Welsh Assembly 'needs tax powers'

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19 November 2012

Wales should have powers on tax and borrowing, an influential new report has said.

The cross-party Silk Commission has published the first of two studies into devolution in the principality. Its report, entitled Empowerment and Responsibility: Financial Powers to strengthen Wales, makes 33 recommendations.

Among them is giving the Welsh Assembly full powers over smaller levies, such as landfill tax, stamp duty, business rates and the aggregates levy, while Air Passenger Duty should be devolved for long-haul flights initially.

It also says responsibility for income tax should be shared between Cardiff Bay and Westminster, although corporation tax should not be devolved unless that power is given to Scotland and Northern Ireland. The report also suggests allowing Assembly borrowing to support key infrastructure projects.

Commission chairman Paul Silk said the cross-party group had worked closely as a team over the past year and had all agreed upon the recommendations that had been made.

"We firmly believe these would benefit Wales and strengthen its democracy and economy," he said. "Our proposals would provide the Welsh Government with an important set of fiscal levers and would enable political parties in Wales to offer people real fiscal choices. What we are recommending is significant and historic."

The Commission on Devolution in Wales was set up last year by the then Secretary of State for Wales Cheryl Gillan.

Current Secretary of State for Wales David Jones said: "I know the Commission have sought opinions from across Wales, so this report is reflective of a very wide range of views on the future fiscal responsibilities that the Welsh Assembly and the Welsh Government should hold."

Mr Jones said he would consider the report's recommendations, discuss with relevant colleagues across Government and respond formally in due course.

The Commission will next begin its work on part two of its remit - reviewing the current non-financial powers of the National Assembly for Wales. It will report on these findings by spring 2014.

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