A nod, a lockstep, and new tax powers for Christmas

 

You could call it a historic day, in the sense the term is usually deployed to mean something that hasn't happened before in Welsh politics.

The Wales Bill was introduced into the House of Commons early this afternoon. Just before half past one, Deputy Speaker Lyndsay Hoyle announced: "Presentation of Bill, Secretary of State David Jones." Pause. "Nod."

The secretary of state nodded with due solemnity. A clerk said: "Wales Bill." Lyndsay Hoyle asked: "Second reading what day?" The answer: "Monday next". A few "hear hears" from unidentifiable sources and MPs moved on to discuss the Budget.

The Bill devolves stamp duty land tax and landfill tax to Wales and paves the way for the Welsh government to acquire, after a referendum, some control of income tax rates. But then if you're reading this page you probably knew that.

If you read today's Financial Times you may be surprised to learn that air passenger duty on long-haul flights won't be devolved. That was ruled out months ago. No FT, no comment, as they used to say.

There have been some changes, largely technical, from the draft Wales Bill published late last year. The most noticeable one is possibly the reduction in the "buffer zone" around all-Wales elections so a referendum could now be held 25 working days either side of a plebiscite. There are also some changes to the Welsh assembly's budgetary procedures.

You can see a timetable for the transfer of powers here.

The controversial "lockstep" that would prevent the Welsh government from varying one income tax band in isolation remains. David Jones told me: "We've made it clear that we think that tax progressivity, that is the higher rates of tax bite, should remain at a UK level. That is what we've got in Scotland and we think it's right for Wales too."

Except many politicians, including some Tory MPs, think the Scottish lockstep will disappear if the Scots reject independence and are offered devo-max instead.

David Jones: "We don't believe that is the case, and in any event that is in the future. We are now dealing with the state of affairs that prevails in Wales at the moment and of course prevails in Scotland and we think it is important that progressivity determined at a UK level. That's what we did in Scotland and that's what we intend to do in Wales."

The Welsh government has suggested the income tax powers on offer are effectively unusable. David Jones said ministers in Cardiff should "think very carefully about that" as taxation powers could unlock more borrowing.

"If they want the borrowing powers they have to have an income stream and the best way to get a sufficient income stream is to take the powers to set their own rate of income tax in Wales. That gives them a larger income stream and it means that they can borrow more. It also gives them an incentive to grow the Welsh economy."

MPs are due to debate the Bill on March 31 and ministers hope it will complete its Commons stages by the summer recess before it heads to the Lords.

David Jones said he hoped it would complete its parliamentary passage by Christmas, five months before the general election. But remember, fiscal devolution is for life, not just for Christmas.

 
David Cornock Article written by David Cornock David Cornock Parliamentary correspondent, Wales

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