Wales politics

Voters must decide on devolved tax powers, says Jones

Carwyn Jones
Image caption Carwyn Jones says the UK government must deal with Wales' "under-funding"

The Welsh assembly should not be handed any powers over taxes without a referendum, First Minister Carwyn Jones has said.

It comes after Welsh Secretary Cheryl Gillan said the assembly government should be "fully accountable" for the money it spends.

Deputy Prime Minister Nick Clegg has raised the possibility of devolving tax-varying powers.

Mr Jones said the major financial issue facing Wales was its "under-funding".

It follows last week's referendum in favour of giving the assembly direct law-making powers. In the wake of the Yes vote, the UK government plans to launch an inquiry into funding for the assembly.

A similar process in Scotland - the Calman commission - led to a bill that would cut Edinburgh's block grant and allow Scotland's devolved administration to make up the shortfall through income tax and borrowing.

The first minister told BBC Wales' Dragon's Eye programme: "It's strange isn't - the only people who are suggesting this are the UK government. We're not suggesting it."

He added: "In order for tax-varying powers to be devolved, particularly income and corporation tax, there would need to be a referendum - no question about that in my mind.

"You couldn't devolve taxes without a referendum."

Scotland was given powers over income tax following a referendum there, he said.

"On the basis of our funding at the moment it would be disastrous because we would have tax-varying powers forced on us, while we are also under-funded at the same time. That's not in the interests of the people of Wales.

"That's why I've always said I'm not in favour of tax-varying powers, particularly at the moment given the fact that we're under-funded. We need to deal with the under-funding as the major issue facing the finance of Wales."

Mr Jones said there was no need for another inquiry and that the findings of the Holtham report into Wales' funding should be dealt with. The assembly government-commissioned Holtham inquiry called for reform of the Barnett formula which sets the size of Wales' devolved budget.

"Our viewpoint is that Wales should receive fair funding," Mr Jones said.

'Deal with problems'

Economist Gerald Holtham, who wrote the report for the assembly government, said he was surprised tax-varying powers had been raised by the UK government "given that there doesn't seem to be any great appetite in Cardiff Bay, at least not in the majority party".

Mrs Gillan said the commitment to a Calman-style commission for Wales was contained in the UK government's coalition programme.

She said it was right that devolution and its funding was kept under review, but the UK government's priority was to pay down the nation's debts.

"But when it comes to funding we've also said that we think that the Barnett formula is coming to the end of its life and therefore the Calman-like process will be examining the funding and we may indeed draw on the valuable work that has been done by Gerry Holtham," she told the programme.

Asked about devolving tax-varying powers, she said: "I'm not going to pre-judge any findings that may come from the process.

"I think you've just got to look at what has been happening though with the Scotland Bill to see that is obviously a direction of travel for Scotland.

"But at the moment I'm surprised with the way in which people are concentrating on something which should be occurring as a matter of course: to keep the arrangements for devolution under review.

"When newly-acquired powers have been taken on by the Welsh assembly government, I would have expected them to come out and deal with the problems that they face on health and education and on the economy of Wales."

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