Wales politics

No new powers without budget deal, says Carwyn Jones

Carwyn Jones

The assembly should not accept new powers without a deal with Westminster on the Welsh Government's budget, First Minister Carwyn Jones has said.

He told AMs he could not recommend the assembly consents to the next step of devolution without agreeing on funding.

Mr Jones's comments create the potential for another stand-off with UK ministers over Wales' budget.

Addressing AMs, Welsh Secretary Alun Cairns said a similar deal had been reached with the Scottish Government.

The Wales Bill, currently going through Parliament, would give the Welsh Government some powers to vary income tax, without the need for a referendum.

For the tax powers to work, the rest of the Welsh Government budget will be adjusted by the Treasury under what is known as a fiscal framework.

A similar deal was agreed with Scotland in February, paving the way for more tax devolution there.

Although the Wales Bill is a matter for Parliament, AMs will be asked to give it their consent in a vote.

Mr Jones said he could not recommend that consent be given without an agreement on the fiscal framework to make sure Wales does not lose out.

"As the Bill currently stands, the Treasury can impose a financial settlement on the people of Wales without the agreement of this place and that is wrong in principle," he said.

"It does not apply in Scotland."

Mr Cairns said: "The Scottish Parliament naturally wouldn't pass a legislative consent motion until there was satisfaction over the fiscal framework, and I think that is a natural place.

"I've said clearly to the first minister that's the position I would expect the assembly to take."

Mr Cairns said AMs should "take confidence" from a UK government pledge to introduce a so-called funding floor, designed to protect the Welsh budget.

He added: "It is in that spirit that I want to continue this discussion that will be developed in parallel with the bill."

The Welsh Secretary was making his annual statement in the Senedd on the Queen's Speech - a tradition that will be scrapped by the bill.

Mr Jones criticised the failure to create a new separate legal jurisdiction for Wales and said the bill "cannot possibly be a lasting settlement as far as Wales is concerned".

Plaid Cymru leader Leanne Wood criticised Labour MPs for failing to support a Welsh legal jurisdiction in a House of Commons vote on Tuesday.

She told Mr Jones "to tell his MPs to get a grip".

The bill would not offer stability "in anything more than the immediate short term", she added.

Mr Cairns said the existing England-Wales jurisdiction "offers businesses simplicity".

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