MPs debate "once in a generation" devolution offer

MPs have just been briefed on the details of the UK government's plans to give Wales taxation and borrowing powers. So what have we learned?

It was a slightly topsy-turvy occasion, a Conservative secretary of state for Wales highlighting the "once in a generation" opportunity of further devolution, calling for a speedy referendum to give the Welsh government the power to vary income tax rates and, possibly, borrow more.

David Jones talked of a "democratic deficit" caused by the current settlement and even found warm words for his Liberal Democrat coalition partners and the Labour finance minister in Wales. There was even a public love-in with his predecessor Cheryl Gillan, who welcomed today's announcement.

Mr Jones may not have been a fan of devolution in the not too distant past but he just about managed to sound the most enthusiastic person in the chamber when advancing the case for an early referendum on whether to give the Welsh government some control over income tax rates.

He said: "We wish to see income tax devolved to the Welsh assembly government too and I do support the devolution of it. I would urge the Welsh assembly government as soon as they can to trigger the referendum because the Conservative party will be campaigning vociferously for a yes vote in that referendum and furthermore for a cut in income tax.

"We believe that devolution should be used to give a competitive edge to Wales, that the powers that are devolved should be used for the purpose of making Wales a more prosperous place. We would like to see the tax cuts apply across the board."

At several points, he even referred to the "Welsh government" rather than the (legally correct) "Welsh assembly government" he often favours. (I wonder if the next Wales Bill will correct that anomaly?)

He talked of the Barnett formula "coming to the end of its life", although it appears as immortal as its 90-year-old creator. Mr Jones appealed to ministers in Cardiff to "rise to the challenge" and look beyond the M4. He thought it "very unlikely" 16-year-olds would be allowed to vote in the referendum.

There are some missing details. We know the Scotland Act will be used as a model but on the timetable of the transfer of powers "further details will emerge in due course" as Mr Jones (inevitably) put it.

His Labour shadow, Owen Smith, smelt a rat, warning: "Prior to the introduction of these new taxes we would need to be very clear about whether the Welsh people would be better or worse off.

"Our position on income tax is that we support the proposal on income tax as laid out by Silk on the basis of a triple lock whereby we will judge whether the people of Wales will be worse off, we will see whether the people of Wales want to take that responsibility under a referendum, and we will see that fair funding is agreed for Wales."

He wanted to know why the UK government had rejected the idea of Wales being able to vary separate income tax bands and said Mr Jones's suggestion of a penny off income tax rates would lead to a £200m shortfall in the Welsh government's budget.

Mr Smith - and the Conservative Jonathan Evans - used the word "historic" that is often heard in debates about Welsh devolution but Rhondda's Labour MP Chris Bryant had other priorities.

He said: "I really hope that my constituents aren't watching this session because I think they will be saying 'we've got a cost of living crisis going on in Wales and we've got hundreds of thousands of families worried about whether they're going to be able to heat or eat this winter and here we are, yet again, fiddling around with the constitutional settlement'.

"They want us to deal with the real issues that matter to them so can I make a suggestion? We get rid of having the referendum and we spend that money instead that you're going to be wasting on keeping the Porth library and the Treherbert library open."

Plaid Cymru's Jonathan Edwards wanted to know if the decision not to allow the Welsh government to change income tax bands separately meant recent pledges by the Welsh Conservatives and Liberal Democrats to cut specific tax rates were "undeliverable". David Jones: "Yes."

Cardiff North Conservative MP Jonathan Evans said: "Today is truly a historic day, as others have said, and it's great to hear this announcement from a Conservative secretary of state. Given the HMRC's recent assessment that in Wale the tax take per capita is 25 per cent less than the position in the UK as a whole surely the only movement there can be in income tax in Wales must be downwards."

Delyn Labour MP David Hanson was sceptical about how different income tax rates would work for his constituents who travel to work in England. Several Conservatives with constituencies east of Offa's Dyke raised their own concerns. David Nuttall hoped the new prison in north Wales would be completely drug-free.

Stephen O'Brien talked of "an absence of accountability for those who live on the wrong side of the border...an absence of democratic legitimacy". David Jones agreed there was sometimes a "democratic deficit" and suggested he find a friendly member of the National Assembly for Wales to raise his concerns.

Peter Hollobone from Kettering had a simple request: "Will you ensure that the administrative costs of the Welsh office are met entirely be Welsh taxpayers?"

David Jones: "That's an interesting suggestion which we shall consider."

Cardiff West MP Kevin Brennan had a simple, if tongue-in-cheek suggestion for sorting out those tricky border issues - expand Wales eastwards to take in towns such as Chester, Oswestry and Ludlow. Now that would be an interesting referendum campaign.