'No barriers' to income tax referendum, says Cameron

A new devolution package for Wales has removed "the last remaining barriers" to an income tax referendum, Prime Minister David Cameron said.

Alongside Deputy Prime Minister Nick Clegg at Cardiff's Millennium Stadium, Mr Cameron said the further powers were a "clearer, stronger, fairer" deal.

They include guaranteed minimum funding for the Welsh government, control of fracking and more energy projects.

First Minister Carwyn Jones claimed the funding pledge was a "vague promise".

Welsh ministers must agree before a referendum can go ahead.

Mr Cameron said the referendum "should go ahead and I would advise people to vote yes".

He rejected the idea that devolving £6bn of NHS spending to Greater Manchester meant a Welsh referendum on income tax powers was no longer necessary.

'Responsible' devolution

The proposals - called Powers for a Purpose - unveiled on Friday follow months of cross-party talks.

They would allow ministers in Wales to raise cash from the money markets for major projects and give the Welsh assembly control of its own elections.

It is understood UK ministers had insisted the minimum funding pledge would be in return for Welsh ministers triggering a referendum to transfer some income tax powers to Wales.

But the wording has been changed to say the "agreement is in the expectation" of such a poll being held, following objections from Labour Welsh ministers and Welsh Liberal Democrat leader Kirsty Williams.

Mr Cameron said: "Today's agreement paves the way for a referendum, that could deliver an assembly that's not just a spending body but is actually responsible for raising more of its revenue too.

"And to me that is responsible devolution, that is real devolution and I think that is vital for Wales and for the United Kingdom."

Powers to set national speed limits across Wales are also proposed, together with a promise to consider the merits of devolving Air Passenger Duty and the option of changing the assembly's name to Welsh Parliament.

With the general election just 10 weeks away, voters will determine which of the political parties will be in a position to take forward the plans after 7 May.

Analysis by Nick Servini, BBC Wales political editor

The Conservatives have been hoping that this package will put to bed once and for all many of the debates surrounding the constitution.

That was always going to be unrealistic when you have such diverse attitudes among the parties, and you're so close to a general election.

As a result there was no agreement on many of the big issues such as welfare, policing, criminal justice, air passenger duty and teachers' pay and conditions.

Stephen Crabb believes he's managed to turn the levers of government departments in Whitehall, like the Treasury, in a way no-one has done in recent years.

Others say it's a list of the lowest common denominators that will be surpassed by different ambitions if a new government is elected in May.

As one party insider told me, it has at the very least flushed people out on where they stand on devolution.

Read more from Nick

'Devolution by deadline'

Mr Clegg said the package "increases the devolved powers at Wales' disposal in important areas such as energy, transport and the environment.

"It paves the way for a stronger, more autonomous assembly, giving Wales more control over its own affairs and it starts the process of delivering fair funding for Wales."

But business leaders voiced concerns the transfer of new powers to Wales was being rushed, with a risk of "devolution by deadline".

CBI Wales director Emma Watkins warned: "Businesses need to know how any new powers are going to be used to best effect - to promote growth in Wales and help the private sector thrive - without creating undue complexity and cost for the thousands of businesses operating across borders."

First Minister Carwyn Jones rejected calls for a referendum on income tax powers, saying there was still "no real commitment" from the UK government on tackling what he called the "underfunding" of Wales.

He said there had been "some welcome progress on certain areas" but the proposals "fall short in crucial areas" such as policing.

Plaid Cymru leader Leanne Wood agreed that the new package stood in "stark contrast" to reforms being offered to Scotland.

"Wales has been left behind and that has to end, and this is a missed opportunity in that respect," she told BBC Radio Four's Today programme earlier.