Wales to be offered tax-varying powers by UK government

Wales is to be offered more flexible income tax-varying powers following a U-turn by the UK government.

Welsh Secretary Stephen Crabb told the Conservative conference he will remove the controversial "lockstep" system that many said made the proposed powers unworkable.

It means Wales could vary income tax rates without ensuring all income tax bands change by the same amount.

But the powers would only be granted after a referendum.

Under current plans, if the Welsh government wanted to cut the basic rate by 1p, all other rates of income tax would also have to be cut by 1p.

First Minister Carwyn Jones has previously criticised the system and the plan caused a split in the Conservative assembly group.

Improve settlement

But Mr Crabb's announcement would see that requirement removed and he called on the Welsh government to trigger a vote that would enable them to use the new tools.

"Our tax devolution will end the politics of the begging bowl in Wales," he told the conference.

"And so will begin a new era of responsible government in Wales. This is devolution with a purpose."

He told the delegates that the new powers brought new accountability to the Welsh government, and he said that "won't feel comfortable at times" for Welsh government ministers.

"But that is what I mean when I talk of devolution that works for the people of Wales, not the politicians of Wales," he added.

The Preseli Pembrokeshire MP also announced he wanted to move to a "reserved powers" model for Wales after the general election.

The move would see the implementation of a new law setting out what powers are reserved to Westminster, with everything else devolved to Wales, ending the current confusion on who is responsible for what, which has seen several cases decided by judges in London.

Mr Crabb said he believed the two announcements were significant steps that would improve the devolution settlement.

The Wales Bill returns to the House of Lords next month when the amendment to remove the lockstep system is expected to be introduced.

Some MPs have called for the referendum requirement on whether Wales should get income tax powers to be dropped.

But Mr Crabb said that just as the people of Scotland had their say on the matter, those in Wales should be given the same option.

A Welsh Government spokesperson said: "We welcome the Welsh Secretary's decision to remove the 'lockstep' which will provide flexibility in the tax system for Wales.

"It will mean that we have a standard level of income tax across the whole of the UK-a solidarity tax, in effect-that is redistributable, then it is for each administration to decide how much it wants to add on top, what the bands might be, and what tax credits might be made available."