Wales income tax powers a 'trap', Labour MP Owen Smith claims

Shadow Welsh Secretary Owen Smith has criticised the income tax powers UK ministers are proposing for Wales.

The Labour MP said the Welsh government had not asked to be able to vary income tax and would not seek that power.

He said allowing Welsh ministers to vary income tax by up to 10 pence in the pound was a "trap" to force them to raise more of the money they spend.

Conservatives said Mr Smith had changed Labour policy as it had previously said the plans were "a good idea for Wales".

On Wednesday Mr Smith told MPs that the positive response from Labour had been about the borrowing powers on offer.

"The First Minister [Carwyn Jones] has been extremely clear," he said.

"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 future.

"We fear there is a trap being laid for the Welsh people by the Conservative party.

"The trap is that a Tory government would use this as an excuse to tell Wales, if you want higher value services in Wales, if you feel you've got to provide better provision for the Welsh people, pay for it yourselves out of your shallower pockets."

Welsh Secretary David Jones said there was no compulsion to vary the rate of tax.

"There would be no compulsion on the Welsh government to change the rate of tax if it didn't think that it was appropriate.

"But that there would be a huge advantage in terms of accountability, in terms of incentive and in terms of the income stream against which it could borrow, which it doesn't have at the moment".

Tory MP Glyn Davies said that Labour had "completely demolished the Silk Commission recommendations" for tax and borrowing powers for Wales and had now declared itself the "anti-devolution party".

Plaid Cymru's Elfyn Llwyd said Mr Smith showed an "astonishing" lack of ambition for Wales and accused other parties of putting up "deliberate barriers to greater financial powers which would strengthen and empower Wales".

'Useless'

Last week, all three opposition leaders in the assembly criticised restrictions on the income tax powers being offered.

The UK Treasury insists changes to one rate must be mirrored by changes to others.

Conservative Andrew RT Davies, Plaid Cymru's Leanne Wood and Liberal Democrat Kirsty Williams said Welsh ministers should be allowed more flexibility.

The first minister said last month the limitations made the powers "pretty much useless".