Economy The recruitment squeeze ahead
NewsApril 2nd, 2024
ViewsNovember 4th, 2013
After a long wait, on Friday the UK Government announced that the Welsh Government will be able to borrow to invest in capital projects and will control Stamp Duty and Landfill Tax, with a referendum on powers to vary income tax to follow. There’s been, hardly surprisingly, near universal welcome for the changes in Wales – what’s not to like?
But the announcement is as interesting for what it doesn’t say as for what it does. Now I’m a fan of brevity but the 2-page statement, in response to Silk’s 149 pages plus Annexes, had me wondering if I’d clicked on the wrong document – but no, 568 words it is.
The Federation of Small Businesses has already pointed out the rather strange lack of reference to Silk’s recommendation that business rates be fully devolved, for example. Business rates are potentially much more significant in terms of income than Stamp Duty and Landfill Tax – yet so far, silence.
But for me the biggest omission from Friday’s announcement is on ‘other taxes’. The Silk Commission recognised that there was merit in the Assembly having powers to raise new, innovative taxes or levies to reflect circumstances in Wales and achieve its objectives. It therefore made the admittedly cautious recommendation that:
The National Assembly for Wales should be given a power to legislate with the agreement of the UK Government on a case by case basis to introduce specified taxes and any associated tax credits in Wales. The Welsh Government should retain the revenue from these without a deduction to the block grant. The UK Government should adopt a flexible approach to any proposal for these taxes from the Welsh Government.
The potential of being able to introduce new taxes is enormous – here is the opportunity to tackle many of the problems that have bedevilled Wales to date. Yet on this arguably more important proposal than a modest variation in income tax – silence.
The Prime Minister’s and Deputy Prime Minister’s statement does promise a response to all 33 of the Silk Commission’s recommendations ‘by the end of the year’. However, as the 1st November announcement was heralded as “the biggest devolution in decades” (a bit of hyperbole that I will leave) and covering the “key recommendations”, it is probably safe to assume that there’s nothing more of substance to come in the 9 weeks left of 2013.
If it is indeed the case that all that comes out of Silk part 1, more than two years after it was established, is £165 million from Stamp Duty and Landfill Tax, the ability to use existing borrowing powers and yet another referendum then many may well conclude that the process of devolution has almost ground to a halt.
And against this back cloth, what prospect of any change from Silk part 2?
I’m not holding my breath.
Victoria Winckler is Director of the Bevan Foundation.
