Wales politics

Income tax rise possible for specific thing, says Jones

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First Minister Carwyn Jones has said there is a case for income taxes to be raised in Wales to pay for specific projects.

Chancellor George Osborne has said some control over income tax rates could be devolved without a referendum.

Mr Jones told The Wales Report on BBC Wales TV that Labour would not increase income tax if they win the 2016 assembly election.

But it could be considered one day, he said.

"I think in the future, what parties will have to look at is saying, we might look at increasing income tax but to pay for a specific thing", Mr Jones told the programme.

The sharing of tax powers between ministers in Cardiff and London would mean the Welsh government controlling £3bn of taxes a year by 2020.

Underfunding claim

Mr Jones told The Wales Report he was concerned by this proposal, claiming it could "lock" Wales into a situation where it was unfairly funded compared to the other UK nations.

"First of all we don't know when we'll have this power and secondly the funding situation we have is precarious," he said.

The first minister pointed out that 80% of the Welsh government's funding comes from the UK Treasury, and Wales was funded less per head than Scotland and Northern Ireland.

"What I don't want is this to become an excuse for the Treasury to say we're not going to look at the fact you're underfunded because you can raise your own money through income tax," he said.

"That locks into underfunding and that's not fair on many of us".

The Welsh Tories have pledged a 5p cut in the 40% rate and a 1p cut in the basic 20% rate, while the Lib Dems said they would focus on a 1p cut in the basic rate to help "ordinary workers".

Plaid Cymru has said the partial devolution of income tax is not enough, calling for fuller tax powers comparable to those offered to Scotland and Northern Ireland.

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