Politics and pay packets

I understand there was no discussion of the Welsh Conservatives' proposal to slash the higher rate of income tax, as well as the basic rate, among the party's assembly members before the announcement was made last week.

The first one Tory AM heard about a policy they'll be expected to talk about in-depth in debates and on the doorstep over the next six months was by watching the news.

The Conservative group at the assembly will have a chance to discuss what has become a headline-grabbing policy at its weekly meeting on Tuesday morning in Cardiff Bay.

It certainly had the desired effect of throwing into sharp focus the potentially new dynamic that the partial devolution of income tax without a referendum could have on politics at the assembly.

The Conservatives will now for the first time be able to go into the election campaign promising to improve the take-home pay of voters' wages.


The challenge will be justifying such a large increase for higher earners at the same time that only a penny would come off the basic rate.

They will have to find the thick end of £250m to pay for the cuts but in answer they point to money-saving policies like scrapping prescription charges and the university tuition fee subsidy.

The Liberal Democrats have pledged to reduce the basic rate by a penny. Plaid have welcomed control of the tax without formally setting out any plans.

Labour can't envisage a scenario in which the new powers would be used.

If it cuts the rate, the public finances are out of pocket, and if it raises the rate then it risks being accused of making Wales unattractive to wealth-creators.

Critics of Labour say that is exactly the point of tax-varying powers - to introduce devolved decision making with real financial consequences.


The First Minister was cool about it when I spoke to him last week, although he did stress the anomaly that exists in an institution which spends significant sums of public money, and yet has less ability to raise revenue than a parish council.

And it would have been odd if Carwyn Jones set himself against the prospect of having control of £2bn's worth of revenue a year when he has called for so many powers in the past.

The Tory taunt is that Labour is afraid of the power, in other words it's afraid of the responsibility of having to raise the money it spends.

I'm not sure about fear, but there's certainly deep scepticism among Labour ranks.

The Pontypridd MP Owen Smith says the Treasury will end up treating the Welsh government in the same way it treats the Scottish government by flipping around a request for funding by telling it to raise the money itself.

Coffee morning

Two footnotes: the first is the timing. The technical removal of the need for a referendum will be in the Wales bill next year but other than that no-one seems to know at what stage it could kick in.

The other is that control over income tax will, for good or bad depending on your view, make people pay more attention to the politics of Cardiff Bay.

One AM told me a constituent came up to him in a coffee morning this weekend to discuss devolved politics with a sense of urgency that had been absent before.

I suppose that's what happens when politics and pay packets come together.