By Vivienne Russell | 15 November 2013
Cardiff could be handed control of £3bn in tax revenues, including powers over business rates, UK ministers said today as they accepted almost all of the recommendations of the Silk Commission on financial devolution to Wales.
Prime Minister David Cameron and Deputy Prime Minister Nick Clegg earlier this month announced that, following the Silk report, stamp duty and landfill tax would be devolved to Wales along with some borrowing powers. The option to vary income tax would be put to a referendum.
Today, the government published full details of its response to the commission, accepting 30 of Silk’s 31 recommendations in full or in part.
As a result, business rates are to be fully devolved to Wales, the Welsh Government will have the ability to create new taxes and it will be able to build up a cash reserve. Limited borrowing powers for current spending are also to be passed to Wales, allowing to them to borrow when there is insufficient funding in the cash reserve to deal with revenue shortfalls.
Ahead of the tax-raising powers coming on stream, Wales is to be given early access to borrowing to fund improvements to the M4.
Chief Secretary to the Treasury Danny Alexander said: ‘The package of financial powers we have published today will be a powerful tool, bringing greater financial accountability and transparency to the Welsh government. This is a good outcome for Wales.’
Welsh Secretary David Jones added the Welsh government now had the tools to make the right investments in Wales.
‘The government believes in devolution and we’re determined to deliver. Accepting the Silk Commission’s key recommendations on financial devolution strikes the right balance and marks an important step in Wales’ devolution journey.
‘These new powers will make for more accountable government for the Welsh people. It is now up to the Welsh government to seize this once-in-a-generation opportunity – to drive forward Wales’ economic development, and to use this opportunity to secure the growth and prosperity that Wales so desperately needs.’
Welsh Finance Minister Jane Hutt said today’s announcement was a ‘big step forward for devolution’.
She said: ‘It is an important milestone on a journey that began back in 2008, when we established the Holtham Commission to review our funding and fiscal levers.
‘Now that things are moving forward, we need to keep up the momentum. This priority now is to get the reforms turned into law, so that we can start to use our new powers to boost the Welsh economy.’