Wales' tax powers row goes on and on

As my colleague David Cornock has been covering, there's still plenty of fallout from the Welsh Grand Committee hearing about tax and borrowing powers being devolved to Cardiff.

One element I'm going to pick up on is the claim by the Conservatives that evidence submitted by the Welsh government to MPs shows it agreed to plans to give it income tax powers, despite comments from the shadow Welsh secretary Owen Smith saying that the first minister didn't want them.

This refers to written evidence from the first minister to the Commons' Welsh Affairs Committee last month saying his government agrees that income tax should be devolved, subject to certain conditions.

However, Owen Smith told MPs on Wednesday: "The first minister has been extremely clear, he didn't ask for income tax varying powers, he doesn't think it a priority for Wales, he doesn't think it's necessarily going to benefit Wales and we will not be seeking income tax varying powers in the future."

The written evidence says it agrees that income tax should be devolved to Wales, subject to a referendum and a better funding arrangement between the Welsh government and Westminster.

It also goes on to say that it disagrees with the rules governing any income tax powers which mean that no one band can be isolated.

This is the so-called lockstep approach which means any changes have to be carried out in tandem across all the bands.

The Conservatives are already dealing with a major split on this issue themselves between the leader in Wales, Andrew RT Davies (who believes the income tax model is unworkable) and the Welsh Secretary David Jones (who thinks it is).

So they are keen to stress that they believe this is evidence of a split within Labour ranks as well.

The Conservative MP for Aberconwy, Guto Bebb, told the committee: "A paper submitted to the Welsh Affairs Committee on 15 January, 2014 made it very clear that the Welsh government were supportive of the devolution of income tax.

"The written evidence supplied by the Welsh government on 14 January, which categorically states that they are in favour of income tax devolution, subject to a referendum."

The Welsh government has denied any contradiction saying that it's an issue it would consider after fair funding (reform of the Barnett formula) is dealt with and the lockstep is removed.

Although, until that happens, it says we're just dealing in hypotheticals.

It also says the current income tax model being offered by the UK coalition government is effectively useless.

And Owen Smith told Radio Wales it's something he may accept in principle, but only after a hugely long sentence listing the barriers that stand in the way.

Either way, it's clear a referendum on the partial devolution of income tax in Wales is a million miles away.