Wales politics

Crucial tax and funding talks ahead, says Jane Hutt

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Crucial talks lie ahead to weigh up how the Welsh budget is fairly funded between Whitehall cash and devolved taxes, the finance minister has said.

Jane Hutt's comments came after a lengthy row over Scottish tax and funding arrangements was settled.

She called for an independent review of Wales' funding arrangements amid the promise of power to vary income tax.

Welsh ministers fear the UK Treasury could cut the block grant before Welsh taxes are sufficient to cover the gap.

Control of two other taxes - stamp duty land tax and landfill tax - passes to Wales in 2018.

'Significant implications'

Ms Hutt said: "Crucial talks lie ahead for us as we seek to establish a fair fiscal framework for Wales which takes into account the properties of our tax bases, our devolved responsibilities and assigns the appropriate risk to the Welsh Government."

She said some of the methods suggested by the UK government for adjusting the block grant in Scotland were contrary to the principle of "no detriment", outlined by the Smith Commission on devolution in Scotland.

"Those methods, if applied to the devolved taxes in Wales, would have significant implications for our future investment in public services in Wales," said Ms Hutt.

"The Welsh government would not be able to accept those terms and this was not the basis upon which the Assembly agreed the devolution of stamp duty land tax and landfill tax to Wales."

An independent body is to review the fiscal framework in Scotland, and Ms Hutt called for a similar arrangement for Wales.

A report from the Wales Governance Centre on Wednesday urged ministers to avoid a repeat of the year-long row over plans to devolve income tax powers to Scotland.

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