The Chief Secretary to the Treasury, Danny Alexander, has said he wants 'significant income tax powers' devolved to the Welsh government. It did not ask for income tax powers but the Silk Commission on devolution supported the idea, if approved in a referendum. AMs have backed Silk's proposals.
We need a new model of devolution for Wales. A model in which additional responsibility for raising revenues strengthens accountability too. A model in which significant income tax powers unlock commensurate borrowing powers for Wales too.
The Chief Secretary also told the Welsh Liberal Democrat conference that safeguards to stop Wales' share of public spending being cut will be put in place this year. Until now when public spending goes up, Wales gets a slightly smaller share of the increase, a process known as 'convergence'.
But Mr Alexander said that there was unlikely to be any immediate benefit, at a time when public spending is falling. But talks between the Welsh and United Kingdom governments would get underway.
We said that ... we would work to agree changes that both governments can accept are fair and affordable. With budgets going down, it is unlikely that convergence will be forecast this time. But by putting in place a robust process now, we are showing that we meant what we said last year.
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