Labour: we won't seek power to vary income tax in Wales

You wait six months for one Welsh grand committee, and then two come along at once.

Hot on the heels of last month's excitement, Welsh MPs gathered today to discuss (what else?) "the government response to part 1 of the commission on devolution in Wales".

Commons leader Andrew Lansley and his Liberal Democrat deputy Tom Brake turned up to take in the fun, or act as a parliamentary equivalent of Estyn on the secretary of state for Wales if you believe his Labour shadow, Owen Smith.

It took a full 17 minutes before someone (Plaid Cymru's Elfyn Llwyd) raised what might be called the bull in the room, or the "19 stone of pure Welsh beef" as Andrew RT Davies describes himself. Last week, Mr Jones dismissed Mr Davies's view on the income tax plans as a personal one - only for Andrew RT Davies to send a letter to the committee suggesting he did in fact have their unanimous support.

Mr Llwyd wanted to know why he disagreed with Mr Davies about the "lockstep" restriction on the Welsh government's ability to vary tax powers. Rates could only be changed in tandem with one another.

"Who speaks for Wales?" asked Mr Llwyd. Mr Jones told him: "I'm not entirely sure whether all the Welsh Tories in Wales agree with that. I, for one, don't."

MPs on the Welsh affairs committee have just completed their inquiry into the powers on offer. Mr Jones was challenged to identify a witness - other than himself or Treasury Minister David Gauke, who supported the lockstep. He said he hadn't been part of the inquiry so couldn't answer the question.

That committee will shortly write its report and given the evidence submitted to it it is hard to see the MPs endorsing the lockstep. There are fears in Conservative circles that the party is losing the argument on the issue but any change of heart would have to wait until after the Scottish referendum this autumn.

The focus of this morning's session then switched largely to Labour policy on devolution - and the UK government's response to the all-party Silk commission on devolution.

The UK government's announcement last year of plans to devolve some tax and borrowing powers to Wales were described by Welsh Finance Minister Jane Hutt as "a good deal for Wales" and "a big step forward for devolution".

Today, shadow Welsh Secretary Owen Smith qualified that welcome, telling MPs it related largely to the borrowing powers on offer.

Mr Smith said: "The first minister has been extremely clear, he didn't ask for income tax varying powers; he doesn't think it a priority for Wales, he doesn't think it's necessarily going to benefit Wales and we will not be seeking income tax varying powers in the future."

Mr Smith questioned the motives of the Conservatives in giving the Welsh government the ability to vary income tax by up to 10 pence in the pound, saying it was a trap.

"The trap is that a Tory government would use this as an excuse to tell Wales, if you want higher value services in Wales, if you feel you've got to provide better provision for the Welsh people - pay for it yourselves out of your shallower pockets".

David Jones said there was no compulsion to vary the rate of tax: "There would be no compulsion on the Welsh government to change the rate of tax if it didn't think that it was appropriate. But that there would be a huge advantage in terms of accountability, in terms of incentive and in terms of the income stream against which it could borrow, which it doesn't have at the moment".

Tory MP Glyn Davies said that Labour had "completely demolished the Silk Commission recommendations " and had now declared itself the "anti-devolution party".

Elfyn Llwyd said that Owen Smith showed an "astonishing" lack of ambition for Wales and accused other parties of putting up "deliberate barriers to greater financial powers which would strengthen and empower Wales".