New fiscal framework provides long term financial security for Wales
Wales was today (Monday December 19th) guaranteed long term financial security in a milestone agreement between the UK and Welsh Governments.
The framework is a key part of the overall Wales Bill package which is delivering a clearer and fairer devolution settlement for Wales. It paves the way for making the National Assembly for Wales a more powerful and accountable institution and reflects the mature relationship between Cardiff Bay and Westminster.
The fiscal framework means that:
The Assembly will take on responsibility for Welsh Rates of Income Tax (WRIT) from April 2019. (Subject to the removal of the referendum requirement through the current Wales Bill and the Welsh Government setting out its intention to introduce Welsh rates of income tax to the National Assembly for Wales)
The Welsh Government will have a fair level of funding for the long term, taking into account Welsh tax capacity and treating population change consistently across tax and spending
The amount of capital borrowing available to the Welsh Government will be doubled up to £1bn
Alun Cairns, Secretary of State for Wales, said:
Agreement on the fiscal framework is a significant milestone in the Welsh devolution journey. It lies at the heart of the Wales Bill’s determination to provide secure long-term funding for the Welsh Government and give Cardiff Bay greater visibility when looking at spending decisions.
We have worked hard to arrive at a deal to provide the Welsh Government with a clear financial structure with which it can push on with improving the Welsh economy.
This framework underlines the mature relationship between Westminster and Cardiff as we move closer to agreeing a lasting settlement for the people of Wales.
Confirmation of the deal agreed by David Gauke, Chief Secretary to the Treasury and Welsh Government Finance Minister Mark Drakeford was made in a Written Ministerial Statement laid before Parliament today.