Wales devolution: Bond sales idea for borrowing

Ministers want to borrow money to help pay for projects like an M4 relief road around Newport

Big investment projects like a £1bn M4 relief road for Newport could be paid for by the sale of government bonds.

The move would be allowed as part of the £500m a year ministers can borrow under new financial powers being devolved to Wales.

Welsh and UK government ministers who met in Cardiff also talked about the level of Welsh funding by the Treasury.

Welsh Secretary Stephen Crabb said "fair funding" was an issue he wanted to see resolved.

He joined UK Treasury ministers Danny Alexander and David Gauke at the first meeting of the Joint Exchequer Committee (JEC) on Monday, chaired by the Welsh government's Finance Minister Jane Hutt.

'Rights to choose'

Mr Alexander said he had no objection to giving Wales the same powers to sell bonds as Scotland.

He said: "I suspect, in practice, Wales will want to raise the money through the Treasury as it does at the moment, but if Wales chose in future to say 'we'd like to raise money on the private markets', from my point of view there's no barrier to that happening.

"It's about giving Wales the freedoms and the rights to choose and make decisions about these things that Scotland has and I think that's the right way forward."

Discussions also turned to whether Wales loses out under the Barnett Formula, which sets out how UK Treasury money is shared between Scotland, Northern Ireland and Wales.

The Welsh government claims it is under-funded by £300m a year, but other parties dispute the accuracy of the figure.

Mr Crabb said he recognised there were "question marks over fair funding for Wales", adding that he wanted to see the issue resolved as much as First Minister Carwyn Jones.

The Welsh Secretary repeated his call for the Welsh government to take responsibility for income tax powers being offered as part of the Wales Bill currently going through Parliament.

However, Mr Jones has restated his position that until the issue of Barnett Formula funding was addressed, he saw "no advantage" in the offer of power to vary income tax rates.