The speech I would have given on The Conservative denbate yesterday If I had been called

Firstly can I join with the movers of this motion in welcoming the statement that the NATO summit will be held at the Celtic Manor in 2014 and recognises the high economic benefit that hosting such an event should have on the Welsh economy;

I believe that it is significant that the event is being held in Celtic Manor.

Those who believe in coincidences will think that is why Celtic Manor where the Ryder cup was played was chosen.

I firmly believe that this is another spin off from the successful Ryder cup held there and can I pay tribute to Terry Matthews and former first minister Rhodri Morgan for the effort they put in to bringing the Ryder cup to Celtic Manor and Wales.

On the Westminster Government’s response to Silk part 1 can I start off positively?

I am very pleased to see borrowing powers

This will allow major infrastructure investment in Wales over and above that already available

But borrowing comes with a revenue cost which will need to be factored into future budgets

The statement does leave a number of questions including

What is the Annual borrowing Limit


What is the cumulative borrowing limit


Will prudential borrowing powers, as provided to Local Authorities be available


Will the Government be able to borrow from the PWLB


Will it effect the current capital allocation formula

The statement that you need to have an income stream to borrow has been said so many times it has become generally accepted.

I believe that it is a bizarre notion

You can enter into 30 year PFI deals or 30 year contracts without a revenue stream but a 30 year loan needs one

The income stream the Welsh Government is being given

Land fill tax which Government policy is to reduce and where most of the money comes from Local Authorities

Whose main source of funds is the welsh Government

Stamp duty on land is a tax which varies depending upon the stage of the economic cycle.

I do however welcome the devolution of both as a positive step

I like many others am disappointed that the aggregate levy and air Passenger duty were not devolved

Neither raises large sums of money but meet the criteria of being easy to identify where the tax is being collected

I hope the Westminster Government will reconsider both and the fact that air passenger duty was not given to Scotland, despite Calman recommending it, is no reason why it cannot be devolved to Wales

Turning to income Tax which is the major revenue source in Wales. I have two major concerns:

Firstly the Barnett formula needs to be reworked and also we would need an income tax floor to deal with catastrophic events such as the major Steel closures of the 1980s over which a Welsh Government would have no control

Secondly Scotland never used its tax varying power for very good reasons. If you increase above England you upset the electorate. If you decrease it and then have to cut public services then you upset the electorate.

Also income tax varies considerably, 300 million pound between 2007/8 and 2010/11 so a treasury facility to borrow for revenue expenditure would be needed. Income tax is not a one twelfth of total each month tax but one which has spikes and troughs.

I have also read another bizarre statement that without income tax raising powers there is no incentive on the welsh Government to grow the economy. I do not believe that there is any member of this assembly who does not wish to grow the Welsh economy, we might disagree on how to do it but we have the same end aim.

Finally whilst we await the detail on Silk part 1 we further await Silk part 2.

Which I expect to recommend reserve powers and I hope will recommend the Northern Ireland model of future devolution but that is a debate for a future plenary session