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Plaid laments missed opportunity to reject controversial income tax proposal

Plaid Cymru's Hywel Williams says he's disappointed with Labour MPs for failing to back his attempt to persuade a cross-party committee to criticise UK Government plans for income tax devolution.

He'd proposed an amendment to the Welsh Affairs committee's report on the draft Wales Bill which would have called for the controversial 'lockstep' form of income tax power to be abandoned. The Bill would give Welsh ministers power to vary the tax but only by changing all rates simultaneously.

The amendment failed, however, and the Arfon MP says it was a missed opportunity.

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Controversial 'lockstep' tax power still means big change says committee chair

Although it backs the UK Government's plan to devolve some control over income tax to the Welsh Government after a referendum, the Welsh Affairs Select Committee report doesn't say what form that control should take. That's because there's sharp disagreement between and within the political parties.

The draft Wales Bill would give the Welsh Government the power to vary income tax by up to 10p but only by altering all three rates at the same time. This is what's known as 'lockstep' and critics say it would be so unwieldy that in practice it would be unlikely ever to be used.

But the chair of the committee, David Davies, says it would still be a significant change to the financial powers and responsibility of the Welsh Government.

MPs back income tax plan but call for funding change

A cross-party group of Welsh MPs has backed UK Government plans to transfer some control over income tax to the Welsh Government. But the Welsh Affairs Select Committee says that should only happen if the people of Wales vote for the change in a referendum.

In its report on the draft Wales Bill the committee also says it has 'sympathy' with the view that the way UK funds are allocated to Wales should be changed before any transfer of income tax powers. It says the formula used should be reviewed before the next UK General Election in 2015.

Another of the Bill's aims is also criticised. The committee says that instead of imposing five-year terms on the Assembly, the power to decide that should be devolved to Cardiff Bay.

Welsh Income Tax very unpopular with Tory voters

Despite the row over Welsh income tax between David Jones and Andrew RT Davies, both men agree that there should be a referendum on giving the Welsh Government income tax raising powers -and that the Conservatives would campaign in favour. But Tory voters are deeply hostile to the idea.

Detailed analysis for tonight's Sharp End of the latest Wales Barometer opinion poll shows that Conservative voters are the most heavily against, with Labour voters justifying their party leaders' reluctance to embrace the idea. Lib Dem politicians' enthusiasm is not matched by their supporters.

  • How would you vote in a Welsh Income Tax referendum?
  • Labour: Yes 36% No 41%
  • Conservatives: Yes 16% No 71%
  • Plaid Cymru: Yes 60% No 23%
  • Lib Dems: Yes 35% No 40%

If Plaid Cymru voters mostly want Welsh income tax, they too could be disappointed. Plaid's leader, Leanne Wood, has said a referendum cannot be a priority due to proposed restrictions on any income tax powers. (The analysis is based on how people would vote when choosing their constituency AM).

Opinion shifts on European Referendum and on Welsh Income Tax

Despite the strong showing in UKIP support for this May's European Election, the Wales Barometer Poll shows that supporters of staying in the European Union now outnumber those who would vote in a referendum to leave the EU.

  • Stay in EU 41% (38% in December)
  • Leave EU 38% (40% in December)
  • Don't know/Won't vote 22% (22% in December)

Meanwhile, as the prospect of a referendum on the devolution of income tax powers appears to be receding, support for the whole idea is also in decline.

  • Yes 31% (35% in December)
  • No 42% (38% in December)
  • Don't know/Won't vote 28% (26% in December)

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Could income tax power be imposed on Wales?

I understand that some MPs in the government parties are considering the possibility of pushing through plans to transfer tax-varying powers to Wales without a referendum because of what they see as Labour 'intransigence' on the issue. The current plans require a referendum before any such move.

If you want to catch up on the row, and see why Labour thinks the proposal is a politically-motivated 'trap,' click here, here and here. The other parties believe Labour is angry that devolution has been taking out of its hands for the first time.

One Conservative source said that 'intransigence' raises 'serious questions about the way in which fiscal responsibility can be imposed on the Welsh Government' and used the word 'imposed' deliberately. It's controversial even to suggest and is a sign of exasperation on the government benches.

Labour shows true 'anti-devolution' colours says Plaid

Plaid Cymru has joined criticism of the Shadow Welsh Secretary's comments on plans to transfer tax-varying powers to the Welsh Government. Hywel Williams MP says Labour has shown its 'true colours as the anti-devolution party.'

Even the Prime Minister used PMQs to state that he is in favour of taking these further steps to secure the transfer of income tax powers to the National Assembly.

It is a sad day when the Tories in London speak more warmly about Welsh devolution than the Labour party in Wales!

The transfer of income tax powers was proposed by the cross-party Silk Commission, whose recommendations were unanimously welcomed. If the Labour party had such a problem with Wales gaining more fiscal responsibility and accountability then why not say so sooner?

– Hywel Williams MP, Plaid Cymru

Draft Wales Bill moves Income tax devolution closer

The devolution of Income tax came a step nearer today, as Welsh Secretary David Jones MP published a draft Wales bill which allows the Welsh Government to control the tax - subject to a referendum.

It was also announced that assembly candidates will be able to stand in constituencies and for regional seats, along with confirmation of borrowing powers for the Welsh Government.

Our political reporter Owain Phillips is in Westminster and sent this report.

Cameron's 'Double Yes' for Welsh income tax

David Cameron and Nick Clegg in the Senedd in November

At a reception for lobby journalists last night, the Prime Minister used a phrase I think you'll hear from Conservative politicians a lot more in 2014. The phrase was 'double yes' and is David Cameron's shorthand for his approach to what should happen next with income tax powers for Wales.

A Wales bill is expected to be published before the end of the year (which only leaves next week) paving the way for a referendum to be held. If there were a Yes vote in that referendum, it would give the Welsh Government partial control over income tax raised in Wales.

When I asked David Cameron about the prospects of a referendum he said he'd be pushing for a 'double yes' and added that meant 'yes' to holding a referendum in the first place and then campaigning for a Yes vote in that referendum. And he's urged Welsh Tories to do the same.

Labour is against getting that power without reform of the way the Welsh Government is funded. Only this week, the First Minister said it would be a Tory 'trap' to transfer income tax control with unfair funding. You can see his comments by clicking here.

Welsh Conservatives in the Assembly are in an awkward position. They back the transfer of income tax powers but remain disappointed by the type of transfer on offer. They want the power, as recommended in the Silk Commission, to alter separate tax bands so that they can cut the middle rate.

But the power that will be set out in the Wales Bill next week is what's known in the jargon as 'lockstep' which means that a future Welsh Government would only be able to vary each of the three income tax bands at the same rate.

Sources close to Welsh Conservative leader Andrew RT Davies says he and Tory AMs will continue to campaign to be able to lower the 40% band 'because it's the only realistic band to reduce.'

They're clinging onto that in the face of the difference of opinion with the London end of the party because there have been some hints that the Treasury might leave open the prospect of future change to the form of income tax power.

Certainly the Welsh Liberal Democrats would want that to be the case because they want to cut the basic rate by 2p. And they, don't forget, boast of a direct line to the Lib Dem Chief Secretary to the Treasury, Danny Alexander.

That's for the longer-term. In the near future, 2014 looks set to be a struggle between Labour's resolute no and David Cameron's 'Double Yes.'

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