Thursday, 26 November 2015

Income-tax powers may be Trojan Horse

 but we know it is and can deal with it.

I am not sure how delighted Plaid Cymru should be  about the  announcement in the Chancellor's Comprehensive Spending Review that Wales is to be granted income-tax powers without a referendum, hailing a victory for his party which was the first to propose such a move.

Responding to the news, Jonathan Edwards MP said:

"This is welcome news and a significant victory for Plaid Cymru.
"For several years, we have argued that the principle of fiscal autonomy has already been conceded by the devolution of minor taxes.
"This means that a referendum would have been a complete waste of time and resources, and we are pleased that the UK Government has finally seen sense on this matter.
"However, Plaid Cymru believes that income tax powers alone are not enough. We want to see Wales being offered the same financial and fiscal powers as the other nations of the UK.
"Scotland has been granted full income tax powers with no referendum while Northern Ireland is set to receive corporation tax powers. Wales is not a second class nation and there is no reason why Westminster shouldn't be offering us the same deal.
"Only then will the Welsh Government have the tools necessary to make decisions and changes that will work in the best interests of the Welsh economy, not the Treasury in Westminster

We must however  recognise the Tories have done this not to boost devolution or the Welsh economy.

Writing in the Wasting Mule 

George Osborne has just changed the dynamics of the looming Assembly election campaign.
His announcement that income tax powers will be devolved without a referendum puts parties under pressure to say what they will do with these new levers.
Until now, the question was whether a referendum would ever be held. Now the parties have the chance to present proposals for made-in-Wales tax policies.

Will the move create new political space for Welsh Conservatives? Suddenly, elections are not just about how you want public money spent, but how you want it raised.
The introduction of a floor to ensure a minimum level of funding for the Welsh Government has long been demanded, and the Conservatives can go into the election boasting that they have delivered this.
This will not quell demands for a new funding formula that reflects the high levels of need in Wales. Nevertheless, we can expect Welsh Tories will hold it up as a triumph, alongside the party’s role in the creation of S4C.
 The Tories will seek to use this move to claim that the other Party in the Assembly are  high spenders and high Taxers'

Welsh Conservative leader Andrew RT Davies has said he wants to use new income tax powers to take 5p off the higher tax rate in Wales.
He told BBC Wales cutting the rate from 40% to 35% would attract entrepreneurs to Wales and "create quality jobs".
Mr Davies estimated the reduction - using powers announced in Chancellor George Osborne's spending review - would cost up to £75m.
Mr Davies's tax plan would save those earning £50,000 about £400 per year.

So its not something that will necessarily  go down well the majority of the low paid Welsh electorate .

But the Tories strategy has always been to target those who can benefit from their polices  and the Low paid are not among them . After all his party won an overall Westminster majority with 36.9% on a 66.1% turnout

That is why they have put this through without a referendum which could very well be lost.

But that does not mean we should not welcome this Trojan Horse that it may be . If our Assembly or Parliament is going to be something that just redistributes the money it receives from Westminster  it must be able to have control over how it raises its revenue and yes take responsibility for it.
We should know whats inside and be prepared to use it for our advantage.

I mentioned that the Tories probably think of this measure as a Trojan Horse but along as we know that what it is.W may be able to use it for  our own advantage it will not be easy but we can use this opportunity to point that there is a alternative  to Westminster demolishing the Welfare state and government is not just about giving more money to the higher paid.


  1. "Scotland has been granted full income tax powers with no referendum"

    Err I know September 2014 is a wee while ago now but there definitely was a referendum where an ill defined "vow" gave the impression that full fiscal autonomy was on the table with a no vote. Income ta devolution is the bare minimum of what a No vote was supposed to represent and is indeed a fiscal trap.

  2. not so much a 'trojan horse' but maybe a gift horse glyn? if wales was self governing we'd already have powers over income tax and parties in wales would be arguing over raises or cuts to taxes as they do in any other country. its all part of the development of a nation on the way to political maturity.

    course this on its own shouldnt be seen as a saviour of the welsh economy, the tax base is very low in wales and even an across the board 1p increase in income tax would only bring in around £200 million to the welsh coffers - the major economic levers still lay with westminister. But yesterday's announcement means wales will be able to raise its own income taxes for the first time in its long history and symbolically thats very important. And it seems to have upset rachel banner to - and surely thats no bad thing.

  3. Rachel who? Oh yes True Wales haven't heard much from them.Rather typical of the Mule to give space to a group that probably doesn't really exist anymore.

  4. Of course it’s a trap, the Welsh Government can’t and won’t use the powers and it gives the current Tory and any future UK Government a free pass to ignore any future calls for better funding, the answer will be raise taxes if you want more money.

    It couldn’t be more clear from the Spending Review that Labour has once again screwed Wales over, even Tory MP’s are complaining more about S4C funding than Labour, but the majority of welsh voters will still be voting for Labour next May and welsh devolution is in big trouble because UKIP is now the only opposition to more powers, a point of view that’s almost mainstream, they’ll be challenging Tory, Labour, Lib Dems and Plaid Cymru for votes all over Wales at every election from now on and gaining ground.

    I was starting to feel a bit more hopeful after the General Election, but I realise that things are going from bad to worse and there nothing anyone can do about it.

    1. better funding? do you want wales forever to be dependent on largess from westminister? frankly its much better we in wales get used to raising our own income taxes than relying on handouts from the british treasury. you'll certainly be in the running for the jeremiah of the year award with your prognosis for welsh devolution - there was similar skepticism about support for more powers for wales in the run up to the 2011 referendum and we know how that turned out.