NORTHERN IRELAND 1 WALES 0

Legislation that should allow Corporation Tax powers to be devolved to Stormont has been published. Corporation tax is levied on the profits made by companies. The current rate paid by businesses in Northern Ireland is 21%, which compares unfavourably with the 12.5% rate in the Republic of Ireland. The Northern Ireland Executive wants to be able to match the tax rate in the Republic. The new powers won't come into effect until 2017.

It is vital that our country has the tools to build a fair and sustainable economy and it is important that power is fairly balanced across the UK, with Wales having parity with the other constituent parts. The Silk Commission recommended that Corporation Tax should be devolved to Wales in the event of it being devolved to other parts of the UK.

The Westminster Con Dem coalition government plans to pass the law before May's general election. All the political parties in Wales agreed to this principle and Plaid Cymru has long argued the case for this important lever to be made available to the Welsh Government. The party, formally known as New Labour, has said that it will not oppose the passage of the Bill. 

THE DRAFT WALES BILL

Plaid Cymru has responded to the publication of the Wales Bill by pledging to table amendments that would preserve the integrity of the Silk Commission’s recommendations on devolving further powers to Wales.

Hywel Williams MP, who sat on the Welsh Affairs Committee scrutinising the Draft Wales Bill, expressed disappointment that the UK Government had “cherry-picked” some Silk’s recommendations and that his party would seek to put this right so that the transfer of new fiscal powers will bring maximum benefits to the Welsh economy. Mr Williams added that any votes on the amendments would be “a test of Labour’s priorities” given the clear split in opinion between the party’s members in London and Cardiff over granting Wales more job-creating powers

Speaking shortly after the Bill was published, Hywel Williams MP said:

"Plaid Cymru has been united and consistent in making the case for the transfer of job-creating and economy-boosting financial powers from Westminster to Wales.

"We therefore welcome the publication of the Wales Bill that will seek to implement some of the recommendations of the cross-party Commission on Devolution chaired by Paul Silk.

"However, our goal from the start has been to preserve the integrity of the Commission's original recommendations and it is disappointing to see that they have been cherry-picked in this way.

"We will aim to put this right by tabling amendments to the Wales Bill with a view to scrapping the lockstep - a roadblock that would limit the Welsh Government's income tax-varying powers and was not part of the original recommendations. We will also seek to amend the Bill so that Air Passenger Duty is devolved to Wales as per the Silk Commission report.

"Having labelled the lockstep a "Tory trap" and having bought Cardiff airport, it would be a huge embarrassment for the First Minister of Wales - as the most powerful member of the Labour Party in the UK - if he fails to convince Labour MPs in Westminster to support these amendments which are so crucial to boosting the Welsh economy.

"The Wales Bill will therefore be a test of Labour's priorities.

“Overall, the Bill represents a lost opportunity to include the recommendations of the second report of the Silk Commission which indicated that wider powers such energy, transport, and policing should be transferred to Wales. There is plenty of time in the parliamentary calendar given that the Coalition Government has run out of substantive things that they can agree on to legislate. We could have had a full and comprehensive Wales Bill.”

WHATEVER IT IS I AM AGAINST IT!

When it comes to the devolution of control of our countries natural resources, the Silk recommendations are quire far reaching, with recommendations in relation to energy, water, the Crown estates and marine licensing (both inshore and off shore). This may explain why some of the usual Red Tory suspects, following perhaps the politics of Groucho Marx rather than Karl, are against it. Taken as a whole, if they are accepted by Westminster, the recommendations will both stabilise and develop the devolutionary settlement as it applies to Wales.

In relation to energy, Silk has recommend that all energy planning consents (non-renewable and renewable) below 350 MW should be devolved (currently the threshold is 100 MW). I can see no reason why the National Assembly's powers over planning consent for energy developments to projects generating 350 MW or less should be limited. The Commission recommended that the UK Government should have a statutory duty to take account of Welsh planning policies when exercising its retained responsibilities for larger projects – this perhaps might be a first.

Silk has also recommended that responsibility for issuing marine licences in Welsh offshore waters should be devolved. The Welsh Government should receive parity with Scotland and Northern Ireland for the proposed Contracts for Difference from 2017. Things get particularly interesting when it comes to control of water resources, with Silk recommending that the boundary for legislative competence should be aligned with the national border, with further work to assess costs and benefits for consumers and the industry.

The news that the Secretary of State’s intervention powers in relation to water should be removed in favour of a formal intergovernmental protocol should remove yet another ‘negative’ power from a cabinet position that is rapidly losing any real relevance. Along with finally sorting out the remaining water related anomalies, further powers over sewerage are also recommended to be devolved to the National Assembly, which makes sense.

At first glance, the Silk recommendations in relation the accountability of the Crown Estates, don’t necessarily appear to amount to much, but, potentially further down the line they may well have a significant impact in conjunction with the other recommended transfer of powers in relation to energy and water resources. Silk has recommended that in relation to the Crown Estate, a Welsh Crown Estate Commissioner should be appointed, in consultation with the Welsh Government.

This is a sensible step which should enable the potential for investment in Wales to be maximised, the new Commissioner should be supported by a Crown Estate office in Wales, subject to meeting value-for-money criteria. Silk has also recommended that the existing executive responsibilities of Welsh Ministers for marine conservation and licensing in the Welsh inshore area should be extended to the Welsh offshore area.

All in all, if the recommendations are accepted by Westminster (and the devolution of further powers actually takes place) in relation to energy, water, offshore responsibilities and the Crown estates then a significant step will have been taken towards giving the National Assembly the tools to do the job. While I think that we should wholeheartedly welcome the Silk commission’s recommendation of devolution of extra powers, but, find that part of me wonders what might have accomplished in Wales, if we had the tools to do the job and the political will.

THE SILK ROAD (I)

Taken as a whole the latest Silk recommendations, if accepted in their entirety by Westminster, can be said to mark out a road to stabilise and develop our devolutionary settlement. Somewhat understandably the media focus on the latest Silk recommendations has concentrated on aspects of Policing and Youth (Criminal) Justice.

There are other potentially far more significant recommendations, although you might be mistaken from much of the media’s focus on policing and criminal justice. One of the better overall analyses of the latest Silk Commission recommendations can be found on the Oggyblggy blog site.

Silk has also looked at transport and natural resources, which may move us towards a much more balanced devolutionary settlement, closer to the Scottish model. While many transport powers are already devolved, the Silk Commission took evidence that suggested that it would make sense to change the current devolutionary settlement so that the allocation of responsibilities more coherent.

Silk has recommended the further devolution of powers on rail, ports, bus and taxi regulation, along with control over speed and drink drive limits. The recommendations would create a simpler more coherent arrangement and could lead to the development of a much more integrated transport strategy for Wales. Silk has also recommended that the functions of the Traffic Commissioner in relation to buses should be devolved to Wales.

While there are understandably no recommendations in relation to the inter-city cross-border rail franchises, which Silk suggested should remain non-devolved, there is scope for the Welsh Government to have a greater role in the appointment of a new franchise operator. In relation to roads, there no recommendations for any changes in powers but it has been suggested that there should be much closer coordination between the two Governments.This is something which could ensure a more strategic long term approach rather than switching transport priorities back and for between east-west and north-south.

The recommendations should be welcomed and hopefully Westminster will put our national interests before its own party political interests and rapidly devolve the further powers.  Too much time has been wasted and too many opportunities have been lost because the National Assembly actually lacked adequate powers to work for Wales, to act in the Welsh national interest and to build a stronger, more prosperous nation.

BE CAREFULL WHAT YOU WISH FOR...

So there we have it, Carwyn Jones has said that it is unfair for Welsh people to be charged to enter their own country and that the tolls on the Severn bridges would be reduced if the Welsh government takes control of them. To be honest I would have been surprised if he had said anything different. Naturally the Con Dems want to retain control, as does the Department for Transport, aside from denying the Senedd the tools to do the job, rather than snubbing the people of Wales this probably has more to do with controlling a handy revenue stream.

I question the Labour in Wales Government’s sincerity when it comes to calling for control of the Severn Bridges (and the tolls) to be transferred to Wales. I suspect that they are trying to make as much political capital as possible with their calls to the Con Dem Government in Westminster transfer the Severn Bridges to Wales; it’s easy to do this when you know that the Con Dems won’t do it. It’s a good if cynical example of a pretty inert government creating the convenient  illusion that it is ‘standing up for Wales’.

Were the Con Dem Government, as part of the implementation of the Silk Commission recommendations, to offer as part of the package the transfer of the Severn Bridges (and control of the tolls) aside from shock I would not be surprised if Labour in Wales rejected the powers offered. Such an eventuality would in my opinion be as a result of the near nuclear explosion from Labour in Westminster Welsh MPs, numerous fevered telephone conversations down the M4 from Westminster and the Labour in Wales’s not so underlying lack of belief in the devolution for Wales.

At present it costs £6.20 to take a car over the M4 and M48 bridges from England to Wales, while driving into England is free. The bridge toll for vans and minibuses is £12.40 and for lorries and coaches is £18.60. A Welsh Government report last year suggested that abolishing the tolls could increase traffic by an estimated 12% - equivalent to about 11,000 vehicles a day.  The report also revealed that businesses and commuters spend £80 million pounds a year crossing the bridges.

At the moment the M4 and M48 Severn bridges are run by a private company (Severn Crossings Plc) carrying around 80,000 vehicles a day. The concession will finally come to an end and the bridges return to the UK government when takings from the tolls reach £996 million pounds (1989 prices) at some point in 2018. While the Labour in Wales’s government in Cardiff has expressed a desire to take control when they return to public ownership in about 2018, the Con Dem Westminster government has shown no inclination to make a decision about the bridges' future management one way of another.

If the Con Dems offer nothing of value then Carwyn will have to wait for a Labour Westminster government before he can get his hands on the Severn Bridges and the tolls. He may have a long wait for both a Labour Government in Westminster and any commitment from Labour in Westminster to transfer control of the Severn Bridges to the Senedd.  When the last Labour Government was in office before the financial crash there was scant commitment to transfer any powers or assets to Wales, so why should things change after the next Westminster general election.

Not a subsidised toll bridge near us...

When in office the Labour Westminster Government quietly subsidised the Humber Bridge tolls, but, made no move towards doing anything about dealing with the tax on jobs and the tax on commuters that pass themselves off as the Severn bridge tolls. The Humber Bridge subsidy has been continued by the Con Dem Coalition Government, who also shows no inclination to transfer control of the Severn Bridges to Wales or offer to help Welsh commuters and businesses out with a simular subsidy.

The Conservatives in the Senedd have also proposed transferring the bridges to Wales, cutting the bridge tolls and using the proceeds to spend on infrastructure – which puts them out of step with their government in Westminster. So we have elected representatives from the same party in opposition to each other over an issue of importance to the Welsh people and our economy. Nothing new here, Labour in Wales was often at loggerheads with Labour in Westminster, putting party (and self) interest before the interests of Wales.

Now when it comes to transferring the Severn Bridges (and their income) to Wales, this is also not a new idea. Back in October 2010 Professor Peter Midmore produced an independent economic study of the Severn Bridge tolls which recommended that the revenues should stay in Wales, once the crossings revert to public hands. The Welsh Affairs Select Committee back in December 2010 recommended that the bridge tolls be cut once the concession ends.

Plaid has long called for control, or shared control, over the bridge to be devolved to the Welsh government and for negotiations to start immediately to ensure that the transfer is in place by 2018. The Party, committed to reducing the tolls on the Severn Bridges to under £2 per car, recognises that the high cost of the tolls impacts on commuters and businesses (especially freight and logistics) and on people visiting Wales. The bridges are of such importance that it is only fair that control, or at least shared control, over them is in the hands of the Welsh people.

A BUDGET FOR AN ASPRIN NATION

It was more like a budget for an aspirin nation, along the lines of an economic take two aspirin and it will be better in the morning, than a budget for an aspiration nation. The problem is that George Osborne’s Budget brings scant benefit to the Welsh economy and provides clear indication that Con Dem Treasury policies are failing Wales.

The Chancellor’s not unsurprisingly failed to transfer key job-creating powers from Westminster to Wales something that means his Budget will fail to boost demand in the Welsh economy and prevent vital investment in major infrastructure projects.There was a basic failure to accept that Plan A, such as it was, has failed.

It’s time to try something different (Plan B perhaps) and to adopt a range of progressive policies including reversing the tax cut for those earning over £3,000 a week which is still due to be implemented in April 2013. Once again a Westminster Government has failed to cut its cloth to match reality as the pursuit of World Power Status continues with the Trident renewal which is set to cost £100 billion pounds over the lifetime of a new system carries on.

The Chancellor also failed to make progress on introducing a Financial Transaction (the Robin Hood) Tax that would raise £20 billion a year and help curb the speculative behaviour in the financial sector which caused the crash in the first place and the decision to scrap the stamp duty on shares trading is a regressive move as it’s the only thing in the UK currently resembling this tax.

There are some positives such as the announcement on childcare support which is a positive move but even this does not help people on tax credits or universal credit as those on the lowest incomes will still face the greatest barriers to finding work. The scrapping of the planned rise in fuel costs was also a positive, but the opportunity to sort out a longer-term solution with a fuel duty stabiliser to prevent soaring prices at the pump, was missed.

The announcement of the £10,000 tax threshold is also welcome as it will help people on lowers incomes, something that Plaid has long supported. Despite the few positives, ordinary families in Wales are still set to pay the price for the failings of the banks and the self-defeating policies of the Treasury.

Most importantly for Wales, what the Chancellor should have announced is the implementation of the recommendations made by the Silk Commission. This would have ensured that we in Wales have control over the levers that would allow investment in major infrastructure projects, creating jobs and boost demand in the economy.

DOING THE NUMBERS

The Labour in Wales Government’s reaction to the report of the Silk Commission, which recommended limited tax varying powers be devolved to Wales, is somewhat subtle, if not unexpected. Carwyn Jones, First Minister, has said that there should be no question of the raising (or perhaps using) the power to vary tax rates being devolved until the unfair funding formula which ‘robs’ Wales of some £350 million pounds a year is reformed.

Oddly enough when in government from 1997 until 2010 the Labour Party (whether in Wales or Westminster) consistently refused to accept that Wales was underfunded and that there was any problem with the Barnet funding formula. Now in opposition and (despite the surface gloss) fairly hostile to the idea of devolving further powers to Wales (if not to the concept of Wales itself) things have somewhat unsubtly changed.

Sleeping soundly for Wales, because of the financial disaster left by the last Labour in Westminster Government, Carwyn can safely call for fair funding, in the knowledge that he won’t get it.  Loudly calling for something he knows Wales won’t get he can safely ignore the recommendations of the Silk Commission and focus our attentions on the fair funding issue. All well and good, save for the fact that Labour in Wales (and London) did precisely nothing to fix the problem of fair funding in Wales when they had both the power and the opportunity.

The Commission has recommended that control a number of smaller taxes be devolved to Wales including air passenger duty on long haul flights (a reduction of which could benefit Cardiff-Wales airport); stamp duty, the aggregates levy, landfill tax, and the full devolution of business rates, etc. I have no problem with any of that at all, or the devolution of the power to vary income tax by up to ten pence in the pound.

The failure to consider the devolution of corporation tax (unless it is devolved to Scotland and Northern Ireland) is in my opinion a missed opportunity. I welcome the proposed if limited devolution of borrowing powers for capital projects, current spending and tax revenue variation. The proposal to create a Welsh Treasury function for better financial accountability should also be welcomed if a little belated.

As for the referendum, Wales only got one last time because Labour in Wales had to pay that price to be in government. I have no doubt that whatever the Labour in Wales National Assembly manifesto includes for 2016 it won’t include any reference to the Silk Commission’s findings or another referendum. Labour has been consistently ambivalent on further powers and remains (however well camouflaged) decidedly ambivalent on the issue of devolution project.

The Commissioners, who have hitched the whole financial package to a further referendum, may have potentially brought the whole devolutionary process to a grinding halt. Any referendum cannot be held until it gets the support of a Welsh Government, two thirds of elected AM’s and the support of the Secretary of State – who may well be a Labour Party selectee by 2016

By 2016 the political landscape in Westminster may have changed - we could be a good year into another Labour in Westminster government who would by fairly indifferent to making parliamentary time for Wales related issues in their first year of office. By way of comparison, Peter Hain’s delaying tactics prior to the last referendum on legislative powers might pale into insignificance when compared to what the self-interested Labour in Wales parliamentary representatives might accomplish.

Yet perhaps if Labour in Wales found itself faced with the prospects of no majority (and no trimmings) in Cardiff Bay after May 2016 it would either be forced to choose between forming a minority government or going into coalition with Plaid of the Lib Dems (if there are any left by then). Post 2016 the political situation in the bay could be much more complicated with Conservative AM’s and a smattering of UKIP AM’s. So any chance of a rainbow coalition and a referendum will be entirely dependent (no pressure) on Plaid’s performance, with a new Leader and the desire to stand up for Wales – so there is everything to play for over the next three years.

JOB CREATING POWERS COULD TRANSFORM WALES

Plaid has welcomed the Western Mail poll which show that the vast majority of Welsh voters support the devolution of tax-varying powers to Wales.

Plaid Cymru Leader Leanne Wood AM said;

"The fact that a clear majority want to see the transfer of these powers to our nation is very positive news.

“Plaid Cymru's submission to the Silk Commission has called for the Welsh Government to be able to set Welsh income tax rates.

“Having these powers in Wales would give us more tools to focus on economic growth and the creation of more jobs that would then increase the tax base.

“Surely any self-respecting Welsh Government would prefer to have control over these job-creating levers rather than see them remain in the hands of a remote government in Westminster which doesn't place the economic well-being of our nation as a priority or even an after thought.

"People are saying clearly that they want our nation to take greater control over the economic tools that can help to improve our lives. The First Minister and his Labour Government now have a big decision to make - the choice is between taking responsibility for ourselves or to continue to blame others; the choice is between home rule or continued Tory rule."