Wales Bill

Like, I am sure, most people in Wales I welcome the Wales bill and believe it is generally a step in the right direction.

Unfortunately this support  comes with some caveats.

I welcome the ban on double jobbing by preventing assembly members from also being MPs. I would like to see a further ban on being a councillor and a member of the national assembly wales. In many ways that generates a greater conflict of interest as local government is one of the two major services covered by the National assembly for wales.

 

If one person cannot adequately represent constituents at Westminster and Cardiff how can they adequately represent on their local council and the National assembly?

 

I strongly oppose the ability of candidates to stand on for both a constituency and on the list.

This is one of these issues on which politicians are accused of being self serving. Just because you are rejected by the electorate that should not stop you being elected.

Lose in the constituency and then it does not matter there is always the regional list. Taking the risk out of elections especially when we have an electoral system where even a catastrophic drop in votes does not equate to the same reduction in seats won.

Secondly I have a number of concerns regarding the devolution of income tax

1)    Very pleased to see the no detriment rule as Scotland. Wales would have no control over tax allowances and band points. Scotland has been protected from any negative affect on their budget by this. Very pleased to see this in the Command Paper of the Wales Bill

 

2)    We need a minimum of a Barnett Floor now, but a proper needs-based distribution formula needs to be in the legislation in order to get it through the treasury and to avoid locking in the under funding of Wales

 

3)    Income Tax whilst not as volatile as other taxes has shown volatility with up to £300 million difference between years. Would need to agree a point where Wales was not disadvantaged year on year. Also goes on to the strange idea that because the Welsh Government does not benefit from tax increases there is no incentive to grow the economy. Whilst I might disagree with the method proposed I do not think there is a member in this chamber who does not want to grow the Welsh economy.

 

4)    There would need to be protection against external factors e.g. a major closure caused by a Westminster Government decision that would seriously reduce the Welsh Government tax income

 

5)    The Lock step means that tax changes could not be used. Whilst changes to the higher rates could be made and would either raise or cost relatively small sums;

 

a substantial change in the basic rate would either cost large sums of money or cause huge public outcry.

 

6)    There will be a need borrowing powers to cover shortfall in income tax and borrowing is also required to fund infrastructure. There will need to be a borrowing limits one for revenue and also the ability to build reserves  and to invest them separately, if desired, from the treasury.

 

7)    Remember Scotland has had the power to vary the basic rate of income tax but has not varied the basic tax rate under any government.

 

8)    Defining Welsh tax payers especially in border areas. This depends on the Income tax knowing the up to date home address of all tax payers.

 

 

On Borrowing Powers

I intend to compare the proposed borrowing powers of the Welsh Government with those of  a local Council.

A local authority has total discretion on how it spends it’s capital allocation

But it can also undertake prudential borrowing

It can borrow as much, or as little as the Council feels is needed and it believes it has the ability to repay.

It can borrow for whatever reason

It can make local choices

Building new schools, road improvements or new civic buildings

That is borrowing for capital schemes is available for use across the whole of the Council’s  Infrastructure Investment

Why should the Welsh Government be treated less favourably that the local councils?

Of course instead of borrowing the Welsh Government could

Enter into a 30 year PFI deal.

Which will cost more

Because the private company involved

Will borrow at a higher rate than from the PWLB

And

Will have profit built in

This would be acceptable to the treasury

Can be carried out without any attempt at external control

I consider it to be bizarre

To borrow you need an income stream

Yet no income stream is needed for

PFI schemes lasting over 30 years

Leases and leasing equipment

Yet each has an on going annual cost similar to, although more expensive than borrowing.

Borrowing should be under the same conditions

We should have

Welsh decision on how much to borrow

Welsh decisions on What to spend it on

Welsh decisions on who to borrow it from