devolution

Devolution

I very much welcome the debate and the cross party consensus on taking devolution forward

Whilst there is a small group of people who want to close down the Assembly

And an even smaller group of people who want Independence

There is a growing consensus in Wales shown in opinion polls

Which I see echoed when talking to my own constituents

A desire to have a working sphere of Government with the tools to do the job

I wish to concentrate on two areas firstly the reserved powers model and then tax devolution

As someone who has been a strong supporter of the reserved powers model I am pleased that this is becoming the consensus view.

Early last year I wrote a series of articles published by the IWA describing the devolution settlement in the rest of the UK and within Europe.

All based upon the reserved powers model.

In the individual members debate on the 26^th June last year supporting the reserved powers model

With support from members of all parties

It was passed by

43 votes for

6 against

2 abstentions

I hope today on this issue we can achieve unanimity

As I said then and now reiterate

The Reserved powers is not about more powers it is about clarity on what is and what is not devolved.

Turning to the financial proposals in this resolution

I do not believe taxation is primarily an economic driver

I believe its primary aim is to raise money for public services

If Northern Ireland and Scotland have the devolved to them corporation tax then Wales should as well;

 

But to Quote the Holthanm report

 

It is evident that varying corporation tax in different parts of the UK raises issues at both the UK national and the European level and these may be in conflict. The UK Governmentt would presumably wish to ensure that any variation was implemented in a way that was regionally equitable and not costly to HM Treasury. Yet devolution would also have to be consistent with European law, which precludes tax systems that could be interpreted as State aid to some businesses at the expense of others.”

 

Some people believe that low corporation tax in Ireland including the now closed double Irish helped the Irish economy

But the OECD said

 

Ireland’s appeal has been based on the quality, price and availability of its labour, the welcoming attitude to foreign investors, the use of the English language and exploitation of ‘first-mover advantages’: once one producer in a sector establishes production facilities in Ireland, it is generally easier to attract its competitors.

  But there is no question that the robust and prolonged expansion of the US economy – the source of most of the direct investment flows – and the attractive policy and institutional setting in Ireland have been the major driving forces.  A generally conducive and transparent regulatory framework, an open trade regime and competitive labour costs have generated this outcome.

 

 A long-standing favourable tax regime applied to tradeable goods sectors, financial incentives and substantial industrial support targeted at a small number of key dynamic sectors with spin-off potential, may also have been important in convincing major multinational incorporations to choose Ireland as a production location in order to serve at least the EU market”.

 

If Air Passenger Duty for direct long-haul flights is devolved to Scotland then it should be devolved to Wales

 

There should be a review the level of the borrowing powers afforded to Wales in the Wales Bill

 

I do not believe the Welsh Government should be treated less favourably than either Scotland or Welsh Local Authorities

 

Welsh Local Authorities can engage in borrowing to a locally set prudential limit

 

I do not see if it is good enough for Welsh Councils that the Welsh Government should not be treated the same

 

Welsh Government should be allowed to issue its own bonds

Just like Local Authorities and whilst borrowing from the PWLB has traditionally been cheaper Transport for London used bonds to part fund crossrail.

Again if Local authorities can do it so should the Welsh Government

 

we have come a long way since I first raised the reserved powers model at a Gorwel meeting

Hopefully with cross party agreement we can take Wales forward