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| Wales should have power to raise taxes, report finds | Wales should have power to raise taxes, report finds |
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| The power to raise taxes and borrow money should be devolved to Wales, a key report on the future of the country and its relationship with the rest of the UK has concluded. | The power to raise taxes and borrow money should be devolved to Wales, a key report on the future of the country and its relationship with the rest of the UK has concluded. |
| A "significant and historic" series of recommendations designed to "empower" Welsh voters and the Welsh government have been set out in the Silk report, written by the Commission on Devolution in Wales. | A "significant and historic" series of recommendations designed to "empower" Welsh voters and the Welsh government have been set out in the Silk report, written by the Commission on Devolution in Wales. |
| The report makes 33 recommendations and says that, if implemented, they would make the Welsh assembly responsible for determining a proportion of its own budget for the first time, thus making it more accountable to voters. | The report makes 33 recommendations and says that, if implemented, they would make the Welsh assembly responsible for determining a proportion of its own budget for the first time, thus making it more accountable to voters. |
| Recommendations in the report, entitled Empowerment and Responsibility: Financial Powers to Strengthen Wales (pdf), include: | |
| • The national assembly for Wales should be empowered to take tax decisions in devolved policy areas, starting with the smaller-yielding taxes, such as landfill tax, stamp duty and aggregates levy. | • The national assembly for Wales should be empowered to take tax decisions in devolved policy areas, starting with the smaller-yielding taxes, such as landfill tax, stamp duty and aggregates levy. |
| • Air passenger duty should be devolved for long-haul flights initially, with full devolution possible in future. | • Air passenger duty should be devolved for long-haul flights initially, with full devolution possible in future. |
| • Responsibility for income tax should be shared between Cardiff Bay and Westminster, with the Welsh government being able to vary income tax rates within the UK income tax structure (but income tax devolution should be subject to a referendum). | • Responsibility for income tax should be shared between Cardiff Bay and Westminster, with the Welsh government being able to vary income tax rates within the UK income tax structure (but income tax devolution should be subject to a referendum). |
| • Power to borrow to support increased investment in infrastructure. | • Power to borrow to support increased investment in infrastructure. |
| According to the report, the package of recommendations would ensure that around one quarter of devolved spending in Wales would be determined by taxes decided in the country. | According to the report, the package of recommendations would ensure that around one quarter of devolved spending in Wales would be determined by taxes decided in the country. |
| The chairman, Paul Silk, said: "The commission worked closely as a team over the past year and have all agreed recommendations which we firmly believe would benefit Wales and strengthen its democracy and economy. Our proposals would provide the Welsh government with an important set of fiscal levers and would enable political parties in Wales to offer people real fiscal choices. | The chairman, Paul Silk, said: "The commission worked closely as a team over the past year and have all agreed recommendations which we firmly believe would benefit Wales and strengthen its democracy and economy. Our proposals would provide the Welsh government with an important set of fiscal levers and would enable political parties in Wales to offer people real fiscal choices. |
| "What we are recommending is significant and historic. It will give Wales its own tax and borrowing system for the first time." | "What we are recommending is significant and historic. It will give Wales its own tax and borrowing system for the first time." |
| The secretary of state for Wales, David Jones, said: "I will now consider the report's recommendations, discuss with relevant colleagues across government and respond formally in due course." | The secretary of state for Wales, David Jones, said: "I will now consider the report's recommendations, discuss with relevant colleagues across government and respond formally in due course." |
| Danny Alexander, the chief secretary to the Treasury, said: "I look forward to reviewing the commission's recommendations and working with the Welsh government and all parties in the Welsh assembly to deliver an ambitious outcome that best meets the needs of the people of Wales." | Danny Alexander, the chief secretary to the Treasury, said: "I look forward to reviewing the commission's recommendations and working with the Welsh government and all parties in the Welsh assembly to deliver an ambitious outcome that best meets the needs of the people of Wales." |
| The cross-party commission was set up by the UK government in October 2011. Its remit was divided into two. This first part was to consider the assembly's financial powers. It will now begin the second part, taking a wider look at the powers of the national assembly, to report by spring 2014. | The cross-party commission was set up by the UK government in October 2011. Its remit was divided into two. This first part was to consider the assembly's financial powers. It will now begin the second part, taking a wider look at the powers of the national assembly, to report by spring 2014. |
| The Electoral Reform Society Wales warned the size of the assembly would need to be reviewed if it received extra powers. | The Electoral Reform Society Wales warned the size of the assembly would need to be reviewed if it received extra powers. |
| It says consideration needs to be given to how many assembly members would be needed in future to ensure ministers were properly accountable for the £15bn budget. | It says consideration needs to be given to how many assembly members would be needed in future to ensure ministers were properly accountable for the £15bn budget. |
| The society's director, Steve Brooks, said: "Over the years, additional powers have been devolved to the assembly including full law-making powers last year. While this is a welcome maturing of devolution, the fact that 13 of our 60 assembly members are either ministers or preside over assembly business means that the number of government backbenchers and opposition members able to hold the Welsh government to account is limited. | The society's director, Steve Brooks, said: "Over the years, additional powers have been devolved to the assembly including full law-making powers last year. While this is a welcome maturing of devolution, the fact that 13 of our 60 assembly members are either ministers or preside over assembly business means that the number of government backbenchers and opposition members able to hold the Welsh government to account is limited. |
| "Voters across Wales will want to know that ministers are using any new tax and borrowing powers responsibly. We need a strong national assembly that's able to hold the government's feet to the fire, and scrutinise how taxes are raised, public money is spent, and laws made." | "Voters across Wales will want to know that ministers are using any new tax and borrowing powers responsibly. We need a strong national assembly that's able to hold the government's feet to the fire, and scrutinise how taxes are raised, public money is spent, and laws made." |
| How would the changes affect Welsh people? | |
| The Silk report sets out the effects Welsh citizens would notice if its recommendations were adopted. They include: | |
| • All income tax payers would pay part of their income tax to the Welsh government. In addition, the rate of income tax they paid would be determined by the Welsh government. So Welsh income tax payers could see a link between tax and spending in Wales. | |
| • The differential between basic and higher rates of tax would be determined by the Welsh government so it could make the tax system more or less progressive than the rest of the UK according to the preferences of Welsh citizens. | |
| • Houses bought would be subject to a Welsh stamp duty or whatever replacement tax the Welsh government might introduce once stamp duty was devolved. | |
| • People making long-haul flights from a Welsh airport would pay a Welsh rate of air passenger duty, which could be higher or lower than in England. |