commission and I think the commission which we intend to appoint will not only review assembly funding and finance. |
| "But it will go further than that. It will also consider tax-varying powers including corporation tax... and importantly, borrowing powers. | "But it will go further than that. It will also consider tax-varying powers including corporation tax... and importantly, borrowing powers. |
| "It's well-known that for the past two terms we didn't advocate such a commission. The time has now come for this to take place." | "It's well-known that for the past two terms we didn't advocate such a commission. The time has now come for this to take place." |
| Ms Hutt also said that they could not establish a commission "with a pre-determined agenda which is why the independent review is so important". | Ms Hutt also said that they could not establish a commission "with a pre-determined agenda which is why the independent review is so important". |
| 'Small price' | 'Small price' |
| During the debate the Lib Dem AM Jenny Randerson admitted that it would not be an easy process. | During the debate the Lib Dem AM Jenny Randerson admitted that it would not be an easy process. |
| But she reminded the chamber that the former Labour cabinet minister Lord (Joel) Barnett himself believed that the formula needed to be reviewed. | But she reminded the chamber that the former Labour cabinet minister Lord (Joel) Barnett himself believed that the formula needed to be reviewed. |
| The formula was devised in 1978 as a means of deciding how public money was spent across the UK. | The formula was devised in 1978 as a means of deciding how public money was spent across the UK. |
| Conservative AM Alun Cairns said, however, that there was no evidence that Wales would be better off if the formula was reviewed. | |
| He said that the assembly should have the evidence before calling for a change of policy. | He said that the assembly should have the evidence before calling for a change of policy. |
| Meanwhile the Royal College of Nursing has joined a cross-section of groups in the fields of transport, health and education to call once again for an independent inquiry into how Wales is funded. | Meanwhile the Royal College of Nursing has joined a cross-section of groups in the fields of transport, health and education to call once again for an independent inquiry into how Wales is funded. |
| Earlier this week Prime Minister Tony Blair said that the Barnett formula was a "small price to pay" for keeping the UK together. | Earlier this week Prime Minister Tony Blair said that the Barnett formula was a "small price to pay" for keeping the UK together. |