Secretary of State for Wales, David Jones and Chief Secretary to the Treasury, Danny Alexander, have today (20 March 2014) introduced the Wales Bill into Parliament. This Bill devolves a significant package of tax and borrowing powers to Wales, giving the National Assembly of Wales and the Welsh Government more levers and incentives to boost economic growth.
In November 2013 the Government accepted almost all of the recommendations made by the Silk Commission in its first report. The Wales Bill now provides the legislative framework to implement these new financial powers. It also includes changes to the electoral arrangements for the Assembly, following a Government consultation in 2012. The Bill has begun its parliamentary passage following pre-legislative scrutiny of the legislation in draft.
The Wales Bill includes the following:
- Devolve stamp duty land tax and landfill tax to Wales, enabling the Assembly to replace them with new taxes specific to Wales;
- Allow further taxes to be devolved, with the agreement of Parliament and the Assembly;
- Provide for a referendum in Wales on whether an element of income tax should be devolved;
- Allow the Assembly, subject to a vote in favour in a referendum, to set a Welsh rate for the purpose of calculating the rates of income tax to be paid by Welsh taxpayers and;
- Grant new powers for Welsh Ministers to borrow to fund capital expenditure, and extend the circumstances in which they can borrow in the short term to manage fluctuations in tax revenues; and
- Gives the Assembly the power to decide the procedure for scrutinising and authorising the Welsh Government’s tax and spending plans.
Further details are provided in the accompanying publication Financial Empowerment and Accountability, including changes that do not require legislation such as the full devolution of business rates. As a package, these changes will make the Assembly and the Welsh Government more accountable to the people of Wales by raising some of the money they spend.
Speaking after introducing the Wales Bill, Secretary of State for Wales, David Jones said:
The Wales Bill introduced into Parliament today is a major milestone in Welsh devolution. The package of tax and borrowing powers it devolves to Wales should be used by the Welsh Government to grow the Welsh economy, give Wales a competitive edge and help the people of Wales feel more secure about having a better future.
Just as important, it will make the Assembly and the Welsh Government more accountable to the people who elect them. For the first time, they will be responsible not only for the money they spend but for raising some of that money as well.
The Bill will also make Assembly elections fairer and more equitable.
The swiftness by which we have introduced this Bill is testament to this Government’s desire to see the Bill passed before the end of this Parliament and provides the opportunity for devolved governance in Wales to be fairer, more accountable and, crucially, more able to support economic growth.
Chief Secretary to the Treasury, Danny Alexander said:
I am delighted that we have been able to introduce the Wales Bill to Parliament today.
The package of financial powers in this Bill will provide powerful new tools for Wales to exercise greater control over its future. The Bill also significantly strengthens the Welsh Government’s financial accountability and transparency. The Powers in this Bill will help future Welsh Governments to deliver a stronger economy and a fairer society in Wales.
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The Welsh Affairs Committee reported on its pre-legislative scrutiny of the draft Wales Bill on 28 February, making 11 recommendations for change. The Government responded to the Committee today (20 March 2014), accepting all but two of the Committee’s recommendations.
The Bill will also:
- Extend Assembly terms permanently from four to five years, making it less likely that Assembly elections will coincide with Westminster parliamentary elections in future.
- Remove the prohibition on candidates in Assembly elections standing in a constituency and on the regional list.
- Prohibit “double jobbing”, by preventing Assembly Members from also being MPs.
- Formally change the Welsh Assembly Government’s name to the Welsh Government.
- Clarify the position of the First Minister between dissolution of the Assembly and an Assembly election.
- Allow the Treasury to set an aggregate limit on the amount of housing debt that local housing authorities in Wales may hold, and Welsh Ministers to set a limit for each authority within the overall total.
- Require the Law Commission to provide advice and information to Welsh Ministers on law reform matters they referred to the Commission.