Bevan Foundation calls for independent commission on fiscal devolution

Economy Some money
NewsAugust 21st, 2015

The impact of fiscal devolution to UK nations and regions on Wales needs be reviewed, the Bevan Foundation has said. Responding to the House of Lords Economic Affairs Committee’s inquiry into the devolution of public finances, the think tank has called for an independent commission to be established which will assess the affect of UK fiscal devolution on Wales and how it should proceed.

Since the Silk Commission considered financial devolution in 2012, Wales has been given the power to hold a referendum on varying income tax, additional borrowing powers and control over Land Transaction Tax, Landfill Disposal Tax, and any new taxes it chooses to introduce. The Bevan Foundation is currently researching the potential of these new taxes.

But the think tank warns that Wales is also affected by the devolution of fiscal powers to other UK nations and regions. Proposals to devolve certain tax-raising powers to English cities and the devolution of further fiscal powers to Scotland and Northern Ireland have rapidly changed the UK context.

Director of the Bevan Foundation, Dr Victoria Winckler said:

The devolution of public finances is taking place at a rapid pace across the UK – the Silk and Holtham Commissions’ reports were written in a very different constitutional climate. 

“A new independent commission to evaluate the impact of financial devolution on Wales is necessary as further tax-raising and borrowing powers have been devolved to the UK nations, and are proposed for English cities as well. We must avoid ad-hoc decisions being taken for one devolved nation when it could have implications for others, and consider the strain that the devolution of tax-raising powers puts on the Barnett formula.  

“Fiscal devolution to Wales cannot be looked at in isolation, and an independent commission is necessary to ensure this does not happen.”

Due to Select Committee rules, we are unable to publish our full response at this time.


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