Wales Bill

Lord Hanson of Flint Excerpts

Tuesday 14th June 2016 Commons Chamber

[Alun Cairns]

I am grateful to the hon. Gentleman for his question, and I hope we can cover some of those points later in the debate, but, Madam Deputy Speaker, much will depend on what you determine and interpret as subsidiarity.

[Mr David Hanson (Delyn) (Lab)]

The Secretary of State just mentioned Welsh income tax rates. What guarantees is he going to give the House with regard to the Welsh block grant to the National Assembly for Wales over the duration of this Parliament, which is all he can speak for? My worry is that he will cut the block grant and expect the people of Wales to make up the difference from higher income tax rates.

[Alun Cairns]

The right hon. Gentleman will recognise the funding floor introduced by my right hon. Friend the Chancellor of the Exchequer, which was a clear commitment and promise delivered by the Government. Of course, the Barnett adjustments need to be considered, and discussions between the Welsh Government and the Treasury and my officials are ongoing. We would like to see progress on those matters as the Bill is scrutinised throughout the parliamentary process. Both Administrations are determined to find a transparent way that will rightly serve the people of Wales and the Welsh and UK taxpayer.

--- Later in debate ---

[Alun Cairns]

I am happy to clarify that matter. The Bill gives provision for who votes rather than for compulsory voting.

The Assembly is a fully fledged legislature, trusted with passing laws that affect the lives of millions of people in Wales. It is right that the legislative framework in which it operates reflects that, and enables the Assembly to decide how it conducts its business.

The Bill also repeals the unnecessary and outdated right of the Secretary of State for Wales to participate in Assembly proceedings. Subject to the Bill’s progress, I hope that my attendance at the Assembly in a few weeks’ time will be the last by a Secretary of State for Wales. I am sure that Members of all parties, both here and in Cardiff Bay, will welcome that—probably for many different reasons. I am sure that it will go down well in all parts of the House. A key feature of a mature legislature is that it raises, through taxation, at least some of the money it spends. With power comes responsibility. The Assembly must become more accountable to those who elect it. It must take responsibility for raising more of the money that it spends. The devolution of stamp duty, land tax and landfill tax, and the full devolution of business rates in April last year, are the first steps towards that, and it is only right that a portion of income tax is devolved too.

In the autumn statement, my right hon. Friend the Chancellor announced that we will legislate to remove the need for a referendum to introduce Welsh rates of income tax, which means that the Welsh Government can take on more responsibility for how they raise money, and the Welsh Government want that to happen.

There are practical issues—the right hon. Member for Delyn (Mr Hanson) raised some of these—to agree with the Welsh Government, particularly how the Welsh block grant is adjusted to take account of tax devolution. Those discussions are already taking place, and I expect them to progress as the Bill passes through both Houses.

[Mr Hanson]

Will the Secretary of State clarify—I should possibly know the answer to this—on what the tax is based? Is it on residence in Wales or work in Wales?

[Alun Cairns]

It is residence in Wales. There will be further technical issues that we will want to clarify in discussions between the Treasury, the Welsh Government and the Wales Office. Those elements will be considered in further detail as the Bill progresses, and as the adjustments are agreed between all parties involved. The base is focused on residency rather than on where people work.