Welsh Government: Tax-varying Powers

Lord Wigley Excerpts

Tuesday 27th November 2012 Lords Chamber

Asked by

[Lord Wigley]

To ask Her Majesty’s Government whether they will take steps to enable the Welsh Government to have greater tax-varying and borrowing powers.

[The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)]

My Lords, the Government established the Silk commission to look at the case for devolving fiscal powers to Wales, and the commission reported its findings last Monday. The Government are very grateful for the expertise and rigour that the commission has brought to this important work. We will now carefully consider its recommendations and assess whether they are right for Wales and for the UK as a whole. The Government will respond to the report in due course.

[Lord Wigley]

My Lords, I welcome the noble Baroness to the Dispatch Box to answer questions in this way, not least because not so long ago she was asking exactly the same questions as I am asking today. Does she accept that the Welsh Government have no borrowing powers at present other than to cover temporary revenue shortfalls—a power that has never been used—or residual WDA powers, which are offset against the DEL budget and therefore provide no additional benefit? Now that the Silk report has come forward, as the noble Baroness mentioned, unanimously recommending that the Welsh Government should have new powers to borrow to fund capital investment over and above the DEL budget, as well as powers to issue bonds, can she give an undertaking that the Government will quickly move to provide these powers for the Welsh Government?

[Baroness Randerson]

The noble Lord will appreciate that, as the report was published only last week, it is very early to make decisions. I can make no firm comments about the outcome of the process that we are going through at the moment. However, on borrowing, it is important to recognise that in October a joint announcement by the Secretary of State at the Wales Office, the Welsh Government and the Chief Secretary to the Treasury acknowledged that in principle the Government agree to borrowing powers for the Welsh Assembly, and we anticipate the potential of the Welsh Assembly having the right to raise and levy taxes in order to offset those borrowing powers.