What could tax power for Scotland mean for Wales?

Plans are expected to be unveiled to give the Scottish Parliament full control over income tax when the Smith Commission publishes its recommendations. And whatever is planned for Scotland is likely to lead to major change to Welsh devolution. It's thought that the Commission will recommend

  • The full devolution of income tax and power to vary bands and rates although not the power to set personal allowances and only earned income, ie not savings or investments.
  • Control over most of the welfare system for Scotland including housing benefits.
  • Air Passenger Duty

There have also been suggestions that future Scottish Governments could be handed control over decisions on fracking and abortion legislation, although this is said to be the subject of serious dispute.

A separate process is underway for further devolution for Wales, co-ordinated by the Welsh Secretary Stephen Crabb. But he said in a speech in Cardiff last week:

It will be important that we identify the proposals arising from the Smith Commission that warrant further consideration and analysis for Wales. This is the third element of the work we are beginning. I am certainly not saying that what is right for Scotland will necessarily be right for Wales. Far from it. I believe it is important for each of the devolved settlements to have the right set of powers for that particular nation. But we should not let the opportunity provided by the Smith Commission slip by without thinking which of its proposals need to be given further thought in a Welsh context.

– Stephen Crabb MP, Secretary of State for Wales

Meanwhile the First Minister has also said he’ll be keeping a close eye on the Smith recommendations.

In his speech to Labour’s annual conference in September, Carywn Jones said whatever powers are offered to Scotland must be offered to Wales and Northern Ireland (even if they’re not taken up.)

... the future we promised to Scotland must be delivered - an equal share of resources, a seat at the table, a powerful Parliament - that must be offered to Wales and Northern Ireland too. Not just home rule for Scotland, but home rule all round.


Even before the referendum, the First Minister had tweeted that ‘whatever is offered to Scotland should be offered to Wales.’

It’s also clear that all four parties in the Assembly will want to see Air Passenger Duty devolved to Wales if it’s given to Scotland.

That was something explicitly stated when the four party leaders drew up a blueprint, which was later backed by all Assembly Members, they explicitly

More details here and here and this is the relevant part of their joint motion:

  1. Calls for the UK Government to: > a. ensure that the same powers are given to Wales regarding the devolution of Corporation Tax if they are provided to Northern Ireland and Scotland; > b. devolve Air Passenger Duty for direct long-haul flights; > c. review the level of the borrowing powers afforded to Wales in the Wales Bill; and > d. work with the Welsh Government to enable it to issue its own bonds >
– Joint motion on devolution

There’s much less agreement on how much, if any, control of income tax future Welsh Governments should have.

Before Scotland voted in September it was widely predicted that the referendum would change everything, whatever the result. We’re seeing how true that is for Wales as well as for Scotland. The rule book has been ripped up.

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